Steel, Alex --- "Money for Nothing Cheques for Free? The Meaning of 'Financial Advantage' in Fraud Offences" [2007] MelbULawRw 8; (2007) 31(1) Melbourne University Law Review 201 (2024)

ALEX STEEL^[*]

[This article offers a critique of the current understanding of the phrase‘financial advantage’ in Australian fraud offences.It begins byconsidering the history and use of these offences, and ultimately argues thatthe concept embodied by the phrase isfar more complex and uncertain than recentcase law suggests. It examines the concept in relation to both the Englishpecuniary advantageoffences and the additional phrase ‘any money or anyvaluable thing’ in the Crimes Act 1900 (NSW) s 178BA offence,and contrasts it with offences based on the causing of detriment. It issuggested that discussions of defaultingand penniless debtors in relation tothe offence are misguided and that financial advantage can only occur when theaccused is placedin a better position as a result of the deception, and theadvantage obtained is ‘financial’ innature.]

I INTRODUCTION

This article considers the meaning of the term ‘financialadvantage’ in a number of fraud offences in Australian jurisdictions.Part II provides an overview of the introduction of these offences inEngland^[1] and Australia and theinitial difficulties associated with the intended and actual interpretation ofthe offence. It then suggeststhat the offence, while initially intended to beancillary, is now one of the key fraud offences in Australia, particularly inNewSouth Wales. In Part III, this article examines in detail the scope ofthe phrase, with emphasis on the areas that have caused some difficulty for thecourts.In particular, the applicability of the phrase to circ*mstances ofdefaulting debtors is examined with a critical analysis of thedecision of theVictorian Court of Appeal in R v Vasic(‘Vasic’).^[2]The article suggests that the approach adopted in Vasic is mistaken andthat the approach taken in the earlier cases ofFisher v Bennett^[3]and Coelho v Durbin(‘Coelho’)^[4]is to be preferred. That is, that financial advantage requires evidence that theaccused is in a better position than prior to thedeception,^[5] and that this can bedescribed as an advantage that is primarily financial innature.^[6] Further legislativedefinition may be needed to clarify the meaning of the term.

IIBACKGROUND TO AND USE OF THE OFFENCE

A The History of FraudOffences

While stealing chattels has been a crime at common law since the earliestrecorded times,^[7] the use ofdeception to obtain property or advantage is prohibited under the criminal lawonly as a result of legislative intervention.In earlier times, while the commonlaw recognised crimes of cheating or defrauding the public welfare, whichlargely involved theuse of false weights or tokens, the courts were content toleave victims of private deceptions to their civilremedies.^[8] In 1704, Holt CJ isreported to have said: ‘It is not indictable unless he came with falsetokens; we are not to indict oneman for making a fool ofanother’.^[9]

However, the Industrial Revolution brought increased complexity and mobilityto society, with the result that business became muchmore frequently conductedbetween strangers, which in turn, led to an increase in the need to truststatements that the victim couldnot be expected to verify. In order to protectthe nascent economy, the British Parliament began enacting offences dealing withspecificforms of deception, which over time, were replaced with broader andmore general offences.^[10]

By the consolidations of the late 19^th century, the main fraudoffence was that of ‘obtaining property by falsepretences’.^[11] This remainedthe fraud offence most commonly charged throughout the 20^thcentury^[12] until the introductionof the ‘obtaining pecuniary advantage by deception’ offence ins 16(1) of the Theft Act 1968 (UK) c 60.

B The EnglishOffence

Initially, the Criminal Law Review Committee, on whose report the TheftAct 1968 (UK) c 60 was based, recommended that offences of obtainingproperty and obtaining credit by deception be supplemented by a generalfraudoffence of inducing a person to do or refrain from doing an act with a view togain.^[13]However, this offence was controversial even within the Criminal Law ReviewCommittee^[14] and it was removedduring debate on the Theft Bill 1968 (UK) inParliament.^[15] In its place, anoffence of obtaining pecuniary advantage was proposed by the government, withthree indicative examples of suchadvantage included in the offence. Duringdebate, the Bill was further amended by the government to restrict the offenceto the threeinstances of advantage described. It was considered that, withoutsuch a restriction, the offence would be undesirablyuncertain.^[16]The resulting offencewas:^[17]

16Obtaining a Pecuniary Advantage by Deception.

(1)A person who by any deception dishonestly obtains for himself or anotherany pecuniary advantage shall on conviction on indictmentbe liable toimprisonment for a term not exceeding five years.

(2)The cases in which a pecuniary advantage within the meaning of thissection is to be regarded as obtained for a person are caseswhere —

(a)any debt or charge for which he makes himself liable or is or may becomeliable (including one not legally enforceable) is reducedin whole or in part,evaded or deferred; or

(b)he is allowed to borrow by way of overdraft, or to take out any policyof insurance or annuity contract, or obtains an improvementof the terms onwhich he is allowed to do so; or

(c)he is given the opportunity to earn remuneration or greater remunerationin an office or employment, or to win money by betting.

(3)For purposes of this section ‘deception’ has the samemeaning as in section 15 of thisAct.^[18]

Difficulties with the interpretation of these specific descriptions, whichwere famously labelled ‘a judicialnightmare’,^[19] led to areview of the offence by the Criminal Law ReviewCommittee.^[20] The Committeerecommended that s 16(2)(a) — covering the evasion or deferral ofdebts — be repealed and replaced witha more delineated set of offencesbased on the intention of the defalcatingdebtor.^[21] This was subsequentlyenacted as the Theft Act 1978 (UK)c 31.^[22] By this time,however, the breadth of the new statutory theft offence had been realised byprosecutors and, with the willingnessof courts to accept broad interpretationsof its terms,^[23] the offence oftheft expanded to cover much of the territory that had previously been seen asthe province of fraud.

C The Offence inAustralia

Variants of the Theft Act 1968 (UK) c 60, s 16 offence wereintroduced in Victoria in 1973,^[24]Tasmania in 1975^[25] and NSW in1979.^[26] In 1995, the offence wasused as the basis for the fraud offences in s 17.3 of the Model CriminalCode,^[27]and has now been adopted as part of the Commonwealth CriminalCode^[28] and the AustralianCapital Territory CriminalCode.^[29] SA also introduced anoffence with a similar effect in2002.^[30]

The exact wording and operation of the offence varies from jurisdiction tojurisdiction. For example, in Queensland and Western Australiathere is no needfor the advantage to be pecuniary, and in Queensland there is also no need for adeception. This article focusesupon the approach taken by the courts inVictoria and those jurisdictions which have followed the Victorian model ofobtaining financialadvantage by deception — namely, NSW, Tasmania, theACT and the Commonwealth. However, aspects of the Victorian offence informthevariants in all jurisdictions and, thus, the analysis presented may be of use intheir interpretation as well.

Of course, for each jurisdiction, decisions of the respective supreme courtsamount to the only binding precedents. However, giventhe similarity of thedifferent versions of the offence across the five jurisdictions focused uponhere, this article assumes thatany relevant decision in one jurisdiction wouldbe seen as strong persuasive precedent in the other jurisdictions. Indeed, thisisborne out in the cases.^[31] Whereparticular jurisdictions differ from the majority form of the offence, thisdifference is noted.

The version of the offence that appears in the Model Criminal Code isindicative of the majority form. It provides that:

17.3Obtaining financial advantage by deception

A person who by any deception dishonestly obtains for himself, herself oranother any financial advantage is guilty of anoffence.^[32]

The offence, therefore, contains three elements: (1) the use of a deception;(2) a dishonest obtaining for the defendant or another;and (3) a financialadvantage.^[33] In addition, thedeception must be shown to have caused the obtaining.

D Justifications for theIntroduction of the Offence in Australia

The introduction of the offence in Australia was considered first inVictoria, at a time prior to the publication of the CriminalLaw ReviewCommittee’s ThirteenthReport^[34] and at the height ofjudicial uncertainty over the meaning of s 16(2)(a) of the Theft Act1968 (UK) c 60. In light of these difficulties, the offence introduced inVictoria was expressed in general terms. The Chief Justice’sLaw ReformCommittee SubCommittee on the Law of Theft stated in its 1972 report on thedraft Crimes (Theft) Bill 1972 (Vic):

the attempted definition is complex and obscure and the subcommittee considersthat the concept of dishonestly obtaining a financialadvantage by deception isa sufficient statement of the crime to constitute a satisfactory operativeprovision.^[35]

InNSW, the offence was introduced as part of a package of offences intended todeal with whitecollar crime. While other offenceshad been recommended by areport of the Criminal Law Review Division of the NSW AttorneyGeneral’sDepartment,^[36] this offenceappeared in the amending Bill^[37]without any prior indication that it was needed and with no explanation of itsintended role in the AttorneyGeneral’s secondreadingspeech.^[38] Moreover, although theEnglish Criminal Law Review Committee had by that time recommended amendment tothe Theft Act 1968 (UK) c 60, s 16 offence, no reference tothat amendment, or the subsequent use to which the offence had been put, wasmade.

Thus, it appears that the difficulties experienced in attempting to confinethe offence in England led to the omission of any specificrestrictions in theAustralian variants. It would also appear that, at least in Victoria, theremoval of the restrictions on scopewas justified on the basis that the offencewould be merely ancillary to the main fraud offences, in particular, obtainingpropertyby deception.^[39] Such anintention appears to have long since disappeared in NSW (if it ever existed). Infact, the offence has now replaced thatof false pretences as the overwhelminglypreferred fraud offence for the prosecution to charge in NSW. This is clear fromstatisticalrecords of the number of convictions for fraud offences, asdiscussed below.

E Current Use of theOffence

In NSW, if ranked in terms of the number of convictions (includingattempts)^[40] recorded by theJudicial Commission of NSW, the most important fraud offences under theCrimes Act 1900 (NSW)are:^[41]

The obtaining of financial advantage offence (entitled ‘Obtaining moneyetc by deception’) is thus the central NSW fraudoffence. It appears thatthe offence is used to a similar degree inTasmania.^[42] In SA, the newdeception offences relevantly require proof of a benefit or advantage of aproprietary or financial nature.^[43]Thus, financial benefit is likely to become a core offence.

