R v Robertson[2023] QCA 47

SUPREME COURT OF QUEENSLAND

1. [1]
   FRASER and BOND JJA:  On 25 August 2021, the appellant was convicted after a 3-day jury trial in the District Court of a single count of fraud as an employee to the value of $30,000 or more, contrary to s 408C(1)(e), (2)(b) and (2)(d) of the Criminal Code (Qld).  He was sentenced to 2 years’ imprisonment, wholly suspended for an operational period of 2 years.
2. [2]
   The particulars of the charge were as follows:

“At all material times [the appellant] was an employee of the Hope Vale Foundation Ltd [(the Foundation)].

The [appellant] caused a detriment to [the Foundation] by causing bank credits to be transferred from [the Foundation’s] bank account/s thereby, depriving them of the benefit of the funds. The bank credits were transferred to another person namely Gregory Raymond McLean or other person/s:

• 21 December 2012 to the sum of $30,000; and / or
• 21 December 2012 to the sum of $6,000; and / or
• 24 December 2012 to the sum of $12,500; and / or
• 20 February 2013 to the sum of $9,900.

The [appellant] caused the bank credits to be transferred in that he either did the act (s 7(1)(a) of the Criminal Code), and / or aided and encouraged for the act to be done (s 7(1)(c) of the Criminal Code), and / or procured the act to be done.

The transfer of bank credits was dishonest in that:

• The [appellant] knew Gregory Raymond McLean did not provide any professional services to [the Foundation]; and / or
• The [appellant] knew Gregory Raymond McLean was not entitled to the money; and / or
• The [appellant] knew the transfer of the bank credits was not for a legitimate purpose of [the Foundation].”

3. [3]
   The factual dispute at trial concerned whether the appellant’s conduct was properly to be regarded as dishonest.
4. [4]
   By notice of appeal dated 14 September 2021, the appellant appealed against his conviction on the following grounds:

3. “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

3. 2.
   A miscarriage of justice occurred because the jury was not directed that a verdict of guilty depended upon satisfaction beyond reasonable doubt that the appellant did not honestly believe he was entitled to deal in the funds by transfer where there was approval or direction by the Director of [the Foundation], June Pearson.”

5. [5]
   For reasons which follow, the appeal must be allowed; the conviction quashed; and a retrial ordered.

The relevant evidence at trial

6. [6]
   Hope Vale is an aboriginal community in Far North Queensland.  The local authority for the community is the Hope Vale Aboriginal Shire Council (the Council).

The Foundation

7. [7]
   The Foundation is a “not for profit”^[1] company limited by guarantee incorporated under the Corporations Act 2001 (Cth).  The date of commencement of its registration under the Corporations Act was 13 February 2009.^[2]The Constitution of the Foundation reveals that it was established for the objects of:^[3]

“Charitable and benevolent purposes for the relief of poverty, sickness, suffering, distress, misfortune, disability and helplessness consistent with the spirit and intendment of the Statute of Charitable Uses of 1601, amongst and in the Community of Hope Vale”.

8. [8]
   Schedule (A) to the Constitution expanded on that general statement of charitable purposes by:

   1. (a)
      an inclusive list of purposes which should be regarded as charitable purposes, e.g., the relief of poverty; the advancement of education; the advancement of religion including Aboriginal lore and custom;^[4]
   2. (b)
      an identification of direct programs which could be regarded as included in such purposes, e.g., family support programs; substance abuse diversion; sexual assault and domestic violence programs;^[5]
   3. (c)
      an identification of activities which would be regarded as consistent with beneficial purposes, e.g., addressing social and economic disadvantage in the community; providing accommodation and housing services;^[6]
   4. (d)
      empowering the Foundation to act as a corporate trustee of charitable trusts;^[7] and
   5. (e)
      empowering the Foundation to do anything a natural person could do, in support of the objects of the Foundation.^[8]
9. [9]
   Notwithstanding the last-mentioned empowering provision, cl 5 of the Constitution set out a very broad range of specific powers which the Foundation would have “for the purpose of carrying out the objects and not otherwise”.  Amongst other powers were the following powers:

   1. (a)
      “to make such grants to or in aid of or to make donations or give assistance to or to make contracts with such individuals, … as may be necessary or desirable”;^[9]
   2. (b)
      “to sell, improve, manage, develop, exchange, lease, dispose of, turn to account or otherwise deal with all or any part of the property and rights of [the Foundation]”;^[10] and
   3. (c)
      “to do all such other acts matters and things and to enter into and make such agreements as are incidental or conducive to the attainment of the objects and the exercise of the powers of the [Foundation].”^[11]
10. [10]
    The Constitution made provision for a board of directors (the Board) to manage the business and affairs of the Foundation.^[12]  The Constitution provided a mechanism for the appointment of the first Board and then for future election of Board members and office-bearers of the Foundation.^[13]  The Constitution also provided that the quorum necessary for Board decisions was three of the four directors who were also members of the Foundation, or such greater number as might be fixed by the Board.^[14]
11. [11]
    In the event of casual vacancies occurring, the Constitution provided that the Board “shall appoint another member with the same qualifications to fill the vacancy for the balance of the term of office which the former office-bearer or other director would otherwise have served.”^[15]  If the number of continuing directors was reduced below the number for a quorum, the continuing directors were specifically empowered to act for the purpose of increasing the number of directors to the number of the quorum.^[16]
12. [12]
    The Constitution prohibited directors from voting in respect of certain matters, including issues on which the director had a conflict of interest.^[17]  The same provision prohibited a director from voting for the Foundation to make a personal loan to private individuals or members.
13. [13]
    The Board was empowered to appoint (and to remove) an individual as General Manager of the Foundation, to fulfil the role of implementing the Foundation’s policies and decisions.^[18]  The General Manager was empowered to manage the Foundation’s affairs on a day-to-day basis.^[19]
14. [14]
    In pursuance of its objects, the Foundation was responsible for providing a variety of projects within the community.  As at 2012 its sole initiative was “the banana farm”;^[20] a parcel of land purchased by the Council with the intention of providing local jobs.^[21]

The roles of relevant people in relation to the Foundation

15. [15]
    The members of the Board of the Foundation relevantly comprised:^[22]

