THE KING v TREVOR PAUL CLARK [2023] SASCA 15

On Appeal from DISTRICT COURT OF SOUTH AUSTRALIA (HIS HONOUR JUDGE CUTHBERTSON) [2022] SADC 45 Appellant: THE KING Counsel: MR M HINTON KC WITH MS A RATHBONE - Solicitor: DIRECTOR OF PUBLIC PROSECUTIONS (SA) Respondent: TREVOR PAUL CLARK Counsel: MR E BELPERIO - Solicitor: ILES SELLEY LAWYERS Hearing Date/s: 27/09/2022 File No/s: SCCRM-22-157 A SUPREME COURT OF SOUTH AUSTRALIA (Court of Appeal: Criminal) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court in which it was generated. R v CLARK [2023] SASCA 15 Judgment of the Court of Appeal (The Honourable President Livesey, the Honourable Justice Bleby and the Honourable Justice David) 23 February 2023 CRIMINAL LAW - PROCEDURE - ADJOURNMENT, STAY OF PROCEEDINGS OR ORDER RESTRAINING PROCEEDINGS - STAY OF PROCEEDINGS CRIMINAL LAW - PARTICULAR OFFENCES - PROPERTY OFFENCES - THEFT CRIMINAL LAW - PARTICULAR OFFENCES - PROPERTY OFFENCES - MISAPPROPRIATION - FRAUDULENT CONVERSION BY PERSONS ENTRUSTED WITH PROPERTY EQUITY - TRUSTS AND TRUSTEES - DISCRETIONARY TRUSTS Crown appeal on an issue antecedent to trial. The respondent is charged on Information with 46 counts of theft, contrary to s 134(1) of the Criminal Law Consolidation Act 1935 (SA) (‘CLCA’), and seven counts of dishonestly dealing with documents, contrary to s 140(4) of the CLCA. The property the subject of the first 15 counts of theft was held on a discretionary trust by a trustee company, First Rundle. Another company, First Rundle B, was the primary beneficiary under the trust deed. The respondent was the sole director and shareholder of both companies. He held the shares in First Rundle B on trust for MF. The balance of the theft counts also concerned property held on a discretionary trust by First Rundle. At the time of the dealings the subject of these charges, the trust deed had been varied to add MF as a primary beneficiary. -- 1 of 29 -- At the request of the trial judge, the prosecution particularised the ‘owners’ of the property, for the purposes of the elements of the offence of theft, as First Rundle and First Rundle B in respect of the first 15 counts, and First Rundle, First Rundle B and MF for the purposes of the balance of the counts. The trial judge stayed the first 15 counts on the basis that the prosecution could not prove beyond reasonable doubt that the First Rundle and First Rundle B did not consent to the respondent dealing with those funds to meet various personal and other expenses, as required by s 134(1)(b). This was because the respondent was the sole director and shareholder of both those companies. The judge declined to stay the balance of the counts in respect of which MF was particularised as an owner. The Director contends on appeal that the trial judge erred in staying Counts 1 to 15. The respondent cross-appeals against the failure to stay the balance of the theft charges, challenging the rulings made by the judge to the effect that: • where multiple owners of property are particularised, the prosecution need only prove lack of consent of one owner to establish the offence of theft; and • where the accused is a trustee of a discretionary trust, and the property the subject of the charge comprises funds held on that trust, the objective elements of theft can be established where the owner particularised on the Information is only a potential beneficiary of the trust. Held, by the Court, allowing the appeal, dismissing the cross-appeal, and setting aside the stay: 1. There was circumstantial evidence capable of demonstrating that the dishonest misuse of director’s powers occurred without the owners’ consent. Neither company could consent to the dishonest appropriation of trust property by the respondent in his capacity as director for his personal benefit or for the benefit of businesses with which he was involved. 2. The judge erred in holding that the prosecution need only prove one owner where more than one is particularised conjunctively. However, this provides no basis for granting a stay, given that the trial can proceed on the basis that the circumstantial evidence is capable of proving a lack of consent of the particularised owners. 