Yates v. Wilson & Ors

Judges: Woodward J
Morling J

Einfeld J

Court:
Full Federal Court

Judgment date: Judgment handed down 23 March 1989.

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Einfeld J.

This appeal involves a threshold challenge to the trial of the applicant on 65 charges under the Commonwealth Crimes Act. These matters came before a single Judge

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seeking judicial review of the decision by a magistrate of the Local Court of New South Wales to commit the applicant for trial on 10 December 1987. His Honour refused an order of review and the appellant has appealed that refusal.

The first submission on behalf of the prosecution both at first instance and before this Full Court was that the Court had no jurisdiction under the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act) and under sec. 39B of the Judiciary Act to review or consider committal proceedings. The first part of this submission concerning the ADJR Act would require a review of the decision of a Full Court of this Court in
Lamb v. Moss (1983) 49 A.L.R. 533 . It was conceded in this appeal that that decision provides the necessary jurisdictional basis for this matter to proceed. It was therefore agreed at the hearing of this appeal that the matter be left in abeyance until the substantive issues here have been determined.

The 65 charges under attack in this appeal are brought under sec. 29A(2) of the Commonwealth Crimes Act. This subsection provides:

``Any person who, with intent to defraud, by any false pretence, causes or procures any money to be paid, or any chattel, valuable security or benefit to be delivered or given, by the Commonwealth or by any public authority under the Commonwealth to any person, shall be guilty of an offence.''

The appellant is charged with having through an agent and with intent to defraud caused by a false pretence a benefit to be given to him by the Commonwealth in the form of not levying, in the sense of imposing or requiring payment of, an amount which the Commonwealth says was due by way of sales tax on certain goods being imported by the appellant into Australia. The factual basis on which this matter proceeds is not in dispute. Between November 1982 and February 1985, some 65 individual shipments of goods attracting sales tax were imported and cleared to a company called Sundance Amusement Systems Pty. Ltd. (Sundance) without the payment of sales tax to the Australian Customs Service acting on behalf of the Taxation Office. This was achieved by the appellant's customs agent quoting the sales tax registration number of someone else to the customs officials at the point of importation pretending that it entitled the appellant to exemption from the tax liability that would otherwise have accrued on the goods.

The effect of quoting a sales tax number is that sales tax is not then charged on the goods. By various Sales Tax Acts, bona fide manufacturers, importers, and certain other dealers in goods are exempt from the payment of sales tax. Sundance was not the holder of a registered sales tax number at the relevant time, the number in fact quoted being held by another company with which the applicant was involved. It appears that Sundance was under the day-to-day management of the appellant but it was actually owned by other persons.

The short point raised by this appeal is whether by achieving, by the presentation of the false sales tax number, the non-imposition of sales tax on the goods in question, the appellant can be guilty of causing or procuring a benefit to be given by the Commonwealth within sec. 29A(2). The Court below held that ``to be relieved of the requirement to pay a tax by dint of the fact that the tax is not demanded, amounts, so far as the person relieved is concerned, to a benefit within the meaning of this section''.

The appellant argues that the evasion of a liability to pay tax, even by an admitted fraud, does not amount to the procuring of ``a benefit'' within the meaning of sec. 29A(2). The argument is essentially that this is an offence of false pretences and that historically such an offence requires the passing of property from a victim to the perpetrator. The non-imposition of a tax, it is said, involves no passing of property or anything else from the Commonwealth to the appellant. Further, a ``benefit'' within the meaning of the Act is something positive, not a failure to impose something negative in the form of a detriment such as a tax. The argument of the appellant is that the false pretence must have resulted in ownership of some property passing to the offender.

In
R. v. Petronius-Kuff (1983) 3 N.S.W.L.R. 178 at p. 181 , Street C.J., after reviewing authority, said that sec. 179 and 180 of the New South Wales Crimes Act 1900 (dealing with false pretences) are not directed towards the concept of property in a technical sense but rather to physical custody of objects:

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``... it is the translation of physical custody in an object which is meant when the section refers to obtaining property.''

Sections 179 and 180 of the New South Wales Act state:

``179 Whosoever, by any false pretence or by any wilfully false promise, or partly by a false pretence and partly by a wilfully false promise, obtains from any person any property, with intent to defraud, shall be liable to penal servitude for five years.

180 Where the accused, by any false pretence or by any wilfully false promise, or partly by a false pretence and partly by a wilfully false promise, causes, or procures, any money to be paid, or any property to be delivered, to himself, or any other person for the use or benefit, or on account of himself, or any other person, with intent to defraud, he shall be deemed to have obtained the same within the meaning of section 179.''

