The Queen v Anderson[1999] QCA 302

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

CA No  182 of 1999

Brisbane

THE QUEEN

v

ANTHONY DUNCAN ANDERSON

(Applicant)

Appellant

de Jersey CJ

Pincus JA

White J

Judgment delivered 3 August 1999

Separate reasons for judgment of each member of the Court; each concurring as to the orders made.

APPEAL AGAINST CONVICTION DISMISSED.

APPLICATION FOR LEAVE TO APPEAL AGAINST SENTENCE GRANTED AND  APPEAL ALLOWED. THE  THREE YEARS IMPRISONMENT IMPOSED BELOW  SET ASIDE AND IN LIEU THEREOF THE APPLICANT SENTENCED TO TWO YEARS IMPRISONMENT.

REASONS FOR JUDGMENT - de JERSEY CJ

Judgment delivered 3 August 1999

1. The appellant was convicted by a jury of having, with intent to defraud, induced one Tucker to pay him the sum of $50,000.00, partly by wilfully falsely promising Tucker that he, the appellant, would continue to conduct the business Cashback Enterprises, and partly by falsely pretending to Tucker that his, the appellant’s, interest in the business was not the subject of a particular debt.  The charge was based on s 427 of the Criminal Code as it stood before its repeal as from 1 July 1997: the offence conventionally called “false pretences” was subsumed in the offence of “fraud” (s 408C).  The appellant appeals against the conviction, and seeks leave to appeal against the sentence of three years imprisonment imposed upon him.

2. The charge arose from the sale by the appellant of a share in a pawnbroking business in Rockhampton.  It was important to the complainant, Mr Tucker, as purchaser, that the business be debt free, and, because Mr Tucker and his wife had no business experience, that the appellant continue to run the business, at least for a time.  Mr Tucker gave evidence of representations to that effect, on which he and his wife relied in determining to pay the $50,000.00 to the appellant.  In fact, the business was not free of debt:  there was a bill of sale over the business securing a $39,000.00 debt;  and a matter of days after the payment, the appellant was not running the business and could not thereafter be contacted.

3. The appellant contended that there was no sufficient evidence of either representation.  The promise was made by the appellant to Mr Tucker in Rockhampton on 23 March 1996.  Mr Tucker and his wife were to purchase a 48% share in the business, with the balance of 52% remaining with the appellant as managing partner.  The Tuckers were to reside in Blackwater, and the appellant and his wife were to continue to run the business.  Then, as Mr Tucker said in his evidence, “eventually we (the Tuckers) would move into Rockhampton when we had sufficient experience in the business and take that over, then he (the appellant) and Colleen (the appellant’s wife) would retire”.  The accountant for both parties, Mr Hancock, gave evidence that at a subsequent meeting on 10 April 1996, the discussions between the parties proceeded on the basis that the appellant and his wife would continue to run the business until the Tuckers gained sufficient experience to take it over.

4. Counsel for the appellant submitted that that evidence did not establish a promise in terms of the charge, by contrast with, at best, an observation in the course of discussion as to what might occur.  The evidence of Mr Tucker, which is consistent with the position described by their accountant, was to the effect that the appellant agreed that he would remain the managing partner and with his wife continue to run the business until the Tuckers gained sufficient experience to do so themselves.  The jury could reasonably have construed that evidence as establishing the appellant’s “promise”, that is, assurance or undertaking, to the requisite effect.

5. Counsel separately submitted that the jury could not have been satisfied beyond reasonable  doubt that the promise was wilfully false, in that the appellant did not then intend to honour it.  Mr Tucker had finally paid the appellant the $50,000.00 (by two instalments) by 30 April.  Mr Tucker was to go to the business premises on 3 or 4 May.  When he attended, he found them shut up, with no sign, either then or thereafter, of the appellant.   The jury was entitled to draw from that evidence the requisite inference as to the appellant’s lack of intent, when making the promise, to fulfil it.

6. The appellant also contended that there was no sufficient evidence of the representation that the appellant’s interest in the business was debt free.  Mr Tucker gave evidence that on 10 April 1996, Mr Hancock raised the question of a debt owed to Mark Edwards, from whom the appellant had earlier purchased his interest in the business.  The appellant said that that debt “was fixed up or paid out”.  Mr Tucker in cross-examination rejected the suggestion that the appellant had said simply that the debt had been “fixed up”, and Mr Tucker said that he left the meeting believing that the debt had been paid.  Counsel’s submission rested on the words “fixed up”, said to be equivocal.  But the evidence of Mr Tucker made it clear, coupling that expression with the reference to the debt’s having been “paid out”, that on his recollection, the appellant was representing that the debt had indeed been discharged.  That gave the jury sufficient foundation for concluding beyond reasonable doubt that the representation was made.

