The Queen v Morunga

IN THE COURT OF APPEAL OF NEW ZEALAND

CA 539/99

THE QUEEN

CHARLES SYDNEY MORUNGA

Hearing:	17 February 2000
Coram:	Richardson P Heron J Panckhurst J
Appearances:	K M Daniels for Appellant G J Burston for Crown
Judgment:	17 February 2000

JUDGMENT OF THE COURT DELIVERED BY RICHARDSON P

On 5 October 1999 the appellant, Charles Sydney Morunga, pleaded guilty on arraignment to a charge of stealing an amount greater than $600, the property of his employer, the Masterton Licensing Trust, between 2 April 1997 and 28 January 1998.
Mr Morunga was bar manager and supervisor of the gaming machines at the Trust's Homestead Tavern. His duties required him to check the machines daily, remove coins as appropriate, audit the machine meter figures, bank the profits, and prepare the necessary paper work.
Subsequent auditing of the gaming machines' actual bankings compared with the bankings which should have been made to reflect the metered use of the machines over that period and the calculated shortfall in hoppers of the machines established a total shortfall in takings for that period of $34,600.
On his assessment of the evidence Judge Dalmer recorded in his ruling, given on 29 November 1999 following a hearing on 3 November, that around April 1997 Mr Morunga started playing the machines late in the evening after locking up the tavern and quickly became addicted.
He would take money from the float or the cash box in the machine, play for maximum stakes and go through $200-$300. ... Normally he spent one to two hours gambling each evening. ... He did not use his own money. If he won, and that was rare, he put back his "winnings" into the machine Gambling was a thrill and he rapidly became "a pathological gambler". Sometimes he took money home which was used to pay for groceries, rental arrears, more betting, a car payment and settling his bottle store account He calculated what he took home at between $6,368.00 and $8,858.00. He was willing to repay thus sum. It was accepted that he had used what clicked up on the meters but felt that his stealing related only to what he took away from the premises.
The Judge's ruling was given in order to provide a factual and legal basis for sentencing purposes. The ruling begins:
If someone takes coins from a gaming machine, then puts those coins back into the machine, plays the appropriate game, loses and repeats this process many times with the same lack of result, do his actions amount to theft That question along with the issue of quantum has to be resolved in this case.
The argument for the Crown was that by removing cash from gaming machines and then using that cash to play the machines, Mr Morunga committed theft from his employer of that money. Although the actual coin might end up in the machine it had originally come from, he was taking the risk time and again as to whether his gambling would give him a return and each time he did so to the value of the coin the coin was lost.
The argument for Mr Morunga was that the accused was simply recycling the coins, which acted as a type of key to activate the machine. Essentially what Mr Morunga was doing was using the machine for entertainment and to recycle coins taken from either the float or the machine itself. His intention was always to return the coins to the machine and thus he did not have an intention to deprive the owner permanently of the coins taken. However when he took money away from the premises from the float, the cash box, or in the form of winnings from the machine, it was acknowledged theft had occurred.
Section 220(1) and (5) of the Crimes Act 1961 provides:
(1)Theft or stealing is the act of fraudulently and without colour of right taking, or fraudulently and without colour of right converting to the use of any person, anything capable of being stolen, with intent--
(a) To deprive the owner, or any person having any special property or interest therein, permanently of such thing or of such property or interest; ...
(5)Theft is committed when the offender moves the thing or causes it to move or to be moved, with intent to steal it.
Judge Dalmer concluded, and it is not in dispute, that the first three elements of theft were clearly established. Every time Mr Morunga took a coin from the machine or the float he was physically moving the coin and therefore taking it. The taking was fraudulent each time in the sense that it was done deliberately and dishonestly. It was also done without colour of right. Mr Morunga did not suggest he had any honest belief that what he did was justifiable.
The issue, the Judge said, was did Mr Morunga intend to deprive the owner of the coin permanently of it when he took that coin.   He continued:
This involves looking at Mr Morunga's intent at the time the coin was moved by him   At that point I consider he did intend to deprive the owner permanently of the coin.   He did not intend like Mr Harrison simply to recycle the coin, that is deprive the owner temporarily of the coin.   He intended to gamble with the coin, using the hoped for proceeds as he wished and leaving behind what he did not require.   In other words he took each coin to be disposed of as he saw fit.   The schedule he produced shows that Mr Morunga took regularly weekly amounts to cover pool games, betting and playing poker machines.   He took regular monthly sums to cover the cost of groceries and other things.   He took specific amounts to cover car payments, rent arrears, and his liquor account.   Mr Morunga arrogated to himself the right to decide whether and if so how much of the money taken by him would be left behind in the machines.   This is, in my view, quite different from taking money from a machine, intending only to play it through the machine again, recycle it as it were and then leave it in the machine when finished.
