Macleod v the Queen

Robert James Macleod appealed to the High Court of Australia against his convictions for fraudulent application of company property under s 173 of the *Crimes Act 1900* (NSW). The charges arose from an investment scheme where Macleod, as a director of Trainex Pty Ltd, used investor funds for purposes other than film production, including personal benefit and repayment of his loan account with another company. Macleod contended that as the sole beneficial shareholder and controlling mind of Trainex, his consent to the application of funds precluded a finding of fraud.

The High Court was required to determine whether a person who is the sole beneficial shareholder and controlling mind of a company can be guilty of fraudulently applying the company's property contrary to s 173. Further issues included whether the trial judge had adequately directed the jury on the meaning of "fraudulently" and whether Macleod's conduct required the realisation that it was dishonest by the standards of ordinary, decent people. Macleod also argued that the use of funds was contemplated by the company and that consent by the victim (in this case, himself as shareholder) negated fraud.

The Court reasoned that a director or officer could be convicted of fraudulently applying company property even if they were the sole beneficial shareholder. The Court held that the consent of a shareholder, particularly when that shareholder is also the director alleged to have acted fraudulently, does not necessarily cure what would otherwise be a breach of s 173. The Court found that the trial judge's directions, when read as a whole, adequately identified the necessary dishonest intent and instructed the jury to assess the appellant's conduct against the standards of ordinary, decent people.

The appeal was dismissed.