[1971-72] PNGLR 293

PAPUA NEW GUINEA
[SUPREME COURT OF JUSTICE]

REGINA

V

WALSH

Port Moresby
Minogue CJ Frost SPJ Kelly J

27-28 September 1971
8 October 1971

CRIMINAL LAW - Appeal - Larceny as a servant - Mutilation of books of account - False pretences - Indictment - Rule that indictment must charge one offence only - General deficiency - Whether general deficiency can be constituted by proof of several distinct thefts without more - Mutilating books of account - Intent to defraud - Adequacy of proof - The Criminal Code, ss. 567[ccclviii]1, 568(1)[ccclix]2†, 641[ccclx]3‡ - Supreme Court (Full Court) Ordinance 1968 s. 28(1) (c)[ccclxi]4.

“General deficiency” in s. 568 of the Criminal Code means the difference in money terms between the amount which, at the end of the period selected for accounting, a person or corporation should possess in cash or deposits, or investments representing cash, and the amount he or it actually possesses. Proof without more of a totality of any number of specific sums proved to have been stolen does not constitute proof of a general deficiency. Accordingly, the general prohibition in s. 567 against an indictment charging more than one offence applies where there is no evidence directed to show that on a general reconciliation of the accounts there was an overall deficiency.

Held

(1)      that failure to prove a general deficiency where the indictment in effect charged a number of separate offences amounted to a material irregularity in the course of the trial within the meaning of s. 28(i) (c) of the Supreme Court (Full Court) Ordinance 1968; accordingly an appeal against conviction should be allowed unless the court considers that no miscarriage of justice had actually occurred;

(2)      that by reason of the irregularity which occurred it was not possible to say that the appellant may have lost a chance which was fairly open to her of being acquitted so that the Crown had not shown that there was no miscarriage of justice upon the trial and the appeal should be allowed on this count;

Dicta in Mraz v. The Queen (1955), 93 C.L.R. 493, at p. 514 adopted.

(3)      that on a charge of mutilating books of account with intent to defraud, where it was necessary to prove that the accused had stolen the sums in respect of which it was alleged that certain invoices had been removed, evidence that the money the subject of the invoices had not been banked on the first and second banking days after the date of the invoice was not sufficient to show that the money had been stolen and the appeal should be allowed on this count.

Cases Referred To

Mraz v. The Queen (1955), 93 C.L.R. 493;
Martin v. Osborne (1936), 55 C.L.R. 367; R. v. Joiner 4 Cr. App. R. 64.

Appeal to the Full Court

Sandra Nessie Walsh was convicted on four counts, one of larceny as a servant, two of mutilating books of account with intent to defraud, and one of inducing the execution of a valuable security with intent to defraud. On each charge, she was released on entering a bond to be of good behaviour. The Secretary for Law appealed against the leniency of the sentence in each case, and the accused entered a cross-appeal against the four convictions. The facts and arguments appear sufficiently from the judgment of the Court.

Counsel

Waight (with him Roberts-Smith), for the Crown.
Griffin, for the respondent to the appeal, and the appellant on the cross-appeal.
Cur. adv. vult.

8 October 1971

MINOGUE CJ FROST SPJ KELLY J:  The proceedings before us consisted of an appeal against sentence brought by the Secretary for Law and a cross appeal by the convicted person, Sandra Nessie Walsh, against her conviction. We propose to deal firstly with the matter of the appeal against conviction and for convenience we shall refer to Mrs. Walsh as the appellant.

The appellant was charged upon indictment and convicted on four counts as follows: firstly, that between the first day of May and the seventh day of October 1970, being the servant of Papua Agencies Pty. Ltd., she stole $1,514.52 which had come into her possession on account of the said Papua Agencies Pty. Ltd.; secondly, that on the 22nd day of May, 1970, being the servant of the said company, she mutilated a book which belonged to the said company, namely a three thousand series invoice book, with intent thereby then to defraud; thirdly, that on the 11th day of June, 1970 she committed a similar offence to that contained in the second count; and fourthly, that on the 2nd day of August, 1970, being the servant of the said company, she falsely pretended to one John Middlebrook (who was also a servant of the said company) that an amount of $2,496.90 was due and owing in respect of wages of employees of the said company and with intent to defraud induced the said John Middlebrook to execute a valuable security, namely a cheque for $2,496.90.

