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[2014] ACTSC 47
General information, not legal advice.
Supreme Court of the ACT
2014-03-07
Murrell CJ
Original judgment source is linked above.
(1) Use false document - Not guilty
(2) Attempt to obtain financial advantage by deception - Guilty
CRIMINAL LAW - Using false document - accused provides quotation to insurance company in name of third-party for work done by himself
CRIMINAL LAW - Attempting to obtain financial advantage by deception - accused provides invoice to insurance company in name of third-party for work done by himself
Crimes Act 1900 (NSW) s 178C
Criminal Code 2002 (ACT) ss 35, 38, 44, 300, 302, 325, 332, 344, 347
Evidence Act 2011 (ACT) s 184
Bradley v Lamborn [2013] WASC 30
Elias v The Director of Public Prosecutions [2012] NSWCA 302
Garry Ronald Fisher v Peter James Bennett [1987] ACTSC 27
Matthews v Fountain [1982] VicRp 104; [1982] VR 1045
Peters v The Queen [1998] HCA 7
Re London and Globe Finance Corporation Ltd (1903) 1 Ch 728
SAJ v The Queen [2012] VSCA 243
Sayed v The Queen [2012] WASCA 17
Walsh v The Queen (1990) 52 A Crim R 80
1. On 29 July 2013 the accused elected to be tried by a judge alone. He filed a certificate from his legal practitioner stating that the practitioner had advised him in relation to the election and that he had made the election freely.
2. The accused pleaded not guilty to the following offences:
3. I set out the principles of law that I apply and the findings of fact that I make for the purpose of arriving at a verdict.
4. The charges are being heard together as a matter of convenience. Each charge is to be considered separately and a separate verdict is to be returned on each of charge.
5. The prosecution has the task of proving the guilt of the accused beyond reasonable doubt. The accused is presumed to be not guilty of each charge unless and until the prosecution proves him guilty beyond reasonable doubt. Suspicion must play no part in my function as the judge of the facts. If I feel that the accused may be guilty and even if I feel that he probably is guilty, as long as I have a reasonable doubt about his guilt on a charge, I must return a verdict of not guilty on that charge.
6. The prosecution does not have to prove the truth of each statement of each prosecution witness. What the prosecution must prove beyond reasonable doubt is each legal element or ingredient of a charge and the essential facts necessary to establish each legal element.
7. In making findings of fact I must rely upon the evidence, i.e. the evidence given by the witnesses and the evidence contained in the exhibits. I must apply my common sense.
8. The prosecution case is that the accused made an insurance claim for water damage to the kitchen of his residence at 7 Winder Place, Charnwood (the premises). In support of the claim, on 9 October 2007 the accused provided the insurance company, Hollard, with a quotation for repairs (the quotation) that purported to emanate from Brendan Hancock Building, but which was not produced or authorised by Brendan Hancock (count 1 - dishonestly use false document). On 29 May 2008, the accused provided Hollard with an invoice in the name of Brendan Hancock Building Pty Ltd (the invoice). The invoice implied that the approved work had been completed in accordance with the quotation, but the work had been undertaken by the accused himself (count 2 - attempt to obtain financial advantage by deception). The claim was not paid.
9. As a matter of practical reality, in this trial I must be satisfied beyond reasonable doubt of the following contentious matters:
10. Pursuant to s 184 of the Evidence Act 2011 (ACT), in a document dated 2 March 2014, the accused admitted the following matters of fact:
11. In a document dated 5 March 2014, the accused admitted the following additional matters of fact:
12. In admitting these matters, the accused understood that the admissions could be used against him in the trial as proof of each of the matters admitted.
13. Brendan Hancock gave evidence that he had known the accused since 2005 or 2006. He was a qualified carpenter. Prior to 2007, he had undertaken subcontractor work for the accused's company, Total Tiling, over a period of about two months. Thereafter, he did some small jobs for the accused. In cross-examination he was reminded that with the accused he had undertaken the moderately substantial job of removing an old kitchen and installing a new kitchen at Deakin House, Deakin.
