R v Stewart

SUPREME COURT OF SOUTH AUSTRALIA
(Court of Criminal Appeal)
R v STEWART
[2010] SASCFC 72
Judgment of The Court of Criminal Appeal
(The Honourable Chief Justice Doyle, The Honourable Justice David and The Honourable Justice Peek)
16 December 2010
CRIMINAL LAW - APPEAL AND NEW TRIAL - APPEAL AGAINST CONVICTION RECORDED ON GUILTY PLEA
CRIMINAL LAW - PROCEDURE - PLEAS - GENERAL PLEAS - PLEA OF GUILTY - WITHDRAWAL AND RESTORATION OF PLEA - GENERALLY
Appellant operated a supported residential facility - pleaded guilty to three counts of deception - sentenced - appellant appeals against conviction and sentence - whether miscarriage of justice - whether appellant understood the basis of her plea of guilty - whether the plea of guilty was entered on an incorrect basis - whether there was uncertainty and confusion between appellant and her legal advisors as to the basis of the charge and the basis of the plea - whether the charges were properly particularised - appeal allowed - convictions set aside - retrial ordered.
Criminal Law Consolidation Act 1935 (SA) s 130, s 139, s 139(a), s 353(1); Supported Residential Facilities Act 1992 (SA) s 3, s 10, s 23, s 24; Retirement Villages Act 1987 (SA) s 18, referred to.
R v Pugh (2005) 158 A Crim R 302; R v Brooks (2007) 96 SASR 478; R v Forde [1923] 2 KB 400; Meissner v The Queen (1995) 184 CLR 132; R v Wilkes (2001) 122 A Crim R 310, considered.

R v STEWART
[2010] SASCFC 72
Court of Criminal Appeal: Doyle CJ, David and Peek JJ

DOYLE CJ: Ms Stewart pleaded guilty in the District Court to three counts of deception contrary to s 139(a) of the Criminal Law Consolidation Act 1935 (SA) (the CLCA). The Judge sentenced her to imprisonment for three years, and fixed a non-parole period of 20 months.
Ms Stewart now appeals against her conviction and sentence. A single Judge of this Court granted permission to appeal.
Ms Stewart challenges her conviction on the ground that to allow the conviction to stand would give rise to a miscarriage of justice. The grounds of appeal are that she pleaded guilty in the absence of proper advice from her legal advisors, that the elements of the offences were not made out, and that her advisors “did not adhere to her written instructions”. The submissions by Dr Churches, counsel for Ms Stewart on appeal, departed from these grounds. He relied on a combination of inappropriate pressure from her legal advisors to plead guilty; a failure by her counsel to advise her adequately as to the bases on which she should plead guilty; and a failure by her legal advisors to pay adequate attention to her assertions from time to time that she was not guilty.
As to the sentence, Ms Stewart claims that the sentence is manifestly excessive, and that the Judge should have suspended the sentence.
I have concluded that the appeal against conviction should be allowed, and a retrial ordered. My reasons follow.
The facts are rather complicated. A number of matters that are relevant remain unclear. In the end my decision rests upon the circumstances of the plea itself, and so I will be as brief as I can with the facts.
The charges
Ms Stewart operated a supported residential facility as defined by the Supported Residential Facilities Act 1992 (SA) (the SRF Act). A “supported residential facility” is defined as follows in s 3 of the SRF Act:
supported residential facility or facility means premises at which, for monetary or other consideration (but whether or not for profit), residential accommodation is provided or offered together with personal care services (other than for members of the immediate family of the proprietor of the facility).
“Personal care services” include nursing care and assistance with or supervision of personal care.
The Annual Report 2010 of the South Australian Office of the Public Advocate contains a section on supported residential facilities. It states (at 44):
SRFs are shared facilities that provide congregate living with meals, care and medication provision …
Many people are admitted to SRFs because of the lack of alternative affordable and supportive choices. They are a disadvantaged group, are physically sicker and have a higher death rate than the general population.
The Report indicates that many residents have a primary psychiatric disability, and others suffer from an intellectual disability.
The SRF Act requires the operator of such a facility to be licensed, as must be the premises: s 23 and s 24 of the SRF Act.
The appeal proceeded on the basis that Ms Stewart was the operator of the supported residential facility at the relevant time. But the material before the Court contains references to a company that she controlled, referring to it as if it was the operator. This aspect was never sorted out. In the end it is not necessary to do so to dispose of the appeal. I will refer to this company as “the company”.
The SRF (as I will call it) was at Glynde. The premises were held under a lease that was due to expire on 12 September 2007.
