The Queen v Thompson [2005] NZCA 72; [2005] 3 NZLR 577 (27 April 2005)

Last Updated: 20 December 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA404/04THE QUEEN

v

PETER JOSEPH THOMPSON

Hearing: 18 April 2005

Court: Glazebrook, Baragwanath and Goddard JJ

Counsel: J N Bioletti for Appellant
A Markham for Crown

Judgment: 27 April 2005

JUDGMENT OF THE COURT

1. Order substituting for verdicts of guilty found by jury verdicts of guilty of offences under s 246(1) Crimes Act 1961.
   
2. Order under s 33 Sentencing Act 2002 that a probation officer prepare a reparation report for the Court and that appellant make a declaration as to his financial capacity.
   

100. Hearing of sentence appeal adjourned pending receipt of report.

____________________________________________________________________

REASONS

(Given by Baragwanath J)

Background

[1] The appellant was convicted by a jury in the District Court at Auckland on 18 June 2004 on three counts of fraudulent use of a document in breach of s 229A of the Crimes Act 1961 (now repealed). He had earlier pleaded guilty to two further counts under the same section and was sentenced to an effective term of three and a half years imprisonment and ordered to pay reparation of $80,230.20. He appeals against conviction and sentence.
[2] The indictment before the jury was in the following terms:

1 THE CROWN SOLICITOR AT AUCKLAND charges that PETER JOSEPH THOMPSON on or about the 5th March 2001, at Cambridge, with intent to defraud, used a document capable of being used to obtain a pecuniary advantage, namely an instruction dated 5 March 2001 from VR Weinberg to the Bank of New Zealand at Cambridge to pay $53,707.20 from the bank account of VR and PS Weinberg to the account of C and P Thompson at WestpacTrust bank account number 03-0239-00035678-25, for the purpose of obtaining a pecuniary advantage for himself.

2 THE said Crown Solicitor further charges that PETER JOSEPH THOMPSON on or about the 26th March 2001, at Cambridge, with intent to defraud, used a document capable of being used to obtain a pecuniary advantage, namely a WestpacTrust deposit dated 26 March 2001 depositing $4336 into the account of C and P Thompson account number 03-0239-0035678-025 for the purpose of obtaining a pecuniary advantage for himself.

3 THE said Crown Solicitor further charges that PETER JOSEPH THOMPSON on or about the 9th April 2001, at Hamilton, with intent to defraud, used a document capable of being used to obtain pecuniary advantage, namely a TSB Bank cheque dated 9 April 2001 on the account of JT or HL Gibson and made out to C and P Thompson for $10,000, for the purpose of obtaining a pecuniary advantage for himself.

[3] The counts to which the appellant pleaded guilty before trial alleged:

5 THE said Crown Solicitor further charges that PETER JOSEPH THOMPSON on or about the 2nd November 2001, at Auckland, with intent to defraud obtained from DALE SLATTER a document namely a BNZ Bank Cheque No. 000021 020139 0079817 00 drawn on the account of RA and MR Patel and made payable to Foster for $6,187.50 being a document that was capable of being used to obtain a pecuniary advantage.

6 THE said Crown Solicitor further charges that PETER JOSEPH THOMPSON on or about the 20th November 2001, at Auckland, with intent to defraud obtained from MARTYN FREER a document namely a WestpacTrust Cheque No. 069929 drawn on the account of The Pom D’Kiwi Trust – M Freer, NW Slatter and made payable to Turner Hopkins for $3,500.00 being a document capable of being used to obtain a pecuniary advantage.

[4] The five counts all related to fraudulent sales transactions involving second-hand construction materials and vehicles. The appellant procured advance payment for goods that he had no intention of supplying. In some cases the goods did not exist.
[5] In respect of the three counts before the jury the appellant had been employed in his brother’s construction equipment company, Roadstone Equipment Limited. Although the appellant represented himself to be the owner of the company he was merely a sales representative with no independent authority to finalise sales or sign cheques.
[6] The complainant in respect of the first and second trial counts, Mr Weinberg, met the appellant after responding to a Roadstone advertisement for excavation machines. The appellant said that he would arrange to import a suitable vehicle from Japan. At his request Mr Weinberg paid the purchase price of $53,707.20 in advance to a nominated bank account (count 1). Later at the appellant’s request he made a further payment of $4336 which the appellant represented to be the GST on the transaction. The nominated account was the personal account of the appellant’s wife. The digger did not arrive. The Crown case was that it did not exist and that the whole transaction was a sham (count 2).
[7] The complainant in respect of count 3, Mr Hamilton, responded to an advertisement for a particular digger priced at $50,000, said to have 5500 engine hours on the clock. He agreed to buy the digger and at the appellant’s request arranged payment of a $10,000 deposit, again to Mrs Thompson’s account. Although the digger existed it was never supplied. The Crown established that the record of the engine hours had recently been tampered with and substantially affected the vehicle’s value.
[8] The two counts to which the appellant pleaded guilty concerned purported sales of building materials and a Ford trailer truck. In each case the appellant requested and obtained advance payment (of $6187 and $3500 respectively) but the goods were never delivered. Those convictions were not challenged on appeal.

