SUPREME COURT OF QUEENSLAND

[1]  McMURDO P: I agree with Fraser JA.

[2]  FRASER JA: On 17 September 2008, the appellant was found guilty by a jury of 20 counts of fraud.  The appellant was sentenced to concurrent five year terms of imprisonment for the seven convictions of fraud which involved property of a value of $5,000 or more.  He was given concurrent terms of two years imprisonment for the remaining 13 counts of fraud.  The learned District Court judge ordered that 44 days spent by the appellant in pre-sentence custody were deemed time already served under the sentence, and a further order was made for the forfeiture of cattle formerly owned by one of the complainants.

[3] The appellant appeals against his conviction and he applies for leave to appeal against sentence. 

Appeal against convictions

[4] The indictment charged 32 counts of fraud under s 408C(1)(b) of the Criminal Code 1899 (Qld), each of which charged that the appellant had "dishonestly obtained" something from the complainant named in each count.  The various counts alleged that the appellant had dishonestly obtained cattle, vehicles, stock fuel and other goods, transport services and periods of agistment.

[5] The Crown case on seven of the 32 counts was that the appellant re-sold various consignments of cattle which the Crown alleged, in other counts, had earlier been dishonestly obtained by the appellant.  After the prosecutor closed the Crown case on the sixth day of the trial the trial judge accepted defence counsel’s argument that there was no evidence that the appellant had obtained the proceeds of the re-sales of those consignments of cattle dishonestly.  The re-sales were not rendered dishonest merely by proof that the appellant had originally obtained the cattle dishonestly.

[6] The trial judge having ruled that the appellant had no case to answer, the appropriate course was either for the prosecutor to enter a nolle prosequi or for the trial judge to direct an acquittal on the seven counts: R v Puplett [1968] QWN 16.  Neither course was taken.  During the hearing of the appeal the respondent’s counsel sought the return of the indictment for the purpose of entering a nolle prosequi on those seven counts.  The appellant acceded to that course and it was followed.[1] 

[7] The trial judge rejected a further submission made on behalf of the appellant after the close of the Crown case that the appellant had no case to answer on the remaining 25 counts.  That ruling is challenged in this appeal.

[8] The appellant gave and called evidence in his defence.  At the conclusion of the 11 day trial, the jury found the appellant guilty of 20 of the remaining 25 charges, namely counts 4 to 9, 11 to 15, 19, 20, 22 to 24, 27 to 29 and 32. 

The grounds of appeal

[9] The only ground of appeal in the notice of appeal filed by the appellant is that the verdicts of guilty were unsafe and unsatisfactory.  At the hearing of the appeal leave was granted to add four additional grounds of appeal.  The appellant’s senior counsel made it clear that these new grounds also formed the bases of the original ground.  The four new grounds of appeal are as follows:

"(a)The learned trial judge erred in not upholding the no case submission in respect of all counts;

(b) The learned trial judge erred in failing to adequately direct the jury to have regard to the possibility that Pacific Investments Pty Ltd had obtained the property in considering whether it was persuaded beyond reasonable doubt that the appellant had obtained the property.

(c) The learned trial judge erred in failing to provide the jury with any warning or direction in respect of the use they could make of the evidence which had been led in the Crown case in respect of those charges where the no case submission was upheld;

(d) The learned trial judge erred in his re-directions responding to the jury's requests by not emphasising the primacy of the need to prove dishonesty."

Ground (a): The learned trial judge erred in not upholding the no case submission in respect of all counts 

[10]  The appellant was the sole director of a company called Pacific Drive Investments Pty Ltd.  The company was registered in September 2004 and it began trading in about February 2005.  Between 10 March 2005 and 11 February 2006 the appellant spoke to each of the numerous complainants about buying cattle or other property or acquiring services.  In most cases no arrangement was concluded until a contract was made between the complainant concerned and the company, represented by the appellant. 

[11]  Defence counsel put his no case submission somewhat tentatively.  Indeed he told the trial judge that it might be described as "the defence counsel then submitted somewhat faintly".  Nevertheless he submitted that there was no case to answer because the evidence taken at its highest showed that the company, rather than the appellant, obtained the various cattle, goods and services.  Defence counsel cited Lee J's judgment in R v Ehlert [1996] QCA 555 in support of his submission. 

[12]  The prosecutor characterised the effect of that submission as being that the Crown had not been able to establish that the appellant was "the mind and will" of the company.  The prosecutor then pointed out that a company extract tendered in the Crown case demonstrated that at all relevant times the appellant was the only shareholder, the only director, and the secretary of the company.  The prosecutor also referred to evidence that the appellant gave directions to his staff in relation to financial information and other matters.  He argued that on this evidence no-one else might be found to be the "mind or will of the company".

[13]  In ruling against the no case submission the trial judge summarised defence counsel's argument but did not give any reasons for rejecting it.  His Honour's reason for rejecting the submission may be that which emerges from the following exchange with defence counsel during argument:

"His Honour:  I think the point is though, Mr McInnes, that Pacific Drive did not act independently of Mr Lenahan, did it?

Mr McInnes:  No, there's----- 

His Honour: Mr Lenahan is Pacific Drive."

The issues

[14]  Resolution of ground (a) turns upon the construction and application of s 408C(1)(b) of the Criminal Code.  Section 408C(1) provides:

(1)A person who dishonestly—

(a) applies to his or her own use or to the use of any person—

(i)property belonging to another; or

(ii)property belonging to the person, or which is in the person’s possession, either solely or jointly with another person, subject to a trust, direction or condition or on account of any other person; or

(b)obtains property from any person; or

(c)induces any person to deliver property to any person; or

(d)gains a benefit or advantage, pecuniary or otherwise, for any person; or

(e)causes a detriment, pecuniary or otherwise, to any person; or

(f) induces any person to do any act which the person is lawfully entitled to abstain from doing; or

(g) induces any person to abstain from doing any act which that person is lawfully entitled to do; or

(h) makes off, knowing that payment on the spot is required or expected for any property lawfully supplied or returned or for any service lawfully provided, without having paid and with intent to avoid payment;

commits the crime of fraud."

