R v Perrin[2017] QCA 194

SUPREME COURT OF QUEENSLAND

1. MORRISON JA:  On 20 December 2016 the appellant, Mr Perrin, was convicted, after a trial, of six counts of aggravated forgery (counts 2, 3, 5, 7, 9 and 11) and three counts of aggravated fraud (counts 6, 10 and 12).  The appellant was subsequently sentenced to concurrent terms of imprisonment on each conviction:

1. eight years on the aggravated fraud counts;
2. six years on the forgery counts 2, 5, 7 and 11; and
3. seven years on the forgery counts 3 and 9.

2. The appellant challenges his convictions on several grounds.  The original ground^[1] was abandoned at the hearing of the appeal.  Instead the grounds^[2] pressed were:

1. the learned trial judge wrongly decided that the exculpatory provision contained in s 22(2) of the Criminal Code (Qld) would not be left for the jury to consider.  Alternatively a miscarriage of justice occurred because the learned trial judge wrongly decided that the exculpatory provision contained in s 22(2) of the Criminal Code (Qld) would not be left for the jury to consider; and
2. a miscarriage of justice occurred because the jury was not directed that verdicts of guilty depended upon satisfaction beyond reasonable doubt that the appellant did not honestly believe he was entitled to put his then wife’s signature on the documents the subject of the forgery counts and did not honestly believe he was entitled to gain the pecuniary benefits the subject of the fraud counts.

3. Leave is also sought to appeal against the sentences imposed on the grounds that: (i) they are manifestly excessive, and (ii) the learned sentencing judge erred in failing to take into account the applicant’s cooperation in the administration of justice.  The basis for the second ground was that no allowance was made for the applicant’s cooperation in reducing the length of the trial by making admissions as to the forgeries and the fact that his fingerprints were on certain documents, thus avoiding the need for evidence from five witnesses.^[3]
4. In the event that leave to appeal against the sentence is allowed, the applicant does not seek to challenge the head sentences, but only that the parole eligibility date be varied, so that he is eligible for parole on 20 June 2020 (after he has served three and a-half years).
5. The following explains my reasons for concluding that the appeal against the convictions should be dismissed, and the application for leave to appeal against sentence should be allowed.

Background facts

6. Because the original ground of appeal (that the verdicts were unsafe or unsatisfactory) was abandoned, there is no need to set out an exhaustive account of the facts.  The following draws upon those agreed as relevant by the appellant and the respondent.
7. The appellant and Nicole Bricknell^[4] were married in 1996 and their first child was born in 1998.  Prior to that birth she gave up work as a beauty therapist.  The appellant was a solicitor.  They purchased a house and land at Southern Cross Drive, Cronin Island, in about May 1999.  The purchase price was about $1.5m.  To fund that purchase the appellant and Mrs Perrin obtained a loan secured by a mortgage over the property.  The property was put in Mrs Perrin’s name because the appellant’s former partner in a law firm was being sued and the appellant wanted to avoid any possibility of the partner’s actions affecting them.  He told her that a lawyer (which he was) puts assets in his wife’s name in order to protect the asset.
8. A company, Christie Qld Pty Ltd, (Christie) was created around 1998.  Mrs Perrin and the appellant were the only directors and shareholders.  The purpose of the company was to run everything for their family.  Christie held all of their cash assets.
9. Mrs Perrin gave birth to their second child in 2000 and around that time the appellant finalised a transaction to do with a surfwear business called Billabong, which eventually resulted in them receiving $33m.  She and the appellant knocked down the house they had purchased at Cronin Island, and built a new house.  Sometime after 2001, they purchased the adjoining house and land.^[5]  They rented that house out for a while but then decided that, due to land tax issues, they would knock it down.  They then amalgamated the titles of the two properties into one title, in her name.
10. The Billabong shares^[6] were in Mrs Perrin’s name.^[7]  After Billabong was floated they received $8m and that money was put into Christie’s bank account.  The money was used to demolish the house at Cronin Island and to fund the construction of the new house, at a cost of $7.4m.
11. Mrs Perrin said she basically ran the household and looked after the children, and she left the appellant in charge of the business affairs.^[8]  She said that they would discuss things,^[9] but business decisions were made by the appellant; he said that he would only give her a brief overview.^[10]  As to the ownership of properties the appellant said he “thought of everything as ours”.
12. At all times the appellant and Mrs Perrin banked with the Commonwealth Bank (the Bank).  Christie and MDP Consolidated Pty Ltd (MDP), another entity owned by the appellant and his wife, also had accounts with the Commonwealth Bank.  The appellant had a line of credit in his name as borrower, provided by the Bank.  That line of credit was secured by a mortgage over a property at Hedges Avenue on the Gold Coast.
13. According to the appellant:

1. in 2006 they entered into an arrangement to buy overseas properties for $50m;  they were 20 per cent of the purchasing entity, and other parties (the Thynnes) held the balance;
2. the purchase price was to be paid in instalments;
3. Mrs Perrin knew of and was agreeable to enter into the investment, and contracts were signed;
4. when the second payment fell due, the Thynnes could not contribute their 80 per cent share;  as a result a registered charge was granted over Christie’s assets in favour of the vendor, SAI;
5. because they were jointly liable on the purchase, the Perrins were liable to pay all of the purchase price;
6. in February 2007, a payment was not made on time and, on the morning after it was due receivers arrived, demanding payment of the money or they would seize Christie’s assets; the appellant rapidly made arrangements to obtain the required funds; Mrs Perrin was required to sign a Deed of Guarantee and she did so when the appellant brought it to her;^[11] and
7. a further payment was due in June 2007 and an extension was negotiated by the appellant, for which guarantees were signed by the appellant and Mrs Perrin; subsequently the appellant negotiated a priority agreement with the Thynnes, so that the Perrins were to be fully repaid before the Thynnes received anything.

14. In April 2008, the appellant requested an increase the credit provided from the Bank, from about $3 million to $5 million.  He said it was so he could invest in a company.  The Bank required additional security by way of a mortgage over the property at Cronin Island.  Additionally, the bank required guarantees from Christie and from Mrs Perrin.
15. By May 2008 another instalment was due to SAI.  Neither the appellant nor Christie had the money to pay it.  The appellant said that he told Mrs Perrin that they needed to borrow to retrieve their position, and they agreed he would arrange to get a loan from the Bank.
16. The Bank prepared the relevant documents, which were then given to the appellant.  On 16 May 2008, Mr Parker told the appellant that it was necessary for the mortgage documents to be witnessed by a JP or a solicitor.  The appellant accepted that Mr Parker may well have offered the services of one such witness in the Bank’s office.
17. On or about 16 May 2008, the appellant wrote signatures on a number of the Bank’s documents.  Admissions were made that the signatures purporting to be those of Mrs Perrin, which appeared on the following documents, were not her signatures but were written by the appellant:

1. a Deed of Guarantee by Christie as guarantor;^[12]
2. a Deed of Guarantee by Mrs Perrin as guarantor;^[13]
3. a Mortgage for the property at Southern Cross Drive, Cronin Island;^[14]
4. a Consumer Loan Authority provided by Christie;^[15] and
5. a document entitled “Acknowledgement and Consent - Proof of Identity Details”.^[16]

18. The documents were returned to the Bank, and the line of credit was increased to $5,000,200.
19. A couple of days later the appellant requested that his line of credit be increased further, on a temporary basis.  The appellant said (again) that it was so he could invest in several companies or one of his existing investments.  The Bank agreed, provided further guarantees were given.
20. The Bank’s documents were taken to the house at Cronin Island by Mr Parker.  Mr Parker said he met, and spoke to, Mrs Perrin for the first time when he called at the house, though he initially did not know who she was.  She was on her way out and he told her that he had called over to have documents signed.  He asked her if the appellant was there, and she said that she was not sure.  Mr Parker was about to leave the documents in the letterbox when he saw the appellant on the driveway so he gave them to the appellant.  Mr Parker said that the documents were later returned to the Bank.
21. According to the appellant:

1. Mr Parker^[17] brought documents around to the Cronin Avenue house to sign;
2. Mrs Perrin was just about to leave to do the school run;
3. she stopped her car on their driveway; and
4. the appellant introduced her to Mr Parker and the latter said “I’ve given the documents for you guys to sign” and Mrs Perrin said “great … Matthew, take care of it”.^[18]

22. According to Mrs Perrin:^[19]

1. as she was on the driveway, leaving to collect children from school, she spoke to a man she did not know who asked for the appellant;
2. she said he was inside and to ring the doorbell; there was no further conversation; and
3. she could not recall any discussion about documents but it was possible that she said to give documents to the appellant.

23. On or about 20 May 2008 the appellant wrote signatures on a number of documents.  Admissions were made that the signatures purporting to be those of Mrs Perrin, which appeared on the following documents, were not her signatures but were written by the appellant:

1. a Deed of Guarantee by Christie as guarantor;^[20]
2. a Deed of Guarantee by Mrs Perrin as guarantor;^[21] and
3. a letter concerning a “Credit Contract”.^[22]

24. As to why Mrs Perrin’s signatures were not on those documents the appellant said: “Nicole and I agreed when the documents are there, if I’m there I’ll sign them.  If I’m not there, Matthew, you sign them for me, because we need to get this done”.
25. As to the documents dated 20 May 2008, the appellant said Mrs Perrin did not sign the documents because she was not available or it was inconvenient.  However, at 12.05 pm on 20 May 2008, the appellant sent an email to his personal banker (Mr Parker) stating he had “Nicole on standby” to sign the documents.  But the appellant denied doing so to deceive the Bank into thinking Mrs Perrin would sign the documents herself.
26. The Bank then increased the line of credit to $7m, with that increase to remain in place until 30 July 2008.
27. On 25 May 2008, the appellant advised Mr Parker that he wanted to have his facility made permanent, not temporary.  Mr Parker told him that the arrangements had to change from a line of credit to a business loan.  The Bank proposed a BetterBusiness loan, with the appellant as borrower.  The Bank indicated it could make a $10m loan, and the appellant requested that.  The purpose of the loan was for the appellant’s investment business.
28. A new set of Bank documents was required, which included a new mortgage over the Cronin Island property and new guarantees from Christie and Mrs Perrin.  The Bank prepared the necessary documents.  They were returned to the Bank, already signed.
29. In June 2008 the appellant wrote signatures on the Bank’s documents.  Admissions were made that the signatures purporting to be those of Mrs Perrin, which appeared on the following documents, were not her signatures but were written by the appellant:

1. a Deed of Guarantee by Mrs Perrin as guarantor;^[23]
2. a Deed of Guarantee by Christie as guarantor;^[24] and
3. a mortgage for the property at Southern Cross Drive, Cronin Island.^[25]

30. The Bank made the loan of $10m to the appellant on 27 July 2008.
31. On or about 4 August 2008, the appellant asked the Bank for a loan of $17m.  The appellant said it was so he could make additional investments.  The Bank was prepared to lend an additional $3.5m as a separate loan secured in a manner similar to the other loan, with an additional guarantee from MDP.
32. On the appellant’s version, in August 2008, he told Mrs Perrin that they would have to increase the loan to pay the next instalment.  Mr Parker arranged it urgently.  The appellant said: “And, again, the same situation, Nicole said if we need it quickly, if I’m here, I’ll sign them.  If you’re here, sign them.  Just make sure SAI does not come back again.”
33. In August 2008 the appellant wrote signatures on documents.  Admissions were made that the signatures purporting to be those of Mrs Perrin, which appeared on the following documents, were not her signatures but were written by the appellant:

1. a Consent and Acknowledgement of Guarantee Form;^[26] and
2. a Business Loan Authority with Christie as security provider;^[27] and
3. a Business Loan Authority with MDP as security provider.^[28]

34. The documents in paragraphs [17](b) and (c), [23](b) and (c), [29](a) and (b), and [33](a) and (c) above were purportedly witnessed by Fraser Perrin.  Admissions of fact were made that the signatures purporting to be those of Fraser Perrin on those documents were not his signature but were written by the appellant.  The appellant admitted that he had written them without Fraser Perrin’s knowledge or authority.
35. The appellant acknowledged that as a businessman and former solicitor he appreciated the importance of a witness’s signature on documents such as these.  The appellant’s explanation for writing Fraser Perrin’s signature on the documents was that he was compelled by time constraints despite the fact that Fraser Perrin worked in an office one minute’s drive away from the house at Cronin Island where the documents were signed.
36. The additional $3.5m was made available on 20 August 2008.  Shortly thereafter the appellant invited Mr Parker and his assistant (Ms Strathmoore) to lunch.  The lunch was on 28 August 2008.  The appellant and Mrs Perrin attended.  Mr Parker said that the appellant said let’s not talk business or words to that effect.  Mr Parker thought the lunch was a form of thanks for their work on the loans.  Ms Strathmoore’s evidence was that the appellant said something to the effect of thank you for doing this loan so quickly, we really appreciate it, and Mrs Perrin said words to the effect, yes it was really well done.
37. In all of the dealings above the appellant was the point of contact for the Bank and gave all the instructions for the transactions.  The bank had no contact with Mrs Perrin apart from the lunch referred to in paragraph [36] above.
38. Evidence was led from an officer of the Bank that had the mortgages and guarantees not been provided then the Bank would not have advanced the funds.^[29]
39. The appellant said and did nothing to alert the Bank that he had signed the documents on behalf of Mrs Perrin.  The appellant knew that it was a common practice when signing with authority to sign “for” or “on behalf of” the other person.  The appellant represented to the Bank that the signatures on the relevant documents had been put there by Mrs Perrin herself.  The appellant also represented to the Bank that the purported signatures of Fraser Perrin had been written by Fraser Perrin himself.
40. On 16 March 2009, the appellant attended at the home of Tracey Hill and in her presence signed and dated a document titled “Statement of Matthew David Perrin”.  This document^[30] reads as a confessional statement.  In it the appellant admitted that he forged Mrs Perrin’s signature on the documents the subject of the charges, that he forged the signatures of the purported witness where necessary, that he kept the paperwork from her, that she was not aware of the mortgages or the extent of liability, and that she did not, and never would, agree to using the house as security.  The appellant admitted signing the document but denied he was the author.
41. The extent of the appellant’s financial difficulties was revealed to family members on 20 January 2009.  Those present included Fraser Perrin and Mrs Perrin.  When the appellant said he had “done some bad things and he was … broke”, and that the house had been mortgaged,^[31] the appellant broke down.^[32]

Mrs Perrin’s evidence

42. Mrs Perrin’s understanding was that their financial position was entirely sound as at January 2008 and that she was never aware of any difficulties in this regard until January 2009.  In 2008, she was never made aware that a line of credit had been extended, that guarantees had been given, or that loans for $10m and $3.5m had been obtained.  She said that after the Billabong float they “would never have needed to borrow money … for any reason at all”.^[33]
43. She signed some documents that the appellant presented to her on two occasions (at their son’s rugby field and at a swimming pool).  The appellant told her that they were connected with the Chinese investment involving the Thynnes, but were guarantees in their favour, and that the lawyers who asked her to sign were their own lawyers, or lawyers for a co-investor.^[34]  She did not read the document the appellant asked her to sign as she trusted him to tell her what it was.^[35]
44. She never gave the appellant any authority, either express or implied, to mortgage the property at Cronin Island, to offer her as a guarantor for loans or lines of credit, or to sign documents on her behalf.  She denied that the appellant had been signing her name on documents since 1999 with her permission.  She said it was not her signature on a guarantee dated 29 September 2004 which exposed her to a $100m liability^[36] and that it was not her signature on an application to construct a jetty.