3. The nature of MF’s interest in the funds held on the discretionary trust, being an equitable chose in action, does not preclude the prosecution from establishing that the respondent intended to make a serious encroachment on MF’s proprietary rights within the meaning of s 134. Bankruptcy Act 1966 (Cth); Crimes Act 1900 (NSW) s 173; Criminal Law Consolidation Act 1935 (SA) ss 13, 130, 131, 132, 134, 140(4); Criminal Procedure Act 1921 (SA) ss 151, 157(1)(c)(i), 158(6); Family Law Act 1975 (Cth) ss 4(1), 79(1); Legislative Interpretation Act 2021 (SA) s 20; Trustee Act 1936 (SA) ss 7, 9, referred to. Addstead Pty Ltd (in liq) v Liddan Pty Ltd (1997) 70 SASR 21; A-G (UK) v Downing (1767) 97 ER 1; Attorney-General’s Reference (No 2 of 1982) [1984] QB 624; Clarkson v Davies [1923] AC 100; Elder’s Trustee and Executor Company Limited v Higgins (1963) 113 CLR 426; Gartside v Inland Revenue Commissioners [1968] AC 553; Kennon v Spry (2008) 238 CLR 366; Kerin v The Queen [2022] SASCA 19; Low v Bouverie [1891] 3 Ch 82; MacLeod v The Queen (2003) 214 CLR 230; McDonald v Higgins (2013) 227 A Crim R 130; Mills v Mills (1938) 60 CLR 150; Multinational Gas & Petroleum Co v Multinational Gas & Petrochemical Services Ltd [1983] Ch 258; Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306; Percival v Wright [1902] Ch 421; Phipps v Boardman [1967] 2 AC 46; Questions of Law Reserved on Acquittal (No 2 of 1993) (1993) 61 SASR 1; Raby v Ridehalgh (1855) 44 ER 41; Re Brogden; Billing v Brogden (1888) 38 Ch D 546 ; Romeyko v Samuels (1972) 2 SASR 529; R v Clark (No 3) [2022] SADC 45; R v Elliot (1996) 185 CLR 250; R v Kerin [2014] SASC 19; R v Kerin (2013) 116 SASR 316; R v McGee (2008) 102 SASR 318; R v Rolfe [2021] HCATrans 137; R v Smith [1995] 1 VR 10; Sainsbury v Inland Revenue Commissioners [1970] Ch 712; Salomon v Salomon & Co Ltd [1897] AC 22; Walsh v Tattersall (1996) 188 CLR 77; Walton v Gardiner (1993) 177 CLR 378; Williams v Spautz (1992) 174 CLR 509; Youyang Pty Ltd v Minter Ellison Morris Fletcher (2003) 212 CLR 484, considered. -- 2 of 29 -- R v CLARK [2023] SASCA 15 Court of Appeal – Criminal: Livesey P, Bleby and David JJA 1 THE COURT: This is a Crown appeal on an issue antecedent to trial of charges of theft contrary to s 134 of the Criminal Law Consolidation Act 1935 (SA) (‘CLCA’). It concerns the means by which the prosecution may prove an absence of consent of an owner of property to a person dealing with the property within the meaning of s 134. The trial judge stayed 15 counts of theft on the basis that the prosecution could never establish that there was an absence of consent by the owner as required by s 134(1)(b). 2 Section 130 of the CLCA gives an extended definition of who may be regarded as an ‘owner’ for the purposes of Part 5 of the CLCA. Part 5 is concerned with dishonesty offences and includes the offence of theft in s 134. Section 130 provides: owner of property means— (a) a person who has a proprietary interest in the property other than an equitable interest arising under— (i) an agreement to transfer or grant an interest in the property; or (ii) a constructive trust; or (b) in relation to property subject to a trust (other than a trust arising from an agreement to transfer or grant an interest in the property or a constructive trust)—a person who has a right to enforce the trust; or (c) in relation to property received from or on account of another by a person who is under an obligation to deal with the property or its proceeds in a particular way—the person from whom, or on whose account, the property was received; or (d) a person who is entitled to possession or control of the property, (and, if there are 2 or more owners of property, a reference in this Part to the owner is a reference to both or all of them); 3 Notwithstanding that extended definition of ‘owner’, the trial judge held that the prosecution could never prove beyond reasonable doubt that the corporate owners of certain trust funds did not consent to the respondent dealing with those funds to meet various personal and other expenses. He reached that conclusion on the basis that the respondent was the sole director and shareholder of those companies. 4 The judge declined to stay the remainder of the counts of theft on the Information. By a Notice of Cross-Appeal on Issue Antecedent to Trial, the respondent challenges rulings made by the trial judge to the effect that: -- 3 of 29 -- [2023] SASCA 15 The Court 2  where multiple owners of property are particularised on the Information, the prosecution need only prove lack of consent of one owner to establish the offence of theft; and  where the accused is a trustee of a discretionary trust, and the property the subject of the charge comprises funds held on that trust, the objective elements of theft can be established where the owner particularised on the Information is only a potential beneficiary of that trust. 