The Queen v Morales[1997] QCA 89

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

C.A. No. 451 of 1996

Brisbane

THE QUEEN

v.

EDWARD MORALES

(Applicant) Appellant

Macrossan CJ

Davies JA

McPherson JA 

Judgment delivered 29 April 1997.

Joint reasons for judgment of Macrossan C.J. and McPherson J.A.; separate concurring reasons of Davies JA.

APPEAL AGAINST CONVICTION DISMISSED AND APPLICATION FOR LEAVE TO APPEAL AGAINST SENTENCE REFUSED.

CATCHWORDS: CRIMINAL LAW - Section 408C Criminal Code - Dishonest application of bank guarantees - Black v. Freedman (1920) 12 C.L.R. 105 applied.

Counsel:  Mr A. Maher for the appellant

Ms. L. Clare for the respondent

Solicitors:  Legal Aid Office (Qld.) for the appellant

Director of Public Prosecutions (Qld.) for the respondent

Hearing Date:  5 March 1997

JOINT REASONS FOR JUDGMENT - MACROSSAN CJ & McPHERSON JA

Judgment delivered 29 April 1997

The appellant pleaded not guilty to two counts under s. 408C of the Criminal Code of dishonestly applying to his own use (1) proceeds of a bank guarantee issued by the National Bank in his possession on account of one Kocsardi; and (2) proceeds of a bank guarantee issued by the A.N.Z. Banking Group in his possession on account of Stern Electronics Pty. Ltd.  The appellant’s brother Pedro Morales was originally charged jointly on the same indictment; but, at the close of the Crown case, the learned trial judge acceded to a defence application and directed the acquittal of that accused.

After a trial lasting eight days, the jury, within an hour of retiring, returned verdicts of guilty on both counts.  The appellant was sentenced to imprisonment for three years on each count.  He now appeals against conviction and applies for leave to appeal against the sentences imposed.

Of the six grounds in the notice of appeal against conviction, only five were relied on in the outlines of argument.  In substance they consisted of complaints directed to the fairness of the summing up (grounds 1, 2 and 3); an objection to evidence adduced by the Crown concerning the use to which the appellant put the proceeds of the bank guarantees (ground 4); and a further ground (ground 5) that the judge misdirected the jury on the effect of the bank guarantees.  Ground 6 was abandoned.

In order to understand the submissions, it becomes necessary to recount some of the circumstances leading to the two offences charged.  In 1992 two companies Elegant Tiles Pty. Ltd. and Elegant Porcelain Pty. Ltd. commenced the businesses of importing and selling in Queensland tiles and porcelain items manufactured in Spain.  It was part of the appellant’s case at trial that it was not he, but a solicitor Mr George Mylonas, who was the real directing mind and will of the two corporations; but, however that may be, the appellant was a director and either he or in some cases his brother Pedro (who was the other director) signed the cheques drawn to dispose of the money representing the proceeds of the bank guarantees referred to in the indictment.

By 3 September 1992 a contract of that date (ex. 1) had been entered into between Elegant Tiles Pty. Ltd., described as the Importer, and Porsan Australia Pty. Ltd. described as the Distributor. Clause 3.1 provided that the Importer would sell products, meaning ceramic tiles, to the Distributor for the Importer’s price when ordered.  By cl. 3.4 the Distributor agreed to purchase products to the total of 100,000 sq.m. of tiles in the first six months, and further quantities at stated intervals thereafter, with the Importer issuing an invoice for ordered products specifying both quantity and price.  Clause 5.2 provided that risk and property should not pass until the Distributor had taken delivery of the products and accepted them in store or at nominated point of arrival.  Clause 6.1 provided for payment of the price as follows:

“6.1.1 by letter of credit upon order of the products;

6.1.2 the letter of credit will be drawn down to the extent of seventy-five percentum (75%) of its value upon delivery and acceptance of the Products at the place nominated by the Distributor;

  6.1.3 the balance twenty-five percentum (25%) of the letter of credit to be drawn down twenty-one (21) days after delivery and acceptance.”

