Sinanovic v Regina

IN THE COURT OF CRIMINAL APPEAL 60330 OF 2001

STEIN JA O'KEEFE J BUDDIN J

1 STEIN JA : I agree with O'Keefe J. 2 O'KEEFE J: Hakija Sinanovic (the appellant) has appealed against his conviction on 25 May 2001 in respect of a charge laid under s 178A of the Crimes Act 1900. The conviction was by a judge of the District Court (the trial judge) who by consent heard and determined the matter without a jury. On 28 May, 2001 the appellant was sentenced to imprisonment for 18 months to commence on 2 April 2002 with a non-parole period of two months to expire on 2 June 2002. 3 The section under which the appellant was charged provides that: "Whosoever having … received any money … upon terms requiring him … to … pay to any person the whole or any part of : (a) such money … fraudulently misappropriates to his … own use or the use of another person, … such money or valuable security, shall be liable to imprisonment for seven years." 4 The indictment against the appellant alleged that: "Between 1 July 1995 and 30 November 1995 at Sydney in the State of New South Wales having received certain money, namely the sum of $27,800 upon terms requiring him, the said Hakija Sinanovic to pay the same by investing in the acquisition for Tina Ruello of an interest in a restaurant known as "Stella" fraudulently did misappropriate to his own use the said money in violation of the terms upon which he the said Hakija Sinanovic so received the said money." 5 The history of the matter is that the appellant had previously stood trial and been convicted for the same offence on an indictment in terms identical to that set out in paragraph 3 above. He appealed to the Court of Criminal Appeal, which set the conviction aside and ordered a new trial. No point was taken in relation to the form of the indictment either at the first trial or on appeal, nor was any adverse comment made by the Court of Criminal Appeal in relation to the form of the indictment. Likewise, at the second trial there was no demurrer to the indictment, nor was any point taken in relation to its form. At the end of the Crown case, a submission was made that the only evidence before the Court was "the entrusting of certain funds to the defendant with a view to his investing it" and that the Crown "have not shown the defendant was in any way dishonest … there is nothing to show any criminality on the part of the defendant.". It was not until amended grounds of appeal were filed on 25 February 2002 that any point was taken in relation to the form of the indictment. The amended grounds of appeal sought to raise an additional ground as follows: 3. That the court (sic) in the indictment did not disclose any offence under s 178A of the Crimes Act and accordingly was bad. 6 By notice of motion filed on 5 March 2002 the appellant gave notice that the court would be moved on the date fixed for the hearing of the appeal to substitute for the grounds of appeal already filed, grounds of appeal as follows: "1. The charge upon which the appellant was convicted was not a charge known to law. 2. His Honour erred in misdirecting himself as to the elements of the charge laid under s 178A. 3. His Honour erred in not entering a verdict of not guilty as requested, following the completion of the Crown case. 4. The verdict is unreasonable and cannot be supported by the evidence."

