Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Elias v The Director of Public Prosecutions (NSW) [2012] NSWCA 302
• Hearing dates: 10 September 2012
• Decision date: 20 September 2012
• Before: Beazley JA at [1]; Basten JA at [2]; Blanch J at [22]

Decision

Summons dismissed with costs.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: ADMINISTRATIVE LAW - judicial review - jurisdictional error - review of dismissal of appeal against conviction for making false statement to obtain financial advantage - applicant sought to simultaneously submit question of law to Court of Criminal Appeal - whether concept of jurisdictional error wider than error of law - whether alternative relief available - whether relief should be refused on discretionary grounds - Crimes Act 1900 (NSW), s 178BB; Criminal Appeal Act 1912 (NSW), s 5B; Supreme Court Act 1970 (NSW), s 69; District Court Act 1973 (NSW), s 176; ADMINISTRATIVE LAW - judicial review - jurisdictional error - review of refusal of primary judge to submit question of law to Court of Criminal Appeal - whether question formulated was question of law - whether jurisdictional error - Criminal Appeal Act 1912 (NSW), s 5B; Supreme Court Act 1970 (NSW), s 69; District Court Act 1973 (NSW), s 176; CRIMINAL LAW - appeal - procedure - case stated pursuant to Criminal Appeal Act 1912 (NSW), s 5B - whether question formulated was question of law - whether abuse of process to pursue relief pursuant to s 5B and judicial review simultaneously - whether duty of primary judge to submit a question arose - whether delay in formulating question warranted; CRIMINAL LAW - making false statement to obtain financial advantage - whether obtaining a loan on ordinary commercial terms is a financial advantage - whether disadvantage must be suffered by owner of property or lender - whether dishonest intent required - Crimes Act 1900 (NSW), s 178BB; WORDS AND PHRASES - "question of law" - Criminal Appeal Act 1912 (NSW), s 5B
• Legislation Cited: Crimes Act 1900 (NSW), s 178BB; Crimes Act 1958 (Vic), s 82; Crimes (Sentencing Procedure) Act 1999 (NSW), s 9; Criminal Appeal Act 1912 (NSW), s 5B; District Court Act 1973 (NSW), s 176; Supreme Court Act 1970 (NSW), s 69; Theft Act 1968 (UK), s 15
• Cases Cited: Allianz Australia Insurance Ltd v Cervantes [2012] NSWCA 244; The Australian Gas Light Company v The Valuer-General (1940) 40 SR 126; Australian Securities and Investments Commission v Saxby Bridge Financial Planning Pty Ltd [2003] FCAFC 244; 133 FCR 290; Birdseye v Australian Securities and Investments Commission [2003] FCAFC 232; 76 ALD 321; Charara v the Director of Public Prosecutions and Others [2001] NSWCCA 140; Collector of Customs v Agfa-Gevaert Ltd [1996] HCA 36; 186 CLR 389; Director of Public Prosecutions v Cassell (1995) 80 A Crim R 160; Ex parte McGavin; Re Berne (1946) 46 SR(NSW) 58; 63 WN(NSW) 45; Hoffenberg v District Court of New South Wales [2010] NSWCA 142; John Richard Walsh (1990) 52 A Crim R 80; Lavorato v Regina [2012] NSWCCA 61; Meakin v Director of Public Prosecutions [2011] NSWCA 373; R v Owen Stolpe (NSWCCA, unrep 30 October 1996); Regina v Duru and Regina v Asghar [1974] 1 WLR 2; Robinson v Woolworths Ltd [2005] NSWCCA 426; 64 NSWLR 612; Sasterawan v Morris [2007] NSWCCA 185; 69 NSWLR 547; Sasterawan v Morris [2008] NSWCA 70; Spanos v Lazaris [2008] NSWCA 74; Welham v the Director of Public Prosecutions [1961] AC 103
• Texts Cited: East, Pleas of the Crown (1803), vol 2, at pp 852, 854
• Category: Principal judgment
• Parties: Nemer Elias (Applicant); Director of Public Prosecutions (NSW) (First Respondent); District Court of New South Wales (Second Respondent)
• Representation: Counsel: Mr D Oliveri (Applicant); Mr I Bourke (First Respondent); Submitting appearance (Second Respondent); Solicitors: Oliveri Attorneys (Applicant); S C Kavanagh, Solicitor for Public Prosecutions (First Respondent); I V Knight, Crown Solicitor (Second Respondent)
• File Number(s): CA 2011/173061

Decision under appeal

• Jurisdiction: 9101
• Date of Decision: 2011-05-18 00:00:00
• Before: Lakatos DCJ
• File Number(s): DC 2009/211685

HEADNOTE

[This headnote is not to be read as part of the judgment]

In 2006 and 2007 the applicant sought loans from two financial institutions. He made false declarations to each institution in relation to his employment and income. The institutions provided him with loans which were secured by way of mortgages. The value of the securities exceeded the amount borrowed, the repayments were made on time and the applicant paid all relevant expenses.

