S a J v The Queen
[2012] VSCA 243
•4 October 2012
SUPREME COURT OF VICTORIA
COURT OF APPEAL
No S APCR 2012 0136
| S A J | Applicant |
| V | |
| THE QUEEN | Respondent |
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| JUDGES | NETTLE, WEINBERG JJA and DAVIES AJA |
| WHERE HELD | MELBOURNE |
| DATE OF HEARING | 1 August 2012 |
| DATE OF JUDGMENT | 4 October 2012 |
| MEDIUM NEUTRAL CITATION | [2012] VSCA 243 |
| JUDGMENT APPEALED FROM | R v [SAJ] (Ruling No 1) [2012] VSC 244T (Whelan J) |
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CRIMINAL LAW — Application for leave to appeal against interlocutory decision — Applicant charged with three counts of using position as a director dishonestly with intention of gaining advantage for someone else, contrary to s 184(2)(a) of the Corporations Act 2001 (Cth) —Whether objective test in Peters v The Queen (1998) 192 CLR 493 sets out relevant standard of dishonesty — Alternatively whether combined objective and subjective test in Ghosh [1982] QB 1053 sets out relevant test —Whether ‘dishonestly’ used in ‘ordinary’ or ‘special’ sense — No requirement to prove subjective awareness of dishonesty — Leave to appeal granted — Appeal dismissed — Macleod v The Queen (2003) 214 CLR 230 applied.
STATUTORY INTERPRETATION — Criminal law — Commonwealth offences — Physical and fault elements under Criminal Code — Whether legislative history indicates that ‘dishonestly’ used in a ‘special’ sense — Parliamentary preference for Ghosh test — Whether enactment of Ghosh test in relation to other Commonwealth offences evinces legislative intention that Ghosh apply to s 184(2)(a) — Expressio unius est exclusio alterius — Whether test in Peters capable of applying to fault element under the Criminal Code.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr M Regan with Mr P Smallwood | Victoria Legal Aid |
| For the Crown | Dr G J Lyon SC with Mr P J Doyle | Commonwealth Director of Public Prosecutions |
NETTLE JA:
In this matter I have had the very considerable advantage of reading in draft the joint reasons for judgment of Weinberg JA and Davies AJA.
As their Honours explain, the essential question is whether the word ‘dishonestly’ in s 184(2) of the Corporations Act 2001 (Cth) imports the objective test of dishonesty adopted by the High Court in Peters v The Queen,[1] and more recently reiterated in McLeod v The Queen,[2] or the two part objective and subjective test adopted by the English Court of Appeal in R v Ghosh.[3]
[1](1998) 192 CLR 493, 504 [18] (Toohey and Gaudron JJ), 527 [79] (McHugh J), 533 [93] (Gummow J) and 555 [145] (Kirby J).
[2](2003) 214 CLR 230, 242 [38] (Gleeson CJ, Gummow and Hayne JJ).
[3][1982] 1 QB 1053, 1064 (Lord Lane CJ, Lloyd and Eastham JJ).
The problem arises because in some other sections of the Corporations Act, in particular ss 1041F(2) and 1041G(2), and in some Chapters of the Criminal Code Act 1995 (Cth), namely, Chapter 4, s 73.9(3); Chapter 7, s 130.3; and Chapter 10: ss 470.2, 471(2), 474.1 and 480.2, it is specifically provided that, for certain defined purposes, ‘dishonest’ means dishonest according to the standards of ordinary people and known by the accused to be dishonest according to the standards of ordinary people.
Logically, it is difficult to imagine that Parliament intended the Ghosh test to apply the offences to which those sections are directed but not also the offence for which s 184(2) provides. That sense of disquiet is heightened by the preference for the Ghosh test expressed in the Explanatory Memorandum to the Criminal Code Amendment (Theft, Fraud, Bribery and Related Offences) Bill 1999 (Cth).
In the end, however, as Weinberg JA and Davies AJA explain, although Chapter 2 of the Criminal Code applies to s 184 of the Corporations Act, Chapter 2 does not provide in terms for the application to s 184(2) of the Corporations Act of any of the definitions of ‘dishonest’ found in Chapter 4, 7 or 10 of the Criminal Code,[4] and
the express inclusion of similar Ghosh-type definitions of ‘dishonest’ in ss 1041F(2) and 1041G(2) of the Corporations Act positively implies, expressio unius est exclusio alterius, that such a definition is not intended to apply to s 184(2).
[4]Kwok v R (2007) 175 A Crim 4 278.
In the result, I agree with Weinberg JA and Davies AJA that the judge below was right to hold that he was bound to apply the Peters test and, consequently, that leave to appeal should be granted, but the appeal dismissed.
WEINBERG JA
DAVIES AJA:
The applicant, SAJ, is charged with having contravened the provisions of s 184(2)(a) of the Corporations Act 2001 (Cth) (‘Corporations Act’). The charges concern a series of transactions entered into in March 2008 by three companies, Opes Prime Group Ltd (‘OPGL’), Opes Prime Stockbroking Ltd (‘OPSL’) and Leveraged Capital Pty Ltd (‘LC’). SAJ was a director of each of those companies at that time. The Crown contends that he used his position as a director of OPGL (count 1), and as a director of OPSL (count 2), dishonestly with the intention of directly or indirectly gaining an advantage for LC.
The charges assert that the conduct which constituted the applicant’s dishonest ‘use’ of position was the role that he played in the entry by OPGL, OPSL and LC into various arrangements with the ANZ Bank (‘the Bank’).
The trial has yet to take place. As matters stand, there will be no dispute about the fact that the applicant was a director of the three companies concerned, and no dispute that they entered into the relevant arrangements, as alleged, in March 2008. There will also be no dispute that the applicant was one of the directors responsible for the implementation of those arrangements.
It seems that one effect of these arrangements was that OPGL and OPSL
undertook additional obligations to the Bank, and provided security for those obligations. In substance, the terms of pre-existing arrangements between OPSL and the Bank were altered in a way that was to the Bank’s advantage, and to OPSL’s detriment. These arrangements enabled LC to satisfy an obligation for which it was liable, and which it would otherwise have been unable to meet.
The matter is to be heard in the Trial Division. There will probably be an issue in the trial as to whether the applicant’s intention was to ‘directly or indirectly’ gain an advantage for LC. However, the main issue that is likely to arise is whether the applicant can be shown to have acted ‘dishonestly’.
The judge below heard argument on a preliminary legal issue as to the meaning of that term.
The Crown submitted that it was required to prove that the applicant acted ‘dishonestly’, in a purely objective sense. The test was whether the applicant’s conduct would be regarded as dishonest by the standards of ordinary, decent people. This test was said to be derived from the decision of the High Court in Peters v The Queen.[5]
[5](1998) 192 CLR 493 (‘Peters’).
