R v Shearer
[1989] TASSC 96
•9 May 1989
Serial No. B18/1989
List “B”
COURT: SUPREME COURT OF TASMANIA
CITATION: R v Shearer [1989] TASSC 96; B18/1989
PARTIES: R
v
SHEARER
FILE NO: 117/1988
DELIVERED ON: 9 May 1989
JUDGMENT OF: Wright J
Judgment Number: B18/1989
Number of paragraphs: 19
Serial No B18/1989
File No 117/1988
THE QUEEN v SHEARER
REASONS FOR JUDGMENT WRIGHT J
9 May 1989
I will give my ruling on the "No Case" submission now. The accused has been indicted for stealing contrary to s234 of the Criminal Code. It is alleged that between on or about the 30 December 1987 and on or about 4 February 1988, he stole $676,435.37 in money, the property of Westpac Banking Corporation (which I will hereinafter refer to as "Westpac"). Evidence was given at the trial which if accepted, is capable of establishing the following facts.
Prior to the 29 December 1987 the accused deposited the sum of $23,000.00 with Partnership Pacific Limited, a subsidiary company wholly owned by Westpac. This money was for investment on the accused's behalf and was placed by Partnership Pacific Limited on interest bearing deposit with Westpac. On 29 December 1987, Mr Curtin, a clerk employed by Partnership Pacific Limited, received instructions to withdraw the whole of the funds invested for the accused in this way and to deposit them to the credit of a current account in the joint names of the accused and his wife with Westpac at its St Kilda branch. By error Mr Curtin caused $700,000.00 to be paid into that account. The error resulted from his placing the wrong account number on bank documentation as a consequence of which the accused received credit for funds intended for another investor and, by simultaneous error, the funds intended for the accused were credited to the account of a third investor. There is no evidence to suggest the accused knew of this error at the time and it is not suggested that he induced the error by fraudulent or misleading conduct in anyway.
Prior to the deposit of the $700,000.00 to the credit of the joint account, the accused and his wife had operated that account for some unspecified period of time and had a credit balance of $4,590.22 when the $700,000.00 came to hand. There is nothing in the evidence to establish that either the accused or his wife were told of the deposit of $700,000.00 by Westpac or its officers at the time the deposit occurred. On the 7 January 1988, the accused provided a written instruction to Westpac in the following terms. The document is dated the 7 January 1988. It reads:
"Please transfer all of the funds in my cheque account (number 830097) except $400.00 to the SBT Bank at 213 Sandy Bay Road, Hobart, Tasmania, 7005. My account number at that bank is 1206–18466; the branch number is 427012. Thank you."
The document was signed F Shearer and underneath are the words printed "F Shearer".
Acting upon this instruction the accountant at the St Kilda branch arranged a telegraphic transfer of $696,000.00 from St Kilda to the Westpac branch at Sandy Bay, and the accountant at that branch authorised and arranged for the transmission of those funds to the Savings Bank of Tasmania, Sandy Bay branch to an account in the name of the accused and his wife. These transactions occurred on the 11 January 1988, and in respect of them it is useful, I think, to refer to the evidence of Mr Anstee at p280. He told the court that in January 1988 he was stationed at the Savings Bank of Tasmania, Sandy Bay branch. He said he was authorised to speak on behalf of the Bank and had access to its records, and he said he had examined those records. His evidence continued as follows:
"MR FAULDS: Yes, thank you. Now are you aware of a warrant being transferred or forwarded to the branch, the Sandy Bay branch of the SBT from Westpac on the 11th January, 1988? ... Yes.
Yes, thank you. Perhaps the witness could just be shown that document, your Honour – P14. Thank you; is that the document? ... It is.
Yes, right. What effect does that document have on your bank as far as the details there are concerned? ... It's an instruction for us to credit the funds mentioned on the draft direct to the account that is listed on the draft, which in this case is to Account 1206–18466 which was in the name of Shearer.
Right. Well, was it just Shearer or were there other names – or names – was there another name or names attached to it? ... The draft was on it, 'S L Shearer'; however, the account listed was a joint account between Mr Shearer and his wife.