The applicant was charged with two counts of making a false statement with intent to obtain a financial advantage, contrary to Crimes Act 1900 (NSW), s 178BB. He was convicted on 13 December 2010 in the Local Court.

The applicant appealed to the District Court against his conviction. Lakatos DCJ dismissed the appeal 18 May 2011. On 26 May 2011 the applicant sought judicial review of that decision in the supervisory jurisdiction of the Supreme Court pursuant to Supreme Court Act 1970 (NSW), s 69. That application was assigned to the Court of Appeal.

On 25 November 2011, before the s 69 application had been heard, the applicant submitted a request to Lakatos DCJ to submit a question of law to the Court of Criminal Appeal, pursuant to Criminal Appeal Act 1912 (NSW), s 5B. The question was whether the obtaining of each loan was a financial advantage in specific circumstances, being circumstances which reflected the circumstances of the case.

Lakatos DCJ refused that request on 17 February 2012. His Honour held that the proposed questions were not questions of law and that it would be an abuse of process for the applicant to pursue the relief available pursuant to s 5B and s 69 simultaneously.

The applicant amended his s 69 application, seeking judicial review of the refusal to submit a question of law. The issues for determination on review were whether:

(i) the proposed questions were questions of law,

(ii) it would have been an abuse of process to submit a question of law, and

(iii) the applicant had obtained an advantage within the meaning of s 178BB.

The Court held, dismissing the application:

In relation to (i)

1. The question sought to be stated was a question of fact and the primary judge was correct in his conclusions and was correct in refusing to submit a question of law under s 5B: [2], [19], [48]

(per Basten JA, Beazley JA agreeing)

2. The finding referred to in the form of question 'did I err in making finding x?' is usually an ultimate conclusion which inevitably involves a composite of various legal and factual elements: [18]

Robinson v Woolworths Ltd [2005] NSWCCA 426; 64 NSWLR 612; Sasterawan v Morris [2007] NSWCCA 185; 69 NSWLR 547; Birdseye v Australian Securities and Investments Commission [2003] FCAFC 232; 76 ALD 321; Australian Securities and Investments Commission v Saxby Bridge Financial Planning Pty Ltd [2003] FCAFC 244; 133 FCR 290 referred to.

In relation to (ii)

(per Basten JA, Beazley JA agreeing)

3. The primary route for challenge to a judgment in the criminal jurisdiction of the District Court should be to the Court of Criminal Appeal. While there may be a potential abuse of process in pursuing relief in two jurisdictions at once, it will usually be the proceeding by way of judicial review which should be discontinued. This will be the case where any potential error could be dealt with pursuant to s 5B: [3], [7]

Sasterawan v Morris [2007] NSWCCA 185; 69 NSWLR 547; Sasterawan v Morris [2008] NSWCA 70 discussed.

4. Generally, the jurisdiction under s 5B is likely to be wider in that it is not restricted to jurisdictional error. On the other hand, there may be circumstances in which a jurisdictional error cannot properly be formulated as an appropriate question for the purposes of s 5B: [6]

Sasterawan v Morris [2008] NSWCA 70 disapproved; Spanos v Lazaris [2008] NSWCA 74; Hoffenberg v District Court of New South Wales [2010] NSWCA 142; Meakin v Director of Public Prosecutions [2011] NSWCA 373; Allianz Australia Insurance Ltd v Cervantes [2012] NSWCA 244 referred to.

5. No duty to submit a question pursuant to s 5B arises unless the question raised for submission is a question of law. Similarly, the prior commencement of an alternative procedure, or unjustifiable delay, may be factors relevant to the scope of the power and thus the duty: [8]-[9]

Ex parte McGavin; Re Berne (1945) 46 SR (NSW) 58 discussed.

