DPP v Brownlie & Brownlie

Ms V Anscombe, Acting Solicitor for Public Prosecutions

1 The respondents are husband and wife. Together they operated a jewellery shop for some years until December 2010. In December 2010, they ceased trading and entered into voluntary liquidation.

2 On 26 May 2015, prior to a jury being empanelled, a judge of the County Court granted the respondents' application for a permanent stay of 10 charges of theft brought against them. The judge ordered the stay of these charges because she concluded that the charges were foredoomed to fail, and that they were thus an abuse of process. On 27 May 2015, pursuant to s 295(3) of the Criminal Procedure Act 2009, the judge certified that her decision was of sufficient importance to the trial to justify it being determined on an interlocutory appeal.

3 The Director of Public Prosecutions (the applicant) seeks leave to appeal the judge's decision with respect to nine of the charges in respect of which the stay was granted.[2] The applicant's grounds of appeal are:

1. The learned trial judge erred by ordering a stay of the prosecution made against the respondents as an abuse of process on the basis that the prosecution was foredoomed to fail.
2. The learned trial judge erred by finding that there was no evidence upon which a properly instructed jury could find that the respondents had an intention to permanently deprive the complainants of their property.
3. The learned trial judge erred by failing to properly apply the legal test as to whether the respondents had an intention to permanently deprive pursuant to ss 73(12) and 73(13) of the Crimes Act 1958.

4 Each of the nine charges the subject of this application was a charge of theft.

5 The Crown alleged that between 1 August 2008 and 12 August 2010, the respondents received watches and items of jewellery from their customers during the course of trading as a jewellery shop, and that they then dealt with or disposed of that property in a manner that was not authorised by their customers. Each charge related to a separate complainant. Each complainant is said to have given a similar account of leaving their item at the shop, then making numerous enquiries as to the progress, and continually receiving excuses for the delay, until the shop finally closed in December 2010. (The respondents' company, Caulfield Jewellers Pty Ltd, through which they conducted their business, went into voluntary liquidation on 3 December 2010.)

6 Police enquiries with various second-hand dealers and pawnbrokers in Melbourne revealed that the second respondent, Mrs Brownlie, had, on occasions during the relevant period, attended two pawnbrokers to sell or pawn watches or jewellery.

7 The Crown case was put on the basis that the respondents were engaged in a joint criminal enterprise; that is, that they entered into an agreement with each other to steal items of jewellery from customers when the opportunity arose and that the agreement remained in existence at the time of each offence. The Crown contends that each of the charges on the indictment constitute part of an ongoing criminal enterprise and, therefore, that both respondents are equally criminally liable for all offences which fall within the scope of that ongoing criminal enterprise. Both respondents are alleged to have participated in the joint criminal enterprise in that:

(a) they both maintained the jewellery shop business by working in the shop and managing the business;

(b) they were both involved in giving customers excuses for the delay in returning their items; and

(c) the second respondent, Mrs Brownlie, took the items of jewellery to pawn at the pawnbrokers.

8 In her ruling, the judge summarised the case as follows:

The prosecution case is that after Caulfield Jewellers Pty Ltd entered into voluntary liquidation on 3 December 2010, the items of property set out in each of those charges to which I have referred were located at a pawnbroker's business. Each item was left by [Davina Brownlie] as security on various occasions for loans of cash. For the purpose of this ruling there is no issue that, at the time [Davina Brownlie] was acting on behalf of, and with the agreement of, her husband, [Bertram Brownlie].

The prosecution case is that the items of property which were pawned by [Davina Brownlie] were dishonestly appropriated on the basis permission was not given by the complainants, who the prosecution say were the owners of items, to pawn the items. Thus, to do so was usurping the rights of the owners. The prosecution must prove that, when the accused appropriated each of the items of property referred to in each charge, the accused intended to permanently deprive the owner of the item, and that the intention was that the owner would never get their property back.

The prosecution case is that, at the time the items of property came into the possession of the accused, there was no offence committed, but at a later stage the accused appropriated each item dishonestly, as I have stated. The prosecution must prove that, at the time of the appropriation, the accused intended to permanently deprive each of the complainants, being the owners of the property set out in the charges in the indictment. It is not enough to prove the accused only intended to deprive the owner of his or her property temporarily, and then to give it back to him or her.