5 For the reasons that follow, the judge erred in ordering the stay of Counts 1 to 15. He did not err in refusing to order a stay of the remaining counts of theft. We allow the appeal, dismiss the cross-appeal and set aside the stay. All charges should proceed to hearing in the District Court. Procedural background 6 The respondent is charged on Information with 46 counts of theft, contrary to s 134(1) of the CLCA, and seven counts of dishonestly dealing with documents, contrary to s 140(4) of that Act. 7 On 14 April 2022, the trial judge stayed the trial of Counts 1 to 15 on the basis that the prosecution of those counts was foredoomed to fail and, in consequence, that to permit the prosecution to proceed would amount to an abuse of process.1 8 The judge declined to stay the prosecution of the balance of the charges pending an appeal by the Director. Similarly, he declined to give the respondent permission to appeal to press what has become the cross-appeal. 9 The Director made an urgent application to this Court on 22 April 2022, seeking a stay of the trial of the balance of the charges pursuant to s 158(6)(c) of the Criminal Procedure Act 1921 (SA) (‘CPA’). On 26 April 2022, this Court granted a stay to avoid the exercise of its appellate jurisdiction being rendered inutile.2 10 On the granting of the stay of the trial pending appeal, the Director did not oppose the respondent raising questions by way of cross-appeal. On 27 April 2022, both the appeal and the cross-appeal were listed for hearing before this Court. 11 Pursuant to s 157(1)(c)(i) of the CPA, the Director of Public Prosecutions has a right of appeal against a decision on an issue antecedent to trial on any ground that involves a question of law alone. By s 151 of the CPA, the term ‘issue antecedent to trial’ is defined to mean a question as to whether proceedings on an 1 [2022] SADC 45. 2 Cf. R v Elliot (1996) 185 CLR 250 at 257 (Brennan CJ, Gummow and Kirby JJ); R v Rolfe [2021] HCATrans 137 at 3-4 (Gleeson J). -- 4 of 29 -- [2023] SASCA 15 The Court 3 information, or a count of an information, should be stayed on the ground that they are an abuse of process of the court. The appeal 12 The Court’s powers on an appeal against a decision on an issue antecedent to trial are governed by s 158(6) of the CPA. The Director’s sole ground of appeal is in the following terms: The trial Judge erred in staying counts 1 through 15 on the Information on the basis that the prosecution can never establish beyond reasonable doubt that First Rundle Pty Ltd, or First Rundle B Pty Ltd, respectively the trustee and the beneficiary of the First Rundle Trust, as owners of the trust funds within the meaning of s 130 of the Criminal Law Consolidation Act, 1935 (SA) did not consent to the respondent dealing with the trust funds as he did, in circumstances where the defendant was the sole director and sole shareholder of both First Rundle Pty Ltd and First Rundle B Pty Ltd. 13 The question for this Court on the appeal is essentially whether the evidence which the prosecution proposes to lead could, if accepted, prove an absence of consent as required by s 134(1)(b) of the CLCA. Section 134 is in the following terms: 134—Theft (and receiving) (1) A person is guilty of theft if the person deals with property— (a) dishonestly; and (b) without the owner's consent; and (c) intending— (i) to deprive the owner permanently of the property; or (ii) to make a serious encroachment on the owner's proprietary rights. Maximum penalty: (a) for a basic offence—imprisonment for 10 years; (b) for an aggravated offence—imprisonment for 15 years. (2) A person intends to make a serious encroachment on an owner's proprietary rights if the person intends— (a) to treat the property as his or her own to dispose of regardless of the owner's rights; or (b) to deal with the property in a way that creates a substantial risk (of which the person is aware)— (i) that the owner will not get it back; or -- 5 of 29 -- [2023] SASCA 15 The Court 4 (ii) that, when the owner gets it back, its value will be substantially impaired. (3) It is possible to commit theft as follows: (a) a person may commit theft of property that has come lawfully into his or her possession; (b) a person may commit theft of property by the misuse of powers that are vested in the person as agent or trustee or in some other capacity that allows the person