Criminal law - Appeal against conviction - Stealing by conversion - Using roll of tape before paying for item - Honest claim of right - Whether implied licence to use

Director of Public Prosecutions (Nauru) v Fowler [1984] HCA 48; (1984) 154 CLR 627

Ilich v The Queen [1987] HCA 1; (1987) 162 CLR 110

Macleod v The Queen [2003] HCA 24; (2003) 214 CLR 230

Martin v Puttick [1968] 2 QB 82

R v Cushion (1997) 150 ALR 45

Samuels v The State of Western Australia [2005] WASCA 193; (2005) 30 WAR 473

1 COMMISSIONER SLEIGHT: On 19 August 2010, the appellant Mr Raymond John Mickelberg, was convicted in the Magistrates Court at Perth with stealing a Henkel roll of tape (orange 30 m) worth $16.80, the property of Bunnings Group Ltd trading as Bunnings Innaloo.

2 The charge against Mr Mickelberg also alleged he stole a Fanworks Baja ceiling fan worth $309. Following a trial in the Magistrates Court, his Honour Magistrate Cicchini acquitted Mr Mickelberg of the stealing of the ceiling fan but found him guilty of the charge of stealing the roll of tape.

3 Mr Mickelberg appeals against that conviction. The initial grounds of appeal were as follows:

Ground 1

The learned Magistrate erred in law holding that the applicant was guilty of stealing the roll of tape.

Particulars

(a) The applicant admitted that he had torn three strips from an open roll of tape and placed the strips across the top of a box so as to seal the box which contained a fan.

(b) The evidence of the applicant was that he intended to pay for both the fan and the tape.

(c) The learned Magistrate held that he was not satisfied beyond reasonable double that the applicant had not intended to pay for the fan and therfor [sic] acquitted the applicant of the charge of stealing the fan.

(d) However, he held that because the applicant had admittedly used three strips of tape to seal the box, he had thereby stolen the the [sic] tape, within the meaning of Section 371(2)(e) of the Criminal Code and that 'it matters not that he intended to purchase the roll of tape'.

(e) That was an error of law. If as the learned Magistrate impliedly held, he could not be satisfied beyond reasonable doubt that the applicant did not intend to pay for the tape, at the time that he used three strips of it to seal the box, then the applicant could not be guilty of 'fraudulently' converting the tape to his own use.

Ground 2.

The learned Magistrate wrongly held that the evidence established beyond reasonable doubt that the roll of tape was the property of Bunnings.

4 On 22 November 2010 Blaxell J gave Mr Mickelberg leave to appeal on ground 1 and made an order that the application for leave to appeal in respect of ground 2 be heard concurrently with the appeal.

5 On the hearing of the appeal, which came before me on 28 March 2011, I granted Mr Mickelberg leave to add a further ground of appeal. The amended ground of appeal is as follows:

The learned Magistrate erred in law in holding that the Appellant was guilty of stealing the roll of tape without considering Section 22 of the Criminal Code, in particular, the honest claim of right.

Particulars

1. The Magistrate at pages 118, 122 and 123 found that the Appellant at all times intended to pay for the roll of tape.
2. Therefore there could be no intention to defraud Bunnings of the roll of tape.

1. Having established that there was no intent to defraud, His Honour was obliged in the interests of a fair trial to apply Section 22 of Criminal Code, the honest claim of right and find that the Appellant had acted without any intention to defraud. (Illich v R 1987 CLR110 Gibbs CJ 115-117)

1. Section 371 (1) of the Criminal Code should not have been applied as once it was established that there had been no intention to defraud Section 371 can not apply.
2. Section 371(2) of the Criminal Code states that a person who takes anything capable of being stolen or converts any property is deemed to have done so fraudulently if he does so with any of the following intents: (a), (b), (c), (d), (e) arid (f). There Was no evidence that the Appellant had any of the intents therefore, the deeming provision in Section 371(2) of the Criminal Code has no effect on the application of Section 22 of the Criminal Code.

6 Both Mr Mickelberg and the respondent have filed supplementary submissions in relation to this amended ground and the respondent concedes the appeal on the amended ground. I conclude that this concession is correctly made and accordingly I will grant leave on this ground of appeal and grant the appeal. The reasons for doing so are as follows.

