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False or misleading statements

To top [5-500] Introduction

The statutory offences of obtaining property by false pretences were designed to meet perceived deficiencies in the law of larceny. These were contained in ss 179–185 (rep) Crimes Act 1900. Sections 179–185 were repealed on 22 February 2010 by the Crimes Amendment (Fraud, Identity and Forgery Offences) Act 2009. Despite the repeal, this chapter of the Bench Book has been retained since offences under those repealed provisions are still coming before the courts.

The essential difference between “larceny” and “obtaining by false pretences” is that the former is an offence against possession, whilst the latter, at least in its original statutory form, included activities designed to unlawfully induce another to part with his or her property.

Gaps in the law have been filled by the creation of other offences. For example, in 1961 the statutory offence of obtaining credit by fraud (s 178C (rep)) was created, and in 1979 offences of obtaining money etc by deception or by false or misleading statements (ss 178BA (rep) and 178BB (rep)) were enacted in the Crimes Act 1900. Sections 178BA, 187BB and 178C were also repealed by the Crimes Amendment (Fraud, Identity and Forgery Offences) Act 2009.

To top [5-510] Section 178BA (rep) Crimes Act 1900

Section 178BA (rep) penalises the obtaining by deception of any money, valuable thing or “any financial advantage of any kind whatsoever”. The section defines “deception” to include both deliberate or reckless words or conduct and (unlike the offence of false pretences) if by words includes representations of law as well as fact. The definition is also extended to include causing a computer system to make a response, and an act or omission with the intention of causing a machine “designed to operate by means of payment or identification” to make an unauthorised response, thereby creating an offence of “deceiving” a machine, such as putting foreign coins into a slot machine or obtaining money through an automatic teller machine (ATM). “Money” is defined in s 4 Crimes Act 1900, but there is no definition of “valuable thing” or “financial advantage”. “Money” may include a cheque: R v Hunt (1996) 88 A Crim R 307.

As to a “valuable thing”, the question of whether the expression is limited to tangible objects or entities, or whether it also includes intangibles, was left open in R v Love (1989) 17 NSWLR 608 at 617. The meaning of the expression, however, was regarded as being limited by the necessity of showing that it was capable of being “obtained”.

A “financial advantage” may be “of any kind whatsoever”. The requirement of “obtaining” in respect of the financial advantage may, however, serve to narrow the ambit of the phrase, but it has been held that the words should be given their plain meaning and should not be narrowly construed: R v Walsh (1990) 52 A Crim R 80, 81.

The elements of the offence are that the accused:

(i) 

by deception as defined in s 178BA(2);

(ii) 

dishonestly obtained for the accused or another person;

(iii) 

a financial advantage (or money or a valuable thing).

See: R v Licardy (unrep, 28/09/94, NSWCCA). The deception must have induced in the owner of the money or valuable thing an intention to part with his or her property rather than merely the custody or control of the money etc in question.

In the case of money, the general rule is that property in it will pass on delivery. In the case of a charge of obtaining a valuable thing by deception, the question of when and by what means it may be said to have been “obtained” may be affected by the nature of the thing in question: R v Kron (1995) 78 A Crim R 747 at 477.

In the case of a charge relating to a financial advantage, it is more difficult to apply the notion of the creation of an intent to part with something as in the case of money or a tangible thing. The extension of a credit facility by deception may involve an “obtaining” within the meaning of s 178BB (as well as s 178C (rep)) Crimes Act 1900.

In the context of the English Theft Act 1968, it has been held that an intention to repay an equivalent sum of money will not prevent conviction. It is to be noted, however, that s 178BA does not have an equivalent to s 118 Crimes Act 1900 in relation to the offence of larceny, and it may be that the existence of an intention to repay an equivalent sum in the case of money, or to return the valuable thing, will go to the question whether the Crown has established beyond reasonable doubt that the money or valuable thing was obtained “dishonestly”.

Because of the requirement of a causal connection between the alleged deception and the intent to part with the subject matter of the charge, there will need to be evidence (direct or circumstantial) of a mind deceived, except in the case of a computer or a machine referred to in s 178BA(2) Crimes Act 1900. Although the money and so forth must be obtained “dishonestly”, if the Crown proves a deception then this is evidence upon which the jury may find dishonesty on the part of the accused. As to a claim of right, see [5-880].