to deal with the property. Example— Suppose that land is vested in a trustee in a fiduciary capacity. She is empowered under the instrument of trust to mortgage the land for the purposes of the trust. The trustee dishonestly mortgages the land as security for a personal liability that is unrelated to the trust. In this case, the trustee commits theft of the interest created by the mortgage. (4) If a person honestly believes that he or she has acquired a good title to property, but it later appears that the title is defective because of a defect in the title of the transferor or for some other reason, the later retention of the property, or any later dealing with the property, by the person cannot amount to theft. (5) Theft committed by receiving stolen property from another amounts to the offence of receiving but may be described either as theft or receiving in an instrument of charge and is, in any event, punishable as a species of theft. (6) If a person is charged with receiving, the court may, if satisfied beyond reasonable doubt that the defendant is guilty of theft but not that the theft was committed by receiving stolen property from another, find the defendant guilty of theft. 14 Section 134(3)(b) provides an example of the scope contemplated by s 134(3). Pursuant to s 20 of the Legislation Interpretation Act 2021 (SA), legislative examples are neither exhaustive nor do they limit the meaning of the CLCA: 20—Use of examples An example included in an Act or a legislative instrument— (a) is not exhaustive; and (b) may extend, but does not limit, the meaning of the provision of the Act or legislative instrument to which it relates. 15 Section 130 of the CLCA defines the word ‘deal’ as follows: deal—a person deals with property if the person— (a) takes, obtains or receives the property; or -- 6 of 29 -- [2023] SASCA 15 The Court 5 (b) retains the property; or (c) converts or disposes of the property; or (d) deals with the property in any other way; 16 The same provision defines the term ‘owner’ as set out above. 17 The term ‘property’ is defined in the following way: property means real or personal property and includes— (a) money; (b) intangible property (including things in action); (c) electricity; (d) a wild creature that is tamed or ordinarily kept in captivity or is reduced (or in the course of being reduced) into someone's possession; 18 Section 134(1)(a) requires that the person deal with the property dishonestly. Section 131 addresses the concept of dishonesty: 131—Dishonesty (1) A person's conduct is dishonest if the person acts dishonestly according to the standards of ordinary people and knows that he or she is so acting. (2) The question whether a defendant's conduct was dishonest according to the standards of ordinary people is a question of fact to be decided according to the jury's own knowledge and experience and not on the basis of evidence of those standards. (3) A defendant's willingness to pay for property involved in an alleged offence of dishonesty does not necessarily preclude a finding of dishonesty. (4) A person does not act dishonestly if the person— (a) finds property; and (b) keeps or otherwise deals with it in the belief that the identity or whereabouts of the owner cannot be discovered by taking reasonable steps; and (c) is not under a legal or equitable obligation with which the retention of the property is inconsistent. (5) The conduct of a person who acts in a particular way is not dishonest if the person honestly but mistakenly believes that he or she has a legal or equitable right to act in that way. Example— -- 7 of 29 -- [2023] SASCA 15 The Court 6 A takes an umbrella violently from B honestly but mistakenly believing that B has stolen A's umbrella and that A is entitled to use force to get it back. In fact, it belongs to B. A is charged with robbery. A cannot be properly convicted on this charge because of his honest but mistaken belief (however unreasonable). However, he may still be guilty of an assault. (6) A person who asserts a legal or equitable right to property that he or she honestly believes to exist does not, by so doing, deal dishonestly with the property. Example— A takes an umbrella violently from B honestly believing that the umbrella belongs to A and that A is entitled to possession of the umbrella (but knowing that she is not entitled to use force to get it back). The assertion of that possessory right (whether or not correctly founded in law) is not dishonest (and therefore cannot amount to theft) although the means used to get the umbrella back may well amount to some other offence. 