Ian James Goudie v Donna Marie Thompson [1995] ACTSC 53 (5 June 1995)

SUPREME COURT OF THE ACT

IAN JAMES GOUDIE v. DONNA MARIE THOMPSON
No. SCA82 of 1994
Number of pages - 12
Practice And Procedure - Criminal Law

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
HIGGINS J

CATCHWORDS

Practice And Procedure - appeal against conviction in Magistrates Court - original guilty plea claimed to have been based on error of law - nature and powers of Supreme Court when hearing such an appeal - appeal by way of rehearing - admission of further evidence pursuant to s214 of Magistrates Court Act - unfettered discretion of court to admit further evidence in circumstances - power of appeal court to reverse plea of guilty entered at first instance - plea of guilty should not be permitted to support that which would otherwise be a miscarriage of justice.

Criminal Law - appeal against conviction for theft - monies raised during course of fund-raising activity for charitable society alleged not to have been paid - leave granted to appellant to adduce further evidence - ownership of or equity in property alleged to have been stolen unclear - breach of duty to handle funds as directed not necessarily theft - use of criminal law in cases where conduct in question seems merely to raise a civil debt - no evidence of intention to permanently deprive charitable society of any property - appeal upheld - conviction and penalty set aside.

Magistrates Court Act 1930 (ACT),ss208(1)(a), 214

Crimes Act 1900 (ACT), ss93, 95, 96, 97
Theft Act 1968 (UK), s5(3)
Crimes Act (Vic), s73(9)

Messel v Davern (1981) 9 NTR 21
Campbell v Fortey (1987) 85 FLR 462
Woden Valley Glass v Psaila [1993] FCA 399; (1993) 122 ALR 387
Rothwells Ltd v Entity Group Ltd (1990) 101 FLR 460
Aluminium Industrie Vaasen B V v Romalpa Aluminium Ltd (1976) 1 WLR 676
Chattis Nominees Pty Ltd v Norman Ross Homewords Pty Ltd (In liq) (1992) 28

NSWLR 338

Attorney-Generals' Reference (No. 1 of 1985) (1986) 2 All ER 219
Law of Theft, 6h ed, (79) 43
R v Baraduy (1984) VR 685
R v Murphy (1985) 4 NSWLR 42
Lloyd (1985) 1 QB 835
Coysh v Elliott (1963) VR 114
R v Liberti (1991) 55 A Crim R 120

HEARING

CANBERRA, 10 April 1995
5:6:1995

Counsel for the Appellant: Mr J L O'Keefe

Instructing solicitors: T Barry Williams

Counsel for the Respondent: Mr A Doig

Instructing solicitors: Director of Public Prosecutions

ORDER

THE COURT ORDERS THAT:

1. The appeal be upheld and the conviction and penalty set aside.

2. In substitution therefor, a verdict of acquittal be recorded and the

information dismissed.

DECISION

HIGGINS J On 19 August 1994, the appellant pleaded guilty to a charge that he:

... in the Australian Capital Territory, between the 5th July,
1993 and the 22nd October, 1993, did steal money, of the total
value of $243.00 belonging to the ACT Society of the Physically
Handicapped Incorporated.

2. Consequently, Magistrate Burns recorded a conviction and, without passing sentence, ordered that the appellant be released upon entering into a recognisance, self in the sum of $500.00 to be of good behaviour for a period of 12 months from that date.

3. By his amended Notice of Appeal dated 21 February 1995, the appellant asserted that he entered his plea of guilty as a result of an error of law. He further asserts that, on the facts as alleged, the offence charged was not made out.

The factual background
4. The facts alleged were that, between 5 July 1993 and 22 October 1993, the appellant was an entrant in the Queen of Canberra Quest. That Quest was sponsored by and was for the benefit of the abovenamed Society. On 5 July 1993, the appellant signed a contractual document with a firm trading as Fund Raising Options. In fact, as was revealed on the hearing of this appeal, the "firm" was a company called Fundraising Services Pty Ltd (FRS).

5. It was further alleged that the "firm" supplied the appellant "as a representative of the Queen of Canberra Quest" with 100 "units" of chocolate worth $3,780.00.