[15]  The term “property” is defined in s 408C(3)(a) to include (amongst other things, and without limiting the definition in s 1) “credit, service, any benefit or advantage”.  That plainly comprehends the cattle and other property, services and rights identified in the charges against the appellant.

[16]  The appellant contended that the trial judge erred in finding that the appellant had a case to answer on these charges under s 408C(1)(b) because his Honour disregarded the legal distinction between the appellant and his company; that in relation to each of the 20 counts of which the appellant was convicted other than counts 20 and 28, each transaction was made between the complainant concerned and the company; that the evidence demonstrated that any property was “obtained” by the company rather than the appellant; and that the trial judge therefore should have accepted the no case submission for counts 4 to 9, 11 to 15, 19, 22 to 24, 27, 29 and 32.  Counts 20 and 28 were excepted from this argument because, as the appellant’s senior counsel conceded in oral argument, there was evidence in relation to those two counts that the appellant had obtained the relevant property under contracts he had personally made with the complainants.

[17]  At the hearing of the appeal, the respondent contended that the distinction between the appellant and his company was irrelevant upon the proper construction of s 408C(1)(b).  That stance was modified in the respondent’s written submissions delivered by leave after the hearing.  The respondent then conceded that the appellant’s argument was correct and that the convictions should be quashed for some of the counts of which the appellant was convicted, namely count 5 (which charged the appellant with dishonestly obtaining a period of agistment) and counts 6, 8 and 23 (which charged the respondent with dishonestly obtaining transport services).  The respondent’s counsel accepted that for those counts the evidence did not establish that any “benefit” within the meaning of the extended definition of “property” in s 408C(3)(a) was "obtained" by the appellant.

[18]  In relation to counts 20 and 28 the respondent adopted the appellant’s concession that the evidence supported conclusions that the appellant had contracted personally with the complainants.  For the remaining fourteen counts of which the appellant was found guilty (counts 4, 7, 9, 11 to 15, 19, 22, 24, 27, 29 and 32, which I will call “the contentious counts”), the respondent maintained its contention that the legal distinction between the appellant and his company was irrelevant.

[19]  The contentious counts concerned the sale and delivery of property, mostly cattle, but also a semi-trailer and stock crate (count 9), semi-trailer and prime mover (count 32), stock feed and supplies (count 14), stock feed (counts 15, 24, 27), stock feed and animal health products (count 19), and stock graze feed supplement (count 29).

The evidence

[20]  Because there was no significant dispute between the parties as to the effect of the evidence it is not necessary to describe it all, but it is appropriate to summarise the evidence adduced in support of the contentious counts. 

Counts 4 and 11 (Sale of cattle)

[21]  As I have mentioned, most of the counts concerned the sale of cattle.  Count 4 is a typical example.  It charged that on the twenty-fourth day of April 2005 at Capella in the State of Queensland, the appellant dishonestly obtained cattle from Kevin James Lawrence. 

[22]  Mr and Mrs Lawrence gave evidence in substantially similar terms.  They ran a grazing property at Capella, which is about 50 kilometres from Emerald.  The appellant telephoned in response to their advertisement offering 57 cattle for sale.  He expressed interest in buying the cattle.  In response to Mr Lawrence’s insistence of payment before his cattle left the paddock the appellant said that payment wouldn’t be a problem, that he owned an investment property, and that he developed blocks (of land).  (The appellant gave other reasons for his and the company’s supposed wealth to other complainants.  The prosecutor submitted that such representations were shown to be inaccurate.  They formed part of the evidence alleged to demonstrate the dishonesty of the appellant.) The appellant said that he bought cattle and sold them to feedlots.  He subsequently visited the Lawrences’ property in February 2005, inspected the cattle in the paddock, and said that they were suitable for his needs.  They agreed that the price would be a specified figure per kilogram according to a weighing at a future date.

[23]  An order form dated 15 February 2005 was tendered.  It is in the form of an order by the company Pacific Drive Investments Pty Ltd to Mr and Mrs Lawrence to supply specified numbers of cattle of an approximate weight at a specified rate per kilogram “to be weighed on date of sale”.  The order was signed by the appellant above the words “Signature of Person Authorised to Quote”, and it was signed also by Mr Lawrence.

[24]  Mr and Mrs Lawrence gave evidence that on 4 March 2005 the appellant again attended the property.  The cattle were weighed and the sale was finalised.  At that time the Lawrences wrote out and gave to the appellant an invoice for the agreed price addressed to “John Lenehan Pacific Drive Investments Pty Ltd”.

[25]  The appellant delayed in organising to pay for and collect the cattle.  In a later facsimile transmission under the letterhead of the company and dated 11 March 2005, the appellant asked Mr Lawrence to identify the brands and confirm that there was no mortgage or encumbrance over the cattle.  Mr Lawrence provided the requested information by a facsimile sent on the same date to “John Lenahan Pacific Drive Investments”. 

[26]  The Lawrences ultimately allowed the appellant to organise the removal of the cattle before they had been paid for them.  On 24 April a truck organised by the appellant arrived at the property and the 57 head of cattle were loaded onto it and driven to a place near Gympie.  The appellant was not present.  At that time Mrs Lawrence signed a “National Vendor Declaration (Cattle) And Waybill”, which referred to the cattle being consigned to “John Lanehan, Pacific Drive Investments”.  On 3 May 2005 the Lawrences and the appellant signed an “Agreement for Sale of Cattle” which recited an agreement between the Lawrences (“Vendor”) and Pacific Drive Investments Pty Ltd (“Purchaser”) for the sale of the cattle and also the latter’s agreement to pay specified sums for agistment for the period 23 March to 24 April 2005.

[27]  There was also evidence from a Mr Ryan, the sales yard representative at the Gympie Sales Yards, that he later made an agreement with the appellant for him to leave 55 head of cattle in the yards.  Mr Ryan made it plain that he gave his evidence after refreshing his memory from records, which were not produced.  He gave similar evidence about other consignments of cattle kept at the yards by the appellant.

[28]  Mr Ryan’s evidence did not contradict the complainants’ evidence and the documents which demonstrated that the company, rather than the appellant personally, had obtained possession of and title to the cattle from the complainant.  There was no evidence of any other transaction by which the appellant personally might have obtained possession or title.

