Simonsen v Waters
[2012] WASC 482
•11 DECEMBER 2012
SIMONSEN -v- WATERS [2012] WASC 482
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2012] WASC 482 | |
| Case No: | SJA:1034/2012 | 4 SEPTEMBER 2012 | |
| Coram: | McKECHNIE J | 11/12/12 | |
| 25 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed Convictions set aside Matter remitted to Magistrates Court for retrial | ||
| B | |||
| PDF Version |
| Parties: | MARK SIMONSEN BRETT WATERS |
Catchwords: | Criminal law and procedure Criminal Code (WA) s 22 Honest claim of right Dishonest means Whether correct to find an intention to defraud before looking at honest claim of right |
Legislation: | Criminal Code (WA), s 22 |
Case References: | Mathews v The Queen [2001] WASCA 264; (2001) 24 WAR 438 Molina v Zaknich [2001] WASCA 337; (2001) 24 WAR 562 Noble (1990) 70 A Crim R 568 R v Kastratovic (1986) 42 SASR 59 R v Love (1989) 17 NSWLR 608 Roberts v Western Australia [2005] WASCA 37; (2005) 29 WAR 445 Walden v Hensler (1987) 163 CLR 561 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CRIMINAL
- Appellant
AND
BRETT WATERS
Respondent
ON APPEAL FROM:
Jurisdiction : MAGISTRATES COURT OF WESTERN AUSTRALIA
Coram : MAGISTRATE P G MALONE
File No : PE 50863 of 2010, PE 50864 of 2010, PE 50865 of 2010, PE 50866 of 2010, PE 50867 of 2010, PE 50868 of 2010, PE 50869 of 2010, PE 50870 of 2010, PE 50871 of 2010, PE 50872 of 2010, PE 50873 of 2010, PE 50874 of 2010
Catchwords:
Criminal law and procedure - Criminal Code (WA) s 22 - Honest claim of right - Dishonest means - Whether correct to find an intention to defraud before looking at honest claim of right
(Page 2)
Legislation:
Criminal Code (WA), s 22
Result:
Appeal allowed
Convictions set aside
Matter remitted to Magistrates Court for retrial
Category: B
Representation:
Counsel:
Appellant : In person
Respondent : Mr L M Fox
Solicitors:
Appellant : In person
Respondent : Director of Public Prosecutions (WA)
Case(s) referred to in judgment(s):
Mathews v The Queen [2001] WASCA 264; (2001) 24 WAR 438
Molina v Zaknich [2001] WASCA 337; (2001) 24 WAR 562
Noble (1990) 70 A Crim R 568
R v Kastratovic (1986) 42 SASR 59
R v Love (1989) 17 NSWLR 608
Roberts v Western Australia [2005] WASCA 37; (2005) 29 WAR 445
Walden v Hensler (1987) 163 CLR 561
(Page 3)
- McKECHNIE J:
How this matter comes to court
1 Mr Simonsen and Mr Legge were once partners in a business registered as AGE Automation which was described as being involved the installation and maintenance of gate access systems, automated control and automatic sliding doors.
2 The business did not last very long, only for a few months in 2003. In April 2003, Mr Simonsen changed the address and banking details for a number of invoices which were forwarded to various companies that had received service from AGE Automation and who owed the partnership money. The money was banked into an account registered by Mr Simonsen with a similar name, AGS Automation. The debtors did not really lose anything. They paid money for services rendered. However, Mr Simonsen certainly gained a benefit when money found its way into his account. Whether he was entitled to it was a live issue at trial.
3 Many years later, Mr Simonsen was charged with 12 counts of fraud or attempted fraud. He was convicted, fined and a compensation order made. Against those convictions he appeals to this court on 16 grounds. Most of the grounds lack substance. However, the ground concerning honest claim of right must succeed and the convictions are set aside.
The trial
4 Mr Simonsen, whom I will now refer to as the appellant, stood trial in February 2012. He was represented by counsel, Ms Clohessy. The complainant was represented by Mr Hawkins.
The charges
5 The charges are in common form differing only in the name of the complainant, the amount and whether the offence was an attempted offence (six were attempts). The second charge (10/50864) is a useful example. It is charged under the Criminal Code (WA) s 408(1)(c) and reads:
Between 4 April and 30 June 2003 at Yokine, Mark Jeffrey Simonsen, with intent to defraud by deceit gained a benefit, namely cash to the value of $1746.80.
(Page 4)
6 At the commencement of the trial, counsel tendered a statement of agreed facts:
1. Each complainant listed on the complaints requested work completed by AGE Automation.
2. Each business is recognised under the Business Names Act as an Entity as stipulated on the complaints.
3. The work requested by each business was carried out by AGE Automation on or before the dates specified on the invoices.
4. AGE Automation invoices each client for the work completed.
5. Each complainant received an invoice from AGE Automation for a specified amount (as detailed on the complaint) for the work completed. The amounts invoiced to each complainant is not disputed.
6. On the 24th April 2003 the accused opened a new business with the Dept of Consumer and employment protection in name of AGS Automation.
7. The accused opened a bank account with St George Bank under the name of AGS Automation.
8. On or about the 24th April 2003 the accused removed himself as a partner from the business, AGE Automation.
9. Between 4th April and 30th June 2003 the accused sent further invoices to the complainants requesting payment. The invoices sent by the accused contained the AGE letterhead with exactly the same details as the original invoice, except the address, bank and ABN numbers had been changed. Each invoice was stamped 'Any reason for this overdue account? If Not, please send us a cheque'.