14. Mr Hancock further said that, in about September 2007, the accused asked him to inspect water damage to the kitchen of the premises. Having inspected the damage, Mr Hancock said that he was willing to fix it and that the cost would be "a couple of thousand dollars roughly". The accused showed him a quotation (similar to the quotation given to Holland) that contained Mr Hancock's details, including his ABN number. The accused stated that he would forward that document to the insurance company so that work could commence. During the conversation, Mr Hancock felt uneasy about doing the work, but he did not say so. Mr Hancock did not recall the whole of the conversation at the premises.
15. Mr Hancock said that he had nothing to do with preparation of the document and he would not have prepared a document in a similar form because the document was typed and Mr Hancock wrote quotations by hand.
16. Mr Hancock disagreed with the suggestion put to him in cross-examination that, when he was shown the quotation document, he told the accused that the price of $20,422 was a figure that would be necessary to complete the work at the premises, and that he said that the figure "looked about right" or was "about right for installing a brand new kitchen".
17. Mr Hancock agreed in cross-examination that, when he spoke to the insurance investigator in mid-2008, he made the following statement:
Brendan Hancock Building, my signature was on that. I did have a quick look over it, because I thought the figures were right for a brand new kitchen to be made up by a kitchen company, and then he goes, "Let me deal with it, let me deal with it. It will be okay." I said, "Okay", because I trusted him. What a mistake that was.
18. Mr Hancock also agreed in cross-examination that he had answered the investigator in that way because at that stage he recalled that he had signed the quotation, thinking that the figures were about right for a brand new kitchen. He accepted that, if he had put his signature to the quotation, it was because he was prepared to undertake the work.
19. At about the time that the accused produced the quotation document to him, Mr Hancock became aware that the accused had an old kitchen at the premises that had been purchased at an auction and that the accused wished to use the second-hand kitchen to effect repairs to his own kitchen.
20. Mr Hancock was only 21 in September 2007. He was living at home with his parents. He described himself to the investigator as "young and naive". Rather than saying "no" as soon as the accused proposed submitting the quotation in his name, Mr Hancock went away to think about it. He sought the advice of his father and another older man.
21. According to Mr Hancock, it was a couple of days after the accused showed him the quotation (although he does not recall the precise timing) that he spoke to the accused and told him that he did not want to be involved. Thereafter, the accused called Mr Hancock several times, asking him to proceed with the work. Mr Hancock refused. Eventually, Mr Hancock declined to accept calls from the accused.
22. In cross-examination, Mr Hancock conceded that he agreed initially to do the repairs but later changed his mind.
23. Mr Hancock said that he had no involvement in submitting the quotation to the insurance company.
24. Hollard authorised the work to proceed. The authorisation dated 7 November 2007 was addressed to Brendan Hancock Building (Exhibit 6) and sent to a facsimile machine at the home of Mr Hancock's parents. The authority did not come to the attention of Mr Hancock. When it was not being used to send outgoing facsimiles, the facsimile machine was usually turned off.
25. The accused told Mr Hancock that he intended to start up his own company, but by that stage Mr Hancock did not want to do further work with the accused.
26. The invoice in the name of Brendan Hancock Building Pty Ltd did not come to the attention of Mr Hancock until police showed it to him. None of the details on that document (including the address, telephone details and ABN number) bore any connection to Mr Hancock.
27. Mr Detheridge, the insurance loss adjuster who inspected the premises on behalf of Hollard, gave evidence that he prepared a scope of works document in relation to the damaged kitchen. He provided a copy of the scope of works document to the accused. He invited the accused to submit a quotation from his preferred repairer. Mr Detheridge himself obtained quotations from Accurate Design, A and A and Lemons Floorcoverings. After the work was authorised, progress appeared to be tardy. As a result, in about April 2008, Mr Detheridge telephoned the accused. The accused said:
That the work was progressing well and looks fantastic... [Mr Oettinger] advised that the repair invoice would be available in the near future.
28. Mr Dietheridge returned to the premises and satisfied himself that the work had been completed in accordance with the scope of works.