7 The general background to this matter is that Mr Mickelberg had purchased a Fanworks Panama ceiling fan from a Bunnings store in early to mid-January 2009. On 20 January 2009 Mr Mickelberg attended the Bunnings Innaloo store in order to exchange the ceiling fan and also to purchase some bulky items located in a secure yard attached to the store. Mr Mickelberg drove his vehicle into the yard to facilitate the loading of the bulky items. On entering the yard Mr Mickelberg alerted a yard gatekeeper that Mr Mickelberg intended to exchange the ceiling fan. After parking his vehicle, Mr Mickelberg entered the store carrying a box containing the Fanworks Panama ceiling fan. Mr Mickelberg went to the electric goods section of the store where he swapped the Fanworks Panama ceiling fan for a Fanworks Baja ceiling fan. After selecting the replacement fan (which was in a box) Mr Mickelberg took the box to one of the store's centre isles and rested the box on a pillar. Mr Mickelberg said he did this as he wished to inspect the contents of the box in better lighting which existed in the centre isle. Mr Mickelberg opened the box so as to ensure that all the component parts ceiling fan were in the box. Having satisfied himself of the contents, Mr Mickelberg left the box and went to search for something to reseal the box.

8 There was some dispute on the evidence given at trial as to where Mr Mickelberg located a roll of tape but it is common ground that with a roll of tape from the store he taped up the box containing the replacement fan. Mr Mickelberg then carried the box and the remaining roll of tape to his vehicle and placed both of them in the cab of the vehicle. Mr Mickelberg also loaded up some other items of purchase and got into his vehicle and started up his vehicle. A store detective who believed Mr Mickelberg was about to leave the yard without paying for the items selected by Mr Mickelberg, intercepted the vehicle. Mr Mickelberg denied that he was intending to leave the yard without paying for the items he had selected. His evidence was that he was simply moving his vehicle before collecting other items. It is common ground that in order to leave the yard Mr Mickelberg needed to pass through a checkpoint at an exit gate. Mr Mickelberg stated that his intention before leaving the premises was to pay for all items he had selected including the fan and the roll of tape. The prosecution's case was that Mr Mickelberg never intended to pay for the fan and the roll of tape and was guilty of stealing.

9 On the evidence, the magistrate found that he could not be satisfied that Mr Mickelberg was, at the time he was approached by the store detective, intending to leave the premises without paying for the items in his vehicle and specifically the fan. On that basis the magistrate concluded that in relation to the fan he could not be satisfied that Mr Mickelberg intended to permanently deprive the owner of the fan and accordingly the magistrate acquitted Mr Mickelberg of stealing the fan. However, the magistrate reached a different conclusion in relation to the roll of tape.

10 The magistrate found that until Mr Mickelberg paid for the roll of tape the property in the roll of tape remained with Bunnings Group Ltd. Up until payment Mr Mickelberg had only a licence to select an item and present the item for payment. This conclusion was based upon the decision of Martin v Puttick [1968] 2 QB 82. In that case Winn LJ stated:

Pausing there for a moment before coming to the more special facts of this case, it seems to me that when a customer does so pick up goods from shelves or other display stands in a shop which conducts its business as a supermarket store, the customer does not then become entitled to any form of property in the goods, nor does the customer acquire any exclusive possession of the goods. The basic understanding of persons trading in this way, and inviting purchases of their goods, and of the shoppers who go to such stores must, it seems to me, be that from the moment of picking up any such article until the point of time and of place. i.e., of position in terms of space, when the customer is at the cash desk and is transacting with the cashier the completion of the purchases by obtaining from the cashier the total price and paying that price, in the interval, the customer is holding the goods and carrying them by permission of the proprietor of the store for the purposes of the transaction (88 - 89).

11 The magistrate went onto conclude that Mr Mickelberg had no right to use the roll of tape and by using the roll of tape converted the roll of tape to his own use. Further the magistrate concluded Mr Mickelberg dealt with the roll of tape with an intention to deal with it in such a manner that it could not be returned in the condition in which it was at the time of the conversion. Relying on s 371(2) of the Criminal Code (WA) the magistrate concluded this constituted stealing.

12 The definition of stealing is contained in s 371(1) of the Criminal Code which provides as follows:

A person who fraudulently takes anything capable of being stolen, or fraudulently converts to his own use or to the use of any other person any property, is said to steal that thing or that property.

13 Section 371(2) contains a deeming provision in relation to when a person acts fraudulently. The subsection relevantly provides

A person who takes anything capable of being stolen or converts any property is deemed to do so fraudulently if he does so with any of the following intents, that is to say -

(a) An intent to permanently deprive the owner of the thing or property of it or any part of it;

...

(e) An intent to deal with it in such a manner that it cannot be returned in the condition in which it was at the time of the taking or conversion.

Amended ground of appeal - honest claim of right

14 The amended ground of appeal is based upon the contention that the conviction should be set aside on the basis that the magistrate did not give consideration as to whether Mr Mickelberg had a defence under s 22 of the Criminal Code when such a defence on the evidence ought to have been considered.