9 The respondents applied to the judge for a permanent stay of the charges against them on the basis that the charges were an abuse of process because they were foredoomed to fail. The principles to be applied in such an application have recently been restated by this Court in Little.[3]

The principles applicable to an application such as that under consideration were laid down by the Full Court in Smith.[5] Those principles have been applied in a number of cases across several jurisdictions, and are not in doubt.[6], [7] Thus, a permanent stay of a charge on an indictment may only be granted if the charge is foredoomed to fail. For the purposes of the present application the Court should take the prosecution case at its highest.

The legal principles which apply to applications for a permanent stay of criminal proceedings make it clear that a stringent test must be applied. To stay a trial as an abuse of process is an exceptional course and should be exercised 'sparingly and with the utmost caution.'[9] There must be '... a fundamental defect which goes to the root of the trial.'[10]

In a case where the basis for the application is that the prosecution is foredoomed to fail, the test is more onerous than would apply on the resolution of a submission of no case to answer at the conclusion of a prosecution case at trial.[11] The failure of some essential aspect of the case must be inevitable.[12] A stay application on the basis that the prosecution is 'foredoomed to failure' is not an anticipatory no-case submission.[13] It is much more than that - to be successful the applicant must demonstrate positively that the prosecution case is hopeless, plainly so and condemned to remain that way. We consider that it involves much more than establishing a good arguable no-case submission.

During argument in this Court, senior counsel for the applicant submitted that if this trial were to proceed, at the end of the prosecution case a submission of no case would succeed. For the reasons we have expressed above we consider this approach to be incorrect. Certainly if a prosecution case is foredoomed to failure, in time, a no case submission will succeed; but that is saying no more than 10 is greater than five. It does not prove that 10 is five. Similarly an ultimately successful no-case submission does not demonstrate that the institution and pursuit of the prosecution to that point has been an abuse of the Court's process.

We respectfully agree with the formulation of the test for such an application articulated by Byrne J in R v Smith & Ors:[14]

In my view, in a case such as the present, the power to order a permanent stay of a criminal proceeding before the court should be limited to the case where it is plain beyond argument that the prosecution case suffers from some incurable vice. Such a vice must be readily apparent and clearly fatal to the prospect of success of the prosecution. (emphasis added).

12 The judge's ruling makes plain that her Honour well understood the principles governing the application for the stay that had been made to her. Having dealt with those authorities, her Honour said:

As to each charge of theft, the prosecution must prove, beyond reasonable doubt, each of the following elements: (1) that the accused appropriated property that belonged to another person; (2) that the accused intended to permanently deprive that person of his or her property; and (3) that the accused acted dishonestly. The prosecution case is that the accused acted jointly by dishonestly appropriating each item of property set out in the charges on the indictment, in circumstances where they came into possession of the items innocently with the consent of the owners, but later assumed the rights of the owner in usurping the owner's rights by pawning each of those items without the consent of the owners.

Consequently, the prosecution relied on section 72(4) of the Crimes Act which provides, 'Any assumption by a person of the rights of an owner amounts to an appropriation, and this includes where he has come by the property, (innocently or not), without stealing it, any later assumption of a right to it by keeping or dealing with it as owner.' Also, the Crown relies on s 73(12) and s 73(13).

Section 73(12): 'A person appropriating property belonging to another without meaning the other to permanently lose the thing itself is nevertheless to be regarded as having the intention of permanently depriving the other of it if his intention is to treat the thing as his own, to dispose of, regardless of the other's rights; and a borrowing or lending of it may amount to so treating it if, but only if, the borrowing or lending is for a period and in circumstances making it equivalent to an outright taking or disposal.'

Section 73(13): 'Without prejudice to the generality of subsection (12) where a person having possession of control (lawfully or not) of property belonging to another parts with the property under a condition as to its return, which he may not be able to perform, this (if done for purposes of his own and without the other's authority) amounts to treating the property as his own to dispose of regardless of the other's rights.'