29. On about 1 July 2008, Greg Hancock, an insurance investigator, spoke to the accused. There was a conversation to the following effect.
Mr Hancock: Why is the company name in Brendan Hancock's name because I have information that Brendan Hancock did not know anything about it?
Accused: He was a partner in the business but he resigned.
30. On 5 July 2008, the accused sent an email to Greg Hancock (Exhibit 11) in which he stated:
I have contacted the tradesmen concerning the joinery and and [sic] the electrical and the plumbing for the kitchen unit and have asked them to specifically fax you with copies of the work carried out and their license numbers. I believe this is more detailed than the standard invoice and should hopefully clarify things for you...
31. It was not suggested that any prosecution witness had deliberately lied.
32. The accused suggested that Mr Hancock had "downplayed" the extent to which he had worked with the accused and that the reliability of his other evidence was therefore doubtful. It was suggested that he was mistaken about some matters.
33. I found Mr Hancock to be an unsophisticated and forthright witness who was doing his very best to recall relevant matters. He readily conceded that his memory about some matters was poor. He admitted matters of which he was reminded during cross examination. These were matters about which I would not have expected him to have a good memory. I have no hesitation in accepting his evidence as reliable.
34. The accused gave evidence. He was not obliged to do so. He could have exercised his "right to silence." However, he decided to give evidence on oath and subject himself to cross-examination.
35. The accused said that the work undertaken on the kitchen corresponded with the scope of works provided by the insurance company, except that the kitchen doors were not stripped and re-varnished but were replaced.
36. He undertook most of the work himself, with the assistance of his father and a few mates, none of whom received monetary reward. He used materials that he had to hand, except for the floating floor that was installed (which he purchased at a discount from his employer and which was installed by a tradesperson), the electrical materials and the bench tops (which he purchased from Handy Kitchens in Sydney). He had purchased the carcass for the kitchen cabinets from a demolition site at Woden. The carcass was in "as new" condition.
37. The accused said that, at the relevant time and into 2008, he and Mr Hancock worked together on projects, mainly kitchen jobs, including a job at Deakin House. The accused would prepare quotations (because he had experienced in doing so), "run the quote past" Mr Hancock, source the materials and prepare the invoices. Payment would be made to Mr Hancock, who would cash the cheques and share the profits with the accused.
38. In relation to the quotation for the premises, the accused said:
We had done several projects before, as he gave evidence to, when he was working for me at Total Tiling, and then afterwards, mostly in 2007 and 2008, we then did several projects together. Now, because at that point in time I didn't have a company registered for me, all of that work was done under his name and all of invoicing through from [sic] him.
39. In relation to the work at his premises, the accused considered that the insurance company was "the client" because they had requested a quotation. He prepared a quotation in the usual way, and then telephoned Mr Hancock and asked him to come to the premises. He showed Mr Hancock a quotation that resembled the quotation and asked whether he agreed with the contents. Mr Hancock said that he did agree. He was "quite positive" about doing the work.
40. According to the accused, it was several months later, in late November or early December, that Mr Hancock telephoned him and said that he did not agree to do the work. The accused concluded that Mr Hancock
was concerned about taxation implications by running all of these jobs through his company... he wasn't registered for GST, and if we did too many big jobs it would kick him across.... I said, "Oh, that's okay. We can set up a company and we can run it through from there."
41. The accused gave evidence that at no time after that conversation did Mr Hancock indicated a willingness to do business with the accused.
42. The accused did not ask Mr Hancock whether he could use Mr Hancock's name in relation to forming the company. Mr Hancock was not involved in forming the company and was never associated with the company.
43. The principal place of business nominated for the company was 5 Swallow Street Dunlop. It was the address of Mr Irving, an acquaintance of the accused.
44. The accused agreed that he wanted to conceal from the insurance company that Mr Hancock was not doing the work and that he (the accused) was undertaking the work himself. He wanted to convey that the person who had quoted for the work had completed it. He expected to make a "commercial profit" from doing the work. He did not believe that he had dealt with the insurance company in a deceptive manner.