Were it not for the fact that sec. 4 of that Act defines property as including:

``... every description of real and personal property, money, valuable securities, debts and legacies,...''

I should have said that this decision is not relevant at all here because of the differences between sec. 29A and sec. 179 and 180 of the respective Acts. Its significance is its emphasis on something positive actually passing from the victim to the offender: see also Halsbury's Laws of England 3rd Ed., Vol. 10 para. 1592 and 1597, Watson and Purnell, Criminal Law in New South Wales 2nd Ed., Vol. 1 para. 665; Watson and Watson, Australian Criminal Law - Federal Offences Vol. 1 para. 831; C. Howard, Criminal Law 4th Ed., p. 186; C.R. Williams and M.S. Weinberg, Property Offences 2nd Ed., pp. 121-122.

I am not persuaded that this Act should be read in the constricted way suggested by the appellant. It is, I think, strictly true that for the best part of 150 years at least, false pretences cases have been related to property or money but I do not think that this illustrates anything other than the way in which society was operative for the bulk of that period. To support his argument, the appellant points to the link in sec. 29A of ``benefit'' with ``chattel'' and ``valuable security''. In my view, the most that establishes is that the word ``benefit'' itself was not generally to be found in the early definitions of false pretences because there were few or no ``benefits'' on offer that were not chattels, valuable securities or money. If it was limited to property, ``benefit'' would add nothing to the provision but would merely be another way of expressing the other two appellations. I cannot see a reason for reading down the word ``benefit'' so as to make it proprietorial only, in the sense of a directly identifiable physical item. No one would suggest in today's Australia that a ``fringe benefit'' was so limited.

Section 29A and the word ``benefit'' were first inserted into the Act in 1926. The Parliamentary Debates do not reveal why: see Hansard Vol. 112, p. 1001. However, it is instructive to look briefly at what else happened in 1926 when this amendment was made. First of all, as part of sec. 29A itself, there was inserted subsec. (1). This provided the same introductory words as subsec. (2), namely ``Any person who with intent to defraud by any false pretence...''. By contrast with subsec. (1), the offence here is obtaining from the Commonwealth, by the false pretence, a ``chattel, money, valuable security or benefit''. It is difficult to conceive that a person writing or contemplating a clause in that form would have in mind that the word ``benefit'' would mean the avoidance of a negative or detriment. Each of the other concepts which must be ``obtained'' for an offence to be committed is something positive and material rather than something of which the Commonwealth itself could not know at the time it has been deprived. A government may in a colloquial sense ``give'' the people a tax cut, but the people ``obtain'' the intended consequent increase in their disposable incomes. In my view, it is artificial to speak of their ``obtaining'' a reduction or non-imposition of a tax within the meaning of provisions like sec. 29A(1). Having in mind the obvious similarity of these two offences, it is difficult to accept that the word ``benefit'' could have been intended to have different meanings in them. It is an accepted rule of statutory construction that the meanings of the same word in such circumstances should as far as possible be the same: D.C. Pearce, Statutory Interpretation in Australia 2nd Ed., p. 32.

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In modern society, particularly in relation to the exercise by the Commonwealth of the powers of government, the word ``benefit'' has substantial meaning in the framework of provisions such as these other than in terms of actual property. Modern government provides a number of ``benefits'' to people in the community, including its employees and persons who deal with it in one form or another. For some persons, it provides the use of official cars, aircraft and accommodation. It also provides such benefits as free telephones, overseas and interstate travel, hotel and other accommodation, medical services, staff, offices and equipment, occasionally such concessions as free travel across bridges and on freeways where otherwise tolls are collected, and free membership of government institutions such as art galleries, museums or other public places, such as sporting arenas. The Commonwealth supplies benefits to its employees in terms of annual and long service leave, maternal and parental leave, and sick pay, workers' compensation and associated services such as rehabilitation facilities. It supplies opportunities for financial advice, free programs to assist employees to stop smoking, and some financial incentives, such as subsidised housing, to assist people to take up positions offering in remote areas or areas well away from their ordinary residences. There are others. Every one of these could be obtained or procured by a false pretence. They could be and often are items of considerable value.

Section 29A(2) must be looked at in that context. It must also be examined on the basis that the words used to describe how the chattel, valuable security or benefit is extracted or derived by the offender, are ``delivered'' and ``given''. There is no guidance in the Act as to which of those two words apply to which of the items needed to be procured before the offence can be committed. In other words, the reader is left to apply whichever of the two words ``delivered'' and ``given'' is appropriate to the three separate concepts, ``chattel'', ``valuable security'' or ``benefit''. If the language is stretched, possibly either gerundive can apply to any of the three nouns. Whatever might be said about the other two, it seems to me, however, that ordinary language would generally speak of ``giving'' a benefit. Despite the potential breadth of the word ``given'', there is, in my view, undoubtedly a clear concept that something positive having a value and not comprising the non-imposition of a negative must pass.