6. It had been intended that the chocolates would be sold for $3.00 a box. How many "boxes" were contained in a "unit" was not clear on the evidence. The prosecution alleges that a percentage of the money so raised was to "go into the Queen of Canberra Quest". FRS was to be paid for the chocolates by 26 July 1993.

7. In fact, many of the chocolates remained unsold and were collected by FRS on 13 August 1993. Their value was, apparently, credited to the debt allegedly then due to FRS. The alleged facts continued:

From the chocolates that had been sold $243 comprised the
profit component which was to be given to the Queen of Canberra
Quest.

8. Despite a number of requests to do so, the appellant failed to pay over to the Society the proceeds of the presumed sale of chocolates. He offered no explanation for that failure until, on 22 October 1993, he was interviewed by police.

9. In that interview he was alleged to have stated that he had spent money raised from the sale of chocolates and understood that he had acted dishonestly. The next day, money was paid to the Society representing its anticipated profit in full.

10. Counsel for the appellant explained to the learned Magistrate that the appellant had not read the documents he had signed. He was unaware that he had an obligation to bank the proceeds of the sale of chocolates immediately upon receipt. Whether or not there was such an obligation may not be as apparent as the appellant's counsel asserted. I will refer to that later. Counsel for the appellant continued the explanation, stating that the appellant had given some chocolates to friends to sell. Any money which was paid to him had been used by the appellant for his own purposes. The fact, as appeared in the lengthier explanation offered to police, that some chocolates were taken by others without payment was not referred to.

11. On the hearing of the appeal, the appellant sought not only to reverse his plea of guilty but also to adduce further evidence pursuant to s214 Magistrates Court Act 1930 (ACT) (MC Act).

The nature of and powers of the Court in relation to this appeal - admission of further evidence.
12. It was common ground that this appeal, being an appeal to which s208(1)(a) MC Act applies, is by way of rehearing: see Messel v Davern (1981) 9 NTR 21; Campbell v Fortey (1987) 85 FLR 462; Woden Valley Glass v Psaila [1993] FCA 399; (1993) 122 ALR 387.

13. On the hearing of the appeal, this Court is obliged to have regard to the evidence given in the proceedings out of which the appeal has arisen. However, the Court has the power to draw inferences of fact whether in accordance with inferences drawn at first instance or not: see s214(2) MC Act.

14. Power is also conferred pursuant to s214(3) to order the production of documents necessary for the determination of the appeal.

15. Section 214(4) permits the Court to receive further evidence on the hearing of the appeal. The Court is required to receive that evidence if:

(a) it appears to the Supreme Court that the evidence is likely to
be credible and would have been admissible in the proceedings
out of the (sic) which the appeal arose on an issue relevant to
the appeal; and
(b) the Supreme Court is satisfied that the evidence was not
adduced in those proceedings and there is a reasonable
explanation for the failure to adduce it.

16. In Campbell v Fortey (supra), Miles CJ noted that the discretion to receive further evidence is an unfettered one. It is not essential that the evidence be "fresh evidence" in the traditional sense nor that error in any relevant sense on the part of the court at first instance be demonstrated. Due regard is, of course, to be paid to the findings and reasons of the court of the first instance: see also Rothwells Ltd v Entity Group Ltd (1990) 101 FLR 460.

17. It seemed to me appropriate to extend leave to the parties to adduce further evidence in the circumstances.

18. The appellant did not dispute the general thrust of the facts put to the learned Magistrate at first instance. Those facts were amplified by further evidence tendered on behalf of the respondent. That evidence consisted of the transcript of a taped record of interview between the appellant and the respondent, Constable Thompson. The documentation signed by the appellant to enter the Quest and to obtain the chocolates was also tendered.

19. That information was further supplemented by an affidavit of Jacqueline Nichole Carpenter, coordinator of the Quest and an employee of the Society. An affidavit by the appellant was also received.

20. Ms Carpenter's affidavit confirmed that the appellant had signed and completed an application form to enter the Quest. He was given a written form of contract used for the purposes of the Quest, although he did not fill in any details on the form or sign it.