The applicant, however, submitted that the Crown had to prove that he was dishonest not merely from an objective point of view, but also in a subjective sense. He submitted that the term ‘dishonestly’ connoted a dual test. The Crown would first have to establish that his conduct would be regarded as dishonest by the standards of ‘ordinary people’.[6] That would not, of itself, be sufficient. The Crown would have to go further, and prove that he was aware, at the relevant time, that ‘ordinary people’ would view his conduct in that way.
[6]Criminal Code Act 1995 (Cth) sch 1 s 130.3.
The applicant submitted that this dual test derived from the definition of ‘dishonesty’ found in various provisions of the Criminal Code Act 1995 (Cth) (‘the Criminal Code’). He referred, in particular, to ss 73.9(3), 130.3, 470.2, 474.1 and 480.2.
The applicant relied primarily upon s 130.3. That section was introduced into the Criminal Code by the Criminal Code Amendment (Theft, Fraud, Bribery and Related Offences) Act 2000 (Cth) (‘Theft, Fraud, Bribery and Related Offences Act’).
The various definitions of ‘dishonesty’ contained in the Criminal Code embody what is often referred to as the ‘Ghosh test’. That name obviously derives from the decision of the English Court of Appeal in R v Ghosh.[7]
[7][1982] QB 1053 (‘Ghosh’).
The Explanatory Memorandum that accompanied the Bill that led to the Theft, Fraud, Bribery and Related Offences Act explained that the government had taken a considered decision to prefer the ‘Ghosh test’ to that laid down by the High Court in Peters.
The issue before the judge below was, in essence, simply this: should the test for dishonesty for the purposes of s 184(2)(a) of the Corporations Act be the Peters test, or the Ghosh test?
In a ruling given on 12 June 2012, his Honour held that he was bound to apply the Peters test, and not the Ghosh test. The applicant now seeks leave to appeal against that interlocutory decision. The application is brought pursuant to s 295 of the Criminal Procedure Act 2009.
The judge below has certified, pursuant to s 295(3)(b), that the interlocutory decision is of sufficient importance to the trial to justify it being determined on an interlocutory appeal.
The relevant legislative provisions
Section 184(2) of the Corporations Act, which creates the offences with which the applicant has been charged, relevantly provides:
(2) A director, other officer or employee of a corporation commits an offence if they use their position dishonestly:
(a) with the intention of directly or indirectly gaining an advantage for themselves, or someone else, or causing detriment to the corporation…
The section is one of a series of provisions that fall under the general heading: ‘Good faith, use of position and use of information — criminal offences’. In construing s 184(2), and searching for the meaning of the term ‘dishonestly’, it is important to note that the section is preceded by s 184(1) which provides:
(1) A director or other officer of a corporation commits an offence if they:
(a) are reckless; or
(b) are intentionally dishonest;
and fail to exercise their powers and discharge their duties:
(c) in good faith in the best interests of the corporation; or
(d) for a proper purpose.
Moreover, s 184(2) is followed by s 184(3) which also uses the term ‘dishonestly’. That section provides as follows:
(3)A person who obtains information because they are, or have been, a director or other officer or employee of a corporation commits an offence if they use the information dishonestly:
(a)with the intention of directly or indirectly gaining an advantage for themselves, or someone else, or causing detriment to the corporation; or
(b)recklessly as to whether the use may result in themselves or someone else directly or indirectly gaining an advantage, or in causing detriment to the corporation.
Despite the fact that s 9 of the Corporations Act defines many of the terms used within that Act, the word ‘dishonestly’ is not defined. That word is, however, specifically defined in various provisions of the Criminal Code. It is constantly given the meaning accorded to it in s 130.3, which relevantly provides as follows:
For the purposes of this Chapter, dishonest means:
(a)dishonest according to the standards of ordinary people; and
(b)known by the defendant to be dishonest according to the standards of ordinary people.
This definition is plainly derived directly from Ghosh. It applies in relation to a host of offences contained within ch 7 of the Criminal Code, all of them involving theft or fraud perpetrated upon the government. As previously indicated, it is also used specifically in relation to a series of categories of offences contained elsewhere in the Criminal Code.[8]
[8]Section 73.9 -‘providing or possessing a travel or identity document issued or altered dishonestly or as a result of threats’;
Section 1308A of the Corporations Act is also relevant. It provides:
Subject to this Act, Chapter 2 of the Criminal Code applies to all offences against this Act.
Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility. Section 2.2 relevantly provides:
(1) This Chapter applies to all offences against this Code.
(2)… this Chapter applies on and after 15 December 2001 to all other offences.
Accordingly, these general principles contained in the Criminal Code apply to all offences committed on and after 15 December 2001 under the Corporations Act.
Section 3.1 of the Criminal Code (which falls within ch 2) provides that an offence ‘consists of physical elements and fault elements’. It follows that the offence contained within s 184(2)(a) consists of both such elements.
Section 3.2 provides:
In order for a person to be found guilty of committing an offence the following must be proved:
(a)the existence of such physical elements as are, under the law creating the offence, relevant to establishing guilt;
(b)in respect of each such physical element for which a fault element is required, one of the fault elements for the physical element.
Section 4.1, which is also within ch 2, and therefore applicable to the offences contained within the Corporations Act, relevantly provides that the physical element of an offence may be ‘conduct’, ‘a result of conduct’, or ‘a circumstance in which conduct, or a result of conduct, occurs’.
Section 5.1, which is still within ch 2, relevantly provides that a ‘fault element for a particular physical element may be intention, knowledge, recklessness or negligence’,[9] but that a law that creates an offence may specify ‘other fault elements for a physical element of that offence’.
[9]These terms are defined in ss 5.2-5.5.
Section 5.6(1) provides that if ‘the law creating an offence does not specify a fault element for a physical element that consists only of conduct, intention is the fault element for that physical element’. Similarly, s 5.6(2) provides that ‘if the law creating the offence does not specify a fault element for a physical element that consists of a circumstance or a result, recklessness is the fault element for that physical element’.
It is perfectly clear that given s 2.2(2) of the Criminal Code, and s 1308A of the Corporations Act, the provisions of ch 2 of the Criminal Code are all applicable to charges brought under s 184(2)(a). However, none of the definitions of the term‘dishonestly’ in the Criminal Code are contained within ch 2. They are, rather, to be found in chs 4, 7 and 10.
The competing contentions
It is necessary to say something at this stage regarding both the Ghosh test, and the rejection of that test by the High Court in Peters.
Ghosh concerned an appeal by a surgeon who had been convicted of attempting to procure the execution of a cheque by deception, attempting to obtain property by deception, and two counts of obtaining property by deception contrary to the provisions of the Theft Act 1968 (UK). The Crown case was that he had falsely represented that he had performed an operation and that money was owing to him for that procedure. In fact, the operation had been performed by someone else, and/or under the National Health Service Provisions.[10]
[10]Ghosh [1982] QB 1053, 1057 (Lord Lane CJ).
