Mathews v The Queen
[2001] WASCA 264
•31 AUGUST 2001
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : COURT OF CRIMINAL APPEAL
CITATION: MATHEWS -v- THE QUEEN [2001] WASCA 264
CORAM: MALCOLM CJ
STEYTLER J
BURCHETT AUJ
HEARD: 2 AUGUST 2001
DELIVERED : 2 AUGUST 2001
PUBLISHED : 31 AUGUST 2001
FILE NO/S: CCA 17 of 2001
CCA 18 of 2001
CCA 43 of 2001
BETWEEN: DOUGLAS EDWARD MATHEWS
Appellant
AND
THE QUEEN
Respondent
Catchwords:
Appeal and new trial - Charge of fraud under s 409(1)(c) of the Criminal Code - Intent to defraud - Appropriate directions to jury - Error of confusing actual subjective intent under s 409(1)(c) with objective requirement of s 24 defence - Proof of intent - Relevance of good character - Circumstances where good character direction required - Circumstances where conviction quashed and verdict and judgment of acquittal entered
Legislation:
Criminal Code, s 24, s 409(1)(c)
Result:
Conviction quashed
Judgment of acquittal
Category: A
Representation:
Counsel:
Appellant: In person
Respondent: Mr D Dempster
Solicitors:
Appellant: In person
Respondent: State Director of Public Prosecutions
Case(s) referred to in judgment(s):
Alford v Magee (1952) 85 CLR 437
Attwood v The Queen (1960) 102 CLR 353
Derry v Peek (1889) 14 App Cas 337
Director of Public Prosecutions for Nauru v Fowler (1984) 154 CLR 627
Ibbs v The Queen [2001] WASCA 129
Ilich v The Queen (1987) 162 CLR 110
King v The Queen (1986) 161 CLR 423
Parker v The Queen (1997) 186 CLR 494
Peacock v The King (1911) 13 CLR 619
Peters v The Queen (1998) 192 CLR 493
Proudman v Dayman (1941) 67 CLR 536
R v Schmahl [1965] VR 745
Reg v Berrada (Note) (1989) 91 Cr App R 131
Reg v Vye [1993] 1 WLR 471
Regina v Aziz [1996] AC 41
Reid v The Queen [1980] AC 343
Simic v The Queen (1980) 144 CLR 319
The King v Wilkes (1948) 77 CLR 511
Vallance v The Queen (1961) 108 CLR 56
Case(s) also cited:
Nil
MALCOLM CJ: This was an appeal against conviction. On 24 November 2000 the appellant was convicted on four counts under s 409(1)(c) of the Criminal Code on an indictment which alleged that, on 29 December 1998 at Maddington, the appellant, with intent to defraud, by fraudulent means, gained a benefit on three occasions in amounts of $4,000, $5,000 and $30,000 for Mathews Drilling Services. The fourth count, which was for the same offence, was that on 31 December 1998 at Maddington, with intent to defraud, by fraudulent means, the appellant gained a benefit in the amount of $100,000 for Mathews Drilling Services.
The appellant was subsequently sentenced to imprisonment on 15 January 2001 for 10 months on each count to be served cumulatively. The total term of imprisonment was, therefore, 3 years and 4 months. An order was made backdating the sentence to 24 November 2000 when the appellant was first taken into custody.
Notice of an application for leave to appeal against conviction under s 688(1)(b) of the Criminal Code dated 1 February 2001 was filed at the Court on 19 March 2001, some weeks out of time. An application was made for an extension of time within which to appeal which was not opposed by the Crown and an extension of time was granted by this Court at the hearing. It is noteworthy that the appellant was unrepresented at the hearing of the appeal. The grounds of appeal were extensive, but the central issue raised by the appeal concerned the issues arising in such a case in relation to s 409 of the Criminal Code and the defence of honest and reasonable but mistaken belief in a state of things under s 24 of the Code.
At the conclusion of the argument on 2 August 2001 the Court was unanimously of the opinion that the appeal should be allowed and the convictions quashed, and the Court then reserved the question whether a new trial should be ordered. It was then indicated that the reasons for reaching that conclusion would be published later. The reasons to be published by Burchett AUJ set out his reasons for joining in the making of those orders. It is sufficient for me to say that I am in entire agreement with those reasons.
I would only add that I am concerned that the appellant was unable to obtain legal aid in relation to his appeal which, as it emerged, raised important questions of law relating to the provisions of the Criminal Code which I have mentioned, as well as the need for a direction concerning the relevance of good character, where a person of previously unblemished record and good character is on trial for an offence in respect of which the
credibility of his evidence was critical to his defence. The failure to give such a direction in this case deprived the appellant of a fair trial.
