Parsons v The Queen

[1998] HCATrans 282

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 WEDNESDAY, 12 AUGUST 1998, AT 3.21 PM

Copyright in the High Court of Australia

MR G.D. WENDLER:   If the Court please, I appear with my learned friend, MR R.T.A. WADDELL, for the appellant.  (instructed by Allan McMonnies)

MR P.A. COGHLAN, QC:   If it please the court, I appear with my learned friend, MR R.A. ELSTON, for the respondent.  (instructed by P. Wood, Solicitor for Public Prosecutions (Victoria))

GLEESON CJ:   Yes, Mr Wendler.

MR WENDLER:   Your Honours, the question in this appeal is whether a person can be lawfully convicted of an offence pursuant to section 81(1) of the Victorian Crimes Act which concerns obtaining property belonging to another by deception with the intention of permanently depriving the other of property, in circumstances where it is alleged that the property obtained consisted of a cheque or a number of cheques drawn and delivered in favour of a particular payee.

GAUDRON J:   The payee not being, in this case, the appellant?

MR WENDLER:   That is right, your Honour.

GAUDRON J:   Yes, it was the company?

MR WENDLER:   Yes, he was an employee at all material times of the juristic entity described as Canyon Bay Pty Ltd.

GLEESON CJ:   What exactly do we know about the cheques?  Some of them were bank cheques, I gather?

MR WENDLER:   Yes, they were.

GLEESON CJ:   Are there copies of them available?

MR WENDLER:   Your Honour, the copies unfortunately that are to hand are not an entire parcel of copies.  My friend can perhaps assist the Court

GLEESON CJ:   Our problem is that because there was a plea of guilty at first instance, there does not seem to have been a great deal of factual investigation of some matters that may now become relevant.  Is the information we have in the appeal book the whole of the information that the Court of Appeal had before it?

MR WENDLER:   Yes, it is.  The information that the Court of Appeal had was, of course, the sentencing remarks.  Some of the cheque forms were produced to the Court of Appeal but apparently some of them are not able to be located.

GLEESON CJ:   Was there some kind of statement of facts at the time of the plea of guilty?

MR WENDLER:   The statement of facts are those which are set out in the judgment of the learned President as the background facts which underpin the pleas of guilty in the County Court.

HAYNE J:   And there would ordinarily have been a statement of facts available to the Court of Appeal?

MR WENDLER:   That may well be correct, your Honour.  However, the facts are set out in some detail in the judgment of the learned President.

GAUDRON J:   And the indictment indicates ‑ ‑ ‑

MR WENDLER:   The presentment, of course, is in the appeal book and that ‑ ‑ ‑

GAUDRON J:   Yes, but the cheques, in all cases, were payable to Canyon Bay Pty Ltd?

MR WENDLER:   That is right, yes.  In each case the cheques were payable to ‑ ‑ ‑

GAUDRON J:   And it was said that the appellant took them from the named people, not being Canyon Bay, with the intention of depriving those people of them by making various representations.

MR WENDLER:   Yes, that right.

GLEESON CJ:   Were they payable to Canyon Bay Pty Ltd or bearer?

MR WENDLER:   Yes, some of the cheques were described in that way, the payee being Canyon Bay Pty Ltd.

GLEESON CJ:   Where do we see that in the presentment?

MR WENDLER:   That is also mentioned in the judgment of the learned President.  I will just pick it up ‑ ‑ ‑

GLEESON CJ:   But where did he get it from?

MR WENDLER:   I am sorry, your Honour?

GLEESON CJ:   Where did he get the information from that some of them were payable to Canyon Bay Pty Ltd or bearer?

MR WENDLER:   In relation to submissions made by counsel acting for the Director in the appeal.

GLEESON CJ:   He got it from the ‑ ‑ ‑

HAYNE J:   No, Mr Wendler, that would have been a most remarkable course of events in the Court of Appeal.  As I say, ordinarily speaking, the Court of Appeal would have had a statement of facts which the appellant would also have had.  Now, was there some departure from the ordinary practice in this case?

MR WENDLER:   Well, there was no statement of facts in any application put before the Court of Appeal.  The Court of Appeal proceeded on the basis of the detailed sentencing remarks.

GLEESON CJ:   Let me ask another related question.  How did they know that some of the cheques were bank cheques?

MR WENDLER:   The Court of Appeal had produced to it during the course of the appeal some of the cheque forms and in fact in relation to count 4 in the sentencing remarks the County Court judge actually specifies that they are bank cheques.  In particular at page 13 of the appeal book ‑ ‑ ‑

HAYNE J:   If I may say also, Mr Wendler, the Court of Appeal would ordinarily have had not simply the sentencing remarks but the whole of the transcript of the plea in which there may well - I do not know - have been a statement of agreed facts or a statement of admitted facts.  It is simply not right to say that it depends only on the sentencing remarks, unless there has been a remarkable change in practice.

