THE QUEEN v WILFRED JOHNSON [2003] NZCA 184 (7 August 2003)

IN THE COURT OF APPEAL OF NEW ZEALAND

CA131/03

THE QUEEN

v

WILFRED JOHNSON

Hearing: 28 July 2003

Coram: Anderson J

Paterson J

Salmon J

Appearances: J Bioletti for Appellant

D P H Jones for Crown

Judgment: 7 August 2003

JUDGMENT OF THE COURT DELIVERED BY ANDERSON J

Nature of the appeal

[1]	In November 2002 the appellant was convicted on his trial by a District Court Judge and jury on a number of counts of fraud.They included 18 counts which alleged that, contrary to s229A(b) of the Crimes Act 1961, with intent to defraud, he used a document capable of being used to obtain a pecuniary advantage, for the purpose of obtaining a pecuniary advantage for himself and/or others.A further count under the same provision of the Crimes Act related to obtaining a benefit.He now appeals against conviction on those 19 counts.
[2]	The documents in question were, in the main, loan applications made by the appellant to lending institutions.One count related to financial statements, an Agreement for Sale and Purchase, and a Deed of Lease.Another count related to a driver’s licence.The Crown case was that the documents so used to obtain loan monies, a purpose which was achieved, contained false information.None of these factual matters is in issue on this appeal, which is confined to a single question of law.
[3]	That question concerns the meaning and effect of the expression “capable of being used to obtain any privilege, benefit, pecuniary advantage or valuable consideration” appearing in s229A, the text of which is as follows:

229ATaking or dealing with certain documents with intent to defraud

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.

Appellant’s arguments

[4]	Mr Bioletti’s submission for the appellant is that the words under consideration require, as an essential ingredient of the offences, that a relevant document must be one which is of a type that by itself can be exchanged or redeemed for a benefit (which term is intended in this judgment to include privilege, benefit, pecuniary advantage or valuable consideration); and that it is not enough that a document can or may be used by a holder in order to obtain a benefit.In counsel’s submission, the section requires that the document must be one which, within its contents, authorises the holder without more to obtain a benefit.Such a document, he submitted, might be, for example, an airline ticket, a credit card, or a winning totalizator ticket, whose capability of obtaining a benefit is independent of their actually being used.
[5]	Counsel argued that in the present case the documents in question were not of themselves capable of obtaining a benefit because they did not in their terms authorise any such obtaining.The loan applications and supporting documents could be used for the purpose of obtaining loans but could not obtain a loan themselves, unlike, for example, documents which upon tender would occasion a loan which had previously been approved pursuant to an application.
[6]	Mr Bioletti’s argument was founded on what he submitted was the clear intent of the section.He was unable to refer us to any court decision which might lend weight to his argument but he did call in aid the historical context in which s229A was enacted by the Crimes Amendment Act 1973.The Criminal Law Reform Committee had reported on the need for changes to the criminal law in respect of the theft or unauthorised use of documents such as credit cards and airline tickets which, although of little intrinsic value, nevertheless afforded the opportunity for frauds on an exceptionally large scale.That report led to the Crimes Amendment Bill 1973 which, in an explanatory note in respect of what is now s229A, referred to airline tickets and credit cards.Speeches in the House of Representatives, particularly by the late Hon Dr Martin Finlay QC, also specifically referred to airline tickets and credit cards, and commented upon their high potential value but small intrinsic value – see Hansard Vol 382 p494-5, Hansard Vol 384 p2569.
[7]	Inherent in Mr Bioletti’s approach is the proposition that Parliament amended the Crimes Act 1961 to fill a gap and not to add a further string to the prosecutorial bow which, in relation to false pretences, forgery and uttering could already have dealt with the fraudulent use of documents.

Crown arguments

[8]	The Crown submitted, first that s5 of the Interpretation Act 1999 militates against the interpretation contended on behalf of the appellant.Section 5 provides as follows:

5Ascertaining meaning of legislation

(1)The meaning of an enactment must be ascertained from its text and in the light of its purpose.

(2)The matters that may be considered in ascertaining the meaning of an enactment include the indications provided in the enactment.

(3)Examples of those indications are preambles, the analysis, a table of contents, headings to Parts and sections, marginal notes, diagrams, graphics, examples and explanatory material, and the organisation and format of the enactment.

[9]

The Crown submitted, next, that the wording of the report of the Criminal Law Reform Committee suggests a much wider interpretation than that contended on behalf of the appellant.Particular reference was made to that portion of the report which is reproduced in an earlier decision of this Court, R v Jordan CA253/02, 9 December 2002.We reproduce below part of that report:

Report

of

The Criminal Law Reform Committee

THEFT AND FRAUDULENT USE OF CREDIT

CARDS AND AIR LINE TICKETS

The Committee was asked to consider what changes, if any, are necessary in our criminal law in respect of the theft or unauthorised use of such documents as credit cards and airline tickets, which are not themselves of any value but afford the opportunity for frauds on an exceptionally large scale.

