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Court of Criminal Appeal 2 August 2007

Francisco CHUNG v Regina

[2007] NSWCCA 231

Fraud & dishonesty
SENTENCING DISHONESTY OFFENCES GUILTY PLEA NO INTENTION TO DISPLACE COMMON LAW CRIMINAL LAW PRACTICE AND PROCEDURE

Citation: Francisco Chung v Regina [2007] NSWCCA 231
Court: New South Wales Court of Criminal Appeal
Date: 2 August 2007
Judge(s): Spigelman CJ; Hislop J; Harrison J

Background

The appellant was a Westpac employee who transferred a software template to external parties, enabling those parties to access specific customer accounts and transfer funds. The fraud caused losses exceeding US$3.5 million and A$1.1 million. The appellant pleaded guilty to one count of conspiracy to cheat and defraud at common law.

After entering his plea but before sentencing, the appellant challenged the District Court's jurisdiction. He argued that the common law offence of conspiracy to cheat and defraud had been displaced by Commonwealth legislation, specifically section 184(2) and (3) of the Corporations Act 2001 (Cth) and Division 11.5 of the Criminal Code Act 1995 (Cth). The practical stakes were significant: the statutory offence carried a maximum of five years imprisonment, whereas the common law offence carries no fixed maximum.

Coorey DCJ rejected the challenge at first instance. The appellant sought leave to appeal to the Court of Criminal Appeal.

  • Whether the common law offence of conspiracy to cheat and defraud had been impliedly displaced or "repealed" by section 184(2) and (3) of the Corporations Act 2001 (Cth) in combination with Division 11.5 of the Criminal Code Act 1995 (Cth), at least in respect of corporate employees who defraud their employer
  • Whether prosecuting the appellant under the common law conspiracy charge, rather than the statutory offence, constituted an abuse of prosecutorial discretion or an abuse of process

Decision

On the first issue, the Court found no intention in the Commonwealth legislation to displace the common law offence. Section 185 of the Corporations Act expressly provides that sections 180 to 184 operate "in addition to, and not in derogation of, any rule of law" relating to a person's duties in connection with a corporation. This language was considered a clear indication that Parliament did not intend the statutory scheme to crowd out pre-existing common law rules.

The Court also examined section 5E of the Corporations Act, which states that the Corporations legislation is not intended to exclude or limit the concurrent operation of any law of a State or Territory. While an issue arose as to whether "law of a State" in section 5E encompasses the common law, this was ultimately of lesser moment given the unambiguous terms of section 185. The Court concluded that the Commonwealth Parliament had not, by enacting section 184, evinced any intention to displace the common law conspiracy offence.

On the abuse of process argument, the Court reaffirmed the well-established principle that the prosecution holds a broad and largely unreviewable discretion in selecting charges. A court will interfere only where there is strong evidence that the Crown is pursuing an ulterior purpose. The mere fact that a chosen charge carries a higher maximum penalty than an available alternative does not, without more, constitute an abuse of process.

The Court also noted that the appellant's underlying factual premise was questionable in any event. Because the conduct involved eight separate bank clients, multiple contraventions of section 184(2)(a) may have been available, meaning the assumption that the statutory route would result in a lower overall sentence was not made out.

Orders Made

  • Leave to appeal granted
  • Appeal dismissed

Key Takeaways

  • The Court of Criminal Appeal confirmed that section 184 of the Corporations Act 2001 (Cth) does not displace the common law offence of conspiracy to cheat and defraud, with section 185 of that Act expressly preserving concurrent common law rules of duty and liability.
  • Where Commonwealth legislation expressly states that its provisions operate "in addition to, and not in derogation of" existing rules of law, courts will treat that as a clear signal against implied displacement of the common law.
  • A prosecution's decision to charge a common law offence carrying an unlimited maximum penalty, rather than a statutory offence with a fixed ceiling, does not by itself constitute an abuse of process.
  • Interference with prosecutorial discretion in charge selection requires strong evidence of an ulterior purpose, not merely the availability of an alternative charge carrying a lower maximum.
  • In dismissing the appeal, the Court observed that the appellant's factual premise regarding sentencing exposure was itself uncertain, given that multiple substantive charges may have been available on the facts.

Legislation and Cases Referenced

Legislation
- Constitution, s 109
- Corporations Act 2001 (Cth), ss 5E, 9, 184(2), 184(3), 185, 1308A, 1311(2)
- Crimes Act 1912 (Cth), ss 29D, 86, 86A
- Criminal Appeal Act 1912, s 5F
- Criminal Code Act 1995 (Cth), Div 11.5, Div 11.6, s 135.4

Cases
- Chow v DPP (1992) 28 NSWLR 593
- Felton v Mulligan (1971) 124 CLR 367
- Maxwell v The Queen (1996) 184 CLR 501
- Peters v The Queen (1998) 192 CLR 493
- R v El-Kotob (2002) 4 VR 546
- R v McCready (1985) 20 A Crim R 32
- The Queen v Hoar (1981) 148 CLR 32
- Weininger v The Queen (2003) 212 CLR 629