R v Fischetti & Sharma [2003] ACTSC 16 (14 March 2003)

Last Updated: 31 March 2003

R v FRANK JOHN FISCHETTI and R v AVINASH BHARDWAJ SHARMA [2003] ACTSC 16 (14 MARCH 2003)

EX TEMPORE REASONS FOR RULING

CRIMINAL LAW - making and using false instrument - s 124 Crimes Act 1900 (ACT) - on prosecution's case transfer of funds between accounts opened by someone purporting to be another - whether transfer document purported to have been made in the form in which it was made by a person who did not make it in that form.

CRIMINAL LAW - stealing - s 86(1)(a) Crimes Act 1900 (ACT) - on prosecution's case funds accessed from Automatic Teller Machine - whether funds could have been obtained by deception - whether a representation is made on presentation of a card to access funds using an Automatic Teller Machine.

Crimes Act 1900 (ACT), ss 86, 124, 287

Crimes Act 1958(Vic), s 83

Forgery and Counterfeiting Act 1981 (UK), s 9

Theft Act 1968 (UK), s 15

Evidence Act 1995 (ACT), s 137

R v Ceylan [2002] VSCA 53; (2002) 4 VR 208

R v More [1987] 1 WLR 1578

Brott v R [1992] HCA 5; (1992) 173 CLR 426

Attorney-General's Reference (No. 1 of 2000) [2001] 1 WLR 331

R v Jeraj [1994] Crim LR 595, CA

R v Donnelly (Ian) [1994] 1 WLR 1017; [1984] Crim LR 490 CA

East, Pleas of the Crown, 1803

Halstead v Patel [1972] 1 WLR 661

R v Page [1971] 2 QB 330

Kenny's Outlines of Criminal Law, 15^th ed, (1936) p284

Kennison v Daire [1986] HCA 4; (1986) 160 CLR 129

R v Mujunen (1993) 67 A Crim R 350

Kennison v Daire (1985) 38 SASR 404

Davies v Flackett (1972) 116 Sol Jo 526

Tugaga (1994) 74 A Crim R 190

Nos. SCC 86 of 2002 and SCC 206 of 2001

Judge: Gray J

Supreme Court of the ACT

Date: 14 March 2003

IN THE SUPREME COURT OF THE )

) No. SCC 86 of 2002

AUSTRALIAN CAPITAL TERRITORY ) No. SCC 206 of 2001

THE QUEEN

v

FRANK JOHN FISCHETTI

and

THE QUEEN

v

AVINASH BHARDWAJ SHARMA

REASONS FOR RULING

Judge: Gray J

Date: 14 March 2003

Place: Canberra

THE COURT RULES THAT:

1. Pursuant to s 287 of the Crimes Act 1900 (ACT), the jury be directed to acquit the accused on counts 3, 4, 5 and 6 of the indictment.

Preliminary

1. The indictment in this matter charges that -

... between the 7^th day of March 2001 and the 12^th day of April 2001 at Canberra in the Australian Capital Territory Frank Fischetti and Avinash Sharma made a false instrument, with the intention that they or another person should use it to induce another person to accept it as genuine, and by reason of so accepting it, to do some act to that other person's, or anther person's, prejudice.

PARTICULARS

Commonwealth Bank of Australia bank cheque number 289944 dated 12 April 2001 payable to Kilopoulous Property Investments in the amount $252,500.00

AND FURTHER THAT on the 12^th day of April 2001 at Canberra aforesaid Frank Fischetti and Avinash Sharma used a false instrument, which was and which they knew to be false, with the intention of inducing another person to accept it as genuine, and by reason of so accepting it to do some act to that person's, or another person's, prejudice.

PARTICULARS

Commonwealth Bank of Australia bank cheque number 289944 dated 12 April 2001 payable to Kilopoulous Property Investments in the amount $252,500.00

AND FURTHER THAT between the 8^th day of March 2001 and the 12^th day of April 2001 at Canberra aforesaid Frank Fischetti and Avinash Sharma made a false instrument, with the intention that they or another person should use it to induce another person to accept it as genuine and by reason of so accepting it, to do some act to that person's, or another person's, prejudice.

