South Australian Police v Matt Carradine No. SCGRG 95/2500 Judgment No. 5682 Number of Pages 5 Criminal Law (1996) 66 Sasr 584

[1996] SASC 5682

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA DEBELLE J

CWDS
Criminal law - particular offences - property offences - appeal against acquittal - obtaining money by false pretences - whether prosecution had proved all of the elements of the offence - whether inducement caused by false representations - magistrate ought to have convicted the respondent. Criminal Law Consolidation Act, 1935 s195, referred to. Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd (1915) AC 705; Tesco Supermarkets Ltd v Nattrass (1972) AC 153; Brambles Holdings Ltd v Carey (1976)15 SASR 270, applied.

HRNG ADELAIDE, 23 January 1996 #DATE 28:6:1996 #ADD 28:10:1996
Counsel for appellant:     Ms J Olsson
Solicitors for appellant:    Crown Solicitor (SA)
Counsel for respondent:     Mr S Macfarlane with Mr N Rainford
Solicitors for respondent: Rainford and Associates

ORDER
Appeal allowed.

JUDGE1 DEBELLE J On 9 November 1995 in the Adelaide Magistrates Court the respondent was acquitted of a charge of obtaining money by false pretences. The prosecution appeals against the acquittal.
2. It was alleged against the respondent that on 24 November 1994 with intent to defraud he had obtained from Woolworths (SA) Ltd money to the value of $50 by falsely pretending that he was the lawful owner of a radio cassette player contrary to s195 of the Criminal LawConsolidation Act 1935.
3. The prosecution case was that the respondent was in the Woolworths store in Rundle Mall, Adelaide, with a young woman. The respondent had removed a boxed radio cassette player and placed it in a plastic bag. He and the young woman then went to the refund counter. Two female members of the staff of Woolworths were on duty at the refund counter, Ms Stone and Ms Fenwick. Ms Fenwick was the superior officer. She was the section manager. Ms Stone could not make a refund except with the authority of Ms Fenwick.
4. On reaching the refund counter, the respondent produced the cassette player and asked for a refund. Ms Stone asked whether a warranty card for the cassette recorder had been completed. The woman with the respondent replied in the affirmative. Ms Stone asked the respondent to complete an application for the refund. She handed the form to him. The respondent handed it to the young woman who completed the form. The form was completed in the name of Amanda Saliba. That was not the name of the woman with the respondent. The woman then handed the form back to Ms Stone. Ms Stone accepted the application and signed it. She took it to Ms Fenwick to authorise the refund. Ms Fenwick glanced at the form and authorised the refund. She opened the cash register, took out a $50 note and handed it to the respondent. The respondent was apprehended very shortly after and before he could leave the store.
5. The magistrate found beyond reasonable doubt that
    . the cassette recorder was the property of Woolworths;
    . the respondent had removed it from the shelf in the
    electrical department of Woolworths and placed it in a bag;
    . the respondent proceeded to the refund counter and asked for
    a refund;
    . the words that the respondent said to Ms Stone were, "Can I
    have a refund, please?"
    . Ms Stone handed the application form to the respondent to
    complete;
    . the young woman completed the form and handed it back to Ms
    Stone;
    . by his conduct in presenting the cassette recorder and by his
    words, the respondent represented to Ms Stone that he was a
    person entitled to obtain a refund;
    . the respondent and the young woman acted in concert but that
    the respondent played the dominant role in applying for and
    obtaining the refund;
    . the total representations made to Ms Stone consisted of the
    conduct of the respondent, the oral statements made by him, the
    answer to the question about the warranty card given by the
    young woman and the completion by her of the written
    application;
    . each of these representations contributed to the decision on
    the part of Ms Stone to accept the refund application subject to
authorisation by Ms Fenwick. The magistrate concluded, however, that the prosecution had not proved that the respondent's pretence induced Ms Fenwick to hand the money to him. He thus found that the prosecution had not proved all of the elements of the offence of obtaining money by false pretences contrary to s195 as identified in R v Timperon (No 2) (1976) 15 SASR
1, 5. He said:
    "In particular the prosecution must prove, in addition to
    the matters upon which I've made findings that the pretence made
    by the defendant must have induced someone else to part with the
    money to the defendant or to a third party. The pretence must
    operate on the mind of the person from whom the property was
    obtained although the pretence need not be made to the person