In my opinion, it would be unjust in this case for a new trial to be ordered to permit the Crown to conduct its case on a basis different from that on which the original trial was conducted as has been explained by Burchett AUJ, particularly in the light of the fresh evidence before this Court regarding the appellant's previous practice in relation to the drawing of cheques.
STEYTLER J: I have had the advantage of reading the reasons for decision to be published by Burchett AUJ. I agree with them and have nothing to add.
BURCHETT AUJ: The year 1998 was a miserable year for the applicant Mr Mathews. His marriage, which had lasted over 30 years (he attained 54 years of age in 1998), and of which there were two adult children, a son and a daughter, was coming to an irreconcilable end. In August, he became a recipient of sickness benefits for depression and for a permanent shoulder injury which had compelled him to cut short his previously active life as the owner and operator of the business of a drilling prospector. He was giving way to heavy drinking and gambling. In addition to his other problems, he was grieving over the death of a young driller whom he had trained. On 20 November, he sold his intellectual property rights, drilling rigs and certain other equipment for the sum of $300,000 to one Charles Leslie Stapleton, with whom he had had substantial business dealings since 1987. Under the agreement, which was in writing, the money was to be paid by Mr Stapleton into a specified bank account at BankWest Bank of Western Australia "on or before the 10th December 1998". That account was in the name Dart Base Metal Exploration. Then, on Christmas Eve, Mr Mathews' wife left him to go and live with their married daughter. The reality of divorce - which did follow within a few months - had to be faced.
Mr Mathews did not face it at once. He took his problems to the Casino, seeking relief in alcohol and gambling. On his own evidence, he was no stranger to gambling in large sums, having at a previous time gambled away during a short period more than $70,000. On or about 29 to 31 December 1998, he lost over $80,000 at the Casino.
It was the circumstances in which the money utilised in his gambling was obtained by Mr Mathews that led to his being indicted upon four counts under s 409(1)(c) of the Criminal Code, that is to say, putting it
shortly, of fraud. Those counts referred, respectively, to sums of $4,000, $5,000, $30,000 and $100,000. In the case of each of the first three counts, it was alleged that "[o]n 29 December 1998 at Maddington DOUGLAS EDWARD MATHEWS with intent to defraud, by fraudulent means, gained a benefit in the amount of [$4,000, $5,000 or $30,000, depending on the count] for MATHEWS DRILLING SERVICES". The last count was in the same terms, except that it related to 31 December 1998 and to the sum of $100,000. What Mr Mathews did was to draw cheques, in the amounts mentioned in the counts, on the Dart Base Metal Exploration account in favour of Mathews Drilling, and pay those cheques into an account in the name of his business Mathews Drilling Services at the National Australia Bank, Maddington. He then drew cash cheques on that account to fund his gambling. The problem was that there was virtually no money available in the Dart Base Metal Exploration account to meet the cheques drawn on it. However, the National Australia Bank, which doubtless regarded Mr Mathews as a good customer, allowed him to draw on the deposited cheques without waiting for their clearance, notwithstanding that he had no overdraft arrangements with the Bank.
The crucial issue on which each count in the indictment turned may now be stated. If, when Mr Mathews drew on the Dart Base Metal Exploration account and deposited the relevant cheque in the Mathews Drilling Services account, he believed that Mr Stapleton had complied with his contract to pay $300,000 into the Dart Base Metal Exploration account, he clearly did not have an "intent to defraud". On the other hand, if, as the Crown alleged, he knew the money had not been received into the account, in the absence of some further exculpatory factor, a fraudulent intent would seem clearly to follow.
Fundamentally, the question was whether the circumstances enabled the jury to reject Mr Mathews' evidence of his belief, and to conclude, beyond a reasonable doubt, that he had acted, in the language of s 409(1), "with intent to defraud". He admitted he had not checked to confirm that the money was there, but he gave uncontradicted evidence that he had had dealings with Mr Stapleton, over a period of years, in which Mr Stapleton had paid him large sums - such as $400,000 and $600,000 - and, in these dealings, had "never defaulted". He swore that, in consequence, he "had no reason to doubt" the payment had been made.
At the outset of his evidence, Mr Mathews told the jury he had no criminal convictions, not even traffic convictions. He was certainly entitled to the benefit of his good character, which was not disputed, both in relation to the credit to be given to his evidence and in relation to the question whether he was a man likely, now in his mid fifties, to commit a serious crime.
