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[1975] PNGLR 216 - Regina v Jamieson
PAPUA NEW GUINEA
[SUPREME COURT OF JUSTICE]
REGINA
V
JAMIESON
Port Moresby
Prentice J
16-18 August 1972
21-24 August 1972
CRIMINAL LAW - Particular offences - Stealing - Elements of offence - Debt collecting business - Banking of cheques - Drawing of cheques - Disposal of proceeds of cheques - Criminal Code (Queensland adopted), ss. 391[cclxviii]1, 393[cclxix]2, 395[cclxx]3, 398[cclxxi]4.
The accused, who was employed by Creditcheck, a debt collecting agency, was engaged by “Sabusa” to collect for it a debt of $1,531.89 from Heydorn. The accused received from “Davara”, a company associated with the debtor, a cheque made out to bearer Sabusa. The accused caused the cheque to be credited to Creditcheck’s working bank account. Some months later, not having accounted to Sabusa, the accused withdrew sums of $3,000 and $700 from Creditcheck’s working account, and $1,900 from the Creditcheck trust account, (leaving balances of $387 and $97 respectively) and departed with his family to Australia. The accused was charged on two counts: firstly of stealing $1,378.71, the property of Sabusa (which had come into his possession on account of Sabusa); and secondly that he stole money amounting to $1,531.89, the property of Heydorn, which money had lately been received by him with the direction that the same should be paid to Sabusa. (Both counts related to the one set of dealings, the difference in amount being accounted for by a right to deduct commission.)
Held
N1>(1) The banking of the cheque to Creditcheck’s account did not constitute stealing; being a normal part of a debt collectors business to pay into its own account such cheques, there was no taking or conversion within s. 391 of the Criminal Code (Queensland adopted).
Croton v. The Queen, [1967] HCA 48; (1967) 117 C.L.R. 326 referred to.
N1>(2) As there cannot be larceny of a chose in action the drawing of the cheques on Creditcheck’s accounts did not constitute stealing within the Criminal Code; s. 395 of the Code does not assist in the constitution of the offence of stealing; it can operate only to deem property to be that of another person.
Croton v. The Queen[1967] HCA 48; , (1967) 117 C.L.R. 326 applied.
N1>(3) The subsequent disposal of the proceeds of the cheques drawn on Creditcheck’s account did not amount to larceny, there being nothing to relate the moneys withdrawn to the proceeds of the Davara cheque.
Croton v. The Queen[1967] HCA 48; , (1967) 117 C.L.R. 326 referred to.
N1>(4) As to the second count, even if a direction of the kind contemplated by s. 393 of the Criminal Code were held to have been given by Heydorn (or possibly implied by Davara), there was no evidence from which it could be concluded that the money was in any sense Heydorn’s, and the charge on this count was not made out.
N1>(5) Though a case of fraudulent misappropriation of money or fraudulent failure to account, as understood in some jurisdictions had prima facie been established, there was no case to answer on either of the counts charged.
Trial
This was a trial of the accused Jamieson on two counts of stealing, both charges arising out of the same set of dealings by the accused with certain monies recovered by him as part of a debt collecting business. Full facts appear in the reasons for judgment hereunder.
Counsel
G. Gajewicz, for the Crown.
R. V. Gyles, for the accused.
Cur. adv. vult.
24 August 1972
PRENTICE J: I have given interlocutory judgment herein, holding that the Crown is entitled to call evidence of “similar facts” for the purposes of establishing in the accused a fraudulent intent, and to rebut defences of inadvertence, mistake and mishap. The Crown began to call such evidence, and appeared immediately to be in peril of not being able to justify its opening on this subject. I invited the learned Chief Crown Prosecutor to consider whether he wished to proceed on the course on which he had embarked, having in mind the possibility of a mistrial being worked. He indicated that he did. However at this juncture, learned defence counsel asked to be heard on a submission of no case to answer. It was his contention that even granting the admissibility and admission of the “similar facts” evidence, the Crown case could not stand. On the Crown indicating that it had closed its case but for the similar facts evidence and both counsel agreeing that much labour and possible expense could be perhaps saved in the event of my entertaining defence submissions at this earlier-than-usual stage, I agreed to hear argument on the no case to answer point. It was agreed that should I uphold defence counsel’s submissions, an acquittal should result immediately.
