R v Dunning and Dunning
[1995] QCA 196
•23/05/1995
IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
C.A. No. 59 of 1995 C.A. No.100 of 1995
Brisbane
| Before | Davies J.A. McPherson J.A. Pincus J.A. |
[R. v. Dunning R.S.and Dunning A.T.]
T H E Q U E E N
v.
ROBERT STUART DUNNING and
ANTHONY THOMAS DUNNING
(Appellants)
REASONS FOR JUDGMENT - THE COURT
Judgment delivered the 23rd day of May 1995
Stuart Dunning and Andrew Dunning were tried and convicted
in the District Court at Brisbane of defrauding the
Commonwealth. Stuart was found guilty under s.29A(1) of the Crimes Act 1914 (Cth.) of seven counts of obtaining by false pretences and sentenced to imprisonment for 9 months. Andrew was found guilty of one count of the same offence and was required to enter into a good behaviour bond and to perform 120 hours of community service. The sentences are not questioned.
These are appeals against conviction by both Stuart and Andrew
Dunning.
The fraud alleged against the appellants involved misuse
of the Commonwealth Jobstart programme during a period
beginning in late November 1992 and ending in late February
1993. Under that programme, unemployed persons are assisted to find work by a system of Commonwealth subsidies paid to private
employers who agree to employ them for a fixed period of time.
According to the evidence at trial, the procedure followed by
the Commonwealth Employment Service (CES) requires, or in this
case required, the execution of an Jobstart "Umbrella
Agreement" by which the employer agrees to be bound. A
separate Jobstart schedule is then completed and signed by the
employer for each subsidised employee who is taken on. Payment
of the subsidy is made to the employer at four-weekly intervals
at the rate of $220 per week for each subsidised employee and
is paid on the submission of a claim for payment. Payment is
made by the Department of Finance, but is recorded in the CES
computer system.
In the present case the employer was Aust-Asian Security Consultants, for which Stuart Dunning worked as an executive or, as he described it, a consultant. He signed the Umbrella Agreement, which is dated 26 October 1992 (ex. 1), on behalf of Aust-Asian Security Consultants, which was a business name under which a Mr Russell Howarth traded. Stuart Dunning and others had originally been partners in the business, but had sold their interests for a nominal sum to Howarth at some time before the events giving rise to these charges. Thereafter,
both Stuart and Andrew Dunning continued to work in the
business at its office at 34 Berwick Street, Fortitude Valley.
For what it matters, there is said to have been an "understanding" among the former partners and Howarth that, when the business had expanded sufficiently, parts of it would be hived off and transferred to the former partners.
The business was essentially that of employing, training and hiring out security guards. Howarth was responsible for their training. Stuart was responsible for the Jobstart applications as well as handling some other businesses of his own from the same office, and Andrew managed the payroll and work roster. Customer demand for security guard services fluctuated considerably, so that the number of guards employed
also varied widely from time to time. However, there was a core of permanently employed security guards on the staff of Aust-Asian. About five of them were always needed to service the shopping centre at Sunnybank Hills and another one or two for a mobile patrol; but others were employed casually as
occasion demanded.
Each of the seven counts in the indictment against Stuart Dunning charged a separate false pretence under the Crimes Act 1914 (Cth.) alleged in each instance to have been made in a Jobstart schedule relating to a particular named employee in respect of whom subsidy was paid under the Jobstart programme.
The falsity was said to lie in the number of employees of Aust-Asian Security stated in each schedule. The extent to which subsidy payments are available to an employer for employees under the programme is limited by the number of persons employed who are unsubsidised. In the Jobstart instruction manual "unsubsidised employees" are described as
including "full-time staff and paid part-time or casual staff
who work at least 20 hours per week". The eligibility ratio is
1:1 for the first 10 employees. Above 10, the ratio is 1:3.
Reading from the manual, Mr Curcurato, who at the relevant time
was manager of the Special Services Centre of CES at Fortitude
Valley, said in evidence at the trial:
"The maximum number of subsidised employees to unsubsidised is up to 10 in a ratio of one Jobstart employee to one unsubsidised employee. Where the establishment employs 10 or more, the ratio is 10 Jobstart employees plus 33% of the number of unsubsidised employees in excess of 10 rounded down."
