Chung v R

1. [1]

   BASTEN AJA: From June 2008 until November 2015, the applicant, Yvonne Chung, was the financial controller of a surveying business, Lynton Surveys Pty Ltd. By an indictment dated 19 August 2021, she was charged with one count of dishonestly obtaining a financial advantage by deception, by withdrawing a total of $301,300 from her employer’s bank account between 4 July 2010 and 1 December 2015. By way of alternative, the indictment charged 175 individual withdrawals, the first of which occurred on 5 July 2010 and the last in November 2015. All the offences were formulated by reference to s 192E(1)(b) of the Crimes Act 1900 (NSW).

2. [2]

   Following a trial before Sutherland DCJ and a jury in the District Court, on 14 June 2023, the applicant was acquitted of the first omnibus count but found guilty of 78 of the individual counts. On 17 July 2023, she was sentenced to an aggregate term of imprisonment for three years which was directed to be served by way of an intensive correction order.

3. [3]

   By a notice of appeal filed on 25 January 2024, the applicant appealed in relation to all 78 offences for which she was convicted. Six grounds of appeal were identified, none of which involved a question of law alone, thereby requiring leave, pursuant to s 5(1)(b) of the Criminal Appeal Act 1912 (NSW).

4. [4]

   For the reasons set out below, with respect to grounds 2–5, leave should be refused; with respect to grounds 1 and 6, there should be a grant of leave to appeal, but the appeal should be dismissed.

Background circumstances

1. [5]

   The applicant’s employer was owned by one of two directors, Mr Peter Hooker, and, at the time when the applicant commenced her employment in June 2008, the company had some 55 employees. [1] An unsigned copy of the contract of employment was tendered; Mr Hooker gave evidence that the contract had been signed by him and the applicant. [2] The contract provided that the applicant would be paid an annual salary of $90,000, described as “inclusive of annual leave loading”. The contract also provided for payment of a superannuation contribution of 9% of her annual salary, to be raised to 10.5% after two years employment. Her performance was to be reviewed annually with an opportunity for a “discretionary performance bonus” dependent on the performance of the company and the employee. She resigned on 16 November 2015.

2. [6]

   Part of the applicant’s responsibilities as Financial Controller included payment of salaries, including her own. Mr Hooker gave evidence that in 2015 he had become concerned about the financial position of the company and had arranged for an audit to be conducted by an independent accountant. According to Mr Hooker, the day on which the applicant tendered her resignation was the Friday of the week following the day the auditor attended and sought access to the company’s records. [3] Mr Hooker said that he was then absent at a conference for a few days, but on his return found a large amount of shredded paper in a bin outside the office and noted that the shredder located next to the applicant’s office was full. On her arrival at work at about 11am, Mr Hooker confronted her about the shredding of documents to which the applicant had responded that they were “just her documents”. She denied that they were office records. Mr Hooker told the applicant that he did not believe her and directed her to leave the premises.

3. [7]

   On the hearing of the appeal, counsel for the applicant contended that the prosecution case ultimately rested upon the credibility of Mr Hooker, and the credibility of the applicant who gave evidence in her own defence. However, the primary aspect of Mr Hooker’s evidence which was disputed was the proposition that at no stage during the seven years of her employment did he approve an increase in her base salary.

4. [8]

   Despite the fact that the relevant office records relating to her employment were missing, there was an extensive documentary record, including not only the unsigned contract of employment but payslips relating to the applicant. In addition, the prosecutor tendered evidence demonstrating that between 1 April 2010 and 9 December 2012, that is, a period of some two years eight months, commencing three months before the first of the charged offences, the applicant withdrew a total of $135,140 in cash from an ATM at the Star City Casino. The evidence was admitted, and the decision to admit it was the subject of ground 1 of the proposed appeal.

5. [9]

   Four other aspects of the evidence should be noted by way of background. First, there was a copy of a letter sent by Mr Hooker to the applicant dated 9 March 2016, stating that she had been overpaid $124,196.88 and seeking repayment of that amount. The amount was calculated at the rate of $50.77/hr, which indicated a base salary of $99,000 per annum.

