SUPREME COURT OF QUEENSLAND

[1]  KEANE JA:  On 21 May 2008 the appellant was convicted upon the verdict of a jury of nine counts of possession of a counterfeit prescribed security in contravention of s 9(1)(b) of the Crimes (Currency) Act 1981 (Cth) ("the Act").  On 22 May 2008 the appellant was sentenced to one year imprisonment to be released on recognizance after serving six months.  The appeal was heard on 16 June 2008.  The Court allowed the appeal and quashed the appellant's conviction on 20 June 2008 on the basis that the reasons of the members of the Court would be published in due course.  What follows are my reasons for deciding that the appeal should be allowed.

[2] The appellant sought to have the convictions set aside on the ground that the learned trial judge erred in law in ruling that:

"proof that a document was a 'counterfeit prescribed security' as defined by s 3 of the [Act], did not require proof of the existence at the relevant time of an actual 'prescribed security' (as defined), from which the counterfeit document had been created."

[3] I propose to summarise the case advanced by the Crown at trial and the material provisions of the Act before setting out the reasons for the learned trial judge's ruling.  I will then set out the arguments advanced on the appeal and proceed to a discussion of those arguments.

The Crown case at trial

[4] The appellant was charged with the following offence:

"That on the 18th day of March 2005 at Brisbane in the State of Queensland [the appellant] had in [his] possession a counterfeit prescribed security, namely, a United States of America $500,000,000.00 Federal Reserve note serial number K768973911 knowing it to be a counterfeit prescribed security."

[5] The appellant was also charged with eight other offences.  These charges were framed in identical terms save that the serial number of each note differed.  Each of these charges were in the following terms:

"That on the 18th day of March 2005 at Brisbane in the State of Queensland [the appellant] had in [his] possession a counterfeit prescribed security, namely, a United States of America $100,000,000.00 Federal Reserve note serial number [as particularised] knowing it to be a counterfeit prescribed security."

[6] The appellant had apparently obtained access to the notes in question in the Philippines in about 2001 and was in the process of negotiating to have the documents sold for a figure of three per cent of their face value.  There was no evidence in the Crown case, or, indeed, any suggestion, that notes of this kind had ever been produced or issued by the Federal Reserve Bank of the United States.  The Crown argued that each note was apparently intended to be accepted as a bond issued with the authority of the government of the United States of America. 

[7] In this regard, on the reverse side of each note, the document is declared to be "bonds" issued by the Secretary of the Treasury acting on the instructions of the President of the United States of America.  Each note incorporated a series of coupons promising the payment of interest.  Each note was inscribed on its face "pay to the bearer on demand [the face value of the note]".  Each note purported to be signed by the Treasurer of the United States, the Secretary of the Treasury, and was inscribed with the seal "Federal Reserve Bank of the United States".  Each note purported to date from 1934, but analysis of the ink used on each note showed that it had been printed much more recently.  The notes were housed in a number of metal boxes of official-looking appearance and were accompanied by what purported to be certificates of authenticity.

[8] That having been said, the notes in question were obviously bogus by reason of their amounts and grammatical errors on their face.  The Crown case, that each of the notes was a "counterfeit prescribed security", was advanced by relying on the definition of that term in the Act.  It is convenient now to refer to the material provisions of the Act.

The Act

[9] The term "counterfeit prescribed security" is defined by s 3 of the Act to mean:

"(a) any article, not being a prescribed security, that resembles, or is apparently intended to resemble, or pass for, a prescribed security; or

(b) any article, being a prescribed security, that has been altered in a material respect and in such a manner as to conceal, or to be apparently intended to conceal, the alteration;

and includes any such article whether it is or is not in a fit state to

be uttered and whether the process of manufacture or alteration is

or is not complete."

[10]  The term "prescribed security" is defined by s 3 of the Act to mean:

"any bond, debenture, stock, stock certificate, treasury bill or other like security, or any coupon, warrant or other document for the payment of money in respect of such a security, issued by the Commonwealth of Australia, by an authority of the Commonwealth of Australia or by, or with the authority of, the government of a country other than Australia."

