R v Clark (No 3) - [2022] SADC 45

DISTRICT COURT OF SOUTH AUSTRALIA
(Criminal: Application)
R v CLARK (No 3)
[2022] SADC 45
Reasons for Ruling of his Honour Judge Cuthbertson
14 April 2022
CRIMINAL LAW - PROCEDURE - ADJOURNMENT, STAY OF PROCEEDINGS OR ORDER RESTRAINING PROCEEDINGS
The applicant is charged with 46 counts of Theft and 7 counts of Dishonestly Dealing with Documents allegedly committed between 23 January 2008 and 11 June 2013. He has made an application for the 46 counts of theft to be stayed on the basis that they are foredoomed to fail as particularised on the Information and in the draft prosecution written opening dated 4 April 2022. Consideration and discussion of the elements of theft, namely that the applicant dealt with the property without the consent of the owner.
HELD:
i. 'Owner' under s 130 of the Criminal Law Consolidation Act 1935 (SA) refers to anyone particularised by the Prosecution and not all the theoretical owners who match the definition;
ii. In a charge of theft under s 134 of the Criminal Law Consolidation Act (SA), Prosecution need only prove lack of consent in at least one of the particularised owners if there are more than one;
iii. Prosecution can never prove lack of consent in the two owners particularised in counts 1-15, see VDP4;
iv. Prosecution may be able to prove lack of consent in theft counts found at counts 16-54, see VDP4;
v. Stay of proceedings in counts 1-15 as there is no evidence of lack of consent of owner;
vi. Prosecution could prove the element of theft of intention to permanently deprive.
Criminal Law Consolidation Act 1935 (SA) ss 130(b), 34(1), 134(1)(b), 134(1)(c),189; Crimes Act (NSW) s 173; Victorian Crimes Act (Vic) s 72, referred to.
Attorney-General's Reference (No 1 of 1983) [1983] 2 VR 410; Attorney Generals Reference (No 1 of 1985) (1984) 41 SASR 147; R v R (1991) 57 A Crim R 39; Thorp v Abbotto (1992) 34 FCR 366; Questions of Law Reserved on Acquittal (No 2 of 1993) (1993) 61 SASR 1; Macleod v R (2003) 214 CLR 230; R v McGee [2008] 102 SASR 318; R v Kerin [2013] 116 SASR 316, [2013] SASCFC 56, considered.

R v CLARK (No 3)
[2022] SADC 45

The applicant is presented on an Information in this Court filed on 17 November 2017.
This is a sixth application pursuant to Rule 49 of the District Court Rules and the second to permanently stay proceedings in respect of charges of Theft.
The application is for a permanent stay in relation to 46 Counts of Theft under s134(1) of the Criminal Law Consolidation Act 1935.
The basis for the application is that it is asserted that the prosecution can never succeed in proving the charges because it can never prove beyond reasonable doubt the element of the offence, that the applicant dealt with property of the owner without the consent of the owner.
With one exception, the applicant agrees that there is evidence upon which a jury could be satisfied beyond reasonable doubt of the other elements of the offence.
Who is the “owner”?
For the purposes of the offence, “owner” is defined in s130 of the Criminal Law Consolidation Act 1935 as follows:
“Owner” of Property means -
(a)a person who has a proprietary interest in the property other than an equitable interest arising under—
(i) an agreement to transfer or grant an interest in the property; or
(ii) a constructive trust; or
(b)in relation to property subject to a trust (other than a trust arising from an agreement to transfer or grant an interest in the property or a constructive trust)—a person who has a right to enforce the trust; or
(c)in relation to property received from or on account of another by a person who is under an obligation to deal with the property or its proceeds in a particular way—the person from whom, or on whose account, the property was received; or
(d) a person who is entitled to possession or control of the property,
(and, if there are 2 or more owners of property, a reference in this Part to the owner is a reference to both or all of them).
The prosecution nominates or particularises the owners in Counts 1 to 15 as being First Rundle Pty Ltd and First Rundle B Pty Ltd.
In Counts 16 onwards they nominate the owners as First Rundle Pty Ltd, First Rundle B Pty Ltd and Mr Ferrerati Ferrarone.
Is the “owner” only the entity(ies) particularised by the prosecution as the “owner” or is it comprised all the owners that one can conceivably think of that meet the definition of “owner” in the Act?