On appeal, it was argued that the trial judge had misdirected the jury as to the meaning of the term ‘dishonestly’ when he simply told them that the applicable standard of honesty was a matter for them to determine. The trial judge gave the jury various examples of what he considered might be regarded as dishonest conduct, including ‘getting something for nothing’, ‘sharp practice’ and ‘manipulating systems’.[11]
[11]Ibid 1057 (Lord Lane CJ).
The Court of Appeal noted that the term ‘dishonestly’ had been construed, at an appellate level, in two distinct ways. One line of authority held that the test for dishonesty was entirely subjective.[12] The other held that it was completely objective.[13]
[12]See, eg, R v Landy [1981] 1 WLR 335.
[13]See, eg, R v Greenstein [1975] 1 WLR 1353.
Lord Lane CJ framed the question for the Court’s determination as follows:
Is ‘dishonestly’ in section 1 of the Theft Act 1968 intended to characterise a course of conduct? Or is it intended to describe a state of mind? If the former, then we can well understand that it could be established independently of the knowledge or belief of the accused. But if, as we think, it is the latter, then the knowledge and belief of the accused are at the root of the problem.[14]
[14]Ghosh [1982] QB 1053, 1063.
Lord Lane CJ then stated that, in his view, Parliament could not have intended the word ‘dishonestly’ to catch ‘conduct to which no moral obloquy could possibly attach’.[15] He formulated the test to be applied as follows:
In determining whether the prosecution has proved that the defendant was acting dishonestly, a jury must first of all decide whether according to the ordinary standards of reasonable and honest people what was done was dishonest. If it was not dishonest by those standards, that is the end of the matter and the prosecution fails.
If it was dishonest by those standards, then the jury must consider whether the defendant himself must have realised that what he was doing was by those standards dishonest. In most cases, where the actions are obviously dishonest by ordinary standards, there will be no doubt about it. It will be obvious that the defendant himself knew that he was acting dishonestly. It is dishonest for a defendant to act in a way which he knows ordinary people consider to be dishonest, even if he asserts or genuinely believes that he is morally justified in acting as he did.[16]
[15]Ibid.
[16]Ibid 1064.
Therefore, Ghosh held that the prosecution had to satisfy two components to establish dishonesty. First, it had to show that the accused had acted dishonestly according to the standards of reasonable and honest people. Second, the accused must have realised that his conduct was dishonest according to those standards. In other words, there was both an objective and subjective component to the test.
The objective component derived from the earlier Court of Appeal decision in R v Feely.[17] There, it was held that the word ‘dishonestly’, being an ordinary word of the English language which is ‘in common use’, the jury did not need the help of the judge in its application.[18] The jury should simply decide whether an appropriation was dishonest by applying ‘the current standards of ordinary decent people’.[19] The jury were, in effect, being invited to apply their own standards when considering whether dishonesty had been established.
[17][1973] QB 530 (‘Feely’).
[18]Ibid 537 (Lawton LJ) citing in support the views of Lord Reid in Brutus v Cozens [1973] AC 854, 861: ‘[T]he meaning of an ordinary word of the English language is not a question of law’.
[19][1973] QB 530, 537-8 (Lawton LJ). In Ghosh, for whatever reason, ‘ordinary decent people’ became ‘reasonable and honest’ people.
In Feely itself, the accused, the manager of a betting shop, took about thirty pounds from his employer’s safe. He left no IOU or other record of the transaction. He did not tell his employers what he had done. Four days later, when the deficiency was discovered, he provided an IOU for the full amount.
The accused’s defence, when charged with theft, was that he fully intended to repay the money. The trial judge directed the jury that this was no defence in law. If the accused did not believe that his employers would have permitted him to take the money (and they had previously prohibited the practice of borrowing from the till), he would be guilty of theft even if he intended to repay, however soon, and had the means to do so. This was held to be a misdirection. Whether the accused had acted dishonestly was for the jury to say. The conviction was quashed.
When Victoria adopted the provisions of the Theft Act 1968 (UK) in 1973, it was initially assumed that the law, as applied in this State, would replicate that applicable in England. However, in a trilogy of cases decided in the late 1970s and early 1980s, it became apparent that the meaning of the term ‘dishonestly’ was contentious, and that Feely would not be followed.
In R v Salvo,[20] the Court of Criminal Appeal concluded that Feely was wrongly decided. The appellant had been charged with obtaining property by deception, contrary to 81(1) of the Crimes Act 1958. It was held that the term ‘dishonestly’ imported, as an element in the offence which the Crown had to prove, that the accused obtained the property without any belief that he had, in all the circumstances, a ‘legal right to deprive’ the other person of the property.[21]
[20][1980] VR 401.
[21]Ibid 432 (Fullagar J).
The correctness of Salvo was challenged in R v Brow,[22] and again in R v Bonollo.[23] Despite misgivings on the part of some members of the Court, Salvo was approved. Since that trilogy of cases, juries in this State have been directed in accordance with Salvo, and have been told, in effect, that dishonesty means without a belief in a claim of right.
[22][1981] VR 783 (‘Brow’).
[23][1981] VR 633 (‘Bonollo’).
In Peters, the High Court considered an appeal by a solicitor against his conviction on a charge of conspiracy to defraud the Commonwealth pursuant to ss 86(1)(e) and 86A of the Crimes Act 1914 (Cth). The Crown case was that the appellant was party to an agreement to conceal the true amount of a client’s income from the Commissioner of Taxation by means of sham mortgage transactions.
The trial judge directed the jury that they had to be satisfied that the appellant was dishonest. He then directed them as to the meaning of that term in accordance with Ghosh, distinguishing conspiracy to defraud, under the Crimes Act 1914 (Cth), from the state offences of theft and obtaining property by deception under the provisions of the Crimes Act 1958 (Vic). Conspiracy to defraud was, of course, a common law offence, but where the target of the fraud was to be the Commonwealth, the charge would be laid under the provisions of the Crimes Act 1914 (Cth).
The appellant argued that, notwithstanding that conspiracy to defraud was a common law offence, and did not expressly require proof of dishonesty,[24] the jury should have been directed in accordance with Salvo, and the other Victorian cases which had applied that test.[25] In other words, the appellant contended that the jury should have been told that they could not convict him of conspiracy to defraud unless the Crown established an absence of belief on his part that he had a legal right to do what he had done.
[24]R v Scott [1975] AC 819.
[25][1980] VR 401.