There is a possible ambiguity in the way in which the Jobstart eligibility criterion is stated. It could mean that, with a total employee establishment of 10, only 5 could legitimately be subsidised; or alternatively that, out of a
total of 20 employees, subsidy was payable in respect of 10 of them before the ratio of 1:3 took effect. The second approach is more favourable to the appellants, and it seems clear from
the evidence of Mr Curcurato that it was the interpretation he adopted in administering the scheme. Although somewhat hesitant about it, he agreed that at the committal proceedings
he had given evidence that an employer with 16 unsubsidised
employees could legitimately have another 12 subsidised employees. That would admit of 12 such Jobstart employees in a total of 28 both subsidised and unsubsidised.
The representation. The first element to be established
in the prosecution case was that Stuart Dunning had, in
relation to each of the seven counts against him, made a representation or statement of fact. The representation relied on was the number of non-subsidised and subsidised employees recorded in each of the Jobstart agreement schedules relating to a particular named employee for whom subsidy was in due course paid by the Commonwealth. In the printed form of Jobstart schedule there was a compartment or "box" in which those figures were inserted manually. Apart from the schedule signed by Andrew Dunning, which was the subject of the single charge of which he was found guilty, each of the schedules in evidence at the trial was admitted to have been signed and dated by Stuart Dunning. To that extent it was proved that
Stuart Dunning had in each case made the representations about numbers of employees. However, the evidence showed that at least in some instances the procedure adopted was that the
details in the relevant box in the schedule were filled in by a
CES employee Ms Samantha Otter in her own handwriting after telephoning Stuart Dunning at his office to obtain the figures.
She seems to have followed a practise of checking to confirm that there were at least enough unsubsidised employees to meet the ratio required under the Jobstart programme. After being completed the schedule form was later taken back to be signed to the Aust-Asian office at 34 Berwick Street, sometimes by the prospective Jobstart employee when he went there for his job interview. In his evidence at the trial Stuart Dunning denied
having supplied figures over the telephone, or having spoken
much at all to Ms Otter; but the issue being one on which there was evidence both ways, it was open to the jury to accept the testimony of Ms Otter on that question.
Falsity. The next matter to be proved by the prosecution
was that the figures stated in the various schedules as the
numbers of unsubsidised and subsidised employees were false.
The CES office kept its own records of the number of Aust-Asian
employees being subsidised. Strictly speaking, therefore, it
was only the number of unsubsidised employees that mattered.
The fraud could be perpetrated only if their numbers were
overstated. Failing to make this clear was a source of some
confusion at the trial and to some extent on appeal.
The first step was to prove what those numbers really were
in fact at the times alleged in each count. There were some
major difficulties in establishing this at the trial. The wages books or wages records of Aust-Asian Security Consultants were not tendered to prove the number of employees at particular times, and the prosecution relied for its proof on the recollections of some of those who had served in the Aust- Asian office at relevant times. In this respect there was a marked divergence in the oral testimony of the witnesses who gave evidence on behalf of the prosecution and of the defence at the trial. Ms Terri Gander, who had been employed by Aust- Asian in a secretarial capacity, said there were probably 15 employees "if you counted the casual-type -- the mobile guards and all that sort of thing". Ms Diana Conray, who was similarly employed, said the maximum number employed was 12 to 15. However, her work took her out of the office for four or five hours of the day; her presence there was, she agreed,
"transitory"; and her observation of the number of security guards employed was based on seeing work rosters on the wall in Andrew's office. Russell Howarth said the maximum permanently employed "would have been anything from 12 to 15"; but he was referring only to security guards, and by "permanently employed" he was excluding those he called "extra guys" taken on as casual employees.
The relevance of Terri Gander's evidence was challenged in a supplementary written submission by Mr Kozera of counsel for Stuart Dunning forwarded after the appeal had been heard. Her testimony at the trial that there were probably only 15 employees was related to the period until September or early October 1992. She was, she said, dismissed from her employment "in late November - middle of November". Her observation of the number of employees "between September and October when you were fired" (as prosecuting counsel put it in his question to her) must, it was submitted by Mr Kozera, therefore have been a reference to the total number of unsubsidised staff. This appears to be correct because, although the Umbrella Agreement ex. 1 bears the date 26 October 1992, which is the date on which it was signed by Stuart Dunning, it was not signed by an officer of the CES until 4 November 1992; and there is a provision in cl.13.1 of the Agreement that it is to "become effective on the later of the respective dates" on which it was executed by each party.
