Ilich v R [1987] HCA 1; (1987) 162 CLR 110 (3 February 1987)

HIGH COURT OF AUSTRALIA

ILICH v. THE QUEEN [1987] HCA 1; (1987) 162 CLR 110
F.C. 87/001

Criminal Law (W.A.)

High Court of Australia
Gibbs C.J.(1), Wilson(2), Brennan(3), Deane(4) and Dawson(2) JJ.

CATCHWORDS

Criminal Law (W.A.) - Stealing - Fraudulent taking or fraudulent conversion - Taking deemed fraudulent if done with intent to deprive owner of thing or property in it - Overpayment of debt - Creditor unaware of overpayment - Retention after discovery of mistake - Whether ownership of money passed - Whether conversion - Criminal Code (W.A.), s 371.

HEARING

Perth, 1986, October 14-15; Canberra, 1987, February 3. 3:2:1987
APPEAL from the Supreme Court of Western Australia.

DECISION

GIBBS C.J.: After a trial in the District Court of Western Australia the applicant was convicted on a charge that on 24 September 1984 at Bridgetown he stole the sum of $600 in money the property of one Peter Glen Brighton. An appeal to the Court of Criminal Appeal of Western Australia was dismissed. He now seeks special leave to appeal to this Court.

2. Shortly stated, the facts of the case were as follows. The applicant, a veterinary surgeon, had been acting as a locum tenens for Mr Brighton in the latter's practice at Bridgetown. Mr Brighton returned to Bridgetown on the evening of 23 September, and on the following afternoon he discussed with the applicant the amount that was owing to the latter for his services. There seems no room to doubt that Mr Brighton was upset and agitated during this conversation - he said that this was because he found the house and clinic, which the applicant had been occupying, in a chaotic state; the applicant, on the other hand, endeavoured to elicit in evidence that Mr Brighton's agitation was due to some matrimonial difficulties, but the learned trial judge disallowed questions put for that purpose. The applicant and Mr Brighton gave conflicting versions as to what occurred on the afternoon of 24 September. It was common ground that the applicant signed an acknowledgment that he had received $1,176 from Mr Brighton for "locum veterinary work and all incidental costs". Mr Brighton said that this sum was agreed upon in discussions and that he then handed $1,176 in notes to the applicant who counted the notes and signed the receipt. He said that after he made the payment he had some money remaining, some of which, amounting to $600, he placed in a Telecom envelope which he left on the table. The telephone then rang and he left the room to answer it and after that walked outside to say goodbye to the applicant, who had by that time gone to his vehicle. When he returned to the room he found that the $600 was missing from the envelope, and that some papers were missing. That evening he telephoned the police. Two days later the missing papers were found at his clinic.

3. The applicant said that he had not finished calculating the amount owing to him when Mr Brighton asked him to sign the receipt. He at first refused. Then Mr Brighton threw onto the table in front of him first the Telecom envelope with a wad of notes inside it and then two other bundles of notes. Mr Brighton, who was pressing him to leave, told him to sign the receipt, although he had not finished counting the money, and he did so. He put the money in his briefcase, not knowing how much he had received. As he was leaving the telephone rang and Mr Brighton went to answer it. The applicant left and stayed that night with friends at Bridgetown. He counted the money for the first time at about 11.00 p.m. that night and found that he had received $530 too much. He also found some maps and papers that did not belong to him. Next morning he drove to the clinic and dropped the maps and papers through a broken window. He kept the $530, which he had separated from the rest of the money, and put it in a cooler bag in the car. He then drove back to Perth. Soon after his arrival there he was interviewed by the police. It was common ground that when he was questioned he made some false statements to the police about what he had done with the money. He gave a signed statement in the course of which he said that at the time when he was paid the money he suspected that he was overpaid but that he did not establish that fact until that night. In the statement he said:

"I had the opportunity to tell the Detectives that
I had the money and that I was going to return it
but this was not my intention. I believed that I
had been dealt with unfairly."

"It was a bit hard to know whose money that was.
It had been given to me ... I didn't know what I
was going to do with it. The safest thing to be to
keep it safe and that's where it was."

4. If the jury accepted the evidence of Mr Brighton, they could have been satisfied that the applicant took the money from the Telecom envelope, knowing that it was not intended for him and that he was not entitled to it. If they accepted the evidence of the applicant, they could have concluded that Mr Brighton gave the money in the envelope to the applicant intending him to keep it (no doubt mistakenly believing that it formed part of a total of $1,176), or that the applicant believed that that was the case, and that only later that night did the applicant discover that he had been overpaid; they further could have thought that the applicant was keeping the money safe while he decided what to do with it. They could of course have been doubtful which version of the facts was correct.

5. The learned trial judge commenced his summing up of the law to the jury in this way:

"A person who takes something belonging to another
or having in his possession something belonging to
another steals that property if certain criteria
are observed and one is that he has an intention to
permanently deprive the owner of the thing taken or
the thing which he finds to be in his possession
or, in the case of money, stealing takes place if
there is an intent to use the money at his own
will, even though he may intend subsequently to
repay the money to the owner."

Later, after dealing with the facts his Honour said:

"It must have been taken, as we say,
fraudulently. That is, with the intention of
permanently depriving the owner of it, or in the
case of money, of using it at his own will, when he
took it or when he became aware of the excess. If
you find, in accordance with the accused's
evidence, that although, as he said, he suspected
it was more than he was entitled to when he
received it, if you find that he discovered the
excess when he went out to his car immediately
after receiving the money or discovered it at
11 o'clock, or late at any rate that night, it
matters little. He was aware at the latest by
11 o'clock that night that he had been overpaid, to
use his expression. If you can imagine yourself
going into a shop and handing over a $20 bill in
payment for something and being given the change
from $50, if you simply put the excess in your
pocket and walk away, obviously you are stealing
the excess. I think that that would be perfectly
obvious to any of you. In circumstances such as
that of course you must immediately tell the
cashier that you have been overpaid and hand the
surplus back."

His Honour went on to suggest that if the applicant's version of the facts was accepted the applicant should have notified Mr Brighton of the overpayment on the following morning.

6. The jury seem to have had a reasonable doubt on the question whether the applicant deliberately took the money knowing that he was not entitled to it, and may have proceeded on the view that he later discovered that he had been overpaid, because after the jury had retired they returned and the foreman asked the learned trial judge the following question:

"Could you please reclarify the point of law
regarding the definition of stealing as it pertains
to the overpayment of the money?"

To that question the learned trial judge replied:

"Members of the jury, stealing money is taking
money to which one is not entitled with the
intention of either depriving the owner of the
money or else with the intention of using the money
at one's own will, even if there is an intention to
repay it at a later time. In the event of money
being mistakenly overpaid by way of payment of a
debt or in the instance which I gave you this
morning of receiving change, if the person
receiving that money to which he is not entitled,
upon becoming aware of the excess payment decides,
'Well, that's bad luck for the owner of the money
who did not intend to give it; I will keep it',
that is stealing."

7. Stealing is defined in s.371 of the Criminal Code (W.A.), whose provisions, so far as they are material, are as follows:

"(1) A person who fraudulently takes anything
capable of being stolen, or fraudulently converts
to his own use or to the use of any other person
any property, is said to steal that thing or that
property.

(2) A person who takes anything capable of
being stolen or converts any property is deemed to
do so fraudulently if he does so with any of the
following intents, that is to say:-

(a) An intent to permanently deprive the
owner of the thing or property of it or
any part of it;

...

(f) In the case of money, an intent to use it
at the will of the person who takes or
converts it although he may intend to
afterwards repay the amount to the owner.

...

(4) In the case of conversion, it is
immaterial whether the property converted is taken
for the purpose of conversion or whether it is at
the time of the conversion in the possession,
control or management of the person who converts
it. It is also immaterial that the person who
converts the property is the holder of a power of
attorney for the disposition of it, or is otherwise
authorized to dispose of the property.

...

(6) The act of stealing is not complete until
the person taking or converting the thing actually
moves it or otherwise actually deals with it by
some physical act."

8. The law as enacted by this section is free from some of the complexities of the common law. Stealing, as defined, includes both fraudulent taking and fraudulent conversion. A taking or conversion is deemed to be fraudulent when done with one of the intentions described in pars.(a)-(f) of s.371(2). No further state of mind is necessary. Of course there is no criminal responsibility for a taking or conversion effected in the exercise of an honest claim of right and without intent to defraud (Criminal Code (W.A.), s.22) or under an honest and reasonable but mistaken belief in the existence of a state of things when if that state of things actually existed the accused would not be liable to punishment (Criminal Code (W.A.), s.24, s.1 ("criminal responsibility")). It is necessary to prove that the thing stolen is the property of someone (Criminal Code (W.A.), s.370). The Code does not require that the taking or conversion be without the consent of the owner, but, at least in a case where no question of special property arises, and where there is no attempt to defraud, the practical effect of its provisions is that a person who takes or converts goods will not be criminally responsible if he acts with the consent of the owner or under an honest and reasonable but mistaken belief that he is acting with the owner's consent.