During 2005 Ms Stewart was in dispute with the landlord. The dispute related to the permitted number of occupants of the SRF at Glynde. The licensing authority (see s 10 of the SRF Act) limited the number of occupants to 29, whereas Ms Stewart had taken up the lease on the basis that she could have 50 occupants. The limitation was attributable to the state of the premises. Ms Stewart regarded the landlord as responsible for this. That was the origin of her dispute with the landlord. From about the middle of 2005 Ms Stewart was refusing to pay rent to the landlord. Her business was struggling financially because of the limit on the number of occupants she was allowed to have.
Ms Stewart was developing another SRF at Magill. She was carrying out renovations on those premises in the latter part of 2005.
That is the background to the charges.
In October 2005 the company entered into a detailed contract with Mr Ferronato, on behalf of his father, who was a resident in the SRF at Glynde. In return for a payment of $41,000, the contract provided that long term accommodation would be provided to Mr Ferronato’s father.
The form of the contract does not appear to be appropriate for an SRF. The contract refers to the Retirement Villages Act 1987 (SA) (the RV Act). The form of the contract appears to be more appropriate for a retirement village as defined by the RV Act. The SRF at Glynde was not a retirement village. These comments about the form of the contract are based on my own limited knowledge of SRFs and retirement villages, not on submissions to the court.
In his witness statement, filed in the Magistrates Court, Mr Ferronato said that Ms Stewart told him that the payment was a bond, that it would be held “in trust”, and that Ms Stewart would receive the interest. In fact, clause 7.1.6 of the contract describes the payment as “a loan free of interest” as long as the contract is not rescinded. The contract makes provision for repayment, according to a formula, in the event of Mr Ferronato’s father leaving the SRF. The contract is of a kind with which the community is fairly familiar, or at least those who are concerned with the accommodation of the sick and the elderly.
This payment is the subject of count 1.
In November 2005 a contract in the same form was entered into between the company and the brother of another resident. The brother paid the company $63,000. According to Ms Stewart the intention was that the patient in question would be provided with long term accommodation at the Magill Facility. The payment would facilitate renovations of the accommodation and ensure the provision of long term care at Magill. The statement by the brother appears to be consistent with what Ms Stewart says. This payment was the subject of count 2.
Another contract in the same form was entered into in January 2006 between the daughter of a resident and the company. The payment was $64,000. The daughter was told that the making of the payment would make her mother a “permanent resident”. The daughter was told that if the payment was not made, her mother would have to move out of the SRF at Glynde. This payment was the subject of count 3.
None of the money was repaid when repayment was sought pursuant to the contract. As I have already said, when the contracts were signed the business at Glynde was in serious financial difficulty. The money was paid into an account that was used to meet the running costs of the SRF and, I gather, to pay for some of the renovations at the Magill facility. Those who paid the money probably had no idea of the state of the business at Glynde. There were references to the payment as a “bond”. It seems unlikely that the payers understood that by virtue of the contract the payment was a loan, and was not required to be held in a trust account.
Count 1 on the Information filed in the District Court is as follows:
Statement of Offence
Deception. (Section 139(a) of the Criminal Law Consolidation Act, 1935).
Particulars of Offence
Tracey Deanna Stewart between the 1^st day of September 2005 and the 30^th day of November 2005 at Glynde, deceived Paul Anthony Ferronato by dishonestly accepting monies from him to the amount of $41,000 as a residential bond when she was not licensed to do so, and by doing so dishonestly benefited herself.
The other two counts are in exactly the same form, the only differences being the name of the person allegedly deceived and the amount of the bond.
Section 139 of the CLCA provides as follows:
139—Deception
A person who deceives another and, by doing so—
(a)     dishonestly benefits him/herself or a third person; or
(b)dishonestly causes a detriment to the person subjected to the deception or a third person,
is guilty of an offence.
Maximum penalty:
(a)     for a basic offence—imprisonment for 10 years;
(b)     for an aggravated offence—imprisonment for 15 years.
Relevant definitions are set out in s 130 of the CLCA. “Deceive” means to engage in deception. “Deception” is defined as follows:
deception means a misrepresentation by words or conduct and includes—
(a)     a misrepresentation about a past, present or future fact or state of affairs; or
(b)     a misrepresentation about the intentions of the person making the misrepresentation or another person; or
(c)     a misrepresentation of law;
Particulars of the charges, going beyond what is set out in the Information, were neither sought nor given.