[11]  Reference must also be made to the definition of "counterfeit money" which, by virtue of s 3 of the Act, means:

"(a) any article, not being a genuine coin or genuine paper money, that resembles, or is apparently intended to resemble, or pass for, a genuine coin or genuine paper money; or

(b) any article, being a genuine coin or genuine paper money, that has been altered in a material respect and in such a manner as to conceal, or to be apparently intended to conceal, the alteration;

and includes any such article whether it is or is not in a fit state to

be uttered and whether the process of manufacture or alteration is

or is not complete."

[12]  The Act does not contain a separate definition of "genuine coin" or "genuine paper money".  Section 3 of the Act provides:

"(2) For the purposes of this Act, a coin or paper money shall be taken to be a current coin, or current paper money if it is lawfully current in Australia or in a country other than Australia by virtue of a law in force in Australia or in that country, as the case may be.

(3) For the purposes of this Act, a coin or paper money shall be taken to be a genuine coin or genuine paper money if it is, or has been, a current coin or current paper money in any country (whether or not the country concerned is still in existence)."

The ruling of the trial judge

[13]  At trial the appellant submitted that, absent evidence of a genuine security against which the allegedly counterfeit document could be compared in order to determine whether it was "apparently intended to resemble, or pass for" the genuine article, there was no case for him to answer. 

[14]  The learned trial judge rejected that submission.  His Honour ruled in the following terms:

"At first reading it was my impression that the offence of possessing counterfeit prescribed security required the reader to look at the definition of 'prescribed security' and then to locate some particular instrument which could be compared with the one that's challenged in the Court. Now, if the definition stopped at something that was apparently intended to resemble a prescribed security, that would be correct. You can't say that something resembles something else unless you've got two things to compare.

However, the prosecution says, the legislation also refers to the expression 'or pass for' a prescribed security. I can see that it is meant to mean something different. That's why it is there. There is not necessarily the need for a visual comparison.

In that respect, support can be found in the dictionary definitions. In the Oxford English Dictionary the words 'to pass for' can mean 'to be accepted as equivalent to, to be taken for, to be accepted, or received.' The idea of 'to counterfeit' extends to 'to put a false or deceiving appearance upon; to disguise falsely...to put on, with intent to deceive, the appearance or semblance of; to forge, pretend, simulate'. I am influenced by those definitions.

I do appreciate that the definition of 'prescribed security' in the statute does rather seem to focus attention on a particular existing, at least at some time, instrument that was issued by the central bank of a country. Attention would have to be paid to that issued document in deciding if the challenged document was passed off in its place.

However, having hesitated about the two different interpretations, I have decided that, on balance, what the prosecutor says should be accepted. In deciding if something 'passes for' a prescribed security, one does not have to have in front of one a particular document, but, rather, it would be sufficient if the appearance of the whole document would indicate to a reader that it was apparently intended to be an instrument of a central bank.

So, it does not matter, that the prosecution has not tendered a bond, issued by the Federal Reserve Bank, and imitated by others."

The arguments on the appeal

[15]  The appellant's argument is that to be a "counterfeit prescribed security" the article must be an imitation of an actual security issued by a government.  In the appellant's submission, a counterfeit prescribed security must be something which is a likeness, to some degree, of a genuine prescribed security. 

[16]  In the written submissions filed on behalf of the appellant, it was submitted that the phrase "to pass for", in the definition of counterfeit prescribed security, means "be accepted as"; and that this phrase adds nothing to the word "resemble".  In oral argument on the appeal, Mr MacSporran SC, who appeared for the appellant, disavowed the suggestion that "to pass for" adds nothing to "resemble".  It must be said at once, of the appellant's earlier suggestion that the phrase "to pass for" is synonymous with, and adds nothing to, the word "resembles", that it is a very strong thing to treat words in a statute as having no effect.  Ordinarily, a statute is to be construed on the footing that the legislature intends every word to be given effect.  In oral argument, Mr MacSporran accepted that this was so, arguing that the words "intended to pass for" were apt to catch a degree of similarity falling short of resemblance.

[17]  Mr Rice of Counsel, who appeared for the respondent, argues that the appellant's conviction can be sustained on the footing that the notes in question were "apparently intended to … pass for a prescribed security".  On this argument, the similarity of a bogus document to a genuine security may assist the conclusion that it is apparently intended to be accepted as a prescribed security, but the "apparent intention" that a document, which is not an attempted reproduction of a genuine article, should pass for a financial instrument issued by a government authority may appear from other circumstances.