Difficulties soon arose in attempting to carry the contract ex. 1 into effect.  Porsan was a company of which Stephen Truscott was the principal.  Karoly Kocsardi mentioned in count 1 of the indictment was an investor with an interest in that company.  At some stage after ex. 1 was executed, it was arranged that he would take delivery of the tiles direct from Elegant Tiles, and that he would provide the letter of credit required by cl. 6.1. for payment of the price.  As it turned out, the instrument provided to Kocsardi by the National Bank was not a letter of credit, but a bank guarantee dated 28 January 1993 (ex. 5) in the sum of $146,839.00 in favour of Elegant Tiles.  The bank guarantee was in the common form of an instrument of that kind, incorporating an unqualified promise by the Bank to pay that amount to Elegant Tiles upon notice that payment was required.

Matters did not proceed as planned.  An order was placed for 10,000 sq.m. of tiles, but not for the full quantity of 100,000 sq.m. specified in cl. 3.4. By notice dated 5 February 1993 (ex. 16), addressed to Porsan, Elegant Tiles required payment of the sum of $146,839.00, of which $110,129.25 representing 75% was required “upon delivery of the goods” and the balance of $36,709.75 within 21 days of delivery.  On 4 March 1993 Elegant Tiles gave notice (ex. 6) to Porsan that it had defaulted under cl. 3.4 of the contract by failing to purchase the requisite quantity of tiles, and by a further notice dated 6 April 1995 (ex. 7), it terminated the contract altogether.

The tiles did not arrive from Spain.  Some of the problems seem to have stemmed from the fact that, naturally enough, the Spanish manufacturer would not part with the tiles or perhaps even manufacture them until its price was paid or secured, which Elegant Tiles was not in a position to do.  According to some of the prosecution witnesses at the trial, the appellant at one stage said that the tiles had been shipped and were on the sea to Australia.  In the end, Elegant tiles gave notice (ex. 15) to the Bank requiring payment of $146,839.00 under the bank guarantee.  That notice bore the seal of the company authenticated by the signatures of the appellant and his brother Pedro.  It is not dated; but on 20 March 1993 the sum of $146,839.00 was credited to the account of the company with the Bank  (see ex. 20).  The notice ex. 15 given to the Bank contains the statement, “Delivery of the ceramic tiles has been effected ...”.

Against this background of fact, it is convenient to begin with ground 5, which is described in the appellant’s written outlines as raising a threshold question on the appeal.  In advancing it, counsel for the appellant relied on Wood Hall Ltd. v. Pipeline Authority (1979) 141 C.L.R. 443, 445, where, in speaking of the bank guarantee in that case, Barwick C.J. said:

“In my opinion, there is no basis whatever upon which the unconditional nature of the Bank’s promise to pay on demand can be qualified by reference to the terms of the contract between the contractor and the owner.  Equally, there is no basis on which the owner’s unqualified right at any time to demand payment by the Bank can be qualified by reference to the terms or purpose of that contract.”

On the strength of this statement, it was submitted that the bank guarantee ex. 5 could not be qualified by reference to the relationship between Kocsardi and Elegant Tiles.  The parties to ex. 5 were the Bank and Kocsardi, and it provided no “link” between Kocsardi and Elegant Tiles or the accused.  The trial judge was, it was said, therefore wrong in failing to direct the jury that the contract between Elegant Tiles and Porsan did not in any way enter into the offence charged against the appellant under s. 408C.  Only if the Bank had been the complainant could s. 408C have had any application to such a case.

The proposition has only to be stated for its fallacies to appear.  Section 408C makes it an offence for a person to apply property dishonestly.  The property must be either (a) property belonging to another, or:

“(b) property belonging to the person, which is in the person’s possession or control ... subject to a trust, direction or condition or on account of any other person ...”.

