SUPREME COURT OF QUEENSLAND

[1]  HOLMES JA: I agree with the reasons of White JA.

[2]  FRASER JA: I agree with the reasons of White JA.

[3]  WHITE JA: The appellant was convicted in the District Court in Townsville on 13 April 2010 after a trial on one count of fraud as an employee pursuant to s 408C(1)(a), (2)(b) of the Criminal Code and one count of fraud in respect of property that had come into his possession for the benefit of his employer pursuant to s 408C(1)(a), (2)(c) of the Criminal Code in respect of conduct occurring in November and December 2007.  He was sentenced to imprisonment for 12 months to be released after serving three months with an operational period of two years, a declaration of one day served under the sentence and an order for restitution of $1,580.00.

[4] The appellant filed a notice of appeal on 14 April 2010 and an application for leave to appeal against sentence on 20 April 2010.  He was granted bail pending the hearing of his appeal on 21 April 2010 by Cullinane J in the Supreme Court at Townsville.

[5] The appellant argued his appeal by telephone on 26 November 2010.  At the conclusion of the hearing, the Court allowed the appeal, set aside the convictions, ordered a re-trial and granted the appellant bail pending any re-trial with a condition that he have no contact with prosecution witnesses.  The Court indicated the reasons would be published subsequently.  These are those reasons for allowing the appeal.

Circumstances of offending

[6] The appellant was an employee of Globe Australia Pty Ltd (“Globe”) which sold chemicals to pest control businesses.  Mr Edmund Tuffin operated such a business and had an account with Globe.  On 23 November 2007 Mr Tuffin went to Globe’s premises in Townsville and purchased two bottles of Termidor, a termite insecticide.  The price for the two bottles was $880.00.  The employee who served him that day was the appellant.  The appellant was well-known to Mr Tuffin as a person who lived near him and who had given him a lift to work on a number of occasions.  Mr Tuffin had difficulty reading and writing.  His normal practice was to sign and date a cheque and get the person behind the counter to fill out the rest of the cheque.  He explained that in the past several cheques had not been honoured through incorrect spelling on the cheques, presumably relating to the name of the payee.  On this day Mr Tuffin wrote “880.00” on the cheque and signed it.  He did not fill in the payee details, leaving that for the appellant to do.

[7] Later that day the cheque was deposited into the appellant’s account with Uni Credit Union.  The document instructed the Commonwealth Bank, where Mr Tuffin and his wife had an account, to pay “M. Nemec” the sum of $880.00 in words and figures.  The appellant’s dealings with this “cheque” constituted the first count of fraud.[1]

[8] Mr Tuffin gave evidence that subsequently he received correspondence from the Sydney office of Globe indicating that his account was in arrears to the amount of approximately $3,500.00.  He arranged to pay $2,000.00 off that account.  On 6 December 2007 he went to Globe’s premises and spoke to the appellant.  He told him that he had come to pay $2,000.00 off his account.  Mr Tuffin signed the cheque and the appellant filled in the other details.

[9] On 10 December 2007 that cheque was deposited into the appellant’s account with Uni Credit Union.  The cheque requested the Commonwealth Bank to pay “M. Nemec” the sum of $2,000.00 in words and figures.  The appellant’s dealings with this cheque constituted the second count of fraud.

[10]  On the same day, 6 December 2007, Mr Tuffin also purchased one bottle of termite insecticide for $440.00 and wrote a separate cheque for that amount.  Mr Tuffin explained that he did so because it was easier for his bookkeeping than writing a single cheque for the total amount.

[11]  The appellant gave evidence that Mr Tuffin, learning that the appellant did some after hours painting jobs, asked him to quote on painting the inside of his house.  The appellant said that he quoted $2,880.00 after he had inspected the house in the absence of Mr Tuffin or his wife.  It was his evidence that the cheque for $880.00 was given to him to purchase materials for the job and that he was, accordingly, directed by Mr Tuffin to insert his name onto the cheque.  Similarly, the cheque for $2,000.00 on 6 December was a payment for the work.  The appellant said that he delayed starting the painting until he had obtained an AB number, then issues arose about the cheques and he paid back to Mr Tuffin $1,300.00.  Mr Tuffin denied that the cheques were given to the appellant other than for his employer, Globe.

     Appeal against conviction

[12]  The appellant raised three grounds in his notice of appeal – that the trial Judge erred in:

●        failing to uphold a no case submission;

●        amending the indictment;

●     directing the jury, as a matter of law, that the property in the cheques belonged to the relevant complainants.

[13]  The indictment charged the appellant that he “… dishonestly applied to his own use money belonging to GLOBE AUSTRALIA PTY LTD” and as a circumstance of aggravation that he was an employee of Globe.  By count two he was charged that he “… dishonestly applied to his own use money belonging to EDMUND JAMES TUFFIN” and the money came into his possession subject to a condition that it should be applied to a trade account in the name of Edmund James Tuffin in favour of Globe. 

[14]  The charges were brought pursuant to s 408C(1)(a) of the Criminal Code and the circumstances of aggravation were provided for in s 408C(2)(b) and (c).  Section 408C provides, relevantly:

“(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

…

commits the crime of fraud.”

