(Unrevised)

(Her Honour Judge Douglas)

R U L I N G

HER HONOUR: So I will give my reasons now, but I will indicate as I said, as to the 49 charges of obtain a financial advantage by deception, because of the ruling of law, I acquit Mr Thomson and I will give reasons comprehensively shortly and I will indicate just as in relation to the theft offences, there is now 15 and so I will set out in detail the law, and overall my ruling is that the Crown is entitled. The Crown case, the way it is put, is capable of meeting each of the elements of the offence of theft.

In analysing the evidence, I will convict Mr Thomson of Charges 9, 22, 32, 47, 58, 160. 163, 169, 173, 219, 220 and 223.

I will indicate that, with some of those offences, it is not clear exactly what sum was stolen because it is not clear how much he paid for the services of escorts. The amount stolen is a particular. It is not a matter that needs to be proven beyond reasonable doubt, and I will refer to that shortly.

This proceeding is an appeal against conviction and sentence imposed by the Melbourne Magistrates' Court on 25 March 2014 pursuant to s.254 of the Criminal Procedure Act 2009. The appeal is in relation to 65 charges - the appeal was in relation to 65 charges which are set out in a document headed, "Notification of appeal lodged", which had 16 charges of theft and 49 of obtain a financial advantage by deception. It is a rehearing and the applicant pleaded not guilty through his counsel to each of the charges which are the subject of this rehearing.

I have set out the 16 charges of theft to which this appeal was in relation to. The 49 charges of obtain a financial advantage by deception are Charges 2, 5, 16, 18, 20, 41, 56, 75, 76, 86, 195, 114, 119, 124, 130, 132, 174, 177, 178, 179, 181, 182 to 6, 195, 197, 218.

First, I set aside the orders made by the Magistrates' Court at Melbourne on 25 March 2014, as this is a hearing de novo in respect of the charges the subject of the appeal notice. Initially at the hearing amendments were made before this court in relation to the quantum of some of the charges. This was unopposed. There were also amendments made today which I permitted the Crown to make in relation to the charges of theft.

I have applied the law in relation to amendments on appeals from the Magistrates' Court and I refer to the authorities referred to at the commencement of this proceeding which is Candolim Pty Ltd (Deonisia Mendonca and Larano Mendonca) v Brendan Garrett in the County Court of Victoria, a decision of the Supreme Court of this state, [2005] VSC 270. I confirm the orders made in relation to the amendments as I have referred to.

This proceeding commenced on Monday 24 November 2014. Ms L Taylor, senior counsel, and Ms Mandy appeared on behalf of the prosecution. Mr James - now Mr James, you are Queen's Counsel, is that right?

MR JAMES: I am, Your Honour.

HER HONOUR: Queen's Counsel.

Mr Carr and Mr James appeared on behalf of the appellant. The evidence which the prosecution rely on generally and specifically in relation to each charge is set out in a document which was tendered dated November 2014, "Statement of undisputed facts". This course was adopted by agreement between the parties so that the result was no evidence was led and no statements were tendered. Counsel for the prosecution and counsel for the appellant are in agreement that this case is to be decided solely on the facts as set out in that document, "Statement of undisputed facts".

Ms Taylor made submissions and relied on a document, "Outline of legal submissions by respondent", dated 23 November 2014. Mr James made submissions and relied on two documents, "Outline of appellant submissions for County Court appeal", dated 19 November 2014, and, "Appellant submissions in reply", dated
24 November 2014. This decision is in two parts. First in relation to the offences of theft and secondly in relation to the offences of obtaining a financial advantage by deception.

As to the charges of theft, this morning Ms Taylor sought to make an amendment which I have agreed is appropriate, that as 58 and 221 reflect one criminal act, there ought be one charge only and that will be 58. 221 will be - what order would you like me to make?

MS TAYLOR: Withdrawn.

HER HONOUR: Withdrawn, yes, thank you.

The prosecution case is that the appellant was an employee of the Hospital Services Union and entitled to use credit cards belonging to the Hospital Services Union for the sole purpose of the business of the Hospital Services Union and not for personal expenses. The prosecution case is that on each occasion set out in each

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of the charges of theft, the appellant used a MasterCard, no.5587013163880019, issued by the Commonwealth Bank of Australia to the Health Services Union. Just so it is not repetitive, I will say the HSU, and the CBA for the Commonwealth Bank of Australia.

To withdraw cash as a cash advance from an automatic teller machine, which I will now refer to as an ATM, he was not authorised to do so and he did not use the cash for an authorised purpose, namely for an expense relating to the business of the HSU which the Crown say he was only entitled to do, and also expenses in carrying out his duties as national secretary of that organisation.

The Crimes Act provides that a person who is guilty of theft - if a person is found guilty of theft, the maximum penalty is ten years' imprisonment. Section 72 sets out the basic definition of theft. Subsection 1, "A person steals if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it".