The applicant asserts that the owner in s130 means every conceivable owner that meets the definition regardless of whether it is particularised by the prosecution. The consequence, they say, is that the prosecution must prove lack of consent in every conceivable owner and not just those they have particularised.
This follows, they say, because of the wording in s134(1):
134—Theft (and receiving)
(1) A person is guilty of theft if the person deals with property—
(a) dishonestly; and
(b) without the owner's consent; and
(c) intending—
(i) to deprive the owner permanently of the property; or
(ii) to make a serious encroachment on the owner's proprietary rights.
Maximum penalty:
(a)for a basic offence—imprisonment for 10 years;
(b)for an aggravated offence—imprisonment for 15 years.
Section 134(1)(b) specifies an element of the offence to be proved beyond reasonable doubt to be that the offence be “without the owner’s consent” and “owner” is defined in s130 of the Act.
There are a large number of entities that meet the definition of being “an owner”.
The consequence of the applicant’s submission being correct would be that the prosecution would have the onerous task of proving lack of consent in every entity who comes within the definition of “owner”, a fairly onerous task.
The applicant also relies on the part of the definition of “owner” which reads “and if there are 2 or more owners of property, a reference in this Part to the owner is a reference to both or all of them”.
The prosecution say that they are entitled to particularise “owner” as to the specific entities which they choose to nominate and they only need to prove lack of consent in relation to any one of those they so particularise or nominate.
Neither side has been able to refer to any authorities on the topic.
I am of the view that the prosecution only needs to particularise the “owner” or “owners” that they say is aggrieved by the transaction under scrutiny and that they choose to nominate. It may be difficult or virtually impossible for the prosecution to ascertain all conceivable owners that meet the definition and to lead evidence of lack of consent in all those conceivable owners, especially bearing in mind that the definition of “owner” is a wide definition and expands the range of the entities that one would normally consider to be “owners”.
I hold, therefore, that the prosecution may nominate in its particulars of the offence the specific owners in respect of which they intend to establish lack of consent as required in the definition of the offence.
Is it necessary for the prosecution to prove lack of consent in every entity particularised as “an owner” or need the prosecution only prove lack of consent in any one of those owners that they have particularised?
The alternative applicant submission is that, if the prosecution particularise more than one entity as the “owner”, they must prove lack of consent in every such entity.
In my view it is only necessary for the prosecution to prove lack of consent in one of the owners that it particularises.
One of the reasons for the offence is to provide some sort of remedy to aggrieved entities whose ownership rights have been interfered with. Just because one of a number of entities nominated as an “owner” by the prosecution cannot establish that it did not give consent for the transaction ought not to mean that other entities nominated which can prove lack of consent to the conduct of the applicant should have their action fail.
Just as in the old common law offence of larceny, where the prosecution alleges the larceny of a number of items, the prosecution does not fail because it can only prove the taking and carrying away of one or some of the items alleged stolen as part of the larceny. It does not mean the whole action should fail. So it is, in my view, that if there is lack of proof of lack of consent by one of the owner entities particularised, it should not mean that the whole action should fail insofar as there are other owner entities particularised in respect of which lack of consent can be proved.
Nor is the action duplicitous, in my view if it is particularised that there are more than one owner entity because the nub of the action is dealing with property. There is only one dealing with property even if it affects the property interests of more than one owner entity. Thus, there is no duplicity.
Who Are The Owners?
First Rundle Pty Ltd is trustee for the First Rundle Trust and First Rundle B Pty Ltd is the beneficiary.
The funds dealt with in each count are funds that were in the account of First Rundle Pty Ltd
First Rundle Pty Ltd has at all relevant times the applicant as its sole shareholder and sole beneficiary. So does First Rundle B Pty Ltd.
First Rundle Pty Ltd comes within the definition of owner as it is “a person who has a right to enforce the trust” (See s130(b)).
First Rundle B Pty Ltd as beneficiary is also owner by virtue of being “a person who has a right to enforce the trust” (See s130(b)).
In 2010, the Trust Deed was amended such that Mr Ferrerati Ferrarone became a beneficiary and in respect of Count 16 onwards he is particularised as an owner along with First Rundle Pty Ltd and First Rundle B Pty Ltd. (see Deed of Variation of First Rundle Trust dated 2010, cl 3).
Thereafter, he comes within the definition of an owner as being “a person who has a right to enforce the Trust;” (see s130(b)).
