Scanlan v Regina

Scanlan v Regina - [2006] NSWCCA 238 - NSWCCA 2006 case summary — Zoe

[17]

About a month after the death of Warren Thorley, Greg Brown, Kel Bandahari and Michelle Grainger each resigned. In evidence Mrs Thorley denied that she had terminated their employment or forced their resignations. Mr Begovic ceased employment in the business in February 2001. 9 It was the evidence of Mrs Thorley that she relied upon the appellant and Tim Begovic to explain to her the operating systems of the business. After Mr Begovic tendered his resignation in 2001 so that he could find employment closer to his home, Mrs Thorley offered the appellant a promotion involving further duties, including accounts receivable and payable, payroll, bank reconciliation and data entry into the accounting software program MYOB (Mind Your Own Business). Mrs Thorley said that a salary package of $47,578.94 per annum to commence from 7 February 2001 had been agreed between her and the appellant. An unsigned document was tendered which set out that arrangement. Included in the document was a condition that "Annual leave cannot be accrued". 10 After Mr Begovic resigned a couple of temporary accountants were employed and eventually Peter Hingerty was hired on a permanent part-time basis for two or three days per week. Mr Hingerty was an accountant and looked after the tax responsibilities of the business such as BAS and the end of year financial report. 11 Mrs Thorley described the bill paying procedure for the business. She would collect the mail and leave it on the appellant's desk. The appellant would prepare cheques and bring them to her with a "with compliments" slip of paper that stated "payment of invoice number ---" and the number and Mrs Thorley would sign the cheque. Mrs Thorley was the sole signatory of cheques for the business. Throughout the relevant period Mrs Thorley continued to sign cheques as they were presented to her by the appellant. 12 It was Mrs Thorley's evidence that the appellant had access to six bank accounts. The Thorley Laboratories account was the operating account for the business. Mrs Thorley saw the bank statements for the operating account when the mail was opened, but she never examined them closely. The payroll account was permanently on its overdraft limit of $180,000 and the principal account was also continually operated on an overdraft that went up and down to a limit of $250,000. From time to time Mrs Thorley put in her own money when the overdraft amounts became too high. 13 The business used the Commonwealth Bank's Quickline internet banking program. Mrs Thorley said the installation of the software was an administrative task with which she was not involved and that she did not really know much about it. She did not do the internet banking and was not issued with a password. Over the period 2001-2003 the appellant had hired three part-time members of staff to assist her in her work, the last being Lorraine Cox who stayed for about six months. 14 In September 2002 Mrs Thorley commenced preparations to move the administration and accounts of the business back to Queensland. It was her intention that the business start operating from Queensland from July 2003 at the commencement of the financial year. In September 2002 Mrs Thorley notified the appellant and Peter Hingerty that they would need to look for other work after the transfer. 15 In early 2003 Mrs Thorley's daughter, Rebecca Thorley, commenced working in the business. As part of the process of involving Rebecca in the family business, Mrs Thorley asked the appellant to teach Rebecca the various operating systems. These included the MYOB accounts payable and receivable, how cheques were prepared and the rudiments of the payroll system. Mrs Thorley did not want to be involved in the day to day running of the business. It was Mrs Thorley's intention to set up a satellite office at her home at Pymble and to keep only the files that pertained to directorship duties. Mrs Thorley did not offer the appellant a position in Queensland and on 9 May 2003 the appellant tendered her resignation giving one month's notice with a final working date of 6 June 2003. 16 The Sydney offices of Thorley Laboratories closed on Monday, 2 June 2003. Monday and Tuesday were spent packing and shipping and on Wednesday 4 June, the appellant, Rebecca and Mrs Thorley commenced setting up the office at the Thorley's Pymble home. 17 On the morning of 4 June, Mrs Thorley telephoned the Commonwealth Bank to request a statement for the previous three days because the account systems had not been operating. She was advised by the bank that it could only provide a thirty-day statement which she agreed to. When the bank attempted to fax the statement for the last thirty days, the appellant came to Mrs Thorley and told her that there was a paper jam and that the fax had not come through. Mrs Thorley asked her daughter, Rebecca, to stand at the fax machine to make sure that it did not jam again while she contacted the Commonwealth Bank to request that the fax be resent. Mrs Thorley then left the home for an appointment to have her car serviced. Mrs Thorley's evidence (disputed by the appellant) was that the appellant had tried to dissuade her from having the bank fax the statement. 18 It was Mrs Thorley's evidence that while at her appointment at Brookvale, she received a call on her mobile phone from the appellant. The appellant said that she had to talk to her urgently: "I have to talk to you. It's urgent, I have to talk to you now. I've stolen some money from the company". Mrs Thorley replied "You mean you stole some money, what do you mean?" The appellant said "Yes I have, I was desperate, you wouldn't understand, I was very desperate, I had nowhere else to go. Look, it doesn't matter now, I was just desperate, you'll find out anyway, I have to tell you." Mrs Thorley: "How much did you steal?" Appellant: "Oh around $90,000". When Mrs Thorley asked her to come back to Pymble to discuss the matter the appellant said: "No, I can't face you. I can't look you in the eye again". Mrs Thorley again asked her to return to which the appellant replied: "No, I cannot come back, I won't do that, I can't look you in the eye." The phone call then terminated abruptly. 