13 The judge then noted a number of submissions made on behalf of the respondents, including a submission 'that the prosecution has no evidence as to the element of intention to permanently deprive'.

14 Each respondent relied on the provisions of s 65, s 67 and s 75 of the Goods Act 1958. The judge ruled that those provisions 'do not provide legislative authority to the accused to pledge or sell items'. No complaint was made in this Court about this aspect of the judge's ruling, so that for present purposes it may be ignored.

15 The judge went on to deal with whether there was evidence that might establish that the respondents had an intention to permanently deprive the complainants of their property. Having discussed the evidence as disclosed in the depositions, the history of the relevant legislative provisions,[15] and relevant authority on the topic, her Honour said:[16]

In this case the Crown relies on the sections of the Theft Act to which I have referred, and particularly ss 73(12) and (13). The evidence relied on is the fact that the items that are the subject of those charges are at the pawnbrokers, the pawnbrokers' records, to which I have referred, and the evidence of the pawnbrokers. The evidence is that, looking at the evidence as a whole, the prosecution case is that, at the time [Mrs Brownlie] pawned the items, she did not intend to permanently deprive the owners of the items. The Crown case is that she left them and, pursuant to s 73(13), it is clearly theft.

That is not correct. I consider, upon an analysis, looking at the evidence to which I have referred, there is no evidence that she had the intention to permanently deprive. The evidence goes to, notwithstanding she didn't have the consent, that it was a temporary basis as security for loans, and I refer to the evidence that is led. The course of conduct in relation to the items in the indictment, and items on the same pawn ticket, over the course of not an insubstantial period, she continued to make interest payments at the pawnbrokers, and the sums of money were not small sums of money.

Other items, up until November, a month before liquidation, payments of capital were paid, and those items were redeemed. [The two pawnbrokers] referred to her conduct over the previous years. There is no evidence, in my view, capable of amounting, first, to an outright taking, in s 73(12). As to the criterion in s 73(13), which is 'may not be able to perform', this case differs to Fernandez's case,[17] in my view. In that case it was clearly a risk. In this case the course of conduct over the years, which is seen in the pawn tickets, is that she has continued to pay interest payments, which were not all small amounts.

The inference which can be drawn is that she acted so as to ensure that the items remained intact with the pawnbroker. As I stated, some of them were for a lengthy period. [One complainant], from April 2009; [another complainant] October 2009; [two other complainants], November 09; [four other complainants], for January 2010; and [still another complainant] was a shorter period. But, nevertheless, it was payments made by her to keep those items there. There were items redeemed, as I stated, in October and November.

The evidence relied upon by the prosecution points one way, that is an intention only to temporarily deprive and, in my view, the circumstances do not refer to an outright taking, and it cannot be proven that, in the circumstances, she may have not been able to perform those payments. The authority I referred to that was very helpful, Dardovska's case,[18] referred to pawning as well as holding for ransom, and I consider it significant that it was put in a way, when a person steals an item, and takes that item to be pawned, said this way: 'regarded as having intended to deprive William' - that's the victim - 'permanently of that item'.

This is in quite a different situation, because it is over a period of time, as I said, making not insubstantial payments of interest, and redeeming items left on the same pawn ticket over that period. There is no evidence that [the second respondent] conducted herself other than to temporarily leave those items as security. I rule that she did not have the authority to do so. It was dishonest appropriation. However, in my view, there is no evidence of the element of an intention to permanently deprive.

Therefore, in applying the law, which is very strict, set out by His Honour Mr Justice Brooking, and His Honour Mr Justice Byrne in Smith's case, I consider that there is an incurable vice, and those counts are foredoomed to fail.

17 It was submitted that the act of pawning another person's property as security for a loan, without the consent of the owner to do so, is the very conduct to which subsections 73(12) and 73(13) of the Crimes Act 1958 is directed. These provisions, it was submitted, create a statutorily imputed 'intention to permanently deprive' in circumstances where the accused might not have formed an actual intention to permanently deprive the owner of the property.

18 The applicant contended that the trial judge's conclusion that the prosecution case is devoid of any evidence capable of proving that the respondents had an intention to permanently deprive 'was premised on an erroneous interpretation of subsections 73(12) and (13)'. Hence, the application for leave to appeal the interlocutory decision should be granted and the appeal allowed. The order staying charges 1, 3, 4, 5, 7, 8, 9, 10 and 11 on the indictment should be set aside.