MR WENDLER:   The focus in the Court of Appeal was essentially upon the construction of section 81(1), in particular the expression “property belonging to another”.

GLEESON CJ:   This may not ultimately determine the outcome of the appeal by any means but it just because of the procedure that occurred in this case and in particular because this was not an issue that was raised at first instance.

MR WENDLER:   No, quite.

GLEESON CJ:   We are a little light on information about these cheques.  Now, you may ultimately persuade us that the information that is missing is irrelevant.  I have no view one way or the other about that.  It is just that there are a number of things that I, for my part, would like to know about the cheques, about what was written on them, about what happened to them, that were not investigated at first instance.

MR WENDLER:   As I say, your Honour, in relation to the cheque forms, when the solicitors acting for the appellants made inquiries of the Victorian Director in order to raise these forms, only a few of them could be found.

GLEESON CJ:   Let me just take one of the bank cheques.  It was drawn by a bank?

MR WENDLER:   Drawn on a bank, yes.

GLEESON CJ:   Drawn by a bank on a bank?

MR WENDLER:   Yes.

GLEESON CJ:   Payable to Canyon Bay Pty Ltd or bearer?

MR WENDLER:   That is right.

GLEESON CJ:   Was it crossed and marked “not negotiable”.

MR WENDLER:   Yes, it was.  Those bank cheques were referable to count 4 on the presentment and are identified in the sentencing remarks of the County Court judge on page 13 of the appeal book.  There is further mention of the fact of bank cheques also on page 11 at about point 5.  The point ultimately for the Court of Appeal concerned the application of a portion of Lord Goff’s speech in Preddy and Ors v The Queen concerning his Lordship’s analysis of a cheque transaction for the purposes of section 15 of the English Theft Act which is, and was at all material times, in identical statutory language to section 81(1) of the Victorian Crimes Act.  So, the whole appeal turned on Lord Goff’s analysis of this cheque transaction in circumstances where cheques had been obtained by deception and in each case the cheque was made out in favour of a third party payee.

So, at the end of the day, what the Court of Appeal did was to, in a sense, refashion the civil law to suit a criminal law problem.  Now, Lord Goff’s speech clearly suggests that the raising and delivery of a cheque creates a chose in action in favour of the payee in the creation of a new property right which did not previously exist, so it cannot be said that a person is obtaining property belonging to another in those circumstances.  The question for the Court of Appeal was essentially whether that piece of jurisprudence could be effectively applied to an identical statutory provision in circumstances where cheques had been obtained through fraudulent conduct.

GAUDRON J:   Is one of the difficulties in this case that the person from whom the accused was said to obtain a property with the intention of depriving that person of it is not the payee but in some cases the drawer and in other cases the purchaser of the bank cheque so that the chose in action, if any, was vested in the payee or any person to whom the payee negotiated the cheque.  Now, is that what you say is one of the problems?

MR WENDLER:   Well, so far as this particular appellant’s criminal responsibility is concerned, that is one of the problems in applying the commercial law to cheque transactions.  If Lord Goff is correct, then it could not be said that this particular appellant had obtained property belonging to another in the circumstances in which he obtained that property, so it immediately affects ‑ ‑ ‑

GUMMOW J:   But the property is the chattel.

MR WENDLER:   Well, property is defined in the Victorian Crimes Act as inclusive of choses in action that ‑ ‑ ‑

GUMMOW J:   I know that, but undoubtedly there was an acquisition of a piece of paper, was there?

MR WENDLER:   As a matter of fact, there is, but that is not the point.  The point is whether he is getting property belonging to another ‑ ‑ ‑

GUMMOW J:   Well, he was getting property, he was getting a chattel.

GLEESON CJ:   Can you not steal a bank cheque?

MR WENDLER:   Well, you could steal a bank cheque as such, but the ‑ ‑ ‑

GLEESON CJ:   Well, now, just take count 4.  Terry Stewart, I gather, came into possession of four bank cheques for which he paid some bank.  I presume that what happened was that he went into a bank and paid them $29,524 and as a result he got four bank cheques payable to Canyon Bay Pty Ltd, or bearer, to a total value of $29,524.  Now, suppose before he had handed them over to Mr Parsons a third party had come in through his window and taken the bank cheques out of his drawer and made off with them.  Would that be larceny?