PARTICULARS

A CPS Credit Union funds transfer slip requesting the transfer of $10,000 from the CPS Credit Union account of Millenium Property Investments to Millenium Commercial Rentals.

AND FURTHER THAT on the 12^th day of April 2001 at Canberra aforesaid Frank Fischetti and Avinash Sharma used a false instrument, which was and which they knew to be false, with the intention of inducing another person to accept it as genuine, and by reason of so accepting it, to do some act to that person's, or another person's, prejudice.

PARTICULARS

A CPS Credit Union funds transfer slip requesting the transfer of $10,000 from the CPS Credit Union account of Millenium Property Investments to Millenium Commercial Rentals.

AND FURTHER THAT on the 12^th day of April 2001 at Canberra aforesaid Frank Fischetti and Avinash Sharma stole $1000.00 belonging to CPS Credit Union Co-operative (ACT) Limited.

AND FURTHER THAT on the 17^th day of April 2001 at Canberra aforesaid Frank Fischetti and Avinash Sharma stole $500.00 belonging to CPS Credit Union Co-operative (ACT) Limited.

2. The prosecution rely upon the presentation of a Commonwealth of Australia bank cheque to the CPS Credit Union Co-operative (ACT) Limited in the sum of $252,500.00 to be credited to the account Koliopoulous Property Investments held with that institution. In fact that account is said to be a sham in the sense that it was not opened, as it purported to be, by a Bill Koliopoulous but was opened or caused to be opened by the accused Frank Fischetti using a false identity of Bill Koliopoulous. A number of other accounts were purportedly opened by that identity including Millennium Property Investments and Millenium Commercial Rentals. By telephone transfer from the Koliopoulous Property Investment account, certain of these accounts were credited with funds based on the acceptance of the cheque. Transfers were also effected between the accounts by written transfer slips presented at the Credit Union's branches. An example forms the third and fourth counts on the indictment. Monies were then withdrawn from accounts to which the sums had been transferred by use of Automatic Teller Machines in sums of either $500.00 or $1,000.00. An example of each forms counts five and six on the indictment.

Rulings

3. Yesterday I indicated my rulings on counts 1 and 2 of the indictment as far as Mr Fischetti was concerned and I found a case to answer in relation to those counts in respect of him. I also found a case to answer in respect of Mr Sharma in relation to count 2 and I considered overnight as to whether or not I should rule that there was no case to answer in relation to count 1. I decline to do so, I find a case to answer in relation to count 1 in respect of Mr Sharma.

4. I was also asked to rule in relation to counts 3, 4, 5 and 6 on the indictment and I now give my reasons for this ruling.

5. In relation to the charges of making and using a false instrument, namely a CPS Credit Union funds credit slip and the two charges of stealing, I have come to the conclusion that the evidence relied upon by the prosecution is not capable in law of sustaining the charges laid.

The charges of making and using a false instrument

6. In the case of the charges forming counts 3 and 4 of the indictment, that of making and using a false instrument, the prosecution rely upon the evidence that Mr Fischetti was the real applicant in opening the accounts of both Millennium Property Investments and Millennium Commercial Rentals. In opening those accounts he purported to be Bill Koliopoulos. The prosecution also say that he made the transfer forms the subject of the third count transferring the sum of $10,000.00 being part of the proceeds of what is said to be a plainly false bank cheque which had been paid into another account that Mr Fischetti had allegedly opened also in the name of Koliopoulos Property Investments.

7. The question is whether in doing so it can be said that Mr Fischetti made a false instrument. Section 124(1)(a) of the Crimes Act 1900 (ACT) provides that an instrument is false if it purports to have been made in the form in which it is made by a person who did not make it in that form. The other provisions of s 124(1) are similarly concerned with falsity concerning the document itself.

8. It is clear from the authorities that it is not sufficient that the document be false in the sense that it contains untruths, but rather that it purports to be something which it is not. The relevant principle was expressed by Winneke P in delivering the judgment of the Victorian Court of Appeal in R v Ceylan [2002] VSCA 53; (2002) 4 VR 208. It may be noted that s 124(1) of the Crimes Act 1900 (ACT) is the equivalent of s 83A(6) of the Crimes Act 1958 (Vic), and section 9 of the Forgery and Counterfeiting Act 1981 (UK).

