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Court of Criminal Appeal 22 August 2014

Mehajer v R

[2014] NSWCCA 167

Also reported as (2014) 244 A Crim R 15
Fraud & dishonesty
CRIMINAL APPEAL CONVICTION WHETHER MISCARRIAGE OF JUSTICE CRIMINAL APPEAL CONVICTION

Citation: Mehajer v R [2014] NSWCCA 167
Court: NSW Court of Criminal Appeal
Date: 22 August 2014
Judge(s): Bathurst CJ (with Johnson J and R A Hulme J agreeing)

Background

The appellant was a property developer who, in 2008, sought to refinance a substantial outstanding loan through the National Australia Bank (NAB). The Crown alleged that falsified financial documents were used to support the loan application, and that the appellant paid $2,000 in cash to a NAB employee as an inducement in connection with the loan process.

The appellant was tried in the District Court on two counts: conspiracy to cheat and defraud NAB (Count 1, jointly with a co-accused), and corruptly giving a benefit to an agent of NAB contrary to s 249B(2) of the Crimes Act 1900 (NSW) (Count 2). He was convicted on both counts and sentenced to a total effective term with release to parole scheduled for December 2015.

The appellant appealed against both convictions and sought leave to appeal against sentence. The central issues concerned whether the trial judge had misdirected the jury, and whether the resulting convictions could stand.

  • Whether the trial judge misdirected the jury by directing them on s 249B(2)(b) of the Crimes Act 1900, when Count 2 was charged under s 249B(2)(a)(i), which has different elements
  • Whether that misdirection caused a miscarriage of justice, and whether the proviso in s 6(1) of the Criminal Appeal Act 1912 (NSW) should apply to preserve the conviction
  • Whether a verdict for the offence not charged (s 249B(2)(b)) could be substituted for the charged offence under s 7(2) of the Criminal Appeal Act 1912, where no alternate count appeared on the indictment
  • Whether the trial judge erred in directing the jury that it was immaterial that the appellant may have had no intent to corruptly deprive NAB of property
  • Whether the trial judge's handling of the jury's deadlock (the "Black direction" issue) created undue pressure and a risk of a hasty or unjust verdict
  • Whether the sentences imposed were manifestly excessive

Decision

Count 2 (secret commissions): misdirection on wrong subsection. The indictment charged the appellant under s 249B(2)(a)(i), which required proof that the benefit was given as an inducement or reward for the agent doing or not doing something in relation to the principal's business. The trial judge, however, directed the jury substantially on s 249B(2)(b), which requires only that the receipt or expectation of the benefit would tend to influence the agent. These are distinct offences with different elements. The Court held that directing the jury on the wrong subsection constituted a significant misdirection causing a miscarriage of justice.

Proviso and substituted verdict. The Crown argued that the proviso in s 6(1) of the Criminal Appeal Act 1912 should apply to preserve the conviction, or alternatively that a verdict for s 249B(2)(b) should be substituted under s 7(2). The Court rejected both arguments. Because the two subsections have different elements and no alternate count appeared on the indictment, substituting a verdict for an offence not charged was not available. Applying the proviso was also inappropriate given the nature and extent of the misdirection.

Remaining conviction grounds. The Court rejected the argument that the trial judge erred in directing the jury about intent to deprive NAB of property, finding no miscarriage of justice on that ground and refusing leave. The Court also found no error in the trial judge's handling of the jury's inability to reach a verdict, concluding that the directions given did not place improper pressure on the jury and there was no danger of a hasty or unjust verdict.

Count 1 (conspiracy) and sentence. The appeal against conviction on Count 1 was refused. On sentence, the Court accepted that the sentence was not manifestly excessive given the scale of the fraud attempted and the significant falsification of financial records. Leave to appeal was granted solely to correct the commencement date of the Count 1 sentence.

Orders Made

  • Leave to appeal against conviction on Count 1 refused
  • Appeal against conviction on Count 2 allowed
  • Conviction on Count 2 quashed
  • New trial ordered in respect of Count 2
  • Leave to appeal against sentence granted
  • Sentence on Count 1 set aside and replaced with: imprisonment comprising a non-parole period of 18 months and a balance of term of 18 months, dating from 18 December 2013, with release to parole on 17 June 2015

Key Takeaways

  • Under s 249B(2) of the Crimes Act 1900, subsections (a) and (b) create distinct offences with different elements: paragraph (a) requires proof that the benefit was given as an inducement for the agent's conduct, while paragraph (b) requires only that receipt of the benefit would tend to influence the agent. Charging one and directing the jury on the other constitutes a material misdirection.
  • A substituted verdict under s 7(2) of the Criminal Appeal Act 1912 is not available where the offence for which substitution is sought was not charged on the indictment and has different elements from the offence that was charged.
  • The Court of Criminal Appeal confirmed that the proviso in s 6(1) of the Criminal Appeal Act 1912 will not rescue a conviction where the jury was directed on the wrong elements of an offence, even if evidence may have supported a conviction on a related but different charge.
  • A "Black direction" (a direction to a deadlocked jury to continue deliberating) does not constitute undue pressure merely because it encourages the jury to strive for unanimity, provided the direction does not foreclose the possibility of disagreement or create a real danger of a hasty or unjust verdict.
  • Manifest excess in sentencing requires that the sentence be unreasonable or plainly unjust; subjective mitigating factors, including community standing, prior good character, and delay between offence and sentence, do not automatically render an otherwise proportionate sentence excessive.

Legislation and Cases Referenced

Legislation:
- Crimes Act 1900 (NSW), s 249B
- Criminal Appeal Act 1912 (NSW), ss 6 and 7
- Jury Act 1977 (NSW), s 55F
- Secret Commissions Prohibition Act 1919 (NSW)
- Corrupt Practices Prevention Act 1854 (UK)
- Public Bodies Corrupt Practices Act 1889 (UK)
- Criminal Code (R.S.C., 1985, c. C-46)

Key Cases:
- Black v The Queen [1993] HCA 71; (1993) 179 CLR 44
- Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357
- Hili v The Queen [2010] HCA 45; (2010) 242 CLR 520
- Patel v The Queen [2012] HCA 29; (2012) 247 CLR 531
- Gilbert v The Queen [2000] HCA 15; (2000) 201 CLR 414
- Baiada Poultry Pty Ltd v The Queen [2012] HCA 14; (2012) 246 CLR 92
- Peters v The Queen [1998] HCA 7; (1998) 192 CLR 493
- Huynh v The Queen [2013] HCA 6; (2013) 87 ALJR 434
- Andrews v The Queen [1968] HCA 84; (1968) 126 CLR 198
- Cooper v Slade (1858) 6 H L Cas 746