The appellant, who is a married woman of twenty-five years, was a bookkeeper and ledger machinist employed by Papua Agencies Pty. Ltd., the main business of which is that of customs agents. Her position involved responsibility for banking of all money received by that company (although she did not herself personally visit the bank on all occasions) and also the maintaining of all accounting records for income and expenditure for the company.

Evidence was led by the Crown to prove the theft by the appellant of twelve specific sums of money of which nine were said to have been received by the company in relation to cash sales invoices. The procedure in this type of transaction is best described in the following passage from the reasons for judgment of the learned trial judge:

“The evidence shows that a transaction with a cash customer would be effected by a member of the company’s staff other than the accused. The member concerned would assess charges made with respect to the transaction and would collect from the customer, either by way of cheque or cash, the amount of the charges assessed. Particulars of the transaction are recorded in a cash invoice form which is made out in triplicate, one copy being given to the customer, one (yellow copy) retained in the customer’s file and the third (a blue copy) retained in the cash invoice book. The first and second copies are perforated for easy extraction from the book, whilst the third is not perforated. The invoice has at its foot a form of receipt for completion by the company employee handling the transaction. The company procedure was that the employee handling the transaction would receive payment from the customer and hand it to the bookkeeper whose duty it was to bank it to the company’s account with the National Bank of Australasia Ltd., Port Moresby.”

Upon the terms of the indictment the charge related to the theft of a single sum of money between the 1st May and the 7th October, 1970. However, when the case was opened it appeared that the Crown proposed to rely upon the theft of the twelve specific sums which amounted in all to the stated sum of $1,514.52.

The substance of the ground of appeal on the first count is that the procedure thus adopted was contrary to the provisions of The Criminal Code. The relevant provisions of The Criminal Code are the following:

Section 567

“Except as hereinafter stated, an indictment must charge one offence only, and not two or more offences: Provided that when several distinct indictable offences are alleged to be constituted by the same acts or omissions, or by a series of acts done or omitted to be done in the prosecution of a single purpose, charges of such distinct offences may be joined in the same indictment against the same person.”

Section 568

“(1)    In an indictment against a person for stealing money, the accused person may be charged and proceeded against for the amount of a general deficiency, notwithstanding that such general deficiency is made up of any number of specific sums of money the taking of which extended over any space of time.

(2)      In an indictment against a person for stealing he may be charged with two or three distinct acts of stealing the property of the same person, committed by him within the space of six months from the first to the last of such acts.

(3)      If, on the trial of a person charged with stealing, it appears that property alleged to have been stolen at one time was stolen at different times, the prosecutor is not by reason thereof required to elect upon which act of stealing he will proceed unless it appears that there were more than three acts of stealing, or that more than six months elapsed between the first and the last of such acts;

In either of such last-mentioned cases the prosecutor is to be required to elect to proceed in respect of two or three acts of stealing which appear to have taken place within the period of six months from the first to the last of such acts.”

Section 641 (second paragraph)

“On the trial of a person charged with any such offence, it is not necessary to prove the stealing by the accused person of any specific sum of money, if, on examination of the books of account or entries kept or made by him, or kept or made in, under, or subject to, his charge or supervision, or by any other evidence, there is proof of a general deficiency, and if the jury are satisfied that the accused person stole the deficient money or any part of it.”