    from whom the property was obtained but can be made to a servant
    or agent. R v Brown (1847) (2 Cox CC 348), R v Rouse (1849) (4
    Cox CC 7), R v Garner (1862) (1 SCR) NSW 137. Clearly the
    pretence was made to Ms Stone and she was induced by it to
    proceed with the refund transaction. However, the final
    decision was not hers. It was Ms Fenwick who made the decision
    to ratify the transaction and to pay the sum of $50 to the
    defendant. I digress to say I am satisfied that the defendant
    made the pretence knowing it to be false and with the intention
    of inducing the staff of Woolworths to part with the sum of $50
    and I so find. The deficiency in the evidence of Ms Fenwick is
    that she did not read the written refund application, exhibit
    P2. She did nothing more than take a cursory look at it. She
    did not speak to either the defendant or the girl Saliba. She
    did not absorb the name of the person applying for the refund.
    I find that Ms Fenwick did nothing more than satisfy herself
    that a certain procedure had been followed. I find that the
    pretence made by the defendant did not operate upon the mind of
    Ms Fenwick being the person who parted the sum of $50. I
    conclude that the prosecution has failed to prove one of the
    elements of the charge beyond reasonable doubt." The prosecution appeals on the ground that the magistrate has erred in this conclusion.
6. The magistrate has taken a very narrow and restrictive view of the element of inducement. It is a view which fails to have regard to management structures and to the manner in which a corporation acts. It is inconsistent with the authorities on which he relied.
7. The prosecution had proved a management structure by which one employee reported to another in writing and the second employee, on being satisfied that the necessary procedures had been followed, authorised a course of action, in this case payment of the refund. In other words, it was Ms Stone's role to ascertain the basis on which the refund was sought. It was Ms Fenwick's role to check that the refund application had been correctly completed and, if so, to authorise payment of it.
8. The process was relatively mechanical. The form for an application for refund was very simple. It contained a few simple questions to answer. It was only some 15 centimetres long and 12 centimetres wide. It required the person completing it to state the item returned, the reason for the return, the value of the item, the name, address and signature of the customer, and whether a purchase docket had been produced. Provision is made for the form to be signed by the employee who dealt directly with the customer and accepted the refund, and for the authorisation of the refund. It would have required but the briefest glance from Ms Fenwick to satisfy herself that she should authorise the payment.
9. It was Ms Stone's task to require the application for a refund to be completed, to satisfy herself of the claim, to decide whether to accept it and, if accepted, to pass it to Ms Fenwick for authorisation. It was Ms Fenwick's uncontroverted evidence that her task was to check that the application for the refund had been properly completed and to signify that by initialling the application immediately below Ms Stone's signature. Once she had authorised the refund, she would then open the cash register and make the necessary payment. She was the only person who had the appropriate key to open the cash register to obtain a refund. On this occasion, she checked the document, signified by signing her initials that she had authorised the refund, and made the payment. This was a standard procedure. She said that she had glanced at the document but did not read it. She said that she had seen that all the correct things had been noted but did not read the name and address of the person receiving the refund. She was satisfied that everything was in order for the refund. She was not concerned who, in fact, was to receive the refund. The magistrate has accepted her evidence. He has correctly found that Ms Fenwick satisfied herself "that a certain procedure had been followed" and that she did not note the name of the person applying for the refund.
10. This procedure is of a kind which is commonly adopted in a hierarchical management structure. One officer will report to another who, on being satisfied that the appropriate procedure has been carried out, will then authorise a particular course of action. The reporting officer is conveying information to that officer. In this case Ms Stone was conveying information to Ms Fenwick. By handing her the complete application for a refund, she was informing her of the effect of the misrepresentation made to her by the respondent.
