Croton v. The Queen

[1967] HCA 48
(1967) 117 CLR 326
(1967) 41 ALJR 289
[1968] ALR 331
(1967) 62 QJP 62

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(Judgment by: Barwick CJ)

Croton
v The Queen

Court:

Judges:
Barwick CJMcTiernan J
Menzies J

Hearing date: 15 November 1967
Judgment date: 21 December 1967

Sydney

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Judgment by:
Barwick CJ

1. The applicant for leave to appeal was convicted in the Supreme of larceny, in each case, of a number of dollars. (at p327)

2. The salient facts as they were evidenced before the jury may be briefly stated. The applicant, a married man living apart from his wife, became associated with a woman by name Helena Irene Webster who had divorced her husband. She lived in Canberra along with her young son in a house owned by her father. She was a school teacher in receipt of a substantial salary and as well in receipt of alimony paid by her erstwhile husband. The applicant and Mrs. Webster fell in love with each other and became engaged to be married. According to Mrs. Webster, who claimed she was ignorant of his marital status, the applicant went so far as to name the day. However, it is common ground that he frequently slept and kept house with her, for a period occupying the house next door to the house in which she lived. He was a mechanic in receipt of substantial wages and it is common ground the pair lieved on his wages. Upon his proposal that they should do so, it was agreed between them that they should endeavour to bank the wages of one of them, living on the wages of the other. The purpose of thus saving some money was said by Mrs. Webster to provide the cost of a honeymoon: but this project falling through, the purpose was changed to the purchase of a home: but this the applicant denied. (at p327)

3. Accordingly, the pair went to the Commonwealth Savings Bank, Ainslie, and there opened a joint account in the names of both but with authority in each to operate the account. The initial deposit was said to be a cheque for Mrs. Webster's salary. The account was subsequently fed for the most part by such cheques though cheques received by Mrs. Webster for maintenance were said also to have been deposited in it. The deposits were usually made by the applicant who retained possession of the bank book. Withdrawals were made from the account from time to time but never by Mrs. Webster and, according to her, never with her knowledge or particular authority. (at p328)

4. On 4th April 1967 the applicant withdrew $130 from the account. On 7th April he withdrew a further $100 and on the same day he withdrew the then balance in the account, namely, $736. The applicant deposited in a savings account in his own name with the A.N.Z. Bank, Queanbeyan, on the same 7th April the sum of $220 which he admitted was the same money he had withdrawn from the joint account. He also deposited in a current account in his own name with the same A.N.Z. Bank on the same 7th April about $600 which he admitted was part of the sum withdrawn on that day from the joint account. (at p328)

5. Mrs. Webster specifically claimed that she did not authorize any of these transactions, and that until the subsequent 6th June, did not know of the withdrawals. It seems, however, that the pair had a considerable domestic difference on or about 7th April. I find no need to further recount or to describe their personal relationships or to discuss or pass judgment upon the merits of the personal conduct of either. (at p328)

6. The terms of s. 117 of the Crimes Act, 1900 of the State of New South Wales are applicable in the Australian Capital Territory so that simple larceny as at common law is an offence in that Territory. At common law, larceny is taking and carrying away the personal goods of another from any place with the felonious intent to convert them to the taker's own use, and to make them permanently his own property without the consent of the true owner. Statutory extensions of the common law effected by the Crimes Act of New South Wales and operative in the Australian Capital Territory include in the property which is susceptible of larceny any valuable security, which by definition includes a cheque (see s. 134, Crimes Act, 1900). By virtue of s. 162 of the Crimes Act, also operative in the Territory, one of the joint owners who steals or embezzles any property belonging to the joint owners may be convicted of larceny as if he were not a joint owner of the property stolen. Section 3 of the Crimes Ordinance 1931 of the Australian Capital Territory provides that whosoever having received any money upon terms requiring him to account for the whole or any part of such money, fraudulently misappropriates to his own use the whole or any part of such money, commits an offence. Provision is made in s. 120 of the New South Wales Act operative in the Territory for an alternative verdict of fraudulent misappropriation upon an indictment of larceny if that offence is found to be proved. (at p329)

7. The counts in the indictment of the applicant were that as one of two joint owners he stole the three several amounts of dollars withdrawn by him from the Commonwealth Savings Bank, Ainslie, in April 1967, the property in the "money" being laid in each charge in the joint owners. (at p329)

