Balcombe v De Simoni

High Court of Australia|1972-07-01|Before: Gibbs JJ

For the reasons I have expressed, the conclusion at which the Supreme Court of Western Australia arrived in this case, in my opinion, was correct. I would dismiss the appeal both for that reason and also because I think the magistrate wrongly decided that the inducement of the contract of purchase by a false pretence was enough to establish the offence.

The respondent was convicted by a Court of Petty Sessions under s. 409 (1) of the Criminal Code, 1913-1969 W.A.. That section in so far as it is material, reads as follows:

Any person who by any false pretence or by any wilfully false promise or partly by a false pretence and partly by a wilfully false promise, and with intent to defraud, obtains from any other person anything capable of being stolen, or induces any other person to deliver to any person anything capable of being stolen, is guilty of a crime, and is liable to imprisonment with hard labour for three years.

It is immaterial that the thing is obtained or its delivery is induced through the medium of a contract induced by the false pretence or the wilfully false promise or partly by a false pretence and partly by a wilfully false promise.

The learned magistrate had found that the defendant had falsely and knowingly represented that he was a student selected in a contest for a monetary prize and an overseas goodwill trip to represent the youth of Australia and had thereby induced a purchaser to give him $6.50 for a cookery book which was to be delivered at a later date. The learned magistrate held the offence was made out notwithstanding his finding that the purchaser was to get something of real value for her money. In my opinion this entailed a finding that the defendant had obtained $6.50 from the purchaser by a false pretence and with intent to defraud.

It was contended before this Court however that there was no evidence on which a finding of intent to defraud could have been made beyond a reasonable doubt for the reason that the intent was no more than to secure an agreement supported by a genuine and adequate consideration.

In my opinion the crucial characteristic of an intention to defraud is not the economic loss which may or may not result to the purchaser but the element of dishonesty. In R. v. Kritz [1] , the Court of Criminal Appeal quoted with approval the direction given by Channell J. as to intent to defraud in R. v. Carpenter [2] . The concluding words of the passage quoted read: " this question as to the intent to defraud substantially comes to this: whether or not the statements were honestly made". This question was also considered by the Supreme Court of Victoria in R. v. O'Sullivan [3] where the Court said [4] :

It is an essential element of the offence that the goods should have been obtained by false pretences with intent to defraud. The intent to defraud includes in every case an intention on the part of the accused that the owner of the goods shall be by such false statements induced to do what he otherwise would not do - namely, part with the goods in question. It is the fraud involved in obtaining the property which supplies the intention demanded by the statute and that intent is not negatived by the fact that the purchaser received or was to receive an object of value: see also R. v. Hammerson [5] and Welham v. Director of Public Prosecutions [6] , per Lord Denning. 1. [1950] 1 K.B. 82, at pp. 86-87. 2. (1911) 22 Cox C.C., at p. 624. 3. [1925] V.L.R. 514. 4. [1925] V.L.R., at p. 518. 5. (1914) 10 Cr. App. R. 121. 6. [1961] A.C. 103, at p. 131.

In my judgment there was ample evidence on which the learned magistrate might have made a finding that there was an intent to defraud on the part of the defendant, a finding which he did, in my opinion, make.

I would therefore grant special leave, allow the appeal and discharge the order to review.

I have had the advantage of reading the reasons for judgment to be delivered by Gibbs J. I agree entirely with these reasons and consider that the order of the Court should be as he proposes.

The questions raised by this application for special leave to appeal are explained in judgments prepared by other members of the Court. The principal question that has to be decided depends upon the proper construction of s. 409 (1) of the Criminal Code W.A.. With regard to the cases to which we were referred in argument, in which there are judicial statements dealing with the offence of obtaining property by false pretences and with the meaning of the expression "with intent to defraud", it is not easy to reconcile all those statements or to extract a principle of construction that can be regarded as well established and as applicable to the statute now under consideration. These authorities are discussed in the judgments of other members of this Court, as well as in that of the learned primary judge. I need not refer again to the passages in them upon which reliance has been placed in argument.