Use of a document

[9] An original indictment charged the appellant with counts of obtaining by false pretences contrary to s 246(2) of the Crimes Act (now repealed). As a result of the judgment in R v Wilkinson [1999] 1 NZLR 403 holding that credit in the bank account is not something “capable of being stolen” and was therefore outside the ambit of s 246(2) the Crown obtained leave to file an amended indictment under s 229A.
[10] The first issue on the conviction appeal is whether a fraudster who induces his dupe to make a payment to his benefit, and the dupe elects to execute a cheque or other written authority as the means of transferring funds to a bank, could be said to “use” that authority to obtain a pecuniary advantage in breach of s 229A.
[11] Section 229A(b) provided:

229A Taking 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,–

...

(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.

[12] The actus reus was the use by the accused of the document. Such use need not be by the accused in person: R v Paterson [1976] 2 NZLR 394 where this Court confirmed that where an offender deliberately uses an innocent agent to perform the actus reus of a crime the offender will generally be treated as principal in terms of s 66(1)(a) of the Crimes Act.
[13] In R v Gunthorp [2003] 2 NZLR 433 the doctrine of innocent agent was applied in a case under s 229A. It was alleged that Mr Hawkins with intent to defraud used a cheque drawn on the account of one of his companies. There was no direct evidence that Mr Hawkins authorised or directed any part of the transaction. But this Court upheld the trial Judge’s finding that as a matter of inference it was ‘inconceivable’ that the transactions could have taken place without Mr Hawkins’ express instructions. It held it was immaterial that the cheque was executed by another without Mr Hawkins’ directly handling it:

14. ...

‘It was not disputed that a person may ‘use’ a document without directly handling it (cf R v Paterson [1976] 2 NZLR 394). An instruction or direction to deal with a document in a particular way will suffice. Counsel submitted that nothing less than that will do. This is too narrow an approach. An instruction to carry out a particular transaction necessarily carries with it an instruction to do what is normally and reasonably necessary for the purpose.

Further authorities on the innocent agent point are R v Fowlds CA222/00 13 December 2000 and R v McGrouther [2004] 2 NZLR 450.

[14] A deeper point is that the cheque in the Equiticorp case was drawn on an account styled “Equiticorp Investments Limited” but debiting Equiticorp Industries Group Limited (EIGL) in favour of Equiticorp Securities Limited on behalf of Richardson Camway Limited the shares in which were held by a family trust set up by Mr Hawkins and a former business partner. The Crown’s allegation was of fraud committed against EIGL in favour of Richardson Camway. All companies other than Richardson Camway were parts of the Equiticorp Holdings Limited group. So as Ms Markham correctly submitted the case was one in which the “use” of the cheque by the offender, Hawkins, was physically performed by the victim EIGL. She argued that the case supports her contention that in the present case the Crown was right to allege that the appellant had “used” the cheque and other bank paper executed by the complainants and their banks.
[15] The argument is logical and superficially attractive. But we are satisfied that it is flawed. In R v Mitford [2005] 1 NZLR 753, 763 para [39] it was noted that:

Care must be taken to avoid the kind of imprecision that can extend criminal responsibility beyond the proper ambit of the measure.

[16] Section 229A had its provenance in a report of the Criminal Law Reform Committee which is reproduced at para [10] of R v Jordan [2003] 2 NZLR 456, 458-9. It was headed:

THEFT AND FRAUDULENT USE OF CREDIT

CARDS AND AIR LINE TICKETS

It included the passages:

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 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 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] NZLR 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.

...

Then followed the draft of s 229A which was enacted without amendment.