The Crown relied on inference, particularly from the fact that four cheques were drawn, rather than one, on the Dart Base Metal Exploration account, and a number of cash cheques, each for less than $10,000, on the Mathews Drilling Services account. Also, the cash cheques were not all cashed at the one branch; they were cashed at the Maddington, Thornlie and Victoria Park branches. To these facts, the unpredictable and recurring requirements of gambling might be thought to have provided some answer; but Mr Mathews relied, so far as the cash cheques were concerned, on his stated longstanding practice of drawing money in cash amounts of less than $10,000 to avoid a regulatory requirement which he said affected, after 1991, goldminers withdrawing the proceeds of their operations in amounts of $10,000 or more. He denied that the amounts of the cash cheques had anything to do with a banking practice of allowing a customer to withdraw less than $10,000 against an uncleared cheque, a practice of which he said he had no knowledge. There was no evidence he had been told of such a practice, or that National Australia Bank customers in general were aware of such a practice.
After a trial by jury in the District Court, Mr Mathews was convicted on all four counts, and he was sentenced by Deane DCJ to 10 months on each, to be served cumulatively, so that the total sentence was 3 years and 4 months, with eligibility for parole. He sought leave to appeal, both against his convictions and against his sentences. At the hearing, this Court unanimously concluded that there had been a miscarriage of justice; gave leave to appeal against the convictions; allowed the appeal; quashed the convictions; and ordered that Mr Mathews be released. The Court reserved its decision as to whether a new trial should be ordered, and it reserved its reasons. These are my reasons for joining in those orders, and concerning the question of a new trial.
It is desirable, at this point, to set out so much as may be relevant of two sections of the Criminal Code. Section 409 contains the following:
(1)Any person who, with intent to defraud, by deceit or any fraudulent means -
…
(c)gains a benefit, pecuniary or otherwise for any person;
…
is guilty of a crime and is liable to imprisonment for 7 years."
Section 24 provides:
"A person who does or omits to do an act under an honest and reasonable, but mistaken, belief in the existence of any state of things is not criminally responsible for the act or omission to any greater extent than if the real state of things had been such as he believed to exist.
The operation of this rule may be excluded by the express or implied provisions of the law relating to the subject."
The terms of s 24 reflect the common law principle stated by Dixon J in Proudman v Dayman (1941) 67 CLR 536 at 540. It is worthy of note that the High Court in that case gave full weight to the element of the defence that the belief in question must have been capable of answering the description of "reasonable".
But s 409(1) itself contains a mental element, which may involve a question whether an accused person has a belief in the existence of a state of things, by virtue of the words "with intent to defraud". Also, perhaps, by virtue of the words "by … any fraudulent means". Fraud wears many disguises, and the shapes it may take are multiple. It is therefore necessary, in any case of fraud, to analyse the facts in order to identify the aspect of them which is alleged to reveal a fraud. If there is a fraud, there must have been an intent to defraud. That intent may be revealed by knowledge, such as knowledge that a bank account being drawn upon is devoid of funds. However, since Derry v Peek (1889) 14 App Cas 337, it has been established that an intent to defraud is not to be equated with carelessness; so even an unreasonable belief, fortified by no inquiries, that the account is good for the cheques drawn on it, will suffice to repel a suggestion of intent to defraud. In Smith and Hogan on Criminal Law (5th ed, 1983) at 508, the learned authors, speaking of crimes of fraud in England, take this for granted. "Clearly", they write, "there would be no offence where D represents as true that which he believes to be true but which, as he ought as a reasonable man to have known, is false." Similarly, Glanville Williams stated, in his Criminal Law, The General Part (2nd ed, 1961) in s 34:
"The question of intent to defraud is essentially subjective: it is a question of what the accused intended, not of what a hypothetical reasonable man would have intended, though the intent may be inferred from behaviour."
And, later in the same section, the distinguished author remarked that "it is accepted legal principle that a person who honestly (though negligently) believes in the truth of his statement does not intend to deceive and therefore does not intend to defraud".
In the context of a conspiracy to defraud within s 86(1)(e) and s 86A of the Crimes Act 1914 (Cth), Toohey and Gaudron JJ said in Peters v The Queen (1998) 192 CLR 493 at 504:
"In a case in which it is necessary for a jury to decide whether an act is dishonest, the proper course is for the trial judge to identify the knowledge, belief or intent which is said to render that act dishonest and to instruct the jury to decide whether the accused had that knowledge, belief or intent and, if so, to determine whether, on that account, the act was dishonest."
Their Honours re‑emphasised this proposition at 508.