[29]  Over the succeeding months the appellant gave Mr Lawrence a variety of different explanations for not paying for the cattle.  Following the intervention of the Lawrences’ solicitors, in February 2006 they were paid some $46,000 of the $48,000 owing to them.

[30]  The evidence relating to those other counts which concerned sales of cattle revealed much the same pattern of conduct shown by the evidence on count 4.

[31]  The position was obscured a little during parts of the evidence-in-chief of the complainants because the prosecutor's questions sometimes elided the distinction between the appellant and his company.  But reference to the documents adopted by the complainants in each count makes good the appellant's proposition that in all of the contentious cases the complainant’s evidence was to the effect that the cattle were delivered under contracts with the company. 

[32]  The evidence relating to count 11 is a good example of the way the Crown case was conducted in this respect.  It charged that on 13 June 2005 the appellant dishonestly obtained cattle from Dandilla Pastoral Company (with the circumstance of aggravation that the property was of a value more than $5,000).  Mr Schafferius gave evidence that he operated a beef cattle enterprise as "Dandilla Pastoral Co" at Kumbia.  In response to his advertisement of cattle for sale the appellant telephoned and ultimately visited the station with a prime mover and trailer.  Mr Schafferius said that, "We came to an agreement . . . and he agreed that he’d buy the cattle".  In further evidence-in-chief, however, Mr Schafferius gave evidence that he and the appellant prepared and signed documents when they loaded the cattle on to the appellant’s vehicle.  The first document was a “National Vendor Declaration (Cattle) and Waybill".  It provided that the cattle were consigned to "Pacific Drive Investments Pty Ltd".  The second document is in the form of an order to Dandilla Pastoral Co for the cattle at the price of $880 (including GST) per beast.  It is signed by the appellant next to references to the Australian Business Number and Australian Company Number of Pacific Drive Investments Pty Ltd.

[33]  Mr Schafferius said that the appellant told him that he was in the business of dealing in cattle, that he had some kind of insurance against bad debts, and that he had another B-Double stock trailer parked at the Dalby sale yards.  He adhered to that evidence in cross-examination.  Mr Schafferius agreed that his solicitors obtained a formal judgment of $10,694.42 in his favour and, when it was put to him that the amount eventually paid “by Pacific Drive”, including interest, was $11,232.55, he said that he was not sure of the exact amount; but he agreed that it was correct that he eventually was paid the price plus a bit of interest and his solicitors' costs in January 2006.

[34]  In summary, for each of the contentious counts the evidence did not support a finding beyond reasonable doubt that a complainant parted with his or her cattle otherwise than pursuant to a contract for the sale of the cattle which identified the company as the buyer.

Counts 9 and 32 (sale of vehicles)

[35]  Count 9 concerned a semi-trailer and stock crate and count 32 concerned a prime mover.  There is no question that the property described in count 32 was delivered to the company.  The oral evidence referred to handwritten agreements signed for the complainant and for the company on the day the transaction was finalised.  Those handwritten agreements were replaced by the typewritten agreements which were tendered at the trial, one of which provided for the hire of the trailer and associated equipment and one of which provided for the sale of the truck.  In each case the agreement was unequivocally made between the complainant and the company and the property was delivered only pursuant to such agreements.

[36]  In relation to count 9, the complainant, Mr Doran, gave evidence that in a telephone conversation the appellant said that he had a cattle buying business with semi-trailers, B Doubles, road trains and things like that, and he needed another trailer to cart cattle across Queensland.  In a subsequent telephone conversation Mr Doran agreed to sell his semi-trailer and stock crate for $4,400 including GST and the appellant agreed that he would come and pick up the trailer.  Mr Doran agreed that by that stage he would have sent the invoice through to the appellant's office in Mackay.  A typical example of the manner in which the prosecutor’s questions concerning such transactions were posed is contained in the following passage:

"And basically are the details of that fax what you've sold him, the price including GST and your bank account details?---That's correct, yes."

[37]  Although the question implied that there had been a sale by the complainant to the appellant the document adopted by Mr Doran indicated that the sale was to the company.  It was a copy of a facsimile dated 8 May 2005 sent by P & L Doran to Pacific Drive Investments Pty Ltd.  A tax invoice dated 9 May 2005, also made an exhibit, was similarly addressed to Pacific Drive Investments Pty Ltd.

[38]  I think it clear that the evidence on counts 9 and 32 was incapable of justifying a finding beyond reasonable doubt that property was delivered otherwise than pursuant to a contract made between the complainant and the company.

Counts 15 and 24 (sale of stockfeed and other goods)

[39]  Of the counts concerning stock feed and the like, it is necessary to refer only to those which were based upon admissions (counts 15 and 24).  The oral and documentary evidence for the other contentious counts of this nature unequivocally described contracts made between complainants and the company.  The admissions in relation to counts 15 and 24 included some language which was arguably indicative of a contract between the complainant and the appellant personally, but I have concluded that the admissions were not capable of justifying a finding beyond reasonable doubt that the property was delivered otherwise than pursuant to a contract between the relevant complainant and the company. 

[40]  For example, the following admissions were made in relation to count 24:

"1.that in October 2005 Geoffrey DOUGLAS, owner of Newforce Pty Ltd at Airlie Beach, advertised bales of hay for sale in a Mackay newspaper;

2.that on 4 October 2005 Geoffrey DOUGLAS was contacted by the defendant and subsequently delivered to the defendant 88 bales of hay totalling $260;

3.that Geoffrey DOUGLAS gave the defendant an invoice for $260 (invoice enclosed);

4.that on 5 October 2005 Geoffrey DOUGLAS delivered to the defendant a further 34 bales of hay totalling $161;

5.that on 7 October 2005 the defendant paid $215 into the bank account of Geoffrey DOUGLAS;

6.that on 8 and 9 October 2005 Geoffrey DOUGLAS delivered to the defendant a further 167 bales of hay totalling $885.50;

7.that on 8 October 2005 Geoffrey DOUGLAS gave the defendant an invoice for $1081.50 and handwrote on it (invoice enclosed):

"John, this is not a credit account. I am happy to deliver and invoice on a weekly basis only. Please pay this onvoice [sic] at your earliest convenience. ";

8.that on several occasions Geoffrey DOUGLAS contacted the office of Pacific Drive Investments to request payment;

9.that on 24 October 2005 Geoffrey DOUGLAS faxed to Pacific Drive Investments a statement requesting immediate payment of $1.753.50 (fax enclosed);

10.that in January 2006 Geoffrey DOUGLAS posted a Letter of Demand to Pacific Drive Investments; and

11.that in February 2006 the defendant paid the full amount owing to Newforce Pty Ltd."