The accused faces two charges in respect of his dealings consequent upon his reception of a cheque. By count one he is charged that between 12th October, 1971 and 11th February, 1972 both days inclusive, being the servant of Sabusa Sawmilling Company Pty. Ltd., he stole money amounting to $1,378.71 the property of the said Sabusa Sawmilling which had come into his possession on account of the said Sabusa Sawmilling. By count two he is charged that between the same dates he stole money amounting to $1,531.89, the property of Heydorn Constructions, which money had lately been received by him with the direction that the same should be paid to Sabusa Sawmilling. Both counts relate to the one set of dealings — the difference in amount being accounted for by the accused’s admitted right to debit an amount for his commission.
For the purposes of this submission I should take the Crown case on the evidence at its highest. It may be considered that the following is established:
N2>(1) that the accused’s firm Creditcheck (N.G.) (hereinafter referred to as “Creditcheck”) was engaged by Sabusa Sawmilling Company Pty. Ltd. (hereinafter referred to as “Sabusa”), to collect for it from a company to which the creditor had supplied timber namely Heydorn Constructions Pty. Ltd. (hereinafter referred to as “Heydorn”) — a debt of $1,531.89;
N2>(2) that there was an understanding between Sabusa and Creditcheck that the former might use certain of the latter’s “debt collecting” forms, which allowed a demand for a summary payment of a debt by the debtor named to be entered thereon by the creditor to be named, and requiring payment to be made immediately to the creditor;
N2>(3) that Creditcheck would be entitled to deduct a commission of (at least) 10 per cent and perhaps some other special charges, from the amount collected, as the result of the use of such forms and subsequent action by Creditcheck;
N2>(4) that following the delivery of such a form of Creditcheck’s designing, by Sabusa to Heydorn, the latter company through its officers induced a company with which it was said to be associated namely Davara House Pty. Ltd. (hereinafter referred to as “Davara”) — to supply a cheque that was to be used in payment of Heydorn’s said debt to Sabusa;
N2>(5) that the said cheque made out to bearer Sabusa was given to Creditcheck by Mr. Woodward of Heydorn after a conversation in which Woodward had asked the accused of Creditcheck for time to pay;
N2>(6) that the accused caused the said cheque dated 30th September, 1971 to be negotiated and posted to the credit of Creditcheck’s working account with the A.N.Z. Bank at Boroko on 12th October, 1971;
N2>(7) that the creditor company Sabusa made efforts, which were brought to the accused’s notice, to have his firm account to it for the monies received;
N2>(8) that the accused went on leave for a short period in December 1971;
N2>(9) that shortly after his return in late January the accused variously promised Sabusa’s officers that he would account to the company for the collected debt on 3rd February and 15th February;
N2>(10) that early in February the accused’s premises suffered a fire;
N2>(11) that on 10th February the accused withdrew an amount of $3,000 on a “cash” cheque from Creditcheck’s working account at Boroko Branch of the A.N.Z. Bank, and on the same day a further cheque for $700 which latter he paid into his personal account leaving thereafter a balance of some $387 in the firstmentioned account;
N2>(12) that on the same day the accused withdrew $1,900 by means of a cheque to “cash” from the Creditcheck “trust account” at the same bank leaving a balance therein of $97.00;
N2>(13) that the accused maintained three bank accounts at the A.N.Z. Bank Boroko, one described as Creditcheck working account, one Creditcheck “trust account”, one a personal account. (It was prefaced in the Crown’s opening regarding the “similar facts” evidence to be called, that he had at least one other A.N.Z. Bank account at Port Moresby);
N2>(14) that the accused and his family left Papua New Guinea as a final departure on 11th February, 1972;
N2>(15) that the accused was arrested in Brisbane on 14th March, 1972 and extradited to Papua New Guinea;
N2>(16) that the accused caused $1,165.35 of the monies owing to Sabusa to be telegraphed from Brisbane on 23rd March, 1972 in part payment and paid the remainder of the said monies owing on 9th May, 1972.