19 The appellant denied making any admissions. She agreed that she had made such a phone call but said that the only reason she phoned Mrs Thorley at that time was to tell her that she would not be doing any more work in the business. When asked in cross-examination why she did not give that information to Mrs Thorley face to face, the appellant responded that she thought Mrs Thorley was trying to set her up when Mrs Thorley requested the thirty-day statement from the bank. 20 It was Mrs Thorley's evidence that after she had tried unsuccessfully to call the appellant back, she called her company lawyer, David Heidtman. That conversation dropped out so she tried unsuccessfully to call him back. She then had an incoming call which she answered by saying "Is that you David?" It was Mrs Thorley's evidence that it was the appellant who was making the incoming call and who responded: "No, it's Lynn, Blanca". When Mrs Thorley explained that her call to David Heidtman had dropped out, the appellant said: "Why did you call him?" Mrs Thorley: "Well Lynn, he's the company lawyer, you've just said you've stolen $90,000, I don't know what to do." The appellant became angry and said: "Why did you call him, there is nothing to say, I told you there is nothing to be done anymore." Mrs Thorley: "Yes there is, there's a lot to be done. This needs to be explained, this is an enormous amount of money, you can't just walk away from this." The appellant: "I told you. There's nothing to be done." The call then terminated abruptly. 21 The appellant agreed that she had telephoned Mrs Thorley a second time but denied that any conversation in those terms took place. 22 Mrs Thorley said that as she was driving back to Pymble she received other calls from the appellant on her mobile phone. The appellant was angry that Mrs Thorley had called the lawyer and said that she was stupid to have done so. It was Mrs Thorley's evidence that the appellant "kept on saying she was desperate, really desperate, she had nowhere to turn. And I had plenty of money, I wouldn't miss it." The appellant denied the contents of this conversation. 23 When Mrs Thorley returned to her Pymble home, she examined the thirty-day bank statement and discovered that over and above her salary there were five transfers of money from the business to the appellant totalling $18,646.70 during that period. It was Mrs Thorley's evidence that she did not have any knowledge as to why those amounts had been transferred and that she had not authorised them. 24 Mrs Thorley subsequently obtained from the Commonwealth Bank statements for previous years. Mrs Thorley engaged an accounting firm to audit the business records. The accountant, Peter Hingerty was involved in that audit process. Mr Hingerty prepared a spreadsheet from the results of the audit which Mrs Thorley took to the police (exhibit A). 25 It was the appellant's case at trial that between 2001 and 2003 she had transferred in excess of $384,000 from the business accounts to herself and that she had disguised such transfers as payments to suppliers. (Counts 2, 4 and 6.) She agreed that she had a gambling problem and had spent approximately half of that money on poker machines. The appellant said that she had the permission of Blanca Thorley to transfer those amounts of money and that she had been told by Blanca Thorley to disguise the transfers as legitimate payments to suppliers in the accounts of the business. In other words, the appellant and Mrs Thorley had conspired to hide from the accountants these transfers and to also hide from the accountants the payment by the business of Mrs Thorley's personal expenses. 26 From the appellant's point of view, therefore, the case was conducted by way of a concerted attack upon the credit of Mrs Thorley. It was sought to establish that Mrs Thorley was experienced in financial matters and was well aware of the transfers of money from the business accounts to the appellant. It was suggested that Mrs Thorley had been using monies from the business for her own personal affairs including the construction of a house. It was alleged that it was necessary to hide such matters from the accountants in order to prevent tax repercussions. 27 Detective Senior Constable Darren Evans gave evidence in the Crown case. He had executed search warrants on the Commonwealth Bank in relation to the appellant's bank account and had also executed a search warrant in relation to the appellant's Mastercard account. He had relied very heavily upon the spreadsheet prepared by Peter Hingerty. After the appellant was arrested on 4 September 2003, he had participated in the ERISP. 28 Peter Hingerty gave evidence in the Crown case. His evidence was that Mrs Thorley contacted him in June 2003. As a result he went to Brisbane and spoke to the manager of the business in Brisbane, the external accountant and to suppliers. He then examined the books of the business. He identified approximately 127 transactions which were not bona fide. He identified three methods of disguising the transactions. The first method was the entry of false invoice numbers, using the sequence that the particular supplier used, drawing a cheque for the false amount which would be signed by Mrs Thorley, then destroying the cheque and transferring the money via an electronic funds transfer (EFT) to the appellant's account.