    1. (a)
       Mr Greg McLean, who was also the Mayor of the Council and Chair of the Board;
    2. (b)
       Ms June Pearson, who was the Deputy Mayor of the Council;
    3. (c)
       Mr Neville Bowen, who was also a member of Council, and his alternate, Mr Graham Bowen;
    4. (d)
       Mr Roland McLean;
    5. (e)
       Ms Roxanne Hart;
    6. (f)
       Mr Bernard Hart; and
    7. (g)
       Mr John Bottoms.
16. [16]
    Mr Greg McLean was the person referred to in the particulars of the charge against the appellant.  It is convenient to refer to him as Mayor McLean.
17. [17]
    Ms Pearson gave evidence that the Board did not meet regularly as the Foundation was in its infancy and it was not until early 2013 that regular meetings were required.^[23]
18. [18]
    Mayor McLean resigned from the Board on 2 October 2012 and Mr Bottoms resigned on 19 November 2012.^[24]  There was no evidence that any attempt was made to fill the casual vacancies thereby created.  Ms Pearson acted as Chair of the Board in Mayor McLean’s absence during December 2012 to February 2013.^[25]  It was not until 19 February 2013 that the Annual General Meeting of the Foundation was held and Board vacancies were filled.^[26]  A Board meeting was not held until 11 March 2013.
19. [19]
    The appellant was employed by the Council between March 2005 and October 2012.^[27]  For much of that period he was the Chief Executive Officer of the Council.  At the same time he was also the Secretary of the Foundation and was heavily involved in its creation and establishment.
20. [20]
    In December 2012 the appellant was appointed as the Business Development Manager of the Foundation, by the then General Manager of the Foundation, Mr Jakowski.^[28]  Shortly thereafter Mr Jakowski resigned.^[29]After his departure the appellant and Ms Dawn Lake, Project and Human Resource Manager of the Foundation, were the only operational staff within the Cairns office of the Foundation.^[30]  At that time the appellant was the person who was predominantly responsible for the payment of bills or the transfer of funds on behalf of the Foundation.^[31]
21. [21]
    In February 2013 the Board resolved to terminate the employment of Ms Lake and the appellant.  The appellant’s employment was terminated via letter on 5 April 2013, citing concerns regarding various operational matters.^[32]

The impugned bank transfers

22. [22]
    It will be recalled that the case against the appellant was that he caused a detriment to the Foundation by causing certain transfers from the Foundation’s bank accounts to Mayor McLean, thereby depriving the Foundation of the benefit of the funds.
23. [23]
    Formal admissions made by the appellant pursuant to s 644 of the Criminal Code established that:

    1. (a)
       On 21 December 2012, $30,000 was transferred from the Foundation’s bank account into Mayor McLean’s Indigenous Business of Australia (IBA) loan repayment account.^[33]
    2. (b)
       On 21 December 2012, $6,000 was transferred from the Foundation’s bank account to Mayor McLean’s bank account.^[34]
    3. (c)
       On 24 December 2012, $12,500 was transferred from the Foundation’s bank account into Mayor McLean’s bank account.^[35]
    4. (d)
       On 20 February 2013, $9,900 was transferred from the Foundation’s bank account into Mayor McLean’s bank account.^[36]
24. [24]
    The evidence established that the appellant had access to the Foundation’s accounts at the time the impugned transfers were made.  While it was not admitted by the appellant directly that he had effected the four transfers, this was not in dispute by the conclusion of the trial.

The circumstances in which the impugned transfers were made

25. [25]
    The appellant neither gave nor called evidence at the trial.  However, he had prepared a written statement addressing the circumstances in which the impugned transfers were made and his solicitor forwarded the statement to an investigating officer, Detective Sergeant Worth.^[37]  The Crown tendered the statement through Detective Sergeant Worth.^[38]
26. [26]
    The appellant’s statement recorded details of his role within Council and his familiarity with Mayor McLean and Ms Pearson.  The appellant stated that the Foundation was established at his initiative for the purpose of ultimately managing the banana farm project.^[39]  The statement revealed that the appellant had an opinion as to what was required for a quorum of the Board of the Foundation, but not whether that was because he was familiar with the quorum requirements in the Foundation’s Constitution.^[40]  No other evidence demonstrated that he was familiar with the Foundation’s Constitution.
27. [27]
    The appellant’s statement dealt with the circumstances of the termination of his employment with the Council.  He was assaulted by an individual who was related to Mayor McLean and was the brother-in-law of Ms Pearson.^[41]  He suffered stress from that incident and from work-related conflict.^[42]  Ultimately a settlement was struck between he and the Council where his employment was terminated and his contract (which had some years still to run) paid out in full.^[43]  His termination as a Council employee was effective from 26 October 2012.^[44]
28. [28]
    The appellant believed that Mayor McLean had personal financial difficulties; that he owed monies to IBA; and that IBA was in frequent contact with Council trying to contact Mayor McLean to obtain repayment of monies owed to IBA.  Ultimately the appellant came to believe that the Mayor had struck a deal with the IBA to resolve his debt by paying IBA $45,000.^[45]  The appellant’s statement canvassed a number of interactions between Mayor McLean and the appellant concerning payments which Mayor McLean sought to have the appellant facilitate to be made to him, first by the Council and then by the Foundation.
29. [29]
    First, in August 2012 Mayor McLean advised the appellant (then the Council CEO) that he intended to make a compensation claim to the Council in relation to his relinquishment, apparently to the Council’s benefit, of a mining lease.^[46]  The appellant advised the Council to obtain legal advice.^[47]  Council ultimately resolved to make a payment of $120,000 to Mayor McLean, subject to a satisfactory auditor’s opinion being received.^[48]The appellant stated that Mayor McLean pressured him to approve the payment, but that the appellant refused until the auditor’s opinion was received.^[49]  When the opinion was received, the appellant thought it was ambiguous and continued to resist pressure from Mayor McLean to make the payment, determining that a second opinion should be sought as to the legality of making the payment.^[50]  The appellant said that Mayor McLean continued to place pressure on him to approve the payment, including by making threats and being verbally abusive.^[51]  The appellant stated that the constant bombardment from Mayor McLean made him a nervous wreck.^[52]  It is not apparent from the statement whether there was a resolution of the question of the $120,000 payment from the Council to Mayor McLean before the appellant left his employment with Council on 26 October 2012.
30. [30]
    Second, in August 2012 the Mayor approached the appellant to enquire about obtaining an advance of 2 years of his mayoral salary.  The appellant sought and obtained advice from the Department of Local Government as a result of which Mayor McLean sought and obtained an advance for the amount of $30,000.^[53]  The statement suggested that the advance was made, but that Mayor McLean did not pay it to IBA.^[54]
31. [31]
    Third, the appellant stated that in September 2012 Mayor McLean was more agitated and desperate for money and the appellant approached the General Manager of the Foundation to see if the Foundation might be prepared to provide some funds to Mayor McLean by purchasing a car rental business from him for $15,000.  The statement suggests that such an agreement was struck and the business sold.^[55]  The statement suggested that the payment was made, but that Mayor McLean did not pay it to IBA.^[56]
32. [32]
    Fourth, the appellant stated that in early December 2012 that Mayor McLean rung him a number of times to convey that Council would provide no further support to the Foundation, or to the banana farm.  The appellant stated that he found that to be very disappointing and alarming, given the investment which had been made to date.  At that time the appellant had been making representations to the Council on behalf of the Foundation for $233,000 support in relation to the purchase of certain irrigation equipment.^[57]  Later in December 2012, Mayor McLean approached the appellant asking for money (implicitly from the Foundation) suggesting that he would get Council to provide $500,000 to the Foundation, not just the $233,000 which had been requested.^[58]
33. [33]
    It was this request for monies from the Foundation which provided the specific context for the impugned transfers identified at [23] above.  When approached by the Mayor, the appellant said that the Foundation did not have a lot of cash.  He then stated that he had discussions with Ms Pearson about the Foundation’s position.  His statement detailed the following exchange:^[59]

“I recall June Pearson saying words to the effect "Lee, Greg is in financial trouble what can the [Foundation] do to help him" I used words to the effect “June the [Foundation] does not have buckets of money the only operational monies we have were provided by Council $300,000 I would have to use this money, all other funds are Grant specific for training and equipment" June Pearson continued on "he is desperate"' I stated that "Council will need to make more funds available we just don't have the resources”  I then received calls from Mayor McLean promising the monies from Council as mentioned previously.”