In relation to (iii)

(per Basten JA and Blanch J, Beazley JA agreeing with both)

6. To obtain a loan on ordinary commercial terms is a financial advantage: [20], [46]

(per Blanch J, Beazley JA agreeing)

7. It is not relevant that no disadvantage was suffered by the owner of the property or the lender: [43]

Regina v Duru and Regina v Asghar [1974] 1 WLR 2; Welham v Director of Public Prosecutions [1961] AC 103; John Richard Walsh (1990) 52 A Crim R 80 discussed.

8. There is no requirement that the person obtaining the advantage have a dishonest intent: [44]

R v Owen Stolpe (NSW Court of Criminal Appeal, 30 October 1996, unreported) applied.

Judgment

1 BEAZLEY JA: I have had the opportunity of reading in draft the reasons of Blanch J, with which I agree. I also agree with the additional comments of Basten JA. It follows that the summons should be dismissed with costs.

2 BASTEN JA: I agree with Blanch J that the application must be dismissed with costs. The principal reason given by the primary judge, Lakatos DCJ, for declining to state a case for the consideration of the Court of Criminal Appeal, namely that he was not satisfied that the proposed questions were questions of law, was correct. However, that is not to say that the approach adopted by the primary judge was in all respects correct. There are a number of issues which it is desirable to address.

Abuse of process and privative clause

3 First, the primary judge referred as a secondary reason to the fact that, at the time at which the applicant sought to have the District Court state a case under s 5B of the Criminal Appeal Act 1912 (NSW), there were judicial review proceedings on foot in this Court. That was true, but should not have been decisive. The primary route for challenge to a judgment in the criminal jurisdiction of the District Court (albeit on appeal from the Local Court) should be to the Court of Criminal Appeal. Thus, in exercising the supervisory jurisdiction of this Court, a relevant factor militating against the grant of relief will be the failure of the applicant to avail himself or herself of the appropriate appeal procedure, which in this case is s 5B of the Criminal Appeal Act. Accordingly, while there may be a potential abuse of process in pursuing relief in two jurisdictions at once, it will usually be the proceeding by way of judicial review which should be discontinued.

4 That principle was adopted in the Court of Criminal Appeal in Sasterawan v Morris [2007] NSWCCA 185; 69 NSWLR 547 ("Sasterawan (2007)"). There being two proceedings on foot, the applicant was put to an election and opted, correctly, to abandon the judicial review proceedings in circumstances where it was not clear that any relief sought in those proceedings could not have been sought under s 5B. However, having failed under s 5B, the applicant returned to invoke the jurisdiction of this Court in further proceedings by way of judicial review: Sasterawan v Morris [2008] NSWCA 70 ("Sasterawan (2008)"). Before granting relief in that case, the Court expressly considered whether the alleged errors of law "could not have constituted questions of law capable of being submitted under s 5B(2) ... to the Court of Criminal Appeal for determination": at [90]. Implicit in that question was the proposition that if the "three errors of law now relied upon could and should have been the subject of the stated case", the judicial review proceedings should properly have been dismissed: at [95].

5 Sasterawan (2008) illustrates a second error made by the primary judge, although it appears not to have been critical to the outcome. He noted (p 5) that the jurisdiction of the Court of Appeal is "limited to jurisdictional error and/or error of law on the face of the record". In Sasterawan (2008) the errors of law were identified as errors of law on the face of the record, rather than as jurisdictional error. Neither the Court of Appeal in that case nor the primary judge appear to have been reminded of the fact that the jurisdiction of the Court of Appeal is constrained by the privative clause in the District Court Act 1973 (NSW), s 176. It has long been established that the effect of such a clause is to restrict the jurisdiction under s 69 of the Supreme Court Act 1970 (NSW) to jurisdictional error: see, eg, Spanos v Lazaris [2008] NSWCA 74 at [15]; Hoffenberg v District Court of New South Wales [2010] NSWCA 142 at [4]; Meakin v Director of Public Prosecutions [2011] NSWCA 373 at [52] (Beazley JA) and [102].

6 This is an important constraint: it requires consideration to be given to the differences between the two jurisdictions. Generally, the jurisdiction under s 5B is likely to be wider in that it is not restricted to jurisdictional error. On the other hand, there may be circumstances in which a jurisdictional error cannot properly be formulated as an appropriate question for the purposes of s 5B. As this Court explained in Allianz Australia Insurance Ltd v Cervantes [2012] NSWCA 244, the two phrases "jurisdictional error" and "error of law on the face of the record", conditioning the respective powers, operate by reference to different considerations, stating at [9]:

"Jurisdictional error is a category of error: it is not limited to errors of law in the ordinary sense of that term, but includes factual errors where the objective existence of the fact, as determined by the reviewing court, is a pre-condition to the exercise of power by the authority on which the power is conferred. In the conventional language, a quashing order may be made where a jurisdictional fact has not been established or an error of law, properly described as jurisdictional, has occurred. Thus it is not any error of law, but only those errors which are 'jurisdictional' which provide a basis for relief. By contrast, the second category includes all errors of law, but only if they may be discerned from the record."

