R v Jenkins
[2002] VSCA 224
•20 December 2002
SUPREME COURT OF VICTORIA
COURT OF APPEAL
No. 377 of 2000
| THE QUEEN |
| v. |
| BRUCE DAVID JENKINS |
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JUDGES: | ORMISTON and CHARLES, JJ.A. and O'BRYAN, A.J.A. | |
WHERE HELD: | MELBOURNE | |
DATES OF HEARING: | 19 and 20 August 2002 | |
DATE OF JUDGMENT: | 20 December 2002 | |
MEDIUM NEUTRAL CITATION: | [2002] VSCA 224 | |
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CRIMINAL LAW – Conviction – Furnishing false information contrary to s.83(1) of the Crimes Act – Whether a valuation report for mortgage lending by a Friendly Society is a document used for an accounting purpose – Obtaining financial advantage by deception contrary to s.82(1) of the Crimes Act – Whether there was evidence of a causal connection between the alleged deception and the obtaining of the financial advantage – Whether an accomplice warning was required.
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| APPEARANCES: | Counsel | Solicitors |
| For the Crown | Mr J.D. McArdle, Q.C. Mr J. Saunders | Ms K. Robertson, Solicitor for Public Prosecutions |
| For the Applicant | Mr P.G. Priest, Q.C. Ms M. Hodgson | C.D. Traill Lawyers |
ORMISTON, J.A.:
Between April 1988 and August 1989 the applicant obtained loans, advances and credit facilities of many millions of dollars, in truth, as I understand the calculations, in excess of $69m., from the friendly society then known as the Order of the Sons of Temperance Friendly Society (“O.S.T.”) for the purpose of various purchases of land and the development of buildings and entertainment complexes in Queensland, as well as a further $96m. guarantee facility in relation to the development of complexes known as Dream World and the Great Adventures Portfolio. Indeed it is not disputed by the applicant that those loans, advances and facilities were granted to him or to two companies under his control. What is and has been disputed is whether he obtained those loans, advances facilities and the like in breach of either s.82 or s.83 of the Crimes Act 1958 of this State (“the Act”). After an extensive trial in the Trial Division of this Court the jury found him guilty on ten counts of the relevant 13 counts on the presentment, acquitting him on three of those counts and in addition on two further counts of providing secret commissions. The facts and circumstances are set out in detail in the judgment of O’Bryan, A.J.A., although, with great respect, I would not agree with all the inferences drawn by him, nor with his conclusions as to ground 2.
Five of the counts[1] alleged breaches of s.83(1)(b) of the Act which in substance in each case alleged that the applicant had dishonestly, and with a view to gain a benefit for himself or one of his companies, furnished information for the purpose of obtaining a loan, guarantee facility or advance (as the case may be) by the production of certain documents, being either valuations or updates of valuations, which were required for the accounting purposes of O.S.T. and which to his knowledge were misleading, false and deceptive in various material particulars. The documents used in this way in each case were what purported to be valuations made by one Tibor Jeno Verebes who valued the various properties put forward as securities for each loan advance and the like at what seemed to be vastly inflated figures, certainly figures which were said by expert witnesses in all but one case to be far in excess of the real value of the properties and indeed for the most part far in excess of the price which the applicant or one of his companies was proposing to pay or had paid for them. Mr Verebes conducted a practice in Queensland as a valuer and it is not entirely clear how the documents were first sought or who precisely transmitted them to O.S.T., or more likely to one Bulfin, a finance broker at the firm of McKinley, Wilson Pty. Ltd., who acted as broker in each transaction for O.S.T. and seemingly also for the applicant himself. There was some dispute at the trial as to precisely the relationship between the applicant and Verebes, the applicant’s contentions being that primarily Bulfin was responsible for obtaining the valuations and that he, the applicant, had had only passing contact with Verebes and had provided him with only a limited amount of information for the purpose of these valuations, although this latter point was hotly disputed by the Crown.
[1]Numbered 1, 4, 6, 11 and 12.
A.Furnishing of documents required for any accounting purpose (Ground 2)
The first relevant issue on this application was one which assumed for the purposes of argument that each of the other elements had been made out, but which asserted that none of the charges were properly brought under s.83(1)(b) of the Act because none of the relevant documents, i.e. the valuations, was “required for any accounting purpose”, as that expression is imported from para.(a) of s.83(1) into para.(b) of that sub-section.[2] It was conceded by the Crown that the valuations, when received and retained by O.S.T., did not form part of the conventional accounting records or documents kept by the Society, but it maintained, and the judge at the trial ruled accordingly, that they could be and were required for an incidental purpose related to the society’s accounts. It is desirable here to set out s.83 as a whole, as it read at the relevant time:
[2]In para.(b) the relevant expression is: “produces … any such … document as aforesaid”; which catches up any document referred to in the preceding para.(a) as “made or required for any accounting purpose”.
“(1)Where a person dishonestly, with a view to gain for himself or another or with intent to cause loss to another -
(a)destroys, defaces, conceals or falsifies any account or any record or document made or required for any accounting purpose; or
(b)in furnishing information for any purpose produces or makes use of any account, or any such record or document as aforesaid, which to his knowledge is or may be misleading, false or deceptive in a material particular -
he is guilty of an indictable offence and liable to imprisonment for a term not exceeding seven years.[3]
(2)For purposes of this section a person who makes or concurs in making in an account or other document an entry which is or may be misleading, false or deceptive in a material particular, or who omits or concurs in omitting a material particular from an account or other document, is to be treated as falsifying the account or document.”
[3]As presently amended the last few words read: “liable to level 5 imprisonment (10 years maximum)”: see Act No. 48 of 1997.
There is relatively little authority on the meaning of the expression “accounting purpose”, indeed only one reported decision in this State, which apparently was not cited to the trial judge, namely R. v. Holt[4], and a few English decisions on a practically identical provision[5] which was the progenitor of s.83 of the Act. That authority will be examined later, after considering more general questions and the course of the trial.
[4](1983) 12 A.Crim.R. 1.
[5]Section 17 of the Theft Act 1968 (U.K.)
(i)Whether valuations “required for accounting purposes” under Friendly Societies Act
There being no basis for considering that the valuations were “made” for “any accounting purpose”, the primary issue was and is therefore whether they were “required” for such a purpose. It is not altogether clear by whom a record or document should be so required[6], although I would tend to the conclusion that it ought to be the body (or person) whose accounts are prepared and kept, who should “require” the record or document for any of its accounting purposes. Nevertheless, having regard to the fact that in many cases of this kind those subjected to dishonest attempts to gain benefits may be either complicit in the defective keeping of accounts or may, on the other hand, be so inefficient in their keeping of accounts that they are an easy target for fraudsters, the word “required” should not be confined to what is subjectively required but it should also comprehend the requirements of taxation and other revenue authorities and those of regulatory authorities who are entitled to search or investigate the relevant books of account, i.e. whatever is objectively required. Thus, wherever a body’s accounts must be audited for a particular purpose, the relevant accounting standards laid down for the preparation of those accounts may relevantly require certain records or documents to be kept for the “accounting purposes” of the subject entity. To that extent I would agree with the learned judge, but clearly enough the requirement could be imposed, subjectively in a sense, by the business (or person) who keeps the relevant accounts.
[6]There is no direct authority on this question, to my knowledge.
In the present case the only legislative provisions which were pointed to by the learned judge, both in his ruling and in his charge to the jury[7], as providing a potential basis for such a requirement under statute or regulation were those laid down by the Friendly Societies Act 1986 ("the FSA"), being the Act then in operation controlling the affairs of friendly societies.[8] For this particular purpose, counsel referred to various provisions of the FSA relating to both the use of valuations and the obligation to keep proper accounts. There can be no doubt that it was fundamental to the lending of moneys under that Act that, before an advance on the security of the mortgage over land could be made, a valuation had to be obtained from an independent valuer (see s.68) and that a friendly society could not lend (“must not lend”) more than 75% of the value of a residential property and 662/3% of the value of the land put forward as security in any other case, subject to certain presently irrelevant exceptions: see s.69. Nor is there much doubt that these valuations ought to be retained by a society, if not as a matter of plain common sense, then because of the specific provisions contained in Part 3 Division 4 relating to actuarial valuations, although the latter valuations, as I would understand it, relate generally to the benefit funds of societies rather than individual properties constituting securities for specific loans, and we were not taken to any provision which required valuations under s.68 specifically to be the subject of any actuarial report.
[7]It will be seen that, although the FSA was referred to in the charge, it was only so referred for the purpose of outlining the prosecution contentions, without further exposition by his Honour.
[8]Subsequently the FSA was repealed by the Friendly Societies Act 1996.
There were in addition general provisions in the FSA relating to the keeping of accounts and the making of audits (under Part 3 Division 3) which made like provisions in the (then) Companies (Victoria) Code applicable with a series of necessary modifications relating to friendly societies. Moreover, benefit funds, as established pursuant to Part 4 Division 2 of the FSA, were subject to a requirement that the society ensure that proper accounting records be kept in respect of each fund: see s.73C.
An attempt was made to suggest that the valuations came within the definition of “accounting records” in s.3(1) of the FSA, but in my opinion that is not a correct view. Undoubtedly, paragraph (a) contained a comprehensive list of the ordinary accounting records which one might expect a society to keep, such as invoices, receipts, vouchers and other documents of prime entry, but reliance was placed on paragraph (b) which referred also to “any working papers and other documents that are necessary to explain the methods and calculations by which accounts are made up”. It was suggested that valuations would be the kind of documents which were necessary to explain the calculations of the amount lent in each transaction or, more precisely, the amount which any loan or advance could not exceed. However, paragraph (b) of the definition was tied to what was “necessary” to make up the “accounts” of a society. The FSA specifically defined “accounts” in the succeeding definition in the same sub-section as meaning (and it is to be noted that in this case the word “includes” was not used) the following items:
“(a) surplus and deficit accounts; and
(b) balance sheets; and
(c)notes (other auditor’s reports or director’s reports) which are attached to or intended to be read with any surplus and deficit account or balance sheet;”
(It should be further noted that “surplus and deficit accounts” were also therein defined as including the revenue account and the profit and loss account.) It is obvious that these “accounts” were intended to comprehend the annual accounts put forward by a society, not the basic primary records described in para.(a) of the definition of “accounting records”. Paragraph (b) therefore had a somewhat more limited scope and, without there being direct evidence that the valuations were required for the preparation of the annual accounts, I would not conclude that it is obvious that they were required for the preparation of those accounts. This conclusion, I think, may be emphasised by reference to the fact that actuarial valuations were separately carried out under the FSA, so that, as it would seem, the adequacy of security for the loans of the society did not have to be the subject separately of specific discussion or mention in the ordinary accounts of a society: see esp. Division 4 of Part 3 of the FSA.