To top [5-520] Suggested direction

[The accused] is charged with dishonestly obtaining by deception [money/valuable thing/ a financial advantage]. In order to establish this offence, the Crown must prove beyond reasonable doubt that by [his/her] [deliberate/reckless] [words/conduct], [the accused] acted deceptively so as to induce in the mind of [the person from whom the money etc was obtained] an intention to part with [the money/valuable thing/financial advantage] to [the accused] or to another person … [deal with evidence for the Crown and for the accused and the respective submissions as to these matters].

The Crown must also prove that [the accused/another] did obtain the [money/valuable thing/financial advantage]. The Crown will have proved that [the accused] obtained the money when it … [or its equivalent, for example, a cheque] is given to [the accused] or someone else.

… [A similar direction will be required in the case of a valuable thing].

… [In the case of a “financial advantage”, the direction to be given will depend on the nature of the financial advantage in question. Thus the accused will have “obtained” an extension of credit when [he/she] or someone else is in a position to draw down the facility].

… [Deal with evidence for the Crown and for the accused and opposing submissions as to these matters].

The Crown must also prove beyond reasonable doubt that at the time that the [money/valuable thing/financial advantage] was obtained, [the accused] was acting dishonestly.

Whether a person is acting dishonestly at any given time depends on his or her state of mind. It is the actual state of mind of the accused person at the time of the alleged obtaining which is in question when an allegation is made that a person acted dishonestly. You must judge whether that person was acting dishonestly at the given time by applying the ordinary standards of what is regarded as “dishonest” by ordinary decent members of our community.

If you are satisfied beyond reasonable doubt that [the accused] did, by [his/her] [deliberate/reckless] deceptive [words/conduct], obtain the [money/valuable thing/ financial advantage] in question, to which [he/she] knew [he/she] was not entitled, then it would be open to you to find that [he/she] was acting dishonestly at that time.

[Where the Crown relies on reckless rather than deliberate deception, add

Here the Crown says you will find beyond reasonable doubt that [the accused] by [his/her] [words/conduct] was deceptive because [the accused] was reckless as to the effect on the mind of [deceived person] in that [the accused] knew that such words or conduct might induce that person to [part with the money/part with the valuable thing/confer the financial advantage charged] … [If claim of right is in issue: to which [he/she] knew [he/she] was not entitled] and went ahead and [said/did] those things alleged by the Crown, regardless of whether [his/her] [words/conduct] would have that effect or not. [The accused], on the other hand, relies on the following … [set out evidence and submissions for the accused].]

To top [5-530] Section 178BB (rep) Crimes Act 1900

As to s 178BB (rep) Crimes Act 1900, the section may be compared with s 176 (rep) which is, however, limited in its scope to corporate officers. Like s 178BA (rep), s 178BB extends to the obtaining of any “money or valuable thing or any financial advantage of any kind whatsoever” — as to which, see the notes in relation to s 178BA.

No element of dishonesty is, however, required to be proved by the Crown under s 178BB, although the jury should not be so directed: R v Stolpe (unrep, 30/10/96 NSWCCA).

Intent as to the obtaining must be proved, as must knowledge of the false or misleading nature of the statement relied on by the Crown, or “reckless disregard” as to whether the material particular in the statement is false or misleading.

The phrase “reckless disregard” in s 178BB may be compared with the phrase “whether deliberate or reckless” in the definition of “deception” in s 178BA(2). Although there is considerable discussion in the authorities as to the meaning of “reckless” and “reckless disregard” in various statutory contexts, it appears that a jury should be directed in terms that both expression import a subjective state of mind in the accused in relation to the deception (s 178BA(2)) or making of a false statement (s 178BB) in that, whilst foreseeing the possibility that it may be false, he or she made the statement not caring whether it was true or false, and without any honest belief as to its truth. See the discussion of authorities in Pollard v Commonwealth DPP (1992) 28 NSWLR 659.

It should be noted, however, that the Crown may only rely on “reckless disregard” on a charge of making a false or misleading statement and that, in relation to the publication or the concurrence in making or publishing a statement, the Crown is restricted to actual knowledge of the false or misleading character of the statement: R v Rinaldi & Kessey (1993) 30 NSWLR 605.