November 4, 1992 was also the date on which Stuart Dunning signed the first two Jobstart schedules (exs. 24 and 25). They were not alleged to contain any misstatements and are not the subject of any of the counts in the indictment. Exhibit 24 gives the number of unsubsidised staff as 9 and the number of subsidised employees as 0. Exhibit 25 gives 9 and 2 respectively, which presumably includes the two (Gordon Bennett and David Hocking) mentioned in those schedules who were then being employed on Jobstart subsidy. What is more, exs. 24 and
25 dated 4 November state the "contact" name at Aust-Asian as "Dianna" (Diana Conray), which is written next to the name Terri Gander, which has been crossed out. Diana Conray said that Terri Gander left only a week after she arrived. There was evidence from Ms Otter that it was she who made the alteration to the contact name, which in turn tends to confirm that Terri Gander had ceased to work there some time before 24 November, which is the date of the schedules relied on to support the first four counts in the indictment. On any view at all, only two of the 15 employees she spoke about could have been unsubsidised staff, and her evidence was specifically
related to a time before even they were taken on.
A ground of appeal which is related to exs. 24 and 25, and which it is convenient to mention in this context, is that, in the course of the summing up, the learned judge made the following remark:
"Mr Kozera said, 'Why would Mr Dunning inform CES that there were 26 employees on the form dated 23 November 1992 if he only required a subsidy for three persons'. He was putting it on the basis that if you were only applying for a subsidy for three persons, all you would have to put down in the unsubsidised box was three or a slightly higher number. Why put down 26? Well it is a matter that you could turn your mind to, ladies and gentlemen.
There is a possible explanation. It was not put to Mr Dunning, but a possible explanation may be - and it is a matter entirely for you - that if it was intended to pursue this scheme for any length of time then you may as well start off with a relatively high number rather than jump from about three or four to 26. But that is a matter entirely for you. You might think it is a matter of little consequence in the overall scheme of things."
As has been mentioned, the first Jobstart schedules signed
by Stuart Dunning were exs. 24 and 25, which were dated 4
November 1992. They were therefore what he "started off" with.
The numbers of employees they gave were 9 unsubsidised staff
and either 0 (ex. 24) or 2 (ex. 25) subsidised employees, which
were not the subject of any criminal charges. It was therefore
not correct for his Honour to suggest that the Jobstart
schedules dated 23 November 1992 (which were exs. 2, 8, 9 and
10, in which the numbers given were 26 and 3 respectively)
might have been the starting point of a forward-looking scheme
to make use of those large numbers on a subsequent occasion.
Having regard to the trial judge's final warning that the
matter was of little consequence overall, the point does not
have much significance; but the explanation suggested, which
was not advanced by counsel for the prosecution, added to the confusion about the numbers of unsubsidised employees at the times alleged in the indictment. Proof of those numbers was vital to the prosecution case.
In contrast to the employee numbers of 12 to 15 given in evidence by the prosecution witnesses, the appellant Stuart Dunning confirmed in his evidence what he had said in the police interview, which was that there "would be about 30 to 40 people in Aust-Asian", and further that there possibly could have been 40 to 50 staff working for Aust-Asian Security "under
different avenues". He gave the names of 21 or more of those
he said were employed. So did his ex-wife Natalie Dunning, who
claimed "there was well in excess of 30, 40 people easy.
Between admin and marketing themselves there was easy 15 to 20
people. That's not counting guards". Far from having no idea,
she said she had "a lot of idea" of the number of people
working there, because she was "almost in the middle of the
business" doing the banking and "paying the guards and the
admin staff on time", which she did on the basis of wages
sheets prepared by Andrew Dunning. Mrs Dunning's evidence of
the number of employees between November 1992 and February 1992
(which was the period covered by the counts in the indictment)
was supported by the evidence of Vanessa Neilson, who said there were between 30 and 40 employees. She gave the names of some 12 of them (although in doing so she overlooked Andrew Dunning) and she said there were others whose names she did not recall. They worked, she said, in the kitchen, which was a part of the old two-storey residential house at 34 Berwick Street which had been converted into the offices of Aust-Asian Security Consultants. She explained that she knew them from her work as a receptionist, from taking telephone calls, and
from seeing them come into the office for money. Two other
witnesses Urbanowski and Cvetkovic also said there were 30 to
40 employees, and they gave the names of some of them.