9. If the applicant's version of events is accepted, he did not take the money with any of the intents mentioned in s.371(2). He can be guilty of stealing only if he converted the money with one of those intents. The word "converts" which appears in s.371 is not defined in the Code. In Caxton Publishing Co. v. Sutherland Publishing Co. (1939) AC 178, a case of copyright, Lord Porter, at pp 201-202, referred to the definition of "conversion" given by Atkin J. in Lancashire and Yorkshire Ry. Co. v. MacNicoll (1918) 88 LJ (KB) 601, at p 605:

"Dealing with goods in a manner inconsistent with
the right of the true owner amounts to a
conversion, provided that it is also established
that there is also an intention on the part of the
defendant in so doing to deny the owner's right or
to assert a right which is inconsistent with the
owner's right."

Lord Porter continued, at p.202:

"Atkin J. goes on to point out that, where
the act done is necessarily a denial of the owner's
right or an assertion of a right inconsistent
therewith, intention does not matter. Another way
of reaching the same conclusion would be to say
that conversion consists in an act intentionally
done inconsistent with the owner's right, though
the doer may not know of or intend to challenge the
property or possession of the true owner."

10. In Rogers v. Arnott (1960) 2 QB 244, a case of criminal conversion by a bailee, Donovan J., in a judgment with which the other members of a Divisional Court agreed, said, at p.249, that the analogy between conversion in a civil action and in a criminal action for fraudulent conversion is misleading. He went on, at pp.250-251, to cite with approval two textbooks: Kenny's Outlines of Criminal Law, 17th ed., par.245 and Russell on Crime, 11th ed., p.1095. The passage from Kenny is as follows:

"Exactly what constitutes the 'conversion', which
involves the bailee in the guilt of stealing, has
not been authoritatively stated. The prisoner must
have possession of the goods, otherwise he would
not be bailee, and then, as it would seem, any
conduct on his part which shows that he assumes
either the full title of ownership in the goods, or
asserts a right to pass the full title of
ownership, will amount to such conversion as will
render him guilty of stealing them within the
statute."

According to Russell on Crime:

"It is unfortunate that the term 'conversion' does
not appear to have been given a precise definition
either judicially or in the textbooks. But for the
purposes of the law of larceny it is submitted that
it is necessary that the offender should have
possession of the goods, and that when possession
has been obtained any setting up by the offender of
a full title to the property in himself, adverse to
that of the owner, if done without a bona fide
claim of right, will render him guilty of larceny."

11. These definitions indicate that to constitute a conversion it is necessary that the accused should have acted in a way which is inconsistent with the right of the true owner and this is consistent with what Lord Porter said in Caxton Publishing Co. v. Sutherland Publishing Co. However, for the purposes of the Code it is not necessary that the property should, at the time of the conversion, have been in the possession of the person who converts it: s.371(4). It is in my opinion further unnecessary that the accused should have acted with any intention other than one of those mentioned in s.371(2). Except in these respects, the common law definition of "conversion" provides a guide to its meaning in the Code - that was accepted in Reg. v. Hally (1962) QdR 214, at p 228, in the case of the Queensland Criminal Code. For the purposes of the Code a person converts property if he deals with that property in a way which is inconsistent with the right of the owner of the property. It was open to the jury in the present case, if they accepted the applicant's version of events, to consider that the applicant was keeping the money safe while he decided what to do with it and they may not have been satisfied that he was acting in a way inconsistent with the right of Mr Brighton; in that event they would not have been satisfied that there had been a conversion. Further, of course, they may not have been satisfied that the applicant had formed any of the intentions mentioned in s.371(2).

12. On behalf of the applicant it was further submitted that on the applicant's version of the facts ownership as well as possession of the money would have passed to the applicant when he accepted the money which Mr Brighton threw down for him to take, and that if the applicant did become the owner he could not be guilty of conversion. It is clearly right to say that if the applicant acquired ownership as well as possession there could be no conversion. However, with all respect, I cannot agree that the applicant acquired ownership of the amount which he was overpaid by mistake.

13. It is true to say that when money (including notes) passes into circulation the very act of circulation destroys the title of the former owner and creates new title, but only if the person who acquires the money does so in good faith and for value. The law was stated in Miller v. Race [1758] EngR 129; (1758) 1 Burr 452, at pp 457-458 [1758] EngR 129; (97 ER 398, at p 401) by Lord Mansfield as follows:

"It has been quaintly said, 'that the reason why
money can not be followed is, because it has no
ear-mark:' but this is not true. The true reason
is, upon account of the currency of it: it can not
be recovered after it has passed in currency. So,
in case of money stolen, the true owner can not
recover it, after it has been paid away fairly and
honestly upon a valuable and bona fide
consideration: but before money has passed in
currency, an action may be brought for the money
itself."

More recently, in Banque Belge v. Hambrouck (1921) 1 KB 321, Scrutton L.J. said, at p 329:

"At common law, a man who had no title himself
could give no title to another. Nemo potest dare
quod non habet. To this there was an exception in
the case of negotiable chattels or securities, the
first of which to be recognized were money and bank
notes: Miller v. Race; and if these were received
in good faith and for valuable consideration, the
transferee got property though the transferor had
none. But both good faith and valuable
consideration were necessary ..."

Different considerations apply when the coins or notes are not dealt with as currency, but as articles having a special value because, for example, of their rarity (see Moss v. Hancock (1899) 2 QB 111), but we are not concerned here with that question or with the rules regarding tracing. In the present case, although the applicant could have transferred the property in the money to a third person who took it as currency, it does not follow that he himself got title to the amount which he received in excess of the $1,176 which Mr Brighton intended to pay him, that is to the $530 for which he did not give valuable consideration. Mr Brighton did not, on any version of the facts, pay the applicant $1,706 (or $1,776) mistakenly thinking that the applicant was entitled to that amount; he made no mistake as to the amount of money which he was bound to pay to the applicant but (on the applicant's version of events) he was mistaken as to the quantity of money which he in fact paid over. Mr Brighton had no intention to transfer to the applicant the property in any amount greater than $1,176 and in my opinion he did not do so.

14. It is not material that Mr Brighton could not have sued for conversion of the $530 which, although it had originally been in a separate envelope, could not possibly be separately identified (see Orton v. Butler (1822) 5 B. & Ald. 652 (106 ER 1329); Foster v. Green [1862] EngR 395; (1862) 7 H & N 881 (158 ER 726); Sinclair v. Brougham (1914) AC 398 at pp 431-32) although he could have recovered the money in an action for money had and received as having been paid under a fundamental mistake of fact (see Morgan v. Ashcroft (1938) 1 KB 49; Porter v. Latec Finance (Qld.) Pty. Ltd. [1964] HCA 49; (1964) 111 CLR 177 at pp 187, 190). The rules relating to conversion in tort do not all apply to the criminal law (see Rogers v. Arnott and Reg. v. Hansford (1974) 8 SASR 164, at p 169) and particularly not to the Criminal Code. It was argued that in a case of this kind, where the accused has allegedly fraudulently taken or converted to his own use money which was never intended to be given to him, the accused cannot be convicted of stealing because it is not possible to prove which particular notes were stolen - in the present case it would not be possible to identify the very notes which exceeded the amount of $1,176. Such an argument would, if accepted, allow dishonesty to escape punishment because of a technicality, but I agree with the view of Professor Rupert Cross that a requirement that there can be no conviction of larceny unless the prosecutor is able to produce the very note alleged to have been stolen "is not necessitated by any doctrine of common sense, criminal law or procedure" (see (1958) Crim.L.R. 529, at p.532). A similar question appeared to create no difficulty in Reg. v. Gilks (1972) 1 WLR 1341; 3 All ER 280, a case of dishonest appropriation of money which, on this aspect of the matter, is consistent with other decisions on the dishonest appropriation of goods: R. v. Tideswell (1905) 2 KB 273; Russell v. Smith (1958) 1 QB 27; see also Pilgram v. Rice-Smith (1977) 1 WLR 671; 2 All ER 658. Further, although the applicant would, on his version of events, not have been liable to be convicted for larceny as a bailee (see Slattery v. The King [1905] HCA 66; (1905) 2 CLR 546 and R. v. Ward (1938) 38 SR(NSW) 308, at pp 314-316), the question of bailment simply does not arise in the present case. Since stealing under s.371 may be constituted by a conversion as well as by a taking, the difficulties created by such cases as, on the one hand, Reg. v. Ashwell (1885) 16 QBD 190 and, on the other, Moynes v. Coopper (1956) 1 QB 439 and Reg. v. Potisk (1973) 6 SASR 389 are not relevant to a consideration of the effect of the Code.