The High Court rejected that argument. In doing so, Toohey and Gaudron JJ set out what they saw as the proper test for dishonesty, where that particular issue squarely arose, as follows:
In a case in which it is necessary for a jury to decide whether an act is dishonest, the proper course is for the trial judge to identify the knowledge, belief or intent which is said to render that act dishonest and to instruct the jury to decide whether the accused had that knowledge, belief or intent and, if so, to determine whether, on that account, the act was dishonest. Necessarily, the test to be applied in deciding whether the act done is properly characterised as dishonest will differ depending on whether the question is whether it was dishonest according to ordinary notions or dishonest in some special sense. If the question is whether the act was dishonest according to ordinary notions, it is sufficient that the jury be instructed that that is to be decided by the standards of ordinary, decent people. However, if ‘dishonest’ is used in some special sense in legislation creating an offence, it will ordinarily be necessary for the jury to be told what is or, perhaps, more usually, what is not meant by that word. Certainly, it will be necessary for the jury to be instructed as to that special meaning if there is an issue whether the act in question is properly characterised as dishonest.[26]
[26]Peters (1998) 192 CLR 493, 504.
In approaching the matter as they did, their Honours essentially rejected Ghosh as the appropriate test, save in those comparatively rare cases where there was reliance upon some form of lack of moral obloquy as an answer to the charge or charges laid. In such cases, a direction in accordance with at least the first limb of the Ghosh test would be appropriate. It must be stressed, however, that the joint judgment should not be viewed, as some commentators have argued,[27] as a wholesale endorsement of Ghosh in relation to conspiracy to defraud. At most, it allows for something approximating the Ghosh test to be used in the special circumstances identified in the judgment of Toohey and Gaudron JJ.
[27]Simon Bronitt and Bernadette McSherry, Principles of Criminal Law (3rd ed, Lawbook, 2010) 727.
McHugh J (with whom Gummow J agreed) took a very different approach. His Honour rejected Ghosh almost in its entirety, and as to both its limbs. He held that, in relation to conspiracy to defraud, it was for the trial judge, alone, to determine whether the facts, as found, established an agreement to use dishonest means. In so holding, he necessarily rejected the first limb of Ghosh. However, his Honour went further. He concluded that the trial judge’s charge had been ‘unduly favourable’ to the accused because of its adoption of the subjective component in the Ghosh test.[28] In other words, in his Honour’s view, the test for dishonesty was wholly objective, and a matter entirely for the trial judge. [29]
[28]Peters (1998) 192 CLR 493, 533.
[29]Ibid 531.
The fifth member of the Court, Kirby J, stood alone in favouring a wholly subjective test for dishonesty. However, conscious of the fact that the Court was otherwise equally divided, his Honour indicated that he was prepared to forego his own opinion, and concur with Toohey and Gaudron JJ (whose views he considered closer to his own than those of McHugh J). He did so solely on the basis that this would create a majority of sorts, albeit one that might be described as contrived. It is perhaps a nice question as to whether a majority so constituted can give rise to a ratio.[30]
[30]See generally Alex Steel, ‘The Appropriate Test for Dishonesty’ (2000) 24 Criminal Law Journal 46, 46.
On any view, a majority in Peters distinguished between those offences which refer to dishonesty ‘according to ordinary notions’, and those which refer to that term in a ‘special sense’. Peters, it seems, holds that if there is a question as to whether an act was dishonest ‘according to ordinary notions’ (a somewhat unusual case) then the jury is to be instructed that that issue is to be determined by application of the standards of ordinary reasonable people. If, however, ‘dishonesty’ is used in a ‘special sense’ (as it often will be), the trial judge must direct the jury as to what is, or is not, meant by that word in the particular context in which it appears.
It is clear that Toohey and Gaudron JJ considered Ghosh to be a case where dishonesty was to be interpreted in accordance with its ordinary meaning. Salvo, by contrast, was an example of that term being used in a special sense.
It is perhaps unclear whether, even assuming the first limb in Ghosh to be applicable, the majority in Peters would have endorsed the second limb as well. Plainly, and on any view, McHugh J would not. His Honour made that position clear in stating that:
The beliefs of the accused persons as to whether they thought they were acting honestly are irrelevant.[31]
…
A successful prosecution for conspiracy to defraud does not require proof that the accused knew that he or she was acting dishonestly either in a Ghosh sense or a wholly subjective sense.[32]
[31]Peters (1998) 192 CLR 493, 530.
[32]Ibid 527.
What was not clear, following Peters, was whether proof of knowledge on the part of the accused that he or she was acting dishonestly was essential to other offences. This was particularly so in relation to those offences of which dishonesty was a separate and express element. In such cases, it might be thought that legislation using the term ‘dishonestly’ in a special sense may well require a subjective inquiry, as the Victorian cases suggest. That is particularly so where the role of the adverb ‘dishonestly’ is to criminalise conduct which would be otherwise unobjectionable.
The English Law Commission described such cases in the following terms:
[W]here dishonesty is the main determinant of liability, it acts as a positive element in the offence. The conduct requirements of such an offence are very general, and occur frequently in commerce or indeed in everyday life. Thus dishonesty ‘does all the work’ in such offences. It turns what would otherwise not be even prima facie unlawful (say, making a gain or causing prejudice) into a crime.[33]
[33]The Law Commission, Legislating the Criminal Code: Fraud and Deception, Consultation Paper No 155 (1999) 30.
In 2003, the High Court returned to the meaning of dishonesty and its synonyms. In Macleod v The Queen,[34] the issue to be resolved concerned the construction of s 173 of the Crimes Act 1900 (NSW) which dealt with directors or other company officers fraudulently applying company property. Gleeson CJ, Gummow and Hayne JJ outlined the elements of the offence, drawn from the text of the provision, as follows:
(i) the taking or application of company property by a company director, officer or member; (ii) for his own use or benefit, or any use or purpose other than the use or purpose of the company; and (iii) that the taking or application was fraudulently made.[35]
[34](2003) 214 CLR 230.
[35]Ibid 240.
Their Honours held that the term ‘fraudulently’, in s 173, was synonymous with the term ‘dishonestly’ in other contexts.[36] They said:
Adopting the reasoning in Peters, as we do, and applying it to the offences now under consideration, there is no requirement that the appellant must have realised that the acts in question were dishonest by current standards of ordinary, decent people. To require reference to a ‘subjective’ criterion of that nature when dealing with a claim of right would have deleterious consequences. It would distract jurors from applying the Peters direction about dishonesty, and it would limit the flexibility inherent in that direction. A direction about the ‘subjective’ element of a claim of right was neither necessary nor appropriate in this case.[37]
[36]Ibid 241.
[37]Ibid 245.
