Police v James Chesworth
[2024] ACTMC 32
•29 November 2024
MAGISTRATES COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Police v James Chesworth |
Citation: | [2024] ACTMC 32 |
Hearing Date: | 6 November 2024 |
DecisionDate: | 29 November 2024 |
Before: | Special Magistrate Urbas |
Decision: | See [82] – [84] |
Catchwords: | CRIMINAL LAW - Obtaining financial advantage by deception – Forgery – Using a false document |
Legislation Cited: | Criminal Code 2002 (ACT) ss 18, 20, 22, 38, 56, 57, 300, 305, 332, 343, 346, 347 Crimes Act 1900 (ACT) s 375(13) Legislation Act 2001 (ACT) s 161 |
Cases Cited: | Brott v The Queen (1992) 173 CLR 426 Kennison v Daire [1986] HCA 4; (1986) 160 CLR 129 R v Markuleski [2001] NSWCCA 290; (2001) 52 NSWLR 82 Attwood v The Queen [1960] HCA 15; (1960) 102 CLR 353 |
Texts Cited: | Australian Government, Attorney-General’s Department (March 2002), Commonwealth Criminal Code: Guide for Practitioners |
Parties: | Simon Cocks ( Informant) James Chesworth ( Defendant) |
Representation: | Solicitors ACT Director of Public Prosecutions Robert Candelori ( Defendant) |
File Number: | CC 11831 of 2024 CC 11832 of 2024 CC 11833 of 2024 |
SPECIAL MAGISTRATE URBAS
The Defendant appeared before the Court charged with three offences:
a. CC2024/1831: Obtaining financial advantage by deception, contrary to Criminal Code 2002, s 332;
b. CC2024/1832: Forgery, contrary to Criminal Code 2002, s 346;
c. CC2024/1833: Using a false document, Criminal Code 2002, s 347.
Each offence carries a maximum penalty of 10 years’ imprisonment and/or 1000 penalty units, though an election for summary jurisdiction brings the maximum for each offence to imprisonment for 5 years and/or $15,000 fine: Crimes Act 1900, s 375(13).
It is convenient to analyse the offences in temporal order. The Prosecution’s case is that the Defendant first made a false document by affixing his former wife’s electronic signature to a bank withdrawal form, without her consent, thus committing a forgery. Then, secondly, he presented that form to the Australian and New Zealand (ANZ) Bank to withdraw funds from their jointly self-managed superannuation fund, constituting a use of the false document. These offences were allegedly committed on 17 July 2023. Finally, by obtaining and using those funds to pay for a life insurance policy, he obtained financial advantage by deception, allegedly on 21 July 2023.
The Defendant denies that he acted dishonestly and raises a claim of right defence: Criminal Code 2002, s 38. However, there is some doubt as to which offence this defence may apply.
Forgery
At common law, forgery consists in the “making (of) an instrument which purports to be that which it is not" or in making a “document which not only tells a lie, but tells a lie about itself": Brott v The Queen (1992) 173 CLR 426 per Brennan J at [2], Deane J at [3], Toohey and Gaudron JJ at [8] – [12]; McHugh J at [4] – [12]. McHugh J observed at [4]:
In the paradigm case of forgery, the offence consists in signing another person's name, real or fictitious, to an instrument with intent to defraud.
However, it is not forgery to use another’s signature with that person’s consent or authority: Brott v The Queen, Brennan J at [5], citing older authorities.
This approach is reflected in the terms used in Part 3.6 the Criminal Code 2002, where ‘document’ is defined in s 343 to include “anything on which there are figures, marks, numbers, perforations, symbols or anything else that can be responded to by a computer, machine or electronic device” and ‘false document’ is defined in s 344 to include a document purporting:
(a) to have been made in the form in which it is made by a person who did not make it in that form; or
(b) to have been made in the form in which it is made on the authority of a person who did not authorise its making in that form; …
The concept of inducing the acceptance of a document as genuine is elaborated in s 345 to include conduct “causing a computer, machine or electronic device to respond to the document as if it were genuine”; see also Kennison v Daire [1986] HCA 4; (1986) 160 CLR 129.
The elements of the forgery offence charged under Criminal Code 2002, s 346 are as follow:
a. Defendant made a false document (physical element);
b. Defendant intended to make a false document (default fault element);
c. Defendant intended to use the false document to dishonestly induce another person to accept it as genuine and because that other person accepts it as genuine, to dishonestly obtain a gain (specified fault element of ulterior intention).
10. While s 18 of the Criminal Code 2002 defines ‘intention’ in relation to conduct, circumstance and result, the non-Code term ‘ulterior intention’ is used to refer to a fault element which does not correspond to any particular physical element but is stipulated by the statute to apply to the entire offence:[1]
[T]he distinguishing feature of ulterior intentions is the requirement of proof of an intention to achieve an objective which is not a physical element of any offence. The objective, whether or not achieved, is neither a result nor a circumstance specified in any offence and it is quite distinct from the conduct which it accompanies.
[1] Australian Government, Attorney-General’s Department (March 2002), prepared by Ian Leader-Elliott, Commonwealth Criminal Code: Guide for Practitioners, 5.2 Intention, cited by Simpson J in the NSW Court of Criminal Appeal in Ansari v R, Ansari v R [2007] NSWCCA 204 at [65].
11. In this instance, the ulterior intention is both as to dishonestly inducing another person to accept the false document as genuine and as to thereby dishonestly obtaining a gain. The embedded terms ‘dishonest’, ‘gain’ and ‘obtain’ are defined for Chapter 3 of the Code in s 300, which provides a test for dishonesty having regard to the standards of ordinary people. Dishonesty for an offence under that Chapter is a matter for the trier of fact, according to s 301.
Using a false document
12. The offence of using a false document derives from the common law crime of “forge and utter” which can apply to the use of forged bank withdrawal forms to draw funds: Adami v R [1959] HCA 70; (1959) 108 CLR 605.