Right, thank you. Now, can I ask you to look at this document, please. Are you able to tell the court what that document is? ... This is a deposit voucher which is, of course, the method of placing funds into the client's account.
Right, so let's go back a step; when you receive one of these warrants like you have in front of you, if you still have it there, what steps are taken by the bank with respect to documentation I'm talking about? ..."
There was some discussion then as to what was meant, and Mr Anstee continued that the clerk who receives it would get this particular deposit voucher and fill it out as per the instructions that are on the warrant, and then proceed to process it. He then went on:
Q "May I expand on that slightly?
MR FAULDS: Yes, please.
Q Perhaps it's simpler if I say that a draft or a warrant can be likened to a cheque and has to be processed in the same way as a cheque as being a piece of paper rather than actual cash."
MR FAULDS: I don't know that I completely follow you. What would be the difference if a person brought in a cheque or cash for example in what you're saying now?
A This particular transaction would probably be completed back office rather than at the tele–front".
The witness then repeated that answer, and at p283, Mr Faulds asked:
"Q If someone brought in $1,000 cash, for example, and wanted to deposit it into an account, do you fill out a slip like that?
A Exactly, yes.
Q Or if they didn't fill out a slip, would the teller fill out the slip for them?
A Yes.
Q Right. So the only difference between the two is the cash transaction or if it's a cheque or some other situation takes place at the counter with the customer or the person bringing the money and what you're saying is it happens somewhere else at the back of the bank?
A Quite, right."
On 12 January 1988, the accused telephoned Mr Edmund Nolan, an employee of Partnership Pacific Limited, and queried the transactions which had occurred, resulting in the deposit of these funds at the Savings Bank of Tasmania. He indicated to Mr Nolan that he was aware that an error had been made in transferring so large an amount to his account. Mr Nolan was asked to relate this conversation between himself and the accused, and he said:
"Well, after the gentleman identified himself, he explained to me that there was a problem with some money that wasn't credited to his account. He instructed one of the dealers on the 29th of December to credit a sum of money to an account that he held at the Westpac branch in St Kilda Road, 409 St Kilda Road. This had not been done and he wanted an explanation for it and he also brought to light the sum of $700,000.00 which had been credited to his account for which he requested an explanation from me and that I could not offer at that time."
This is the first time as to which there is any evidence to suggest the accused was aware of the mistake which had been made. On the 13 January, the accused drew a cheque for $695,000.00 upon the Savings Bank of Tasmania account, number 1206–18466, to which the funds from Westpac had originally been credited and he caused the whole of that amount, that is $695,000.00, to be transferred to a new interest bearing account at the Savings Bank of Tasmania number 1206–71712. The account was in his name alone.
Notwithstanding the size and nature of the error which had now been brought to its attention as a result of the accused's telephone call to Mr Nolan on 12 January, Westpac took no immediate or active steps to secure repayment of the funds which had been overpaid. The amount that the accused should have received was $23,564.63, being his initial deposit plus accrued interest. The overpayment therefore amounted to $676,435.37 which of course is the sum specified in the indictment. On the 28 January 1988, the accused withdrew $686,000.00 from the Savings Bank of Tasmania interest bearing account in which the funds were then reposing, by way of three bank cheques for $50,000.00, $50,000.00 and $586,000.00 respectively, which, on the 29 January 1988, he paid to the ANZ Bank at Collins Street, Hobart for transmission via the Citibank in New York to the Citibank, Santiago in Chile. There is no need to trace coincidental or subsequent events in detail. It will suffice to say that late in January, Partnership Pacific Limited instructed solicitors to act for it in an attempt to recoup the sum of $676,435.37, and as a consequence of the diligent attempts by Miss O'Flynn, an employee of those solicitors, that sum was eventually recovered from the accused a few days later in early February. During that time the accused had made arrangements to travel himself to Santiago but had subsequently cancelled those arrangements. He had also arranged for the ANZ Bank to recall the funds which had been sent out of the country pursuant to his earlier instructions to Mr Slee at the Bank.