15. For these reasons, in my opinion, even if Mr Brighton's evidence was not accepted, the jury were entitled to find that the property in a sum amounting to $530 had not passed to the applicant. They would then have had to consider whether they were satisfied that the applicant had converted that sum with either of the intentions mentioned in pars.(a) and (f) of s.371(2).

16. It follows from what I have said that there were serious errors in the summing up. In the first passage from the summing up which I have quoted in this judgment the learned trial judge did not mention conversion but instead said that the accused would be guilty if, finding the money to be in his possession, he intended to use the money at his own will, even though he might have intended subsequently to repay it to the owner. In other words, his Honour wrongly equated the fact of possession with an act of conversion. In the second passage which I have cited, the example of a customer who is given change from $50 when he has handed over a $20 bill was misleading. A person who in those circumstances was given the change and walked away would be guilty of stealing under the Code only if the jury were satisfied that his actions amounted to a conversion of the money and only if he had the necessary intention. There is no rule of law that a person who in those circumstances fails to tell the cashier immediately that he has been overpaid will necessarily have converted the money, although of course a failure to do so might be very strong evidence of both conversion and intention. Finally, in the redirection given in response to the jury's request, the learned trial judge made two errors. First, in referring to the intention mentioned in s.371(2)(a), he omitted to use the word "permanently". Secondly, he again failed to give any direction regarding conversion.

17. The deficiencies in the summing up were in my opinion so serious that the conviction cannot be allowed to stand. Since there was evidence on which the applicant could have been convicted I consider that a new trial should be ordered although it will be a matter for those concerned to consider whether a new trial is warranted having regard to all the circumstances.

18. For these reasons I would grant the necessary extension of time and grant special leave to appeal, allow the appeal, quash the conviction and order a new trial.

WILSON AND DAWSON JJ.: This is an application for special leave to appeal against the judgment of the Western Australian Court of Criminal Appeal dismissing an appeal against a conviction for stealing. The applicant is a veterinary surgeon who was employed as a locum tenens by another veterinary surgeon named Brighton to carry on the latter's practice at Bridgetown and Manjimup in Western Australia while he, Brighton, went on an overseas holiday. Brighton had, apparently, intended to be away for some three weeks. He returned early.

2. Upon returning, Brighton went to Bridgetown where the applicant was occupying his house. He was dissatisfied with the condition of the house and the manner in which the applicant was running his practice and complained to him about it. Brighton told the applicant that he was to finish up as a locum on the following day.

3. Late on that following day a meeting took place at Brighton's clinic at Bridgetown for the purpose of settling financial matters between the two men. The applicant and Brighton gave different accounts of what happened at that meeting.

4. The rate of remuneration agreed upon had been $450 per week plus an allowance for mileage. According to Brighton, he and the applicant reached an agreement that the applicant should be paid $1,176. Brighton said that he handed the applicant a bundle of notes amounting to $1,176 which the applicant counted. He said that at about the same time he placed notes amounting to $600 in a green Telecom envelope and that these notes did not form any part of the moneys to be paid to the applicant. Brighton's evidence was that he placed this envelope on top of a pile of mail and other documents on the same table as the $1,176, but not in a position which would indicate that its contents were to form any part of the moneys which the applicant was to receive. Brighton said that he then left the room to answer the telephone. He said that by the time he returned, the applicant had walked to his car. According to Brighton, he went to the door to see the applicant off and when he returned to the room the green envelope was in a different position. He said that he looked inside the envelope and there was nothing there.

5. The applicant's evidence was that during the meeting Brighton was in an agitated state and was anxious to be rid of him. He said that one after another Brighton threw three amounts of money on the table in front of him. The first amount was said by the applicant to be in a green Telecom envelope. According to the applicant, Brighton told him that there was no need to count the money and asked him to sign a receipt for $1,176. The applicant said that he signed the receipt without counting the money. According to him, he was virtually ordered to leave; the telephone rang as he was leaving but he did not wait. He said it was not until later that evening that he counted the money and found that there was an excess of $530. According to the applicant he went back to the clinic the next morning and dropped through a broken window some mail and other items which he had mistakenly taken with him. The applicant said that he did not leave the $530 or wait to see Brighton because he wanted to return home to Perth and thought it unlikely that Brighton would want to speak further with him. He said that he separated the $530 from the rest of the money, leaving it inside a slit on the side of a cooler which he kept in his motor car. He said that upon arrival in Perth at about 11.30 a.m. he left the $530 in the car and took the other money into the house with him.

6. Police officers came to the applicant's home at about 1.30 p.m. on the same day and according to their evidence the applicant denied having any money other than the $1,176. The police searched the applicant's car and found the $530. They gave evidence that, when asked why he denied having this money, the applicant said that it was because he wanted to "come out on top". The applicant gave evidence that by this he meant that he expected a telephone call from Brighton and that if something had gone wrong "it seemed better that at least I hadn't turned out to be the gullible one and that I would then be able to discuss it further with him". The applicant also gave evidence that he did not regard the $530 as his own and said, "What I planned to do with it was, in fact, what I had done with it, which was that I had had it in safe keeping and that was as far as I had got."

7. In his summing up to the jury, the learned trial judge said:

" The Crown must establish the taking and I
suggest that there is no doubt that an amount in
excess of that to which the accused man was
entitled, was taken by him, perhaps unwittingly in
the first place. That is something which you may
have to decide.

It must have been taken, as we say,
fraudulently. That is, with the intention of
permanently depriving the owner of it, or in the
case of money, of using it at his own will, when he
took it or when he became aware of the excess. If
you find, in accordance with the accused's
evidence, that although, as he said, he suspected
it was more than he was entitled to when he
received it, if you find that he discovered the
excess when he went out to his car immediately
after receiving the money or discovered it at 11
o'clock, or late at any rate that night, it matters
little. He was aware at the latest by 11 o'clock
that night that he had been overpaid, to use his
expression. If you can imagine yourself going into
a shop and handing over a $20 bill in payment for
something and being given the change from $50, if
you simply put the excess in your pocket and walk
away, obviously you are stealing the excess. I
think that that would be perfectly obvious to any
of you. In circumstances such as that of course
you must immediately tell the cashier that you have
been overpaid and hand the surplus back."

After they had retired the jury returned and asked the question:

"Could you please reclarify the point of law
regarding the definition of stealing as it pertains
to the overpayment of the money?"

By this question, the jury clearly indicated that they had not rejected the applicant's version of events. The trial judge answered the question as follows:

" Members of the jury, stealing money is taking
money to which one is not entitled with the
intention of either depriving the owner of the
money or else with the intention of using the money
at one's own will, even if there is an intention to
repay it at a later time. In the event of money
being mistakenly overpaid by way of payment of a
debt or in the instance which I gave you this
morning of receiving change, if the person
receiving that money to which he is not entitled,
upon becoming aware of the excess payment decides,
'Well, that's bad luck for the owner of the money
who did not intend to give it; I will keep it',
that is stealing."

8. Those directions were, in our view, defective, but it is necessary to go to the relevant provisions of the Criminal Code of Western Australia ("the Code") and to some of the cases dealing with larceny at common law in order to show why.

9. The charge against the applicant was laid under s.371 of the Code, which, so far as is relevant, provides:

"(1) A person who fraudulently takes anything
capable of being stolen, or fraudulently converts
to his own use or to the use of any other person
any property, is said to steal that thing or that
property.

(2) A person who takes anything capable of being
stolen or converts any property is deemed to do so
fraudulently if he does so with any of the
following intents, that is to say:-

(a) An intent to permanently deprive the
owner of the thing or property of it or
any part of it;

...

(f) In the case of money, an intent to use it
at the will of the person who takes or
converts it although he may intend to
afterwards repay the amount to the owner.

...

(4) In the case of conversion, it is immaterial
whether the property converted is taken for the
purpose of conversion or whether it is at the time
of the conversion in the possession, control or
management of the person who converts it...."

Under s.370 "every inanimate thing whatever which is the property of any person, and which is movable" is "capable of being stolen" and so includes money.

10. At common law, larceny is committed by a person who, without the consent of the owner, fraudulently and without a claim of right made in good faith, takes and carries away anything capable of being stolen with intent, at the time of such taking, permanently to deprive the owner thereof. This is the definition, which was intended to be declaratory of the common law, given in s.1(1) of the Larceny Act 1916 (U.K.) which has, of course, now been repealed by the Theft Act 1968 (U.K.). What we wish to draw attention to is the fact that at common law larceny involves the taking of something without the consent of the owner who may, for this purpose, include the person in possession of the thing. For this reason it is said that there is no larceny if the circumstances would not sustain an action for trespass. Under the Code, on the other hand, a person who fraudulently takes anything capable of being stolen is said to steal that thing. Absence of consent on the part of the owner is not required and there is, for that reason, no necessary element of trespass. Of course, if the taking is to be fraudulent, there must be the requisite intent but, given that intent, there may be a fraudulent taking of something under the Code even if the owner intentionally delivers the thing to the person said to take it.