McHugh J also accepted that the correct approach was for the trial judge to direct the jury in accordance with the judgment of Toohey and Gaudron JJ in Peters.[38] His Honour said that, in a case where dishonesty is in issue, the trial judge must:
(a) identify the knowledge, belief or intent which is said to render the relevant conduct dishonest; and
(b) instruct the jury to decide whether the accused had that knowledge, belief or intent and, if so, to determine whether, on that account, the act was dishonest; and
(c) direct the jury that, in determining whether the conduct of the accused was dishonest, the standard is that of ordinary, decent people.[39]
[38]Ibid 256.
[39]Ibid 242.
Callinan J, although deciding the appeal on the basis that it was not necessary to construe ‘fraudulently’ in the particular circumstances of the case, also referred to the Toohey and Gaudron JJ approach as ‘apposite’ to determining what is meant by ‘dishonesty’.[40]
[40]Ibid 264.
Macleod may be viewed as having extended the application of Peters by applying an objective standard of dishonesty to an offence which expressly required proof, as an element of the offence, that certain conduct was done fraudulently.
Certainly it seems clear, as a result of Macleod, that the second limb of the Ghosh test now has no place in the common law of Australia.
In Farah Constructions Pty Ltd v Say-Dee Pty Ltd, the High Court, citing Macleod, noted:
As a matter of ordinary understanding, and as reflected in the criminal law in Australia, a person may have acted dishonestly, judged by the standards of ordinary, decent people, without appreciating that the act in question was dishonest by those standards.[41]
[41](2007) 230 CLR 89, 162 (Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ).
One commentator has suggested that the Peters approach to dishonesty is also consistent with the approach taken by the High Court in R v Tang, in a somewhat different context.[42] There, the High Court held that the offence of possession of a slave under the provisions of the Criminal Code could be established on an objective basis with no requirement that the accused be shown to have had an appreciation of the legal significance of the circumstances under which the possession occurred. That may be viewed as little more than a restatement of the basic proposition that an accused can be convicted of a crime without being aware that his conduct amounts to an offence.
[42]Jeremy Gans, Modern Criminal Law of Australia (Cambridge University Press, 2012) 217.
The issue before the Court
The question to be resolved in this appeal may be stated succinctly. It is whether the test for dishonesty adopted in Peters (and reiterated in Macleod) applies also to the offence under s 184(2)(a) of the Corporations Act? Or, does the fact that the subsection contains within it, specifically and in terms, a requirement that there be proof of dishonesty, suggest that some other test should apply? More particularly, does the fact that the Criminal Code has adopted the Ghosh test in preference to Peters mean that a jury, directed as to the element of dishonesty under s 184(2)(a), should be directed in accordance with Ghosh, and not Peters?
Previous authority regarding s 184(2)(a)
Several cases involving the interpretation of s 184(2)(a) were cited below and on the hearing of this appeal.
In Kwok v The Queen,[43] the New South Wales Court of Appeal proceeded on the basis that the test of dishonesty applicable to s 184(2)(a) changed as of 15 December 2001. From that day, ch 2 of the Criminal Code applied to offences set out in the Corporations Act, by reason of the operation of s 2.2 of the Criminal Code.[44]
[43](2007) 175 A Crim R 278 (‘Kwok’).
[44]As set out above n 28.
In Kwok, it appears that the Crown took the view that the Peters test applied prior to 15 December 2001, and that the Ghosh test, as set out in s 130.3 of the Criminal Code, applied thereafter. The conduct said to have constituted the offence took place both before and after that date. To avoid potential confusion, the prosecution was permitted to amend the indictment so as to refer only to conduct preceding 15 December 2001.
In a passage which demonstrates that the Court of Criminal Appeal agreed with the Crown’s view of the effect of s 2.2 of the Criminal Code, and therefore accepted that the test for dishonesty had changed after the relevant date, Santow JA (with whom Hidden and Howie JJ agreed) said:
It remains to consider whether, notwithstanding the words of s 2.2 of the Code, s 130.3 applied to the whole of the events comprehended by the charge merely because the proceedings brought against the accused post-dated 15 December 2001.
I agree with the Crown’s submissions that there is no basis in the relevant legislation to give retrospective effect to the modified definition of dishonesty, as incorporated in subsection 184(2).[45]
[45]Ibid 292.
In Krecichwost v The Queen,[46] the New South Wales Court of Criminal Appeal considered an appeal against conviction on three charges brought pursuant to s 184(2)(a). One ground of appeal asserted that the trial judge had failed to direct the jury as to factors relevant to its consideration of whether the appellant was dishonest. Another ground asserted that the convictions could not be supported by the evidence owing to the lack of evidence said to support a finding of dishonesty.
[46][2012] NSWCCA 101 (‘Krecichwost’).
For reasons that are not immediately apparent, and notwithstanding Kwok, the trial judge directed the jury in accordance with Peters.Neither at trial, nor on appeal, was any challenge mounted to the applicability of Peters to an offence against s 184(2)(a).
Macfarlan JA (with whom Schmidt J and Grove AJ agreed) said:
As the trial judge directed the jury, the issue of the appellant's dishonesty needed to be judged by the jury according to ‘the standards of ordinary, decent people’ (see Peters v R [1998] HCA 7; 192 CLR 493 at [18]). Such judgment required the jury to consider the wide variety of circumstances revealed by the evidence. Unsurprisingly, the experienced counsel who appeared for the appellant addressed the jury at length in relation to the issue of dishonesty. In her Summing-Up the trial judge referred in detail to the appellant's evidence and his counsel's submissions on the topic. The appellant does not allege that her Honour's descriptions were inaccurate or deficient.[47]
[47]Ibid [63].
Strangely therefore, although Kwok had proceeded upon the basis that the test for dishonesty in s 184(2)(a) had changed immediately after 15 December 2001, and that the Ghosh test was thereafter applicable, the Court in Krecichwost took an entirely different view. Not a single mention was made of Kwok.
Following the hearing of the interlocutory appeal in the present case, the Court was informed that although an application for special leave to appeal had been filed against the decision in Krecichwost, the grounds in support of that application did not raise any issue as to the meaning of the term ‘dishonestly’ in s 184(2)(a).
For completeness, it should be noted that in R v Kemp, Judge Martin of the Queensland District Court ruled that the test for dishonesty under s 184(2)(a) had changed as from 15 December 2001, and was, in fact, the Ghosh test.[48] That conclusion was based upon the decision of the New South Wales Court of Criminal Appeal in Kwok.
[48]Oral ruling delivered on 29 May 2012. The accused was acquitted by the jury. Hence, the meaning of dishonesty was not considered at an appellate level.
The applicant’s submissions
The applicant submitted that in order to make out an offence under s 184(2)(a), the prosecution must establish that the accused’s use of his position was both (a) dishonest according to the standards of ordinary people; and (b) known by him to be dishonest according to those standards. In other words, he submitted that the judge below had erred in deciding to follow Peters in preference to Ghosh.