The appellant’s evidence

45. He said he had Mrs Perrin’s authority to sign all the documents the subject of the counts of forgery and she had expressly stated that to him.  All of the documents for the transactions in May, June and August 2008 were signed in similar circumstances of urgency.  He “honestly believed [he] could sign for Nicole”.
46. From the year 2000 on, Mrs Perrin had said if she was available and it was convenient she would sign documents, but if she was not available or it was inconvenient the appellant was to sign for her.
47. The appellant said that Mrs Perrin had expressly authorised him to sign documents on her behalf.

Ground 1 – direction as to s 22(2) of the Criminal Code 1899 (Qld)

48. Senior Counsel for the appellant advanced a number of contentions in support of this ground of appeal, including:

1. a judge is obliged to leave an exculpatory provision if there is some evidence capable of raising it; the appellant’s evidence raised the provision, in that the appellant believed he had his wife’s authority to deal with their property;

2. the learned trial judge did not rule whether or not s 22(2) was raised on the evidence, but rather did not leave s 22(2) to the jury because s 22(2) was not needed because the prosecution had to prove dishonesty beyond reasonable doubt; for the fraud counts that was so, but for the forgery counts it was necessary for the prosecution to prove an intent to defraud beyond reasonable doubt;
3. relying on R v Mill,^[37] the learned trial judge should have directed the jury as to s 22(2); and
4. to the extent that reliance might be placed on R v Dale,^[38] which was cited to the learned trial judge, that decision was per incuriam, as that Court was not referred to, and did not consider, Mill.

49. Senior Counsel for the Crown contended that:

1. for each allegation of fraud or forgery it was necessary to prove, beyond reasonable doubt, that the appellant held an intent to defraud or acted dishonestly; the learned trial Judge so directed the jury;
2. for s 22(2) to apply the words of the section require that there be both an honest claim of right and an absence of an intention to defraud; if there is an intent to defraud it is difficult to conceive there could be an honest claim of right; all cases which prove that a defendant acted dishonestly or with an intent to defraud will defeat s 22(2);

3. Mill was distinguishable, and Dale applied; therefore there was no need to direct the jury as to s 22(2);
4. the directions given were adequate to deal with the real issues at trial;
5. having regard to the manner in which the trial was litigated, there was no need for the trial Judge to direct the jury concerning s 22(2); and
6. if it was found that the jury should have been directed concerning s 22(2), no substantial miscarriage of justice has actually occurred and the proviso in s 668E(1A) of the Criminal Code applies; significant to that was the evidence that the appellant had forged his brother’s signatures as purported witness to the other forged signatures.

Discussion – ground 1

50. The indictment charged a number of offences which can be grouped in this way:^[39]

1. Counts 2, 3, 5, 7, 9 and 11: aggravated forgery; in each case the charge was that the appellant “with intent to defraud, forged a document”, contrary to s 488(1)(a) of the Criminal Code; and
2. Counts 6, 10 and 12: aggravated fraud; in each case the charge was that the appellant “dishonestly gained a pecuniary benefit for himself”, contrary to s 408C(1)(d) of the Criminal Code.

51. The appellant admitted the following facts at trial, as to each of the forged documents:^[40]

1. the purported signature of the appellant’s wife was subscribed, either as guarantor or mortgagor;
2. the purported signature of the appellant’s brother (Fraser Perrin) was subscribed, as the witness to the purported signature of Mrs Perrin;
3. none of those signatures were subscribed by Mrs Perrin or Fraser Perrin; and
4. the appellant wrote all those signatures himself.

52. There was no issue at trial that Fraser Perrin (a solicitor) did not know that his purported signature had been subscribed, nor was it contended that he gave any authority, express or implied, to do so.^[41]  In cross-examination it was not put to him that he had done so in any way.  Fraser Perrin’s evidence was that whenever he was asked to witness a document he was present for the signing, and that was so absolutely without exception.^[42]
53. The jury were given particulars of the charges.^[43]  On each of the forgery charges the act of forgery was “by signing the name of Nicole Perrin” on the relevant document.

Construction of the provisions

54. It is appropriate to commence a consideration of this ground with the provisions that are central to it.  In doing so I will examine the construction of s 22(2) and whether there are two components, one the honest claim of right, and the other the absence of an intention to defraud.  As will become apparent, that consideration will assist in understanding what was said in Dale, and other authorities to which I will refer.
55. Section 488(1) of the Criminal Code relevantly provides:

“(1) A person who, with intent to defraud —

1.  forges a document; or

2.  utters a forged document;

commits a crime.

…

2.  Subsection (1) applies whether or not the document is complete and even though it is not, or does not purport to be, binding in law.

56. Section 408C deals with the offence of fraud, and relevantly provides:

“(1) A person who dishonestly—

1.  applies to his or her own use or to the use of any person—

1.  property belonging to another; or

2.  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

2.  obtains property from any person; or

3.  induces any person to deliver property to any person; or

4.  gains a benefit or advantage, pecuniary or otherwise, for any person; or

5.  causes a detriment, pecuniary or otherwise, to any person; or

6.  induces any person to do any act which the person is lawfully entitled to abstain from doing; or

7.  induces any person to abstain from doing any act which that person is lawfully entitled to do; or

8.  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.

57. Section 22 relevantly provides:

“(1) Ignorance of the law does not afford any excuse for an act or omission which would otherwise constitute an offence, unless knowledge of the law by the offender is expressly declared to be an element of the offence.

2.  But a person is not criminally responsible, as for an offence relating to property, for an act done or omitted to be done by the person with respect to any property in the exercise of an honest claim of right and without intention to defraud.”

58. To constitute an offence under s 488 the person must forge a document (or utter a forged document) “with intent to defraud”.^[44]  The critical words for the defence in s 22(2) are those that require the act to be done “in the exercise of an honest claim of right and without intention to defraud”.^[45]  The similarity between that and what s 488 requires is immediately apparent.
59. Subsection 22(2) removes criminal responsibility for an act (done or omitted to be done) when that act meets three criteria:

1. with respect to property;
2. in the exercise of an honest claim of right; and
3. without intention to defraud.

60. What is clear from the plain words of the section is that the one same act must satisfy all of the criteria.
61. In this case there was an act, not an omission.  For the forgery charges the act was the appellant’s writing his version of Mrs Perrin’s signature on the documents.  Put another way, it was the forging of each document by writing her purported signature on it.  For the fraud charges, it was the obtaining of the pecuniary benefit for himself.
62. No issue was raised on the appeal that the offence under s 488 was one “relating to property”, nor that the relevant act was, in each case, “with respect to any property”.  That means that on each forgery charge the same act (the writing of the purported signature) had to be in the exercise of an honest claim of right and without intention to defraud.  For the fraud charges there was no issue that the act relates to property as it was the gaining of a pecuniary benefit.  That means that on each fraud charge the same act (the gaining of the pecuniary benefit) had to be in the exercise of an honest claim of right and without intention to defraud.
63. Of course the Crown bore the burden of excluding s 22(2).  Because the relevant act had to satisfy all of the criteria in s 22(2), the Crown had to prove, beyond reasonable doubt, that when that act was done, it was done either (i) not in the exercise of an honest claim of right, or (ii) with an intention to defraud.  However, with respect to excluding that the act was done without intention to defraud, on each charge under s 488 the Crown had to prove that the very same act was done with intention to defraud, and on each charge under s 408C that the same act was done dishonestly.
64. In Clarkson v Aspinall; Ex parte Aspinall^[46] the issue of a defence under s 22(2) was raised in respect of the offence of unlawfully using two heifers, contrary to s 445 of the Code.  In the course of his judgment Townley J said:^[47]

“It must of course be pointed out that s. 22 requires the claim of right merely to be honest and that done under it to be done without intention to defraud…”

65. In Olsen v Grain Sorghum Marketing Board; Ex parte Olsen,^[48] Stable J referred to an oft-quoted sentence by Gibbs J in R v Pollard.^[49]  There, dealing with s 22(2), Gibbs J said: “An accused person acts in the exercise of an honest claim of right, if he honestly believes himself to be entitled to do what he is doing.”^[50]  Stable J observed that what was said by Gibbs J did not state comprehensively what was required under s 22(2),^[51] and went on:^[52]

“Without going into the implications of the words “and without intention to defraud” in s. 22 of the Code, which words must have considerable significance in the construction of the section, I repeat my clear view that this was not an act done with respect to property within the meaning of s. 22 of The Criminal Code.”

66. In R v Maher^[53] the Court of Criminal Appeal said:^[54]

“As has already been said, it may be doubted that in the circumstances s. 22 arose for consideration.  It may also be doubted whether it had any application.  Any belief by the appellant that he was doing nothing unlawful affords him no comfort; Olsen v. Grain Sorghum Marketing Board ex parte Olsen [1962] Qd.R. 580 and Walden v. Hensler ex parte Walden [1986] 2 Qd.R. 490.  Yet that is what is really being said.  There is also the requirement that what is done or omitted [sic] must be without intention to defraud.  In any event one applies s. 22 to the facts of the case (count 20 is more particularly considered subsequently) the summing up left the relevant factual issues to the jury and with an application of the significance of the appellant’s subjective state of mind in a charge of a conspiracy to defraud involving dishonesty.”

67. In Dale the Court said of s 22(2):^[55]

“For this section to absolve a person from criminal responsibility for an act or omission that might otherwise constitute a property offence, the same must occur both in the exercise of an honest claim of right and without intention to defraud.”

68. The ordinary approach to statutory construction would support what was said in that respect.  The meaning of a statute is derived from construing its text, in context.  In addition a court construing a statutory provision must strive to give meaning to every word of the provision.^[56]
69. To focus solely on the words “in the exercise of an honest claim of right” as though the remaining words and criteria in s 22(2) did not exist, or to ignore the conjunctive “and”, does not strive to give meaning to every word of the provision.  Those words must be given the meaning that they objectively bear.
70. Many of the authorities that have considered s 22(2) have done so in cases where there was no issue as to intention to defraud, and therefore the discussion proceeded only in terms of whether the claim of right was honest: see, for example, R v Pollard,^[57] R v Waine,^[58] and R v Williams.^[59]
71. Section 22(2) has remained in the same terms since Maher and Dale, and therefore those decisions should be followed unless they were plainly wrong.^[60]  I do not consider that that they are plainly wrong.

Intention to defraud and dishonesty

72. The meaning of dishonesty has been accepted as explaining an intention to defraud.  In Peters v The Queen^[61] Toohey and Gaudron JJ said:

“In a case in which it is necessary for a jury to decide whether an act is dishonest, the proper course is for the trial judge to identify the knowledge, belief or intent which is said to render that act dishonest and to instruct the jury to decide whether the accused had that knowledge, belief or intent and, if so, to determine whether, on that account, the act was dishonest.”

73. The Western Australian Court of Appeal had this to say in Mathews v The Queen,^[62] concerning s 409^[63] of the Criminal Code (WA):

“[17] But s 409(1) itself contains a mental element, which may involve a question whether an accused person has a belief in the existence of a state of things, by virtue of the words “with intent to defraud”.  Also, perhaps, by virtue of the words “by ... any fraudulent means”.  Fraud wears many disguises, and the shapes it may take are multiple.  It is therefore necessary, in any case of fraud, to analyse the facts in order to identify the aspect of them which is alleged to reveal a fraud.  If there is a fraud, there must have been an intent to defraud.  That intent may be revealed by knowledge, such as knowledge that a bank account being drawn upon is devoid of funds.  However, since Derry v Peek (1889) 14 App Cas 337, it has been established that an intent to defraud is not to be equated with carelessness; so even an unreasonable belief, fortified by no inquiries, that the account is good for the cheques drawn on it, will suffice to repel a suggestion of intent to defraud.  In J C Smith and B Hogan on Criminal Law (5th ed, 1983) at p 508, the learned authors, speaking of crimes of fraud in England, take this for granted.  “Clearly”, they write, “there would be no offence where D represents as true that which he believes to be true but which, as he ought as a reasonable man to have known, is false.”  Similarly, Glanville Williams stated, in his Criminal Law, The General Part (2nd ed, 1961) in s 34:

‘The question of intent to defraud is essentially subjective: it is a question of what the accused intended, not of what a hypothetical reasonable man would have intended, though the intent may be inferred from behaviour.’

And, later in the same section, the distinguished author remarked that “it is accepted legal principle that a person who honestly (though negligently) believes in the truth of his statement does not intend to deceive and therefore does not intend to defraud”.

[Steytler J then referred to the passage in Peters, set out above.]

[19] Under s 409(1), the relevant concepts are “intent to defraud” and “fraudulent means”, rather than dishonesty.  But the proper course for a trial judge is of the same kind: the knowledge, belief or intent said to reveal an intent to defraud and fraudulent means should be identified by the judge, and the jury should be instructed to decide whether the accused had that knowledge, belief or intent and, if so, to determine whether, on that account, what was relevantly done by the accused was so done with an intent to defraud and by fraudulent means.”

74. The question whether a person holds an intention to defraud is subjective.  Thus in Sayed v The Queen:^[64]

“[39] The question of whether, for the purposes of s 409(1) of the WA Code, an accused had an “intent to defraud”, is subjective.  The question is concerned with the actual intention of the accused.  The prosecution must prove beyond reasonable doubt that the accused subjectively had the requisite intent.  See Mathews v The Queen [2001] WASCA 264; (2001) 24 WAR 438 [17] - [19] (Burchett AUJ, Malcolm CJ & Steytler J agreeing).”

75. The approach of Toohey and Gaudron JJ in Peters was affirmed in Macleod v The Queen.^[65]  That case concerned s 173 of the Crimes Act 1900 (NSW), which relevantly made it an offence if a person “fraudulently takes, or applies, for his own use and benefit … property of” a company of which they are director.^[66]  The Court of Criminal Appeal^[67] held that held that the fraudulent intent which s 173 required was equivalent to “dishonesty”.  Gleeson CJ, Gummow and Hayne JJ said:^[68]

“[35] In Peters v The Queen, which concerned charges of conspiracy to defraud the Commonwealth under ss 86(1)(e) and  86A of the Crimes Act 1914 (Cth), Toohey and Gaudron JJ said that, ordinarily, fraud involves: ‘the intentional creation of a situation in which one person deprives another of money or property or puts the money or property of that other person at risk or prejudicially affects that person in relation to ‘some lawful right, interest, opportunity or advantage’, knowing that he or she has no right to deprive that person of that money or property or to prejudice his or her interests.”  (Emphasis added.)

[36] Their Honours explained that the term “dishonestly” in a statutory offence may be employed in its ordinary meaning or in some special sense.  The line of authorities concerning the statutory offence of dishonestly obtaining property by deception provides an illustration of the latter.

[37] In a passage that has significance for the present appeal, Toohey and Gaudron JJ stated:

‘In a case in which it is necessary for a jury to decide whether an act is dishonest, the proper course is for the trial judge to identify the knowledge, belief or intent which is said to render that act dishonest and to instruct the jury to decide whether the accused had that knowledge, belief or intent and, if so, to determine whether, on that account, the act was dishonest. ... If the question is whether the act was dishonest according to ordinary notions, it is sufficient that the jury be instructed that that is to be decided by the standards of ordinary, decent people.’

Their Honours rejected any further requirement, derived from R v Ghosh, that the accused must have realised that the act was dishonest by those standards.

[38] A question presented by s 173 of the Crimes Act is whether the taking or application was “fraudulent” or “dishonest” according to ordinary notions.  The passage cited above from the joint judgment in Peters indicates the preferred approach to the meaning of the term “fraudulently” in s 173.”

