R v Jenkins
[2000] VSC 536
•20 October 2000
| SUPREME COURT OF VICTORIA | |
| CRIMINAL DIVISION | Not Restricted |
No. 1472 of 1999
| THE QUEEN |
| v |
| BRUCE DAVID JENKINS |
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JUDGE: | COLDREY, J | |
WHERE HELD: | MELBOURNE | |
DATE OF RULING: | 20 OCTOBER 2000 | |
MEDIUM NEUTRAL CITATION: | [2000] VSC 536 | |
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CATCHWORDS: Evidence – No case submission – Furnishing false information (s.83(1)(b) Crimes Act 1958) – Meaning of "document required for an accounting purpose" – Obtain financial advantage by deception (s.82 Crimes Act 1958) – Whether deception caused financial advantage to be given – Applications refused.
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APPEARANCES: | Counsel | Solicitors |
For the Crown | C. Hillmann and J. Saunders | Office of Public Prosecutions |
| For the Accused | M. Lincoln and M. Hodgson | Victoria Legal Aid |
HIS HONOUR:
Following the completion of the Crown case, Mr Lincoln has submitted on behalf of the accused that there is insufficient evidence to enable the Crown to make out each of the fifteen counts on the presentment, and, accordingly, the jury should be directed to acquit his client.
The circumstances in which a trial judge may take the course urged by counsel are, of course, limited. The principal decision in this area is that of R. v. Doney (1990) 50 A.Crim.R. 157. In relation to matters of an inferential nature, the situation has been discussed in such cases of the Attorneys-General's Reference No.1 [1983] 2 V.R. 410. There have been more recent decisions than either of those: For example, Knight v. The Queen (1992) 66 A.L.J.R. At 860.
I do not propose to go through the various authorities in the course of this ruling, I set out a number of them in the case of R. v. Smith, an unreported decision of 12 February 1993.
Other judges of this Court have discussed this issue, including Vincent, J. in R. v. Hill and Others, an unreported decision delivered on 13 December 1993.
Mr Lincoln dealt firstly with Counts 1, 4, 6, 8, 10 and 11 on the presentment, which may be described in broad terms as "furnishing false information". The relevant section is s.83(1)(b) of the Crimes Act 1958 ("the Crimes Act"). In each count the false material is alleged to be contained in a valuation report by one Tibor Verebes, which is described in the presentment as "a document required for the accounting purposes" of the Order of the Sons of Temperance Friendly Society ("OST").
Mr Lincoln submitted that there was no evidence that the valuer's report was required for an accounting purpose of OST. In developing this submission, parts of the evidence of witnesses Archer (a solicitor acting for OST); Faithfull (the Investment Manager of OST during the period relevant to these charges); and Curtin (an investigative accountant attached to the Major Fraud Squad and previously a Senior Investigator with the Office of the Registrar of Friendly Societies) was canvassed.
The evidence of Archer referred to, confirmed that OST was governed by the Friendly Societies Act 1986 ("the Act"), and pursuant to ss.68 and 69 of that Act, could only lend on the land and fixtures of commercial property and only up to two-thirds of a sworn valuation made by an independent valuer (transcript pp.158-9).
The witness deposed to checking that the security proposed was feasible and looking at each of the valuations to make sure that there was compliance with the loan value ratio (LVR) of two-thirds, required by the Act (transcript p.162). He also gave evidence that final approval would not be given until appropriate financial statements of the borrower and guarantors and appropriate valuations had been obtained.
It was said by Mr Lincoln that Faithfull's evidence related only to seeing the valuations and not to the use to which they were put and, insofar as the evidence of Curtin was concerned, it merely confirmed the loan requirements of ss.68 and 69 of the Act.
However, I note that Mr Curtin also deposed that the valuations and loan applications were part of the OST documentation and that, in his experience with the Registrar of Friendly Societies, he would expect such documents to be maintained as an appropriate business record. I regard that evidence as meaning that such records were expected to be kept by a Friendly Society.
It was argued on the basis of this material that there was no evidence as to the use to which the valuations were put, save to satisfy the two-thirds LVR, and, consequently, it could not be demonstrated that the valuations were documents "required for an accounting purpose" by OST.
In relation to what inferences may be drawn from the document itself, Mr Lincoln cited the English Court of Appeal case of R. v. Sundhers (1998) EWCA 316. That was a case in which Mr Sundhers simultaneously claimed from three insurance companies for identical damage. In each instance the claim forms falsely asserted that he had no other insurance and that he had not made an insurance claim over the previous five years. The Court considered the phrase "a record or document required for any accounting purposes", which is identical to that found in the Victorian legislation.
It was conceded by the Crown that the claim forms were not accounting records required to be kept under the UK Companies Act but it was argued that the claim forms were material upon which such records would be based and which the auditors or accountants may wish to scrutinise in checking the accuracy of those accounts. Whilst noting that this was "a sensible and robust submission which in common sense terms has a great deal to commend it", the Court nonetheless held that evidence was required beyond the fact that the forms were to be retained by the insurance company, and said what was a matter of accounting practice required specific evidence. It could not be inferred from the nature and form of the claim forms.
In the present case, Mr Lincoln argued that no such evidence existed. Referring again to Faithfull's evidence, it was submitted that it was clear that the Mortgage Master Register which contained details of the various mortgages made no specific reference to the valuation document (transcript p.981).