In support of that submission, the applicant contended that, on the proper construction of s 184(2)(a), ‘dishonestly’ was the fault element attaching to the relevant physical element, namely use of position. By contrast, Peters had addressed the situation where dishonesty formed part of the actus reus of the offence. It had not considered dishonesty in the context of that element of the offence being a fault element.
It was next submitted that the Commonwealth Parliament had clearly and repeatedly expressed its preference for the Ghosh test over the Peters test. That preference was said to be manifested by the various other provisions in the Criminal Code, and in the Corporations Act,[49] all of which expressly adopt the Ghosh test. It was also said to be made clear by the following passages of the Explanatory Memorandum to the Criminal Code Amendment (Theft, Fraud, Bribery and Related Offences) Bill 1999 (Cth):
58.The approach in Peters is not favoured because it is necessary for offences like theft to retain a broad concept of dishonesty to reflect the characteristic of moral wrongdoing
…
60.Paragraph (b) of the definition requires knowledge on the part of the defendant that he or she is being dishonest according to the standards of ordinary people. This is crucial if the Criminal Code is to be true to the principle that for serious offences a person should not be convicted without a guilty mind. It reflects a preference for the law which existed prior to the 1998 decision of the High Court in Peters …
[49]Corporations Act 2001 (Cth) ss 1041F, 1041G.
Finally, the applicant drew attention to Spigelman CJ’s statement in R v Lee[50] that:
Authorities on the mental element of an offence based on common law principles are no longer applicable since Ch 2 of the Code came into effect, relevantly pursuant to s 2.2(2) of the Code. It is dangerous to regard them as a point of reference. In substance, from the point of view of determining criminal responsibility, pre-existing legislation … must be treated as if it had been repealed and re-enacted in the same words, but in an entirely different context.[51]
[50](2007) 71 NSWLR 120 (‘Lee’).
[51]Ibid 125.
On that basis, the applicant sought to distinguish Macleod which had endorsed the Peters test, but which had concerned the construction of a state offence rather than an offence to which ch 2 of the Criminal Code applied.
In further written submissions filed after the hearing of the interlocutory appeal, the applicant submitted that an examination of the history of ss 184(1) and 184(2) of the Corporations Act showed that an objective test for dishonesty should be rejected.
The applicant referred to s 107 of the Companies Act 1958 (Vic) which was, relevantly, in the following terms:
(1)A director shall at all times act honestly and use reasonable diligence in the discharge of the duties of his office.
(2)Any officer of a company shall not make use of any information acquired by virtue of his position as an officer to gain an improper advantage for himself or to cause detriment to the company.
That provision was repealed and re-enacted without substantial amendment as s 124 of the Companies Act 1961 (Vic). The applicant noted that in Marchesi v Barnes, a case dealing with s 124(1) of that Act, Gowans J said:
…it is sufficiently alleged that there was conscious and deliberate conduct in disregard of those interests [the interests of the company], and, in my opinion, that is sufficient to satisfy the charge of not acting honestly in the discharge of the duties of the office of director.[52]
[52][1970] VR 434, 438.
The applicant also referred to s 229 of the Companies Act 1981 (Cth) (and its equivalent provisions in state legislation) which were in the following terms:
(1)An officer of a corporation shall at all times act honestly in the exercise of powers and the discharge of his office.
…
(4)An officer or employee of a corporation shall not make improper use of his position as such an officer or employee to gain, directly or indirectly, an advantage for himself or for any other person or to cause detriment to the corporation.
The applicant submitted that the cases interpreting that provision demonstrated that ‘contravention of s 229(4) was not established by merely showing that the officer engaged in conduct that resulted in an advantage to himself, or a detriment to the corporation’. There also ‘needed to be [an] element of impropriety’.[53]
[53]Applicant’s Supplementary Submissions, page 4 quoting Angas Law Services Pty Ltd (in liq) v Carabelas (2005) 226 CLR 507, 527-8 (Gummow and Hayne JJ).
In that regard, the applicant cited Chew v The Queen[54] for the proposition that an offence against s 229(4) required proof of ‘purposive’ conduct, and that an accused’s state of mind was relevant, in an appropriate case, to the element of improper use of position.
[54](1992) 173 CLR 626.
The applicant also referred to R v Byrnes & Hopwood.[55] He accepted that the majority in that case held that there was an objective test of impropriety in relation to improper use of position, but quoted the following statement by Brennan, Deane, Toohey and Gaudron JJ:
When impropriety is said to consist in an abuse of power, the state of mind of the alleged offender is important: the alleged offender’s knowledge or means of knowledge of the circumstances in which the power is exercised and his purpose or intention in exercising the power are important factors in determining the question whether the power has been abused.[56]
[55](1995) 183 CLR 501 (‘Byrnes & Hopwood’).
[56]Ibid 515 (citations omitted).
The applicant next noted that s 229 was replaced by s 232 of the Corporations Law as from 1 February 1993. Section 232(2) was, relevantly, in the same terms as s 229(1) of the Companies Act 1981. Section 232(6) provided that:
(6)An officer or employee of a corporation must not, in relevant circumstances, make improper use of his or her position as such an officer or employee, to gain, directly or indirectly, an advantage for himself or herself or for any other person or to cause detriment to the corporation.
The applicant referred to s 1317FA of the Corporations Law which, he submitted, was the first time the concept of ‘dishonesty’ was expressly incorporated into corporations legislation. That section was headed: ‘[w]hen contravention of a civil penalty provision is an offence’. It provided:
(1)A person is guilty of an offence if the person contravenes a civil penalty provision:
(a) knowingly, intentionally or recklessly; and
(b) either:
(i)dishonestly and intending to gain, whether directly or indirectly, an advantage for that or any other person; or
(ii)intending to deceive or defraud someone.
In Clarke & Forge v The Queen,[57] the Western Australian Court of Appeal held that ‘dishonestly’ in s 1317FA(1) had the Peters meaning.
[57](2004) 50 ACSR 592.
The applicant next referred to the Corporate Law Economic Reform Program Act 1999 (Cth) which introduced s 184 in its current form. It was submitted that the effect of that legislation, in light of its history, was that the word ‘dishonestly’ attaches to the misuse of position, together with either ‘an intention to gain or cause detriment’ or ‘recklessness as to whether the gain or detriment may result’. The applicant also noted that references to ‘deceit’ and ‘defraud’ were omitted, and submitted that this had been done, presumably, ‘because both concepts were considered to be adequately covered by the adverb “dishonestly”’.
Finally, the applicant submitted that if the word ‘dishonestly’ were to be found to relate to a physical element (a circumstance in which conduct occurs), rather than to a fault element, then the default fault element of recklessness would apply to that physical element. In that regard, it was submitted that an accused person cannot be reckless with respect to that act of dishonesty without having, at the very least, an appreciation of what standards of honesty are applicable.
