The Queen v Misic [2001] NZCA 128; [2001] 3 NZLR 1; (2001) 19 CRNZ 139 (11 April 2001)

Court of Appeal of New Zealand

[Index] [Search] [Download] [Help]

---

The Queen v Misic [2001] NZCA 128 (11 April 2001); [2001] 3 NZLR 1; (2001) 19 CRNZ 139

Last Updated: 13 December 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA454/00

THE QUEEN

V

BORISLAV MISIC

Hearing:	28 February 2001
Coram:	Blanchard J Anderson J Paterson J
Appearances:	P M Trehey for Appellant S P France for Crown
Judgment:	11 April 2001

JUDGMENT OF THE COURT DELIVERED BY ANDERSON J

[1] The appellant was convicted on his trial before a Judge and jury on three counts relating to the fraudulent use of a computer program in order to evade being billed for international telephone calls. He was sentenced to 12 months imprisonment but the sentence was suspended for two years pursuant to s 21A of the Criminal Justice Act 1985. He was also sentenced to six months periodic detention. He now appeals against conviction and sentence.
[2] Because the conviction and sentencing occurred in June and July 1999, and the Notice of Appeal was filed in November 2000, 16 months later than the period for appealing stipulated by s 388 of the Crimes Act 1961, the appellant seeks leave to appeal. The Crown abides the Court’s decision on leave.
[3] The appeal against conviction raises the questions whether a computer program in electronic form is a “document” within the meaning of that term in s 229A of the Crimes Act 1961, and whether a computer disk (in this case a hard drive) on which a computer program is recorded is also such a “document”.

The appellant’s activities

[4] The appellant arrived in New Zealand on 16 April 1998 from Belgrade, Yugoslavia. He applied for residency under refugee status on grounds connected with the war in Kosovo. Upon his arrival he moved into his cousin’s apartment in central Auckland. Although the apartment already had a telephone line installed, the appellant arranged within a month for four additional residential telephone lines. Each of the five lines had a three-way calling facility. On about 18 April 1998 the appellant bought a new computer from an Auckland retail supplier. This was a cash purchase by the appellant whose personal particulars were not recorded by the retailer.
[5] The appellant connected the telephone lines to his computer. He downloaded from the internet and installed on the hard drive of the computer a program called “Scavenger” which enables a user to manipulate telephone systems by a method known in the telecommunications industry as “blue boxing”. The method involves the transmission, via a telephone network, of false signals to parts of the network operator’s system causing it to respond as if a telephone connection has not been made when in fact a call is being made. Suppression of the fact and particulars of the call has at least a pecuniary benefit for the call placer.
[6] In the particular case the appellant would invoke the Scavenger program and make a telephone call to Spain using a Home Country Direct Calling Service, which is an international telecommunications protocol allowing calls made in one country to be charged to an account in another country. The technology of the Spanish network made it particularly susceptible to blue boxing. Having received an answer from Spain the appellant would use the Scavenger program to send a signal known as a “Clear Forward” signal to the Spanish network. That network would respond in a way which cleared the connection to its domestic system. The appellant would then use the Scavenger program to transmit information to the Spanish domestic system in order to place a call anywhere in the world. By using three-way conference calling the appellant could then make a further call to a third party and then withdraw from the call leaving the other two parties connected on an unaudited and therefore uncharged for basis. Because of the operation of the protocol, the value of the uncharged call was a loss to Telecom New Zealand. That company began the investigation which led to the trial and conviction of the appellant when routine analysis of the Home Country Direct Calling Service disclosed a massive increase in telecommunication traffic in relation to Spain. Telecom’s inquiries showed that the appellant’s activity had cheated them of the cost of more than 88,000 minutes of calls, the value of which, depending on the timing of a call in relation to peak rates, ranged from $85,000 to $166,000.
[7] The indictment upon which the appellant was tried alleged as follows:-

1 THE CROWN SOLICITOR AT AUCKLAND charges that BORISLAV MISIC between 18 April 1998 and 13 May 1998, at Auckland, with intent to defraud, obtained a document, namely a computer program named SCAVENGER, by electronic file transfer protocol, which was capable of being used to obtain a benefit or pecuniary advantage, namely free toll calls.

