AI-generated summaries. Not legal advice. Always verify against the official judgment on NSW Caselaw.
← All decisions
1
Court of Criminal Appeal 24 July 2008

Sultan v R

[2008] NSWCCA 175

Fraud & dishonesty
CRIMINAL LAW PROPERTY OFFENCES USE OF A FALSE INSTRUMENT MEANING OF “USE” CRIMES ACT 1900, S 300(2)

Citation: Sultan v R [2008] NSWCCA 175
Court: NSW Court of Criminal Appeal
Date: 24 July 2008
Judge(s): Spigelman CJ, Price J, McCallum J

Background

The appellant, a former solicitor working as a mortgage broker, was charged with 17 counts of using a false instrument under s 300(2) of the Crimes Act 1900. The charges arose from a fraudulent loan scheme in which investors were induced to lend money secured over real property, with loan documents purportedly signed by the property owners. In reality, those signatures were forgeries created by another participant in the scheme.

At trial in the District Court, Toner DCJ acquitted the appellant on 16 of the 17 counts but convicted him on Count 15, which related to a single mortgage over a Rose Bay property. The trial judge found that the appellant had introduced the lender's solicitor to a fraudster posing as the true property owner, and that the appellant knew the documents were false. A sentence of imprisonment with a non-parole period of one year and five months was imposed.

The appellant challenged both the conviction and the sentence on appeal to the Court of Criminal Appeal.

  • Whether the trial judge was entitled to infer that the appellant had knowledge of the falsity of the mortgage instrument
  • Whether the appellant's conduct on the day of the transaction amounted to "use" of a false instrument within the meaning of s 300(2) of the Crimes Act 1900

Decision

On the first issue, the Court of Criminal Appeal held that it was open to the trial judge to infer knowledge. The appellant had introduced the parties, nominated the fictitious borrower, identified the security property, and stood to receive substantial fees from each completed loan. Those circumstances provided a sufficient basis for the inference of knowledge.

The more significant question was the meaning of "use" in s 300(2). Spigelman CJ, with whom Price J and McCallum J agreed, held that "use" requires actual deployment of the instrument by the accused, or by an agent or fellow participant in a joint criminal enterprise acting on their behalf. Mere presence at a transaction where another person deploys the false instrument is not sufficient.

On the facts of Count 15, the false mortgage was physically executed and presented to the lender's solicitor by another participant in the scheme. The trial judge made no finding that this person was acting as the appellant's agent, and no joint criminal enterprise was alleged. Accordingly, the appellant could not be found to have "used" the instrument within the statutory meaning.

The Court drew on comparable authority interpreting similar language in different contexts, including the concept of "actual dealing" from R v Lyons, "active employment" from the United States Supreme Court in Bailey v United States, and "actual carrying into action" from the Supreme Court of Canada in R v Steele. Each pointed to the same conclusion: passive presence is not enough.

Orders Made

  • Appeal allowed
  • Conviction quashed
  • Verdict of acquittal directed

Key Takeaways

  • Under s 300(2) of the Crimes Act 1900, "use" of a false instrument requires actual deployment of the instrument by the accused, or by someone acting as their agent or as a fellow participant in a joint criminal enterprise.
  • Mere presence when another person deploys a false instrument does not satisfy the "use" element of the offence, even where the accused has knowledge of the falsity and a financial interest in the transaction.
  • The Court of Criminal Appeal drew on the concept of "actual dealing" from R v Lyons [1984] 2 NSWLR 476, which had previously applied a comparable approach to the offence of "uttering" under s 250 of the Crimes Act.
  • A finding of knowledge of falsity, while necessary, is not sufficient for conviction: the prosecution must also establish that the accused actually deployed, or directed the deployment of, the instrument.
  • In directing a verdict of acquittal, the Court of Criminal Appeal confirmed that an error in the application of the "use" element goes to the sufficiency of the prosecution case, not merely to sentence.

Legislation and Cases Referenced

Legislation
- Crimes Act 1900 (NSW), s 300(2)

Cases
- R v Lyons [1984] 2 NSWLR 476
- Bailey v United States 516 US 137 (1995)
- R v Steele [2007] 3 SCR 3