At the conclusion of the Crown case, counsel for the appellant submitted that there was no case to answer as the prosecution had failed to lead evidence of a general deficiency as required under s. 568(1) of The Criminal Code. The Crown, so it was submitted was compelled to prove a general deficiency to take the case out of the rule of law stated in s. 567 of the Code, namely that an indictment must charge one offence only. In fact the case had been presented by the Crown as a case of general deficiency on the meaning of that term contended for by it. The learned trial judge held that there was a case to answer and the appellant then gave evidence in denial of the charges.

Before us counsel for the appellant submitted that the term “general deficiency” had acquired a technical meaning at common law and that that meaning should be attributed to the words appearing in the Code. However, in our opinion the natural meaning of this term can be gathered from the words of the Code and it is unnecessary to refer to the cases at common law or the corresponding English or Australian statutes.

The Crown strongly relied upon the words contained in s. 568(1)—”. . . notwithstanding that such general deficiency is made up of any number of specific sums of money the taking of which extended over any space of time”.

Counsel for the Crown submitted that proof of a number of specific instances was itself sufficient to constitute proof of a general deficiency, the amount of such general deficiency being the aggregate of the sums involved in each specific theft. But in our opinion the use of the word “notwithstanding” is merely intended to make it clear that s. 568(1) is to be taken as an exception to the generality of the words contained in s. 567, that except as therein stated an indictment must charge one offence only.

To us it seems that the term “general deficiency” is an expression in money terms of the difference between the amount which at the end of the period selected for accounting a person or corporation should possess in cash or deposits or investments representing cash and the amount he or it actually possesses. Such a difference is generally to be discovered by an examination of the books of account or entries kept or made in relation to receipts and disbursements. In this case we think that there should have been evidence of an examination of the books of account or entries kept or made under the appellant’s charge or supervision, or some other evidence that there was a deficiency over some relevant period between the total sums of money received by her and the amount actually accounted for. In the foregoing sections the term “general deficiency” is contrasted with the concept of the theft of a specific sum or sums of money. Upon the natural meaning of the term, therefore, proof without more of a totality of any number of specific sums proved to have been stolen does not constitute proof of a general deficiency. Resort to the words contained in s. 568(1) introduced by “notwithstanding” cannot be used to extend the natural meaning of the term. But if there is proof of a general deficiency the fact that from the evidence it can be shown that the amount of such general deficiency is made up of specific sums in each case proved to have been stolen does not take the case out of s. 568(1). If the Crown case constituted only proof of a number of thefts of specific sums the indictment becomes defective because of the provisions of s. 567 of the Code. On the facts of this case it would not be correct as submitted by counsel for the Crown to regard the number of individual acts of stealing from the same person over a period of time as being a series of acts done in the prosecution of a single purpose. In these circumstances it is for the Crown to frame the indictment under s. 568(2) charging two or three acts of stealing in accordance with the provisions of that sub-section or possibly to proceed upon an election under s. 568(3).

In the present case it is conceded by the Crown that there was no proof of a general deficiency except in the sense of a total of specific sums stolen. There was no evidence, based upon an examination of the books or otherwise, of the total sums received over any particular period and the sums accounted for in the books of account at the end of any such period.

The substance of the Crown case in our opinion was that the Crown was proceeding against the appellant for the theft of twelve specific sums of money and the indictment was in effect charging twelve separate offences which is forbidden under s. 567. As there was no proof of a general deficiency according to the meaning which, in our opinion, is to be given to those words there was no case under the first count made against the appellant. Accordingly, in our opinion, there was a material irregularity in the course of the trial within the meaning of s. 28(1) (c) of the Supreme Court (Full Court) Ordinance 1968. The appeal against conviction on the first count should therefore be allowed unless this Court considers that no miscarriage of justice has actually occurred.

By reason of the irregularity which occurred it is not possible to say that the appellant may not have lost a chance which was fairly open to her of being acquitted (Mraz v. The Queen[ccclxii]5 per Fullagar J.) so that the Crown has not shown that there has been no miscarriage of justice upon her trial. Accordingly in the opinion of this Court the appeal against conviction on the first count succeeds.