At the hearing of the appeal the fourth ground of appeal was said to be subsumed into grounds 1 to 3. 7 The facts as found by the trial judge were that at the times material to the charge there were four persons, who, as partners, were the owners of the Stella restaurant. They were Mrs Tina Ruello (as assignee of her son Massimo Ruello), Renato Falvo, Czaro Falvo and Josney Maruca. 8 Mrs Ruello, a lady of 78 years, had first met the appellant some ten years prior to 1994 or 1995. She came into closer contact with him again in either 1994 or 1995. At that time she was working as a cook at the Stella restaurant in Crown Street, Darlinghurst, and had been so working for approximately 18 years. The restaurant had originally been owned by four people, namely: Renato Falvo, Czaro Falvo, Johnny Maruca and Massimo Ruello, the son of Mrs Ruello. In either 1988 or 1989, Mrs Ruello's son was involved in a serious motor vehicle accident as a result of which he suffered brain damage. His share in the restaurant was later assigned to his mother who thereafter received a small income from the business. 9 The other three partners of the restaurant business were anxious to sell. The appellant was aware of this and discussed the prospective sale of the restaurant with Mrs Ruello. She was anxious to buy the restaurant and the appellant told her that they could buy it together as partners. At the time, Mrs Ruello had approximately $32,000 in savings in Australia and a further $26,000 in Italy. By various means the appellant convinced Mrs Ruello to give him $27,800 with which to buy out the other partners and thus gain ownership of the restaurant business. He also convinced her to arrange for her monies in Italy to be sent to an account which the appellant opened in Mrs Ruello's name, and to put the monies in the bank pending the finalisation of the purchase of the restaurant. In addition, he convinced Mrs Ruello to lend him $3,000. 10 Fortunately for Mrs Ruello, the savings she had in Italy did not come back to Australia in time for the appellant to receive them, but the other monies which had been paid by Mrs Ruello to him for the purchase of the restaurant were used by the appellant for his own purposes and lost to Mrs Ruello. Of the total of $30,800 which she had paid to the appellant, being $27,800 with which to purchase the shares of the other partners in the restaurant business and the loan of $3,000, all she received back was $1,500, although after she had requested the return of her monies, she was promised $15,000 to $18,000 by a specified date as a first instalment of the refund to be made by the appellant. 11 The trial judge detailed the means by which the appellant convinced Mrs Ruello to pay to him the amount of $27,800 for the purchase of the shares of the other three partners in the restaurant business. These means included opening the bank account referred to above. This was said to be so that the money from Italy could be transferred into it for the purposes of the purchase of the restaurant and, in the meantime, would be able to be pointed to as evidencing that she had money in the bank. This, he said, would be material to assist in the purchase. 12 Because the total amount required for the purchase was approximately two million dollars, Mrs Ruello asked where the rest of the money was to come from. The appellant assured her that between the time she gave him her money for the purchase of the restaurant business and the time at which it was to be used for such purchase, he would double it for her. In addition, as a means of further convincing her to part with her money, the appellant gave Mrs Ruello a number of bank notes from Bolivia, Nicaragua, and Greece. These were of high denomination. The worth of these notes was asserted by him to be "two may be three million". He further said: "This is for the restaurant. Two million he said, yes. Crown Prosecutor: Q. So he gave you some pieces of paper saying they were worth 2 million? A. Yes, yes it was, we already have the money for the restaurant.

His Honour: He said that? A. He said.

Q. He said that, "We already have the money for the restaurant"? A. He said "Why are you worrying about the bank book when you have so much more than you gave me". Then I went to the bank and was told --

Crown Prosecutor: Would you have a look at these notes? (Shown). Have you seen them before? A. Yes, they were like that.