By contrast, the offence has remained an ancillary one in Victoria, althoughthe degree to which it is used is still significant.Data collated by CourtServices at the Victorian Department of Justice identifies the number ofconvictions (including attempts)for obtaining by deceptionoffences:^[44]

It is likely that the Crimes Act 1900 (NSW) s 178BA offence is sowidely used because it also includes within its terms the obtaining of avaluable thing, and thus isused as both an obtaining of property offence and anobtaining of financial advantage offence. In using it so, charging police maybeexhibiting a preference for the more modern formulation of the deceptionelements in s 178BA of the Crimes Act 1900 (NSW) over the olderfalse pretences/false promise formulation in s 179.

However, despite this caveat, it is clear that the offence of obtainingfinancial advantage is significantly used by prosecutors inall jurisdictions.As the Victorian data shows, even if there is a clear preference for charging anobtaining of property offencewhen available, the ‘ancillary’financial advantage offence is still very heavily used. Indeed, in Victoria, itnow accountsfor a quarter of fraudrelated convictions in the Magistrates’Court, and one half of all higher court convictions. There isa strongpossibility that similar charging practices will develop in the Commonwealth andthe ACT and, indeed, there is no otheroption inSA.^[47]

It is, therefore, appropriate to consider the offence as one of the mainfraud offences in Australia and worthy of closer analysisthan it has receivedin recent times. This article considers the key element of the offence —what amounts to a financial advantage— and suggests that the issue ismore difficult than has been generally recognised by the courts. In particular,it is arguedthat, contrary to the finding in Vasic, defaulting debtorsshould fall outside the scope of the offence.

IIITHE MEANING OF FINANCIAL ADVANTAGE

The use of the term ‘financialadvantage’^[48] as the requiredoutcome of the prohibited conduct marks a decisive break with older fraudoffences.^[49] While those offencesvaried in their scope and degree of specificity, they all shared a ‘familyresemblance’ with thecore offence of false pretences, which in turn canbe seen as an extension or elaboration of the common law offence oflarceny.^[50] The false pretencesoffence, therefore, revolves around the obtaining of property by theaccused.^[51] While larceny restrictslarcenable property to tangible, moveable property, the definition of propertyin statutory false pretencesor obtaining property offences extends theoffences’ scope to include all forms of property — including landand intangibleproperty.^[52]

By contrast, the financial advantage offence appears to be designed tocomplement and go beyond concepts of property. Emphasisingthe break with theolder fraud offences, Crawford J held inR v Howard,^[53] anearly Tasmanian case, that financial advantage was not a ‘thing’ andthus could not be ‘owned’, nor couldan accused be required tointend to permanently deprive another ofit.^[54]

Despite the novelty of the concept and lack of legislative definition, courtshave largely resisted detailed definition of ‘financialadvantage’.It has been held to be a term of clear and plain meaning which is not to begiven any narrow construction.^[55]In the Tasmanian case of Murphy, Murphy induced people to hand over moneyin return for cheap electrical goods which were never delivered. It was heldthat, despitethe breadth of the term ‘financial advantage’ and thefact that it overlapped with a number of other preexisting offences,it wasimpermissible to read the term down so as not to overlap with other offences.The Court held that the term was to be givena broad construction:

We are concerned with the denotation of a term. The word ‘finance’may cover, depending on context, inter alia, paymentof a debt, or ofcompensation; a ransom; stock of money; borrowing of money at interest; thepecuniary resources of a state and,hence, of a company or individual; to engagein financial operations; to provide oneself with capital. [Shorter OxfordEnglish Dictionary] ... The word ‘advantage’, inter alia, hasthe meaning of having the better of another in any respect; the result ofasuperior position; to benefit or profit. [Shorter Oxford EnglishDictionary] ...By refraining from any definition Parliament avoided sophistry ... and left thelaw to evolve case by case by an application of theordinary meaning of thewords used.Cases where a person obtains services, money or property by means of a boguscheque pose no difficulty. The services, money or propertyamount to a financialadvantage...^[56]

Thus, theCourt held that the term ‘financial advantage’ includes theobtaining of cash as well as other forms of intangiblebenefit. It was alsosuggested that an advantage can be conferred even if its duration is onlyfleeting, with Wright J suggestingthat retention of goods, after paymentand prior to delivery, could amount to a financialadvantage.^[57]

There seems to be universal agreement that the offence is designed to coverthe activities prohibited under the older obtaining ofcredit offences. Thus, itis an offence to engage in deception with a dishonest intent to gaincredit fromanother^[58]or to obtain credit cards.^[59] So,too, is the obtaining of goods or services by the passing of cheques that aresubsequently dishonoured — socalled ‘dudcheques’.^[60] The obtaining ofmoney — whether by cheque,^[61]cash^[62] or electronicmeans^[63] — is a clearfinancial advantage.^[64]

The obtaining of services is also considered a clear example of the gainingof a financial advantage.^[65] Insuch cases, it is necessary to establish that the service is one offered for aprice and that, but for the deception, the accusedwould have been required topay.^[66]

However, while there are situations that might seem to fall clearly withinthe centre of an understanding of the term, the lack ofguidance as to itsboundaries continues to engender uncertainty. This article examines some ofthose situations.

AProperty

The obtaining of property is generally considered to fall within the offenceof obtaining a financial advantage bydeception,^[67]but the existence of other propertybased deception offences and the need toestablish a financial advantage leave open the theoreticalpossibility that theoffence may not be completely coextensive with the obtaining of property.

In one sense, the offence of obtaining a financial advantage through adealing with property is broader than the offence of obtainingproperty. As thefinancial advantage offence does not require an intention to permanently depriveanyone of property, borrowing propertymay fall within the offence — forexample, when one hires equipment with dudcheques.^[68]

In another sense, the offence of obtaining a financial advantage may benarrower than the offence of obtaining property. This is becausestatutory formsof the obtaining property offences define property without any requirement thatthe property be of value.^[69] Inessence, property is deemed to have value. This can be contrasted with theapproach to property in the common law offence of larceny.

To establish larceny, the property taken has to be of sufficient value forthe taking to be criminal, the emphasis of the law beingthat larceny protectseconomic interests, not mere sentimental attachments. The exact amount of valuerequired was historically uncertainand, consequently, the history of larceny islittered with arcane arguments over the question of whether paper documents haveanyvalue.^[70] The requirement thatthe property be of some value caused problems for documents evidencing propertyrights or contracts. While valuewas found to exist in the physical paper of acancelled banknote^[71] and acancelled cheque,^[72] the courtsconsidered the physical nature of these documents to be insignificant and thereal value to be in the chose in actionit evidenced. Thus there could not belarceny in the theft of meredocuments.^[73] In the case ofanimals, those that had no economic value — that is, were not domesticatedor edible — were consideredto be of a ‘base nature’ and notlarcenable.^[74]

Thus it would seem that, if an accused is charged under a statutory obtainingof property offence, no evidence as to the value ofthe property is required.However, if an accused is charged instead under the financial advantage offence,evidence of value mightneed to be established, bringing into play some of theissues confronted in the old larcenycases.^[75]

B Money or ValuableThing

Unlike the versions of the offence in other jurisdictions, the NSW offencealso contains the phrase ‘any money or any valuablething’.^[76] It is somewhatsurprising that this expression reemerged in NSW in the ‘modern’offence, as it does not appear in eitherthe Victorian or Tasmanian offences. Asthe NSW offence is based on the Victorian offence, there is an argument thatfinancial advantagewas intended to refer to forms of advantage that were notmoney, property or a valuable thing. Another argument is that there maybe somedistinction to be drawn between a valuable thing andproperty.^[77] However, it isunlikely that such arguments would find favour with thecourts.^[78]

‘Money’ is defined in s 4 to include ‘all coinedmoney, ... and all bank notes or instruments ordinarily so called,if current assuch, and payable to the bearer.’ In interpreting the meaning of money ins 178A of the Crimes Act 1900 (NSW), another fraud offenceusing the term in a similar way, the NSW Court of Criminal Appeal held inR v Hunt:^[79]‘In general speech the sum of money entered in the books of the bankstanding to the credit of a customer is described as money.Mainly, only lawyersand tax accountants speak or think of choses inaction.’^[80] The Court heldthat the term should be interpreted according to the ‘ordinary meaning ofmoney’^[81] and was notconfined to the definition in s 4. This avoids the need to consider thedetailed elaboration of the term in banking law but has the potential to createdoubt as toits breadth. However, in the Tasmanian case of Murphy, theappellant argued that financial advantage did not includemoney.^[82] This argument wasrejected by the Full Court of Criminal Appeal ofTasmania,^[83] and so, it could becontended that ‘financial advantage’ in NSW already includes money,thus avoiding any need to relyon the interpretation of the term‘money’ itself.

The second term in s 178BA — ‘valuable thing’ —is a somewhat vague concept. It is often used by prosecutorswhen charging theobtaining of cheques^[84] or othertangible forms of property, such as a memorandum of transfer ofland.^[85] It appears to have beensourced from older offences that predate the use of a compendious definition ofproperty.^[86] Its exact meaning inits historical context is unclear, as there does not appear to be any case lawthat examined its meaning. Itmay have been a commonsense term based on theclassification of property into things in possession and things in action. If‘thing’was shorthand for the primary category of things inpossession, the phrase may have been intended to mirror the scope of larcenableproperty — that is, to those chattels that were of somevalue.^[87]

While this is merely speculative, the only NSW decision on the meaning of theterm hints at a similar analysis. InR v Love,^[88] theCrown alleged that Love procured the transfer of land (held by his son) into thename of a person who was unaware of the transferso that he could thereby gain‘control over [the]property’^[89] — that is,conceal his interest in it, but at the same time procure such dealings with itas he chose. The Court of CriminalAppeal held:

We cannot accept that such a state of affairs is a ‘thing’ withinthe meaning of s 178BA. In its widest sense the word‘thing’may include all matters which may be the object of thought. Thus, a state ofaffairs may be described as ‘agood thing’. This sense wasconsidered and rejected, for example, in Re Keyes [1884] NSWLawRp 50; (1884) 5 LR (NSW) 359.In its present context the word is used in a narrower sense. The‘thing’ must be capable of being ‘obtained’.Similarcontextual considerations were decisive in Grant v The Queen[1981] HCA 32; (1981) 147 CLR 503 where the High Court held that the words ‘anything’ in s 40 of the Summary Offences Act 1970 did notinclude credits in bank accounts: see also R v Bennitt [1960] NZPoliceLawRp 21; [1961]NZLR 452 but compare Hardy v The Queen (1980) 25 BCLR 362;R v Stewart (1983) 149 DLR (3d) 583 andR v Scallen [1974] 4 WWR 345 at 377. Whether the word‘thing’ in s 178BA is limited to tangible objects or entities,or whether it also includes rights,it does not, in our view, extend to a stateof affairs of the kind referred to by the expression ‘control of the(Dapto) property’in the presentcase.^[90]

There hasbeen no further judicial elaboration of the meaning of the term ‘valuablething’. Its historic use, and thepossibility that it is limited totangible objects or entities, suggests that the term is in many ways an obscurereference to tangibleproperty. However, unlike the obtaining property offence,it would seem to require proof that the thing is in some way valuable.Theconcept of value here, may extend beyond simply financial value and so mayamount to a broader basis upon which to found liabilitythan the obtaining of afinancial advantage. Additionally, once value is established, there is, as forthe obtaining of propertyoffence, no need to establish that the thing in anyway constitutes an advantage to the accused. For example, if an accused obtainsa storedvalue card, such as a rechargeable mobile phone SIM card, but does notknow the password to be able to use the card, thecard could easily be shown tobe a valuable thing but there might be significant difficulty in establishinghow the accused has inany way personally obtained a financial advantage.