7. Counsel next submitted that the jury was not entitled to conclude that the wilfully false promise and false pretence “induced” Mr Tucker to make the payment.  This contention was based on evidence from Mr Tucker that in entering into the transaction, he relied “mostly”, not on the promise and the pretence, but on the advice of the accountant, Mr Hancock, and his solicitor, Mr Bressington.  Defence counsel at the trial submitted that the appellant therefore had  no case to answer, because a finding that the representation and the promise “induced” the payment could not reasonably therefore be made.  The learned trial judge rejected that submission and left the matter to the jury.

8. It is of some interest to note the way in which Mr Tucker’s concession that he relied “mostly” on his solicitor and his accountant arose.  He was pressed in cross-examination with the suggestion that he relied exclusively on the solicitor and the accountant, but rejected that, countering that he relied also on the representation and the promise, but he nevertheless did accept when it was put to him, in leading form, that he relied “mostly” on the accountant and the solicitor.  The evidence follows:-

“Now, isn’t it the case that the only reason you signed the agreement and the contract and parted with the $50,000 was simply because you relied upon or induced if you like, solely by the advice of professionals, that is Ken Bressington and Mr Hancock?--  I relied on - on the signing of the business agreement I relied on Tony Anderson staying on to run the business.  I also relied on the fact that he said he had cleared the debt.  I relied on my accountant and I relied on my solicitor.

Yes.  But do you understand the question I’m putting to you?  I’m putting to you that you - that you relied exclusively on the professional advice that you were getting before you parted with the money?--  I - I couldn’t say exclusively but I did rely-----

Well would you say mostly?--  Mostly.

Would that be in excess of 75 per cent, if I had to put - if I had to choose a figure for example?--  I - I couldn't put a figure on it.  I-----

More than 50 per cent?--  I - I relied on the three people to make my decision.

All right.  But you’ve just told me that you’ve relied mostly on your professionals?-  Yes, I did.

That’s before you parted with the money?--  Yeah.”

9. The form of s 427 contemplated that more than one factor might operate to induce a relevant payment:  note the words “partly by a false pretence and partly by a wilfully false promise”.  One ordinarily “induces” someone else to do something by leading them “by persuasion or some influence” (Shorter Oxford English Dictionary) to that point.  The issue under s 427, as applicable here, was whether the appellant, by the false pretence and the false promise, persuaded or influenced Mr Tucker to pay the $50,000.00.  As pointed out in Gauci [1996] 1 QdR 521 it is settled, with reference to s 427, “that the pretence need not have been the only influence operating on the complainant’s mind”.  Consistently, it was not here suggested that because the advice of the solicitor and the accountant also operated on his mind, that excluded the conclusion that the pretence and the promise could have induced the payment.  The sole point taken concerned the degree to which a contributing factor must influence the complainant’s mind.  Accepting that the security of the advice of the solicitor and the accountant was the major contributing factor, does that exclude any role for other factors sufficient to warrant the conclusion that they “induced” the payment?

10. The learned trial judge directed the jury that the pretence and the promise “together must be a substantial inducing cause” (emphasis added).  There is no Queensland authority with relation to s 427 establishing the need for a contributing cause to operate substantially before it might be regarded as having induced the relevant consequences.  Such a view would however accord with the approach taken in New South Wales in R v Patmoy (1944) 45 SR(NSW) 127, where the Court of Criminal Appeal was concerned with a charge cast in these terms comparable with those of the repealed s 427:-

“Whosoever, by any false pretence, or partly by a false pretence and partly by a wilfully false promise, obtains from any person any property, with intent to defraud, shall be liable to penal servitude for five years.”

11. Jordan CJ said (p 131):-

“. . . if there were both a false pretence and a false promise, and the false pretence by itself, though an element in the inducement, was not sufficient to have contributed to it substantially, yet if there was also a wilfully false promise, and the false pretence and the false promise taken together amounted to a substantial contribution to the inducement, this was sufficient.”

12. By contrast, under the law of contract, to warrant the conclusion that a misrepresentation, even a fraudulent misrepresentation, has induced a person to enter into a contract, it is not necessary that the representation should have been a substantially contributing cause:  it will suffice even if it plays “only a minor part in contributing to the formation of the contract” (Gould v Vaggelas (1985) 157 CLR 215, 236 per Wilson J).

