SUPREME COURT OF QUEENSLAND

[1]  WILLIAMS JA:  I have had the advantage of reading the reasons for judgment of Keane JA and there is nothing I wish to add thereto.  For those reasons the appeal against conviction should be dismissed, as also should the application for leave to appeal against sentence.

[2]  JERRARD JA:  In this appeal I have the benefit of reading the reasons for judgment of Keane JA and respectfully agree with those, and with the orders proposed by his Honour.

[3]  KEANE JA:  On 16 November 2004 the appellant was convicted by a jury of one count of fraud.  It was alleged that, on various dates between 7 May 2002 and 1 April 2003, he dishonestly obtained property to a value greater than $5,000 from the company of which he was general manager.  He was sentenced to two and a half years imprisonment.

[4] The appeal against conviction was initially based on the contention that there was a miscarriage of justice in that the trial judge made errors in his summing up and that the appellant's legal representatives "at trial were incompetent … and failed to follow the appellant's instructions".  These grounds were not pressed, and the appellant was given leave to substitute the following ground of appeal:

"The Learned Trial Judge failed to properly direct the jury on the rule in Browne v Dunn as it applied to the appellant's evidence relating to the payment of $7,160.00 on 31 March 2003 (item 26, exhibit 19), thereby resulting in a miscarriage of justice."

[5] The appellant also applied for leave to appeal against the sentence on the ground that it is "manifestly excessive".  This application was not pressed.

The Crown case at trial

[6] The appellant was engaged by the company as its general manager at a salary of $52,000 per annum with performance payments every six months based upon agreed performance indicators.  It was also orally agreed between Mr Armitage, the managing director of the company, and the appellant that the company would also pay for the appellant's fuel for travelling to and from work as well as all mechanical work necessary to service and maintain the appellant's vehicle.  It was also agreed that the appellant would be provided with a mobile phone and a laptop computer.  Mr Armitage gave evidence that, for the period of 11 months that the appellant was employed by the company, the cost to the company of fuel and maintenance was approximately $7,000.

[7] Mr Armitage gave evidence that, at the appellant's request, his salary was paid to Bigus Pty Ltd.  This company owned a coffee lounge business on the Sunshine Coast run by the appellant's wife.

[8] The appellant's functions as the company's general manager included running the office and paying bills including staff wages and salaries.  The appellant was paid by rendering an invoice to Mr Armitage for his time.  Mr Armitage would check the invoice and countersign it before the appellant would procure payment by the company.  The appellant had access to the company's bank accounts.  Initially, the payments to the appellant were checked by other officers of the company but this practice ceased shortly after the appellant commenced work.

[9] After discrepancies in the company's accounts were drawn to Mr Armitage's attention at the end of March 2003, he caused the appellant's financial transactions to be investigated by other employees of the company.  On 1 April 2003, Mr Armitage confronted the appellant with the concern that the appellant had been overpaying himself.  At this time the appellant said:  "Obviously, I've made a mistake".  After this interview, Mr Armitage asked the appellant to leave the company's premises and the appellant did so.  Mr Armitage arranged for an audit of the accounts by the company's accountant, Mr Harris, and the police were called.

[10]  From the company's records, a list of expenses paid for or on behalf of the appellant from the company's bank account was prepared as part of Mr Harris' report.  This list was described as Appendix 1.  It became Exhibit 18 at the trial.  The total of the duplications was $15,793.67.

[11]  A second list of invoices received by the company from Bigus Pty Ltd was prepared from the company's records in relation to moneys paid by the company to Bigus Pty Ltd, both in relation to the appellant's claims for remuneration and by way of reimbursement of expenses incurred by him.  This list was described as Appendix 2.  It became Exhibit 19 at the trial.  The total of the overpayment of remuneration according to Mr Harris was $14,849.77.  The total of the unauthorized expenses which the appellant arranged to be paid was $22,369.15.

[12]  Mr Armitage gave evidence that he did not authorize the appellant to use the company's funds to pay the expenses referred to in Exhibits 18 and 19.

