R v Saba

[1994] QCA 320

IN THE COURT OF APPEAL [1994] QCA 320

SUPREME COURT OF QUEENSLAND

C.A. No. 171 of 1994

Brisbane
[R. v. Saba]

BETWEEN

T H E Q U E E N
v.
DESMOND RAMMIZ SABA

(Applicant)

Fitzgerald P.
McPherson J.A.

Ambrose J.

Judgment delivered 02/09/94

Reasons for judgment by the Court

APPEAL DISMISSED

CATCHWORDSCRIMINAL LAW - MISAPPROPRIATION OF PROPERTY - Analysis of Indictment - Partnership - Joint Bank Account - Appellant drew cheques for private purposes - Whether indictment defective in alleging money "belonged" to other partner - Whether "a sum of money" dishonestly applied - Application of s.566(5) Criminal Code (Qld.)

Counsel:	T. Carmody & J. Briggs for the applicant L. Clare for the respondent
Solicitors:	Aboriginal Legal Service for the applicant Director of Prosecutions for the respondent

Hearing Date:26 August 1994

REASONS FOR JUDGMENT - THE COURT
Judgment delivered the Second day of September 1994

The appellant was convicted at his trial in the District Court at Brisbane of one count of misappropriation of property contrary to s.408C of the Criminal Code. The facts, which on appeal are not in dispute, are that in April 1991 the appellant entered into an agreement with a Ms. Lu - her full name is Li Ly Lu - to carry on in partnership a coffee shop business in Fortitude Valley. They opened an account in joint names at the Valley branch of the National Australia Bank, which became the partnership bank account on which each partner had power to draw cheques.

Over a period of time between April 1991 and June 1991, the appellant drew cheques for amounts totalling some $17,243.63, which were honoured on presentation and debited by the Bank to the partnership account. The persons in whose favour those cheques were drawn were not creditors of the partnership, but of the appellant in his private capacity. He was consequently charged under s.408C with dishonestly applying the sum of $17,243.63 to his own use.
To identify the point taken on appeal it is necessary to set out the terms of the charge on which the appellant was indicted and of which he was ultimately found guilty. It was:

"that on divers dates between the 28th April, 1991 and 25th June, 1991 at Brisbane in the State of Queensland, you dishonestly applied to your own use a sum of money, namely $17,243.63 belonging to anther, namely Li Ly Lu, being the amount of a general deficiency".

On appeal, it was accepted by Mr Carmody of counsel for the appellant that the jury was, on the evidence, justified in finding that the applicant had been guilty of dishonestly applying to his own use funds from the partnership account. His submission was, however, that the indictment was technically defective in alleging that it was a sum of money, namely $17,243.63, belonging to Li Ly Lu that was so applied, and that consequently the appellant could not in law have been convicted of the offence charged.

It must be said that, as sometimes happens in cases of this kind, the indictment seems to have been drafted by someone with an imperfect appreciation of the ordinary rules of civil law applicable in circumstances like these. It appears from the evidence that the initial payments to the credit of the bank account had their source in money belonging to and paid into the account by Ms. Lu. However, once property is brought into a partnership or is acquired on account of the firm, it becomes partnership property, and must be held and applied by the partners exclusively for the purpose of the partnership. See Partnership Act 1891, s.23(1). Partners are co-owners of partnership property. In strictness, therefore, the indictment ought perhaps to have alleged the property to be in both the appellant and Ms. Lu jointly. However, no point is made of that on this appeal. Section 408C(1)(b) plainly contemplates that property misappropriated may consist of something that is in or under the control of a person "conjointly" with another; and that was so here in the case of the money in the joint bank account because each partner had authority to draw on it for partnership purposes.

Although it is common to speak of a person having "money' in a bank account, the law is that an amount standing to the credit of a customer in the account does not belong to the customer. The money is the property of the bank which received it from the customer, the underlying theory being that the bank borrows the amount deposited to the credit of the account, and undertakes to repay it on demand or (what is in effect the same thing) to pay it as the customer directs. See Joachimson v. Swiss Bank Corporation [1921] 3 K.B. 110, 127; National Australia Bank Ltd. v. K.D.S. Construction Services Ltd. (1987) 163 C.L.R. 668, 676. The resulting debt owed by the bank to the customer is a chose in action, which is "property" within the meaning of s.408(3)(a), and as such capable of being misappropriated or misapplied : Attorney-General's Reference (No. 1 of 1983) [1985] 1 Q.B. 182, 187, 188.

The indictment in the present case could therefore properly have alleged that the appellant dishonestly applied to his own use a chose or choses in action of the value of $17,243.63 belonging to the firm consisting of himself and Ms. Lu : cf. R. v. Capewell (C.A. no. 88 of 1994). What it did instead was to allege that "a sum of money" in that amount, "... being the amount of a general deficiency", was dishonestly applied by the appellant. It is not clear what purpose was served by including the last few words referring to a general deficiency. In the context of this case, however, they are clearly harmless surplusage which can safely be ignored.

The real question is whether the indictment correctly described the amount which was drawn from the account and dishonestly applied in satisfaction of the appellant's private debts as "a sum of money" of that amount. Mr Carmody contended that it was not correct so to describe it because, as he submitted, the cheques drawn in favour of the appellant's creditors, or perhaps the money they represented, became the property of those creditors as soon as the cheques were drawn. Plainly, however, that is not correct. The cheques themselves, viewed as pieces of paper, did not become the property of those creditors until they were delivered physically, and the money remained the property of the Bank until the cheques were honoured by payment on presentation.

The proper legal analysis of what happened is as follows. The appellant took a series of cheque forms - there appear to have been some 39 in all - and completed and signed them, in each case specifying an amount and naming one of his creditors as the payee. In due course he delivered the cheques to those creditors in satisfaction of his private liabilities. By doing so he converted cheques which belonged to him and Ms. Lu as co- owners : see Baker v. Barclays Bank Ltd [1955] 1 W.L.R. 522. Cheques are simply pieces of paper which have little if any intrinsic worth as such. However, in law the value of a converted cheque is the amount of money received under it: Lloyds Bank v. Chartered Bank of India Australia & China [1929] 1 K.B. 40, 55-56. That is, in a claim for conversion of a cheque, the ordinary measure of loss, which is recoverable as damages, or as moneys had and received : United Australia Ltd. v. Barclays Bank Ltd. [1941] A.C.1.

In the present case all the cheques were honoured on presentation, so that their value was the aggregate amount for which they were drawn, which is the sum of $17,243.63 alleged in the indictment. The indictment does, it is true, refer to that amount as a sum of "money" rather than as the aggregate value of the cheques dishonestly applied. However, s.566(5) of the Code provides, so far as regards the description of the property in an indictment, that an averment of money, without specifying any particular form of money, will be sustained by proof that the offender dealt with anything which is included in the term "money". The term "money" is defined in s.1 of the Code to include cheques, so that the allegation in the indictment here that the appellant dishonestly applied a sum of "money, namely $17,243.63" is capable of being sustained by proof that the appellant applied to his own use cheques to that value or amount.

There was evidence to that effect at the trial, so that the point raised on appeal cannot be sustained. The appellant's defence at the trial, at which he gave evidence, was that the money deposited to the credit of the bank account in joint names was really some form of loan to him from Ms. Lu, for which the partnership agreement was intended to serve only as a security.

In finding that he had dishonestly applied money from the account to his own use the jury rejected that explanation. All the necessary elements of the offences under s.408C were proved by the Crown to the requisite standard. No basis has been shown, whether technical or otherwise, for disturbing the conviction. The appeal must therefore be dismissed.