Sultan v R

Bailey v United States 516 US 137 (1995) CASES CITED : R v Lyons [1984] 2 NSWLR 476 R v Steele [2007] 3 SCR 3

PARTIES: Wayne Denis Sultan (Appellant) Regina (Respondent)

COUNSEL: S Cousins (Appellant) N Noman (Respondent)

SOLICITORS: Canning Craymer Lawyers (Appellant) Director of Public Prosecutions (Respondent)

LOWER COURT FILE NUMBER(S): 06/11/0260; 06/11/0269

LOWER COURT DATE OF DECISION: 3 May 2007; 20 July 2007

IN THE COURT OF CRIMINAL APPEAL 2007/3554002

SPIGELMAN CJ PRICE J McCALLUM J

Thursday 24 July 2008 Wayne Denis Sultan v Regina

The appellant was convicted of one of 17 counts, with which he had been charged of using a false instrument contrary to s 300(2) of the Crimes Act 1900. The Crown case was that he had participated in a fraudulent loan scheme in which he purported to act for a man pretending to be the owner of real property which was to be the security the subject of a mortgage upon which funds would be advanced by a third party. With respect to the count of which he was convicted, the trial judge found that the appellant knew that this person was not the true owner and therefore that the documents were fraudulent. Implicitly, his Honour also found that the appellant's participation in the transaction amounted to "use" of the fraudulent mortgage instrument.

1 It was open for the trial judge to infer that the appellant had knowledge of the falsity of the relevant mortgage instrument. [24]-[25], [47], [48].

2 "Use" in s 300(2) of the Crimes Act 1900 involves the idea of actual deployment by the person charged or by his or her agent or fellow participant in a joint enterprise. It is not enough that the person charged is merely present when the instrument is "used" by another person. [35]-[36], [42], [47], [48]. R v Lyons [1984] 2 NSWLR 476; Bailey v United States 516 US 137 (1995); R v Steele [2007] 3 SCR 3 referred to. IN THE COURT OF CRIMINAL APPEAL 2007/3554002