8. The learned trial judge in his charge to the jury said: "Now, so far as this charge of stealing is concerned, gentlemen, the law provides that although two people may own property jointly, such as money in the bank, as in this case, nevertheless, it is possible for one joint owner to steal the money of another joint owner and that is the charge in this case. Now, a charge of stealing means this, in this particular case, that the accused without the consent of the co-owner, Mrs. Webster, wrongfully and without any claim of right made in good faith, took possession of these joint moneys in the bank, with intent to deprive Mrs. Webster, the other joint owner, permanently of such moneys and when you say he did this wrongfully, in this case the wrongful act consists - or the wrongful intent consists in his intending to appropriate the moneys to his own use, of course, without her consent." Later, his Honour said: "But it is this expression, 'without a claim of right, made in good faith', that may need some little further explanation. The fact, gentlemen, that the accused person had a right to draw the moneys from the bank, or perhaps I should say, rather than a right to draw the moneys, an authority to draw the moneys from the bank, does not mean that he was entitled to deprive her of her savings, of her share in these joint moneys, unless, of course, he had her consent; and it is quite erroneous to suggest that because he was authorized to sign cheques and her signature was not necessary that that gave him a right to the moneys that were in the bank to her exclusion entirely. She had just as much right to these moneys as he had." A number of objections were made to the summing up by counsel for the applicant but none called in question the appropriateness of the charges of larceny to the facts of the case. (at p329)

9. The applicant was convicted on each charge and sentenced to twelve months' imprisonment in respect of each conviction, such sentences to be served concurrently. On this application, counsel for the applicant has submitted that the evidence led by the prosecution did not support the charges of larceny and that for that reason the convictions should be set aside. A number of other submissions critical of the manner in which the trial judge left the matter to the jury were made. But, having regard to the view I have formed upon the principal submission, I refrain from expressing any opinion upon the propriety of the summing up in any of the respects to which our attention has been called, except in so far as it is necessary to refer to it in connexion with a submission that this Court should order a new trial if it should come to the conclusion that the convictions should be quashed. (at p330)

10. This case, in my opinion, is in somewhat the same situation as that dealt with by Lord Goddard in Reg. v. Davenport (1954) 1 WLR 569; (1954) 1 All ER 602 His Lordship said, as I would respectfully repeat of this case, "For some reason or another the indictment charged the appellant with stealing all this money. That could only have been done, I think, because throughout this case there was a misapprehension, under which everyone seems to have been, with regard to the more or less elementary principles of the law of banking and the law of larceny" (1954) 1 WLR, at p 570; (1954) 1 All ER, at p 603 (at p330)

11. As I have indicated, larceny consists in the taking and carrying away of the property of another without his consent, and without colour of right, intending at the time of the taking permanently to deprive the owner of that property. It follows that there must be what is called an asportation. Therefore, apart from any special statutory provision, larceny can only be committed of property which is capable of physical possession and removal. It also follows that to constitute larceny, the property must be removed, except in the case of larceny by a bailee, from the possession of some other person against the will of that person. The special doctrine relating to larceny by a bailee was made to conform to these requirements by treating the larcenous bailee as converting the nature of his possession at the moment he formed the intention to steal. (at p330)

12. The subject matter of the instant charges was money, in each case expressed as a number of dollars, that is, paper money, or coin to the stated face value. That can be asported and be the subject of larceny. But, though in a popular sense it may be said that a depositor with a bank has "money in the bank", in law he has but a chose in action, a right to recover from the bank the balance standing to his credit in account with the bank at the date of his demand, or the commencement of action. That recovery will be effected by an action for debt. But the money deposited becomes an asset of the bank which may use it as it pleases: see generally Nussbaum, Money in the Law: s. 8, p. 103. Neither the balance standing to the credit of the joint account in this case, nor any part of it, as it constituted no more than a chose in action in contradistinction to a chose in possession, was susceptible of larceny, though it might be the subject of misappropriation: see also on this point the judgment of Lord Goddard in Reg. v. Davenport (1954) 1 WLR 569; (1954) 1 All ER 602 with which I respectfully agree. (at p331)