13. The elements of the offence charged under Criminal Code 2002, s 347 are as follow:
a. Defendant used a document (physical element);
b. Defendant intended to use the document (default fault element);
c. The document was false (physical element);
d. Defendant knew the document was false (specified fault element)
e. Defendant intended to use the false document to dishonestly induce another person to accept it as genuine and because that other person accepts it as genuine, to dishonestly obtain a gain (specified fault element of ulterior intention).
14. Use of a document “involves the idea of actual deployment by the person charged or by his or her agent or a fellow participant”: Sultan v R [2008] NSWCCA 175, per Spigelman CJ at [36].
15. Other provisions of Part 3.6, including the definitions of ‘document’, ‘false document’, ‘gain’ and ‘inducing a person to accept a document as genuine’ also apply to this offence, as well as the definitions in s 300. Dishonesty is a matter for the trier of fact, according to s 301.
Obtaining financial advantage by deception
16. This offence is a statutory form of the crime generically referred to as “fraud”. The elements of the offence charged under Criminal Code 2002, s 332 are as follow:
a. Defendant obtained a financial advantage (physical element);
b. Defendant intended to obtain a financial advantage (default fault element);
c. The financial advantage was obtained from someone else (physical element);
d. Defendant was reckless as to whether the financial advantage was obtained from someone else (default fault element);
e. The financial advantage was obtained by deception (physical element);
f. Defendant was reckless as to whether the financial advantage was obtained by deception (default fault element);
g. The obtaining by deception was dishonest (specified fault element).
17. This offence occurs in Part 3.3, for which ‘deception’ is defined in s 325 as including an intentional or reckless deception, whether by words or conduct, including conduct “causing a computer, machine or electronic device to respond to the document as if it were genuine”.
18. Despite ‘financial advantage’ being defined for other parts of the Code including its Dictionary, there is no definition of the term specifically for Part 3.3 and thus for the s 332 offence.
19. In Taylor v The Queen [2019] VSCA 162; (2019) 59 VR 163, the words of Miles CJ in Fisher v Bennett [1987] ACTSC 27; (1987) 85 FLR 469 at [14] were cited with approval:
I do not think that it is necessary to resort to dictionary definitions of the word ‘financial’ or the word ‘advantage’. I think that it is inescapable that an advantage involves a particular situation which is more beneficial to the person concerned than another relevant situation with which it is compared. A financial advantage involves a situation which from the financial aspect is more beneficial than another situation. When one speaks of obtaining a financial advantage by deception, there is imported in my view the notion of improving a financial situation by means of that deception.
20. In that case, Miles CJ was unable to conclude that any financial benefit had accrued to the appellant who had given a valueless cheque to a creditor seeking payment of a debt, observing that as the debt remained he was “unable to see how the retention of the continuing benefit on the facts of the case constitutes a financial advantage in any proper sense of that term” (at [15]).
21. As to deception, apart from the s 325 elaboration, the essence of the term’s meaning is inducing someone else “to believe that a thing is true which is false, and which the person practising that deceit knows or believes to be false”: R v Oettinger [2014] ACTSC 47, per Murrell CJ at [70] citing Re London and Globe Finance Corporation Ltd (1903) 1 Ch 728 at 732, Buckley J.
22. The fault elements of intention and recklessness are as defined in Criminal Code 2002, ss 18 and 20, with s 22 providing the default where a fault element is not provided for a physical element. Intending to obtain a result, such a financial advantage, means being aware that the result will happen in the ordinary course of events: s 18(2). Recklessness as to circumstance or result entails a person’s awareness of a substantial risk that the circumstance or result will exist and, in the circumstances known to the person, unjustifiability of taking the risk: s 20(1) and (2).
Dishonesty
23. The test for dishonesty is in two parts, following the analysis in R v Ghosh [1982] QB 1053, with the definition in Criminal Code 2002, s 300 being as follows:
"dishonest" means—
(a) dishonest according to the standards of ordinary people; and
(b) known by the defendant to be dishonest according to the standards of ordinary people.
24. In Peters v R [1998] HCA 7; (1998) 192 CLR 493, a case involving charges of conspiracy to defraud the Commonwealth, Toohey and Gaudron JJ stated at [18] (note omitted):
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. Necessarily, the test to be applied in deciding whether the act done is properly characterised as dishonest will differ depending on whether the question is whether it was dishonest according to ordinary notions or dishonest in some special sense. If the question is whether the act was dishonest according to ordinary notions, it is sufficient that the jury be instructed that that is to be decided by the standards of ordinary, decent people. However, if "dishonest" is used in some special sense in legislation creating an offence, it will ordinarily be necessary for the jury to be told what is or, perhaps, more usually, what is not meant by that word. Certainly, it will be necessary for the jury to be instructed as to that special meaning if there is an issue whether the act in question is properly characterised as dishonest.
25. In that case, a majority held that the particular offence charged entailed dishonesty relating to both the means agreed upon to effect the fraud against the Commonwealth and also the aim of bringing about a situation prejudicing the legal rights or interests of others. If this was explained to a jury, then a further general direction about dishonesty would be “superfluous” (per Toohey and Gaudron JJ at [33]) but as the trial judge had given such a direction in terms that were unduly favourable to the appellant, there was no miscarriage of justice (per Toohey and Gaudron JJ at [35] and per McHugh J at [91]) and the appeal was dismissed.