11. The person making the refund was not Ms Fenwick but Woolworths. The respondent was charged with obtaining money from Woolworths by false pretences. As employees of Woolworths, Ms Stone and Ms Fenwick were acting as its agents in this transaction by which the refund was made. The representation was made to Ms Stone as the agent of Woolworths and therefore to Woolworths. The representation was also made to Ms Fenwick by means of the written document and, relying on the document, she made the payment on behalf of Woolworths. The fact that Ms Fenwick did no more than take a cursory look at the form and the fact that Ms Fenwick did not herself speak to the respondent or the woman with him does not mean that the false representation did not operate upon her mind. Ms Fenwick satisfied herself that all the necessary information had been gathered concerning the claim for the refund. It was as if she had herself directly received the information. She then authorised the payment acting on the information she had received.
12. There is another way of examining the issue. The question the magistrate had to decide was whether Woolworths was induced to part with the sum of $50 because of the false representations made by the respondent. Woolworths could only act through its employees. A company can acquire a knowledge only through its employees who have authority to receive and communicate relevant information to it. The attribution of a mental state to a corporation can only be achieved by attributing to it the knowledge and belief actually possessed by one or more of its officers: Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd (1915) AC 705; Tesco Supermarkets Ltd v Nattrass (1972) AC 153. In this connection, a state of mind may be the components of different items of knowledge of more than one officer of the company: Brambles Holdings Ltd v Carey (1976) 15 SASR 270, at 275, 280, 281; see also Re Chisum Services Pty Ltd
(1982) 7 ACLR 641, 650. As Bray CJ pointed out in Brambles Holdings Ltd v Carey at 275-276 there are some limitations upon this principle. It does not necessarily mean that a company can know or believe two contradictory things at once. As His Honour stated (at 276) "It is rational belief, not schizophrenia, which is to be attributed to it." It is unnecessary for present purposes to pursue those limitations. Ms Stone and Ms Fenwick had authority to deal with applications for refunds. The authority of Ms Fenwick was more extensive than that of Ms Stone. The respondent made representations to Ms Stone which caused her to put in train the procedures which the management of Woolworths had prescribed for payment of refunds to its customers. She did what was necessary within the limits of her authority to obtain the refund. As the magistrate found, she accepted the claim for the refund. The representation made to Ms Stone and accepted by her was, therefore, a representation made to Woolworths. Having accepted the explanation, Ms Stone went to Ms Fenwick to authorise the refund and to pay it. The fact that Ms Stone had to have the refund authorised by Ms Fenwick and that Ms Fenwick was the person responsible for paying the refund is no more than an internal management control implemented by Woolworths.
13. Upon Ms Stone handing the application for refund to Ms Fenwick with her signature indicating her acceptance of the claim for the refund and Ms Fenwick authorising the claim, the effect of the transaction was that the respondent made a false representation to Woolworths (through its two employees) which had induced the employees and, therefore, Woolworths to make the refund.
14. The essence of the offence is knowingly making a false representation so as to induce another to part with money. The representation need not be made directly to the person who is to part with the money. In a simple business, consisting of a proprietor and an employee, the representation may be made to the employee who in turn communicates it to the proprietor who, on being satisfied with what he has been told, will authorise the payment. The position is no different in principle in a large and more complex organisation. Here, Woolworths had put in place a system for payment of refunds. The provision of an application form enabled a precise statement to be made in connection with the application for the refund. The application set out the essential facts required for payment of a refund. If the facts stated in the application were false, the handing of the form from one person to another constituted a remaking of the false representation to the person to whom the form had been handed.
15. Appellate courts are, as a general rule, reluctant to interfere with an appeal against an acquittal: Thorogood v Warren (1979) 20 SASR
156, 159. This is particularly so where the verdict is based on a reasonable doubt. The issues in this case, however, turn on a question of law. The magistrate has wrongly determined the question whether the respondent induced Woolworths to part with the money. For these reasons, the magistrate ought to have convicted the respondent. I will publish these reasons and hear the parties on the question whether a conviction should be recorded and, if so, I will hear submissions on the question of penalty.