19 Among other things, the respondents submitted that, if there is a 'pawning principle', it does not apply to a case of bailment. Thus the trial judge was correct, so it was submitted, to determine that the 'pawning principle' does not apply to the present case 'because the direct evidence of periodic payment and redemption evidences the norm rather than leaving open the possibility' (sic.). It is contended that there is no evidence (direct or circumstantial) of the respondents' intention to permanently deprive the bailors of property. In any event, so the respondents submitted, the pawning principle does not apply to a commercial arrangement of bailee for reward where a sub-bailment has taken place.

20 Theft is an offence by virtue of s 74 of the Crimes Act 1958.

21 The elements of the crime of theft are found in s 72, so that a person steals if he or she 'dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it'. Thus, the elements of theft are dishonesty;[19] appropriation; of property belonging to another; and an intent to permanently deprive.

22 Section 73 of the Act provides a further explanation of theft. Of particular importance in the present case, ss 73(12) and 73(13) bear on the element of intention to permanently deprive, which was pivotal to the impugned ruling. Subsections (1), (4), (12) and (13) of s 73 provide:[20]

73 Further explanation of theft

(1) This section has effect as regards the interpretation and operation of section 72 and, except as otherwise provided in this Division, shall apply only for the purposes of that section and not otherwise.

...

(4) Any assumption by a person of the rights of an owner amounts to an appropriation, and this includes, where he has come by the property (innocently or not) without stealing it, any later assumption of a right to it by keeping or dealing with it as owner.

(12) A person appropriating property belonging to another without meaning the other permanently to lose the thing itself is nevertheless to be regarded as having the intention of permanently depriving the other of it if his intention is to treat the thing as his own to dispose of regardless of the other's rights; and a borrowing or lending of it may amount to so treating it if, but only if, the borrowing or lending is for a period and in circumstances making it equivalent to an outright taking or disposal.

(13) Without prejudice to the generality of subsection (12) where a person, having possession or control (lawfully or not) of property belonging to another, parts with the property under a condition as to its return which he may not be able to perform, this (if done for purposes of his own and without the other's authority) amounts to treating the property as his own to dispose of regardless of the other's rights.

23 Giving the language of s 73(13) its plain meaning, if a person having possession and control of another's property, parts with it on a condition as to its return which he may not be able to perform, then that amounts to treating the property as his own to dispose of (so long as when he or she parted with the property that was done for his or her own purposes, and when he or she parted with the property on condition that was done without the owner's authority to do so).

24 Although, at first blush, s 73(4) might appear to be an exhaustive definition of appropriation, authority holds that, for there to be an appropriation, a person does not have to assume all of the rights of the owner of property. It is sufficient for there to be an appropriation if a person assumes any of the rights of a true owner. Thus in Morris[21] - where the defendant substituted labels on goods on a supermarket shelf to show a lower price than the actual price, then paid the lesser price for the goods at checkout - Lord Roskill,[22] when dealing with the English equivalent to s 73(4), observed that the definition of 'appropriation' is not exhaustive,[23] and held that 'it is enough for the prosecution if they have proved in these cases the assumption by the respondents of any of the rights of the owner of the goods in question'.[24]

25 In this case, there is evidence - capable of acceptance by the jury - that, as part of a joint enterprise, Davina Brownlie pawned items, left with her and her husband, without the permission of the owners. Thus, they adopted the rights of the owners of the property, by providing the property to third party lenders as security for loans. By doing so, the respondents were advanced cash. It matters little that Mrs Brownlie and her husband may have had a fervent hope that they would be able to redeem the property, or that they had previously been successful in paying interest due on the loans. The fact remains that they parted with the property left in their custody on conditions as to its return which they may not be able to perform. That, so it seems to us, amounts to treating the property as their own to dispose of.