SPIGELMAN CJ PRICE J McCALLUM J

Thursday 24 July 2008 Wayne Denis Sultan v Regina Judgment 1 SPIGELMAN CJ: The appellant stood trial on 17 counts for offences under s 300(2) of the Crimes Act 1900. Each count alleged that he had used a false instrument, knowing it to be a false instrument, with intent to induce a named solicitor to accept the said false instrument as genuine and thereby to act to the prejudice of certain identified persons. The 17 counts related to nine separate loans in a total amount of $5,140,000. On the Crown case the appellant, acting in the capacity of a mortgage broker, received over $400,000 by way of fees with respect to the nine loans. 2 The Crown case was that the appellant was one of the persons involved in a fraudulent loan scheme involving the registration of fraudulent caveats, transfers and mortgages over properties on behalf of investors in order to secure what appeared to be loans to various property owners. The scheme involved money lending on short term at extremely high rates of interest secured over property. The perpetrators induced investors to lend money to persons falsely said to be borrowers, using the alleged borrowers' actual property as security for the investment. 3 Various documents, including mortgages which were deployed, purported to be signed on behalf of or by the owner of property. The signatures appeared to be those of either Manus Michael Friel or Kevin Patrick Friel. In fact the signatures were forged by Michael English, one of the participants in the scheme. 4 The trial was heard by Toner DCJ sitting without a jury. At the end of the prosecution case the accused sought a directed verdict and his Honour acceded to the submission with respect to Counts 1 to 14, which related to loans identified in the proceedings as Loan 1 to Loan 7. Counts 16 and 17 related to Loan 9. In his final judgment Toner DCJ acquitted the appellant on these counts. However, he convicted the appellant on Count 15 which related to Loan 8. The appellant appeals from this conviction. 5 His Honour imposed a sentence on Count 15 of imprisonment for a non-parole period of 1 year and 5 months commencing on 3 May 2007 with a balance of term of 1 year and 9 months to commence on 3 October 2008 and to expire on 2 July 2010. The appellant appeals from this sentence. I note that he has served a considerable proportion of his sentence. 6 The judgment entering the conviction was handed down by Toner DCJ on 3 May 2007. The appellant was sentenced on 20 July 2007. I note that the Notice of Appeal was filed in the Court of Criminal Appeal on 8 February 2008. The appellant, who is a former solicitor, represented himself at trial. He was, however, represented at the sentence hearing. No doubt the issue of legal representation may explain the delay in instituting and prosecuting an appeal. 7 The count upon which the appellant was convicted was as follows: "Count 15: On or about 6 March 2002, at Sydney in the State of New South Wales, did use a false instrument, to wit, a Mortgage reference 8427278T for Folio Identifier 61/B/4247, over property situated at 634-636 Old South Head Road Rose Bay, which Wayne Denis Sultan knew to be false, with the intention of inducing Brian Dean Alcorn to accept the said false instrument as genuine and because of that acceptance, to settle the loan to the prejudice of the owner of the property Manus Michael Friel." 8 Loan 8 which was the subject of Count 15 comprised four documents: a mortgage which is the instrument the subject of the charge, a deed of loan, an acknowledgement of legal advice by the proposed borrower and a direction to pay. Each is dated 6 March 2002 and each bears the signature of "M M Friel". It was never in dispute that Michael English signed the name "M M Friel". 9 On the evidence it was the appellant who instituted the loan by introducing lenders to the group. The appellant, on his Honour's findings, informed the solicitor who acted in all of these arrangements on behalf of the lender that the borrower would be Manus Friel. 10 The solicitor who acted on behalf of the lender met with a number of persons including the appellant and a person introduced to him as Manus Friel on 6 March 2002. The documents were executed that morning, relevantly by Mr English purporting to be Mr Friel in the boardroom of the solicitor's law firm. A number of matters which arose during the course of that morning will be referred to below. The transaction was settled at the offices of the solicitor for the lender later that day. The documents signed on that day by Mr English, in the name of Mr Friel, were given numbers in the proceedings as document 180 (the mortgage), 181 (the deed of loan), 182 (the acknowledgement of legal advice) and 183 (the direction to pay). 11 His Honour set out evidence with respect to the events of the day which he appeared to accept and summarised the following findings of primary fact as follows: "1 Michael English signed documents 180, 181, 182 and 183. 2 Brian Dean Alcorn signed as a witness to those signatures on documents 180 and 181. 3 The name signed by English was MM Friel and was a forgery. 4 The documents and in particular document 180 were used to affect [sic] settlement of loan eight. 5 Brian Dean Alcorn met Michael English on 6/3/02 and believed he was Manus Friel. 6 The accused was present when Michael English was introduced to Brian Dean Alcorn as Manus Friel. 7 I reject the submission that the accused was in someway [sic] entitled to believe that Michael English was also known as Manus Friel. 8 I reject the submission that Michael English was in some way entitled to hold himself out as Manus Friel and to sign the name of Manus Friel as though he was Manus Friel. 9 Michael English was not Manus Friel and was not known as Manus Friel." 12 His Honour identified the critical issue to be whether or not the appellant had the relevant intention and concluded that he did. In this context his Honour noted that the accused had a motive, namely that he would receive sums of money with respect to any loan transactions which were implemented. 13 His Honour also made the following finding: " … it was the accused who instigated the transaction, nominated the borrower, said that Mr Alcorn was to act for Mr Friel as the borrower and nominated the property which was to be the security for the transaction. Each of those propositions is reflected in the documentation, being documents 180 to 183 of exhibit A. … The accused was not a bystander, he was clearly a participant." 14 His Honour went on to find: " … the accused knew that Michael English was not Manus Friel when he was represented as such to Brian Dean Alcorn. He knew the purpose for this deception was to induce Mr Alcorn to accept the Manus Friel signature on document 180 … was genuine and thus the instrument as genuine and he knew that Alcorn's acceptance of it as genuine would cause him to effect settlement of the loan and that it would be to the prejudice of the true owner of the affected property, namely Manus Michael Friel. In knowing these things, I conclude beyond a reasonable doubt that he had that knowledge and intended to induce Brian Alcorn to accept the documents as genuine and to settle the loan to the prejudice of Manus Michael Friel."