Application for Permanent Stay of Proceeding
The applicant applies for a stay of proceedings on the basis that the prosecution can never prove lack of consent in any of the three owner entities it particularises.
On the principles governing a stay of proceedings, Doyle CJ in R v McGee [2008] 102 SASR 318 said:
[87]“The reason why the test for a stay of proceedings on this basis must be a stringent one is apparent. If it were not, the court would be interfering with the decision of the DPP to institute proceedings, and would begin to assume the role of a supervisory authority in relation to those decisions. It is for the DPP to decide whether a charge should be laid, and what charge should be laid. It is the function of the trial judge to preside over that trial, the jury returning its verdict on the charges (unless it is a trial by judge alone). The trial of a charge is not to be precluded because, in the opinion of the presiding judge, the case is a weak one, or even because in the opinion of the trial judge the case is likely to fail. As I said, the function of the court is to hear the charge, unless there are truly exceptional circumstances that warrant the court staying the proceedings at the outset.
[88] Clearly enough, when applying the test in question, the court must consider the prosecution case at its best and highest, on the basis that its witnesses are accepted as witnesses of truth (unless there are exceptional circumstances warranting a different approach), and on the basis that all inferences favourable to the prosecution case will be drawn if they can be drawn. The test that must be met for the grant of a stay is necessarily a stricter test than will apply when the court considers a submission that there is no case to answer. That test was summarised by King CJ in Questions of Law Reserved on Acquittal (No 2 of 1993) (1993) 61 SASR 1 at 5 where King CJ said:
It follows from the principles as formulated in Bilick (supra) in connection with circumstantial cases, that it is not the function of the judge in considering a submission of no case to choose between inferences which are reasonably open to the jury. He must decide upon the basis that the jury will draw such of the inferences which are reasonably open, as are most favourable to the prosecution. It is not his concern that any verdict of guilty might be set aside by the Court of Criminal Appeal as unsafe. Neither is it any part of his function to decide whether any possible hypotheses consistent with innocence are reasonably open on the evidence: Attorney-General’s Reference (No 1 of 1983) [1983] 2 VR 410; Thorp v Abbotto (1992) 34 FCR 366. He is concerned only with whether a reasonable mind could reach a conclusion of guilty beyond reasonable doubt and therefore exclude any competing hypothesis as not reasonably open on the evidence.
There was some criticism before us of the concept of reasonableness in the Bilick test and reference was made to R v R (1991) 57 A Crim R 39 . I do not read that case as deciding that there can be a case to answer on circumstantial evidence which is incapable of producing in a reasonable mind a conviction of guilt beyond reasonable doubt . . .
[89] On an application of the kind now before the court, the court must be mindful of the fact that all it has before it are the written depositions. No witness has given evidence.
[90] The fact that the jury might ultimately decide that the circumstantial evidence in the present case does not exclude hypotheses consistent with innocence is not enough for the submission to succeed. To deal with a submission on that basis in not an appropriate exercise of the court’s power. The prosecution should proceed even though the jury could or might decide that all such hypotheses were excluded, and the court would stay the proceedings only if satisfied that the jury so finding was inevitable. And, as I have said, this is to be considered not by the court weighing a quality of the evidence, but on the basis that evidence will be accepted unless patently incredible, and on the basis that all inferences favourable to the prosecution case that could be drawn will be drawn.”
(see R v McGee, Doyle CJ [2008] 102 SASR 318 at 343- 344)
A typical count for the purpose of analysis is Count 1 which reads as follows:
Particulars of Offence
Trevor Paul Clark on the 23rd day of January 2008 at Adelaide or elsewhere in South Australia, dishonestly dealt with property, namely $300,000, without the consent of the owners, First Rundle Pty Ltd as trustee for the First Rundle Trust and First Rundle B Pty Ltd, intending to permanently deprive the owner of the property or make a serious encroachment on its proprietary rights.
The amendment to add First Rundle B Pty Ltd has not actually been made but the changes in particularisation more accurately explains how the prosecution intends to proceed and I will proceed on the basis that VDP4 correctly sets out how the Prosecution particularise the charges.
I had previously delivered a Ruling on an application to stay proceedings on the same basis as the present application on 23 December 2021.
RULING
JUDGE CUTHBERTSON
NO.DCCRM-17-1799
THURSDAY, 23 DECEMBER 2021 AT 10.05 A.M.