My consideration of the questions raised by the application has brought me to the conclusion, in agreement with that of the Chief Justice, that the orders made by the Supreme Court of Western Australia [1] should not be disturbed. I agree with his Honour's reasons and do not wish to add anything to them except to make some observations upon one question, upon which different views have been taken in this Court.

In the Supreme Court of Western Australia, Wickham J., after referring to ss. 408 and 409 of the Criminal Code, said [2] :

There is therefore an element of intent in the obtaining of the thing by the false pretence in that the false pretence which is itself necessarily dishonest is intentionally used by the accused as an inducement for the obtaining, or, more accurately as an inducement to the victim to allow him to obtain. 1. [1971] W.A.R., at p. 149.

In his reasons for judgment the Chief Justice has written that the intent to induce and inducement in fact are necessary elements of that part of the offence which consists in the obtaining of property by a false pretence and that in addition there must be an intent to defraud by the obtaining of the property. The contrary view is that in the description of the offence there is not included, apart from the words "with intent to defraud", any element of intention at all. According to that view all that is necessary in order to establish that a person has obtained property by a "false pretence" (as defined in s. 408 of the Criminal Code) is to show that he obtained it by means of a representation of a matter of fact which representation was false in fact and that he knew that it was false or did not believe it to be true and in this no intention to obtain the property is involved.

I am of opinion that the view of the Chief Justice is correct. If s. 409 (1) had been enacted without the inclusion therein of the words "and with intent to defraud", it would not have been proper in my opinion to construe it in such a way that an offence would be committed even if it appeared that the accused, although he made a false statement known by him to be false by which in fact he obtained property from another person, had no intention that that person would be induced by the statement to part with any property. I do not think that s. 23 of the Criminal Code would require that it should be so construed. I do not think that the word "obtains", as used in s. 409 (1), includes in its meaning a reference to an unintended and unexpected acquisition of property. The same provision refers to a person who "obtains" something from another person and to a person who "induces" another person to deliver something. In the first case there is required, in my opinion, an intention that the other person will be induced by the false pretence to part with the property so that the maker of the representation may obtain it, just as in the second case it is plain that there must be an intention that the other person will be induced to deliver the property.

In my opinion, special leave to appeal should be granted but the appeal dismissed.

The respondent was employed as a salesman to go from house to house through the suburbs of Perth in an endeavour either to sell books or to obtain subscriptions for periodicals for which his employer had the agency. He was not scrupulous in the methods he employed to effect a sale, but used both deceit and importunities to that end. As a result of complaints concerning his activities he was charged that on 17th August 1970 at Wexcombe by falsely pretending to one Jina Hasluck that he was a student from South Australia selected in a contest for $1,000 and an overseas trip to represent the youth of Australia on a goodwill tour he obtained from the said Jina Hasluck $6.50 in money with intent thereby then to defraud, contrary to s. 409 of the Criminal Code W.A.. The magistrate who constituted the Court of Petty Sessions before which the charge was brought found that the false pretence alleged was made and that it induced Jina Hasluck to part with $6.50 and went on to convict the respondent. The magistrate did not, however, make a finding that the respondent had an intent to defraud. The respondent obtained an order nisi to review the decision of the magistrate upon two grounds, viz., (a) that the magistrate had made no finding that the respondent had made the false pretence alleged with intent to defraud and (b) that there was no evidence of an intent to defraud on the part of the respondent and that he should therefore have been acquitted. The learned judge of the Supreme Court of Western Australia [1] before whom the order nisi was returned took the view that the magistrate must have been satisfied that there was an intent to defraud, so that the first ground failed, but that there was no evidence on which such a finding could have been made and he accordingly made absolute the order nisi and quashed the conviction. The complainant now seeks special leave to appeal against this judgment.