[41]  Although some of those paragraphs, if construed in isolation from others, apparently referred to deliveries made to the appellant, reference to the documents described as "invoice enclosed" (in paragraphs 3 and 7) and to the "fax enclosed" (in paragraph 9) made it plain, as was suggested by the various references to the company in other paragraphs, that the contracts were made with the company rather than with the appellant.  Each of the invoices was addressed to the company and the fax claimed the total amount due including GST ($1,753.50) from the company, with a request to pay the amount immediately "as agreed". 

[42]  Although the details of the evidence differ, of course, from count to count, those summaries of the various different kinds of transactions in the contentious counts are representative of the evidence on all of the contentious counts, at least in relation to the features that are material to this ground of appeal.

The arguments

[43]  For the respondent, Ms Wooldridge argued that the trial was conducted on the basis that there was no practical distinction between the appellant and the company.  It was not submitted, however, that the appellant so conducted the trial or made any admission which precluded his right to make the no case submission or to submit on appeal that the evidence did not support the charges of which he was convicted. 

[44]  Nor was it submitted that the evidence adduced at the trial in relation to the contentious counts was capable of sustaining a finding beyond reasonable doubt that the appellant had acted otherwise than on behalf of and for the benefit of his company.  Rather, the argument for the respondent was that it was not an element of the offence created by s 408C(1)(b) that the relevant property be obtained "for the accused person as opposed to for another".  Ms Wooldridge emphasised the breadth of the inclusive definition of “obtain” in s 408C(3)(e): "obtain includes to get, gain, receive or acquire in any way".  She submitted that reference to that broad definition demonstrated that the criminality involved in the offence was the "obtaining" or "getting" of the property, and that, the appellant having performed the "act" of "getting" the property, he could not “hide behind the corporate veil”.

[45]  The respondent’s counsel also submitted that it was sufficient that the appellant had “physically” obtained the relevant property, but she frankly acknowledged that the Crown case was not run on the basis that although the company acquired the property, rights and services referred to in various charges the appellant “physically” took possession of or acquired the property, rights or services.  She also acknowledged the conceptual difficulties in the submission, particularly in the notion that the appellant “physically” obtained services or rights, such as the transport of cattle and the right to agist cattle, for which the company contracted.  It was presumably for this reason that, as I have noted, the respondent’s written submissions abandoned the argument in relation to the counts which concerned such services or rights.  The contentious counts all concern sales of property, as that term is ordinarily understood.

Discussion

[46]  The respondent’s arguments must be rejected.

[47]  In relation to each of the counts of which the appellant was convicted (other than counts 20 and 28) the evidence was incapable of supporting a finding beyond reasonable doubt that the complainant parted with the relevant property otherwise than pursuant to a contract for sale made between the complainant and the company. 

[48]  The contentious counts all involved contracts of the kind described in the Sale of Goods Act 1896 (Qld), s 4(1):

"A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration, called the price."

[49]  Under the contracts it was the duty of the seller (the complainant) to deliver the goods to the buyer (the company) in accordance with the terms of those contracts:  Sale of Goods Act 1896 (Qld), s 29.  In respect of each of the contentious counts, I have not found any evidence, and the respondent did not contend there was any evidence, to rebut the inference that the contracts were duly performed in that way.  In cases where the appellant was personally present when the goods were delivered (which was not always so) the inference is irresistible that the goods were delivered to the company as represented by the appellant.

[50]  The breadth of the inclusive definition of "obtain" does not advance the respondent’s case.  None of the examples of “obtain” (“get, gain, receive or acquire”) suggest that it includes the delivery of property to someone other than the fraudster.  The definition undoubtedly ensures an extensive reach for the concept of “obtaining” in s 408C(1)(b), but it does not touch the requirement, unequivocally flowing from the language of the section, that the person who obtains the property must be the person who is dishonest.  In that respect paragraph (b) may be contrasted with paragraphs (c) and (d), which comprehend cases in which an individual who is dishonest is (in terms of (c)) not the recipient of property and (in terms of (d)) does not personally gain from his or her dishonesty.

[51]  A similar contrast appeared between the first and second limbs of the former s 427(1) of the Code, which provided:

"(1)Any person who by any false pretence or wilfully false promise or partly by a false pretence and partly by a wilfully false promise and with intent to defraud obtains from any other person any chattel, money or valuable security or induces any other person to deliver to any person any chattel, money or valuable security is guilty of a crime…"

[52]  In relation to the first limb of that provision it was observed by Lee J in R v Ehlert (at 19) that the charge required proof that the persons accused of the relevant fraud "themselves obtained" property of the kind described in the provision.  Lee J added (at 28-29), that:

"The jury might well have thought that it did not matter in the slightest whether the money was in fact paid to the appellant or paid…into the company's coffers for the company's purposes, if they thought the company and the appellant were one and the same.  The jury should have been told that if they concluded that the money was in fact paid to the company they could not hold that the appellant obtained it.  Likewise, if they concluded from the evidence that even if James handed the money to the appellant knowing that it was to be paid into the company and for use by the company in accordance with the purchase of goods as he seemed to have admitted, then likewise the jury could not conclude that the appellant "obtained" the $5,000…The well known decision of the House of Lords in Salomon v Salomon [1897] AC 22, as far as I am aware, still has a place in the criminal law."