It is convenient to take together the appeal against the convictions under the second and third counts. Section 441 of the Code which is the relevant provision provides that any person who being a servant with intent to defraud mutilates any book which belongs to or is in the possession of his employer is guilty of a crime. The mutilation alleged in each count was the removal from the invoice book of the blue copy of an invoice which in accordance with the proper use of the book and the practice of the employer should have been left in the book. The learned trial judge found that the appellant had removed in respect of each such count a blue copy of an invoice from the invoice book in an endeavour to conceal the deficiency in the amounts covered by these invoices. In convicting the appellant the learned trial judge must be taken to have found that such an intention to conceal was sufficient proof of an intention to defraud and if the finding of theft was justified it was not argued before this Court that that element of the offence was not made out. Counsel for the appellant submitted, and this Court considers correctly, that for the Crown to establish its case under these counts it was necessary for it to show that the appellant had stolen the sums in respect of which each of the missing invoices had been made out. Counsel for the appellant in submitting that no such case had been made out first submitted that it was for the Crown to prove beyond a reasonable doubt that the money in question had in fact been taken and that at the end of the Crown case the evidence did not establish this element. The only way of proving that the money had been taken in the circumstances of this case was to show that the money had not been banked in the employer’s bank account. In fact the only evidence relied upon by the Crown was that the money in question had not been banked at the time of the next banking after the date contained on each invoice.

The learned trial judge in his judgment referred to the argument by counsel for the appellant that the Crown case went no further than that the various amounts of the cash sales dockets had not been brought to account at the time of receipt and that the Crown had not established that the amounts had not been brought to account at some later time. Upon this particular argument the learned trial judge went on to say that he had examined the company’s bank deposit slips and all other relevant company records put in evidence and he was satisfied that neither in the banking on the day of receipt nor on the occasion of the next banking could any amount be shown which was attributable to any of the alleged deficiencies on the cash sales dockets. His Honour thus seems to have had some doubt that proof limited to the day of receipt was sufficient and essayed the task of himself examining the evidence to satisfy himself that the sums in question had not been paid in on the banking day next after the first banking day.

From reading the evidence the first feature to be noticed is that there is no evidence that the date of receipt of the money referred to in the cash sales invoice was the date appearing on the invoice. On being questioned as to the procedure with regard to cancellation of a cash sales invoice, Middlebrook said that this did occur where a client, for example, was shipping effects and he decided not to go ahead on account of expense. In those circumstances if no further instructions were received from the client and he did not return then the person making out the cash sales invoice would cancel it. In her evidence the appellant was questioned about the circumstances in which money was received and not banked on the same day. Of course, moneys received after close of banking could not be banked on that day and it was possible that money might have been received on a day on which the bank was not open. But the appellant stated that sometimes a cash sales invoice might be made out and there could be a query whether the docket was right or whether it was taken up in the debtor’s ledger. She could not say in how many instances this occurred but it had happened. This evidence indicates that there were occasions when invoices were made out pending the later payment by the client of the necessary sum of money. If the client advised that he was not proceeding with the transaction or he did not subsequently return then the invoice would be cancelled but the evidence indicates that there must have been cases when the client did return subsequently to pay the money and the transaction went through. There is nothing in the evidence to indicate that the day when the transaction was first commenced was not the date placed upon the invoice so that in these circumstances it was possible for the money to be paid after periods of a week or more from the date appearing on the cash sales invoice. A perusal of the cash sales invoices has supported this conclusion because notes by the appellant as to the date on which sums of money were banked has shown that in some instances this occurred after the lapse of such a period of time. The fact that queries could arise on cash sales invoices seems to us to be quite a reasonable statement and not to be discarded. Certainly there was no evidence that there was an invariable practice that all moneys referred to in cash sales invoices were paid in on the next banking day after receipt. Accordingly, in our opinion, it was not sufficient for the Crown to adduce evidence of an omission to bank on the first or second banking days after the date of the invoice to prove that the money had been taken from Papua Agencies Pty. Ltd. It was necessary, in our opinion, for the Crown to adduce evidence that from an examination of the books of account and the banking records the moneys referred to in the second and third counts had never been paid into the company’s account, certainly as at the date of the audit when the discrepancies were discovered in November, 1970.