It is convenient to proceed immediately to the question of substance involved in the application, which is whether on the evidence the magistrate should have found an intent to defraud, a question which depends upon the true view of the substantive law on the point. By means of the false pretence alleged the respondent induced Jina Hasluck to agree to buy a cookery book which she did not want and to pay the respondent $6.50 as the price of the book. She was given a receipt and was apparently told that the book would be delivered to her at a later date. Her money was subsequently refunded as a result of a suggestion made to the respondent by the police, but it must be assumed in favour of the respondent, since the contrary was not proved, that at the time the false pretences were made and the money was obtained the respondent intended that his employer would arrange for the delivery of the book and that the book would have been delivered and that its normal price was not less than $6.50. The case is therefore one in which there was no misrepresentation as to the nature or quality of the thing to be supplied in exchange for the money or as to the use to which the money would be put when it was paid over; the false pretence was made with intent to induce the representee to part with her money but it was intended to use the money in exactly the manner represented, that is, as the purchase price of the book which it was intended to deliver and which it must be supposed would, in fact, have been delivered, in accordance with the representation.

Section 409 of the Criminal Code W.A. reads as follows:

(2) Any person incurring any debt or liability who obtains credit by any false pretence or by any wilfully false promise or partly by a false pretence and partly by a wilfully false promise or by any other fraud is guilty of a misdemeanour, and is liable to imprisonment with hard labour for one year.

The term "false pretence" is defined in s. 408 of the Criminal Code as follows: Any representation made by words or otherwise of a matter of fact, either past or present, which representation is false in fact, and which the person making it knows to be false or does not believe to be true, is a false pretence.

The words of these sections make it plain that to establish that the respondent committed the crime with which he was charged it must be proved, first, that he obtained from another person property capable of being stolen; secondly, that he obtained such property by means of a representation of a matter of fact which representation was false in fact and which he either knew to be false or did not believe to be true and, thirdly, that he obtained such property with intent to defraud. The learned primary judge took the view that there is "an element of intent in the obtaining of the thing by the false pretence in that the false pretence which is itself necessarily dishonest is intentionally used by the accused as an inducement for the obtaining, or, more accurately as an inducement to the victim to allow him to obtain" (the property) and that " "intent to defraud" connotes something additional to the intention dishonestly to obtain" [1] . With all respect I cannot agree that this is the effect of the section. Section 23 of the Criminal Code provides, inter alia, that:

Unless the intention to cause a particular result is expressly declared to be an element of the offence constituted, in whole or part, by an act or omission, the result intended to be caused by an act or omission is immaterial. The only intention which is an element of the offence created by s. 409 is that expressly provided - an intent to defraud. To constitute the false pretence there must have been a representation which was made by the accused person with knowledge of its falsity or lack of belief in its truth but such a representation will not necessarily have been dishonestly made - it may, for example, have been made in jest. To succeed in obtaining a conviction the prosecution must prove that the accused had the specific intent to defraud but it need not prove that he had any other intention. 1. [1971] W.A.R., at p. 149.

The learned primary judge found some support for the view which he took, and which I feel obliged to reject, in a comparison which he drew between sub-s. (1) of s. 409 and sub-s. (2), which he seemed to think did not make an intent to defraud an element of the offence created by the latter subsection. It is unnecessary for present purposes to express any final view as to the effect of sub-s. (2), but it should be mentioned that it has been held that s. 13 (1) of the Debtors Act, 1869 U.K., and s. 253 of the Crimes Act 1908 N.Z., which appear indistinguishable in any material respect from s. 409 (2), require the prosecution to prove an intent to defraud: R. v. Brownlow [1] ; Reg. v. McKay [2] .

(1910) 4 Cr. App. R. 131. 2. [1961] N.Z.L.R. 256.