6. [10]

   Secondly, there was a letter in response dated 21 March 2016 from the solicitors for the applicant, alleging an underpayment, calculated by reference to the rate of $50.77/hr.

7. [11]

   Thirdly, there were two sets of bank account statements in the name of the applicant, the first from the Bank of Queensland, dating from January 2010 until March 2014; the second from the Commonwealth Bank, dating from January 2010 until November 2015.

8. [12]

   Fourthly, exhibit 188 was an aide memoir prepared by the prosecution, setting out the calculations of overpayment for each of counts 2–176 on the indictment.

9. [13]

   Finally by way of background, it is convenient to identify the basis upon which the jury appears to have reasoned in separating the counts for the purpose of the individual verdicts. The prosecution could only have succeeded on count 1 if the jury were satisfied as to all the individual counts. As they were not so satisfied, they returned a verdict of not guilty on count 1.

10. [14]

    As to the individual counts, the guilty verdicts appeared to reflect three factors. First, the jury was not satisfied beyond reasonable doubt that the employer did not authorise an increase in salary from $90,000 per annum to $99,000 per annum. However, it was satisfied that payments based on a higher salary (up to $150,000 per annum) were unauthorised overpayments. That distinction was understandable. While it involved the rejection of Mr Hooker’s evidence that there were no authorised increases, it reflected a doubt as to the accuracy of that evidence based on the exchange of letters following the applicant’s resignation, where both Mr Hooker and the solicitors for the applicant made calculations based on an hourly rate which equated to $99,000 per annum.

11. [15]

    The second factor involved payments for overtime, holiday pay or sick pay. In broad terms, those findings involved acceptance of Mr Hooker’s evidence, consistently with the draft contract, that she was not entitled to overtime, that the annual salary included the annual leave loading and that she was entitled to 20 days of annual leave and 10 days sick leave per year.

12. [16]

    The third matter of significance derived from the breakdown of guilty and not guilty verdicts, was that only seven counts were upheld for the period prior to December 2012 when the applicant gave evidence that she and her partner had given up gambling at the casino and when there were no longer any records of expenditure on gambling.

Ground 1 – evidence of gambling

1. [17]

   Ground 1 was expressed in the following terms:

2. [18]

   The prosecution tendered the evidence on the basis that it supported an inference that the applicant had a gambling habit which motivated her to commit the early offences. The applicant’s objection was twofold. First, she contended that, without other evidence as to the applicant’s financial circumstances at the relevant time, the fact that she was gambling at a casino did not demonstrate a motive to steal from her employer. Secondly, even if there were some limited probative value in the evidence, it was outweighed by the danger of unfair prejudice to the applicant and should therefore not have been admitted under s 137 of the Evidence Act 1995 (NSW).

3. [19]

   The ruling with respect to the admissibility of the evidence was made prior to the empanelment of the jury. In a judgment delivered on 27 April 2023, the trial judge accepted that evidence of gambling an amount which was, effectively, about half her available salary during the relevant period, was capable of supporting an inference that the allegedly unauthorised payments into her account involved misappropriation.

4. [20]

   The judge also accepted that some members of the public might disapprove of regular gambling to the extent that it would prejudice their ability to fairly consider the prosecution case against the accused. The judge noted, however, that it was not uncommon to seek to obviate a risk of prejudice in child sexual abuse cases by inviting members of the jury panel who have been victims of child sexual abuse to apply to be excused. The judge decided that such an invitation should be extended to persons having strong views about gambling, a course which he in fact took.

5. [21]

   Although counsel for the applicant sought to impress upon this Court that gambling was not an unlawful activity, that consideration is double-edged. Although it is no doubt the case that some members of the public strongly disapprove of regular gambling, the risk that a member of the jury, properly instructed as to the relevance of such evidence would tend to relinquish reason to irrational aversion is quite unlikely.

6. [22]

   The respondent accepted that, although s 137 of the Evidence Act undoubtedly involved an evaluative judgment, admission of evidence was to be assessed on the correctness standard, as explained by Payne JA in R v Passmore. [4] Given the early stage of the proceedings at which the ruling was made, this Court is in as good a position as the trial judge to consider the issue. However, I am not persuaded that the judge erred either in his assessment of relevance or as to the limited potential prejudice should the evidence be admitted.