C Gambling andUnenforceable Debts

The obtaining of credit in relation to wagers is also an area of somecomplexity because of the role of legislative schemes controllinggambling. Forexample, s 56 of the Unlawful Gambling Act 1998 (NSW) deemsall contracts related to unlawful gaming to have no effect and not to give riseto legal rights. Thus, deceptions whichresult in the acceptance of unlawfulbets for credit may not breach the offence of obtaining a financial advantage bydeception.^[91] Nevertheless,deception in gambling is prohibited under a separate regime of offences in theUnlawful Gambling Act 1998(NSW).^[92]

Similarly, in Tasmania, it was held inR v Rosar^[93]that obtaining credit to place bets with a totalisator agency does notamount to obtaining a financial advantage because credit bettingis notpermitted under the Racing and Gaming Act 1952 (Tas) and, thus,the contract is unenforceable. In that case, Slicer J referred to Englishdecisions on whether unenforceable debtscould amount to a financial advantageand held that there was a fundamental distinction between the English andAustralian offences:^[94]

The Theft Act, s 16(2)(a), provided: ‘any debt or charge forwhich he makes himself liable or is or may become liable (including one notlegally enforceable) is reduced or in whole or in part evaded ordeferred.’In relation to which Megaw LJ said at 1047:

It is to be observed that, by the words of s 16(2)(a), the debt is notnecessarily legally enforceable. It was, in the view of thiscourt, clearly opento the jury to find, having been correctly directed in this respect, that therewas a debt.

The Code, s 252A, contains no equivalent provision. No enforceablefuture debt or contract was created by the conduct of the accused. Thedishonestconduct of the accused did not create an existing or potential enforceablebenefit. Absent evidence from [the totalisatoragent] that, notwithstanding theprovisions of the Racing and Gaming Act 1952, s 57K(3), she wouldhave paid out moneys in the event of a successful wager, there is no basis uponwhich a jury, properlyinstructed, could conclude that the accused received anadvantage, either immediate or potential. An essential ingredient of thecrimehas not been made out.

This decision suggests that no financialadvantage will accrue in any circ*mstance where the basis on which the advantagearises isillegal, unless further evidence is adduced showing that the victim iswilling to act irrespective of the legal situation. Similarconsiderations wouldno doubt apply to circ*mstances where a contract has been entered into as aresult of a false representation.

This, in turn, suggests that it is not correct to assume financial advantagemerely from the apparent existence of a contractual agreementor undertaking ofsome kind.^[95] Rather, furtherevidence of both the legal basis of the arrangement and the intention of theparties is necessary in order to determineif there is any financial advantage.This is particularly the case in relation to the evasion of debts.

DThe Difficult Issue: The Evasion of Debts and the ‘PennilessMan’

The older obtaining credit offences were worded in such a way as to make itclear that they did not extend to the deceptive evasionof the payment of adebt. They were only applicable to the initial obtaining of a debt, not anysubsequent evasion of payment.^[96]Further, one could not in any event be found guilty of obtaining credit by fraudif one attempted to pay a debt by passing a dudcheque. InTilley v Official Receiver inBankruptcy,^[97] the HighCourt held that passing a dud cheque was in fact a conditional payment of thedebt which was later rejected by the payingbank. Consequently, no credit wasasked for or obtained by such anaction.^[98] It was a fraud, but notone that obtained credit.

Perhaps in light of this history, there was disagreement in a series ofEnglish cases as to whether the passing of such cheques underthe Theft Act1968 (UK) c 60, s 16 offence amounted to the obtaining of afinancial advantage because it afforded the accused further time in which tomake the payment.^[99] Thisdisagreement was resolved by the House of Lords in Director of PublicProsecutions v Turner(‘Turner’)^[100]in favour of such representations amounting to a financial advantage. However,the decision was based on the wording of the Englishoffence which defined‘pecuniary advantage’ to include the evasion of an antecedentdebt.^[101] Following thisdecision, the offence was amended to remove the subsection referring to evasionof debts, and later replaced withs 2(1)(b) of the Theft Act1978 (UK) c 31, which made it clear that the passing of dud cheques toevade payment of a debt was not criminal unless it was done withintention topermanently evade payment.

A second issue which arose during argument in Turner was whether thefinancial situation of the debtor could affect his or her criminal liability. Inother words, is there a differencebetween a person who chooses not to pay thedebt because they prefer to use their available funds for other purposes (suchas accruinginterest in a bank account) and a person who avoids payment becausethey have no funds with which to pay and are hoping to avertbankruptcy? Indeed,it had been suggested by the Court of Appeal that the latter might not be ableto obtain any financial advantageatall.^[102]

In Australian jurisdictions, the offence does not contain any definitionalsection stating that an evasion of a debt amounts to afinancial advantage, orany mention of the need for an intention to permanently avoid payment. The issuehas thus had to be resolvedby the courts through elaboration of the meaning ofthe phrase ‘financial advantage’ itself.

1ParliamentaryIntentions

Recently, in the Victorian decision of Vasic, the Court of Appeal drewon the history of the introduction of the offence in Victoria to hold that therewas a legislative intentthat the offence be at least as wide as the TheftAct 1968 (UK) c 60, s 16 offence, and thus, although the evasionof a debt was not included in the statutory wording of the offence, the Courtshould effectively imply all of the English definitions into the scope of theoffence.^[103]

This approach means that any dishonest evasion of a debt by deception inVictoria falls within the offence. Nettle JA held:

Thus as I read the Committee’s report and the explanatory memorandum,‘financial advantage’ was thought to be abroader notion than‘pecuniary advantage’, and so to cover at least all of those thingsembraced in the extended definitionof ‘pecuniary advantage’ ins 16(2) of the Theft Act, and an exhaustive definition of the kindcontained in s 16(2) was eschewed lest it be taken to limit ordinaryconceptions of financialadvantage. If that be so, it can scarcely be doubtedthat s 82 was intended to have an operation as broad as s 16 of theTheft Act, if indeed not broader.At least, in as much as s 82 was enacted in the belief that ‘theEnglish reform [had] proved highly successful in practice’,and withevident approval of the way in which ‘the English courts [had] shown adetermination to interpret the new provisionsaccording to their letter andspirit, and to discourage attempts to introduce into the new law thetechnicalities that disfiguredthe old’ and in the hope that the Englishdecisions would ‘be readily available as precedents and guidance for ourowncourts’, I conclude it was intended that the decisions of the House ofLords in Turner’s case and DPP v Ray should applyas much to s 82 as they do to s 16 of the TheftAct.^[104]

Thedifficulty with this is that the decisions in Turner and Director ofPublicProsecutions v Ray^[105]were handed down after the enactment of the Victorian offences, and thereforecould not have been contemplated by those responsiblefor drafting theoffences.^[106] At the time of thedrafting of the Victorian offences, the English authorities were grappling withthe meaning of the terms ‘evasion’and ‘deferment’, buthad not made findings on the general meaning of the term ‘pecuniaryadvantage’.^[107] The issueof the penniless person had not yet beenventilated.^[108]

Further, it seems that the British Parliament itself did not intend that theoffence should extend to the evasion of a debt by thepassing of a dud cheque.The Criminal Law Revision Committee, when asked to review the wording of theoffence, discussed the debatesover the Theft Bill 1968 (UK) in the BritishParliament and concluded: ‘Thus Parliament appears to have assumed thatsection16(2)(a) would not penalise the debtor who gave a worthless chequeunless the deception resulted in the obtaining of property orthe performance ofservices.’^[109]

However, in Turner, the House of Lords held that s 16(2)(a) ofthe Theft Act 1968 (UK) c 60 did in fact extend to this situation,but not because the evasion of a debt by the passing of a dud cheque wasincludedwithin the term ‘pecuniary advantage’. As Lord Reid putit:

It is clear that [the offence] was intended to widen the scope of the existinglaw, but I cannot deduce from its terms or from anythingelse in the Act anyclear indication of the extent of the change which was intended.As the section creates a criminal offence it must not be loosely construed. Eachword must be given its ordinary or natural meaning.It may be permissible, wherenecessary, to give to some word a secondary meaning of which it is reasonablycapable in ordinary speech.But we must not substitute for any word some otherword or phrase or write in anything which is not there. ...On the view which I take of subs (2) we do not have to consider what ismeant by pecuniary advantage.But subs (2) requires meticulous examination and analysis. I think we mustproceed by examining each important word in it. The firstpart is drafted in anunusual way. Does it mean that in the cases set out in heads (a), (b) and (c) apecuniary advantage is to bedeemed to have been obtained, so that it isirrelevant to consider whether in fact any such advantage was obtained, andequally irrelevantto prove that nothing in the nature of pecuniary advantagewas in fact obtained by the accused? I think that that must be its meaningthough I am at a loss to understand why that was not clearly stated. ‘Isto be regarded as obtained’ must, I think, mean‘is to be deemed tohave been obtained’ even if in fact there wasnone.^[110]

Thus,whether the evasion of a debt was in fact a financial advantage did not need tobe decided by the Court. The evasion of a debtwas only held to fall within theoffence in Turner as a result of the peculiar deeming effect ofs 16(2)(a) of the Theft Act 1968 (UK) c 60. Furthermore, thedecision in Turner in no way suggests that the British Parliamentintended that the evasion of a debt by the passing of a dud cheque should fallwithinthe scope of the offence. In fact, the undesirability of the outcome inTurner can be seen by the response of the British Parliament, which wasto ask the Criminal Law Revision Committee to review the offenceand to followits recommendation to repeal the offence and replace it with a narrower one.