34. [34]
    The statement contained the following material shedding light on the appellant’s state of mind at the time of the first three payments (emphasis added):^[60]

“… At approximately 7.30am [on 19 December 2012] Mayor McLean rang me demanding his money “Lee pay the money now”, …. I got out of bed and rang Dawn Lake a little later that morning and after a quick conversation with Dawn Lake and said words to the effect “what should we do? If we don’t pay we get screwed and if we do pay the community will be in uproar when they find out”. Dawn Lake echoed these sentiments and said words to the effect “We need time to get all the funding in place, if council pull the pin we are screwed anyway”. Dawn Lake and I had not thought this through and were being very reactionary and not thinking clearly about the possible consequences. Dawn Lake and I both considered community reaction the biggest problem at that point in time not that we were participating in any illegal activity. Accordingly, we agreed to pay believing this was necessary in the light of the threat of Council progressively withdrawing support and that the project could fail if we did not have Mayor McLean’s support. We paid Mayor McLean the following amounts. I paid the sum of $30,000.00 on 20 December 2012 direct to IBA in settlement of Mayor McLean’s outstanding debt to IBA. A further $18,500 was paid to him on the 21^st December 2012 by direct EFT transfer to a nominated account of to Mayor McLean. June Pearson rang me later to make sure the payment had been made. June Pearson and I discussed Mayor McLean’s financial position on a number of occasions and in particular his debt with IBA and the concern that it might cause problems for [the Foundation], as a result we managed to have Mayor McLean to agree to resign as a director. Mayor McLean with the assistance of Ms Shannon Gibbs had previously negotiated a settlement of $45,000 with IBA and I assumed plus GST accordingly this is why Mayor McLean received two payments on the 20^th and 21^st because he expected the balance for his own purposes. June Pearson would use words to the effect “what did you sort out and when are you paying him” I also told June the following “June I told Greg I am not happy just giving him the money I want it paid direct to IBA” June Pearson and Mayor McLean discussed this and Mayor McLean rang back confirming this was okay and that he had negotiated with a full and final payment for $30,000 with IBA and provided me their bank details. At this stage I just wanted Greg off my back he was running me into the ground.”

35. [35]
    The final transfer occurred on 20 February 2013.  The appellant’s statement contained the following material shedding light on his state of mind at the time of that transfer:^[61]

“In February 2013, Dawn Lake and I had been talking about invoicing Council for the work carried out on behalf of Council for homeownership for this was one of a number of things I intended to discuss at the meeting scheduled with Ross Higgins for 3pm Monday 11^th March 2013. Dawn and I had been discussing for some time the need to recover these costs. However, when I told Mayor McClean in February that we wanted to invoice Council, Mayor McLean jumped on this. June Pearson rang me a short while later confirming words to the effect “We will approve payment immediately just get an invoice into Ross Higgins”. I then had discussions with Dawn Lake and further calls from June about making this payment to mayor McLean, I said to Dawn Lake “we need that money for the [Foundation], Mayor McLean does not care for the community only himself” I refer to a text message I received from Mayor McLean at 3:59pm on the 18/02/2013 “June just rang she spoke to Ross and will speak to Shannon that the invoice has be paid as soon as the details are sent to Ross”. I can also confirm I had an email from Ross Higgins on the 19^th of February 2013 confirming the Mayor and Deputy Mayor had given approval. We processed one last payment for the amount of $9,900.00 directly by EFT into the account of Mayor McLean hoping this would give us breathing space to finalise the Tender and contract for the packing shed and finalise funding agreements with state and Commonwealth governments totalling approximately $3.6million, this included operational money that would have enabled the [Foundation] to put all major infrastructure in place purchase the necessary equipment and have approximately $500,000 for operational purposes.

After making the payment of $9,900 to Mayor McLean, Dawn Lake and I agreed this could not continue and subsequently refused to make any further payments. We knew there would be consequences and we expected we would more than likely lose our jobs. In late February 2013 the Mayor McLean was again looking for money he rang me at [the Foundation] and demanded the balance of the $22,000 received from Council, I used words to the effect “Greg the [Foundation] needs these funds” Mayor McLean responded saying “pay the fucking money what game are you playing”, and once again I received calls from June Pearson “he is very angry he wants his money”. Once again I refused saying words to the effect “[the Foundation] does not have the funds”, Mayor McLean then rang and said “I will get money to the [Foundation]”. I assumed he was referring to the $233,000 from the Commonwealth government.

It was at this stage Dawn Lake and I said this is out of control and decided that all further requests for payments should be declined.

…

Given the circumstances at the time although Dawn Lake and I discussed the payment without fully understanding the consequences, we knew it did not seem right. However, June Pearson whom is the Deputy Mayor and a Director had approved the payments and was aware of the details for each payment, June and Greg would discuss what Greg needed and then pressure me into making a payment”.

36. [36]
    The appellant also recorded details of an occasion in March 2013 after the last payment was made, but where a similar demand was made, similarly apparently authorised by at least one director of the Foundation, but in which he refused making the payment, by stating that Mayor McLean had no entitlement:^[62]

“On the 13th March 2013 I made a call to Mr Russell Gibson one of the new directors for the [Foundation] and informed him of all three payments made to Mayor Mclean from December until the last payment ln February we also discussed advising the other directors. Russell stated "Lee I thank you for your honesty we need to know these things" I thought this was a positive thing for the [Foundation] and that with new board members being properly informed we could deal with the problem posed by Mayor Mclean. I then received a call from Russell Gibson several hours later requesting that I make the payment using words to the effect "Lee can you make the payment to Mayor McLean" I responded by telling Russell that “the [Foundation] is not in a position to make any payments to Mayor McLean and that the [Foundation] comes first", Russell also used words to the effect "Lee can you pay Greg he is making threats.” I responded "Russell [the Foundation] needs to funds and Greg has no entitlement''.”

37. [37]
    Ms Lake was called by the prosecution.  She gave evidence that she transferred from employment with the Council to employment with the Foundation on 1 October 2012.  Her role was that of Project Manager and Human Relations Manager.  She noted that she reported to the Foundation General Manager, Mr Jakowski.^[63]When he resigned in December 2012, the appellant was the Business Development Manager.^[64]When there was a General Manager the General Manager was responsible for paying bills and making transfers out of the Foundation accounts but once he left, the appellant was primarily responsible for those tasks.^[65]
38. [38]
    Ms Lake acknowledged that she was aware of the four impugned payments at the time that they were made.^[66]  She knew that Mayor McLean had been ringing Mr Jakowski and later the appellant, demanding money to pay of his debts.  She knew that Ms Pearson had also rung the appellant asking him “to process payments or to assist [Mayor McLean] to make those payments”.  She witnessed Mayor McLean talking to the appellant about his debts and how much money he owed.^[67]
39. [39]
    She said that she and the appellant had discussed the question of making payments to Mayor McLean in the office, not wanting to make the payments.  Relevantly:^[68]

“Well, can you tell us about those discussions?---About not wanting to make them? Certainly. Lots of discussions around not wanting to make them. And – and about feeling pressured with the – with the threats that were coming in from Greg. As – as the time progressed, Greg became, I guess, more threatening about it.

