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Court of Criminal Appeal 13 May 2008

KING v REGINA

[2008] NSWCCA 101

Also reported as (2008) 184 A Crim R 304
Fraud & dishonesty
CRIMINAL LAW JURISDICTION, PRACTICE AND PROCEDURE SUMMING UP CRIMINAL LAW PARTICULAR OFFENCES OBTAINING LOAN FROM A BANK

Citation: King v Regina [2008] NSWCCA 101
Court: NSW Court of Criminal Appeal
Date: 13 May 2008
Judge(s): Mason P; Simpson J; Latham J

Background

The appellant was a director of a bus company operating a large fleet on the NSW North Coast. In late 2000, he negotiated a $100 million lending facility with the National Australia Bank (NAB) on behalf of his company. Part of the security arrangement required the company to sell a specific tranche of buses to the bank, which would then lease them back to the company.

To document that sale, a Tax Invoice was prepared listing 144 Mercedes Benz buses, each identified by unique chassis and engine numbers, at a total price of approximately $44 million. The appellant supplied the identifying details himself and made a statutory declaration affirming the company's ownership of the buses. The bank paid out over $44 million in reliance on those representations.

The critical problem was that no buses matching those chassis and engine numbers existed. The details in the Tax Invoice were, as the court found, pure fabrication. The appellant was convicted in the District Court of fraud by a jury, sentenced to five years imprisonment with a three-year non-parole period, and appealed to the Court of Criminal Appeal.

  • Whether the trial judge failed to properly identify the issues for the jury in the summing-up
  • Whether the trial judge failed to properly put the defence case to the jury
  • Whether the conviction was unreasonable having regard to the evidence

Decision

The Court of Criminal Appeal dismissed the appeal on all grounds, with all three judges agreeing in the reasons delivered by Mason P.

On the summing-up grounds, the court found no failure to properly identify the issues. The trial judge had given directions on all matters the Crown needed to prove, and on onus and standard of proof. The defence had itself negotiated and agreed to particular directions, and defence counsel made a deliberate and informed decision not to seek a redirection that would have required the judge to elaborate on a defence case the court characterised as confusing and largely irrelevant to the fraud charged.

The central defence argument was that, even if the specific bus numbers were fictitious, the bank had effectively obtained title to whatever Mercedes Benz buses were actually in the fleet. The Court rejected this as failing to answer the fraud. The fraud lay precisely in representing that the buses in the fleet were the specific buses identified in the Tax Invoice. A statutory declaration and detailed invoice did not become a minor misdescription simply because other buses may have existed.

The court observed, drawing on authority, that the defence was arguably better served by the omission of detailed judicial commentary on the defence case, since any elaboration by the judge would have exposed the evidentiary gaps that made the argument untenable. The conviction rested on clearly established facts that were barely challenged at trial, and the court also rejected the ground that the verdict was unreasonable.

Orders Made

  • Appeal dismissed.

Key Takeaways

  • A conviction for fraud by false pretence is not undermined merely because assets of a similar general description existed, where the specific fraud consisted of identifying non-existent assets by fabricated serial numbers in security documentation.
  • In dismissing the appeal, the Court of Criminal Appeal confirmed that a defence theory which does not actually answer the specific allegation in the indictment cannot ground a complaint that the judge failed to properly put the defence case.
  • Where defence counsel negotiates and agrees to particular jury directions, an appellant faces significant difficulty arguing on appeal that those directions were inadequate.
  • No error in a summing-up is established where any elaboration of the defence argument by the judge would have exposed the weaknesses in that argument rather than advancing it.
  • A statutory declaration by a company director asserting ownership of specifically identified property, furnished to a lender as security, formed the evidentiary foundation for fraud where the property described did not exist and the director knew it did not exist.

Legislation and Cases Referenced

Legislation
- Crimes Act 1900 (NSW)

Cases
- Basto v The Queen (1954) 91 CLR 628
- Domican v The Queen (1992) 173 CLR 555
- Donald (1983) 11 A Crim R 47
- Kastratovic (1985) 19 A Crim R 28
- Patten v Thomas Motors Pty Ltd (1965) 66 SR (NSW) 458
- Peters v The Queen [1987] HCA 7; 192 CLR 493
- R v Lawrence (1980) 32 ALR 72
- R v Negline, NSWCCA, 5 December 1990
- R v Smart [1963] NSWR 706
- Spies v The Queen [2000] HCA 43; 201 CLR 603