It is conceivable that my analysis of the requirements of the FSA is inadequate and that, on a proper understanding of the legislation as applied to the actual facts, especially the way O.S.T. operated its business, one might conclude that the retention of these valuations, and in particular the use of any figures contained therein for the making up of the society’s accounts, was a necessary part of the keeping of the society’s accounting records or the preparation of its accounts. Any uncertainty, however, would point to the necessity for specific evidence to have been called on the question at the trial upon which the judge might have given legal directions to the jury as to the proper conclusion they could draw as to whether the valuations were “required for any accounting purpose”. As things stood, I am not persuaded that the provisions of the FSA of themselves enabled the Crown to go to the jury or to persuade the judge that the matter was established beyond argument in the way it appears to have been done in the course of the trial, in particular when a no case submission was made and rejected at the end of the Crown case. As will be seen, the Crown certainly put its case to the jury on an interpretation of the provisions of the FSA which is inconsistent with the analysis I have just made.
(ii) The judge’s rulings and directions to jury
Moreover, the learned judge, in his ruling, appeared to place strong reliance on the provisions of the FSA and took a broad approach to what was required to be done with valuations for “audit” purposes, but said that it was unnecessary to consider all the specific statutory provisions of the FSA for this purpose. The essence of his ruling is, nevertheless, challenged entirely, not merely as to the legal conclusion that he formed but because it led, seemingly without further argument or explanation, to the jury being directed that, if forwarded or furnished to O.S.T., the relevant valuations could have constituted documents required for an accounting purpose. The jury were entitled, so it appeared to his Honour, to reach that conclusion without further evidence and without the need to direct them specifically as to how they might apply the law to the evidence so as to reach any conclusion on that subject.
For this purpose it is important to see how the learned judge in fact directed the jury on the relevant issues. After referring to s.83 of the Act, his Honour stated a number of matters which the Crown had to make out. First was the need for the Crown to prove that the applicant had furnished information for a specified purpose which in the present case was to support applications for loans, advances and the like from O.S.T. Secondly he said that “the Crown must prove that the information was provided in the form of a document required for an accounting purpose. That is, at least one of the purposes of the document must be an accounting purpose.” This was consistent with authority but he said no more as to how that might in law be established. In each case he said that the allegation was that the document was one of the valuation reports by Mr Verebes. The third element which the judge stated had to be proved was that the document was or might have been, to the knowledge of the applicant, misleading, false or deceptive in a material particular. After referring to the necessary aspects of this third element, which are not presently in contention, his Honour then stated that the final two elements which had to be proved were that the furnishing of the information had been done “dishonestly” and that it had been done “with a view to gain” for himself or another, the legal aspects of which were again not in contention.
His Honour then repeated the five elements and then returned to what had to be established in relation to count 1, in particular as to the need to show the nature of the document furnished. As to this he said, in terms which must be set out in a little detail:
“In relation to count 1, which concerned the Glen Crag valuation, the Crown case, as with all those involved with furnishing false information, was that the information, being the valuation report of Tibor Verebes, was supplied by the accused for the purpose of a loan application to O.S.T. It was submitted that the information was in the form of a document required for the accounting purposes of O.S.T. This was so because the valuation was required by the Friendly Societies Act, which applied to O.S.T., before any money could be lent. Further, the valuation was necessary to calculate the total amount which could legally be lent, namely, two-thirds of the value of a commercial property. And, further, it was necessarily required for audit requirements under the Friendly Societies Act as evidence that there had been compliance with the law. It was put that there was evidence from a solicitor, Archer, and Faithfull of O.S.T., of checking the loan proposal against the valuation, and evidence from the accountant Curtin, who had been involved with the office of the Registrar of Friendly Societies, that he would expect such a document to be kept. The fact that it was not referred to on a mortgage master record computer which recorded the loan itself was irrelevant. In all these circumstances, the Crown submitted that the valuation report was clearly a document required for accounting purposes. Again, that submission applies to each of the relevant counts, and I will not repeat it on each occasion that I deal with those issues.” (Emphases added.)
His Honour said nothing, so it would seem, as to whether those legal contentions about the FSA were correct, nor anything further about how the jury should properly determine the issue.
In due course, after considering certain factual contentions of the Crown relating to other aspects of those counts, he returned to the accused’s contentions on the accounting “requirement”. However, again what was summarized was merely those contentions of fact, without any further direction as to the law. So he told the jury that it had been argued that the mere fact that the valuations were required by statute and used to check each loan against the two-thirds ratio did not make the documents the kind that are required for accounting purposes. Further, he repeated counsel’s contention that there was no evidence that an auditor ever looked at the valuations and that the witness Curtin had said that his expectation that the document would be kept but only as an “expression of opinion”. Finally, he repeated the contentions that there was no specific evidence that the valuations were kept, that they were not referred to on the Mortgage Master Record computer and that the Crown could have called evidence on this aspect but had not done so.
The primary difficulty is that the learned judge, although thereafter carefully repeating the contentions of the Crown and counsel for the applicant, never thereafter expanded on what was required at law for the purpose of determining whether each of the valuations was required for accounting purposes. Rather it seemed to be assumed that, if the Crown established the matters which have been set out above[9], that would be sufficient, although at all times the judge appeared to leave the matter to the jury. In my opinion that direction was quite insufficient for the purpose of charging the jury on this issue. Indeed it was misleading, or at the least highly confusing, in that it set out the legal contentions of the Crown in terms of what the FSA “required” both as to the information in the “document” and as to the “audit requirements” of the FSA.[10] The jury may well, in the circumstances, have thought that the judge was endorsing the legal conclusions implicit in those contentions, not because he purported there to give directions to them, but because no other legal directions were given to them as to the FSA. At the least the inherent difficulties pointed to the need for specific directions on the subject.
[9]See esp. para [12].
[10]See the italicised passages in the quotation set out in para.[12] above.
As to these arguments as to the sufficiency of the judge’s charge on this issue, the respondent sought not so much to defend the charge itself as to assert that the judge’s earlier ruling had been correct, and that, on that hypothesis, it was unnecessary to give detailed directions on any related question to the jury, other than to leave to them the factual issue as such. Thus, so it was argued, there was no direction, and did not need to be any direction, as to what in law might amount to an “accounting purpose” and what might be “required” for that purpose, within the meaning of s.83.
However, the underlying facts, as I understand the evidence, do not incontrovertibly support the conclusion that each of the valuations was required for an accounting purpose, unless s.83 ought to be read as requiring proof only that they formed part of the Society’s business records generally. Thus the judge placed reliance on the evidence of the investigator Mr Curtin, who was, of course, unable to speak of O.S.T.’s day-to-day practice except by reference to the Society’s records and to what he “expected” was good business practice. The most Mr Curtin could say was that O.S.T. kept the valuations as part of the Society’s “documentation”, and that he “expected … those documents to be maintained as an appropriate business record” of O.S.T. But that much is obvious. Of course, O.S.T. would (or should) have kept those valuations as part of their general documentary records, for a valuation was a necessary factor in the lending process which ought to be retained to show to any person interested that O.S.T. had satisfied the provisions of ss.68 and 69 of the FSA.
It does not, however, follow, as night follows day, that each valuation would have formed part of or would have been required for the accounting records or “purposes” of O.S.T. In my opinion, as I have attempted earlier to demonstrate, the requirements of these sections were essentially prudential, not accounting, for, though they must be satisfied, they had to be satisfied before a loan or advance was made but they did not determine the amount of a loan or advance, only the maximum amount which could be so lent or advanced. Once a decision had been made to lend a specific sum, and that loan satisfied s.69, the valuation itself thereafter had no bearing on the amount of the loan for any future purpose and it would have had no direct relationship to any of the matters ordinarily recorded in the books of account of the Society, or at least that is how I understood it in the absence of further evidence. Nor, as I would understand the evidence, did the valuations contain other information as to loans or advances, such as one might find, say, in a loan application form, which might be seen fairly to be required for the preparation and maintenance of appropriate accounting records or indeed for any “accounting purpose”.
Again, reference by Mr Curtin to the need to keep proper “business records” took the relevant question no further, for many documents form part of an enterprise’s business records, but they do not necessarily also form part of their accounting books or records. The question which had to be answered was whether, for the purposes of s.83, these valuations had been “made or required for any accounting purpose” and, with great respect to the learned judge, no part of Mr Curtin’s evidence resolved that issue. Unless the judge was able incontrovertibly to conclude that the valuations were in fact required for an accounting purpose, then, notwithstanding any ruling, he was still obliged to leave that question to the jury after giving appropriate directions as to the nature of such records and documents and as to the proper meaning of the expression “required for any accounting purpose”, for those are not words the meaning and effect of which one could fairly ask members of a jury to resolve for themselves. As I have sought to show, the Crown arguments to the jury on the effect of the FSA were wrong in significant respects and the judge should have firmly told them so.
The learned judge also in the course of his ruling referred to the evidence of one Archer, a solicitor in a firm engaged by O.S.T. to deal with its conveyancing transactions and other matters arising out of loans and advances of this kind. Mr Archer conceded that he took no part in assessing the loan applications as such and that his instructions were ordinarily only for the purpose of having appropriate mortgages and other security documents drawn up. For that purpose he would be provided with copies of the loan proposal and of O.S.T.’s acceptance, together with the valuation and any other related documents, again for the preparation of the necessary securities and other documents in order that he might attend at the settlement of the transactions. So far as the valuations were concerned, his only function was to check that the security was within the requirements of the FSA, no doubt so that he might advise O.S.T. if the proposed transaction was contrary to the statutory restrictions. For myself I cannot see any connection between the performance of Mr Archer’s functions and the making or requiring of documents for O.S.T.’s accounting purposes. Mr Archer was dealing, in passing, with the prudential requirements, solely in order to give legal advice if there was any proposed breach. The documents sent to him and the documents prepared by him had no bearing on O.S.T.’s own records, unless and until a mortgage or other security was executed and exchanged, when they might have become part of the relevant records, if there were appropriate evidence as to their use in this way. With great respect, I cannot see that Mr Archer’s evidence advanced the resolution of this question further, even if valuations kept by the Society might have become part of its accounting records.
The only witness who spoke directly as to O.S.T.’s practice was Mr Faithfull, its Investment Manager at the relevant times. It seems that there was no evidence given by persons responsible for the keeping of the Society’s accounting records, and it will be remembered that neither the Managing Director nor Mr Robinson, the Investment Director ordinarily responsible for approval of loans of the kind here in question, were called by the Crown. Mr Faithfull’s evidence was more detailed, but even in relation to the relevant valuations, those made the subject of count 14 were not the subject of direct evidence from Mr Faithfull. Moreover Mr Faithfull’s evidence suffered in general terms, not from any lack of detail in his description of his own activities, but from its failure to state with any precision the connection the valuations had to their retention in the Society’s books and accounting records relating to the transactions. Again it appeared to be assumed that the widest interpretation would be given to s.83 and that it was unnecessary to call evidence as to what was required for the Society’s accounting purposes.
Mr Faithfull’s evidence, however, took the matter a little further in one regard. It is clear that he had important functions to perform in checking the details of loan proposals and in satisfying himself that the provisions of the FSA had been complied with. It is not entirely clear whether he received the relevant documentation before or after approval had been given to particular loans or advances, although there seemed little doubt that the decision to make such loans and advances was not in his hands, but was ordinarily in the hands of Mr Robinson. Nevertheless he said as to his ordinary practice:
“When the documents came in, I would read the valuation, just to make sure that the property that they were putting in the application for [sic] was one that was referred to in the valuation, and make sure that the valuation was within the guidelines as set down by the Friendly Societies Act.”