Right?---As he became stressed. And so, yes. There – we had discussions about what was the implications of if the payments were made, and what would be the implications of the payment not being made.

…

… you touched on that there was – there were discussions about implications or – that’s not your word, but, I guess, what would happen if you did and what happened if you didn’t. What was the effect of those conversations that you had with Mr Robertson?---Basically, if the payment wasn’t made – Greg was mayor at the time. He would have been made bankrupt, which mean he wouldn’t have been able to sit on council, which would have, highly likely, led to the foundation not functioning – not being able to move forward. And when I talk about foundation, the banana farm itself.”

40. [40]
    She acknowledged creating four recipient created invoices prepared after the payments to Mayor McLean had been made as follows:

    1. (a)
       Invoice dated 13 December 2012 from the trustee for Mayor McLean’s family trust to the Foundation for “Professional Fees - Mentoring of local indigenous workforce” in the GST inclusive amount of $30,000, evidencing payment had been made and there was no amount due.^[69]
    2. (b)
       Invoice dated 14 December 2012 from the trustee for Mayor McLean’s family trust to the Foundation for “Technical equipment and facility hire for workforce mentoring” in the GST inclusive amount of $6,000, evidencing payment had been made and there was no amount due.^[70]
    3. (c)
       Invoice dated 20 December 2012 from the trustee for Mayor McLean’s family trust to the Foundation for “Indigenous Business Economic development retreat to support economic development” in the GST inclusive amount of $12,500, evidencing payment had been made and there was no amount due.^[71]
    4. (d)
       Invoice dated 12 February 2013 from the trustee for Mayor McLean’s family trust to the Foundation for “Business development workshop, mentoring and facility hire for period February 2013” in the GST inclusive amount of $9,900, evidencing payment had been made and there was no amount due.^[72]
41. [41]
    She said she created the invoices in about February-March 2013.  She said that she had had a conversation with the appellant that the payments had been made and there was nothing to back them up.  The description and the amounts recorded in the invoices came from the appellant.  She said that Mayor McLean did not supply the services described in the invoices.^[73]
42. [42]
    She was cross-examined on the topic of demands for money made by Mayor McLean.  The two relevant passages of her evidence were:^[74]

“These demands for payment by Greg McLean, he made the demand for payment, and would Robertson say, “No, there’s no money”?---Yes. That did happen.

All right. And, then, would June Pearson come on the phone or ring up?---She would then ring. Yes.

And say, “Process the payment”?---Yes.

All right. And she was the chairperson of the board of the foundation; is that right?---By that point, yes. Because Greg had resigned.

…

All right. June Pearson had been on the council at Hope Vale for a very long time, hadn’t she?---Yes.

All right. She was a woman of considerable authority?---Yes.

Deputy mayor?---Yes.

All right. You had had dealings with her?---Through work, yes.

All right. And you told us that there were these occasions where she gave the direction to process the payment to McLean, Mayor McLean?---She gave the authority to process it.

Right. And you didn’t question her authority?---No.

No?---No. You don’t question June’s authority.”

43. [43]
    Ms Pearson gave evidence that she was not actively involved in discussing payments with the appellant.  Ms Pearson recalled querying about the non-payment of Mr McLean on only one occasion, but that it was a matter which wasn’t “of concern” to her and was only framed as a question.^[75] Ms  Pearson denied saying “Process the payment” or giving authorisation for the payments, as she lacked any such authority, and stated she only said “What’s happening” to the appellant in reference to Mayor McLean’s query.^[76]
44. [44]
    Mr Russell Gibson, the director of the Foundation appointed in early 2013, was called and questioned concerning the events which the appellant had related and which are recorded at [36] above.  He confirmed, partly by recollection and partly by agreeing, that details in an earlier statement of his would have been correct, that he received a phone call from Mayor McLean seeking payment of $6,000 for consultancy work.  Following this conversation Mr Gibson spoke with Ms Pearson and in consequence Mr Gibson directed the appellant to pay the monies said to be owed.^[77]

Consideration

45. [45]
    Section 408C deals with the offence for which the appellant was convicted, and relevantly provides:

3. “(1)
   A person who dishonestly–

3. …

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

3. …

3. commits the crime of fraud.

3. Maximum penalty—5 years imprisonment

3. (2)
   The offender is liable to imprisonment for 14 years if, for an offence against subsection (1)–

3. …

3. (b)
   the offender is an employee of the victim; or

3. …

3. (d)
   the property, or the yield to the offender from the dishonesty, or the detriment caused, is of a value of at least $30,000 but less than $100,000”.

46. [46]
    Putting to one side the aggravating features of s 408C(2)(b) and (d), there are three elements to the offence:

    1. (a)
       a person has suffered a pecuniary detriment;
    2. (b)
       the appellant must have done an act or made an omission which must be regarded as having “caused” that to occur; and
    3. (c)
       the appellant’s act or omission must have been done or made “dishonestly”.
47. [47]
    As mentioned, only the third element was in issue at the trial.  So far as that element of the offence is concerned, in R v Jayaweera [2022] QCA 103,^[78] the Court of Appeal followed Peters v The Queen (1998) 192 CLR 493 at [15]–[18] to observe (citations omitted):

“Yet the law is clear that in a case of this nature, the Crown must articulate clearly the relevant aspect of the accused’s knowledge, belief or intent which, on the Crown case, rendered the accused’s conduct dishonest and the trial judge must:

3. (a)
   identify for the jury the knowledge, belief or intent of the accused which was said to render the impugned conduct by the accused dishonest; and

3. (b)
   instruct the jury to decide whether the accused had that knowledge, belief or intent and, if so, to determine whether, on that account, the conduct was dishonest by the standards of ordinary honest people.”

48. [48]
    Thus, a determination that the impugned conduct was done “dishonestly” for the purposes of s 408C requires, first, determination that the accused had a particular inculpatory state of mind^[79] and, second, the evaluation of acts done or omitted with that particular state of mind as dishonest by the application of an objective standard.^[80]  The Crown carries the burden of proving beyond reasonable doubt the affirmative of each proposition.
49. [49]
    The Crown had particularised its case on dishonesty consistently with the law summarised in Jayaweera.  The alleged inculpatory state of mind had focussed on the appellant’s state of mind as to the legitimacy of Mayor McLean’s claim as against the Foundation, namely:^[81]