7 For present purposes, it suffices to say that no potential error formulated in the present proceeding could not appropriately have been dealt with pursuant to s 5B. Accordingly, it was, in all likelihood, the judicial review proceedings which were inappropriate and in respect of which relief would, if otherwise established, have likely been refused on a discretionary basis.

Duty to state case

8 The applicant placed reliance upon the observations of Jordan CJ in Ex parte McGavin; Re Berne (1946) 46 SR(NSW) 58; 63 WN(NSW) 45, to the effect that a District Court judge (then a Chairman of Quarter Sessions) is obliged to exercise the power to submit a question of law unless "the question is so obviously frivolous and baseless that its submission would be an abuse of process". Those observations, and their subsequent history, were referred to in Sasterawan (2007) at [5]. It is, however, important to understand the premise underlying the duty identified by Jordan CJ, namely that the occasion to exercise the power has in fact arisen. There is no power unless the question raised for submission is a question of law, an assessment which Jordan CJ had already made before observing that a duty arose. Thus, at least in the first instance, the District Court judge must be satisfied that a relevant question of law has been identified before there can be a duty to submit the question to the Court of Criminal Appeal.

9 Furthermore, there may be other bases for identifying an abuse of process which were not relevant in the circumstances of McGavin. For example, and subject to the comments already made in this regard, the prior commencement of an alternative procedure, or unjustifiable delay, may be factors relevant to the scope of the power and thus the duty. The primary judge, not having been satisfied that the issue sought to be submitted for consideration by the Court of Criminal Appeal was indeed a question of law, was under no duty to submit the proposed question. If, in not being so satisfied, the primary judge committed jurisdictional error, that error would be reviewable by this Court and a mandatory order might follow. For the reasons given below, the primary judge did not err in that respect.

Delay

10 There was a further factor which appears to have played a lesser role in the consideration in the District Court than it should have. His Honour referred in his judgment dismissing the application to the fact that there had been "a delay in proceeding with this stated case" but said that the delay itself "would not be fatal if all other things did not stand in the way": judgment, p 5. There is, however, much to be said for the view that the delay should of itself have been fatal.

11 The appeal from the Local Court was dealt with by Lakatos DCJ on 18 May 2011, by way of an oral judgment. The first application for a stated case under s 5B of the Criminal Appeal Act was not made until 22 June 2011, and then on an erroneous assumption that the question would be submitted to this Court rather than the Court of Criminal Appeal, suggesting a question which was not a question of law and without a statement of the case. The Director responded the following day identifying some of the inadequacies. Nothing was then done until 17 November 2011, when the applicant wrote to the Director enclosing a draft stated case and advising that it would be submitted to the District Court in seven days; as it was on 25 November 2011. There was then a hearing in the District Court on 17 February 2012.

12 Such a lackadaisical approach on the part of the applicant, and the manner in which it was dealt with in the District Court, were inconsistent with the terms of s 5B of the Criminal Appeal Act.

13 The Criminal Appeal Act used to provide that any question of law be submitted before the proceedings were disposed of. That constraint has now been removed, but it nevertheless states that the question of law "must be submitted not later than 28 days after the end of the appeal proceedings, or within such longer period as the Court of Criminal Appeal may allow": s 5B(2). It requires little imagination to appreciate that such a rigorous timetable demands that the proposed stated case be provided to the District Court judge within days of the judgment and that there is no time for a hearing and directions.

14 This provision may appear to be procedurally awkward, in that where a request to submit a case is made shortly before or after the 28 day period has expired, the District Court judge will not know what attitude the Court of Criminal Appeal will take and will therefore not know whether to go through the process of settling and submitting such a case. The awkwardness disappears, to a large extent, if it is appreciated that the application for a case to be stated should be made well within the 28 day period, to allow time to settle the questions and have the case submitted to the Court of Criminal Appeal within the prescribed period. In a case where the Court and the parties had engaged in a lengthy process of settling questions, including the filing of submissions and responses, the Court of Criminal Appeal commented on the inappropriateness of the course adopted and noted the emphatic language of the time limit: Lavorato v Regina [2012] NSWCCA 61 at [5]-[18], in my judgment, RS Hulme J agreeing at [52]; [78]-[81] (Schmidt J, RS Hulme J agreeing). (The present case was dealt with in the District Court before that judgment was delivered.)

