Parsons v The Queen

[1998] HCATrans 291

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M42 of 1998

B e t w e e n -

ROUMALD CHARLES PARSONS

Appellant

and

THE QUEEN

Respondent

GLEESON CJ

GAUDRON J
McHUGH J
GUMMOW J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT ADELAIDE ON THURSDAY, 13 AUGUST 1998, AT 10.21 AM

(Continued from 12/8/98)

Copyright in the High Court of Australia

GLEESON CJ:   Yes, Mr Coghlan.

MR COGHLAN:   If it please the Court.  The Court has now been provided with a copy of such cheques as were available to the Court of Appeal and were tendered on the hearing of the appeal.  There were no cheques available for count 2, so the first cheque that is to be seen related to count 3.  The cheques relating to count 4 and the credit vouchers relating to those cheques can be seen on the next four pages following.  In relation to count 5 there appear to be two cash advance vouchers and one cash cheque so at least one cheque is missing as related to count 5.  The cheques relating to count 6 then appear and they were the only cheques available by the time the appeal came on for hearing.

A matter arose yesterday as to what was before the Court of Appeal by way of summary at the time of the hearing of the appeal.  There was a summary of evidence before the court and my learned friend has asked that I tender that to the Court.  Subject to the Court’s agreement I have no difficulty about tendering that summary.

GLEESON CJ:   This was before the Court of Appeal?

MR COGHLAN:   It was before the Court of Appeal, your Honour.

GLEESON CJ:   Yes, I have never seen a case where one was not before the Court of Appeal.

MR COGHLAN:   I think in Victoria, your Honour, it can only happen where occasionally an appeal against sentence comes on at short notice and the parties act on what is in the sentence, but they are very rare cases indeed, I should say.

GLEESON CJ:   Having regard to the plea of guilty, this is understandable; there is nothing in this that explains, for example, how it was or why it was that Stewart gave bank cheques.

MR COGHLAN:   No, your Honour, nothing in the material that was before the court and it would appear on the material that related to count 5, that is relating to Mr Edwards, that two of the documents that I have now tendered to the Court are cash advance vouchers; they presumably were converted into bank cheques rather than - they cannot have been handed over in that form - and the other cheque that was there handed over was a cash cheque.  A very thorough search was made at the time, I must say, for the material and it was first thought none of the cheques could be found and then later researches revealed those cheques that are now before the Court.

It is submitted on behalf of the respondent that the difficulty that has arisen in the present case arises directly out of what his Lordship Lord Goff said in Preddy’s Case and it is submitted on behalf of the respondent that those remarks were obiter, but in any event they should not be followed and they should not be followed because the analysis on which Lord Goff based his analysis was based on a premise which itself was wrong.  That is that Danger’s Case could, without variation, simply be applied to the case of a cheque when the transaction in the nature of the bill in Danger’s Case was quite different.  His Lordship fell into that error, it is submitted, principally because of the reference he made to the note that Professor Smith had made to Mitchell’s Case (1993) Criminal Law Review 788.  It was on the basis almost totally of that note that his Lordship said that both Mitchell’s Case itself and Duru’s Case, which Mitchell purported to follow, had been wrongly decided.

Now, it may be that the logic that reached the result in those cases was wrong but not wrong in a way that affects the proposition of how a cheque was to be treated.  It is submitted that, as the law has always been, in the hands of the payee the cheque is a chose in action enforceable against the drawer of the cheque and in that sense is property in the hands of the payee, and so it must be, the payee having no enforceable rights against the bank.  The only enforceable rights that the payee has are those enforceable rights against the drawer of the cheque.  He can only be protected and said to have had property in the cheque by the existence of the chose in action existing between himself and the drawer of the cheque.

But that is not the only way, surely, in which a cheque can be property.  Does it follow from my friend’s reasoning that, if a barrister writes a cheque out to cash which he gives to his secretary to take to the bank to be cashed to pay the weekly wages of the staff, that if she is robbed on the way to the bank she cannot be robbed of the cheque - indeed, if that is the only property she has, cannot be robbed of anything - but if she is robbed on the way back from the bank she has been robbed of the cash?  It is submitted that it takes the matter simply too far to treat a cheque only as property in the hands of the payee, that a cheque is property, first of all in its pristine form as a blank form capable of ownership, capable of theft, capable of being obtained by deception.  It is equally capable, once it has been completed, of being property and being property of the amount for which it is written out.  The only issue that has arisen by way of criticism of that proposition is the criticism that says you cannot deprive permanently of that instrument because ultimately it will be returned through the banking system.