Under s 409(1), the relevant concepts are "intent to defraud" and "fraudulent means", rather than dishonesty. But the proper course for a trial judge is of the same kind: the knowledge, belief or intent said to reveal an intent to defraud and fraudulent means should be identified by the judge, and the jury should be instructed to decide whether the accused had that knowledge, belief or intent and, if so, to determine whether, on that account, what was relevantly done by the accused was so done with an intent to defraud and by fraudulent means. Generally, since s 24 requires the accused's state of mind, if he is to be exculpated, to be reasonable, introducing a consideration which is unnecessary to innocence under s 409, it will be inappropriate and confusing to direct the jury about s 24, and the judge should not do so. If, in a particular case, a direction under s 24 is required, great care will have to be taken to avoid confusion through a transference of concepts of reasonableness from the statutory defence to the crime under s 409. That the judge should accept in this way the obligation, not merely to expound the law on the subject to the jury, but to identify the questions the law required them to decide, and to explain the law with respect to these questions, was laid down nearly fifty years ago by the joint judgment of Dixon, Williams, Webb, Fullagar and Kitto JJ in Alford v Magee (1952) 85 CLR 437 at 466:
"[I]t may be recalled that the late Sir Leo Cussen insisted always most strongly that it was of little use to explain the law to the jury in general terms and then leave it to them to apply the law to the case before them. He held that the law should be given to the jury not merely with reference to the facts of the particular case but with an explanation of how it applied to the facts of the particular case. He held that the only law which it was necessary for them to know was so much as must guide them to a decision on the real issue or issues in the case, and that the judge was charged with, and bound to accept, the responsibility (1) of deciding what are the real issues in the particular case, and (2) of telling the jury, in the light of the law, what those issues are. If the case were a criminal case, and the charge were of larceny, and the only real issue were as to the asportavit, probably no judge would dream of instructing the jury on the general law of larceny. He would simply tell them that if the accused did a particular act, he was guilty of larceny, and that, if he did not do that particular act, he was not guilty of larceny. It may be that the issues in a civil case tend, generally speaking, to be more complex than in a criminal case. But the same principle is applicable, and looking at the matter from a practical point of view, the real issues will generally narrow themselves down to an area readily dealt with in accordance with Sir Leo Cussen's great guiding rule."
With these principles in mind, I turn to the summing up in the present case to see how it directed the jury to approach the task of determining whether Mr Mathews had an intent to defraud, and employed fraudulent means, when he signed the cheques drawn on the Dart Base Metal Exploration account and deposited them in the Mathews Drilling Services account, upon which he subsequently drew.
After some introductory remarks about the nature of the trial and the onus of proof, the learned judge referred to the Crown contention that a finding of guilt on one count would lead to a finding of guilt on all, and then made her first mention of the defence case. Her Honour said:
"[T]he defence say that because he says he had an honest and reasonable [emphasis added] but mistaken belief as to a certain state of facts then he is not guilty or in other words you could not find him guilty but I will come to that later."
The judge then dealt with the terms of the indictment, referred to s 409(1)(c), and stated that "the Crown must prove a number of elements … beyond a reasonable doubt". Mention of several elements followed: the identity of the offender, "that the accused gained a benefit for Mathews Drilling Services", being an increase in the credit balance of its bank account, and that the benefit "was also gained by fraudulent means", being that the accused "so the Crown allege, was well aware or knew that there were insufficient funds in that account to meet the cheques, and despite this the accused still deposited the relevant cheque in each instance into the Mathews Drilling Services account held at the National Australia Bank." A further element was then stated:
"Next, in relation to each count the Crown must prove that at the time the accused wrote out each cheque on the BankWest account, knowing there were insufficient funds in the account and then deposited the cheque in each instance into the National Australia Bank account and drew upon it, the accused had an intent to defraud. On the Crown case with respect to this element, that is, the element of intent to defraud, the Crown must prove in relation to each count that at the time in question the accused intended deliberately or knowingly to create or cause to appear an inflated or increased credit balance in his National Australia Bank account styled in the name of Mathews Drilling Services when the accused knew or was fully aware that the holder of the account was not entitled to that increased balance.
You will in this context be concerned with deciding what was the accused's intention at the time he did the acts alleged - in other words, when you're considering this element, with intent to defraud. Now, intention is not a physical item. It can't be tendered like all the other exhibits in this trial. You have got a lot of documents as exhibits before you, but you don't have something that's stamped on the back that says, 'This is the accused's intention.' The reason for that, of course, is a common sense one. Intention on anyone's part is an intangible, it's not a physical thing, so how do you decide what a person's intention was? How do you decide, for example, whether or not someone had an intent to defraud at the relevant time, which is something the Crown must prove?
Well, you decide what a person's intention was, or the accused's intention was, in this case, at the relevant time by what he does and says, how he acts and reacts, how he acted and reacted. You really have to draw an inference as to what his intent was in each count from the circumstances as you find them to be on the evidence that is before you in this trial."