The Crown’s submissions
The Crown submitted that, in the absence of any statutory definition of ‘dishonestly’ specifically applicable to s 184(2)(a), that term should be interpreted in strict accordance with Peters.
Before the judge below, the Crown submitted that the applicant’s contention amounted to nothing more than a submission that because Parliament has chosen to enact the Ghosh test for certain offences involving dishonesty, it must follow that it intended that test to apply to all offences involving dishonesty. That was said to be, in effect, a non sequitur. The same submission was repeated before this Court.
The Crown further submitted that the most compelling reason for holding that the Peters test should govern the meaning of ‘dishonestly’ in s 184(2)(a) was that the High Court in Macleod had expressly adopted and applied that test in a context where fraud (being relevantly interchangeable with dishonesty) was not merely part of the physical element, but plainly a separate mental element of the offence.
It was also submitted that the High Court, in R v LK,[58] had expressly endorsed reference to established common law meanings of terms used in offences created or affected by the Criminal Code. It would follow, so it was said, that there was no impediment to adopting the Peters test as appropriate when dealing with s 184(2)(a) of the Corporations Act.
[58](2010) 241 CLR 177, 205 (French CJ), 219-20 (Gummow, Hayne, Crennan, Kiefel and Bell JJ).
The Crown next submitted that a critical premise in the applicant’s argument was that dishonesty, as explained in Peters, involved a physical element only, and not a fault element, using the dichotomy adopted in the Criminal Code. However, drawing upon the judgment of Spigelman CJ in Lee, it was submitted that the Peters test would be understood, ‘in normal parlance … to involve fault on the part of the alleged perpetrator.’[59] That being so, the entire basis for the applicant’s argument was undermined.
[59]Summary of Contentions of the Respondent, 19 July 2012, 2 citing R v Lee (2007) 71 NSWLR 120, 122.
The Crown filed further submissions, in response to a direction by the Court, relating to the history of s 184 of the Corporations Act.
Those submissions noted that neither the Companies Act 1958 (Vic) nor the Companies Act 1961 (Vic) contained an ‘improper use of position’ offence. The first such provision was s 229(4) of the Companies Act 1981 (Cth), as discussed earlier.[60]
[60]Above para 87.
The Crown referred to Byrnes & Hopwood, which considered s 229(4), as authority for the proposition that the test for impropriety under that provision was wholly objective, and did not depend upon the offender’s consciousness of impropriety.
The Crown’s further submissions also outlined the historical development of s 184(1). It was submitted that the analysis demonstrated that the language of that subsection should not be used to assist in the interpretation of s 184(2).
The offence contained in s 184(1) was said to stem from the statement of Romer J in Re City Equitable Fire Insurance Co Ltd[61] concerning the general law duty imposed upon directors. His Lordship described that duty as being ‘to act honestly for the company they represent’.[62] That statement was said to have ‘inspired’[63] the enactment of s 107 of the Companies Act 1958 (Vic), and in turn, s 124 of the Companies Act 1961 (Vic).
[61][1925] 1 Ch 407.
[62]Ibid 428-9 citing Lagunas Nitrate Co v Lagunas Syndicate [1899] 2 Ch 392, 422 (Lindley MR). See generally Ashburner’s Principles of Equity (2nd ed, 1933) 130-1.
[63]Byrne v Baker [1964] VR 443, 450 (Herring CJ, Smith and Adam JJ).
Section 184(2), on the other hand, was said to derive, in part, at least, from a separate strand of authority. It was submitted that this subsection stemmed from the fiduciary duty imposed upon directors to avoid conflicts of interest.[64] As previously indicated, neither Companies Act 1958 (Vic), nor the Companies Act 1961 (Vic) contained any ‘improper use of position’ provision.[65]
[64]Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134.
[65]Those Acts did, however, prohibit the improper use of information: Companies Act 1958 (Vic) s 107(2).
Section 229(4) of the Companies Act 1981 (Cth) and s 184(2) of the Corporations Act involved the creation of a broader offence, never previously enacted. For that reason, and because ss 184(1) and 184(2) stemmed from entirely different general law sources, no assistance could be gained from the language of s 184(1) when construing s 184(2). In particular, nothing turned upon the fact that s 184(1) used the term ‘intentionally dishonest’, whereas s 184(2)(a) spoke only of acting ‘dishonestly’.
The decision below
As noted earlier, the judge below concluded that he was bound, as a matter of law, to construe s 184(2)(a) as requiring the Peters test to be applied. There were two key reasons for that conclusion.
First, his Honour noted that although it was true that Peters had addressed dishonesty in the context of the actus reus of conspiracy to defraud, there was no basis for distinguishing the reasoning in that case when it came to construing s 184(2)(a). That was because Toohey and Gaudron JJ had expressed their conclusion in Peters in the most general of terms, and also because Macleod had applied Peters where dishonesty was plainly a distinct fault element of the offence.
Secondly, his Honour held that although the Commonwealth Parliament had shown a clear preference for the Ghosh test in relation to a number of offences, that, by itself, was not determinative. The Ghosh test had been legislated in specific instances, and not generally and across the board. That selective implementation tended to support the Crown’s position.
The conclusion that Ghosh was not intended to apply generally was further supported by the fact that the legislature, when it created the offences of dishonestly inducing persons to deal in financial products, or acting dishonestly in carrying on a financial services business, felt it necessary to adopt a statutory definition of dishonesty that accorded with Ghosh.[66] Had it been thought that this test should apply also to s 184(2)(a), it might have been expected that a similar provision would have been enacted in relation to that subsection.
[66]Corporations Act ss 1041F-G.
Conclusion
The term ‘dishonestly’ has given rise to considerable difficulty over many years. A great deal, and perhaps too much, has been written on this subject.
At one level, the High Court has conclusively determined the meaning to be given to this term. A combination of Peters and Macleod suggests that, at least in those cases where the word is to be given its ordinary meaning, the test for dishonesty is wholly objective. It does not require proof that the accused was aware that ‘ordinary, decent people’ would view his or her conduct as dishonest.
The decision in Peters has been strongly criticised.
For example, Associate Professor Alex Steel has written that Peters
… in rejecting the Ghosh test as unworkable in practice does not at any point explain why the Feely test is an appropriate test. Thus the judgment presents an unfortunate vacuum of policy or reasoning as to what dishonesty means and what its role is in criminal law.
…
What is also puzzling is the lack of consideration of Fullagar J’s concerns over the judiciary being asked to decide moral concepts.[67] Two members of the Court in Peters, McHugh and Gummow JJ, were happy for the entire question of dishonestly to be a legal one determined by the judiciary, and the entire court found no difficulty with a morally-based community standards approach.[68]
[67]Expressed in Salvo [1980] VR 401, 429 (footnote added).
[68]Alex Steel, ‘The Meanings of Dishonesty in Theft’ (2009) 38 Common Law World Review 103, 126.