45. At page 76 of the transcript, the accused gave the following answers in cross examination:
Crown Prosecutor: And what did you expect the insurance company would understand from the sending of that invoice?
Accused: That it was still the original arrangement that was made.
Crown Prosecutor: Was the work undertaken in accordance with the original arrangement?
Accused: The scope of works was all done accordingly, but the actual people doing it had not.
Crown Prosecutor: Now, did you regard making that claim upon insurance to be dishonest?
Crown Prosecutor: Did you regard that the ordinary person would think that it was dishonest?
Accused: Well, for several years that was my entire focus of my business, to do these things. It's not like I was just some guy who never picked up a tool before or done any of this ... the work was carried out very well, very professionally ... And I thought, "Well, it seems reasonable." I had done the work, it was done professionally, so I should get paid for that.
Crown Prosecutor: And what did you think your entitlement was?
Accused: My entitlement was to the amount that they had agreed to pay when they authorised that quote.
46. I assess the accused in the same way that I assess any other witness.
47. I found the accused to be a glib witness who was moderately sophisticated. Generally, he appeared confident. However, when confronted with difficult propositions he hesitated and prevaricated. At times, he evaded admitting obvious wrongdoing. For example, when cross-examined about his admission 10 above, the accused made the following statements:
Crown Prosecutor: It's an admission to intending that the insurance company would have an incorrect view of matters?
Crown Prosecutor: Okay, and you have difficulty whether that amounts to deceiving on your part?
Crown Prosecutor: I suppose if someone operates on a basis of an incorrect understanding that you have caused them to have it would be fair to say that they had been deceived by you, wouldn't it?
48. There can be no doubt that the accused was prepared to engage in sharp practices for personal financial gain, without qualm.
49. I assess the accused to be a witness upon whose evidence the Court can place no weight. However, the fact that the accused lacked credibility as a witness does not strengthen the prosecution case. The prosecution is still required to prove its case beyond reasonable doubt.
50. Sections 332 and 347 are within Chapter 3 of the Criminal Code. Section 347 provides:
A person commits an offence if the person uses a false document, knowing that it is false, with the intention of -
(a) dishonestly inducing someone else to accept it as genuine; and
(b) because the other person accepts it as genuine, dishonestly -
Maximum penalty: 1 000 penalty units, imprisonment for 10 years or both.
51. "Dishonest" is defined in s 300 of the Criminal Code as follows:
(a) dishonest according to the standards of ordinary people; and
(b) known by the defendant to be dishonest according to the standards of ordinary people.
52. Section 302 in Chapter 3 of the Criminal Code provides:
In a prosecution for an offence against this chapter, dishonesty is a matter for the trier of fact.
(1) A document is false only if the document, or any part of the document, purports -
(a) to have been made in the form in which it is made by a person who did not make it in that form; or
(b) to have been made in the form in which it is made on the authority of a person who did not authorise its making in that form; or
(d) to have been made in the terms in which it is made on the authority of a person who did not authorise its making in those terms; or
54. The elements of the alleged offence under s 347 that the prosecution must prove beyond reasonable doubt are:
55. Elements 1 and 2. I am satisfied beyond reasonable doubt that the accused used the quotation in that he submitted it to Hollard, and that he used it intentionally. These elements are the subject of admission 4 above.
56. Element 3. In relation to the falsity of the quotation, the prosecution submitted that Mr Hancock did not authorise the submission of the quotation to Hollard. The prosecution submitted that, regardless of whether Mr Hancock authorised the submission of the quotation, the quotation was "false" in that it purported to be an "arms length" quotation from Mr Hancock but it lacked any independence. It purported to be formulated by Mr Hancock, but it was formulated by the accused.
57. I am not satisfied beyond reasonable doubt that Mr Hancock did not, by signing a document substantially in the form of the quotation, authorise the submission of the quotation to Hollard. His evidence in that regard was equivocal.
58. I accept that Mr Hancock's current recollection is that he withdrew from involvement in the arrangement within "a couple of days" of the accused showing him a form of the quotation (and, inferentially, before the quotation was submitted to Hollard). However, Mr Hancock admitted that his recollection was not complete and, after the passage of six or seven years, it could not possibly be complete. After such a long period of time, Mr Hancock could mistake a month for "a couple of days".