Mr. Gyles submits that the facts as outlined cannot support a charge of larceny under the Criminal Code (Queensland adopted) in Papua. The charge of larceny on both counts he says is brought under s. 398; the prosecution may seek to rely on s. 395 for the first count, and s. 393 for the second count. His argument continues — that there is no evidence that the accused has taken anything “capable of being stolen”; nor that he converted to his own use anything “capable of being stolen” (s. 391). There is no evidence of any actual movement or dealing (s. 391(6)). The evidence he says establishes that it was a perfectly normal thing for the accused to “pay” a cheque into his firm’s account — the mere negotiation of the cheque could not be a conversion — and once that is established, there could be no taking or conversion of anything capable of being stolen. Even though remaining under a duty to account, the accused thereafter cannot be guilty of stealing cheque or proceeds. Once the banker/customer relationship supervenes the cheque and money have disappeared and a mere chose in action results. He argues in addition that in regard to the second count, there is no evidence that any “money of Heydorn Constructions Pty. Ltd.” was dealt with and none that any “direction” had been given, which had not been complied with.
To establish the meaning of “thing capable of being stolen” (the argument continues), one must go to s. 390 — “every inanimate thing whatever which is the property of a person and which is movable is capable of being stolen”. Section 393 does not alter the definition of stealing but merely deems the property to remain in a particular person in certain circumstances.
The old authorities in New South Wales relating to larceny by a bailee have been canvassed before me. These established that a charge of larceny as a bailee only lies in relation to money in special circumstances — that larceny was not constituted by a failure to account or fraudulent misappropriation. The specific difficulties in relation to fitting the latter transgressions into the category of larceny as a bailee issued in New South Wales in the enactment of s. 125 and s. 178(a) of the Crimes Act. Mr. Howard, the learned author of Australian Criminal Law, states that the difficulty has been overcome in all States — in particular in Queensland by ss. 391-393 and 394 (see op. cit., p. 190). That this was the opinion of Sir Samuel Griffith, the Code’s draftsman, appears from the case reported as In the Matter of a Solicitor[cclxxii]5 — a disciplinary action against a solicitor who failed to account to a client. His Honour stated “It is simply a case of what is now stealing under s. 393 of the Criminal Code. Last year it was not technically stealing, though morally just as bad; now under the Code it is stealing . . .”. Both counsel assure me that they have been unable to find any cases in which the points being argued here under the Code, have been the subject of decisions. One would assume that there must have been instances of debt collectors and persons in other analogous situations in Queensland in the last seventy years being prosecuted for (in effect) fraudulent misappropriation or failing to account. As there are no such offences set by sections of the Code, any such prosecutions would it seems, have been taken as charges of larceny such as are presented here. Learned Crown counsel advises me that the points were to be argued in this court in 1968 before Ollerenshaw J, but the argument was overtaken by a hurried plea of guilty in lieu before Mann C.J
The latest word which might be thought to bear on the subject is the decision of the High Court in Croton v. The Queen[cclxxiii]6; therein the accused withdrew monies from a joint bank account under circumstances that could have amounted to a fraudulent misappropriation. The majority of the court held that a chose in action namely the debt owed by the bank (i.e. the “monies in the bank”) could not be the subject of larceny, and the opinion of the majority of the court on this topic appears in the judgment of Barwick C.J, at p. 330 as follows:
“This case, in my opinion, is in somewhat the same situation as that dealt with by Lord Goddard in Reg. v. Davenport ([1954] 1 W.L.R. 569; [1954] 1 All E.R. 602.). His Lordship said, as I would respectfully repeat of this case, ‘For some reason or another the indictment charged the appellant with stealing all this money. That could only have been done, I think, because throughout this case there was a misapprehension, under which everyone seems to have been, with regard to the more or less elementary principles of the law of banking and the law of larceny’ ([1954] 1 W.L.R., at p. 570; [1954] 1 All E.R., at p. 603).
As I have indicated, larceny consists in the taking and carrying away of the property of another without his consent, and without colour of right, intending at the time of the taking permanently to deprive the owner of that property. It follows that there must be what is called an asportation. Therefore, apart from any special statutory provision, larceny can only be committed of property which is capable of physical possession and removal. It also follows that to constitute larceny, the property must be removed, except in the case of larceny by a bailee, from the possession of some other person against the will of that person. The special doctrine relating to larceny by a bailee was made to conform to these requirements by treating the larcenous bailee as converting the nature of his possession at the moment he formed the intention to steal.
The subject matter of the instant charges was money, in each case expressed as a number of dollars, that is, paper money, or coin to the stated face value. That can be asported and be the subject of l arceny. But, though in a popular sense it may be said that a depositor with a bank has ‘money in the bank’, in law he has but a chose in action, a right to recover from the bank the balance standing to his credit in account with the bank at the date of his demand, or the commencement of action. That recovery will be effected by an action for debt. But the money deposited becomes an asset of the bank which may use it as it pleases: see generally Nussbaum, Money in the Law: s. 8, p. 103. Neither the balance standing to the credit of the joint account in this case, nor any part of it, as it constituted no more than a chose in action in contradistinction to a chose in possession, was susceptible of larceny, though it might be the subject of misappropriation: see also on this point the judgment of Lord Goddard in Reg. v. Davenport ([1954] 1 W.L.R. 569; [1954] 1 All E.R. 602) with which I respectfully agree.”
