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Harris, Regina v [1973] PNGLR 382 (16 February 1973)

[1973] PNGLR 382

PAPUA NEW GUINEA
[SUPREME COURT OF JUSTICE]

REGINA

V

HARRIS

Rabaul
Prentice J

6 November 1972
16 February 1973

CRIMINAL LAW - Lottery - Unlawful use of premises for - Meaning of - “Spinning Wheel” Scheme - The Criminal Code (Queensland adopted) s. 234[cdx]1.

STATUTES - Interpretation - “Lottery” - Criminal Code (Queensland adopted) s. 234[cdxi]2.

WORDS AND PHRASES - “Lottery” - Criminal Code (Queensland adopted) s. 234[cdxii]3.

H. promoted a scheme known as the Spinning Wheel System—a scheme similar in operation to that known as a chain letter. For an initial outlay of $3.25 a participant was sold a brochure explaining the system and a slip of paper known as a “ladder”, divided vertically into seven spaces, numbered, from top to bottom, 1 to 7 and containing the names of seven persons, with a blank unnumbered panel for insertion of the new participant’s name. The participant was then requested to send $5.00 to the person whose name appeared at the top of his ladder and $1.50 “administration fee” to the promoter together with a receipt coupon relating to payment of the $5.00 to the person in the number 1 position on the ladder. In return the participant received three further brochures together with three ladders on which his name appeared in the number 7 position and which he in turn sought to sell. With the process of time and the sale of further ladders, theoretically the participant’s name comes to the number 1 position on the ladder, 2187 ladders should then be in circulation, and the participant should receive $10,935.00.

H. was charged under s. 234 of the Criminal Code (Queensland adopted) with unlawfully using premises for the carrying on of a lottery, the scheme being conducted without any authority.

Held

(1) c; Se 2ion 234 of the Criminal Code (Queensland adopted) which provides that “the term ‘lottery’ includes any scheme or device for the sale, gift, disposal or distribution of any property depending upon or to be determined by lot or chance, whether by the throwing or casting of dice, or the drawing of tickets, cards, lots, numbers, or figures, or by means of a wheel or trained animal or otherwise howsoever”, does not by its terms provide an exclusive definition of the term “lottery” but one intended to enlarge the meaning of “lottery” beyond its natural meaning and not to restrict it.

Rodger v. Harrison[1892] UKLawRpKQB 219; , [1893] 1 Q.B. 161 at p. 167 referred to.

(2) &; The Rin;Spinning Wheel” was a scheme arryi a lottery within the meaning of g of the tthe term used in s. 234 of the Criminal Code (Queensland adopted).

Trial

The accused, Harris, was charged under s. 234 of the Criminal Code (Queensland adopted) with unlawfully using premises for the carrying on of a lottery. The facts, which are fully set out in the judgment hereunder were not disputed. The accused through his counsel, in reality, conceded that an offence by him had been established, if the scheme known as the “Spinning Wheel”, could be construed as a “lottery” under s. 234 of the Code.

Counsel

D. McCawley, for the Crown.
J Dowd, for the accused.
Cur. adv. vult.

PRENTICE J: The accused stands charged under s. 234 of the Criminal Code, that between 21st August and 1st September, 1972, he unlawfully used premises for the carrying on of a lottery.

The facts are not disputed. By the authentication in this court of the evidence given in the District Court on committal, and by admissions of facts made by the accused under s. 644 of the Code, it has been established that at the relevant times the accused carried on (on his own behalf) the activities as set out in Exhibit A3, and that other persons dealt with him in the manner outlined in the “Spinning Wheel” brochure. This brochure, Exhibit A3, sets out the method of running the “chain letter” organisation (in effect), known as “Spinning Wheel”.

From affidavit evidence, and from further admissions by the accused, it is established that the scheme known as “Spinning Wheel” was being run without the sanction of a Crown Law Officer, District Commissioner, or any appropriate authority.

The accused through his counsel, in reality, concedes that an offence by him has been established, if the scheme is to be construed as a “lottery” under s. 234. The section does not define a “lottery”; but enacts that “the term ‘lottery’ includes any scheme or device for the sale, gift, disposal, or distribution of any property depending upon or to be determined by lot or chance, whether by the throwing or casting of dice, or the drawing of tickets, cards, lots, numbers, or figures, or by means of a wheel or trained animal, or otherwise howsoever.”