Proof of an offence against s 139 requires proof of a misrepresentation by Ms Stewart that resulted in Ms Stewart obtaining a benefit, she being dishonest in obtaining that benefit. I would have expected the focus of the charge to be on an identified misrepresentation by words or conduct on the part of Ms Stewart. The charge identifies the dishonest receipt of money, but does not identify a misrepresentation. It remains unclear what that misrepresentation was. This is the origin of the problem. Is one to infer that the misrepresentation was that Ms Stewart was licensed to accept the payment? If so, what is the licence she should have had? Why did she need a licence? Could a dishonest receipt of money be enough? The form of the charge raises a number of questions.
Ms Stewart did not hold a licence under the RV Act. It is true that the RV Act refers to a payment of a “premium”: s 18. But on my reading of the SRF Act it is not obvious that the operator of an SRF is not allowed by law to receive a bond or premium. The SRF Act is simply silent on the topic. My limited knowledge of SRFs suggests that the payment of a substantial premium or bond by a resident is not contemplated by the provisions of the SRF Act, and that this does not occur as a matter of practice. But this does not make it a criminal offence to receive such a payment.
The witness statements of the persons who made the payments do not refer to any representation by Ms Stewart to the effect that she was licensed to receive a bond or premium. There are references to statements by her to the effect that the payment was a bond, and to it being paid into a trust account. There are references to long term residence. It may be that a relevant misrepresentation is to be found in this material. But, as things stand, I cannot match this material to the form of the charges laid. This is a source of further confusion because material contained in the witness statements has been referred to from time to time in the District Court as relevant to the plea of guilty.
Ms Stewart pleaded guilty on 3 March 2009. This was followed by a protracted process involving many adjournments. They were mainly attributable to Ms Stewart not being available (she was living in Queensland, and had health problems) and to attempts by her to raise funds and make restitution to the payers of the money. Ms Stewart was not sentenced until 24 June 2010.
On 5 August 2009 the matter came before the District Court Judge, but was adjourned without detailed submissions being made on the question of sentence. Counsel for Ms Stewart said to the Judge:
Her pleas are entered on the basis she didn’t have an intention to permanently deprive and that she intended at every stage to provide these people with a service but she simply wasn’t legally entitled to enter into these long-term arrangements with respect to the provision of care and, in doing so dishonestly, she makes her plea.
There is a tension within this submission. The tension is between the assertion that Ms Stewart intended to provide accommodation, suggesting a denial of dishonesty, and the assertion that she was not legally entitled to make arrangements for long term care. The latter submission is not explained. That submission, no doubt, is related to the fact that she was in dispute with her landlord and occupied the SRF at Glynde under a lease that had less than two years to run. But there is no reference to any of that in the depositions of the payers.
On 14 January 2010 submissions were made on behalf of Ms Stewart. Along the way her counsel said:
Her pleas are entered on the basis that she was aware and that it was unlawful to receive long-term bonds when she had a short-term lease over those premises.
As can be seen, the emphasis is again on guilt attributable to receiving “long term bonds”, when the lease of the SRF was for a limited term. There is no reference here to being licensed to receive the money.
In these submissions the basis of the plea appears to be that it was unlawful to ask for and receive a bond in return for long term accommodation, when the lease of the premises was due to expire in less than two years, and there was already a dispute with the landlord.
Those circumstances might give rise to a relevant misrepresentation. But this is not to be found in the charges laid. Nor is a misrepresentation in these terms to be found in the witness statements, although it could, I suppose, be deduced from them.
Moreover, the fact that Ms Stewart’s lease was for a limited term seems to me not to be decisive. The contract provided for repayment, according to a formula, in the event of the relevant patient ceasing to be an occupant of the premises. There was talk at the relevant time of moving patients to the facility at Magill.
A little later in the course of submissions counsel said that:
… to trade out of her difficulty via these contracts which were not allowed at by law was a tremendous mistake…
There seems to be no doubt that these contracts were completed by Ms Stewart, without legal advice, using a precedent provided by a solicitor. I agree that they appear to be in a form inappropriate for an SRF. They appear to be appropriate for a retirement village. But it is not clear to me how it can be said that the contracts were unlawful. Nor is a relevant misrepresentation identified.
In the course of his sentencing remarks the District Court Judge said:
In each case you represented to the victim or the victim’s family that in return for the payment they would be provided with permanent accommodation in an aged care facility. You modified an inappropriate blank form of contract which you had obtained from a solicitor for the purpose of dressing the transactions with an appearance of regularity. Your conduct was premeditated and was deliberately deceitful. At no stage could you have provided the permanent accommodation which you had promised and you had already considered vacating the Glynde premises at the time the payments were requested. The total received by you from the victims was $168,000 of which only a very small proportion has been recovered.