10. In five instances namely counts 2, 5,6, 7, & 8 the accused received funds from each of the respective complainants in payment for the work completed by AGE Automation.
11. The funds were deposited into the business account of the accused, namely AGS Automation.
12. The remaining counts even though the accused had sent invoices, the funds were directed and sent AGE Automation and paid into this account.
13. Each complainant states that if they had known that the money/cheques were going into an account other than an AGE account, payment would not have been made.
(Page 5)
- 14. Amendments to the existing complaints to state that the date of the alleged offence was between 4th April 2003 to the 30th June 2003 (Exhibit P1).
7 In the light of the statement of agreed facts there were only two witnesses called for the prosecution, Mr Legge and the investigating officer Detective Sergeant Waters.
8 The defence called two witnesses, Mr Simonsen (the appellant) and Mr Michael Stonehouse, a self-employed IT consultant.
Jeffrey Spencer Legge
9 Mr Legge gave evidence that the partnership commenced in February 2003 and it was operating up until April when:
[Mr] Simonsen, without any contact with me at all, left the partnership over the weekend, the Anzac weekend, and when I returned back on I think the Monday or Tuesday of the Anzac weekend, I found a lot of stuff missing, and I could not get Mr Simonsen to talk to me for a few days (ts 22/2/12, page 9).
We just - it was basically our business name was registered with DOCEP and we operated - we rented premises which we had rented before in Victoria Park, so there was no documentation other than of - and sorry, we opened a joint back account in the trading name of AGE Automation (ts 22/2/12, page 10).
10 Their previous business had gone into liquidation so they carried on a partnership because they both had to make a living.
11 As to post office address:
[I]nvoices that were raised in Vic Park were sent out with that address of the Victoria post office box on it. But also some of the company - some of the people that had dealt with me for years continued to send things to AGE Automation at the Applecross post office box (ts 22/2/12, page 13).
- Since 1996 anything from AGM Automation (the predecessor) went to the Canning Bridge address because it was convenient for Mr Legge to pick it up because he lived in Applecross.
12 Any invoice that was sent out from the AGE partnership had the AGE Automation name on it:
[O]nes that I did on my computer from home for, say, service work, there's a chance that they had the PO Box 991. So any cheques I got there - or payments that had AGE Automation on it, they were deposited in the AGE
(Page 6)
- Automation account, because they were for work done on behalf of AGE (ts 22/2/12, page 14).
13 Mr Legge is a licensed electrician and physically did a lot of the service work:
Mark's forte was the sales, so he would do a lot of quoting for new work, ... some of the invoices went out with the Vic Park address on it and some of them went out from - with the post office address at Applecross, but either way - ... Any payment that was made to the favour of AG Automation - every cheque I get I banked into the AG Automation account.
...
The new work, we actually used subcontractors to install the work - the new gear (ts 22/2/12, pages 15 - 16).
14 There was no dispute in 2003. When I contacted Mark he said:
'Oh you're ripping me off' ... And he said 'I've been checking the books and you're ripping me off'. ... That was probably the last conversation I have ever had with Mark other than in the court system (ts 22/2/12, page 18).
Every invoice we sent out we made a copy (ts 22/2/12, page 20).
Did you agree with Mr Simonsen that he could change the bank account details on invoices sent out in the name of AGE Automation?---No.
Did you agree with Mr Simonsen that he could render invoices for work that had been done by AGE Automation, but render them in the name of AGS Automation?---No.
Did you agree with Mr Simonsen that the address for payment shown on AGE Automation invoices could be changed to an address in Tuart Hill?---No (ts 22/2/12, page 22).
15 In cross-examination it was suggested:
[T]hat when you first started out in the partnership that you didn't actually put Mr Simonsen's name on the bank account? (ts 22/2/12, page 25)
- That was denied.
Mark entered his name with DOCEP later. ... [T]he Bank account at day one was set up as a partnership. ... There were two cheque books and by the end three cheque books in that partnership and an EFTPOS card in the name of AGE Automation (ts 22/2/12, pages 26 - 27).
(Page 7)
16 Mr Legge denied that he put his personal address on the invoices. He put the post office box number. It was a box he opened in the year 1990, used throughout the entire AGM period and continued to use it, '[W]hen Mark and I did the ADS, and I continued to use it with AGE' (ts 22/2/12, page 31).
17 He denied conducting his own work on the side:
Were you purposely giving certain invoices different addresses so that you could get the benefit of that?---No (ts 22/2/12, page 33).
18 He considered that the business ended on 22 April 2003 even though Mark had his name removed on 8 April 2003. '[A]ny cheques that came in for the AGE partnership I banked in the AGE account':
[I] continued on working in my own name after Mark left, so anything I did after that went to me. Anything that was done as a partnership went into the partnership bank account (ts 22/2/12, page 35).
I suggest to you that when the partnership dissolved, you went your own way and did your own thing, as did Mr Simonsen, collecting debts. Is that not the case?---Actually, I didn't go my own way. I continued on in the business, from the same office, but when I did the work I did it in my own name. Anything that was done in the partnership - money received for the work done in the partnership was deposited in the partnership's account (ts 22/2/12, page 39).
