Kaufusi v Rex [2014] TOCA 17; AC 14 & 15 of 2014 (31 October 2014)

IN THE COURT OF APPEAL OF TONGA
CRIMINAL JURISDICTION
NUKU'ALOFA REGISTRY

AC 14&15 of 2014
[CR 8 & 10 of 2013]

BETWEEN:

1. TAVAKE KAUFUSI
2. FIFITA 'ULUHEUA LATU
Appellants

AND:

REX
Respondent

Coram : Salmon J

Handley J

Hansen J

Tupou J

Counsel : Mr L. Niu, SC for the Appellants
Mr S. Sisifa for the Respondent

Date of Hearing : 21October, 2014

Date of Judgment : 31 October, 2014

JUDGMENT OF THE COURT

Introduction

[1] After trial before Cato J the appellants (Mrs Latu and Mr Kaufusi) were convicted of embezzlement contrary to s.158 Criminal Offences Act (the Act) and falsification of accounts contrary to s.159(a). Mrs Latu was found guilty and Mr Kaufusi entered pleas of guilty after the Crown had closed its case. Both were acquitted on a count of theft laid alternatively to that of embezzlement. Mrs Latu was sentenced to2 years 3 months imprisonment, the last 6 months suspended for 12 months. Mr Kaufusi's sentence was 2 years and 8 months imprisonment, with 9 months of the final year suspended for 2 years.

[2] Both appellants appeal against conviction on the count of embezzlement and, their application for leave to appeal against sentence having been declined by the Lord Chief Justice sitting as a single Judge of this Court, for leave to appeal against sentence under s.28 of the Court of Appeal Act.

[3] The sole ground of the appeals against conviction is that the indictments were defective in that the count of embezzlement (and the alternative count of theft) covered multiple offences which should have been the subject of separate charges. The sentences imposed are submitted to be manifestly excessive.

Further background

[4] The appellants and 6 others who faced related charges worked at the foreign exchange section of the Westpac Bank. The Crown case was that over a period of several years on multiple occasions each converted bank funds to their own use by manipulating foreign exchange rates and falsifying entries in the logs which, as tellers, they were required to maintain. The charges against Mrs Latu involved 19 separate transactions between 22 June 2011 and 3 January 2012 amounting in aggregate to $30,917.60.MrKaufusi was alleged to have stolen a total of $41,301.03 on 48 occasions between 17 January 2008 and 30 June 2011.

[5] The deception practised by the appellants and their colleagues was quite simple. Each foreign exchange teller was required to record daily the receipt of foreign currency. At the end of the day the full list of foreign currencies and the equivalent in Tongan currency at the prevailing exchange rate was calculated and checked by the supervisor. The amount actually paid out was recorded in the tellers ledger log. The amount of Tongan currency in each of the two returns should have been the same. On later examination it was found they were not because, by manipulating foreign exchange rates, the amount recorded as paid out in Tongan currency was understated. The teller kept the difference.

The indictments

[6] The indictments of the appellants and theirco-accused contained 3 counts, respectively of embezzlement, alternatively theft contrary to s.143 of the Act, and falsification of accounts. Particulars of each count set out the period spanned by the offending and the total sum involved.

[7] At the outset of the trial counsel for the appellants and their co-accused objected to the way in which the indictment was framed. They argued that each separate act of taking and falsification should have been the subject of a separate count. It was submitted that the indictment circumvented s.160 of the Act which precludes the trial at the same time of more than five such counts. s.160 provides as follows:

"160. In the case of any person intended to be tried in the Supreme Court for embezzlement, falsification of accounts or fraudulent conversion respectively, unless there are special reasons, no order shall be made preventing the trial at the same time of any number of such offences not exceeding 5, whether alleged to have been committed within 6 months from the first to the last of such offences against the same person or not. Nothing in this section shall prevent an indictment containing more than 5 counts from being presented."

[8] Cato J ruled against the objection. He decided that the Crown was entitled to allege in one count a series of related acts, notwithstanding that each could have been the subject of a separate count. He relied on the common law rule enunciated in R v Balls (1871) LR 1 CCR 328 which permits a series of connected acts of dishonesty to be included in a count alleging a general deficiency. The rule has been applied in this jurisdiction in R v Funaki [2005] Tonga LR 239 and more recently by Cato J himself in R v Talia CR 69 of 2013.