59. Element 4. To the extent that the quotation was false, the accused knew that it was false because he participated in every stage of its preparation and submission to Hollard.
60. Elements 5 and 6. In order to prove the factor of dishonesty in elements 5 and 6, the prosecution must prove both that the inducement/obtaining of gain was dishonest by the standards of ordinary people and that the accused subjectively realised that the inducement/obtaining of gain was dishonest by the standards of ordinary people.
61. In this case, it is not necessary to consider the element of "dishonesty" as it applies to elements 5 and 6. The accused admitted that he intended to induce Hollard to accept the quotation as genuine and to obtain a gain on that basis.
62. Because the prosecution has failed to prove element 3 beyond reasonable doubt, this offence is not proven.
Count 2 - Attempt to obtain financial advantage by deception
A person commits an offence if the person, by deception, dishonestly obtains a financial advantage from someone else.
Maximum penalty: 1000 penalty units, imprisonment for 10 years or both.
deception means an intentional or reckless deception, whether by words or other conduct, and whether as to fact or law...
(1) If a person attempts to commit an offence, the person commits the offence of attempting to commit that offence.
(2) However, a person commits the offence of attempting to commit an offence only if the person carries out conduct that is more than merely preparatory to the commission of the offence attempted.
(3) The question whether conduct is more than merely preparatory is a question of fact.
(5) For the offence of attempting to commit an offence, intention and knowledge are fault elements for each physical element of the offence attempted.
66. The elements of this offence that must be proved beyond reasonable doubt are:
67. The nature of the physical and fault elements for such an offence was discussed in Sayed v The Queen [2012] WASCA 17.
68. Elements 1 and 2. These elements are admitted and I find that they have been established beyond reasonable doubt.
69. Elements 3, 4 and 5. Although the accused maintained in his evidence that he had not perpetrated a deception, his counsel properly conceded that, from a legal perspective, the elements pertaining to deception were established.
70. The definition of deception in s 325 does not assist in determining what constitutes a deception. However, the meaning is well settled at common law. In Re London and Globe Finance Corporation Ltd (1903) 1 Ch 728 at 732, Buckley J stated:
To deceive is, I apprehend, to induce a man [sic] to believe that a thing is true which is false, and which the person practising that deceit knows or believes to be false.
71. In admission 10, the accused conceded that, in providing the invoice to Hollard, he understood that it may be taken incorrectly to have come from Brendan Hancock Building and he intended to have that effect, i.e. he intended that Hollard would believe that the invoice had come from Brendan Hancock Building. The accused had intentionally inserted into the invoice details that purported to relate to Brendan Hancock Building but that, in fact, related to the accused. Those details were intended to ensure that the insurance payout was made to the accused rather than Mr Hancock. There is no doubt that this was an intentional "deception".
72. The term "financial advantage" is not defined in the Criminal Code. However, it has been widely considered. It has been determined to have a plain meaning: Matthews v Fountain [1982] VicRp 104; [1982] VR 1045 per Gray J, Walsh v The Queen (1990) 52 A Crim R 80 per O'Bryan J, Elias v The Director of Public Prosecutions [2012] NSWCA 302 per Blanch J at [41] - [43], Bradley v Lamborn [2013] WASC 30 per McKechnie J at [114] - [116]. In Garry Ronald Fisher v Peter James Bennett [1987] ACTSC 27, Miles CJ considered an appeal in relation to a conviction for dishonestly obtaining a financial advantage by deception contrary to s 178C of the Crimes Act 1900 (NSW). At [14], his Honour said:
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.
73. There is no doubt that the insurance payout that the accused intended to obtain was "a financial advantage" to him. It represented a "commercial profit".
74. Element 6. The definition of "dishonest" in s 300 of the Criminal Code includes an objective component and a subjective component. These components reflect the common law test for dishonesty in R v Ghosh [1982] EWCA Crim 2; [1982] QB 1053 at 1064 (Ghosh).