Moreover, once a loan was approved, it was Mr Faithfull’s task to “set up the details” of the loan or other advance on the “mortgage master record computer system”. It seemed, however, that there was no evidence that details of the valuation were entered in the same record nor that the valuation was inserted into or attached to any other file or papers which formed part of the accounting records of the Society. In other words, it seemed to be assumed by the prosecution that there was sufficient to show that Mr Faithfull had checked each transaction (which he dealt with) against the valuation and that in some way or another the valuation was retained in the records of the Society generally, but, on my understanding of the evidence, nothing further relevant to this issue was sought to be established from his testimony.
These matters seem likewise to have been accepted by the learned judge in his ruling for, after referring to two authorities, Attorney-General’s Reference No. 1 of 1980[11] and R. v. Sundhers[12], his Honour stated that he should take a broad approach to the class of documents covered by the section, inasmuch as a document could satisfy the test if it was merely required “for an accounting purpose as a subsidiary consideration”.[13] His Honour then concluded this part of his ruling by saying:
”What seems to me to be incontrovertible in the present case is that the LVR [Loan to Value Ratio] requirement of the Act makes it essential that the valuation report is used for the purpose of calculating the amount of any credit facility which may be extended, or any guarantee provided, in compliance with the legislation. This may be regarded as an accounting exercise. On the evidence to which I have referred, this exercise was done, and the valuation reports were retained by O.S.T. Further, it is not to the point that the valuation report itself was not mentioned on the Mortgage Master Register. Certainly it formed a basis for calculating the sum entered.”
His Honour therefore held that there was evidence that the documents consisting of each of the valuations were required by O.S.T. for an accounting purpose and thus held that there was a case to answer on each of the counts based on s.83.
[11][1981] 1 W.L.R. 34.
[12][1998] E.W.C.A. 316.
[13]A-G’s Reference No. 1 of 1980 at 369.
For reasons which will appear, I am afraid I cannot accept the learned judge’s reasoning, which regrettably seems also to have infected his approach to the manner in which he directed the jury on this subject. It is an overstatement to say, as the judge did, that the valuation report was “used for the purpose of calculating“ the amount of the loan. None of the requests or applications, as I understand them, sought a sum by reference to a percentage or proportion, for they sought specific sums. The valuations therefore were not required for the purpose of actually calculating the amount of the loans; they were only required to check that the amount sought by way of loan or advance did not exceed the prudential requirements of the FSA. Thus, in my opinion, they were used to check that the amount to be lent or advanced was not excessive but not actually to calculate it. If they were merely a means of making that check then, again contrary to his Honour’s observation, that process was not an accounting exercise but an exercise for the purpose of satisfying the prudential requirements of the legislation, for it did not control the amount lent or determined the relevant figure calculated, except to the extent that it placed a maximum upon that which could be lent in conformity with the FSA. The Society determined what sum it wished to lend or advance, whether as requested by the borrower or whether in order to put a lower figure by way of counter offer, and the valuation was used solely to ensure that there was no breach of s.69. On the evidence before the Court, I therefore do not consider that it was an accounting exercise which was then performed; rather it was a prudential exercise and valuation documents were kept, not for the purpose of making any calculations or further calculations as to the sum to be lent or that which the Society would agree to lend, but merely as documents retained in order to satisfy any prudential “audit” carried out pursuant to the FSA.
The assumption behind his Honour’s ruling, in rejecting the no case submission, was that a consideration of the evidence as a whole, and more especially the evidence to which I have just referred, was that the valuations when kept by the Society were required by it for an accounting purpose. The fact that the judge reasoned in this way could not, of course, take the issue from the jury, so that the jury had to find the necessary facts if the counts based on s.83 were to be made out. However, it seems likely that the same reasoning led the judge to the conclusion that no explanation had to be given as to the process the jury had to adopt in answering the question whether each valuation was “required for [an] accounting purpose”, for he merely saw that as a question of fact to be resolved by them. There was thus no explanation of what an “accounting purpose” was, nor as to what circumstances could lead the jury to a conclusion that a particular document was “required” for any such purpose. The judge must therefore have seen it as purely a question of fact which the jury was capable of answering from their own knowledge and experience.
With great respect, it is not obvious, at least to me, why a jury would have sufficient knowledge of accounting matters to be able to reach any necessary conclusion unaided by any analysis and appropriate direction from the trial judge. Many judges, indeed, have some knowledge of accounting practices and others may think that they do, but the present issue was not going to be resolved by the judge, even if he himself was entitled to take “judicial notice” of such matters, for it was the jury which would have to reach the requisite conclusion, a jury made up of people ordinarily without specialised knowledge or training in matters such as accounting, unless it happened that one or more were so qualified by virtue of their training and experience. It would be highly unlikely, however, that all members of the jury had such qualifications.
I venture to suggest, moreover, that even a general knowledge of accounting might not be sufficient to answer the question posed in the present case. Many people may have an understanding of the theory of debits and credits, and of what items are treated as the income and expenditure of a business, but one is not here dealing with a small business, but with a large business run as a friendly society pursuant not merely to rules of accounting of the conventional kind, but also in accordance with those which are appropriate for the Society to satisfy the provisions of the FSA. Certainly I, as a judge, with a smattering of knowledge of these matters gained over a number of years, would not feel confident to say how the accounts of a friendly society should be made up, nor of what documents are created or “made” for such a purpose, nor, especially of the documents which are “required” for that purpose. At the least I should wish to have expert evidence to explain how those figures are made up and how a friendly society goes about keeping and making up its accounts and what it “requires” for those purposes. If that be so, then it would seem all the more important that a jury should have before them proper evidence upon which they might act to reach factual conclusions as to these matters. In turn that should be accompanied, and in particular here should have been accompanied, by an explanation in law, simple though it might be, of what is meant by the expression “required for any accounting purpose”.
However, to be fair to the learned judge, it seems likely that upon a reading of the authorities, he saw this issue as so clear as to require neither expert evidence, nor any explanation by way of direction to the jury as to what those words meant. He did so, as I understand his reasoning, because he saw that a valuation in circumstances such as these was a business document required for the purpose of ascertaining or at least verifying a relevant figure as to the amount of each loan or advance, which necessarily would form part of the Society’s books and accounts. I have already pointed out what I perceive to be, with respect, one error in his reasoning, but it is fair to say that he read the authorities cited to him as giving such a broad-brush meaning to the section so as to make “accounting purpose” of peripheral significance, inasmuch as the valuations might be seen to have been essential documents to be retained by O.S.T. as “appropriate business records”. Thus he saw the matter as a simple matter of fact requiring no great explanation or elaboration to the jury by way of legal directions.
Of course, if the learned judge be correct in his conclusion as to the proper interpretation of the section, then not only should his ruling stand, but it would also justify, at least to a significant degree, the manner in which he directed the jury on this issue and his omission to give any legal explanation of the words here in contention, namely, “required for any accounting purpose”. It is therefore necessary to examine the history of the section and the relevant authorities to see whether they stand for such a wide interpretation as the judge put upon them and, as I understand it, O’Bryan, A.J.A. would also put upon them.
(iii) Section 83 of the Crimes Act 1958: its history and interpretation
Section 83 of the Crimes Act set out above[14], though relatively simple in form, has a number of unusual aspects both of substance and expression, which are largely the product of its history. When inserted into the Act in 1973 by the Crimes (Theft) Act 1973[15], it had a side note, “False accounting”, which is now printed in the Act as a heading but, as O’Bryan, A.J.A. has pointed out in para.[149] of his judgment, those words cannot be of assistance in the interpretation of the section by reason of the relevant provisions of the Interpretation of Legislation Act 1984.[16] That cannot, however, deny a proper characterisation of the section as one directed to the falsification of accounting and related records and the provision of false material contained in accounting and related records and documents. That this is so may be seen not merely from its language, but also from its sources and the reason for its introduction into the Act. As is well known, the section, together with most of the provisions found in Division 2 of Part I of the Act, was taken from the Theft Act 1968 (U.K.), as part of a policy decision to simplify, as was then hoped, the law relating to theft and other property offences. The reasons behind Parliament’s decision to insert those provisions may be seen in a relatively short report of the Chief Justice’s Law Reform Committee’s Sub-Committee on Theft, under the chairmanship of Menhennitt, J., dated 8 February 1971. There were only some minor proposed alterations to the provisions adopted in the English Theft Act which are not presently relevant, so that when the Sub-committee recommended that “false accounting” should be covered by the amending provisions to the Victorian Act[17], one may fairly take it that they were recommending the adoption of s.17 of the English Act (and related sections), the whole of which was in fact set out in Annexure 1 to the Sub-Committee’s report. The only difference between s.83 as inserted into the Victorian Act and s.17 of the English Act was in the reference at the end of para.(b) of s.s.(1) to the class of guilt and the maximum level of punishment. In fact, it is only those provisions which have been amended over the years in Victoria, essentially varying the level of punishment.
[14]See para.[3].
[15]By s.2(1)(b) of Act No. 8425 of 1973.
[16]See s.36(2A).
[17]See para.11(g) on p.9 of the report
Consequently, to discover the reasoning behind the form and substance of s.83, one must therefore go to the report which led to the passing of the English Theft Act, namely that of the English Criminal Law Revision Committee in its eighth report entitled “Theft and Related Offences” published in May 1966.[18] The Committee, under the chairmanship of Sellers, L.J., included such eminent lawyers as Lord Edmund Davies, Lawton, L.J. and Professor Glanville Williams.
[18]Cmnd 2977.
Before turning to the recommendations of the Criminal Law Revision Committee, it is desirable to make one general observation and then to describe some of the history of the sections which s.17 of the English Act was intended to replace, which is largely reflected in the sections which s.83 was intended to replace, although the Victorian Sub-Committee did not concentrate greatly on earlier provisions in this State. In the first place s.83 (and s.17 of the English Act) had an unusual characteristic in that it is effectively an inchoate offence, which does not require proof of the taking of property or the obtaining of any benefit or financial advantage. The offence is complete, under paragraph (a) if there is a falsification (in the broad sense) of any account or relevant record or document, and in the second place, under para.(b), if there is merely a furnishing of information using such an account, record or document knowing it to be materially misleading or deceptive, again speaking in general terms. The opening words show that there must also be proof of dishonesty and also that the alleged act has been done “with a view to gain or with intent to cause loss”, each heads which are themselves defined[19], words which indicate that gain or loss need only be contemplated, not effectuated for the purpose of making out an offence under the section. Bearing in mind the general law as to attempts[20] and the common law of conspiracy to defraud, one might fairly ask why this specific kind of inchoate offence was needed, especially in circumstances such as the present where, for the most part, financial advantage was indubitably obtained, indeed not disputed, by the applicant who challenges only the prosecution as to the criminal manner in which he obtained those advantages by way of loan, advance, guarantee and the like. Each of the reports points out, however, that at the time the various predecessor statutory provisions were passed, there were many deficiencies in the common law relating to fraud and the obtaining of benefits by deception, which at first were remedied by Parliament in one way or another, but by provisions largely directed to specific problems.