This appeal
[9] Mr Niu argued that the rule of general deficiency does not apply to cases such as the present where each separate act could have been the subject of a separate charge. Relying on the judgment of Pearson J in R v Tomlin [1954] 2 All ER 273 he submitted the rule does not apply where it is possible to trace and prove separate acts of embezzlement. In the result, Mr Niu said, the indictments were in flagrant violation of the rule against duplicity.

[10] Mr Sisifa responded that the concept of general deficiency was properly applied. He argued that it could be invoked when the fraudulent activity involved repeated offences over a period of time. Were that not so, he said, it would be impossible to present an indictment that captured the criminality of the alleged offending.

Discussion

[11] The general principle in respect of what has come to be known as the rule against duplicity is that no one count of the indictment should charge the accused with having committed two or more separate offences – see the discussion in Archbold, Criminal Pleading, Evidence and Practice (2009) at 1 – 135. A common law "exception" to the rule emerged in situations concerning "continuous taking" or "general deficiency". The issue in this appeal is whether the exception applies in this case.

[12] The purpose of the rule against duplicity is to enable an accused to know the case he or she is required to meet. It is a rule of elementary fairness but also necessary for the purpose of such matters as a submission of no case to answer or a plea in mitigation. Accordingly, it is necessary to consider the underlying principles of fairness and clarity in deciding whether a count is bad for duplicity – see generally Archbold (supra) at 1-136 - 1-138.

[13] Pragmatic considerations also play a part. In Director of Public Prosecution v Merriman [1973] AC 584 Lord Morris of Borth-y-Gest said (at 539) that questions relating to duplicity:

"... are best answered by applying commonsense and by deciding what is fair in the circumstances."

In the same case Lord Diplock said (at 607) that the rule against duplicity:

"... has always been applied in a practical, rather than a strictly analytical, way for the purpose of deciding what constituted one offence."

[14] A discussion of general deficiency usually begins with R v Balls, the case principally relied on by Cato J. In Ballsthe accused faced three counts of embezzlement. He was a member of a co-partnership who was responsible for receiving payments from persons who bought coal from the co-partnership, to bank the aggregate sum received weekly on a Tuesday and to provide an account of payments received. He failed to bank and account forthe full amount received. He was charged with embezzlement of the total sum he had failed to account for on three separate occasions. They encompassed 31 different payments received. The conviction was upheld. Cockburn CJ said at 332-3:

"It is quite true that if a man receives a number of separate sums and has to account for each of them separately, only three instances of failure to account can be proved under oneindictment. Thus, if there were to be one accounting on Monday, and one on Tuesday, and one on Wednesday, and so on, only three defaults could be charged and proved; though even in such a case, evidence of other instances might be given in order to show that the instances charged were not merely accidental, but that what was done was done intentionally and fraudulently. But here no difficulty of this nature arises. I agree that the prisoner might have been indicted for embezzling any of the separate small sums received by him. But it appears upon the case that his duty was to receive the small sums from time to time to send in the weekly accounts every Tuesday; and every Tuesday to pay the gross amount received by him during the preceding week into a bank. It is true that each of the small sums received had to be accounted for; but he might well be charged with embezzling the aggregate amount. And evidence of the individual items was admissible to show how this aggregate was made up. It would be very mischievous if, in such cases as these, servants could not be indicted for embezzling the aggregate amounts for which they fail to account. No doubt, in such cases, there is an embezzlement of each of the smaller sums going to make up the total not accounted for; but there is not the less an embezzlement of the whole."

[15] Balls was applied in R v Tomlin (supra at [9]) where a shop manager challenged as bad for duplicity a charge that he had embezzled a sum of money over a specified period. It was impossible to prove when individual sums had been taken over the period. The Court of Criminal Appeal held the indictment was unobjectionable. Pearson J, giving the judgment of the court, said that the fact that, as in Balls, the appellant might have been indicted for embezzling any of the separate small sums received did not prevent him from being indicted for embezzling the aggregate of those sums. The court went on to approve the view of Lynskey J in R v Lawson, 36 Cr. App. R. 30and said in conclusion (at 275):

"We desire to make it plain in conclusion, agreeing therein with Lynskey, J., that, in the ordinary case, where it is possible to trace the individual items and to prove a conversion of individual property or money, it is undesirable to include them all in a count alleging a general deficiency. What we are not willing to do is to elevate a rule of practice, applicable to circumstances where it may be required to avoid injustice, into a rule of law applicable to circumstances where it will defeat justice... ."