15 Section 22 of the Criminal Code provides as follows:

Ignorance of the law does not afford any excuse for an act or omission which would otherwise constitute an offence, unless knowledge of the law by an offender is expressly declared to be an element of the offence.

But a person is not criminally responsible, as for an offence relating to property, for an act done or omitted to be done by him with respect to any property in the exercise of an honest claim of right and without intention to defraud.

16 Pursuant to s 22 the exclusion of criminal liability for an honest claim of right only arises where there is no intention to defraud. This raises the issue whether the deeming provisions of s 371(2) of the Criminal Code, which deem acts done with a certain intention to be fraudulent, operate so as to exclude s 22.

17 It is important to note that the deeming provisions contained in s 371(2) do not deem that the intention was fraudulent. Accordingly the intention of the accused may not be fraudulent, but if the intention meets one of the criteria set out in s 371(2) then the taking or conversion is deemed to have been done fraudulently. This is so even though the actual intention of the accused may not be dishonest.

18 Accordingly, a person is not criminally responsible for an offence relating to property if the person has an honest claim of right without having any intention to defraud, even if the taking or conversion may be deemed fraudulent under s 371(2). This conclusion is supported by Gibbs CJ in Ilich v The Queen [1987] HCA 1; (1987) 162 CLR 110 when he stated as follows in relation to the operation of s 371(2) of the Criminal Code:

The law as enacted by this section is free from some of the complexities of the common law. Stealing, as defined, includes both fraudulent taking and fraudulent conversion. A taking or conversion is deemed to be fraudulent when done with one of the intentions described in paras (a)-(f) of s 371(2). No further state of mind is necessary. Of course there is no criminal responsibility for a taking or conversion effected in the exercise of an honest claim of right and without intent to defraud (Criminal Code (WA) s 22) (115).

19 The above conclusion is further supported by the decision of R v Cushion (1997) 150 ALR 45. The Queensland Court of Appeal considered a case stated where an accused person was charged under s 72 of the Crimes Act 1914 (Cth) with having fraudulently and in breach of duty made a false entry in a document. The Court of Appeal ruled that to make an entry 'fraudulently' did not equate with an intention to defraud.

20 Accordingly, a defence under s 22 may still be available even where, as in this case, the accused is found to have fraudulently converted property to his own use.

Was a defence of honest claim of right raised on the evidence?

21 A defence under s 22 of an honest claim of right was considered by the High Court in Macleod v The Queen [2003] HCA 24; (2003) 214 CLR 230. In their joint judgment, Gleeson CJ, Gummow and Hayne JJ stated:

Against that background, several points should be made. The first concerns what is meant when it is said that the accused raises a claim of right. As to that, Dawson J said in Walden:

'It is not ignorance of the criminal law which founds a claim of right, but ignorance of the civil law, because a claim of right is not a claim to freedom to act in a particular manner - to the absence of prohibition. It is a claim to an entitlement in or with respect to property which goes to establish the absence of mens rea. A claim of that sort is necessarily a claim to a private right arising under civil law: see Cooper v Phibbs.'

Secondly, the claim must be made honestly, leading to the proposition expressed by Callaway JA in R v Lawrence that, although an honest claim 'may be both unreasonable and unfounded', if it is of that quality then the claim 'is less likely to be believed or, more correctly, to engender a reasonable doubt'.

Thirdly, particular considerations arise where, fraud being inconsistent with a claim of right made in good faith to do the act complained of, that act has, as a necessary element of criminal liability, the quality of dishonesty according to ordinary notions [41] - [43]. (footnotes omitted)

22 It is not in dispute that the offence that Mr Mickelberg was charged with was an offence relating to property. Further on the basis of Mr Mickelberg's evidence that he intended to pay for the roll of tape it can be inferred that he had an honest claim of right to use the roll of tape without an intention to defraud. Accordingly the issue of s 22 clearly arose on the evidence. The issue of s 22 was not raised at the trial by either Mr Mickelberg (who was self represented) or the prosecutor. Accordingly it is understandable that the magistrate did not consider this possible defence. However the failure of the magistrate to give consideration to s 22 meant that Mr Mickelberg lost the chance of a possible acquittal. Therefore, I conclude that Mr Mickelberg did not receive a fair trial and accordingly an injustice has occurred. Therefore on the amended ground of appeal I grant leave to appeal and grant the appeal.

23 Section 14 of the Criminal Appeals Act 2004 (WA) provides, relevantly, that if the court allows an appeal it may set aside and substitute the order of the magistrate or send the matter back to the Magistrates Court to be dealt with again.