Whether or not the appellant received, controlled or held the proceeds of payment of the bank guarantee in trust for or on account of Kocsardi depended on the relationship that existed between them, and not between them or either of them and the Bank.  All that is shown by the remarks of Barwick C.J. in Wood Hall is that that relationship was not the concern of the Bank when it came to pay those proceeds to the appellant or to Elegant Tiles.

The sum of $146,839.00 was paid by the Bank to or to the account of the company Elegant Tiles at the request of the appellant, who was its director.  To that extent the money is shown to have been “in his possession or control” within the meaning of s. 408C(1)(b), and the appellant was bound to hold it, or to ensure that it was held, subject to any trust, etc., to which Elegant Tiles itself was subject.  He could not lawfully apply it in any other way.  The relationship between Kocsardi and Elegant Tiles was governed by the terms of the contract ex. 1 and, so far as applicable,  the general law.  It was tentatively submitted that the contract had ceased to govern the matter when Kocsardi was allowed to assume the place of Porsan as principal in the transaction, or perhaps when the bank guarantee ex. 5 was substituted for the letter of credit originally contemplated in cl. 6 of the contract.  That was not at any relevant time the attitude adopted by the appellant or, through him, by Elegant Tiles.  The various notices such as exs. 6, 15 and 16 given by Elegant Tiles, through to and including the notice ex. 7 of 15 April 1993 terminating the contract, treated the contract ex. 1 as continuing; in some instances specific contractual provisions were identified and invoked in the notices..  At most, it may be correct to regard the contract as having been varied in some respects; for example, in relation to substitution of a bank guarantee for the letter of credit in cl. 6.1; but it was still the contract as varied that governed relations between the parties or, if there was a novation, between Kocsardi and Elegant Tiles.  Apart from the provisions of the contract ex. 1, Elegant Tiles had no right of any kind to demand payment of the bank guarantee, or to receive or apply the proceeds in any way.  Under its terms, Porsan as Distributer did not become liable to pay the price under cl. 5.2 until it took delivery of and accepted the tiles.  It was not until then that the property passed and the seller became entitled to the price.  That moment never arrived because, as the notice dated 6 April 1993 (ex. 7) itself asserted, Porsan had never ordered 100,000 sq.m. of tiles; and, more particularly, because the tiles never arrived in Australia.

Elegant Tiles might perhaps have had some claim against Porsan or Kocsardi (if he was the real principal) for damages for breach of contract arising from failure to order 100,000 sq.m. of tiles.  It had, however, no right as against Porsan or Kocsardi, whether on that account or any other, to demand payment under the Bank guarantee or to receive the proceeds when paid.  Having, without any right to do so, demanded that payment and received those proceeds, it held them as trustee for the person (who was Kocsardi) who had provided the bank guarantee of which they were the proceeds.  The precise meaning and legal significance of the words “property ... in ... possession or control ... on account of any other person” are perhaps not entirely clear: see Allard (1987) 29 A.Cr.R. 418; and compare R. v. Dubar [1994] 1 W.L.R. 1484; but what is plain is that they include money or other property which, as against another person, the recipient has no right at law or in equity to receive or retain: cf. Black v. S. Freedman & Co. (1910) 12 C.L.R. 105; Spedding v. Spedding (1913) 30 W.N. (N.S.W.) 81.

Having received the proceeds of the bank guarantee, the appellant or Elegant Tiles ought to have held them in trust for or on account of Kocsardi.  Instead, he paid or caused them to be paid in satisfaction of various liabilities, real or supposed, of Elegant Tiles or other companies in which he was interested.  In doing so, he applied that property to his own use, or to the use of another person, within the meaning of s. 408C(1).  The evidence about the cheques tended to establish that element of the offence, as well as showing that the application of the proceeds was carried out “dishonestly” in terms of the section.  The complaint that the evidence was not admissible (ground 5) is plainly not sustainable.