Detective Sergeant Waters
19 Detective Sergeant Waters is attached to the Major Fraud Squad and was the case officer. He executed a search warrant at the appellant's house on 17 August 2010 and seized various documents, including documents that were tendered into evidence. He also interviewed the appellant by way of an EROI. As this is a ground of appeal I set out the transcript.
20 There was discussion on 22 February 2012 about the EROI:
HIS HONOUR: I'm sorry for being a dog with a bone about it, but I really feel as though I need a bit more clarity with these agreed facts. Because, as I understand it, they're meant to be section 32 admissions of fact, and it says, 'In late April the accused created invoice number 2301,' and then it says, 'The accused was interviewed and denied that he'd created any invoices,' and, you know, this and that and the other. So I'm not sure whether I'm dealing with an admitted fact or - - -
HAWKINS, MR: It is now an admitted fact, as is the denial an admitted fact (ts 22/2/12, page 60).
(Page 8)
21 There was a further discussion about the video record of interview the following day, 23 February 2012:
HAWKINS, MR: Did Mr Simonsen take part in a video record of interview?---Yes, he did.
Your Honour, I have the discs. If I can hand up the - it's an interview that took two CDs.
HIS HONOUR: Yes.
HAWKINS, MR: I'd ask if that could be played, please, commencing at 13.17.
Was that interview on 17 August 2010?---Yes, it was, the same day as the search.
HIS HONOUR: It's agreed that we start some stage into it, is it?
HAWKINS, MR: Yes, my friend has asked that I don't play the entire - - -
CLOHESSY, MS: What I actually said, your Honour, was that I wasn't sure if we needed to play the whole thing, and perhaps if there are some points that the prosecutor - my learned friend wants to address, then that's fine, I don't - - -
HIS HONOUR: It's just that if we're missing all the bit about caution and all the rest of it, then I assume that there's no objection taken to the fact that a caution was administered, it was voluntary, all those sorts of issues.
CLOHESSY, MS: No, your Honour.
HIS HONOUR: Yes. Because I assume you two have watched - isn't this meant to be three hours long or something?
CLOHESSY, MS: Yes, your Honour. I really don't see the that's - I don't really see the purpose, but that's a matter for my learned friend.
HAWKINS, MR: It's the manner in which the denials were made, simply saying - - -
HIS HONOUR: What, doing handstands when he was denying them or - - -
HAWKINS, MR: No. No, the express things which were denied as to - - -
HIS HONOUR: Look, I'm guessing - and I'm happy to be corrected - but I assume from the statement of material facts that the significance - this is the first one - the significance of the agreed fact is to say that the - sorry,
(Page 9)
- here it is. 'On Tuesday, 17 August the accused participated in a recorded DVD interview. He denied creating or sending invoices to customers, denied depositing the funds into his AGS business account.' I assume the prosecution are arguing that's an Edwards lie, a lie made in the consciousness of guilt.
HAWKINS, MR: Yes.
HIS HONOUR: What, am I going to sit through the record of interview that's three hours long if that's the only point? Because it is admitted that Mr - and I'm not criticising anybody, I'm just trying to - - -
HAWKINS, MR: Yes.
HIS HONOUR: - - - you two have done your absolute best to confuse me the whole time and this is just part of it. So I'm happy to sit through it if there's some point in it, but if there's not - one suggestion is there is not and you're saying, 'Let's watch it', about the manner of the answers - because, let's face it, the only basis on which a video record of interview is tendered is admissions against interest.
HAWKINS, MR: Yes.
HIS HONOUR: That's what it's fundamentally about - but one also can take exculpatory statements into account. So you look at the admissions but you also look at the explanation as well. You don't have to believe it necessarily - but if there are no admissions, then there is no point in me watching it. It may not be admissible. It's also, funnily enough, admitted that Mr Simonsen lied in that video record of interview, which would seem to be in that category, arguably, of an Edwards lie.
HAWKINS, MR: Yes. If I could treat this as a voir dire?
HIS HONOUR: Yes.
HAWKINS, MR: What Mr Simonsen sought to do was to deny things and say Mr Legge must have sent out those invoices, Mr Legge must have put money into Mr Simonsen's account.
HIS HONOUR: Yes.
HAWKINS, MR: That's why I wanted to play it.
HIS HONOUR: Yes, but if that's admitted then - because it says he denied creating or sending invoices, denied depositing the funds - if you want to say 'And said that Mr Legge must have done it' - because obviously the green Martian would be a suspect as well - - -
HAWKINS, MR: Yes.
(Page 10)
- HIS HONOUR: - - - so 'Mr Legge or the green Martian did it', we could add that in.
CLOHESSY, MS: Your Honour, perhaps if my learned friend does have a - it's a matter, obviously, for discussion, but if my learned friend does have a transcript or some dot points - which it seems he does - if those points can be put to Mr Simonsen, that, in fact, he did say those, and then - - -
HIS HONOUR: You see, I'm absolutely alive to the fact that Mr Simonsen doesn't have to give evidence if he doesn't want to - and I know we haven't reached the point where he has to make that decision.
But I assume if Mr Simonsen wants to explain things, other than the way he did it on the video record of interview, he'll give evidence, and what he'll say, I assume - and I'm not being difficult, and I'm happy to be corrected - he'll say, 'Look, I know I told a whole lot of porky pies in the video record of interview, but I took that one look at that Detective Waters and thought, "Wow, I better lie here, and he frightened me so much," so that's why I lied.' So that will be a matter for Mr Simonsen, if he wishes to and if he's required to, to explain in any evidence that he gives why he said what he said in the video record of interview about the fact that he didn't send out the invoices, and he thought perhaps Mr Legge had.