[19]See the definitions of “gain” and “loss” contained in s.71(1) of the Act, which in turn reflect almost precisely the language of s.34(2)(a) of the English Act.
[20]See now Division 12 of Part 1 of the Act.
As the English report points out, clause 13 as there proposed was primarily intended to take the place of three sections passed in the nineteenth century, being ss.82 and 83 of the Larceny Act 1861[21] and the whole of the Falsification of Accounts Act 1875, although, as the authors fairly concede, the clause “somewhat alters the idea underlying those provisions”.[22] Sections 82 and 83 of the Larceny Act 1861 were somewhat elaborate provisions which were applicable only to directors, managers, public officers and members of bodies corporate and public companies, and they were in fact the re-enactment of ss.6 and 7 of the Punishment of Frauds Act 1857[23]. That earlier Act, to my knowledge the earliest provisions of this kind, was occasioned by a variety of frauds committed by trustees, directors and the like which had largely come to public attention in consequence of the trial of the directors of the British Bank. The history of that Act, as seen from Sir James FitzJames Stephen’s A History of the Criminal Law of England[24], shows that Sir Richard Bethell, then Attorney-General and later Lord Westbury, L.C., sought by the Act to make criminal a large number of frauds by trustees, agents, bailees and directors and officers of companies which had previously escaped because of technical deficiencies at that time in the law relating to theft and embezzlement.
[21]24 & 25 Vict. c.96.
[22]See para.103 at p.52 of the report.
[23]20 and 21 Vict. c.54.
[24]Vol. III Chapter 28 pp.156-159.
The relevant sections of the Punishment of Frauds Act were ss.6 to 8, shortly thereafter re-enacted as ss.82 to 84 of the Larceny Act 1861[25]. Each section was confined to directors, managers, public officers and members of any body corporate or public company. By s.83 it was made punishable if such a person should “with intent to defraud, destroy, alter, mutilate, or falsify any book, paper, writing, or valuable security belonging to body corporate …, or make or concur in the making of any false entry, or omit or concur in omitting any material particular, in any book of account or other document … “ (emphases added). It will be noted that the section comprehended the making of false entries and the omitting of material particulars not only in any book of account but also in all other business documents and it likewise made punishable generally the alteration or falsification of books, papers and the like without confining that aspect to accounts or similar records. By s.84 it was made punishable if such persons should “make circulate or publish, or concur in making, circulating, or publishing any written statement or account which he shall know to be false in any material particular, with intent to deceive or defraud any member shareholder, or creditor of such body corporate or public company, or with intent to induce any person to become a shareholder …, or to intrust or advance any property to such body corporate …, or to enter into any security for the benefit thereof …”. This prohibition on the publishing of false statements or accounts was, it should be noted, general in effect and was largely designed to prevent the publication of false prospectuses which were seen to be rife at the time, which was shortly after the introduction by statute of incorporation with limited liability.[26] A further section in that legislation, seen subsequently to have been of significance, though of more limited scope, was s.6 of the Punishment of Frauds Act, re-enacted as s.82 of the Larceny Act 1861, which imposed penalties on directors and the like who received property but who, “with intent to defraud, omits to make or to cause or direct to be made a full and true entry thereof in the books and accounts of [any] body corporate …”.
[25]Although the committee referred in para.103 only to ss.82 and 83, it later (para.105) referred to s.84, but more importantly para.(b) of s.17(1), as recommended, had a close resemblance to s.84.
[26]See also Stephen, Vol. III pp.228-229 and 233.
The persons at whom those provisions were directed were a relatively small group of the public, namely trustees, directors and other corporate officers, who were seen to be misusing corporations for their own fraudulent ends. A more general provision of this kind was not enacted until 1875, when the Falsification of Accounts Act 1875 was passed[27], which was directed generally at employees who were behaving fraudulently. The reason for this seems to have been the difficulty in prosecuting people for embezzlement, the statutory provisions at the time being interpreted in a way which made convictions hard to obtain if there was merely a general deficiency and there could not be proved to have been specific acts of embezzlement. So Professor Kenny explained the matter in his Outlines of the Criminal Law[28]:
[27]38 and 39 Vict. c.24.
[28]See, e.g., 15th ed. para.323 at p.267.
“It is easy to understand that dishonest clerks often escaped on indictments for embezzlement, because of the difficulty of thus proving an actual appropriation, even when it was clear that money had been received by them, and obtained without their making any entry or other acknowledgment of the receipt.”
Stephen explained the matter somewhat differently in his work[29], pointing to various defects in the law of forgery and the absence of any general provisions relating to the “falsification of particular books of accounts”. The example he there gave, however, seemed to point more to the defects in the law relating to embezzlement, for he described a prosecution against a clerk at a country bank who transferred œ2,000 from a customer’s account to extinguish his own overdraft which failed because, in the absence of forgery, the use of a mere entry in the bank books was treated as amounting only to an unauthorised loan. The only substantive provision in the Falsification of Accounts Act[30], s.1, read in effect as follows:
“If any clerk, officer, or servant, or any person employed or acting in the capacity of a clerk [etc.] shall wilfully and with intent to defraud, destroy, alter, mutilate, or falsify any book, paper, writing, valuable security, or account which belongs to or is in the possession of his employer, or has been received by him for or on behalf of his employer, or shall wilfully and with intent to defraud make or concur in making any false entry in, or alter or omit, or concur in omitting or altering, any material particular from or in any such book, or any document, or account then in every such case the person so offending shall be guilty of a misdemeanour …”.
Again it should be noted that, although the Act was called the Falsification of Accounts Act, the provision extended beyond accounts to books, documents and the like. The breadth of this section, as with ss.82 to 84 of the Larceny Act, may have had significance for the interpretation of the sections in the Theft Act which replaced them, but for what was said at the time the later sections were passed.
[29]Vol. III p.186.
[30]Also known as Lopes’ Act, although it was introduced by Sir John Lubbock.
The objects sought to be achieved by the learned authors of the Criminal Law Revision Committee Report on Theft and Related Offences nearly 100 years later, nevertheless, were made clear in that report. They were looking at all property offences and seeking to rationalise, clarify and improve them as part of one coherent scheme. It was known that there had been much duplication, as well as glaring omissions because of the piecemeal form that past legislation had taken: see paras.6-14. As part of their reform of offences based on false pretences they put forward the offences of obtaining property by deception and obtaining financial advantage by deception, although the subject matter of the latter offence was somewhat narrower than that ultimately passed in Victoria. As the Committee stated in para.102, the proposed clause 13 (s.17 of the Theft Act) as well as clauses 15 and 16 were intended to deal with offences of fraud not covered by the criminal deception proposals therein earlier discussed. Sections 82 to 84 were, together with the Falsification of Accounts Act, to be repealed and replaced by more simply expressed offences directed to “falsification of accounts”. Those aspects of s.84 of the 1861 Act, in particular, penalising directors and officers for publishing false statements were to be preserved in clause 15 (ultimately s.19 of the Theft Act, which substantially corresponds to s.85 of the Victorian Crimes Act), which they said was a clause which in substance “penalises false statements by company directors and persons in similar positions”.[31] The reason for this was that the former s.84 “was originally intended for and is primarily concerned with, fraudulent statements in prospectuses”[32]. Its language was so wide that it would have included, for example, a statement made by a member of a non-commercial body corporate on a subject not concerning finance. Clause 15 may be therefore seen as intended to deal separately with the kinds of deception likely to be committed by directors and officers of companies who make false statements about the affairs of corporations: see generally para.105.
[31]Para.105 of the Report.
[32]Ibid.
Consequently, it is not difficult to see why the Committee chose to concentrate on the falsification of accounts when proposing clause 13, ultimately s.17 of the Theft Act and s.83 of the Victorian Act. In paragraph 103 the Committee when dealing with that subject began by stating: “Clause 13 penalises falsifying accounts or producing or using false documents for accounting purposes. It replaces 1861 ss.82 and 83 and the Falsification of Accounts Act 1875 but it somewhat alters the idea underlying those provisions.” How the underlying idea was to be changed was then explained. After summarising the existing provisions, they summarised them by saying: “Thus the essence of the offences is falsification of accounts in order to defraud an employer. The purpose of the offences is to deal with employees who take steps to defraud their employers which cannot be brought within the offences of larceny, embezzlement or other misappropriation.” They pointed out that those sections were in fact wide enough to cover falsification in order to defraud persons other than employers, though that result was apparently not intended. They concluded their explanation of the new provision in these terms:
“We considered whether to limit the offences to falsification to the prejudice of an employer or to make them, as now, general so as to cover falsification to the prejudice of anyone. We decided in favour of the latter course, partly in order to deal with cases of dishonesty which would not otherwise be covered and partly in order to avoid argument whether falsification in a particular case was of the purpose of defrauding the employer or somebody else. In consequence of widening offences the clause applies to using documents as well as to falsifying them; but as a corollary the offence under the clause is limited to documents required for accounting purposes instead of including documents of all kinds. The practical effect however will be little, if at all, different.” (Emphasis added.)
There can be no doubt in my opinion that the object sought to be achieved by the introduction of the new provision was to confine it to books of account and documents required for accounting purposes, as such. The provenance of s.83 in the Victorian Act is abundantly clear, if one has regard both to the manner in which the English Criminal Law Revision Committee reached its conclusions as to an identical provision and to the way in which the Victorian Sub-Committee of the Chief Justice’s Law Reform Committee advocated its introduction without any qualification. Counsel did not take us to the Parliamentary debates but I assume, having regard to the nature of the amending Act and its largely complete copying of the English Act, that little further would have been said or would need to have been said.
In my opinion, therefore, the section means what it says when it refers to documents which are “required for any accounting purpose”, so that the proper approach, if there be seen to be any ambiguity, is to view the legislation in the light of the desire of those responsible for its drafting to deal with the falsification of accounts and the use of such falsified accounts, with which one must include any related accounting records. The only remaining issue is how close the relationship has to be between the document and the accounting purposes of a party intended to be affected. An “accounting purpose” may be a somewhat loose concept but the intent is clear enough, and so the documents in question should either form part of, or be made or required in connexion with the preparation of, the accounts of the business, in which I would again include both the accounting records as well as the ultimate accounts prepared and published to those with a relevant interest by way of balance sheet, profit and loss account, income and revenue statement or the like. Again one should not be too rigid about the extent to which a document is required, but it should not be a chance or barely incidental connection; there must be some purpose to be served by relating the document, by bringing it into existence, attaching it for one purpose or another, or using the information contained therein, to the totality of materials which are kept or retained by a business or other entity as part of its accounting processes. One might even conceive, though it is not necessary here to conclude, that a document may be required for accounting purposes which is kept quite separately or returned, thrown away or destroyed, which is nevertheless required at some particular stage for the purpose of making up a business’s books of account or used and needed for some other aspect of a business’s accounting records.