Mr Morunga treated what he took as his own to dispose of as he later decided, regardless of the complainant's rights.   His intention was not simply to borrow the money for a brief period.   It was to treat it as his own money which he was later free to take away or leave behind as he chose.   I think this amounts to theft in terms of Section 220 and I rule accordingly.
That reference to Mr Harrison was to a District Court decision (Kaikohe CRN 5027008025, 21 August 1996) where the District Court Judge found that Mr Harrison jammed the machine and used the coins it made available for refilling to play the machine and though there was no evidence he used the money for any other purpose. The Kaikohe Judge concluded that Mr Harrison did not intend to deprive the owner having property in those coins permanently of their use or benefit. He simply took them and fed them back into the machine.
Judge Dalmer subsequently sentenced Mr Morunga on 10 December 1999. He did so on the basis of the findings of fact and law he had reached in his ruling. He recorded that Mr Morunga had treated his employer's money as his own to indulge his gambling habit and to pay other expenses as he saw fit. It was, he said, a gross breach of trust. The Judge went on to consider Mr Morunga's personal circumstances, namely that at age 28 he was a first offender, he had been under considerable pressure at the time, he had support from his family, to whom he had responsibilities, and support from his present employer, and he had taken counselling to assist with his gambling obsession. As recommended by the pre‑sentencing report, the Judge sentenced Mr Morunga to periodic detention and made an order for reparation. He fixed the term of periodic detention at eight months and the amount of reparation at $10,000, to be paid at the rate of $30.00 per week initially, rising to $50.00 per week after not more than 3 months, and thereafter payments to be reviewed quarterly. The reparation order reflected the desirability of not bonding debtors for many years to pay large sums by small weekly contributions, not because the losses could be considered as limited to $10,000.
Mr Daniels for the appellant confined his written submissions to that part of the ruling and subsequent sentencing judgment that concluded Mr Morunga had stolen the cash taken and fed into the gaming machines. Mr Daniels' submission in essence was that the coins taken and recycled and winnings recycled were not moved with the intent of depriving the Trust permanently of those coins. Mr Morunga's intent in taking each coin from the machines was to reinsert it into the machines in order to play the machines. In that way he returned it immediately to the owner.
Mr Burston for the Crown submitted that, in determining whether the appellant intended to deprive the owner of the coins of them permanently, the time at which the intention is to be considered is the time at which the coins were physically removed. At that point in time the appellant took the coins to deal with as his own, to dispose of as he saw fit. In doing so his intention was to use the coins for his own purposes in gambling and to keep for himself the winnings from the machines. In so treating the coins as his own when he removed them from the machine, each of the coins fraudulently taken from the machine was stolen.
It necessarily follows from the requirement of s220(1)(a) that there must be an intent to permanently deprive the owner of the property, that appropriating the property of another with the intent of depriving the owner only temporarily of it is not stealing (see the extended discussion in Garrow and Turkington's Criminal Law of New Zealand, s220.6 and the Criminal Law Revision Committee, Eighth Report: Theft and Related Offences (1966 Cmnd. 2977) paras 56‑58). As Smith, The Law of Theft, 8th ed, para 2-125 puts it, "English law, in general, recognises no furtum usus - the stealing of the use or enjoyment of a chattel or other property". And that no doubt is why joy‑riding in vehicles is reached by a more specific provision (e.g. s228 of the New Zealand Crimes Act).
It is not clear when during an evening and in relation to what sums Mr Morunga decided to take money away from the premises. But it was not suggested by the Crown that there is an evidential foundation for finding, and for a required finding at that, that whenever Mr Morunga took money from the machines his intent was to take it away for his own use and only to play with it in the meantime. Again, referring to the Crown argument on the appeal and the Judge's reasoning, it is, we think, artificial and inconsistent with the Judge's assessment of Mr Morunga's evidence referred to at para [4] to say that the appellant took the coins to deal with as his own, to dispose of as he saw fit. Except for coins taken home, he immediately returned the coins he had taken to his employer's gaming machines In his video statement he acknowledged that nine times out of ten he lost, and that on average he could get through $200 or $250 at least in an hour. The only reasonable inference is that, at least in the great majority of instances, his intention when he removed coins was to play the machines.