MR WENDLER:   Yes, it would.  In fact, Lord Goff confronts that type of situation in his speech, but this was a situation where the appellant was directly obtaining these cheques.  Whether they be bank cheques or bearer cheques, he was directly obtaining them as a result of the fraudulent conduct he had perpetrated on various people.  We get back again to the section ‑ ‑ ‑

GUMMOW J:   But the Goff point, as Justice Gaudron reminds me, is that in the ordinary course the piece of paper goes back into the banking system.

MR WENDLER:   That is right and one of the components of the ‑ ‑ ‑

GUMMOW J:   So, it is not a permanent deprivation?

MR WENDLER:   No, and that is one of the components of the offence and that component must be proved, otherwise there would not be a case to answer.

GLEESON CJ:   But the bank cheque in the case I gave you does not go back to Terry Stewart.

MR WENDLER:   No, but it would go back - in the normal course I would imagine it would go back to the bank that raised it.

GLEESON CJ:   That is right, but the question is whether the thief intended permanently to deprive Terry Stewart of the cheque.

MR WENDLER:   Well, that is right, and whatever is pleaded in the presentment, the appeal proceeded on the basis that he was obtaining these bank cheques either directly on behalf of Canyon Bay Pty Ltd, as their agent, and in each case those cheques were raised ‑ ‑ ‑

GAUDRON J:   Yes, but you lost that before the jury.

MR WENDLER:   I am sorry, your Honour?

GAUDRON J:   You lost that argument before the jury.

HAYNE J:   Well, pleaded guilty.  It never went to it.

MR WENDLER:   It never went to the jury.

GAUDRON J:   Yes, I am sorry.  Well, you lost that argument by pleading guilty.  You cannot go beyond that now.  Your special leave point, as I remember well, was simply the question whether section 88(1) could apply to a cheque.

MR WENDLER:   But, your Honours, the fact that he pleaded guilty is of no consequence.

GAUDRON J:   It must be an admission of at least some facts.

MR WENDLER:   Yes, but in our system of criminal justice the law promises that any person who makes an informed plea of guilty is nevertheless entitled to have that conviction set aside if it can be demonstrated that the facts underpinning the conviction do not support the charge.  I mean, that is calling a spade a spade.  So, the real issue here is the legality of these convictions, having regard to the background circumstances going to underpin the plea.  So, at the end of the day, there was this head-on collision between that relevant portion of Lord Goff’s speech in Preddy - indeed embraced by all other members of the House - which concerned his analysis of a cheque transaction.

GLEESON CJ:   But in relation to cheques other than bank cheques, what Lord Goff said made it impossible to say there was intention of permanently depriving the person in question of the cheque forms was that in the ordinary course they would come back to that person, at least if the person asked for them back.  How can you say the same of bank cheques?

MR WENDLER:   The same analysis applies, in my respectful submission.  It is just that you have the bank raising the chose in action in favour of another bank but, nevertheless, that component of the offence which concerns the permanent deprivation element of it, the cheque form still goes back to the issuing bank, one assumes.

GLEESON CJ:   But it does not go back to the person from whom it is stolen or dishonestly obtained.

MR WENDLER:   No.  In any case, the ‑ ‑ ‑

McHUGH J:   So, your answer to the Chief Justice has to be that you are in a different area of discourse.  What is critical in this case, as I understand your argument, is that it is property belonging to another that must be obtained by deception.

MR WENDLER:   Yes, that is right.  They are words of limitation in section, your Honour, and they cannot be ignored.

McHUGH J:   Yes, that is ‑ ‑ ‑

GLEESON CJ:   Well, who did the bank cheque belong to when they were in Terry Stewart’s drawer?

MR WENDLER:   Well, one assumes, at that stage, it belonged to Terry Stewart.

GLEESON CJ:   That is right.  The reason why in Preddy it was held that you could not analyse this by reference to the cheque forms, as distinct from the chose in action, was that the cheque forms were ultimately going to come back to the person who drew the cheque, but that analysis does not operate in the case of a bank cheque.

MR WENDLER:   In my respectful submission, it still required in the circumstances to have proved and there had to be a factual foundation to make out the charges that it was property belonging to another.  Whether it is Terry Stewart, the bank upon which it was drawn, whatever the situation be, unless there was evidence of that component of the offence, there is a real doubt concerning the integrity of the convictions.

GLEESON CJ:   That is why I was so interested in what the facts were in relation to the details of these cheques, how they were drawn, what was written on them, how they came into the possession of Terry Stewart or Raymond Edwards, as the case may be, and how they then were obtained by Mr Parsons and, as I understand it, unless there is some statement of facts which if it does exist probably glosses over these issues because of the plea of guilty in any event, we are at a bit of a loss.