GLEESON CJ:   I am not sure that that is quite accurate, is it?  If you put the bank cheques to one side for the moment, I thought the way Lord Goff analysed it was to say that if you draw a cheque in favour of John Smith or bearer, intending to deliver it to John Smith in due course, so long as it remains in your possession, all that exists is a piece of paper with some words written on it and its value is de minimis.  When you hand it over to John Smith there is a chose in action which is valuable property.  You gave an example of a cheque being stolen from your secretary on the way to the bank, but what if somebody steals the cheque from your drawer.  What is the property that has been obtained?

MR COGHLAN:   Well, I would submit, your Honour, that it is the cheque to the value for which it is written.

GAUDRON J:   It is a negotiable instrument still, that is assuming it has been signed.

MR COGHLAN:   The difficulty from the respondent’s point of view about that, your Honour, is to accept that it is somehow a nothing, that if it is a bearer cheque, for instance, it is readily capable of negotiation.

GLEESON CJ:   I always thought a cheque is a bill of exchange drawn on a banker.  That is what a cheque is, is it not?

MR COGHLAN:   Yes, certainly, and is therefore, it is submitted, property, that it has to have some status; it cannot, merely because it is in your hands, have no status.  In the way your Honour was putting it, it seems to me Lord Goff’s primary argument was that, that it simply only takes its real status as property once it is a chose in action in the hands of the payee.

GLEESON CJ:   Well, part of what he had in mind was, of course, that if somebody comes in the window and takes it out of your drawer, you can stop payment.

MR COGHLAN:   Well, provided that you know, your Honour, I suppose; that is the ‑ ‑ ‑ 

GLEESON CJ:   And even if you do not know, the bank would pay on it at its peril, to somebody other than John Smith.

MR COGHLAN:   Yes, your Honour, but if we go back for a moment, to say it was a cash cheque.  On Wednesday night counsel writes out the cheque ready to pay wages on Thursday and leaves it in the drawer.  It is stolen overnight, cashed before counsel arrives at chambers the next morning.  It would be very hard to maintain any action against the bank.

GLEESON CJ:   Maybe the most you can say is that the value of such a cheque, whilst in your drawer, is problematic.

MR COGHLAN:   Yes, your Honour, and we would say it a little more strenuously to the extent to say that you cannot say that it is not property.  That is the way the respondent would put that.

GUMMOW J:   Who does it belong to?

MR COGHLAN:   It belongs to the drawer.

GUMMOW J:   Section 71(2) tells you.  It is:

any person having possession or control of it - - -

MR COGHLAN:   And while it is in your drawer you would be the owner.

GLEESON CJ:   I am puzzled by the search for property in the form of a chose in action.  Why can you not solve the problem simply by saying what a cheque is, that is, it is a bill of exchange?

MR COGHLAN:   Yes.  Your Honour, at the end of the day, I adopt that as the better argument.  It is simply a bill of exchange or, to use the language that Professor Smith used and taken up by the Court of Appeal, a valuable security.  The only reason it has to be a chose in action is in terms of what it represents in the hands of the payee, because the one thing the payee cannot do is enforce the cheque against the bank.  So he can only enforce it against you and he can only do so if it is a chose in action, but it is nonetheless therefore capable of being stolen from him and obtained by deception from him, and that appears to have been accepted.  That seems at the very least, your Honour, the complete answer to the bank cheque situation, because he is not the drawer of the bank cheque.

But it is submitted, in any event, that the logic adopted by the Acting Chief Justice in the Court of Appeal is perfectly appropriate, that, as a matter of whether one treats it as a bill of exchange or a valuable security, the question of whether or not it might also be a chose in action in the hands of the drawer or representing some right that he has against the bank is an argument, but I think his Honour the learned Chief Justice has just said you do not need to go that far, that it is a completed bill of exchange.  I mean, Danger’s Case itself, one of the peculiar aspects of that was, at the end of the day, nobody ever contended that Danger did not have property in the bill, the difficulty was that the prosecutor did not have property in the bill, but Danger always had property in the bill and had been the originator of the bill.

GUMMOW J:   Can one thief steal from another thief?

MR COGHLAN:   Yes.

GAUDRON J:   Can he steal a cheque from another thief?  Other property maybe, but say the thief steals my cheque and then another thief comes and steals it from that thief.  Who has property in it at the time of the second theft?

GUMMOW J:   For the purposes of section 71.

MR COGHLAN:   I should think a number of people might.  I suspect your Honour still has property in it, being your cheque in the first place, and then there are the possessory rights that flow to the thief against all others.  Whether it is a matter as a question of public policy the criminal law would chose to enforce might be a separate consideration.

GLEESON CJ:   Or whether the word “possession” in subsection (2) means lawful possession.

MR COGHLAN:   Yes, it would ordinarily be taken to mean lawful possession, but in terms of the way that it is expressed it is submitted there is nothing wrong, as a matter of logic, to say that if a thief stole property and had it in his house and another thief committed a burglary on the house and took all the property away, it would be a peculiar result to say that the second burglar was guilty of no offence, merely on the basis that the property had been first of all stolen.