7. [23]

   If, contrary to that view, a different conclusion were reached, there are two further considerations which militate against upholding the ground. In written submissions for the accused provided on the interlocutory application, emphasis was placed, as it was in this Court, on the importance of there being no evidence of financial exigency. In the written submissions below, counsel stated: [5]

8. [24]

   In fact, evidence was led by the prosecution at the trial as to the applicant’s financial resources, by tendering bank statements for the accounts into which her salary was paid and from which the ATM withdrawals at the casino were made. These statements demonstrated, as counsel for the Director submitted in this Court, that the applicant, while perhaps falling into debit on only irregular occasions, never had a substantial credit balance over an extended period. There was no evidence, nor submission, that the applicant had other resources available to her.

9. [25]

   Counsel for the applicant submitted that the bank account statements were irrelevant because they were not before the trial judge at the time of the interlocutory ruling. While that was so, there was no suggestion that the material was not in the prosecution brief, nor that counsel was caught by surprise when it was tendered. However, the point is not the accuracy of the submissions made on behalf of the applicant to the trial judge, but rather that had the evidence of regular gambling been rejected on the basis proposed on behalf of the applicant, the material could have been retendered with the bank account statements when the latter were tendered in the course of the trial. The practical consequence would then have been that the relevance of the gambling withdrawals would have been enhanced.

10. [26]

    Counsel for the Director further submitted that if the evidence had been wrongly admitted, there was nevertheless no miscarriage of justice. Reliance was placed on the reasoning of the High Court in Hofer v The Queen, [6] a case involving a challenge to convictions based on improper cross-examination of the accused by the prosecutor. The joint reasons of Kiefel CJ, Keane and Gleeson JJ stated, under the heading “A miscarriage of justice?”:

11. [27]

    Counsel for the Director also relied on the further reasons of Gageler J who, while agreeing with the joint reasons that there had been a miscarriage of justice, but no wrong decision on a question of law, had applied the proviso, finding that there was “no substantial miscarriage of justice”. [7] It is not necessary for present purposes to engage with the further reasoning beyond noting the proposition by Gageler J that, “[a]n inconsequential error, including an inconsequential error of law, is not a miscarriage”. [8]

12. [28]

    While counsel for the Director sought to establish that there was no miscarriage, she did so on the basis that of the 70 counts in the indictment which spanned the period of the Star City Casino withdrawals, there were findings of guilt with respect to only five. On that basis, the Director submitted, there was no real chance that the evidence supporting an inference of regular gambling affected the reasoning of the jury.

13. [29]

    While reliance on verdicts of guilty to demonstrate immateriality was understandably rejected in the joint reasons in Hofer, [9] and there were five guilty verdicts in the period of the gambling which may possibly have been affected by the evidence of gambling, the bulk of the counts relating to that period resulted in acquittals. Having regard to the acquittals in the context of the trial and the apparent distinctions drawn by the jury, the admission of the evidence of gambling, assuming it to have been sufficiently potentially prejudicial to warrant rejection, did not give rise to a substantial miscarriage of justice.

14. [30]

    It is appropriate that there be a grant of leave with respect of ground 1, but the ground should be rejected.

Ground 2 – rejection of cross-examination

1. [31]

   Ground 2 read as follows:

2. [32]

   The forensic purpose underlying this ground involved three steps, namely: (i) Mr Hooker had confided in the applicant information of a confidential nature; (ii) the applicant had broken that confidence by gossiping about it at work; and (iii) Mr Hooker had manufactured a false case of fraudulent misappropriation by the applicant in order to extract revenge for her gossiping. The written submissions for the applicant in this Court expressed the propositions as follows:

3. [33]

   This statement of the case was imprecise. To avoid reversing the burden of proof, par 4.1 should have read that it was the prosecution case that the applicant had not received pay increases. As to par 4.3, it was of course achronological. The first sentence presumably referred to counsel’s address to the jury; the second to the applicant’s evidence, and the third to the cross-examination of Mr Hooker. These events occurred in the reverse order. In fact the critical element in the reasoning appeared in the following submission:

4. [34]

   The relevant evidence in the cross-examination of Mr Hooker, spread over several pages, was as follows: [11]

5. [35]

   There was then an objection and a discussion in the absence of the jury. In the course of the discussion, counsel told the judge that he had a copy of an article from the Daily Telegraph in 2016 which showed Mr Hooker at a beach with a young child, and “[t]hat child is described as his son.” [12] Counsel continued: [13]

6. [36]

   The judge noted that Mr Hooker may have been an informant but that he did not lay the charges, but accepted that an informant may maliciously provide a basis for the police to prosecute. After further discussion about motive, the judge said: [14]

7. [37]

   The judge then clarified that the police were contacted in March 2016 and that the Daily Telegraph report was in October 2016. The judge continued: [15]

8. [38]

   There was further discussion about the ruling over several pages. Upon Mr Hooker’s return to the witness box, the judge asked him the date of birth of his daughter’s son, which after a correction, he identified as June 2015. The cross-examination continued: [16]

9. [39]

   Several days later in the course of the trial, an email exchange between the investigating auditor and Mr Hooker was tendered. In the exchange the auditor suggested that a personal fitness and wellbeing invoice for $650 in relation to the applicant, which had been sent to the company, indicated fraud. An application was made to reopen the cross-examination of Mr Hooker to deal with the new evidence. Counsel for the applicant took advantage of that circumstance to reagitate his application to use the Daily Telegraph article to suggest that Mr Hooker was “being untruthful when he says there were no agreements for increases of pay”. [17]

10. [40]

    Counsel then explained his case as follows: [18]

11. [41]

    On 11 May 2023, the judge gave a further ruling, extending over some five pages. As the judge noted, the contention was that in revenge for his belief that the accused was a gossip in the office, Mr Hooker took steps, “in effect, fabricating an allegation of fraud by his former Financial Controller, and, going further than that, in effect, destroying and/or fabricating evidence to implicate her, and falsely reporting the matter to the police in about March 2016”. [19] The judge also expressed doubt as to the existence of any basis for seeking to reopen the ruling. [20] He declined to reopen his previous ruling. [21]

12. [42]

    By the time counsel for the applicant came to address the jury, the proposed motive was expressed in somewhat more guarded, indeed, ambivalent terms. Having called Mr Hooker a “liar” on numerous occasions over almost 20 pages of transcript, counsel stated: [22]

13. [43]

    The relevant passages in the cross-examination have been set out above. It was not actually put to Mr Hooker, as the applicant submitted, that it had been suggested to him in cross-examination that he had been “untruthful by way of revenge”. But supposing it had been put, and assuming that it could have been shown that he had untruthfully identified his grandson as his son to a journalist, some months after the applicant resigned, the evidence went nowhere unless the jury accepted that Mr Hooker knew before he went to police that the applicant had been gossiping about his family affairs at the workplace. He had denied that fact. Even if all those hurdles were surmounted, the basis for wreaking revenge on the applicant would have remained in the realm of speculation.

14. [44]

    The judge’s rejection of the evidence, despite the re-agitation and challenging of that rejection on several occasions, was not shown to be erroneous in any respect. The judge understood that counsel for the applicant had a copy of a newspaper article in which the boy was described as Mr Hooker’s son. The subject-matter of the article was unknown; it was not stated that according to the article Mr Hooker had identified the boy as his son – the journalist may well have made an assumption or the journalist may have misheard Mr Hooker. The various matters which would have had to be explored if this peripheral evidence had been allowed in, are sufficient to demonstrate the correctness of the course of action taken.

15. [45]

    The possibility was also canvassed that the newspaper article might be shown to Mr Hooker and he might be asked if he wished to change his evidence. As a matter of fact, it is not established that there was any relevant evidence to change, but the mere showing of a document with a denial might itself have been unfairly damaging of Mr Hooker’s credit in the eyes of the jury who would not be told anymore about it.

16. [46]

    Despite the asserted importance of the article to the applicant’s case, it does not appear that it was shown to the trial judge; nor was it produced to this Court. Indeed, the real risk for the applicant was that the further the cross-examination was pursued, the greater the likelihood that Mr Hooker would appear to be an honourable man and the applicant, on her own admission, a deceitful gossip.