9. Winneke P said in Ceylan's case (supra) at 217 -

But the real question for the jury was whether they could be satisfied to the requisite standard that the particular loan application which they were considering purported to be something which was not in the sense that it purported to have been made in terms by the person who did not, in fact, make it in those terms. As Lord Ackner said in R v More [1987] 1 WLR 1578 at 1585 when speaking of s 9 of the Forgery and Counterfeiting Act 1981 (the equivalent of s 83(6) of the Crimes Act):

It is common ground that the consistent use of the word "purports" in each of the paragraphs (a) to (h) inclusive of section 9(1) of the Act, imports a requirement that for an instrument to be false it must tell a lie about itself in the sense that it purports to be made by a person who did not make it (or altered by a person who did not alter it) or otherwise purports to be made or altered in circumstances in which it was not made or altered.

Thus to make a false document for the purpose of the offence created by s 83A(1) of the Crimes Act, as was the case in the common law offence of forgery - requires more than simply making or altering a document so that it contains known falsehoods. The relevant falsity goes to the character of the document itself, in the sense that it purports to be something which it is not. As McHugh J said in Brott v R [1992] HCA 5; (1992) 173 CLR 426 at 447 after discussing relevant authorities:

The foregoing discussion shows that the general rule of the common law was that forgery consisted in a person, with intent to defraud, making, altering or adding to an instrument so that the instrument contained a false representation that another person had signed or acknowledged the instrument or part of its contents. If the document contained no more than a false representation by the person who signed or acknowledged the instrument, or part of its contents, no forgery occurred.

10. Nor is this present case a case where the object of the transfer was funds which did not exist. That distinguishes the situation considered by the English Court of Appeal in Attorney-General's Reference (No. 1 of 2000) [2001] 1 WLR 331 and the cases discussed in that case of R v Jeraj (1994) Crim LR 595, and Donnelly [1984] 1 WLR 1017 upon which the prosecution relied. The circumstance of the crediting of funds to the account had taken place, albeit in this case in reliance upon a forged instrument.

11. The transfer document here does not tell a lie about itself. On the prosecution case it was made by Mr Fischetti in respect of an account that he had opened in the name of Millenium Property Investments and Bill Koliopoulos. It transfers an amount that is part of the credit in that account to another account. On those facts, the offence charged cannot be made out.

The charges of stealing

12. In the cases of the charges of stealing it is alleged that the accused withdrew sums from an automatic teller machine that had been credited to the accounts for which access cards had been issued. The credits were part of the proceeds of the false bank cheque that is the subject of counts 1 and 2. The issue is whether the fact of using an access card to obtain what had been credited to the account as a result of the forged cheque being presented is stealing in terms of the Crimes Act 1900 (ACT).

13. The common law definition of stealing is defined in East, Pleas of the Crown, 1803 as:

The wrongful or fraudulent taking and carrying away by any person of the mere personal goods of another from any place with a felonious intent to convert them to his (the takers) own use, and to make them his own property without the consent of the owner.

14. However, the definition in the Crimes Act 1900 (ACT) adopts an approach which is significantly different from that common law definition. Section 86 subsection (1)(a) of the Crimes Act provides:

For this part a person shall be taken to have appropriated property if he or she obtains by deception the ownership, possession or control of the property for himself or herself or for any other person.

15. The deception in this case, upon which the prosecution relies, is the falsity of what is said to be the representation on presentation of the card, that the presenter is entitled to the funds in the account. Analogy was sought to be made with cases concerning the presentation of cheques. In those cases, however, there is a clear representation on the face of the document presented, that is the clear distinction with which the case of Halstead v Patel [1972] 1 WLR 661 dealt and upon which the prosecution relied.