GLEESON CJ:   Well, without wanting to use colourful language, I suppose you could steal the Elgin marbles from England.

MR COGHLAN:   Yes, but there might be a claim of right though, at least on one view of the matter, but certainly there would be such examples of property that would ‑ ‑ ‑ 

GUMMOW J:   The first thief would not be the true owner for the purposes of bills of exchange law, but he might nevertheless have possession for the purposes of the section 71 criminal statute; I think that is what it comes to.

MR COGHLAN:   Yes precisely, your Honour.  He would not have rights that he could enforce in relation to the bills of exchange, but the possessory rights that he has may make it capable of being his property to be stolen from him.  I would not seek to put it any higher than that.

HAYNE J:   But the clerk who is taking the takings to the bank for the day, including cheques, is not true owner of the cheques, but is possessor of them, and if held up on the way to the bank, how would the charge be framed?  Who would be described as possessor or owner of the property stolen?

MR COGHLAN:   For the purpose of armed robbery, a presentment or indictment is framed in the name of the person who has personally been robbed of the property.

HAYNE J:   The clerk rather than the ‑ ‑ ‑ 

MR COGHLAN:   The clerk rather than -the cheques in that instance of course would create no problem because, even on my friend’s argument, if they were received by the employer in the ordinary course of business, the employer would at least have an enforceable chose in action in relation to the cheques and capable of being stolen under these provisions.  But it is submitted that it is a completely artificial distinction to say that if one of the cheques was a cheque written out to cash to get the petty cash or to get the wages, that it could not be the subject of theft in the same way, because it had been written out by the employer who was the drawer of the cheque.  Unless there are other matters that the Court sought me to address, they are the submissions I put on behalf of the respondent.

GLEESON CJ:   Thank you, Mr Coghlan.  Yes, Mr Wendler.

MR WENDLER:   First, your Honours, my friend put an example concerning the clerk going to the bank with the cheque.  We do not dispute that in those circumstances the person who hypothetically robs the clerk could be charged with robbery of a negotiable instrument.  Negotiable instrument being property, the point here of course is that we do not dispute that the cheque is property.  Our argument is that it is not property belonging to another within the meaning of section 81(1), having regard to Lord Goff’s analysis.  The second matter which arose in exchange between your Honour the Chief Justice and my friend concerned the general definition of property and that definition being capable of coping with a situation like this one.

In New Zealand - if I can just hand up - they appear to have got around this problem in this way:  I am inviting your Honour to copies of Garrow and Caldwell, it is a general text on the New Zealand Crimes Act.  At page 219, your Honours will see reproduced there is section 246 of the New Zealand Crimes Act and it is described as:

Obtaining by false pretence -

and the statutory language is:

Every one is liable to imprisonment for a term not exceeding 7 years who, with intent to defraud or cause loss to any person by any false pretence, causes or induces any person to execute, make, accept, endorse, or destroy the whole or any part of any valuable security -

and at the bottom your Honours will see “valuable security” mentioned and a reference to subsection (1) in relation to “valuable security” and it is identified there that in:

response to Danger.....in which it was held that the accused, by inducing another to accept a bill of exchange drawn on him by the accused, did not obtain any valuable security within the section then defining the offence of obtaining by false pretences.  The reason given for the decision was that the “valuable security” must be the property of some person other than the accused -

and so on.  When one goes to the definition of “valuable security”, which is at page 22 in section 2 of the Crimes Act of New Zealand, your Honours will see there that what they did in New Zealand was simply define “valuable security” as inclusive of a cheque, and that is how they, by that expedient, got around a problem such as this effectively.

The other matter I want to raise is a matter which does not strictly arise out of my friend’s submissions, but arises out of a proposition put to me yesterday by her Honour Justice Gaudron.  It is a proposition which I have considered further overnight and I wish to confront it.  Your Honour Justice Gaudron mentioned to me yesterday that, having regard to each of the cheques, except I think there is one cheque which is a cash cheque, being in the name of Canyon Bay Pty Ltd, from the viewpoint of that component of the offence which requires permanent deprivation, the mental element of the offence, whether it can be correctly said that if Canyon Bay is the payee in each case, and there is a new property right being created by the drawer which did not exist initially and therefore could not have belonged to anybody, if that part of Lord Goff’s analysis is correct in law, then how can it be said that the accused here permanently deprived each of the persons identified in the presentment when Canyon Bay is the payee, and the chose in action or property right is being created in favour of Canyon Bay?  I think I indicated to Justice Gaudron that I did not agree with that, but I do agree with that analysis.  That is another problem that arises in this type of situation where there is a cheque transaction and an attempt to assess the criminal responsibility that arises in the type of situation that has arisen in this appeal.

