Stephens v The Queen

Stephens v The Queen - [1978] HCA 35 - HCA 1978 case summary — Zoe

[79]

THE PROVISIONS OF S. 1 (1) OF THE CRIMINAL LAW AMENDMENT ACT, 1902 S.A. ARE A RE-ENACTMENT OF THOSE OF S. 1 (1) OF THE LARCENY ACT, 1901 U.K. WHICH THEMSELVES WERE RE-ENACTED AS S. 20 (1) (IV) OF THE LARCENY ACT, 1916 U.K.. THE LASTMENTIONED PROVISIONS WERE REPEALED BY THE THEFT ACT, 1968 U.K.. ON A CHARGE OF FRAUDULENT CONVERSION IT IS ESSENTIAL THAT THREE THINGS BE PROVED TO THE SATISFACTION OF THE JURY: "FIRST, THAT THE MONEY WAS ENTRUSTED TO THE ACCUSED PERSON FOR A PARTICULAR PURPOSE; SECONDLY, THAT HE USED IT FOR SOME OTHER PURPOSE; AND THIRDLY, THAT SUCH MISUSE OF THE MONEY WAS FRAUDULENT AND DISHONEST.": REG. V. BRYCE [15] . IN THE PRESENT CASE THE ONLY QUESTION RAISED IS AS TO THE FIRST OF THESE ESSENTIALS. THE SOLE POINT TAKEN ON BEHALF OF THE APPLICANT IS THAT THERE WAS NO EVIDENCE ON WHICH THE JURY WERE ENTITLED TO FIND THAT HE WAS ENTRUSTED WITH THE MONEYS WITHIN THE MEANING OF THE SECTION. NO RELIANCE IS PLACED ON THE CIRCUMSTANCES THAT THE MONEYS WERE IN ALL CASES INTENDED TO BE PAID TO SEATOUN, AND THAT IN SOME CASES THEY WERE NOT HANDED TO THE APPLICANT PERSONALLY. A PERSON MAY BE ENTRUSTED WITH PROPERTY WITHIN THE MEANING OF THE SECTION NOTWITHSTANDING THAT IT IS NOT DELIVERED DIRECTLY TO HIM BY THE OWNER, AND THAT THE OWNER DOES NOT KNOW OF HIS EXISTENCE AND HAS NO INTENTION OF ENTRUSING IT TO HIM; IF THE ACCUSED HAS OBTAINED OR ASSUMED THE CONTROL OF THE PROPERTY OF ANOTHER UNDER CIRCUMSTANCES WHEREBY HE BECOMES ENTRUSTED, AND HE FRAUDULENTLY CONVERTS IT, HE COMMITS AN OFFENCE AGAINST THE SECTION. SO MUCH IS ESTABLISHED BY R. V. GRUBB [16] A CASE IN WHICH THE ACCUSED FRAUDULENTLY CONVERTED CHEQUES SENT TO A COMPANY WHICH HE CONTROLLED. THAT CASE HAS CONSISTENTLY BEEN FOLLOWED NOT ONLY IN ENGLAND BUT ELSEWHERE: SEE R. V. CUFFIN [17] ; R. V. MORTER [18] ; REG. V. GILBERT [19] ; REG. V. GOODALL [20] ; REG. V. PRAST [21] . THE ARGUMENT OF MR. DERRINGTON ON BEHALF OF THE APPLICANT IS THAT IN THE CIRCUMSTANCES OF THE PRESENT CASE THE RECEIPT OF THE DEPOSITS DID NO MORE THAN PLACE THE APPLICANT UNDER A CONTRACTUAL OBLIGATION TO REPAY THE MONEYS THAT HE RECEIVED BUT DID NOT CREATE ANY FIDUCIARY OBLIGATION. THE APPELLANT, IT IS SAID, WAS NOT PREVENTED FROM DEALING WITH THE MONEYS AS HIS OWN; HE MERELY BECAME A DEBTOR IN RESPECT OF THE MONEYS PAID TO HIM.

[81]