The appeal
On the hearing of the appeal the Court received evidence by way of affidavit from Ms Stewart, from Ms Stewart’s first solicitor, from the counsel who appeared for her when she pleaded guilty, and from the solicitor who subsequently acted as solicitor and counsel for Ms Stewart after the first solicitor and counsel had withdrawn. Ms Stewart was cross-examined by Ms Matteo, counsel for the Director of Public Prosecutions.
In his affidavit (Exhibit A11) counsel for Ms Stewart referred to matters that he considered before advising her. These included the following:
c.Ms Stewart was not licensed to sell accommodation bonds as she was providing interim care only. To do so she had to comply with the terms of the Retirement Villages Act 1987 and be designated as a “retirement village authority”.
d.It was further apparent that the short term tenure on the current premises was compromised by reference to alleged accumulated rental arrears as at the time the bonds were entered into.
He went on to say (referring to his advice to Ms Stewart):
7.… on 1 February 2009 I engaged in a lengthy telephone conversation with Ms Stewart providing my advice and obtaining her further instructions as regards her attitude towards the disposition of her charges. Her instructions were to the effect that she was in a situation of emotional and financial compromise and accordingly exercised very poor judgment in agreeing to receive monies in exchange for bonds in circumstances where she understood that she was not entitled to do so.
Dr Churches did not apply to cross-examine either of the solicitors or counsel.
In her affidavit and in her oral evidence Ms Stewart claimed, in effect, that her legal advisors told her she had to plead guilty, and that this was because she was “criminally reckless”. She appeared to say that that was the answer, from her legal advisors, to her claims that she had no intention to deceive the payers, as she continued to maintain.
I reject these aspects of her evidence. The affidavits from counsel and from the solicitors are unchallenged. They deny any inappropriate pressure, and the first solicitor and counsel both deny advising her that she had to plead guilty because she had been criminally reckless. Nor does what Ms Stewart says sit with the surrounding circumstances. However, I accept and find that when Ms Stewart pleaded guilty, having regard to the advice that she was given, there was significant confusion as to the basis of the charges, and as to the basis of the plea. This was attributable in part to the form of the charges, and in particular to the failure to identify the misrepresentation upon which the prosecution relied. I find also that there was confusion as between Ms Stewart and her legal advisors, having its origin in the same circumstance, and in the failure to identify clearly the misrepresentation upon the basis of which the plea of guilty was to be entered. I accept that Ms Stewart did not understand the basis of her plea of guilty. I accept Ms Matteo’s submission that as the prospects of making restitution faded, Ms Stewart became more concerned about her plea, and more insistent in her claim that she did not intend to deceive. But, as I have said, I accept and find that there was genuine uncertainty and confusion on the part of Ms Stewart, and as between her and her legal advisors, as to the basis of the charge and as to the basis of the plea.

I am left with a real concern that the confusion and uncertainty led to Ms Stewart pleading guilty without understanding the basis of her plea, the plea being entered to charges not properly particularised, Ms Stewart not acting out of a consciousness of guilt but because she thought she had no choice in the circumstances but to plead guilty.
I have previously considered the principles that apply to an appeal against conviction following a plea of guilty. I did so in R v Pugh [2005] SASC 427; (2005) 158 A Crim R 302 and in R v Brooks [2007] SASC 35; (2007) 96 SASR 478. In each of those cases I summarised the relevant principles. There is no real dispute about the relevant principles, and so I will not go over that ground again. However, there are some points that warrant specific reference here.
The power of the Court to allow the appeal is found in s 353(1) of the CLCA. Decided cases have treated appeals of the kind now before the Court as enlivening the power of the Court to allow an appeal if there has been a miscarriage of justice. That is the ultimate question. An earlier more formalistic approach, reflected in the decision in R v Forde [1923] 2 KB 400 at 403, no longer prevails.
While the ultimate question is whether there has been a miscarriage of justice, individual cases must be decided according to underlying principles. The relevant law cannot be treated as a series of single instances, decisions being based on intuition or a general concern that something might have gone wrong.
For obvious reasons, the Court approaches appeals of this kind with great care. It would not be in the public interest to allow a plea of guilty to be set aside because of second thoughts or late regrets. They are not circumstances that can ordinarily give rise to a miscarriage of justice.
A plea of guilty is an admission of all of the elements of the offence. It is also important to bear in mind the following observation by Brennan, Toohey and McHugh JJ in Meissner v The Queen (1995) 184 CLR 132 at 141:
A court will act on a plea of guilty when it is entered in open court by a person who is of full age and apparently of sound mind and understanding, provided the plea is entered in exercise of a free choice in the interests of the person entering the plea. There is no miscarriage of justice if a court does act on such a plea, even if the person entering it is not in truth guilty of the offence.