At trial and in this Court, the reliability of several of these witnesses was questioned on the basis of interest or otherwise. Several of the women had been in a "relationship" with either Russell Howarth or Stuart Dunning or both. As to Howarth himself, the jury were instructed in the summing up that he was capable of being regarded as an accomplice, and they were given an appropriate warning about relying on his evidence. The trial judge also cautioned them to scrutinise the evidence of Terri Gander and Diana Conray "very carefully", saying that, although not themselves involved in the offences, they might have had reason to know or suspect that the offences were taking place. In support of Howarth's evidence, there was a Workers Compensation Board insurance application form (ex. 29) dated 9 December 1992 stating that only five security guards were employed. Stuart Dunning's explanation of it was that Howarth had told him to misstate the number of employees in order to keep the amount of the premium low. If that was
done, it reflected no credit on either Dunning or Howarth
because the form ex. 29 was signed by both of them. It refers
only to security guards and not other employees of Aust-Asian; but Howarth agreed that it confirmed there were five security
guards permanently employed at Sunnybank Hills. In evidence he had said there were 12 to 15 permanently employed security
guards.
There is one way in which the discrepancy between the two sets of figures may be capable of being reconciled. On any view, there were either eight or nine unsubsidised employees on the office staff of Aust-Asian Security Consultants. Eight of them in fact gave evidence at the trial. They were Ms Gander and Ms Conray; Russell Howarth; Mrs Dunning; Mrs Neilson; Stuart Dunmore; Urbanowski; and Cvetkovic. Andrew Dunning was another, although he did not give evidence. That adds up to nine; but Ms Gander should be left out of the count because she left in the first or second week of November, which was before
the first date in the indictment, which was 24 November 1992.
There were thus eight unsubsidised employees on the office
staff. If the (possibly reduced) number of five unsubsidised
permanent security guards is added in from the Workers
Compensation application form (ex. 29), the total is at least
13, which tallies with the evidence of the Crown witnesses that
there were 12 to 15 permanent employees.
What this leaves out of account is the additional casual employees taken on as security guards from time to time. They are the "extra guys", to whom Howarth referred, who were employed when the customer demand increased on particular occasions. Under the Jobstart programme they counted as "unsubsidised employees" if they were "paid part-time or casual staff who worked at least 20 hours per week". In the case of a business like that of Aust-Asian, it is a possible weakness in
the Jobstart programme that it permitted a security guard to be counted as an unsubsidised employee if he (or she) worked only 20 hours in a particular week. There are indications in the evidence that Stuart Dunning and the other defence witnesses arrived at their totals of 30 to 40 or more unsubsidised employees by including casual security guards who qualified in this way. The evidence raises the question whether the employees who were "subcontracted" out to Aust-Asian could properly be included in the total number of unsubsidised employees. Stuart Dunning said that, as far as he was concerned, those individuals were unsubsidised employees of Aust-Asian if they were paid by Aust-Asian and were wearing its uniform. That view of the matter may as a matter of law be correct. If so, it could help to explain the large numbers of unsubsidised employees stated in the Jobstart schedules.
Whether or not that was the explanation, the jury ought to have been fully instructed to consider whether or not
"subcontracted" employees qualified as unsubsidised employees under the scheme or more accurately whether Stuart Dunning knew they did not. It may be that Stuart Dunning was taking advantage of that weakness in the Jobstart programme. It does not follow that in doing so he was fraudulently overstating the numbers of unsubsidised employees.