What one should be concerned with, however, is a connection with the accounting processes of a business or other entity, not mere use in its business or other operations. For example, documents may be required for the negotiation of contracts or, in large enterprises, for the preparation of prospectuses, but, though particular documents might be required for those purposes, they would not thereby be required for accounting purposes, unless there were accounting aspects of a transaction to which the document was particularly referable. So on its proper construction, unless the section is to be construed on authority as meaning something wider, a requirement for some business purpose or another should not in itself be treated as sufficiently connected, at least unless there was also an incidental but related requirement for the accounting purposes of an enterprise. It will, nevertheless, be necessary to look at the recent authorities on both the English and Victorian sections to see whether authority requires any different conclusion.[33]
(iv)Authorities on meaning of s.83 and of the equivalent provision in the English Theft Act
[33]I have found no relevant authority from other jurisdictions, where the equivalent provisions (if there are any) are different in form and in many cases closer to the earlier English (and Victorian) provisions.
There have been a number of cases decided, especially in England, since the passing of the English Theft Act and of s.83 in Victoria. Most of them have not been reported in the authorised reports and the factual basis for many of them is often obscurely stated. In fact there has only been one reported Victorian case on the section and, before that case was decided, only two of the English authorities to which I am about to refer, were themselves decided. In many cases, unfortunately, the connection between the relevant documents and the affected businesses, books of account or other accounting records is by no means obvious.
The first relevant English case was R. v. Mallett[34]. A charge under s.17 of the English Act alleged the furnishing of a “document required for an accounting purpose”, namely a hire purchase agreement which was false or misleading in a material particular in that it inaccurately described a named person as having been a director for eight years. The information was alleged to have been provided in a form sent to a hire purchase company with a view to gaining moneys from the company upon acceptance. In none of the reports I have read[35] is it made clear how the hire purchase document was used or intended to be used by the hire purchase company, although one might guess that the materials in the form were used to set out the basic accounting information in relation to the transaction. The primary and relevant point argued was that the false statement ought to have been one which was “material to an accounting purpose”. After saying that earlier authorities were of little use, Roskill, L.J. for the Court of Appeal said that the material particulars did not have to be “directly connected with the accounting purpose of the document”[36]. His Lordship accepted that the document itself had to be made or required for an accounting purpose, but he said that the document in that case qualified in that respect and that “it has not been argued that this hire purchase agreement was not such a document”.[37] It seems that once it had satisfied that test then, having regard to the language of the section, it could be shown to be false or deceptive in any material particular regardless of the relevance of that particular to the accounting processes of the business. It will be seen, therefore, that nothing decided in Mallett takes the present question any further, unless it be by reference to the undisputed assumption made as to the “requirement”, which was not set out in detail sufficient to comprehend later. I have referred to the case in some detail only because it has from time to time been relied upon implicitly as showing that, in the case of a document such as a hire purchase agreement, the requirement for an accounting purpose need not be directly established. That was not what Mallett decided.[38]
[34][1978] 1 W.L.R. 820; 3 All E.R. 10.
[35]Including that in the Criminal Appeal Reports: 67 Cr.App.Rep. 239.
[36]At 822; 12.
[37]Ibid.
[38]The misuse of it may be attributed to the headnote in the Weekly Law Reports at 820, which wrongly asserted that it was held that the hire purchase agreement was a document made or required for an accounting purpose, the headnote being regrettably inaccurate in a material particular!
The second English case decided on the section raised the matter squarely, on apparently very similar facts, but with evidence showing the connection between the documents and the relevant accounting records. In Attorney-General’s Reference (No.1 of 1980)[39] a point of law was referred for the opinion of the Court of Appeal relating to the falsifying by the accused of householders personal loan proposal forms sent to a finance company to enable the borrowing of money to buy appliances which the accused was selling. The forms had a number of material inaccuracies and it had been alleged that the accused had acted dishonestly with a view to gain for himself moneys from the finance company. On this occasion, however, the case referred set out the connection between the forms and the finance company’s records. Those forms, when received by the finance company, were used as input documents for the company’s computer records. Not only was the information set out on the reverse of the forms used to make up those records, but the forms had blank spaces in which the company’s staff made entries showing details of the loan, interest and other financial particulars relating to the loan, which was also retained and used to make the necessary entries in its accounting records held on the computer. The trial judge, who had directed an acquittal, appeared to have reached the conclusion that, until acceptance, the forms were merely “for use” in the accounting process and that, as there was no “duty to account”, there had been no documents “made or required” for the relevant purpose. Lord Lane, C.J. speaking for the Court of Appeal said that this was clearly erroneous and that all that had to be shown was that the documents were made or required for the company’s accounting purposes. The mere fact that the documents were “made” for purposes other than accounting purposes was no answer if the documents were “required for an accounting purpose as a subsidiary consideration”.[40] Borrowers would undoubtedly wish the forms to be used for the purpose of having their loan proposals considered by the finance company, but nevertheless the documents might also be required by the company for its accounting purposes. Although the proposals might be rejected, nevertheless: “The purpose, or at any rate one of the purposes, of the figures on the reverse side of the form was in due course to provide the necessary information for the computer [accounting system].”[41]
[39][1981] 1 W.L.R. 34; [1981] 1 All E.R. 366.
[40]At 38; 369.
[41]Ibid.
It should be noted that the argument in part depended upon slight matters of timing and form. For example, one argument rejected was that, until the finance company accepted the proposal, it was not required for an accounting purpose, so that it was contended that the false statement in the document was made at a time when it was not necessarily so required. The Court saw no merit in this argument for the real question was what the purpose of the document was. Secondly, there was an argument that the part falsified was not in fact the part used for the input of material into the company’s computer accounting system. Again the Court rejected the argument stating that the document was one entire document, so that “it was as to part required for an accounting purpose; it was as to part falsified”.[42] The two matters did not have to be in the same part of the document. Finally it should be noted that the Court found that the matter there under consideration had not been debated in Mallett’s case and that the form of the question answered ‘yes’ was this: “Whether a person who dishonestly falsifies a personal loan proposal form in material particulars which he sends thereafter to a finance company, and which they use in their accounting process, falsifies a document ‘required for an accounting purpose’…”[43]. (Emphasis added.)
[42]Ibid.
[43]See the referred question at 36 and the answer at 38-39.
The only Australian decision on the section, that of the Court of Criminal Appeal in this State in 1983, was R. v. Julius Sefton Holt[44] in which Tadgell, J. on behalf of the Court made some brief comments on the application of the section, approving certain propositions in Mallett and Attorney-General’s Reference No. 1 of 1980. The relevant two counts were again those of falsifying, with a view to gain, documents required for accounting purposes. The facts were even stronger in that the accused stockbroker had sent manifestly inaccurate letters to a client purporting to list the client’s current shareholdings and asking the client to check his own records. The second relevant count indeed referred to an attachment called a “statement of account”. Many of the entries were clearly wrong and shown to be part of a scheme by the stockbroker to deceive his client. The only grounds relied upon in the appeal were to the effect that there was no evidence that the documents were required for accounting purposes inasmuch as it was said that the words should be confined to documents prepared specifically for an accounting purpose, such as a document forming part of the formal accounts. Tadgell, J., with whom Young, C.J. and Kaye, J. agreed, rejected[45] that argument, relying upon Attorney-General’s Reference No. 1 of 1980. His Honour continued[46]:
“It is sufficient that the document in question is made for any other purpose if it is in fact required for an accounting purpose: Mallett … . In this case the two documents … were prepared by the applicant for Morgan as his client and offered to him as a statement of his shareholdings or some of them. The applicant invited Morgan to check his own records against them. The applicant was in my opinion putting the documents forward for use by Morgan for his accounting purposes.”
The application was therefore dismissed but, having regard to the obvious nature of the case against the applicant there, the decision does no more than emphasise that an indirect or secondary requirement for an accounting purpose is sufficient. I would not read the reference to Mallett as implying that it is any easier to prove such a requirement, for, as it was stated in Holt, the document must “in fact” be so required.
[44](1983) 12 A.Crim.R. 1.
[45]At 18.
[46]At 18-19.
The next two English cases contain dicta as to the operation of the section but in a context where an offence under the section was being considered as an alternative to a more serious offence charged but not made out. In the first, R. v. Graham & Ors[47], it was held that no alternative count could be established but that the two earlier English cases showed that it was “plain” that “the effect of this section is not to be whittled down”.[48] In its context that statement should not be taken further than those authorities justified. Nor do I accept, at least in unqualified terms, another dictum in that case that knowledge of the purpose for which any record or document is made or required does not form part of the mens rea of the offence.
[47][1997] Crim.L.R. 340.
[48]At 341.
In the second, R. v. Okanta[49], again it was held that an alternative verdict could not be brought in under s.17 where a verdict for obtaining by deception had been set aside. Likewise it was held that the elements of the offence were sufficiently different to prevent that from being done, but the facts here were closer to the present and the reasons, admittedly amounting no more than obiter dicta, may be of some assistance. A letter was sent with a false statement about a borrower’s annual salary in order to persuade a building society to lend money. As the Court of Appeal pointed out[50], the evidence was directed towards the reliance placed by the society on the appellant’s letter and there was no evidence as to the accounting practices of the building society to whom it was addressed. The prosecution asked that it might be assumed that the information was not simply required for the purpose of deciding whether or not to make a loan, but that it was “inevitably” used for the purpose of compiling its internal accounting records or by its auditors in preparing or checking the accounts. That was not accepted and the Court said[51]:
“If there were room for the making of any such assumption, we would be inclined to assume (in the absence of evidence on the topic) that, whereas a Building Society relies upon a ‘reference’ or confirmatory letter of the kind signed by the appellant for the purpose of deciding whether to make a loan (which we do not think amounts in itself to an accounting purpose), the calculation of the instalments for repayment or the rates of interest to be charged are based simply on the customary or ‘tariff’ rates of the Society which have regard to the particular period and type of advance made.” (Emphasis added.)
It may be said of the present case that the valuations were only used for the purpose of deciding whether O.S.T. would make the relevant loans and thus not “required” for an accounting purpose.
[49][1997] Crim.L.R. 452. A transcript of the judgment from Smith Bernal was provided to the Court [1996] E.W.C.A. Crim. 1725.
[50]Para.[24].
[51]Ibid.
Finally a string of four cases, decided by the English Court of Appeal in 1997
to 1998, were relied upon, or at least were referred to the Court as dealing with this issue and I have not been able to find any subsequent discussion of the matter.[52]
[52]One further decision at the time, in R. v. Cummings-John [1997] Crim.L.R. 660 was not cited and does not seem to have been subsequently referred to. The report is too abbreviated to be of any use here.
The first of the cases, Osinuga v. DPP[53] the Court of Appeal purported to follow Attorney-General’s Reference No. 1 of 1980 but on what, as it seems to me, was somewhat slender material. Although it is said[54] in the judgment that “there was no direct evidence which stated in terms that the housing benefit form was a document required for accounting purposes”, there was, according to the case stated, evidence upon which the magistrates were entitled to come to the conclusion that it was in fact being “used” for such a purpose. The document in question, being a housing benefit application form, was clearly intended in the first place to persuade the local authority whether or not to grant the applicant a housing benefit, but it was also held that, if the authority came to that conclusion, the applicant’s income had to be compared with his outgoings in order to calculate what he was entitled to receive, which was based on the material in the form. Thereby it seems to have been accepted that the form was required for the authority’s accounting purposes in the sense of assisting in the relevant calculations, thought it is not clear precisely what evidence was given. The relevant inference may well have been clear and obvious to both magistrates and the Court of Appeal because of their familiarity with the system of housing benefits, but I will assume only that that knowledge was of a kind which enabled them to draw an appropriate inference to the standard required in a criminal proceeding. The argument addressed to the Court was that the purpose of the form was to determine whether the applicant was entitled to a benefit but that it did not have the purpose of enabling a calculation as to the applicant’s benefits. The Court applied Attorney-General’s Reference No. 1 of 1980 to find[55] that the claim form was in fact “serving a dual purpose” and that the calculation of the benefit done “by reference to the form which was submitted” showed that the document was also required for a “subsidiary purpose”, namely the housing authority’s accounting purposes.