[17] Elsewhere in criminal law it is only in a case where a victim acts under compulsion that his act can constitute the act of the offender. The report contained no suggestion of an attempt to depart from the conventional divide between the offender and his victim. Nor does the language of the section. The actus reus or the physical element of the crime is the use by the accused of a document capable of being used to obtain a pecuniary advantage from another; the mens rea or the mental element is the intention of the accused to defraud another. The principle that an accused may act personally or by an agent is an example of the divide, not an exception to it.
[18] In R v Gunthorp the actus reus of using a cheque was performed within Mr Hawkins’ organisation. He as CEO of the Equiticorp Group was in a position to determine policy within EIGL; it was his instrument as well as his victim. But the Crown’s present argument requires performance of the actus reus - the use - not by the accused or his agent but by a complainant who is not his agent. No authority was cited for such proposition and we consider it a bridge too far.
[19] In the very different case of Kilbride v Lake [1962] NZLR 590, 592 Woodhouse J said:

In considering whether the actus reus can be attributed to a defendant, it is important to recognise that this is something which occurs following acts or omissions. It is not the line of conduct which produces the prohibited event but the event itself... The crime... is constituted by the event, and not by the discrete acts or omissions which preceded it: Russell on Crime, 11th ed., pp 25, et seq [12th ed., pp23 ff].

[20] While words have many senses and the choice among plausible options turns often on policy rather than logic, the Crown’s argument fails a simple verbal test. In ordinary parlance the appellant did not personally or by an agent use the documents; what he has done is induce the complainant to use the document. We are satisfied that such conduct is not captured by the provision. The challenge to the use of s 229A succeeds.

Removal of defence of lack of use

[21] A further ground of appeal was that in summing up the Judge removed from the jury the defence that the appellant did not use the documents and directed them that they must find the use element established.
[22] There is force in that argument. In the course of summing up the Judge stated “Now, first, did he use the documents?” The Judge took the jury through the evidence and continued:

So did Mr Thompson use these documents? Follow my direction because the answer to that, I’m telling you, has to be yes.

That position was maintained in other parts of the summing up in relation to use of the documents.

[23] In R v Wang [2005] 1 WLR 661 the House of Lords has unanimously followed its majority decision in Director of Public Prosecutions v Stonehouse [1978] AC 55 and held that there are no circumstances in which a Judge is entitled to direct a jury to return a verdict of guilty. In Craig v R CA142/02 11 December 2002 this Court stated:

[43] Judges should be alert to the essential responsibility of the jury to determine all factual issues relevant to the case.

and cited the speech of Lord Edmond-Davies in Stonehouse at p88:

My Lords, the erroneous direction in the instant case is but one example of a prevalent (though fortunately not universal) tendency in our courts in these days to withdraw from the jury issues which are solely theirs to determine...

There is some recent discussion of the point in Kai Ji v R CA381/03 15 December 2004.

[24] Had the use charges been good in law the convictions upon them could have been sustained only by application of the proviso, as occurred in Stonehouse. But since the documents undoubtedly resulted from the appellant’s direction that the funds be put in his wife’s account, in relation to that element the proviso would have been applied.
[25] There was no challenge to the Judge’s direction in relation to the element of intent to defraud.

Substitution of alternative verdicts: section 396(2)

[26] We turn to consider s 386(2) which provides:

386 Powers of appellate courts in special cases

...

(2) Where an appellant has been convicted of an offence and the jury could on the indictment have found him guilty of some other offence, and on the finding of the jury it appears to the Court of Appeal or the Supreme Court that the jury must have been satisfied of facts which proved him guilty of that other offence, the Court may, instead of allowing or dismissing the appeal, substitute for the verdict found by the jury a verdict of guilty of that other offence, and pass such sentence in substitution for the sentence passed as may be warranted in law for that other offence, not being a sentence of greater severity.

[27] In R v Simon CA230/04, 14 October 2005 this Court considered an appeal against conviction on counts under s 246 of the Crimes Act alleging that the appellant had by false pretences induced customers to execute valuable securities in the course of selling computer parts on the internet. The false representations related as in this case to the appellant’s intention to supply goods. The valuable securities were the documents by which the victim ensured that accounts nominated by the appellant were credited with the funds he required. This Court held that the bank lodgement forms and internet banking forms were “valuable securities” and the appeal failed.
[28] Section 246 (now repealed) provided at the time of the appellant’s conduct:

246 Obtaining by false pretence

(1) Every one is liable to imprisonment for a term not exceeding 7 years who, with intent to defraud or cause loss to any person by any false pretence, causes or induces any person to execute, make, accept, endorse, or destroy the whole or any part of any valuable security, or to write, impress, or affix any name or seal on any document in order that it may afterwards be made or converted into or used or dealt with as a valuable security.