[18]  It is also argued by the respondent that the definition of "counterfeit prescribed security" in sub-paragraph (a) of the definition of that term does not refer to a "genuine" prescribed security.  It is said that it is important to note that the definition of "counterfeit money" expressly refers to an apparent intention to pass for "genuine" money.  The definition of "counterfeit money" stands, the respondent argues, in stark contrast to the definition of "counterfeit prescribed security" which does not incorporate the word "genuine" in its reference to a prescribed security:  the court should not add words to legislation under the guise of construing it. 

[19]  Mr Rice also argues that the more expansive approach reflected in the definition of "counterfeit prescribed security" is explicable, as a matter of policy, on the basis that prescribed securities will often be unfamiliar, even to members of the financial community, so that the broader definition of "counterfeit prescribed security" is directed at the mischief that carefully crafted fictitious documents may more readily be passed for value than counterfeit currency.

Discussion

[20]  As a matter of legal history, the words "apparently intended to resemble, or pass for …" have long been used in legislation concerned with counterfeit currency.  One may refer, for example, to the Coinage Offences Act of 1861 (UK) and to s 149 of the Criminal Code 1899 (Qld). 

[21]  It is clear that, in legislation concerned to protect the integrity of the currency, this form of words postulated a comparison of the allegedly counterfeit article with the genuine article.  Mr MacSporran argues that the language of the definition of "counterfeit money" in the Act is explicable as reflecting this long-sanctioned usage, and that the absence of a reference to a "genuine" prescribed security in paragraph (a) of the definition of "counterfeit prescribed security" does not have the significance which Mr Rice's argument seeks to attach to it.  According to Mr MacSporran, the reference to "prescribed security" in paragraph (a) of the definition of "counterfeit prescribed security" is necessarily to a prescribed security which is, by definition, an actual document issued by a government.

[22]  I note that the Second Reading Speech and the Explanatory Memorandum relating to the Act afford no assistance in ascertaining the intention of the legislature in respect of the question which arises in this case.

[23]  In my respectful opinion, the consideration which is decisive of the appeal is that, when paragraph (a) of the definition of "counterfeit prescribed security" refers to "any article … that resembles or is apparently intended to resemble … a prescribed security", it clearly postulates a resemblance to, or an apparent intention to resemble, an existing article.  The notion of "resemblance" requires a comparison between one existing article and another.  If a "prescribed security" is to afford the required comparison with an allegedly counterfeit document, the "prescribed security" must be a document which actually exists.  The definition, when it includes "any article … [that is] intended to pass for, a prescribed security", must be speaking of a prescribed security of the same kind as that which is capable of being the subject of a comparison with the bogus article, ie an actual prescribed security as opposed to a theoretical possibility. 

[24]  In other words, when the definition in paragraph (a) of "counterfeit prescribed security" refers to a "prescribed security" it must be referring to an actual prescribed security, not a prescribed security which might be thought to be of a kind which might be issued by a government.  For an article to fall within paragraph (a) of the definition of "counterfeit prescribed security" it must have a sufficient degree of similarity to an actual prescribed security (as opposed to the abstract possibility of a prescribed security) that it either resembles that article or, though not actually resembling it, has a sufficient similarity to it that it can be said to be intended to resemble, or be accepted as, that article. 

[25]  On this view, the words "apparently intended to … pass for" are not synonymous with the words "apparently intended to resemble", in that the former words are apt to catch counterfeits which fall short of intended resemblance in terms of their similarity with the "genuine article".  But the need for a genuine article with which to make a comparison is no less in the case of a "counterfeit prescribed security" than in the case of "counterfeit money".

[26]  I have therefore concluded that, on its proper construction, the definition of "counterfeit prescribed security" in the Act cannot be satisfied without proof of an actual prescribed security against which the requisite similarity can be measured.

[27]  While I have reached this conclusion by paying close attention to the text of the Act, considerations of policy do not, in my view, point in the other direction.  Persons asked to accept documents which purport to be prescribed securities in the course of commercial dealings can be expected to exhibit at least the same degree of care to ensure the genuineness of the instrument as is expected from a person asked to accept currency.  Indeed, a financial instrument with which the proposed recipient is unfamiliar would reasonably be expected to excite closer study and inquiry to ensure that it is "the genuine article" than might be excited by currency with genuine examples of which recipients are more likely to be familiar.