[53][1998] Crim.L.R. 216; a full Smith Bernal transcript of the judgment given 21 October 1997 has been supplied to the Court: [1997] E.W.H.C. Admin 902.
[54]At para.[15].
[55]See paras.[8] and [9].
I should add that I would be very cautious about reading much into the ease with which the Court, or more precisely the magistrates, drew the relevant inference in Osinuga. It is clear that the Court said[56] that this was a matter which must be “decided in terms of the evidence which is before the magistrates” in other cases and that the Court was making no “assumption” as to the requirement. As they said[57], it was “clear from the facts found by the justices that there was evidence on which they were able to make a finding” as to the calculations and their use, which was a factual conclusion supported in materials set out in the case stated though not described in detail in the judgment. So they were justified in finding that the document was one required for an accounting purpose of the housing authority.
[56]At para.[16].
[57]At paras.[13] to [15].
The next case, and the one, with great respect, seems best to expose the difficulties and false assumptions which may be made in cases such as the present, is R. v. Sundhers[58]. The appellant had been convicted of furnishing false information by producing a number of insurance claim forms said to be required for the accounting purposes of the insurance companies to whom they were sent. The difficulty was that, although the judge left the issue as to whether the forms had been required for an accounting purpose to the jury, there was little or no evidence upon which they might act to reach that conclusion, unless they were entitled to assume from the very nature of the document that that could be one of its purposes. There was, as the Court noted, no evidence before the jury from representatives of the insurance company or otherwise other than the fact that the claim forms would be retained by the company but without describing the purpose of their retention; nor was there any expert evidence as to the use of claim forms, even if that could have been given in the absence of the factual foundation for it. The recorder had directed the jury that they might take account of the fact that the form and its contents formed part of the basis for assessing the appellant’s loss. Moreover he had suggested that, if auditors or the like needed some evidence as to why payments had been made, the claim form would be an important part of the material supporting the payment. That was likewise the basis for prosecuting counsel’s contention before the Court of Appeal and he drew particular attention to provisions in the Companies Act (U.K.) relating to the keeping of accounting records. Counsel had conceded that the claim forms were not part of the company’s records for that purpose and could not be assumed to be part thereof. He said, however, that it could be assumed by the jury that the material was such as would form the basis of some of those records, so that the jury could assume that the forms were required for the purpose of making up the company’s books.
[58][1998] Crim.L.R. 497: a copy of the Smith Bernal transcript of the judgment was supplied to the Court [1998] E.W.C.A. Crim. 226.
However sensible that result might have appeared to the Court and however likely it was that the claim forms would have been retained for accounting purposes, Buxton, L.J. for the Court said[59] that the argument foundered on the absence of any relevant evidence, the only evidence being that the forms were simply retained for unstated purposes. As his Lordship expressed it[60]:
[59]At para.[12].
[60]Ibid.
“The question that the jury had to answer was, as is conceded, a question of fact, otherwise it would not be going to the jury at all. There was no actual evidence before the jury to demonstrate to them that that [i.e. retention for accounting purposes including audits] is what in fact is done with claim forms.”
So, if the jury reached the relevant conclusion, they must have done so “without specific evidence by drawing … on its general knowledge and experience of the world”. However much that was ordinarily open to them, where it is open it must be permitted only on the assumption that the relevant issues “fall within the general experience of the members of the jury”.[61] But as Buxton, L.J. continued[62]:
“But we regret to say that that assumption cannot be made in respect to a matter such as accounting practice. It no doubt seems self-evident to lawyers …, but for this approach to be justified we would have to be satisfied, and simply as a matter of common sense we feel we cannot be satisfied, but this was a matter, this matter of accounting practice, that the jury could draw on from their own knowledge and experience rather than by dint of evidence.”
So the Court considered that there was no evidence before the jury from which they could properly have concluded that the documents were required for an accounting purpose.
[61]At para.[13].
[62]Ibid.
That conclusion seems, with respect, to be eminently correct, for this issue is not a matter for the jury to speculate about, assisted as it may well be by some more or less particular knowledge on the part of individual jurors but not of others. That is the very reason why evidence, including expert evidence, on such issues should be put before a jury. The use of “local” or specialised knowledge coming from some jurors is no longer to be encouraged. The Court of Appeal added[63] that often very little evidence will have to be called, especially as to the use of claim forms and the like in a business’s accounting processes. They said[64] also that the matter need not be the subject of expert evidence; indeed that kind of evidence might not be truly appropriate, but, with great respect, that wrongly assumes that invariably a simple exposition of “how the claim forms are treated in an accounting way” will answer the question posed by the section. Such an assertion makes another assumption, namely, that proof that “use” of the documents is sufficient, whereas the section demands that they be “required” for an accounting purpose. That will, I believe, often require some expert appreciation of what is required and why, rather than drawing an inference from the fact that the documents are merely kept in the records of an accounts department.
[63]At para.[14].
[64]Ibid.
Two later cases fell on the other side of the line. The first was R. v. Sampson[65]. In this case the accused were charged with producing a document required for an accounting purpose in that they completed a mortgage application form which was false in a material particular and forwarded it to a building society in order to obtain a loan on a house. The form required a good deal of information to be provided including the applicants’ income. In the course of evidence it appeared that the forms were first considered by those responsible for granting the applications and that they were then sent for processing. It seems that when the document was processed a number of figures were worked out, at least in part from the form. Then the relevant witness agreed with this proposition put by way of question: “That [i.e. the processing] is done at Harlow so that presumably the application and the supporting documents that you sent to Harlow become part of their accounting process?” Unfortunately the trial judge misunderstood some of the evidence, so that he had directed the jury along lines that certain other material on the form was relevant to determining whether it was required for an accounting purpose. That material was only relevant to whether the loan should be granted or not. The Court also criticised a passage in which the judge had in effect speculated that the material on the form might have been referred to by the auditors in auditing the society’s books. As was said by Evans, L.J. for the Court of Appeal[66]: “The question was not what auditors might or might not have wanted to see, but what answers they might or might not have been given to whatever questions they asked: the question was for what purpose or purposes was this document required by the building society?” After further criticising the judge for giving what was in effect a direction of law to the jury as to the conclusion properly to be drawn, his Lordship concluded that the directions were clearly unsatisfactory. His Lordship then turned to whether the conviction was safe or not. As to that, however, he said only this, that[67]: “We have already expressed the view that it is impossible to argue … that this document is anything other than a document required for an accounting purpose.” Although the document was used to determine whether a loan should be made, “it is equally clear that the document was forwarded to Harlow, where the relevant information was part of its accounting processes.”[68] This seems[69] to have been based on the fact that the material on the form was required by the society for the purpose of assessing the amount of the loan and the appropriate rate of interest, which in part depended upon the answers given on the form. I would infer that those matters were seen to be essentially “accounting purposes”. The appeal against conviction was therefore dismissed.
[65]Unreported, 3 April 1998. A copy of the Smith Bernal transcript of the judgment was supplied to the Court: [1998] E.W.C.A. Crim. 1177.
[66]At para.[30].
[67]At para.[33].
[68]At para.[35].
[69]See at para.[26].
The court considered the authorities - Mallett[113], Okanta[114] and Osinuga[115] - and Evans, L.J. said;
"Those authorities show that the question whether the document in question is one that is required for an accounting purpose depends, first, upon the nature of the document itself, and secondly, upon the evidence as to the use for which it was made or required in the particular case."[116]
I consider this decision is on all fours with Holt and establishes "dual purpose" as an appropriate consideration for the document.
[113]R. v. Mallett (supra).
[114]R. v. Okanta (supra).
[115]Osinuga v. D.P.P. [1998] A.C.L.R. 216.
[116]Supra at [17].
The court found that the application had a dual purpose. It was required for the purpose of enabling the society to decide the application on its merits and also was required by the society for the purpose of assessing what the amount of the loan should be and what was the appropriate rate of interest. Upon that basis the court held that the application form was a document required for an accounting purpose.
The decision in Osinuga[117] by the Queen's Bench Division comprising Kennedy, L.J. and Smith, J. was concerned with a housing benefit form containing false information. The Court held that the document had a dual purpose, one purpose being that it was required for an accounting purpose. The interesting feature of the case was that the court held that, although there was no direct evidence in terms that the form was required for an accounting purpose, there was sufficient evidence for the magistrates to come to the conclusion that the form was being used for an accounting purpose, namely the calculation of benefit to be paid being made by direct reference to the form.
[117]Supra.
Reference should be made to Sundhers[118], a decision of the Court of Appeal, Criminal Division (England). That was a case concerned with furnishing false information contrary to s.17 of the Theft Act 1968 in the form of false claim forms for home insurance policies. The court held that as there was no evidence before the jury to demonstrate what was done with claim forms, either by the insurer, or an expert, the jury could not conclude that the documents were required for an accounting purpose nor could they draw the conclusion from the nature and form of the claim forms. The court comprising Buxton, L.J., Kay and Moses, JJ, said that:
"[I]f the jury were to form a conclusion on the face of the claim form and of its nature, they could only do so on their knowledge and experience of the world. That was something juries could usefully do when dealing with matters that fell within the general experience of their members, but that assumption could not be made in respect of a matter such as accounting practice."[119]
[118]R. v. Sundhers [1998] Crim.L.R. 497.
[119]R. v. Sundhers (supra) at 498.
Finally, there is the decision of Manning[120] in the Court of Appeal, Criminal Division (England). There the documents to which the false accounting charges related were insurance cover notes. The cover notes were provided to insurers setting out how much an insured had to pay and how they had to pay. The trial judge had indicated to the jury the elements in the cover notes from which they might conclude that they were documents required for an accounting purpose. The court held it had been open to the jury to conclude, simply by looking at the cover notes, that they were documents required for an accounting purpose since they set out what the insured owed.
[120]R. v. Manning [1999] Q.B. 980.
The conclusion I have reached on the authorities is that the critical words in s.83: "made or required for any accounting purpose", have a plain meaning and it is both unnecessary and inappropriate for me to embark upon the task of explaining the meaning. It is enough to say that I consider the expression "accounting purpose" contains words of wide import for "accounting" comprehends a wide variety of operations related to the books and records of a firm or business not all of which need to be performed by a qualified accountant and "purpose" has a wide meaning.[121]
[121]See The Macquarie Dictionary, pp.1399-1400; The Australian Concise Oxford Dictionary at p.890.