MR WENDLER:   Well, your Honours ‑ ‑ ‑

GLEESON CJ:   Unless, of course, you can say, and maybe you can and do say, that no kind of cheque, in any circumstances, can be the subject of this offence.

MR WENDLER:   I press that.  That is the submission I press.  I embrace, in short, that portion of Lord Goff’s speech which concerns his analysis of a cheque transaction in circumstances where an offence requires proof that the property belonged to another and they were words of limitation in the section.  They cannot be ignored.  The English Theft Act contains those words of limitation.  Section 15(1) is identical to section 81(1) of the Victorian Crimes Act.  Now, in the Preddy situation there were electronic transfers but some of those electronic transfers involved cheques and that is what moved Lord Goff to consider the situation when cheques were involved or associated with those particular electronic transfers.  That is how it came about.

GLEESON CJ:   Well, are you content to present this appeal upon the basis that you stand or fall on the proposition that I just put to you?

MR WENDLER:   Yes, because that is the way the Court of Appeal ‑ ‑ ‑

GAUDRON J:   Well, are you?  There may well be a separate argument available with respect to non‑bank cheques as well as any general argument that section 88(1) can never apply to cheques.  I do not know the basis of your second argument but - and this would be by reference to reading 81 in the light of other provisions, including 86(2).

MR WENDLER:   The Court of Appeal handled it in a way that sought to raise the, as it were, legal status of a cheque and described it as a valuable security, as being ‑ ‑ ‑

HAYNE J:   When the Court of Appeal dealt with an appeal brought by your client on the material advanced by your client, the sentencing judge no doubt had before him the depositions obtained on committal.  If there is a want of material in the Court of Appeal, I am not sure that it is to be attributed to the feet of the Court.

MR WENDLER:   I am not suggesting that.  That was not the submission.  The focus of the submission was always the application of Lord Goff’s analysis of the cheque transaction to the circumstances before the Court of Appeal and the Court of Appeal sought to distinguish Lord Goff’s treatment in relation to a cheque transaction and sought to distinguish it on the basis, first, that it has always been the practice in the State of Victoria that cheques have been considered to be valuable securities.

GLEESON CJ:   What is worrying me is the possibility that there might be an intermediate situation.  The Court of Appeal said that a cheque is always property susceptible of this offence.  You say as at least one of your arguments that no cheque is ever property susceptible of this kind of an offence.

MR WENDLER:   It is property but it is not property belonging to another.

GLEESON CJ:   Yes, but there may be an intermediate situation, depending on the facts and circumstances.

GAUDRON J:   That is to say, the bank cheque may be in a quite different position.

MR WENDLER:   Yes.  No submission was made before the Court of Appeal in relation to the special position concerning a bank cheque.  The Court of Appeal in its judgment in fact indicated that, so far as there were any bank cheques involved, that they had a higher status, as it were, and were tantamount to cash and what was really happening, he was stealing the cash from the account of the victim by reason of this special status that bank cheques had in this particular matter.  So, the case proceeded on the basis of Lord Goff’s application to the cheque transaction and whether or not that analysis had any relevance in the State of Victoria so far as cheques are concerned for the purpose section 81(1) of the Crimes Act.

McHUGH J:   Well, can I put this to you.  It seems to me to be an answer to your case but it is not an analysis that seems to have been adopted by anyone, so far as I can see, and it is this:  take the case of the ordinary cheque.  I have the cheque and I write it out.  I have possession of the cheque.  You obtain that possession of that cheque from me and that is property under section 71(2).  You permanently deprive me of that possession.  The cheque does not come back to me as a matter of commercial practice.  It eventually goes to the bank upon whom it is drawn and it stays there.  Now, what is the problem there?  You have obtained the cheque from me, my possession of it, by deception, and that is the obtaining of property by deception.

MR WENDLER:   Yes, but the offence is not obtaining property by deception.  The offence is obtaining property belonging to another.

McHUGH J:   Well, the property belongs to me because I have got possession.

MR WENDLER:   The property does not belong to you, with respect, you have created ‑ ‑ ‑

McHUGH J:   Possession is property.  Possession is property for the purpose of this Act.

MR WENDLER:   Yes, but you have created ‑ ‑ ‑

McHUGH J:   It is my possession.

MR WENDLER:   On Lord Goff’s analysis, what has happened on the drawing of the cheque and the delivery of it, you have created a chose in action in favour of the payee, a new property right which previously did not exist.

