Schmidt v Box [2009] ACTSC 109 (3 September 2009)

Last Updated: 22 September 2009

DANIEL TERRANCE LESLIE SCHMIDT v MATTHEW GEOFFREY BOX
[2009] ACTSC 109 (3 September 2009)

CRIMINAL LAW – dishonestly appropriated property
EVIDENCE LAW – hearsay rule – hearsay rule exception for business records – authenticity of video evidence
MAGISTRATES COURT – appeal from – effect of non-conviction order on appeal – proceedings confused and unfair – right to a fair trial – defence ambushed – Magistrate entitled to draw inferences of guilt

Crimes (Sentencing) Act 2005 (ACT), s 17
Magistrates Court Act 1930 (ACT), s 208
Crimes Act 1900 (ACT), ss 556A, 402
Australian Capital Territory (Self Government) Act 1998 (Cth), s 48A
Evidence Act 1995 (Cth), ss 69, 71
Acts Interpretation Act 1901 (Cth), ss 25, 25A
Human Rights Act 2004 (ACT), s 21

National Australia Bank Ltd v Rusu and Others [1999] NSWSC 539; (1999) 47 NSWLR 309
R v DA [2008] ACTSC 26 (31 March 2008)

ON APPEAL FROM THE MAGISTRATES COURT OF THE AUSTRALIAN CAPITAL TERRITORY

No. SCA 21 of 2008

Judge: Higgins CJ
Supreme Court of the ACT
Date: 3 September 2009

IN THE SUPREME COURT OF THE )
) No. SCA 21 of 2008
AUSTRALIAN CAPITAL TERRITORY )

ON APPEAL FROM THE MAGISTRATES COURT OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN: DANIEL TERRANCE LESLIE SCHMIDT

Appellant

AND: MATTHEW GEOFFREY BOX

Respondent

ORDER

Judge: Higgins CJ
Date: 3 September 2009
Place: Canberra

THE COURT ORDERS THAT:

1. Save for CC9936/07, the appeal be dismissed.

2. The appeal be upheld in respect of CC9936/07 and the conviction in that matter set aside. A verdict of acquittal be substituted.
   
3. Save for CC9936/07, the remaining matters be remitted to Magistrate Lalor to complete sentencing proceedings.
   

1. The appellant was found guilty by Magistrate Lalor on 13 March 2008 upon five charges alleging theft of property, namely cash, the property of Woolworths Ltd, his employer. The five charges relied upon, allegedly representative of 70 others were:

1. That he....On 19 March, 2007, dishonestly appropriated property, namely Australian Currency, to the value of $148.90, belonging to Woolworths Ltd with the intention of permanently depriving it of the property.
2. That he....On 19 March, 2007, dishonestly appropriated property, namely Australian Currency, to the value of $224.90, belonging to Woolworths Ltd with the intention of permanently depriving it of the property.
3. That he....On 19 March, 2007, dishonestly appropriated property, namely Australian Currency, to the value of $39.00, belonging to Woolworths Ltd with the intention of permanently depriving it of the property.
4. That he....On 26 March, 2007, dishonestly appropriated property, namely Australian Currency, to the value of $290.86, belonging to Woolworths Ltd with the intention of permanently depriving it of the property.
5. That he....On 26 March, 2007, dishonestly appropriated property, namely Australian Currency, to the value of $320.80, belonging to Woolworths Ltd with the intention of permanently depriving it of the property.