The appellant's case at trial

[13]  It was put to Mr Armitage in cross-examination by counsel for the appellant that he had orally agreed with the appellant before the appellant commenced employment that the company would pay the appellant $50 per hour in respect of his services, or $104,000 per annum.  The appellant gave evidence in support of this proposition.

[14]  The appellant also gave evidence that he was not engaged as an employee of the company but as a consultant to it.  Nothing seems to turn on the characterization of the relationship between the appellant and the company as one of employment or of principal and independent contractor.

[15]  The appellant accepted that the payments disclosed in Exhibits 18 and 19 had been made.  His case was that, insofar as these Exhibits recorded either expenses paid to Bigus Pty Ltd or on his behalf and at his direction, they were expressly authorized by Mr Armitage.  Insofar as they consisted of payments of remuneration by the company in respect of his employment, they reflected his entitlement to an annual salary of $104,000.  The appellant reiterated that he and Mr Armitage had not agreed upon a salary of $52,000 per annum but had agreed that the appellant would be remunerated at a rate of $50 per hour or, in effect, $104,000 per annum.

[16]  The appellant gave evidence that there were records which supported his evidence that Mr Armitage had authorized in writing his payments of expenses.  These records, the appellant said, had gone missing.  Mr Armitage denied that there were any authorizations signed by him.

[17]  In relation to the appellant's assertion that Mr Armitage had authorized payment of the expenses referred to in Exhibits 18 and 19, the appellant said that written evidence supporting his claims existed in files which were kept at the company's premises and which he had not been allowed to take with him when he was dismissed.  The evidence from Mr Armitage, other employees of the company and the police was that all the documents which were in the filing cabinet on the company's premises at the time of the appellant's dismissal were kept so that, if the documents to which the appellant referred had ever existed, they had disappeared in circumstances where no explanation for that disappearance was available.

[18]  In relation to the issue between Mr Armitage and the appellant as to the remuneration agreed between them for the appellant's services as the company's general manager, there was documentary evidence that the salary range originally advertised by the company, and in response to which the appellant sought employment with the company, stated a range between $47,840 to $57,720 with additional bonuses linked to performance.

[19]  On 6 March 2002, the appellant wrote to the general manager of the company advising of his interest in being considered for the position that had been advertised and enclosing a curriculum vitae.  There was no suggestion in this letter of any view on the appellant's part that the salary range which had been advertised was unacceptable to him.  The appellant gave evidence that he expressed the view that he would not be interested in working for a salary in that range to Mr Armitage and that, as a result, he and Mr Armitage orally agreed upon the arrangement in relation to remuneration of which the appellant gave evidence.  That arrangement would have effectively doubled the salary range expressly referred to in Mr Armitage's letter of 18 March 2002 in which the position of general manager of the company was offered to the appellant on a full time and permanent basis with "… a starting salary of $52,000".

[20]  That letter went on to say:

"Performance payment will be paid every six months based on agreed Key Performance Indicators as outlined in the draft Business Manual handed to you today.  Salary progression will be linked to an approved training programme to be negotiated if you accept this offer."

[21]  In response to Mr Armitage's letter of 18 March 2002, the appellant replied in a letter dated 8 April 2002 in the following terms:

"I wish to formally accept your offer of a contract, subject to the conditions as outlined in our discussions of the 28 March 2002, at your premises in Burpengary … "

[22]  Mr Armitage replied by a letter dated 22 April 2002 in which it was said, inter alia:

"Your salary package is in accordance with the letter of offer and discussions you have held with [the company's] Managing Director."

[23]  The draft of the business manual to which reference had been made in Mr Armitage's letter of 18 March 2002 contained provisions in relation to key performance indicators.  On the footing that key performance indicators were met within the six monthly period prior to profit sharing the manual stated:

"Staff will receive a 3% bonus, based on their gross income for the 6 month period.  All KPI's listed in this agreement must be met for the profit sharing to occur."

[24]  The case against the appellant depended in large part upon whether the jury accepted the evidence of Mr Armitage or that of the appellant in relation to the arrangements struck between them at the commencement of the appellant's employment and in relation to the issue of Mr Armitage's authorizing expenses which the appellant procured to be paid by the company on his behalf.