[19]

The third method was to place false expenses such as "printing and stationary" into the cashbook and to transfer the relevant amount to her account. 29 Because the transfers were by EFT, the bank program did not specify to whom the amounts were being paid until statements were obtained from the bank. It was the opinion of Mr Hingerty that it would have been fairly difficult without a full audit to pick up what the appellant had been doing. Mr Hingerty described the method used as "a very complex structure that she'd put in place to do this". 30 Mr Hingerty had identified another area where there were unjustified payments to the appellant. This was through the payroll in relation to holiday pay. The business used the MYOB program for its payroll. The payroll automatically calculated entitlements for annual leave and holiday pay triggered by the number of hours worked. Mr Hingerty calculated that the appellant had overpaid herself in relation to holiday pay by an amount in excess of $12,000 (count 8). 31 A spreadsheet for this count prepared by Mr Hingerty was tendered in the Crown case (exhibit P). This set out how the overpayment of holiday pay had been calculated by him. 32 When he was actually working for Thorley Laboratories, Mr Hingerty had observed that some of the personal expenses of Mrs Thorley were being paid from the company account. At the end of each year he would review all of the accounts and transfer to Mrs Thorley's loan account any items which looked out of place or did not look like company expense and were found to be personal expenditures of Mrs Thorley. It was his evidence that Mrs Thorley had a very limited knowledge of accounting procedures, no previous business experience and very little knowledge of how the business ran. Mr Hingerty estimated that Mrs Thorley had transferred somewhere between $350,000-$400,000 from her personal funds into the business in order to keep the business within its overdraft limits. He agreed in cross-examination that he had raised with Mrs Thorley on several occasions that she ought not use business funds to pay personal accounts. 33 Timothy Begovic gave evidence in the Crown case. He was a qualified accountant who worked in the business until February 2001 when he left for family reasons. His evidence was that at no time had he been instructed by either Warren or Blanca Thorley to misrepresent the business accounts. In chief he described Mrs Thorley's command of the business as "limited at best". In cross-examination he agreed that Mrs Thorley had had some involvement in the business in that occasionally she would come onto the premises and use Mr Thorley's office. After Mr Thorley went into hospital, she had a large involvement in the business. He was aware that Mrs Thorley had had some involvement in the dismissal of two employees accused of fraud in the late 1990's, but he was unaware of the extent of that involvement. He knew that Mrs Thorley had interviewed persons applying for positions in the business. 34 Mr Begovic recalled a meeting in about December 2000 after Mr Thorley's death when Mrs Thorley had instructed him to pay all of her personal expenses through the company for the time being. He did not regard that as an unusual request since the business was privately owned and there were no public shareholders at risk. He explained that those personal expenses were accounted for in the following way: He would meet with Mr Thorley at the end of a financial year and Mr Thorley would determine how much he was prepared to pay fringe benefits tax on and how much he was prepared to refund via his main account, which were accrued distributions unpaid and also monies placed into the business from personal funds. To his knowledge there was nothing unlawful in what Mr Thorley was doing. He assumed that Mrs Thorley would follow the same practice. 35 He agreed that the appellant in his experience was a dedicated worker and had not done anything during the time that he was working in the business which indicated any dishonesty. 36 The appellant gave evidence. She said that Mrs Thorley had been quite active in the business before the death of Mr Thorley. She said that she had tendered her resignation not long after Mr Thorley's death but that Mrs Thorley had persuaded her to withdraw it with promises of promotion and a significant pay rise. 37 She said that Mrs Thorley was familiar with the banking system used by the business, that she was familiar with the MYOB system and that she frequently used the appellant's computer. 38 The appellant agreed that the monetary amounts in the 127 bogus entries identified by Mr Hingerty had been transferred to her account but said: "Blanca Thorley wanted to put me on a wage package that previous employees had been on and it just happened Blanca said to me just transfer money to your account."