GLEESON CJ:   Well, there is a time lapse between drawing it and delivering it.  That is part of the facts we do not know, but suppose these cheques sat in somebody’s drawer for a week while he was trying to make up his mind whether he would go ahead with the transaction.

MR WENDLER:   Well, then, there would not be the creation of a chose in action.  The chose in action is crystallised on delivery

McHUGH J:   But the chose in action has nothing to do with it.  You see, you were talking about a chose in action.  I am talking about it as a piece of paper with writing on it and I have the possession of it and you deprive me of it by your deception.  You have obtained the possession of that piece of paper, that property from me, by deception.  You do not have to deprive somebody of something.  Larceny can take place when somebody merely has possession of something.  You can even steal your own property, in one sense, as was held in one of the cases about a pawnbroker.

MR WENDLER:   But the cheque form - its value is - well, let us call it 5 cents, the value of the stamp duty, I suppose.

GLEESON CJ:   Even if it is a bank cheque?

MR WENDLER:   Well, whatever the value is, the cheque form by itself is not the value of what has been ‑ ‑ ‑

GUMMOW J:   No, but what people cannot or will not understand is that when you say a cheque has been converted, you sue in tort for conversion and you sue for conversion of the piece of paper, and by special doctrines the value of it is given special characteristics of the value of the so‑called chose in action.  It is all explained by Lord Diplock in a case called Marfani v Midland Bank (1968) 1WLR 956 at 970 to 971 and that is the position of commercial law and the law of tort. Now, that, if anything, just adds more force to what Justice McHugh is putting to you about the criminal law of treatment of these instruments. The chose in action is a bit of a mirage in all of this.

MR WENDLER:   Well, it is a property right and it is a property right which is specifically identified in the Victorian Crimes Act as being one of the categories of property.

GAUDRON J:   Yes, but let us assume that there is no reason why the piece of paper cannot be property.  There is no reason why as a piece of paper a cheque is not property in the same way as this is my property.  If there is an answer, and I am not suggesting necessarily that there is one, to what is put by Justice McHugh, it has to be within the notion that there is no intention of depriving the person permanently of the cheque, of the piece of paper, because you do not care if they go to the bank and eventually get it back.  That is where if there is an answer it has to be in that area.

MR WENDLER:   Yes, and that is a component, of course, of the offence.

McHUGH J:   Furthering the analysis I put it to you, if you have obtained that piece of paper from me by a cheque by deception, I have an action against you in detinue or trover for the value of it.  You have deprived - and if you tore it up there and then, I still have a cause of action against you.

HAYNE J:   Even if you give the pieces back.

MR WENDLER:   Your Honours, it still comes back to whether or not the appellant - the bottom line - was lawfully convicted of these particular charges.  Now, Lord Goff in his speech handles the issue concerning the return of the piece of paper back to the bank and links that to that component in the offence which requires ‑ ‑ ‑

GUMMOW J:   It is not just the piece of paper, it is the piece of paper with particular endorsements and writing on it and it changes its character as it is stamped and marked with its passage through the system.

GAUDRON J:   So, once the cheque is paid and stamp duty paid, the person who owned the piece of paper can never get back the same thing as that of which he or she was deprived.

MR WENDLER:   The Court of Appeal was saying that ‑ ‑ ‑

GUMMOW J:   It is no longer a cheque, it is dead.  It is spent.

MR WENDLER:   No, quite.  It is a record, as Justice Tadgell in his judgment indicates, a record of a transaction.

GUMMOW J:   That is right.

MR WENDLER:   It still comes back to, at the end of the day, whether it is property which belongs to another and they are words, as I have already indicated, of limitation.  They cannot just be ignored ‑ ‑ ‑

HAYNE J:   And is this property that belongs to no one or is it not property?  What is the effect of these words of limitation to which you point in this case?

MR WENDLER:   It is property in the sense that it is the creation of a chose in action in favour of the payee.  It is property in that sense but it is not property belonging to another in the Lord Goff sense because there has been the creation of a property right which previously did not exist, and that is why it cannot be said that it is property belonging to another.  That was the whole basis of the analysis that Lord Goff applied to a cheque transaction.

GUMMOW J:   Yes, I know you say that, but I just cannot understand it at the moment, that is all.

MR WENDLER:   Well, your Honours, in the outline I have identified, in effect, the three ‑ ‑ ‑ 

GUMMOW J:   No, the amount of damages which one might recover by an action in trover may vary depending upon the condition of the instrument at the time of the act complained of.  Its value may vary, but that is not the point.  When it is a dead cheque at the end, it is worth zilch; it is quite different at the earlier stages.