Falsity. In the result, the evidence concerning the true number of employees was in many respects confusing and far from cogent. For present purposes, however, it will continue to be assumed that it was open to the jury to accept the prosecution evidence that the total number of employees (including those subsidised by Jobstart) of Aust-Asian Security Consultants never exceeded 12 to 15 at the times specified in the counts in the indictment. To show that Stuart Dunning's representations about employee numbers were false in each case, it is necessary to compare the total employee figures of 12 to 15 with those stated in the Jobstart schedules which he signed. In the right hand column below the number of unsubsidised staff employees is
given first, and then the number of subsidised employees:
Table 1
Stuart Dunning
| Count 1 | Ex.2 | Copy - John Solano |
Ex.15Original - John Solano 26/3
dated 23 November 1992
| Count 2 | Ex.8 | Copy - Richard Curson |
Ex.16Original - Richard Curson 26/3
dated 23 November, 1992
| Count 3 | Ex.9 | Copy - Frank Surmon |
Ex.17Original - Frank Surmon 26/3
dated 23 November, 1992
| Count 4 | Ex.10Copy - Alan Wayne | |
|
dated 23 November, 1992
| Count 5 | Ex.11Copy - Richard Neave | |
|
dated 30 November, 1992 (? 32/10)
| Count 6 | Ex.12Copy - G. Strickland | |
|
dated 11 December, 1992
| Count 7 | Ex.13Copy - Gavin Keehn | |
|
dated 24 February, 1993
Andrew Dunning
Ex.14Copy - Anthony Pischitelli
Original - Anthony Pischitelli 35/12 dated 15 February, 1993
The first seven entries relate to each of the seven counts against the appellant Stuart Dunning. The eighth relates to the single count against Andrew Dunning, as to which he signed the relevant schedule. The information in Table 1 is derived from the Jobstart schedules signed by those persons, which
formed the basis for the false pretences alleged in each case.
The numbers 32/0 given for count 5 look very much like an error for 32/10 through omitting the digit 1 before 0 in the course of completing the box in the relevant schedule (ex. 11) for 30 November 1992. In what follows the assumption will be
made that this entry should read 32/10. The reason why two exhibits are given against each entry is that both the original and a carbon copy of the schedule were put in evidence. From here on only the original exhibit will be referred to. If (but only if) at all relevant times when the Jobstart schedules were delivered to CES, there were only 12 to 15 employees on the
establishment, then it follows that the figures that appear first in the right hand column were overstated, and in some
cases markedly so.
In determining the numbers of employees to show the
falsity of the statements in the Jobstart schedules, it is,
however, also necessary to refer to the evidence of Mr Brian
Hall. He is an investigations officer with the Fraud Prevention Unit in the Commonwealth Department of Employment, Education and Training in Brisbane, who said he was familiar with the Jobstart programme and with the documents, including agreements, schedules, and claims for payment used in connection with it. He was subpoenaed by the defence to produce those records or "books of account" at the trial, but in fact gave evidence at a late stage of the trial about the
result of his searches of the CES records. His evidence, which was not questioned by the prosecution, was that Jobstart subsidy was being paid to Aust-Asian Security Consultants in respect of subsidised employees in the number and on the dates following:
Table 2
Date Subsidised employee nos.
Counts 1-423 November 1992 (Hall) 3 (Table 1)(3)
| Count 5 | 30 November 1992 | 8 | (10) |
| Count 6 | 11 December 1992 | 9 | (10) |
| Count 7 | 24 February 1993 | 6 | (12) |
The comparison above shows that in the case of some of the counts the number of subsidised employees was being overstated by Stuart Dunning. Overstating those numbers would not have
facilitated perpetration of the alleged fraud.
Counts 5 and 6. The evidence from Mr Hall on which Table 2 is based is not easy to reconcile with the evidence of prosecution witnesses that employee numbers totalled no more than 12 to 15. If the numbers of subsidised employees on 30 November 1992 and 11 December 1992 (counts 5 and 6 against Stuart Dunning) were as high as eight and nine, then the number of unsubsidised staff out of a total of 12 must on those two dates respectively have been only four on 30 November, and
three on 11 December. Even if the total of all employees, subsidised and unsubsidised, was 15, the numbers of unsubsidised employees on those two dates could not have been more than seven and six respectively. This cannot be reconciled even with the total of eight or nine unsubsidised former employees who gave evidence or were present at the
trial. The figures of eight and nine given by Mr Hall as the numbers of subsidised employees on 30 November 1992 and 11 December 1992 may be compared with the numbers given in the Jobstart schedules exs. 10 and 11 (Table 1), which stated that there were 10 subsidised employees on each of those dates. The numbers given by Stuart Dunning for subsidised employees in the Jobstart schedules on those dates are therefore higher than those recorded by CES for those dates, which is not suggestive of an intent to defraud.