[53]  Those statements were not necessary for the decision in that case but in my opinion they are correct and apposite here.  The language in s 408C(1)(b) is not apt to create a statutory exception to the legal distinction between a company and the company’s sole director and shareholder which was authoritatively confirmed more than a century ago in Salomon v A Salomon & Co Ltd [1897] AC 22.  Nor does any reason appear to adopt a non-literal construction of the provision in favour of the Crown.  That is particularly so in circumstances in which other paragraphs of s 408C(1) create offences which are capable of application in cases in which a director acting only as a company’s representative dishonestly procures the delivery of property to or other benefits for the company.

[54]  I think it quite clear that the necessity of distinguishing between an “obtaining” by a company and an “obtaining” by one or more of its directors is as applicable to a charge of fraud under s 408C(1)(b) as it was to a charge under the first limb of the former s 427(1). The remark to that effect by the learned authors of Carter’s Criminal Law of Queensland at paragraph [s 408C.55] is an accurate statement of the law, in my respectful opinion.

[55]  On the footing that the Court adopted that view, the respondent did not contend that any of the evidence adduced in the Crown case was capable of supporting a finding that the appellant, rather than the company, “obtained” the property described in the charges I have identified.  For the reasons I have given I consider that this was a case in which there was a “defect in the evidence such that, taken at its highest, it will not sustain a verdict of guilty”[2] on any of the counts of which the appellant was convicted, other than counts 20 and 28.  As I have indicated, the respondent’s opposition to that conclusion was premised only upon its argument, which I think is irreconcilable with s 408C(1)(b), that the distinction between the appellant and his company is irrelevant.

[56]  It follows that the no case submission should have been accepted in relation to counts 4 to 9, 11 to 15, 19, 22 to 24, 27, 29 and 32.  I would add that the evidence given in the defence case was not apt to repair the defect in the Crown case which I have discussed.  That evidence, where it touched upon this issue, tended to confirm that the relevant contracts were made with the company rather than with the appellant.

[57]  Before discussing the appellant’s submission that the remaining convictions on counts 20 and 28 should also be set aside, I will consider the respondent’s defensive contention under s 668F(2) of the Criminal Code.

Substitution of verdicts under s 668F(2) of the Criminal Code

[58]  The respondent’s counsel advanced an alternative contention in oral submissions at the hearing of the appeal.  She argued that if her primary submission was rejected the Court should exercise the power under s 668F(2) of the Criminal Code to substitute for the 18 guilty verdicts under s 408C(1)(b) verdicts of guilty of offences against s 408C(1)(c).  Because this argument was not made in the respondent’s outline the parties were given leave to make written submissions on the point.

[59]  In the respondent’s written submissions, this alternative contention was maintained only in relation to nine counts, namely counts 4, 7, 9, 11, 12, 13, 22, 29 and 32.  The respondent submitted that in relation to those counts the appellant had discussions with the complainant, he made dishonest representations (mainly about the appellant’s and the company’s financial positions and ability to pay) in the course of inducing the complainants to enter into agreements and ultimately to deliver the property in question, and the complainants agreed to and did deliver the property.

[60]  A summary of the evidence provided by the respondent’s counsel makes good her submission that there was evidence to that effect in relation to those counts.  I have referred to some of that evidence in my discussion of representative examples of the contentious counts.  Despite this, I am unable to accept the respondent’s contention that the Court is empowered by s 668F(2) to substitute verdicts of guilt for offences different from those charged against the appellant.

[61]  Section 668F(2) provides:

"Where an appellant has been convicted of an offence, and the jury could on the indictment have found the appellant guilty of some other offence, and on the finding of the jury it appears to the Court that the jury must have been satisfied of facts which proved the appellant guilty of that other offence, the Court may, instead of allowing or dismissing the appeal, substitute for the verdict found by the jury a verdict of guilty of that other offence, and pass such sentence in substitution for the sentence passed at the trial as may be warranted in law for that other offence, not being a sentence of greater severity."

[62]  The respondent relied upon s 581 or, alternatively, s 584 of the Code as fulfilling the first of those requirements.  These provisions are contained in chapter 61 of the Criminal Code, which concerns the “effect of indictment”.

[63]  Section 584 provides:

"(1)If, on the trial of a person charged with any indictable offence, the evidence establishes that the person is guilty of another indictable offence of such a nature that upon an indictment charging the person with it the person might have been convicted of the offence with which the person is actually charged, the person may be convicted of the offence with which the person is so charged.

(2) A person so tried is not liable to be afterwards prosecuted for the offence so established by the evidence, unless the court before which the trial is had thinks fit to discharge the jury from giving any verdict, and to direct the accused person to be indicted for that offence; in which case the person may be dealt with in all respects as if the person had not been put upon trial for the offence with which the person is actually charged."

[64]  Subsection 584(1) does not allow a person to be convicted of any offence other than that which is charged in the indictment.  The respondent’s submission must therefore refer to s 584(2).  It operates only in the case comprehended by s 584(1), namely where the evidence at trial establishes that the person is guilty of an indictable offence other than that charged in the indictment and where, had that other offence been charged, the person might have been convicted of the offence charged in the indictment.  In that case s 584(2) precludes the person from later being prosecuted for that other offence, except where the trial judge discharges the jury from giving a verdict on the offence charged in the indictment and directs the accused to be indicted for that different offence.

[65]  The trial judge was not asked to exercise and did not exercise that exceptional power in this case.  On the face of s 584(2) it ceased to have any scope for operation once the jury delivered its verdicts on the offences charged in the indictment.  Although the respondent’s submissions referred to s 584, its counsel did not argue that this Court could now exercise the power conferred by s 584(2) upon the trial judge.