Much the same may be said about the transaction alleged in the second count, in which the complainant was Stern Electronics Pty. Ltd.  The contract document from which this charge of an offence under s. 408C took its starting point was not in evidence, but Mr Meyer of the complainant company testified that it was in the same terms as ex. 1.  In this instance the bank guarantee ex. 12 dated 25 March 1993 was for $74,240.00 and is expressed to be “for import of sanitary items as per invoice no.4 dated 19 March 1993 from Elegant Porcelain”.  In that particular, it specifically identified the transaction giving rise to the relationship between that company and Stern Electronics.  In this instance, Mr Meyer in his evidence at the trial claimed that it was only because the appellant had agreed that the proceeds of the guarantee should be held in a solicitor’s trust account until the good were supplied that he consented to allowing the guarantee to be called up.  If that evidence was accepted by the jury, it meant that the proceeds may well have been held under an express trust, condition or direction within the meaning of s. 408C(1).  The condition was not adhered to.  In the result, some $26,000 from the total amount was remitted to the manufacturer in Spain.  What became of it is not disclosed by the evidence at the trial; but the goods never in fact arrived in Queensland. The balance of the money was applied in much the same way as in the case of count 1. 

There is plainly no substance in either grounds 4 or 5.

Of the other three grounds 1, 2 and 3, the first is that the trial judge failed to warn the jury not to rely on the evidence of a Mr Favaloro, who was a witness for the prosecution.  Of him, the appellant’s written outline submits that “it was plainly open to the jury to infer that he was lying due to bias and malice”.  So it may have been.  Some reasons were advanced in evidence for thinking he was associated with Mylonas, whom the defence sought to cast in the role of guiding spirit of the Elegant company enterprises.  For this reason and because of inconsistencies in his own evidence and that of other witnesses, it was submitted that the trial judge ought to have warned the jury not to act on Favaloro’s evidence except where it was corroborated.  But Favaloro was not in any of those established categories of witnesses whose evidence attracts the need for a warning to the jury about the absence of corroboration.  It misconceives the role of a trial judge to suppose that he or she is invariably required to draw the attention of the jury to specific inconsistencies in the evidence of  witnesses with a view to demonstrating their unreliability.  That is ordinarily the task of the advocates for the parties, who will already have performed that function when the time for summing up arrives.  It is not the judge’s duty to repeat what counsel in their addresses have said on the subject, or to adopt the version of one of them at the expense of the other.  Favaloro was only one of several major witnesses for the Crown who testified about matters in issue at the trial.

The second in this category of complaints about the summing up is, on one view of it, possibly more substantial.  At the trial an issue developed over a particular statement said to have been made by Mylonas.  On the defence version of it, there was an occasion in the boardroom of the Elegant companies in early 1993 when, in speaking of Porsan’s failure to act in accordance with the contract, Mylonas emphatically declared:

“That is it.  We have had enough.  If they haven’t done it by the right time, draw down the guarantees.  We will take that as damages for the delay to the actual importing of the goods.”

Evidence to that effect was given by Mr Wayne Phillips, who was called as a witness by the appellant.  The appellant himself testified in chief that on the occasion in question Mylonas had told the appellant:

“This is just not on.  You’ve got to draw down the guarantee and claim it as damages on this contract.”

Or, according to another account of it:

“Edward, you’ve got to draw down that bank guarantee, otherwise you’ve lost me.”

Or again:

“He [Mylonas] turned to me, Pedro and Ron [Favaloro], and he said ‘Draw it down.  Draw it down’.  At the time he gave me the bank guarantee ...”

The issue about the terms of this or some such conversation first began to emerge when Favaloro was giving evidence in the prosecution case at trial.  According to him, the appellant told him that he (the appellant) was going to draw down the guarantee for $146,000.  Favaloro said that the goods had not arrived yet, so he told the appellant that he was not in a position to do it.  The same witness also said he later spoke to Mylonas about it; and, on about 17 March 1993, in the presence of the appellant and Pedro, Mylonas explained to the appellant that he was not able to draw down the bank guarantee, if the goods had not arrived in Australia.  However, according to Favaloro, the appellant himself told Favaloro a little later that it was “not a criminal offence; it’s a civil matter, and nobody could be involved in it”.  The appellant then went ahead and did it.