21. At a meeting of Quest entrants, the appellant was given a bank deposit book for the deposit of monies raised by the appellant for the Quest. He was handed a document explaining the use of the deposit book. He was told that:

... any monies raised had to be banked to Canberra Advance Bank
or returned to the ACT Society Office within 3 days of receiving
the monies.

22. Between June 1993 and 25 October 1993, Ms Carpenter had contacted the appellant "on numerous occasions", to remind him of that instruction, that is, to deposit monies "within 3 days ... of the conclusion of a fundraising event". She confirmed the payment of $243.10 on 25 October 1993. The appellant's entry in the Quest was, she said, cancelled.

23. The appellant's evidence was that he had his attention drawn to the rule about banking money in the following terms:

Most people hang onto the money they've raised until close to
the end of the quest and then make a bulk payment.

24. He was first approached for the profits from the sale of chocolates by the police. He agreed he had spent the proceeds of the sale of chocolates but claimed he intended to pay whatever was due to the Society in due course.

25. He denied he was ever excluded from the Quest. Nothing turns on that controversy.

26. In fact, the appellant, during his record of interview, also had claimed that he intended to pay whatever he owed. The chocolates he was supplied with had not been specifically designed or labelled for the Quest. They were simply chocolate products usually or commercially available and packaged as such.

To whom did the proceeds of sale of chocolates belong when appropriated by the appellant to his own use?
27. The entry form signed by the appellant, apart from its apparent assumption that all entrants would be female, was unremarkable. It did contain the following declaration:

I declare that I am eligible and agree to abide by the rules
and conditions of the Quest ...

28. It may be assumed that the "rules and conditions" included the provisions of the blank agreement form handed to the appellant as well as the deposit book instructions he later received.

29. The "agreement" contained some provisions in relation to fundraising:

5) In relation to the money earning functions held or organised
with or by an entrant for the benefit of the said entrant or
the Society an account shall be kept of monies paid and monies
received in a convenient and auditable form in accordance with
the attached schedule (There was no "attached schedule" to the
document adduced in evidence. There was no evidence any such
"attached schedule" was given to the appellant). Such books of
account to be placed before the Board of the Society and the
conclusion of the Quest or upon request by the President, Vice
President, or Board Member of the Society.

30. Whatever the "attached schedule" may have contained, it was common ground that, at the time the appellant was charged, the Quest had not ended. Nor had he been, before 25 November 1993, requested to comply with this provision.

31. Of greater relevance was the following provision:

(8) The entrant shall at the conclusion of any money-raising
function for the benefit of the Society as soon as reasonably
practicable, place the money in an account which has been
opened by the Society. Due allowance may be made for money
expended or accounts receivable or payable.

32. It is plain from this provision that an entrant was not expected to pay money to the Society unless and until a "money raising function" had concluded and the surplus over the cost properly incurred in conducting the function had been ascertained. It was only that surplus which the entrant was then obliged to pay to the Society.

33. Entrants, of course, might receive awards, as well as recognition, for funds raised and paid to the Society. Thus, each entrant had a personalised deposit book. The only provision relevant for present purposes in the written instructions for use of the deposit book was:

(d) All monies raised immediately become the property of the
Society. Accordingly deposits are to be made at the bank (that
is, the Advance Bank to the Society's account) or the office as
appropriate as soon as practicable after each event. Please
note that no withdrawals can be made from the Quest account.

34. It may be added to the above that Ms Carpenter had, she believed, told the appellant that "as soon as practicable" was, in effect, three days.

35. Monies could not be regarded as "raised" until the relevant "money raising function" had concluded and the surplus over costs properly incurred had been ascertained.