15 The only two factors which might have militated in favour of an extension of time in the Court of Criminal Appeal in this case were not in fact supportive of such an application. First, as the primary judge noted, there had been a delay between pronouncement of the judgment in open court and the availability of a written version of the judgment "for proper consideration by the parties": judgment, p 3. That factor, which will arise in almost all cases in which ex tempore judgments are delivered, whether in this Court or in the District Court, is of quite limited weight, at least in circumstances where the offender is represented. It is the duty of the lawyer who is present at the hearing to take an adequate note of the ex tempore reasons. The mere fact that they are now recorded, which did not happen in the past, will not usually warrant a delay in formulating questions where the issues are well known to the judge who delivered the reasons and who will know if the questions proposed properly reflect the decision.

16 Secondly, his Honour noted that the applicant had moved promptly to review his decision, by filing a summons in this Court eight days after the oral judgment was delivered. In some circumstances, that might provide a significant factor in a later consideration of whether there should be an extension of time. However, in this case the factor would have been of little weight because the summons contained no grounds identifying relevant questions of law.

17 It is not the job of the trial judge to pre-empt the power of the Court of Criminal Appeal to extend time, but where there is no arguable basis for extending time, the trial judge may refuse to state a case being satisfied that the application would be hopeless.

Formulation of questions

18 What may be submitted to the Court of Criminal Appeal under s 5B is "any question of law arising on any appeal to the District Court" from a judgment in the Local Court. That the exercise in formulating a question of law requires legal training may be accepted; however, the routine practice of ignoring guidance given by this Court and the Court of Criminal Appeal can not be justified. The preferred form of question proposed by applicants is along the lines 'Did I err in law in making finding x?'. The finding referred to is usually an ultimate conclusion which inevitably involves a composite of various legal and factual elements: see Robinson v Woolworths Ltd [2005] NSWCCA 426; 64 NSWLR 612 at [7]-[10]. Similar remarks were made in Sasterawan (2007) at [15]-[16]. Similar difficulties have afflicted the exercise by the Federal Court of its "appellate" jurisdiction with respect to questions of law under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth): see Birdseye v Australian Securities and Investments Commission [2003] FCAFC 232; 76 ALD 321 at [18]ff (Branson and Stone JJ) and Australian Securities and Investments Commission v Saxby Bridge Financial Planning Pty Ltd [2003] FCAFC 244; 133 FCR 290 at [46]-[47] (Branson J).

Whether question of law identified

19 The question which the primary judge was invited to submit to the Court of Criminal Appeal is set out by Blanch J at [32] below. Although the arguments for the applicant in this Court ranged somewhat more widely, the question raised for submission to the Court of Criminal Appeal was, in essence, whether a loan having the usual commercial characteristics of being secured by a mortgage and involving payment by the borrower of interest on the outstanding capital and the lender's costs of the transaction, was capable in law of constituting a "financial advantage" to the borrower. The word "advantage", which was at the heart of the applicant's submissions, is no doubt a word capable of different connotations and nuance in different circumstances. However, there was no submission that it was not, in its statutory context, a word bearing its ordinary English usage. The ordinary meaning of a non-technical word is a question of fact: whether facts found are capable of falling within the meaning may be a question of law, and that may be the case whether or not the word is to be given its ordinary meaning: Collector of Customs v Agfa-Gevaert Ltd [1996] HCA 36; 186 CLR 389 at 395.

20 The question whether a loan constitutes a financial advantage may depend upon the circumstances at the time the loan is obtained, but does not require some objective assessment of the consideration obtained by each party to the contract. Commerce depends upon the common assumption that the provision and receipt of goods and services involves mutual benefits and advantages to each party. Given the level of home ownership and credit card usage in our community, it may safely be assumed that the vast majority of people believe that they obtain an advantage when obtaining financial accommodation, for which they have to pay. The advantage is sometimes so attractive that individuals will make false declarations to obtain a loan. The proposition that the obtaining of a loan, on ordinary commercial terms, known to the borrower at the time the loan was obtained, was incapable of constituting a financial advantage in the ordinary sense of that phrase, might variously be described as hopeless, baseless, misconceived or unworthy of serious attention. The question sought to be raised by the applicant did not in truth involve any question of law; nor was it reasonably arguable.