11. Because larceny at common law requires a trespass - it is sometimes described as an offence against possession - a person lawfully in possession of something cannot be guilty of larceny of it. "Hence, even if consent to the mere taking of possession was obtained by fraud, but there was then no animus furandi, it is not larceny at common law if the chattel is subsequently permanently misappropriated. A bailee could not be guilty of larceny at common law of the goods bailed, so long as the bailment continued": R. v. Ward (1938) 38 SR(NSW) 308, at p 314 per Jordan C.J.; Slattery v. The King [1905] HCA 66; (1905) 2 CLR 546. Under the Code, however, stealing contains no trespassory element although there must be a taking. The question whether a person could, under the Code, steal something already in his lawful possession, is answered by the express provision that a person may steal, not only by fraudulently taking something, but also by fraudulently converting it to his own use. Of course, a person may convert something which is in his possession, although he cannot convert something which he also owns. That is because conversion in the criminal law at least involves a dealing with the thing said to be converted in a manner inconsistent with the owner's right in the thing: Caxton Publishing Co. v. Sutherland Publishing Co. (1939) AC 178, at pp 201-202 citing Lancashire and Yorkshire Railway Co. v. MacNicoll (1918) 88 LJ (KB) 601, at p 605 per Atkin J.

12. With these differences between the common law and the Code in mind, it is possible to look at those cases dealing with mistake in relation to larceny to see what assistance might be gained from them. Mistake is relevant in this case because, upon one version of events, an overpayment was made by Brighton by mistake. Because of the differences between the Code and the common law the exercise can only be helpful in a general way and it is unnecessary to go into great detail. Moreover, we should say at the beginning that the decisions to which we are about to refer are far from having received universal approbation.

13. The cases fall into two categories. First there are those, of which Reg. v. Middleton (1873) LR 2 CCR 38 is the principal decision, in which the person handing over the thing said to be stolen did so under a mistake which was known at the time by the person to whom the thing was handed. Cases in the second category, of which Reg. v. Ashwell (1885) 16 QBD 190 is the leading authority, occur where the thing said to be stolen was handed over under a mistake which was unknown at the time by the person to whom the thing was handed and was learnt by him only subsequently.

14. In Middleton the accused was handed by a post office clerk by way of withdrawal from a savings account an amount which was more than was standing to the accused's credit in that account. At the time the clerk made the payment, he mistakenly referred to a letter which authorized the payment, but to another depositor. The accused was convicted upon trial, the case being reserved for the Court of Crown Cases Reserved where it was eventually heard by a Full Court of fifteen judges. By a majority of eleven to four the conviction was upheld.

15. In Ashwell the accused asked for a loan of a shilling and was handed by mistake, in the dark, a sovereign. The accused did not at first realize the mistake, but when he did some time later, he appropriated the sovereign. He was convicted upon trial but again a case was stated for the Court of Crown Cases Reserved. The fourteen judges (who included the trial judge) were equally divided and accordingly the conviction stood.

16. Many analyses of the judgments in these cases have been made, but it is sufficient for present purposes to observe that the decision in Middleton can only be explained upon the basis (somewhat of a fiction upon any view) that there was a taking against the consent of the owner at the time the accused received the money and that he acquired neither the right to possession nor ownership of it. The apparent consent of the clerk who paid the money was vitiated by his mistake. It may also be observed that it was the whole of the money which was held to be stolen, not just the amount by which the payment exceeded the money which was in the accused's account.

17. The decision in Ashwell must, we think, rest upon the proposition (difficult to accept as it is) that the mistake on the part of the person handing over the coin and on the part of the accused, meant that the accused, although he obtained physical possession of the coin, did not obtain possession of the sovereign until he realized that the coin was a sovereign. At that point he formed an intention to keep it and was held to have taken it without consent.

18. The cases of Middleton and Ashwell have received a measure of acceptance in England, although they have been the subject of considerable criticism. See M.R.E. Kerr, "The Time of Criminal Intent in Larceny" (1950) 66 Law Quarterly Review, p.174; R. Cross, "Larceny De Lege Lata" (1950) 66 Law Quarterly Review, p 497; R. v. Hudson (1943) KB 458; Russell v. Smith (1958) 1 QB 27; Reg. v. Gilks (1972) 1 WLR 1341; (1972) 3 All ER 280. Cf. Reg. v. Flowers (1886) 16 QBD 643; Moynes v. Coopper (1956) 1 QB 439. In Australia they have never been confirmed or adopted and the decision in R. v. Goodrick (1922) 18 Tas.LR 36 is clearly contrary to Middleton. See also Reg. v. Wauchope (1957) 2 FLR 191.

19. In Reg. v. Potisk (1973) 6 SASR 389 the accused changed some travellers' cheques into Australian currency at a bank. The teller applied the wrong exchange rate and gave the accused too much. The accused did not realize this until he got home and counted the money. He then decided to keep it. In the Full Court of the Supreme Court of South Australia, Bray C.J., with whom Mitchell J. agreed, found both Middleton and Ashwell distinguishable but would have declined to follow them in any event. The reasons which the Chief Justice gave for regarding both of those decisions as unsatisfactory are cogent and we should be inclined to agree with his view that they should not be followed. However, in this case, as in Potisk, there are important differences which make the English decisions clearly distinguishable and which render unnecessary any detailed discussion of the reasons in those cases.

20. Both Middleton and Ashwell have been treated, and in our view must be treated, as cases in which the mistake which was made was of a sufficiently fundamental kind to negate the apparent consent and to prevent ownership from passing. A mistake will be of that kind if it is as to the identity of the transferee or as to the identity of the thing delivered or as to the quantity of the thing delivered. See Glanville Williams, Textbook of Criminal Law, (1978), p.779; Williams and Weinberg, Property Offences, 2nd ed. (1986), p.44; Russell on Crime, vol.2, 12th ed. (1964), p.1553; J.C. Smith, (1972) Criminal Law Review, pp.586-588. In those circumstances, and perhaps only in those circumstances, can it be said that the mistake is such that the transferor never really intended to deliver the thing transferred and so never gave consent to the transfer. Middleton may be regarded as a case of mistake as to the identity of the transferee: the clerk thought that the accused was the person referred to in the letter authorizing the payment. Less plausibly, Middleton may be regarded as a case of mistake as to the identity of the deposit: see (1972) Criminal Law Review, p.587. Ashwell may be regarded as a case of mistake as to the identity of the thing delivered: both the lender and the accused thought it was a shilling whereas it was in fact a sovereign. The third category - mistake as to the quantity of the thing delivered - requires in our view some qualification where the thing is money but may be illustrated by Russell v. Smith where eight sacks too many of pig meal were mistakenly delivered to the accused who appropriated them. He was convicted of theft.

21. Where there is a mistake which is not of a fundamental character it will not vitiate consent so that possession and ownership will pass in accordance with the apparent intention of the owner. Thus in Reg. v. Prince (1868) LR 1 CCR 150, where the cashier of a bank handed over money, intending to do so although deceived by a forged order, there was held to be no larceny. And in Lacis v. Cashmarts (1969) 2 QB 400 where the accused took goods from a self-service store and paid the amount which the manager read from the cash register, which was less than the price, there was held to be no larceny. Upon this view the decision in Reg. v. Gilks, which was made in reliance upon Middleton, was wrong and it has been criticized accordingly: (1972) Criminal Law Review, p 585 et seq.; G.F. Orchard, "The Borderland of Theft Revisited" (1973) New Zealand Law Journal, p.110.

22. In the present case there was no mistake as to the identity of the person to whom the money was delivered. There was no mistake as to the identity of the thing delivered, which was money. If there was any mistake it was as to the quantity of money delivered and it is therefore necessary to turn to the qualification of that category of fundamental mistake which we think must be made in the case of money.

23. In Potisk there was no mistake as to the quantity of money handed to the accused. The teller made a mistake in applying the wrong exchange rate but he intended to hand over the amount which he did. The case might have been decided simply upon the basis that there was no fundamental mistake to prevent possession and ownership passing, but Bray C.J. at p.401 adverts to the qualification which we have suggested saying that "... cases where ownership has been held not to pass, despite delivery, because of a mistake are cases relating to the title to specific chattels, and I doubt whether they can apply to delivery of money in circumstances like these". And at p.404 he refers to the "curious question" which would have arisen in Potisk if the accused had been guilty of larceny, namely, whether he stole the whole of the money delivered to him or only the amount which was in excess of the sum to which he was entitled in exchange for his travellers' cheques.