26. In R v Baxter and Brading [2012] ACTSC 82, Penfold J at [92] carefully distinguished dishonesty under the Criminal Code 2002 from other bases on which the community might disapprove of an action taken, in that case forcible entry to recover property asserted to belong to the accused:
Defining the outer limits of the concept of “dishonesty” is difficult, and it is a question on which “ordinary people” could in my view reasonably differ. The concept has an important role in the definition of various offences, and there are real dangers in blurring the boundaries intended to be created by the use of such specific concepts – as already noted, “dishonesty” is not merely a synonym for “unacceptable” or “criminal”. It is not enough that a court concludes (as I have in this case) that a person has engaged in conduct that ordinary people would find unacceptable. Such a conclusion does not oblige, or enable, the court to give an unnatural or extended meaning to a concept such as “dishonesty” in order to permit a finding that the unacceptable conduct constitutes the offence that happens to have been charged in the particular case. Conduct that is unacceptable not because it is dishonest in the normal sense of the word but because it involves other objectionable elements (for instance, a reliance on threats or implied threats) is the subject of other prohibitions …
27. Her Honour was unable to be satisfied that there was the required dishonesty (at [95]).
Claim of right
28. The common law defence of claim of right may extend to offences such as forging and uttering: Walden v Hensler [1987] HCA 54; (1987) 163 CLR 561 per Gaudron J at [6] citing R v Hobart Magalu (1974) PNGLR 188; or to robbery: R v Fuge [2001] NSWCCA 208; (2001) A Crim R 310. However, the statutory formulation in Criminal Code 2002, s 38 is narrower due to the restriction in subsection (1) that it apples to “an offence that has a physical element relating to property”. The subsection then provides that a person is not criminally responsible for such an offence if:
(a) when carrying out the conduct required for the offence, the person is under a mistaken belief about a proprietary or possessory right; and
(b) the existence of the right would negate a fault element for any physical element of the offence.
29. This form of the claim of right defence is thus a subspecies of the mistake defence, restricted to mistake as to a proprietary or possessory right, where the hypothetical existence of the right would negate a fault element, typically a fault element of dishonesty, for a physical element.
30. Subsection (2) then goes on to provide a complementary claim of right defence “for any other offence arising necessarily out of the exercise of a proprietary or possessory right that the person mistakenly believes to exist”. This has been described as “a true claim of right defence, which goes beyond mere negation of fault elements, in offences which involve neither force nor violation of property rights”.[2] However, its scope is restricted by the requirement that the offence alleged has been one “arising necessarily out of the exercise of [the right]” which will not excuse acts of dishonesty chosen under the pretext of vindicating one’s rights: “Deception is a tactic one may choose in pursuit of one’s rights; however it is no way necessary to their exercise.”[3]
[2] Australian Government, Attorney-General’s Department (March 2002), prepared by Ian Leader-Elliott, Commonwealth Criminal Code: Guide for Practitioners, 9.5 Claim of right.
[3] Op cit. 9.5D, Claim of right provides a defence of indeterminate scope to offences which do not involve property or the use of force against a person.
31. Property is defined somewhat unhelpfully in the Dictionary to the Code as including electricity, gas, water, wild animals and body organs, but there is a signpost reference also to the definition in the Dictionary to the Legislation Act 2001, which provides:
property means any legal or equitable estate or interest (whether present or future, vested or contingent, or tangible or intangible) in real or personal property of any description (including money), and includes a thing in action.
Note A thing in action is an intangible personal property right recognised and protected by the law. Examples include debts, money held in a bank, shares, rights under a trust, copyright and right to sue for breach of contract.
32. As conceded by the Defendant’s legal representative during the hearing, it is difficult to see how either the forgery offence or the use of false document offence has a physical element relating to property, and therefore the s 38(1) claim of right defence is not available for those two offences: DPP v Booth [2018] ACTCA 8 at [53] – [61], citing Walden v Hensler [1987] HCA 54; (1987) 163 CLR 561; see also Macleod v The Queen [2003] HCA 24; (2003) 214 CLR 230, at [39] – [49]. However, the s 38(2) variant may be available, and will need to be considered.
33. By contrast, the obtaining of a financial advantage offence does present as having a physical element relating to property, particularly in a case such as the present where it is alleged that the Defendant obtained access to funds in a superannuation account through deception. The s 38(1) form of the claim of right defence may then need to be considered for this offence, particularly to the extent that any mistake as to proprietary or possessory right might negate dishonesty.
34. Because this defence is found in Criminal Code 2002, Part 2.3 (Circumstances in which there is no criminal responsibility), the Defendant has an evidential burden in relation to the matter, which is the burden of presenting or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist, per s 58(2) and (7). The Prosecution then has the legal burden of disproving the defence, to the standard of beyond reasonable doubt, per s 56(2), s 57(1).
35. Where an evidential burden is discharged in relation to a claim of right, the Prosecution must then prove beyond reasonable doubt that there was no genuine belief that, if true, would negate liability for the offence charged: Roberts v Western Australia [2005] WASCA 37; (2005) 29 WAR 445 per Templeman J at [32]. In the terms used by the Criminal Code 2002, s 38(1), this translates as proving beyond reasonable doubt that either the Defendant had no mistaken belief about a proprietary or possessory right or that the existence of such a right would not negate a fault element for any physical element of the offence, in particular, dishonesty.
36. The above case illustrates a further interesting aspect of claim of right in relation to forgery. Noting that the offence under the Western Australian Criminal Code has as its first element the intent to defraud, coupled with either forging or uttering, Templeman J observed at [28]:
It follows that a person accused of forging who had no intention to defraud, could not be guilty of that offence. It would therefore be otiose to raise the defence of honest claim of right to the property acquired by the accused person. However, if the evidence disclosed that the accused might have had an honest belief in his or her entitlement to the relevant property, it would be necessary for the jury to consider whether the prosecution had satisfied it beyond reasonable doubt that the accused had any intention to defraud.
37. The position under the Criminal Code 2002 is similar. If the evidence does not establish to the criminal standard that the Defendant intended to use a false document to dishonestly induce another person to accept it as genuine and because that other person accepts it as genuine, to dishonestly obtain a gain, then neither the forgery offence in s 346 or the use offence in s 347 can be made out, notwithstanding that a claim of right argument may also be raised. This will remain the case even if the s 38(2) defence is available although the s 38(1) defence is not.
38. If, on the other hand, the evidence does establish the statutory fault element, then s 38(2) at least falls to be considered.
Evidence
39. The Defendant’s former wife gave evidence. Although identified by her married name in the documents tendered, she had a different surname at the time of giving her evidence during the proceedings, and it is in my view appropriate and not disrespectful to refer to her simply as the Complainant, particularly given that it is her electronic signature that, on the Prosecution’s case, was used without her consent by her former husband to withdraw funds from a self-managed superannuation fund (SMSF) and thereby to dishonestly obtain a financial advantage from her.