Footnote omitted
One also must bear in mind that the presence or absence of a genuine consciousness of guilt on the part of the accused may be a relevant matter, but is not necessarily decisive. A person might be held to a plea of guilty even though the plea was entered by the person in question without any consciousness of or belief in guilt. Another matter to consider is the relevance of erroneous legal advice. In Brooks I said at [77]:
[77]To say this is not to deny the potential relevance of the question of whether an accused who pleads guilty has had proper legal advice … However, the adequacy of the advice given to the accused is but one factor to consider in deciding whether or not there has been a miscarriage of justice. The adequacy of the advice given is not, of itself, determinative of the question of whether there has been a miscarriage of justice. For example, in R v Murphy [1965] VR 187 Herring CJ and Adam J accepted that the advice on the basis of which a plea of guilty was entered might have been unduly pessimistic in one respect, and unduly optimistic in another, but still concluded that there was no miscarriage of justice (at 189).
Footnote omitted
In R v Wilkes [2001] NSWCCA 97; (2001) 122 A Crim R 310 Wood CJ at CL at [16] set out some observations by Badgery-Parker J in an unreported decision. They are worth repeating. They are relevant to this case. Badgery-Parker J said:
The need to accord finality to a plea of guilty because of its status as a solemn admission of all of the ingredients of the offence is postulated upon knowledge by the person entering that plea of all the facts (see the passage cited earlier from the judgment of Lee J in Sagiv) and it is not necessary to be accorded such finality if there are circumstances which indicate that the plea ‘was not really attributable to a genuine consciousness of guilt’: per Scholl J in Murphy. If the integrity of the plea is bona fide questioned because it appears that the person who entered that plea was not in possession of all the facts and did not entertain a genuine consciousness of guilt, then in my opinion the plea of guilty ought to be set aside and a new trial ordered if (but only if, and the onus lies on the appellant) it is clear that there is, in the words of Justice Scholl ‘an issuable question of guilt’ — to put it more simply, if there is a real question to be tried. If the plea was not entered into with full knowledge of the facts and as a genuine recognition of guilt, and if the material before the Court of Criminal Appeal shows that there is a real question about the guilt of the accused, then the proper course must be to set aside the plea of guilty, to quash the conviction, and to order a new trial.
In the present case it is necessary to focus attention on the circumstances of the plea of guilty.
Because of the manner in which the charge was worded, the uncertainty to which that gave rise, and the uncertainty as to the nature of the prosecution case, Ms Stewart lacked an understanding of the basis of the charge against her when she pleaded guilty. The advice to her in relation to her plea failed to resolve that problem. The end result was a plea of guilty on a basis that Ms Stewart did not understand, on a basis that may have been incorrect, and without any true admission of guilt on the part of Ms Stewart, she continuing to maintain that she had not intended to deceive.
In short, the plea was entered in relation to a charge that lacked clarity, on a basis that was uncertain, Ms Stewart not understanding the basis and there being no consciousness of guilt on her part. It is these circumstances in combination that lead me to conclude that to allow the plea to stand would give rise to a miscarriage of justice.
The plea was made voluntarily, but that is not decisive. The fact that Ms Stewart did not entertain a “genuine consciousness of guilt” does not of itself lead inevitably to the conclusion that the convictions should be set aside. It is the combination of that factor with other factors that leads to the conclusion that I have reached. The fact that an accused person does not understand all aspects of the charge to which the person pleads guilty, and all the reasons why a plea of guilty is appropriate, does not of itself lead inevitably to the conclusion that the conviction should be set aside. Once again, in this case it is the uncertainty in the charge, and the extent of the uncertainty as to the basis of the plea, in combination with the other factors that leads to the conclusion that I have reached. It is not necessary to consider whether, at a trial, Ms Stewart is likely to be found not guilty. It suffices to say that, considering the material before the court, it cannot be said that there is no arguable defence.
Conclusion
For those reasons I would allow the appeal and set aside all three convictions. I would order a retrial. There is sufficient material before the Court to indicate that there might be a basis for a finding of guilt on an amended charge.
In the circumstances it is unnecessary to consider the appeal against sentence. The sentence necessarily falls with the setting aside of the conviction.
DAVID J: I would allow the appeal. I agree with the reasons of the Chief Justice and the orders he proposes.
PEEK J: I agree with the reasons of the Chief Justice and the orders he proposes. I would allow the appeal.

[2010] SASCFC 72

16 December 2010

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