2 THE said Crown Solicitor further charges that BORISLAV MISIC between 18 April 1998 and 28 May 1998, at Auckland, with intent to defraud, used a document, namely a computer disk containing a software program named SCAVENGER, which was capable of being used to obtain a benefit or pecuniary advantage, namely free toll calls, for the purpose of obtaining for himself or for any other person a benefit or pecuniary advantage, namely free toll calls.

3 THE said Crown Solicitor further charges that BORISLAV MISIC between 18 April 1998 and 28 May 1998, at Auckland, knowing a document to have been made with intent to defraud and in a manner that is a reproduction of the whole or any part or parts of another document, namely a software program called SCAVENGER, used this document with intent to defraud.

[8] Section 229A of the Crimes Act 1961 provides as follows:-

Every one is liable to imprisonment for a term not exceeding 7 years who, with intent to defraud,—

(a) Takes or obtains any document that is capable of being used to obtain any privilege, benefit, pecuniary advantage, or valuable consideration; or

(b) Uses or attempts to use any such document for the purpose of obtaining, for himself or for any other person, any privilege, benefit, pecuniary advantage, or valuable consideration.

[9] Sections 263, 266A and s 266B provide as follows:-

263 Interpretation

(1) For the purposes of this section and of sections 264 to 279 of this Act,—

“Bank note” means any negotiable instrument used or intended for use as currency and issued by the Reserve Bank of New Zealand, or by any bank in any country other than New Zealand, or by the Government of any such country, or by any other authority authorised by law to issue notes:

“Document” means—

(a) Any paper, parchment, or other material used for writing or printing, marked with matter capable of being read; or

(b) Any photograph, or any photographic negative, plate, slide, film, or microfilm, or any photostatic negative; or

(c) Any disc, tape, wire, sound track, card, or other material or device in or on which information, sounds, or other data are recorded, stored, or embodied so as to be capable, with or without the aid of some other equipment, of being reproduced therefrom; or

(d) Any material by means of which information is supplied, whether directly or by means of any equipment, to any device used for recording or storing or processing information; or

(e) Any material derived, whether directly or by means of any equipment, from information recorded or stored or processed by any device used for recording or storing or processing information:]

“False document” means a document—

(a) Of which the whole or any material part purports to be made by any person who did not make it or authorise its making; or

(b) Of which the whole or any material part purports to be made on behalf of any person who did not authorise its making; or

(c) In which, though it purports to be made by the person who did in fact make it or authorise its making, or purports to be made on behalf of the person who did in fact authorise its making, the time or place of its making, where either is material, or any number or distinguishing mark identifying the document, where either is material, is falsely stated; or

(d) Of which the whole or some material part purports to be made by a fictitious or deceased person, or purports to be made on behalf of any such person; or

(e) Which is made in the name of an existing person, either by him or by his authority, with the intention that it should pass as being made by some person, real or fictitious, other than the person who makes or authorises it:

“Revenue paper” means any paper provided by the proper authority in New Zealand or in any other country for the purpose of being used for stamps, licences, permits, post office money orders, postal notes, or postal orders, or for any purpose whatsoever connected with the public revenues of New Zealand or of any other country.

(2) For the purposes aforesaid—

(a) It is immaterial in what language a document is expressed or in what country or place it is expressed to have effect:

(b) A crossing on any cheque, draft on a banker, post office money order, postal note, postal order, coupon, or other document of which the crossing is authorised or recognised by law shall be deemed to be a material part of it.

266A Altering Or Reproducing Document With Intent To Defraud

(1) Every one is liable to imprisonment for a term not exceeding 10 years who, with intent to defraud,—

(a) Makes any alteration in any document, whether by addition, insertion, deletion, obliteration, erasure, removal, or otherwise; or

(b) By any means, makes a document that is a reproduction of the whole or any part or parts of another document, or of the whole or any parts of 2 or more documents, or of any combination of any of those things.

(2) An offence against subsection (1) of this section is complete as soon as the alteration or document is made with such intent as aforesaid, although the offender may not have intended that any particular person should use or act upon the document so altered or made, or should be induced by it to do or refrain from doing anything.

266B Using Altered Or Reproduced Document With Intent To Defraud

(1) Every one is liable to imprisonment for a term not exceeding 10 years who with intent to defraud, knowing a document to have been altered or made in a manner, and with the intent, referred to in subsection (1) of section 266A of this Act,—

(a) Uses, deals with, or acts upon it; or

(b) Causes any person to use, deal with, or act upon it.

(2) For the purposes of this section, it is immaterial that the document was altered or made outside New Zealand.