Sub-s.(2), "A person who steals is guilty of theft and 'thief' shall be construed accordingly."

A number of issues have arisen during the hearing, both legal issues and factual issues, in relation to each of the charges of theft, namely, whether as a matter of law the prosecution can rely on what is described as a continuing course of appropriation; secondly, is the evidence relied on by the prosecution capable of amounting to an appropriation as a matter of law, and whether there is duplicity as submitted on behalf of the appellant; thirdly, is the evidence relied on by the prosecution, namely the obtaining of a chose in action or a line of credit property for the purpose of the offence of theft in s.72 of the Crimes Act, and is cash property when it is in the possession of the appellant after the transaction of the withdrawal of the cash from the ATM was completed; four, at the time of the alleged appropriation by the appellant did the property belong to the HSU; fifth, whether the prosecution can prove beyond reasonable doubt the appellant acted dishonestly; sixth, whether the prosecution can prove beyond reasonable doubt the appellant had the intention to permanently deprive the owner of the cash, that is said by the Crown to be the HSU, by intending to treat the cash as his own to dispose of regardless of the owner's rights (s.73(12) Crimes Act); seven, are the charges of theft justiciable in the State of Victoria? Finally, applying the law as I have determined it to be has the prosecution proved its case beyond reasonable doubt as to each charge of theft?

First, whether the prosecution can rely on a continuing course of appropriation.

In the outline of submissions by respondent, paras.22 and 23 at pp.6 and 7 the prosecution submitted that there was a series of appropriations, and I will read from that document:

"The prosecution say the HSU had a right to draw on an amount of cash from the CBA to the extent of the HSU's line of credit with the bank. This right belonging as it did to the HSU was misused and therefore usurped and/or adversely interfered with by the appellant as the cash was withdrawn for non-union and therefore unauthorised purposes. The appellant therefore appropriated the rights of the HSU. The right to draw on the cash was appropriated and was a wrongful appropriation both because the appellant had no authority to make cash withdrawals and was not authorised to then use the cash for his own benefit, rather than for the benefit of the members of the HSU. There was a series of appropriations, a course of conduct amounting to wrongful or misappropriation, satisfying all of the elements of theft.

The initial appropriation was done with the intention to permanently deprive the HSU of its right to call on the cash as is evidenced by the appellant's use of the cash withdrawn, then upon the spending of the proceeds of this appropriation.

This can also be characterised as a series of appropriations amounting to wrongful appropriation, even if the initial appropriation of the right to draw down cash were authorised or inadvertent/innocent, which the prosecution say it was not.

The course of conduct is a series of appropriations and evidence of the intention to permanently deprive and to do so dishonestly which amounts to the offence of theft see Roffel, dissenting judgment of Brooking J, considered recently in Oris Funds Management Limited v National Australia Bank (2005) VSCA 148 of Chernov AJ, as he then was.

The prosecution submission is that Brooking J's dissenting judgment in Roffel's case, and the decision of Oris Funds Management v National Australia Bank support the proposition that a series of appropriations can amount to a single wrongful misappropriation for the purpose of a single count of theft."

I disagree. Brooking J did not address whether, or suggest that the series of appropriations to which he referred could be charged as a course of conduct which constituted a single appropriation for the purpose of a theft charge. It is clear that His Honour did not maintain that the series of appropriations could also constitute a single appropriation. His Honour did not address this issue. Consequently the prosecution cannot rely on a series of appropriations as a matter of law.

The reliance on para.18 in the Oris Funds Management case, and Brooking J in Roffel's case in my view is misconceived. In Oris Funds Management at the sub-heading, "Fraud or breach of duty," Chernov JA discussed the High Court decision in MacLeod v R (2003) 214 CLR at 230.

His Honour stated that the decision of the High Court did not contain any suggestion to the effect that mere endorsement of cheques by a director constituted prima facie evidence to his breach of duty to the company. His Honour stated that the critical question in that case was whether it could be said in the circumstances of the case that there was a wrongful appropriation of the cheques and proceeds and that the majority overturned the conviction on the basis the company through its directing mind had consented to the applicant's drawing of the cheques on its account, and therefore, the element of appropriation was missing since it could not be said the applicant had interfered with or usurped any of the rights of ownership.

His Honour referred to Roffel's case as follows:

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"Brooking J, however considered that even if the cheques and money were taken with the authority of the company there was still a series of appropriations."

His Honour said that Roffel had plainly appropriated the cheques fraudulently because he applied the funds for his own purposes. In that respect His Honour's view was endorsed by MacLeod.