The Theft Act 1978 (UK) c 31 replaced s 16(2)(a) of theTheft Act 1968 (UK) c 60 with the following:

2Evasion of liability by deception

(1)Subject to subsection (2) below, where a person by any deception —

(a)dishonestly secures the remission of the whole or part of any existingliability to make a payment, whether his own liabilityor another’s;or

(b)with intent to make permanent default in whole or in part on anyexisting liability to make a payment, or with intent to letanother do so,dishonestly induces the creditor or any person claiming payment on behalf of thecreditor to wait for payment (whetheror not the due date for payment isdeferred) or to forgo payment; or

(c)dishonestly obtains any exemption from or abatement of liability to makea payment;

he shall be guilty of an offence.

(2)For purposes of this section ‘liability’ means legallyenforceable liability; and subsection (1) shall not applyin relation to aliability that has not been accepted or established to pay compensation for awrongful act or admission.

(3)For purposes of subsection (1)(b) a person induced to take in payment acheque or other security for money by way of conditionalsatisfaction of apreexisting liability is to be treated not as being paid but as being induced towait for payment.

(4)For purposes of subsection (1)(c) ‘obtains’ includesobtaining for another or enabling another to obtain.

The Criminal Law Revision Committee, in recommending reform, commented:‘Where a debtor obtains by deception further time topay a debt, thisshould be an offence only if the debtor intends never to pay thedebt.’^[111]

Committee members Sir RupertCross^[112] and Professor GlanvilleWilliams even dissented from this proposal, with the latter arguing that suchactions by a debtor were stupidbut notcriminal.^[113] He pointed out thatit seemed strange to penalise a preliminary step of engaging in a deception whenthe intended result of not payingthe debt was of itself notcriminal.^[114]

The effect of this discussion is to place into some doubt the assertions asto legislative intent that Nettle JA gleans from the explanatorymemorandum. In any event, one can question whether reliance on inferences fromexplanatory memoranda to Bills is a strong basis onwhich to define the meaningof terms if the meaning is not a commonsense one. Further, courts injurisdictions other than Victoriamay not be as confident that theirjurisdiction’s offence was introduced with the sameintention.^[115]

2The Meaning ofFinancial Advantage

A majority of the Court in Vasic also held that, regardless oflegislative intent, the evasion of a debt falls within the general meaning offinancial advantage, relyingon previous Victorian decisions and referring toacademic commentary.^[116] It issuggested that such an approach is more sustainable than focusing uponlegislative intent. Indeed, if it appears that an evasionof a debt fallsoutside the ordinary meaning of financial advantage, a pious hope on the part ofthe legislature that they were reenactingthe English offence would beinsufficient to imply thesubsections.^[117]

(a) Academic Discussion

The debate in Australia over whether evasion amounts to a financial advantagewas begun by Professor David Lanham and Ian LeaderElliott.Lanham argued thatthe idea that a penniless debtor obtained a financial advantage by avoidingbeing pursued by the creditor wouldforce the courts to determine whether therewas in fact any likelihood that the creditor would bring the matter to court toenforcethe debt, or at least whether the accused believed that this was thecase.^[118] The reason he statedthe issue in this way was because, not only must an advantage be obtained, butit must also be a financial one.Thus, the question of whether any advantageaccruing from the evasion was financial could only be determined on the basis ofthelikely financial implications of the evasion. To limit this form of enquiry,Lanham turned to the issue of whether the evasion was‘unilateral’or ‘bilateral’ — an issue that was discussed inTurner.^[119] Bilateralevasions occur when the debtor induces the creditor to defer or forgive thedebt. Unilateral evasions occur when this doesnot happen, such as when a dudcheque is passed. Lanham argues that the offence should only cover bilateralevasions, and not extendto unilateral ones, because it is only under the formerthat the debtor actually gains a financial advantage visavis thecreditor.^[120]

LeaderElliott argued that the distinction between unilateral and bilateralevasions is important insofar as determiningadvantage.^[121] He suggested thatif the evasion is bilateral, this is in itself sufficient proof of a financialadvantage to the debtor.^[122] Therights forgone by the creditor amount to the advantage gained by the debtor.However, in unilateral evasions, it is necessaryto provide further evidencethat the evasion caused a financial advantage toaccrue.^[123]

(b) Case Law

In the Victorian case ofMatthews v Fountain,^[124]the accused gave a cheque he knew would be dishonoured to an employee as aputative payment of wages. When it was dishonoured, heinduced the employee tocontinue working for another month by admitting to financial difficulties andpromising to make good thepayment (which he never did). On appeal, Gray Jheld that financial advantage was obtained by inducing the employee to continueworking,but provided obiter dicta as to the broader issues:

In my opinion, however ‘penniless’ a person may be, he derives afinancial advantage by evading an antecedent debt, forhowever short a period.In one sense it can be said that he obtains ‘credit’ or time to pay.The proffering of a valuelesscheque is equivalent to proffering counterfeitbank notes. He fobs off the creditor and gains time to pay. The fact that hemay,in a given case, be unable to pay is, in my opinion, irrelevant. He isrelieved for the time being of being harried by the creditorby legalproceedings or otherwise. If the observations of Widgery, LJ are valid, theywould apply equally to the case of a man who,although having the means to pay,has resolved not to do so. It could be said that such a person has not evadedthe debt or obtainedany financial advantage by his deception. In thisconnection, one may ask rhetorically — ‘Why is the valueless chequeproffered?’ It is clearly tended to confer some advantage upon the personpractising the deception. Equally clearly, in myopinion, it is a financialadvantage.The matter can be looked at another way. By proffering a valueless cheque, theprofferor is falsely representing that it is a validcheque. If therepresentation had been true, the profferor would lose the amount of the cheque,upon its presentation. In the caseof the false representation he loses nothingupon the presentation of the cheque. He thus obtains a financial advantage byreasonof thedeception.^[125]

Essentially,Gray J was suggesting three bases on which financial advantage could exist.It could arise by: (1) the gaining of anyextension of time in which to pay; (2)the avoidance of being harried by the creditor; or (3) the avoidance of thefinancial detrimentinvolved in actually paying the debt.

By contrast, in the ACT case ofFisher v Bennett,^[126]no advantage was found to have arisen in the gaining of an extension of timein which to pay. Having borrowed money from Langridge, Fisher failed torepay it by the agreed date. After repeated demands from Langridge, Fisherhanded over a cheque for the amount, which was dishonoured. The trial magistrateheld that the circ*mstances in which the chequewas passed amounted todeception, in that Fisher acted ‘recklessly, with indifference as towhether the cheque would or wouldnot be met uponpresentation’.^[127] Onappeal Miles CJ held:

I do not think that it is necessary to resort to dictionary definitions of theword ‘financial’ or the word ‘advantage’.I think thatit is inescapable that an advantage involves a particular situation which ismore beneficial to the person concernedthan another relevant situation withwhich it is compared. A financial advantage involves a situation which from thefinancial aspectis more beneficial than another situation. When one speaks ofobtaining a financial advantage by deception, there is imported inmy view thenotion of improving a financial situation by means of that deception. I amunable to see on the facts of the presentappeal how it can be said that theappellant’s financial situation was improved by his holding out to MrLangridge by meansof the valueless cheque, that there were sufficient funds inthe account to discharge his debt to Mr Langridge. M S Weinberg andC R Williamsin The Australian Law of Theft (1977) observe at p 145 that forbearanceto sue on the part of the cheated creditor, even if only temporary, is itself afinancialadvantage. There was no forbearance in the present case. There was noreducing or forgiving the debt. Interest continued to accrue.It was submitted on behalf of the prosecution that the appellant, by passing thevalueless cheque, obtained the continuing benefitof the money that Mr Langridgehad previously lent him. This may be correct but I am unable to see how theretention of the continuingbenefit on the facts of the case constitutes afinancial advantage in any proper sense of thatterm.^[128]

Here,Miles CJ was conceptualising financial advantage as an improvement inone’s financial situation, rather than its meremaintenance, asGray J had suggested.

Recently, the Victorian Court of Appeal inVasic,^[129] afterconsidering these two approaches and the arguments of Lanham, upheld theapproach in Matthews v Fountain. However, in so doing, theCourt appears to have misconceived the issues at stake by conflating the issueof the penniless personwith the question of whether financial advantage isobtained. As LeaderElliott pointed out, the issues areseparate.^[130] Whether a pennilessperson can obtain a financial advantage by delaying payment is one question.Whether delaying payment amountsto a financial advantage is another. Ifdelaying a debt is not of itself a financial advantage, the issue of whether aperson ispenniless is of no importance.