19 Finally, s 132 addresses the concept of an owner’s consent: 132—Consent of owner (1) A reference to the consent of the owner of property extends to— (a) the implied consent of the owner (or owners); or (b) the actual or implied consent of a person who has actual or implied authority to consent on behalf of the owner (or owners). (2) A person is taken to have the implied consent of another if the person honestly believes, from the words or conduct of the other, that he or she has the other's consent. (3) However, a person who knows that another's consent was obtained by dishonest deception is taken to act without consent. The nature of the power to stay criminal proceedings 20 The parties accepted that the power exercised by the trial judge ought not to have been exercised unless there were ‘truly exceptional circumstances that warrant the Court staying the proceedings at the outset’.3 Consistently with authorities concerning abuse of process,4 and the inherent jurisdiction of a court to stay its proceedings on grounds of abuse,5 proceedings should only be stayed as an abuse if they ‘can be clearly seen to be foredoomed to fail’,6 or they would ‘inevitably and manifestly fail’.7 3 R v McGee (2008) 102 SASR 318 at [87] (Doyle CJ). 4 Williams v Spautz (1992) 174 CLR 509 at 520. 5 Walton v Gardiner (1993) 177 CLR 378 at 392-393 (Brennan J). 6 Walton v Gardiner (1993) 177 CLR 378 at 393 (Mason CJ, Deane and Dawson JJ). 7 Walton v Gardiner (1993) 177 CLR 378 at 411 (Brennan J), see also R v Smith [1995] 1 VR 10 at 14-15 (Brooking J). -- 8 of 29 -- [2023] SASCA 15 The Court 7 21 When exercising the power to grant a stay, it is important that the Court not interfere with the decision of the Director to institute proceedings, nor ‘begin to assume the role of a supervisory authority in relation to those decisions’.8 Accordingly, the test for a stay ‘must be a stringent one’.9 A trial is not to be precluded merely because the trial judge takes the view that the ‘case is a weak one, or even because in the opinion of the trial judge the case is likely to fail’.10 22 In R v McGee,11 Doyle CJ, drawing on King CJ’s summary of the test in Questions of Law Reserved on Acquittal (No 2 of 1993),12 described the approach the Court should take as follows:13 Clearly enough, when applying the test in question, the court must consider the prosecution case at its best and highest, on the basis that its witnesses are accepted as witnesses of truth (unless there are exceptional circumstances warranting a different approach), and on the basis that all inferences favourable to the prosecution case will be drawn if they can be drawn. The test that must be met for the grant of a stay is necessarily a stricter test than will apply when the court considers a submission that there is no case to answer… On an application of the kind now before the court, the court must be mindful of the fact that all it has before it are the written depositions. No witness has given evidence. The fact that the jury might ultimately decide that the circumstantial evidence in the present case does not exclude hypotheses consistent with innocence is not enough for the submission to succeed. To deal with a submission on that basis is not an appropriate exercise of the court’s power. The prosecution should proceed even though the jury could or might decide that all such hypotheses were excluded, and the court would stay the proceedings only if satisfied that the jury so finding was inevitable. And, as I have said, this is to be considered not by the court weighing a quality of the evidence, but on the basis that evidence will be accepted unless patently incredible, and on the basis that all inferences favourable to the prosecution case that could be drawn will be drawn. 23 The parties accepted that it is necessary for this Court to review the material available to the trial judge in order to determine whether, taking the prosecution case at its highest and drawing all inferences favourable to the prosecution case, there was material capable of proving beyond reasonable doubt that there was an absence of consent by the ‘owners’ of the relevant trust property. It is immaterial that the trier of fact, whether a jury or a trial judge sitting alone, might not ultimately decide that the circumstantial evidence excludes hypotheses consistent with innocence. 