[66]  That may be put to one side, because I accept the respondent’s alternative contention that on the indictment charging the appellant with the fraud offence created by s 408C(1)(b) the effect of s 581 is that the jury could have found the appellant guilty of the fraud offence under s 408C(1)(c).  Section 581 provides:

"Upon an indictment charging a person with any of the offences following, that is to say—

(a)stealing, with or without a circumstance of aggravation;

(b)fraud, with or without a circumstance of aggravation;

(c)obtaining from any other person any chattel, money or valuable security by passing a cheque that is not paid on presentation for payment;

(d)unlawful use or possession of a vehicle, with or without a circumstance of aggravation;

(e)unlawfully receiving anything under section 433;

(f)counselling or procuring any other person to commit any of such offences;"

[67]  It was argued for the appellant that where an indictment charged an offence created by one paragraph of s 408C(1), s 581 did not allow a conviction for an offence created by another paragraph.  That construction is certainly arguable, but it would produce the strange result that, whilst s 581 comprehended substitution of convictions amongst the diverse range of offences described in paragraphs (a) to (f) of the section, it did not comprehend the substitution of convictions amongst the more closely related offences created by the various paragraphs of s 408C(1).  I would not attribute such an odd purpose to the legislation.  The preferable and, I think, more natural construction, is that the phrase in the introductory words “with any of the offences following” applies distributively, not only amongst the paragraphs of s 581, but also amongst any different offences comprehended within each such paragraph.  Applying the ordinary rules of construction in that way, there is no residual ambiguity or doubt about the reach of the provision.[3]

[68]  In relation to s 581(b), the result of this construction is that a person charged with any of the offences of fraud created by s 408C(1) (with or without a circumstance of aggravation) may be convicted of any other such fraud offence committed with respect to the same property, if such other offence is established by the evidence.

[69]  The second requirement of s 668F(2) is that the jury “must have been satisfied” of facts which proved the appellant guilty of the other offence.  That condition is satisfied only if the Court concludes “to the point of certitude that the jury did find certain acts or omissions and that those acts or omissions, as a matter of law, made the accused guilty of the other offence”: Spies v The Queen (2000) 201 CLR 603 at 621 per Gaudron, McHugh, Gummow and Hayne JJ.  The High Court was there concerned with the equivalent provision in s 7(2) of the New South Wales Criminal Appeal Act 1912.  Their Honours said that:

“…s 7(2) only operates where the jury have been satisfied of those facts on evidence properly admitted, and where the jury have been properly directed as to the facts which are to be used as the basis of entering a conviction in respect of the other offence.  If any of the facts of which the jury must have been satisfied is the product of evidence wrongly admitted, or has or may have been influenced by a misdirection, non-direction or other error on the part of the trial judge, s 7(2) cannot operate.  The words ‘must have been satisfied of facts’ mean that the jury must have been properly satisfied of facts proved by admissible evidence in accordance with proper directions.”

[70]  I do not see how this requirement of s 668F(2) could be satisfied here.  The trial judge gave appropriate directions to the jury as to the elements of the eighteen relevant alleged offences against s 408C(1)(b).  Putting aside the circumstance of aggravation charged in some of the counts, the substance of what the judge told the jury was that the prosecution was obliged to prove that on a stated date the appellant dishonestly obtained specified property, rights or services from an identified complainant.  It was not an element and the trial judge did not direct the jury that it was an element of any of the alleged offences that the appellant offered any inducement to the complainants, that he did so dishonestly, or that a complainant was thereby induced to deliver the relevant property to the company.  So much was emphasised by the trial judge’s final redirection to the jury, which is set out in paragraph [91] of these reasons.

[71]  The jury must have found at least that at the time when the contracts were concluded the appellant did not intend to pay for the property; but it does not follow that the jury found that the appellant made the inducements upon which the respondent now relies.  In relation to each of the counts about which the respondent’s present submission is made, the Crown set out to prove that the appellant made dishonest misrepresentations to the complainants to induce them to part with their property, but that was not the only evidence upon which the jury might have found the requisite element of dishonesty in s 408C(1)(b).

[72]  The prosecutor adduced other evidence (including evidence of the appellant’s awareness of his own property and financial status) to support the Crown case that, at the time of the various transactions with the complainants, the appellant knew that he and the company would not be able to pay for the relevant property.  Consistently with the respondent’s restriction of this alternative argument to only some of the convictions, the jury convicted the appellant of some offences against s 408C(1)(b) where there was no evidence capable of proving any inducement: that is consistent with my conclusion that the jury did not necessarily rely for its findings of dishonesty on any count upon the evidence concerning the alleged misrepresentations.

[73]  Furthermore, the appellant was not faced with a case in which it was essential for him to defend charges that he made dishonest representations to the complainants to induce them to contract with the company.  Although defence counsel directed some cross-examination of some complainants to their evidence of what the appellant had told them, he generally did not cross-examine them about the element of inducement.  Conversely, the appellant denied making representations alleged against him and, otherwise than in relation to count 22, he was not cross-examined about the representations alleged against him.

[74]  It would be a basic denial of justice now to reconstruct against the appellant a case with which he was not charged at trial, which was barely litigated at trial, and in relation to which the jury was given no directions.  The power conferred by s 668F(2) is not available in this case, in my opinion.  If it was available, it would plainly be inappropriate to exercise it.

[75]  I would therefore reject this defensive argument for the respondent.  It follows that the convictions on counts 4 to 9, 11 to 15, 19, 22 to 24, 27, 29 and 32 for offences against s 408C(1)(b) must be set aside and not substituted by convictions for offences against s 408C(1)(c).  Because the evidence at trial was insufficient to support those convictions there should not be an order for a new trial on those charges and verdicts of acquittal should be entered.[4]  It will be a matter for the Crown to consider whether it is open and appropriate for it to bring fresh charges for different offences.

[76]  My conclusions in relation to ground (a) of the appeal render it unnecessary to consider ground (b), but the other grounds bear upon the appellant’s argument that the remaining convictions, on counts 20 and 28, should be set aside.

Ground (c): The learned trial judge erred in failing to provide the jury with any warning or direction in respect of the use they could make of the evidence which had been led in the Crown case in respect of those charges where the no case submission was upheld.

[77]  Of the 32 charges:

(a) Seven charges were found at trial to have been incompetent on the ground that the evidence was incapable of justifying a finding that the appellant was dishonest in obtaining property;

(b) The jury acquitted the appellant of five of the remaining 25 charges;

(c) The Crown conceded in the appeal that four of the 20 convictions should be set aside on the ground that the evidence was incapable of establishing that the appellant, rather than his company, obtained the relevant property;

(d) I have concluded that 14 of the remaining 16 convictions should be set aside for the same reason. 