16. That case was concerned with s 15 of the Theft Act 1968 (UK) that provided an offence of by deception dishonestly obtaining property. Lord Widgery CJ, in giving the judgment of the Court of Appeal in that case, said at 664:

Taking the essentials of that section separately it is necessary to show that the obtaining was by deception. One goes back to authority on the earlier law to remind oneself of what representation is made by someone who presents a cheque for payment at a bank other than the bank or branch upon which the cheque is drawn. We find that conveniently in Reg v Page [1971] 2 QB 330, 333 where the extract from Kenny, Outlines of Criminal Law, (15th ed) 1936 at 284 adopted by the court on that occasion is set out. The extract is this:

... the familiar act of drawing a cheque (a document which on the face of it is only a command of a future act) is held to imply at least three statements about the present: (1) that the drawer has an account with that bank; (2) that he has authority to draw on it for that amount; (3) that the cheque as drawn, is a valid order for the payment of that amount (ie that the present state of affairs is such that, in the ordinary course of events, the cheque will on its future presentment be duly honoured).

17. That passage is at pages 664 and 665 of that report. However, in the case of the presentation of a card to access funds by an automatic teller machine, there is no similar representation. It is not easy to see how a machine can be the recipient of a representation, and that would seem to be the implication from the High Court's decision in Kennison v Daire [1986] HCA 4; (1986) 160 CLR 129.

18. That was indeed the conclusion that McPherson J in the Queensland Court of Appeal arrived at after his discussion of the decision in Kennison v Dare (supra) in the case of R v Mujunen (1993) 67 A Crim R 350, in particular at 359 where he said:

Once it is accepted that the automatic teller machine cannot be treated as if it were a person having authority to decide or consent on behalf of the bank the question is reduced to one of the terms on which the customer was entitled to use the teller machine to draw on his account.

19. I also refer to Davies JA at 361 where he comes to the same conclusion. In Kennison v Daire a cardholder, whose account had been closed, accessed an ATM when it was offline knowing that the bank had a facility which would pay a sum up to $200.00 in that circumstance.

20. Kennison v Daire was concerned with the common law definition of larceny. In the Full Court of the Supreme Court of South Australia reported in (1985) 38 SASR 404 the court carefully analysed the function of automatic teller machines. The Chief Justice in that case considered the legal effect of the machine responding to the insertion of the card by saying at 409:

If the source of the money were not a machine but a human agent of the bank and the money were paid out in response to the production of the card and the quoting of the PIN, the appellant might be guilty of obtaining money by false pretences, but he could not be guilty of larceny. That is so because of the intention of the human agent to pass the property in and possession of the money to him. But a machine can form no such intention. The relevant intention of the bank is necessarily formed antecedently to the transaction.

21. In the case also Jacobs J, who dissented in the result but not on this aspect, said at 413:

The answer, as it seems to me, is that the ATM is not simply a box or repository. It is, by direction of, and therefore with the consent of the bank, designed to respond in a particular way to a particular mechanical action by the card-holder whether or not that person is authorised so to act. And that is what it did. That person may have committed a fraud on the bank, or on the true owner of the card, but in my opinion he is not in the eyes of the law guilty of the offence of larceny of the money.

22. The approach underlying these views was that underlined by O'Loughlin J in that same case, who at 416 said:

It has been held, and in my opinion rightly so, that a machine cannot be the subject of deception (Davies v Flackett (1972) 116 Sol Jo 526). This is the approach which, in my opinion, is apposite in this case. There is no question of deception to be considered; deception, as a concept, can only arise when a human being is the subject of the deceit.

23. I am satisfied that the presentation of the access card, which founds the facts concerning counts 5 and 6, does not contain the representation for which the prosecution contends and cannot amount to obtaining property by deception. The facts do not support the charge laid.

24. I propose to direct, pursuant to s 287 of the Crimes Act 1900 (ACT), that the accused be acquitted on counts 3, 4, 5 and 6 of the indictment.

I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Gray.

Associate:

Date: 28 March 2003

Counsel for the prosecution: Mr A Robertson

Solicitor for the prosecution: Director of Public Prosecutions (ACT)

Counsel for the first accused: Mr C Everson

Solicitor for the first accused: Jennifer Saunders & Co

Counsel for the second accused: Mr N Adams

Solicitor for the second accused: Sheila Foliaki-Singh

Dates of hearing: 13 March 2003

Date of ruling: 14 March 2003