[20]

The appellant gave evidence of a number of conversations to that effect between April and June 2001. 39 The appellant gave evidence that she and Mrs Thorley made up false names for contractors, which they then inserted in the MYOB system. This enabled payments to be made to Mrs Thorley personally and to the appellant in such a way as to appear to be proper expenses of the business. She described her relationship with Mrs Thorley as that of "very good friends". She had been working for the Thorleys since December 1995 when she commenced employment with XL Tech. She said that she genuinely believed that she was entitled to the holiday pay which she had allocated to herself and that at no time did the MYOB system indicate that she had overpaid herself in respect of holiday pay. 40 As indicated, her version of events concerning 4 June 2003 and in particular the contents of phone calls differed significantly from that of Mrs Thorley. She denied making any admissions as to taking money without authorisation. Otherwise she agreed with some of the evidence of Mrs Thorley as to some of the things said in those conversations although the effect of the conversations on her evidence was quite different. 41 The appellant agreed that she had developed an addiction to poker machines between 2001 and 2003. She denied that she had lost touch with reality when she was putting money into the machines and denied that she needed to keep taking money from the business to support her addiction. She denied that she had taken advantage of Mrs Thorley's inexperience in running the business to siphon off money for her gambling addiction. 42 Michelle Grainger gave evidence in the appellant's case. She had commenced working for XL Tech when she was 21. She had worked there fulltime until the end of 1993. Thereafter she worked part time in the business between 1994 and 1997 and between 1998 and 2000 until approximately three months after Warren Thorley died. Her evidence was that Mrs Thorley had occasional input into the business, sometimes from home and sometimes in the office, mostly to do with marketing issues and sometimes office administration. Mrs Thorley had interviewed staff for positions, generally conducting the first interview with Mr Thorley conducting the second interview. In the brief period that she had continued working after the death of Mr Thorley, she saw the appellant provide Mrs Thorley with cheques to sign accompanied by invoices and supporting documents. She had seen Mrs Thorley reading bank statements regularly and using computers.