24 In Director of Public Prosecutions (Nauru) v Fowler [1984] HCA 48; (1984) 154 CLR 627, Gibbs CJ, Murphy, Wilson, Deane and Dawson JJin relation to such a discretion said:

The power to grant a new trial is a discretionary one and in deciding whether to exercise it the court which has quashed the conviction must decide whether the interests of justice require a new trial to be had. In so deciding, the court should first consider whether the admissible evidence given at the original trial was sufficiently cogent to justify a conviction, for if it was not it would be wrong by making an order for a new trial to give the prosecution an opportunity to supplement a defective case. In the present case, the admissible evidence given at the trial satisfies this test. Then the court must take into account any circumstances that might render it unjust to the accused to make him stand trial again, remembering however that the public interest in the proper administration of justice must be considered as well as the interests of the individual accused (630).

25 Mr Mickelberg did not give any evidence that he thought that Bunnings would not mind if he used the roll of tape in the way he did. However, his evidence that he intended to pay for the roll of tape leaves open the inference that he held such a belief. Given that the magistrate was not satisfied that Mr Mickelberg did not intended to pay for the tape it is difficult to see on what basis the inference of an honest claim of right could reasonably be excluded. Accordingly, in my opinion I should exercise my discretion to set aside the conviction and substitute it with a judgment of acquittal in relation to the charge.

26 For completeness sake I will deal with the other grounds of appeal.

27 The essence of ground 1 of the appeal is that if the magistrate was not satisfied Mr Mickelberg did not intend to pay for the tape, then a conversion of the tape to Mr Mickelberg's own use, could not be fraudulent.

28 As I have already indicated earlier in this decision, a conversion can be deemed fraudulent under s 371(2) even though there is no intent to defraud. Accordingly, aside from the issue of an honest claim of right, there is no reason why the deeming provision of s 371(2) cannot operate, even though Mr Mickelberg may have had an intention to pay for the roll of tape. Under s 371(2)(e) if a person converts any property then he is deemed to do so fraudulently if he does it with an intent 'to deal with it in such a manner that it cannot be returned in the condition in which it was at the time of the conversion'.

29 The magistrate held that Mr Mickelberg by using the roll of tape dealt with it in a manner that it could not be returned to Bunnings in the same condition it was at the time of the conversion. This was a finding clearly open on the evidence. Once the magistrate made that finding, the deeming provision came into operation.

30 Further, the magistrate made a critical finding that Mr Mickelberg only had a licence to choose an item and present it for payment. The magistrate found that Mr Mickelberg did not have a licence to use the roll of tape. The absence of this licence to use the roll of tape meant that Mr Mickelberg converted the roll of tape to his own use. Mr Mickelberg would not have converted the roll of tape to his own use if the owner gave Mr Mickelberg permission (either express or implied) to use the roll of tape as a conversion exists only where there is a use inconsistent with the owner's rights: Ilich (116) (Gibbs CJ).

31 The finding by the magistrate that Mr Mickelberg did not have permission to use the tape was open to the magistrate given the nature of the business conducted by Bunnings Group Ltd. However this conclusion by the magistrate may not have universal application in all self service stores or markets.

32 In the case of Martin v Puttick Winn LJ in dealing with the legal position of the customer after selection of an item said:

Whether it is strictly right to speak of the relationship of the customer to the goods during that interval is one of bailment or of licence or of custody may not be very clear. Such a situation is one where plainly the proprietor of the store, by implication, has given a limit permission to handle and carry goods which are still his property.

33 Whether a customer has an implied licence to part use a selected item before payment will depend upon all the circumstances. For example some fruit vendors allow customers to try a sample before paying for an item.

34 In my opinion the magistrate was correct to conclude that, based upon the findings that Mr Mickelberg did not have permission to use the roll of tape and that Mr Mickelberg intended to deal with the roll of tape in a manner that it could be returned in its original condition, that Mr Mickelberg's conduct fell within the definition of stealing.

36 In my opinion there was ample evidence for the magistrate to conclude beyond reasonable doubt that the roll of tape belonged to the Bunnings Group Ltd. The roll of tape was located in the Bunnings store. Mr Mickelberg acknowledged that the roll of tape belonged to Bunnings Group Limited by his evidence that he intended to pay for the roll of tape.

37 Leave can only be granted on a ground of appeal if the court is satisfied that a ground has a reasonable prospect of succeeding: Criminal Appeals Act s 9. This means that the ground should have a rational and logical prospect of succeeding: Samuels v The State of Western Australia [2005] WASCA 193; (2005) 30 WAR 473. In the circumstances I am not satisfied that the ground 2 has a rational and logical prospect of success. Accordingly I refuse leave in relation ground 2.