Q. And these were the notes he said were worth two million? A. Yes, he said they were two million for the restaurant …" 13 Whereas the appellant asserted that the notes were valuable and that "we already have the money for the restaurant", in fact the notes were worthless. For example, the Bolivian notes had no value whatsoever outside Bolivia, and even inside Bolivia were of no value beyond 90 days of the date of issue, a time which had passed when the notes were given by the appellant to Mrs Ruello. 14 The trial judge held that the notes were given to Mrs Ruello by the appellant "to allay her fears and … dishonestly with an intent to obtain the money he knew she had". 15 The trial judge also held that he was satisfied beyond reasonable doubt that the appellant received the money from Mrs Ruello specifically for the purpose of investing it in the acquisition of the Stella Restaurant, but that the appellant failed to do so. 16 The case for the appellant was that the indictment presented against the appellant charged an offence unknown to the law. It was submitted that it did not specify the name or names of any person or persons to whom the monies in question were to be paid. This was essential, so the argument ran, for a charge under s 178A of the Crimes Act 1900. The argument proceeded that when a proper analysis of the evidence was undertaken, it was clear that the monies paid by Mrs Ruello to the appellant were paid for the purposes of investment, rather than on terms requiring the appellant to pay such money "to any person" and that if any offence was revealed by the evidence, it was an offence under s 178BA of the Crimes Act 1900. No such offence had been charged and a conviction for an offence under such section is not an alternative open to the court when dealing with a charge under s 178A of the Crimes Act 1900. (Andrews v The Queen (1968) 126 CLR 198 at 211) 17 In support of his argument, counsel for the appellant drew attention to several passages in the evidence of Mrs Ruello relating the terms of conversations between her and the appellant. Those passages stressed on behalf of the appellant are set out in bold type. However they need to be read in context. One of the conversations between the appellant and Mrs Ruello took place either at her place or at the appellant's place some two or three days after her son's birthday: "Q: Did you ever have conversations with the accused about the restaurant? A: Yes. He asked me about the fact that the restaurant was up for sale. … Q: What did you say to him with regard to the fact that the restaurant was up for sale? A: He said to me: 'we can buy it together'. … Q: Did you have sufficient money to buy the restaurant with him? A: Well, in fact, when he mentioned buying the restaurant, I said to him: 'I haven't got the money'. Q: What was his response to that? A: He said that if I had some money, he was working in a bank, that he would double the money. Q: Did he explain to you how the money could be doubled? A: Well, he said he was working in a bank and that it was possible to do it, it was his job to do it. Q: When he suggested purchasing the restaurant, who did he say would be the owners of the restaurant? A: What? Restaurant? What do you mean? Q: You have been telling us about the restaurant being up for sale, and that he suggested purchasing it. A: Yes. The two of us were going to buy it."