[22]

(a) "Lies" direction 43 The appellant submits that his Honour's direction as to lies in his summing up was tantamount to excusing perjury in that the principal witness for the Crown, Mrs Thorley, clearly told lies. This submission was made against the background of the defence case that Mrs Thorley had been involved in disguising personal transactions as business expenses and that she had consented to the appellant taking money from the business in that context. A specific issue was whether Mrs Thorley had been spoken to by Mr Begovic about such conduct and at trial it had been submitted on behalf of the appellant that Mrs Thorley's evidence was at odds with that of Mr Begovic. 44 There is no substance to the submission. His Honour gave full and comprehensive directions concerning how the evidence of witnesses should be assessed, in particular the standard direction as to whether the jury could accept all or part only of a witness's evidence. Not only did his Honour specifically cover the situation where the jury might find that a witness had lied about a particular issue, but specifically dealt with some of the conflicts or apparent conflicts in the evidence which had been drawn to their attention in the submissions of counsel. 45 In relation to the specific conflicts of evidence which had been drawn to the jury's attention, his Honour pointed out that this may not necessarily mean that the persons giving evidence were telling lies but may indicate that people recollect events differently, that some witnesses have poorer memories than others and that some witnesses may perceive the same facts differently. His Honour indicated that the direction applied generally but also in relation to particular matters which had been raised by counsel in respect of both the appellant and Mrs Thorley. 46 In this context his Honour gave as an example the difference between the evidence of the appellant at trial relating to the involvement of Mrs Thorley in the business before the death of Mr Thorley and the answers of the appellant in her ERISP. His Honour gave that as an illustration of how a person's perceptions can change with the passage of time. In the circumstances this was a very favourable direction from the appellant's point of view. 47 No error has been identified in this aspect of his Honour's summing up.

[30]

Ground 2 - Bianca Thorley committed perjury or perverted the course of justice. 66 A fundamental issue at the trial was whether Mrs Thorley had authorised the taking of monies by the appellant from the business. The matters raised by the appellant in support of this ground of appeal do little more than canvass matters which were fully ventilated at trial. 67 The question of whether admissions were made by the appellant in telephone conversations with Mrs Thorley on 4 June 2003 was fully explored. Contrary to the appellant's submission the telephone records of both Mrs Thorley and the appellant (exhibit C) are consistent with Mrs Thorley's evidence and do not derogate from it. Those records show that the appellant made nine calls to Mrs Thorley between 12.30pm and 2.33pm. The calls at 12.36pm (9 minutes) and 1.55pm (9 ½ minutes) are consistent with Mrs Thorley's evidence. Mrs Thorley's mobile phone records show two calls to her solicitor at 12.58pm (5 minutes) and 1.05pm (12 ½ minutes) which is also consistent with her evidence. 68 The appellant submits that the statement to the police by David Heidtman (Mrs Thorley's solicitor) to the police is false. The appellant has referred to some of the matters in that statement. The appellant submits that her counsel at the trial erred in not tendering that statement as part of her case. 69 It is clear from the submission itself and the affidavit of the appellant's counsel that full disclosure of the statement had been made to the appellant and to her legal advisers before the trial. Since the statement did not go into evidence at trial, it is not before this Court. Even without seeing the statement, it is easy to surmise why it was not introduced into evidence in the appellant's case. While there might have been some things in the statement which assisted the appellant, if as I suspect it contained a record of hearsay admissions by the appellant, not only would it have strongly supported Mrs Thorley's evidence if it had been tendered it would have seriously damaged that of the appellant. 70 The appellant submits that a witness, Lorraine Cox, was available to give evidence and that had she been called in the appellant's case she would have given evidence as to Mrs Thorley's extensive knowledge of the banking system. The appellant criticises her counsel at trial for failing to call this witness. 71 This matter has been specifically dealt with in the affidavits of the appellant's solicitor at trial, Ms Tipper, and her counsel, Mr Fliece. Both depose that they were told by the appellant that Lorraine Cox did not wish to be involved in the matter. Annexed to the affidavit of Ms Tipper is an email from the appellant to that effect. 72 The appellant also submits that the evidence as to false cashbook entries and false invoices was fabricated and that this matter was not properly put before the jury. That submission is not supported by the way in which the trial was conducted. There was no issue that there were false invoices created by the appellant which were linked directly to the payments from the business into her bank account. Most of the source documents tendered were not disputed. 73 This ground of appeal is not made out.