76. Applying those principles to the present case it can be seen that for s 488 and s 408C offences, to establish the offence the Crown must prove that the act was dishonest.  For s 488 the element is “intent to defraud” which Macleod equates with dishonesty.  For s 408C the relevant element is “dishonestly … gains a benefit”.^[69]  However, for the Crown to exclude s 22(2), because the Crown must prove that there was an absence of “intention to defraud”, which is equated with dishonesty, in each case the Crown must prove the act was not dishonest.  It is therefore apparent that proof of one eliminates proof of the other.
77. That conclusion derives support from the way the case on the fraud counts was prosecuted.  The Crown relied upon particulars which had been provided for each of the fraud counts.^[70]  In each case the particulars of the relevant dishonesty were the same:

“He did so dishonestly as he forged the signature of Nicole Perrin on the relevant guarantor documents in relation to Christie Qld Pty Ltd, her personal guarantee, and the Mortgage in relation to 15 Southern Cross Drive, Cronin Island and submitted these documents to the Commonwealth Bank of Australia to obtain the credit.”

78. Thus, for each of the fraud counts the dishonesty was particularised as being the fact that the documents were forged and submitted to the Bank.  That necessarily imported that the dishonesty was because the act was done with an intention to defraud.
79. As to the question of the proof required in respect of the honest claim to right, in MacLeod Gleeson CJ, Gummow and Hayne JJ held that that question ought to be decided by applying the test according to the standards of ordinary decent people:^[71]

“[45] The trial judge reminded the jury of his directions with respect to the meaning of “fraudulently” in s 173 and continued:

‘[I]n assessing the accused[’s] case that he was entitled to use the company money as he did you should apply the same principles, that is whether by ordinary notions the accused was acting honestly by the standards of ordinary decent people.  Finally I remind you that again the onus remains on the Crown to establish the elements of the charges beyond reasonable doubt.’

The appellant complains that there was no specific reference to the “subjective” criterion attending a claim of right.  But the directions to be given about a claim of right must reflect the elements of the offence charged and the nature of the mens rea required.

[46] Adopting the reasoning in Peters, as we do, and applying it to the offences now under consideration, there is no requirement that the appellant must have realised that the acts in question were dishonest by current standards of ordinary, decent people.  To require reference to a “subjective” criterion of that nature when dealing with a claim of right would have deleterious consequences.  It would distract jurors from applying the Peters direction about dishonesty, and it would limit the flexibility inherent in that direction.  A direction about the “subjective” element of a claim of right was neither necessary nor appropriate in this case.”

80. What follows from the authorities above is that in order for the Crown to establish the absence of an honest claim of right in s 22(2), it must prove that the act done under that belief is dishonest.  Therefore the proper course is for the trial judge to identify the knowledge, belief or intent which is said to render that act dishonest, and to instruct the jury to decide whether the accused had that knowledge, belief or intent and, if so, to determine whether, on that account, the act was dishonest.  In a case under s 488 or s 408C of the Criminal Code the act must be shown to be dishonest according to ordinary notions, and it is sufficient that the jury be instructed that that is to be decided by the standards of ordinary, decent people.
81. In other words, intention to defraud is a subjective state of mind of the accused, but to be assessed as dishonest according to the standards of ordinary, decent people, an objective test.
82. That is distinct from the nature of an honest claim of right itself.  According to well-settled authority such a claim: need only be honest, it need not be reasonable, and the belief must be to a legal entitlement, not to an absence of a prohibition;^[72] may stem from a belief in a right the law does not recognise;^[73] and be both unreasonable and unfounded in law or fact.^[74]  As was said in Pollard, a person acts in the exercise of an honest claim of right, if he honestly believes himself to be entitled to do what he is doing.^[75]  Therefore the relevant state of mind is one subjectively held, and the evidentiary basis for it is proved on a subjective basis.

Was a direction on s 22(2) required?

83. It is necessary, in light of the respondent’s contention that the way the trial was conducted is relevant to this issue, to examine the exchange in respect of whether an honest claim of right was raised, and how it was dealt with.
84. In the course of submissions at the trial, as to what directions should be included in the summing up, defence Counsel raised an honest claim of right.^[76]  The learned trial judge expressed the view that it was not necessary to direct on s 22(2), saying “… all the prosecution have to prove is that he dishonestly did it.  If you’ve raised a reasonable doubt about the dishonesty, that’s the end of it”,^[77] and that if the appellant had implied authority, or honestly believed he had implied authority, then he would not be acting dishonestly.^[78]  As the debate progressed defence Counsel submitted that “an intent to defraud ... coalesces with an honest claim of right”.^[79]
85. The learned trial judge was given a copy of Dale, with the Crown submitting that what Dale stood for was that “section 22 doesn’t really have any work to do in case because the jury would have to be satisfied … before they could find the charge proved, that the facts are such that it’s already excluded.”^[80]
86. Defence Counsel handed up written submissions as to directions he sought,^[81] and referred to Roberts v State of Western Australia,^[82] promising to send a copy to the learned trial judge and Counsel for the Crown.  I will refer to Roberts in some detail shortly.  At the same time defence Counsel said he agreed with the learned trial judge that “in a case such as this one” there was a “logical hurdle because if the Crown don’t prove dishonesty, that’s the end of the matter.  You don’t need to go and look at his honest - his belief or his claim”.^[83]  Crown Counsel accepted that “all the matters which I’ve raised are led towards that point”.^[84]
87. On the appeal Senior Counsel urged that the learned trial judge had effectively ruled that a direction on s 22(2) was not necessary.  Accepting, for the moment, that to be so, it seems plain that defence Counsel accepted, on the basis of Roberts, the proposition put be the learned trial judge, that if the Crown did not prove dishonesty then there was no need to look to an honest claim of right.
88. In so far as the learned trial judge said that she was “going to make a ruling on [a] submission”, it seems plain that her Honour was referring to the written submission, which did not seek a direction in terms as to s 22(2), but did seek a direction about honest claim of right in respect of “the transactions that do not create an interest in property”.^[85]  That, of course, would not comprehend the mortgages which were signed.

Proof of intention to defraud and honest claim of right

89. In Macleod Gleeson CJ, Gummow and Hayne JJ dealt with the issue of an honest claim of right and how that was affected by the issue of dishonesty:^[86]

“[41] Against that background, several points should be made.  The first concerns what is meant when it is said that the accused raises a claim of right.  As to that, Dawson J said in Walden:

‘It is not ignorance of the criminal law which founds a claim of right, but ignorance of the civil law, because a claim of right is not a claim to freedom to act in a particular manner - to the absence of prohibition.  It is a claim to an entitlement in or with respect to property which goes to establish the absence of mens rea.  A claim of that sort is necessarily a claim to a private right arising under civil law: see Cooper v Phibbs.”

[42] Secondly, the claim must be made honestly, leading to the proposition expressed by Callaway JA in R v Lawrence that, although an honest claim “may be both unreasonable and unfounded”, if it is of that quality then the claim “is less likely to be believed or, more correctly, to engender a reasonable doubt”.

[43] Thirdly, particular considerations arise where, fraud being inconsistent with a claim of right made in good faith to do the act complained of, that act has, as a necessary element of criminal liability, the quality of dishonesty according to ordinary notions.

[44] Section 173 of the Crimes Act is such a provision.  Hence the observation by Simpson J to the effect that a finding that the appellant acted dishonestly and thus had the necessary mens rea foreclosed a finding that the appellant lacked the necessary mens rea for dishonesty because he had acted under a bona fide belief that he was entitled to do as he did.  Her Honour referred to the evidence of the appellant:

‘that he regarded the funds as being funds belonging to Trainex, and himself as being the owner of Trainex, and therefore the owner of the money.  He said that he had not, in the early years, drawn a salary but, that, when the company’s financial position was more secure, he was entitled to do so.  He said that he believed that the company owed him more than the amount that he borrowed from it.’

The function of the claim of right put forward by the appellant was to seek to engender a reasonable doubt with respect to the overall persuasive burden on the prosecution of proving that there had been the fraudulent taking or application alleged.”

90. The third proposition referred to in the passage above has relevance to the present case.  The offence of forgery under s 488 has the element of intention to defraud.  If that was proved it had the necessary quality of dishonesty inconsistent with an honest claim of right to do the act, i.e the forgery.  The offence of fraud under s 408C expressly has the element of dishonesty, which, if proved, was necessarily inconsistent with an honest claim of right to do the act.  Their Honour’s approval of the statement by Simpson J in the Court of Criminal Appeal also applies here: a finding that the appellant acted dishonestly and thus had the necessary mens rea foreclosed a finding that the appellant lacked the necessary mens rea for dishonesty because he had acted under a bona fide belief that he was entitled to do as he did.
91. In the present case that is what the learned trial judge said, and what defence Counsel accepted, in the course of the submissions as to whether her Honour ought to direct on s 22(2): see paragraphs [84] to [86] above.
92. In Macleod, Gleeson CJ, Gummow and Hayne JJ held that specific directions as to an honest claim of right were not required in the circumstances:^[87]

“[50] The appellant submitted that the trial judge’s directions were inadequate because they failed (i) to identify the need for dishonest means in the application of the funds, including the absence of informed consent of the “victim” of the fraud; (ii) to specify the facts from which dishonesty was to be inferred; (iii) to identify the need for prejudice to the company; (iv) to advert to the requirement for the prosecution to exclude a bona fide claim of right which involved a genuine, as opposed to reasonable, belief in the claimed right; and (v) to state that the appellant was entitled to be acquitted unless the jury were satisfied that the transactions were not loans.

[51] It will be apparent from what has been said earlier in these reasons that these submissions were misconceived.  Section 173 does not impose a requirement for an absence of informed consent on the part of the “victim” of the fraud and specific directions respecting a “claim of right” are not required.  The trial judge adequately identified the facts from which dishonesty was to be inferred, by specifying the particular applications which were the subject of each count and by contrasting the prosecution case with what the appellant had claimed was his genuine belief in his entitlement to act as he did.  The prejudice to Trainex, being the significant loss of property, did not need specifically to be identified.”

93. In terms of the propositions derived from Macleod, there is no material difference between the provisions considered there and the provision applicable in the present case.  Section 173 of the Crimes Act 1900 (NSW) made it an offence if a person “fraudulently” took or applied property for his own use and benefit.  That is, in terms, an analogue for s 408C(1)(a).  Section 488 of the Criminal Code made it an offence to forge a document with “intent to defraud”.  In each the Crown had to establish that the relevant act was done fraudulently, and thus dishonestly.
94. In my view, applying Macleod to the present case of forgery under s 488 of the Criminal Code, where the act itself is admitted, a finding that it was done fraudulently, and thus dishonestly, foreclosed a finding that the appellant lacked the necessary mens rea for dishonesty because he had acted under a bona fide belief that he was entitled to do as he did.  The same is the case under s 408C(1)(d).  There was, therefore, no need to direct the jury as to s 22(2) of the Criminal Code.
95. The Court of Criminal Appeal in Western Australia reached the same conclusion in Roberts v Western Australia.^[88]  There the appellant was charged under s 473 of the Criminal Code (WA),^[89] with forging her husband’s signature on a number of cheques, and altering the amounts and cheque butts on others.  She then presented the cheques for payment.  She did not dispute that she had signed the cheques or altered them, but gave evidence of an honest claim of right, which, it was contended, attracted the WA s 22^[90] which is materially in the same terms as the Queensland s 22(2).  She said she had her husband’s authority to sign his name and use the cheques, the proceeds of which were substantially used for household expenses to maintain her husband’s standard of living.
96. Templeman J referred to Macleod, and to its conclusion that dishonesty is to be decided according to ordinary notions, drawn from Peters.^[91]  His Honour then said:^[92]

“[27] In my view, it is difficult – If not impossible – for the defence of honest claim of right to be raised against a charge of forgery.  That is because s 473 of the Code defines forging in the following way:

Any person who with intent to defraud —

1.  forges a record; or

2.  utters a forged record,

is guilty of a crime …

(Emphasis supplied.)

[28] It follows that a person accused of forging who had no intention to defraud, could not be guilty of that offence.  It would therefore be otiose to raise the defence of honest claim of right to the property acquired by the accused person.  However, if the evidence disclosed that the accused might have had an honest belief in his or her entitlement to the relevant property, it would be necessary for the jury to consider whether the prosecution had satisfied it beyond reasonable doubt that the accused had any intention to defraud.”

97. Templeman J went on to find that as the learned trial judge erred in his directions to the jury, to the extent that he did not direct the jury as to that aspect of the claim of right that depended on the expenditure being for household expenses in order to maintain her husband’s standard of living, and concluded:^[93]

“[33] Furthermore, the jury should have been directed that even if the appellant did not honestly believe she was entitled to use her husband's money as she did, she could not be convicted of fraud unless he was prejudiced in some way by her conduct.  If the result of the conduct was that Mr Roberts’ money was used to pay for expenses he would have met in any event, he was not defrauded: see R v Kastratovic (1985) 42 SASR 59 at 52 per King CJ, applying Welham v Director of Public Prosecutions [1961] AC 103 at 123.

[34] Clearly, if the appellant did not intend to defraud her husband, or if he was not defrauded in fact, the appellant could not have been convicted on the basis that she intended to defraud his bank.

[35] I therefore conclude that although it would not have been appropriate for the trial judge to direct the jury in relation to s 22 of the Criminal Code, a direction ought to have been given in relation to an honest claim of right in the sense set out above.”

98. Plainly Templeman J found that there was no necessity to direct on s 22 where the offence was forgery and the claim of right was no more than to do the act constituting the forgery.  Where his Honour considered a direction as to honest claim of right should have been given was in respect of that part of the claim which involved the proceeds being drawn and expended for the benefit of her husband, in respect of expenses he would have met in any event.  Those features are absent in the present case.
99. On this issue McLure J agreed with Templeman J,^[94] adding only some comments on a question (irrelevant for present purposes) as to the Crown’s contention that the offence was not one relating to property.
100. So too did Jenkins J:^[95]

“[165] For the reasons given by Templeman J I agree that it was otiose for the learned trial judge to direct the jury with respect to an honest claim of right pursuant to the Criminal Code (WA), s 22.”

101. Having examined some aspects of the approach to the proof of fraud in Peters and Macleod, Jenkins J observed that there was no authoritative decision applying the principles in Peters “to a provision in the Code such as s 473^[96] which has an element of it a specific intent to defraud, in the light of s 22”.  His Honour then added:^[97]

“[172] However, my view is that the definition of fraud as stated by Toohey and Gaudron JJ, with the necessary modifications to adapt it to proof of an intent to defraud applies to proof of the intent to defraud element in the Criminal Code, s 473.  This means that the prosecution is required to prove that an accused believed that he or she had no lawful right to deprive the alleged victim of their money or property or to prejudice their interests.  This definition of an intent to defraud strengthens the arguments for offences under the Criminal Code, s 473 not to be regarded as offences with respect to property for the purposes of the Criminal Code, s 22.  This is because if, as I would find, s 473 requires proof that an accused was not acting under an honest claim of right, there is simply no work for s 22 to do.”

102. I pause to note that whilst Roberts was footnoted in the appellant’s outline,^[98] the only aspect referred to was in respect of whether forgery offences can be offences relating to property.  The reasons of Templeman J on this issue, and the passages set out in paragraphs [96] to [101] above, were not addressed.
103. The decision on this issue in Roberts has since been followed in Western Australia, in Harwood v Western Australia.^[99]
104. Accordingly there was no need, in the circumstances of this case, to give a direction under s 22(2) of the Criminal Code.