CLOHESSY, MS: Certainly, your Honour.
HIS HONOUR: So, yes, if he doesn't give evidence as I absolutely accept that he doesn't have to, I'll just be left in the situation where I've got no video record of interview, and no evidence from Mr Simonsen, and that's fine. I'll just cope with that situation if and when it happens.
CLOHESSY, MS: Certainly.
HIS HONOUR: But I'm not particularly disposed to sit through three hours if the whole point of it is that Mr Simonsen admittedly told lies.
CLOHESSY, MS: Certainly, your Honour. I share that.
HIS HONOUR: Because Edwards' case says, 'Look, people do lie,' which is hardly a great revelation, whether it's the High Court or otherwise, but sometimes there are lies that are appropriately categorised as lies made with the consciousness of guilt, and that makes them evidence, but of course, people can explain lies in all sorts of ways - they panicked, they did this, they did that. So that's as I would see the law.
CLOHESSY, MS: Certainly, your Honour.
HIS HONOUR: So what are we doing?
HAWKINS MR: I won't seek to play the video record of interview.
(Page 11)
- HIS HONOUR: May you be richly blessed (ts 23/2/12 pages 10 - 13).
22 Following further discussion the prosecutor did not play the record of interview.
23 The cross-examination of Detective Sergeant Waters related to documents and their source. Further documents were tendered. Nothing of significance emerged.
The defence case
24 Mr Simonsen gave evidence that he was 55 and a consultant. He described the formation of the business AGM Automation, how he had invested $50,000, and how the company had been placed into liquidation. He explained how Mr Legge and he decided to form a simple partnership:
[E]ffectively a partnership at will. We agreed on a number of items in regards to - that it would be a fifty-fifty partnership and that we'd register the business name, open up a bank account in both names and effective the AGE partnership kicked off in January 2003.
...
... the relevant paperwork was filled out by both of us and filed in regards to the business registration and the joint bank account (ts 23/2/12 page 38 - 39).
25 The arrangement about drawings was that they would pull weekly drawings of anywhere between $600 and $750 a week. That was the arrangement but it did not occur. He explained how the business was run:
So I'd be speaking to builders and architects and doing site visits, picking up project drawings and all that - so I could do take-offs and what not - and I'd be compiling all those. When those particular quotes came to fruition where they were converted into an order, I would make up a job file with the quote and all that, and I would give that to Mr Legge who would then organise a subcontractor to do the job when it was ready. He would place orders with suppliers for the relevant equipment that was required for the project as well. He would also - because he was an electrician he would also undertake and the service work, and, effectively, once services were completed or the projects were completed, he would then generate the invoices for the projects and the service work (ts 23/2/12 page 40).
26 The business address was serviced offices at Unit 9, 328 Albany Highway, Victoria Park. There was an ABN, the legal name of which was GS Legge and MJ Simonsen. The postal address was PO Box 380,
(Page 12)
- Victoria Park. In late April 2003 Mr Simonsen effectively asked to have his name removed.
27 Mr Simonsen gave evidence of a final dispute and that the records available in the office were in disarray:
[I] was trying to sort out the partnership, work out what money was owed to creditors, basically trying to put together a picture so that Mr Legge and myself could account to each other for the partnership (ts 23/2/12 page 48).
28 He was taken to the invoices that he created and asked to explain:
Well, effectively, those invoices were copies - well, should I say the reminders that were sent out that were the originals, copies of the originals.
So what was your intention?---Basically to get moneys in that were owed by debtors - because our terms were, effectively, seven days, the accounts were overdue - and I would think that any other business would do the same thing.
At the time that you issued those reminders, did you believe those accounts had been paid?---No, I didn't, and because Mr Legge wasn't talking to me, you know, I wasn't sure what - but the information I had in front of me at the time indicated that they were outstanding debts.
Did they have 'Paid' stamped on they?---Not that I know of, no.
...
Well, like I said, when you're referring to the ABN, the number that was on there before was not the correct one - and, in fact, that was the ACN number. The address, yes. But in saying that, the address that was on the original invoices wasn't the address of the business anyway. It was Mr Legge's private address. So from my point of view, by me putting my address on there - I didn't see the difference.
Did you change the bank account details?---Yes.
Why did you do that?---Because, like I sort of said earlier, I had concerns about moneys going out of the business. Mr Legge was - had been divesting funds out of the account
...
The AGE account was pretty much a non-event, and, like I said, there was creditors out there, I needed to put the money somewhere.
What was your intention?---To reconcile with Mr Legge and finalise the partnership accounts (ts 23/1/12 pages 48 - 50).
(Page 13)
29 Mr Simonsen gave evidence that he received some payments but not enough to meet the debts of the company:
At the time that you issued the invoices, did you believe the money was owed to the business?---Absolutely. There was work done. They were legitimate debtors.
...
I recall that there was one payment that I found out later on that it was a double payment and that was refunded.
...
So in carrying on doing these invoices and such, what did you believe you were doing?---Collecting the debts that were owed to the business.
Okay. What about the AGS business?---Yes?
...
...Well, basically when I realised that the partnership between Mr Legge and myself wasn't going anywhere, I still had - because I was responsible for doing all the sales and quotes of the business, I still had a lot of customers out there in the marketplace that were dealing with me and effectively I had projects that were coming up that needed to be dealt with, and that was the vehicle that I did it with.