Trial Directions

[10] The Crown case at trial was that in respect of Count 1 the computer program “Scavenger” was a document, and in respect of Count 2 the computer’s hard disk containing that program was also a document.
[11] Having considered issues of that nature in a pre-trial ruling on an unsuccessful application for discharge pursuant to s 347 of the Crimes Act 1961, the Judge directed the jury as follows:-

For the purposes of this case you must accept from me that as a matter of law, a computer program or copy of the one like Scavenger is a document ...

For the purposes of this case, I tell you that you must accept it from me as a matter of law a computer disk containing a software program is a document.

[12] It is plain that in the pre-trial hearing and at trial, counsel and the Court took the word “program” to refer to the Scavenger program data received by the appellant’s computer via the internet download, installed in the computer’s hard disk and so utilised by the appellant. There does not seem to have been evidence about the technology of that process but the appellant’s challenge to the aptness of the description “document”, for the purposes of s 229A, was founded on linguistic distinctions, not technological characteristics. Our examination of the application of s 229A is therefore also on the basis that the program was data received, recorded and reproduced by the appellant’s computer. It is not necessary for the Court, in this case, to go beyond that brief statement of the technology.
[13] On this appeal, counsel for the appellant submitted that the trial Judge’s directions were wrong, that as a matter of law the term “document” in s 229A does not extend to the program or the hard disk, and that accordingly the appellant has been wrongly convicted on Counts 1 and 2. A ground of appeal that in relation to Count 3 the trial Judge misdirected the jury on the matter of fraudulent intent was not pressed by counsel when examination of the point showed it to be without substance.

Appellant’s arguments on appeal

[14] Counsel for the appellant submitted that the term “document” in s 229A does not extend to computer related data storage devices. This submission is based, not on what the legislature may have intended to be included but on what the legislature may have intended to be excluded.
[15] Crucial to the argument advanced on behalf of the appellant is the fact that the legislature, by an amendment to the Crimes Act passed in 1973 and operative from 1 January 1974, enacted s 229A and amended the definition of “document” in s 263(1) for the purposes of only ss 264 to 279 of the Crimes Act, and did not apply the amended definition to s 229A. This argument invokes the maxim of interpretation expressio unius est exclusio alterius; that is, the express inclusion of one of alternatives, amounts to an exclusion of the other.
[16] Counsel for the appellant developed this theme in various ways. He pointed out that the absence of a statutory definition of “document” in respect of s 229A was remarked upon by the New Zealand Law Commission at paragraphs 65 and 66 of its Report Number 54.
[17] Then counsel referred to Hansard Report of the Parliamentary Debate on the Crimes Amendment Bill 1973 and in particular the exposition of the late, greatly respected lawyer, the Hon Dr A M Finlay QC, who was the Minister of Justice at the time. The Honourable Minister informed the Parliament that Clause 3 (which was to become s 229A) dealt with a situation where a person who steals material of little intrinsic value but capable of extensive effects when used, would now be dealt with in terms of the potential of the offence. Clauses 4, 5 and 6 (which were to become ss 263, 266A and 266B) sought first to redefine forgery –

which at present is confined to documents and is essentially concerned with printed material. The definition is extended to include photographs or films, disks, tapes, wires, sound tracks and things of that nature – retrievable processes by which that kind of material can be brought back and re-activated – and material derived from stored information.

[18] Counsel also referred to the 1972 Report of the Criminal Law Reform Committee whose advice was reflected in the 1973 amendments to the Crimes Act. We do not think that this antecedent report adds anything relevant to the implications, for interpretation purposes, of a comparison between the amended and previous legislation, and the Ministerial speech to Parliament.
[19] Counsel then sought to distinguish cases from which the trial Judge had derived assistance in connection with the pre-trial ruling on the s 347 application. These included Nicholson v Police M148/85, Napier Registry, per McGechan J on 10 November 1986; R v Firth [1998] 1 NZLR 513; Butera v Director of Public Prosecutions (Vic) [1987] HCA 58; (1987) 76 ALR 45, 53; Grant v South Western and County Properties Ltd [1974] 2 All ER 465, 474.
[20] Next, counsel relied on a principle that the Court will not go outside the provisions of a comprehensive penal statute, as this Court observed in R v Wilkinson [1999] 1 NZLR 403.
[21] Finally, counsel submitted that a principle of strict contravention of penal statutes compelled an interpretation which did not extend the meaning of “document” in s 229A to computer related storage devices.