    1. (a)
       knowledge that Mayor McLean did not provide any professional services to the Foundation;
    2. (b)
       knowledge that Mayor McLean was not entitled to the money; and
    3. (c)
       knowledge that the transfer of the bank credits was not for a legitimate purpose of the Foundation.
50. [50]
    In other words, the gravamen of the Crown case was that the appellant knew of the lack of merits of Mayor McLean’s claim as against the Foundation and, on account of his having that knowledge, his causing Foundation funds to be transferred to the Foundation was dishonest by the standards of ordinary, honest people.  The appellant’s argument on appeal was, effectively, a confession and avoidance of that case on the facts.  His case was that there was evidence which, if accepted by the jury, suggested that that despite the appellant’s personal adverse view of the lack of merits of Mayor McLean’s claims as against the Foundation, he honestly thought that he was entitled to set aside his personal views and transfer Foundation monies to Mayor McLean because the acting Chair of the Board of the Foundation authorised him to do so.  It is convenient to refer to this as the evidence concerning the appellant’s exculpatory state of mind.
51. [51]
    The trial judge directed the jury on the element of dishonesty in a way which was also consistent with Jayaweera.^[82]  Her Honour summarised the evidence on which the appellant relied as suggesting that he held an exculpatory state of mind and left that evidence merely as evidence that the jury could take into account in determining whether it was satisfied beyond reasonable doubt on the element of dishonesty as alleged by the Crown.^[83]  Her Honour gave an appropriate direction as to the post-offence conduct concerning the preparation of false invoices.^[84]  However, her Honour did not direct the jury that they could not reach a conclusion of dishonesty unless they were persuaded beyond reasonable doubt that the appellant did not honestly believe that he was entitled to transfer Foundation monies to Mayor McLean because the acting Chair of the Board of the Foundation authorised him to do so.
52. [52]
    Both grounds of appeal complain about the adequacy of the directions given by the trial judge to the jury about how the jury should address the evidence concerning the appellant’s exculpatory state of mind.  They may be considered together.
53. [53]
    Chapter 5 of the Criminal Code, which is headed “Criminal responsibility” and which pursuant to s 36 applies with some exceptions to “all persons charged with any offence against the statute law of Queensland”, stipulates circumstances in which a person is “not criminally responsible” (i.e., liable to punishment as for an offence^[85]) for an act or omission that would otherwise constitute an offence.  Thus, s 22(2) relevantly provides that “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”. In other words, s 22(2) provides an excuse for what would otherwise be criminal conduct and specifies circumstances in which an accused will not be liable to punishment for that conduct.
54. [54]
    It is settled law that if there is some evidence capable of raising an excuse provided by the Criminal Code, the legal or persuasive burden is on the Crown to exclude beyond reasonable doubt the proposition that the accused was acting in circumstances giving rise to the excuse – that is, to exclude any reasonable possibility that the proposition is true.^[86]  As to the whether the excuse is fairly raised on the evidence such that it should be left to the jury, the question is whether, on the version of events most favourable to the accused that is suggested by the evidence, a jury acting reasonably might fail to be satisfied beyond reasonable doubt that the accused was not acting in circumstances giving rise to the excuse.^[87]  The appellant’s counsel had submitted to the trial judge – correctly – that there was evidence capable of raising the excuse in the present case.
55. [55]
    The primary judge accepted that submission but, apparently seeking to follow R v Perrin [2018] 2 Qd R 174, expressed the following view in argument:^[88]

“Return to the section 22 issue, because I reviewed the decision of [Perrin] again and I came to the view that because the issue in the trial is dishonesty, if the prosecution proves beyond reasonable doubt that the defendant’s actions were dishonest, then there’s no work for section 22 to do. But can I indicate this is how I propose to direct the jury about what is effectively the central issue in the trial.”

56. [56]
    The trial judge indicated to counsel that she proposed to identify to the jury the evidence on which the appellant would rely to support the s 22 excuse, but in the context of the identification of matters which the prosecution had to prove in order to prove that the appellant was acting dishonestly.^[89]  And, as recorded at [51] above, that is what she did.
57. [57]
    The trial judge was wrong to treat Perrin as establishing that s 22(2) could not have any work to do in relation to offences in which dishonesty was an element.  In Walden v Hensler (1987) 163 CLR 561, Brennan J observed that in Queensland, to exclude the application of Chapter 5 or one of its provisions to a statutory offence, s 36 must be repealed pro tanto.^[90]  No argument was advanced here that the introduction of s 408C to the Criminal Code in 1979 operated in that way.  His Honour went on to observe that if the offence is one relating to property “[s]ection 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,…”.^[91]  If there is some evidence capable of raising the excuse, the law is that stated at [54] above.  Accordingly, the issue is not whether the statutory excuse applies or has any work to do – those terms are inapposite.  Rather, the issue is whether the directions given in the case are such as will ensure that the accused cannot be convicted unless the jury is persuaded beyond reasonable doubt of circumstances which would exclude the excuse.  In any particular case, the formulation of the requisite directions will depend on how the charge has been formulated and particularised, the evidence elicited in the case, and the nature of the exculpatory state of mind which is raised on the evidence.
58. [58]
    In many cases, proof beyond reasonable doubt of the dishonesty element of the offence as particularised will necessarily negative beyond reasonable doubt the possibility that the impugned conduct was done in the exercise of an “honest” claim of right and “without an intention to defraud”, thereby excluding the possible operation of the s 22(2) excuse and negating the necessity of directions addressing it.  That will occur when the evidence proving the existence of the state of mind of the accused relied on by the Crown to prove the elements of the offence (i.e., the inculpatory state of mind) is, as a matter of logic, necessarily inconsistent with the existence of the alleged exculpatory state of mind.  In such a case, if a jury was satisfied beyond reasonable doubt of the existence of the former, that would necessarily mean it was satisfied beyond reasonable doubt of the non-existence of the latter.  Any evidence tending to prove the existence of the exculpatory state of mind would merely be evidence to be taken into account in determining whether the existence of the inculpatory state of mind had been proved beyond reasonable doubt.
59. [59]
    Macleod v The Queen (2003) 214 CLR 230 was a case of that type.  The following observations may be made about the reasoning in that case:

    1. (a)
       The Crown case against Macleod was that with an apparent view to obtaining taxation concessions, Macleod, as a director of Trainex Pty Ltd and two other companies, had offered investment opportunities in a film production scheme.  The scheme had been promoted as involving the acquisition of copyright in primary works, the production and marketing of films and the sharing amongst investors of profits derived from the joint ownership of the copyright in the films.
    2. (b)
       Several thousand investors contributed more than $6,000,000 to the scheme promoted by Trainex.  An “Investor’s Deed” had required Trainex to hold invested funds on trust for the purpose of film production and obliged it to proceed with film production when sufficient funds were received.  However, of the monies invested, only about $718,000 was used to make films.  More than $2,000,000 was applied, in a variety of ways, to Macleod’s own benefit.  The largest of these amounts was $955,000 which he used to purchase a home unit in his own name.  Other amounts were paid to the credit of a loan account in one of the other companies in his name and on which he subsequently drew.
    3. (c)
       Macleod was convicted, amongst other counts, of five counts alleging that, as director or officer of a company, he had fraudulently applied property owned by the company for his own use or for purposes other than those of the company, in contravention of s 173 of the Crimes Act 1900 (NSW).  Fraudulent intent was a necessary ingredient for each of the counts which relied on s 173.
    4. (d)
       At trial, Macleod gave evidence on his own behalf.  Relevantly, he said 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.  On appeal to both the Court of Criminal Appeal and to the High Court, Macleod argued, amongst other things, that s 173 required the prosecution to prove the absence of a bona fide claim of right in the accused.  He argued that no adequate directions had been given with respect to the claim of right which he had made.  He complained that the directions were inadequate because they failed 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.
    5. (e)
       The attempted reliance on a bona fide claim of right was not an assertion of reliance on a statutory equivalent of s 22(2) of the Criminal Code.  The High Court observed (citations omitted):^[92]

“… in this case, the notion of “claim of right” is 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.”