26 The effect of ss 73(12) and 73(13) is, in our view, tolerably clear. Subsection (12) provides that, if a person appropriates property belonging to another - without meaning the other permanently to lose the thing itself - the person is nevertheless to be regarded as having the intention to permanently deprive, if his intention is to treat the thing as his own to dispose of regardless of the other's rights. And subsection 73(13) provides that a person is to be regarded as treating the property as his own to dispose of regardless of the owner's rights in circumstances where he parts with the property under a condition as to its return which he may not be able to perform (if done for purposes of his own and without the owner's authority).

27 Thus, in our opinion, there is evidence available in the prosecution case capable of satisfying the element of intention to permanently deprive, in the way that element is to be understood in light of ss 73(12) and 73(13).

28 Our view is fortified by the erudite judgment of Charles JA (with whom Phillips CJ and O'Bryan AJA agreed) in Dardovska.[25] His Honour traced the history of the relevant provisions, and made plain that they were intended to replicate the 'pawning principle' of larceny at common law. He observed:[26]

Before the 1968 legislation was enacted in the United Kingdom, an 'intention permanently to deprive' as an element in the crime of larceny had troubled the courts on many occasions, particularly in circumstances where the accused could only be shown to have had what might be called a conditional or reckless intention to appropriate. There were three situations in which courts had found an intention permanently to deprive in such circumstances: first, where a person took property from the owner intending to return the property only if the owner paid for it, referred to as the 'ransom principle';[27] secondly, where the intention was to return the property only after it had undergone some fundamental change of character, the 'essential quality principle';[28] and thirdly, where a person pawned another's property without his consent, hoping to be able to redeem the pledge, but without being certain of his ability to do so, the 'pawning principle'.[29] The intention of the House of Commons when passing the Theft Act was that s 6 of that Act was to be a 'restatement of the law with regard to those cases which might not literally amount to a deprivation of the ownership, which had been so regarded from time to time'. The passage of the Theft Act and its metamorphosis from the recommendations of the UK Criminal Law Revision Committee into the final form of the Theft Act is traced in an illuminating article by Professor J R Spencer which also explains the pre-existing common law.[30] Professor Spencer said of s 6 that it 'sprouts obscurities at every phrase'. The obscurity then first-mentioned is what is the relationship between the two clauses of s 6(1), namely, whether the first clause of the subsection lays down a general principle to which the second clause makes a limited exception, in the case of an appropriation by borrowing or lending; or whether the second clause entirely governs the first, restricting the scope of the apparently general principle to cases where property has been borrowed or lent. I think that in Victoria the answer to this question is, for s 73(12), that clearly the first of these two explanations is correct, having regard to the explanatory memorandum which said of the two sections (they were then numbered (13) and (14)) that:

Sub-section (13) states that a person is to be regarded as intending permanently to deprive another of his property if he intends to treat it as his own regardless of the other's rights, even though he does not mean the other permanently to lose the thing itself. Specifically, a borrowing or lending of another's property may amount to a permanent deprivation if and only if the circumstances and the period of time in question make the transaction equivalent to an outright taking or disposal.

Sub-section (14) provides a rider to sub-section (13). It deals with the case of one who, having another's property, parts with it under a condition as to its return which he may not be able to perform, and does so for his own purposes and without the owner's authority. For example, if John, being short of funds, takes William's transistor radio and pawns it, he is to be regarded as having intended to deprive William permanently of his radio. Most of the modern decisions under the present law are to the same effect.

29 Since there is evidence available capable of satisfying the element of intention to permanently deprive - by virtue of a combination s 73(12) and s 73(13) - it must necessarily follow that the prosecution's case is not, in the way that the judge thought it was, foredoomed to fail.

30 The order permanently staying charges 1, 3, 4, 5, 7, 8, 9, 10 and 11 on indictment C1308963A.2 cannot be permitted to stand.

31 For the foregoing reasons, the application for leave to appeal against the interlocutory decision of 26 May 2015 must be granted and the appeal allowed. We would set aside the order for a permanent stay of charges 1, 3, 4, 5, 7, 8, 9, 10 and 11 on indictment C1308963A.2.

[1] To ensure that there is no possibility of identification, this judgment has been anonymised by the adoption of a pseudonym in place of the names of the Respondents.