...

[29] Asked why this Court should not exercise discretion under s 386(2) to substitute convictions under s 246(1) Mr Bioletti submitted that the defence had focused at trial on the “use” issue rather than the element of intention to defraud and that if the charges had been laid under s 246(1) more attention would have been devoted to the fraud element; the appellant might have elected to give evidence.
[30] But the appellant did advance at trial an affirmative defence to the fraud element. In support of the oral submissions of lack of mens rea noted by the Judge in summing up the appellant’s wife was called to produce a trial balance setting out particulars of funds said by the defence to have been put into the account of his brother’s company. Its contention was that the appellant’s retention of the funds received from the complainants was performed in the honest belief of entitlement to reimbursement.
[31] We do not accept that there is solid basis for the submission that the defence as to honest belief would have been advanced in any materially different way had s 246(1) been relied upon by the Crown at trial.
[32] Recourse to s 386(2) renders the Stonehouse point academic. We exercise discretion to substitute verdicts of guilty of the following substituted counts, which refer to the author of the valuable security in each case:

1 THE CROWN SOLICITOR AT AUCKLAND charges that PETER JOSEPH THOMPSON on or about the 5th March 2001, at Cambridge, with intent to defraud by means of a false pretence induced VR Weinberg to execute a valuable security namely an instruction dated 5 March 2001 to the Bank of New Zealand at Cambridge to pay $53,707.20 from the bank account of VR and PS Weinberg to the account of C and P Thompson at WestpacTrust bank account number 03-0239-00035678-25, for the purpose of obtaining a pecuniary advantage for himself.

2 THE said Crown Solicitor further charges that PETER JOSEPH THOMPSON on or about the 26th March 2001, at Cambridge, with intent to defraud by means of a false pretence, induced PS Weinberg to execute a valuable security, namely a WestpacTrust deposit dated 26 March 2001 depositing $4336 into the account of C and P Thompson account number 03-0239-0035678-025 for the purpose of obtaining a pecuniary advantage for himself.

3. THE said Crown Solicitor further charges that PETER JOSEPH THOMPSON on or about the 9th April 2001, at Hamilton, with intent to defraud by a false pretence, induced JT Gibson to execute a valuable security, namely a TSB Bank cheque dated 9 April 2001 on the account of JT or HL Gibson and made out to C and P Thompson for $10,000, for the purpose of obtaining a pecuniary advantage for himself.

Televising the proceeding

[33] The final ground of the conviction appeal was that there was grant of a belated application for the televising of the proceedings. Mr Bioletti submitted:

1. The filing of the late application resulted in the trial judge being made aware that the appellant was a convicted fraudster. If matters had been dealt with in accordance with the protocol another judge could have dealt with the matter leaving the trial judge free from such knowledge;
2. The jury would well know that the media were particularly interested in the accused rather than in the events of the charges which were unremarkable. So the effect of the media application was to deny the appellant a fair trial.

[34] There was no submission that the Judge’s awareness of the appellant’s convictions adversely affected the way in which the Judge conducted the trial and directed the jury. It is not uncommon that the Judge will have conducted bail or severance hearings at which the accused’s criminal record will have come into evidence. There is no basis for concluding that the Judge’s knowledge of the appellant’s record resulted in miscarriage of justice as required by s 385 of the Crimes Act.
[35] Nor does the mere fact that the media application was granted provide any basis for a finding of miscarriage of justice. Section 14 of the New Zealand Bill of Rights Act 1990 provides:

14 Freedom of expression

Everyone has the right to freedom of expression, including the freedom to seek, receive, and impart information and opinions of any kind in any form.

[36] And s 138 of the Criminal Justice Act 1985 requires that, save as otherwise provided by statute:

...every sitting of any court dealing with any proceedings in respect of an offence shall be open to the public.