As far as the member of the public is concerned, the scheme operates in this way. He is approached, and for a sum of $3.25 is sold a brochure explaining the system and a slip of paper known as a “ladder”. The brochure has on its bottom right hand corner a section which is intended to be date-stamped at a post office, cut off, and sent to the promoters as proof of a subsequent payment—if that payment is made direct to the person whose name appears at the top of the ladder. The ladder is divided vertically into seven spaces numbered from top to bottom, 1 to 7. At the foot is a space for “name, address and bank” of the purchaser of the ladder. Under the figures 1 to 7 appear the factors of 3, commencing at the bottom with “3” under the figure “7” and ending at the top with “2187” under the figure “1”. The factor of 2187 indicates the number of amounts of $5.00, that each person may receive once his name has moved upwards and gained top position on the ladders which are successively issued, after his initial purchase.

The new recruit, if I may call him that, fills in his name, address and bank particulars in the bottom (unnumbered) panel and is requested to send $5.00 to the person whose name appears at the top of the list on his ladder, and to send $1.50 “administration fee” to the promoter, together with the “receipt” coupon (if he has sent the money direct to the person whose name is number 1 on his ladder) as proof that he has paid the $5.00 to the person in that number 1 position. (Apparently the $5.00 may be paid directly to that person or sent care of the promoter.) In return the recruit is to receive three further brochures together with three ladders on the latter of which names have been filled in to all the numbered slots, with his name occupying the bottom number 7 slot. He then in turn seeks to gain further recruits by selling for $3.25 a brochure plus a ladder in which his own name appears as number 7. When he has done this: (a) he has paid out $3.25 plus $1.50 plus $5.00 = $9.75; (b) he has received 3 X $3.25 = $9.75. He must then wait until by the process of time, and sale of further ladders, his name comes to the top of the ladder, and on (as he hopes) numerous sales of ladders endorsed with his name in number 1 position, he receives $5.00 on each such sale.

The scheme assumes that the promoter in filling out each set of three ladders eliminates the top name from the one returned by the new recruit and moves the other six names up one slot each, inserting the new recruit’s name in number 7 position, on each of the three new ladders which he the promoter, creates. It does not appear how the first sets of names are achieved, or whether those names are of real persons.

The scheme is very similar in nature to that known as “Australian Bonanza” and appears to differ from that known as “World Wide Roulette”, referred to in the judgment of the House of Lords in Atkinson v. Murrell[cdxiii]4 substant only only, in that in Atkinson’s case the participants paid money t to the person whose name name topped his list, instead of (as herein, usually) through the promoter.

A “lottery” is not defined by the laws of England. In Barnes v. Strathan[cdxiv]5, a Scottish case, a scheme was held to be a lottery in that “the occurrence of the event upon which payment fell to be made could neither be approximately predicted nor materially influenced by the exercise of any knowledge, experience, art or skill on the part of” (in that case) “the holder of the parent bond.” In McLean v. Murch[cdxv]6 Smith J thad that “The Multiplication Bureau” a scheme whereby “trees” of bonds created, and, and commissions received on the occurring of “indirect” enrolments of new bond holders in a series, amounted to the distribution of cash commissions on chance, and was a lottery within the meaning of the New Zealand Gaming Act, s. 41 (c). Atkinson v. Murrell[cdxvi]7 decidewas nwas not necessary that a prize fund be created out of which distributions be made on a chansis, in ordn order that a lottery be created. Their Lordships specifically approved though apparently obiter, the Divisional Court’s decision below, to the effect that the receipt of monies by a person whose name worked to the top of the list in “World Wide Roulette”, (in a fashion similar to that contemplated in “Spinning Wheel”) depended solely on chance.

It is submitted that the meaning of “lottery”, in s. 234 of the Criminal Code, as to which no interpretative decisions are available, should be read down on the ejusdem generis rule, so as to apply only to a situation where there is a positive selection of winners. The words “whether by the throwing or casting of dice, or the drawing of tickets, cards, lots, numbers, or figures, or by means of a wheel or trained animal, or otherwise howsoever,” all qualify the words “lot or chance” it is said; and all connote some mechanical or artificial contrivance or means not involving human intervention.

I am of the opinion that resort may not be had to the ejusdem generis rule, so as to read down the elements of a lottery to a restricted class—in favour of the defendant—penal statute though of course, it is. Section 234 provides initially that “the carrying on of a lottery of any kind whatever” in a place, shall constitute a misdemeanour. It then proceeds to provide that “the term ‘lottery’ shall include” ... (certain types of activities) finishing with the general words “or otherwise howsoever”. Lord Esher says of such a type of definition clause (in the instant case before him it read “the expression assurance shall include any conveyance ...”) “The meaning of the word ‘include’ in such a definition as is given in this Act seems to be this. The word interpreted has its ordinary meaning. That meaning it still has in the Act. But then there are other meanings that the legislature wishes it to have in the Act. So the definition is used to enlarge the meaning of the term beyond its ordinary meaning and make it include matters which the ordinary meaning would not include. But this enlargement of meaning is confined to the matters expressly mentioned in such definition.” (Rodger v. Harrison[cdxvii]8). In other words such a “definition” section may be not an exclusive definition—but an enlarging one.