40. The Complainant said that she and the Defendant had been married in 2011, had thereafter shared finances including a number of bank accounts, and that she had been the primary income earner for most of the time until their separation in 2022, while he had been mainly in charge of managing their finances including the SMSF, of which both were trustees and beneficiaries. She said she had not really been aware whether the two of them had individual accounts within the fund but knew that her employment superannuation was paid into the fund, mainly related to her employment in the public service. A joint ANZ account was used for SMSF transactions.
41. When the relationship broke down in mid-2022, she began to remove the Defendant from her cards as a secondary card holder, and placed restrictions on how any funds could be accessed. Over the next year, and by mid-2023, she controlled her own salary in a sole account and was responsible for her own spending. The restrictions were also put in place for the ANZ account.
42. On 17 May 2023, the couple had divorced and signed Family Court of Australia consent orders dealing with the division of assets and property, including winding up the SMSF and restraining them both from dealing with the funds therein other than to give effect to the consent orders (Exhibit 1a: Sealed copy of consent orders; Exhibit 1b: signed copy of consent orders).
43. In August 2022, an interim Family Violence Order (FVO) was obtained by the Complainant, a condition of which was to prohibit contact between them except through their lawyers. After this time, the Complainant said that she was no longer putting funds into the SMSF and had reverted to using her employer super fund. However, each continued to have access as co-trustees.
44. The Complainant said that she accessed the ANZ account through an application on her mobile phone, allowing her to see any transactions. The funds in this account came from her super as well as some shares. She gave evidence of having imposed restrictions on this account, requiring that the bank obtained both her and the Defendant’s signature on any withdrawal request as well as confirm the instructions through phone calls to both. Her evidence was that the bank followed the signature requirement but not, or not always, the phone confirmation backup. This arrangement lasted from September 2022 into mid-2023, the time of the alleged offences.
45. She described the process as follows in an email chain sent to the Informant (Exhibit 2):
I fill out the withdrawal form and send to my family lawyer who then passes onto James’ lawyer to complete and progress to ANZ to process (including a phone call to both parties to confirm the withdrawal is mutually agreed prior to processing the form).
46. This email chain also includes an example of her communications with the bank dated 1 February 2023 confirming her agreement as one of the trustees of the SMSF to lift the restriction on the ANZ account to allow payment to be made for a compliance fee, after which payment she instructed that the restriction was to be reinstated. An earlier email chain documents similar instructions being given by her to the bank to allow payment of an ATO instalment amount on 20 October 2022, again with the instruction to reinstate the restriction after payment (Exhibit 3).
47. The Complainant said that there were annually renewed life insurance policies covering herself and the Defendant with premiums directly debited from the ANZ account linked to the SMSF, but that after the withdrawal restriction was imposed, she was not expecting any such payment to be made in 2023 as she had contacted the insurer to say that she did not wish her policy to be renewed and had been told that it would simply lapse on non-payment, and assumed that this would apply also to the Defendant’s life insurance policy.
48. On 22 July 2023, she noticed an unauthorised transaction on her ANZ mobile phone application dated 21 July 2022 with a description WDL OTHER NOMINATED A/C [series of numbers] LIFE INSURANCE REIMBURSEMEN (sic) in the sum of -$5,243.37. A screenshot was tendered (Exhibit 4). She immediately alerted the ANZ bank. She said that she recognised the numbers in the description as being those of the Defendant’s Westpac account.
49. As this occurred on a Saturday, she was only able to leave a recorded phone message with the ANZ bank customer support line but sent an email and followed up with a phone call on the following Monday. The email was tendered with a date of 23 July 2023 at 12:22 AM AEST stating that there had been a withdrawal from her account and paid to the Defendant’s account, which she had not approved as part of the restriction arrangements requiring two signatures for any withdrawal (Exhibit 5). When she was able to speak to ANZ bank staff, they advised that they had received a completed and signed withdrawal form, which bore both her and the Defendant’s signatures, but she was insistent that she had not signed the form or put her electronic signature on it. A copy of the withdrawal form, which is dated 17 July 2023, was tendered (Exhibit 6).
50. This document instructs the ANZ bank to debit the “ATF Chesworth Superfund” with BSB and account number provided, and to credit a different account with a different BSB with $5243.37 with a reference stating “Life Insurance Reimbursemant” (sic). Signatures of the Defendant and the Complainant appear underneath their respective names, hers with a faint line underneath what appears to be a hand-written signature. Both signatures bear the date of 17 July 2023.
51. The Complainant said that she had not spoken to the Defendant or his lawyers on 17 July 2023, had not signed the withdrawal document at all, had never seen it before being sent it by the bank, and that the Defendant had never sent it to her, signed or unsigned. She stated that she never gave the Defendant permission to use her electronic signature.
52. In cross-examination, the Complainant maintained that she never gave the Defendant authority to use her electronic signature on documents, including those related to the SMSF even prior to their separation. She agreed that it had been her unilateral decision to discontinue her life insurance policy and had not consulted him as a co-director of the SMSF. She resisted the suggestion that there were two separate accounts within the fund corresponding to each of them as members of the SMSF, saying that she assumed it was one joint pool of funds. She said that when she imposed the restriction requiring both signatures it was because she was afraid that he would take her money, and that she had contributed far more to the fund than he had. She did accept that she was the sole beneficiary of the Defendant’s life insurance policy. In re-examination, the Complainant confirmed that she understood the SMSF be one account.
53. A forensic document examiner gave evidence. Dr Tracey Kajer stated that she had compared the signature of the Complainant on the ANZ withdrawal form with her signatures on several other documents, most notably the Family Court consent orders that had been signed by both parties. The finding was that there was a complete match between the signatures on the withdrawal and consent forms, using an overlay process described in the expert’s report which was tendered, with the faint line under the Complainant’s signature on the withdrawal form explicable as the result of a “copy and paste” effort or as an artefact introduced during the copying (Exhibit 7).