Counsel for the accused submits that there is no case to answer, either on the single count contained in the indictment or any alternative which might arguably be left to the jury under the provisions of Ch XXXIX of the Criminal Code. It is plain, I think, that the funds deposited to the credit of the joint account at the St Kilda branch of Westpac did not come into the accused's possession at the time of that transaction because both at that time, and for an appreciable period thereafter, the funds remained the property of the Bank. The accused's right to recover the whole or any part of the funds reposing in that account depended upon his status as a creditor and the Bank's status as a debtor. He acquired neither possession nor ownership of the $700,000.00 by the mere entry of those funds to the credit of his joint account at the St Kilda branch. That position was not changed in any material way when the St Kilda branch transferred that balance to the Sandy Bay branch of Westpac, nor did that transaction transform the $700,000.00 standing to the credit of the accused and his wife in that account into "movable" property. As Morling J said in Vickers v The Minister for Business and Consumer Affairs (1982) 43 ALR 389 at p403:
"I do not think the ability of a customer to transfer his account with a bank from one branch to another makes the customer's chose in action against the bank movable. The customer's right to repayment and to sue the bank to recover the credit balance in his account does not move when he transfers the account to another branch. The right remains intact and unchanged in every relevant respect notwithstanding a change in the location of the branch at which the account is kept. It is true that when a customer keeps a savings account at a branch of a bank his right to repayment is a right to receive repayment at that branch. But the right is, of course, against the bank itself and is not attached to the branch. That right does not move at all if the account is transferred to another branch. Certainly it does not move in the sense that movable personal property is contemplated as being moved under the relevant provisions of the Customs Act ...".
In my opinion what his Honour said there concerning the Customs Act is equally applicable to the provisions as to theft in the Criminal Code in this State. It is necessary, therefore, to determine whether these or subsequent transactions resulted in the accused taking or converting to his own use or to the use of another person movable property belonging to another person. This is an essential element, of course, in the prosecution case because under the Code, ss1, 226 and 227(1), it is necessary for the Crown to show that something movable, that is, something tangible, was unlawfully handled in one of these ways by the accused. A mere chose in action cannot be stolen under the criminal law applicable in Tasmania and it is, therefore, necessary to bear this element of the crime of stealing in mind as a further discussion of the case proceeds.
In my opinion, the earliest time at which it could be said that money actually changed hands is when Westpac, Sandy Bay branch, caused the sum of $696,000.00 to be deposited to the credit of the accused and his wife in account number 1206–18466 at the Savings Bank of Tasmania. However, it is plain from what I have already said that there is no evidence to support the view that the accused was aware of the magnitude of the sum being transferred when that event occurred and, consequently, there is no basis upon which it could be said there was a dishonest taking by him of the funds at that stage. Accordingly, there is no basis in law upon which he could be convicted of stealing under s226(1)(a) of the Code in respect of that transaction.
Furthermore, as I take the view that the transaction now under discussion was sufficient of itself to vest ownership of the funds either in the accused himself, or the Savings Bank of Tasmania to be held by it on his account, it is not possible to contemplate that thereafter he could convert those funds to his own use in some unauthorised or illicit fashion so as to call the provisions of s226(1)(b) into operation. Normally one cannot be guilty of larceny by conversion in respect of property of which one is already the owner. Although the funds in question clearly passed directly from Westpac to the Savings Bank of Tasmania, it is plain that this transaction was carried out with the Savings Bank of Tasmania acting as the accused's agent for the receipt of the funds so that in a real sense it could be said that the accused received (or, to use the more familiar concept of the criminal law, "took") the funds at this point.