Professor C R Williams has criticised Peters on the basis that there is no sound reason for distinguishing between dishonesty in its ‘ordinary’ sense, and the use of that term in some ‘special’ sense, as in theft. He argued, however, that irrespective of the merits of the decision, its effect was clear. In his view, it substantially undermined the Victorian trilogy of Salvo, Brow and Bonollo, and meant that those cases should be reconsidered.[69]
[69]C R Williams, ‘The Shifting Meaning of Dishonesty’ (1999) 23 Criminal Law Journal 275.
The High Court has, since Peters, referred to the Victorian trilogy of cases dealing with dishonesty in the context of theft.[70] So far as we are aware, there has been no suggestion, at any time, that those cases might have been incorrectly decided. If anything, they were treated as sui generis, given the particular problems associated with offences such as theft and obtaining property by deception.
[70]Macleod (2003) 214 CLR 230, 242 (Gleeson CJ, Gummow and Hayne JJ).
This Court, too, after Peters, has repeatedly followed the trilogy of Victorian cases on this subject. The law in this area is regarded as settled.[71]
[71]See, eg, R v Todo (2004) 10 VR 244.
Added to the criticisms levelled at Peters by various commentators are the reasons set out in the Explanatory Memorandum to the Criminal Code Amendment (Theft, Fraud, Bribery and Related Offences) Bill 1999 for preferring the inclusion of the second limb of the Ghosh test in the Criminal Code, as set out earlier at para [81].
Faced with the difficulty that Peters had defined dishonesty as having, in its ordinary sense, an entirely objective meaning, the applicant sought to distinguish that case before this Court. The submission was that, in Peters, the issue of dishonesty did not arise in the context of a fault element as such, but only as a component of the actus reus of conspiracy to defraud.
Whatever force that submission might otherwise have had if Peters stood alone, Macleod renders it untenable. It is perfectly clear, from Macleod, that the Peters test is applicable even where dishonesty goes beyond being simply a component of a physical element, but applies as a distinct fault element.
Both the applicant and the Crown acknowledged below, and before this Court, that ‘dishonestly’ in s 184(2)(a) is a fault element within the meaning of the Criminal Code. If the applicant’s submission that the Ghosh test must be applied because the Criminal Code itself so dictates is rejected, it would seem to follow that this Court is bound to follow Peters, albeit by way of Macleod.
There are some commentators who would prefer to see Peters given as little scope as possible. There are also, of course, others who have serious reservations as to Ghosh, and favour Peters.[72] Of course, insofar as the Ghosh test has been legislated, it is not for any court to challenge the merits of that parliamentary choice.
[72]See, eg, David Lusty, ‘The Meaning of Dishonesty in Australia: Rejection and Resurrection of the Discredited Ghosh Test’ (2012) 36 Criminal Law Journal 282.
Plainly, whether Peters governs the meaning of ‘dishonestly’ in s 184(2)(a) will depend, at least in part, upon whether that term is to be interpreted ‘according to ordinary notions’. If so, and putting to one side the textual argument based upon the Criminal Code, the approach taken by Toohey and Gaudron JJ must be applied.
There is nothing in the text or statutory context of s 184(2)(a) to indicate that the word ‘dishonestly’ is used in any ‘special sense’.[73] Had the legislature intended that the term be so construed, it could, and presumably would, have given it a precise definition. That was, after all, the approach taken in the Criminal Code itself. It was also the approach taken by various state and territory jurisdictions that had, over the years, used the term as an element of particular offences.[74] We do not think that it is necessary or desirable to express a view on the meaning of the composite phrase “intentionally dishonest” in s 184(1)(b) in order to inform the meaning of “dishonestly” in s 184(2)(a) because the sections can be read and understood in their own context by reference to the particular duties that, if contravened, create the criminal offences.
[73]Cf the policy reasons underlying the judgments in Salvo, Brow and Bonollo where the Full Court, in each case, concluded that the nature of the offences in question required the term ‘dishonestly’ to be carefully, and narrowly, defined. The problem of what to do with ‘Robin Hood’ is unlikely to loom large in the context of s 184(2)(a).
[74]See, eg, Crimes Act 1900 (ACT) s 96(4)(b) (originally enacted in the Crimes (Amendment) Ordinance 1985 (No 4) and now repealed) which enacted the test proposed in McGarvie J’s judgment in Bonollo: [1981] VR 633, 668.
There is also nothing in the legislative history to indicate that the word ‘dishonestly’ is used in any ‘special sense’. When Parliament introduced civil penalties for directors who contravened their statutory duties,[75] including the duty not to misuse their position improperly to gain an advantage for themselves or someone else or to cause detriment to the company,[76] it also enacted s 1317FA(1) to demarcate between civil and criminal liability for contravention of statutory duties. Section 1317FA(1) did so by prescribing the mental elements required to impose criminal liability on directors. The section criminalised contravention of the statutory duties where the person “knowingly, intentionally or recklessly” and either “dishonestly and intending to gain … an advantage for that or any other person” or “intending to deceive or defraud someone”. Before then, criminal liability for a contravention did not depend on proving dishonesty, though the case law was redolent with differing views about the mental element that was required.[77] The enactment of s 1317FA(1) reflected a clear legislative policy that directors should not be criminally sanctioned for contravention of their statutory duties unless the mental elements existed. This policy is maintained by the current s 184 which has replaced s 1317FA(1). Notably absent from s 1317FA(1) and s 184 is any definition of dishonesty for the purposes of those sections, which is to be contrasted with the later enacted s 1041F(2) and s 1041G(2) in a different statutory context. The legislative history shows a deliberate and clear dichotomy between civil and criminal liability but nothing in the legislative history indicates that Parliament intended ‘dishonestly’ in s 184(2) to bear other than the ordinary meaning that the word imports.
[75]Now contained in sections 180, 181, 182 and 183 of the Corporations Act 2001 (Cth): s 1317E of the Corporations Act 2001 (Cth)
[76]Section 182 of the Corporations Act 2001 (Cth)
[77]See, eg, Marchesi v Barnes [1970] VR 434; Australian Growth Resources Corporation v Van Reesema (1988) 13 ACLR 261; Chew v The Queen (1992) 173 CLR 626; Byrnes & Hopwood (1995) 183 CLR 501.
If that is indeed the approach to be taken to the word ‘dishonestly’, as we think it is, there seems little for this Court to do but to follow Peters. That is so even though the precise route through which that conclusion is reached requires a detour through Macleod.
This was the approach taken by the judge below. In our opinion, his Honour was correct to do so. Leave to appeal should be granted, but the appeal dismissed.
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section 470.2 – ‘postal offences’;
section 474.1 – ‘telecommunications offences’; and
section 480.2 – ‘financial information offences’.
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