IT IS ACCEPTED THAT THERE CAN ONLY BE AN OFFENCE UNDER THIS SUB-SECTION IF THERE WAS A FIDUCIARY ELEMENT IN THE RELATIONSHIP OF THE ACCUSED PERSON TO THE PROPERTY ALLEGED TO HAVE BEEN FRAUDULENTLY CONVERTED BY HIM: SEE R. V. JONES [22] ; RUSSELL ON CRIME, 12TH ED. (1964), VOL. 2, P. 1120; WEINBERG AND WILLIAMS: AUSTRALIAN LAW OF THEFT, P. 191. IN R. V. HOTINE [23] , AND IN R. V. CUFFIN [24] , THE COURT WENT SO FAR AS TO SUGGEST THAT THERE MUST BE A TRUST. NEVERTHELESS IT DOES NOT SEEM TO ME NECESSARY THAT EITHER THE JURY OR THE COURT OF CRIMINAL APPEAL SHOULD INQUIRE WHETHER THE ACCUSED RECEIVED THE PROPERTY IN CIRCUMSTANCES GIVING RISE TO A TRUST. SUCH A CONSTRUCTION WOULD LEAD TO UNDESIRABLE COMPLEXITY IN THE ADMINISTRATION OF THE CRIMINAL LAW AND IS NOT MADE NECESSARY BY THE WORDS OF THE SECTION. ONE OF THE ORDINARY MEANINGS OF THE WORD "ENTRUST" IS "TO CONFIDE THE CARE OR DISPOSAL OF" (SEE SHORTER OXFORD ENGLISH DICTIONARY) AND IT IS IN THAT SENSE THAT THE WORD IS USED IN THE SECTION. TO BRING THE CASE WITHIN THE SECTION THE PROPERTY MUST HAVE BEEN ENTRUSTED TO THE ACCUSED EITHER FOR SAFEKEEPING OR TO BE APPLIED, PAID OR DELIVERED FOR A PARTICULAR PURPOSE OR TO A PARTICULAR PERSON. IN OTHER WORDS IT MUST HAVE BEEN EARMARKED FOR CERTAIN PURPOSES WHICH ARE NOT PURPOSES OF THE ACCUSED HIMSELF (SEE SMITH AND HOGAN: CRIMINAL LAW, 1ST ED. (1965), P. 433; WEINBERG AND WILLIAMS, OP. CIT., P. 191). IT IS NECESSARY TO CONSIDER THE TERMS ON WHICH THE PROPERTY WAS RECEIVED. IF MONEY WERE GIVEN TO THE ACCUSED ON TERMS THAT HE MIGHT USE IT AS HE WISHED, BUT MUST LATER RETURN IT (FOR EXAMPLE IF AN ORDINARY LOAN WERE MADE TO THE ACCUSED) THE CASE WOULD NOT BE WITHIN THE SECTION. THIS OF COURSE DOES NOT MEAN THAT THE SECTION ONLY APPLIES WHERE THE ACCUSED WAS OBLIGED TO KEEP THE MONEY IN SPECIE. FOR EXAMPLE MONEY DEPOSITED AS SECURITY FOR THE HONESTY OF THE PAYER, ON TERMS THAT THE PAYEE WILL PAY IT INTO A BANK ACCOUNT AND RETURN IT AT THE END OF A SPECIFIED PERIOD, WILL COME WITHIN THE SECTION: R. V. DONALD SMITH [25] . PROFESSOR SMITH, IN AN ARTICLE "THE SCOPE OF FRAUDULENT CONVERSION", [1961] CRIM. LAW REVIEW 797, AT P. 800, SUGGESTS THE FOLLOWING TEST WHERE THE OWNERSHIP IN MONEY IS TRANSFERRED:

[83]

WHERE AN ACCUSED PERSON PROMISES TO DO WORK FOR ANOTHER AND IS PAID MONEYS IN ADVANCE FINE DISTINCTIONS ARE SOMETIMES DRAWN. IN R. V. JONES [26] THE ACCUSED WAS ADVANCED MONEY BY ONE PERSON FOR THE PURCHASE OF PAINT AGAINST THE SUM AGREED TO BE PAID FOR PAINTING A ROOM AND BY ANOTHER PERSON TO BUY SOME PLYWOOD, AGAIN THE PAYMENT BEING AN ADVANCE. THE COURT OF CRIMINAL APPEAL QUASHED THE CONVICTIONS FOR FRAUDULENT CONVERSION, SAYING [27] : "THESE ARE SIMPLY CASES OF A MAN REPRESENTING THAT HE WAS WILLING TO DO SOME WORK, GETTING PAYMENT IN ADVANCE, AND THEN NOT DOING IT." IN REG. V. BRYCE [28] THE ACCUSED, WHO HAD AGREED TO DO SOME GARDENING WORK, GOT PAYMENTS ON ACCOUNT ON VARIOUS PRETEXTS THAT HE WOULD HAVE TO BUY MATERIAL AND SO FORTH. THE CONVICTION WAS QUASHED FOR MISDIRECTION, BUT THE COURT DOUBTED WHETHER THERE WAS SUFFICIENT EVIDENCE OF ENTRUSTMENT. ON THE OTHER HAND, IN REG. V. HUGHES [29] THE ACCUSED, A BUILDER, ASKED FOR AN ADVANCE TO BUY MATERIALS BUT HAVING OBTAINED IT USED IT FOR OTHER PURPOSES. HIS CONVICTION WAS SUSTAINED; THE COURT SAID: "IN THE PRESENT CASE THE MONEY WAS PAID OVER FOR A PARTICULAR PURPOSE AND NOT GENERALLY ON ACCOUNT." IT IS UNNECESSARY TO CONSIDER WHETHER THESE DECISIONS CAN BE RECONCILED ON THE FACTS, BUT THERE IS NO INCONSISTENCY IN THE GROUNDS ON WHICH THEY PROCEEDED - IN THE TWO EARLIER CASES IT WAS HELD THAT THERE WAS NOTHING MORE THAN A PAYMENT ON ACCOUNT, WHEREAS IN THE LATER CASE IT WAS HELD THAT THE MONEY WAS ENTRUSTED TO THE ACCUSED FOR THE PARTICULAR PURPOSE OF BUYING THE MATERIALS. IN EVERY CASE THE DECISION MUST DEPEND ON ITS OWN FACTS. SIMILARLY, WHERE A DEPOSIT IS PAID TO AN AGENT, IT WILL BE RIGHT TO HOLD THAT IT WAS ENTRUSTED TO HIM WITHIN THE SECTION IF IT WAS PAID TO HIM TO HOLD AND REFUND IF A PARTICULAR EVENT DID NOT OCCUR (SEE R. V. BROWNRIGG [30] ; REG. V. PILKINGTON [31] ) BUT IT WILL DEPEND ON ALL THE CIRCUMSTANCES WHETHER THE AGENT WAS UNDER THAT OBLIGATION WHICH MUST EXIST BEFORE HE CAN BE SAID TO HAVE BEEN ENTRUSTED WITH THE MONEY (CF. REG. V. HALL [32] A CASE UNDER S. 5 (3) OF THE THEFT ACT, 1968 U.K.).

At a glance

Court

Decision date

Before

Source

Judgment (92 paragraphs)

Parties

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