and "Q: Did the accused tell you, or did you know, how much the restaurant was up for sale? A: Approximately two million because of the property. Q: Is that two million Australian dollars? A: Yes. Q: You have told us that you had 31 or 32,000 in savings in the house and you have told us you had 26,000 in Italy? A: Yes. Q: Did the accused make any suggestion to you, suggestions how the balance of that $2 million would be made up? A: He said he would think of what was missing His Honour: That is what he said to her, "I would think of what is missing". Is that what she is saying? Interpreter: It is in third person. She said: "He would think of what is missing, finding. His Honour: So that is her answer. He said "I would think of what was missing." 18 After the conversations referred to above there was a further conversation between the appellant and Mrs Ruello about the necessity to open a bank account. Prior to the signing of the documents necessary for the transfer of the money Mrs Ruello had in Italy to an account at the Bank which she opened at the behest of the appellant, she was told by the appellant that the reason for the transfer of the money from Italy was: "… because he said, 'get the money to be transferred over here so you can purchase'". Q: For what purpose was that money being sent over? A: Because the money would be added to the money that we had here because he said that the money would be needed to purchase the restaurant." 19 Mrs Ruello also handed to the appellant an additional amount of $1,800. She said that this was: "Because it would have returned a lot more than what I gave him and because the money was needed for the purchase." 20 In cross examination, Mrs Ruello was asked a number of questions which sought to establish that the monies which she gave to the appellant were given for the purpose of investment in a general sense. This can be seen from the following passages which were relied on on behalf of the appellant: "Q: When you went to the Bank, and you opened the bank account, you trusted him that day, did you? A: Yes of course, I always trusted him in the sense that he made me believe many things. Q: Did you ever cease to have any trust in him? A: Well, after he deprived me of all my money, no. Q: Until while you were giving him the money, you were quite happy to trust him? A: Well, happy - I was happy that I may be able to buy my share in the restaurant as he promised me. Q: What was he going to do? He was going to lend you the money to buy this share in the restaurant? A: I had told him I didn't have much money. … Q: The question was, was he going to lend you the money? A: He said, that little amount I had was going to be enough because he would have invested it in a fruitful way so that it eventually would be enough to the purchase. … Q: How much money did you give him for investment then? A: The first time I gave him $3,000, then I gave him 1,800, then I gave him $26,000. That was the day he was wearing the emerald jacket, and put the money in his internal pocket. … Q: You gave him $3,000 for investment ? A: No, he asked for a loan. He said he had payments to make. Q: A little while ago you said that that was the money you gave him for investment; 3,000, 1,800 and 26,000? A: Well I thought I was lending him the money because he would return it to me but also the investment we were talking about… Q: The $26,000 you gave him was also initially a loan? A: No. Q: Not a loan? A: No, he said we have to have some money in that account because on the day of the auction we would have to show that we had some money in the Bank. Q: What was going to happen to the $26,000? A: That if we waited for the Italian money to come over here as well we would have put together the two amounts and would have had some money to use in that account. Q: Let me get this very clear, you were giving him the $26,000 to do what? A: To buy, to buy. I have said it I don't know how many times. Q: Why did you give him the $26,000? A: He asked me for the bank book because he was saying that he had to put the money in it so that on the day of the auction we would be able to show we had some money in the bank. Q: Why did she (sic) give him the 26,000, to do what with it? A: To buy my share of Stella." 21 In relation to the amount of $26,000 which was handed over to the appellant, Mrs Ruello also said: "Q: Did you hand over $26,000? A: Yes. Q: Why did you do that? A: Well, actually … for the same reason, because we had to purchase the restaurant, because he wanted to put the money in the bank ." 22 The totality of the evidence makes it clear, as the trial judge found, that Mrs Ruello gave $27,800 to the appellant for the purposes of purchasing the Stella Restaurant from the existing partners so that she and he would become the owners, as sole partners. Such a purchase involved buying the shares of the other three partners. The money for the purchase was to be paid to them in order to acquire their interests in the restaurant. It was for payment to them for their shares that the monies, other than the loan for $3,000, were given by Mrs Ruello to the appellant. 23 The trial judge stated the elements of the offence as follows: "(1.) that the accused received the sum of $27,800 between 1 July 1995 and 30 November 1995; (2.) that he received the money upon terms requiring him to pay the money by investing in the acquisition for Tina Ruello of an interest in a restaurant known as Stella; and (3.) he fraudulently did misappropriate the said money to his own use in violation of the said terms." 24 In his attack on the form of the indictment, senior counsel for the appellant relied on the decision in Andrews v The Queen (1968) 126 CLR 198, in particular the following: "To make out the counts of the indictment, it was necessary to establish that the applicant received the monies upon terms requiring him to account to Payne or to him and his wife as the case may be. It then had to be established that at a time when he was bound to account according to those terms he fraudulently omitted to do so. Because of the precise concepts involved in this particular statutory offence great care is called for … to ensure that the ingredients of the offence are lucidly and accurately explained to the jury." (at 205) 25 This passage, so it was submitted, mandates the naming in the indictment of the person or persons to whom the money in question is to be paid in order that the technical requirements of the section are met. I do not agree. While it stresses the technical nature of the offence, the passage is merely relating those technical requirements to the particular facts of the case then before the Court. It does not, in my opinion, state that it is essential to the validity of the indictment that the person or persons to whom the money in question is to be paid must be named in the indictment. 26 Although the indictment did not name the three persons who were Mrs Ruello's partners in the Stella Restaurant business, the concept of purchasing the restaurant necessarily entailed the payment of the purchase price for their shares to them. The appellant was aware of the essence of the matter alleged against him, namely, that he took Mrs Ruello's money on the basis that he would use it to purchase the shares of the other partners in the restaurant business so that Mrs Ruello would become an owner with him of the restaurant but that he failed to do so and used the money for his own purposes. The indictment identified the essential factual ingredients of the offence and contained sufficient particularity to enable the appellant to be reasonably apprised of the charge that he faced. (Council of the City of Shoalhaven v State Pollution Control Commission (1991) 52 A Crim R 291 at 294) 27 The inclusion of the names of the three partners in the indictment was not a necessary ingredient of the charge under s 178A of the Crimes Act 1900. Although it is highly desirable that the person (or persons) to whom the money the subject of a charge under that section is to be paid should be named, the actual name (or names) of such person (or persons) is in essence a particular rather than an averment essential to the validity of the indictment. 28 On behalf of the appellant it was further argued that the reason Mrs Ruello gave the amount of $27,800 to the appellant was for him to invest it and that that being the appellant's failure to account was not a failure which fell within s 178A of the Crimes Act 1900. In support of this argument reference was made to the following passage from Andrews v The Queen (supra); "So far as the first count of the indictment was concerned ( under s 178A Payne expressly said that he made the amount stated in the charge available to the applicant by way of 'investment' for which he accepted a post-dated cheque." (at 209) 29 However, in the present case the trial judge determined (correctly in my view) that the reason that Mrs Ruello gave the amounts totalling $27,800 to the appellant was in order to buy out the interest of the other three partners in the Stella restaurant by paying that money to them for the transfer of their shares to Mrs Ruello and the appellant. That is quite a different situation from that considered by the High Court in Andrews v The Queen (supra). 30 The effect of Andrews v The Queen (supra) is that on a charge of fraudulently omitting to account contrary to s 178A of the Crimes Act 1900 the Crown has merely to establish that the monies the subject of the charge were received by an accused on terms requiring such accused to account for them and that at the time when the accused was bound to account for such money in accordance with such terms he fraudulently omitted to do so. 31 In my opinion the trial judge correctly stated the necessary elements of the offence for which the appellant was tried. He found that the reason Mrs Ruello gave her money to the appellant was so that the restaurant could be purchased (J5) Pending the purchase of the restaurant the monies were to be placed in the ANZ bank account which had been opened in Mrs Ruello's name at the insistence of the appellant. The monies in question were not, however, placed in that account by the appellant, nor were they used for the purchase of the restaurant, nor returned to Mrs Ruello. The judge specifically held that: "I am … satisfied beyond reasonable doubt that the accused received the money from Mrs Ruello specially for the purpose of investing it for the acquisition of the restaurant Stella. I am also satisfied beyond reasonable doubt that the accused did not invest the money"