24 It follows that the next step is to consider how the charges are framed, together with the material relied on by the prosecution. 8 R v McGee (2008) 102 SASR 318 at [87] (Doyle CJ). 9 R v McGee (2008) 102 SASR 318 at [87] (Doyle CJ). 10 R v McGee (2008) 102 SASR 318 at [87] (Doyle CJ). 11 (2008) 102 SASR 318. 12 (1993) 61 SASR 1 at 5 (King CJ). 13 R v McGee (2008) 102 SASR 318 at [88]-[90] (Doyle CJ). -- 9 of 29 -- [2023] SASCA 15 The Court 8 The charges and factual background 25 It is not necessary to set out all counts in the Information. For present purposes, Count 1 is representative of the form of the 15 charges of theft the subject of the stay against which the Director has appealed: First Count Statement of Offence Theft. (Section 134(1) of the Criminal Law Consolidation Act, 1935). Particulars of Offence Trevor Paul Clark on the 23rd day of January 2008 at Adelaide or elsewhere in South Australia, dishonestly dealt with property, namely $300,000, without the consent of First Rundle Pty Ltd as trustee for the First Rundle Trust with others, the owner of that property, intending to permanently deprive the owner of the property or make a serious encroachment on its proprietary rights. 26 The relevant Trust in this case is the First Rundle Trust. 27 The Trustee of the First Rundle Trust is First Rundle Pty Ltd (‘First Rundle’). The respondent is the sole director and shareholder of First Rundle. 28 The only Primary Beneficiary of the First Rundle Trust as defined was, until 2010, First Rundle B Pty Ltd (‘First Rundle B’). The respondent is the sole director and shareholder of First Rundle B. Nonetheless, the respondent holds his shareholding in First Rundle B as Trustee for another, Mr Mario Ferrarone. From 2010, by a Deed of Variation, Mr Mario Ferrarone became an additional, Primary Beneficiary of the First Rundle Trust. Counts 16 to 54 inclusive concern the period after this event. Of these, Counts 16 to 29, 31, 32, 34 to 42 and 44 to 49 are also charges of theft. 29 The prosecution case as particularised at the request of the trial judge is that the two relevant owners of the trust property for the purposes of Counts 1 to 15 are First Rundle and First Rundle B. The relevant owners for the purposes of Counts 16 to 29, 31, 32, 34 to 42 and 44 to 49 are First Rundle, First Rundle B and Mr Ferrarone. 30 The Trust Deed by which the First Rundle Trust was established contains, relevantly, the following provisions relevant to the powers of the Trustee to deal with property of the Trust:  Recital A describes the purpose of the Trust: The Settlor desires to provide a Fund for the Distribution of Property for the benefit of the Primary Beneficiaries named and described in the First Schedule to this Deed and the Associates of those persons hereinafter referred to. -- 10 of 29 -- [2023] SASCA 15 The Court 9  The Eligible Beneficiaries are the Primary Beneficiaries and the Associates of the Primary Beneficiaries (cll 2.9; 2.4). There was no suggestion on the appeal that the respondent is an Associate of the Primary Beneficiary.  Clause 6.0 governs the distribution of excess property: Notwithstanding anything elsewhere contained in this Deed but subject to Clauses 13.0 to 18.0 (both inclusive) the Trustee in its absolute and uncontrolled discretion (but having regard to the matters referred to in the proviso to clause 9.0) may Distribute Property of the Trust Fund in excess of the immediate requirements of the Trust from time to time before the Vesting Day among the Eligible Beneficiaries or one or more of them.  Clauses 13.0 to 18.0 inclusive concern the obligation to give written notice to and obtain the consent of the Property Appointor before distributing any Property of the Trust to any of the Eligible Beneficiaries. The Second Schedule names the respondent as Property Appointor.  Clause 9.0 governs the distribution among the Eligible Beneficiaries of property constituting or comprising the Net Income of the Trust Fund in each Accounting Period in the absolute discretion of the Trustee.  Clause 10.2 empowers the Trustee, notwithstanding cl 9.0, to make Interim Distributions of Property constituting or representing Net Income derived during any Accounting Period among the Eligible Beneficiaries in the absolute discretion of the Trustee.  Clause 19.0 confers various powers on the Trustee in relation to the Trust Fund.  