The setting of words in the section of our Criminal Code appears to me to be rather different to that in which the ejusdem generis rule is applied. It is one of the use of the most general words, followed by and including “definition”, which itself ends in the most general words conceivable. As Lord Macmillan pointed out in Canadian National Railways v. Canada Steamship Lines, Ltd.[cdxviii]9 tusdem rule rule does not apply to restrict, where general do notow on an enumeration of particular instancetances, but precede the particular instances. I form the view that its setting in the section, and its form, indicate that the inclusive definition provision was intended to enlarge the meaning of “lottery” beyond its natural meaning, and not to restrict it.

As the Court of Appeal of New South Wales pointed out in Purdon v. Dittmar[cdxix]10 (adoptindeyindeyer J’s remarks in Crowe v. Graham[cdxx]11) the word “otherwise” means “in another way or other ways”. As Windeyer J states in the above-mentioned judgment, to read the words “or otherwise” as meaning “likewise or in some like manner or way” seems a departure from the ordinary meaning of the phrase ... the words “or otherwise publishes” are there. Their effect is not to enlarge an existing genus by adding new things of a like kind. It is to demonstrate a different and wider genus to which the prohibited acts all belong, namely publishing. His Honour goes on to remind that the ejusdem generis rule is an exception to the rule that general words are to be construed generally.

I find myself satisfied that the participants in “Spinning Wheel” having acquired initially a brochure and ladder, and thereafter sold three more such himself, depends entirely on the chance of others selling brochures and ladders, and of purchasers thereof when his name is on the top of the list, sending him $5.00. That he has no control nor does he exercise any influence in the subsequent course of events. That the amount of money he might receive depends entirely on chance as to the number of ladders and brochures sold and as to the number of purchasers who carry through the scheme.

I conclude that the “Spinning Wheel”, was a scheme for carrying on a lottery. That it did in fact constitute a scheme whereby money was distributed by chance. Since hearing argument on the matter I have read the judgment of Torrington D.C.J (In re B. M. Hennies & Anor., 16th November, 1972) in which his Honour concluded that the “Australian Bonanza”, a scheme almost on all fours with “Spinning Wheel”, constituted a contrivance for the disposition of property by chance within the meaning of s. 3 (1) of the New South Wales Lotteries and Art Unions Act 1901.

A perusal of the exhibits indicates that no individual ledgers were kept so as to show the total payment by the promoters to individuals. Large numbers of payments are shown but most are of $5.00. The largest individual payment I could find was of $80.00. Some participants appear to have received a number of payments but the totals do not appear to be even of the order of $100.00 except perhaps in one or two cases. There appears in the ledger, Exhibit F, what seems to be a running total of the monies paid out—the last such entry indicates an amount of $23,012.00 as the running total at some time after 30th August, 1972. As each payment of $5.00 represents also receipt by the promoters of a fee of $1.50—it appears that something like $7,000.00 has come through the accused promoter’s hands between May and August, 1972. This figure would be larger it seems if any significant proportion of the $5.00 payments by new recruits were made direct to the person whose name was in the number 1 position on the “ladder” received by each new recruit. The bank pass books indicate large withdrawals from the accused’s private account. The “wheel” has certainly “spun” for the promoters.

I convict the accused of the offence with which he is charged.

Accused convicted.

Solicitor for the Crown: P. J Clay, Crown Solicitor.
Solicitor for the accused: P. G. Lefevre & Co.

[cdx]Infra p. 383.
[cdxi]Infra p. 383.
[cdxii]Infra p. 383.
[cdxiii] [1972] 3 WLR. 465.
[cdxiv] (1929) SC. (J) 41.
[cdxv] [1934] NZLR. 7.
[cdxvi] [1972] 3 WLR. 465.
[cdxvii][1892] UKLawRpKQB 219; [1893] 1 QB. 161, at p. 167.
[cdxviii] [1945] AC. 204, at p. 211.
[cdxix] (1972) 1 N.SWLR. 94.
[cdxx][1968] HCA 6; (1970) 121 CLR. 375, at p. 388.