[2] The charges that were stayed were charges 1, 3, 4, 5, 7, 8, 9, 10 and 11 on indictment C1308963A.2. On 13 May 2015, the judge granted a permanent stay in respect of 25 other charges of theft brought against the respondents. No complaint is made about that order or the order, made on 26 May 2015, staying charge 2 on the current indictment.

[3] Little (a pseudonym) v The Queen [2015] VSCA 62 (Priest JA, Lasry and T Forrest AJJA) ('Little').

[4] Ibid [59] (citations in original).

1. [5] R v Smith & Ors [1995] VicRp 2; [1995] 1 VR 10. See also Nelson[(a pseudonym) v DPP (Cth) [2014] VSCA 217, [6]-[11] (Maxwell P, Redlich and Priest JJA) ('Nelson')].

2. [6] R v Leece (1996) 65 FCR 544 (Gallop, Burchett and Hill JJ); R v Petroulias (No 1) [2006] NSWSC 788; (2006) 217 FLR 242 (Johnson J); R v McGee [2008] SASC 328; (2008) 102 SASR 318 (Doyle CJ, Gray and White JJ); R v Azad [2007] VSC 115 (Curtain J); DPP (Cth) v County Court of Victoria [2010] VSC 157; (2010) 239 FLR 139 (J Forrest J); Nelson.
3. [7] Although the decision was later overturned by the High Court in Smith & Ors v R [1994] HCA 60; (1994) 181 CLR 338, that was because it was held that the Full Court had held no power to entertain an appeal by the Crown against the trial judge's decision to grant a stay. The principles upon which the Full Court purported to decide the case were not, however, put in doubt.

[8] Little, [73]-[76] (citations in original).

[9] Jago v District Court of New South Wales [1989] HCA 46; (1989) 168 CLR 23, 76 (Gaudron J).

[11] R v Smith [1995] VicRp 2; (1995) 1 VR 10, 14 (Brooking J).

[14] Ibid. It should be noted that in Smith v R [1994] HCA 60; (1994) 181 CLR 338, the High Court upheld an appeal by the accused from that murder trial against the determination of the Victorian Appeal Division reversing the stay ordered by the trial judge. The High Court concluded that s 14(3) of the Supreme Court Act was a bar to an appeal by the Crown against an order permanently staying a prosecution. The Court did not otherwise analyse the conclusions reached by Brooking, Byrne and Eames JJ about the circumstances in which a permanent stay of a criminal prosecution might be granted. Those judgments relied on established High Court authority.

[15] Sections 72 and 73 of the Crimes Act 1958.

[17] See R v Fernandes [1996] 1 Cr App Rep 175.

[18] See R v Dardovska [2003] VSCA 4; (2003) 6 VR 628.

[19] See Crimes Act 1958, ss 73(2) and 73(3); R v Salvo [1980] VicRp 39; [1980] VR 401; R v Bonollo [1981] VicRp 63; [1981] VR 633; R v Brow [1981] VicRp 75; [1981] VR 783. See also Peters v The Queen (1993) 192 CLR 473; Macleod v The Queen [2003] HCA 24; (2003) 214 CLR 230.

[21] R v Morris [1984] UKHL 1; [1984] AC 320 ('Morris'). See also R v Baruday [1984] VicRp 59; [1984] VR 685; R v Roffell [1985] VicRp 51; [1985] VR 511.

[22] Lord Fraser of Tullybelton, Lord Edmund-Davies, Lord Brandon of Oakbrook and Lord Brightman agreeing.

[25] R v Dardovska [2003] VSCA 4; (2003) 6 VR 628 ('Dardovska'). See also R v Arnold [1997] 4 All ER 1, 15.

[26] Dardovska, [24] 634-5 (emphasis added).

[27] R v Hall (1849) 3 Cox CC 245.

[28] R v Cabbage [1815] EngR 287; (1815) Russ & Ry 292; 168 ER 809; R v Beecham (1851) 5 Cox CC 181.

[29] R v Medland (1851) 5 Cox CC 292.

[30] Spencer, "The Metamorphosis of Section 6 of the Theft Act" [1977] Crim LR 653; see also Smith and Hogan, Criminal Law, 10th ed, (2002), pp 554-5.