Section 29B was also added in 1926. This penalises a person who ``imposes or endeavours to impose upon the Commonwealth... by (an) untrue representation... with a view to obtain money or any other benefit or advantage...''. This provision is particularly significant in considering the interpretation of sec. 29A. Firstly, it introduces the concept of ``any other benefit or advantage''. This expression is not embraced by, and is theoretically much wider than, the terms used in both limbs of sec. 29A. Second, it only refers to money other than the ``other benefit or advantage''. This reduces the particularity of the company in which the word ``benefit'' is to be found and thus potentially broadens its reach to include anything that may legitimately be the subject of an imposition:
Bacon v. Salamane (1965) 112 C.L.R. 85 . As D. Lanham and M.S. Weinberg comment at p. 119 of Criminal Fraud, Taylor J.'s dissenting judgment in Bacon v. Salamane is interesting because of its rejection of the majority's view that obtaining employment was a ``benefit'' within the meaning of sec. 29B. The fact that the words ``money or other benefit or advantage'' are collected in that form meant that the word had a restricted meaning and could not include employment or the conditional right to payment of wages. Again, however, the concept is overwhelmingly positive and material. There seems no room for anything like the avoidance of a tax.

The third relevant feature of sec. 29B is that the word ``advantage'' is more general than ``benefit'' and encompasses any financial advantage to which the offender was not entitled, including one gained by the negative of not having to pay something. Whatever the breadth of its meaning, ``benefit'' cannot be indistinguishable from ``advantage''. I can think of no other significant ``advantage'' likely to be encompassed by sec. 29B than the avoidance of a detriment like a fiscal or financial burden. The absence of ``advantage'' from sec. 29A thus suggests that this type of result is not the intended target of an offence of false pretences under this Act.

Although historic concepts of false pretences were limited to money, money's worth and chattels, I think that it is no departure in

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principle to extend those objects to governmental concessional benefits of the type I have been discussing. However, there is no historical reason, and nothing in the framework of sec. 29A or in its legislative environment, which suggest that the offence of false pretences was ever intended to penalise or protect the achievement of an object like reducing or avoiding a tax liability. No case or comment was referred to in argument, and I have found none, which suggests that false pretences prosecutions are thought in Australia to be, or have anywhere else ever been considered as, relevant to the enforcement of tax laws in the way attempted here. Perhaps that is because no other false pretences provisions have been found to include the procurement or obtaining of ``benefits'' as one of their objects. If so, that would in my opinion support the concept that the Australian Parliament had no revolutionary concepts in mind in 1926, and that all it was seeking to do was to pick up modern positive emoluments or facilities, other than money, chattels and valuable securities, made available, given or held by the Commonwealth and its agencies and authorities which can be and are dishonestly procured or obtained. The absence of any reference in the 1926 Parliamentary Debate on the amending legislation to introduce sec. 29A and 29B (and sec. 29C and many other provisions), to more expansive and especially tax objectives such as are now suggested, leads me to believe that sec. 29A was not intended to be part of the armoury available for the prosecution and punishment of people who dishonestly evade their taxation obligations. The limitation of the penalties still provided today to relatively small terms of imprisonment, without fines, add to the force of this conclusion. In my view, this case is an attempt to extend false pretences into an area which it was never intended to and does not cover.

Accordingly, I am of opinion that his Honour fell into error in holding that the facts agreed for the purposes of this litigation can make out the offences contained in the 65 charges.

A decision of the Court to that effect would raise for determination the jurisdictional issue earlier adumbrated. As the majority of the Court is, however, of a different view to me, the issue does not arise at all. I therefore limit myself to a brief observation. I have read the detailed submissions on this matter made by the prosecution here and in the court below. In my opinion, this case does not provide an appropriate forum for the review of Lamb v. Moss. This court has exercised this jurisdiction on many occasions since that decision, both at first instance and on appeal. A reconsideration by a bench of three Judges of the Court would only invite further challenges to other similarly constituted Full Courts with the risk, if not likelihood, that the issue would become more, not less, uncertain and controversial. In
Briot & Ors v. Riedel & Anor unreported 10 March 1989 , I expressed the view in a similar jurisdictional challenge that even if Lamb v. Moss was overturned, it may not necessarily dispose of the jurisdiction of the Federal Court in relation to committal proceedings in federal matters. This is also not the right case for the determination of those possibilities. For all these reasons, I would follow Lamb v. Moss in this case.

I would uphold the appeal and order the third respondent to pay the appellant's costs including the costs at first instance.