[37] In R v Wharewaka HC AK CRI-2004-092-4373 8 April 2005 it was stated:

[12]... The principle that criminal trials and sentencing are performed in public is a fundamental element of the accused’s absolute right to justice and is limited only by certain statutory exceptions. That right to justice is recognised by the common law’s insistence on a fair trial: R v Griffin [2001] 3 NZLR 577, 587 para [40]; R v A (No 2) [2002] 1 AC 45, 70 para [51] per Lord Hope and the heading to s 27 of New Zealand Bill of Rights Act; the right to a public hearing has been confirmed by s 25 as among the:

...Minimum standards of criminal procedure

Everyone who is charged with an offence has, in relation to the determination of the charge, the following minimum rights:

(a) The right to a fair and public hearing by an independent and impartial court...;

[13] The reasons why the right to justice requires a public hearing, stated memorably in Scott v Scott [1913] AC 417, have been summarised by Woodhouse P in Broadcasting Corporation of New Zealand v Attorney General [1982] 1 NZLR 120, 122-3. The need for assurance of justice to the accused, to victims and to the community can only be met by public audit of how the courts exercise the great powers they receive in order to discharge heavy responsibilities. It has been expressed in the precept that a judge while judging is himself on trial.

...

[15] To give effect to the principle of open justice in changing circumstances requires evolution of its application. The principle, entitling a right of public entry to the courtroom save in exceptional circumstances, has long been applied to permit the presence in court of accredited news reporters whose presence may bring to the attention of the wider community fair and accurate reports of what is done in their name: Attorney-General v Leveller Magazine Ltd [1979] AC 440... The reality that television is now the eyes and ears of the community in a way that was previously the preserve solely of newspapers and later radio has required its recognition in terms of the court procedures. The need for what Lord Steyn has called

[t]he glare of contemporaneous publicity [to] ensure that trials are properly conducted [as] a valuable check on the criminal process.

And its

...mak[ing] uninformed and inaccurate comment about the proceedings less likely

In re S (A Child) Identification: Restrictions on Publication [2004] 3 WLR 1129, 1141 paras 29-30.

is indisputable.

[38] So in New Zealand a committee including judicial and media representatives has prepared the In-Court Media Coverage Guidelines which include:

1. Application of guidelines

These guidelines:

(a) Apply to all proceedings in the Court of Appeal, the High Court, and the District Court from 1 January 2004.

(b) Do not have legislative force.

(c) Do not create rights and should not be construed to create expectations.

(d) Replace the Guidelines and Voluntary Code of Conduct for Expanded Media Coverage of Court Proceedings dated May 2000.

2. Purpose

(1) These guidelines are intended to ensure that applications for in-court media coverage are dealt with expeditiously and fairly and that so far as possible like cases are treated alike.

(2) In making decisions and exercising discretions under these guidelines, the court may have regard to the following matters:

(a) the need for a fair trial;

(b) the desirability of open justice;

(c) the principle that the media have an important role in the reporting of trials as the eyes and ears of the public;

(d) the importance of fair and balanced reporting of trials;

(e) court obligations to the victims of offences;

(f) the interests and reasonable concerns and perceptions of victims and witnesses.

...

4. Discretion of the court

(1) All matters relating to in-court media coverage are at the discretion of the court.

...

9. Decisions after hearing

...

(3) In considering the application, the Judge may have regard to:

...

(b) the media applicant’s standing as a media organisation;...

[39] Television in the court room is now a regular feature of the juridical landscape. That is the essential reason why the bare fact that the present proceeding was televised provides no grounds for apprehending miscarriage of justice.

Sentence

[40] The appellant challenged the combination of the sentence of three and a half years imprisonment and an order for reparation of some $80,000 contending that he lacks means to pay reparation and that in result the order would constitute a fine which he has no capacity to pay. The Crown acknowledged that there was no realistic prospect of significant reparation.
[41] But there was no evidence before us as to Mr Thompson’s actual means. Pursuant to s 33 of the Sentencing Act 2002 we order that a probation officer prepare a reparation report for the Court in accordance with s 34 on:

1. The financial capacity of the appellant;
2. The maximum amount that the appellant is likely to be able to pay under a sentence of reparation;

100. The frequency and magnitude of any payments that should be required under a sentence of reparation if provision for payment by instalments is thought desirable.

[42] For the purposes of preparation of the reparation report we direct the appellant to make a declaration as to his financial capacity in accordance with s 42. Any information given by the appellant should be checked as far as possible against independent sources which the report should identify.
[43] The determination of the appeal against sentence is adjourned pending receipt of such report.

Solicitors:
Jeremy Bioletti, Auckland for Appellant
Crown Law Office, Wellington