Okay?---But none of the business that I did with AGS had anything to do with AGE. (ts 23/2/12 pages 51 - 52).
References to the EROI
30 Mr Simonsen was asked why he denied doing all of this in his interview:
Well, probably the best way I would describe it is that I was stressed at the time, I'd just started a new job. My wife is not a well woman. She was stressed out about the whole thing. Also at that time I had not any legal advice, so I didn't know what was going on and I realised the police weren't there to do me any favours (ts 23/2/12 page 52).
31 He conceded he chose to remain silent when the police videoed the search of his house.
32 He said the business 'it hasn't wrapped up. Mr Legge still hasn't accounted to me everything - still hasn't been reconciled' (ts 23/2/12, page 52):
(Page 14)
- What was your intention by putting the money in your own separate bank account?---Because, like I said, I had to put it somewhere, and the partnership account wasn't looking very healthy at the time and, like I said, there was debtors out there, including - should I say, there was creditors out there, including myself, and I was concerned that I would be left holding the baby, with no funds to pay (ts 23/2/12 page 53).
Cross-examination
33 In cross-examination the appellant was taken to documents which he had signed in relation to registering the name AGS Automation on 24 April 2003 and a letter dated 23 July 2003 which he agreed he wrote:
I have ceased to be involved in this business effective 22 April 2003. I have previously provided details to your department in this regard. Should you require a signature from the other proprietor, Jeff Legge, you will need to contact him directly. Due to a dispute that I have with him, I have effectively cut ties.
34 He was asked whether he had ceased using the premises at Victoria Park:
If things were coming to a head, why is it fair that Mr Legge picks up the rent and not you, if you were still using that address?---Well, I just saw this as a natural process of finalising things between - in the partnership (ts 23/2/12 page 60).
35 He stopped using the serviced office in late April.
Mr Simonsen, you were extremely upset with Mr Legge, weren't you?---I think anybody would have been under the circumstances.
And you wanted to get what you thought was rightfully yours?---No, I would disagree with that. I considered that I was a creditor and - - -
Why did you consider you were a creditor?---Well, the business, as I said, has never been reconciled and fully accounted for, and under the partnership agreement I was entitled to 50 per cent of the net profits - which I have never received - and I was also entitled to partnership drawings, and going by my spreadsheet there was - - -
Hold there, please?---Well, put it this way, the partnership drawings, I think, that were outstanding to me account to just under $6000.
So you were determined that any money you received after the bust-up you would keep?---Not necessarily. Like I said, I was a - I considered that I was a creditor of the partnership and they were rightful entitlements (ts 23/1/12 page 68).
(Page 15)
36 The defence also called Michael Stonehouse who is a self-employed IT Consultant implementing, supporting, managing computerised accounting systems. He was brought into the previous company when it went into liquidation and the partnership was formed between Mr Simonsen and Mr Legge. He was asked to come in a set up the MYOB application to make it easier for them to manage their accounts.
37 In early 2003 he tried to reconcile the accounts, pulling the records together. The records were fairly lacking:
[T]here's missing bank statements, missing chequebooks, missing invoices. It was very hard to try and prepare, you know, a full set of accounts on partial records (ts 23/2/12 page 72).
The magistrate's reasons
38 Before final addresses the magistrate had an interchange with counsel:
HIS HONOUR: Yes, you've got me completely tricked. It's up to the prosecution to prove each element of the offence beyond a reasonable doubt. I understand that and Mathews case is that you've got to look at the intention subjectively.
HAWKINS, MR: Yes.
HIS HONOUR: However it is also the prosecution's job to negative any defences that are available on the evidence, but one of the problems with an honest claim of right is, there's got to be no intention to deceive, so if the prosecution are successful in establishing a subjective intention to deceive, it's like the equivalent of knocking all the skittles down in one go.
HAWKINS, MR: Yes, yes, your Honour.
HIS HONOUR: Section 22 falls away because you've negatived it on the basis of proving the subjective intention. That's as I perceive the law (ts 24/2/12 page 2).
- The prosecutor agreed. This interchange is the cause of the problem. The course proposed by the magistrate was likely to lead to error and the prosecutor did not put him right.
39 In this interchange, reference was made to Mathews v The Queen [2001] WASCA 264; (2001) 24 WAR 438. At issue in Mathews' case was not s 22 but s 24. Burchett AUJ, (Malcolm CJ and Steytler J agreeing) emphasised the subjective nature of intent to defraud.
(Page 16)
40 The magistrate returned to this conversation at the commencement of his reasons. He defined the essential dispute as a fraud. The magistrate then made credibility findings, finding Mr Legge consistent and credible:
I didn't see anything or didn't hear anything that was inherently unbelievable (ts 24/2/12, page 18).
41 In summary he said:
[I] don't have any doubts about the credibility of Mr Legge (ts 24/2/12, page 19).
42 He then turned to the evidence of the appellant noting that he had admitted lying to the police in the record of interview. He found:
Now, there's just no question that the post office address in Tuart Hill was not and was never an AGE number, so it's stated on the invoice that was obviously something Mr Simonsen had chosen to put on it. Now, the number of the bank account was clearly not an AGE account and was just again, something Mr Simonsen decided to put on it, and when it came down to receiving the money, of course Mr Simonsen didn't put it in some account that was identifiably AGE number 2, as I've indicated in submissions or anything like that. He put it into an account that only he had access to, described in a different name and had all the hallmarks of deception (ts 24/1/12 page 21).