I consider it is necessary in every case involving the critical words in s.83 to answer the question whether the evidence will support a finding that the document in question was one required for an accounting purpose, whether or not the document might have been required for another purpose or purposes. In order to answer the question regard must be had to all of the following matters:
(i)the nature of the document;
(ii)the use for which it was made or required by the person to whom it was produced;
(iii)the evidence, whether direct or indirect, upon which the fact-finding tribunal, whether it be a magistrate, a judge or a jury, could conclude that the document was made or required for an accounting purpose.
In the present case, the nature of each valuation report was patently obvious. It cannot be gainsaid that one of the purposes of the report was to assess the current fair market value of the property described in the report for mortgage security purposes. But it had another purpose, equally important. It enabled O.S.T. to determine whether to advance money by way of mortgage on the subject property, and how much to advance. Most importantly, the report provided the all important LVR, but if it did not do so the report enabled a person, such as Faithfull, to make the calculation for the purposes of s.69 of the Friendly Societies Act. The evidence of Faithfull, in particular, and Archer provided evidence for the jury of the use for which the report was required by O.S.T., that use being for an accounting purpose.
I agree with the trial judge that Archer's evidence[122], Faithfull's evidence[123] and Curtin's evidence[124] provided evidence from which the jury could draw an inference that valuation reports were documents O.S.T. "required for an accounting purpose". The valuation was used for the purpose of calculating the LVR before money was lent and it was required for audit requirements as evidence that there had been compliance with the Friendly Societies Act.
[122]Transcript 158-9 and 162.
[123]Transcript 975-979.
[124]Transcript 904.
The charge explained how inferences may be drawn and explained the valuation report in terms of the accounting purposes of O.S.T. in relation to count 1 and all counts involved with furnishing false information.[125] It was open to the jury to infer that the valuation reports were required for an accounting purpose without the need for a witness to say so.
[125]Transcript 1534, 1536.
In my opinion the three bases upon which ground 2 was argued all fail.
Ground 1 - No Accomplice Direction
Mr Priest submitted that the trial judge should have given the jury an accomplice direction or warning with respect to the evidence of Verebes. No request was made to the judge for such a direction by either party. Apparently, the judge was expected to raise the matter of an accomplice warning himself. Had he invited counsel to consider the matter I have little doubt that defence counsel, an experienced criminal advocate, would have asked the judge not to do so, for the defence case was that Bulfin and Robinson, assisted by Verebes, were the real villains who made large sums of money out of arranging loans with inflated valuations, while the applicant was simply a "fool" and was not associated with any wrongdoing by others.
To associate the applicant with Verebes as accomplices in respect of the crimes charged would be likely to have seriously hindered the defence. The trial was conducted on a different basis to that conjured by Mr Priest since the verdicts are known.
Quite clearly, the jury was entitled to find, and must have found, that Verebes prepared false, misleading and deceptive valuation reports for his own benefit and the benefit of Bulfin, Robinson and others. The jury must have found that the applicant knowingly and dishonestly used the reports to obtain loans from O.S.T. The evidence clearly revealed that the applicant personally sought valuations from Verebes and, either alone, or with Bulfin, applied pressure to Verebes to inflate the value of property or furnish false or misleading information to O.S.T. The evidence was that the applicant asked Verebes to value property "as is" and not "as will be" after refurbishment, and Verebes did so. In the case of Dreamworld, the valuation figure was grossly inflated.
In his final address, the prosecutor avoided describing Verebes as an accomplice although he linked Verebes' misconduct with Bulfin.
The matters raised in ground 1 were also raised in Pen He[126] with respect to a Crown witness, Thath Pech. Counsel raised with the trial judge the question whether Pech was an accomplice but then indicated an intention not to invite the jury to so regard her. On appeal, counsel for the applicant submitted that an accomplice warning should have been given, indeed that the judge was required as a matter of law to give an accomplice warning.[127] The court held that, if there was evidence on which a reasonable jury could have found on the balance of probabilities that Pech was an accomplice in the sense of a participant as a principal in the crimes charged, an accomplice warning had to be given, and that this was so even though such a warning had not been sought and indeed had been disavowed. In the circumstances, the court considered that a new trial had to be ordered as the proviso to s.568(1) of the Crimes Act 1958 could not be applied. The court was of the opinion there was evidence on which a reasonable jury could have found that Pech was an accomplice.
[126]R. v. Pen He (2001) 122 A.Crim.R. 487.
[127]Davies v. D.P.P. (U.K.) [1954] A.C. 378 at 395-399; Tripodi v. The Queen (1961) 104 C.L.R. 1 at 9 and R. v.Miletic [1997] 1 V.R. 593 at 605.
Mr McArdle challenged the conclusion of the court in Pen He that an accomplice warning is mandatory. He referred to Gallagher[128] where the Court of Criminal Appeal held that there had not been a miscarriage of justice as a result of the trial judge's failure to give an accomplice warning when no warning was plainly in the best interests of the applicant. Mr McArdle also referred to Fountain and Tootell[129]. There, the Court of Appeal found it unnecessary to decide whether there is an exception to the general rule requiring an accomplice in circumstances where the giving of such a warning could not serve the interests of the accused or would damage his interests.
[128]R. v. Gallagher [1986] V.R. 219.
[129]R. v. Fountain and Tootell (2001) 124 A.Crim.R. 100.
It is necessary to retreat in time to 1954 when the House of Lords decided Davies[130]. Lord Simonds, L.C. delivered a speech on behalf of five Law Lords in which he stated the rule of law as to accomplices' evidence in three propositions[131]:
"1.In a criminal trial where a person who is an accomplice gives evidence on behalf of the prosecution, it is the duty of the judge to warn the jury that, although they may convict upon his evidence, it is dangerous to do so unless it is corroborated.
2.This rule, although a rule of practice, now has the force of a rule of law.
3.Where the judge fails to warn the jury in accordance with this rule, the conviction will be quashed, even if in fact there be ample corroboration of the evidence of the accomplice, unless the appellate court can apply the proviso to s.4(1) of the Criminal Appeal Act 1907."
[130]Supra.
[131]Davies (supra) at 399.
No question can arise in the present case regarding the proviso, for the substantial evidence implicating the applicant in all the counts was that of Verebes. Without his evidence it would have been difficult to admit in evidence the valuation reports, or to explain how they came about.
Lord Simonds then posed and answered the question: "What is an accomplice within the rule?" He described three categories of persons called as witnesses who have been held to be, or held liable to be treated as, accomplices. Only category 1 is relevant in the present case.
"On any view, persons who are participes criminis in respect of the actual crime charged, whether as principals or accessories before or after the fact (in felonies) or persons committing, procuring or aiding and abetting (in the case of misdemeanours). This is surely the natural and primary meaning of the term 'accomplice'."[132]
[132]Davies (supra) at 400
Verebes was presented in the County Court on two counts of furnishing false information contrary to s.83(1)(b) of the Crimes Act 1958. They were representative counts and concerned valuation reports for three properties (count 1) and five properties (count 2), none of which was a property with which the counts against the applicant were concerned. The applicant's offences were different and the properties involved were different. In the evidence of Verebes, it was never suggested that he was participes criminis with the applicant. He was proffered as an incompetent and/or inexperienced valuer and under the influence of Bulfin. It could not have been found by the jury on the balance of probabilities that Verebes was a principal or accessory before the fact to the applicant's offending. Had the jury been instructed on the meaning of accomplice (category 1 in Davies) it could not have found that the applicant and Verebes were accomplices. Neither counsel for the applicant nor counsel for the prosecution would be likely to have asked the jury to do so. It simply happened that the applicant made use of Verebes' incompetence as a valuer and biddable nature in the hands of Bulfin, to advantage of the applicant. I am, therefore, of the opinion that the rule of law explained by Lord Simonds was not applicable to the circumstances and, therefore, was not breached by the trial judge. An accomplice warning was not required, in my opinion, and ground 1 fails. I leave for further consideration whether a trial judge has a discretion not to give an accomplice warning, if to do so would be likely to damage the defence case.
Ground 4 - Separate Trial Direction
Mr Priest submitted that the judge's direction to the jury that: "Each count must be considered separately in light of the evidence which applies to it" did not go far enough. In particular, he argued, the judge should have warned the jury that particular findings on one count did not bind them with respect to another. Further, he submitted, the trial judge ought to have given the jury a propensity warning.
The need for the judge to go further in his direction than he did arose because the counts in the presentment related to six properties (the sixth being Wildwood Estate, Buderim - counts 8 and 9 - on which not guilty verdicts were found) with the evidence revealing a similar modus operandi in relation to each property, Mr Priest submitted. Consequently, there was a need to warn the jury that, if it found dishonesty in respect of one property transaction, the finding could not be used in proof of a count involving another property. Further, Mr Priest submitted, the jury should have been warned that they ought not reason from a finding of guilt on one count that the applicant was the kind of person likely to have committed another offence.
The verdicts of acquittal, particularly in relation to Buderim, indicate that the jury heeded the direction to consider each count separately and did so.
The judge's direction to the jury was more expansive about the separate trial issue than the single sentence quoted above relied on by Mr Priest. It is necessary to repeat all that the judge said:
"Before turning to the elements of the various charges, I want to say something about the separate trial of the counts on this presentment.
The Crown here brings a number of separate or different charges, or counts, as they are technically called, against the accused. They are all on the presentment, being the formal document, and you have a copy of that document in front of you. Bringing the charges on the one document, and in the one case, is done for convenience. Obviously, in this case, it would be highly inconvenient and expensive to hold a separate trial before a separate judge and jury on each count. However, you must not allow convenience to displace justice. The accused is entitled, as is the Crown, to a separate consideration by you of each crime charged.
It would be quite wrong to say, simply because you find the accused guilty or not guilty on one count, that he must be guilty or not guilty, as the case may be, of another. Each count must be considered separately in the light of the evidence which applies to it. You must ask yourselves as to each count separately, 'Am I satisfied beyond reasonable doubt by the evidence that he is guilty of this crime?' If that question is answered 'Yes', you should find the accused guilty on that count. If it is answered 'No', you should find the accused not guilty of that count."[133]
[133]Transcript 1530-31.
During the charge and at its conclusion, no exception was taken to the direction about the separate trial issue by counsel for the applicant, although opportunities to do so were offered by the judge during and at the conclusion of the charge.
Mr Priest relied upon the judgment of the Court of Appeal in Appleby[134]. Appleby was charged with 94 counts of theft and one count of obtaining financial advantage by deception. The trial judge divided the counts into four groups. The judge gave the jury a direction to give separate consideration to each count, on several occasions, but did not include in his charge a propensity warning. No exception was taken to the directions at the trial, but on appeal, it was argued that the directions were inadequate in all the circumstances. This ground was upheld in the leading judgment of Smith, A.J.A., in whose judgment Callaway, J.A. and Southwell, A.J.A. agreed. Smith, A.J.A. said[135]:
"In my view the direction was inadequate. The insufficiency was increased in my view because the charges for the second and third groups spoke only of the counts about which the judge was then charging the jury. His Honour's charges did not refer to the counts referred to in the earlier charges for which convictions of guilt had been recorded. Thus the jury was not specifically directed to put those earlier convictions out of their minds. His Honour should also have gone further and warned the jury against reasoning from any of the earlier convictions - that the applicant was the kind of person likely to commit theft and, therefore, had stolen the goods in question in the later counts: see R. v. Vonarx, (unreported, Court of Appeal, Vic., Winneke, P., Callaway, J.A. Southwell, A.J.A., File No 181/95, 15 November 1995.)"