Conclusion

21 On any view, the present application must be dismissed; the applicant must pay the costs of the respondent in this Court.

22 BLANCH J: The claimant seeks orders in relation to a refusal by his Honour Judge Lakatos in the District Court to state a case from the determination of the claimant's appeal to the District Court. The orders sought are:

"(1) An order that his Honour Judge Lakatos of the District Court settle a draft stated case for determination by the Court of Criminal Appeal of the question of law arising from his judgement on 18 May 2011.

(2) An order that his Honour Judge Lakatos of the District Court submit the question of law arising from the stated case (after it has been settled) to the Court of Criminal Appeal pursuant to section 5B of the Criminal Appeal Act 1912.

(3) In the alternative, an order that the Court of Appeal, in its discretion, determine the question of law arising from the draft stated case and quash or set aside both the conviction and sentence imposed on the Claimant by his Honour DCJ Lakatos in the District Court of New South Wales on 18 May, 2011."

Facts

23 On 9 September 2005 the claimant signed a declaration in his mortgage application to Homeside Lending that his profit after expenses and salary was $70,000. He declared this information was true and correct and sought a loan in the sum of $225,000 secured by way of a mortgage over his home. The loan was granted to the claimant and it is accepted by the claimant that his declaration that his profit was $70,000 was not true.

24 On 19 July 2006 he sought a loan in the sum of $312,000 from Macquarie Mortgages to refinance the existing mortgage. To secure this loan he said he was self-employed and that his annual income was $75,000. The claimant accepts these statements were false because he was not employed at the time he signed the application and his income was not $75,000.

25 The circumstances surrounding the loans came to attention as a result of a Police Integrity Commission investigation of a police officer George Kahila who, while a serving police officer, provided brokerage assistance including assistance to this claimant in respect of these loans.

26 The argument made by the claimant in both the Local Court and in the District Court was that the security for the loans far exceeded the amount borrowed. The repayment instalments were all made on time and the claimant paid all relevant expenses so that there was no financial advantage to him.

27 He was charged with two counts of an offence contrary to s 178BB of the Crimes Act 1900 since repealed. That section stated:

"Whosoever, with intent to obtain for himself or another person any money or valuable thing or any financial advantage of any kind whatsoever, makes or publishes, or concurs in making or publishing, any statement (whether or not in writing) which he knows to be false or misleading in a material particular or which is false or misleading in a material particular and is made with reckless disregard as to whether it is true or is false or misleading in a material particular shall be liable to imprisonment for five years."

28 The charges came before the Downing Centre Local Court for hearing on 13 December 2010. The magistrate found beyond a reasonable doubt that the claimant was sufficiently apprised of the information on the forms he signed and that he knew or had reckless disregard as to the truthfulness of the statements and that he knew the particulars contained in the statements were false. He also found that the statements were made with intent to obtain a financial advantage. The magistrate also found the statements were false in a material particular because the evidence from one of the lending agencies was that the decision to grant a loan is based on the ability to service a loan and that depends on the declaration of income. The magistrate found the offences proved, convicted the claimant and deferred sentence on condition he entered a bond pursuant to s 9 of the Crimes (Sentencing Procedure) Act 1999 for a period of 18 months and he was ordered to pay court costs of $79.

29 The claimant appealed against the conviction and that appeal was dismissed by his Honour Judge Lakatos on 18 May 2011. His Honour rejected the argument that there should be no conviction because the mortgagors had made no loss at all, that payments were still being made "and nobody has been harmed". It was argued that because the security offered for the loans well exceeded the amounts of the loans that the claimant did not intend to acquire any financial advantage.

30 On 17 February 2012 Judge Lakatos heard an application to state a case to the Court of Criminal Appeal. In refusing to state a case his Honour noted firstly that the application being made on 17 February 2012 was considerably delayed, bearing in mind the original decision by him had been made on 18 May 2011. The explanation for that delay was because the claimant filed a summons in this Court seeking prerogative relief some eight days after the decision made in the District Court. His Honour was also concerned about the appropriateness of stating a case for the determination of the Court of Criminal Appeal when exactly the same arguments were being sought to be agitated before the Court of Appeal. He referred to the decision of this Court in Sasterawan v Morris (2007) 69 NSWLR 547; [2007] NSWCCA 185 where at [8] Basten JA noted it may be an abuse of process to maintain an application for leave to pursue a statutory appeal and to maintain an application for judicial review at the same time.