43 He came to the conclusion that Mr Simonsen was not a credible witness at all:
He's just not to be believed in my view (ts 24/1/12, page 21).
44 He then made findings of fact:
Now, the findings of fact that are necessary for the consideration of the matter and I turn now to the question of whether the prosecution have proved each element of each of these offences beyond a reasonable doubt. Now, I turn first of all to the first element and there's just no question and it's an admitted fact that the prosecution have proved that it was the accused who sent the altered reminder notices.
It does seem to me also that the prosecution have proved beyond a reasonable doubt in respect of each of the counts that Mr Simonsen either gained or attempted to gain a pecuniary benefit. In the five cases where the money was received, he definitely paid it into the AGS account and in the other matters it's admitted that the intention was that had the moneys been receipted, they would have been paid into that AGS account. Now, of course, AGS had absolutely nothing to do with the AGE moneys. It was certainly the case, as I discussed with Ms Clohessy during submissions, that Mr Simonsen had a right, no doubt, to approach AGE
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- customers as a partner in the business and require them to pay moneys that were appropriately made to AGE and he also had an entitlement to draw on the AGE accounts.
Now, that of course, was subject of course to the fact that AGE had to make payments for the running of its business, whether they were office payments or lease payments or payments for contractors or whatever the case might be and it be subject to the drawings that each of them had agreed to make, but at the end of the day, it can't be argued that Mr Simonsen didn't have an entitlement to draw on the AGE account he did, but what he didn't have an entitlement to do was to direct funds away from that AGE account before they were even put in there, which is exactly what Mr Simonsen did.
He, it didn't matter to the customers, and again this is something that was mentioned in addresses, but as far as the Strata Personal Management or O'Brien Automatic Systems, they just had to pay some money to AGE. They were asked to make out the payments to AGE Automation. The fact that it might have had a different address and different bank detail might have caused some office problems but they were certainly being asked to pay AGE. Where the deception was to affectively interfere or intercept rather, those payments by deflecting them off to Mr Simonsen's control and him in turn putting them into a business that had absolutely nothing to do with AGE.
Now, the cornerstone of this matter is, as has been discussed, is whether the prosecution had proved an intention to defraud and it's necessary for me to look at the subjective intent of Mr Simonsen. Now, in that regard, Mr Simonsen in his interview with police, denied creating or sending the reminder invoices to the customers that I've mentioned and denied depositing the moneys sent by the customers to an altered address. This again was an admitted fact and my judgment is one of those lies that is said to be and can be stated as showing a consciousness of guilt.
It seems to me that if Mr Simonsen was supposedly stressed et cetera, it made no sense for him to do other than say, 'Well, look, what are you talking about? Of course I received these monies. It's all part of the - Of course I sent the invoices because it was all part of my exercise to make sure that the partnership was dissolved properly. Yes, of course I received the money and, look, I put it into a separate section of AGS or something, or I've asterisked it on bank statements going to AGS to make sure, because I only wanted to open one account.' Things like that he could have easily said.
Bearing in mind I accept the right to silence, but this is of course Mr Simonsen choosing to speak, but he actually lied about it and said, 'No, I haven't sent any reminder invoices and no, I didn't receive any of the money.' It just seems to me that clearly takes it away. If he had made the statement and said, 'Yes, I got the money redirected and, yes, I put it into the AGS account,' he might have been shown to be naïve and stupid, but
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- when he lies about it, it seems to me that Mr Simonsen had a consciousness of the fact that he knew what he had done was wrong and that his intention was to defraud (ts 24/2/12 page 25 - 27).
45 He then dealt with the element of deceit:
Now, the final element as I mentioned earlier was that the prosecution have to prove beyond reasonable doubt that the accused used deceit. Again this was the subject of some discussion in submissions. The deceit was not directed towards the customers. As mentioned, they had rendered a service to AGE Automatic (indistinct) and had an obligation to pay for the service. It seem to me it didn't matter to them whether there was a change of address or bank details. Businesses do that. They change address, they change banks. That isn't the problem.
In asking that monies be sent, it wasn't suggested the invoices to be otherwise than bearing the AGE Automation name, and it looked on the face of it that the payments were being directed to AGE Automation, albeit at a different address and different bank account details. The deceit, in my judgment, lay in the accused directing the payments away from the correct AGE address. The Tuart Hill address was never a legitimate AGE address. He did that so that he could seize those payments or intercept them.
Of course, the deceit also lay in paying the monies into AGS. AGS have not bended [rendered] any of the services associated with the payments, had nothing to do with that. That was all AGE work. The customers had no obligation to pay AGS anything. The deceit used by Mr Simonsen in correcting or altering the address and bank details was simply to make it possible to seize those payments by those details. As I've mentioned earlier, his intention was to grab the payments and defraud Mr Legge of them (ts 24/2/12 page 28).
46 Finally, the magistrate turned to s 22 and he said:
An honest claim of right is only viable where there isn't an intention to deceive. ... Now, it seems to me that in the process of coming to a conclusion that I've had that there was an intention to defraud, Mr Simonsen wasn't engaged in some exercise making a full and proper account in AGE.