It should be pointed out at once that the last paragraph of the quoted passage from the summing up, consistently with the earlier imposition upon the defence of a requirement that Mr Mathews' belief be "reasonable", must have conveyed to the jury an entirely objective view of the relevant intention: it was to be gauged from conduct, and they would "really have to draw an inference as to what his intent was … from the circumstances". This was seriously misleading; indeed, it presupposed rejection of the evidence of Mr Mathews. For, only if his assertion of his belief was rejected, could it be suggested the jury would "have to draw an inference". If he was accepted as a witness of truth, or even if the jury entertained a reasonable doubt that he might be telling the truth, no question of inferring intention from circumstances could arise, for belief and intention are matters of the actual subjective state of a person's mind. The correct approach to decision was, not to rely on inferences alone, but to "weigh his testimony along with any inferences": Vallance v The Queen (1961) 108 CLR 56 at 83, per Windeyer J.
The trial judge proceeded immediately to a lengthy discussion of the details of the bank accounts and the cheques drawn on them. She mentioned the National Australia Bank's willingness to allow cheques for less than $10,000 to be cashed against uncleared deposits. This, of course, was irrelevant to any inference unless it could first be concluded that Mr Mathews was aware of the Bank's attitude. The fact is that there was no proof that he knew of it, but the summing up seems to overlook that aspect of the case. It turns to the total loss to the Bank of $83,000, and then to the agreement with Mr Stapleton, although it omits to mention that, under this agreement, $300,000 was to be paid, not merely on or before 10 December 1998, but into the very account on which the relevant cheques were drawn. Then there is mention of the evidence of Mr Mathews, and the judge continues, stating its substance as follows:
"[Y]ou're also entitled to look at the evidence that the accused has given, and the accused's evidence in this case is before you in two forms: his answers to the questions on the videotaped record of interview which you will have with you in the jury room and you may certainly play it again, and in that video he admitted that he operated the two bank accounts that I have mentioned and he admitted writing out all of the relevant cheques that I have mentioned and the cheques that the police asked him about.
He did not really dispute depositing the cheques into the various accounts or withdrawing funds from those accounts. He told Detective Boxshall, and indeed he mentioned it several times, I think, that he wasn't a great book‑keeper and he didn't keep a particular eye on what was in his accounts - for example, the Dart Base Metals Exploration account. He told police that he was expecting a deposit of $300,000 to be made in that account pursuant to his contract with Mr Stapleton and he assumed that the funds were in the account at BankWest at the time he wrote out the cheques the subject of the indictment.
He said as far as he was concerned there was money in that account and so he just wrote out the cheques. He did not see a need to check with the bank to confirm that money had in fact arrived and been deposited in the account. He was also asked about the diary entry on 18 December 1998 and he said that he couldn't remember if he checked on that occasion with the bank about the money coming in or not. He said that he did not check with Mr Stapleton as to whether or not Mr Stapleton had actually sent the $300,000 to be put in his account because he trusted Mr Stapleton, in effect.
He also told police that as he had no overdraft facility on any of his bank accounts that he assumed that the banks would stop any cheques he wrote if he - or if his accounts, more particularly, were not in funds. As to the fact that the cheques he wrote on the drilling services bank account were all for amounts of under $10,000, the accused said it was his money and his right to do what he liked with it. In the end most of the money he obtained by way of writing out those 11 cheques was gambled by him at the casino.
When he gave evidence this morning, the accused said much the same type of things to you. He told you that he had marital difficulties and so he decided that he would take out $200,000 from his BankWest Dart Base Metal account and leave the remaining 100,000, which of course was the total of $300,000, in that BankWest account for his wife. He said that he believed at this time the $300,000 that he was expecting from Mr Stapleton pursuant to their agreement was in fact in that particular account. He said he had dealt with this man over the years and he had no reason to doubt Mr Stapleton's word.
So the accused said he wrote out four cheques on that BankWest account over a period of about 2 days for the amounts specified in each count on the indictment. He really couldn't explain why he just did not write out one cheque for $200,000 and put it into his National Australia Bank account. It was, it seems, just the way that he did things and he couldn't see any point in doing otherwise. He also said in cross-examination that he would probably have written out another cheque for $61,000; that is, to make up the $200,000, the next day, but that, it would appear, did not happen.
He denied being aware that National Australia Bank tellers had a discretion to cash cheques up to $10,000 against uncleared funds and he also denied having a significant gambling problem. He suggested that at the time he would not have written out a cheque for $5000 to his son if he was aware that there were insufficient funds in the account to meet that particular cheque.
