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

Margaret McMurdo P and Morrison JA and Dalton J

25 August 2015

In this important decision the Court of Appeal has held that the test for “dishonesty” adopted from the decision in R v Ghosh, which has long been held to apply in Queensland, is no longer appropriate.

The matter before the Court of Appeal arose following a referral from the Attorney-General under s 668A of the Criminal Code. It considered the important question of what the Crown must prove in order to satisfy the element of “dishonestly” as that term is used in the offence of “Fraud” in s 408C. The specific question referred was:

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

(a)      what the accused person did was dishonest by the standards of ordinary honest people; and

(b)      the accused person must have realised that what he or she was doing was dishonest by those standards?” [4].

The respondent, a director and shareholder of companies which sold and rented used forklifts, had been charged with 11 counts of fraud pursuant to s 408C of the Criminal Code. It was alleged that he had issued false invoices to a finance company on the basis that his companies had purchased forklift machines, when that was not the case. [1].

The prosecution applied for a pre-trial ruling as to what must be proven to satisfy the element of “dishonestly” in s 408C. [2]. At first instance the judge, applying R v Laurie [1987] 2 Qd R 762 and R v White (2002) 135 A Crim R 346; [2002] QCA 477, held that the term “dishonestly” has the meaning given to it in R v Laurie – namely that the directions in R v Ghosh [1982] QB 1053 are the appropriate directions to give the jury. [3]. Those directions require that a jury will use the two-part test of dishonesty established in Ghosh: 1) determine whether an act was dishonest in accordance with ordinary standards of a reasonable and honest person.  2) determine whether the defendant must have realised the act was dishonest.  A conclusive finding as to both parts of the test results in a finding that the act was dishonest.

The Attorney-General’s submissions

Noting that the word “dishonestly” is not defined in the Criminal Code, the Attorney-General argued that its meaning derives from the ordinary sense of the word in the English language: see R v Harvey [1993] 2 Qd R 389.

The Attorney-General contended that the appropriate test for determining the meaning of “dishonestly” in s 408C was that set out by the High Court in Peters v The Queen (1998) 192 CLR 493 and Macleod v The Queen (2003) 214 CLR 230, which revised the previous Queensland decisions relied upon by the judge at first instance. As the High Court is the final arbiter of State criminal law, it followed that the decisions in Peters v The Queen and Macleod v The Queen are binding in Queensland: see Phillips v The Queen (2006) 225 CLR 303, 322–323 [60].

Accordingly, consistent with its reasoning, the question posed in the reference should be answered: “No” – since the jury ought be instructed that the question of dishonesty is to be determined according to the standards of ordinary decent people. [6]. The prosecution need not, additionally, prove that the accused person realised that the relevant act was dishonest by the standards of ordinary honest people. [6].

The respondent’s submissions

The respondent argued that the primary judge correctly determined that “dishonestly” in s 408C has the meaning given to it in R v Laurie and confirmed by subsequent Queensland authority. [13]. It contended that the meaning is a question of statutory construction and not the application of the common law, and as such Peters v The Queen and Macleod v The Queen should be distinguished and the long established construction of “dishonestly” applied. [13].

The respondent contended that “dishonestly” in s 408C is used in a special sense, submitting that the question posed in the reference should be answered: “Yes”. [21].

The point of law referred

In considering the question posed in the reference, the court acknowledged that since R v Laurie, Queensland courts have consistently adhered to the Ghosh approach in directing juries as to the meaning of “dishonestly” in s 408C: see R v Allard [1988] 2 Qd R 269 and R v Sitek [1988] 2 Qd R 284. [28]; [45].

As to whether “dishonestly” in s 408C is used in its ordinary sense or a special sense – the “central question” to the appeal [39] – the court particularly considered R v Salvo [1980] VR 401. The relevant offence in that case involved the elements of both “deceit” and “dishonesty”. Fullagar J, with whom Murphy J agreed, held that the word “dishonestly” in s 81(1) of the Crimes Act 1958 (Vic) was used in a special sense. [40]. In that case, it was noted that the concept involved in “dishonestly” in s 81(1) shares similarities with the common law requirement of “intent to defraud” or absence of a claim of right, yet is subjective in the sense of an intention to defraud another without any belief in a legal right to do so. The word “dishonestly” indicates that the accused person has no belief that they have a legal right to the property. [40].

The approach of the court in R v Salvo has been followed by Victorian courts, and juries have been directed that “dishonestly” in s 81(1) offences means without a belief in a claim of right. In the 2012 case of SAJ v The Queen (2012) 36 VR 435, the court stated that:

“Certainly it seems clear, as a result of Macleod, that the second limb of the Ghosh test now has no place in the common law of Australia.” [65].

By contrast with the Victorian position, the President observed that since Peters v The Queen and Macleod v The Queen, Queensland courts have continued to direct juries in accordance with the Ghosh test: see R v White (2002) 135 A Crim R 346, 349; [2002] QCA 477; R v Ferreri [2012] QCA 308 and R v Alwis [2004] QCA 19. [45]. Prior to the appeal, the only case in the Court regarding s 408C where Peters and Macleod were discussed was R v Seymour [2004] QCA 19.

That was an appeal against conviction on 11 counts of fraud under s 408C on grounds which included that the trial judge, in giving the Ghosh direction, erred in not directing the jury in accordance with Peters v The Queen and Macleod v The Queen. The Court of Appeal held that the directions sufficiently complied with the requirements set out in Peters and Macleod. As such, that judgment was of limited assistance to the Attorney-General’s case since the issue of whether the Peters meaning of dishonesty should replace the Ghosh meaning was not addressed. [45].

Ultimately, after considering all the authorities, her Honour the President concluded that:

“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. [47].

As ‘dishonestly’ in s 408C has its ordinary meaning, this Court must follow the meaning given to ‘dishonestly’ 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.” [48].

Accordingly, in response to the point of law referred, the court unanimously answered “No”. [50]–[52].