The question of what was said on the occasion in question was raised again in the cross‑examination of Mylonas, who at the trial gave his evidence for the Crown after Favaloro had testified.  He denied he had said “Draw down the guarantee and claim it as damages or you’ve lost me”.  This gave counsel for the Crown a right to re-examine on the matter, which he exercised. When asked about it, Mylonas said he told the appellant:

“If you draw down on the guarantee without the goods having left Spain, then you’ve committed a criminal offence, which is theft.  If the goods are en route to  Australia and you draw down the guarantee then it becomes a civil matter between yourself and Porsan; but goods haven’t left Spain, so that would be theft.”

What has been brought together to this point represents the substance of the evidence on the subject, although there were also some other references to it in the course of the trial.  Faced with that testimony, it was for the jury to resolve the conflict by choosing between the witnesses on either side, if they felt they were able to do so; or if they could not, to keep it in mind in deciding whether or not they were left with a reasonable doubt about proof of the offence.  The question was one that went only indirectly to proving of one of the elements in the prosecution case, which was whether the appellant realised it was dishonest to apply the proceeds of the bank guarantee in satisfying liabilities of Elegant Tiles, rather than continuing to hold those proceeds on account of Kocsardi.  The question was not whether he could call up the guarantee, but whether he believed he could legitimately use the proceeds once they were under his control.

The way in which the judge approached that issue was to direct the jury (which he did more than once) that it was for the Crown to exclude beyond reasonable doubt the explanation given by the appellant:

“that his solicitor Mylonas said that it was all right to draw down the bank guarantees and to use the money as damages in relation specifically to Kocsardi; and his general understanding of the evidence he gave, that is, the accused, that Mylonas had advised him that he could draw down the bank guarantee, the funds thereof.”

When, towards the end of the summing up, the learned judge returned to the question, he gave this direction:

“Defence submitted there was no dishonest intent and referred you to the evidence of Phillips, Wayne Phillips, who gave evidence that he overheard Mylonas telling the accused to draw the moneys down after he got off the phone.

Now, that evidence of Mr Phillips - and I mention to you I haven’t touched upon it previously - that you have to consider the evidence of Mr Phillips obviously in the case, it is part of the evidence in the case; but you still have to consider whether the accused acted dishonestly, or alternatively whether the Crown has satisfied you and excluded the honest claim of right, and excluded [it] beyond reasonable doubt.  I will give you an example.  If a solicitor said to you, ‘Look we have got this transfer document.  Your wife is out of the country.  Just sign it here and we will put it in and we can let the transaction go ahead’, and you are asked to forge your spouse’s signature.

Now, in the absence of a written authority from your spouse, it is a matter for you:  the community may think that that was a dishonest act.  In other words, you wouldn’t necessarily do everything your solicitor tells you to do.  Now, having said that, you have to be satisfied beyond reasonable doubt in this case, looking at all the circumstances, whether the Crown has excluded the honest claim of right and no intention to defraud on the part of the accused, and whether they have satisfied you that the accused was thereafter dishonest, having considered all of this evidence.”

On appeal, the complaint was made that the judge had given “only passing mention” to the evidence of the “key” defence witness Wayne Phillips, and had then “interpolated an example unfavourable to the defence after introducing the evidence of Mr Phillips, thereby weakening the force of the defence”.  It must be acknowledged that the example given by the judge is not especially clear or particularly apposite to the case in hand.  But the point he was seeking to make, that “you wouldn’t necessarily do everything your solicitor tells you to do”, appears sufficiently clearly at the end of the example, and in a context in which his Honour again emphasised that the Crown was required to exclude any honest claim of right or intention to defraud on the part of the appellant.  The fact that the appellant had acted on the advice of a solicitor would not exculpate him from criminal responsibility if he knew what he was doing was dishonest.