If the number 12 to 15 given by the prosecution witnesses was the total only of the unsubsidised staff, then Aust-Asian Security Consultants were, on the dates in counts 5 and 6, within the limits of eligibility for subsidy under the Jobstart programme. For 10 subsidised employees, there must be at least 10 unsubsidised staff, which would be met by having 12 to 15 employees who were unsubsidised.
Counts 1 to 4. The discrepancy between the Crown witnesses and Mr Hall's evidence becomes even more apparent when one turns to Hall's figures for subsidised staff on 23 November 1992, which are the subject of counts 1 to 4 (see Table 1). For that date the number given by Hall (Table 2) for subsidised employees was three. To be eligible for Jobstart subsidy for three employees, an unsubsidised staff establishment of only three would be required. On the Crown evidence of the Aust-Asian establishment, taken at the lowest figure of 12, the ratio on 23 November 1992 was thus 12:3.
Admittedly this assumes that the figure of 12 does not include subsidised employees; but, even if 12 is treated as the total of all employees, both subsidised and unsubsidised, the ratio on 23 November 1992 would be 9:3. Both ratios are within the limits of eligibility for the Jobstart programme based on the
extract from the manual read out by Mr Curcurato. The number of employees for whom, according to Mr Hall (Table 2), subsidy was being paid on 23 November 1992 tallies with the number stated (which was three) in the Jobstart schedules exs. 2, 8, 9, and 10 (Table 1), signed on that date, which are the schedules on which the first four counts 1, 2, 3 and 4 of false pretences are based.
Count 7. The number stated in the Jobstart schedule
(ex. 13) dated 24 February 1993 for unsubsidised staff is 35
and for subsidised employees 12 (Table 1). This is the subject of count 7 in the indictment. Assuming that both figures are false, and that the first figure should, on the prosecution
evidence, have been only 12, while on Hall's evidence (Table 2) the second figure should have been six, the true ratio on 24 February 1993 would be 12:6 instead of 35:12 as stated in the Jobstart schedule ex. 13. A ratio of 12:6, or even of 6:6 (if the 12 included the subsidised employees), is still within eligibility limits under the Jobstart programme.
Inducement. There was a further element in the charges which it was for the prosecution to establish. This, in the case of each count, was that the false representation in the Jobstart schedules induced the Commonwealth to part with money to Aust-Asian Security Consultants; that is, that in each instance there was an obtaining by means of the false pretence.
The fact that money was paid to Aust-Asian Security in respect of each employee subsidised can be traced through the exhibits and, in particular, the "screen dump" print-out from the CES computer system. A document placed with the exhibits at the trial contains a summary of the payments made in respect of each employee who is shown in the Jobstart schedules. To that extent, the prosecution established its case. The question whether it was proved beyond reasonable doubt that the payments were made in reliance on the false statement or misrepresentation in each case as to the numbers of unsubsidised employees is, however, another matter. To some extent it is simply a matter of inference from the facts. Each Jobstart schedule containing the falsely stated figures was signed, dated, and submitted to CES in order to induce the payment of subsidy; and, if the subsidy was paid, as in fact it later was, it may be a legitimate inference that the false
statement operated to induce that payment, even if Ms Otter appears to have followed a practice of making confirmatory enquiries of her own about the matter.
Intent to defraud. However, if, in the case of counts 1, 2, 3, 4 and 7, Aust-Asian Securities was, on any view, in fact eligible for the Jobstart subsidy paid by the Commonwealth, it is necessary to consider whether, in the light of this fact,
the element of intent to defraud was established. The same question also arises in relation to counts 5 and 6 if the witnesses' figure of 12 to 15 employees is taken to refer only to the number of unsubsidised staff, and not to the total number of employees both subsidised and unsubsidised.