[16] Mr Niu relied on this passage to support his argument that the indictments offended the rule against duplicity. He argued that general deficiency could be invoked when property was stolen over a period and it was impossible to prove the separate acts that had led to the overall loss. But, said Mr Niu, general deficiency does not apply and should not be relied on when there is evidence of individual acts of taking over a period each of which constitute and could be charged as a separate offence.

[17] We accept that the rule of practice referred to in Tomlin would support such an approach. But we do not accept that the rule should be applied in cases such as the present. It is to be noted that, in enunciating what he was careful to describe as a rule of practice which should not be elevated into a rule of law, Pearson J was referring to the ordinary case where the rule may be required to avoid injustice. He was not laying down a principle of universal application. To apply the rule in this case would be to apply it to circumstances where it would, as Pearson J feared it could, defeat justice.

[18] It is not suggested that there is any lack of clarity or uncertainty in the indictment. The Crown provided further particulars which identified with precision the dates and amounts involved in each separate act of conversion. Mr Niu rightly acknowledged that no prejudice to the appellants resulted from the way the indictment was framed. They had notice of each and every act relied on by the Crown as constituting the offence. The accused in cases where individual acts cannot be particularized are arguably disadvantaged by comparison. The appellants' argument requires that the general deficiency rule can be applied whenever the prosecution is unable to prove individual acts of conversion but not in cases where it can. In our view that outcome would be both anomalous and unjust.

[19] If the general deficiency rule could not be invokedin this case the appellants and their co-accused could have been tried for only five of the multiple acts of conversion they were accused of committing. Only a small portion of the criminality involved in their offending would have been captured. There would have been little consequential saving in time or cost. The Crown would have been required to lay out evidence of the overall scheme in order to prove the individual acts of theft. As was acknowledged in Balls, it will always be permissible – we would say necessary - to give evidence of other instances in order to show that what was done was done intentionally and fraudulently. It would be an affront to common sense if the Crown were to be required to call evidence of the entire course of criminal activity but could secure convictions on only small portion of it.

[20] We are satisfied that this is not the "ordinary case" that Pearson J had in mind. In cases where there is a pattern of repeated offending of the same kind, as in this case, we see no reason why the rigours of the rule against duplicity should not, in the interests of justice, be relaxed.

[21] We note that the same reasoning appealed to Cato J in R v Talia, (supra at 7). He said at [6]:

"Although in many cases of general deficiency it may not be [possible] to isolate all of the wrongful acts, where there has been a continuum of similar unlawful offending or a similar modus operandi or pattern involving many acts generally involving small amounts, the approach of alleging a general deficiency should in my view be permitted."

We agree.

Appeals against sentence

Mr Kaufusi

[22] In sentencing Mr Kaufusi, Cato J adopted a starting point of 3 years 9 months. He allowed 13 months for mitigating factors. These were Mr Kaufusi's belated guilty plea, his previous good character and the fact that his family had repaid the money. In suspending 9 months of his sentence, the Judge assessed him as having good prospects of rehabilitation.

[23] Mr Niu did not criticize the starting point adopted by the Judge but said there had been insufficient allowance made for mitigating factors. He contrasted the Judge's approach with the allowance he made for a co-offender, Stephanie Cocker, whose offending he described as the most serious of those who pleaded guilty. She had stolen a total of $97,450 over a two year period. The starting point of four and a half years reflected this. Mitigating factors -an early guilty plea and good character – reduced the sentence to three years of which one year was suspended. The Judge said her early guilty plea demonstrated genuine contrition.

[24] Mr Kaufusi's plea came too late to qualify him for any significant discount on sentence. Mr Niu said he would have pleaded guilty at the beginning of the trial after the Judge rejected the objection to the indictment were it not for a concern that to do so would prejudice his appeal rights. If that was his belief it was misplaced and we do not think he can seek further credit for his pleas of guilty on that account. Mr Kaufusi could not have complained if the Judge had given him no credit at all for his late pleas. We infer, however, from the aggregate allowance of 13 months for mitigating factors that the Judge allowed a nominal discount of one month for the late guilty pleas.