13. The receipt of the paper money or coins by the applicant from the bank could not have been larcenous for several reasons. In the first place, the transference of possession of that paper money or coin was voluntary on the part of the bank: it was not a taking of that paper money or coins out of the possession of the bank against the will of the bank. Secondly, if it matters, that paper money or coins was not taken out of the possession of the joint owner of the bank credit, Mrs. Webster; for she never did have possession of that paper money or coins: nor did the bank at any time hold possession of that money as in any sense her agent. Further, the property in that paper money or coins was in the bank immediately before it was handed over to the applicant, and not in Mrs. Webster, or Mrs. Webster and the applicant jointly. And, lastly, as I see the evidence of the suggested arrangement between the applicant and Mrs. Webster, the property in and possession of the money or coins, in my opinion, passed to the applicant solely, even if on receipt of them he came under an obligation to account to Mrs. Webster for all or some part of the "money" they represented. No critical attention was paid in the summing up to the question of what was the actual arrangement between the applicant and Mrs. Webster. It was assumed in the passages which I have quoted that the "moneys" in the bank were the joint property of the two, in the sense that each owned half, or at any rate that each had a definable share. But that conclusion does not necessarily flow from what was proved. The precise arrangement would in the first place be a matter of fact for the jury under proper direction. But, in my opinion, there was no evidence at all upon which it could be found that the paper money or coins withdrawn by either the applicant or Mrs. Webster, were themselves to be held on behalf of both, pending the use of the specific coinage for the stated purpose. The most that could be drawn, in my opinion, from that evidence was that if either withdrew any of the credit of the account, he or she would be accountable. In deciding what the arrangement really was, a jury would no doubt be reminded that it should not overlook the fact that the pair had been living on the earnings of the applicant, which may well have been much in excess of the salary of Mrs. Webster. However, I shall later return to the significance of the absence of any consideration of, or direction upon, the nature of the actual arrangement which was made in connexion with the Bank account. It would, therefore, seem to me that the radical elements of larceny were missing in this case. Of course, s. 162 was material in the case but it was not the source of liability. It does no more than remove the objection that one joint owner could not at common law be guilty of larceny of the property jointly owned. It simply requires that he be treated as if he were not a joint owner. It does not remove the necessity for all the elements of larceny to be present: see, for example, in Reg. v. Neat(1899) 69 LJ QB 118, at p 120 per Wills J., and per Wright J. (1899) 69 LJ QB, at p 121 But it does allow a part owner to be a bailee for his co-owner where otherwise he would be a bailee for both of property susceptible of larceny. (at p332)

14. But it was submitted for the Crown in opposition to the grant of leave that the convictions for larceny were maintainable because when the applicant received the money he came under an obligation to apply "it" for the purposes of the joint owners, and that it was larceny to form and carry out an intention to apply "it" to his own purposes exclusively. But, in my opinion, this proposition is unacceptable. It confuses the senses in which the word money is used in the law and fails to observe a fundamental distinction between larceny and fraudulent misappropriation: see in this connexion the analysis of Jordan C.J. in R. v. Ward [1938] NSWStRp 5; (1938) 38 SR (NSW) 308, at pp 315 et seq (at p332)

15. If the arrangement between the parties was that, whilst each might, neither would, withdraw the money without the particular consent of the other, the withdrawal of money by the applicant would not be criminal unless attended with a fraudulent intention to misappropriate the money: in which event it would not be larceny but, if anything, fraudulent misappropriation. (at p332)

16. If the arrangement was that, although either might withdraw the credit standing in the account, and so reduce the "fund" - to use a neutral term - into his own possession, but so that, none the less, the fund would be held for use exclusively in furtherance of agreed purposes, it would be fraudulent misappropriation at the time when a fraudulent intention was formed not to apply the "fund" to the stated purposes, but to employ it for the sole purposes of the party withdrawing it from the bank: but again it would not, in my opinion, be larceny. (at p332)

17. But, if the arrangement was that the party withdrawing the fund would hold the specie, the actual paper money or coins received from the bank, and apply that only for the stated purposes, it might be argued that the applicant by withdrawing the credit in the account, and accepting the specie from the bank, agreed with his co-owner or mutually consented that he would hold the specie, presumably as bailee, until it was paid over in pursuit of the agreed purpose. For my part, such an argument should fail, even if the agreement in that sense was made out. For, in my opinion, even so, as I shall later mention, he would not be a bailee of the specie, so as to be in a position to commit the offence of larceny as a bailee. Of course, none of these possible arrangements were put before the jury : and in my opinion, there was no evidence upon which either the first or third possibilities could have been found to have existed in fact. (at p333)