The point was taken up by counsel on the application for redirections.  He referred to the “key testimony” of Phillips, and suggested it had been obscured by the example given, asking that the jury be reminded again of Phillips’ evidence of his having overheard the conversation with Mylonas.  His Honour seems initially to have thought that he might have overlooked the evidence of Phillips (which he had not), and he said he had “taken a note of that”.  The debate then turned to other matters, and, in the end, the judge did not refer the jury again to what Phillips had said.  Instead, having accepted that he had in one respect misread the transcript passage of the re‑examination of Mylonas to the effect that he had warned the appellant it would be a criminal offence to draw down the guarantee without the goods having left Spain, the judge caused that passage to be read to the jury again.  That was far from what counsel for the defence had been looking for; but the matter was left there.  No further re-direction was sought.

On appeal, this complaint about the summing up tended to merge with ground 3 in the notice of appeal, and to take on the character of a more general complaint of lack of balance in the summing up, which is not the ground taken in the notice of appeal.  It states that the directions to the jury concerning elements of the offence included only “examples” favourable to the prosecution:

“including uncorroborated parts of Mr Favaloro’s testimony.  The evidence of Mr Phillips or Mr Wasmund was not mentioned by his Honour”.

The matter of Favaloro’s evidence has already been discussed in these reasons.  The evidence of Mr Phillips was mentioned in the passage of the summing up set out above.  Mr Wasmund, who was a senior officer of the National Bank, was another witness called by the defence.  He did not touch upon advice given by Mylonas to the appellant because Wasmund was not present during the relevant conversation.  It was not suggested that he was.  Rather Mr Wasmund was called to give, and gave, evidence that Mylonas himself had spoken to him on two or three occasions about the bank guarantee.  His evidence was adduced as part of the appellant’s overall attempt to show that it was really Mylonas, and not the appellant, who was in charge of the Elegant companies.  Assuming that to be so, it was nevertheless the appellant himself who applied the proceeds of the bank guarantees in paying liabilities of those companies.  Even if he had acted under express orders from Mylonas it would not have relieved him from the criminal responsibility for what he did.  The question whether  he was proved to have done so dishonestly remained the issue for decision.

It is, however, desirable to point out that, when  judged by the standard adopted and applied in Morex Meat Australia Pty. Ltd. &. Doube (1995) 78 A.Cr.R. 269, 271-272, the summing up cannot fairly be faulted as lacking in balance.  As was accepted in that decision of this Court, the question is not whether the case for the accused was presented to the jury in summing up to an extent equal to that employed in presenting the Crown case; but “whether the terms of the summing up itself taken as a whole contain sufficient presentation of the defence case to enable the jury to understand what it is”.  As to that, the learned judge here left it in no doubt that the jury must, before convicting, be satisfied beyond reasonable doubt that the appellant realised that he was not entitled to use the proceeds.  The defence case, he said, is that “the accused believed he was entitled to use the money ...”.  His Honour referred on three separate occasions in summing up to the evidence of the appellant that Mylonas had said he was entitled to draw on the bank guarantees, and once to the evidence of Phillips to the same effect. If quantitative comparisons are relevant, there were only three references to the evidence of Mylonas and Favaloro that the appellant was warned not to draw down the guarantees.  The real complaint was that the damaging passage in the re‑examination of Mylonas was read out to the jury once in summing up, and again on the re‑direction; but, in the circumstances of this case, that is not sufficient to demonstrate a lack of balance, or to justify allowing the appeal and ordering a new trial.

It follows that the appeal against conviction must be dismissed.

So far as sentence is concerned, the effective sentence, for these two offences, of imprisonment for three years to be served concurrently is within the range of a proper sentencing discretion as disclosed in other cases of the kind. The total amount misappropriated was $146,000 on count 1, and some $48,000 or so on count 2 after deducting the sum of $26,000 (the fate of which is unknown) remitted to Spain.  It was submitted that the misappropriation was not a premeditated fraud that was planned well in advance, but rather a sudden response to overwhelming financial pressures; but that, if it be so here, is a common feature of many offences of dishonesty that come before the courts.  In this instance the appellant used some $40,000 of money received to pay off a debt he owed to his sister, and some of it to bolster a different business altogether.  There is no tangible prospect that restitution will be made to those who lost these large sums of money.

