Director of Public Prosecutions v. Turner (1973) 3 All ER 124

R v. Smith (1982) 7 A CrimR 437

Matthews v. Fountain [1982] VicRp 104; (1982) VR 1045

Weinberg & Williams, The Australian Law of Theft (1977) p.145

Article in (1977) 1 Crim LJ 188

The conviction by the Magistrate and the penalty imposed be set aside and the information be dismissed.

The costs of the appeal and of the proceedings in the Magistrates Court be paid by the respondent/informant.

This is an appeal against a convition in the Canberra Magistrates Court on 21 November 1986 for an offence under s. 178C (1) of the Crimes Act 1900 New South Wales in its application to the Australian Capital Territory. The section provides as follows:

dishonestly obtains for himself or any other person

any money or valuable thing or any financial

advantage is guilty of an offence punishable, on

conviction, by imprisonment for a term not

exceeding 5 years.

(2) In this section, "deception" means any

deliberate or reckless deception by words or

conduct in relation to any matter of fact or law or

in relation to the intention of any person."

2. The deception alleged was a representation by the appellant that a cheque drawn by him on a bank account held by him and dated 10 October 1984 was a good and valid order for the payment of the sum of $10,000. The financial advantage alleged was the evasion of the payment of a debt to Frederick Bruce Langridge.

3. The facts as found by the Magistrate are not in dispute. In early September 1984 the appellant was interested in purchasing the Royal Hotel at Yass in New South Wales. In order to raise the purchase price in Canberra he had to dispose of an interest in another property in New South Wales. On Thursday, 6 September 1984 he approached Mr. Langridge and asked him for a loan of $10,000 in order to overcome a temporary difficulty caused by delay in the documents relating to the New South Wales property arriving in Canberra. Mr. Langridge arranged for an overdraft of $10,000 on his bank and a cheque for that amount was drawn by Mr. Langridge in favour of a firm of solicitors and handed to the appellant on Friday, 7 September 1984. It was agreed that the appellant would repay the $10,000 together with bank charges and any interest on the following Monday or Tuesday. On or after the Tuesday and several times thereafter Mr. Langridge made demands on the appellant for repayment of the money owing. On one occasion the appellant stated that he had required the moneys which the finance company had made available to him to be used for some other purpose. On some unspecified occasion prior to 16 October 1984 the appellant paid the interest outstanding at that date to Mr. Langridge.

4. On 16 October 1984 Mr. Langridge received a cheque in the sum of $10,000 drawn on the account of the appellant at the National Australia Bank, Yass Branch. Mr. Langridge collected that cheque from the Royal Hotel at Yass where it had been left for him by the appellant. It was made payable to the Pot Belly, a name under which Mr. Langridge carried on business. Mr. Langridge paid it into his bank account the following day. He received notice on 23 October 1984 that the cheque had been dishonoured. It was held by the learned Magistrate that the passing of the cheque for $10,000 involved a deception on the part of the appellant in that he acted recklessly, with indifference as to whether the cheque would or would not be met upon presentation.

5. The only issue for determination upon this appeal is whether the evidence leads to the conclusion that, as a result of the deception, the appellant obtained a financial advantage within the meaning of s. 178C (1). The question, in my view is one of mixed law and fact. It is not necessary to demonstrate error on the part of the Magistrate. The appeal is by way of rehearing upon the evidence in the court below: Magistrates Court Ordinance 1936 s. 214, s. 218.

6. It was put on behalf of the respondent informant, and it was not contested, that the appellant had by his deceptive conduct secured the deferral of the payment of a debt duly owing by him. It was further put on behalf of the respondent, that proof of deferral of the payment of a debt is, without more, sufficient proof of obtaining financial advantage. Reliance was placed on a decision of the House of Lords, Director of Public Prosecutions v. Turner (1973) 3 All E R 124. In that case the respondent was charged with an offence against s. 16 of the English Theft Act 1968. The section provided as follows:

"1. A person who by any deception dishonestly

obtains for himself or another any

pecuniary advantage shall on conviction on

indictment be liable to imprisonment for a

term not exceeding 5 years.

2. The cases in which a pecuniary advantage

within the meaning of this section is to be

regarded as obtained for a person are cases

where -

(a) any debt or charge for which he

makes himself liable or is or may

become liable (including one not

legally enforceable) is reduced or in

whole or in part evaded or

deferred . . . . "

"It was strenuously argued that a penniless man

can obtain no advantage, pecuniary or other, by

evading his debt or by getting it reduced or deferred

because he could not have paid any of it in

any case. That might be a forceful argument if

obtaining a pecuniary advantage in fact were a

necessary element in the offence here charged.

But if in the circumstances of this case a

pecuniary advantage is deemed to have been

obtained, then it need not be proved and its

absence in fact is no defence".

8. With respect to his Lordship, it seems to me that those words are not only true, but they underline the distinction between the English legislation and the statutory provisions with which this appeal is concerned. It is perhaps debatable whether s.16 (2) of the English legislation is a "deeming" provision. Perhaps it is more accurate to say that it defines the term "pecuniary advantage" for the purposes of sub-section (1). In any event, for the purpose of proving an offence under the English legislation, proof of the deferral of a debt is, by force of the statute itself, sufficient proof of obtaining a pecuniary advantage. In this Territory the prosecution has to prove that the appellant obtained a financial advantage. There is no similar deeming, defining or facilitating provision in s.178C (1) of the Crimes Act.