2. The prosecution case was that the appellant had, on the occasions mentioned, operated the electronic cash register at the liquor outlet of the Dickson Woolworths store so as to record a refund to a customer for stock returned. The funds were then, presumably, withdrawn from the cash drawer so that the register would, notwithstanding the bogus debits, balance.
3. The difficulty for the prosecution case was that to process a refund an operator, such as the appellant, needed a supervisor to input a PIN code held directly by that supervisor and, at least in theory, not available to anyone else. It also appeared that there was no stock take check to ascertain the presence or absence of the stock allegedly returned.
4. The prosecutor at trial sought to rely upon the evidence of Mr Ian Hunter, a loss prevention investigator with Woolworths.
5. He had, on 3 April 2007, received a query from Ms Debbie Taylor, a fellow employee of the appellant, quering a refund that had been processed.
6. Accordingly, a review of refunds given in the Liquor Department of the store was conducted by Mr Hunter. He gave examples of where refunds would be legitimate. For example returns after a party or returns of wine that were unsuitable. Only a supervisor, not an operator such as the appellant, could authorise the process of a refund by an operator.
7. Mr Hunter had checked upon the number of refunds processed by the appellant between 1 March 2007 and 2 April 2007. Between 1 March and 30 April (sic) $22,600 worth of refunds were processed at the Liquor Department of which the appellant had processed $8,880 odd. It was accepted that not all of those would be fraudulent. His Honour made it plain that he would not entertain any adverse inference that any other refund had been fraudulent. There was no application to rely on tendency or coincidence evidence.
8. When Mr Hunter attended on 3 April 2007 to conduct the audit, the appellant went off work and did not thereafter return. It was not suggested that any adverse inference could be drawn from this event, indeed it was the subject of innocent explanation which was not seriously disputed.
9. Mr Hunter accessed the electronic records and the video tape surveillance footage for the relevant period. He acknowledged that the two records might well differ in recording a time and, indeed, in his view, they did so.
10. Nevertheless, Mr Hunter noted similarities between the electronic record of transactions and the video footage indicating that, at the time the refund transaction represented by CC07/9936 took place, no customer was present, nor was a supervisor. The supervisor code used for the refund transaction was allocated to a Ms Tiffany Saunders. She was not then rostered on duty. The employee records were tendered without objection which supported that proposition. A similar pattern was identified in respect of CC07/9935.
11. The next transaction related to CC07/9926. The electronic journal identified before and after transactions consistent with the video footage. There was no apparent transaction with a customer consistent with the refund of $148.90. The supervisor code used was that of Ms Melita Siljkovic. She was not present. A similar pattern was identified in respect of each of the impugned transactions.
12. There were no discrepancies in the till balances which would indicate that any entry for a refund was not accompanied by the removal of the same or a similar amount of cash. A till discrepancy of $12.00 was identified on one day which would not support the view that any refund recorded had not been paid.
13. An inference was clearly open on this evidence that the operator then present was using a supervisor’s code in the absence of that supervisor and had recorded the relevant returns of stock and credited a sum of money to that transaction. As the credit was not there when the till was balanced it clearly equated to cash removed. The inference that it was the person who made the false entry who removed an equivalent sum in cash would be very strong.
14. In cross examination, Mr Hunter identified a discrepancy between the video footage time stamps and the recorded times of the electronic register of 1 hour and 6.3 minutes. The hour was a result of a failure to adjust for daylight saving. In copying the video, police lost the time image. Mr Hunter restored it on the exhibit but without the addition 6.3 minutes.
15. Upon that explanation for the apparent time discrepancy emerging, Mr Romano, for the appellant, protested at being “ambushed”. At that point his Honour adjourned the proceedings to allow Mr Romano time to “deal with the ambush”.
16. Upon resumption Mr Romano continued his cross-examination without protest. Mr Hunter then conceded that he could not recall whether he had noticed the time codes on the CCTV footage he viewed when he first saw it.
17. It was apparent that Mr Romano had assumed the times on the video and the electronic register matched. If they had, of course, then, at the times shown for the impugned transactions, the appellant was not at the register and could not have processed the impugned transactions. Mr Romano explained to his Honour that he had not previously objected to the identification from video footage of the transactions recorded on the electronic register by reason of the assumption he had made. It seems that Mr Romano considered that the manipulation of the time stamps on the CCTV footage had had the result of leading the defence into making a false assumption as to what the evidence would show.
18. His Honour again offered Mr Romano further time to consider his position given the situation which had arisen. Mr Romano then raised, retrospectively, an objection to the video tape footage being admitted in evidence. Of course, if that objection had succeeded, it would be difficult to exclude the hypothesis that the impugned transactions were preformed by another employee or that a supervisor was then present. The codes were known to and used by an unauthorised person followed from the evidence that supervisors’ codes for the impugned transactions were so used. It could not, therefore, be assumed that a dishonest operator could not gain access to the appellant’s PIN code and use that, with a supervisor’s PIN to create the bogus transactions. His Honour was not prepared to reject the tender. Mr Romano declined to seek an adjournment to enable further testing of the CCTV footage. Mr Hunter agreed with Mr Romano that he had not interviewed the appellant though he was aware that police had done so.
19. Ms Tiffany Saunders, one of the relevant supervisors, gave evidence that she had not authorised the refund that was the subject of charge CC07/9935 ($290.86) nor for CC07/9936 ($320.80) on 26 March 2007. Nor had she given her codes to any other person.
20. Ms Melita Siljkovic was the supervisor whose code was used on 19 March 2007. For charge 07/9926 ($148.90) she stated she had left the store by the time that transaction was shown as having been performed. She, also, had not given her password or code to any other person. She did, in cross-examination, advert to the possibility that a person might observe her using her code and commit it to memory.
21. Ms Tiffany Driscoll was another supervisor. Her code had been used for the refunds referred to by charges 07/9927 ($224.90) and 07/9928 ($39.00) on 19 March 2007. Her roster confirmed that she had not been on duty at the time these refunds were processed. She had not, she said, authorised either of them. She had not given her code or PIN numbers to any other person nor authorised their use by any other person.