13. It is strictly not necessary to resolve in this case the question whether or not for purposes of establishing “inducement” under the repealed s 427, that promise and pretence need have substantially influenced the complainant to make the payment.  The learned judge directed the jury that it needed to be satisfied of that substantial effect.  The circumstance that Mr Tucker relied “mostly” on the solicitor and the accountant did not as a matter of fact exclude the conclusion that the pretence and promise were nevertheless also “substantial” other contributing causes, in the sense in which the word substantial is ordinarily understood.  And so, on the basis on which the judge left the matter for the jury’s consideration, the conclusion it reached was open.  The matter was, however, put too favourably to the accused.

14. It is odd that the extent to which a subject contributing factor need - in a factual sense - play a part in bringing about a result, should be thought to differ, in a matter like this, depending on whether the issue arises in the civil or the criminal arena.  Of course the standards of proof necessarily differ.  But why should what need be proved, for this essentially factual matter, otherwise differ?

15. To induce the consequence, the contributing factor obviously must play some “material” role, in the sense that it is relevant, pertinent or germane to the result, in that it has been influential in leading to the result.  But to require that the degree of contribution must also be “substantial”, which in this context - as the argument before us illustrated - one would interpret as requiring a greater contributory role, a weighty or major role, is unnecessary, and indeed unjustifiable.

16. With an offence like this, where there is intent to defraud, the criminal sanction must, and should, have been intended to attach where the misrepresentation contributed in any material degree to the occurrence of the relevant event, here the payment.  There is nothing to the contrary in the verbiage of the then Code provision, and that, being its natural interpretation, should therefore prevail.  The approach in Gould v Vaggelas transposed to this criminal context, should be preferred to that indicated by Jordan CJ in R v Patmoy.  It follows that the summing up was in this respect unduly favourable to the appellant.  In any case, as pointed out, on the basis on which it was left to the jury, the jury was entitled to reach the conclusion it plainly did.

17. The appellant included other grounds in his notice of appeal.  Counsel made brief observations upon them in the written outline, and none of them has substance.  Counsel properly conceded upon the hearing of the appeal that he was unable to pursue those other grounds any further.  There is no need in those circumstances to set out in this judgment any further analysis of them.  It should be ordered that the appeal against conviction be dismissed.

18. The applicant was 55 years old.  He had been convicted about four years earlier of an offence of failing to keep a register of second hand goods transactions, for which he was fined.  That conviction carried no particular significance with relation to the sentencing for this offence.  In imposing three years imprisonment for this offence, the learned judge noted that the applicant showed no remorse, and that the fraud had an adverse effect on a number of people.

19. Counsel for the applicant submitted that the learned judge fell into error in that he allowed himself to be influenced, in determining the sentence, by the effect of the applicant’s conduct on persons who should not properly have been regarded as victims of this particular offence.  In the course of sentencing the applicant, the judge said this:-

“It has been submitted to me that this fraud which you have committed has had a very significant impact upon a number of people.  Not least of those of course is yourself but certainly other people have been seriously affected by your fraudulent activity. 

Mr Tucker is a married man, still relatively young with two children.  The impact of this upon him and his family is serious and has had an adverse economic impact upon him.  You told Mr Edwards that the money that you received from Mr Tucker in relation to the sale would be paid to him to clear the debt which was in fact still owing to Mr and Mrs Edwards.  He has not been paid. 

Other people including your wife have been seriously adversely affected by this offence that you have committed.”

20. While the effect on Mr Tucker, as complainant, was plainly relevant and importantly so, it is difficult to see how any effect on Mr Edwards could be relevant.  Mr Edwards was not a victim of this offence. 

21. From time to time, in sentencing offenders, judges make observations on the consequences of the conduct of the offender in various respects, sometimes not particularly directly related to the commission of the offence.  That is sometimes an appropriate course.  But to avoid any suggestion that the judge may have taken irrelevant matters into account in the sentencing process, in the context for example of R v Burrows [1996] 1 Qd.R. 359 and R v D [1996] 1 Qd.R. 363 and the authorities discussed in those cases, judges should in those circumstances be careful to make it clear that such extraneous matters have not played any part in determining the sentence.  In this case, it is difficult to avoid the conclusion that his Honour’s reference to Mr Edwards does signify its having played a role in his determination of the appropriate penalty.

22. That view is reinforced by some elevation in the level of the penalty, confirmed by a review of the cases to which we were referred, especially R v Bamfield (CA No 502 of 1994, 4 April 1995) (3 years for stealing a vessel worth $200,000.00; conviction after trial; premeditation; 42 year old accused with substantial record), R v Brooks (CA No 183 of 1996, 20 September 1996) (2½ years with parole after 12 months for commercial fraud involving more than $200,000.00; conviction after trial; 60 year old accused with no record) and R v Ching (CA No 269 of 1992, 21 October 1992) (2 years for false pretences involving $59,920.00; 52 year old accused with no prior history; conviction after trial).  Confining oneself to the relevant circumstances only, those cases would warrant in this situation the imposition of a penalty of the order of two years imprisonment, with no recommendation in respect of early parole.