The relevance of R v Dale and R v Mill

105. At the trial the learned trial judge was referred to this Court’s decision in R v Dale,^[100] as support for the proposition that it was unnecessary to direct the jury on s 22(2).  That resulted, it was said, because on the forgery counts the Crown had to prove intent to defraud in any event, and if they did there could not be a case for an honest claim of right, because s 22(2) only applied where the relevant act was done “in the exercise of an honest claim of right and without intention to defraud”.
106. On the appeal the appellant placed considerable reliance upon this Court’s decision in R v Mill.^[101]  It was contended that the Court in Dale had not been referred to Mill, and was therefore decided per incuriam and could not be relied upon.  It is necessary, therefore, to examine both decisions.
107. In Dale the offender was a director of Water at Wooyung Pty Ltd.  That company entered into contracts to buy land that Dale wished to develop as a project known as Water at Wooyung.  It failed to make payments required under the contracts in respect of vendor finance.  The land was sold by the vendors as mortgagee in possession, and the project failed.  Before it failed Dale invited clients to invest money in the project.  The Crown case was that: Dale was dishonest in what he said to induce the investments, and what he said about the use of the funds; the funds were not applied to the project but to pay out other investors who wished to withdraw from the project; funds were also used by Dale for his own purposes; and in all but one case, where a cheque made out to Water at Wooyung Pty Ltd was endorsed to a company controlled by Dale’s wife, the funds were deposited into Water at Wooyung’s bank account.^[102]
108. What is apparent from that synopsis is that funds were obtained by dishonestly representing certain aspects of the project (such as he owned the land free of encumbrance, when he did not) and what those funds would be used for.
109. The defence case on appeal was expressed this way:^[103]

“In essence the defence case, as put, was that the appellant’s company structure was such that he believed that he could move things around as he liked.  As such, when the appellant applied the money as he did, it was open to conclude that he was exercising an honest claim of right.”

110. The Court^[104] referred to s 22(2) saying that for it to absolve a person from criminality the act or omission “must occur both in the exercise of an honest claim of right and without intention to defraud”.^[105]  The Court doubted that the evidence raised s 22(2) at all:^[106]

“It is not readily apparent how the defence case as outlined in the appellant’s written submissions would have availed for any of the s 408C(1)(d) counts.  They concerned the dishonest gaining of a benefit for Water at Wooyung Pty Ltd to which the respective cheques were payable.  That company did not gain the benefit of the proceeds of the cheques by the appellant “moving around” funds within the corporate group.”

111. In any event the Court said:^[107]

“[36] Be that as it may, the offences of which the appellant was convicted are all fraud based.  Central to each of these offences is the element that the person acted dishonestly.  At the trial, the defence was conducted on the basis that there was no dishonesty or intention to defraud.  The learned judge directed the jury thoroughly as to the element of dishonesty in respect of all counts.  No complaint is made about that.

[37] The appellant’s submission that a direction reflecting s 22(2) ought to have been given faces a substantial logical hurdle.  The Crown case required it to prove beyond reasonable doubt that the appellant was dishonest.  If that was proved, then there was no scope for the operation of s 22(2).  The jury could not have found that the appellant acted dishonestly yet exercised an honest claim of right in respect of any of the counts.  On the other hand, if dishonesty was not proved, the jury would have no need to consider whether an honest claim of right was exercised.  Given those circumstances, a direction concerning honest claim of right was unnecessary.

…

[40] … Given the basis upon which the defence was conducted, there was no material difference between proof beyond reasonable doubt that the appellant was dishonest and disproof to that standard that he was exercising an honest claim of right without intention to defraud.”

112. In my respectful view that approach is correct, in accordance with Macleod and Roberts, and, as with Roberts, directly applicable to forgery offences under s 488 and the fraud offences under s 408C(1)(d) of the Criminal Code.  To succeed the Crown has to prove a necessary element, namely an intention to defraud or dishonesty, which is indistinguishable from proof that excludes the absence of intention to defraud or dishonesty (necessary for the defence under s 22(2)).
113. The Court in Dale relied upon the Full Court decision in R v Sitek.^[108]  That case considered the question whether a trial judge, in a s 408C case, erred in not leaving to the jury a defence of honest and reasonable mistake of fact under s 24 of the Code.  That court^[109] said:^[110]

“If the jury took the view that the appellant was dishonest in the manner alleged by the Crown, they could hardly in the circumstances of this case consider that he was nevertheless acting under an honest mistake.  The two positions would be contradictory.  It was on this basis that the learned trial judge did not allow s 24 to go to the jury, and he was clearly correct in taking that course.”

114. Mill concerned a charge under s 408C(1)(a)(i) of the Criminal Code, brought against a company director.  It was that he had, over three years, “dishonestly applied to his own use or the use of another sums of money belonging to [the company] Suga Pty Ltd and Seiko Suga”.  During the period of the offences Mill was the accountant of the company and Mrs Suga.  For two and a half years of the relevant period he was the sole director of the company,^[111] and the sole signatory on the company’s bank account.  His own company (Mill Corp) was a 20 per cent shareholder in Suga Pty Ltd.
115. He requested money from Mrs Suga, purportedly for use in supporting the restaurant business operated by the company.  There were a number of transactions by which money went to Mill or entities associated with him,^[112] including money paid by Suga Pty Ltd to Mill Corp by cheque, direct transfers from Mrs Suga, direct transfers from Mrs Suga’s daughter, deposits by Mrs Suga from finance arranged by Mill, and use of Mrs Suga’s credit card to pay for work done at the restaurant.
116. The issue at trial was whether Mill’s role in the transactions was dishonest.^[113]  The defence case was that the payments made to Mill’s firm or company were payments of fees for his services or reimbursement for services rendered or payments made by him on behalf of Suga Pty Ltd as the operator of the restaurants.  He also contended that, to the extent that he signed documents as Mrs Suga, that was consistent with a practice within the family where one family member would sign the name of another in business transactions.
117. The Court in Mill held that the summing up given to the jury was inadequate to reflect what was required under the exculpatory provision of s 22(2).  The relevant part of the summing up was set out in the appeal judgment:^[114]

“Well, now, the thrust of the defence case, at least in part, appears to be that Mill, being the driving force behind the setting up of the restaurants dealt with in the evidence or at least the expansion into Earlville Stockland, was entitled to and did, in effect, pay himself back out of Suga Pty Ltd for that effort or if he hadn’t got around to paying himself out that he was entitled so to do and that a lot of what’s described as defalcations could be explained that way.

Now as to the balance of funds that the Crown alleges are the subject of fraudulent dealing it might be the case that they constituted regular loans to him or his company or Mill entities or partners and so on which were taken on a loan arrangement with the knowledge and acquiescence, in effect, of the Sugas.

Well, now, you’ll remember the test of dishonesty that I directed you about.  There were the two things, dishonest according to the standards of the community and further dishonest, according to those standards, to the knowledge of the accused.  So the defence case which you need to consider would be even if he wasn’t so entitled strictly speaking that is what he believed and so he would contend the Crown could not prove that second requirement that I spoke of earlier, that he knew what he was doing was dishonest by community standards.  So that’s what you need to consider and decide what you make of that.  If you are left with uncertainty about whether that was the position then that would seem to constitute a reasonable doubt about the element of dishonesty but it’s a matter, of course, for you to assess and apply the necessary standards.

In other words if money is taken by somebody with knowledge of the owner, be that owner a natural person or a company which is a legal entity, on the basis to the knowledge of the owner of the property it was an agreed loan or an agreed knowledge about payment for effort then one could hardly conclude that that would be dishonest according to the objective standard.  That’s the standard of the ordinary, honest people let alone that an accused in that situation knew it was dishonest according to that standard, that’s the subjective test, and you would have to acquit if you are in that situation, you understand.  Now it is only if you, the jury, are satisfied to the contrary of that position that I’ve just described and gone through, and satisfied of dishonesty according to the tests that I’ve directed you about that you could convict.

Well, now, that as I understand it is the gist of the defence case.”

118. As can be seen from the highlighted parts of that passage, the jury were instructed to consider the defence case (that Mill believed he was entitled to make the payments) by applying the objective standard of dishonesty according to community standards, but also by applying the second step, that he knew what he was doing was dishonest by community standards.
119. Keane J^[115] referred to that part of the summing up, and, observing that the learned trial judge did not expressly advert to s 22(2), set out the Supreme and District Courts Benchbook standard direction.  What his Honour observed as significant about that direction was “its focus is upon the belief of the accused person to do that with which he or she is charged”.^[116]  Keane J was referring to this part of the standard direction:^[117]

“‘To defraud’ in this context means to do [or omit to do] something dishonestly, so the requirement that the claim of right be honest and the requirement of the absence of an intention to defraud are really two ways of saying that the defendant must have honestly believed himself to be entitled to do what he did [or omitted to do].

There is no burden on the defendant to prove that he made an honest claim of right without intention to defraud.  The prosecution must satisfy you beyond reasonable doubt that he did not do so.  So if the prosecution has failed to satisfy you beyond reasonable doubt that when [the defendant] [details of act or omission, e.g., took the suitcase owned by ‘X’] he [did not honestly believe he was entitled to [act or omission, e.g., take it], you must find the defendant not guilty.”

120. Keane J then turned to the question whether the direction actually given was adequate to satisfy what was required in respect of s 22(2).  His Honour said:^[118]

“[83] It was essential, as a fundamental aspect of the appellant’s right to a fair trial according to law, that the jury be instructed that the appellant should be acquitted unless they were satisfied beyond reasonable doubt that the appellant did not honestly believe that he was entitled to apply the moneys in question by way of payment of fees due to him or by way of reimbursement of expenses incurred by him for Suga Pty Ltd.

[84] The learned trial judge’s directions to the jury explained the notion of “fraudulent application” in terms of “dishonesty”, and his Honour explained that concept in terms of activity which is dishonest by the standards of ordinary people.  In R v Lawrence, Callaway JA, with whom Southwell AJA and Smith AJA agreed, said that “[n]o one would choose that language to explain to a jury the elementary proposition that a person cannot fraudulently misappropriate property that he believes to be his own …”.  Callaway JA went on to explain that:

‘[i]f an accused person asserts a belief that is clearly inconsistent with dishonesty, it can only confuse the jury and put the accused in uncalled-for peril to instruct it to judge that belief by reference to the ordinary standards of reasonable and honest people and whether the accused must have realised that what he was doing was dishonest by those standards … It would be absurd for a judge to instruct a jury to consider whether, in accordance with the ordinary standards of reasonable and honest people, a person may appropriate his own property or take money owing to him in a manner authorised by his debtor …’

[85] These observations are applicable here.  Even though Callaway JA was not speaking about the provisions of the Criminal Code, his remarks encapsulate the inadequacy of the learned trial judge’s direction to the jury in this case.  The appellant’s right to a fair trial according to law included the fundamental entitlement to have the jury instructed that if he honestly believed that he was entitled to apply the moneys the subject of count 1 to his own use, then, however unreasonable that belief may have been, he should be found not guilty of the charge in count 1 on the indictment.  The jury were not directed in these terms.”

121. As is apparent, Keane J held that the summing up was inadequate because it did not instruct the jury that they had to focus on the accused’s belief, but rather it introduced the unnecessary element of assessing that belief by reference to the ordinary standards of reasonable and honest people.  The fault was that it did not instruct the jury that Mill should be acquitted unless they were satisfied beyond reasonable doubt that he did not honestly believe that he was entitled to apply the moneys.  So much is evident from what Keane J said by way of ultimate conclusion:^[119]

“In my respectful opinion, the instruction in the law given to the jury by the learned primary judge did not clearly raise for the jury’s consideration the proposition that the appellant was entitled to be found not guilty of the offence charged in count 1 on the indictment if the prosecution failed to establish that the appellant did not honestly believe that he was entitled to apply the moneys of Mrs Suga and Suga Pty Ltd to his own use.  Accordingly, I consider that the conviction in respect of count 1 must be set aside.”

122. The question Mill dealt with was whether the directions actually given to the jury in that case were sufficient in relation to the exculpatory effect of s 22(2), that being the issue on the submissions of both sides.^[120]  Therefore, Mill was concerned with the terms of an inadequate direction.  Dale was concerned with a different question, namely whether there was error by failing to direct on the question of s 22(2), given that no such direction was sought or given at trial.^[121]
123. I do not accept the contention that Dale was decided per incuriam because Mill was not referred to that Court, nor that Mill has anything definitive to say as to the question of the necessity to direct on s 22(2) in a case such as the present case.

Reliance on R v Dillon; Ex parte Attorney-General (Qld)

124. The appellant relied upon this Court’s decision in R v Dillon; Ex parte Attorney-General (Qld).^[122]  In particular, reference was made to the fact that this Court held that dishonesty for the purposes of s 408C of the Criminal Code was to be proved by the standards of ordinary honest people, and said that that construction sat harmoniously with provisions such as s 22(2).^[123]
125. Dillon concerned charges of fraud under s 408C Criminal Code.  Dillon was a director and shareholder of companies which sold and rented used forklifts.  It was alleged that he obtained money from a finance company by representing that his companies had purchased certain forklift machines.  The Crown alleged that was dishonest because, at the time of each finance company payment, the forklifts had not actually been purchased, so the finance company received false invoices.
126. The prosecution applied under s 590AA (1) of the Criminal Code for a pre-trial ruling as to what it must prove to satisfy the element of “dishonestly” in s 408C.  The primary judge found that he was bound by the authorities of this Court, and the term “dishonestly” in s 408C had the meaning given to it in R v Laurie,^[124] and cases that followed Laurie, particularly R v White.^[125]  Therefore the primary judge ruled that the appropriate directions to the jury as to the meaning of “dishonesty” were those in R v Ghosh^[126].
127. The matter came to this Court on a reference by the Attorney-General under s 668A of the Criminal Code, seeking an opinion on the following point of law:

“To satisfy the element of dishonesty does the Crown have to prove that:

1.  what the accused person did was dishonest by the standards of ordinary honest people; and

2.  the accused person must have realised that what he or she was doing was dishonest by those standards?”

128. The Court reviewed a line of authority, including R v Ghosh,^[127] R v Laurie,^[128] R v Allard,^[129] and R v Sitek,^[130] which held that the test of dishonesty was subjective but the standard of honesty to be applied was the standard of ordinary honest people.  That line of authority preceded the High Court decisions in Peters v The Queen^[131] and Macleod v The Queen,^[132] which held that the jury should be instructed that the question of dishonesty is to be determined according to the standards of ordinary decent people, but the prosecution does not have to prove that the accused person realised that what he or she did was dishonest by the standards of ordinary honest people.^[133]  Macleod was cited with approval in Farah Constructions Pty Ltd v Say-Dee Pty Ltd,^[134] where the majority said:

“As a matter of ordinary understanding, and as reflected in the criminal law in Australia, a person may have acted dishonestly, judged by the standards of ordinary, decent people, without appreciating that the act in question was dishonest by those standards.”

129. The Court in Dillon^[135] held that held that all that was required to prove dishonesty for the purposes of  s 408C, was to prove dishonesty by the standards of ordinary honest people:

“[47] …There is nothing in the terms of s 408C which import that, to be found guilty, the accused person must obtain the property without a belief that he or she has the legal right to deprive others of it.  Of course, there will be many cases, as in Laurie for example, where the evidence raises the issue of honest claim of right so that, under s 22(2) Criminal Code the prosecution must disprove this beyond reasonable doubt.  After careful consideration of the authorities and the parties competing contentions, I am persuaded that the term “dishonestly” in s 408C has its ordinary meaning rather than a special meaning importing that, to be found guilty, the accused person must obtain the property without a belief in a legal entitlement to it.