Hence the statement by Glanville Williams:

“The evidential burden of a claim of right is on the accused, but the persuasive burden is on the prosecution to rebut it.””

6. (f)
   In the Court of Criminal Appeal, the attack on the adequacy of the directions made by the trial judge had been rejected.  Simpson J had observed:^[93]

“The judge expressly referred to this evidence in the summing-up. Having referred specifically to the evidence given by the appellant, he reminded the jury of the directions in relation to the meaning of “fraudulently” and directed the jury that they should apply the same principles “in assessing the accused (sic) case that he was entitled to use the company money as he did”.

In the circumstances, in my view, this was an entirely adequate direction. It is difficult to see how, if the jury found that the appellant had acted dishonestly, they could then find that he acted under a bona fide belief that he was entitled to do as he did. Where dishonesty is a specific element of an offence charged, it is difficult to see that a bona fide claim of right adds anything, or requires anything additional by way of directions. Here, in fact, the jury was specifically reminded of the factual matters the appellant relied on to support the assertion of a claim of right.

In my opinion there is no substance to the criticism of the directions given in relation to these counts.”

7. (g)
   In the High Court, Gleeson CJ, Gummow and Hayne JJ concluded that “fraudulently” had a meaning interchangeable with “dishonestly” and followed the observations of Toohey and Gaudron JJ in Peters as the appropriate directions to be given to the jury when dishonesty of the accused is in issue.  They referred to the directions which the trial judge had given and found no fault in them, concluding that:^[94]

“The judge’s directions, when read as a whole, (i) identified the knowledge, belief or intent which was said to render the conduct of the appellant dishonest, and (ii) instructed the jury to decide whether the appellant had that knowledge, belief or intent and, if so, to determine whether, on that account, the act was dishonest, by reference to the standards of ordinary, decent people. The submission that the Court of Criminal Appeal erred in holding that these directions were adequate in the circumstances should be rejected.”

8. (h)
   Their Honours had earlier noted that “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.”^[95]  But in the case before them, their Honours agreed with the approach taken by Simpson J that a finding that Macleod acted dishonestly and thus had the necessary mens rea foreclosed a finding that he 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.^[96]Their Honours developed their explanation that the evidence of the mens rea for dishonesty negated the suggested bona fide belief in these terms (citations omitted, emphasis added):^[97]

“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.

It was open to the jury, looking at the matter by reference to the standards of ordinary, decent people, to conclude that at the time of the various takings or applications of sums by the appellant he knew of his lack of entitlement to take or apply the funds of Trainex for his own use or benefit and that, on that account, his acts were dishonest. Some of the evidence supporting that conclusion was summarised by Simpson J as follows:

“This evidence included evidence of the disposal of the investors’ funds: of more than $6 million invested, approximately $2.2 million was used for the appellant’s own purposes. He in fact made formal admissions, pursuant to s 184 of the Evidence Act 1995 [(NSW)], to that effect. A very small proportion of the funds ($718,000) was used in producing films. The income statement sent to investors falsely represented that income had been derived. The ‘income’ they showed was in fact funds derived from subsequent investors, and not from the marketing of completed film[s]. The so-called subsidy of 70 per cent offered to investors was similarly a misrepresentation of the true position. The instruction given by the appellant to [Trainex's account and office manager] to conceal records from the [Australian Securities Commission] was evidence the jury were entitled to use as evidence of dishonesty.”

Much of the evidence went both to dishonesty in the initial raising of the funds from investors and the application of the property of Trainex; contrary to what appears to have been an assumption in the appellant’s submissions, there was no necessary dichotomy between the two. The prosecution case had been that the entire film production enterprise was “a sham”. Evidence tending to indicate a deliberate and sustained course of deception by the appellant is probative of a lack of genuine belief in an entitlement to apply the property of Trainex to his own use or benefit.

Further, the documentation prepared by Trainex suggested that the appellant knew that Trainex owed obligations to others in respect of the disposition of the funds which he applied to his own use. A conclusion clearly was open that the appellant had known that the funds of investors were being held, pursuant to the Investor’s Deed, for the particular purpose of film production and that he was obliged to see that those funds be kept by Trainex on trust for application for that purpose and not otherwise. The taking of those funds by the appellant for his own benefit, thereby placing Trainex in breach of trust, in the face of the documentary evidence that those funds had been raised for the purpose of film production, was indicative of the lack of any honest belief in his asserted entitlement to act as he did.”

9. (i)
   McHugh J agreed with the reasons of Gleeson CJ, Gummow and Hayne JJ for determining that it was neither necessary nor appropriate for the trial judge to direct the jury about a “subjective” test for a claim of right.^[98]  Callinan J also concluded that the evidence demonstrating dishonesty necessarily operated to negate any honest claim of right.^[99]

60. [60]
    R v Perrin was also a case of the type mentioned at [58] above.  For present purposes, it suffices to refer only to the judgment of Morrison JA (with whom Atkinson J agreed).  The following observations may be made about his Honour’s reasoning:

    1. (a)
       Perrin had been convicted of multiple counts that he “with intent to defraud, forged a document”, contrary to s 488(1)(a) of the Criminal Code and also with multiple counts that he “dishonestly gained a pecuniary benefit for himself”, contrary to s 408C(1)(d) of the Criminal Code.
    2. (b)
       Morrison JA pointed out that as to the forgery charge, s 488(1)(a) required proof of two elements, namely that the appellant had forged a document and that he did so with intent to defraud.^[100]  On each of the forgery charges the act of forgery was “by signing the name of Nicole Perrin” on the relevant document.^[101]  To make good those charges the Crown had to prove that each relevant act of forgery was done with intent to defraud.
    3. (c)
       On the forgery counts, the Crown case was that the appellant had forged his then wife’s signature on a number of bank and other financial documents.  Perrin made formal admissions at trial that the relevant documents contained the purported signatures of his then wife.  Importantly, Perrin also admitted that relevant documents also contained the purported signature of his brother, as witness to the purported signature of the wife.  Perrin admitted that the signatures were not those of his wife or his brother.  Perrin admitted that he wrote all the signatures himself.  There was no challenge at trial to the evidence from the brother that he did not know his purported signature had been placed on the documents, nor was it put to the brother that he had authorised that to occur in any way.  The Crown adduced evidence from the appellant’s wife that she had never given her husband any authority, express or implied, to sign the relevant documents on her behalf.
    4. (d)
       On each of the fraud counts, the Crown case was that the appellant had dishonestly gained pecuniary benefits obtained from a bank to which he had supplied the documents in connection with requests for increases in a line of credit with the bank and its conversion to a business loan to allow more borrowings, and an additional loan.  To make good those charges, the Crown had to prove that the acts by which he gained the benefits, namely forging the signatures on documents and submitting documents containing forged signatures, were done dishonestly. The particulars of the relevant dishonesty should be emphasised:

“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.”