The crucial question then is what constitutes an intent to defraud. The expression is not defined in the Criminal Code but some assistance may be derived from the discussion of the meaning of the words in other contexts. In In re London and Globe Finance Corporation Ltd. [3] , Buckley J. said:

To deceive is, I apprehend, to induce a man to believe that a thing is true which is false, and which the person practising the deceit knows or believes to be false. To defraud is to deprive by deceit: it is by deceit to induce a man to act to his injury. More tersely it may be put, that to deceive is by falsehood to induce a state of mind; to defraud is by deceit to induce a course of action. These words, which "ever since they were reported have been accepted and used in the criminal courts as providing a satisfactory account of the essentials of "defrauding" on the one hand and "deceiving" on the other" (Welham v. Director of Public Prosecutions [4] ), and have been cited with apparent approval in this Court (R. v. Kidman [5] ), have been regarded as applicable to a charge of the present kind: R. v. Bennett and Newton [6] . It must, however, be observed that as Buckley J. expounded his definition of "to defraud" he expanded its scope, and not all of his words are apposite to a charge of obtaining by false pretences with intent to defraud. It is of the essence of such a charge that property be obtained and, therefore, on such a charge it cannot be held, as has been held in relation to other offences, such as forgery (Welham v. Director of Prosecutions [1] ), that an intent to bring about a course of action which does not involve the obtaining of property may amount to an intent to defraud. In relation to the present charge an intent to defraud must mean an intent to deprive another of property by deceit. Such an intent may exist notwithstanding that an offender who obtains goods by false pretences intends ultimately to pay for them if he can (Reg. v. Hamilton [2] ) or, if he obtains money, intends to pay it back (Reg. v. Naylor [3] ; R. v. Carpenter [4] ; R. v. Kritz [5] ; Reg. v. Denning [6] ). The intent to defraud need not be an intention permanently to deprive the victim of his property or to inflict permanent loss upon him; the fraud, as was said in R. v. Carpenter, [7] , is in the mode of getting the property. In my opinion, the principle was correctly stated in the judgment of the Full Court of the Supreme Court of Victoria in R. v. O'Sullivan [8] ; The intent to defraud includes in every case an intention on the part of the accused that the owner of the goods shall be by such false statements induced to do what he otherwise would not do - namely, part with the goods in question. 1. [1903] 1 Ch. 728, at pp. 732-733. 2. [1961] A.C., at p. 127. 3. (1915) 20 C.L.R. 425, at p. 447. 4. (1913) 9 Cr. App. R. 146, at p. 154. 5. [1961] A.C. 103. 6. (1845) 1 Cox C.C. 244. 7. (1865) 1 C.C.R. 4. 8. (1911) 22 Cox C.C. 618. 9. [1950] 1 K.B. 82. 10. [1962] N.S.W.R. 173. 11. (1911) 22 Cox C.C., at p. 624. 12. [1925] V.L.R., at p. 518.

However, in R. v. Carpenter [4] in a passage described in R. v. Kritz [9] as the locus classicus on the subject, Channell J. said [7] :