[48] As “dishonestly” in s 408C has its ordinary meaning, this Court must follow the meaning given to “dishonesty” by the High Court in Peters and Macleod.  Despite the previously settled approach in Queensland since 1987, Queensland Courts must now construe the term “dishonestly” in s 408C as requiring the prosecution to prove only that what the accused person did was dishonest by the standards of ordinary honest people.  To secure a conviction, the prosecution need not prove that the accused person must have realised that what he or she was doing was dishonest by those standards.  This construction works harmoniously with the defence provisions of the Criminal Code, particularly s 22(2), so that, where there is evidence that the accused person had an honest belief that he or she was entitled to act as he or she did, to secure a conviction the prosecution must disprove the honest belief beyond reasonable doubt.”^[136]

130. It was contended that the last sentence of the passage set out above supported the proposition that where an honest belief was advanced in a forgery case, a direction had to be given about s 22(2).  I do not accept that contention.  Dillon was not concerned with a s 22(2) defence.  On the Attorney-General’s reference as to s 408C the Criminal Code, it concerned only with what was required to prove “dishonesty” for the purposes of s 408C.  It was not concerned with the meaning of “intent to defraud” in s 22(2), nor any aspect of the application of s 22(2).  The last sentence was merely a general statement about s 22(2), not an analysis of how it should be construed, let alone its operation in terms of the directions necessary in a forgery case.

The appellant’s dilemma in respect of s 22(2)

131. The appellant’s case was that he had an honest claim of right in respect of his writing Mrs Perrin’s name on documents given to the lending bank, including guarantees and mortgages of Mrs Perrin’s property.  That claim was advanced in a variety of ways in evidence, but included:

1. on the appellant’s evidence Mrs Perrin agreed that they needed to borrow and she told him to sign for her if she was not there;^[137]
2. he and Mrs Perrin had agreed many times that he was authorised to sign for her;^[138]
3. the documents were signed under severe time constraints, leading him to think that he had authority;^[139] and
4. at times she said that she would not spend the time singing a pile of documents and he should take care of them for her.^[140]

132. As for forging Fraser Perrin’s signature as witness, no such explanation was given.  The appellant said that:

1. he wanted to get the documents done before a co-investor reacted by putting receivers in;
2. the documents had to be done in a hurry;
3. he believed that they were binding on the bank in any event;
4. he did not consider the witness part to be a crucial part of the document; and
5. that was the way he had done business transactions for 10 years.^[141]

133. He accepted that Fraser Perrin did not know his signature had been written on by the appellant,^[142] and he never gave the appellant authority or permission to do so.^[143]
134. Whilst the particulars of the forgery charges were based on forging Mrs Perrin’s signature, and not that of Fraser Perrin, the forging of Fraser Perrin’s signature occurred (in each case) at the same time as that of Mrs Perrin, and for the same purpose.  There was no claim of right that could be made in respect of the forgery of Fraser Perrin’s signature.  Thus when the jury came to assess whether there was an intention to defraud for the purposes of s 488, or whether there was an absence of an intention to defraud for the purposes of s 22(2), they had the admissions of the appellant that Fraser Perrin’s signature was put on the documents: (i) without any claim to authority, (ii) without Fraser Perrin’s knowledge, (iii) for the purpose of pretending to the lending bank that the documents had been regularly executed, and (iv) at least on one occasion, in the knowledge that the bank required the documents to be properly witnessed and would have (at least) sent them back to be redone if they were not.
135. That may well have been seen by the jury as powerful evidence of intention to defraud, albeit that it arises in respect of an act that is not the charged act.

Conclusion on ground 1

136. For the reasons expressed above ground 1 fails.

Consideration of adequacy of the directions given

137. Had a different conclusion been reached as to ground 1, consideration would need to be given as to whether a substantial miscarriage of justice had occurred as a result of the absence of a specific direction on s 22(2).  For the reasons which follow I have concluded that no such miscarriage of justice arises.  In the face of the admissions as to forging the documents, and the unchallenged evidence that as a consequence of the forgery and fraud counts Mr Perrin received a pecuniary benefit, and given that the only substantive defence was that he was entitled to do what he did, the directions actually given were adequate to identify that which the jury required, and satisfied what was said in Macleod to be sufficient.^[144]
138. The summing up in the present case said several things, on the question of how to assess intent to defraud, having identified that as an element of the forgery charges, and having emphasised that the burden of proof remained on the Crown throughout.^[145]  First, in the course of explaining what might result from the assessment of evidence:^[146]

“Where, as here, there is evidence called for the defendants, usually one of three possible results will follow.  You may think the Defence evidence is credible and reliable and provides a satisfying answer to the prosecution case.  Well, of course, if that is the case, your verdict would be not guilty because the accused said, “I had authorisation and I thought the bank was satisfied that I was signing.”  So if that was his state of mind, or if you are left in a reasonable doubt about that, you would find him not guilty.”

139. Secondly, specifically on the elements of the forgery charges:^[147]

“What is the second part of the charge?  With intent to defraud.  Now, intention and intent are familiar words.  In the legal context they carry their ordinary meaning.  In ascertaining the accused’s intention you are drawing an inference from the facts which you find established by the evidence concerning his state of mind.  Because you cannot look into someone’s state of mind, so you usually determine intention, or intent, by looking at the conduct, and that is what you are asked to do here.”

140. The emphasis in that passage upon the requirement that the jury ascertain “the accused’s intention” and “his state of mind”.  The learned trial judge then turned to the fraud charges, specifically drawing the jury’s attention to the fact that the elements are different from forgery.^[148]  Her Honour directed the jury that dishonesty for those charges was to be assessed by the standards of ordinary honest people.^[149]
141. Thirdly, at the start of her Honour’s summary of defence counsel’s address:^[150]

“His Defence counsel said that is consistent with his belief that he was authorised, expressly or impliedly, to sign her signature, and that the bank would be accepting of that, and that he was entitled to do what he did.  And you will remember that he gave evidence, “I’ve done it before.”  It is up to you.  Is that because he honestly believed that the bank would accept those signatures, or because he got away with it before?  But you need to think about it, because that is state of mind.”

142. The jury were not directed that the assessment of whether the appellant honestly believed that he was entitled to act as he did was to be judged by the standards of ordinary honest people, as opposed to his belief being honestly held on a subjective basis.
143. In my view, those three passages reveal that the jury were directed that they had to assess the appellant’s state of mind, not by reference to the standards of others, and if he honestly believed that he was entitled to do what he did then he was to be acquitted.  That direction has all the elements of the relevant part of the standard Benchbook direction.  The directions do not contain the flaw that was evident in Mill, and referred to in the judgment of Callaway J in R v Lawrence.^[151]  Further, they substantially meet the requirements referred to by Keane J at [85] in Mill.
144. In my view, the directions given in the present case were adequate to identify that which the jury required, and satisfied what was said in Macleod to be sufficient.^[152]
145. A similar conclusion as to the adequacy of directions was reached by the Victorian Court of Appeal, relying on Macleod, in R v Senese.^[153]  The offences there were false accounting contrary to s 83(1)(a) of the Crimes Act 1958 (Vic), involving false representations to shareholders as to the state of their respective interests in certified deposits.  The offender claimed a legal right to do what he did.  The complaint was that the trial judge did not clearly direct the jury as to an honest claim of right as to the use of the funds.  The Court said it was “unfortunate that the trial judge here did not take greater care to emphasise in terms more than she did that, given that the applicant raised the defence of honest belief that he had a right to use the funds as he did, it was for the Crown to prove beyond reasonable doubt that the applicant did not hold such a belief”.^[154]  However the Court’s ultimate conclusion on this issue was:^[155]

“[45] … It is plain that in this case her Honour’s charge identified the applicant’s intent, which rendered his conduct the same as for the purposes of counts 25 and 26, namely, to use the money in question for the benefit of himself and his company notwithstanding that it belonged to the subscribers.  It is also clear, I think, from the whole of her Honour’s charge that the jury were sufficiently told that it was for them to decide if the applicant had such an intent and, if so, to be satisfied beyond reasonable doubt that, on account of that, his conduct was dishonest.

[46] For these reasons, I consider that her Honour did not fail sufficiently to instruct the jury that the onus was on the Crown to establish that the applicant did not have the honest intent for which he contended and, in the circumstances, her Honour’s failure to tell the jury, in terms, that the Crown had to exclude the reasonable possibility of dishonest intention, did not detract from the sufficiency of her charge nor amount to a miscarriage of justice.  It is also apparent from what I have said that I consider that there is no merit in the applicant’s claim that the effect of her Honour’s direction was to reverse the onus of proof.  It follows that in my view this aspect of ground 2 should fail.”

Ground 2 – direction as to reasonable belief

146. Senior Counsel for the appellant contended that this was a case where the appellant claimed to be entitled to deal with property he had an interest in (his house/land and funds in an account of a company that he and his wife were the only directors and shareholders).  Therefore, the jury should have been directed that guilty verdicts could not be returned unless it was proved beyond reasonable doubt that the appellant did not honestly believe that he was entitled to put Mrs Perrin’s signatures on the documents, and did not honestly believe that he was entitled to gain a pecuniary benefit for himself.
147. Senior Counsel for the Crown contended that:

1. this was not a case where the appellant claimed to be entitled to deal with property in which he had an interest; the appellant fraudulently mortgaged the house at Cronin Island that was solely owned by Mrs Perrin and falsely represented he had her personal guarantee;

2. the appellant was involved as a director and shareholder in the company Christie; guarantees bearing the purported signature of Mrs Perrin as director of Christie were the subject of counts 1, 4 and 8, upon which the jury were unable to agree; these were the only counts where it might be said the appellant had an existing legal interest in property that related to the charge; the jury’s inability to agree on these counts indicates they were conscious of considerations such as those in Mill which in that case required discussion of s 22(2); and
3. a direction that the appellant could not be convicted unless it was proved he did not honestly believe he could or was entitled to put Mrs Perrin’s signature on the documents would not have availed the appellant; the jury must have been satisfied that he forged Mrs Perrin’s signatures with an intention to defraud; the same can be said for the appellant’s submission he was entitled to a direction that the prosecution must disprove that he honestly believed he was entitled to gain the pecuniary benefit for himself.

148. In this respect the argument relied upon several passages in Roberts.^[156]

Discussion – ground 2

149. The contention is that the jury should have been directed that they could not convict unless they were satisfied beyond reasonable doubt that the appellant:

1. did not honestly believe he was entitled to put his then wife signature on the documents the subject of the forgery counts; and
2. did not honestly believe he was entitled to gain the pecuniary benefits the subject of the fraud counts.

150. In support of this ground reliance is placed on Roberts at [32], [35] and [140].  Those paragraphs must be seen in context:^[157]

“[32] In my view, with all respect to his Honour, this was a significant omission.  I consider that, having regard to the appellant’s evidence, the jury should have been directed that it could not convict unless satisfied beyond a reasonable doubt that the appellant did not have an honest claim to the moneys the subject of the relevant cheques.  In other words, the jury should have been directed that it could not find an intention to defraud unless satisfied beyond a reasonable doubt that the appellant did not honestly believe she was entitled to use her husband’s money to pay for household expenses and other expenses which she believed it necessary to incur in order to maintain his required standard of living.

[33] Furthermore, the jury should have been directed that even if the appellant did not honestly believe she was entitled to use her husband’s money as she did, she could not be convicted of fraud unless he was prejudiced in some way by her conduct.  If the result of the conduct was that Mr Roberts’ money was used to pay for expenses he would have met in any event, he was not defrauded: see R v Kastratovic (1985) 42 SASR 59 at 62 per King CJ, applying Welham v Director of Public Prosecutions [1961] AC 103 at 123.

[34] Clearly, if the appellant did not intend to defraud her husband, or if he was not defrauded in fact, the appellant could not have been convicted on the basis that she intended to defraud his bank.

[35] I therefore conclude that although it would not have been appropriate for the trial judge to direct the jury in relation to s 22 of the Criminal Code, a direction ought to have been given in relation to an honest claim of right in the sense set out above.

…

[140] In determining whether a person has been defrauded in fact, it is necessary to have regard to the nature of the property in question.  The common understanding is that the amount standing to the credit of a customer at his or her bank is the customer’s money.  Technically, the relationship of banker and customer is that of debtor and creditor and the customer’s property is a chose in action against the bank.  The state of the account between banker and customer (that is, the level of the bank’s indebtedness) is unaffected by unauthorised transactions on the account with the result that the bank suffers the loss: National Bank of Commerce v National Westminster Bank Plc [1990] 2 Lloyd’s Rep 514. Otherwise, nothing of significance turns on whether the property is money or a chose in action; the issue is whether the appellant had an honest claim of right “in or with respect to” the property.  A person can have an honest belief with respect to property even if dishonest means were used to access the property: Peters v The Queen  (1998) 192 CLR 493 at 508; R v Kastratovic (1985) 42 SASR 59. I agree with Templeman J for the reasons he gives that the jury should have been directed that it could not convict the appellant unless satisfied beyond reasonable doubt that she did not have an honest claim to, or with respect to, the moneys the subject of the relevant cheques.”

151. The first contention is the same as that in ground 1, and fails for the same reasons.
152. The second contention depends on the highlighted parts of the passages above.  However, for several reasons the contention cannot be accepted.
153. First, in my respectful view, in those passages Roberts cannot be taken as laying down a rule for all cases.  The particular circumstances of that case were what called for the direction referred to.
154. Secondly, Roberts was different from the present case.  It concerned cheques forged by the wife by his wife signing her husband’s name and altering the amounts.  Those cheques were then drawn on the husband’s bank account, to which she was not a signatory.  She altered cheque butts to avoid confrontation with her husband, and possible violence.^[158]  Her evidence was that she had used the cheques to pay for household and other expenses which she needed to meet in order to maintain the standard of living her husband required, and believed she was entitled to do so.^[159]  It was the latter belief that formed the honest claim of right as to use of the pecuniary benefits of the forgery and fraud.
155. In the present case the appellant forged Mrs Perrin’s signature on mortgages over property which was in her name, and supporting guarantees purportedly by her, in order to have the Bank advance money to him, on his account as borrower, so that he could make investments.  The use of the pecuniary benefits of the forgery and fraud was quite different from that in Roberts.
156. Thirdly, the reason for the requirement for a direction under s 22(2) in Roberts was that the relevant belief concerned the husband’s money being used to pay his expenses and support his lifestyle.  Therefore if anyone was defrauded it was the husband.  By contrast, the present case was conducted on the basis that it was the Bank who was defrauded.  The forgery and fraud were particularized as being the use of the forged document for the purpose of obtaining a line of credit from the Bank, and the fraud as being gaining the line of credit or the loans from the Bank.^[160]  And that is what the jury were told in the summing up.^[161]
157. Fourthly, the appellant was the borrower from the Bank, not Christie.  The fact that the appellant may have placed the borrowed funds in Christie for his own investment purposes does not, in my view, change the factors distinguishing this case from Roberts.  Once the funds were in Christie’s account, they were the property of Christie, and it was Christie that used the funds to invest, authorised by the appellant in his capacity as a director of Christie.  It may be that there was, or could be inferred, some arrangement as between the appellant and Christie, reflecting a loan from him to it; but none was suggested in the evidence at trial.  However that may be, the funds, once in the hands of Christie, were not the property of the shareholders,^[162] let alone the directors.  That Christie was the corporate vehicle used by the appellant for the purposes of an investment business does not alter that.
158. In a practical sense that means that the pecuniary benefit of the forgery or fraud was, in the first instance, the loan funds lent to the appellant alone.  At the point of the loan Mrs Perrin could not be said to have any interest (legal or beneficial) in those funds.  Funds that became Christie’s property were not property in which the appellant or Mrs Perrin had a legal or beneficial interest.  Their rights were as directors and shareholders.
159. Fifthly, in any event, in my view the directions actually given were sufficient to encompass the point raised under this ground: see paragraphs [137] to [145] above.
160. In my view, ground 2 fails.