18. It seems to me that the submission of the Crown in respect of the convictions for larceny really amounts to an assertion that the applicant became a bailee of the paper money or coin for the joint owners, and that he committed larceny as a bailee when he formed the intention to take the paper money and coin to deposit it to his own credit with his bank. But, other considerations apart, as I have indicated, I do not think he could be such a bailee. It is settled beyond dispute that to constitute a bailment there must be a delivery, actual or constructive, by the bailor, whether owner or possessor, or by his duly authorized agent, i.e., authorized to create the bailment, to the bailee, so that something which requires the physical possession of the chattel bailed, be done with, or to it, or that it be kept against its return to the bailor. This is so, though by the second paragraph of s. 125 of the New South Wales Crimes Act there is no need for any agreement by the bailee to restore or deliver the specific property delivered to him. (at p333)

19. Here the suggested subject of the bailment was the paper money or coins. Mrs. Webster did not pass possession of it to the applicant: nor was the bank an agent of Mrs. Webster to bail the paper money or coins to the applicant for, in my opinion, neither the nature of the bank account, nor the ability of either of the depositors to withdraw the whole or part of the money, constituted the bank such an agent. Finally, on any view of the evidence, in my opinion, it could not be held that the applicant was required, either to do some particular thing or act with the paper money or coins or to return it or them to the bailor. This is so, in my opinion, even if it be correct to say that, upon Mrs. Webster's account of the matter, the applicant was bound to account for the "money" withdrawn. The actual paper money or coins was, in my opinion, even in that case his own and he was under no obligation not to use it for his own purposes. He was not, in my opinion, a bailee of it. (at p333)

20. I have indicated my doubt that it was established that he came under an obligation to account to Mrs. Webster, or to apply the money in any particular way, at the time he received from the bank the amount withdrawn from the bank account. It was a joint account with a right in each to withdraw. Whether or not there was evidence of a legally-binding arrangement as to the ultimate use of the amount standing in it may be doubted: and in default of such an arrangement it may be that either could withdraw the whole or any part without coming under any obligation to account. Whether or not the proceeds of the account were joint property is not answered merely by the fact that, in the circumstances, the account was in the joint names. Further, even supposing such an agreement as to the use of the proceeds of the joint account, it does not follow that it extended to require the amount to be kept in that account: the ability of either to withdraw from the account might be thought to tend against such a construction of these arrangements. These considerations are not of critical importance in connexion with my treatment of the submission with which I am presently dealing. But they indicate that, on any view, the summing up was not adequate; also they are of importance in connexion with the suggestion that an alternative verdict of fraudulent misappropriation might have been returned by the jury. (at p334)

21. If the correct conclusion of fact is that there was a binding arrangement of a kind to be legally enforceable that the credit in the account should only be used for a sufficiently defined purpose, and that the withdrawal of the balance in the account by the applicant, itself evidenced his intention to use the proceeds for some purpose unconnected with the agreed purpose (which I doubt), the applicant none the less, in my opinion, would not commit larceny, but might be found guilty of misappropriation. (at p334)

22. For these reasons, in my opinion, the convictions should be set aside on the ground that there was no evidence to support them. There then arises the question whether any further order should be made. It was not suggested that this Court should substitute convictions for misappropriation but it was submitted that there should be an order for a new trial. Although s. 36 of the Judiciary Act 1903-1959 (Cth) gives this Court power in any case which has been tried to order a new trial, there would seem to me to be no warrant in this case for making such an order. The accused has been put in jeopardy upon an indictment and the Crown has called, in my opinion, no evidence to support it. Whilst it may be said that had the Crown chosen to pursue that course, it could have requested the trial judge to direct the jury that they could bring in the alternative verdict, not only did the Crown not do so, but it supported the summing up of the learned trial judge of which I have quoted the significant portions. Upon that summing up, there would have been no room for an alternative verdict. A summing up in relation to fraudulent misappropriation would, of necessity, have been different. The jury would have had to determine whether there was in fact a binding agreement as to the use of the proceeds of the account and, also, perhaps, whether that agreement required the moneys to be retained in that particular account. In addition, the precise intent of the applicant when withdrawing the moneys would have had to be considered under a much more precise direction than the somewhat general direction, in fact, given by the trial judge in relation to larceny. (at p335)

23. Further, the applicant was sentenced to twelve months' imprisonment in respect of his conviction on each count, the sentences to be concurrent. At the time of the delivery of this judgment, he is still serving these sentences. Even if otherwise there was room to exercise a discretion as to ordering a new trial, in my opinion, this is not a case in which we should do so. (at p335)

24. In my opinion, no other order should be made than that leave to appeal be granted, the appeal allowed and the convictions quashed. (at p335)