R V TREVOR PAUL CLARK
RELATING TO P.3 OF TRANSCRIPT
HIS HONOUR: As I understand it, Mr Ferrerati, the complainant, conducted a wool broking business in Italy. He decided to go into business with Elders buying and selling Australian wool to Italy on his own behalf and on behalf of Elders in their joint venture. But he did not want his wool broker clients to know about the fact that he was in business against them, as well as being a broker in relation to their own transactions.
My understanding is he sought to achieve this by arranging the accused to set up a vehicle whereby he could conduct this business of wool buying and selling with Elders without it being disclosed or known to other wool buyers in Italy.
It is not entirely clear to me, because the particulars have been particularly hard to come by from the prosecution, but I assume Mr Ferrerati did not know the specific details of the vehicle that was being set up by way of trust by Mr Clark, but simply knew that the moneys would go to Mr Clark, but they would be his moneys and Mr Clark would hold the moneys for him. He was not intending to divest himself of any assets, but rather was going to keep them, but in the name of another for and on behalf of himself.
That is not entirely clear from reading the statements that the prosecution has provided, but anyway, reading between the lines it seems to me that that is probably what Mr Ferrerati intended.
So a trust was set up by Mr Clark, the trustee was First Rundle Pty Ltd. Its primary beneficiary was First Rundle B Pty Ltd. After 2010 Mr Ferrerati himself was added as a primary beneficiary.
Now, over a long period of time large amounts of money were deposited into the bank account of First Rundle Pty Ltd, the sole shareholder and director of which was, as I have said, Mr Clark.
The prosecution say that these funds that were paid to First Rundle Pty Ltd were then paid into Mr Clark's own account and used for his private purposes. These transfers of money from First Rundle Pty Ltd are the subject of the charges of theft against Mr Clark.
The prosecution has pleaded that the transferred amounts were each without the consent of First Rundle Pty Ltd as trustee for the First Rundle Trust. The defence have countered that the prosecution cannot prove a lack of consent because the director and sole shareholder is Mr Clark.
Now, in my view there is some merit in that submission, and I do not accept the authority that the Crown has provided as being authority for the proposition that they advance and that they say, Kerin's case supports.
Certainly the Crown do not have to prove who the owner was in certain circumstances where it is clear there is lack of consent, but here the very issue is lack of consent, and in my view it is an element that they do have to prove.
No-one has provided me yet, and I have not had time to find one, but there must be an authority directly on point, and I suspect the point is that the prosecution probably cannot prove lack of consent in this matter on that particular point.
As I said, it is not entirely clear to me but I think it is likely that Mr Ferrerati made Mr Clark aware of the fact that these funds remain his funds, and that Mr Clark's job was to return them at an appropriate time to Mr Ferrerati. When they were placed in the account of Mr Clark, from First Rundle Pty Ltd, he well knew that, that the funds were Mr Ferrerati's and to be kept for him.
When he took the funds out and used them for his own purpose it was probably in breach of trust. It might have been an express trust that Mr Clark hold the funds coming from First Rundle Pty Ltd on trust for Mr Ferrerati because of what he knew from his dealings with Mr Ferrerati. It would have either been an express trust, if Mr Ferrerati had expressly said 'You hold them on trust', or an implied trust in the event that there is insufficient evidence to demonstrate an express trust. Either way, the funds in Mr Clark's hands were probably held on trust for Mr Ferrerati.
Mr Ferrerati meets the test of an owner under the Criminal Law Consolidation Act, the extended definition of an owner, and the prosecution can prove, I suspect, that he, Mr Ferrerati, did not consent.
He comes within the extended definition of an owner of the property, the funds, under sub-para.(a) of the definition, being a person who had a proprietary interest in the property other than an equitable interest arising under an agreement to transfer, or a constructive trust.
He probably also met the definition of owner under sub-para.(b) in relation to property which was subject to a trust, an express trust, or an implied trust, being a person who has right to enforce that trust.
He probably also meets the definition under sub-para.(d), a person entitled to possession or control of the property, as the funds were his property by virtue of either an express or an implied trust.