[25]  In the light of the contemporaneous documentation, the case for the prosecution on this issue was a strong one.  There can be little doubt that it was open to the jury safely to prefer the evidence of Mr Armitage to that of the appellant.

The appeal

[26]  The only ground of appeal which the appellant pressed concerned item 26 in Exhibit 19 which related to a payment of $7,160 for "Disbursements Subcontractor/Supplies & Chemicals".

[27]  In cross-examination of Mr Armitage, counsel for the appellant had put to Mr Armitage the proposition that the amount the subject of this entry was "in fact paid to Mr Kelly on that basis [ie to keep down consultancy fees, possibly so as to conceal its true nature as part of his remuneration package from other employees] as his consultancy fee for the month of April 2003".  Mr Armitage denied this proposition.

[28]  The appellant gave evidence that this amount was payment of his consultancy fee for April 2003 but was characterized in this way so that it could be charged directly against a job being performed by the company and so invoiced as an overhead to the customer.  In cross-examination, the appellant denied that such an approach to invoicing the customer would have been dishonest.  He also denied it was a way for him to disguise payments being made out of the company for his own purposes.

[29]  The learned trial judge commented to the jury that it had not been put to Mr Armitage that he had been party to an attempt to charge the appellant's time directly to the customer.  His Honour read the relevant passages of the evidence to the jury.  He drew the jury's attention to the circumstance that at the date of the invoice, ie 1 April 2003, the appellant had not performed any consulting services for the month of April.  He concluded:

"… Is this invoice a case where the accused was not entitled at that stage to be paid any money for his services.  He wasn't entitled to payment at that time so he puts in a claim for supplies and chemicals.  He says it was to maximize something on a job.  It's a matter for you, ladies and gentlemen."

[30]  No redirection was sought by the appellant's counsel at trial, but it is now said that the learned trial judge erred in failing to direct the jury in relation to the operation of the rule in Browne v Dunn[1] with regard to this evidence and that his failure to do so resulted in a miscarriage of justice because the issue of credibility as between the appellant and Mr Armitage was all important.  The appellant relied on the decision of this Court in R v Foley[2] in support of a submission that the learned trial judge should have warned the jury that the failure to put the explanation which the appellant gave in evidence may have been the result of a misunderstanding or error on the part of counsel and did not necessarily cast any doubt on the appellant's credibility.

[31]  In R v Foley the Court said:[3]

"While variations in circumstances of particular cases may call for different responses, it is now generally recognised in criminal trials that in summing up on this issue, the judge should simply point out to the jury that the particular matter was not put to the relevant witness;  that it should have been put so that the witness could have the opportunity of dealing with the suggestion;  and that the witness has been deprived of the opportunity to give that evidence and that the court has similarly been deprived of receiving it (Cf R v McNamara (CCA (NSW), 15 December 1995, unreported)).  There will be exceptional cases where it is necessary to go further, for example where there seems to be a tenable case of recent invention.  There may for example be a strong perception that the cross-examiner has deliberately preserved a case from damage by preventing it from being tested, and that this has enabled the client to lie by and present the case that belatedly seems opportune.  The giving of additional directions in such cases is however fraught with difficulty.

'It is one thing to remark upon the fact that a witness or a party appears to have been treated unfairly.  It is quite another thing to comment that the evidence ... of a person should be disbelieved, perhaps as a recent invention, because it raises matters that were not put in cross-examination to other witnesses by that person's counsel' (Birks at 690).

R v Robinson ([1977] Qd R 387, 394) is one of the exceptional cases where such directions are appropriate, but the need for caution in giving such directions is now well recognised.  There are many possible explanations of a failure by counsel to observe the rule, and some of these do not reflect upon the credibility of the client.  Counsel, for example, may have misunderstood the instructions, or the failure may be through oversight.  Jurors are not familiar with the rules and practices of preparation for trial, the special relationship between lawyer and client or counsel's duties and responsibilities to the court in conducting a case.  If then a jury is to be instructed in a way which will permit adverse inferences to be drawn against the credibility of a defence witness, there must be at least some explanation of these factors, and particular mention of the possibility of other explanations such as misunderstanding or error on the part of counsel.  It should also be made clear that before drawing an adverse inference against the accused, the jury should be satisfied that there is no other reasonable explanation for the omission to cross-examine.