It was an exercise in grabbing the money that there was an intention to defraud. He used the deceptive means of changing a correct address, changing or putting the wrong bank details, and he grabbed the money when he got it. It seems to me that in coming to the conclusion of the element of the offence of making out deception and the intention to do the fraud that the prosecution has negatived any section 22 defence (ts 24/2/12 page 28).
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The grounds of appeal
47 There are 16 grounds of appeal. Leave was granted in respect of ground 2 and leave is to be determined in respect of the other grounds.
48 Ground 3 has substance. I will deal with the other grounds first.
Ground 1
The learned magistrate erred in fact in finding the appellant guilty in respect to the 12 charges of fraud in relation to the 12 debtors, when in fact in his honour's summation he found that no fraud had been committed against the 12 debtors.
49 The magistrate found:
[I]t didn't matter to the customers, and again this is something that was mentioned in addresses, but as far as the Strata Personal Management or O'Brien Automatic Systems, they just had to pay some money to AGE. They were asked to make out the payments to AGE Automation. The fact that it might have had a different address and different bank detail might have caused some office problems but they were certainly being asked to pay AGE (ts 24/2/12 page 25).
50 The magistrate found there was an intention to defraud. It is not necessary to prove an intention to injure or deceive or defraud any particular person: Evidence Act 1906 (WA) s 29. In any event, the magistrate did not find an absence of fraud. There is no merit in this ground.
Ground 2
The learned magistrate erred in fact in that the 12 charges of fraud against the 12 debtors as noted in his honour's summation, he asserted that the fraud related to the former partner, Mr Legge and/or the former partnership, when the appellant had not been charged with fraud against Mr Legge or the former partnership and the charges did not relate to this in the allegations contained in the prosecutions statement of material facts.
51 The appellant was charged with fraudulently obtaining a benefit. It is clear enough that he had obtained a benefit because the accounts were either paid to him or he attempted to have them paid to him. He was not charged with causing a detriment to Mr Legge. In a colloquial sense, the fraud was against Mr Legge. However, the findings of the magistrate and the way in which the charges were framed were valid in relation to benefit. This ground is dismissed.
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Grounds 4 and 5
4. The learned magistrate erred in fact in his summation for matters that had not been established or evidenced.
5. The learned magistrate erred in fact and law in that the elements of the charges were not established.
52 No particulars were given as to these grounds and the grounds are not established.
Ground 6
The learned magistrate erred in fact and law in that the former partnership ('AGE Automation') was not the complainant.
53 The magistrate may have referred to AGE Automation as the complainant but if he did so, this was neither an error of fact nor law. The word was used in a colloquial sense not a technical sense. There is no substance in this ground.
Grounds 7 and 8
7. The learned magistrate erred in fact and law as the statement of material facts relied on by the prosecution was based on the debtors of the former partnership, who were not complainants in the matter nor did not give evidence.
8. The learned magistrate erred in fact and law by allowing the witness statements of the debtors of the former partnership to be entered into evidence when the witnesses were not present in Court and did not give evidence.
54 The short answer to these grounds is that the witnesses were not required to give testamentary evidence because of the statement of agreed facts which had effect as an admission. These grounds are dismissed.
Ground 9
The learned magistrate erred in fact in that the appellant did not have the benefit of all information to hand to provide in the defence as this had been seized and was not fully disclosed.
55 No particulars have been given in relation to this ground which is, in any event, without merit. Both the prosecution and defence put before the magistrate material which they contended supported their cases.
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Ground 10
The learned magistrate erred in fact and law by relying on the assertions made by the prosecution regarding the video of interview; however the learned magistrate had not informed himself by viewing the video.
56 The magistrate did not view the EROI because counsel for the appellant thought it was unnecessary. The appellant is bound by the decisions of his counsel. This ground is dismissed.
Grounds 11 and 12
11. The learned magistrate erred in fact and law in that the invoices tendered into evidence were different from the invoices that were disclosed to the defence.
12. The learned magistrate erred in fact in that there was never any concealment of the funds placed in a workable account to pay partnership debts as the partnership account was at risk of being raided by the former partner, Mr Legge.
57 These are matters of argument which were rejected by the magistrate. There is no merit in these grounds.
Ground 13
The learned magistrate erred in fact and law in that there was no evidence of any deception.
58 The magistrate found there was deception. It is hardly surprising as the invoices sent to the debtors are capable of being regarded as deceptive, and indeed obviously are. This ground has no substance.
Ground 14
The learned magistrate erred in fact by making an order for compensation when the evidence showed that the funds had been previously paid by cheque.
59 The magistrate made a compensation order for Exclusive Strata. The appellant said they had been paid and counsel said there is a cheque butt that reflects they have been paid. The magistrate said:
I'll make the order and if Mr Simonsen can bear out that it's been paid then he won't have to pay it twice. There's a compensation order of $2,268 to Exclusive Strata Management (ts 24/2/12, page 37).
60 This ground is without substance.
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Ground 15
The learned magistrate erred in fact in saying that there was no evidence to suggest that Mr Legge was diverting funds for his own benefit, when evidence was tendered from the bank confirming that this had happened.
61 The magistrate was entitled to form a view about Mr Legge's credibility and did so. Two other things may be said about this ground. The first is that it is irrelevant to the issues before the court. Moreover, allegations of misappropriation were not put to Mr Legge at any time for his comment. The only evidence was the appellant's evidence:
I had some concerns about some internet payments and some moneys going out of the business account that didn't appear to be somewhat kosher - - - (ts 23/2/12, page 44).