36. The chocolates in question were, it appears, delivered on or about 5 July 1993 by FRS. That was the entity referred to as "Fundraising Options". On delivery, the appellant signed an invoice. The invoice was directed to:

GROUP NAME: Quest of Canberra
ADDRESS: 45 Block C
Currong Flats
Braddon ACT
POSTCODE: 2601

The chocolates were detailed as follows:

MILK PEANUT MARS BARS MALTESERS
210g 201g 200g 160g
UNIT PRICE $37.80 $37.80 $37.80 $37.80
QUANTITY 20 20 20 40 100
TOTAL $ 756 756 756 1512.00 3780

The invoice then claimed:

TOTAL DUE $3780
PAYMENT DUE BY: 26/7/93

Because the goods were to be used in a fundraising drive for the Society, sales tax exemption was notified upon the invoice. The appellant signed a declaration, endorsed on the invoice in the following terms:

This requisition is made by me subject to my appointment as
agent in accordance with the terms and conditions of the Agency
Agreement appearing on the reverse thereof. I warrant that I am
over eighteen (18) years of age.
POSITION HELD: Coordinator
NAME: Ian Goudie
(signature of appellant)
........................
Signature of Agent for Fundraising Services
Pty Ltd

37. By the "terms and conditions" on the reverse of the invoice, if he ever read them, the appellant agreed to act as agent for the sale of goods supplied by FRS.

38. The goods were to remain the property of FRS until sale. The sale price was to be no less than "the minimum amount shown on the Consignment Stock Order". That, in context, referred to the sum charged on the front of the invoice. It is not possible from the evidence to calculate the "surplus" that would be achieved if each relevant "box" of chocolates was sold for $3.00.

39. The balance of terms, relevant for present purposes, were as follows:

3. ... I will enjoy a commission for sales effected by me equal
to the amount at which I sell in excess of the minimum amount
and before accounting to (FRS) for the proceeds of sales made
by me debit this commission.
4. I will account to you for the total sales made by me as agent for
(FRS), less the amount of commission which I am authorised to retain
under clause 3 within 21 days of receipt of the goods consigned to me.

40. The agreement is silent as to what would follow if no goods were sold within the 21 days after their delivery to the appellant.

41. Further, the conditions seem to contradict the apparent force of the demand for payment of $3,780.00 "due by 26/7/93".

42. Whether or not funds received from sale of chocolates, so far as they represented the minimum price, were the property of FRS or whether the appellant merely incurred a debt due to the FRS of $3,780.00 is a question which does not arise for decision: see, however, Aluminium Industrie Vaasen B V v Romalpa Aluminium Ltd (1976) 1 WLR 676; Chattis Nominees Pty Ltd v Norman Ross Homewords Pty Ltd (In liq) (1992) 28 NSWLR 338.

43. While the funds received from sale of chocolates may have belonged, on receipt, to the appellant or FRS, they clearly did not belong to the Society. Even as to FRS, only the "minimum price" received, if any, was subject to the "Romalpa clause" in the agreement.

44. The respondent's case depends on the appropriation by the appellant of a sum equal to the profit made or payable in respect of chocolates delivered to the appellant and not returned to FRS.

45. In stating the issues, the difficulty for the prosecution case is highlighted. The "fund raising event" does not seem sensibly to be defined as each sale of a chocolate bar or box. It can only be the sale to various buyers of the consignment or consignments of chocolate. The sum due to the Society is that amount which exceeds the sum due to FRS, and, indeed, any other costs or expenses incurred in buying or selling the chocolates. Whether or not the sales of chocolate should be regarded as a single "fund-raising event", or whether, not being an "event" or "function", there was merely an obligation to account for profits after all chocolates were sold or returned, there had been no ascertainment of profit or account taken to establish the profit as at 25 November 1993. Indeed, the occasion for doing so had yet to arise.

46. There is no evidence before me as to how the sum of $243.00 was calculated. I have assumed that it represents a sum that would have been the "profit" if chocolates sold or consumed as at that date were to be valued at $3.00 per bar or box and FRS was paid its "minimum price".

47. The definition of "property" in s93 Crimes Act 1900 (ACT)(Crimes Act 1900) is wider than money or goods and chattels. It includes "a chose in action and any other intangible, other than an incorporeal hereditament".

48. Whatever the appellant allegedly stole, it could not have been any particular chocolate bar, box or pack or any particular note or coin. It was his neglect to bank the sum ascertainable, if any, after he had finished the sale or disposal of chocolate that was the alleged "theft".

49. No doubt, if he had persisted in a refusal to account to the Society for profits earned or deemed to have been earned on sale or disposal of chocolates, the Society could have sued to recover the debt due to it and for any consequential damages for breach of its agreement with the appellant.