Admittedly this does not sit very well with a particularisation of the offence by prosecution which has stood for some three years which remains a particularisation that the property has been dealt with without the consent of First Rundle Pty Ltd. However, looking generously at the particularisation, it seems to me that, taking count 1 as an example, the particularisation is that 'dealt with properly without the consent of Rundle Pty Ltd as trustee for the First Rundle Trust with others the owner of that property'. The 'with others' I take it is a qualification of 'the owner' rather than a qualification of the words 'as trustee'. In other words the particularisation, although it is not clear, probably asserts not that he is trustee with others for the First Rundle Trust but rather he owns with others. So in other words that it had more than one owner and one of the owners can be Mr Ferrarati and whether First Rundle Pty Ltd consented or not, he certainly as owner did not consent. So that is why, it seems to me, that the prosecution is not doomed to failure and I cannot say that it is without any doubt definitely doomed to failure such that I should order that the proceedings be stayed.

The matter has been set down for trial in this Court on 5 April 2022. It is a difficult trial involving unusual legal concepts for a jury and the need for two of the prosecution witnesses to give evidence on video link up from Italy.
On the morning of the first day of trial I received this application for stay on the basis that the proceedings could not possibly succeed.
The applicant asserts that I had ordered the prosecution to present to me on the Friday prior to the trial a copy of their proposed opening to the jury. I did so because I thought that the pleadings were particularly opaque and I wanted an opportunity to see how the prosecution intended to present its case before the case was presented to the jury.
A draft opening duly arrived on Monday 4 April 2022.
The draft opening dealt inter alia with the element of the offence concerning proof that the owners of the property did not consent to the transaction the subject of the charge. The draft reads as follows:
So this second element/ingredient requires the prosecution to prove that, at the time Trevor Clark dealt with the funds, he did not have the consent of the owners of the property and those owners are First Rundle Pty Ltd (as trustee for the First Rundle Trust) and First Rundle B Pty Ltd (as beneficiary) and, from mid 2010, Mario Ferrarone (as beneficiary).
You will remember what I said earlier about the powers that First Rundle Pty Ltd Could exercise in respect of the funds were ONLY those permitted under the Trust Agreement and that the company needed to also act in accordance with its fiduciary duties.
It is the Prosecution case that First Rundle Pty Ltd could absolutely NOT consent to the money being dealt with in the way that it was because the money was not being used for a purpose authorised under the Trust Agreement.
Moreover, First Rundle Pty Ltd could NOT have consented to the funds being transferred to Trevor Clark personally or to another company that Clark had control of because to do so would be in breach of its fiduciary duties as a trustee (namely to protect the assets of the Trust for the benefit of the beneficiary/beneficiaries).
Going one step further, Trevor Clark could not consent to First Rundle Pty Ltd (as its Director) to transfer the funds to himself or to another company that he has control of because to do so would be in breach of his fiduciary duties as a Director of First Rundle Pty Ltd as it would mean that he was causing First Rundle Pty Ltd to fail in its duties as a trustee.
It is also the Prosecution case that First Rundle B Pty Ltd could absolutely NOT have consent to the money being dealt with in the way that it was because the money was not being used in a way which was for the benefit of First Rundle B Pty Ltd.
And finally, it is the Prosecution case that Mario Ferrarone DID NOT consent to the money being dealt with in the way that it was because it did not benefit Mr Ferrarone as a beneficiary of the Trust (see draft prosecution opening).
The application for a stay complains as follows:
4. By ruling dated 23 December 2021, Judge Cuthbertson refused the application and published a ruling. Judge Cuthbertson held that there was some merit in the submission that the prosecution cannot prove a lack of consent on the part of First Rundle Pty Ltd because the Director and sole Shareholder at all relevant times was Mr Clark. His Honour held that the reason why the Prosecution was not doomed to failure was because it was probably the case that Mr Ferrarone-Ferrarati [sic] himself meets the test of an owner on the basis that, either expressly or impliedly, Mr Clark held funds on trust for Mr Ferrarone-Ferrarati [sic] because he either knew or it was implied that the funds belonged to Mr Ferrarone-Ferrarati [sic] were to be kept for him.
5. The Prosecution have declined to amend the Information to reflect the ruling but were ordered to provide a written opening so that the counts would properly particularised before the trial. [sic]
6. Upon receipt of the Prosecution’s written opening just after midday today 4 April 2022, it is apparent that the case that the Prosecution intends to run is not the case that Judge Cuthbertson ruled was open to them in his Honour’s December ruling, and is contrary to the findings in that ruling.