31 Basten JA said:

"... it will usually be an abuse of process to maintain proceedings in this Court, and contemporaneously, in the Court of Appeal, even though the grounds may not be identical."

32 A further matter which troubled his Honour Judge Lakatos was whether there was a question of law to be stated. The question of law put to his Honour was:

"Did I err in law in finding that the obtaining of a loan by the appellant was capable of amounting to a financial advantage in circumstances where,

(a) The loan was secured by a mortgagor of the appellant's real property the value of which far exceeded the loan amount;

(b) There was interest payable by the appellant on the loan at the rate determined by the lender; and

(c) That the appellant paid all the costs associated with the transaction."

33 His Honour referred to the decision of Jordan CJ in The Australian Gas Light Company v The Valuer-General (1940) 40 SR 126 at pages 137 to 138 where it was said:

"(1) The question what is the meaning of an ordinary English word or phrase as used in the Statute is one of fact not of law.

(2) The question whether a particular set of facts comes within the description of such a word or phrase is one of fact.

(3) A finding of fact by a tribunal of fact cannot be disturbed if the facts inferred by the tribunal, upon which the finding is based, are capable of supporting its finding, and there is evidence capable of supporting its inferences.

(4) Such a finding can be disturbed only (a) if there is no evidence to support its inferences, or (b) if the facts inferred by it and supported by evidence are incapable of justifying the finding of fact based upon those inferences... or (c) if it has misdirected itself in law."

34 Section 5B(1) of the Criminal Appeal Act 1912 states:

"A Judge of the District Court may submit any question of law arising on any appeal to the District Court in its criminal and special jurisdiction coming before the Judge to the Court of Criminal Appeal for determination, and the Court of Criminal Appeal may make any such order or give any such direction to the District Court as it thinks fit."

35 In Ex parte McGavin; Re Berne and Others (1946) 46 SR 58 at 61 Jordan CJ said:

"The word "may" is prima facie facultative only; but it was pointed out in Macdougall v Paterson (1851) 11 CB 755 at 773, that "when a statute confers an authority to do a judicial act in a certain case, it is imperative on those so authorized, to exercise the authority when the case arises, and its exercise is duly applied for by a party interested, and having the right to make the application": Cook v Cook (1923) 33 CLR 369 at 377; R v Mitchell [1913] 1 KB 561. Section 23 of the Interpretation Act of 1897 does not prevent the application of this rule, where it is necessary to give effect to the evident intention of the statute: Smith v Watson (1906) 4 CLR 802 at 811, 819, 827. In my opinion, it is the duty of a Chairman of Quarter Sessions to submit to the Court of Criminal Appeal any question of law which either party to the appeal may raise and ask to be so submitted, unless, in his opinion, the question is so obviously frivolous and baseless that its submission would be an abuse of process."

36 That statement has been applied consistently: see Director of Public Prosecutions v Cassell (1995) 80 A Crim R 160 and Charara v the Director of Public Prosecutions and Others [2001] NSWCCA 140.

37 The claimant argues the prosecution must prove the claimant was financially better off as a result of the loan or that the transaction gave him a financial advantage over the lender. The argument advanced in this case is that there was no evidence to support a finding the claimant intended to obtain a financial advantage and consequently there is a point of law to be stated and this gives rise to a point of law.

Financial advantage

38 In Regina v Duru and Regina v Asghar [1974] 1 WLR 2 the Court was dealing with an offence of obtaining property by deception contrary to s 15(1) of the Theft Act 1968 (UK). That was a case dealing with obtaining mortgages by applications which contained untrue particulars about the applicant's financial status. It was argued there was no proof of an intention to permanently deprive because the loans would be repaid. The Court held in that context at page 8 that "The fact that the mortgagors were under an obligation to repay the mortgage loans does not affect the defendants' intention permanently to deprive the council of those cheques."

39 In Welham v the Director of Public Prosecutions [1961] AC 103 the House of Lords was dealing with a case involving a charge of forgery where false documents had been provided to finance companies in order to obtain loans and where it was asserted the loans would be repaid. Lord Radcliffe at page 124 quoted East, Pleas of the Crown (1803), vol 2, at pp 852, 854 that:

"... in all cases of forgery, properly so called, it is immaterial whether any person be actually injured or not, provided any may be prejudiced by it."