24. It is an error, as Lord Mansfield pointed out as long ago as 1758 in Miller v. Race [1758] EngR 129; (1758) 1 Burr 452, at p 457 [1758] EngR 129; (97 ER 398, at p 401), to treat money in the form of cash in the same way as other goods. Money in most circumstances cannot be followed, which is to say that property, or ownership, generally passes with possession. "It has been quaintly said, 'that the reason why money can not be followed is, because it has no ear-mark:' but this is not true. The true reason is, upon account of the currency of it: it can not be recovered after it has passed in currency": ibid. Money is, of course, capable of being stolen and if it is stolen, property in the notes or coins does not pass to the thief. But if the thief passes the money into currency, which he may do by making payment with it, ownership will pass with possession notwithstanding the thief's lack of title providing the transaction was bona fide and for valuable consideration: Moss v. Hancock (1899) 2 QB 111; Banque Belge v. Hambrouck (1921) 1 KB 321; Clarke v. Shee and Johnson [1774] EngR 107; (1774) 1 Cowp 197 (98 ER 1041). That is because of the doctrine of negotiability - and negotiability was first attributed to chattels in the form of money - which constitutes an exception to the common law rule that a man who has no title himself cannot pass title to another; nemo potest dare quod non habet: Banque Belge v. Hambrouck, at p 329.

25. In the circumstances of this case this aspect of negotiability is of less importance - since Brighton had title in the money - than the rule that when money passes into currency property goes with possession. Whether money only passes in currency when it is negotiated, that is, when it is used for payment bona fide and for value, or whether money may pass in currency in other circumstances when it is not delivered in specie, is something which it is unnecessary to examine here. Definitions of currency tend to speak in terms of it being a medium of exchange, but this nevertheless imports the notion of payment. See Moss v. Hancock at p 116; Mann, The Legal Aspect of Money, 4th ed. (1982), p 8. Upon any view money passes into currency when it is negotiated and in this case, upon the applicant's version of the facts, the transaction in which the money changed hands was both bona fide and for value. He was unaware of the overpayment when it was made and consequently there was no reason to doubt the bona fide character of the transaction. Thus the notes or coins ceased to be the subject of specific title as chattels and passed as currency, that is to say, passed "from hand to hand in point, not merely of possession, but of property": Sinclair v. Brougham (1914) AC 398, at p 418 per Viscount Haldane L.C. We do not think that it is possible to say that only the correct amount was paid for valuable consideration and that the amount of the overpayment passed hands for no consideration and hence as mere chattels rather than currency. Apart from the insuperable difficulty of identifying the notes or coins which constituted the overpayment, it is the transaction itself which characterizes the payment. The transaction between the applicant and Brighton was bona fide and for value. The payment, which was part of that transaction, was also of that character. It is not possible, in our view, to apportion the consideration to some of the chattels comprising the notes or coins transferred and not to others.

26. With goods other than currency, property does not pass with possession unless it is the owner's intention that it should and it has been held (not without some difficulty) that it is possible to conclude in cases of overdelivery that appropriation of the whole of the goods involves the theft of the excess goods without any need to identify them. See R. v. Tideswell (1905) 2 KB 273; Pilgram v. Rice-Smith (1977) 1 WLR 671; (1977) 2 All ER 658. Cf. Lacis v. Cashmarts, at p 411. However where property passes with possession, as with currency, no such conclusion is possible in relation to an amount overpaid. There is, we should add, a civil action to recover money paid under a mistake of fact and equitable rights may arise. See Chase Manhattan v. Israel-British (1981) Ch 105.

27. The result is that in this case, even without rejecting Middleton and Ashwell, there was no mistake of a fundamental kind which would have operated to prevent ownership in the money passing at the time at which, upon the applicant's evidence, it was handed by Brighton to the applicant. There was no mistake as to the identity of the transferee, there was no mistake as to the identity of the money and any overpayment, being in currency, did not prevent property in the whole amount being transferred to the applicant.

28. If in this case Brighton intentionally handed the money to the applicant, including the amount of the overpayment, and the applicant took the money without being aware of any mistake on the part of Brighton, property in the money passed with possession and there was neither a fraudulent taking within the meaning of s.371 of the Code nor a subsequent conversion when the applicant realized Brighton's mistake. To the extent that the prosecution alleged that the applicant fraudulently took an amount of money, the applicant was entitled to rely upon s.24 of the Code. That section gave to the applicant the benefit of an honest and reasonable mistake of fact which, upon his version of events, arose on his part when he took the money believing it to be the amount to which he was entitled. That section in this case, however, seems to add little in terms of practical result to the law as we have endeavoured to explain it. Nor upon the evidence did a bona fide claim of right arise as a separate defence requiring reliance upon s.22 of the Code.

29. Clearly the directions given by the learned trial judge to the jury were defective. As we have said, the question asked by the jury after they had retired indicates that they had not rejected the applicant's version of events. The applicant was entitled to a direction that if the jury were satisfied - or if they were left with a reasonable doubt about it - that Brighton delivered the money to the applicant who took it unaware of any overpayment, then the applicant should be acquitted of stealing, notwithstanding that he subsequently realized Brighton's mistake and retained the money. No such direction was given.

30. It remains to consider whether the applicant should be exposed to a new trial. His story is not inherently improbable and, had the jury been adequately directed, it is likely that he would have been acquitted. It is not an invariable rule that a new trial should be ordered where there is evidence upon which a jury could have convicted on an adequate direction. See Clemesha v. The Queen (1978) WAR 193, at p 201, per Wickham J. Justice having once miscarried in this case, we think that it would be better served in the end if there were no order for a retrial. We would grant special leave, allow the appeal, quash the conviction and direct a verdict and judgment of acquittal be entered.

BRENNAN J.: The applicant was convicted on indictment before the District Court of Western Australia of the crime of stealing the sum of $600 in money, the property of Peter Glen Brighton, on 24 September 1984.

2. The applicant, a veterinary surgeon, had been engaged by Brighton to act as his locum in his practice at Bridgetown from 5 September 1984 while Brighton was overseas. Brighton returned earlier than expected on 23 September. Brighton then complained about the applicant's conduct of the practice during Brighton's absence and his care of Brighton's house in which the applicant had lived. The applicant was asked to leave. On the afternoon of 24 September a discussion took place between them about financial matters. The evidence of Brighton as to what took place differed from the evidence of the applicant. According to Brighton, they agreed that the applicant should be paid $1176, and the applicant was paid that amount in cash and signed a receipt. Brighton then separated out a further $600 from the cash he had on hand and put it in an envelope. He put some money in the till and the balance in his pocket. Brighton said that when the discussion ended, the phone rang on the receptionist's desk in the surgery and he left the room. He said that when he returned the applicant had left and had taken with him not only the money which Brighton had paid him but also the money which was in the envelope. As the $600 in the envelope had nothing to do with the settlement between Brighton and the applicant, Brighton's version of the facts amounted to a simple case of stealing the money contained in the envelope.

3. That was not the applicant's version of what happened. His evidence was that, as the discussion proceeded, Brighton placed on the table three separate amounts of money which were to pay the applicant what was due to him. One of these amounts was in an envelope. Brighton insisted that the applicant sign the receipt for $1176 without counting the money and then virtually bundled him out of the surgery. The applicant left, putting all the money that he had been given into his satchel. He said that the telephone rang as he was leaving the surgery, but he did not tarry as Brighton had made it clear that he did not wish to speak to him any further. At about 11 o'clock that night, he said that he counted the money and then, for the first time, discovered that he had been overpaid - not by $600 but by $530. He then separated out $530 and put it in a cooler in his car where the police found it the next day after he had driven to his home in Perth. When asked in evidence what he intended to do with the $530, he said:

" What I planned to do with it was, in fact, what I
had done with it, which was that I had had it in
safe keeping and that was as far as I had got."

When asked, "Did you regard the money as your own?" he replied, "Not at all, no". Nevertheless, it would have been open to the jury to find that, accepting the applicant's evidence as to how he came to have the money he put in his satchel, the applicant formed the intention, on discovering the excess $530 that he had been paid, to keep it as his own. A direction was required from the learned trial judge as to the applicant's right to acquittal or liability to conviction if the jury should form the view that the applicant's version of the taking of the money from the surgery and the subsequent discovery of the overpayment was or might be true. His Honour gave the jury this direction in the summing up:

" The Crown must establish the taking and I
suggest that there is no doubt that an amount in
excess of that to which the accused man was
entitled, was taken by him, perhaps unwittingly
in the first place. That is something which you
may have to decide.