The other matter that Justice Gaudron reminded me of yesterday was in reference to section 86 of the Victorian Crimes Act and the definition of “valuable security”.  It think I indicated yesterday that we sought to read down that definition; it is not inclusive of cheques.  However, a scrutiny of section 86(3) reveals that the definition of “valuable security” is referable for the purposes of this section, section 86.  So, to the extent that “valuable security” is capable of being inclusive of a negotiable instrument identified as a cheque, we accept that.  The reality here is that the proper charge should have always been, in my respectful submission, a charge pursuant to section 86(2).

GUMMOW J:   That may be but that is not the real question.  The real question is:  is there any submission that 81 is to be read down in some way in the light of 86?  Is there a specific provision made in 86?

MR WENDLER:   Well, it is to the extent that 86, when it identifies the expression “valuable security”, says “for the purposes of this section”, the inference being that it is limited to the criminal conduct that is sought to be proscribed within the terms of 86.  Now, had the Victorian Parliament decided that a definition of “valuable security” was appropriate for the purpose of section 81, it would have identified exactly what valuable securities were and would have identified a cheque as being in that category.  So, to the extent one can assess the legal relationship between sections 86 and 81, it is our respectful submission that section 86 is referable to situations capable of being referable to a situation involving a cheque, whereas ‑ ‑ ‑ 

GUMMOW J:   What does this definition mean, in section 71(1), “property”?  It says “including things in action”.  How can one dishonestly appropriate an intangible?

MR WENDLER:   The definition of “property” is inclusive of a personal right being raised.  You can steal a personal right, but what you are stealing must be a personal right belonging to another.  We cannot lose sight of that statutory expression “belongs to another” and read section 81 as if those words just did not exist.

GLEESON CJ:   Preddy did not deny, did it, that once a cheque is delivered to the payee by the drawer, it can thereafter become the subject of theft or dishonestly obtaining?

MR WENDLER:   Yes, I agree with that, but that is in circumstances where it is taken from the payee, but in circumstances where the legal relationship is between payee and drawer, that was the focus of Lord Goff’s speech.

GLEESON CJ:   Well, that is the significance of Danger.  Danger was a case in which the bill of exchange belonged at all times, as I understand it, to the alleged offender, and what he did was persuade the victim to accept the bill of exchange but the bill of exchange never belonged to the victim, the acceptor.

MR WENDLER:   Well, he never had property, that is so; Danger was not obtaining property.

GLEESON CJ:   He never had possession of it, he never had property in it; he just took the offender’s bill of exchange and accepted it.  He wrote his name on it, I suppose, that is all he did.

MR WENDLER:   That case provided the jurisprudential basis for Lord Goff’s analysis of the cheque transaction and the analysis really focuses upon:  at what time is their property created and how is the property created legally?

GLEESON CJ:   Well, no one doubted that the relevant property was created at the latest when a cheque was handed over to the payee by the drawer.

MR WENDLER:   That is the only time it can be - that is when it crystalises, in our respectful submission, that the property for chose in action, personal obligation, the right, enforceable by action, is created.  At that stage, because it did not exist before, it cannot be said to have belonged to another, because it never existed before.  Either jurisprudence is applicable to cheque transactions or it is not and to the extent that - in my respectful submission, it does not advance a resolution of the problem by, as it were, fashioning the civil law so it fits a hard criminal case to the detriment of what the civil rules have always been in relation to the creation of chose in action when cheques are involved.

Your Honours, it is instructive to note the supporting remarks of Lord Jauncey in Preddy where, at page 841C of the judgment, in his speech he summarises it succinctly by saying:

It would be tempting to say that the appellants by deception obtained money belonging to the lenders and therefore offences have been committed.  That however would be to adopt a simplistic approach ignoring the nature of the precise transactions which are involved.

In other words, the fundamental relevance of the House of Lord’s decision in relation to cheque transactions was not to ignore the legal ramifications in relation to a cheque transaction, but to reaffirm them for the purpose of their application to the criminal law problem that it was deciding.

Your Honours, finally there was mention in my friend’s submissions concerning Professor Smith and his treatment of some of the decisions of the English Court of Criminal Appeal and also his treatment of the decision in Preddy.  There is reproduced the article in the booklet of authorities at the letter O his academic article that is described as “Obtaining Cheques by Deception or Theft” and, your Honours, we have adopted a shorthand method for analysing some of the cases adopted by Professor Smith and we submit that, so far as that article is concerned, to the extent that Professor Smith was dealing with a piece of legislation which did not have statutory language, is the same, indeed even similar, to the modern English Theft Act.  We have prepared a summary of those cases overnight just for your Honours’ assistance.  I do not propose to go through each and every case.  The further written submissions are self-explanatory.  If the Court pleases, I do not have any further submissions.

GLEESON CJ:   Yes, thank you, Mr Wendler.  We will reserve our decision and we will adjourn.

AT 10.59 AM THE MATTER WAS ADJOURNED