It is also worth noting at this juncture, having regard to some of the arguments advanced to me by the learned prosecutor yesterday, that "currency" is a term which can and frequently does have much wider connotations than the more restricted term "legal tender", and I do not think that the High Court in Ilich v Reg (1986–87) 162 CLR 110 meant to confine currency simply to coinage or treasury notes. I refer for that proposition, incidentally, to the High Court decision in Watson v Lee (1979) 26 ALR 461. This does not mean that Westpac could not maintain a civil suit against the accused for money had and received, as was pointed out by Deane J in Ilich v Reg (supra) and also by Brennan J at pp143, and 140 to 141 respectively. We are not, however, now dealing with a civil suit, nor in my opinion are we dealing with an alleged theft of the kind in question in Kennison v Daire (1985) 160 CLR 129 or McKee v Milosevic, an unreported decision of Nathan J in the Supreme Court of Victoria delivered on 2 June 1988. The circumstances of this case appear to me to be governed by the decision of the High Court in Ilich v Reg (supra) and it is necessary, therefore, to refer briefly to what was said in that case. I refer firstly to Brennan J at p135 where he said:
"Under the Code" [and he was there referring to the Western Australian Code] "the problem of fraudulent conversion after possession – a problem of which the Court of Criminal Appeal had divided equally in Ashwell – is solved by including fraudulent conversion in the definition of stealing. There does not have to be an asportation of the thing as the common law required, but the person taking or converting the thing must actually move or otherwise deal with it by some physical act: s371(6). Nevertheless, the Code does not impose criminal liability on a person either for taking or for converting his own property if no other person has a proprietary interest in that property or if no other person's proprietary interest is infringed by the act which is said to complete the taking or conversion. When a person is charged under the Code with stealing property which he is said to have acquired by mistake, instruction may be sought from the cases on the topic decided under the common law only if the differences between the common law and the Code are steadily borne in mind."
At p137, his Honour continued:
"... when an owner of movable property delivers possession of it to another with an intention that ownership should be transferred to the other – the intention which Blackburn J in Prince and the minority in Middleton regarded as inconsistent with larceny – the delivery with that intention is ordinarily effective to transfer ownership of the property and the transfer of ownership precludes liability for fraudulent conversion. For the purposes of the crime of stealing by conversion under the Code, the inquiry into the intention of the person who is said to be the owner of the property is undertaken in order to determine whether ownership of the property has passed to the person charged, not to determine whether the property was taken invito domino."
And finally, at p138 he said:
"When a person in possession of money in the form of currency hands it to another intending him to be the owner of it and the other receives it with the same intention, prima facie, the other acquires ownership of the money. That is because currency, when it passes from hand to hand, transfers not merely possession of the notes or coins, but property in them." [And he there referred to Sinclair v Brougham]. "But there are some exceptions to this general proposition. They inhere in the rule that a person who receives money in the form of currency in good faith and for valuable consideration acquires a good title in the money even though the person who gave him possession of the notes or coins had no title to them."
His Honour then went on to discuss that exception and another exception which I do not think have any direct application to the present case. He concluded his remarks in this segment of his reasons at p139 by saying:
"The prima facie conclusion that ownership of money in the form of currency passes when the person in possession hands it to another intending him to be the owner may be displaced in some cases where the intention is formed by a mistake. In such cases the payer is entitled to recover it in specie before it is disbursed". [And he referred to Porter v Laytec Finance]. "But it is not every mistake which precludes the formation of the intention essential to the transfer of ownership of notes or coins. That mistake must be fundamental to the transaction."
Nathan J in McKee v Milosevic (supra) to which I have already referred briefly, very helpfully summarised the effect of Ilich (supra), in my opinion, at pp13–14 of his judgment where he said:
"I consider it possible, even desirable, to tabulate some features which emerge from this examination of authorities. I consider Potisk is not incompatible with Ilich or Kennison, rather the majority of Ilich appeared to support the majority in Potisk. These features I refer to are –
1Prima facie ownership of money in the form of currency passes when a person in possession of it hands it to a recipient intending that person to become its owner and the recipient receives it with the same intention.
2Prima facie the efficacy of that transfer is displaced where it results from a fundamental mistake by the transferring party.
3Fundamental mistake may arise in relation to:–
(i)The identity of the recipient.
(ii)The identity of the money and
(iii)Whether the transferrer knew what he or she was doing.
(4)A fundamental mistake if a transferrer passes possession of money to a person whom he or she wrongfully believes is a creditor.