In the end the accused says that he had an honest and reasonable - or he made an honest and reasonable mistake in thinking or believing that those funds of $300,000 were available to him in his BankWest account to be drawn upon by him, and that in fact brings into play another section of our Criminal Code, which is section 24. Mr Smith has referred that to you in his address, but it's necessary that I speak to you about it because it is in fact the defence that the accused raises in this case, bearing in mind, of course, that an accused doesn't have to prove or disprove anything. Section 24 of our Code says this:
'A person who does or who omits to do an act' -
well, in this case we're looking at a person who actually does an act, namely the writing out of the four cheques -
'under an honest and reasonable but mistaken belief in the existence of any state of things is not criminally responsible for the act or the omission to any greater extent than if the real state of things had been such as he believed to exist.'
Now, that sounds like quite a mouthful, so I will attempt to explain it to you in slightly clearer terms. First of all, the mistake on the part of the accused must be a mistake of fact, not a mistake of law. It is the law that a person who does or who omits to do - but as I said, we're looking at a person, the accused, who does an act under an honest and reasonable but mistaken belief in any state of things - and 'state of things' refers to the existence of any facts - is not criminally responsible for their actions to any greater extent than if the real state of things had been as they actually believed them to be."
It will be seen at once that, in this lengthy passage, the judge continues to treat Mr Mathews' defence - "the defence that the accused raises in this case", her Honour calls it - as being that "he made an honest and reasonable mistake in thinking or believing that those funds of $300,000 were available to him in his BankWest account" [emphasis added]. She quotes s 24, with its requirement of "an honest and reasonable … belief", as relevant to that one defence.
Without a break, following the passage I have just quoted, the judge proceeds to summarise the position in the words:
"So in this case the accused is saying that he wrote out those cheques under an honest and reasonable but as it turns out wrong or mistaken belief that the $300,000 he was expecting to be deposited into his BankWest account from Mr Stapleton was actually there. Now, it is not for the accused to prove that he had an honest and reasonable belief in this state of things, it is for the prosecution to satisfy you beyond a reasonable doubt on all the evidence before you that the accused, Mr Mathews, did not have a positive belief honestly and reasonably held that the $300,000 he was expecting to be transferred and deposited into his BankWest account in the name of Dart Base Metal Exploration, pursuant to his agreement with Mr Stapleton had arrived into that account.
You will remember the accused said he based this belief on the fact that he and Mr Stapleton were long time business associates and friends. He said that Mr Stapleton had always honoured his word in their prior dealings and the contract between them was an example of the situation that they had agreed upon and that he expected to come to pass. Now, 'honest and reasonable but mistaken belief' - in this context the word 'honest' has a subjective connotation; in other words, did the accused himself honestly hold the belief?
So you are looking at it in fact from the accused's perspective, subjectively. The word 'reasonable' in this context has an objective meaning, not a subjective meaning, so not only must Mr Mathews have honestly held the belief, but he must have held that belief on reasonable grounds, that is, in the context of all of the evidence that you have heard in this trial, was it reasonable for Mr Mathews to have held that belief?
The accused must provide reasonable grounds from which his belief might reasonably be inferred. So in the end, members of the jury, in looking at this aspect of the matter it is a matter for you to decide on all of the evidence there is evidence that the accused may have had an honest and reasonable belief. You will have to decide in the first place, was it honest, and in the second place, was it reasonable in all the circumstances. The first being a subjective test, that is, as to honesty, and the second, that is [as] to reasonableness being an objective test.
Remember it is not for the accused to satisfy you that he did hold such an honest and reasonable but mistaken belief, it is for the Crown to satisfy you that the accused did not hold such an honest and reasonable belief. If there is a reasonable doubt as to this matter the accused is entitled to be acquitted. In the end you must appreciate that your decision or decisions, because you will be reaching four verdicts, involves more than simply deciding whether or not you believe that [sic] the Crown witnesses or the accused.
This really isn't a case where you have had a lot of witnesses called by the Crown who say things that are greatly in conflict with what the accused said. The Crown really have just called some banking evidence and some evidence from a police officer which really is not particularly in dispute. In the end it is the interpretation perhaps of that evidence that is a matter that you will be concerned with."
In the first paragraph of this passage, three times the words "and reasonable" or "and reasonably" are inserted, the third time in the course of what the jury would have been likely to have taken as a general statement of what the prosecution had to establish. That must have been particularly likely after the previous passage putting what appeared to be the same issue from the accused's point of view as "the defence … in this case". The error and the enormous damage to the applicant's case were compounded in the penultimate paragraph when the judge told the jury that believing the accused's evidence would not be enough to decide the case. What could this mean but that there would remain an objective question, by which he might be condemned, though telling the truth?