7. The Prosecution intends to open to the jury that there were three owners, First Rundle Pty Ltd in its capacity as trustee of the First Rundle Trust, First Rundle B Pty Ltd in its capacity as beneficiary and Mario Ferrarone only in his capacity as beneficiary of the Trust from 2010 onwards. In the opening there is no suggestion of any express or implied trust between the Defendant and Mr Ferrarone in the way described in his Honour’s December ruling nor has there been any further statements provided by Mr Ferrarone that could support the existence of any such trust.
(Sixth Application Pursuant to Rule 49 dated 4 April 2022, pp 2-3)
Although I would point out that I did not rule that the case that the prosecution intended to run was not open to them, I did express doubts as to its viability as an appropriate way to run its case.
The provision of particulars by way of the draft opening made it clear that the prosecution intended to present its case on the basis that lack of consent by the entity from which the funds were alleged to have came could be established on the basis that the entity “could absolutely NOT consent to the money being dealt with in the way that it was because the money was not being used for a purpose authorised under the Trust Agreement.”
Because of the new application filed by the applicant, it became appropriate, to revisit this issue which I touched on in my previous Ruling but had not thought fit to rule on. The draft opening produced by the Prosecution squarely indicates that the Prosecution still intends to run the case it foreshadowed on the last occasion.
During discussions with counsel, it became apparent that there were a number of other subsidiary issues that arose which are relevant and which I must rule on.
Proof of Lack of Consent
It follows therefore that in ruling on this application it is sufficient for me not to stay the proceedings if there is a possibility reasonably open for the prosecution to prove just one of the alleged owners did not consent to the transactions the subject of the charges.
The issue was touched on by the Full Court in a recent decision R v Kerin [2013] 116 SASR 316 .
In a charge of Theft by a solicitor from the property of an elderly woman for whom the solicitor held a Power of Attorney, Peek J said at para 185:
“I am afraid that the net result of his Honour’s remarks were to convey the impression to the jury that the requirement of proof of non-consent was to be replaced with proof of ‘misuse’ which in turn was to be equated with, or viewed in terms of, ‘recklessness’ or ‘incompetence’ or ‘bad investing’ or whatever”.
His Honour continued:
“I conclude that the trial judge erred in substituting this different element of misuse for the true element of lack of consent. His Honour should have directed the jury that the prosecution was required to prove that the relevant dealing was not consented to by [the elderly lady]. He should have further directed that such non-consent in the present case could be proven by demonstrating that the relevant dealing performed by the appellant occurred during a period of legal incompetency of [the elderly lady] and was not performed with reasonable diligence to protect her interests. (s7 of the POA Act).
I conclude that the judge as a matter of law seriously misdirected the jury as to one of the elements of the offence of theft, that of lack of consent.”
In the present case, the proved lack of consent must come from the company, First Rundle Pty Ltd or First Rundle B Pty Ltd in the case of the first fifteen counts and them or Mr Ferrerati Ferrarone in respect of the remainder.
As the applicant points out, at the relevant time, the applicant was both the sole shareholder and also the sole director of the companies.
As he will not be giving evidence for the prosecution at the trial how can the prosecution ever prove that the company did not consent to the transactions in Count 1 etc?
In conducting these transactions the prosecution say that the applicant was acting in a delinquent and dishonest fashion in breach of various requirements of the law and the trust relationship. It follows, say the prosecution, that the company could not have consented to the relevant transactions.
Peek J in R v Kerin reminds us that it is not sufficient for a judge directing a jury in a charge of theft to leave to the jury that dishonest and delinquent conduct can be substituted for the need for proof of lack of consent. The Judge must specifically direct the jury that as an element of the offence it must be proved beyond reasonable doubt that the owner did not consent to the transaction the subject of the charge.
In that case the charge to the jury was defective and led to a retrial.
Peek J did leave open the possibility that the prosecution could call in aid of proof of the element of lack of consent, the delinquent conduct of the applicant.
In Kerin’s case, however, the owner whose consent, or lack of it, was under consideration was a human being albeit one with disruption of her faculties.
Presumably she did not give evidence at the trial on the question of whether she consented to her funds being used for the private purposes of her attorney but the majority of the court considered that it was open for the jury to look at that issue by considering the question of whether she would likely have consented to what the applicant was alleged to have done and to conclude that there was no way she would have consented to the transactions the subject of the charges.
