Andrews v The Queen

It is quite clear upon reading the indictment that the stated date in each count is the date on which the offence is charged to have been committed. But according to the evidence the stated date was in each case the date on which the money was received by the applicant. That the indictment was in this form resulted in part no doubt from inattention on the part of those preparing it but possibly in part because of uncertainty as to what were the terms on which it was proposed to allege that the money had been received by the applicant. Section 360 would have saved the indictment had there been no date but, having regard to the nature of the offence charged, the time at which the accounting was due ought properly to be stated even if only between limiting dates; the more so that it is at that time that the omission to account must be shown to be fraudulent. In this case, if those questions become critical to the result, the date charged will be definitive, though it may plainly be the wrong date and ought to have been amended at the trial.

The questions which the application for special leave raises will be more readily appreciated if we first indicate the evidence which the Crown led at the trial.

The applicant before the occurrences out of which the charges arose had been known to Payne who was an employee of the Postmaster-General; his wife had been known for a longer period to Mrs. Payne. His initial approach to them was to ask them to allow him or a company controlled by a friend of his, Harold Morris Dredging Co. Pty. Ltd. (the dredging company), to use their home address as an accommodation address. This the Paynes agreed to do, though in the result it was not so used. About this time the Paynes had contracted to buy certain land described as Lot 39, Alkira Circuit, Narraweena, which is a suburb adjacent to the suburb of Dee Why. They had paid a deposit of £189 together with a sum of £30 4s. 9d. for valuation and survey fees under a contract dated 19th February 1965 which called for completion by 15th May 1965 by the payment of the balance of a total price of £1,895. They intended to erect a house for themselves upon the land; and apparently by the time the applicant made to them the proposals to which we shall refer they had placed sketch plans in the hands of a firm of real estate agents to obtain an estimate of the cost of construction of such a house and to arrange finance to build it.

The applicant at the outset told Payne that the dredging company was endeavouring to raise some £25,000 for dredging work. This was amplified later to a statement that the company was seeking a contract to dredge Newcastle Harbour and that if the company should be awarded such a contract, he, the applicant, would be employed in the work and be paid some £12 an hour for at least sixty hours per week. On 4th May 1965 Payne at the applicant's instigation lent the applicant the sum of £250 as, according to Payne, "a short term investment in Harold Morris Dredging Co." The applicant, as arranged between them, gave Payne in exchange for that sum and Payne accepted a cheque for £300, post dated 1st September 1965. On the same day the applicant told Payne that Morris, the principal shareholder in the dredging company, as a mark of appreciation for the ability to use the accommodation address, had agreed to assist the Paynes in building a house upon the land they had contracted to purchase. A week later, on 11th May, the applicant placed before Payne what on its face was a building agreement in the form of the lump sum contract published under the sanction of the Royal Australian Institute of Architects and the Master Builders' Federation of Australia (1964 ed.). This document bears date 11th May 1965. On its covering page it is described as "Agreement and Schedule of Conditions of Building Contract between R. H. Andrews, Construction Manager and Agent, and H. & M. Payne of 82 McIntosh Road, Narraweena", that being their then address. In its operative parts, the applicant was misdescribed as "the proprietor" and the Paynes were likewise misdescribed as "the builders". But it is quite clear from other parts of the document that this was no more than a misdescription. The builder promised to erect a brick veneer house on the land at Narraweena according to drawings and specifications said to have been signed by the parties, for the sum of £4,350. The Paynes as proprietors promised to pay the builder this sum, of which £1,000 was immediately payable as a deposit.

In the clause in the form (cl. 3) by which the architect for the purpose of the contract was intended to be named, the form was amended to read "The term "the architect" in the said conditions shall mean the said R. H. Andrews" giving the applicant's then address. At the foot of that clause the words "where the word "architect" is mentioned substitute "construction manager" " were added.

Neither of the Paynes signed this document: but the applicant did, describing himself "Construction Manager and Agent". The form of contract was otherwise completed, including the date for possession and the date for completion. Each was set down as "15th September 1965 (approx.)".

On the same day, the applicant handed Payne another document which the applicant described to him as "an authority appointing me manager for the construction of the building". Payne retained the form of building agreement and paid to the applicant that day the sum of £1,000, for which he accepted a receipt which described the money as "being for Deposit of Building to be constructed on Lot 39, Alkira Circuit, Narraweena, N.S.W." The receipt is signed, "R. H. Andrews, Agent", and a duty stamp affixed and cancelled. On the back of the receipt there is written "Final payment to be made on completion as arranged" over the signature of the applicant. Subsequently, Payne copied out in his own handwriting and sent to the applicant the form of authority which the applicant had given him. That bears date 11th May 1965 and is in the following terms:

This is to certify that I, Howard Payne, of 82 McIntosh Rd., Dee Why, have given authority to construct a Brick Veneer Home on Lot 39, Alkira Circuit, Narraweena, to the full sum of four thousand three hundred and fifty pounds plus any extras that may be added to the final drawings as per contract.