17. [47]

    After the completion of the hearing, and without leave counsel for the applicant sent a copy of the article to the presiding judge’s associate. That course was inappropriate: the document has not been considered.

18. [48]

    There is no sufficient basis to warrant a grant of leave with respect to ground 2.

Grounds 3 and 4

1. [49]

   Each of grounds 3, 4 and 5 was the subject of brief written submissions, to which the Director responded in writing. Counsel for the applicant did not seek to expand upon the grounds in oral submissions. They may be dealt with briefly.

2. [50]

   Ground 3 was in the following terms:

3. [51]

   The directed verdict was sought in respect of the 174 individual counts (that is, other than the global count 1 and count 65 which had been separately dismissed by way of a directed verdict). The basis of the application was the subject of ground 4, which read:

4. [52]

   Before the trial judge, counsel for the applicant had submitted that, because the prosecutor had particularised certain matters within each charge, it was bound by that particularisation, which had to be proved to the criminal standard. There were apparently two issues which the applicant alleged followed from the form of particularisation.

5. [53]

   The first was described in the following terms: the pleading related to the amount obtained by the applicant in excess of her entitlements, but in fact identified the financial disadvantage to the employer. The distinction arose because the amount paid by the employer went partly to the employee and partly to the Commissioner of Taxation. Indeed, that was how the application for a directed verdict was formulated, namely that tax having been paid before any amount went into the applicant’s bank account, the amount shown on the indictment exceeded the amount of the financial advantage she received by at least the amount of the tax paid.

6. [54]

   Accepting that the particulars identified each unauthorised payment calculated as a gross amount of salary, the applicant had to explain why she did not benefit not only from the payment into her account but also from the payment on account of tax which would otherwise have been due to be paid by her. That course was not taken.

7. [55]

   The second point raised appears to reflect a possibility identified by the jury in a note sent to the judge in the following terms:

8. [56]

   The particular example related to two apparent increases in base salary. The judge directed the jury that if one increase was authorised, but not the other, there was still an overpayment permitting a verdict of guilty. Because the response was restricted to that circumstance, the jury came back later to ask a similar question with respect to an overpayment which comprised an element of base salary and an element of overtime. The judge directed them to the same effect, namely that if only one of two elements had been proved to be unauthorised, the jury would be able to return a verdict of guilty in respect of that count.

9. [57]

   It was not clear which document the applicant relied on as constituting “particulars”. Each count in the indictment included an amount for the financial benefit, but did not explain the basis of calculation. Mr Freeman, Lynton’s Financial Controller at the time of the trial, gave evidence of the basis of the calculations, which were also partly set out in an aide-memoire which became exhibit 188. However, it was not explained how that evidence constituted “particulars” of the charge.

10. [58]

    These matters need not be pursued further. As to the refusal of directed verdicts, as the Director’s written submissions stated, there was no explanation as to how the case fell within the test identified in Doney v The Queen [24] and reaffirmed in the The Queen v A2. [25] There was undoubtedly evidence capable of supporting a verdict of guilty on each of the individual counts, except count 65.

11. [59]

    With respect to ground 4, the Director correctly submitted that it was not necessary for the judge to direct the jury that it must be satisfied as to the precise terms of each particular in order to find a charge proven. It is well-established that particulars are not elements of the offence and that only the latter are required to be proved beyond reasonable doubt. [26] The failure to establish beyond reasonable doubt an inessential fact in a particular, or a fact which emerged from the evidence of a prosecution witness, is not fatal to the prosecution case. There being no explanation as to why a different principle applied in respect of whatever were described as particulars in the present case, neither ground 3 nor ground 4 warrants a grant of leave to appeal.