Appeal Ground 1 15 The first ground of appeal is: "The learned trial judge's findings that 'knowledge and intent' are wrong, and contrary to the weight of the evidence." 16 I have set out above his Honour's findings of primary fact. The appellant does not challenge findings 1, 2, 3, 5 and 9 and accepts that finding 6 was open. He also accepts that findings 7 and 8 were open but notes that they are simply the rejection of suggestions which were made in the course of cross-examination by the appellant. The appellant did not give evidence at the trial. 17 In submissions the appellant accepted that evidence at the trial about the appellant's participation in loans 1 to 6, which were prior in time to the loan the subject of Count 15, could be relied upon in certain respects. However, counsel for the appellant submitted that the highest the evidence could go was that the appellant knew that Mr English was passing himself off under another name. This he submitted was not sufficient for the finding of intent for the offence charged. 18 The submissions for the appellant did not directly address his Honour's findings on the issue of knowledge and intent which I have quoted above and which I summarise as follows: · He knew that Michael English was not Manus Friel. · He knew the purpose of the deception was to induce Mr Alcorn to accept the Manus Friel signature on the mortgage as genuine. · He knew that Alcorn's acceptance of the signature as genuine would cause him to effect settlement of the loan. · He knew that that settlement would be to the prejudice of the true owner of the affected property. · He intended to induce Brian Alcorn to accept the documents as genuine and to settle the loan to the prejudice of the owner. 19 His Honour set out the evidence upon which he based his conclusions. This included, most relevantly: · The appellant knew Michael English by name and met him on a number of occasions. · On the way to Sydney from Brisbane by airplane another participant who was sitting next to the appellant heard a third participant say to Michael English, both of whom were sitting in the row behind, "Now remember you're Manus today" and after this the accused said to him words to the effect: "Don't worry about that". · The accused was present when Mr English was introduced to Mr Alcorn under the name of Manus Friel. 20 There was evidence, subsequently withdrawn, that the accused was present when Mr English signed the documents in the name of Manus Friel. Eventually that witness accepted that he could not remember precisely who was in the room at that time although the accused had arrived with the other persons from Brisbane and had been present at some time during the relevant period. 21 Michael English gave evidence that the accused was beside him when he produced a false driver's licence containing his photograph but the name of Manus Friel, being a photocopy of a purported Queensland licence that he gave to Mr Alcorn for purposes of identification. Furthermore, Michael English gave evidence to the effect that when he actually signed the documents the appellant was "beside me". 22 However, his Honour made no finding of primary fact to the effect that the appellant was present when Mr English signed the documents in the name of Manus Friel. Nor does any such finding play a role in the finding on the issue of knowledge and intent set out at par [14] and summarised at par [18] above. It may, however, be implicit in his Honour's findings. A key distinction between the counts on which the appellant was found not guilty and the count under appeal is that the appellant was not even present on the other occasions. Nevertheless there is no express finding. 23 The only criticism that is made of any aspect of his Honour's reasons in this respect appears in the submissions on Ground 3 - the unsafe and unsatisfactory ground. It was there submitted that intent can only be inferred if knowledge is established and knowledge cannot be established here. The appellant referred to the fact that English, in the appellant's presence, showed another participant a driver's licence in the name of Manus Friel. There is no evidence that the appellant actually saw this licence, but it was suggested that, if he did, this may have suggested that Friel was a pseudonym regularly used by English. 24 It was submitted that if more than one inference is reasonably open on the facts, then the inference most favourable to the accused must be drawn. There is no such principle in the criminal law. The driver's licence was one amongst numerous pertinent circumstantial facts. There may be an inference that the appellant knew that the licence was in the other name. However, this is no basis for an inference that the appellant may have believed that Friel was a pseudonym used by English. It was open to the trial judge to conclude that the only rational inference to be drawn from the whole of the evidence was the one his Honour did draw. 25 Ground 1, expressed as it is in terms of being against the weight of the evidence, should be rejected. There was ample evidence for each of the findings of primary fact that his Honour made, for the inferences he drew and for the findings with respect to knowledge and intent.

Ground 2 26 The second ground of appeal is: "2 The learned trial judge's findings about 'use' are wrong, and contrary to the weight of the evidence." 27 In this regard the appellant drew attention to his Honour's finding of fact 4 which to repeat is: "4 The documents and in particular document 180 were used to affect [sic] settlement of loan 8." 28 The appellant submits that his Honour does not explain his finding in terms of who used the document, and in what circumstances it was used and why it was used. 29 In this respect I find it to be of some significance that his Honour made no express finding that it was the appellant who "used" the instrument. The Crown has also had some difficulty in formulating precisely how it was said that it was the appellant who "used" the instrument. 30 The appellant submitted that the offender had no control over the document and without control there was no "use" with the meaning of the section. I do not believe that "control" is the relevant test. 31 Section 300(2) appears in Pt 5 Div 2 of the Crimes Act entitled False Instruments. Division 1 is entitled Forgery and Div 3 is entitled False and Misleading Information. Various verbs are deployed in the Part which identify the conduct made criminal by respective sections, including "uttering" (ss 251, 260, 265, 271, 291), defined in terms "uttered, offered, disposed of or put off" (s 250). 32 Section 300 provides:

"(1) A person who makes a false instrument, with the intention that he or she, or another person, will use it to induce another person: (a) to accept the instrument as genuine, and (b) because of that acceptance, to do or not do some act to that other person's, or to another person's, prejudice, is liable to imprisonment for 10 years. (2) A person who uses an instrument which is, and which the person knows to be, false, with the intention of inducing another person: (a) to accept the instrument as genuine, and (b) because of that acceptance, to do or not do some act to that other person's, or to another person's, prejudice, is liable to imprisonment for 10 years." 33 Furthermore "instrument" is defined in s 299(1): "(a) any document, whether of a formal or informal character, or (b) a card by means of which property or credit can be obtained, or (c) a disc, tape, sound track or other device on or in which information is recorded or stored by mechanical, electronic or other means."

34 The Crown case was not based on an allegation of a joint criminal enterprise. It was not part of the Crown case that if Mr English or any of the participants "used" the false document, that would constitute "use" by the appellant. As I have noted above, there is no finding that the appellant was present in the room when the signature was affixed. However, even if he were present, that would not establish "use" by him unless the "use" by others could be attributed to him. That was not the Crown case. 35 The verb "to use" is protean and takes its meaning from its context. It is a transitive verb. The specified object is "instrument" which is defined in terms of a physical thing capable of containing information or writing or its equivalent. There is, in my opinion, no "use" within the meaning of s 300(2) unless there is a direct link between the conduct of the accused and the deployment of the instrument for a purpose. 36 In my opinion, in s 300(2) "use" involves the idea of actual deployment by the person charged or by his or her agent, or fellow participant in a joint enterprise. It is not enough that the person charged is merely present when the instrument is "used" by another person. Presence could support an accessorial charge, but not a charge of "use". 37 The position is the same as that which this Court determined to be the case with respect to a charge of "uttering" as defined in s 250 of the Crimes Act, ie "uttered, offered, disposed of, or put off". In R v Lyons [1984] 2 NSWLR 476 at 482, Street CJ said: "In order to found a conviction, it must be possible to identify some actual dealing with the document in this State which can be ascribed to the appellant either directly or through a person or agent acting for him." 38 Accordingly, the handing over of false documents in Victoria to representatives of the company intended to be deceived did not constitute "uttering" in New South Wales when the representatives returned to Sydney and presented the documents to the company.

39 In Lyons, Street CJ went on to refer to "physical handling" of the document. That was a reference to the facts of that case and I do not understand his Honour to suggest that physical contact was an essential aspect of use. An "actual dealing" with a document can occur without "physical handling".

40 To similar effect is the decision of the Supreme Court of the United States in Bailey v United States 516 US 137 (1995). The offence involved "'use' of a firearm" (at 144). The Court concluded that the prosecution must prove "active employment of the firearm" (at 143). Accordingly, an accused who had a gun in his pocket, but did not deploy it or even refer to it, could not be convicted of "use". 41 Also to similar effect are the observations of the Supreme Court of Canada which, also in the context of use of a firearm, approved a formulation that there must be an "actual carrying into action, operation or effect" (R v Steele [2007] 3 SCR 3 at [29]). 42 The idea of "actual dealing" (Lyons) or "active employment" (Bailey) or "actual carrying into effect" (Steele) is the sense in which "use" is to be understood in s 300(2). 43 On his Honour's findings of fact, the appellant did not "actually deal" with or "actually employ" or "actually carry into effect" the false instrument unless it could be held that the person or persons who did so was his agent. There was no such finding. Nor was any such person alleged to be a part of a joint criminal enterprise with the appellant. 44 Ground 2 should be upheld.

Conclusion 45 It is unnecessary to deal with Ground 3. 46 I propose the following orders: 1 Appeal allowed. 2 Quash the conviction. 3 Direct a verdict of acquittal. 47 PRICE J: I agree with Spigelman CJ. 48 McCALLUM J: I agree with Spigelman CJ. **********

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