The Crown’s arguments on appeal

[22] Counsel for the Crown submitted that s 229A was a successful attempt to rid the law of fraud of undesirable technical complexity by focusing on the element of dishonesty in the use of documents. He submitted that “document” should be given an ordinary meaning ascertained against a background of s 6 of the Interpretation Act 1999 which mandates that:-

An enactment applies to circumstances as they arise.

[23] Counsel submitted that in its ordinary meaning the word “document” embraces the concept of a computer program downloaded onto the computer and of the disk containing the program, the key concept being recorded information rather than the method of storage. He referred to the meaning, identified in the New Shorter Oxford English Dictionary:-

Something written, inscribed, engraved etc., which provides evidence or information or serves as a record

and emphasised that the definition is not limited to any specific medium of inscription.

[24] Counsel also referred to the Encarta World English Dictionary (Macmillan Australia 1999) which includes in its definitions:-

... a computer file created using an applications program, e.g. a database, spreadsheet, illustration or text file.

[25] In its ordinary meaning and usage, submitted counsel, the word “document” embraces a computer program.
[26] As to the history of s 229A and s 263, counsel submitted, in effect, that the legislative amendments were not intended to restrict the ordinary meaning of “document” for the purposes of fraud, but to expand a restricted statutory meaning of “document” which applied to the crime of forgery. That restricted meaning was, in effect, the present s 263(a) which contemplates a document as paper or a similar medium.
[27] Counsel submitted that the Parliamentary address by the Dr Finlay QC remarked that the purpose of the amending legislation was to enact the recommendations of the Criminal Law Reform Committee. The Explanatory Note to the Crimes Amendment Bill also reflects that objective. It noted that the Committee’s Report in relation to what is now s 229A identified the problem of fraudulent use of documents of small intrinsic but high potential pecuniary value, such as airline tickets and credit cards. The existing law could meet that situation only in terms of theft where an inadequate penalty would be a consequence of the small intrinsic value of the stolen material.
[28] Accordingly, submitted counsel, the Parliament was concerned with different objectives in respect of s 229A and the forgery provisions to which s 263 relates, so that the maxim expressio unius est exclusio alterius is inapt.
[29] Counsel also relied upon the incongruity of the propositions that the Parliament intended the law of forgery to reflect modern realities but at the same time intended a remedial provision which focused on fraudulent exploitation of potential rather than intrinsic value, to ignore such realities.
[30] As to the argument on behalf of the appellant that the definition adopted by the trial Judge went outside the scope of a penal statute rather than strictly interpreting it, counsel for the Crown submitted that the argument misunderstood that the meaning accepted by the trial Judge was not an extension of existing meanings but that, rather, the material in question were plainly within a present accepted meaning of the term “document”.

Decision on the appeal against conviction

[31] Putting to one side any relevant implications of the enactment of s 263, we have no difficulty accepting that the computer program and computer disk in question are each a “document” for the purposes of s 229A. Essentially, a document is a thing which provides evidence or information or serves as a record. The fact that developments in technology may improve the way in which evidence or information is provided or a record is kept does not change the fundamental purpose of that technology, nor a conceptual appreciation of that function. Legislation must be interpreted with that in mind. As Lord Hoffman said, in Birmingham City Council v Oakley [2001] 1 All ER 385 at 396:-

The words must be construed as ‘always speaking’ in the sense used by Lord Steyn in R v Ireland, R v Burstow [1997] 4 All ER 225 at 233, [1997] UKHL 34; [1998] AC 147 at 158-159. I quite agree that when a statute employs a concept which may change in content with advancing knowledge, technology or social standards, it should be interpreted as it would be currently understood. The content may change but the concept remains the same. The meaning of the statutory language remains unaltered.