(5)Overpayment by a creditor to a debtor does not, of itself, amount to a fundamental mistake.
(6)The prima facie transfer is vitiated where the recipient has induced it by an act of bad faith.
(7)A person who receives money in the form of currency without consideration acquires no better title than the person from whom the money was received."
I emphasise point 5.
In my opinion, at the time that possession of the funds in question passed out of control of Westpac to the Savings Bank of Tasmania, there was no fraudulent intent or dishonest purpose shown to have been possessed by the accused. There is certainly no direct or circumstantial evidence sufficient to support such a conclusion or inference and I understand the Crown accepts that.
Still less has it been shown that any such intent brought about that transfer of funds in the first place, as I have already mentioned. From the evidence the only reasonable conclusion to reach is that the funds that passed to the Savings Bank of Tasmania passed to that Bank as money in the form of cash or currency.
I refer to what Morling J said in Vickers' case at pp404–406 as to the concepts of what is or is not "cash". In the case before him Morling J concluded that the funds in question, being a balance in a savings bank account, were not "cash in hand" but what I am now considering is the correct characterisation of funds, not at the time they stood to the credit of any person in a bank account, but when they passed from one bank to the other in the way described in Mr Hunniford's evidence.
In my opinion, when the funds passed in this way they passed as negotiable currency between the banks. At the first point at which it may be inferred that the accused determined to use for his own purposes the monies standing to his credit at the Savings Bank of Tasmania, those funds no longer belonged the Westpac. That Bank had effectively divested itself of ownership and the Savings Bank of Tasmania now owned the funds and, vis–a–vis the Savings Bank of Tasmania, the accused had every right to withdraw such funds as he saw fit up to the limit of that account. Even if one assumes that the transactions he undertook in respect of the Savings Bank of Tasmania account were carried out in respect of movable property, (and I hasten to add that as to this I have very considerable doubt), there was no dishonest taking by him of the funds initially when they first passed to the Savings Bank of Tasmania and there was no subsequent wrongful conversion by him of those funds. Consequently, the crime of stealing was not committed, however reprehensible his conduct may have been from a purely moralistic standpoint.
In reaching this conclusion I have accepted the basic thrust of the argument advanced by Mr Ayliffe of counsel for the defence, but I do not see a necessity to make the subtle distinctions which he drew between the judgments of Wilson, Dawson JJ and Deane J on the one hand, and on the other hand, the judgment of Brennan J in Ilich's case (supra). In my opinion, there was no fundamental mistake by Westpac capable of vitiating the transaction when it transferred the funds to the Savings Bank of Tasmania. The transaction having been one which involved currency, both ownership and possession passed from Westpac to the Savings Bank of Tasmania and there having been no bad faith by either the accused, or of course, the Savings Bank of Tasmania which accompanied that transaction, it was not vitiated on that ground.
There was no mistake as to the identity of the intended recipient of the funds. There was no mistake as to the identity of the thing delivered, that is, the money. And if I am correct in saying that the time for examination of the transaction for mistake is the time at which the transaction occurs, there was no mistake as to the quantity of the funds being transferred. The mistake which resulted in that error occurred several days beforehand when Mr Curtin entered the incorrect account number on the relevant deposit slip. With this last aspect in mind, it may be that in the present case, it is unnecessary to resort to the notion that the overpayment made was one involving currency before rejecting the contention that the transaction involved a fundamental mistake.
For these reasons, I have concluded that the accused cannot lawfully be convicted on the indictment as drawn, and that the jury must be directed to acquit. Similar considerations to those already mentioned lead me to the conclusion that the accused may not lawfully be convicted of the alternatives available under s338(b), that is, obtaining property by a false pretence, or s338(ca), that is, dishonestly obtaining a financial advantage. For reasons already canvassed, there is no evidence upon which a false pretence or a dishonest obtaining of money may be attributed to the accused at any relevant time during the course of the transactions in question. Consequently, my direction will be to the jury to acquit simpliciter, and no alternatives will be left to them.
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