Conclusion and orders

[28]  I am respectfully of the opinion that the learned trial judge erred in rejecting the appellant's argument.

[29]  For these reasons, I considered that the appeal should be allowed, the conviction should be set aside, and a verdict of not guilty should be entered.

[30]  MACKENZIE AJA:  I agree with Keane JA's analysis of the proper construction of the Crimes (Currency) Act 1981 (Cth) and need to add nothing to it.  I agree with the orders delivered by him.

[31]  FRYBERG J:  The appellant was sentenced on 22 May.  His notice of appeal against conviction was filed on 4 June.  The appeal was heard on 16 June.  The orders of this Court were made on 20 June.  In short, the point in issue has been determined at breakneck speed.  That has not benefited the argument.

[32] At the close of the Crown case Brabazon DCJ asked the prosecutor what the Crown contended were the elements of the offence.  A substantial discussion then took place between both counsel and his Honour on the question whether the Crown had to demonstrate the existence of specific genuine prescribed security with which the bogus documents could be compared.  In the course of that discussion counsel for the appellant observed that if such a demonstration had to be made, there was no case to answer.  At its conclusion his Honour accepted the prosecution's submission that it did not have to so demonstrate.  The appellant was then called on and he elected to call no evidence and not to give evidence.  Counsel then addressed the jury.  In the light of his Honour's ruling, counsel for the appellant “didn't really contest that exhibits 1-9 were articles apparently intended to pass or Federal Reserve Bank bonds” (as his Honour put it in his summing up to the jury).

[33]  In that summing up his Honour told the jury that “pass for” meant “to be accepted as equivalent, to be taken for, to be accepted or received”, but he did not refer to the question whether it was incumbent on the prosecution to demonstrate the existence of a specific genuine prescribed security with which the bogus documents could be compared.  After quoting that definition he observed that counsel for the accused “did not submit to you that [the exhibits] weren't in that category and I think we can leave that behind us quite easily”.  He told the jury:

“[T]he key and a vital issue for you to decide … is: can the prosecution prove beyond reasonable doubt that Mr Wallader was aware, on the day when he took the box away from the office on 18th March 2005, that they were not genuine, that they were fakes, not real, Federal Reserve Bank bonds, and that's the thing that you're here to decide, the real thing and the key issue.”

Contrary to what at times seemed to be assumed by the arguments in the appeal, he did not tell the jury that the prosecution did not have to prove such a security existed.  Nonetheless if as a matter of law the prosecution did bear such an onus, the failure to tell the jury so would mean that this appeal must succeed.

[34]  His Honour's directions reflect the way in which the case was conducted by the parties both at first instance and on appeal.  That approach was in my judgment unfortunate.  It glossed over some significant matters of fact.  For example his Honour referred more than once to the Federal Reserve Bank.  No such bank exists, nor had the prosecution charged or proved the existence of such a bank.  The documents in question did not refer to such a bank.  They referred to two of the 12 privately owned reserve banks which constitute the United States Federal Reserve System.  Whether they did so convincingly was not considered.  Moreover his Honour told the jury that the question was whether the appellant knew that the documents were not genuine “bonds”.  Presumably he referred to bonds because bond was a word which appeared on the back of the documents.  However that overlooked the facts that the indictment alleged that the documents were notes, that on their face they were called notes, that they were expressed to be legal tender and that they had what purported to be coupons attached to them.  These facts would not have taken the documents outside the definition of prescribed security in the Crimes (Currency) Act 1981 (Cth); but they were relevant to the question whether the documents were apparently intended to pass for genuine documents.

[35]  At trial and on appeal the Crown relied only on the words “apparently intended to … pass for”.  On appeal any argument based on misdirection as to the meaning of the words “apparently intended” was expressly abandoned.  The argument has revolved solely around the question whether the words “pass for” in the phrase “resemble or pass for” require in every case proof of the existence of a genuine document for comparison.  No attention has been paid to the words “apparently intended”, no cases on the meaning of those words have been cited and no comparative statutory contexts have been referred to.  I think that is to be regretted.  The words are not unique to the Act and it may be that the meaning to be attributed to them would cast light upon the expression “pass for”.  Nor has any attention been paid to other aspects of the expression “pass for”.  Questions such as whether the Act envisages the passing for as occurring among lay people untutored in the ways of such documents or among financiers or others with experience of what they look like have been ignored.  It would not be appropriate for me to delay delivery of judgment in this appeal to do my own research on these matters when counsel have deliberately eschewed them and a majority of the Court proposes to order the immediate acquittal of the appellant (who is presently in prison).