Here, the situation is different in that the question of consent, or lack of it, is to be considered in the case of a non-human entity. Considerations of human reasoning cannot be used in the case of a company to infer lack of consent.
Evidence of whether the company consented or did not in the present case cannot be considered in the context of how a human would have viewed the matter. The applicant is the sole director and shareholder. Only he, or documents of the company, could cast light on whether the company consented to the transaction.
There are no documents and it can be can safely assumed that the applicant will not be giving evidence on behalf of the prosecution at the trial that the company did not consent.
In Macleod v R (2003) 214 CLR 230, the appellant was charged with fraudulent application of company property by a Director or Officer.
The appellant was the sole beneficial shareholder of the company and the issue was whether consent of the appellant as sole shareholder cured what would otherwise be a breach by the appellant of s173 of the Crimes Act NSW.
Section 173 of the Crimes Act (NSW) 1900 at the relevant time provided as follows:
Whosoever, being a director, officer, or member, of any body corporate, or public company, fraudulently takes, or applies, for his own use or benefit, or any use or benefit other than the use or purpose of such body corporate, or company, or fraudulently destroys any of the property of such body corporate, or company, shall be liable to penal servitude for 10 years.
I note that proof of absence of consent was not an element of that charge.
The decision of Gleeson CJ, Gummow & Hayne JJ held:
[51] “… s173 does not impose a requirement for an absence of informed consent on the part of the ‘victim’ of the fraud and specific directions respecting a ‘claim of right’ are not required.
The trial judge adequately identified the facts from which dishonesty was inferred, by specifying the particular applications which were the subject of each count and by contrasting the prosecution case with what the appellant had claimed was his genuine belief in his entitlement to act as he did.”
This was a case where there was no element of absence of consent that had to be proved by the prosecution. The charge was not a charge of Theft so the fact that the applicant as sole shareholder might have consented is not to the point. He may still have acted fraudulently.
In Attorney Generals Reference (No 1 of 1985) (1984) 41 SASR 147, the defendant was charged with an offence under s189 of the Criminal Law Consolidation Act (SA) which then read as follows:
S189“Any person who, being a director, member of public officer of any body corporate or public company, fraudulently takes or applies for his own use or benefit, or for any use or purposes other than the use or purposes of the body corporate or public company, any of the property of the body corporate or public company shall be guilty of a misdemeanour and liable to be imprisoned for a term not exceeding seven years”.
A director of a body corporate was presented for trial in the District Criminal Court on an information alleging three offences against this section. The particulars with respect to each of the three counts alleged that the director had ‘fraudulently applied for use or purposes other than the use or purposes of a body corporate, property of the body corporate, namely cheques drawn on the account of the body corporate held at the State Bank of South Australia. Port Adelaide Branch” (see page 148-149).
At the end of the prosecution case the trial judge ruled that the Crown had not proved the requisite ingredients of the offence and directed an acquittal but reserved certain questions of law for the consideration of the Full Court.
The District Court Judge had concluded that there was no fraudulent application of funds by the defendant “because, and to all intents and purposes, the company is (the defendant), and whatever civil remedies, or whatever offence he may have committed to get to the company’s legislation he cannot be shown to have, nor has he contravened on the authority as I read them, the provisions of s189 of the Criminal Law Consolidation Act” (see page 149).
Before those remarks the Judge had spoken of the accused as “the embodiment of the company”, of the mind of the company being his mind, and evidence of mens rea but “no evidence of the absence of consent by the company” (see page 149).
Prior J held that, “The fact that he is in dominant control does not render him incapable of fraudulently applying the property of the company in breach of s189.”
His Honour continued, “s189 is a form of fraudulent conversion, not larceny. Whatever difficulties remain with respect to company directors and either the common law of larceny, or that reflected by the statutory offence of Theft, exemplified by s72 of the Victorian Crimes Act, a man in dominant control of a company can fraudulently apply the company’s property.” (See page 154)
Again, this is not a charge of Theft under section 134 of the SA Act and so there was no element needed to be proved of absence of consent.
But such an element does apply if the charge is one of Theft (s134) as the majority in R v Kerin [2013] SASCFC 56 has pointed out.
It follows, that the Crown can never establish beyond reasonable doubt that the company positively did not consent to the transactions which are the subject of the charges in counts 1-15.