I sign this in full knowledge that Mr. R. H. Andrews will act as Construction Manager and our Agent.

Although the building agreement was not signed by the Paynes, they both said in evidence that they had agreed to pay £4,350 to the applicant and that he had agreed to build the house for them. Shortly after 11th May, the applicant informed Payne that a company named Suburban Constructions Pty. Ltd. was a subsidiary of the dredging company and that this company would be building the house. At some date approximate to 14th May the applicant gave Payne a letter signed on behalf of Suburban Constructions Pty. Ltd. by which a quotation of £5,850 was submitted for the construction on the said land of a house to "own plan" as per a sketch attached and a further quotation of £6,560 for that house with certain additional items. A little later a further letter from this company tendering for the erection of the house and the additional items for the sum of £6,624 was received by Payne through the applicant. When he complained that this price was beyond their means, the applicant assured Payne that as Morris would be building on five other blocks which he was purchasing in the same subdivision, the difference between the price in the building agreement and the price of the tender would "be offset against the other houses", Payne's house to be used as an exhibition home. Payne accepted that position.

On subsequent occasions the applicant obtained sums of money from Payne or from them both, first on the footing that a deposit had to be paid to secure the bricks which would be necessary for the building of the house, and later for the completion of the purchase of the land as the house could not be built until the Paynes became the owners of the land.

The total amount involved in the six charges is £2,625. The written acknowledgements, including the post-dated cheque, evidence only the receipt of £2,425. But there is no dispute as to the receipt of the further £200 or that it was paid in connexion with the building. Payne said that he paid over the money "in the belief that it was to be applied for the payment of the land and part construction of the house". He said he knew that the house could not be built till he had paid for the land which he knew he had not done up to 1st June 1965. He conceded that he also knew that he was not required to pay anything "on the house until it was started". He gave the following evidence in cross-examination:

Q. And you gave evidence before the lower court, didn't you, on 3rd and 4th April 1966 - May, I am sorry, you remember giving evidence on that occasion? A. Yes.

Q. Do you remember this question being asked of you. "Q. If you are prepared to invest -" I had better read just before that. "Q. What was said about that? A. If I would - he said - if - Mr. Andrews said if I was prepared to invest -. Q. If you are prepared to invest? A. I am prepared to invest a further sum in the dredging work this would be offset against the construction costs of the house." Do you remember giving that evidence? A. Yes.

Q. And of course, that was after you had given this money on the - £250 on 4th May, wasn't it? A. Yes.

Q. And the further sum - you were asked to invest a further sum in the dredging work? A. Yes, it was to be offset against the cost of the house.

Q. And of course that was by way of advance to the accused, the money you gave, that is right, isn't it? A. I advanced it to him for the house, for the house and the land.

Q. You advanced the money to him knowing that it would go towards the negotiation of this contract in respect of the dredging work, didn't you? A. It was to be applied, as I understand it, to the house.

Q. You also gave evidence on the same day in a question. "What was said about that?" I am sorry, I go to the question before. "Q. Anything about a sum of money for building? A. Yes. Q. What was said about that? A. If I would advance the money to him this money would be applied to the cost of building the house." And that is correct, isn't it? A. Yes it all goes to the house.

Q. Did you say this in the lower court, "What was said about that?" and your answer in the lower court was, "If I would advance the money to him this money would be applied to the cost of building the house"? A. Yes, it would go to the house.

Q. Well, do you wish to vary the answer you gave in the lower court though, that is all that is being asked of you at the moment? A. All I can say is that it was my belief and the receipt showed that all the money that I advanced was to go to this house and the land.

The contract for the purchase of the land called for completion by 15th May: but it appears from the evidence that the deposited plan of the subdivision of which the lot purchased was a part was not registered until July 1965 so that prior to that time the vendor was not in a position to complete or to demand the balance of the purchase money.

According to the evidence of the Crown, Suburban Constructions Pty. Ltd. was not a subsidiary of the dredging company; there was no real basis for the suggestion that the dredging company or Morris personally would pay £2,000 or any sum towards the cost of a house for the Paynes and the applicant was never in a position to build the house. He did pay certain sums of money to the shire council in July 1965 for a builder's service charge, for a road opening fee, for building fees, and for a deposit on kerbing and guttering the land. He obtained a building permit in the Paynes' name and the shire council's approval to the specifications of a brick veneer house to be built on the said land. But he paid nothing towards the balance of purchase price of the land, the contract for which was ultimately cancelled and the deposit forfeited. There came a time when it was clear that the dredging company would not be given the work of dredging Newcastle Harbour. At that time Payne agreed to accept the return of the money he had handed over to the applicant but that has never been done.