[134]R. v. Appleby (1996) 88 A.Crim.R. 456.
[135]At 480.
Smith, A.J.A. considered that the failure to take objection should not be fatal to the applicant's case. His Honour considered that prejudice arose from a combination of elements, one of which was the number of allegations of theft which would put pressure on a jury to find the applicant guilty on some 10 theft charges and to proceed from there to consider other theft charges, having determined the applicant was a thief. An appropriate direction was called for, his Honour concluded, to ensure a fair trial.
In my opinion, the decision in Appleby in relation to the separate trial issue turned on the multiplicity of charges of theft to be considered by the jury and the inherent danger of prejudice being caused to the applicant unless proper directions were given. I consider that the jury was given a proper direction in the circumstances of the present case and that the applicant was not denied a fair trial by a non-direction on the propensity issue. That experienced counsel did not ask for a more expansive direction is an indication, I consider, that he considered the direction was correct and adequate in the circumstances. No substantial miscarriage of justice occurred, in my opinion, and ground 4 is not sustained.
Ground 5 - Aggregate of Errors
In my opinion, for this ground to succeed, an error or errors of the kind specified in grounds 1 to 4 had to be demonstrated leading to a conclusion that there was a miscarriage of justice. As I did not find error, this ground cannot succeed.
In my view, the application for leave to appeal the convictions should be dismissed.
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SCHEDULE 1
DRAMATIS PERSONAE
1. Order of the Sons of Temperance National Division Friendly Society (O.S.T.).
(i)A Friendly Society incorporated under the Friendly Societies Act 1986, managed by at least five directors (s.16) and officers (s.30).
(ii)Empowered by s.66(1) to invest its funds, inter alia, by making to “a member, another person or a corporate body” an advance which is secured by a mortgage of freehold or leasehold land.
(iii)By s.68 of the Act must obtain a valuation of the land from a registered valuer who is not a director or officer of the friendly society and who is engaged independently of the owner of the land before the society makes an advance on the security of a mortgage over land.
(iv)By s.69 of the Act must not lend on the security of a mortgage over land if the total of the value of the advance and any amount secured by any prior mortgage exceeds 662/3% of the value of the land used otherwise than for the purposes of a house that is to be occupied by the borrower.
2.Archer, David George. A partner in Ebsworth and Ebsworth, Solicitors for O.S.T. and having expertise in commercial loan securities.
3. Faithfull, Daryl, employed by O.S.T. as its Investment Manager.
4. Rogers, Bruce James. Valuer of Ashmore Commercial Centre.
5. Leggett, Colwyn Joseph. Valuer of Glen Crag property.
6. Duthie, Gavin John. Valuer of High St. property.
7. White, Glen Joseph. Valuer of Dream World Theme Park.
8. Murphy, Paul Stephen. Valuer of Dream World Theme Park.
9. Coonan, Glen James. Valuer of Great Adventures Portfolio.
10. Curtin, Gerard Steven. Investigator – Major Fraud Squad.
11.Keith Bulfin of McKinley Wilson & Co. Ltd., a stockbroking firm. Bulfin was a mortgage broker and an agent of O.S.T. in facilitating loans.
12.Paul Robinson. The Investment and Marketing Director of O.S.T.
Bulfin and Robinson were not witnesses in the trial of Bruce David Jenkins. Bulfin was prosecuted in the County Court and pleaded guilty to a number of counts of obtaining financial advantage by deception, receiving a secret commission, making and using a false document and fraudulently inducing investments, the victim being O.S.T. Robinson was prosecuted in the County Court and pleaded guilty to six counts of making a false statement as an officer of O.S.T.
13. Tibor Jeno Verebes a valuer in the business Novak Tonkin.
Verebes was a witness in the trial of Jenkins.
He was prosecuted in the County Court and pleaded guilty to three counts of furnishing false information in relation to valuations of properties in respect of which Bulfin was arranging loans from O.S.T. Those valuations were far in excess of the true value of the properties valued.
14. William Robert Setterfield. The Managing Director of O.S.T.
Mr Setterfield was not called as a witness.
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SCHEDULE 2
TRANSACTION SUMMARY
| Property | Counts | Contract/ Purchase Price | Verebes Valuation | Loan amount/LVR1 | Other valuations |
| Glen Crag. Leichardt Street | 1 & 2 | $2.41 million on 22 April 1988 | $6.67 million on 29 April 1988 ["as is" $3.3 million] 2 | $4.2 million/ 63.2% | Leggett $2.1 million (1/10/90) |
| High Street, Southport | 4 & 5 | $1.45 million on 30 June 1988 | $8.17 million ["as is" $6.5 million] on 29 July 1988 | $3.8 million/ 46.5% [58% "as is"] | Bruce Jenkins, 7 & 25/7/1988 $8.3/$6.5 million3 Duthie $4 million (3/5/90)4 $2.3 million (11/3/91) |
| Ashmore Comm Centre | 6 & 7 | $4.05 million on 15/12/19885 | $7 million on 22/11/1988 | $4.5 million/ 64.3% | Rogers $2.1 million (28/8/90) |
| Great Adventures Portfolio (G.A.P.) Dreamworld | 11 | $156.6 million on 18 May 1989 | $53.6 million on 10/4/1989 $78.219 million on 4/8/89 _____________ $186.5 million on 6/4/1989 TOTAL = $240.1 million | $135 million/ 56% | White/Murphy $42.5 or $45 million (17/2/89) Coonan $43 million (18/1/1990)____ White/Murphy $90 million (17/2/89) Murphy $75‑$105 million6 |
1 LVR = Loan to Valuation Ratio.
2 LVR - Using Verebes valuation.
3 $8.3 million, Letter Jenkins to Bulfin, 7/7/1988, Exhibit SAS001/JB45.
$6.5 million, Letter Jenkins to Bulfin, 25/7/1988, Exhibit SAS 002/JB47.
4 Date of instructions, not valuation. This was not a formal valuation.
5 Settlement date. Contract date was 18/10/1988.
6 Prices paid in subsequent theme park transactions.
| Property | Counts | Contract/ Purchase Price | Verebes Valuation | Loan amount/LVR | Other valuations |
| High Street (Revaluation) | 12 & 13 | Original contract price $1.45 million Subsequent expenditure on all refurbishment $1.17 million6 | Completion - $9.5 million "As is" $8.186 million on 11/5/89 | Advance of $2.61 million (secured on the additional value here, and the excess from the other properties above) | Duthie $4 million (3/5/90)7 $2.3 million (11/3/91) (from above) |
| Dreamworld and G.A.P. (Revaluation) | 14 | $156.6 million on 18 May 1989 (from above) | $264.719 million on 4/8/1989 | $54 million credit facility +$96 million guarantee facility = $150 million/ LVR 56/6% | See valuations above G.A.P. and Dreamworld |
LVR Loan to Valuation Ratio (Limit on Amount of Advance s.69 Friendly Societies Act 1986)
6 Including refurbishment of other properties.
7 Date of instructions, not valuation. This was not a formal valuation.
SCHEDULE 3
GUILTY VERDICT COUNTS SUMMARY
Section 83(1)(b) Crimes Act 1958 - False accounting
(1)Where a person dishonestly, with a view to gain for himself or another or with intent to cause loss to another -
(a)destroys, defaces, conceals or falsifies any account or any record or document made or required for any accounting purpose; or
(b)in furnishing information for any purpose produces or makes use of any account, or any such record or document as aforesaid, which to his knowledge is or may be misleading, false or deceptive in a material particular -
he is guilty of an indictable offence etc.
Count 1. Information furnished to O.S.T. on or about 4 May 1988 for the purpose of a loan from O.S.T. in the sum of $4.1 million on a property known as Glen Crag, Brisbane, in the form of a valuation report dated 29 April 1988.
Count 4. Information furnished to O.S.T. on or about 26 August 1988 for the purpose of a loan from O.S.T. in the sum of $3.8 million on a property known as High Street, Southport, in the form of a valuation report dated 29 July 1988.
Count 6. Information furnished to O.S.T. on or about 9 December 1988 for the purpose of a loan from O.S.T. in the sum of $4.5 million on a property known as Ashmore Commercial Centre in the form of a valuation report dated 22 November 1988.
Count 11. Information furnished to O.S.T. on or about 1 May 1989 for the purpose of a guarantee facility from O.S.T. in the sum of $135 million on a property known as Dreamworld Theme Park in the form of a valuation report dated 10 April 1989.
Count 12. Information furnished to O.S.T. on or about 11 May 1989 for the purpose of an application for an advance in the sum of $2.61 million from O.S.T. on a property known as High Street, Southport in the form of a valuation updated dated 11 May 1989.
These five counts may be described elsewhere as "Furnishing False Information".
Section 82 Obtaining financial advantage by deception
(1)A person who by any deception dishonestly obtains for himself or another any financial advantage is guilty of an indictable offence and liable to level 5 imprisonment (10 years maximum).
(2)For purposes of this section "deception" has the same meaning as in section 81.
Section 81(4) For the purposes of this section, "deception" -
(a)means any deception (whether deliberate or reckless) by words or conduct as to fact or as to law, including a deception as to the present intentions of the person using the deception or any other person;
Count 2. On 9 May 1988 dishonestly obtained a financial advantage in the form of a credit facility in the sum of $4.2 million by deception by false representations in respect of the Glen Crag building.
Count 5. On 29 August 1988 dishonestly obtained a financial advantage in the form of the creation of a credit facility in the sum of $3.8 million by deception by false representations in respect of the High Street, Southport building.
Count 7. On 15 December 1988 dishonestly obtained a financial advantage in the form of the creation of a credit facility in the sum of $4.5 million by deception by false representations in respect of the Ashmore Commercial Centre.
Count 13. On or about 12 May 1989 dishonestly obtained a financial advantage in the form of the creation of a further credit facility in the sum of $2.61 million by deception by false representations in respect of the High Street Southport building.
Count 14. On or about 21 August 1989 dishonestly obtained a financial advantage in the form of the creation of a credit facility in the sum of $54 million and a guarantee facility in the sum of $96 million by deception by false representations in respect of Dreamworld Theme Park and Great Adventures Portfolio.
These five counts may be described elsewhere as "Obtaining Financial Advantage by Deception."
Friendly Societies Act 1986
"Valuation of land.
68. Before a friendly society makes an advance on the security of a mortgage over land, a valuation of the land must be obtained from a registered valuer who is not a director or officer of the friendly society, or of a subsidiary of the friendly society, and who is engaged independently of the owner of the land.
Limit on amount of advance
69. (1) A friendly society must not lend on the security of a mortgage over land if the total of the value of the advance and any amount secured by any prior mortgages exceeds -
(a)75% of the value of the land, if there is erected on it, or proposed to be erected on it, a house that is to be occupied by the borrower; or
(b)662/3% of the value of the land in any other case."
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