MR WENDLER:   He was charged, your Honours, pursuant to section 81(1) and it was pleaded in each case that he had obtained cheques from various people, and at the end of the day the Court of Appeal held that what in fact he was doing was stealing the money from the bank accounts of each of the victims, in the sense that he had stolen either the chose in action, a valuable security, or he had stolen the cheque form in that sense.

GAUDRON J:   It does not matter.  If he stole the piece of paper - let us just deal with the piece of paper - and got certain advantages thereby, it is quite appropriate that he should be sentenced on the basis of the advantages he got.  So it does not matter how you characterise it, whether you characterise it as stealing the money in the bank or what have you; all you have to do is find that there is property belonging to another.

MR WENDLER:   Well, that is the central issue in relation to his criminal responsibility.  I mean, how do we characterise this expression in the Victorian Act, “property belonging to another”?

McHUGH J:   But you see the indictment was very simply drawn ‑ ‑ ‑ 

MR WENDLER:   Well, it was simply drawn, but it was ‑ ‑ ‑ 

McHUGH J:   That a cheque for the sum of X number is payable to so‑and‑so with the intention of permanently depriving the said so‑and‑so.

MR WENDLER:   It was accepted, of course, that each of those charges had been raised pursuant to section 81(1) of the Victorian Crimes Act.  The pleadings in relation to each of the charges are concise, as it were, but it was accepted that his criminal responsibility was anchored in section 81(1).

HAYNE J:   If you analyse the matter in terms of choses in action and the creation of rights, in whose favour were the rights created by these cheques?

MR WENDLER:   Well Canyon Bay, the payee - the chose in action is created in favour of Canyon Bay, on delivery.

HAYNE J:   Was that the creature of the appellant?

MR WENDLER:   He was an employee of Canyon Bay at all material times.

McHUGH J:   It was a genuine company and he put the money into their account and then because these cheques were signed without payees and amounts he was able to ‑ ‑ ‑ 

GLEESON CJ:   If you look at the bottom of page 836 of Preddy, you will see the key to Lord Goff’s analysis.  He acknowledges that the cheque form belongs to the drawer, but he says:

there can have been no intention on the part of the payee permanently to deprive the drawer of the cheque form, which would on presentation of the cheque for payment be returned to the drawer via his bank.

MR WENDLER:   Right.

GLEESON CJ:   Now, that may be right in relation to ordinary cheques; I do not understand how it can possibly be right in relation to bank cheques.

McHUGH J:   And it is not right, is it, in terms of banking practice in this country?

GAUDRON J:   You do not talk about it as the cheque form.  What is taken is a cheque form in a particular condition and there is a difference, for example, between a piece of blank paper - that was never an issue - and one with an artistic work on it, and you do not get it back in the same form.  That is the difficulty with your argument, or with the analysis made by Lord Goff.

MR WENDLER:   The issue concerning bank cheques ‑ ‑ ‑ 

GUMMOW J:   Has there been some criticism in England of this analysis in Preddy?

MR WENDLER:   Yes, your Honours will recall that in the judgment of the Court of Appeal there is mention of an academic commentator by the name of Professor Smith who, it appears, is very interested in this area of criminal responsibility involving fraudulent conduct as a result of negotiable instruments using ‑ ‑ ‑ 

GLEESON CJ:   Lord Goff relied on an earlier article by Professor Smith and Professor Smith now claims to have been misunderstood.

MR WENDLER:   Professor Smith has been a bit capricious throughout his commentary, not just over time. In the earlier case of Duru, which is reproduced, I think, at the ‑ ‑ ‑ 

GUMMOW J:   But is there any criticism in any of the banking journals of all this?

MR WENDLER:   No, your Honours, that I can find; in fact there has been no treatment ‑ ‑ ‑ 

GLEESON CJ:   Mr Wendler, coming back to this analysis on the bottom of page 836 by Lord Goff, is it not answered in any event by your plea of guilty, which involved an admission on your client’s part that he had the intention of permanently depriving Terry Stewart of the cheques?

MR WENDLER:   Yes, but the admission is scrutinised in the context of whether the convictions are correct in law.

GLEESON CJ:   But that is a proposition of fact on the bottom of page 836 and the top of page 837; it is perhaps even a fact that needs to be understood in the light of English banking practice.

MR WENDLER:   It still comes back to whether it is property belonging to another, irrespective of that other ‑ ‑ ‑ 

GLEESON CJ:   No, he had already said it is property belonging to another.  Lord Goff says yes, it is true, a cheque form is property belonging to the drawer, but he says there can have been no intention of permanently depriving, which is a proposition of fact, I would have thought, and we have got an admission of fact here.