It must have been taken, as we say,
fraudulently. That is, with the intention of
permanently depriving the owner of it, or in the
case of money, of using it at his own will, when
he took it or when he became aware of the excess.
If you find, in accordance with the accused's
evidence, that although, as he said, he suspected
it was more than he was entitled to when he
received it, if you find that he discovered the
excess when he went out to his car immediately
after receiving the money or discovered it at 11
o'clock, or late at any rate that night, it
matters little. He was aware at the latest by 11
o'clock that night that he had been overpaid, to
use his expression. If you can imagine yourself
going into a shop and handing over a $20 bill in
payment for something and being given the change
from $50, if you simply put the excess in your
pocket and walk away, obviously you are stealing
the excess. I think that that would be perfectly
obvious to any of you. In circumstances such as
that of course you must immediately tell the
cashier that you have been overpaid and hand the
surplus back."

4. It seems that the jury accepted the applicant's version as to how he came to have the money in his satchel or at least entertained a reasonable doubt as to that version, because they asked the trial judge for a further direction:

" Could you please reclarify the point of law
regarding the definition of stealing as it
pertains to the overpayment of the money?"

The trial judge responded:

" Members of the jury, stealing money is taking
money to which one is not entitled with the
intention of either depriving the owner of the
money or else with the intention of using the
money at one's own will, even if there is an
intention to repay it at a later time. In the
event of money being mistakenly overpaid by way
of payment of a debt or in the instance which I
gave you this morning of receiving change, if the
person receiving that money to which he is not
entitled, upon becoming aware of the excess
payment decides, 'Well, that's bad luck for the
owner of the money who did not intend to give it;
I will keep it', that is stealing."

These directions did not require the jury to consider whether the applicant owned the money in his possession when he discovered the overpayment and in the redirection the reference to the owner's intention assumes a fact critical to ownership. The jury were directed that an intention to keep the whole of the money formed when the overpayment was discovered made him liable to conviction for stealing. The applicant was convicted.

5. The applicant appealed to the Court of Criminal Appeal against his conviction on the grounds, inter alia, that these directions were erroneous. The applicant's evidence had raised for consideration the criminal liability of a person who keeps money which he is paid by mistake. That question has spawned a considerable literature. At the trial and on appeal to the Court of Criminal Appeal, that question was addressed as though the answer turned solely on the intention of the applicant as payee. No consideration was given to the question whether the jury should have been directed to consider whether the money the subject of the charge had become, at the relevant time, the property of the applicant. The ownership of the money which, on the applicant's evidence, was handed to him by Brighton was not discussed until it was raised during argument in this Court, but no submissions were then made as to the authority of the cases presently to be mentioned or their relevance to the provisions of s.371 of the Criminal Code of Western Australia. Although this Court would wish to have the benefit of informed argument and prior judicial consideration in considering an issue arising on appeal and might refuse special leave to appeal when an issue has not been so considered or argued, the issue in this case has arisen shortly after and by way of contrast with the judgment of this Court in Kennison v. Daire [1986] HCA 4; [1986] HCA 4; (1986) 60 ALJR 249; 64 ALR 17 and is of such daily practical importance that special leave should be granted.

6. In Kennison v. Daire, this Court dismissed an appeal against conviction for larceny of a man who, having closed his account at a bank, used a card which had been issued to him to cause an automatic teller machine to disgorge money which he, knowing he had no title to the money, appropriated. Kennison v. Daire was decided under s.131 of the Criminal Law Consolidation Act 1935 (S.A.) which, as King C.J. pointed out when the case was before the Full Court in South Australia ((1985) 38 S.A.S.R.404, at p.406), contains no statutory definition of the offence of simple larceny, whereas this case falls to be decided under the Criminal Code of Western Australia. There are significant differences between the common law of larceny and the provisions of the Code relating to stealing but, as we shall see, the differences would not have led to a different result in Kennison v. Daire if that case had been prosecuted under the Code.

7. Section 22 of the Code provides, inter alia, as follows:

" ... a person is not criminally responsible, as
for an offence relating to property, for an act
done or omitted to be done by him with respect to
any property in the exercise of an honest claim
of right and without intention to defraud."

8. Section 370 of the Code defines what is capable of being stolen:

" Every inanimate thing whatever which is the
property of any person, and which is movable, is
capable of being stolen.

..."

Australian notes as defined by s.32 of the Reserve Bank Act 1959 (Cth) and coins are things capable of being stolen, so long as they can be identified (cf. Croton v. The Queen [1967] HCA 48; [1967] HCA 48; (1967) 117 CLR 326, at p 330; Reg. v. Hennelly (1888) 14 VLR 59). The material parts of s.371 of the Code read as follows:

" (1) A person who fraudulently takes anything
capable of being stolen, or fraudulently converts
to his own use or to the use of any other person
any property, is said to steal that thing or that
property.

(2) A person who takes anything capable of
being stolen or converts any property is deemed
to do so fraudulently if he does so with any of
the following intents, that is to say:-

(a) An intent to permanently deprive the
owner of the thing or property of it
or any part of it;

...

(f) In the case of money, an intent to
use it at the will of the person who
takes or converts it although he may
intend to afterwards repay the amount
to the owner.

...

(4) In the case of conversion, it is
immaterial whether the property converted is
taken for the purpose of conversion or whether it
is at the time of the conversion in the
possession, control or management of the person
who converts it. It is also immaterial that the
person who converts the property is the holder of
a power of attorney for the disposition of it, or
is otherwise authorized to dispose of the
property.

..."

9. A person cannot be guilty of stealing property which he owns and in which no other person has a proprietary right that is infringed by his dealing with it. That is as true of stealing under the Code as it is of larceny at common law. But, to establish larceny at common law, it was necessary to prove, inter alia, that the thing said to have been stolen was taken from the possession of the prosecutor. There had to be a trespass: Reg. v. Ashwell (1885) 16 QBD 190, at p 209. Consequently, as Griffith C.J. pointed out in Slattery v. The King [1905] HCA 66; (1905) 2 CLR 546, at pp 554-555, "a person entrusted with property to hold for another, who converted that property to his own use, could not be charged with larceny, because he did not wrongfully take it away, having had it lawfully in his possession". And thus a bailee could not be guilty of larceny at common law of the property bailed so long as the bailment continued: R. v. Ward (1938) 38 SR (NSW) 308, at p 314. But the Code provisions are broader than the common law of larceny, notably in two respects: first, the Code imposes criminal liability on a person who, having acquired possession of property lawfully, fraudulently converts it; and secondly, the Code creates a number of offences relating to the misappropriation of money or other property received in such circumstances that the person receiving it is not entitled to it absolutely: see ss.373, 374, 375. When Sir Samuel Griffith drafted the provisions now enacted as ss.370 and 371 in Western Australia (ss.390 and 391 in Queensland) he embraced in the definition of stealing "all cases of fraudulent conversion of movable property", following, for the most part, the proposals contained in the Draft Code prepared by the Commissioners of 1878 in England (see his covering letter of 29 October 1897, pp.xii and xiii: Brisbane, 1897). This was a radical innovation for, as he explained judicially in Slattery, at p.555, the general rule at common law was that the "fraudulent misappropriation of property was not a criminal offence if the possession of it was originally honestly obtained". Thus, in Kennison v. Daire, King C.J. put the question in this way (at p 407):

" If it was the intention of the bank, actual or
imputed, that the property in or possession of
the money should pass to the appellant, he is not
guilty of larceny." (Emphasis added.)

10. Under the Code, however, the problem of fraudulent conversion after acquiring possession - a problem on which the Court of Criminal Appeal had divided equally in Ashwell - is solved by including fraudulent conversion in the definition of stealing. There does not have to be an asportation of the thing, as the common law required (Croton, at p.330), but the person taking or converting the thing must actually move or otherwise deal with it by some physical act (s.371(6)). Nevertheless, the Code does not impose criminal liability on a person either for taking or for converting his own property if no other person has a proprietary interest in that property or if no other person's proprietary interest is infringed by the act which is said to complete the taking or conversion. When a person is charged under the Code with stealing property which he is said to have acquired by mistake, instruction may be sought from the cases on the topic decided under the common law only if the differences between the common law and the Code are steadily borne in mind. The cases decided under the common law are necessarily concerned with the passing of possession as well as the passing of ownership and (subject to certain exceptions) with the existence of an animus furandi at the time of taking as distinct from the time of conversion.

