SUPREME COURT OF VICTORIA - COURT OF APPEAL

R v PETERS

Tadgell, Ormiston JJA and Southwell AJA

13 - 15 August, 11 November 1996 - Melbourne

Tadgell JA I have had the advantage of reading in draft the reasons for judgment of Southwell AJA, with which I concur. I ought, however, to state in my own words the basis for my conclusion that ground l of the application for leave to appeal against conviction should fail.

Ground 1, which Southwell AJA sets out, seeks to call into question some of the learned judge ' s instructions to the jury on the law. In charging the jury upon their task to decide whether the applicant was proved for the purpose of the first count to have acted dishonestly, the judge evidently purported to formulate his instruction in accordance with the test prescribed in R v Ghosh [1982] 1 QB 1053 . Counsel for the applicant sought to contend first that the test prescribed by Ghosh was not applicable and secondly that, even if it was, the charge purportedly based upon it did not, as a matter of form, correctly state the test.

Counsel frankly conceded that the decision of this court in R v Lawrence (1996) 86 A Crim R 412 ; 138 ALR 487 (pronounced less than two months before the hearing of the present applications) stood in the way of the first contention. Lawrence decided that, upon a charge of fraudulent misappropriation of property laid pursuant to s 71(1) of the Crimes Act 1914 (Cth), fraud might be equated to dishonesty; and that in such a case the test prescribed by Ghosh should be applied in determining whether dishonesty had been proved. In so deciding, the court in Lawrence assimilated the dishonesty to be proved in a charge under s 71(1) to that to be proved upon a charge of conspiracy to defraud under the former s 86(1)(e) and its successor, s 86A , of the Crimes Act 1914 (Cth) (under which the present applicant was charged), for which the test prescribed in Ghosh has been accepted in Queensland, South Australian and Western Australian courts: eg R v Maher [1987] 1 Qd R 171 ; R v Aston (1987) 44 SASR 436 ; Cornelius v The Queen (1988) 34 A Crim R 49 . Counsel went so far as to assume, and properly so, that this Court would approve the selection by the learned trial judge of the test prescribed in Ghosh. In my opinion we have no option but to do so. To do otherwise, and to accede to counsel ' s submission that the proper test is that sanctioned by R v Salvo [1980] VR 101 ; R v Brow [1981] VR 783 and R v Bonollo [1981] VR 633 , would require us not only to refuse to follow R v Lawrence: it would be inconsistent with dicta of the Full Court in R v Smart [1983] 1 VR 265 at 294-5, R v Walsh [1984] VR 475 at 478 and R v Edwards [1988] VR 481 at 489. Counsel did refer us, but without perceptible enthusiasm, to a recently-reported decision of the New South Wales Court of Criminal Appeal in R v Condon (1995) 83 A Crim R 335 . Condon refers to R v Love (1989) 17 NSWLR 608 , in which Salvo was applied in the case of an offence under a provision of the Crimes Act 1900 (NSW) (s 178BA ) similar to the provision of the Crimes Act 1958 (NSW) (s 81) that was relevant in Salvo. The several cases to which I have referred above, in which it was decided that the Ghosh test, and not the Salvo test, of dishonesty should be applied in cases concerning allegations of fraudulent conduct contrary to the Commonwealth Crimes Act, were not mentioned in Condon. It is a decision which we should, in my opinion, respectfully decline to follow. As counsel forecast, therefore, his first contention fails.

Counsel ' s second contention was founded on the form of the judge ' s charge, the chiefly relevant portion of which Southwell AJA has set out in six numbered paragraphs that I need not repeat. Towards the end of his charge the learned judge summarised the element of dishonesty as an ingredient of the charge of conspiracy to defraud by saying that:

… what was intended to be done was dishonest, according to the standards of ordinary reasonable and honest people in the community and … that the accused knew that what was intended was dishonest by those standards.

There were two essential criticisms of the judge ' s formulation of the test. The first was that, in advising the jury that:

… there are two considerations to which you must have regard. The first involves an objective test and the second a subjective test …

the charge was at odds with Ghosh and decisions of this court before Lawrence. The submission was that Ghosh laid down a subjective test alone and that the judge ' s reference to an objective test was wrong. It was submitted, moreover, that Lawrence (although incorrectly applying the test for dishonesty as laid down in Ghosh) determined that the test for dishonesty as prescribed by Ghosh is purely subjective. This is to attribute to the court in Lawrence a recognition and acknowledgment that Ghosh laid down a purely subjective test. The court in Ghosh did not, as I read the judgment of Lord Lane CJ, do anything of the kind, and I can find nothing to the contrary in the judgment in Lawrence of Callaway JA, with whom Southwell and Smith, AJJA. concurred. The relevant passage of the judgment in Ghosh at QB 1064 of the report, is as follows:

In determining whether the prosecution has proved that the defendant was acting dishonestly, a jury must first of all decide whether according to the ordinary standards of reasonable and honest people what was done was dishonest. If it was not dishonest by those standards, that is the end of the matter and the prosecution fails.

If it was dishonest by those standards, then the jury must consider whether the defendant himself must have realised that what he was doing was by those standards dishonest … .