MR WENDLER:   That is only one component of the offence, of course.  The other component of the offence concerns what the correct analysis is in relation to the cheque transaction.  I mean, it really keeps coming back to those words in section 81(1), “property belonging to another”, and whether or not there was any evidence at all in relation to whether that component of the offence had been made out.

GAUDRON J:   But surely, until the cheques were delivered to the appellant, they were the property of the person who in fact delivered them - in most cases, he or she being the drawer, in other cases he or she being the person who purchased the bank cheque from the bank.

MR WENDLER:   Your Honour, I accept that, yes, but once on delivery, if we accept the Goff analysis and there is this crystallisation creation of new property right ‑ ‑ ‑ 

GAUDRON J:   Yes, well, then the only peg you can hang your argument on is the absence of intention to permanently deprive that person of the piece of paper.

McHUGH J:   And contrary to English banking practice, nobody ever gets a cheque returned here.  The banks keep the cheques for various periods, 7 to 14 years, as they are required to under income tax legislation.

MR WENDLER:   I suppose people who are issued with cheques and they bounce, they get them returned, I suppose.  So there are some cases when cheques are returned.

HAYNE J:   With as much virtue as they had when they were issued.

MR WENDLER:   In fact it is worse than that.

HAYNE J:   Are we getting evidence from the Bar table?

MR WENDLER:   You have to pay $9 now or something and you never get that back either, so you look at the fee certificate and you have got to take off $10 and then the postage and it goes on from there, it does not get any better.  If the Court pleases, I do not think I can pursue it much further.  I rely also on the other material in the outline.

GLEESON CJ:   This may be a question properly to ask Mr Coghlan, but I will ask you, Mr Wendler.  The concept of a valuable security, what is the relevance of that in relation to this argument?

MR WENDLER:   Well, the Court of Appeal, in particular in the judgment of his Honour Justice Tadgell, in effect was saying that a cheque was tantamount to the valuable security.  In that sense he was getting the money from the bank account.  It was tantamount almost to cash, and the submission is that the law has always understood valuable securities as being such things as mortgages, for instance, or a bill of sale where you have got a right over property.  Now, to raise the status of a cheque to that level, to suggest that you have got a right over the money in the bank account, in my respectful submission, is really a very generous way of describing a valuable security, because ‑ ‑ ‑ 

GAUDRON J:   Is there not a definition of “valuable security” in ‑ ‑ ‑ 

MR WENDLER:   Yes, there is and it is reproduced at tab G and it comes under the Victorian Crimes Act; it is within the context of section 86 of the Act and section 86(3) says:

For purposes of this section “deception” has the same meaning as in section 81, and “valuable security” means any document creating, transferring, surrendering or releasing any right -

and so on.

GAUDRON J:   There is no doubt at all that, on the facts alleged in the presentments, the appellant would have come within section 86(2), is there?

MR WENDLER:   I am sorry, I missed the end of that, your Honour.

GAUDRON J:   Well, the facts alleged in the presentment in this case would undoubtedly have brought the appellant within the terms of section 86(2) of the Crimes Act, would it not?

MR WENDLER:   No, I do not agree with that, your Honour.

GAUDRON J:   Perhaps not in the presentment, but the suggestion that he was promising the delivery of paper with no intention that it should ever come.

MR WENDLER:   Section 86 appears to be dealing with, if one looks at section 86(1), security documents.

GAUDRON J:   Well, look at section 86(2) and the definition of “valuable security”.

MR WENDLER:   Yes, in my respectful submission, that section should be read down to encompass documents such as mortgages and other securities of that kind, rather than, as it were, cheques.

GAUDRON J:   Well, perhaps we need not pursue it.

GLEESON CJ:   Well, now, does the concept of “valuable security” have any relevance to section 81?

MR WENDLER:   Well, it does for the purposes of the way the Court of Appeal resolved the matter, because the Court of Appeal in effect described, and continued to describe throughout its judgments, the cheque as being in the nature of valuable security; a right to money in the bank.  It had that type of status, as good as cash.

GLEESON CJ:   And therefore property.

MR WENDLER:   That is right, property in that sense.  He was getting the money in the bank because he was getting a valuable security, and equivalent to cash, I think, was an expression that was used.

GLEESON CJ:   I can understand that in relation to bank cheques.  All right, thank you, Mr Wendler.  Yes, Mr Coghlan.

MR COGHLAN:   If it please the Court, as to the matters that arose originally, there was, as in accordance with the usual practice, a summary before the Court of Appeal of the evidence that had been before the sentencing judge.  It has never been the practice to provide those summaries to this Court in cases involving either conviction or sentence.

