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Court of Criminal Appeal 1 November 2001

R v Wong

[2001] NSWCCA 444

Fraud & dishonesty

Citation: R v Wong [2001] NSWCCA 444
Court: NSW Court of Criminal Appeal
Date: 1 November 2001
Judge(s): Studdert J, Ipp AJA, Greg James J

Background

The appellant was a director and manager of Strategic Commodities Pty Limited, a company that acted as an intermediary in trade transactions involving goods sourced from Hong Kong. Strategic Commodities held a bank account with ANZ, and the appellant's usual role involved handling administrative and clerical work, including directing the bank on how to deal with incoming funds.

In mid-1999, ANZ made an internal error and duplicated a transfer of approximately AUD $431,000 that had already been paid out to a Hong Kong company, Wealth Court Limited, on instructions from Strategic Commodities. An ANZ employee, unaware the transaction had already been processed, contacted the appellant to seek instructions on what appeared to her to be a pending incoming transfer. The appellant provided a letter directing ANZ to deposit the full amount into the Strategic Commodities account, in a form different from the standard letters previously used. Over the following three weeks, the appellant withdrew almost the entire sum and used it to purchase shares in his own name, his brother's name, and through a company he controlled.

The appellant was charged with fraud under section 176A of the Crimes Act. He was convicted after a five-day trial in the District Court before Shadbolt DCJ and ordered to enter into a good behaviour bond for two years. He appealed his conviction to the Court of Criminal Appeal.

  • Whether the trial judge erred in admitting or excluding certain evidence said to be relevant to the appellant's defence
  • Whether the bank's error and the subsequent crediting of funds was sufficient to constitute the actus reus of the fraud offence
  • Whether the Crown had breached the rule in Browne v Dunn by failing to cross-examine the appellant on the authorship and authenticity of certain documentary exhibits
  • Whether the jury's verdict was unreasonable or unsupported by the evidence

Decision

The Court dismissed each of the four grounds of appeal. On grounds 1 and 2 (evidentiary issues), Ipp AJA found the disputed evidence was neutral and would not have materially assisted the appellant. Greg James J added that even if the material had some relevance, it would have been liable to exclusion under section 135(b) of the Evidence Act because of the risk of unfair prejudice.

On the third ground, concerning whether the bank's conduct was sufficient to constitute the alleged fraud, Ipp AJA held that ANZ's erroneous crediting of funds created rights as between the bank and Strategic Commodities. The bank then transferred those rights in consequence of its obligations, and that conduct was sufficient to establish the elements of the offence charged.

On the Browne v Dunn complaint, the Court found no substance in the criticism that the Crown had failed to put certain matters to the appellant in cross-examination. Greg James J referred to the analysis of Hunt J in Allied Pastoral Holdings, noting that where a party bears the issue in chief and seeks to discharge it, the relevant notice requirement under Browne v Dunn is typically satisfied. No application had been made during the trial for the judge to direct the jury on this issue, which further undermined the complaint on appeal.

On the unreasonable verdict ground, Studdert J reviewed the circumstantial evidence in detail. The jury was entitled to reject the appellant's account that he acted throughout on instructions from the company's controller, Ms Liu, who did not give evidence. The verdict could not be characterised as unreasonable.

Orders Made

  • Appeal against conviction dismissed.

Key Takeaways

  • A conviction for fraud under section 176A of the Crimes Act can arise where a bank mistakenly credits funds and then transfers related rights to an account holder, provided the other elements of the offence are established.
  • Under the rule in Browne v Dunn, where a party bears the issue in chief and seeks to discharge it, the requirement to put opposing matters to a witness in cross-examination is generally satisfied. A failure to raise this at trial undermines a Browne v Dunn complaint on appeal.
  • Circumstantial evidence alone can support a fraud conviction where the jury is entitled to reject an innocent explanation offered by the accused.
  • Evidence that is neutral in its effect, or that would risk unfair prejudice under section 135(b) of the Evidence Act, will not establish appellate error simply because it was not placed before the jury.
  • In dismissing the appeal, the Court of Criminal Appeal confirmed that a verdict is not unreasonable merely because the accused offered an alternative explanation, if that explanation was properly open to the jury to reject.

Legislation and Cases Referenced

Legislation:
- Crimes Act (NSW), s 176A
- Evidence Act (NSW), s 135(b)

Cases:
- M v The Queen (1994) 181 CLR 487
- R v Birks (1990) 19 NSWLR 677
- Browne v Dunn (1894) 6 R 67 (HL)
- Allied Pastoral Holdings Pty Limited v The Federal Commissioner of Taxation (1983) 44 ALR 607