The learned trial judge relied upon the doctrine of similar acts as expounded by Dixon J. (as he then was) in Martin v. Osborne[ccclxiii]6. In our opinion, this rule of evidence does not assist the Crown upon this part of the case for the reason that upon the particular facts of this case the failure of the appellant to show that the money had been banked on the first or second occasions referred to was reasonably consistent with the fact that the moneys in question had been received after the date shown on the invoice. Although this rule of evidence is available to prove the actus reus in the cases reviewed by Evatt J. in Martin v. Osborne[ccclxiv]7 and in the other cases referred to before us there is no instance of the use of the rule to establish such a basic element of the charge as in the case of an alleged theft, that the employer’s money was stolen and particularly where there is no reason to suppose that direct evidence could not be called by the employer without recourse to proof of a repetition of similar acts or occurrences—see Martin v. Osborne[ccclxv]8 per Evatt J. at p. 401. Thus in our opinion there was insufficient proof in the Crown case that a theft had taken place. The importance in establishing this fact is shown by the case of R. v. Joiner[ccclxvi]9 cited by counsel for the appellant. In our opinion the evidence adduced was insufficient to establish a vital step in the proof of the offences and accordingly the appeal on the second and third counts should be allowed. In these cases also we consider that the Crown has not shown that there has been no miscarriage of justice.

As to the fourth count it was necessary for the Crown to establish that a false pretence was made to John Middlebrook by the appellant and that such false pretence was an inducement to him to sign the cheque in question (Code, s. 428). In fact Middlebrook’s evidence was that he could not remember any of the surrounding circumstances or any conversation concerning the cheque and he had no independent recollection of it. All that the Crown could rely upon is that in accordance with the usual procedure the appellant would have produced the cheque to Middlebrook for signature and informed him that it was a cheque for native wages. We consider that it is not beyond the bounds of possibility  thet Middlebrook might have signed the cheque as one of a bundle of documents or cheques for his signature without any information being given by the appellant to him or the cheque butt shown to him.  No case was cited to us in which a pretence was inferred from circumstances as meagre as those surrounding this transaction.  In our opinion, there was insufficient evidence that any pretence had been made either expressly or by implication by the appellant to Middlebrook or that it was any act of the appellant which induced Middlebrook to sign the cheque.  For this reason the conviction on this count also cannot stand and we do not consider that there is sufficient evidence on which the appellant could be convicted of an attempt to commit this offence. Here also the Crown has not shown that there has been no miscarriage of justice.

The verdict of guilty is therefore set aside in each case, the appeal allowed and the conviction on each of the four counts quashed. In the circumstances we are not disposed to order a retrial and we direct that a verdict of acquittal be entered on each count. In the light of our decision it becomes unnecessary for us to consider the appeal against sentence and we make no order in relation to that appeal.

Cross appeal allowed. Verdicts on counts one to four set aside, and conviction and sentence on each of these counts quashed. Directed that verdict of acquittal be entered on each count. No order on appeal against sentence.

Solicitor for the appellant: J. Anthony Griffin.
Solicitor for the Secretary for Law: P. J. Clay, Crown Solicitor

[ccclviii]Infra, p. 296.
[ccclix]Infra, p. 296.
[ccclx]Infra, p. 297.
[ccclxi]The effect of s. 28(1) (c) is set out at p. 299.
[ccclxii](1955) 93 CLR. 493, at p. 514.
[ccclxiii](1936) 55 CLR. 367, at p. 376.
[ccclxiv](1936) 55 CLR. 367.
[ccclxv](1936) 55 CLR. 367, at p. 401.
[ccclxvi]4 Cr. App. R. 64.