Clause 23.0 provides that the Trustee has the sole and absolute discretion in the exercise of all rights, powers and trusts appertaining to the Net Income and capital of the Trust and their distribution to the Eligible Beneficiaries, ‘or appertaining to the Property comprised in the Trust Fund’.  Clause 24.0 then provides: 24.0 The Trustee hereby covenants to exercise all due diligence and vigilance in protecting the Trust Fund provided that the Trustee shall not be responsible for: 24.1 any loss or damage occasioned by the exercise of any discretion or power hereby or by law conferred on the Trustee or by failure to exercise any discretion of power or by any error or forgetfulness whether of law or of fact; or 24.2 any breach of duty or trust whatsoever on the part of the Trustee or its Accountant legal advisers or generally unless it is proved to have been committed made or omitted in fraudulent bad faith by the Trustee. 31 The prosecution case against the respondent alleges the following. It must be emphasised that what follows represents the case for the prosecution which may -- 11 of 29 -- [2023] SASCA 15 The Court 10 or may not ultimately be established. There are a number of factual issues about which the parties are in contest. 32 At all relevant times, the respondent was a professional accountant operating an accounting practice called Trevor Clark & Associates. In 2005, he advised Mr Mario Ferrarone, a wool broker based in Italy who was engaged in business with Elders International. Essentially, Mr Ferrarone sought advice about the establishment of a ‘blind trust’ whereby his involvement in the sale of Australian wool in Italy might be concealed. It appears to be the defence case that, in addition, the establishment of a blind trust assisted Mr Ferrarone in minimising taxation obligations under Italian law. 33 Following advice from the respondent, in December 2005, Mr Ferrarone instructed the respondent to settle the First Rundle Trust and to register two companies, First Rundle and First Rundle B as Trustee and beneficiary respectively of the First Rundle Trust. As mentioned, the respondent remained the sole director and shareholder of both companies, although the shareholding in First Rundle B was held on Trust for Mr Ferrarone. 34 In October 2007, the sum of $300,000 was deposited into the Trevor Clark & Associates bank account. That sum belonged to First Rundle and represented funds invested in a joint venture between Mr Ferrarone and Elders International; the joint venture was called Elders Merino Topline (‘Elders Merino’). 35 In November 2007, the respondent opened a bank account in the name of First Rundle and the amount of $300,000 was transferred from the Trevor Clark & Associates bank account to that account. It remained there until 23 January 2008, when it was transferred into the respondent’s personal bank account (Count 1). Thereafter, the monies were disbursed over a period of around six weeks into accounts associated with the respondent, whether personally or through businesses in which he was involved. 36 Before the October deposit of $300,000, the respondent had, by email, sought instructions from Mr Ferrarone as to how the funds were to be invested. In December 2007, he sent Mr Ferrarone an email, to which was attached a bank statement showing the deposited funds, seeking instructions on whether they should be invested at a higher rate of return. On 11 December 2007, Mr Ferrarone directed the respondent by email to invest the funds as the respondent had suggested. The respondent never invested the funds as Mr Ferrarone directed. 37 Between June and December 2009, further sums totalling $1.45 million were deposited into the First Rundle account. Again, these were funds from the Elders Merino joint venture. They were being returned as the joint venture was being unwound and shut down. 38 Between July 2009 and June 2010, the respondent transferred funds totalling just under $780,000 from the First Rundle account into other accounts to which -- 12 of 29 -- [2023] SASCA 15 The Court 11 the respondent had access, whether personally or through businesses with which he was involved (Counts 2 through to 15, inclusive). 39 On 14 October 2009, the respondent sent Mr Ferrarone an email, reporting that he had invested ‘two parcels’ of funds until 31 January 2010. This information was false as no funds were then invested. This conduct is not the subject of any charge. 