To “publish” means to convey the offending statement to the mind of another: Webb v Bloch (1928) 41 CLR 331, 363; R v Rinaldi & Kessey (1993) 30 NSWLR 605, 609. To “concur” in a publication involves no more than doing an act which, together with the acts of others (who may be behaving quite lawfully), brings about publication. The word is not coextensive with the concept of aiding, abetting, counselling or procuring in s 351 Crimes Act 1900: R v Lee (unrep, 19/06/97, NSWCCA).

A statement may be rendered false or misleading by material omission even though otherwise factually accurate: R v Bishirgian (1936) 1 ALR 586; R v M (1980) 2 NSWLR 195. A statement is false or misleading in a material particular if, of moment or significance, it is capable of influencing the mind of the person to whom it is directed, and is not merely trivial or inconsequential: R v Clogher [1999] NSWCCA 397, and the authorities cited.

To top [5-540] Suggested direction

In order to establish this offence, the Crown must prove the following —

1. 

That [the accused] [made/published/concurred in making or publishing] a statement whether oral or in writing … [set out the statement relied on by the Crown];

2. 

which statement was false or misleading in a material particular … [set out the particulars of falsity; materiality and the evidence for the Crown and the accused, and summaries opposing submissions];

[If appropriate, add

A statement may be “false or misleading” not only by stating that which is positively untrue or misleading but also where, by omitting something, it renders that which is stated false or misleading.]

[If in issue, add

A statement is material if it is of significance and not merely trivial or inconsequential and is relevant to the purpose for which it was being made. In determining whether a statement is false or misleading, and also whether it was material in that sense, you will have regard to the whole of the statement and the context of circumstances in which the statement was made and the purpose for which the statement was made and received.]

3. 

that [he/she] did so with the intention of obtaining for [himself/herself/another] [money/a valuable thing/financial advantage] … [if a valuable thing or a financial advantage, set out the nature of the thing or advantage relied upon by the Crown];

4. 

which statement [he/she] knew to be false or misleading in a material particular … [set out the Crown’s case as to knowledge and the accused’s case, and the opposing arguments];

As I have said, the Crown must prove beyond reasonable doubt that when [he/she] [made/published/concurred in making or publishing] the statement that [he/she] knew that it was false or misleading. Knowledge is a state of mind and it is [the accused’s] actual state of mind which the Crown must prove. This will almost invariably be something which can only be inferred from all the circumstances. If, at the end of your deliberations, having considered all the relevant evidence, you are of the view that there is a reasonable possibility that the Crown has not established that [the accused] did know that the statement was false or misleading, you must acquit [the accused].

It is important to keep in mind that it is [the accused’s] actual state of mind at the time of … [making etc] the alleged statement which the Crown must prove, not what another person may or would have known in the circumstances.

[Where the charge is “making” and the Crown relies on “reckless disregard”, add

Here the crown alleges [in lieu of/in addition to actual knowledge] that in making the alleged statement [the accused] acted in reckless disregard of the false or misleading nature of the statement. In order to establish this, the Crown must prove beyond reasonable doubt that when [the accused] made the statement [he/she] knew that the statement might possibly be false or misleading to persons acting on it and went ahead and made the statement regardless of whether it was false or misleading.]

To top [5-550] Notes

1. 

Although a single statement may contain a number of allegedly false or misleading material particulars, a question of duplicity may arise where the Crown charges more than one allegedly false or misleading particular in a single count: R v Giam (1999) 104 A Crim R 416.

2. 

Where a single statement is charged but there is more than one allegedly false or misleading particular relied on by the Crown, any one of which is capable of supporting the charge, it is enough to establish the charge if any one is proved beyond reasonable doubt. The jury may be so directed, but the jury should also be directed that before convicting on the basis of any one allegedly false or misleading material particular, they must be unanimously of the view that the Crown has established beyond reasonable doubt it’s case in respect of that particular: R v Brown [1984] 79 Cr App R 115. See also in different contexts: R v Beach [1994] 75 A Crim R 447; KBT v The Queen (1997) 191 CLR 417.

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