At sentencing the appellant was 33 years of age.  He is the sole support of a 10 year old daughter in Australia, whose mother lives in Spain.  He himself came to Australia when he was 10, and was educated here, although he later returned to and worked in Spain for some time.

He has a few previous convictions, although none of much relevance to these offences.  He has sustained two convictions for wilful exposure and one for behaving in an indecent manner.  In 1989 there was a conviction for a minor false pretence, but it is said to have arisen out of what was essentially a civil dispute.  In 1995 he was convicted of an offence of arranging a pretended de facto relationship to obtain permanent residence, for which he was sentenced to 6 months imprisonment but released forthwith on a good behaviour bond.  The offence was committed to help his brother; but it was, again, an offence involving dishonesty.  He has twice undergone periods of probation in the past, which it may be inferred were completed successfully.  All matters considered, however, his is not a case calling for a recommendation for early parole.

Both the  appeal against conviction and the application for leave to appeal against sentence should be dismissed.

REASONS FOR JUDGMENT - DAVIES J.A.

Judgment delivered 29 April 1997

I have had the advantage of reading the reasons for judgment of Macrossan C.J. and McPherson J.A.  I agree with their Honours that the appeal against conviction and against sentence must be dismissed for the reasons which they give.  However I wish to add some remarks of my own upon the only ground of substance for the appeal against conviction which was, in effect, that the learned trial Judge did not sum up fairly in relation to the question whether the appellant acted dishonestly in drawing down, and applying the proceeds of, the bank guarantee given on behalf of Kocsardi and, consequently, whether he also acted dishonestly in drawing down, and applying the proceeds of, the other bank guarantee.

The complaint against the learned trial Judge's directions in this respect, put in its best light for the appellant, was as follows.  There was evidence upon which the jury could have found that, in drawing down, and applying the proceeds of, the bank guarantee given on behalf of Kocsardi, the appellant was acting on the advice of his solicitor, Mylonas, that it was legally permissible to do so;  and if that evidence was accepted, it was submitted, the jury could not have been satisfied beyond reasonable doubt that the appellant's action in drawing it down and applying the proceeds was dishonest.  There was an equal number of witnesses on each side of the question whether Mylonas gave advice to that effect:  the appellant and Phillips said that he did;  Mylonas and Favaloro said that he did not.  That contest and its consequences, so it was submitted, were not fairly put to the jury.

It is true that the contest between the witnesses on that point was not put in those terms and it would no doubt have been better if it had.  However the learned trial Judge did tell the jury, as Macrossan C.J. and McPherson J.A. have pointed out, that it was for the Crown to exclude beyond reasonable doubt the explanation by the appellant that Mylonas had said it was alright to draw down the guarantee and to use the proceeds as damages.  His Honour said that this was the main aspect of the defence case.  He told them that if they were satisfied that the accused honestly believed that he was entitled to do what he did and had no intention to defraud they must acquit.  He said that this was so even if the accused's belief stemmed from a belief in a right which the law did not recognize.  And he emphasized again that there was no onus on the accused but that the onus remained on the Crown to exclude the explanation and to prove that the accused acted dishonestly.  Moreover his Honour did refer to Phillips' evidence on this question, albeit at a later point in his summing up, and introduced that evidence by referring to the defence submission that there was no dishonest intent, for which, his Honour said, reliance had been placed on Phillips' evidence that he overheard Mylonas telling the accused to draw the monies down.

It is therefore plain that all of the relevant evidence on this question was referred to by the learned trial Judge in the context of this contest and its consequences even if it was not all referred to at the same time.  And the consequence of not being satisfied, beyond reasonable doubt, of the evidence of Mylonas and Favaloro in this respect was fairly put to the jury.  I therefore agree that there was no sufficient lack of balance in summing up to justify allowing the appeal and ordering a new trial.