54. The Informant, Constable Simon Cocks, gave evidence. He said that he met with the Complainant after she contacted ACT Policing and that he requested documents from ANZ with her authority and obtained a transaction report for the withdrawal of $5,243.37 on 21 July 2023 (Exhibit 8). On September 2024, a search warrant was executed at the Defendant’s then temporary residence at the Adobe Hotel, where he provided police with his ACT licence, his mobile phone and laptop computer and told them the passwords for these devices. Excerpts of the body-worn camera (BWC) footage taken by the officer during this interaction were played and tendered (Exhibit 9), in which the Defendant stated that his ex-wife had been sent and signed the withdrawal, he had permission to withdraw funds, and was not aware of any relevant document being on his laptop. The Informant then gave evidence and was cross-examined as to the further inquiries conducted.
55. The Defendant gave evidence. He confirmed that he and the Complainant had married in 2011, had set up the SMSF in 2012 and that he mainly managed the finances, which included paying bills, investment strategy and purchasing shares. Any SMSF documents needed to be executed by both parties. He said that at times she signed documents, but at other times she provided him with her electronic signature, which he then applied with her knowledge over an 11-year period.
56. From August 2022, following the relationship breakdown, he was excluded from their jointly owned home and was left without income as he had run his business from that property. From that time until July 2023, he lived in his car or was in hospital with severe depressive illness. He confirmed that consent orders were signed in May 2023 after mediation, and that the couple had life insurance policies through the SMSF which were paid annually by direct debit, his being more expensive due to his medical issues, but the Complainant being the beneficiary of his policy in the event of his death. He was declined disability cover by the insurer, with a higher premium imposed on the death cover. He said that he was not aware of the restrictions imposed by her on the ANZ account until notified by their accountant and was not aware of any process resulting in the cancellation of direct debits. He was not receiving correspondence as he was living in his car.
57. The Defendant was shown a document which he recognised as a OnePath life insurance policy renewal notice stating that his life cover of $1,575,000 would be renewed with an automatic deduction from his nominated account of the annual premium of $5,243.37 on 30 April 2023 (Exhibit D1). The final page details a 200% medical loading, which the Defendant explained effectively doubled his premium compared to his wife’s similar life insurance policy. He said that he did not receive this renewal notice as he had no access to his mail at that time. In any case, there had been no discussion with the Complainant about cancelling either life insurance policy and he assumed the renewal would occur as in the past, being “business as usual” for the SMSF.
58. After the mediation, he learned that his life insurance policy had not been renewed and phoned OnePath to be told that the direct debit had been cancelled. He explained that on the same day, being 25 May 2023, he paid for the policy with his Mastercard, on the assurance by OnePath that although the policy had lapsed it would be reinstated on payment of the overdue premium to the policy underwriter, Zurich Australia Ltd. A Mastercard statement for May/June 2023 in his name shows a payment made on that date of $5,243.37 with his credit limit exceeded by the end of the statement period (Exhibit D2). The Defendant explained that he was concerned he would be uninsurable if the policy lapsed due to his ill health, and he had no income and was living on his credit cards. He said that he asked his lawyers to contact the Complainant to ask why the renewal through the direct debit facility had been cancelled, but received no reply. It was around this time that he was residing at the Adobe Hotel, when the police came to speak to him.
59. Asked about the disbursement from the SMSF on 21 July 2023, he said in his evidence that he created the ANZ account withdrawal request for $5,243.37 by typing in the BSB and account details, crediting his Westpac account, stating the purpose of the payment was for life insurance reimbursement, and he printed and signed a hard copy of the document. He then attempted to get the Complainant’s signature by making a request through his lawyers, but there was no reply, and in his difficult circumstances with his credit cards “maxed out”, he applied her electronic signature as he had done in the past on SMSF documentation as “business as usual”. He said that he did not recall where he obtained the signature, but accepted that it could have been from the consent orders as the forensic document examiner had concluded.
60. After she filed a complaint about the withdrawal and through her lawyers demanded it be repaid, he said he agreed to do so from the proceeds of a house sale, which occurred later.
61. An email trail from the SMSF auditors states that in order to avoid additional compliance costs there had to be clear documentation showing how the $5,243.37 payment was an SMSF expense and this was provided (Exhibit D3).
62. The Defendant said in his evidence that although there was only one ANZ bank account connected to the SMSF, within the fund itself there were separate accumulation accounts for himself and the Complainant reflecting their respective contributions. Taken to the most recent financial statements for the SMSF prepared by Halletts Financial Services Group Pty Ltd, the Defendant identified a member statement in his name, showing an accumulation account and a closing balance at 30 June 2024 of slightly over $21,000. The next page has a member statement for the Complainant with a closing balance at 30 June 2024 of over $334,000 (Exhibit D4).
63. Similar statements for the previous financial year were also provided (Exhibit D5). The Defendant explained that the large difference in the amounts in the two accumulation funds was due in part to his medical expenses and ATO approved withdrawals from his separate fund. Significantly, he pointed to an insurance premium payment of $6,977.40 in his statement for 2023-2024 while there was no such payment showing from the Complainant’s statement. He said this was because she had discontinued her life insurance policy while he had renewed his, and also explained that there was no such payment recorded for 2022-2023 as he had paid that premium using personal funds. He said that he had since been repaid the $5,243.37 disbursement he had made in July 2023 from the proceeds of the house sale. He produced a screenshot from his phone showing a direct credit of $5,243.37 paid by Bedfords Legal Chesworth into the ANZ account on 4 September 2023 (Exhibit D6).
64. Finally, he was asked about what he told the police during the search warrant execution, and said that he had been woken up and was hazy, but admitted that he had not been completely honest in claiming that the Complainant had in fact signed the ANZ withdrawal form.
65. In his cross-examination, the Defendant was pressed on his evasive answers to the police about what documents would be on his laptop and accepted that he had not been as correct as the police would have liked. He repeated that he had just woken up and thought that they were referring to paper documents rather than ones that might be stored electronically. As to his dealings with the SMSF he maintained that he had a fiduciary duty under the law to continue to operate the fund as a trustee, including still having permission to use her signature as in the past. He maintained that he had tried to contact the Complainant several times through his lawyers but without reply, in order to have the restriction lifted so that he could pay for his life insurance. However, he did agree that he had not sought her permission to apply her electronic signature.