The question here turns on the meaning of the expression
"with intent to defraud" in s.29A(1) of the Crimes Act, as
interpreted by the High Court in Balcombe v. de Simoni (1972)
126 C.L.R. 576. Specifically, the Court there was considering s.409(1) of the Criminal Code (W.A.), which makes a person guilty of an offence "who by any false pretence ... and with intent to defraud, obtains from any other person anything
capable of being stolen ..."; but, for present purposes that provision is indistinguishable from s.29A(1) of the Crimes Act, which makes a person guilty of an offence "who, with intent to defraud, by any false pretence obtains from the Commonwealth
... any ... money". In Balcombe v. de Simoni, the respondent was convicted of obtaining by false pretences when, in the course of his occupation as a salesman, he sold a book to a householder by falsely representing that he was a student who
had been selected in a contest to represent the youth of
Australia on a goodwill tour overseas. The householder paid the price and received the book in exchange. In the High Court the respondent's conviction under s.409(1) of the Code for obtaining the price of the book by false pretences was upheld (Barwick C.J. and Walsh J. dissenting) by a majority of their Honours consisting of McTiernan J., and Gibbs J. with whom Menzies J. agreed.
In his reasons for judgment McTiernan J. (126 C.L.R. 576,
588) referred with approval to the following passage from the
decision of the Full Court of Victoria in R. v. O'Sullivan
[1925] V.L.R. 514, 518:
"It is an essential element of the offence that the goods should have been obtained by false pretences with intent to defraud. The intent to defraud includes in every case an intention on the part of the accused that the owner of the goods shall be by such false statements induced to do what he otherwise would not do - namely, part with the goods in question."
The same passage from R. v. O'Sullivan was described by Gibbs J. in his judgment as correctly stating the principle (126 C.L.R. 576, 594). His Honour said (Balcombe v. de Simoni (1972) 126 C.L.R. 576, 595-596) in reference to a person
charged with obtaining by false pretences:
"What is essential is that he should have intended to obtain the property by means of a deception. To say this is not to fail to give proper weight to the words 'with intent to defraud'. If those words did not appear in the section it would be enough if the accused made a statement which was false to his knowledge and if the person to whom the statement was made was induced to part with property by reason of such false pretence, and it would be immaterial whether the statement was intended to have this effect. What the inclusion of the words 'with intent to defraud' makes necessary is that the accused should have made the false pretence with the intention of inducing another person to part with property. Therefore, if a beggar obtains money by pretending to be blind, and with the intention that the person to whom the pretence is made should be induced by that pretence to give him alms, the offence is committed notwithstanding that the money is used exactly as the person who gave it intended that it should be used, for the relief of the beggar. Similarly, if a man, by pretending to hold a certain position, or to possess certain assets, intentionally induces another to lend him money which he would not otherwise have lent, the former has an intent to defraud, notwithstanding that he intends to use the money for the very purpose for which he says he wants to borrow it."
The conclusion to be gathered from these extracts from the majority judgments in Balcombe v. de Simoni is that, in order to establish "intent to defraud" under s.29A(1), the prosecution must prove that the accused made a false statement knowing it to be false and intending that the person to whom it
was made should act on it by parting with property which would not otherwise have been parted with. In the context of the present case, it was therefore necessary to show that Stuart Dunning intended his false statements about employee numbers to induce the Commonwealth to pay the Jobstart subsidies.
It is in this respect that the evidence of Mr Hall raised
difficulties for the prosecution. As appears from what has
been said, if the numbers for unsubsidised staff were
overstated, that overstatement, in the case of most but not all of the charges, was unnecessary to justify the number of unsubsidised employees engaged because, even on the most conservative estimate, the number of unsubsidised employees justified the engagement of the number of subsidised employees
in fact engaged. It also appears from what has been said that,
at least on some occasions, the number of subsidised employees was understated. These facts, if understood by the jury, should have raised a doubt whether Stuart Dunning had the necessary intention at the relevant times.
The jury were not directed to the evidence of Mr Hall as
bearing on this issue. Indeed, his evidence was not mentioned
at all in the summing up, either on the question of intent to defraud or as a means of arriving at the correct numbers of
employees, whether subsidised or unsubsidised. Since no redirection was sought, counsel at the trial must bear some of the responsibility for the oversight; but in the circumstances that emerged once Mr Hall's evidence went in, it is not possible with confidence to say that, if the necessary attention had been given to it, the result would have been the same.