There are of course ways and means of avoiding the necessity of presenting such issues to juries at the end of the trial.  Sometimes it is possible to have a witness or witnesses recalled for cross-examination.  Sometimes it may follow from the conduct of the trial that it is not fairly open to counsel to make a particular suggestion in address.  Sometimes the reason for the omission is itself explored at trial, and if it can be seen that the omission reflects only on counsel (or solicitor) and not the accused, then the only available comment would relate to the potential disadvantage to the witnesses or to the Crown's case from the omission, with an express statement that this was not the fault of the accused but rather of counsel.

It will, however, be necessary for additional directions to be given in some cases notwithstanding their difficulty.  Without this safeguard some counsel might deliberately follow the undesirable practice of what is colloquially described as beating around the bush.  The practice of failing to expose actual instructions of the case that is to be put cultivates dishonesty and is unworthy of counsel."

[32]  It can be seen that this passage is concerned to ensure that an accused person is not unfairly prejudiced by a judicial over-reaction to unfair conduct on the part of the accused.  In the present case, the learned trial judge did not "over-react", but adopted the practice generally sanctioned in the passage cited from R v Foley.  In my view the learned trial judge was not obliged to go further.  The evidence in question concerned the credibility of the appellant's explanation for the terms of one of many items of expenditure.  The learned trial judge did not suggest to the jury that they might conclude from the way the appellant's case had been conducted that the appellant had engaged in discreditable unfairness.[4]  The learned trial judge did not suggest that the jury might conclude from the discrepancy that the appellant's evidence was a recent invention in the sense that it was a concoction by the appellant which was not put to Mr Armitage so as to deny Mr Armitage the opportunity of denying the truth of the appellant's evidence.  The learned trial judge did not highlight the fact of the discrepancy between the explanation for the invoice put to Mr Armitage and the appellant's evidence as something which the jury might take into account in assessing the credibility of the appellant's evidence generally.

[33]  The failure of experienced trial counsel to seek to adopt any "countermeasures", such as having Mr Armitage recalled or seeking a redirection on the point is explicable by the possibility that any redirection, if sought and given, would have highlighted the discrepancy, and hence the possible improbability of the version advanced by the appellant, as well as the willingness of the appellant to engage in acts of dishonesty.  It might also be, of course, that unlike R v Birks,[5] this was not a case of error on the part of counsel or of genuine misunderstanding between client and counsel, and that counsel took none of the available steps to ensure that the confusion was clarified because no such steps could honestly be pursued.  Once it is accepted, however, that there was potentially some forensic advantage to the appellant in not seeking the redirection then his case is governed by the principle enunciated by Gaudron J in TKWJ v The Queen[6] that:

"Where it is claimed that a miscarriage of justice was the result of a course taken at the trial, it is for the appellant to establish that the course was not the result of an informed and deliberate decision.  This he or she will fail to do if the course taken is explicable on the basis that it could have resulted in a forensic advantage unless, in the circumstances, the advantage is slight in comparison with the disadvantage resulting from the course in question."

[34]  In light of the possible explanations for the course taken at trial by the appellant's counsel it cannot be said that the course adopted by counsel was so without merit that it constituted a miscarriage of justice in the terms described by Gaudron J.

[35]  Finally, if it was necessary to invoke the provisions of s 668E(1A) of the Criminal Code, in my opinion, this would be an appropriate case in which to do so.  Having regard to the strength of the Crown case there is no real possibility that the appellant may have been acquitted had a fuller direction been given as to the possible significance of the discrepancy.[7]

[36]  In my opinion the appeal against conviction should be dismissed.  The application for leave to appeal against sentence which was not pressed should also be dismissed.