[32] It is unarguable that a piece of papyrus containing information, a page of parchment with the same information, a copper plate or a tablet of clay, are all documents. Nor would they be otherwise if the method of notation were English, Morse code, or binary symbols. In every case there is a document because there is a material record of information. This feature, rather than the medium, is definitive.
[33] The development of documents from handwritten notations on parchment to the inscription of inked type on paper is perhaps a greater extension of human technology than, say, the shift from recording on magnetic tape to the storage of information by a personal computer. A quarter of a century ago, in Grant v South Western and County Properties Ltd [1974] 2 All ER 465, the English High Court held in a learned judgment that a tape recording is a document. Although unacknowledged in the English case, the New Zealand High Court had already found this to be so. In Snow v Hawthorn [1969] NZLR 776 Woodhouse J, as he then was, had determined that a tape recording is a “document”. In Nicholson v Police (M148/85, Napier Registry, 10 November 1986) McGechan J found that a computer disk is a document within the meaning of s 253(b) of the Crimes Act 1961. A television film has been held to be a “document” in connection with a subpoena duces tecum – Senior v Holdsworth [1975] 2 All ER 1009. Counsel for the appellant sought to distinguish those authorities on the basis that the meanings were affected by their procedural or statutory contexts. We think, however, that the various contexts exemplify a broad rather than a restricted use of the term in modern circumstances. Greig J came to the same view in Standen v Licensing Control Commission [1990] 2 NZLR 722.
[34] We think it unnecessary to reiterate the etymological and jurisprudential exposition of the learned judgment of Walton J in Grant v South Western and County Properties Ltd. It is sufficient for us to observe that the program and disk in issue constitute material things which record and provide information and that as such they are readily comprehended by the term “document”. We think that this case exemplifies not a novelty of interpretation in respect of the documents in question, but rather a novelty of their fraudulent use in order to obtain a pecuniary benefit.
[35] The ordinary meaning of “document” being readily sufficient to cover the computer program and disk used by the appellant in his fraud, the only remaining issue is whether the logic imported by the maxim expressio unius est exclusio alterius displaces the ordinary meaning. In our view it does not.
[36] The particular logic assumes a common starting point. But a consideration of the antecedent legislation, even without recourse to the Report of the Criminal Law Reform Committee, or the Explanatory Note to the Crimes Amendment Bill, or the Parliamentary speech of the Dr Finlay QC, shows that there was not a common starting point. The amendments to the legislation in respect of forgery contemplated a broadening of a restricted definition of what amounted to forgery. The amendments in respect of fraudulent use of a document contemplated a new offence which had regard to how a document might be used to obtain a pecuniary benefit beyond its intrinsic value. If that other contemporary information were considered the inferred legislative intent is reinforced.
[37] The Latin maxim exemplifies a technique of logic rather than an absolute prescription of jurisprudence. It is more than countered in this case by the Crown’s submission to the effect that it is entirely untenable that the legislature intended to bring modernity to an existing concept of dishonesty, but at the same time intended to identify a new criminal mischief in terms of old fashioned examples. If that were the case, why would the Explanatory Note in respect of s 229A mention credit card fraud, while a card is explicitly mentioned only in s 263? Clearly it was thought that “document” in s 229A covered the ground except in the case of forgery where particular problems existed, as McGechan K pointed out in Nicholson v Police. The short point is that in enacting s 229A the legislature intended to proscribe a type of fraudulent use of documents, whereas in enacting s 263 the legislature was concerned to extend an outmoded specific definition which had been of limited scope in its particular statutory application.
[38] For these reasons we are not persuaded that the learned trial Judge’s findings and directions to the jury that the computer program and the computer disk were documents, were wrong.

Appeal against sentence

[39] The submissions on behalf of the appellant’s appeal against sentence were largely directed to the proposition that the substantive sentence of 12 months imprisonment on each count, albeit suspended, should not have exceeded nine months. We mean no disrespect to learned counsel for the appellant in holding that this argument seemed to be driven more by the implications of a 12 month sentence in relation to what counsel understood to be the appellant’s immigration status than by the inherent merits of the appeal.
[40] In our view the 12 months imprisonment was not an excessive sentence for a deliberate, sophisticated fraud involving significant pecuniary advantage for the perpetrator and corresponding loss to the victim. There is an inescapable inference that the appellant entered New Zealand intending to set up the criminal activity he soon undertook. This was not a spontaneous experiment motivated by curiosity but a deliberate course of fraudulent conduct which was highly likely to have continued indefinitely if it had not been noticed and traced by Telecom New Zealand.
[41] As well as there being those aggravating features of the present case, we think a firm sentence was necessary as a deterrent to others who might be tempted to exploit modern technology for criminal gain.

Conclusion

[42] It is appropriate to grant leave to appeal because of the expediency of examining the issues raised by this appeal and leave is granted accordingly. But the appeals themselves are not meritorious, for the reasons set out in this judgment, and they are dismissed accordingly.

Solicitors:
Crown Law Office, Wellington