66. After initially denying it, he then accepted that he had been aware of the restrictions on the ANZ account from late 2022 or early 2023. He agreed that he took the funds out of this account some two months after he had paid for his insurance personally as reimbursement, a deliberate choice. He did not accept that the funds in the SMSF were pooled despite some documentation suggesting this, as the two members still had separate accumulation funds which were attributed specifically in the accounting and auditing documents. He did not accept that he was not allowed to take funds out to pay for his life insurance and said that he later agreed to repay the amount “for ease” and was then shown an email between the lawyers stating that he agreed to make that repayment from the sale of a house. This was tendered by the Prosecutor (Exhibit 10).
67. The Defendant acknowledged that he had created the withdrawal document on which he had put the Complainant’s electronic signature, but maintained that he did not believe he needed her consent for that transaction. He denied that he had obtained a financial advantage as the funds were owed to him as a reimbursement: “It’s not a financial advantage if a debt is owed to me. It’s an equal, balanced transaction” (Transcript p.145). He disagreed that he had been dishonest.
68. In re-examination, he authenticated an email trail with his lawyers on 13 June 2024 in which he had responded to a claim by the Complainant that the SMSF insurance policies had lapsed with information that his insurance policy “had not lapsed and was paid for via credit card (and due to be refunded by the Superfund)” and asked that she be advised of this event (Exhibit D7). Further audit documents were also tendered (Exhibits D8 and D9). This closed the Defence case.
Consideration
69. I must give myself the following directions in considering the evidence in this proceeding:
a. The Prosecution bears the onus of proof in relation to each element of an offence and the standard of proof is beyond reasonable doubt, and if there is any reasonable doubt about an element of an offence there must be a verdict of not guilty for that offence: Criminal Code 2002, ss 56, 57; Woolmington v DPP [1935] AC 462;
b. As finder of fact in this proceeding, I also observe: R v Mulcahy [2010] ACTSC 98:
i.I must bring an open and unbiased mind to the evidence; I must view that material coldly, clinically and dispassionately, and I must not let emotion enter into the decision-making process, because both the Prosecution and the Defendant are entitled to a verdict free of partiality, prejudice, favour or ill will.
ii.I must determine whether each of the witnesses is an honest and reliable witness; and whether the witness has an accurate memory of the event about which the witness has given evidence.
iii.I must determine the relevant facts according to the evidentiary material, considered logically and rationally, without acting capriciously or irrationally.
iv.I may use common sense, my individual experience and wisdom, in doing so.
v.I am not required by any rule of law, logic or common sense to accept a witness wholly or to reject a witness wholly; I can accept everything that a witness has said if I consider all of it worthy of acceptance, or I can reject everything that a witness has said if I consider none of it worthy of acceptance, or I can accept that part of what a witness said that I consider worthy of acceptance and reject the rest of what that witness said as I consider it unworthy of acceptance.
c. As to the Defendant having given sworn evidence, I note that he was not required to do so, but by giving evidence he becomes a witness whose evidence is not any better or any worse than the evidence of other witnesses in his trial simply because he is the Defendant, and his evidence falls to be considered in the same way as the evidence of the other witnesses in his trial falls to be considered; and by giving evidence he did not assume any burden or obligation to prove anything in his trial.
d. If I accept the Defendant’s evidence, or find it to be possibly true, I must find him not guilty; but even if I reject the Defendant’s evidence or version of events, I must put it to one side and assess whether the Prosecution’s evidence establishes guilt beyond reasonable doubt: Liberato v R (1985) 159 CLR 507; Da Silva v R (2019) 268 CLR 57; Finau v The Queen [2021] ACTCA 17.
e. The Defence also suggested a direction as there are three charges, so that non-acceptance of the Complainant’s evidence on one charge might be taken into account in relation to other charges: R v Markuleski [2001] NSWCCA 290; (2001) 52 NSWLR 82.
70. I found the Complainant’s evidence to be generally honest and credible and not much embellished though she was understandably unimpressed by the discovery that her ex-husband had used her digital signature without her permission and withdrawn a sum of $5,243.37 from their joint SMSF to reimburse his payment of a life insurance policy that she wanted nothing to do with following the separation. However, her knowledge of the operation of the SMSF and the possibility that the two had separate accumulation funds within it was minimal, and she at one point said that she now knows that this is how the funds were attributed (Transcript p.61).
71. I also found the Defendant’s evidence to be generally credible, though there was evasiveness in his answers to the police that were recorded on the Informant’s BWC, and his evidence in Court was more forthcoming in some respects. In particular, he acknowledged that he had created the withdrawal document including adding the Complainant’s electronic signature (Transcript p.144). He also accepted that he sent the form to the bank for the purpose of obtaining what he believed was a reimbursement owed to him but disputed that this was a financial advantage as a debt was owed to him, describing it as “an equal, balanced transaction” (p.145). He did not agree that he acted dishonestly in doing so (p.147).
72. As a person coming before the Court without a criminal history, the Defendant is entitled to have his good character considered as a factor in assessing whether he committed any offences: Attwood v The Queen [1960] HCA 15; (1960) 102 CLR 353. However, it is also to be remembered that people do commit crimes for the first time, including financial crimes.
73. For completeness, I add that the evidence of the forensic document examiner and the police officer was credible and professionally presented, though as the origins of the Complainant’s electronic signature on the withdrawal form were no longer in dispute by the end of the case, the expert opinion will not have as much importance in my consideration as it might otherwise. Arguably, some expert opinion on the financial details of the SMSF would have been helpful.