GLEESON CJ:   The only problem here is that, because there was a plea of guilty at first instance, some of the facts that could possibly be relevant to the issue that is now raised for consideration do not appear in the record, the most obvious of them being the cheques.

MR WENDLER:   That is so, your Honour.  As I recollect, what happened on the hearing of the appeal is that the cheques were called for and a number of the cheques were produced and I am able to produce to the Court those cheques that were produced to the Court of Appeal.  My friend has been provided with a copy of those.  If I can perhaps have those copied overnight, your Honour; I thought I had more copies than those available.

The summary which had been provided would make it clear that it is only count 4 of the counts with which we are dealing that concern themselves with bank cheques.  The issue raised by the learned Chief Justice in relation to bank cheques seems to confine it to count 4.  It is submitted indeed in relation to that, while mentioning that count, that even on my friend’s argument, a bank cheque in the hands of the person who purchased it from the bank would, at the very least, have to be a chose in action enforceable by him against the bank, at the very least, in much the same way as the analysis of Lord Goff:  once the cheque is passed from the drawer into the hands of the payee, in the hands of the payee is certainly a chose in action.  So, failing all else, when dealing with a bank cheque, it would have gone through the first stage as outlined by Lord Goff, and taken up at least that characterisation.  It is submitted that it is probably more than that, but it is almost certainly a valuable security and when dealing with the bank’s cheque it is virtually money’s worth.

Your Honour the learned Chief Justice had asked the question about valuable security.  In one sense valuable security intruded into the argument because of what Professor Smith had had to say in his article in the Criminal Law Review 1997 at page 396.  He had taken up the question of larceny and those items capable of being stolen and eventually came to do an analysis of how certain items such as cheques might be stolen, and he deals with that in a paragraph at page 397, under the heading, “The law before 1968”.  Towards the bottom of the page, just after the headnote number 9 appears:

At common law, larceny could not be committed of written instruments.  Instruments relating to real estate could not be stolen because they “savoured of the realty”, which, being immovable, could not be stolen; and instruments creating or evidencing things in action were not considered “chattels” because they had no intrinsic value.  Parliament filled this gap in the law by specifically mentioning valuable securities, making, as Russell on Crime put it, “the stealing of choses in action in many instances an offence [not larceny as such] of the degree of felony”.  This rule of the common law is no doubt the reason why it was not sufficient for the statutory offence of obtaining by false pretences to be defined to apply only to “chattels” and money.

And so on.  And, for those purposes, valuable security had not been defined.  It became of importance in the present context because, when at the end of the day Professor Smith was attempting to analyse what the written cheque was before it was handed over to the payee, he opted for calling it a valuable security.

Now, it is submitted on behalf of the respondent, whether it has the name “valuable security” or not, it is simply property; it is, for instance, capable of being stolen.  It is capable of being stolen even as a blank cheque and has some value, at least, at that stage.  A blank cheque would be something capable of being obtained by deception, but it is submitted as a matter in particular of ordinary commercial practice, that the cheque, when it has been written out, no matter what character it takes on in the hands of the payee, is property and because it is property it is capable of being obtained.  That is where the second difficulty raised by Lord Goff came into play.  If it comes back through the banking system, is there an intent to permanently deprive?

But it is submitted it does so on two bases:  either the basis raised by Justice McHugh that the commercial reality is that it does not return to the drawer, in fact, but goes to the bank; or secondly, it has been so stripped of its value that it is simply not the same thing, and it plainly is not the same thing.  It may represent a convenient receipt or evidence of the transaction, but it is not the property that left the drawer at the time he handed it to the payee.

GLEESON CJ:   Well, there is a third element in the present case, that is that there is a formal admission of the intention.

MR COGHLAN:   Yes, your Honour.

GLEESON CJ:   And I do not think it is being argued that that is an intention that, as a matter of law, is impossible to hold in relation to a cheque.

MR COGHLAN:   No, that is so, your Honour.  I suppose the simplest example would be the stealing of a cheque which was not negotiated, but simply taken for some other purpose, but kept.  It can always be the subject of property to be permanently deprived from the drawer of the cheque.  So it is submitted that it is an important consideration that whatever it be that is returned to the bank, whatever it is that the person has the right to receive is something that is absolutely stripped of its former value.

GLEESON CJ:   Mr Coghlan, is that a convenient time?

MR COGHLAN:   That is, your Honour.

GLEESON CJ:   We will adjourn until 10.15 in the morning.

AT 4.17 PM THE MATTER WAS ADJOURNED
UNTIL THURSDAY, 13 AUGUST 1998