[33]

Ground 5 - Incompetent representation resulting in a miscarriage of justice. 79 The appellant submits that she was incompetently represented, both by her solicitor and by her counsel. She says that she only met her counsel for the first time about two weeks before the trial commenced. She submits that important documents were not subpoenaed on the basis that the cost could not be justified. She submits that several potential defence witnesses were not interviewed despite full contact details being provided. The appellant is critical of the cross-examination by her counsel in that he did not properly put the mobile phone records to Mrs Thorley, that he did not properly use the appellant's original tax group certificates which showed authorisation by the business for holiday pay received by the appellant, that he did not properly use the MYOB certificates which showed that the appellant only did a beginner's course on that system and that he did not properly use written statements from former employees which were available to him. 80 The relevant principles were discussed by this Court in R v Birks (1990) 19 NSWLR 677 at 684: "It sometimes happens that a person who has been convicted of a crime seeks to have the conviction set aside on the ground that counsel at the trial has acted incompetently, or contrary to instructions. It is well settled that neither of these circumstances will, of itself, attract appellate intervention. At the same time the courts acknowledge the existence of a power and duty to quash conviction in some cases. The difficulty is to find, in the authorities, a formula which adequately and accurately defines the class of case in which a Court of Criminal Appeal would intervene. A common theme running through the cases, however, is that such intervention is a matter about which the courts are extremely cautious … The relevant principles may be summarised as follows: 1. A Court of Criminal Appeal has a power and a duty to intervene in the case of a miscarriage of justice, but what amounts to a miscarriage of justice is something that has to be considered in the light of the way in which the system of criminal justice operates. 2. As a general rule an accused person is bound by the way the trial is conducted by counsel, regardless of whether that was in accordance with the wishes of the client, and it is not a ground for setting aside a conviction that decisions made by counsel were made without, or contrary to, instructions, or involve errors of judgment or even negligence. 3. However, there may arise cases where something has occurred in the running of a trial, perhaps as the result of "flagrant incompetence" of counsel, or perhaps from some other cause, which will be recognised as involving, or causing, a miscarriage of justice. It is impossible, and undesirable, to attempt to define such cases with precision. When they arise they will attract appellate intervention." (Gleeson CJ) 81 In her affidavit Ms Tipper deposed that the Legal Aid Commission had involvement with the appellant from the time of her committal in 2004. Ms Tipper was involved and received further instructions from the appellant from February 2005. The appellant continued to work in other employment right up to the commencement of the trial. Ms Tipper said that instructions were communicated to counsel as and when they were received from the appellant. By the time counsel and the appellant had their first conference, counsel was already aware of the contents of the brief and of up to date information provided to Ms Tipper by the appellant. 82 In the course of the trial there was never a suggestion by the appellant's legal representatives that there was insufficient time to prepare the trial or that they had any difficulty in that regard. The transcript of the trial strongly suggests that counsel was at all times prepared and cognisant of the relevant issues. The only occasion he asked for some time was to interview the witness Michelle Grainger. 83 The appellant's submission as to the issue of subpoenas is not supported by the affidavits of Ms Tipper and Mr Fliece. A subpoena was issued to the accountants in Brisbane. The difficulty was that the documents described by the appellant either did not exist or could not be found. Accordingly, compliance with the subpoena was abandoned. Cost was not an issue. Ms Tipper also expressed the opinion that the appellant's trial was not prejudiced through the absence of the documents in that they related to a peripheral issue involving Mrs Thorley's credit. 84 In relation to the alleged failure to interview and call witnesses, the position in relation to Lorraine Cox and Pauline Stanley has already been dealt with. The appellant told Ms Tipper that another potential witness, Sally Woods, was scared to be a witness. Another witness, Catriona Duncan, was subpoenaed and interviewed but was not called because she worked in the business between 1992 and 1996. The only other witness nominated by the appellant, Michelle Grainger, gave evidence. 85 The criticism of the cross-examination by Mr Fliece at trial is not justified. As indicated the mobile phone records were an exhibit, there was evidence that the appellant had only limited training on MYOB and there was no dispute that the group certificates showed that the appellant had some holiday leave entitlement. 86 This ground of appeal is not made out.

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