The applicant's defence, put forward in a statement not on oath was that all the transactions were loans to him personally.

Each count charged that the applicant had fraudulently omitted to account. This alternative of s. 178A was quite inappropriate on any view of the facts of the case.

If the section had been at all appropriate to the case, the offence to be charged would have been that of fraudulent misappropriation. But there is no provision whereby a verdict of fraudulent misappropriation of money received on terms falling within s. 178A can be returned on a charge of fraudulently failing to account: nor is there any other alternative verdict available. Consequently, if the applicant were to be convicted, the case against him must be made out according to the precise charge and the proof of it, a circumstance which it seems to us the Court of Criminal Appeal overlooked.

To make out the counts of the indictment, it was necessary to establish that the applicant received the moneys there particularized upon terms requiring him to account to Payne or to him and his wife as the case may be. It had then to be established that at a time when he was bound to account according to those terms, he fraudulently omitted to do so. Because of the precise concepts involved in this particular statutory offence, great care is called for on the part of the trial judge to ensure that the ingredients of the offence are lucidly and accurately explained to the jury. It cannot be said, in our opinion, that the summing up in the present case measured up even approximately to what was required. In fact, in relation to the counts of the indictment, we cannot think the jury could have obtained any real assistance from it: they certainly could not have gathered from it what was the precise nature of the offence charged and in one respect, at least, it clearly misdirected them.

The Court of Criminal Appeal ought to have been highly critical of the summing up. His Honour had said:

Now there are three matters in charges of this particular type that the Crown has to establish to you. First of all the first one is that the accused received the money, secondly that he received it upon certain terms, and thirdly that he fraudulently omitted to pay the money. You will remember that counsel for the accused in this case said that so far as the first matter is concerned there is no doubt whatever in this case that the accused did receive the money, so you will not have to worry yourselves about that first part, as to whether the money was paid over and handed to and received by the accused.

You then come to the second and third matters that you have to consider, and counsel for the accused puts it to you and asks, "What are the terms on which he received it, and what was the deceit practised by the accused?" The accused puts it to you, of course, that this money was a loan. The Crown on the other hand puts it to you that there is clear evidence in this case that the money was to be used as specified and that there was a deceit on the part of the accused. It is your task, however difficult it may be, to examine the whole of the evidence, and having heard the arguments of both counsel it is for you to say whether you are or you are not satisfied to the degree that I have indicated of being satisfied beyond a reasonable doubt. Of course the Crown puts it to you in this case that the accused's argument that has been put to you that it was a loan is ridiculous. Those are matters that are for you and you alone.

Now I had intended, gentlemen, when counsel for the Crown started to address you to do what he has done and take you through quite a bit of the evidence again, but only a few minutes ago the learned Crown Prosecutor took you through a considerable portion of the evidence to show you the very portions of it which the Crown relies upon as to what were the terms on which the money was handed over by Mr. Payne or Mrs. Payne and what was the deceit.

Deceit, of course, involves the word "fraudulently" and it is an impossible matter for any of us to look into another person's mind and say what he intended to do, what he was trying to do, so you have to look at all the surrounding circumstances in the case and draw from those circumstances what was the intention of the accused: did he intend to defraud, and those are the very matters that the learned Crown Prosecutor a few minutes ago took you through in very great detail and therefore I do not intend to repeat them to you.

You have had a number of witnesses, you have a number of exhibits and those exhibits will be before you to examine. The Crown puts it to you that they are important documents showing that a number of them are written in the accused's own handwriting, the receipts are written in his handwriting, and you will draw certain conclusions from that. However, every question of fact in this case is a matter for you, I only have to tell you what the law is, and that is that you have got to be satisfied and you have to be satisfied on those two matters, what are the terms, what was the fraudulent omission to pay, and you will apply that law to the facts in this case.

I feel it would be hardly fair to you, to your intelligence, if I may say so, gentlemen, if I were to repeat it all again to you to try and tell you what the Crown relies on, but you then have to consider what the defence has put to you.

This constituted the whole of the assistance the trial judge gave the jury at this stage upon the elements of the charge. The rest of his summing up consisted of a reading of portions of the applicant's statement.