Having adopted the approach in Matthews v Fountain,Nettle JA continued:

It may also be observed in passing that the suggested ‘pennilessman’ exception to obtaining financial advantage by deceptionis as flawedas a matter of economic theory as it is intractable in practice. Evidently, theidea of the exception depends upon thepremise that there is no advantage to adebtor in deferring payment of a debt unless the debtor has the money or themeans of obtainingthe money with which to pay the debt. According to thatconception of things, if a debtor has the money or the means of obtainingit,the delay affords him or her a financial advantage equal to the time value ofthe debt for the period of the delay; in otherwords, the return which the moneywould generate in that period or the cost of borrowing the money for thatperiod. Conversely, ifthe debtor has no money and no means of obtaining it, thedelay affords him nothing; for without money he has no means of obtainingareturn on money and if he cannot borrow money he cannot be said to have avoidedthe costs of borrowing it. But as a matter of economictheory a debtor canalways borrow money. In theory it is all just a matter of price, and so everyonecan borrow — at a price— no matter what the level of their creditrisk. As the economist would have it, the price elasticity of credit may behyperbolicallysensitive to borrower security, but the gradient of that functionnever reaches infinity.And so it is too in reality. For in reality, in the society in which we live,there are no penniless men. Widespread and deep thoughpoverty may be in somesections of our society, all men in it have some money or at least the abilityto obtain some money, by workor by the realisation of assets or by borrowing,even at exorbitant rates, or perhaps even in the form of social securityentitlements.To that extent, all men obtain a financial advantage by deferringthe payment of a debt; no matter how poor they may be. They arerelieved of aclaim upon such money or ability to generate it as they may have, for the periodof the deferral.^[131]

There is a breathtaking conclusiveness to the pronouncements onpoverty and finance in this passage that many may find hard to matchwith thereality of lived experience. However, putting that to one side, the acceptancethat there are no completely penniless peopledoes not address the reasoning inFisher v Bennett.

(c) Assessing the Decisions

Fisher was not penniless. As Lanham noted, the question of financialadvantage in a situation of unilateral evasion applies with equalforce to bothpenniless and obduratedebtors.^[132] In both situations,the liability of the debtor is unchanged and no financial advantage accruesmerely through nonpayment. MilesCJ in Fisher v Bennettregarded this argument as having force and applied it to Fisher, finding thatthere was no evidence to establish beyond reasonabledoubt that a financialadvantage had accrued — that is, there was no evidence to establish thatFisher’s position hadimproved, despite his lack ofpenury.^[133] In other words, thelack of advantage was not dependent on Fisher’s financial status.

In Matthews v Fountain, Gray J argued that the gainingof time in which to make payment and relief from being harried by creditorsamounted to a financialadvantage.^[134] However, neitherof these propositions is selfevident. In relation to the gaining of time,Miles CJ noted in Fisher v Bennett that interest hadcontinued to accrue on the outstandingloan.^[135] In such circ*mstances,the delay in payment would, by contrast, appear to worsen the debtor’sfinancial position. In normalcirc*mstances, the interest rate on a loan isgreater than that which can be obtained by investing the amount owed.Consequently,unless the credit was extended without any interest component, orwith one less than the market rate, no financial advantage wouldaccrue. Eithersituation would require evidence as to the terms of the loan or credit and anevaluation of the relative financialimplications. One could not simply assumeany advantage.

In relation to the relief from harassment by creditors, any such relief mightwell be a significant emotional advantage to the debtor,but as Lanham pointedout, it would not remove the financialliability^[136] and, in fact, wouldbe likely to increase the resolve of the creditor to commence court action torecover the money. In financialterms, such an outcome would increase thefinancial disadvantage by adding a liability for courtcosts.^[137]

What is really at stake in these arguments is highlighted byGray J’s third argument in Matthews v Fountain— that is, whether an avoidance of detriment on the part of the debtor canamount to an advantage.^[138] Incommon parlance, an advantage is where one is better off than before, not whereone is in the same position or worse. In the Theft Act 1968 (UK)c 60, s 16 version of the offence, the evasion of a debt, irrespectiveof advantage, fell within the meaning of ‘pecuniaryadvantage’because the legislation specifically defined the term to includeevasion.^[139] ‘Pecuniaryadvantage’ was therefore a term of art. But, in light of the Australianlegislative approach of not definingfinancial advantage and judicialpronouncements that the term is one of ‘clear and plainmeaning’,^[140] there arestrong arguments against any equation of avoidance of detriment with advantageto the accused. The meaning of financialadvantage should be kept within clearlyunderstood boundaries, not stretched to fit circ*mstances that might appear tobe criminalbut that do not easily fall within the ambit of financial advantage,as that term is commonly understood.

Such distinctions between commonsense meanings of financial advantage and useof equivalent terms of art can be seen in the Model Criminal Codeapproach to the area. While the offence discussed in thisarticle^[141] is expressed as againing of a financial advantage, the Model Criminal Code includes otheroffences^[142] which are simplyexpressed in terms of causing a ‘gain’, with ‘gain’ and‘loss’ specificallydefined in s 14.3(1):

‘gain’ or ‘loss’ means gain or lossin money or other property, whether temporary or permanent, and:

(a) ‘gain’ includes keeping what one has; and

(b) ‘loss’ includes not getting what one mightget.^[143]

It is thus arguable that the explicit definition of ‘gain’ as‘includ[ing] keeping what one has’ is a resultof a legislativeunderstanding that such a situation would not normally be considered a gain oradvantage.

(d) Advantage or Detriment?

In large part, the difficulty arises because the corollary offence of causinga detriment by deception has not been enacted in Victoria,Tasmania or NSW. Bycontrast, in SA, the offence contained in s 139 of the Criminal LawConsolidation Act 1935 (SA) is worded as follows:

139Deception

A person who deceives another and, by doing so —

(a)dishonestly benefits^[144]him/herself or a third person; or

(b)dishonestly causes adetriment^[145] to the personsubjected to the deception or a third person,

is guilty of an offence.

It is suggested that under this offence, the issue in Vasic need neverarise because the creditor clearly suffers detriment. This detriment is notbased on the fact that they do not receiverepayment of the money owed, but thatthey are deceived into ceasing to seek to have the moneyrepaid.^[146]It is only when there is no offence of causing detriment that courts strain tofind an advantage in a situation of detriment.

Logically, there are three possible outcomes of the accused’s act:advantage, continuance of the status quo and detriment. Consequently,it is alsologically possible that, as a result of an action, party A may maintain theirstatus quo, but party B may be either advantagedor disadvantaged. It maytherefore be a logical fallacy to conclude that party A gains an advantage byestablishing that party Bhas suffered a detriment. Whether it is a logicalfallacy is determined by whether advantage and/or detriment are judged byreferenceto the broader environment or solely by reference to the otherparty.

In Murphy, the Tasmanian Court of Appeal endorsed definitions ofadvantage from the Shorter Oxford English Dictionary, namely:‘having the better of another in any respect; the result of a superiorposition; to benefit orprofit.’^[147]

The first of these definitions could be seen to situate advantage solely interms of a relation to the other party and permit advantageto be determinedfrom only one perspective. It would therefore be possible to argue that asbetween party A and party B, if A tricksB into giving A $100, no furtherevidence is required to establish that A is in a position of financialadvantage. The difficultyis that this requires an assumption of a zerosum gainand the exclusion of all other factors. If, in fact, B owes A $500, paymentof$100 still represents a $400 detriment toA.^[148] Further, if the money thatB hands over is not B’s money, but C’s, then B may not have evensuffered any real detrimentand the only party whose position is substantiallyaffected, C, is outside of the frame of reference. Thus, financial advantage canonly be reasonably determined by further evidence of the nature of therelationship between A, B and C, the circ*mstances of theloan and itsrepayment, and any other relevant issues.

It is, therefore, suggested that it is fallacious to assume that anydetriment automatically amounts to a reciprocal advantage: advantageordetriment must be determined by taking into account the wider environment,rather than just the instant situation of the parties.

(e) Fair Labelling

Further, failing to take into account the broader context in determiningadvantage may offend against a number of principles whichare generally seen asunderlying the form that criminal law should take. Use of a term that does notaccord with community understandingsof its meaning offends against theprinciple of maximum certainty or fair warning, in the sense that individualswill be misled asto the scope of the offence. Moreover, if the offence is givena very broad meaning it may become overly vague and thus lead to problemsofretroactivity (that is, conduct will only be seen as criminal after theevent).^[149] Ashworthcomments:

Why should such emphasis be placed on certainty, predictability, and ‘fairwarning’? As with the principle of nonretroactivity,a person’sability to know of the existence and extent of a rule is fundamental: respectfor the citizen as a rational, autonomousindividual and as a person with socialand political duties requires fair warning of the criminal law’sprovisions and no unduedifficulty in ascertaining them. The criminal law willalso achieve this respect more fully if its provisions keep close to moraldistinctions that are both theoretically defensible and widely felt: thissuggests a connection between fair warning and fairlabelling.^[150]

Fairlabelling has been described by Clarkson in the following terms:

Criminal offences should accurately describe the prohibited conduct as far aspossible. ... Offences should be structured, labelledand punished to reflectthe extent of wrongdoing and/or harm involved. Criminal offences are categorisedfor symbolic reasons. Itis to communicate the differing degrees of rejection orunacceptability of different types of conduct. Such symbolic messages arenotconveyed by the creation of broad morally uninformative labels...^[151]

It issuggested that the labelling of the offence as one of financial advantage placesthe emphasis on the changed position of theaccused, not the maintenance of anexisting position or the effect on the victim. It is therefore inappropriate toattempt to insertsituations of detriment into the offence. The refusal of thelegislature to define the term ‘financial advantage’, togetherwiththe reluctance of the courts to attempt to do so at a general level, means thatpersons attempting to avoid conduct prohibitedunder the offence have no basisfor interpretation other than the community’s understanding of that term.It is therefore appropriatefor the courts to approach interpretation cautiouslyand not to seek to include within the scope of the offence situations that gobeyond this understanding.

3The Need to Prove Allthe Elements of Offences and the Existence of Alternative SummaryOffences

Further, the alternative approach of Miles CJ demonstrates anotherimportant principle of criminal law — that, absent legislativeintervention, the burden of proof is on the prosecution to prove all theelements of the offence.^[152] Allthat the prosecution alleged in Fisher v Bennett was that thecheque had been dishonoured. On that basis alone, Miles CJ was unwilling toassume that any financial advantage had accrued.

By contrast, inVasic,^[153] the VictorianCourt of Appeal upheld the approach of Gray J inMatthews v Fountain that the proffering of a valueless cheque,of itself, amounted to a financialadvantage.^[154] To do so has theeffect of judicially creating a special class of deceptions within the generaloffence that will (effectively) bedeemed to be a financial advantage withoutthe need for the prosecution to adduce any evidence of such advantage.

There seems to be no clear basis for significantly increasing the liabilityof those who pass cheques rather than engage in otherforms of deception. Thedeeming of any form of activity as automatically obtaining a financial advantageis something that shouldbe done explicitly by legislatures, not by courts.