Mr Lincoln also referred to the definition of "accounting record" in s.3(1) of the Act and pointed out that it did not include "valuation".
In response, Mr Hillman, on behalf of the Crown, argued that the valuation report was a document statutorily required to be provided to the lender (being a Friendly Society) for the very purpose of extending a credit facility or providing a guarantee. It was a necessary document to enable the determination of whether a loan satisfied the constraints of ss.68 and 69 of the Act. Furthermore, the valuation report would necessarily have to be retained, given the legal requirements of the specific LVR, for subsequent auditing or other accounting purposes.
Indeed, Mr Hillman relied on most of the passages quoted by the defence as to the use made of the valuation report.
Additionally, he referred to the evidence of Faithfull at pp.974-6 that the valuation was examined to identify both the property and to check that the valuation was within the guidelines set down by the Friendly Societies Act.
Mr Hillman submitted that the term "accounting purpose" had to be widely construed. He cited the authority of the Attorney-General's Reference No.1 of 1980, 1 All E.R. 366. This was a case in which false hire purchase proposal forms were submitted to a finance company, and for the purpose this argument it is sufficient to note that the view of the English Court of Appeal, in construing the phrases with which we are concerned, was that a document (here the loan proposal) could, as well as being a proposal form, be required by a finance company for an accounting purpose. The Court said (at p.369) "a document may fall within the ambit of the section if it is made for some purpose other than an accounting purpose, but is required for an accounting purpose as a subsidiary consideration".
Insofar as Sundhers case is concerned, Mr Hillman sought to distinguish it on the basis that it related merely to a claim form and not a document statutorily required to be in the hands of the lender before a loan or credit facility was provided.
If pressed I would be disposed to view that Sundhers case represents too narrow an approach to the class of document under consideration, and that the Attorney-General's Reference more sensibly articulates the breadth of the category into which this type of document may fall.
It is not necessary to construe s.3(1) of the Act and, in particular, to decide whether s.3(1)(b) is broad enough to include valuation reports. In this regard, I simply note that the section is inclusive, not exclusive.
What seems to me to be incontrovertible in the present case is that the LVR 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 ass an accounting exercise. On the evidence to which I have referred, this exercise was done, and the valuation reports were retained by OST. 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.
It follows that I consider there is evidence that the document was required by OST for an accounting purpose.
In relation to Counts 2, 5, 7, 9, 13 and 14 of obtaining a financial advantage by deception (s.82 of the Crimes Act), Mr Lincoln accepted for the purpose of argument that the accused knew that the valuation reports were deceptive. However, his submission was that there was no causal link between the provision of the false valuation and the lending of the money.
It was argued that there was no evidence that any deception operated on the mind of Mr Robinson, the person at OST who finally approved the relevant loans. Moreover, the fact that Mr Robinson had not been called gave rise to the Jones v. Dunkell proposition that it was unlikely his evidence would have assisted the Crown case. Accordingly, the Crown could not prove that OST was induced to make the loans or grant the credit facility as a result of any false valuation.
As an ancillary submission directed to Counts 9 and 14 of the presentment, which concerned the Buderim property and Dreamworld respectively , Mr Lincoln pointed to the notation on the relevant valuations "Prepared for McKinley Wilson & Co, attention Mr Keith Bulfin on instructions from Mr Bruce Jenkins". This notation demonstrated that this was not an independent valuation. It was submitted that, since the valuer, Mr Verebes, was not acting as an independent valuer as required by the Act, OST were acting in breach of ss.68 and 69 of the Act and, consequently, could not be said to have acted upon those valuations.
In response, Mr Hillman referred to the earlier passages of evidence of Archer and Faithfull that the valuations were relied upon to determine (inter alia) whether the proposed loan was within the LVR.
Specifically at p.999 of the transcript, Mr Faithfull asserted that OST relied upon the valuations of Verebes. Moreover, the provisions of the Act under which OST was operating meant that the credit facilities or guarantees could not have been provided without reliance being placed on the valuation.
If that valuation was falsely inflated, but was presented as a good and genuine valuation, then any financial benefit obtained in reliance upon its terms must have been obtained by deception.
It was further submitted that the notations on the Buderim and Dreamworld valuations were ultimately of no consequence. The valuations may have been in breach of the Act but, nonetheless, they were acted upon by OST.
Broadly, the question is whether it would be open to a jury to infer beyond reasonable doubt that the financial advantage was the result of the false valuations.
In my view, there is ample evidence linking the provision of the credit facilities and the guarantee to the provision of the valuation reports. It was only upon the provision of these valuations that any loans could be triggered, and in fact were triggered. Moreover there is evidence that the valuations were relied upon by OST. Further, in each instance, the credit facilities ultimately provided reflected those valuation figures.
It is, of course, open to the defence to seek to weaken the inference of a causal link, including pointing to the absence of Mr Robinson as a witness, but this is not a case where, applying the principles enunciated in Doney's case, a no case submission can succeed.
Insofar as the arguments on Counts 9 and 14 are concerned, I agree with the submissions of Mr Hillman. The negligent or wilful breach by OST staff of the requirement of an independent valuer cannot avail the accused if a jury was satisfied that OST acted on the basis of false information contained in those valuation reports.
Accordingly, those counts should go to the jury.
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