Further, the notion that by treating the coins as his own the appellant had the requisite intent involves substituting a different test for the clear words of the section. An intent to permanently deprive imposes a different and temporal test whereas it seems the Judge saw the control of the coins and the arrogation of the right to decide how much of the money was left in the machines as the determinative factor. We are satisfied that the Judge erred in holding on that reasoning that the Crown had established that every time Mr Morunga took a coin he intended to deprive the Trust permanently of that item of property.
We turn to a fresh and different argument that Mr Burston raised orally at the hearing and no doubt in response to a reference from the Bench to R v Pick [1992] Crim L R 238, and in particular to the commentary there by Professor Smith and his earlier discussion of a similar point at [1976] Crim L R 330. See also, his Law of Theft, para 2-144. Mr Burston's submission was that by not simply returning a coin to its owner, the Masterton Licensing Trust, the appellant deprived the owner of the opportunity to use it for any purpose of the owner. It was, he said, theft. If property was to be returned only for services to be rendered to the taker, then that was theft. And here, the services were the use of the gaming machines.
Pick concerned the taking by a punter of gaming chips placed by another punter on a roulette table. The analysis and result in Pick are not immediately in point However, Professor Smith observed (pp 228‑229) that the difficulty lay in finding an intention permanently to deprive. He referred to the well settled principle at common law that a person who takes another's property intending to sell it back to him has a sufficient intention permanently to deprive: that the defendant in Pick took the chips intending to return them to the club only in return for being allowed to play and if he were prevented from playing he would naturally expect to receive back the money paid for the chips. Similarly, in the earlier discussion, Professor Smith explained that there is a conditional intent to deprive where the rogue intends to return the property only in a certain event.
There is an immediate distinction between those cases and the present in that the appellant here took and returned the property intending that he could and would play the machines then and there On one view it would be unrealistic to distinguish between using the property taken before returning it, and in returning it and benefitting from the immediate consequences of returning the property in that way to the employer. However, we prefer to leave what may be a difficult argument for another day. The evidence and findings in the District Court were not directed in any way to this new point and in relation to that particular intent issue. Had it been squarely before the District Court the appellant would no doubt have repeated and emphasised his evidence in terms of guilty intent that he felt his stealing related only to what he took away from the premises.
We should also record that we had no argument directed specifically to the winnings - the property in that money received by Mr Morunga and returned to the machines. There is no evidence directed to the quantification of the amounts involved, and it has not been argued that any such sums, if proved, would be of a different character from the cash taken directly from the machines. And whatever the quantum it could not affect the amount in respect of which Mr Morunga is culpable under s220.
In the result we are not called on to consider whether the Crown could have charged the appellant with theft by failing to account in respect of the money fed back into the machines (s222). Again, in the unusual circumstances of this case, we are not required to explore the mysteries of liability for duty and GST on gaming transactions and profits.
We turn to review the sentence decision. Mr Daniels accepted that periodic detention and reparation would be appropriate orders. He submitted that the term of periodic detention, and the amount of reparation, should be reduced to reflect a decision that the amount stolen was not more than $8,858, rather than the $34,600 as found by Judge Dalmer.
The thefts of the substantial sums taken away from the premises involved gross breaches of trust extending over many months. Even had the offending been held to extend to the full $34,600, in terms of culpability it is theft of that money taken away which represents the truly grave criminality of his conduct. We are satisfied that the sentence of eight months periodic detention is the appropriate term for this offending by this offender. That sentence will start again on Saturday, 26 February, and the appellant is to report to the Masterton Work Centre at 9 am on that day. However, the amount of the reparation order requires reduction and it is reduced to $8,000.
The appeal against conviction is itself dismissed and the appeal against sentence is allowed as to part by varying the amount of the reparation order accordingly.

Solicitors
Ken Daniels, Masterton, for appellant
Crown Solicitor, Wellington.

[2000] NZCA 15

17 February 2000