This is particularly relevant given the existence of summary offencesprohibiting the passing of dud cheques. For example, the NSWoffence is asfollows:

178BValueless cheques

Whosoever obtains any chattel, money or valuable security by passing anycheque which is not paid on presentation shall, unlesshe or she proves:

(a)that he or she had reasonable grounds for believing that that chequewould be paid in full on presentation, and

(b)that he or she had no intent to defraud,

be liable to imprisonment for one year, notwithstanding that there may havebeen some funds to the credit of the account on whichthe cheque was drawn atthe time it was passed.^[155]

Similar offences exist inVictoria^[156] andSA.^[157] These offences providefor automatic liability for any passing of a cheque that is not paid onpresentation, and for the defencethat there was no fraudulent intention ornegligence in thepresentation.^[158] It is suggestedthat summary offences of this nature adequately deal with situations where acheque has been passed and no advantagegained.^[159]To invoke the more serious offence of obtaining of financial advantage, theprosecution should be required to prove some actual financialadvantage.

4CausationIssues

But even accepting the assumption in Vasic that deferring payment doesnot place a debtor in a worse financial position, it is necessary to show how itis that the deceptionpractised leaves the debtor better off financially thanbefore the deception. It may be true that everyone gains a financial advantageby delaying payment. The financial quantum or nature of the advantage gained,however, appears to be exactly the same whether onerefuses pointblank to pay,or engages in deception to do so. In order for the passing of a dud cheque orany other form of deceptionto amount to a financial advantage, it must be shownthat the financial situation has changed as a result of that deception. Theoffence requires that the financial advantage be obtained by means of thedeception, not as a default outcome due to a lack of changein the situation. Inother words, even if the evasion of a debt amounts to a financial advantage, theissue of causation remainsand it is difficult to see how the deceptive evasionof that payment, rather than the mere fact of nonpayment, is the operatingcause^[160] of theadvantage. This point was also made by Lanham in his most recent coauthoredtextbook.^[161]

The situation can be compared with that of Ho v TheQueen.^[162] In that case, thedefendant employees were employed to instruct a broker to buy and sell futurescontracts on the Sydney FuturesExchange on behalf of clients. Instead, theyengaged in bucketing — that is, they took the opposite side of aclient’sorder on either their own or their employer’s account.Payment of profit was by way of cheque drawn on the employer and issuedby oneof the principals of the business. Szeto, the second appellant, also had aprivate arrangement with his clients to receivea percentage of anyprofits.^[163] On one alternativeof the prosecution’s case, the allegation was that the clients weredeceived by the accused as to the natureof the money that was paid out to them.The NSW Court of Criminal Appeal examined the requirement that the obtaining becausallylinked to the deception and held that:

What ... must be established ... is a causal connection between the deceptionused and the obtaining of the money: Kovacs at 416; Charles [1977]AC 177 at 192; Clarkson [1987] VicRp 80; [1987] VR 962 at 980; [1987] VicRp 80; 25 A Crim R 277 at296–297. The deception must have been the means whereby the money wasobtained, or the effective cause of the money havingbeen obtained: Royle (1971) 56 Cr App R 131 at 141–142. In Stanhope (unreported,Court of Criminal Appeal, NSW, 10 September 1987), this Court said inrelation to s 178BA that it is an essential ingredient of the offencecreated by that section that the cause ofthe payment of the money (or thehanding over of the valuable thing or the giving of the financial advantage) wasthe deception usedby the accused. ...Szeto had obtained the money for himself from the member (as his share of theprofits paid out) by representing to that member thatthe payment to the memberfrom the association, which he had obtained for him, represented thatmember’s profits made fromtrading completely and for a profit on theSydney Futures Exchange. ...But ... this deception has not been shown to be the effective cause of thepayment. The money was given to the appellant Szeto bythe particular memberpursuant to the private arrangement which he had made with that member to sharethe amount paid out by theassociation to that member as his profit. The moneyhad in fact been paid out by the association to that member as his profit.Whetherthe money did or did not in fact represent his profit from trading onthe Exchange does not alter the character in which it had beenpaid out to himby the association. Nor did the deception by Szeto upon the member as to thetrue character of the money paid outto him by the association alter thecharacter in which the money had been paid out by the association. It was thatcharacter in whichthe money had been paid out by the association whichtriggered off the private sharing agreement. Again, there was no nexus betweenthe deception by Szeto upon the member and obtaining that money from the memberpursuant to thatarrangement.^[164]

Similarly,on the facts of Vasic, although the creditor was deceived into believingpayment would be effected by the cheque, the assumed financial advantage basedon gaining time to pay accrued to Vasic as a result of the lack of payment, notas a result of the deception. The only causal effectof the deception — asdistinct from the failure to pay — is to relieve the debtor from beingharried by the creditor.However, it is argued that this is not a financialadvantage.^[165]

5TheRequirement That the Advantage Be Financial

Not only must there be proof of an advantage, but that advantage must also be‘financial’. This was emphasised in theunreported case ofCoelho,^[166] in which theNSW Supreme Court held that the requirement in s 178BA of the CrimesAct 1900 (NSW) that the advantage be financial had a limiting effecton the scope of the concept. In that case, compliance plates from twounregistered cars had been swapped and one of the cars had been presented forregistration, with the swapped plates creating thedeceptive impression that thecar presented was in fact the other car. The Court was asked to determinewhether such a deceptioncould amount to a financial advantage.BadgeryParker J held:

Other judges have declined to attempt to define the concept of ‘financialadvantage’ (see for example Matthews v Fountain ...wherein the judge was bold enough to describe the concept as a very simple one).I am not altogether sure that I agree with that,nevertheless it does seem to meto be the essence of the concept of financial advantage that the person allegedto have obtainedsuch has obtained a benefit which can be valued in terms ofmoney and a benefit which can be seen to be financial as distinct frombenefitsof another kind.I have no doubt that to obtain the registration of a motor vehicle is anadvantage in a practical sense to the person by whom thatstep is achieved, butit does not appear to me to be an apt use of English to describe the benefit asa financial benefit, except(perhaps) in circ*mstances where the evidence showedan intention on the part of the person involved to utilize the vehicle thusregistered in some way which could confer upon him benefits which could bedescribed as financial benefits.I do not say, for example, what I think was ventilated in argument before themagistrate, that the offence would necessarily havebeen proved had it beenshown that the plaintiff, having secured registration of the vehicle was in aposition to sell it and achievea profit which exceeded the cost ofregistration. It may be that proof of some such prospect and intention mightmake out the offence,but I do not so hold. I am content to rest my decision ona finding that the obtaining of registration of the vehicle is not theobtainingof a financialadvantage.^[167]

Althoughit would not seem controversial, the reasoning in Coelho has not beenassessed by an appellate court, perhaps in part because the decision has notbeen widely reported and has not been drawnto the attention of courts in latercases considering the scope of financial advantage. It is suggested thatBadgeryParker J’stwo requirements — that the benefit becapable of valuation in monetary terms, and that it be financial as distinctfrom benefitsof other kinds — are important guides to the interpretationof the concept. They also highlight two areas of uncertainty: (1)how remotefrom the deception the monetary benefit canbe;^[168] and (2) whether it ispossible to value a benefit in terms of money but yet characterise it as notbeing financial.^[169]

(a) The Need to BeAble to Quantify the Advantage in Terms of Money

The first limb of the test is that any advantage must be able to bequantified in terms of money. Practically, this is necessary ata preliminarystage in any event because the value of the advantage affects the decision toproceed summarily or by indictment.

In Victoria, s 53 of the Magistrates’ Court Act 1989(Vic) permits summary prosecution of offences where the value of the advantageis less than $25 000 and where it is appropriate forit to be dealt withsummarily.^[170] Consequently,summary prosecution of the offence requires both a desire on the part of theprosecution to proceed summarily and themagistrate’s approval. However,if the advantage involved is valued at over $25 000 the matter must be proceededwith on indictment.Tasmania has a similar approach to that of Victoria. If theoffence is charged in relation to property valued at under $20000,^[171] the offence may beproceeded with summarily if the defendant does notobject.^[172] If the value of theproperty is less than $5000, the offence is dealt with summarily unless themagistrate decides otherwise.^[173]Consequently, in both jurisdictions, if the financial advantage is valued atover a certain amount the offence must be proceeded with onindictment.

In NSW, the reverse is true. Section 260 of the Criminal Procedure Act1986 (NSW) provides that, by default, all proceedings are assumed to besummary, no matter what the value of the advantage might be, unlessthere is anelection by the prosecution (or the defendant, if the value is over $5000) toproceed on indictment. If the advantageis valued at $5000 or greater, themaximum penalty is two years’ imprisonment or a fine of $11000.^[174] Where the value of theproperty is less than $5000, the maximum penalty is 12 months’imprisonment and/or a fine of $5500,unless the property concerned is valued atless than $2000, in which case the maximum fine is$2200.^[175] Despite the right toproceed on indictment, this discretion is rarely exercised by the police otherthan for very serious frauds.Importantly, defendants may be tried summarily forany value of financial advantage. This leaves discretion with the parties andobviates the need for a precise valuation.