5. (e)
   The appellant had advanced as a ground of appeal that s 22(2) of the Criminal Code should have been left for the jury to consider.  The appellant had given evidence that he had his wife’s authority to sign all the documents the subject of the counts of forgery and she had expressly stated that to him.  He said he had “honestly believed [he] could sign for Nicole”.  This was evidence capable of giving rise to the s 22(2) excuse, namely the possibility that the acts impugned by the prosecution, as described above, were acts done in the exercise of an honest claim of right and without intention to defraud.

6. (f)
   Morrison JA analysed ss 408C and 488(1) of the Criminal Code, noting that dishonesty and intent to defraud were, respectively, elements of ss 408C and 488(1).^[102]  Following observations made in Macleod the element of “intent to defraud” was to be equated with dishonesty.^[103]  In a case under s 488 or s 408C the impugned 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.  In other words, intention to defraud is a subjective state of mind of the accused,^[104] but to be assessed as dishonest according to the standards of ordinary, decent people, an objective test.^[105]
7. (g)
   His Honour examined the elements necessary to establish the excuse under s 22(2), treating “honest claim of right” and “without intention to defraud” as separate criteria and concluded that for the section to apply the relevant act would have to satisfy both criteria.^[106]  The former criterion requires only that the claim be honest, it need not be reasonable, and the belief must be to a legal entitlement, not to an absence of a prohibition; the claim may stem from a belief in a right the law does not recognise, and be both unreasonable and unfounded in law or fact; and the relevant state of mind is one subjectively held and the evidentiary basis for it is proved on a subjective basis.^[107]  The question whether a person holds an “intention to defraud” is also subjective and is concerned with the actual intention of the accused.^[108]
8. (h)
   His Honour accepted that the Crown would have to exclude the operation of s 22(2), but given his analysis of the elements of the offences and of the excuse, treated proof beyond reasonable doubt of dishonesty which would satisfy the relevant elements of the offence of fraud under s 408C and forgery under s 488, as necessarily amounting to negation beyond reasonable doubt of the possible operation of the excuse because it negated the possibility that the relevant act was done “without intention to defraud”.
9. (i)
   His Honour followed and applied observations made by the Court of Appeal in R v Dale [2012] QCA 303 at [36]–[40] per Gotterson JA (McMurdo P and Mullins J concurring) in the following terms (emphasis added):^[109]

“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.

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.

…

… 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.”

10. (j)
    His Honour concluded^[110] that to succeed the Crown had to prove a necessary element, namely an intention to defraud or dishonesty, which was indistinguishable from proof that excluded the absence of intention to defraud or dishonesty (necessary for the excuse under s 22(2)).  There was therefore no need for any separate attention to be addressed to s 22(2) before the jury.

61. [61]
    The last paragraph of the quote from Dale is of critical importance for the disposition of this appeal.  The logic accepted in Macleod, Dale and Perrin could not apply where the existence of the alleged inculpatory state of mind was not necessarily logically inconsistent with the existence of the alleged exculpatory state of mind, such that both states of mind might exist at the same time in relation to the impugned conduct.  In such a case a jury might be satisfied beyond reasonable doubt of the former yet not satisfied beyond reasonable doubt of negation of the latter.  In such a case, if there was evidence supporting the existence of such an exculpatory state of mind as might support a s 22(2) excuse, a failure to direct the jury consistently with s 22(2) would be to deprive the accused of the possibility of his statutory excuse under the Criminal Code.
62. [62]
    In the present case, it was plainly open to the jury to be persuaded beyond reasonable doubt that the appellant had a strong adverse view of the merits of Mayor McLean’s claims to be paid monies from the Foundation accounts, thereby justifying the Crown’s case as to the appellant’s inculpatory state of mind.  Notably, that evidence was directed to the appellant’s state of mind concerning Mayor McLean’s rights as against the Foundation.  But there was evidence that despite the appellant’s personal adverse view of the merits of Mayor McLean’s claims as against the Foundation, he honestly thought that he was entitled to set aside his personal views and transfer Foundation monies to Mayor McLean because the acting Chair of the Board of the Foundation authorised him to do so.  On that case, the inculpatory state of mind could exist at the same time as the exculpatory state of mind.  The logic accepted in Macleod, Dale and Perrin could not apply.
63. [63]
    There were obvious difficulties with the hypothesis concerning his allegedly honest belief.  Should Ms Pearson’s evidence be accepted over the appellant’s statement?  Could the appellant truly have held that view given what he knew about the quorum requirements of the Foundation, or what the evidence suggested he might have known or believed about Ms Pearson’s authority?  Could the appellant have honestly believed that the mere fact that the acting Chair of the Foundation authorised him to transfer Foundation monies to Mayor McLean entitled him to do so even if, as the Crown particulars alleged, he knew that Mayor McLean was not entitled to the money and the transfer was not for a legitimate purpose of the Foundation?  If he truly held that view, then why did he involve himself in subsequent preparation of false invoices?  But these were all matters for the jury’s consideration.  The present point is that – the s 22 excuse having been fairly raised on the evidence – they were to be considered in the context of the jury being given a direction which told them that they could not convict unless satisfied beyond reasonable doubt of matters which would necessarily mean that a s 22(2) excuse had been excluded.  It is worth recalling that in R v Pollard [1962] QWN 13,^[111] Gibbs J, when referring to an alleged honest claim of right to take a motor car stated, stated:

“It is not to the point that the accused had no right to take the vehicle. If he had honestly believed that he was entitled to take it, or if the jury had a reasonable doubt whether he had such a belief, he should have been acquitted, however wrong his belief may have been, and however tenuous and unconvincing the grounds for it may seem to a judge.”

64. [64]
    In the present case, the trial judge was required (in addition to formulating directions addressing the prosecution case consistent with the law explained in Jayaweera):

    1. (a)
       to identify for the jury the knowledge, belief or intent of the accused which was said to amount to such an exculpatory state of mind as might support the s 22(2) excuse; and
    2. (b)
       to instruct the jury that they could not convict unless satisfied the Crown had proved beyond reasonable doubt that the relevant conduct was not done with that knowledge, belief or intent.
65. [65]
    It would have sufficed if the judge had (in addition to formulating directions addressing the prosecution case consistent with the law explained in Jayaweera):

    1. (a)
       identified for the jury that the appellant contended that despite his personal adverse view of the merits of Mayor McLean’s claims, he honestly believed that he was entitled to set aside his personal views and transfer Foundation monies to Mayor McLean because the acting Chair of the Board of the Foundation authorised him to do so; and
    2. (b)
       instructed the jury that they could not convict unless satisfied the Crown had proved beyond reasonable doubt that he did not honestly believe he had that entitlement.
66. [66]
    In the present case, it was the failure to give the latter part of that direction which occasioned a miscarriage of justice.

Conclusion

67. [67]
    The appeal should be allowed.
68. [68]
    The following orders should be made:

1. appeal allowed;
2. conviction quashed; and
3. retrial ordered.