50. It is not theft to refuse to pay for goods delivered on credit. That is so even if the purchaser intended to default unless an act of deception is engaged in within the circumstances contemplated by s96(1) Crimes Act 1900. That is certainly not the case here. The appellant used cash which represented proceeds of sale of chocolate for his own purposes. There is no evidence to suggest he intended to do so when he, as an entrant in the Quest, ordered the chocolate. That use by him of the proceeds of sales did not offset or diminish his debt to FRS or the Society. It may have made it more difficult for him to pay such debts but it did not appropriate them in whole or in part.

51. The circumstances were, in fact, similar to those considered in Attorney-Generals' Reference (No. 1 of 1985) (1986) 2 All ER 219. The facts of that case were that an employee wrongfully used his employer's premises to make a secret profit for himself. It was submitted that as the profit belonged in equity to the employer, it was trust money. By appropriating it to his own use the employee committed theft. The Court of Appeal was asked to rule as to the validity of that submission. The Theft Act 1968 (UK), s5(3), was equivalent to s95(2) and (3) Crimes Act 1900.

52. Section 5(3) provided:

Where a person receives property from or on account of
another, and is under an obligation to the other to retain
and deal with that property or its proceeds in a particular
way, the property or proceeds shall be regarded (as against
him as belonging to the other.

53. Lord Lane CJ for the Court, held at 221:

Whether that argument (that is, that there is theft of the
profit element of the receipts) is correct or not depends on
whether A (the alleged thief) can properly be said to have
received property (that is the payment over the counter for
the beer he has sold to the customer) 'on account of the
employers'. We do not think he can. He received the money on
his own account as a result of his private venture. No doubt
he is in breach of his contract with the employers; no doubt
he is under an obligation to account to the employers at least
for the profit he has made out of his venture, but that is a
different matter. The fact that A may have to account to B for
money he has received from X does not mean necessarily that
he received the money on account of B.

54. His Lordship then examined the hypothesis that the employee became a trustee of the profit for the employer and had stolen that profit. His analysis of that proposition was as follows, at 225:

A used the employer's property and his own money to make a
private profit in breach of contract. He received from
customers sums of money which represented in part the cost of
the beer he had bought and in part possible profit for which
he was accountable to the employers. This profit element,
assuming it existed, never became a separate piece of property
of which A could be trustee. It remained part of a mixed fund.
Therefore there never was a moment at which A was trustee of a
definite fund. It follows that there never was a moment when
the employers had any proprietary interest in any of the money.
The money did not belong to another. There was therefore no theft.

55. It was also pointed out that no less difficulty would arise in proving dishonesty and guilty intent. The employee no doubt knew he was acting in breach of his duty and contract but he would not necessarily have been aware that he was stealing the profit he was making. As his Lordship observed, also at 225:

There are topics of conversation more popular in public houses
than the finer points of the equitable doctrine of the
constructive trust.

56. That decision was criticised by Prof JC Smith, Law of Theft 6th ed, (79), 43. I recognise that the decision is not binding on me but it seems to me that it should be accorded great respect. Further, I consider that the Court should lean against the use of the criminal law in circumstances where the conduct in question seems to be merely a civil debt.

57. In R v Baraduy (1984) VR 685, s73(9), Crimes Act (Vic), the equivalent to s95(3) Crimes Act 1900, was held to apply to a situation where a broker received premium refunds on behalf of a client. The broker had paid those cheques into his own account. That factual situation is, however, materially different from the present. In Baraduy (supra), when the cheque was paid into his account by the broker, the debt represented by the cheque belonged to the insured who was dishonestly deprived of it. There was no such identifiable chose of action in this case when the appellant appropriated the money he had received from chocolate sales.

58. It may be that, had the sum of $243.00 been ascertained as the sum due to the Society and placed in the deposit book for credit to the Society, an appropriation by the appellant at that point would be theft. I express no decided view on that point. However, it is clear to me that there can be no theft at an earlier stage before either identification or appropriation to the Society of the profit element to which it would become entitled in due course.