The difficulties associated with the need to establish the monetary value ofthe advantage in Victoria and Tasmania are evident inOtte v Magistrates’ Court ofVictoria,^[176] a caseinvolving a charge of attempting to obtain a financial advantage by deception.Otte had attempted to secure a deposit on ahouse by passing dud cheques. Eachcheque was for an amount of $26500.^[177] The prosecution arguedthat the financial advantage he attempted to obtain was the avoidance of thepayment of the full $26 500.Otte’s defence argued that the only valuethat he had attempted to obtain was the avoidance of interest for late paymentofthe deposit money. The magistrate would have heard the case summarily, but,because the face value of the cheques was over $25 000,his Honour feltconstrained to commit Otte to an indictable trial. This approach was upheld byBalmford J in the Supreme Court ofVictoria, who held that it was‘necessary to assess, as a matter of fact, the value of the financialadvantage which the plaintiffis alleged to have attempted toobtain.’^[178] His Honourheld on the basis of the handup brief that Otte had attempted to obtain creditfor the full value and, therefore, thatthe offence should be proceeded with onindictment.^[179]

A similar result is likely in Tasmania, but in NSW, the magistrate would havebeen able to proceed summarily irrespective of the valueof the financialadvantage alleged. Such an approach might usefully be adopted in otherjurisdictions as a way of dealing with thevery real issue ofovercriminalisation of matters that might be more appropriately dealt withthrough contractualchannels.^[180]

But the need to be able to quantify the advantage in monetary terms alsoraises an important issue of principle in construing theoffence — thatis, the principle of fair warning. As outlinedabove,^[181] the lack of definitionof the term implies that its meaning must not depart significantly from itsordinary meaning into a term ofart. It is suggested that the reasoning inVasic in relation to the penniless person is a classic example of such adeparture. The argument is highly reductionist and uses the factthat, intheory, everything can be bought and sold to prove that, in practice, there areno literally penniless people. The argument in Vasic ignores manyhighly significant contributors to poverty, such as the practical barriers ofgeography, age, gender, education andthe laws regulating the provision ofcredit.

Another concern about the reasoning in Vasic is that it suggests acorollary argument — that it is possible to value everything in monetaryterms, because in economic theoryeverything has a price and can be bought andsold. This raises issues of both remoteness and legal policy. As Lanham notedrecently,such reasoning may lead to results that seem ‘too tenuous toamount to a real financialadvantage’.^[182]

For example, a man who by deception induces a woman to have sex with him(presumably) gains an advantage of somesort.^[183] But it would clearly beagainst public policy for a prosecutor to engage in an exercise of attempting toascertain the going ratefor a prostitute in some way similar to the victim andthereby quantify the advantage gained in monetary terms. If a disgruntledemployee by deception obtains confidential information, that information may beof use to a competitor and thus the competitor mightbe either willing to payfor it, or be able to quantify the financial advantage that knowledge of theinformation might lead to.But absent the actual sale of the information, theremay be significant issues of remoteness in establishing the point at which anyfinancial advantage accrues.

In fact, Gray J’s argument that there is a financial advantage infobbing off a creditor or in buying time is also an economicargument. Itimplies that one can apply opportunity cost analyses to the idea of financialadvantage or, more simply, that ‘timeis money’. Any deceptive actthat delays the victim in doing an action could be reduced to an opportunitycost equation.

What this shows is that the demonstration of the ability to reduce anadvantage to monetary terms provides a necessary, but not sufficientbasis forliability. In fact, if one adopts economic theory, as Nettle JA does inVasic, then any advantage is capable of reduction to monetary terms. Whatis needed is a further test — one that limits the theoreticalcalculationsto a practical understanding of financial advantage which accords with communityperceptions. Any such limit would haveto be found in what BadgeryParker Jwas describing when his Honour suggested that a second limb was necessary— that the advantagebe of a financial kind.

(b) NonFinancialAdvantages

The second limb of BadgeryParker J’s test is to distinguishbetween financial advantages, and advantages of other kinds. Onthe facts inCoelho, it would have been possible to determine the market price for thevehicle with no registration, and with a full year’s registration,and tohold that by registering the vehicle the increase in its value amounted to thefinancial advantage gained. However, in decliningto sanction that analysis,BadgeryParker J implied that a distinction could be drawn between thefinancial advantage of selling acar and the advantage gained from registrationof the car. The advantage of registration was presumably that it allowed the cartobe driven on the state’s roads. This would cause a number of advantagesto accrue, such as those of available transportationand personal independence.But it could not be primarily described as a financialadvantage.^[184]

It would seem, then, that while almost every activity can at some level bereduced to a financial advantage, the approach taken byBadgeryParker Jwould require that the advantage be primarily or significantly one that isfinancial in nature.

The difficulty with such a test is that it fails to bring any further clarityto the issue.^[185] At the end ofthe day, it may not be possible to go beyond the magistrate or the jury havingto determine for themselves whetherthe advantage acquired is one that can beclassed as being of a substantially financial nature.

A further issue in so characterising the advantage is whether the intentionsof the accused are to be taken into account. For example,the deceptiveobtaining of a valuable work of art from a victim might be motivated by greed orother financial aims, or it mightbe motivated by vindictiveness (as in amarriage breakup). Whether intent is an appropriate factor to consider dependslargely onwhether the essence of the crime is an unjust enrichment, or thecausing of loss to the victim. If the focus is on the latter, thenthe aim ofthe defendant is not as relevant. However, as notedabove,^[186] the symbolic labellingof the offence is aimed at prevention of gain, not loss.

The answer in such a case may be that, although financial advantage is to bedetermined objectively, an accused may be incapable ofobtaining such anadvantage if they are unaware of its existence, or at least, incapable of doingso dishonestly. InFisher v Raven^[187]and AttorneyGeneral’s Reference [No 1 of1988]^[188] it was heldthat fraud offences of this kind require a positive act on the part of theaccused. By implication, it is impossible todo a positive act of obtainingunless one is aware of, or least reckless as to, the nature of what is beingobtained. Similarly,it would seem that in order to obtain an advantagedishonestly, it is necessary for the accused to have a belief in relation to theact causing the advantage that could be characterised asdishonest.^[189] A belief that theact resulted in no advantage would seem to not satisfy this requirement.

Consider, for example, an accused who disbelieves an eccentric artcollector’s claims that a work he owns is an early LloydRees drawing, andpasses a dud cheque to get possession of the work purely to cause distress tothe collector. If the drawing isin fact worthless, no financial advantage mayhave been obtained. If it is indeed a Rees drawing, while both property and avaluablething may have accrued to the accused, the lack of intention to obtainanything of financial value may mean that the accused haseither not obtainedwhat he intended to obtain or has acted in a way that cannot be described as adishonest obtaining.^[190]

E Is There Utility inthe Unilateral–Bilateral Distinction?

With such difficulties, the attempt to limit the nature of financialadvantage to situations in which the victim is induced to positivelyassent toan outcome, as suggested by Lanham, is worth revisiting. His argument was thatit was only in these situations that a debtorgained an advantage that was notgained by a mere refusal topay.^[191] However, the flaw inLanham’s argument is that in no situation does the debtor ever actuallygain a real, lasting financialadvantage. Even if the creditor is induced bydeception to forgive the debt, such forgiveness will disappear once thedeception isexposed. Further, if the evasion is unilateral, the financialadvantage to the debtor may in fact be more real while the deceptioncontinues.^[192] This is even moreso when one considers circ*mstances beyond those of the defaulting debtor. Theprinciple would only seem to beworkable in a debt repayment situation, not asituation where there is no preexisting relationship between the parties. Forexample,in a straightout fraud, the victim is induced into acts without anybelief that they are owed anything by the accused. The inducedact is notarrived at via negotiations relating to any existing obligations of theaccused.

More fundamentally, there is an air of artificiality about the supposeddistinction between unilateral and bilateral evasions. Torequire a positive acton the part of the person deceived invites semantic debates over whethercirc*mstances are an act or an omission,an example of which is the discussionby LeaderElliott as to whether payment by cheque is unilateral orbilateral.^[193] Such approachesare unlikely to bring clarity to the law, nor are they reliable predictors as tothe scope of an offence, becausetheir very abstract nature provides fertileground for imaginative deployments of theconcept.^[194]

Having said that, the uncertainty would be lessened if, rather than basingliability on whether a deception was bilateral or not,the offence specificallyset out the circ*mstances in which liability would arise. Such a legislativeenactment could draw on theidea of a bilateral evasion. This appears to be whatoccurred in England. The Theft Act 1978 (UK) c 31, s 2 offenceprohibited the securing of the remission of a debt and the obtaining of anyexemption from or abatement ofliability, both of which require assent from thecreditor. In any event, this would necessitate legislative intervention.

IV CONCLUSION

The foregoing has attempted to demonstrate that the concept of a financialadvantage is not one of clear meaning, particularly whenone attempts todetermine what amounts to an advantage in attempts to avoid the payment ofdebts. It has been argued that the approachtaken in Vasic andMatthews v Fountain misconceives the notion of what anadvantage is, and instead substitutes a test of whether the creditor suffers adetriment.

Instead, it is necessary to take a more critical view of advantage. Followingthe analysis in Fisher v Bennett, it is suggested that adefendant may only be held to have gained an advantage if the prosecution canprove that the defendant isin a better position than they were in prior to thepractising of the deception, and that the deception caused the improvement intheir position. Such an advantage cannot be proved merely by evidence of adetriment to the victim.

The defendant’s improved position must also not only be capable ofvaluation in monetary terms, but also be an advantage thatis financial innature. It has also been suggested that defining the requisite advantage solelyin monetary terms is problematic,as it draws the courts into a theoreticaleconomic attempt to value actions in monetary terms. Although one possiblelimitation maybe to require that any advantage be primarily a financial one, itis difficult to see how this could work as a clear and predictablemeasure ofcriminal liability.

However, this is a broad criminal offence and the principle of strictconstruction should apply. The issues of whether any positivechange to thedefendant’s position resulted (or would have resulted if the ruse wassuccessful), whether that change can bequantified in monetary terms and whetherthe overall result can be characterised as primarily ‘financial’ innature,all need to be established beyond reasonable doubt. As liability maywell turn on whether the advantage gained is a financial one,the issue ought tobe left to the determination of the finder of fact applying communityunderstandings of what is and is not financial.This is likely to lead to a morelimited scope for the term, but, absent explicit definition by Parliaments, thisis appropriate.

The English experience does, however, suggest that there may be room forfurther useful legislative reform in this area. The initialEnglish attempt toexhaustively define what activities amounted to a pecuniary advantage wasitself problematic and led to reform, the primary aim of which was toexcisecertain activities from the scope of the offence, in particular, persons whopassed dud cheques to buy more time to pay debts.

Similarly, in Australia, it may be opportune to excise some forms of conductfrom the scope of the offence, and to insert some activitiesthat should bedeemed to be a financial advantage without the need for further proof. However,in doing so, such provisions shouldnot attempt to exhaustively define theconcept of financial advantage.