If the defendant made statements of fact which he knew to be untrue, and made them for the purpose of inducing persons to deposit with him money which he knew they would not deposit but for their belief in the truth of his statements, and if he was intending to use the money so obtained for purposes different from those for which he knew the depositors understood from his statements that he intended to use it, then we have the intent to defraud That passage mentions an element which is not found in the present case, namely, an intention to use the property obtained for purposes different from those for which the representee understood from the representations made by the accused that he intended to use it, and the question arises whether these words ought to be regarded as expressing a general principle applicable to all cases. In R. v. Kritz [5] where R. v. Carpenter [4] was emphatically approved, this question was not discussed, but the decision in that case does suggest that this additional element need not always be established, for the court there approved as sufficient a summing up in the following words, which were treated as satisfying the statement of the law in R. v. Carpenter [1] : If a false statement, false to the knowledge of the person making it, is made, and by this means money or credit is obtained, and the person who gives that money or credit does so in reliance on the false statements that have been made - well, that is sufficient and you need not go any further. The fact that the man may, and undoubtedly would if he got the chance, repay the money is, to my mind, quite immaterial, even if, in fact, it can be said that he did repay the money but it is immaterial what he intended to do with the money if he obtained it by means of pretences that are false, with intent to defraud. And to defraud, as I say, means by deceit to get other people to take a certain course of action that is harmful to them [2] . This summing up made no mention of any additional requirement of an intention to use the property for a purpose different from that for which the person handing it over intended it to be used, but suggests that it is immaterial how the accused intended to use the property. However, R. v. Kritz [3] cannot be regarded as deciding the question now under consideration. R. v. Kritz [3] is discussed in R. v. Denning [4] but the judgment in the latter case may prove misleading, first, because in setting out [5] the direction approved as correct in R. v. Kritz [3] the words relating to intent to defraud are omitted, thus wrongly suggesting that a direction which failed to mention intent would be sufficient, and, secondly, because it applies [6] the decision in Director of Public Prosecutions v. Smith [7] which cannot be regarded as authoritative in Australia - see Parker v. The Queen [8] . 1. (1911) 22 Cox C.C. 618. 2. [1950] 1 K.B., at p. 87. 3. (1911) 22 Cox C.C., at p. 624. 4. [1950] 1 K.B. 82. 5. (1911) 22 Cox C.C. 618. 6. (1911) 22 Cox C.C. 618. 7. [1950] 1 K.B., at p. 86. 8. [1950] 1 K.B. 82. 9. [1950] 1 K.B. 82. 10. [1962] N.S.W.R. 173. 11. [1962] N.S.W.R., at p. 179. 12. [1950] 1 K.B. 82. 13. [1962] N.S.W.R., at p. 178. 14. [1961] A.C. 290. 15. (1963) 111 C.L.R. 610, at p. 632.

Considering the matter on principle I am of opinion that it is not necessary that an accused person should have intended to use the property for purposes different from those for which the victim of his deceit understood he would use it before he can be held to have had an intent to defraud. What is essential is that he should have intended to obtain the property by means of a deception. To say this is not to fail to give proper weight to the words "with intent to defraud". If those words did not appear in the section it would be enough if the accused made a statement which was false to his knowledge and if the person to whom the statement was made was induced to part with property by reason of such false pretence, and it would be immaterial whether the statement was intended to have that effect. What the inclusion of the words "with intent to defraud" makes necessary is that the accused should have made the false pretence with the intention of inducing another person to part with property. Therefore, if a beggar obtains money by pretending to be blind, and with the intention that the person to whom the pretence is made should be induced by that pretence to give him alms, the offence is committed notwithstanding that the money is used exactly as the person who gave it intended that it should be used, for the relief of the beggar. Similarly, if a man, by pretending to hold a certain position, or to possess certain assets, intentionally induces another to lend him money which he would not otherwise have lent, the former has an intent to defraud, notwithstanding that he intends to use the money for the very purpose for which he says he wants to borrow it.

In the present case, as I have said, the magistrate made no specific finding that there was an intent to defraud. If a judge summing up to a jury omitted to direct them that an actual intent to defraud is a necessary element of the crime, I would be of opinion that the direction was insufficient. However in the present case the magistrate, after refusing to accept the denials of the respondent that the representations alleged were made, proceeded to convict the accused and if, consistently with the view which he took of the respondent's credibility, the magistrate was bound to find an intent to defraud, his conviction ought to be sustained. In my opinion, the only possible conclusion from the evidence is that the respondent made false pretences with the intention of inducing Jina Hasluck to part with her money; in other words, the respondent had the intention of depriving her of her money by deceit and, therefore, had an intent to defraud. The magistrate's conclusion was in my opinion correct.

I would grant special leave to appeal, and would allow the appeal and discharge the order to review.

High Court of Australia Barwick C.J. McTiernan, Menzies, Walsh and Gibbs JJ. Balcombe v De Simoni [1972] HCA 9

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