62 There is no substance in this ground.
Ground 16
The appellant was denied procedural fairness as indicated in the transcript for reasons for decision and as noted above.
63 No question of procedural unfairness arises.
Ground 3
64 I return to ground 3:
The learned magistrate erred in fact and law in that the appellant had an honest right of claim to income derived from the former partnership, which was a partnership at will and was a 50/50 equal partnership
65 A claim of right is not a claim to act in a particular matter but a claim to an entitlement in or with respect to property: Walden v Hensler (1987) 163 CLR 561. A claim of right may be a claim to take or use or have access to property as well as a claim of ownership. The right need not be reasonable or have any foundation in accepted legal doctrine: Walden v Hensler; Molina v Zaknich [2001] WASCA 337; (2001) 24 WAR 562.
66 If there is an honest claim of right there cannot be any intention to defraud.
67 In the passages from the evidence I have earlier quoted, the appellant maintained that his intention was to get in moneys that were owed by debtors, to reconcile with Mr Legge, and finalise the partnership accounts.
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68 Under the Partnership Act 1895 (WA) s 40 every partner must account for any benefit derived by him, without the consent of the other partners.
69 A person can have an honest belief with respect to property even if dishonest means were used to access the property: Roberts v Western Australia [2005] WASCA 37; (2005) 29 WAR 445 [140].
70 InR v Kastratovic(1986) 42 SASR 59:
The application of the principles which I have derived from the authorities appears to lead to the conclusion that a person is not defrauded if he is caused to do no more than pay his just debt. If no more occurs than that, he cannot be said in any true sense to have acted to his detriment or to have been prejudiced in any lawful right, interest, opportunity or advantage. He has been caused to do no more than perform his lawful obligation (64).
...
It would seem then that an intent to do no more than procure the payment of a debt which is presently due and payable to the accused, or which the accused believes to be presently due and payable, by the alleged victim is not an intent to defraud and is not converted into an intent to defraud by the employment of dishonest means or the means which are forbidden by the statute (65).
...
Many larceny cases dealing with the defence insist upon this distinction. Cf Reg. v. Williams. Cf also Welham, where it was said that in ninety-nine cases out of a hundred, the deceitful mind accompanying use of deceitful means will at the same time prove the intent to defraud as to end; but in one case out of a hundred it will not. In one case out of a hundred, honest belief in a claim of right to specific money or specific property may be raised in a way which colours the nature and the purpose of the taking or the attempt to take or, I would say, the obtaining or the attempt to obtain. What tends to weaken the inference of intent to defraud the victim is the accused's honest belief that he has a claim upon the property and the right to take self help measures against the real or supposed victim. Whenever there is a contest over a right to, or a right to retain, property or money, the nature of that contest and belief about rights will have an effect upon intent to defraud (80 - 81).
71 In R v Love (1989) 17 NSWLR 608:
Of course in many cases the deception will be powerful evidence of dishonesty. However, when a claim of legal right of the kind now in question is raised, the issue is whether there was a belief in a legal right to
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- obtain the property, not whether there was a belief in a legal right to practise the deception (615 - 616).
72 By focussing on the intention to deceive which he described as 'like the equivalent of knocking all the skittles down in one go' (ts 24/2/12, page 2), the magistrate failed to properly consider whether the prosecution had negatived the issue whether the appellant held an honest claim of right.
73 The magistrate found:
Now, I have to say that I come to the conclusion that Mr Simonsen was not a credible witness at all. He's just not to be believed in my view.
74 However the magistrate precluded any separate assessment of the honest claim of right by focusing solely on the intention to defraud. He failed to give attention to the possibility that the appellant may have had an honest claim of right in respect of the money, even if that claim had no basis in law and because of the focus on the intention to defraud.
75 At no point did the magistrate examine the honesty of the claim, being distracted by the deception with which it was put into effect. It is not possible to reach a conclusion about the intention to defraud without considering whether the prosecution has negatived the honesty of the claim.
76 In Noble (1990) 70 A Crim R 568 (Matheson J):
In posing the question in the way he did, there is a real possibility that his Honour crossed over the distinction drawn by White J between what might be a dishonest means on the one hand and a belief in a lawful entitlement to the money on the other hand which is the claim of right. It is clear law that dishonesty about the means is not conclusive of dishonesty at the end.
77 The magistrate seriously misdirected himself when he said, in effect, that intention to defraud trumped honest claim of right. A court must first of all determine whether the prosecution has negatived an honest claim of right. If there is a reasonable possibility that an accused holds an honest claim of right to the money, then such a claim is incompatible with an intention to defraud.
78 I am conscious that the magistrate made adverse findings about the appellant's credibility; that he was not to be believed. However, those findings were made in respect of the lies and deception which the appellant had engaged in.
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79 Because of his view that intent to defraud trumps honest claim of right, I cannot be confident that the magistrate specifically engaged the issue whether the appellant honestly held the belief that he was entitled to bring in the money in the dishonest way he chose, and account to his partner in due course.
80 There has been a miscarriage of justice and the convictions must be set aside.
81 In reaching this conclusion I make no finding as to whether the claim of right has merit. That is a question for a retrial, it being for the prosecution to negative the existence of such a claim as well as establish an intention to defraud.
Orders
82 The convictions are quashed. The orders made in consequence are that the convictions are set aside; the matter is remitted to the Magistrates Court for retrial.
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