[25] The question then is whether Mr Kaufusi's repayment of the full amount stolen and previous good character were sufficiently recognized, specifically whether a discount of 12 months adequately reflected those factors. While the Judge could have been more generous, we do not believe he is shown to have erred.

[26] It is important that there is a meaningful allowance when recompense of losses is made. It demonstrates a desire to atone and of course lessens the impact of the crime on the victim. If adequate allowance is not routinely made, there is also the concern that the incentive to make reparation will be reduced.

[27] In our view a discount of little over 25% for good character and for making reparation is sufficient though the Judge could not have been criticised if he had allowed more. We see no inconsistency with the allowance for mitigating factors in Cocker; the greater part of the discount of 33% to her sentence would have derived from the early guilty plea.

[28] Nor do we consider the Judge has been shown to have erred in the period of suspension he chose. Mr Niu referred us to the decision of Schuster J in R v Halapua CR 91 of 2009 in which 3 years of a sentence of 3 years 1 month was suspended. It was also a sentence for embezzlement. The sum involved - $16000 – was repaid in full.

[29] Previous sentencing decisions at first instance are generally of limited assistance, particularly where a different Judge is involved and there is a significant discretionary element. Halapua is no exception. On the face of it the end sentence of 3 years 1 month was very high; there had been an early guilty plea and co-operation with the police as well as full reparation. We have the clear impression that mitigating factors were a significant factor in the decision to suspend almost the entire sentence.

[30] We accept that Cato J could well have suspended more of the sentence but, again, there is no error of principle in his approach and the period of suspension was well within the scope of his discretion. Mr Kaufusi may see some inconsistencyin the fact that, despite making full reparation, he will serve only one month less than Mrs Cocker whose offending was more serious. But when regard is had to other distinguishing features, we do not consider there is an unacceptable degree of disparity.

Mrs Latu

[31] Mrs Latu stole a little over $30,000 over the period June 2011 – January 2012. There were 19 separate acts of defalcation. Aged 24 years at sentence, she had begun working part-time at Westpac in 2009 after graduating with a diploma in business accounting. She became a full-time teller in 2011. Mrs Latu said she had come under pressure from older and more senior employees to join in the fraudulent scheme. This appears to have been accepted by the Judge who said he suspected she "fell victim to the seductive influence of others around her".

[32] Cato J imposed the end sentence of 2 years 3 months imprisonment after deducting 6 months for previous good character from a starting point of 2 years 9 months. In suspending 6 months of the sentence, he took into account her youth and the fact that she may have succumbed to pressure from others. Though somewhat sceptical of the sincerity of her expressions of remorse, describing her apology as belated and convenient, he was prepared to recognize that she had some prospects of rehabilitation.

[33] Mr Niu did not criticize the term of imprisonment to which MrsLatu was sentenced. He focused on the period of suspension, arguing that it should have been 21 months. As she has served 6 months, a successful appeal would effect her immediate release.

[34] We are not without sympathy for Mrs Latu. She was young and vulnerable to her co-workers, who had been exploiting the loophole in the system for some years. The pressure on her to fall into line could have been considerable.

[35] It is not however suggested that the Judge did not appropriately weigh the context of Mrs Latu's offending in reaching the end sentence. As in the case of Mr Kaufusi, we accept that the Judge could not have been criticised if he had suspended a greater portion of the sentence. But he gave consideration to all relevant considerations. His conclusion that Mrs Latu's prospects of rehabilitation did not justify a longer period than six months was one he was entitled to reach in the exercise of his discretion.

[36] The sentences imposed on both appellants could be seen as comparatively stern. It is however worth emphasizing that, unless the sentencing Judge has made an error of principle, we are not at liberty to interfere unless the sentences are manifestly excessive. Neither sentence was in that category.

Result

[36] The appeals against conviction are dismissed. Leave to appeal against sentence is granted but the appeals are dismissed.

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Salmon J

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Handley J

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Hansen J

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Tupou J