69. [69]
    MORRISON JA:  I have had the advantage of reading the draft reasons of Fraser JA and Bond JA.  Their Honours’ analysis enables me to state briefly why I have reached a different conclusion.
70. [70]
    The four impugned payments made by the appellant from the Foundation’s bank account to the Mayor (McLean) were:

    1. (a)
       21 December 2012: $30,000 into McLean’s Indigenous Business of Australia (IBA) loan repayment account;
    2. (b)
       21 December 2012: $6,000 into McLean’s bank account;
    3. (c)
       24 December 2012: $12,500 into McLean’s bank account; and
    4. (d)
       20 February 2013: $9,900 into McLean’s bank account.
71. [71]
    The central question at the trial was whether appellant’s act or omission must have been done or made “dishonestly”.
72. [72]
    So far as that element of the offence is concerned, in R v Jayaweera,^[112] the Court of Appeal observed:

“Yet the law is clear that in a case of this nature, the Crown must articulate clearly the relevant aspect of the accused’s knowledge, belief or intent which, on the Crown case, rendered the accused’s conduct dishonest and the trial judge must:

1. (a)
   identify for the jury the knowledge, belief or intent of the accused which was said to render the impugned conduct by the accused dishonest; and

2. (b)
   instruct the jury to decide whether the accused had that knowledge, belief or intent and, if so, to determine whether, on that account, the conduct was dishonest by the standards of ordinary honest people.”

73. [73]
    The Crown had particularised its case on dishonesty consistently with the law summarised in Jayaweera.  The alleged inculpatory state of mind focussed on was the appellant’s state of mind as to the legitimacy of McLean’s claim as against the Foundation, namely:

    1. (a)
       knowledge that McLean did not provide any professional services to the Foundation;
    2. (b)
       knowledge that McLean was not entitled to the money; and
    3. (c)
       knowledge that the transfer of the bank credits was not for a legitimate purpose of the Foundation.
74. [74]
    The question agitated on appeal proceeded on the basis that the appellant’s knowledge of those three matters had the result that requisite dishonesty was established but for the operation of s 22(2).
75. [75]
    That is to say, the impugned conduct was done “dishonestly” for the purposes of s 408C because the evaluation of acts done or omitted with that particular state of mind was dishonest by the application of an objective standard; that is, by the standards of ordinary honest people.
76. [76]
    Put at its highest, the appellant’s statement is said to have raised the s 22(2) issue in this way:

    1. (a)
       the Crown case was that the appellant knew of the lack of merits of McLean’s claim as against the Foundation and, on account of his having that knowledge, his causing Foundation funds to be transferred to McLean was dishonest by the standards of ordinary, honest people; and
    2. (b)
       despite the appellant’s personal view of the lack of merits of McLean’s claims as against the Foundation, he honestly thought that he was entitled to set aside his personal views and transfer Foundation monies to McLean because the acting Chair of the Board of the Foundation (Pearson) authorised him to do so.
77. [77]
    Pearson’s evidence included that:

    1. (a)
       she had been aware that McLean owed money to IBA but did not know how much;^[113]
    2. (b)
       she was first aware of the payments when an auditor’s report was done;^[114]
    3. (c)
       she had no power to approve the payments;^[115] and
    4. (d)
       she did not direct the payments to be made;^[116]
78. [78]
    There was no suggestion in the evidence or the appellant’s statement that Pearson had any different state of knowledge from that held by the appellant as to the three matters at the heart of the Crown case, namely that:

    1. (a)
       McLean did not provide any professional services to the Foundation;
    2. (b)
       McLean was not entitled to the money; and
    3. (c)
       the transfer of the bank credits was not for a legitimate purpose of the Foundation.
79. [79]
    To the contrary, the appellant’s statement said that Pearson “was aware of the details of each payment, [she] and [Mclean] would discuss what [McLean] needed and then pressure me into making a payment”.^[117]  And, “Pearson was aware of exactly what was happening”.^[118]
80. [80]
    The appellant’s statement also contained the following descriptions of Pearson’s involvement in the payments to McLean:

    1. (a)
       “All of the calls from [McLean] and [Pearson] were about [McLean] and money. I recall [Pearson] saying words to the effect “… [McLean] is in financial trouble what can the HVF do to help him”; “he is desperate”;^[119]
    2. (b)
       when the first three payments had been made “… Pearson rang me later to make sure the payment had been made”; “ … Pearson and I discussed [McLean’s] financial position on a number of occasions and in particular his debt with IBA and the concern it might cause problems for HVF:^[120]
    3. (c)
       “... Pearson would use words to the effect “what did you sort out and when are you paying him” I also told [Pearson] the following “ … I told [McLean] I am not happy just giving him the money I want it paid direct to IBA”; [Pearson] and [McLean] discussed this and [Mclean] rang back conforming this was okay”;^[121]and
    4. (d)
       as to the payment of $9,900: “… Pearson rang me a short while later confirming words to the effect “We will approve payment immediately just get an invoice into Ross Higgins”. I then had … further calls from [Pearson] about making this payment to [McLean]”.^[122]
81. [81]
    Dawn Lake worked as a project manager, with the appellant, McLean, and Pearson.  Her evidence was that she worked in the same office and heard the phone conversations where McLean was putting pressure on the appellant to transfer funds to him so he could pay his debts:^[123]

    1. (a)
       McLean was “ringing and demanding money”;^[124]
    2. (b)
       then Pearson was “ringing after that asking [the appellant] to process payments or to assist [McLean] to make those payments”;^[125]
    3. (c)
       McLean was “talking about his debts and how much money he owed to IBA to obtain a solicitor, etcetera”;^[126]
    4. (d)
       there was a number of discussions “About not wanting to make them? Certainly. Lots of discussions around not wanting to make them. And – and about feeling pressured … with the threats that were coming in from [McLean]”;^[127]
    5. (e)
       the discussions between herself and the appellant included “the implications if we did was this, that how do you justify it?  How do you explain?”;^[128] and
    6. (f)
       she created the invoices to record the payments, but they did not reflect services actually provided and did not record actual agreements to provide services.^[129]
82. [82]
    Thus, the evidence established the Crown case for dishonesty, namely that McLean: (i) did not provide any professional services to the Foundation; (ii) was not entitled to the money; and (iii) the transfer of the bank credits was not for a legitimate purpose of the Foundation.  The appellant’s contentions on the appeal accept that to be so.
83. [83]
    Consequently, Pearson’s acts in authorising the payment were, in the circumstances, dishonest by the standards of ordinary, honest people.  In other words, the appellant knew that Pearson was authorising payments that were to be made dishonestly by the standards of ordinary, honest people.  Pearson’s authorisation did not change the accepted fact that McLean: (i) did not provide any professional services to the Foundation; (ii) was not entitled to the money; and (iii) the transfer of the bank credits was not for a legitimate purpose of the Foundation.
84. [84]
    More importantly, it must follow from the appellant’s state of knowledge that he knew that Pearson’s conduct in authorising the payments was dishonest by the standards of ordinary, honest people.
85. [85]
    That being the case, in my view, the s 22(2) issue falls within the decision in R v Perrin.^[130]  The appellant expressly disavowed any suggestion that he argued Perrin was wrongly decided.  The two relevant elements of s 22(2) are: (i) an honest claim of right; and (ii) acting without an intention to defraud.  Each is negated in this case because proof of the dishonesty for s 408C necessarily involves proof that negatives the elements of s 22(2).  The claim of right is that Pearson authorised the payments, but, on the evidence, the appellant knew that Pearson’s actions were relevantly dishonest, and reliance on her authorisation was therefore relevantly dishonest.
86. [86]
    I would have dismissed the appeal.