Finally, permeating the further directions in this last passage that I have extracted from the summing up, are repeated statements that Mr Mathews "must provide reasonable grounds from which his belief might reasonably be inferred", and it must be "reasonable in all the circumstances". And in general terms, which could not sensibly be limited to the s 24 defence, the judge says, in effect, in the final paragraph of the passage that the case is not one of conflict between the Crown witnesses and what the accused said, but in the end the question is the interpretation of the evidence. That is to reinforce the proposition that the decision depends on an objective determination. Her Honour could not have said anything like this had she had in mind the true significance of the applicant's own evidence of his subjective belief, which had nothing to do with interpretation, being either true or not.
The trial judge did go on to make some remarks about the requirement that the Crown prove the elements of each count beyond reasonable doubt. In the course of those remarks, her Honour did say:
"[I]f you are left with a reasonable doubt that there is a reasonable possibility that the accused may be telling the truth you must acquit [him]."
But that is very far from the full explanation which would have been needed, if the false impression sown by the earlier portions of the summing up were to have been corrected, particularly as the jury may have taken the reference to what the accused was "telling" as a reference to what the judge had just told them he was "saying", that is, "that he wrote out those cheques under an honest and reasonable … belief".
In my opinion, it was inevitable that this summing up would have left the jury with the impression that, unless the belief asserted by Mr Mathews was objectively reasonable, he was guilty. That is not the law; so there was a serious misdirection. Furthermore, nowhere is there the kind of clear identification of the true issues to be determined by the jury that is demanded by the law as stated by the High Court in Alford v Magee.
There is another matter which should be mentioned. Close to the end of the summing up, the judge said:
"[Y]ou are still very much going to be concerned with deciding credibility in this case. Credibility and reliability."
Those were significant remarks, since, as has been made clear, Mr Mathews gave evidence. In at least two respects, his evidence should have been seen as strengthened by his good character, shown by his having no criminal convictions, not even traffic convictions, at his mature age. Good character is relevant to the matter of credibility; it is also relevant to the question whether a person accused of a crime, such as fraud, would be likely to have had a criminal intent. It is the usual practice, in criminal trials before juries, where evidence has been given of the accused's good character, to remind the jury of it, and to tell them they may use it as bearing on these issues. In the present case, the trial judge made no reference to it in her summing up.
In Attwood v The Queen (1960) 102 CLR 353 at 359, Dixon CJ, McTiernan, Fullagar, Taylor and Menzies JJ said in their joint judgment:
"The expression 'good character' has of course a known significance in relation to evidence upon criminal trials; for it denotes a description of evidence in disproof of guilt which an accused person may adduce. He may adduce evidence of the favourable character he bears as a fact or matter making it unlikely that he committed the crime charged. … As Cockburn CJ said [in a case their Honours cited]: 'The fact that a man has an unblemished reputation leads to a presumption that he is incapable of committing the crime for which he is being tried'."
However, in R v Schmahl [1965] VR 745 at 750, Sholl J said:
"I think it would not be right to lay down a rule that in every case where evidence of good character is given, the judge must give a direction as to the way in which it can be used."
This view was approved by the High Court in Simic v The Queen (1980) 144 CLR 319 at 333. That was a case of murder involving savage violence; but the important thing to notice about it is that the court's approval was given to the proposition that not "in every case" must a direction be given. It does not follow that a case such as this, where the credibility of Mr Mathews' evidence about his belief made all the difference to the question whether he committed a crime or not, should have been decided without reference by the judge to his good character.
The latest authorities on the point are a series of decisions in England. In Regina v Aziz [1996] AC 41, the House of Lords affirmed a developing line of cases, and in particular Reg v Berrada (Note) (1989) 91 Cr App R 131 and Reg v Vye [1993] 1 WLR 471. Lord Steyn, speaking for a unanimous House, said (at 50 - 51):
"Lord Taylor of Gosforth CJ started his judgment by saying that the issues debated in Reg v Vye [1993] 1 WLR 471 would at one time not have been regarded as arguable. I would add that in recent years there has been a veritable sea‑change in judicial thinking in regard to the proper way in which a judge should direct a jury on the good character of a defendant. It has long been recognised that the good character of a defendant is logically relevant to his credibility and to the likelihood that he would commit the offence in question. That seems obvious. The question might nevertheless be posed: why should a judge be obliged to give directions on good character? The answer is that in modern practice a judge almost invariably reminds the jury of the principal points of the prosecution case. At the same time he must put the defence case before the jury in a fair and balanced way. Fairness requires that the judge should direct the jury about good character because it is evidence of probative significance."