In these circumstances the verdicts of guilty cannot be saved by the operation of proviso to s.668E(1) of the Code. In Balcombe v. de Simoni (1972) 126 C.L.R. 576, 579, Gibbs J. held that the only possible conclusion from the evidence in that case was that the necessary intent to defraud existed.
However, that was an appeal from a decision of a magistrate, and his Honour also said that if a judge summing up to a jury omitted to direct that an actual intent to defraud was a necessary element of the crime, he would have considered the direction insufficient. Here the trial judge did direct that an intention to defraud was a necessary element; but the jury were not, in relation to that element, instructed to consider the significance in that context of evidence which was directly relevant to it and which required some explanation for them to understand it.
It is a notable although not necessarily decisive feature of the case that, although the numbers of unsubsidised staff may have been overstated, the Commonwealth does not appear to have paid out more than the amount which Aust-Asian was in fact
eligible to receive under the Jobstart programme. Other less satisfactory aspects of the prosecution evidence at the trial have already been discussed. In particular, the figure of 12
to 15 employees based on the recollections of the witnesses Gander, Conray and Howarth is consistent with their having counted in that total only those members of the staff whom they saw regularly. They were not asked to identify the names of employees whom they included in the total of 12 to 15. There is a possible basis in the evidence for thinking that those
witnesses may have excluded from the total which they gave the numbers of those security guards who were being casually employed for 20 hours or more in a week in order to fill specific demands for their services. It seems clear that Howarth excluded the "extra guys" in giving 12 to 15 as the total number of permanent security guards. The matter is one of which the other two prosecution witnesses would not necessarily have been aware. In the case of Terri Gander, her personal knowledge of employee numbers could not have extended beyond mid-November 1992 at latest, when her employment was
terminated, which was before the date (24 November 1993) alleged in the first four counts of the indictment. In consequence, her evidence about the total number of employees cannot be considered as either relevant to the charges or reliable. It may nevertheless have influenced the jury in reaching their verdicts by appearing to confirm what the other prosecution witnesses said.
What has been said applies with equal force to the case against the appellant Andrew Dunning, which was based on figures of 35/12 given in the schedule ex. 14 dated 15 February 1993. Mr Hall did not give the total of subsidised employees recorded in the CES records for that date (Table 2); but it is unlikely that it was in fact very different from the figure he gave as the number for 24 February 1995, which was 6, compared with the 12 given in the Jobstart schedules (exs. 13 and 14) for both dates (Table 2).
In the circumstances the verdicts cannot be regarded as safe or satisfactory. We would therefore allow the appeals and quash the convictions. Having regard to the general imprecision of the prosecution evidence, based as it is simply
on recollections, of the numbers of unsubsidised staff at the dates of each of the Jobstart schedules on which the Crown case
depends, we are not disposed to order a new trial but consider
that judgment of acquittal should be entered in respect of each
count in the indictment against both appellants.
IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
C.A. No. 59 of 1995 C.A. No.100 of 1995
Brisbane
[R. v. Dunning R.S.and Dunning A.T.]
T H E Q U E E N
v.
ROBERT STUART DUNNING and
ANTHONY THOMAS DUNNING
(Appellants)
Davies J.A.
McPherson J.A.Pincus J.A.
Judgment delivered 23/05/95
Reasons for judgment by the Court
APPEALS BY EACH APPELLANT AGAINST CONVICTION ALLOWED.
CONVICTIONS SET ASIDE. JUDGEMENTS OF ACQUITTAL ENTERED IN
RESPECT OF EACH COUNT ON THE INDICTMENT.
| Solicitors: | Legal Aid Office for the appellants |
| Commonwealth Director of Prosecutions for the respondents |
Hearing Date: 8 May 1995
CATCHWORDSCRIMINAL LAW - Obtaining by false pretences - Section 29A(1) Crimes Act 1914 (Cth.) - Commonwealth Jobstart Programme - Whether accused made a representation or statement of fact - Whether statements or representations were false - Whether false representation induced Commonwealth to part with money - Meaning of "intent to defraud" - Balcombe v. de Simoni (1972) 126 C.L.R. 576 - R. v. O'Sullivan [1925] V.L.R. 514
| Counsel: | S. Kozera for the appellant Robert Stuart |
| Dunning | |
| D.R. Lynch for the appellant Anthony Thomas Dunning | |
| J.M. Dick for the respondent |
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