Insofar therefore, as a charge asserts as owner of the property the subject of the charge, the corporate entity First Rundle Pty Ltd the prosecution will not be able to establish the elements of the offence of Theft that the transaction was “without the consent of First Rundle Pty Ltd”.
The same is to be said for proof that First Rundle B Pty Ltd did not consent.
To that extent the charges must fail.
It seems to me that the above must apply in respect of every charge in which First Rundle Pty Ltd and First Rundle B Pty Ltd are particularised as the “owners” of the property dealt with.
The position is different from Count 16 onwards when Mr Ferrerati Ferrarone is particularised as a “owner”. He is the principal complainant. It is clear the prosecution will be able to lead evidence to prove that he did not consent to the transactions. He is an owner as he has a “right to enforce the trust”. (see s130 CLCA)
To that extent the prosecution will be able to lead evidence that one of the three entities particularised as an additional owner did not consent. That in my view is sufficient to make out a potential case in relation to counts 16-54. The charges of Dishonestly Dealing with Documents are not the subject of the application.
It follows that I would stay Counts 1 to 15 because the prosecution can never prove lack of consent of the two entities particularised as the owner.
I would decline to stay Counts 16 onwards because in my view the prosecution will be able to lead some evidence that the third owner particularised did not consent to the transactions the subject of the charges.
Can the prosecution prove as an element of the offence that the dealing with the property was intending to deprive the owner of the property:
“Section 134(1)(c) intending –
(i)To deprive the owner permanently of the property; or
(ii)To make a serious encroachment on the owner’s proprietary rights.”?
The applicant further argued that as there were no net funds in the account of First Rundle Pty Ltd at the time of any withdrawals, so it was asserted, it can never be proved by the prosecution that, at the time of the dealing with the property, the applicant had intended to deprive the owner permanently of the property or to make a serious encroachment on the owner’s proprietary rights.
The applicant argues that when Mr Ferrerati Ferrarone becomes a primary beneficiary (see Deed of Variation of First Rundle Trust Pty Ltd 2010 Clause 3) he becomes a discretionary beneficiary (see Declaration Deed Establishing First Rundle Trust dated 22 December 2006).
Clause 3 declares that the Trustee shall hold the Trust fund upon trust to distribute the net income among the eligible beneficiaries.
Eligible beneficiaries is defined in Clause 2.9 to mean the primary beneficiaries et al and Mr Ferrerati Ferrarone becomes a primary beneficiary in 2010.
Clause 4 of the deed establishing First Rundle Trust provides that the Trustee may pay the eligible beneficiaries “in shares and proportions that the Trustee in its absolute discretion determines.” (See Clause 4).
This means that Mr Ferrerati Ferrarone may receive nothing by way of distribution.
The applicant argues that, in these circumstances, it cannot be proved that there was an intention to permanently deprive the owner of property, Mr Ferrerati Ferrarone being the “owner” may never receive the property under the terms of the Trust. He is only a discretionary beneficiary.
In my view this argument must fail because there can still be an intent to permanently deprive the “owner” of the property. The applicant may envisage that his “dealing” with property would deprive Mr Ferrerati Ferrarone of the chance of being a beneficiary and hence he has deprived him of the funds being dealt with or at least made a serious encroachment on his future proprietary rights. At the best there is an intention to permanently deprive the owner of any property he may get in the fund.
The argument that the account of First Rundle Pty Ltd had a negative balance at all relevant times.
Firstly, the only basis upon which it can be asserted that there were no net funds in the account is by relying on the accounting documentation of the applicant. The prosecution points out that different documents seized from the applicant give different accounting descriptions of the net proceeds of funds in the account that was dealt with by the applicant. Both cannot be correct.
The prosecution say that the argument for the applicant depends on self-serving documentation which does not necessarily state the true state of the accounts of First Rundle Pty Ltd.
Secondly, we are dealing here with the question of the applicant’s intent at the time of allegedly committing an offence. His intent may not depend on the objectively true state of affairs but rather his belief as to the state of affairs of the account from which he drew the funds. Thus, the true state of affairs of the accounts may not matter.

I reject the argument that the Prosecution can not possibly prove an intent to permanently deprive the owner or owners.
In summary, I stay Counts 1 to 15. I decline to stay any of the other Counts in the Information filed dated 17 November 2017 on the basis that the charges are particularised as in Ex VDP4.