74. I turn now to whether the elements of each offence have been established as required.
75. I begin with CC2024/1831: Obtaining financial advantage by deception, contrary to Criminal Code 2002, s 332;
a. Defendant obtained a financial advantage (physical element);
i.When pressed in her closing address on what the financial advantage was that the Defendant had obtained, the Prosecutor characterised this as “he was reimbursed that sum of money which he otherwise would not have been entitled to be reimbursed until the winding up of the fund” (Transcript p.165);
ii.Similarly to Miles CJ in Fisher v Bennett [1987] ACTSC 27; (1987) 85 FLR 469 at [15], I have difficulty in understanding how the Defendant’s payment of the sum of $5,243.37 from his own funds in the SMSF to his Westpac account “constitutes a financial advantage in any proper sense of that term”;
iii.The Prosecutor suggested that the SMSF funds were jointly owned property, but the charge under consideration is not one of appropriating property, as in a theft, where Criminal Code 2002, s 305(1) might apply to joint owners;
iv.Rather, accepting at least as a reasonable possibility that the Defendant’s view of the SMSF allocations was correct, and it was not contradicted by any expert or ultimately even by the Complainant, and was indeed somewhat supported by the documentary evidence (Exhibits D1 – D5), all he did was to transfer an amount of $5,243.37 from his own funds in the SMSF to his Westpac account;
v.Applying my common sense and using the somewhat vernacular, when he chose to renew his life insurance policy he was “out of pocket” by that amount, which was then a credit card debt, but when he reimbursed himself he was neither the richer nor the poorer for it, he gained no financial advantage by doing so and was still “out of pocket” by that exact same amount, a situation he described in his evidence as an “equal, balanced transaction”;
vi.That he did so using undoubtedly deceptive and dishonest means, which I return to below, and in contravention of a restriction on the account associated with the SMSF, does not convert this into a financial advantage as none occurred.
b. Defendant intended to obtain a financial advantage (default fault element);
i.Taking the Defendant’s explanation of his motivations as at least reasonably possibly true, he was not intending to obtain a financial advantage through his actions, as opposed to no doubt obviating some future financial problem on account of having “maxed out” his credit cards and needing to pay them down;
ii.He intended to move money from one account into another, and intended to do so by using deceptive and dishonest means, but not intending to obtain financial advantage thereby.
c. The financial advantage was obtained from someone else (physical element);
i.The Prosecutor suggested that the someone else could be a corporation, such as the bank itself or the SMSF: Legislation Act 2001, s161;
ii.However, that will not assist as the charge particularises the financial advantage as having been obtained from the Complainant, not from anyone else;
iii.It was uncontested, and was supported by the documentary evidence, that the Defendant had more than $5,243.37 in the SMSF, so no loss to her is evident;
iv.That the SMSF also contained funds attributable to her as the holder of an individual accumulation account does not mean that the funds were in any legal sense joint property, and again, the charge is dishonestly obtaining financial advantage from another rather than appropriating another’s property;
v.Prosecution cases submitted in closing included one dealing with a constructive trust, but no such argument was developed: West v Mead [2003] NSWSC 161;
vi.I do not accept it as having been proved that there was any financial advantage obtained from the Complainant.
d. Defendant was reckless as to whether the financial advantage was obtained from someone else (default fault element);
i.It is not established that the Defendant was subjectively aware of a substantial risk that a financial advantage would be obtained from someone else, and that it was unjustifiable in the circumstances known to him to take that risk.
e. The financial advantage was obtained by deception (physical element);
i.I do accept that there was a deception used, by creating the withdrawal form with a false signature and presenting it to the bank as having been signed by both parties, but as there was no financial advantage obtained thereby, it cannot be accepted that any financial advantage was obtained by deception.
f. Defendant was reckless as to whether the financial advantage was obtained by deception (default fault element);
i.Although the deception was, on the evidence, intentionally engaged in, it is not established that the Defendant was subjectively aware of a substantial risk that a financial advantage would be obtained by that deception, and that it was unjustifiable in the circumstances known to him to take that risk.
ii.Unjustifiability of using the deceptive means does not equate to unjustifiability of taking the risk that these means would result in a financial advantage.
g. The obtaining of financial advantage by deception was dishonest (specified fault element).
i.The use of deception to facilitate the transaction would, in my assessment, be regarded by ordinary members of the community as dishonest according to their standards, and this was likely known to the Defendant as a financially literate member of the community, but that is not the test to be applied;
ii.Rather, the adverb ‘dishonestly’ in the offence qualifies the obtaining by deception from another person of a financial advantage, and as none was obtained in this case, this qualifier has no proper subject of operation on the facts. I am unable to conclude that there was a dishonest obtaining of a financial advantage.
76. As the elements of this offence have not been established beyond reasonable doubt, I must dismiss the charge.
77. There is no need to consider the claim of right defence in relation to this offence.
78. The next offence is CC2024/1832: Forgery, contrary to Criminal Code 2002, s 346;
a. Defendant made a false document (physical element);
i.The ANZ withdrawal form created by the Defendant, on his own evidence, is a false document in the sense that it bears the signature of a person who did not sign it and who did not consent to its being placed on the document;
ii.It is a false document according to the statutory definition: s 344(1)(a), (b);
iii.It is a “document which not only tells a lie, but tells a lie about itself": Brott v The Queen (1992) 173 CLR 426.
b. Defendant intended to make a false document (default fault element);
i.The evidence of the Defendant establishes that he intentionally made this false document, by downloading and signing it, and then applying the Complainant’s signature to it;
c. Defendant intended to use the false document to dishonestly induce another person to accept it as genuine and because that other person accepts it as genuine, to dishonestly obtain a gain (specified fault element of ulterior intention).
i.This element of ulterior intention comprises two distinct dishonest intentions, the first being to dishonestly induce another person to accept it as genuine;
ii.The Defendant, on his evidence, used and intended to use the false document to draw funds from the SMSF by presenting it to the ANZ bank;
iii.The bank is undoubtedly a legal ‘person’ for the purposes of this offence, and even if the withdrawal was processed to any extent by automated means, inducing a person includes ‘causing a computer, machine or electronic device to respond to the document as if it were genuine’: s 345;
iv.The bank would only process the withdrawal if it accepted the document as genuine, that is, as having been signed by both the Defendant and Complainant;
v.Deception means inducing someone else “to believe that a thing is true which is false, and which the person practising that deceit knows or believes to be false”: R v Oettinger [2014] ACTSC 47.