23. Because it appears the learned judge did take irrelevant matters into account in the course of the sentencing, this Court should itself resentence the applicant.  The application for leave to appeal against sentence should be granted, the appeal against sentence allowed, the sentence of three years imprisonment imposed in the District Court set aside, and in lieu thereof it be ordered that the applicant be sentenced to two years imprisonment.

REASONS FOR JUDGMENT - PINCUS JA

Judgment delivered 3 August 1999

1. I have read and subject to the following remarks agree with the reasons of the Chief Justice.  His Honour explains that, to resolve the issues in the present case, it is unnecessary to determine to what extent the pretence or promise charged, under the former s 427 of the Criminal Code, brought about the conduct referred to in the latter part of s 427(1) - i.e. brought about the obtaining or the delivery there referred to.  The judgment of Jordan CJ in Patmoy (1944) 45 SR (NSW) 127 at 131 relied on by the appellant's counsel discusses such a question, arising under the then corresponding New South Wales provision.  The problem considered there is how the section operates where there is both a false pretence and a false promise, each contributing to the outcome;  it does not appear to me that the reasoning necessarily applies to the issue raised here.

2. In Laverty [1970] 3 All ER 432, the English Court of Criminal Appeal expressed the view that to prove obtaining property by deception it must be shown "that the false representation acted on the mind of the purchaser" (433).  This test appears to accord with the position which subsists in a civil action for deceit, as explained in the Chief Justice's reasons.  However, it seems to me arguable that, in a criminal context, where the Crown sets out to prove that the act of an accused brought about a particular result, it may not be enough to satisfy the jury that the act complained of contributed in a minor way to the result.  A recent discussion of a similar problem is to be found in the principal set of reasons in Wardley Australia Limited v Western Australia (1992) 175 CLR 514.  That was an action brought in reliance on s 82(1) of the Trade Practices Act 1974 (Cth) which permits recovery of damages by a "person who suffers loss or damage by conduct of another person . . .".  Referring to the word "by" in the quoted expression, the reasons state (525):

" . . . the word clearly expresses the notion of causation without defining or elucidating it.  In this situation, s. 82(1) should be understood as taking up the common law practical or common-sense concept of causation recently discussed by this Court in March v. Stramare (E & MH) Pty Ltd".  ((1991) 171 CLR 506) 

As Deane J pointed out (544) in Wardley the obvious analogy for the purposes of applying the relevant sections of the Trade Practices Act was with the general law of damages relating to negligent or fraudulent misstatement.  However, in the principal set of reasons, the judges did not say that there should be applied under the statute the common law doctrine that, for the purposes of an action in deceit, it is enough for the plaintiff to show that the misrepresentation materially contributed to the occurrence of the loss.  This omission and the expressions used by the Court give reason to doubt whether proof that a minor contribution to causation of the loss would be enough, under the statute there being considered.

3. To come back to the words of s 427, it will be noted that it says "by any false pretence or wilfully false promise or partly by a false pretence and partly by a wilfully false promise" in which the word "by" may have the "common-sense" meaning ascribed to it in Wardley's case.  That is, it may be that in s 427 cases one simply asks whether in the ordinary sense of the word "cause" the pretence or promise caused the victim to part with the money, or other result alleged.

4. However, although there may be s 427 offences as yet undisposed of and so the point is not necessarily academic (despite the repeal of s 427), one need not (as the Chief Justice points out) reach a conclusion on the matter just discussed, in the present case.  This is so because the way the judge directed the jury is not the subject of complaint and the evidence was quite enough to justify a conviction on the basis of that direction.

5. I agree with the orders proposed by the Chief Justice.

REASONS FOR JUDGMENT - WHITE J

Judgment delivered 3 August 1999

1. I agree for the reasons expressed by the Chief Justice that the appeal against conviction should be dismissed.

2. I further agree that it appears that the learned sentencing judge was inappropriately influenced in imposing the penalty that he did by reference to the effect of the applicant’s wrongdoing upon a person who was not a complainant and not directly affected by the wrongful conduct.  The authorities to which the Chief Justice refers suggest that an appropriate penalty in this case should be a term of imprisonment of 2 years with no recommendation for eligibility for release on parole earlier than the statutory scheme.

3. I would grant the application for leave to appeal against sentence, allow the appeal and in lieu of the sentence imposed below order that the applicant be sentenced to 2 years’ imprisonment.