[78]  Thus 25 of the 32 charges should not have been before the jury.  The appellant argued that the two convictions on counts 20 and 28, which were open on the evidence, should be set aside on the ground that the appellant was prejudiced by the numerous charges of dishonesty and evidence adduced in support of those charges that should not have been before the jury.

[79]  The trial judge ruled in favour of defence counsel's no case submission upon the seven counts late in the afternoon of day six of the trial.  At the commencement of day seven, the trial judge directed the jury to disregard those seven counts "completely"; to "disregard any further consideration so far as those counts are concerned"; to disregard any of the admissions in respect of those seven counts; that the counts on the indictment "with which we will now not be concerning ourselves" were those seven counts; and that those seven counts were "no longer before you". 

[80]  At the commencement of the trial judge's summing up on the afternoon of day nine of the trial, the trial judge reminded the jury that the appellant was "now charged with 25 offences as currently set out in the indictment" and that the original indictment comprising 32 counts "has now been reduced to 25".  The jury was also given a schedule detailing the evidence in relation to each count.  It identified the seven counts that were not to be considered. 

[81]  Subsequently in the summing up, on the morning of day 10 of the trial, the trial judge directed the jury that the fact there were 25 offences in the indictment did not allow the jury to jump to any conclusion that the appellant must be guilty of at least some of them or to pose the question why the appellant would be charged with so many offences if he was not guilty of at least some of them.  The trial judge further directed the jury that if the jury was satisfied beyond reasonable doubt that the appellant was guilty in respect of one offence that did not mean that he was guilty of any of the others; or that a finding of guilty on one count could be used “to colour your thinking” to consider therefore that he is guilty of any of the others.  The trial judge explained that to convict the appellant on that basis would be to convict him because of the jury's opinion of his character or his tendencies rather than on the evidence relevant to the particular count; the law insisted that people were only to be convicted on the basis of the relevant evidence placed before the court at trial in respect of each charge. 

[82]  The trial judge repeatedly directed the jury to consider each charge separately and to eschew propensity reasoning.  His Honour said, for example, that, "It is important that you try each charge on the evidence that strictly relates to that charge and you do not act in the process by using evidence relevant to any other charge or reason that because he may have committed one of the other offences, if you so find that, then he is likely to have committed any of the other offences."  In that context the trial judge added that the evidence in respect of all counts was clearly defined.  Later the trial judge referred to the sheets given to the jury which, separately in respect of each count, identified the elements of the offence.  The judge observed that "I’ve done that in a separate way, because I've wanted to make sure that you understand that principle, that you have to consider each count separately and therefore it’s important that when you’re deliberating, you look at each count in a separate way…" There were further references in the summing up about the jury's obligation to focus on each count separately and to go through the counts one by one. 

[83]  The trial judge allowed for particular exceptions to the directed separate consideration of each count.  First, the judge directed the jury that if it found that any admission made in respect of any count which was no longer being considered was relevant to any other count it had to consider, then it could use that admission.  Having regard to the strength of the trial judge's directions against propensity reasoning, to which the use of admissions was not suggested to be an exception, I do not consider that this prejudiced the appellant.  No exception was taken to these directions in the summing up and nor was this particular direction the subject of submissions in the appeal. 

[84]  Secondly, in addition to the trial judge’s summaries of the evidence and submissions made for each party separately in relation to each count, his Honour summarised the evidence which the jury was told related to all counts, particularly the evidence concerning the financial capacity of the appellant and his company.  The presence of the incompetent charges and evidence bearing only upon them had no bearing upon the legitimacy of the jury’s use of this body of evidence on counts 20 and 28. 

[85]  In relation to the seven charges the subject of the successful no case submission, the directions I have summarised, which it may be assumed were followed by the jury, obviated the potential prejudice of which the appellant now complains.  The jury can have been in no doubt that the evidence relating to the seven counts taken from the jury was incapable of lending support for the Crown case on any of the remaining counts. 

[86]  Similarly, in the light of the trial judge’s strong and repeated directions to the jury to avoid propensity reasoning and (subject to the exceptions I have mentioned) to consider each count and the evidence on it separately from each other count, I reject the submission for the appellant that he was prejudiced by the failure of the trial judge to direct the jury to disregard the numerous other incompetent counts and that the evidence was insufficient to establish any of the offences charged in those counts.  The directions adequately protected the appellant against the prejudice that otherwise might have arisen by the presence of the many other charges which were incapable of establishing that the appellant, rather than his company, obtained property.  If the jury might otherwise have adopted impermissible propensity reasoning, the directions precluded it.  I would add that the jury’s acquittal of the appellant of five of the charges and the intelligent terms of their question which I discuss below support the conclusion that the appellant was not prejudiced by the inappropriate presence of many incompetent charges and much evidence directed only to those charges. 

[87]  I therefore reject the appellant's ground (c). 

Ground (d): The learned trial judge erred in his re-directions responding to the jury's requests by not emphasising the primacy of the need to prove dishonesty.

[88]  The trial judge finished summing up in the middle of the morning on day 10 of the trial.  After lunch on that day the trial judge referred to a note from the jury in the following terms:

"The jury seeks guidance on what we are ruling on in regard to obtaining property dishonestly. A person may agree to a purchase, intending to pay at some eventual date, but not intending to honour the payment due date. An ordinary honest person would consider this to be a dishonest act. However, Mr McInnes [defence counsel] postulated that we are here to determine only that the defendant never intended to pay at all. This statement did not appear to be refuted or challenged by either Mr Turner [the prosecutor] or your Honour. Is it the case that we are to rule on the transaction based only on a part of the transaction or are we to judge the whole of the transaction, being the intent to pay a given amount by a given time?"

[89]  The trial judge redirected the jury that the Crown case was confined by the following particulars given by the prosecution before the trial commenced, which the trial judge had read to the jury early in his summing up:

"That each transaction, and you imply its course of conduct, was dishonest. He bought goods/services knowing that he could not pay for them and not having any intention to pay for them he misrepresented himself as having the ability to pay and only started making payments once the police became involved and after many months had passed from payments being due. Even when he sold cattle he did not use the proceeds to make repayments".