11. In Reg. v. Prince (1868) LR 1 CCR 150 it was held that a wife who presented to a bank a forged cheque purportedly drawn on her husband's account and who received the amount of the cheque in bank and other notes was not guilty of larceny of the notes but guilty of false pretences. That was because the bank's cashier had intended to give the wife both possession of and property in the notes. The principle was stated by Blackburn J. in this way (at p.155):

" ... as the law now stands, if the owner intended
the property to pass, though he would not so have
intended had he known the real facts, that is
sufficient to prevent the offence of obtaining
another's property from amounting to larceny; and
where the servant has an authority co-equal with
his master's, and parts with his master's
property, such property cannot be said to be
stolen, inasmuch as the servant intends to part
with the property in it. If, however, the
servant's authority is limited, then he can only
part with the possession, and not with the
property; if he is tricked out of the possession,
the offence so committed will be larceny."

12. In Reg. v. Middleton (1873) LR 2 CCR 38, a depositor who had 11 shillings standing to his credit in a Post Office Savings Bank account presented a warrant for the withdrawal of 10 shillings but was paid, by the teller's mistake, 8l.16s.10d. The prisoner picked up the money intending to keep it as his own though he realized that a mistake had been made. His conviction was upheld by a majority of eleven to four. In the judgment of Blackburn J. in Prince and in the judgments of five of the judges in Middleton (see pp.48, 55, 62, 70) it was accepted that if the person from whom the property is obtained intends to part with ownership of it, having authority to do so, the person who obtains it cannot be convicted of larceny. Bramwell B. (at pp.54-55) pointed out that the taking had to be invito domino - not against the owner's will but without it - and he said:

" ... where the dominus has voluntarily parted with
the possession, intending to part with the
property in the chattel, it has never yet been
held that larceny was committed, whatever fraud
may have been used to induce him to do so, nor
whatever may be the mistake he committed; because
in such case the dominus is not invitus. So also
where the possession has been parted with in such
way as to give the bailee a special property: ...
It is not necessary that the property should
pass, the intent it should is enough: see Rex v.
Coleman (East's Pleas of the Crown (1803) Vol.II,
p.672)."

That view was rejected by the majority. Seven of the judges including Blackburn J. said (at p.43):

" In the present case the finding of the jury,
that the prisoner, at the moment of taking the
money, had the animus furandi and was aware of
the mistake, puts an end to all objection arising
from the fact that the clerk meant to part with
the possession of the money."

In Reg. v. Potisk (1973) 6 SASR 389, Bray C.J. pointed out that Middleton had not been adopted in Australia and preferred the dissenting views which followed what Blackburn J. had said in Prince. And he referred to R. v. Goodrick (1922) 18 Tas.LR 36, where Nicholls C.J., to whom Middleton was cited, said (at p 37):

" ... I am unable to say that there is any case
reported or any principle laid down by which a
man can be held guilty of larceny of goods which
have been willingly and intentionally transferred
to him without any fraud on his part by the owner
of those goods, the owner knowing what he is
doing and what the goods are and to whom he is
delivering them."

In Kennison v. Daire, King C.J., with whose judgment this Court expressed substantial agreement, followed the approach of Bray C.J. in Potisk. And so the weight of Australian authority supports the minority view in Middleton as stating the common law in this country. At common law the intention of the owner was treated as critical to proof of the trespass, but the common law inquiry as to whether the dominus is invitus to the taking has no relevance to stealing by conversion under the Code. However, when an owner of movable property delivers possession of it to another with an intention that ownership should be transferred to the other - the intention which Blackburn J. in Prince and the minority in Middleton regarded as inconsistent with larceny - the delivery with that intention is ordinarily effective to transfer ownership of the property and the transfer of ownership precludes liability for fraudulent conversion. For the purposes of the crime of stealing by conversion under the Code, the inquiry into the intention of the person who is said to be the owner of the property is undertaken in order to determine whether ownership of the property has passed to the person charged, not to determine whether the property was taken invito domino.

13. The problems to which the common law gave rise (see for example, M.R.E. Kerr, "The Time of Criminal Intent in Larceny" (1950) 66 Law Quarterly Review, p.174) provoked Professor Cross in 1956 to plead for legislative reform of the law of larceny, at least to the extent recommended in the Draft Code of 1878 (see 72 Law Quarterly Review, p.183). In time the Theft Act 1968 (U.K.) was enacted, including a provision (s.5(4)) which created a statutory fiction with respect to the ownership of property which a person "gets ... by another's mistake". Even so, it seems that the majority view in Middleton retains its relevance in England (see Reg. v. Gilks [1972] EWCA Crim 2; (1972) 1 WLR 1341; (1972) 3 All ER 280 and the note on that case in (1972) Criminal Law Review, p 585) although s.5(4) has been held to extend criminal liability to a dishonest failure to make restitution for an amount overpaid: see Attorney-General's Reference (No.1 of 1983) (1985) Q.B.182. The first direction given to the jury in this case might have found support in the majority view in Middleton and the redirection might have found support in Attorney-General's Reference (No.1 of 1983). But the majority view in Middleton is not authoritative in this country and Attorney-General's Reference (No.1 of 1983) was decided under a materially different statute. Neither case provides a criterion for determining whether the ownership of money paid by mistake remains with the payer or is transferred to the payee. Yet that is the relevant question for the purposes of the crime of stealing by fraudulent conversion under s.371. To answer that question, it is necessary to refer to the general law.

14. When a person in possession of money in the form of currency hands it to another intending him to be the owner of it and the other receives it with the same intention, prima facie the other acquires ownership of the money. That is because currency, when it passes from hand to hand, transfers not merely possession of the notes or coins, but property in them: per Viscount Haldane L.C. in Sinclair v. Brougham (1914) AC 398, at p 418. But there are some exceptions to this general proposition. They inhere in the rule that a person who receives money in the form of currency in good faith and for valuable consideration acquires a good title to the money even though the person who gave him possession of the notes or coins had no title to them: Wookey v. Pole (1820) 4 B & Ald 1, at p 7 (106 ER 839, at p 841). The first exception is that a person who receives money in the form of currency without consideration acquires no better title than the person from whom the money was received so that even if the notes or coins are given to him with the intention that he should own them, the notes and coins can be recovered from him in specie by the true owner so long as they are identifiable. Before money received without consideration has passed in currency an action may be brought for the money itself: per Scrutton L.J. in Banque Belge v. Hambrouck (1921) 1 KB 321, at p 329; and see Miller v. Race [1758] EngR 129; ; (1758) 1 Burr 452, at pp 457-458 [1758] EngR 129; (97 ER 398, at p 401). The second exception is that the owner of notes and coins may recover them from a person who has obtained possession of them in bad faith so long as the actual notes or coins can be identified: Clarke v. Shee [1774] EngR 107; (1774) 1 Cowp 197, at p 200 [1774] EngR 107; (98 ER 1041, at p 1043). On the applicant's version of what happened, he received the money from the then owner, Brighton, in good faith - Brighton alone was responsible for the mistake in the amount he paid the applicant.

15. The prima facie conclusion that ownership of money in the form of currency passes when the person in possession hands it to another intending him to be the owner may be displaced in some cases where the intention is formed by mistake. In such cases the payer is entitled to recover it in specie before it is disbursed: Porter v. Latec Finance (Qld.) Pty.Ltd. (1964) 111 CLR 177, at p 183. But it is not every mistake which precludes the formation of the intention essential to the transfer of ownership of notes or coins. The mistake must be fundamental to the transaction. In Norwich Union Fire Insurance Society v. Wm. H. Price, Ld. (1934) AC 455, Lord Wright said (at p 463):

" It is true that in general the test of
intention in the formation of contracts and the
transfer of property is objective; that is,
intention is to be ascertained from what the
parties said or did. But proof of mistake
affirmatively excludes intention. It is,
however, essential that the mistake relied on
should be of such a nature that it can be
properly described as a mistake in respect of the
underlying assumption of the contract or
transaction or as being fundamental or basic."

To determine whether a mistake is fundamental, one must properly identify the transaction and the relationship of the mistake to it: Porter v. Latec Finance (Qld.) Pty.Ltd., at p 187. When the relevant transaction is the transfer of possession or ownership of property, a fundamental mistake must relate to the knowledge of the owner of the property as to what he is doing, what the property is, and to whom he is transferring possession or ownership (to adapt the test applied by Nicholls C.J. in Goodrick). Of course, minds may differ on the character to be attributed to a particular mistake. Take Ashwell, for example. There the prosecutor, intending to lend Ashwell a shilling, gave him a sovereign by mistake. Ashwell thought it was a shilling but when he later discovered it to be a sovereign, he kept it for himself. The present relevance of the case is in the opinion of the judges that Ashwell fraudulently converted the coin, presumably on the ground stated by Cave J., at p.201, "as there was a mistake as to the identity of the coin no property passed". But it is at least arguable that the relevant transaction was not the loan of a shilling but the delivery of the coin the value but not the identity of which was mistaken. In Potisk, Bray C.J. observed (at p.395):

" ... though there was no mistake as to the
identity of the particular metal disc handed
over, there was a mistake about its value and
perhaps about its kind. A sovereign may be
different in kind from a shilling. I think that
some of the Judges thought it was."