in such manner and that "I am satisfied beyond reasonable doubt that he fraudulently misappropriated the money for his own use." (J 8) 32 It was further contended on behalf of the appellant that the form of the indictment was such that the proviso to s 6 of the Criminal Appeal Act 1912 could not, as a matter of law, be applied in the instant case. In this regard he relied, inter alia, on the decisions of the High Court in Wilde v Regina (1998) 164 CLR 365 at 371-372 per Brennan, Dawson and Toohey JJ and of the Court of Criminal Appeal in Regina v Giri [2001] NSWCCA 197, unreported 12 June 2001). 33 As I have already said, in my opinion, the elements of the offence for which the appellant was tried were correctly stated and there was ample evidence to support the findings of the trial judge that such offence had been made out. Had the matter now before the court been raised during the trial the indictment could have been amended. It was not so raised and the indictment was not amended. Even if the names of the persons to whom the monies in question were to be paid were not included in the indictment and even if this, contrary to the conclusion to which I have come, may have constituted a technical defect in the indictment, the appellant was well apprised of the nature of the charge against him, was content to proceed on the basis of the indictment that that had already been considered in a previous trial and by the Court of Criminal Appeal and there was ample evidence to substantiate the offence under s 178A of the Crimes Act 1900 to which the appellant understood he was answering. (Cheng v The Queen (2000) 208 CLR 248 at 284) Accordingly, the case is one in which it would, in my opinion, be appropriate to apply the proviso of s 6 of the Criminal Appeal Act 1912 and I would do so were it necessary to do so. Cases such as McQueeney (1989) 39 A Crim R 58 and Spies (2000) 113 A Crim R 448 which were referred to by counsel for the appellant are not to the contrary of such a conclusion. However, for the reasons that I have already indicated it is not necessary to do so. 34 For the foregoing reasons I am of opinion that whilst the appellant should be permitted to rely upon the additional grounds of appeal referred to in the notice of motion of 5 March 2002, the appeal should be dismissed. 35 BUDDIN J: I agree with O'Keefe J. 36 Appeal dismissed.

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