His Lordship affirmed (at 47) the following principles, as stated in Vye at 479:
"(1) A direction as to the relevance of his good character to a defendant's credibility is to be given where he has testified or made pre‑trial answers or statements. (2) A direction as to the relevance of his good character to the likelihood of his having committed the offence charged is to be given, whether or not he has testified, or made pre‑trial answers or statements."
The law is stated accordingly in Archbold (2001) in s 4‑406 and s 4‑407, with elaborations for special cases, and citation of further authorities.
While, on the authority of Simic v The Queen, it remains the position in Australia that not every case can be said to require a direction as to the effect of good character, the "veritable sea‑change in judicial thinking" to which Lord Steyn referred may well affect the range of cases in which such a direction is called for. In my opinion, it is at least necessary in a case, as this is, where the defence really depends on the subjective state of the accused's mind, concerning which he has given evidence claiming a belief consistent with innocence. For this reason also, in my opinion the trial miscarried.
The remaining question is whether the Court, having quashed the convictions, should order a new trial. That, of course, is a matter of the exercise of a judicial discretion: The King v Wilkes (1948) 77 CLR 511 at 518, per Dixon J; Vallance v The Queen at 62, 66, 69, 83; Director of Public Prosecutions for Nauru v Fowler (1984) 154 CLR 627 at 630 - 631; King v The Queen (1986) 161 CLR 423 at 433; Parker v The Queen (1997) 186 CLR 494; Ibbs v The Queen [2001] WASCA 129. Here, the Crown case seems to have been based on the proposition accepted by the judge that Mr Mathews' belief, which had been asserted when he was originally questioned by the police, was required to be objectively reasonable. At the hearing in this Court, counsel for the Crown opened his submissions by saying:
"If it please the court, there was a relatively short trial and a great deal of the evidence, as indeed her Honour remarked upon during summing up, was agreed. The essential issue seems to have been, and it was certainly left to the jury on this basis, as to whether the crown could negative to the required standard the defence which had been raised which is one of section 24."
The point is that an order for a new trial would allow the Crown to conduct the case on a different basis. Having given no attention at the trial to Mr Mathews' condition at the time, as it may have affected his state of mind - the numerous factors to which I referred at the beginning of this judgment - and no attention to proving he knew of the alleged practice of the National Australia Bank in relation to cash cheques, the Crown, if a new trial were ordered, could set about seeking to establish a case on the basis of actual knowledge and intent. It would perhaps not be "a quite different case to that presented against [Mr Mathews] at trial", in the words of Dawson, Toohey and McHugh JJ in Parker at 519, but it would be different in a not unimportant way. The lapse of time and the significant period of imprisonment (over 8 months) already served by Mr Mathews, bearing in mind his good character and the other subjective factors in the case, also tell against a new trial: Parker at 520. In the end, the discretionary decision must balance many factors; it is by no means the product of some inevitable logic, but must take broad account of the justice of the particular case: see the discussion by Lord Diplock, speaking for the Privy Council, in Reid v The Queen [1980] AC 343 at 349 - 351, which is cited by Dawson J in King at 433, and by Dawson, Toohey and McHugh JJ in Parker at 520; and see the remarks of O'Connor J in Peacock v The King (1911) 13 CLR 619 at 675; cf per Griffith CJ (dissenting) at 641. Much depends on the nature of the consideration which raises a question whether there should be a new trial in a particular case. Where that consideration involves "public interest issues which the Director of Public Prosecutions is best placed to decide … it may be appropriate to order a new trial, leaving it to the Director to decide whether to proceed": Ibbs v The Queen at par [24] per Malcolm CJ. But even in such cases, the Court has a discretion which was affirmed in the lastmentioned authority.
Finally, Mr Mathews put before the Court, as fresh evidence, material tending to confirm his assertions about his previous practice in the drawing of cheques. It has been unnecessary to consider whether that evidence was of a character to provide an independent ground for allowing the appeal, but it does suggest the Crown case would not be a strong one upon a new trial. In Ilich v The Queen (1987) 162 CLR 110, the majority of the High Court relied on their assessment of the appellant's prospect of acquittal, had the jury been correctly directed, and in Ibbs v The Queen this Court relied on its assessment of the appellant's prospect of acquittal, had the jury been aware of certain fresh evidence, to conclude in each case, after weighing up the competing considerations affecting the decision, that a new trial should not be ordered.
In all the circumstances, a new trial should not be ordered, and a judgment and verdict of acquittal should be entered under s 689(2) of the Criminal Code.
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