After counsel for the applicant had pointed out some of the deficiencies of this summing up, his Honour recalled the jury and gave them some additional directions. We should quote the whole of what his Honour then said on the nature of the charge:

Gentlemen, there are just one or two things that my attention was drawn to yesterday afternoon after you had left that I thought I should clear up in case I had used the wrong words once or twice in my summing up. You remember I said that the Crown has to prove three things: The receipt of the money first - that is not disputed. That the accused did receive that money: secondly, that he received it on terms requiring him to account, and thirdly that he acted fraudulently, that is to say that he induced the Paynes to part with the money, and in case I did use the wrong word, that the accused acted fraudulently, the essence of that is that he did induce by his words or by his writings (and the exhibits will be before you) that he induced the Paynes to part with their money.

The second matter was that it may be in reading the indictment to you and referring to it later - the charges are these: That on the various dates for the six different charges that having received certain money, £250 or whatever it was in the six different charges, the accused upon terms requiring him to account to Mr. Payne or Mrs. Payne or both of them, fraudulently did omit to account in violation of the terms in which he so received the money. I think I omitted to use the words, at one stage, "In violation of the terms on which he had received it".

The first question is whether a case for special leave to appeal has been made out. In our opinion, the case is pre-eminently one for the grant of such leave. As we see the matter, the applicant was not in reality tried for the offences for which he was indicted and the Court of Criminal Appeal has failed to exercise the supervision it ought to exercise over the procedures at criminal trials. The very fundamentals of a proper criminal trial have not been observed and the manifest deficiencies of the summing up have been excused by the Court of Criminal Appeal for reasons which, in our opinion, cannot be justified. Special leave to appeal should be granted.

In the first place, it is to our minds plain to demonstration that in any case the convictions of the applicant cannot stand as the summing up did not instruct the jury at all as to crucial matters to which the indictment gave rise; and in fact they were misdirected in a vital respect. We refer in particular to that passage in the summing up in which his Honour said: " thirdly that he acted fraudulently, that is to say that he induced the Paynes to part with the money "

Even if the counts of the indictment were appropriate at all to the circumstances of the case, that direction was erroneous. The question would be, did the applicant fraudulently omit to account for the money, not, did he fraudulently obtain it. The Court of Criminal Appeal appears to have endorsed this portion of the summing up.

The Court of Criminal Appeal rightly perceived that the summing up was more appropriate to a charge of false pretences but thought that "this is not surprising in a way because the issue was clear cut". The Court said:

It may be that this led the learned chairman to omit some directions on certain matters, but he did in the first instance present the only issue as one of fact, according to pp. 2 and 3 of the summing up, namely that the Crown case was that there was a payment to the appellant on account of the land and house as Paynes' agent or trustee. And the conflict with that was the appellant's case that it was a loan to him for investment by him in the dredging company or as promotion and that he was a principal. It may be, as I say, that the desire of the learned judge to leave the exact factual issue to the jury perhaps led him away from dealing with the case on more technical questions involved in the terms of the section. However, upon the learned judge's attention being drawn to this, the learned chairman on the day after he had given these directions to the jury returned to the matter, and on 16th June which was the last day of the trial, the learned chairman then re-directed the jury as to the matters the Crown had to prove, by telling them that the Crown had to prove the receipt of the money by the accused and that it was on terms requiring him to account, and that he acted fraudulently, in other words, that he induced the Paynes to part with their money on other and different considerations.

The matter was thus left to the jury in accordance with the terms of the section, but the real issue still presented itself to the jury according to the learned judge's summing up: Did the appellant receive the money on the terms specified by the prosecution and was he deceitful and fraudulent in the way that he disposed of it? These were matters for the jury and their answer by way of conviction showed that they accepted the Crown case and rejected the explanation of the appellant. If there was any room for possible argument as to whether the summing up, looked at as a matter of the pedantic approach of a lawyer, fell short perhaps in some respects, I would myself say that the proviso to s. 6 would apply and there was in fact no miscarriage of justice done to the appellant by the learned judge's treatment of the issues in the case. The summing up I think eventually left to the jury exactly the issues which the conduct of the trial on either side dictated.

The quotation is enough, in our opinion, to show that the Court of Criminal Appeal failed to perform its proper function. It is not pedantry to insist that an accused be tried for the crime for which he is charged: and the function of the proviso to s. 6 of the Criminal Appeal Act, 1912 is not to provide a Court of Criminal Appeal with a refuge from the performance of the exacting duty imposed in the interests of the due administration of the law of close analysis of the sufficiency of the evidence led to support the essential ingredients of the precise charges laid and of the manner in which a presiding judge has instructed the jury as he should in the elements of the offence and the relevance of the evidence thereto. In our opinion, the Court of Criminal Appeal in this case did not perform this task.