It is true that Lord Lane had introduced that statement of the test by saying in the next preceding paragraph:

There remains the objection that to adopt a subjective test is to abandon all standards but that of the accused himself, and to bring about a state of affairs in which " Robin Hood would be no robber " : R v Greenstein [1975] 1 WLR 1353 . This objection misunderstands the nature of the subjective test. It is no defence for a man to say " I knew that what I was doing is generally regarded as dishonest; but I do not regard it as dishonest myself. Therefore I am not guilty. " What he is however entitled to say is " I did not know that anybody would regard what I was doing as dishonest " .

By so disposing of the stated objection to the adoption of " a subjective test " (at QB 1064) his Lordship was not, as I respectfully think, intending to say that a subjective test was to be applied to the exclusion of any other. So to understand him is to ignore the reference in the next following paragraph that I have quoted to " the ordinary standards of reasonable and honest people " , and the reference in the next paragraph but one to conduct that " was dishonest by those standards " .

There is a passage in the judgment of Callaway JA in Lawrence upon which counsel for the applicant relied to show a rejection of an objective test. After having set out in full the relevant paragraphs of the judgment in Ghosh, his Honour observed (at A Crim R 424; ALR 498) that:

The words of the judgment delivered by Lord Lane are not the words of a statute. They need not be repeated verbatim and they should be adapted to the facts of the instant case but, in the interests of uniformity throughout Australia, there should be no departure from their substance. The Crown does not have to prove, beyond reasonable doubt or at all, that what was done was dishonest according to the ordinary standards of reasonable and honest people. The jury are presumed to know those standards and evidence of them is not receivable. The touchstone is not what an ordinary reasonable person would regard as dishonest but rather the ordinary standards of reasonable and honest people. Ghosh ' s case must be read in the light of R v Feely [1973] QB 530 , especially at 537-8, and it is not to be supposed that a phrase such as " the current standards of ordinary decent people " would taint a direction with error. [Original emphasis.]

Callaway JA was there making an appraisal of the trial judge ' s charge and the passage is to be read in that context. I do not understand his Honour in that or any other passage in his reasons to reject an objective test and to prefer only a subjective one. Indeed the reference to " the touchstone " (at A Crim R 424; ALR 498) of " the ordinary standards of reasonable and honest people " (at A Crim R 424; ALR 498) indicates the contrary [Emphasis added].

Counsel for the applicant referred also to passages in R v Edwards at VR 489 , 497 and 500, and submitted that they support a conclusion that dishonesty, in a case of conspiracy to defraud, is to be proved by reference to a subjective state of mind of the accused. No-one doubts that in such a case the Crown must prove that the accused person had a dishonest state of mind; and that that requires a consideration of the mental state of the accused, not the mental state of someone else. The inquiry is personal to the accused and, in that sense, it may be labelled a subjective inquiry. The label, however, is by itself unhelpful to determine whether the accused ' s conduct has been proved to be dishonest in the sense meant by the statute, which cannot be supposed to contemplate that every Robin Hood may have his pennyworth from the Commonwealth. There must be a " touchstone " (at A Crim R 424; ALR 498) by reference to which the accused ' s own appreciation of his conduct is to be gauged. It cannot be a purely subjective enquiry to be determined by reference to the accused ' s criteria of right and wrong. The judge ' s direction that the jury should apply a subjective and an objective test was in my opinion correct.

The second essential criticism of the form of the charge was that it directed the jury to determine whether what the accused had done was dishonest by applying what they considered to be " the current standard of ordinary and reasonable honest people " ; and he used the variants " ordinary reasonable honest people " and " ordinary reasonable and honest people " . These words are to be compared with those used in Ghosh and adopted in Lawrence, namely " the ordinary standards of reasonable and honest people " (at A Crim R 424; ALR 498). Counsel for the applicant submitted that the verbal formulation so stated by the judge, being at variance with that stated in those two authorities, was wrong. Counsel was unable to explain how the variance produced an appreciable difference in meaning and I have been unable to discern any. What Lord Lane CJ, Callaway JA and the learned trial judge alike were seeking to do was to offer a useful, practical touchstone by reference to which the conduct of the accused was to be gauged in accordance with generally acceptable community standards. The adjectives used to identify or describe standards of that kind are, in my respectful view, not limited to those used by Lord Lane CJ or Callaway JA. At all events the appropriate notion can be conveyed in other words. Callaway JA acknowledged as much, as Southwell AJA points out in the present case. Lord Lane CJ and Callaway JA used two adjectives, reasonable and honest, to designate people whose ordinary standards were to be applied. The learned trial judge substituted the adjective " current " to describe standards. That adjective (and it was perhaps desirable that it be added since the jury were considering in 1995 conduct that occurred in 1983) could not possibly distort the test, given that the judge added " ordinary " to " reasonable " and " honest " to describe the people whose standards were relevant. The jury were, then, being instructed to apply the relevant contemporary standards of ordinary, reasonable and honest people. A natural meaning of the instruction was, I should say, that the standards relevant were those which ordinary, reasonable and honest people would naturally apply in judging the impugned conduct to be dishonest or not. The criticism of the charge in this respect was, in my opinion, not made out.

I have nothing else to add to what Southwell AJA has said save to say that the Crown case as to count 1 was strong, as it was in R v Peters (1993) 116 FLR 461 , where the applicant ' s fraudulent scheme was remarkably similar to that in this case. Both applications should be dismissed.