[90]  The trial judge then directed the jury that the answer to the question it had posed was that, "you are to decide the counts before you on the basis that the prosecution case is that the accused did not intend to pay for the property in question at any time and only started to pay the accounts after the police investigation commenced." 

[91]  Subsequently the jury enquired through the bailiff whether that redirection could be given to them in writing.  The redirection was transcribed and given to the jury, without objection.  Later, counsel suggested that there should be an amendment to the redirection.  The trial judge acceded to the submission and further directed the jury that:

"So the answer to your question posed [at] the end of your note is, you are to decide the counts before you on the basis that the prosecution case is that at the time of the obtaining the accused did not intend to pay for the property in [question] at any time and only started to pay the accounts after the police investigation commenced."

[92]  The trial judge added, "just so that you will be perfectly, perfectly clear and there is no issue on that which may be causing you any difficulty, you could insert the words 'at the time of the obtaining' where I have indicated."

[93]  Following those directions the transcript records questions by a juror, which the trial judge answered affirmatively, whether the prosecution case was as summarised or paraphrased in the directions.  The transcript also records a remark by the juror to the effect that the confusion had come because there seemed to be a difference "between the fact that he not having any intention to pay and misrepresented himself versus he just did not intend to pay…ever, …".  The trial judge confirmed that.  The juror responded that, taking the trial judge's direction as paraphrasing the Crown case, the confusion was cleared up.

[94]  The appellant argued that the redirections had the potential to confuse because they referred to an allegation that the appellant only started to pay the accounts after the police investigation commenced, which was an irrelevant consideration for the jury.  It may be accepted that this part of the redirections was unnecessary, but I do not accept that it prejudiced the appellant.  If it had any effect, it was to impose the unwarranted burden upon the Crown of proving beyond reasonable doubt that the appellant only commenced to pay accounts after commencement of the police investigation: that should have been regarded merely as evidence in support of the Crown case that the appellant contracted for property without intending to pay for it. 

[95]  The appellant also argued that the direction failed to provide guidance about the concept of obtaining property dishonestly.  This is said to have been what the jury sought in the first sentence of its request for a redirection. 

[96]  I also reject that argument.  The guidance which the jury sought in relation to obtaining property dishonestly related to the matters set out in their note.  The trial judge had given extensive and conventional directions to the jury about dishonesty.  (His Honour warned the jury, for example, that the fact that the defendant failed in his business or that he made business mistakes was not dishonest, the fact that he might have been reluctant to admit his mistakes was not dishonest, and that the jury could not convict the defendant merely on the basis that the defendant might have thought only that he "might pay them down the track".)

[97]  It is apparent that the concern expressed by the jury arose from the way in which the particulars confined the Crown case.  As was observed in the jury's note, an ordinary person might consider it to be dishonest for a buyer to agree to a purchase when the buyer intended to pay eventually but did not intend to pay by the due date.  The redirections made it clear that the Crown case was confined, in a way which was quite favourable to the appellant, to a case that the appellant entered into agreements to purchase when he did not intend to pay at any time. 

[98]  I would reject the appellant's appeal against his convictions on counts 20 and 28.

Sentence appeal

[99]  On the premise that all but two of the 20 convictions must be set aside, this Court is obliged to re-sentence the appellant for those remaining convictions, on counts 20 and 28.

[100]  The maximum penalty for those offences was five years imprisonment. (At the relevant time the maximum penalty for those offences charged with the circumstance of aggravation that the property exceeded a value of $5,000 – all of the convictions for which I consider must be set aside – was ten years imprisonment). 

[101]  The total value of goods and services obtained with respect to count 20 was $2,768, which, according to the admissions at trial, was repaid in full in February 2006.  With respect to count 28, the complainant never received any part of the price of $2,650. 

[102]  The criminality established by the jury's verdicts of guilty on these two offences for which the appellant is to be punished is that the appellant contracted to buy goods from the complainants when he did not intend to pay for those goods at any time.

[103]  The appellant was born on 21 September 1943, so he is now 65 years of age and he was 61 and 62 years old when he committed the offences in counts 20 and 28.  The appellant had no prior criminal history of any significance.  He had been convicted and fined for relatively minor past offending; one offence involved his use of a fictitious telephone account some 20 years before this offending and another was for failing to submit a report of a company’s affairs.  There were references confirming that the appellant was otherwise of good character.  The appellant had been gainfully employed in various capacities since leaving school in 1957. A psychologist’s report was tendered but it contained nothing worthy of remark. 

[104]  The appellant is not entitled to the mitigation which would have accompanied a plea of guilty to these two offences, although he cannot be held responsible for the length of the trial.  That was largely attributable to the inclusion in the indictment of a large number of incompetent charges.  I regard as applicable, however, the findings of the trial judge when sentencing the appellant that he had shown no tangible remorse for his conduct.  His Honour did accept defence counsel's submission that the appellant regretted the hardship he had caused the complainants. 

[105]  In view of the bare-faced frauds found by the jury on the two counts it was appropriate to record convictions, but in the circumstances I have outlined it is most unlikely that imprisonment would have been imposed for those convictions if they had stood alone.  Accordingly, and given that the appellant has been imprisoned for more than eight months since he was sentenced on 30 October 2008, I would not now impose any other punishment.

[106]  It would follow that the appellant is entitled to immediate release from prison in relation to all counts on the indictment.

Proposed Orders

[107]  I consider that the following orders are appropriate:

1. Allow the appeal against the convictions on counts 4 to 9, 11 to 15, 19, 22 to 24, 27, 29 and 32, quash those convictions, and enter verdicts of acquittal on those counts.

2. Dismiss the appeal from the convictions on counts 20 and 28.

3. Grant the application for leave to appeal against sentence, allow the appeal from the sentences imposed on counts 20 and 28, set aside the sentences imposed in the District Court, and order that the appellant not be punished in respect of those counts. 

[108]  I note that the Court was not asked to set aside the order made by the trial judge that the 15 head of cattle formerly owned by the complainant Lawrence be forfeited to the Commissioner of Police Queensland. 

[109] JONES J: I have read the reasons prepared by Fraser JA.  I respectfully agree with those reasons and the orders proposed.