In light of the coexistence of obtaining property and obtaining financialadvantage offences, it is suggested that the obtaining ofproperty offencesshould now be seen as an example of a deemed financial advantage. That is, thelegislature considers that if anyproperty is obtained, then evidence inrelation to the identification of the property is all that is required. There isno furtherrequirement that the property be valued in order to show theexistence of a financial advantage. As notedabove,^[195] this resonates withthe history of larcenable property.

Other situations where financial advantage is clear might also usefully beset out in legislation. This could include such mattersas the obtaining of aservice without the usual payment or the obtaining of credit.

A concomitant offence of causing detriment, such as that already in force inSA, is also a necessary enactment in other jurisdictions.Much of the complexityof the issue would dissipate with the enactment of such an offence. Indeed, itis arguable that an offenceof causing detriment to a victim is in fact a morejustifiable offence than that of obtaining a financial advantage. It is notclearwhy it should be criminal for a person to make a windfall gain if no otherperson suffers loss as a result. The harm principle ofcriminal law is clearly ajustification for a causing detriment offence, but in order to apply such aprinciple to an obtaining financialadvantage offence, a broader, less directand less easily justified use of the principle isneeded.^[196]

It is also suggested that the existence of specific offences for the passingof dud cheques means that no gap in the law is createdif a person passes such acheque without any intention to avoid payment. Glanville Williams’criticism^[197] of attempts to drawdistinctions between criminal and civil liability based on whether there was anintention to permanently evadepayment is compelling and any attempts at evasionby passing dud cheques should be dealt with under specific cheque offences, asis currently possible in NSW and SA. The fact that the preexisting debtcontinues to accrue reinforces Glanville Williams’point that people whopass cheques in such circ*mstances are simplystupid,^[198] not engaging inserious crime.

^[*]BA, LLB, MA (Macq); SeniorLecturer, Faculty of Law, University of New South Wales.

^[1]In fact, the Theft Act1968 (UK) c 60 and associated legislation applies to both England andWales. At the risk of offending the Welsh, this article refers toEnglish andWelsh legislation compendiously as English.

^[2][2005] VSCA 38; (2005) 11 VR 380.

^[3][1987] ACTSC 27; (1987) 85 FLR 469.

^[4](Unreported, Supreme Court ofNew South Wales, BadgeryParker J, 29 March 1993).

^[5]SeeFisher v Bennett [1987] ACTSC 27; (1987) 85 FLR 469, 472–3(Miles CJ).

^[6]See Coelho (Unreported,Supreme Court of New South Wales, BadgeryParker J, 29 March 1993) 2.

^[7]See the account in Sir JamesFitzjames Stephen, A History of the Criminal Law of England (1883) vol 3,129ff.

^[8]In R v Wheatly[1761] EngR 31; (1761) 2 Burr 1125; 97 ER 746, a brewer sold 16 gallons of amber as 18gallons. Mansfield CJ held at 1127–8; 748:

that the fact here charged should not be considered as an indictableoffence, but left to a civil remedy by an action, is reasonableand right in thenature of the thing: because it is only an inconvenience and injury to a privateperson, arising from that privateperson’s own negligence and carelessnessin not measuring the liquor, upon receiving it, to see whether it held out thejustmeasure or not.

The offence that is indictable must be such a one as affects the public. Asif a man uses false weights and measures, and sells bythem to all or to many ofhis customers, or uses them in the general course of his dealing: so, if a mandefrauds another, underfalse tokens. For these are deceptions that common careand prudence are not sufficient to guard against. So, if there bea conspiracy to cheat: for ordinary care and caution is no guard againstthis.

^[9]R v Jones[1795] EngR 1068; (1795) 1 Salk 379; 91 ER 330.

^[10]For historical accounts:see, eg, Jerome Hall, Theft, Law and Society (2^nd ed,1952) 50–2; Tom Hadden, ‘The Origin and Development of Conspiracy toDefraud’ (1967) 11 American Journal of Legal History 25. The firstgeneral fraud offence was created by the Obtaining Money by False Pretences,etc Act 1757, 30 Geo 2, c 24, although it was not seen as such until thedecision in Young v The King (1789) 3 Term 98; [1789] EngR 2389; 100 ER 475. The19^th century form (see, eg, Larceny (England) Act 1827, 7& 8 Geo 4, c 29, s 53) remains substantially unchanged in the CrimesAct 1900 (NSW) s 179.

^[11]There were, of course,other important fraud offences, particularly that of forgery, which remains ahighly prosecuted offence. Fora discussion of the introduction of forgery as aserious crime: see, eg, Randall McGowen, ‘From Pillory to Gallows: ThePunishmentof Forgery in the Age of Financial Revolution’ (1999) 165Past and Present 107.

^[12]Over the course of the20^th century the offence was statutorily enlarged in various ways toinclude legal documents and false promises.

^[13]Criminal Law RevisionCommittee, Eighth Report: Theft and Related Offences, Cmnd 2977 (1966) 44(‘Eighth Report’).

^[14]See ibid 46–7 wherethe arguments against the offence by a minority of the Committee are setout.

^[15]It was removed by amendmentat the Committee stage: United Kingdom, Official Report, House of Lords,12 March 1968, vol 290, cols 157–74.

^[16]For a history of theoffence: see Criminal Law Revision Committee, Thirteenth Report: Section 16of the Theft Act 1968, Cmnd 6733 (1977) 26–34 (‘ThirteenthReport’).

^[17]The offence was recentlyrepealed and replaced by a new regime of fraud offences contained in theFraud Act 2006 (UK) c 35. These offences are based on recommendations ofthe Law Commission of England and Wales to introduce general fraud offencesbased on obtaining gain or causing loss by false representation: The LawCommission, Fraud: Report on a Reference Under Section 3(1)(e) of the LawCommissions Act 1965, Cm 5560 (2002).

^[18]Theft Act 1968 (UK)c 60, s 16. With reference to s 16(3), note that‘deception’ was defined in s 15(4) as ‘any deception(whetherdeliberate or reckless) by words or conduct as to fact or as to law,including a deception as to the present intentions of the personusing thedeception or any other person.’

^[19]R v Royle [1971] 3 All ER 1359, 1363 (Edmund Davies LJ). See also The Law Commission,above n 17.

^[20]Criminal Law RevisionCommittee, Thirteenth Report, above n 16.

^[21]Ibid 17–18.

^[22]For a critical review ofthis history: see R v Preddy [1996] UKHL 13; [1996] AC 815, 830–3 (LordGoff).

^[23]The key impetus for thisdevelopment seems to have been the decision in R v Lawrence[1971] UKHL 2; [1972] AC 626, which ruled that lack of consent was no longer an element of theoffence.

^[24]Crimes Act1958 (Vic) s 81, amended by Crimes (Theft) Act 1973(Vic) s 2(1)(b).

^[25]Criminal Code Act1924 (Tas) s 252A, enacted by the Criminal Code Act 1975(Tas) and amended by Criminal Code Amendment (Financial Advantage) Act1989 (Tas) s 4.

^[26]Crimes Act1900 (NSW) s 178BA, enacted by the Crimes (Amendment) Act1979 (NSW) sch 1(4).

^[27]See Model Criminal CodeOfficers Committee of the Standing Committee of AttorneysGeneral(‘MCCOC’), Chapter 3: Theft, Fraud, Bribery and Related Offences(1995) 135–9.

^[28]Criminal Code Act 1995(Cth) s 134.2.

^[29]Criminal Code 2002(ACT) s 332. Both the Commonwealth and the ACT also have generaldishonesty offences which dispense with the need to prove a deception:seeCriminal Code Act 1995 (Cth) s 135.1; Criminal Code 2002(ACT) s 333. For those offences, a dishonest intent to cause a gain ora loss is required. Gain and loss are defined in financialterms.

^[30]Criminal LawConsolidation Act 1935 (SA) s 139, amended by the Criminal LawConsolidation (Offences of Dishonesty) Amendment Act 2002 (SA).

^[31]See, eg, Vasic[2005] VSCA 38; (2005) 11 VR 380, 383, 386 (Nettle JA), where the Victorian Court of Appealconsidered the ACT Supreme Court’s decision inFisher v Bennett [1987] ACTSC 27; (1987) 85 FLR 469, but ultimately, elected notto follow it. Similarly, the ACT Supreme Court in Fisher v Bennett[1987] ACTSC 27; (1987) 85 FLR 469, considered the Victorian Supreme Court’s decisionin Matthews v Fountain [1982] VicRp 104; [1982] VR 1045, and distinguished it onthe facts: at 472 (Miles CJ).

^[32]MCCOC, above n 27.

^[33]See, eg,R v Licardy (Unreported, Supreme Court of New South Wales,Court of Criminal Appeal, Loveday AJ, BadgeryParker and Bruce JJ, 26May 1995).

^[34]Criminal Law RevisionCommittee, Thirteenth Report, above n 16.

^[35]ChiefJustice’s Law Reform Committee, Law of Theft (1972)3.

^[36]New South Wales, SummaryProsecution in the Supreme Court of Corporate and ‘White Collar’Offences of an Economic Nature, Paper No 13 in Joint Volumes of PapersPresented to the Legislative Council and Legislative Assembly and Ordered to BePrinted (1978–79).

^[37]Crimes (Amendment) Bill1979 (NSW).

^[38]New South Wales,Parliamentary Debates, Legislative Assembly, 28 March 1979,3321–8 (Francis John Walker, AttorneyGeneral and Minister forJustice).

^[39]See Explanatory Memorandum,Crimes (Theft) Bill 1973 (Vic) 8, which suggested that the offence was intendedto be merely ancillary to the false pretences offence and to operate wherenoproperty had passed hands.

^[40]That is, the number ofpersons convicted where the relevant offence was the principal offencecharged.

^[41]This data is based on acollation of convictions by offence as recorded by the Judicial Commission ofNew South Wales SentencingInformation Service, Judicial Information ResearchSystem (25 June 2007)<http://www.judcom.nsw.gov.au/sentencing/jirs.php>.

^[42]Kate Warner, Sentencingin Tasmania (2^nd ed, 2002) 346–8.

^[43]Criminal LawConsolidation Act 1935 (SA) s 139. Section 130 defines‘benefit’.

^[44]Data provided pursuant to arequest made to Court Statistical Services. See also Richard Fox and ArieFreiberg, Sentencing: State and Federal Law in Victoria (2^nded, 1999) 983–7.