The problem has not become serious in New Zealand, but it had become sufficiently serious overseas by 1964 for the formation in that year of the Fraud Prevention Group within the International Air Transport Association.

The person who steals a credit card or airline ticket is of course guilty of the offence of theft (s.220 of the Crimes Act 1961) and there are other offences which could in some circumstances be used for the prosecution and conviction of a person who used one of these stolen documents, for example obtaining by a false pretence (s.246) and personation (s.248).The maximum punishment for theft is, however, except in certain specified cases, dependent on the value of the stolen article and in the case of credit cards and airline tickets would not be more than 3 months’ imprisonment; and the other two offences are restricted in their application.The offence of false pretences is applicable only in relation to a valuable security, or any document that may afterwards be dealt with as a valuable security, or anything capable of being stolen; so that it would not be appropriate where what was obtained was, for example, overnight accommodation or aeroplane transport.The offence of personation requires an intent to obtain possession of or title to any property, or any qualification, certificate, diploma, licence or benefit; and it would be difficult to bring the sort of advantage that credit cards or airline tickets would be used to procure within the ambit of the term “benefit” when used in conjunction with the preceding class-words.

The inadequacy of the present law should thefts and frauds of the type in question become at all frequent is therefore obvious.Moreover it causes difficulty where, as in the case of theft of cheques, there may be more than one view as to the basis on which the value of the thing stolen should be assessed.See R. v. Bennitt [1961] N.Z.L.R. 452.

The Committee is of the opinion that the best solution to the problem is to enact a completely new section in the Crimes Act, worded widely enough to apply not only to credit cards and airline tickets but also to any other type of document with which the holder can obtain a benefit or any valuable consideration, and covering every type of action in respect of such a document which is presently criminal (e.g. theft, conversion, obtaining by a false pretence) or is done for a fraudulent purpose.

[10]	The Crown further submitted that the plain wording of s229A refers to a document that is “capable of being used to obtain...” thereby connoting a potential to be used.There is no reference to the document requiring an inherent worth or value waiting to be triggered.The circumstances of use must be relevant and they will often determine capacity.Further, any document has to be used before it can reap any reward, even those with an inherent capacity to obtain a benefit.
[11]	The Crown referred to decisions of this Court which have held that the following documents fall within the ambit of the section; a letter requesting money – R v Baxter [1998] 3 NZLR 144 at p155, line 5 et seq; a letter purporting to evidence a domestic rental arrangement – R v Fowlds, CA222/00 13 December 2000; totalizator tickets for a winning horse but in respect of which payment had already been made – R v Dakers [1980] 1 NZLR 747; a fictitious weighbridge ticket – R v Hansard CA172/77, 17 February 1978.
[12]	The Crown submitted that the interpretation suggested by the appellant would lead to absurdities.A credit card would be “capable” only if the credit limit were not exceeded and all other relevant terms of the contract between the cardholder and finance house was satisfied.It was submitted that the issue of capability would be reduced to a legalistic dissection of the contractual relationship between the cardholder and the financial institution as opposed to an inquiry into the facts surrounding the document and its attempted or actual use.
[13]	In the Crown’s submission the issue whether a document is “capable of being used” must be a question of fact.The successful use of it to obtain money will essentially answer that question.

Discussion

[14]	The opposing arguments may conveniently be referred to in terms of inherent capability and situational capability.Mr Bioletti’s argument is certainly novel and should it be correct then the courts have been convicting, and this Court has been upholding convictions for fraudulent conduct which is not within the scope of the particular section.
[15]	We think an implied premise of the argument for the appellant is that conduct cannot be capable of prosecution under more than one statutory provision which proscribes it.But of course there is no reason why certain conduct should not be amenable to prosecution under more than one statutory provision, at the election of the prosecutor.There may be, for example, a fraud involving a forged document, such conduct amounting to a false pretence and also uttering.
[16]	The extract from the report of the Criminal Law Reform Committee, reproduced in paragraph [9] above, indicates an intention that the new section should be wide in its reach.We note also the remarks of Hon Dr A M Finlay QC reported in Hansard Vol 384 p2569, second column:

The definition of the Acts constituting the offence is wide, but is tempered by the requirement of an intent to defraud, which provides what is really the vital element in any of the offences.

[17]	We see no reason to read down the section to the intent that “capable of being used” should mean “lawfully capable of being redeemed or exchanged for”.In short, the words in question embrace both inherent capability and situational capability.That is how they have been understood by the courts in the past and it is how the words themselves read.
[18]	We come to our view on the basis of the words of the statute and not for the reasons of practical inconvenience suggested by the Crown in the argument summarised in paragraph [12] hereof.
[19]	The appeal must therefore be, and it is, dismissed.

Solicitors:

J Bioletti, Auckland for Appellant