Application for leave to appeal the sentence

161. The only aspect of the sentence challenged was the parole eligibility period.  The learned sentencing judge ordered that it be “after the statutory period of half the sentence”.  The practical effect of that, taking into account 39 days of pre-sentence custody (between 20 December 2016 and 27 January 2017) was that the parole eligibility date was set at 20 December 2020.
162. The central contention by senior counsel for the applicant was that the learned sentencing judge erred in failing to take into account the applicant’s cooperation in the administration of justice, and no allowance was made for the applicant’s cooperation in reducing the length of the trial by making admissions as to the forgeries and the fact that his fingerprints were on certain documents, thus avoiding the need for evidence from five witnesses.  Reliance was placed on R v Wiggins,^[163] where this Court held that a failure to take into account such a factor is an error.
163. It was contended that if error was shown then this Court should re-exercise the sentencing discretion and vary the sentence by ordering, pursuant to s l60C(5) of the Penalties and Sentences Act 1992, that the date that the applicant is eligible for parole is 20 June 2020 (after he has served three and a-half years imprisonment).
164. For the Crown, senior counsel submitted that whilst the learned sentencing judge did not specifically refer to this factor in her remarks, it had been raised in written and oral submissions, and it was unlikely that it was overlooked.  The appellant’s co-operation was but one factor relevant to sentence.  It shortened the trial to the extent of obviating the need to call three handwriting and two fingerprint experts.  It was submitted, and not challenged by the applicant at sentence, that the matters admitted probably could not be seriously contested.  In light of the other matters identified by the learned sentencing judge it could not be considered the sentencing discretion has miscarried because of a failure to articulate precisely the allowance to be made for this factor.

Discussion

165. The learned sentencing judge referred to a number of matters which would impact upon the length of actual custody before parole eligibility.  There was no criticism made of her Honour’s listing of the factors, nor the apparent weight she gave them.  They included:

1. the applicant’s lack of criminal history, noteworthy academic and employment history, and his highly successful financial dealings;
2. the many references on his behalf, and the fact that he had been a significant contributor to charities and the community;
3. that he had turned to the criminal conduct as a result of risk-taking or the consequence of an economic downturn and/or the influence of the Global Financial Crisis;
4. initial expressions of remorse had dissipated over time; he still had no self-realisation and/or remorse;
5. her Honour found that he wrote the letter of confession signed in March 2009, but persisted with his denial of it; and her Honour expressly rejected that Mrs Perrin knew of and approved the loans, a submission persisted with by the applicant at the sentencing;
6. general deterrence was the predominant consideration, rather than rehabilitation; and
7. whilst there had been delay, that was attributable to the investigation and requests by the applicant for adjournments; notwithstanding that, there had been no offences since 2009.

166. The learned sentencing judge specifically referred to the shortening of the trial by admissions:^[164]

“At the trial, you did make admissions as to the forgeries, but it must be said you did so in the case of considerable evidence.”

167. The sentence imposed by the learned sentencing judge was reached by “[b]alancing all of the features ...”.^[165]
168. In my view, the contention that the learned sentencing judge did not take into account the fact that admissions were made which shortened the trial, should be rejected.  Her Honour expressly mentioned that factor, and the qualifying feature that the admissions were made in the face of “considerable evidence”.  Unless the applicant elected not to give evidence at the trial then those admissions were almost inevitable given his own evidence as to who wrote the signatures on the documents.  And the prospect of his not giving evidence seems to have been slim given that he needed to have an evidentiary basis for the honest claim of right, and that was only going to come from him, and after cross-examination of those whose signatures were forged.^[166]
169. True it is that the learned sentencing judge did not say expressly what allowance was made for that factor, but that applies for all the other factors as well.  I do not consider that each factor has to be given an announced specific allowance in the sentencing remarks.  That runs against the accepted proposition that sentencing is an instinctive synthesis, rather than a series of separate components to be added and subtracted.^[167]
170. Once it is accepted, as I consider it must be, that the learned sentencing judge did take the admissions and the shortening of the trial into account, there are difficulties in reaching the conclusion that no allowance was made for it.  Furthermore, it presents difficulties in concluding that the sentence is manifestly excessive because that allowance, amongst all of the relevant factors, was too small in the circumstances.
171. However, in my view those difficulties can be overcome in this case when one analyses the outcome as to the parole eligibility date.  The learned sentencing judge ordered that the parole eligibility date be “after the statutory period of half the sentence”.  That is the same outcome as if her Honour had said nothing on the topic.  If an allowance was already factored into that result, one wonders: what was the position before the allowance?  One possible answer to that is that her Honour considered a parole eligibility date at greater than 50 per cent of the time to be served in actual custody.  There is no hint of that in the submissions or sentencing remarks.
172. Another answer is that, in truth, no allowance was made.  In my respectful view, that is the answer and it involved error in the sentencing discretion.  That means this Court needs to re-sentence the appellant on that aspect.
173. In my view, some modest but demonstrable allowance should have been made for the fact that the admissions meant that the trial was shortened, at a considerable saving in time and cost.  Half of the longest sentence (eight years) was 48 months, which is why (allowing for time already served) the parole eligibility date was set at 20 December 2020.  In my view that period should have been shortened by six months, and thus the parole eligibility date should be set at 20 June 2020.
174. The application for leave to appeal the sentence should be allowed to that extent.

Disposition of the appeal and application.

175. For the reasons expressed above I would make the following orders:
     1. The appeal against conviction is dismissed.
     2. The application for leave to appeal against sentence is allowed.
     3. The appeal against sentence is allowed.
     4. The order as to parole eligibility, imposed on 27 January 2017, is set aside, and in lieu thereof it is ordered that the parole eligibility date is set at 20 June 2020.
     5. Otherwise the sentences imposed on 27 January 2017 are affirmed.
176. PHILIPPIDES JA:  I have had the advantage of reading the reasons of Morrison JA and gratefully adopt his outline of the facts.  I agree that the appeal against conviction should be dismissed for the reasons given below.  In my view, the application for leave to appeal against sentence should also be dismissed.
177. The appellant was charged with nine counts of aggravated forgery under s 488(1)(a) and s 488(2)(d) which required proof that the appellant with intent to defraud the Commonwealth Bank of Australia (the bank) forged the following documents by signing the name of his wife, Nicole Perrin, on them:
     1. deeds of guarantee in the name of Christie Pty Ltd (counts 1, 4 and 8);
     2. deeds of guarantee in the name of the appellant’s wife (counts 2, 5 and 7);
     3. a consent and acknowledgement of guarantee given in her name (count 11); and
     4. mortgages over the property on Cronin Island (of which his wife was the registered owner) (counts 3 and 9).
178. The appellant was found guilty of six of the counts (counts 2, 3, 5, 7, 9 and 11).  No verdicts were able to be reached on the remaining three counts (counts 1, 4 and 8) and the jury were discharged from returning verdicts on those counts.
179. The appellant was also charged and convicted of three counts of aggravated fraud under s 408C(1)(a) and s 408C(2)(d) (counts 6, 10 and 12), the particulars in respect of each of those counts relevantly being that the appellant:^[168]
     1. dishonestly gained a pecuniary benefit for himself, namely a line of credit (in varying amounts) by representing that he had the guarantee of Christie Qld Pty Ltd, the personal guarantee of Nicole Perrin and a registered mortgage over the Cronin Island property; and
     2. did so dishonestly, as he forged the signature of Nicole Perrin on the relevant guarantor documents in relation to Christie Qld Pty Ltd, her personal guarantee and the mortgage in relation to the Cronin Island property and submitted those documents to the bank to obtain the credit.

Grounds of appeal

180. Two grounds of appeal against conviction were agitated.  The first ground alleged error by the trial judge in failing to leave the exculpatory provision in s 22(2) of the Criminal Code (the Code) for the jury’s consideration (it was said that either a ruling was made to that effect or, alternatively, if no ruling was made, a miscarriage of justice resulted from the provision not being left for the jury’s consideration).  The second ground concerned the absence of a direction in respect of s 22(2) which it was contended resulted in a miscarriage of justice.

The appellant’s submissions as to ground 1 – failure to leave s 22(2) of the Code

181. Senior counsel for the appellant argued that the trial judge was obliged to leave s 22(2) if there was some evidence capable of raising it.^[169]  In the present case, the evidence in respect of which the provision was said to have been raised has been set out in the reasons of Morrison JA above.  Essentially, it concerned the appellant’s belief that he had his wife’s authority to sign her signature on the various documents and had authority “to deal with their property”.
182. The appellant contended in written submissions that the trial judge’s reasoning for not leaving s 22(2) was erroneous, in that her Honour reasoned that the prosecution was required to prove dishonesty beyond reasonable doubt.^[170]  It was argued that, although the fraud counts required proof of dishonesty, for the forgery counts, it was necessary for the prosecution to prove an intent to defraud beyond reasonable doubt.  It was clarified in oral submissions that ground 1 went to all the counts (both forgery and fraud).^[171]
183. The appellant placed reliance on the discussion of R v Mill,^[172] where s 22(2) was found to have been raised in relation to charges of fraud and, in particular, the following statement of Keane JA:^[173]

“The appellant’s right to a fair trial according to law included the fundamental entitlement to have the jury instructed that if he honestly believed he was entitled to apply the moneys the subject of [the fraud count] to his own use, then, however unreasonable that belief may have been, he should be found not guilty of the charge ...”

184. Senior counsel for the appellant argued that R v Dale,^[174] which was referred to the trial judge in this case by the respondent on the applicability of s 22(2), was decided per incuriam, in that a direction about s 22(2) was found not to be required, because there was no scope for the provision in respect of an offence of fraud under s 408C, which necessarily required proof of dishonesty.  Dale was also criticised on the basis that it did not consider Mill (which was not cited to the Court).  Additionally, it was argued that Dale was inconsistent with R v Dillon; Ex parte Attorney-General (Qld),^[175] where, it was said, the Court “did not discern that s 22(2) had no scope to operate to exculpate from fraud”.^[176]  Further, it was submitted that Dale failed to consider the following statement of Brennan J in Walden v Hensler:^[177]

“Section 22 operates to preclude criminal responsibility for an act done or omitted to be done whether or not there is a mental element in the offence charged which would be negated by an honest claim of right…”

The appellant’s submissions as to ground 2 – absence of direction as to s 22(2) of the Code

185. Senior counsel for the appellant argued that the present case was one where the appellant claimed to be entitled “to deal with property he had an interest in”,^[178] being the house and land at Cronin Island and funds in an account of a company of which he and his wife were the only directors and shareholders.  Accordingly, it was argued in written submissions, relying on Roberts v Western Australia,^[179] that the jury should have been directed that guilty verdicts could not be returned unless it was proved beyond reasonable doubt that the appellant did not honestly believe that he was entitled:

1. to put his then wife’s signature on the documents; and
2. to gain a pecuniary benefit for himself.

186. The actual articulation of the direction that senior counsel submitted should have been given to the jury was formulated in oral submission as follows:^[180]

“… if you conclude or if the prosecution cannot exclude the possibility that at the time that the [appellant] signed his wife’s name to the guarantees, and signed his wife’s name to the mortgage document, and obtained from the bank the pecuniary benefits, if you cannot exclude at that time that he wasn’t acting in the exercise of an honest belief that he was entitled to sign those documents in his wife’s name, and/or to obtain the pecuniary benefit from the bank, then your verdict would be not guilty.”

187. It was submitted that, in the circumstances of this case, the directions given by the trial judge concerning intent to defraud and dishonesty were inadequate in that they were not apt to ensure that the claimed belief was considered in determining whether the appellant intended to defraud or was acting dishonestly.  In making that submission, reliance was placed on the question asked by the jury, as illustrating that the jury was concerned to understand what might flow if they concluded that the appellant acted with his wife’s consent.

The defence of a claim of right without intent to defraud under s 22(2) of the Code

188. It is convenient firstly to address the nature of the exculpatory provision in s 22(2) of the Code.  Section 22(2) provides a defence for an offence relating to property, which the offences of fraud under s 408C and forgery under s 488(1) are.  Section 22(2) provides a defence to those offences where what an accused did with regard to the property was done:

1. in the exercise of an honest claim of right; and
2. without intention to defraud.

189. While the evidential burden of a claim of right is on the accused, there is a persuasive burden on the prosecution to rebut the claim of right where it is raised on the evidence.^[181]
190. As to what is meant when it is said that the accused raises a “claim of right”, the following statement of Dawson J in Walden was endorsed in Macleod v The Queen:^[182]

“… a claim of right is not a claim to freedom to act in a particular manner – to the absence of prohibition.  It is a claim to an entitlement in or with respect to property which goes to the absence of mens rea.  A claim of that sort is necessarily a claim to a private right arising under civil law: see Cooper v Phibbs.”

191. An accused acts in the exercise of an honest claim of right (in respect of the property the subject of the charge), sufficient to be relieved of criminal responsibility, if the accused honestly believes himself/herself to be entitled to do the act done in relation to that property.^[183]  The section is directed to a belief in a right relating to property the subject of the charge, which is genuinely held of a legal entitlement to do the act in or with respect to the property.^[184]  A person therefore has a claim of right “if he is honestly asserting what he believes to be a lawful claim, even though it may be unfounded in law or fact”.^[185]  That is to be contrasted with an erroneous belief that what one is doing is lawful which is a mere mistake of law and no defence.^[186]
192. Section 22(2) thus focuses on the act done by the accused with respect to property the subject of the property offence.  It provides a defence only, where the relevant act done with regard to the property, was done out of an honestly held claim of right as to a legal entitlement in or with respect to the property and not intending by that act to induce another to act to their prejudice or detriment.
193. In Mill,^[187] Keane JA noted with approval the suggested Supreme and District Courts Benchbook (the Benchbook) direction and its focus upon the subjective belief of the accused person to do the act the subject of the charge.  It relevantly provides:^[188]

“Under our law, a person is not criminally responsible, for an offence relating to property, if what he did … with respect to the property was done … in the exercise of an honest claim of right and without intention to defraud…

‘To defraud’ in this context means to do … something dishonestly, so the requirement that the claim of right be honest and the requirement of the absence of an intention to defraud are really two ways of saying that the defendant must have honestly believed himself to be entitled to do what he did ...

There is no burden on the defendant to prove that he made an honest claim of right without intention to defraud.  The prosecution must satisfy you beyond reasonable doubt that he did not do so.  So if the prosecution has failed to satisfy you beyond reasonable doubt that when [the defendant] [details of act or omission] … he did not honestly believe he was entitled to [act …, e.g., take it], you must find the defendant not guilty.”

The flaws in the appeal grounds

194. In my view, the grounds of appeal must fail.  They are flawed in that they are premised on a failure to appreciate the mental elements of the property offences in question and the true nature of a claim of right.  Those flaws have also resulted in a misapprehension of the decisions of Mill, Dale and Roberts.
195. Before addressing those flaws, it is useful to set out the directions given concerning the mental element involved in each of the property offences and then to consider the interaction between s 22(2) of the Code and the relevant mental elements of the property offences.

The directions given as to the offences of fraud under s 408C of the Code

196. For present purposes, the elements of the offences of fraud under s 408C(1)(d) of the Code required proof beyond reasonable doubt of two elements, being that:

1. the appellant gained a pecuniary benefit for himself; and
2. he did so dishonestly.