9. The respondent also relied upon the decision of the Victorian Court of Criminal Appeal in R v. Smith (1982) 7 A Crim R 437. The legislation there was in similar terms to s. 178C (1). It is true that there are passages in the judgments in that case which are capable of bearing an interpretation that the evasion of a debt to which the accused was liable constituted a financial advantage. A close reading of the case, however, discloses that the question in issue was whether the appellant was guilty of a deception. The question of whether of not he had obtained a financial advantage was not raised as an issue.

10. The particular question of whether a person passing a valueless cheque in purported discharge of an antecedent debt obtains a financial advantage was considered by Gray J. in the Supreme Court of Victoria on a stated case in Matthews v. Fountain [1982] VicRp 104; (1982) VR 1045. The way in which the particular question arose on the facts enabled his Honour to answer the question quite succinctly. The facts were that the appellant carried on a business in the course of which he employed a lady to work for him. At the end of the first two weeks of her engagement the appellant dishonestly purported to pay the lady by means of a valueless cheque. The lady continued to work for the appellant for another four weeks, during which the cheque was dishonoured.

11. On these facts his Honour concluded that it was open to the judge at first instance to find that the appellant did obtain a financial advantage from his deception, and that apart from any advantage accruing from the evasion of the immediate obligation to pay wages, the lady continued to provide unpaid services for the appellant for longer than she would have but for the deception. In his Honour's view, the latter circumstance alone amounted to a financial advantage.

12. His Honour went on to accede to an invitation from counsel to express his opinion "more broadly than is required for the purpose of this particular set of facts". His Honour discussed a number of hypothetical situations and concluded at p.1050:

"What I have said does not alter the fact that

the prosecution has to prove that the defendant

obtained a financial advantage. This must be

established as a fact, beyond reasonable doubt, in

each case. What I am saying is that, in the

common place case, the obtaining of a financial

advantage is an inescapable inference from the

circumstances, regardless of the financial

position of the defendant".

13. The reference to the financial position of the defendant relates to the hypothetical example of the "penniless man" mentioned initially by Lord Widgery C.J. when Turner's case was before the Court of Criminal Appeal at (1973) 2 All ER 828 and by Lord Reid in the House of Lords in the passage referred to above. That concept is discussed at length in an article in (1977) 1 Crim LJ 188. In that article the author, Professor Lanham, discusses the example of a person who incurs a debt perfectly honestly but practises deception at a later stage in order to obtain relief from the creditor's claim. On page 193 the author observes that in a case of what he calls "unilateral evasion" the deceitful debtor gains nothing which he could not have obtained by outright refusal to pay or by keeping out of the creditor's way, and that where the debtor passes a valueless cheque, it is hard to see what financial advantage is obtained. The example of unilateral evasion is contrasted by the author with the situation where by deception the debtor secures the agreement of the creditor to reduce or forgive the debt. I think that there is force in the author's remarks.

14. In Matthews v. Fountain, Gray J. said at p 1050 that "there may be factual situations (although they are not easy to conjure up) in which it may be said that, despite the dishonest proffering of a valueless cheque, there was no financial advantage obtained". I agree. On the factual material before me, it seems that this is such a case. I conclude as a tribunal of fact that I have a doubt as to whether the appellant obtained any financial advantage when he left the valueless cheque for Mr. Langridge to collect at the Royal Hotel at Yass. I do not think that it is necessary to resort to dictionary definitions of the word "financial" or the word "advantage". I think that it is inescapable that an advantage involves a particular situation which is more beneficial to the person concerned than another relevant situation with which it is compared. A financial advantage involves a situation which from the financial aspect is more beneficial than another situation. When one speaks of obtaining a financial advantage by deception, there is imported in my view the notion of improving a financial situation by means of that deception. I am unable to see on the facts of the present appeal how it can be said that the appellant's financial situation was improved by his holding out to Mr. Langridge by means of the valueless cheque, that there were sufficient funds in the account to discharge his debt to Mr. Langridge. Weinberg and Williams in The Australian Law of Theft (1977) observe at p.145 that forbearance to sue on the part of the cheated creditor, even if only temporary, is itself a financial advantage. There was no forbearance in the present case. There was no reducing or forgiving the debt. Interest continued to accrue.

15. It was submitted on behalf of the prosecution that the appellant, by passing the valueless cheque, obtained the continuing benefit of the money that Mr. Langridge had previously lent him. This may be correct but I am unable to see how the retention of the continuing benefit on the facts of the case constitutes a financial advantage in any proper sense of that term. It is possible, I think, to conceive of factual situations where a debtor does obtain a financial advantage by deferring or avoiding the payment of a debt due by means of a deception. Some of them were mentioned by Lord Widgery C.J. in Turner's case and some are mentioned by Professor Lanham. I do not think that any purpose would be served by my attempting to add to those examples. Each case depends on its facts.

16. I should mention another aspect of the case which was not raised before the Magistrate or before me. The offence is alleged to have occurred in the Australian Capital Territory, without particularity as to exactly where in the Territory. It is desirable, in my view, that an information ought condescend to particularity as to the place of the commission of an offence, although failure to do so may not be fatal to the prosecution. Nevertheless, if thought had been directed in this case as to exactly where the offence was alleged to have occurred, the Court, as well as the parties, would have been on notice that the actus reus upon which the prosecution relied might not have occurred in the Territory at all, but at Yass in New South Wales. I express no decided view on the question whether the "obtaining" of a financial advantage, if it occurred, occurred within the Territory or not, but if it did not, then the Territory Courts lack jurisdiction to try the appellant.

17. For the foregoing reasons I find that the prosecution has not proved beyond reasonable doubt that the deception of the appellant resulted in his obtaining a financial advantage within the meaning of s.178C(1). The appeal is upheld, the conviction by the Magistrate and the penalty imposed are set aside and the information is dismissed. I shall hear the parties on costs.