22. The respondent was the investigating police officer. Relevantly, a record of interview was tendered. The appellant, in that interview, responded to the allegations put to him by pointing out that he could not “do refunds”. He denied that he had performed the refunds in question.
23. Mr Romano made a no case submission, arguing that there had been no evidence of the taking of money. It was possible that stock had been taken out, dishonestly or otherwise, and the refund rung up to cover the errors. Mr Khan, for the respondent, submitted that an inference was open that cash was removed to cover the refund entries even though there was no surveillance evidence of such a removal.
24. His Honour agreed.
25. In my opinion that conclusion was correct.
26. Mr Romano then sought to tender a letter from the Director of Public Prosecutions (DPP) which had, apparently, declined to produce the entire surveillance tapes, whether relating to the impugned transactions or not.
27. His Honour, again quite correctly in my view, ruled that, absent an application to adjourn or stay the proceedings, the non-production of all the material in the possession of the prosecution, that document had no relevance.
28. It was conceded and accepted that the appellant was not adversely known to police.
29. That was the defence case.
30. During prosecution submissions his Honour, correctly, noted that the appellant’s record of interview was evidence which contradicted the prosecution evidence though the primary evidence itself was not disputed. He also noted that the prosecution had not been able to challenge the reasons given by the appellant for his resignation and was of good character.
31. Nor did his Honour accept that anything concerning the appellant’s financial situation could support an adverse inference. The issue left by the prosecutor was that the only reasonable inference open on the video and printout evidence of transactions was that the appellant had fraudulently entered bogus refunds and surreptitiously withdrew cash from the till to cover them.
32. Mr Romano obviously had had his main attack, that the appellant was not behind the counter at the time of the impugned transactions, cut away from beneath him by the explanation of the time discrepancies given by Mr Hunter.
33. The point of attack Mr Romano offered was to challenge the evidence of the supervisors that they had not used their codes to authorise the refunds in question. He correctly emphasised that none of the supervisors admitted to giving their codes to anyone else, let alone the appellant. Even, if it was possible to observe and note the code of a particular supervisor, Mr Romano suggested that could not be said to be proved that he had obtained all three codes.
34. His Honour did observe that, if he was satisfied that the appellant performed the impugned refunds, he did not need to be satisfied as to how he obtained the relevant codes. That observation was, of course, subject to the reservation that, if there was a reasonable doubt that he ever had the codes, then there would have to be a reasonable doubt about whether he performed the refunds in question.
35. Mr Romano submitted that the prosecution evidence should have been accepted as originally disclosed and not as modified by Mr Hunter’s evidence. He suggested that the possibility of innocent error could not be ruled out.
36. His Honour found, in reliance on the video footage, that the appellant was present at the actual time of the impugned transactions and must have performed them. He correctly recognised that that conclusion was inferential. There was no direct evidence of it or the consequential misappropriation. Nevertheless, notwithstanding the evidence of prior good character, his Honour found the offences proved.
37. On appeal, Mr Archer submitted that the evidence of the time stamp on the video footage was inherently doubtful. Further, that the hypothesis that the appellant obtained the supervisors’ access codes was not proved. The process of reasoning supporting the prosecution case was, he submitted, based on hearsay assumptions.
38. A side issue was that on 13 March 2008, his Honour declined to record convictions on the entirely reasonable basis that, other charges being outstanding it was not possible to say that a non-conviction order might not be made even after those matters were determined. Thus the matter was on 2 December 2008 brought back before Magistrate Lalor who recorded convictions to meet a prosecution submission that no appeal was competent until such an order, at least, had been made.
39. Although in this case it makes no difference, in many cases a defendant may well be aggrieved by a finding of guilt even if followed by a non-conviction order. It would be unjust if such a finding could only be addressed by judicial review rather than an appeal on the merits. Before the Crimes (Sentencing) Act 2005 (ACT) was introduced, s 208 of the Magistrates Court Act 1930 (ACT) provided for an appeal by the person charged, not only against a conviction but also against a decision made under s 556A of the Crimes Act 1900 (ACT) as it then was, later s 402. That provision has now been replaced by a non-conviction order under s 17 of the Crimes (Sentencing) Act 2005. The point may be made that, notwithstanding that provision, the repeal or narrowing of a basis for an appeal from the Magistrates Court, the provisions of s 48A of the Australian Capital Territory (Self Government) Act 1998 (Cth) may render such a provision invalid. That, however, is not a question upon which I am required to rule. If indeed the amendments to the Magistrates Court have had that effect. The matter should be urgently remedied.
40. Ms Campbell, for the respondent, submitted, first, that on the evidence presented, his Honour had been entitled to draw the inferences of guilt which he did.
41. A new ground of appeal complained that the prosecution had been conducted in a manner that was “confused and unfair” leading to the tender of inadmissible evidence to which objection was not taken.
42. Ms Campbell noted that, insofar as objection was not taken, his Honour was entitled to assume that the decision not to do so was taken on reasonable grounds.
43. The essence of the prosecution case was the electronic journal record compared with the video surveillance record. That showed refunds being processed at times when the appellant was at the register but, despite the refunds, the register till still balanced (within a few dollars).
44. She conceded that, for 9936/07, the journal records were in fact incomplete and the appeal must succeed in respect of that charge. The complete records were tendered otherwise. That was subject to this qualification. That is, that the time on the video Mr Hunter sought to correlate to the electronic journal, though present when he viewed it, had been erased from the exhibit as tendered. He had made notes of what he saw so as to enable him to identify the relevant transactions.
45. Section 69 of the Evidence Act 1995 (Cth) was introduced to except business records from the hearsay rule. Section 71 of that Act extends that exception to electronic records. Thus any objection to either the electronic journal entries or the CCTV surveillance footage would have been, in my view, futile. It may be that Mr Hunter was not the custodian of those records. However, it seems to me that, even if challenged, the authenticity of the video and electronic journal would have been established.
46. As Bryson J noted in National Australia Bank Ltd v Rusu and Others [1999] NSWSC 539; (1999) 47 NSWLR 309, 312:

At the simplest, the authenticity of a document may be proved by the evidence of the person who made it or one of the persons who made it, or a person who was present when it was made, or in the case of a business record, a person who participates in the conduct of the business and compiled the document, or found it among the business’s records, or can recognise it as one of the records of the business.

47. Mr Hunter was apparently qualified to authenticate the tendered records on at least the latter two bases. The term “document” is defined by s 25 of the Acts Interpretation Act 1901 (Cth) to include the source of data held in electronic form. Section 25A of that Act includes within that term the transformation of the data into a form readable or viewable by a court.
48. There is no doubt in my mind that, on the evidence presented, his Honour was entitled to find the offences proved beyond reasonable doubt. Indeed, I would concur with that decision.
49. That leaves two questions, the first was whether the proceedings were indeed, so confused and unfair as to be a breach of the right of the appellant to a fair trial contrary to s 21 of the Human Rights Act 2004 (ACT) (and see R v DA [2008] ACTSC 26 (31 March 2008)).
50. The prosecution was confused and presented confusingly, as his Honour remarked several times. However, the chance of acquittal lost by the prosecution’s confusion was to my mind illusory. Mr Romano, reasonably, assumed that the video failed to verify that the appellant was at the electronic register when the impugned transactions were processed. That was based on a misunderstanding of the significance of the apparent time differences as revealed by Mr Hunter’s report. That was removed by his evidence. Mr Romano was offered an adjournment to consider the impact of that evidence but declined it. Was that unreasonable? I think not. It must have been apparent that the explanation Mr Hunter offered was almost self-evidently correct.
51. That ground must be rejected.
52. It leaves the remaining ground. That is, that Mr Hunter’s evidence nevertheless relied on inadmissible hearsay. He alone had noted the two time stamps on the original surveillance tape. However, it seems to me that, although it opened an attack on the accuracy of Mr Hunter’s recollection that was offset by his contemporaneous note and the correlation of the actual transactions which were observable on the video footage with the electronic register printout.
53. It follows, in my view, that save for 9936/07, the appeal must be dismissed. The appeal is upheld in respect of 9936/07 and the conviction in that matter set aside. A verdict of acquittal is substituted. The remaining matters are otherwise remitted to Magistrate Lalor to complete sentencing proceedings.
54. I will hear the parties as to any ancillary orders or directions.

I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Chief Justice Higgins.

Associate:

Date: 3 September 2009

Counsel for the Appellant: Mr K Archer
Solicitor for the Appellant: Romano Satsia Kordis - Legal
Counsel for the Respondent: Ms J Campbell
Solicitor for the Respondent: Director of Public Prosecutions for the ACT
Date of hearing: 6 May 2009 and 31 July 2009
Date of judgment: 3 September 2009