Radical elements of the offence of larceny were missing in the case. The court held that the disposition of the actual sum of money subsequent to its withdrawal from the bank would not amount to a larcenous dealing either but would seemingly amount at most to a fraudulent misappropriation (op. cit., pp. 331-332). The court applied the analysis of Jordan C.J, from R. v. Ward[cclxxiv]7.
It appears that the most convenient way to analyse the facts here in order to see whether larceny has been made out is to consider three questions:
N2>(A) does the banking of the cheque to Creditcheck’s account constitute larceny;
N2>(B) does the drawing of the cheques against the said account in the manner done, constitute larceny;
N2>(C) does the subsequent disposal of the proceeds of the latter cheques constitute or complete an act of larceny.
N1>(A) The circumstances surrounding the making of the contract between Sabusa and Creditcheck in the giving of the cheque by Mr. Woodward to Mr. Jamieson are but lightly sketched. The Creditcheck forms put in the disposition of Sabusa require a payment “direct to the client” named. This was not done. We know Mr. Woodward contacted Jamieson asking for time and that he took a cheque personally to Jamieson. The rest is speculation or inference, except to the extent that it appears from the evidence of the witnesses Kearns and Sanders that Creditcheck was entitled to deduct commission from the cheques received. Mr. Sanders agreed that where a debt was paid to Creditcheck — that company would owe his company an amount equivalent to the amount they had collected less their commission and expenses. One would expect that it could be a normal part of a debt collector’s business to pay into its own account cheques received in purported payment of clients debts, so as to elucidate whether the payer’s account was in funds. One imagines a client company would hardly appreciate, as a considerable service, the mere sending on of debtors cheques which were not met. From the tenor of the evidence of Kearns and Sanders it would appear clear to me that the payment into its own account in the first instance of monies received from the client’s debtors was contemplated by Sabusa as normal. I see no reason why the same inference should not be drawn in regard to Mr. Woodward’s understanding of the position but I shall return to that. I would conclude therefore that the initial posting to the firm’s account of the Davara House cheque in favour of Sabusa was not a taking or conversion and I understand the Crown to concede this as to the first count.
N1>(B) The Crown contends that the definition of money in s. 1, in combination with s. 566 (5) and s. 398 (VIII) (c), s. 391 and s. 395, have the effect that the accused by withdrawing monies in the way he did, “dealt with” the money the subject of count one in such a manner as to constitute the offence of larceny. I am unable to see that s. 566 (5) or s. 398 (VIII) (c), which is a subsection dealing only with punishment, go to enlarging the definition of thing capable of being stolen in s. 391 or to establishing the constituents of this offence, though the draftsman appears to contemplate that such an enlargement had been made. In my opinion s. 395 does not assist in the constitution of the offence of larceny; it can operate only to deem property to be that of another person. There appear to be no provisions of the Code which have been referred to me which distinguish the position here from that in Croton’s case — that there cannot be larceny of a chose in action and that the drawing of cheques does not establish larceny within the Code.
N1>(C) Similarly Croton’s case appears to be an authority working against the contention that subsequent disposal of the proceeds can be held to amount to larceny. In considering whether the disposal of the monies constitutes stealing there is a further difficulty in that there is nothing to relate the monies actually withdrawn to the proceeds of the Davara cheque, as compared with other monies posted to the working account and which may have been held on behalf of other debtors among the “mixed monies”. One cannot I think, make the assumption that though the amounts removed from the account on 10th February were greater than the amount of the Davara cheque that the proceeds of the Davara cheque are to be considered as included therein rather than perhaps partly therein and partly in the amount remaining in the bank, or even wholly in other bank accounts of the accused and his firm. I note that as at 10th February there remained some $1,350 distributed among the Boroko A.N.Z. Bank accounts.
Section 393, which has the effect of deeming that money received from a person subject to a direction shall, as to the money or proceeds, remain that of the person from whom received, does not appear to assist the Crown on count one.