[36]  I agree with Keane JA that the words “pass for” should not be construed so as to add nothing to “resemble”.  The question is, what do they add?  Is it enough that the documents apparently possess at least some of the qualities of a prescribed security to such an extent that they might be accepted as such; or must they possess at least some of the qualities of a particular prescribed security which is or perhaps once was in existence?

[37]  The definition catches three types of articles:

• articles which resemble a prescribed security;
• articles apparently intended to resemble a prescribed security;
• articles apparently intended to pass for a prescribed security.

The respondent accepted that in the first case the word “resemble” necessitated a comparison with a particular prescribed security.  I am by no means convinced that this concession was properly made.[1]  It is unnecessary to consider it further.  Accepting it, the second type of article must be one which viewed objectively was intended to resemble a particular security, even if the intention was not achieved.  That raises the question, whose intention?  Where the phrase “apparently intended” is used in the context of a statement[2], it is not difficult to construe it as referring to the intention of the maker of the statement.  It is not so clear that the intention in the present case can be that of the s 9 offender, ie a person merely in possession of the document.  On the other hand there are difficulties if the intention is not that of the offender.  It is unnecessary to determine the point.  What is clear is that some person must have the necessary intention.  Documents do not acquire intentions except by transferred parts of speech.

[38]  If the first two types of articles require comparison with a particular prescribed security, it must be because of the use of the word “resemble”.  One can see the force of an argument that this word by its natural meaning suggests the need for a visual comparison.  In my judgment “pass for” does not carry a similar connotation.  That phrase focuses attention not on similarities but on usage and acceptance in any context to which the documents might come.  Such articles might well be used or accepted as prescribed securities because they possess qualities which persons who deal with them expect prescribed securities to have, not because they look like a particular prescribed security.  Once it is accepted that it is the qualities apparently possessed by this third type of article which must be the focus of attention, the need for comparison with a particular prescribed security vanishes.

[39]  Keane JA makes the point that the definition “when it includes ‘any article … [that is] intended to pass for a prescribed security’ must be speaking of a prescribed security of the same kind as that which is capable of being the subject of a comparison with the bogus article”.  If by the same kind is meant having at least some of the same or similar qualities, I agree.  However it does not seem to me to follow that the appropriate comparison can not be made unless a particular prescribed security is intended to be emulated.  In my judgment it is sufficient that the qualities, or some of them, of prescribed securities can be the subject of comparison.  Just what those qualities are could be the subject of expert evidence.  It was not suggested in the present case that the evidence did not permit such a comparison.

[40]  I do not support my preferred interpretation by a comparison with the use of the word “genuine” in the definition of “counterfeit money”.  I accept Mr MacSporran’s argument that the purpose of that word is to cover both currency and what was once currency, Australian and foreign.

[41]  The Act is plainly intended to implement Australia's obligations under the International Convention for the Suppression of Counterfeiting Currency.  Until 1981, as the Minister said in the second reading speech in the Senate, “Australia had been unable to accede to the Convention because of hitherto inadequate legislation which has not enabled Australia to reciprocate the protection afforded to Australian currency by a large number of member countries of the United Nations”.  But it was intended to do a good deal more than that.  The Convention did not cover the counterfeiting of government securities, nor did it deal with counterfeiting of coins of numismatic interest.  The Act covers such securities as well as superseded money both domestic and foreign.  It was intended to rationalise existing statutory protection for Australian securities and extend it to foreign securities.  Its ambit discloses no reason why it should have been limited to cases where some comparison could be made with an existing genuine security.  Australia has a real interest in protecting investor confidence in its securities; and reciprocity for foreign securities may also be seen as being in the national interest.

[42]  Counsel did not suggest that any other provisions of the Act created a tension with either of the proposed interpretations.  I shall therefore not take time to examine the use of the definition in all of the contexts in which it appears.

[43]  In my judgment the appeal should be dismissed.