We now turn to the question of what order should be made upon the appeal, an order for a new trial or a quashing of the convictions without further order. For this purpose, it is necessary to examine with care the evidence given by the Paynes to ascertain whether it did afford material which could properly be left to the jury and on which they could convict the applicant of the charges laid against him.

So far as the first count of the indictment was concerned, Payne expressly said that he made the amount stated in the charge available to the applicant by way of "investment" for which he accepted a post-dated cheque. That this count should have been withdrawn from the jury is elementary.

The remaining counts fall into two categories: those which relate to money wholly paid for the construction of the building and those which wholly or partly relate to money paid towards completion of the purchase of the land.

The matter as to the first group of counts is complicated by the insistence by the applicant in his dealings with Payne that he, the applicant, was to be the "Construction Manager and Agent", a description which is ambiguous. But the Paynes stated clearly enough in evidence that they contracted with the applicant for the construction of a house at a price. One thousand pounds was paid as a deposit pursuant to that agreement. It seems to us that this insistence on the part of the applicant was rather intended to place his conduct of the building operations beyond the effective criticism of the Paynes than to make himself merely their agent in all respects as distinct from their contractor. But whatever significance is given to the appellation "Construction Manager and Agent" it does not detract, it seems to us, from the basic fact that all the moneys mentioned in the charges except that portion which was to be paid to the vendor of the land were in fact paid to the applicant by the Paynes under the building agreement made with the applicant and in anticipatory satisfaction of the obligations it imposed or was thought to impose upon them. From the point of view of the offence under s. 178A of the Crimes Act, it cannot matter, in our opinion, that the Paynes were induced by fraud to enter into the agreement and to pay the moneys for the payment of which the agreement provided. Nor would it matter that the proper conclusion was that the building agreement did not represent a consensus at all. Either circumstance would be relevant and central to a charge of obtaining money under false pretences, a charge to which the existence of the agreement thus procured would be no defence. But neither the fraudulent inducement of the agreement and of the payment of money thereunder nor the conclusion, if drawn, that there was no such agreement, would mean that those moneys were received on terms that they should be accounted for in the relevant sense to Payne or to him and his wife or that there was a fraudulent failure to account. The Paynes intended that the moneys should be in satisfaction of what they had engaged or which they thought they had engaged to pay in exchange for the promise of the applicant or what they thought was the promise of the applicant to construct or procure the construction of the house. Indeed, Payne knew and conceded that he knew that the building could not commence till later than the date of the payment of any of these moneys. He paid them in advance upon an understanding that they would be applied to the building of the home, a statement which in its setting can only mean that he advanced the moneys on the understanding that their payment would be in satisfaction of his obligation under the agreement. We have set out his answers in which he assented in substance to that position. In our opinion, no evidence was produced by the Crown that the applicant received these moneys on terms that he should account for them to Payne or to him and his wife. The most favourable view for the Crown is that he received them on terms that he would use them to enable him to perform the building agreement. Consequently, in our opinion, the convictions of the applicant on these counts should be quashed. As we have indicated, he could not have been convicted on this indictment of obtaining money by false pretences. Thus the quashing of the convictions would afford the applicant no valid plea of autrefois acquit to such a charge.

There remain the other counts. Here there is evidence that the applicant received sums of money, as Payne said, to pay for "balance of land and part of construction". That does not support a count of receiving money on terms that he account for it within the meaning of s. 178A. It would support a count that he received it on terms that he should pay it to the vendor of the land in performance of the Paynes' obligation under a contract of purchase of the land. As we have already pointed out, there is no provision for regarding s. 178A as providing a series of alternative verdicts. Consequently, without amendment at the trial, the fact that the evidence would support a different charge is of no avail. But it should be observed that the charge is that the failure to account was on 1st June. By no means can other certain dates to which the fraudulent omission is referable now be substituted for the charged date. At that date, the evidence appears to be that the vendor of the land had not placed itself in a position to demand completion and the payment of the balance of the price of the land. Thus, even if the charge could be regarded as one relating to the payment of the money to the vendor, it is at least questionable whether a breach of the terms assumed would have been made out. The Criminal Appeal Act, s. 7 would not warrant an amendment of the verdict. There is no ground for ordering a new trial on an indictment when no sufficient evidence to support it has been called at the trial. In our opinion, the proper course is to quash the conviction on these counts on the ground that there was no evidence to support them.

Special leave to appeal should be granted. The appeal allowed. The order of the Court of Criminal Appeal set aside and in lieu an order made allowing the appeal to that Court, quashing the convictions of the applicant and setting aside the sentences imposed upon him.