vi.By engaging in this deception, on my assessment, he intended to dishonestly induce another person to accept the document as genuine, where dishonesty is again assessed by reference to the standards of ordinary people and known by the Defendant to be dishonest according to those standards;
vii.The second element of ulterior intention is the intention to dishonestly obtain a gain, where ‘gain’ is defined in s 300 for all of Chapter 3 as:
(a) a gain in property, whether temporary or permanent; or
(b) a gain by way of the supply of services;
and includes keeping what one has;
viii.Although I am not satisfied that the Defendant through his deceptive use of the false document obtained any financial advantage or a gain in property, and although this was not quite how the Prosecution closed on this element, I am satisfied on the evidence that the Defendant did intend to obtain a gain by way of the supply of services, namely the processing by the ANZ bank of the withdrawal of $5,243.37 from the SMSF account and into his Westpac account;
ix.I am also satisfied that he intended to do dishonestly, where dishonesty is again assessed by reference to the standards of ordinary people and known by the Defendant to be dishonest according to those standards;
x.Although the dishonesty element in this offence occurs embedded within an ulterior intention element, this would not appear to require a special meaning of dishonesty to be adopted which would depart from the explicit use of the term in the offence provision and the definition of dishonesty in s 300; cf. Peters v R [1998] HCA 7; (1998) 192 CLR 493;
xi.Even on the premise that he was lawfully entitled to draw on his own funds to pay off his credit card debt, that he did so by deception in the form of applying a false electronic signature to the withdrawal form amounts to intending to dishonestly obtain the supply of services, and this includes keeping what one already has.
xii.I find that all of the elements of this offence are proved beyond reasonable doubt, subject to considering the defence of claim of right below.
79. The third offence is CC2024/1833: Using a false document, Criminal Code 2002, s 347;
a. Defendant used a document (physical element);
i.The Defendant used the withdrawal form he had created by sending it to the ANZ bank in order to withdraw the amount of $5,243.37 from the SMSF account, where using a document means “actual deployment by the person charged or by his or her agent or a fellow participant”: Sultan v R [2008] NSWCCA 175;
b. Defendant intended to use the document (default fault element);
i.On the Defendant’s evidence, he both created and used the withdrawal form as an intentional act, seeking to reimburse himself for his life insurance premium;
c. The document was false (physical element);
i.The withdrawal form bearing a false signature of the Complainant was a false document, as explained above: s 344(1)(a), (b);
d. Defendant knew the document was false (specified fault element);
i.Because the Defendant intentionally made this document, including by applying the Complainant’s electronic signature to it, he knew the document to be false;
ii.Knowledge of a circumstance means being aware that it exists: s 19;
e. Defendant intended to use the false document to dishonestly induce another person to accept it as genuine and because that other person accepts it as genuine, to dishonestly obtain a gain (specified fault element of ulterior intention);
i.As for the forgery offence, this comprises two elements of intention, the first being to dishonestly induce another person to accept it as genuine;
ii.As for the forgery offence, this element is satisfied;
iii.The second element of ulterior intention is the intention to dishonestly obtain a gain, which is also satisfied as set out for the forgery offence.
iv.Even on the premise that he was lawfully entitled to draw on his own funds to pay off his credit card debt, that he did so by deception in the form of using a withdrawal form on which he had applied a false signature amounts to intending to dishonestly obtain the supply of services, which is a gain, and this includes keeping what one already has;
v.I find that all of the elements of this offence are proved beyond reasonable doubt, subject to considering the defence of claim of right below.
80. The parties made submissions on the basis that the s 38 claim of right defence applies only to “an offence that has a physical element relating to property”, which would include the offence of obtaining a financial gain by deception, but this is only true of the s 38(1) form of the defence. As I have concluded that that offence has not been proved beyond reasonable doubt, there is no further need to consider whether the Defendant’s claim of right would negate a fault element.
81. However, for the other two offences which I have found on the evidence to be established beyond reasonable doubt, the alternative form of claim of right in s 38(2) falls for consideration. The question then is whether either was an “offence arising necessarily out of the exercise of a proprietary or possessory right that the person mistakenly believes to exist”.
a. The Complainant gave evidence that she gave no permission to the Defendant to use her electronic signature. The Defendant gave evidence to the effect that he considered he had some form of ongoing permission, based on past habits while the couple were married, to use her signature in SMSF dealings, thus arguably discharging an evidentiary burden in relation to the claim of right defence: s 58;
b. The Prosecution must then disprove the claim of right beyond reasonable doubt;
c. On my assessment, there is no reasonable doubt about the matter. The Defendant may have thought himself entitled to reimbursement of his expense incurred by renewing his life insurance policy, which benefitted the Complainant rather than him in the event of his death, but neither the forgery nor the use of a false document offence can be said to arise necessarily from his mistaken belief in such entitlement or an ongoing permission to use his former wife’s signature in SMSF dealings.
d. As the Prosecutor said in her closing submission, there were other options available even if he was facing financial hardship and finding communications with the Complainant through two sets of lawyers difficult and frustrating. While going some way to explain why he took the course that he did, it cannot be accepted to any extent that this course arose “necessarily out of the existence of a proprietary or possessory right” that he thought he had. This was not any form of “business as usual” as he claimed in his evidence. This may have been his perception, but it was not the objective reality.
e. I therefore conclude that the claim of right defence does not negate liability. Nor do I consider that the Defendant’s good character prevents me from reaching this conclusion.
Decision
82. The Defendant is found not guilty of the first offence, CC2024/1831: Obtaining financial advantage by deception, contrary to Criminal Code 2002, s 332; I dismiss that charge.
83. The Defendant is found guilty of the second offence, CC2024/1832: Forgery, contrary to Criminal Code 2002, s 346;
84. The Defendant is found guilty of the third offence, CC2024/1833: Using a false document, Criminal Code 2002, s 347.
| I certify that the preceding eighty-four [84] numbered paragraphs are a true copy of the Reasons for Decision of his Honour Special Magistrate Urbas. Associate: Lucy Skeldon Date: 16/01/2025 |
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