Ground 5

1. [60]

   Ground 5 read as follows:

2. [61]

   The applicant’s written submissions advised that, “[t]his ground of appeal is in many respects related to the fourth ground”. However, it is conceptually different. The problem with it is that the trial judge gave precise directions to the proposed effect. In other words, the factual assumption underlying the ground is misconceived. [27]

3. [62]

   If the reference in the applicant’s submissions to ground 4 meant that the direction was flawed because it permitted the jury to be unanimous as to one of two elements of the calculation rather than having to be unanimous as to both, then the ground indeed falls away if ground 4 is rejected. On either approach, ground 5 does not warrant a grant of leave to appeal.

Ground 6

1. [63]

   Ground 6 read:

2. [64]

   Although the written submissions asserted that there was imbalance “in a number of respects”, in oral submissions it became clear that there were two limbs to the submission. The first was a statement made by the judge in the course of the summing up to the following effect: [28]

3. [65]

   The thrust of the complaint in relation to this passage was that it may have been understood as an implicit invitation to treat the motive proposed by the defence as “rubbish”.

4. [66]

   There is often a tension between the need for counsel and the judge to engage with the jury in language which they understand, and the dangers which can flow from using colloquial expressions. However, in the passage set out above, the judge was deliberately emphasising the point that a complete rejection of an element of the defence case did not mean that the prosecution gained some positive strength from that rejection. The jury had been told in conventional terms, and more than once, that a reasonable doubt about an element of a charge must lead to acquittal. Accordingly, the jury would have been conscious that, even if not affirmatively satisfied that Mr Hooker had the suggested motive to lie, they may have entertained a doubt as to his truthfulness. The judge was addressing, entirely appropriately, the possibility that the jury might not have been left in any doubt as to, and might have been dismissive of, the proposed motive. It was important that they understood that, even in such a case, they should not use that rejection of the accused’s case to reinforce a belief in the prosecution case.

5. [67]

   If the judge had addressed the issue in terms of the jury being “completely dismissive” of the alleged motive, no complaint could have been made. There is no reason for thinking that the colloquialism would have been misunderstood as an indication that the judge considered the claimed motive to be hopeless.

6. [68]

   This answer to the challenge picks up the second limb of ground 6, which was that when dealing with matters raised by the defence, the trial judge “would not infrequently dismiss them by saying simply ‘its entirely a matter for you’, or words to such effect”.

7. [69]

   The statement in question was put in various ways at different times and was entirely appropriate. Neither the judge’s views on the facts, nor those of counsel, were to be substituted for the jury’s own careful assessment of the evidence. As the respondent noted, at the beginning of the summing up such directions were given in the conventional generic terms, without reference to either party. For example, the judge gave the following direction: [29]

8. [70]

   Counsel for the applicant did not take the Court to specific passages in the summing up to support the second limb of his complaint. In any event, there is no purpose in setting out particular passages here: the typescript of the summing up exceeded 190 pages and must be read as a whole. Considered as a whole, there is no basis for a complaint that the defence case, or the defendant’s evidence, was treated dismissively or that there was otherwise any lack of balance.

9. [71]

   Although ground 6 lacks substance, there should be a grant of leave to appeal, but the ground must be rejected.

Orders

1. [72]

   For the reasons set out above, the Court should make the following orders:

   1. (1)

      With respect to grounds 2, 3, 4 and 5, refuse leave to appeal.

   2. (2)

      With respect to grounds 1 and 6, grant leave, but dismiss the appeal.

2. [73]

   CAMPBELL J: I have had the considerable advantage of reading the judgment of Basten AJA in draft. I agree with the orders proposed by his Honour and with his reasons. I wish to say with regard to ground 6, my consideration of the whole of the trial judge’s summing up in the context of the trial as a whole did not strike me as lacking in balance in any way. His Honour expressed himself somewhat conversationally. Some of his language was expressive but, like Basten AJA, I did not regard that as being in any way dismissive of the applicant’s evidence or her case. His Honour emphasised the onus and standard of proof on a number of occasions and gave more than one Liberato direction. While it is impermissible to reason backwards from the verdicts to the summing up, the pattern of the verdicts demonstrates that the jury gave mature consideration to the whole of the case put forward by each party. There is nothing about the outcome suggestive of any lack of balance in the jury’s approach.

3. [74]

   CAVANAGH J: I agree with orders proposed by Basten AJA and with his Honour’s reasons. I also agree with the additional observations of Campbell J.