His Honour then continued and stated that the decisions of MacLeod and Roffel do not supportthe submission that a mere endorsement of a non-negotiable check by a company director in favour of his business amounts to prima facie evidence of fraud or breach of fiduciary duty in the sense he had referred. The phrase series of appropriations was said by Justice Brooking as follows: "In my opinion, even in the present case the sums of money and check were taken with the authority of the company, there was still a series of appropriations." As I sated, His Honour did not maintain that the series of appropriations could constitute a single appropriation. His Honour did not address that issue. Consequently I rule the prosecution cannot rely on a series of appropriations as a matter of law.

The next matter I need to consider is at the time the appellant used the CBA MasterCard at the ATM to withdraw cash, at that stage was he appropriating property? The prosecution case is the time the appellant withdrew the cash on each occasion from an ATM, he appropriated property. An issue has been taken as to whether, taking the prosecution case at its highest, that is accepting the allegation, as a matter of law was the transaction of the withdrawal of cash capable of amounting to an appropriation of property. To prove appropriation the prosecution must prove that property was in existence before it is capable of being appropriated.

Two decisions from the United Kingdom were referred to, quite properly, R v Kohn [1979] - I haven't got the precise citation with me, I should have. In any event, it's the Court of Appeal and it was law Justice Geoffrey Lane, Justice Swannick and Justice Easham, and it was - I haven't got the precise citation, in any event, and also the Attorney General of Hong Kong v Nai-Keung [1987] 1 Weekly Law Reports 1339.

The application of the principle referred to in those decisions is set out in a Victorian decision of a Supreme Court judge of this state, Justice Hampel, as he then was, in Akbulut v Grimshaw [1998] VR756. In that case His Honour ruled that by making unauthorised telephone calls the accused created an obligation for the owner to pay for the calls but did not deprive the owner of property, intangible or otherwise, although his conduct was dishonest and to the detriment of the owner of the telephone.

The definition of property in s.71 of the Crimes Act is this, "Property includes money and all other property, real or personal, including things in action, and other intangible property." Ms Taylor, on behalf of the prosecution, submitted that the HSU as holder of the CBA MasterCard had a line of credit and a right to draw on an amount of cash from the CBA to the extent of the HSU's line of credit. She submitted that as the appellant withdrew cash, which she was not authorised to do, and when he withdrew the cash, intended to use it later for an unauthorised purpose. This right belonged to the HSU and was misused and therefore he usurped and/or adversely interfered with that right of the HSU.

Ms Taylor submitted the cash was property belonging to the HSU as the account holder was entitled to call on the bank to provide money or cash to the extent to which the account was in credit, or to the extent of a line of credit afforded by the bank by way of overdraft. She referred to the authorities to which I have already referred, of Kohn, but also R v Croton [1967] 117 CLR 326, C-r-o-t-o-n, Ms Taylor submitted that a credit card account held by an account holder is a right to draw on the funds of the bank on demand. It is a credit card with the bank and the right to cash can be enforced against the bank, due to an existing legal relationship. She submitted that it shows an action or a thing in action belonging to the HSU and not to the appellant.

Mr James on behalf of the appellant submitted that at the time of the withdrawal of cash, the holder of the HSU CBA MasterCard was able to withdraw money by way of a credit facility. That credit facility was provided by the bank solely in its discretion in the absence of any agreement with the bank. Mr James submitted, upon an analysis of the authorities, in the circumstances, that the HSU was relying on a credit facility. Therefore there was no shows in action, or thing in action. It differed from the relationship between an account holder of a check account, an account holder with an overdraft, or an account holder with a credit balance in the bank account, as set out in the authorities.

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I will read from Kohn's case, because I found it of assistance. In the head note the facts are set out and I will refer to it very quickly. "The appellant was charged on indictment inter alia with nine counts of theft. He was an accountant with a variety of business interests, including various companies. The offences were alleged to have taken place when the appellant used company checks for his own use and drew various sums of money from the bank accounts of the company concerned.

There was three categories. The first category, there were three counts where the account concerned was in credit. The second category was where there were five counts where the account was in overdraft, and the third category was where the overdraft limit had been exceeded. I must say, I wasn't reading from the headnote, I was referring to it.

Now at p.404 the court referred to the first category. I will read what the court said. "So far as the first situation is concerned when the account is in credit the prosecution say that where an account is in credit the relationship of debtor and creditor exists between the bank and the customer.

The customer is the creditor and the bank is the debtor. The debt is owing by the bank to the customer. That debt is something which cannot be physically handled. It is not a thing or shows inaction, it is something which can be only secured by action, and it goes to the argument this is a case of a thing in action, par excellence. If it be proved that the defendant has stolen, in other words appropriated that thing in action, then the offence is made out."

The court then referred to a very old decision of Talkington v. McGee 1902 2 Kings Bench Full 27. The part referred to I think is helpful. "Chosen action is a known legal expression used to describe all personal rights of property which can only be claimed or enforced by action and not by taking physical possession.