He went on to say:

"Of course, as I have said, in ninety-nine cases out of a hundred the intent to deceive one person to his prejudice merely connotes the deceiver's intention of obtaining an advantage for himself by inflicting a corresponding loss upon the person deceived. In all such cases the economic explanation is sufficient. But in that special line of cases where the person deceived is a public authority or a person holding a public office, deceit may secure an advantage for the deceiver without causing anything that can fairly be called either a pecuniary or an economic injury to the person deceived. If there could be no intent to defraud in the eyes of the law without an intent to inflict a pecuniary or economic injury, such cases as these could not have been punished as forgeries at common law, in which an intent to defraud is an essential element of the offence, yet I am satisfied that they were regularly so treated."

40 At page 125 he said:

"In my opinion it is clear that in connection with this offence the intent to defraud existed when the false document was brought into existence for no other purpose than that of deceiving a person responsible for a public duty into doing something that he would not have done but for the deceit, or not doing something that but for it he would have done. Correspondingly, to put such a document forward with knowledge of its falsity and with a similar intent was to commit the crime of uttering it. That seems to me to be the essential point of the present appeal."

41 In John Richard Walsh (1990) 52 A Crim R 80 the Victorian Court of Criminal Appeal was dealing with s 82 of the Crimes Act 1958 (Vic) which provides that "a person who by any deception dishonestly obtains for himself or another any financial advantage is guilty of an offence" and O'Bryan J said at page 81:

"Attention focused upon the meaning of the words 'financial advantage'. In Matthews v Fountain [1982] VR 1045 Gray J observed that:

'The concept of financial advantage is a simple one. It is expressed by the use of two common words, each of clear meaning.'

I agree that the words should be given their plain meaning and that no narrow construction should be given them."

42 At page 82 his Honour said:

"It is also not to the point that Westpac might not suffer any financial disadvantage by the provision of a financial advantage to the applicant."

43 The common theme of these cases is that it is not relevant that no disadvantage was suffered by the owner of the property. In this case it is not relevant whether the lender suffered a disadvantage and that part of the contention of the claimant must fail.

44 Moreover there is no requirement that there be a dishonest intent. In R v Owen Stolpe, NSWCCA unreported 30 October 1996, Hunt CJ at CL said:

"A comparison between the terms of s178AB and s178BB makes it clear that the inclusion of an ingredient of dishonesty in the former and its omission in the latter was deliberate. In order to prove an offence under s178BA, it is necessary for the Crown to establish that, notwithstanding that the accused obtained the relevant advantage by deception, he also did so dishonestly; although in many cases the deception will be powerful evidence of dishonesty, it may not be so where, for example, the Crown has not eliminated any reasonable possibility that the accused honestly believed that he had a right to obtain that advantage. In order to prove an offence under s178BB, the Crown does not have to prove dishonesty; it is sufficient to establish that there was an intent to obtain money or valuable thing or any financial advantage."

45 At page 12 his Honour referred to the requirement that the statement must be false "in a material particular" and said:

"The term 'material' in s178BB has been defined by this Court as requiring no more and no less than that the false particular must be of moment or of significance, not merely trivial or inconsequential. It will be material if it is relevant to the purpose for which it was being made, and that it will be relevant to that purpose if it may be taken into account by the person to whom the statement is made in making any decision upon the matter in respect of which the statement is made. It is unnecessary to establish that the statement is one which must or will be or was so taken into account."

46 The words financial advantage are plain words as O'Bryan J noted in Walsh supra. To obtain two significant loans would appear on the face of it to be a financial advantage even if secured by a mortgage. The loans put the claimant in a position to use funds he would not otherwise have at his disposal and gave him the opportunity to repay over a period of time. In this case he was wanting to assist his sons and he needed the finance to do so. The inference can be drawn that he saw an advantage in obtaining the loans that being an ability to help his sons at a time they needed help and when otherwise he would not have been able to do so. In my view it clearly was a financial advantage.

47 I note that if he had received money instead of credit and the charge had been obtaining money by means of making a statement knowing it to be false in a material particular, this argument could not have arisen.

48 The question sought to be posed in the stated case is framed in terms of "did I err in law in finding that the obtaining of a loan by the appellant was capable of amounting to a financial advantage?". The real question is whether the obtaining of the loan was a financial advantage. In my view, it was and it is a question of fact and the judge was correct in his conclusions and was correct in refusing to state a case under s 5B of the Criminal Appeal Act 1912.

49 In my opinion the summons should be dismissed with costs.

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Decision last updated: 21 September 2012