The Second Count. As I understand the Crown’s contention, it is entitled to rely here on s. 393. That section may be paraphrased for purposes of the facts of this case as: “Where a person receives (a cheque) ... or any property whether capable of being stolen or not with a direction ... that the cheque ... or any other money received in exchange for it or any part thereof ... shall be applied to any purpose or paid to any person specified in the direction — such cheque and proceeds are deemed to be the property of the person from whom the cheque was received until the direction has been complied with.” A direction is claimed to have been given by Heydorn that the cheque was to be given to Sabusa. This is evidenced, it is said, by the fact of the cheque being made out in the name of Sabusa and the fact that a conversation (the details of which were not given) took place between the accused and Mr. Woodward of Heydorn. It is clear that Woodward knew Creditcheck to be a debt collector and regarded it as the agent of Sabusa. He may well have been expected to know that Creditcheck would be entitled to deduct commission, and might be expected by its client to test the bona fides of any cheque received by it. I do not think the evidence establishes any specific direction given by Heydorn to Creditcheck that would prevent the latter itself banking the cheque which was to bearer.
Difficulties similar to those outlined in regard to count one might prevent the subsequent actions of the accused amounting to a larceny in my opinion but with this difference, that s. 393 might be said to effect the enlargement of the category of things which can be the subject of larceny. I have difficulty in seeing that this can be its effect; as I have stated, it appears to be merely a section concerned with deeming property to remain in a particular person. But it does not appear to me to be necessary to come to a conclusion on this aspect for another reason. Even if a direction of the kind contemplated by s. 393 were held to have been given by Heydorn (or possibly impliedly by Davara), there is no satisfactory evidence from which it could be concluded that the money was in any sense Heydorn’s as alleged — the structure of, and relations between, the companies Heydorn and Davara, were not proven. There is nothing to show that anything more than a payment by Davara of a debt contracted by Heydorn, was intended or effected. No gift of the cheque or the proceeds was proved. The nature of the arrangements between Davara and Heydorn was not established. If the drawing of the cheque in favour of Sabusa were to be construed as a “direction” — it perhaps should rather be considered a direction by Davara. It may well be that the true position is that the cheque and money represented was Davara’s and received (within the meaning of s. 393) from Davara. This of course would not support the second count which alleges property in the money allegedly stolen in Heydorn.
The Crown suggests that the evidence must support a number of alternative verdicts, one of simple larceny (R. v. Allan and Prentice[cclxxv]8) or obtaining the delivery of property by a false pretence and with intent to defraud (s. 581 (b)). Suffice to say that I have dealt with this case without considering whether the element of servant status, as alleged, has been established. The reasoning I have adopted would tell against a charge of stealing simpliciter, equally. In my opinion there is no evidence of a false pretence or of an intent to defraud on the obtaining of the cheque, which would dispose of this submission, as I apprehend.
The position in which I find myself on my conclusions is daunting indeed to me. It is that of apparently disagreeing with the eminent Code maker on the effect of the provisions of his Code.
I am of the opinion for the reasons advanced that though a case of fraudulent misappropriation of money or fraudulent failure to account, as understood in some jurisdictions, has prima facie been established (the defence of course has not yet been heard), there is no case for the accused to answer on either of the counts on which he stands charged here. The accused is therefore acquitted on both counts.
Accused acquitted.
Solicitor for the Crown: P. J Clay, Crown Solicitor.
Solicitor for the accused: N. White & Reitano.
[cclxviii]
N1>“(1) a person who fraudulently takes anything capable of being stolen, or fraudulently converts to his own use or to the use of any other person anything capable of being stolen, is said to steal that thing.”
[cclxix]Infra p. 224.
[cclxx]Section 395 provides: “When a person receives . . . any money on behalf of another, the money is deemed to be the property of the person on whose behalf it is received, unless the money is received on the terms that it shall form an item in a debtor and creditor account, and that the relation of the debtor and creditor only shall exist between the parties in respect of it.”
[cclxxi]Section 398 provides: “Any person who steals anything capable of being stolen is guilty of a crime, and is liable, if no other punishment is provided, to imprisonment with hard labour for three years.”
[cclxxii][1902] Q.S.R. 9.
[cclxxiii](1967) 117 C.L.R. 326.
[cclxxiv][1938] NSWStRp 5; (1938) 38 S.R. (N.S.W.) 308, at p. 315.
[cclxxv] (1962) 47 Cr. App. R. 67.
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