197. The trial judge directed the jury as to the first element of the offence of fraud, that it was necessary to prove that the appellant gained the pecuniary benefit for himself as follows:

“… in order to prove fraud, the prosecution must prove that the accused gained a pecuniary benefit for himself.  You will see that is how it is charged in the indictment.  What is a pecuniary benefit?  What you would think it is, a financial gain.”

198. Her Honour directed as to the mental element required, that the appellant dishonestly gained the pecuniary benefit for himself as follows:

“The prosecution must prove beyond reasonable doubt that his action was done dishonestly.  And in order to prove that, the prosecution must prove that what he did was dishonest by the standards of ordinary honest people.

Dishonest is a common English word, untrustworthy, deceptive.  So you apply what you understand the word dishonesty to mean, and if the Prosecutor has satisfied you beyond reasonable doubt that what he did was gain the money, the pecuniary benefit by dishonesty, applying the standards of ordinary honest people, then they have proved that part.”

199. The directions as to the requisite mental element were uncontroversial and in conformity with the suggested direction in the Benchbook,^[189] which correctly identifies the mental element of dishonesty the prosecution must prove, derived from Dillon, as being “that what the defendant did was dishonest by the standards of ordinary honest people”.
200. There was no complaint with these directions.

The directions given as to the offences of forgery under s 488(1) of the Code

201. For present purposes, the elements of the offences of forgery under s 488(1) of the Code required proof beyond reasonable doubt that:

1. the appellant forged the documents in question (by falsely purporting to sign his wife’s signature to the documents); and
2. he did so with intent to defraud.

202. In the present case, the trial judge directed on the physical element of the offence of forgery in conformity with the concise suggested direction in the Benchbook, derived from Welham v DPP.^[190]  “To forge”, as explained in Welham is a metaphorical expression borrowed from the occupation of the smith and means no more than to make or form but at law was always taken in an “evil sense” denoting a false making.^[191]  As to that element, her Honour directed:

“In order to prove the counts of forgery, the prosecution must prove that the [appellant] forged a document.  Forge is defined in the Criminal Code.  To forge a document means, amongst other things, to deal with a document or a material part of it, and deal with includes purporting that the document is made by a person who did not make it.  A document is defined in the Criminal Code as well.  It includes anything on which there is writing.  So to forge means in this case, this is the Crown case, purporting that the document is made by someone who did not make it.”

203. Likewise as to the mental element of the offence of forgery, the trial judge directed in accordance with the suggested Benchbook direction as follows:

“What is the second part of the charge.  With intent to defraud.  …

What is an intent to defraud.  It just means an intent to practice a fraud on another, in this case, the bank.  It is, therefore, the allegation here from the Crown, that there was an intention on him to deprive the bank of a right not to lend him the money, or to cause it to act to its detriment to lend him the money, or contrary to what would otherwise have been its duty.  An intention to defraud is established notwithstanding there is no intention to cause financial loss.  You do not have to prove that you intend to cause financial loss.  It is that you caused someone to act in a way that they would not otherwise have acted.  And here the case is the intention was to get the bank to lend the money when it would not otherwise have done so if it had known the signatures were forged.”

204. Her Honour also gave the standard directions as to the issue of “intention” and “intent”:^[192]

“Now, intention and intent are familiar words.  In the legal context they carry their ordinary meaning.  In ascertaining the [appellant’s] intention you are drawing an inference from the facts which you find established by the evidence concerning his state of mind.  Because you cannot look into someone’s state of mind, so you usually determine intention, or intent, by looking at the conduct, and that is what you are asked to do here.

Intention may be inferred or deduced from the circumstances in which the event happened, from the conduct of the [appellant] before, at the time, or after he did the specific act with which he is charged, and, of course, whether a person has said something about his intention may be looked at for the purpose of deciding what the intention was at the relevant time.”

205. The trial judge also gave further directions in response to a question from the jury, which focussed on the defence case and redirections, to which I will return to later.
206. There was also no complaint concerning any of these directions.

The mental element required for fraud under s 408C of the Code

207. In Dillon,^[193] McMurdo P held (the other members of the Court agreeing) that the term “dishonestly” was to be construed in accordance with the meaning given to that term by the High Court in Peters v The Queen^[194] and Macleod.  Dillon thereby overturned a line of authority, commencing with R v Laurie,^[195] applying the test in R v Ghosh,^[196] in respect of the mental element of dishonesty for the purposes of s 408C.  In so doing, the Court in Dillon^[197] adopted the distinction made in Peters^[198] and Macleod^[199] between two types of uses of the word “dishonestly” in a statutory offence; where the word is used in its special sense^[200] and where it is used in its ordinary sense.
208. In Peters, it was held in relation to the offence of conspiracy to defraud under s 86(1)(e) and s 86A of the Crimes Act 1914 (Cth), that “to defraud” was to be understood as involving conduct that was “dishonest according to the standards of ordinary honest people”.^[201]  Likewise, in Macleod^[202] it was held that, for the purposes of the offence of fraudulent application of company property by a director or officer under s 173 of the Crimes Act (NSW), “fraudulent” was to be so understood.
209. Fraud concerns the use of dishonest means to bring about a situation prejudicing or imperilling existing legal rights or interests of others by the employment of such means.^[203]  The gravamen of fraud concerns the devising of a dishonest scheme “designed to produce an advantage to one person at the expense of another or the community at large”.^[204]  As stated in Welham,^[205] to defraud looks at the “effect of cheating upon another person: what Blackstone … called ‘to the prejudice of another man’s right’”.
210. A complaint made in Macleod concerning the direction given to the jury was the failure to identify the need for dishonest means in the application of the funds (including the absence of consent by the victim of the fraud) and the acts from which dishonesty was to be inferred.  The Court in Macleod^[206] endorsed the following statement of Toohey and Gaudron JJ in Peters as to the course to be adopted where it is necessary for a jury to decide whether “an act is dishonest”:^[207]

“… the proper course is for the trial judge to identify the knowledge, belief or intent which is said to render that act dishonest and to instruct the jury to decide whether the accused had that knowledge, belief or intent and, if so, to determine whether, on that account, the act was dishonest … If the question is whether the act was dishonest according to ordinary notions, it is sufficient that the jury be instructed that that is to be decided by the standards of ordinary, decent people.”

211. Ordinarily, as stated in Peters^[208] and reiterated in Macleod,^[209] fraud involves:

1. the intentional creation of a situation in which the accused deprives another of money or property or puts at risk the money or property of another or prejudicially affects that person in relation to some lawful right, interest, opportunity or advantage;^[210]
2. knowing that he or she has no right to deprive that person of that money or property or to prejudice that person’s interests.

Fraud under s 408C and an honest claim of right under s 22(2) of the Code

The decisions of Peters and Macleod

212. The use of dishonest means to obtain property which the accused believes he or she is legally entitled to take cannot constitute fraud.^[211]  In Peters,^[212] Toohey and Gaudron JJ observed that, in respect of the knowledge required to be proved for conspiracy to defraud there under consideration, that as a matter of ordinary experience, it would generally be inferred from the use of dishonest means to deprive another of property or imperil rights or interests the accused knew he or she had no right to or to prejudice those rights or interests.  Their Honours also stated:^[213]

“And as with the defence of honest claim of legal right, it will be taken that there is no issue in that regard unless the absence of knowledge or, which is the same thing, belief as to legal right is specifically raised and there is some evidence to that effect.” (emphasis added)

213. In Macleod, the appellant complained that there was no specific reference in the directions to the jury to the “subjective” criterion attending a claim of right.^[214]  That was said to be an “additional element of the offence”^[215] requiring the trial judge to direct the jury as to the need for the prosecution to exclude a bona fide claim of right.^[216]  The Court observed^[217] that Peters rejected the equation of “dishonesty” with an absence of a belief of legal right, except where that term is used in a special statutory sense.^[218]  It was explained that s 173 of the Crimes Act not being such a special statutory provision, the notion of “claim of right” was rather:^[219]

“… a manifestation of the general principle identified by Dawson J in Walden v Hensler, namely that it is: ‘always necessary for the prosecution to prove the intent which forms an ingredient of a particular crime and any honestly held belief, whether reasonable or not, which is inconsistent with the existence of that intent will afford a defence.” (emphasis added)

214. That observation is pertinent to s 408C, as is the Court’s observation that particular considerations arise, with respect to a provision, such as that being considered in Macleod, where fraud being inconsistent with a claim of right made in good faith to do the act complained of, “that act has, as a necessary element of criminal liability, the quality of dishonesty according to ordinary notions”.^[220]
215. The function of the claim of right put forward by the appellant in Macleod was to seek to engender a reasonable doubt with respect to the overall persuasive burden of proving that there had been the fraudulent taking or application alleged.^[221]  That is, as to whether the accused had used dishonest means to prejudice the rights or interests of another.^[222]  Since there was no requirement for the offence under s 173 of the Crimes Act that the appellant himself must have realised that the acts in question were dishonest by “current standards of ordinary, decent people”, it was held that to require “reference to a ‘subjective’ criterion of that nature when dealing with a claim of right would have deleterious consequences”.^[223]  A direction about the subjective element of a claim of right was thus neither necessary nor appropriate.^[224]  The accused’s subjective belief as to whether the conduct was dishonest according to ordinary standards was not relevant.  It was open to the jury in Macleod, determining the matter by ordinary notions, to conclude that the appellant knew of his lack of entitlement to take or apply the funds for his own use or benefit and that on that basis his acts were dishonest.^[225]

The decision of Dillon

216. In conformity with the approach taken by the High Court, Dillon held^[226] that the term “dishonestly” in s 408C did not have a “special meaning” importing “that, to be found guilty, the accused person must obtain the property without a belief in a legal entitlement to it”.^[227]  Having its “ordinary meaning”, the prosecution is required to prove only that what the accused did was dishonest by the standards of ordinary honest people and was not, additionally, required “to prove that the accused person must have realised that what he or she was doing was dishonest by those standards”.^[228]
217. As mentioned, in Macleod,^[229] it was emphasised that “dishonesty” is not to be equated with an absence of a belief of legal right, except where used in its special sense.  It follows, that since “dishonestly” is used in s 408C in its ordinary sense, there remains room for the application of s 22(2) in the case of fraud under s 408C.  As was stated by McMurdo P in Dillon,^[230] the construction of the term “dishonestly” to connote and require that the conduct in question be dishonest only according to ordinary honest standards, works harmoniously with the defence provision of s 22(2).  Accordingly, where there is evidence that the accused actually had an honest belief (no matter how unreasonable or wrongheaded^[231]) as to a legal entitlement to act as he or she did, to secure a conviction, the prosecution must disprove that honest belief beyond reasonable doubt in order to negative the defence of honest claim of right under s 22(2).^[232]

The decision in Mill

218. Furthermore, where an honest claim of right to property is raised on the evidence, a direction as to the subjective element of dishonesty in terms of the Ghosh test can never be a sufficient direction for the purposes of s 22(2).  It is in that context that it is informative to turn to Mill.
219. Although it preceded Peters, the decision highlighted the inadequacy of the Ghosh test as apt to focus the jury’s attention as to the subjective nature of an honest claim of right.  The trial judge had directed as to the test of dishonesty in terms of the Ghosh test (that the jury consider whether what the accused did was “dishonest according to the standards of the community and further dishonest, according to those standards, to the knowledge of the accused”^[233]).  On appeal, it was not disputed that an arguable case of exculpation under s 22(2) was raised at trial, even though the appellant had not adverted to the provision in his address.  Rather, the issue was whether that part of the direction as to dishonesty, which directed the jury’s inquiry to the accused’s own belief as to whether he acted dishonestly according to the standards of ordinary people, was a sufficient direction for the purposes of s 22(2).
220. The circumstances of the fraud count in question in Mill related to the transfer of money from Suga Pty Ltd, a company of which Mill was a director, to other entities that he owned or controlled.  The evidence of complex arrangements, both personal and business, gave rise to a real issue as to whether Mill honestly believed he was legally entitled to transfer the money; by way of payment of fees due to him or by way of reimbursement of expenses incurred by him.
221. It was held by Keane JA^[234] that the appellant was entitled to have the jury instructed that he should be acquitted, unless they were satisfied beyond reasonable doubt that he did not honestly believe that he was entitled to apply the moneys to his own use (by way of payment of fees due to him or by way of reimbursement of expenses incurred by him for Suga Pty Ltd).  In other words, the jury should have been directed that if the appellant honestly believed he was entitled to apply the moneys to his own use then, however unreasonable that belief, the defendant should be found not guilty.^[235]  In so finding, Keane JA applied the dicta of Callaway JA in R v Lawrence,^[236] that directions as to the element of dishonesty, in terms of activity which was dishonest by the standards of ordinary people, was incapable of explaining to the jury the proposition that a person cannot fraudulently misappropriate property that he believes to be his own.^[237]  The directions given by the trial judge were therefore inadequate.  They did not clearly raise for the jury’s consideration the proposition that the appellant was entitled to be found not guilty if the prosecution failed to establish that the appellant did not honestly believe he was entitled to apply the moneys in question to his own use.^[238]
222. The significance therefore of Mill, which the appellant’s submissions overlooked, is that it illustrates how the language of the second limb of Ghosh is inadequate for the purposes of properly directing the jury as to the exculpatory effect of s 22(2) in respect of a count of fraud under s 408C(1)(a)(i), where a claim of right is raised on the evidence.

The decision in Dale

223. Counsel for the appellant sought to contrast the decision in Mill with that made in Dale, which was considered by the trial judge as to the application of s 22(2).  In arguing that it was wrongly decided, it was contended that Dale^[239] appeared to stand for the proposition that, in relation to a charge of fraud, a direction under s 22(2) is not required because there is no scope for the provision where the prosecution is endeavouring to prove an offence of fraud under s 408C, which necessarily involves proof of dishonesty.
224. Dale concerned a count under s 408C(1)(a)(ii) of the Code of dishonest application to the use of another of property in his possession subject to a condition and counts under s 408C(1)(d) of the Code of dishonest gaining of a benefit.  The charges concerned investments made in “the Water at Wooyung project”.  The Crown alleged that the appellant dishonestly persuaded people to invest in the project and dishonestly dealt with their money.  The Crown case relied upon false assertions by the appellant that he “owned” the land in question free of encumbrance and representations by him that investors’ money was to be applied to the project.^[240]  The Crown case maintained that investors’ moneys were not applied to the project and that they were dishonestly used by the appellant for private purposes or to repay other investors who wished to withdraw from the project.  The Crown case also referred to false statements made to investors, after they had invested, including that the invested moneys were sitting in an account unspent, whereas, in fact, significant portions of them had been used for private purposes and for repaying other investors who had wished to withdraw.^[241]
225. Gotterson JA stated:^[242]

“It is not readily apparent how the defence case as outlined in the appellant’s written submissions would have availed for any of the s 408C(1)(d) counts.  They concerned the dishonest gaining of a benefit for Water at Wooyung Pty Ltd to which the respective cheques were payable.  That company did not gain the benefit of the proceeds of the cheques by the appellant ‘moving around’ funds within the corporate group.  Perhaps that is why this ground in its unamended form related only to count 1 which concerned a cheque payable to Water at Wooyung Pty Ltd which the appellant endorsed for payment to Antrim Corporation Pty Ltd.”