75. In Sayed v The Queen [2012] WASCA 17 at [45], Buss JA (with whom Martin CJ and Hall J agreed) noted that in Peters v The Queen [1998] HCA 7 (Peters) the High Court decided that the Ghosh test would no longer apply under the common law of Australia, and that the reintroduction of the second component of the Ghosh test was deliberate. In SAJ v The Queen [2012] VSCA 243, Weinberg JA and Davies AJA (with whom Nettle JA agreed) at [114] noted that the decision in Peters had been strongly criticised, but applied Peters and held that, under the provision being considered in that case, the test of dishonesty was entirely objective. In relation to the test for dishonesty in the Criminal Code, the decision in Peters is of historical interest only.
76. I accept the submission of counsel for the accused that the relevant "dishonesty" relates to the end (of obtaining a financial advantage) rather than the means by which the end is obtained. It is possible that deceptive means are used, yet the end is not obtained "dishonestly".
77. The accused further submitted that, provided that the scope of works approved by an insurer is met, according to the standards of ordinary people it is not "dishonest" for a claimant to obtain an insurance payout in circumstances where the insurer believes that it is paying an independent tradesperson preferred by the claimant, but in fact the insurer is paying the claimant to undertake the work himself or herself and to make a "commercial profit".
78. As a matter of fact, I reject this submission. I am satisfied beyond reasonable doubt that ordinary people believe that insurers should only compensate loss, and should not be the unwitting vehicle for insured persons to make a "commercial profit". Further, I am satisfied beyond reasonable doubt that the accused was well aware that these are the standards of ordinary people. That is why he went to so much trouble to form and utilise the company Brendan Hancock Building Pty Ltd, and to convey the impression that Brendan Hancock had undertaken the approved work by utilising an invoice that had the general appearance of the quotation. When confronted by Mr Greg Hancock he failed to disclose that he had undertaken the work himself, and he forwarded an email stating:
I have contacted the tradesmen concerning the joinery and and [sic] the electrical and plumbing for the kitchen unit and have asked them to specifically fax you with copies of the work carried out and their license numbers...
79. This document was not the work of someone who believed that it was acceptable to ordinary people that he had done the work himself.
80. In the alternative, the accused argues that he acted under a "mistake of fact" in that he believed that he was entitled to the insurance payout.
(1) A person is not criminally responsible for an offence that has a physical element for which there is a fault element other than negligence if -
(a) when carrying out the conduct making up the physical element, the person is under a mistaken belief about, or is ignorant of, facts; and
(b) the existence of the mistaken belief or ignorance negates a fault element applying to the physical element.
(2) In deciding whether a person was under a mistaken belief about facts, or was ignorant of facts, the trier of fact may consider whether the mistaken belief or ignorance was reasonable in the circumstances.
82. A belief that one is entitled to an insurance payout is not a "mistake of fact". It is a mistake of law. Even if it was a mistake of fact, in this case the mistaken belief was not reasonable in the circumstances.
83. Mistake of fact has no application to the circumstances of the present offence.
84. In the alternative, the accused argues that he had a "claim of right" to the insurance funds.
(1) A person is not criminally responsible for an offence that has a physical element relating to property if -
(a) when carrying out the conduct required for the offence, the person is under a mistaken belief about a proprietary or possessory right; and
(b) the existence of the right would negate a fault element for any physical element of the offence.
(2) A person is not criminally responsible for any other offence arising necessarily out of the exercise of a proprietary or possessory right that the person mistakenly believes to exist.
86. Section 38 relates only to "an offence that has a physical element relating to property", i.e. it relates only to offences under Part 3.3.2 of the Criminal Code. The offence in question comes under Part 3.3.3.
87. Further, for s 38 to apply, the mistaken belief must apply to "a proprietary or possessory right". A right to obtain an insurance payout does not relate to any particular property or right to possession of any particular property.
88. Claim of right has no application to the present offence.
I certify that the preceding eighty-nine (89) numbered paragraphs are a true copy of the Reasons for Decision herein of her Honour, Chief Justice Murrell.
R
Oettinger [2014] ACTSC 47