[15]  By s 408C(2):

“An offender guilty of the crime of fraud is liable to imprisonment for 5 years save in any of the following cases when the offender is liable to imprisonment for 12 years, that is to say –

…

(b)if the offender is an employee of another person, and the victim is the other person;

(c)if any property in relation to which the offence is committed came into the possession or control of the offender subject to a trust, direction or condition that it should be applied to any purpose or be paid to any person specified in the terms of trust, direction or condition or came into the offender’s possession on account of any other person;

…”

[16]  By s 408C(3):

“For the purposes of this section –

(a)property, without limiting the definition of property in section 1, includes credit, service, any benefit or advantage, anything evidencing a right to incur a debt or to recover or receive a benefit, and releases of obligations; and

…

(d)persons to whom property belongs include the owner, any joint or part owner or owner in common, any person having a legal or equitable interest in or claim to the property and any person who, immediately before the offender’s application of the property, had control of it; and

….”

[17]  By s 1 of the Criminal Code the term “property” includes:

“(a)every thing animate or inanimate that is capable of being the subject of ownership; and

(b)money; and

…”

[18]  At the end of the prosecution case, counsel for the appellant made a “no case” submission in relation to both counts.  This submission was based on the argument that the money in each count was owned by the appellant.  Counsel for the appellant relied upon the definition of “cheque” in s 10 of the Cheques Act 1986 (Cth), arguing that a document did not become a cheque until it nominated a bearer.  This did not occur until the appellant filled in the bearer details to himself and, by then, he had possession of and, thus, property in the cheque which he then owned.  Since the term “money” in s 1 of the Criminal Code included a “cheque”, the appellant had no case to answer because the money then belonged to him.  This argument clearly overlooked the full definition of “cheque” in s 10(1).  Section10(1) provides that a cheque is an unconditional order in writing that:

“(a)is addressed by a person to another person, being a financial institution; and

(b)is signed by the person giving it; and

(c)requires the financial institution to pay on demand a sum certain in money.”

A perusal of the subject cheques shows that each document is a directive addressed by Mr Tuffin “to another person” but that other person must be “a financial institution”, in this case, the Commonwealth Bank.  The document was clearly a cheque within the meaning of s 10 from the time Mr Tuffin signed it and the amount was inserted. 

[19]  This argument was not raised in response to the defence submissions.  Instead the prosecutor sought leave to amend each count by deleting the word “money” where it appeared in the counts and substituting the word “property”.  The trial judge granted the application over objection.  There was no re-arraignment.

[20]  The appellant submitted that his Honour erred in permitting this amendment.  Section 572 of the Criminal Code provides, relevantly:

“(1)If, on the trial of a person charged with an indictable offence, … it appears that any words that ought to have been inserted in the indictment have been omitted, … or that any words that ought to have been omitted have been inserted, the court may, if it considers that the variance, omission, or insertion, is not material to the merits of the case, and that the accused person will not be prejudiced thereby in the person’s defence on the merits, order the indictment to be amended, so far as is necessary …”

The amendment was unnecessary.  Having correctly refused the application for a “no case” order, although on an incorrect basis which it is unnecessary to repeat, the amendment did not unfairly prejudice the appellant because the real issue was the element of dishonesty in relation to each count and the trial evidence encompassed that element.

[21]  It is, however, with respect to ground three, that the appeal must be allowed.  After instructing the jury that the facts were for them, his Honour explained that count one concerned the property of Globe and count two the property of Mr Tuffin.  He explained that the foundation of the charge was that the appellant had applied to his own use property belonging to another.  His Honour directed the jury that in each case a cheque was property within the meaning of the law and, banking that property into his own account, was applying the property for the appellant’s own purposes.  His Honour explained the distinction between the property in the first count belonging to Globe in the charge and, in the second count to Mr Tuffin.  His Honour then said:[2]

“It might be difficult to understand but I’m directing you that it means that the property in the second count remained that of Mr Tuffin, that is the cheque.  In the first count I’m directing you it was the property of Globe Australia Pty Ltd.”

His Honour then said:

“The focus of attention, however, will be on the final element.”

After mentioning some uncontroversial matters he said:[3]

“The controversial aspect, and this is what the Crown need to also prove to the standard of proof that I’ve mentioned, is that the defendant acted dishonestly in each count.  And to prove that the Crown need to establish that what he did was dishonest by the standards of ordinary honest people and that the defendant realised that what he was doing was dishonest by those standards.”

[22]  After the jury retired, defence counsel sought a redirection on the basis that the ownership of the cheques was a matter for the jury and not a question of law and by directing the jury that the cheques belonged to Globe and to Mr Tuffin, his Honour had usurped their function.  His Honour declined to redirect.  Quite clearly the issue of the ownership of the two cheques was at the heart of the defence case.  On the defence case the appellant had come by the cheques honestly – they were his because Mr Tuffin had given them to him for the painting work.  To direct the jury that as a matter of law the property in the cheques reposed in Globe and Mr Tuffin completely undermined the defence case.  In order to convict, the jury needed to be told that they had to accept Mr Tuffin’s evidence beyond reasonable doubt that the cheques were not for the purpose asserted by the appellant.  The question of dishonesty was an essential element to the charges and was fundamental to the question of guilt.  His Honour erred in removing that element from the consideration of the jury.[4]  It was not, accordingly, a trial which proceeded according to law.

Application for leave to appeal against sentence

[23]  In light of the orders made on the appeal it is not appropriate to make comment on the sentence.

Orders

[24]  The orders made on 26 November 2010 were:

1.Appeal allowed.

2.Convictions recorded on 13 April 2010 set aside.

3.Re-trial ordered.

4.The appellant be admitted to bail pending re-trial conditioned on having no contact with prosecution witnesses.