226. His Honour continued:^[243]

“The appellant’s submission that a direction reflecting s 22(2) ought to have been given faces a substantial logical hurdle.  The Crown case required it to prove beyond reasonable doubt that the appellant was dishonest.  If that was proved, then there was no scope for the operation of s 22(2).  The jury could not have found that the appellant acted dishonestly yet exercised an honest claim of right in respect of any of the counts.  On the other hand, if dishonesty was not proved, the jury would have no need to consider whether an honest claim of right was exercised.  Given those circumstances, a direction concerning honest claim of right was unnecessary.”

227. His Honour concluded that:^[244]

“Given the basis upon which the defence was conducted, there was no material difference between proof beyond reasonable doubt that the appellant was dishonest and disproof to that standard that he was exercising an honest claim of right without intention to defraud.”

228. I do not accept that Dale was decided per incuriam.  In both Mill and Dale, a s 22(2) direction had not been sought at trial.  However, it is important to bear in mind that, as with Mill, Dale was decided prior to this Court’s decision in Dillon, so at a time when the elements of the offence of fraud required proof of “dishonesty” by reference to the Ghosh test including that the accused believed he was acting dishonestly according to ordinary standards.  Accordingly, the submission that a 22(2) direction was required, as Gotterson JA noted, faced “a substantial logical hurdle” given what “the Crown case required it to prove” and the “basis on which the defence was conducted”.^[245]  Gotterson JA’s statement as to the lack of scope for the operation of s 22(2) should be understood in that context.  While it is true that Mill was not considered in Dale, there was no cause to do so.  Nor was there any need to consider the statements in Walden to which the appellant referred.

The mental element of intent to defraud for forgery in s 488 of the Code

229. As to what Morrison JA has written at [76]-[81], I agree that the term “to defraud” for the purposes of the forgery offence in s 488 equates with “dishonestly” as that term is used in s 408C.  For the purposes of fraud, the standard by which the accused’s conduct is assessed as dishonest is that of the ordinary honest person and whether the accused has the requisite mental element is determined by those standards not any subjective belief concerning those standards.
230. By contrast, the mental element of an “intent to defraud” required under s 488 is concerned with the accused’s actual intent to induce another to act to their prejudice by means of the act of forgery in issue.  To defraud for the purpose of s 488, requires that the accused did the act in issue dishonestly in that he or she had the subjective intention to induce another to act to their prejudice in respect to an entitlement in or with respect to property.  Such a subjective intention necessarily connotes an absence of belief as to a legal entitlement in or with respect to the property.

Intent to defraud needed for forgery and a claim of right under s 22(2) of the Code

231. Accordingly, in the case of forgery, it is, as Templeman J observed in Roberts,^[246] difficult, if not impossible for the defence of honest claim of right to arise, given that a subjective intention to defraud another must be proved as an element of the offence.  A person accused of forging, who lacked an intention to defraud (that is, an actual intent to induce another to act to thereby that person’s prejudice) could not be guilty of the offence of forgery, such that it would be otiose to raise an honest claim of right to the property.^[247]  However, as his Honour stated:^[248]

“… if the evidence disclosed that the accused might have had an honest belief in his or her entitlement to the relevant property, it would be necessary for the jury to consider whether the prosecution had satisfied it beyond reasonable doubt that the accused had any intention to defraud.”

232. In Roberts, the appellant’s case was that, in signing Mr Roberts’ name on his cheques and in altering them, she acted under an honest and reasonable, but mistaken, belief that she had his authority to do so.^[249]  Templeman J observed that, although the jury were directed as to the need for proof of an intention to defraud, the trial judge did so by reference only to the issue of authority and consent and did not refer to the appellant’s evidence that she had used the cheques to pay for household and other expenses which she believed she needed to meet in order to maintain the standard of living Mr Roberts required.^[250]  Templeman J considered that this was a significant omission.
233. Firstly, while the appellant did not assert an entitlement to the money, there was evidence from which the jury might have concluded that the appellant honestly believed she was entitled to use her husband’s money to pay for household expenses and other expenses which she believed it necessary to incur in order to maintain his required standard of living.^[251]  The issue of whether the appellant had an honest belief as to an entitlement to use the money in that way went to the absence of an intent to defraud.^[252]
234. Secondly, even if the appellant was found not to have an honestly held a belief as to her use of the money, the evidence before the Court raised as an issue whether Mr Roberts was in fact defrauded.  That issue concerned whether the appellant’s conduct did or did not result in Mr Roberts being prejudiced in some way (because the money was used for expenses he would have had to meet).^[253]  His Honour cited Welham,^[254] where it was explained that defrauding involves doing something to someone, and although it is almost invariably associated with the obtaining of an advantage for the person who commits the fraud, it is the effect on the person who is the object of the fraud that ultimately determines its meaning.
235. Accordingly, Templeman J held^[255] that the jury should have been directed that they could not find an intention to defraud unless satisfied that the appellant did not honestly believe she was entitled to use the money as she did or if Mr Roberts was not defrauded in fact.  It was in those circumstances that Templeman J concluded^[256] that, although it would not have been appropriate for the trial judge to direct the jury in relation to s 22 of the Code, a direction ought to have been given in relation to an honest claim of right in the sense set out above.
236. McLure J, agreeing with Templeman J, observed^[257] that an accused may have an honest belief as to property even if dishonest means were used to access the property and concurred with Templeman J “that the jury should have been directed that it could not convict the appellant unless satisfied beyond reasonable doubt that she did not have an honest claim to, or with respect to, the moneys the subject of the relevant cheques”.
237. Roberts does not advance the appellant’s grounds of appeal in the manner expanded upon in oral submissions.  The present case is not one where there could be any question that, if the bank was induced to extend the line of credit by the use of the forged documents, that the appellant’s gain was not reflected in a detriment to the bank.  Further, whether the appellant’s claim that he himself honestly believed he was entitled to do what he did (sign his wife’s signature on the documents and to present them to the bank to obtain the line of credit, having done so before), such that there was an absence of intention to defraud, was sufficiently addressed in the directions given by the trial judge which specifically dealt with the opposing cases as explained below.

Ground 1 – whether s 22(2) should have been left to the jury

238. Irrespective of whether a ruling was or was not made as to s 22(2), there was no error in not leaving that provision for the jury’s consideration in relation to the offences of fraud or forgery.
239. For the forgery counts, the property, with respect to which the acts were said to be done in the exercise of an honest claim of right, were “the valuable securities and the property the subject of the valuable security” and “the mortgage and the property the subject of the mortgage”.^[258]  For the fraud offences, the property was identified to be the pecuniary benefit (the extension of a line of credit by the bank).
240. As to the forgery counts of which the appellant was convicted,^[259] the prosecution was required to satisfy the jury beyond reasonable doubt that the appellant had a subjective intention to induce the bank to act to its detriment by making the false documents constituting the mortgage and guarantee in his wife’s name.  Given what was required to be proved for the forgery counts, there could be no requirement to direct the jury that they needed to be satisfied beyond reasonable doubt that the prosecution had disproved an honest claim of right.
241. In respect of the assertion by the appellant to be honestly entitled to deal with property at Cronin Island, senior counsel sensibly did not advocate that the honest claim could be put any higher than that, although the property was registered in his wife’s name, the appellant had paid for that property and described it as his.  It is understandable that no direction was sought as to so untenable a claim of an honest belief as to a legal entitlement to deal with the property.
242. The directions given by the trial judge concerning what was required to be proved for an intent to defraud to which reference has already been made, combined with the following further directions were more than sufficient to focus the jury’s attention on the defence case in relation to the element of the appellant’s subjective intention to defraud, which was the true issue for the jury’s consideration:^[260]

“I will go now to the counsel’s arguments… So Defence counsel spoke to you and said you would be satisfied his ex-wife did authorise him to sign her signature.  There are good reasons to think so.  He spoke about the exhibit in which he wrote her signature but Matthew Perrin underneath.  It’s a matter for you, if you think that was a mistake, or whether you think that does indicate that he was letting the bank know that he was signing her signature.

His Defence counsel said that is consistent with his belief that he was authorised, expressly or impliedly, to sign her signature, and that the bank would be accepting of that, and that he was entitled to do what he did.  And you will remember that he gave evidence, ‘I’ve done it before’.  It is up to you.  Is that because he honestly believed that the bank would accept those signatures, or because he got away with it before?  But you need to think about it, because that is state of mind.

…You will remember that was the conversation in the driveway.  He talked about the lunch with the bank officials, or officers, and he said thanking them for help with the loans, if that happened, was inconsistent with her not authorising him, and inconsistent with an intention to defraud.”  (emphasis added)

243. The trial judge additionally gave the following redirection:^[261]

“… I will just remind you about intent to defraud, which is relevant to the charges of forgery… 

If, therefore, there is an intention on the part of the accused to deprive another person of a right – not of a thing, of a right – or to cause him or her – this is the bank – to act in a way to his or her or the bank’s detriment or prejudice – or contrary to what would otherwise be the bank’s duty, an intent to defraud is established notwithstanding there is no intention to cause pecuniary or economic loss.  It is not necessary to prove an intent to defraud any particular person, but the Crown case here is it’s to defraud the bank.

So to defraud is to deprive by deceit, and it’s a deceit to induce someone to act other than to change their course of direction.  So here the Crown case is: a false pretence was made to the bank by the forged signatures, and that was to get the bank to hand over the money, and the bank would not have done that if they had known the signatures were false.

The other questions you have relating to your inability to reach a concluded position in respect of the express or implied authority from Nicole Perrin: they are matters of fact.  That is for you.  You need to resolve that.  Intent to defraud means intending to get someone to act in a way they wouldn’t have acted if it had not been for the false pretence.”

244. These directions were relevant in identifying the subjective nature of an intention to defraud which necessarily negated a claim of right under s 22(2).
245. As to the fraud charges, it was necessary for the trial judge to identify the facts from which dishonesty was to be inferred, by specifying the particular knowledge, belief or intent alleged to render the conduct in obtaining a pecuniary benefit dishonest according to ordinary notions and by contrasting the prosecution case with what the appellant claimed was his genuine belief in his entitlement to act as he did.^[262]  The further directions and redirections did so at some length.
246. As was the case in Macleod, the function of the claim of right put forward in relation to the fraud offences was to seek to engender a reasonable doubt with respect to the overall persuasive burden of proving that the pecuniary benefit was obtained fraudulently.  That is, as to whether the appellant intentionally used dishonest means to induce the bank to act to its detriment in providing a line of credit to which he knew he had no entitlement.  In those circumstances, there was no requirement to direct the jury as to a subjective claim of right pursuant to s 22(2).

Ground 2 – The absence of a s 22(2) direction

247. Given what I have said in relation to ground 1, it is clear that no direction as to s 22(2) of the Code was required.  The directions and redirections given adequately dealt with the real issues in the trial and with the law the jury needed to understand to resolve those issues.

The application for leave to appeal against sentence

248. The appellant was sentenced to concurrent terms of imprisonment as follows:

1. for the aggravated fraud counts (6, 10 and 12) – eight years imprisonment;
2. for the forgery counts relating to the mortgages (3 and 9) – seven years imprisonment; and
3. for the forgery counts relating to the guarantees (2, 5, 7 and 11) – six years imprisonment.

249. The appellant contended that the sentence was manifestly excessive and obtained leave to add as a ground that the sentencing judge erred in failing to take into account the appellant’s cooperation in the administration of justice.  The application for leave to appeal against sentence was directed only to the failure to impose a parole eligibility date earlier than the statutory halfway point.
250. In imposing sentence, the sentencing judge gave consideration to circumstances in which the offending arose; the appellant had been a successful businessman but had resorted to criminal conduct when he encountered financial difficulties.  Her Honour noted the considerable loss sustained by the bank that was then in the vicinity of $9m.  Her Honour also commented that, while the appellant initially expressed of remorse to his family (in January 2009), that remorse dissipated over time.  Her Honour remarked that it was “disturbing” that the appellant persisted in contending that his former wife knew and approved of the loans, and that the submissions at sentence revealed that the appellant blamed not only his former wife, but the bank and his former business partners.  Her Honour concluded that the appellant still had “no self-realisation” or “remorse”.
251. Her Honour noted that the appellant had made admissions to the forgeries, but that he did so in the face of considerable evidence against him.  As the sentencing judge noted, no allowance could be made for a plea of guilty.  Her Honour took into account that the publicity the case had attracted, which contributed to the public shaming of the appellant.  Her Honour noted, in relation to the delay between his first confession to family in 2009 and his being charged in 2012, that it was attributable to the investigation and requests by the appellant to adjourn the trial.  However, her Honour also noted that no offences had been committed in the intervening period.  Her Honour took into account that the appellant had been a significant contributor to charities and the community and references were provided on his behalf.
252. At sentence, the submission was made on behalf of the appellant, as a factor in mitigation, that his “significant admissions” shortened the trial “considerably”.^[263]  The prosecutor contended that the length of the trial was “somewhat shorter” due to the appellant’s cooperation in making “extensive admissions about the signatures and fingerprints”, which obviated the need to call evidence from five witnesses.^[264]  The appellant’s counsel argued that the appropriate sentence was seven years with moderation of the period in custody to reflect, inter alia, the “admissions made on trial”.^[265]
253. The appellant’s complaint before this Court was that no allowance was made for his cooperation which was “substantial” in the sentence imposed.  It was submitted, relying on R v Wiggins,^[266] that it was a factor that should have been taken into account and the sentencing judge erred in not doing so.  On that basis, it was submitted that this Court should exercise the sentencing discretion afresh.  It was submitted the sentences imposed should be varied in terms of the custodial component of the sentences by ordering that the date the appellant is eligible for parole be 20 June 2020,^[267] that is after he has served three and a half years imprisonment rather than four years of the eight year term.
254. For the reasons given by Morrison JA, I agree that the contention that the sentencing judge had no regard to the appellant’s cooperation in imposing the head sentence is not made out.  Her Honour expressly referred to the fact that the appellant “made admissions” but, as mentioned, observed that that had occurred in the face of “considerable evidence”.  Nor do I consider that error is demonstrated in the approach taken in not imposing a parole eligibility earlier than the half way point.
255. As Morrison JA has stated at [170], once it is rejected that no allowance was made for the appellant’s admissions, there are difficulties in a contention that the sentence imposed was manifestly excessive because insufficient allowance was made for that factor.  In my view, that applies to the sentences as a whole, comprising the head sentences and the refusal to impose a parole edibility date before the usual halfway point.
256. I am unable to join in the view that the position is otherwise when one analyses the outcome with respect to the parole eligibility date.  In pronouncing, at the conclusion of the sentencing remarks, the terms of imprisonment imposed, her Honour stated that the terms were imposed “concurrently” and that the appellant would be “eligible to be considered for parole after the statutory period of half the sentence”, before making a declaration as to time served.  It is not uncommon for sentencing judges to make an order as to the parole eligibility date (although not strictly necessary where a date inconsistent with the statutorily imposed period is not being made) to explain to the prisoner the parole eligibility position which follows as a matter of statute where no earlier or later date is ordered and to put the matter beyond doubt.
257. In my view, it is not open to interpret the experienced sentencing judge’s order as to parole eligibility as indicative of an error in the exercise of the sentencing discretion because of a failure to properly take into account the factor of the admissions made.  Her Honour was merely articulating the position that followed in terms of parole eligibility in the absence of an order for earlier parole.  Furthermore, it was entirely within the sentencing discretion not to order an earlier parole eligibility date and the failure to do so did not demonstrate error, or that the sentences imposed were manifestly excessive so as to permit this Court to interfere with the sentences imposed.

Orders

258. I would dismiss the appeal against conviction and refuse the application for leave to appeal against sentence.
259. ATKINSON J:  I agree with the orders proposed by Morrison JA and with his Honour’s reasons.