IN THE SUPREME COURT OF TONGA
Supreme Court, Nuku'alofa

AM 33/2010

Funaki Enterprises

v

Kakala

Scott CJ 
21 October 2010; 2 November 2010 

Criminal law – default in loan repayments – private prosecution false representation – appeal dismissed 

In about 2009 the appellant agreed to lend, and the respondent agreed to borrow, a sum of money. The appellant brought a civil claim against the respondent and obtained judgment in the total sum, inclusive of costs and legal fees, of $1292. The Court ordered repayment to be made at the rate of $400 per month. Only $450 was repaid. The criminal proceedings (a private prosecution under the provisions of section 197 of the Criminal Offences Act (the Act as amended)) were commenced by summons dated 15 March 2010. The respondent was charged with obtaining $1125 from the appellant by false pretences, contrary to section 164 of the Criminal Offences Act. The appellant's secretary told the court that the respondent had sought a loan, had entered into an agreement to borrow and repay and then he had made default in his repayments. The respondent claimed that there was no evidence to show that any representation made by the respondent when applying for the loan was false; accordingly, an essential element of section 164 was lacking. The Magistrate found no case for the respondent to answer. 

Held: 

1. A statement of intention about future conduct, whether or not a statement of existing fact, was not a statement that could amount to a false pretence. If, however, such a statement was accompanied by a statement of fact, such as a statement of ability to repay, which was proved to have been false at the time it was made, then a false pretence may be found to have been established: R v Dent (1955) 39 Cr App R 131. 

2. The appellant was unable to point to any false representation as to an existing fact made by the respondent when he obtained his loan. The appeal was dismissed. 

Cases considered: 
Edgington v Fitzmaurice (1885) 29 Ch D 459
R v Dent (1955) 39 Cr App R 131 
R v Makahununiu [2005] Tonga Law Reports 41 

Statutes considered: 
Criminal Offences Act (Cap 18) 
Larceny Act 1916 (E&W) 

Counsel for the appellant : Mr Kengike 
Counsel for the defendant : Mr Fakahua

Judgment 

[1] In about 2009 the appellant agreed to lend, and the respondent agreed to borrow, a sum of money. Although the agreement was in writing no copy of the agreement has been produced to this court or to the court below. 

[2] Taking the Summons and the transcript of the proceedings together it appears that a total of $1566 was borrowed but only two repayments of $50 were made. 

[3] The appellant brought a civil claim against the respondent and obtained judgment in the total sum, inclusive of costs and legal fees, of $1292. The Court ordered repayment to be made at the rate of $400 per month. Only $450 has been repaid. 

[4] The criminal proceedings (a private prosecution under the provisions of section 197 of the Criminal Offences Act (the Act as amended)) were commenced by summons dated 15/03/2010. The respondent was charged with obtaining $1125.00 from the appellant by false pretences, contrary to section 164 of the Act. This section is in essentially identical terms to section 32 of the Larceny Act 1916 (E&W). It appears from the summons that the sum of $1125 represented the amount still owed by the respondent to the appellant.

[5] The evidence against the respondent was that of the appellant's secretary. He told the court that the respondent had sought a loan, had entered into an agreement to borrow and repay and then he had made default in his repayments. 

[6] At the conclusion of the appellant's case, Mr. Fakahua submitted that there was no evidence to show that any representation made by the respondent when applying for the loan was false; accordingly, an essential element of section 164 was lacking. 

[7] The Magistrate upheld the submission and found no case for the respondent to answer. He relied on R .v. Makahununiu [2005] Tonga Law Reports 41. 

[8] On appeal before me, Mr. Kengike explained that s 164 had been amended in 2005 to allow private prosecutions; this was because of the number of cases of this type. It was becoming far too common for money to be borrowed but never repaid.  The sanction of the criminal law was needed to deter this kind of conduct. 

[9] Mr. Kengike referred me to paragraphs 1948 to 1950 of the 36th Edition of Archbold in which the elements of the Larceny Act provision are examined. Relying on the words of Bowen L.J in Edgington .v. Fitzmaurice 29 Ch. D 459, 483 he submitted that the respondent's failure to repay was clear evidence that he had no intention to repay when he took the loan. 

[10] In my view the law is clear. As stated by Ward CJ in Makahununiu "the need for the deception to relate to a present fact [is still part] of our law". 

[11] In R v Dent (1955) 39 Cr. App. R 131 it was held that a statement of intention about future conduct, whether or not a statement of existing fact, is not a statement that can amount to a false pretence. If, however, such a statement is accompanied by a statement of fact, such as a statement of ability to repay, which is proved to have been false at the time it was made, then a false pretence may be found to have been established. 

[12] The passage referred to me by Mr. Kengike contains the following observation: 

"It would probably now be unsafe in any circumstances to base an Indictment under [section 64] on a statement of future intention alone" 

[13] The Magistrate was right. The appellant was unable to point to any false representation as to an existing fact made by the respondent when he obtained his loan. The appeal must be dismissed.