16. On the applicant's version of what happened, there was no fundamental mistake in this case. Brighton simply handed notes to the applicant in payment of what he owed. There was no evidence of Brighton being mistaken as to what he was doing, or what he was handing to the applicant or who the applicant was. The only mistake was as to the number or value of the notes needed to discharge the debt owed to the applicant. That was not a fundamental mistake: it did not vitiate Brighton's intention that the applicant should have as his own the notes which Brighton put on the table in payment. When a debtor pays out money to discharge his debt, he has but one intention with respect to the money paid, namely, to transfer ownership in discharge of the debt. It is artificial to ascribe to a debtor an intention to tranfer ownership of some only of the notes and coins he pays. In any event, when there is a commingling of the notes and coins in an overpayment, none is identifiable as a note or coin delivered in overpayment, and assuming all else in favour of the prosecution none could be identified as a thing which has been stolen: cf. Lacis v. Cashmarts (1969) 2 QB 400, at p 411.

17. That is not to say, of course, that the payee is not obliged to refund an overpayment made by mistake. He is indebted to the payer in the amount of the overpayment, but that does not affect the payee's ownership of the notes and coins he has received. The incurring of the debt is the consequence of acquiring ownership of the money: the payee would not owe the debt if he had not become the owner of the money with which the overpayment was made. The creditor cannot insist on the return in specie of notes and coins to the value of the overpayment: Orton v. Butler (1822) 5 B. & Ald.652 (106 ER 1329).

18. If Kennison v. Daire had been decided under the Code, the result would not have been different. The erstwhile customer of the bank would have been liable to conviction under the Code for fraudulently taking the bank's money, for no intention to pass either possession or ownership in the money was attributed to the bank. But when an intention to pass possession and ownership of money is attributable to a payer and he mistakes merely the amount he intends to pay, a payee who has not induced the mistake is not criminally liable, though he may be civilly liable, for failing to refund any excess paid by mistake. If it were otherwise, the customer who counts the change after coming home from the supermarket would be guilty of stealing any excess received if, on discovering the excess, the customer resolves to spend that money and to refund the excess when shopping next week (cf. s.371(2)(f)). Even s.5(4) of the Theft Act does not go so far.

19. Applying these principles to the applicant's version of what happened, a different direction was called for from that given by the learned trial judge. The jury should have been directed that if Brighton handed the applicant the money which he put in his satchel intending thereby to pay the applicant what was due to him, the applicant became the owner of that money and he could not be convicted of stealing any part of it whatever his intention may have been as to returning the amount overpaid. They should have been further directed, pursuant to s.24 of the Code, that if the applicant honestly and reasonably believed that Brighton had handed him the money which he put in his satchel intending thereby to pay the applicant what was due to him, he could not be convicted of stealing any part of it whatever his intention may have been as to returning the amount overpaid. They should have been further directed that if they had any reasonable doubt as to whether the applicant was handed the money in payment of what was due to him or as to whether the applicant honestly and reasonably believed that he was handed the money in payment of what was due to him, he could not be convicted of stealing any part of it. There was no evidence of any claim of right which called for a direction pursuant to s.22 of the Code.

20. As the direction given was to the opposite effect, the appeal must be allowed. We were invited not to order a retrial. The jury's request for redirection suggests that they were satisfied that an overpayment had been made, but they convicted because they were directed that the existence of a guilty intention required a verdict of guilty of stealing. If the proper direction had been given to the jury, it is reasonable to surmise that a verdict of acquittal would have been returned. I would therefore grant special leave, allow the appeal, quash the conviction and sentence and, declining to order a retrial, order that a verdict and judgment of acquittal be entered.

DEANE J.: As I followed the argument in the present case, it was common ground that the applicant could not properly have been convicted of the offence of stealing (under s.371 of the Criminal Code of Western Australia) if the legal property in the money which he was alleged to have stolen had already passed to him. The effect of the learned trial judge's direction to the jury was that, even if the applicant's evidence of how he came to be in possession of the excess moneys were accepted, he would nonetheless be guilty of stealing the amount of the overpayment if, after he became aware of the fact that he had been mistakenly overpaid, he decided to keep it. Plainly, such a direction was wrong if the legal effect of the applicant's account of what occurred at the time when he received the money was that the property in all the money passed to him at that time.

2. According to the applicant, Mr. Brighton threw three separate bundles of notes on the table indicating that the total of those moneys represented the amount due to the applicant. The applicant's evidence was that Mr. Brighton insisted that the applicant sign a receipt without counting the money and then effectively forced him to leave the premises. The applicant gathered the money together without distinguishing between the three former bundles and placed it in a satchel. It was only afterwards that the applicant counted the money and realized that he had been overpaid.

3. On this version of what happened, the three bundles were treated by both Mr. Brighton and the applicant as being simply the components of the one collection of notes of which Mr. Brighton delivered possession to the applicant with the plain intention of passing the property in all of them to the applicant in payment of the outstanding debt. It is impossible to identify any particular notes in the applicant's possession as constituting the overpayment. It could scarcely be (and has not been) suggested that the property in none of the notes passed with the result that the applicant was bound to return all of them to Mr. Brighton. From the applicant's point of view, what was involved at that stage was the honest receipt of currency which was delivered and received as representing, in its entirety, payment of an outstanding debt. That being so, the conclusion seems to me to be inevitable that, on the applicant's account, the legal property in all of the notes passed to him by and on delivery and receipt. In that regard, I would note my general agreement with what is said by Wilson and Dawson JJ. in their judgment in the present case and by Bray C.J., with whom Mitchell J. agreed, in his judgment in Reg. v. Potisk (1973) 6 SASR 389. True it is that Mr. Brighton could have sued the applicant at law in an action for money had and received for the amount of the overpayment and that equitable relief may have been available in the form of a declaration that the applicant was a trustee of part of the actual money which he had received. The basis of such an action for money had and received or such a declaration of trust (if it were available) would not, however, have been that the legal property in particular notes representing the amount of the overpayment had not passed. To the contrary, the basis of such a legal action or declaration of trust would have been that the applicant had actually obtained the legal property in all of the moneys, including the amount of the overpayment, as a result of a mistake of fact. In summary, the effect of the applicant's account of what occurred was that, by reason of a mistake of fact which was not induced by the applicant, Mr. Brighton paid and passed the property in a larger sum of money than he and the applicant had intended with the legal consequence that the applicant became liable at law to pay to Mr. Brighton an amount equal to the overpayment.

4. It follows that the learned trial judge's direction to the jury was fundamentally mistaken and that the trial miscarried. The question arises whether a new trial should be ordered. In my view, it should not. The jury's request for a further direction to "reclarify the point of law regarding the definition of stealing as it pertains to the overpayment of the money" would indicate that some or all of the jurors were of the view that there was (at the least) a reasonable doubt about whether the applicant's account of how he came to be in possession of the money was untrue. The persistence of such a reasonable doubt would, if the jury had been properly directed, have resulted in the applicant's acquittal. In these circumstances and in a situation where the trial judge's view was that the appropriate sentence upon conviction was a fine, it appears to me that considerations of justice strongly militate against an order that the applicant be subjected to a further trial.

5. There is a further matter which should be mentioned. It relates to some remarks made by the learned trial judge, in the course of his direction to the jury, about part of the cross-examination of Mr. Brighton by counsel who then appeared for the applicant. His Honour's comment was that that part of counsel's cross-examination constituted "an attempt, and, you might think, as I do, a despicable attempt to denigrate the witness". In view of the conclusion which I have reached that the appeal should be upheld on the main point, it is unnecessary for me to consider the submission that that comment by the learned trial judge represented an additional ground for setting aside the applicant's conviction. In fairness to counsel who appeared for the applicant on the trial, however, it should be said that, in a situation where Mr. Brighton had given evidence that he was "annoyed" because of the applicant's alleged conduct and in which his emotional control on the occasion was relevant both to the reliability of his recollection of events and to the likelihood of his having behaved in the manner suggested by the applicant, the cross-examination was both relevant and proper. His Honour's comment that it constituted a "despicable attempt to denigrate the witness" was unjustified and should not have been made.

6. Special leave to appeal should be granted and orders should be made having the effect that the applicant's conviction is quashed and a verdict of acquittal is entered.

ORDER

Extension of time for making application for special

leave granted.

Application for special leave to appeal granted.

Appeal allowed.

Order that the judgment and order of the Court of

Criminal Appeal of the Supreme Court of Western Australia be set aside. In lieu thereof allow the appeal to that court, quash the conviction and sentence and order that a verdict and judgment of acquittal be entered.