Was there an intention permanently to deprive the Society of any property?
59. Even if the cash appropriated had been "property belonging to another", a question would still arise as to whether an "intention of permanently depriving" the Society of the monies so appropriated had been established.

60. Certainly, the appellant had asserted that he intended to replace any shortfall found to be due from him. He said that when questioned by police. He paid the sum demanded the day following that questioning. He did have the benefit of prior good character on which he could have relied both as to the issue of credit and as to whether an inference of dishonesty should be drawn: see R v Murphy (1985) 4 NSWLR 42.

61. Ms Carpenter's evidence is capable of an inference, adverse to the appellant, that he was aware he should bank some of the funds as and when received. It is open to infer that he could have calculated and banked the profit component of each individual bar of chocolate.

62. However, there is no evidence to indicate whether the appellant understood or believed that to be what was required of him. Indeed, it seems somewhat improbable that such would be required. It is not clear precisely as to what time or times he believed he would need to pay over the money. It is true that he used the money because he was not employed and needed living expenses. That must cast doubt upon his assertion that he intended to make good the deficiency when called on. That deficiency would be reasonably foreseeable if he used the sale proceeds without the prospect of receiving sufficient earnings to make good the shortfall.

63. Nevertheless, as a judge of the facts, bearing in mind that any adverse inference that the appellant dishonestly intended to deprive the Society permanently of its share of the monies received, must be accepted beyond reasonable doubt, I do not think I can be that certain. There is a reasonable doubt. The appellant would have to be given the benefit of it.

64. Even had there been an unauthorised borrowing by the appellant of monies then the property of the Society, such a borrowing is not necessarily a permanent deprivation: see for example Lloyd (1985) 1 QB 835. As s97(4) Crimes Act 1900 makes clear, the mere fact that coins and notes cannot be returned in specie does not thereby require a finding of intent permanently to deprive the true owner of the value represented by those notes and coins.

Should the appellant be permitted to withdraw his plea of guilty?
65. The question, of course, remains as to whether the appellant should be given leave now to withdraw his plea of guilty tendered before and acted upon by Magistrate Burns.

66. In Coysh v Elliott (1963) VR 114, Sholl J affirmed the power of a court, whether at first instance or on appeal, to reject a plea of guilty and substitute a plea of not guilty. Coysh was a case in which an unrepresented defendant's explanation in mitigation, if accepted, would have implied lack of guilt of the offence charged.

67. More recently, Kirby P, in R v Liberti (1991) 55 A Crim R 120, (Grove and Newman JJ concurring), affirmed the existence of that power. The power should be used with restraint but will be exercised if it appears (121):

that the appellant did not appreciate the nature of the charges
or did not intend to admit that he was guilty of them; or
that the appellant, upon the admitted facts, could not in law
have been convicted of the offence charged.

68. The plea is, of course, an admission of those facts of which the accused person was or might be supposed to have been aware. Such a person will not always appreciate the legal consequences of those facts. Normally, such person will have those consequences explained by his or her lawyer. However, as Kirby P noted in Liberti (supra) at 125:

Ultimately, the accused is entitled to look to the court before
which he or she comes to offer protection from a conviction
which is not, in law, sustained by the facts.

69. In this case, while the facts were simple enough, their significance legally was not. The fact that the appellant claimed to have intended to pay the Society what was due to it, notwithstanding his use of the proceeds of sales, is less likely to have been misunderstood. However, even if the plea of guilty could be regarded as indicating an intent to default on the sum due to the Society, it is not essential to the innocence of the appellant with respect to the offence charged that such factual issue be resolved in his favour. In any event, the appellant complains that he was unaware of the significance of any fact alleged. It was possible his lawyer overlooked the significance of it, particularly in context.

70. In any event, in deciding to set aside a plea of guilty, even an apparent admission of fact should not be allowed to support an apparent miscarriage of justice if it positively appears that such apparent admission was made mistakenly or inadvertently.

71. In this case both aspects of the discretion referred to by Kirby P support the view that the plea change should be allowed.

Conclusion
72. It follows, therefore, that the appeal will be upheld and the conviction and penalty set aside. In substitution therefor, a verdict of acquittal will be recorded and the information dismissed.

73. I will hear the parties as to costs.