40 In November 2009, following a tax amnesty in Italy, Mr Ferrarone declared his Australian assets to the Italian government. In connection with the amnesty, the respondent signed a declaration confirming that Mr Ferrarone was the effective owner and beneficiary of goods in the possession of the First Rundle Trust which included 2 million shares in Elders Merino, with each share having a value of $1, together with a term deposit in an unspecified amount. The respondent faxed a copy of that declaration to Mr Ferrarone and couriered the original to Italy. Accompanying the declaration was an Adelaide Bank statement for the period 28 November to 31 December 2008 showing a balance of just over $323,000 in a First Rundle account. That statement was false as, at the time, the balance in the account was $226.39. Again, this conduct is not the subject of any charge. 41 From late 2009 to early 2010, the ANZ Bank communicated with the respondent concerning a number of credit and loan facilities in the names of the respondent, his accounting practice and various businesses he operated. This correspondence continued until 16 November 2010 when the respondent, together with other members of his family, signed a Deed of Forbearance. 42 In mid-2010, the First Rundle Trust Deed was varied and Mr Ferrarone was named as an additional Primary Beneficiary of the First Rundle Trust. He was also nominated as both the Property Appointor and Trust Appointor of that trust. 43 On 22 July 2010, the ANZ Bank sent to the respondent letters of demand in his personal capacity as well as to businesses with which he was associated, regarding various defaults on credit and loan facilities held with the bank. 44 Between July and November 2010, further sums totalling just over $1.13 million were deposited into the First Rundle account. Again, these funds represented a return on the Elders Merino joint venture. 45 Between August 2010 and January 2012, the respondent transferred funds totalling just over $1.18 million from the First Rundle account to accounts associated with him personally or to which he had access as a result of businesses he operated (Counts 16 to 29, 31, 32, 34 to 42, 44 and 45). 46 On 16 November 2010, the respondent and members of his family entered into another Deed of Forbearance with the ANZ Bank, which required a payment of $160,000 on or before 17 November 2010. On that same day, a bank cheque in favour of ANZ Bank was drawn on the respondent’s personal account for $160,000. That sum had been transferred from the First Rundle account into the -- 13 of 29 -- [2023] SASCA 15 The Court 12 respondent’s account that day (Count 25). The bank cheque was deposited in part satisfaction of the further Deed of Forbearance. 47 Thereafter, conditions of the Deed of Forbearance were not met. On 30 March 2011, the respondent and others entered into a Further Deed of Forbearance with the ANZ Bank. This required a payment of $82,000 on or before 23 March 2011. On 30 March 2011, a second bank cheque in favour of ANZ Bank was drawn on the respondent’s account. That cheque was drawn after $100,000 was transferred from the First Rundle account into the respondent’s account a week earlier (Count 27). The bank cheque was deposited by the ANZ Bank in part satisfaction of the Further Deed of Forbearance. 48 On 11 May 2011, the ANZ Bank wrote to the respondent and other family members to confirm an agreement for further forbearance. At that stage, the total amount owed to the bank exceeded $5.4 million. A condition of the further forbearance was the payment of $220,000 to the bank on or before 16 May 2011. 49 On 19 May 2011, a third bank cheque was drawn in favour of the ANZ Bank against First Rundle funds held in a term deposit with the Bendigo Bank (Count 29). The bank cheque was deposited by the ANZ Bank in part satisfaction of the further forbearance. 50 On 30 May 2011, the respondent communicated with Mr Ferrarone’s Italian accountant by email, copying Mr Ferrarone. The email contained a number of attachments. These included an AMF yield fund annual statement in the name of First Rundle. That showed a closing balance of $1.157 million as at 31 December 2010. That certificate was false. The correct balance at that date was nil (Count 30). 51 Police seized a copy of the true AMF yield fund annual statement and the false certificate from the respondent’s office on 23 June 2015. 52 On 14 June 2011, the respondent communicated with Mr Ferrarone by email. Attached to the email was another AMF yield fund annual statement in the name of First Rundle. That certificate showed a closing balance of $1.08 million as at 31 December 2009. That too was false, as the correct balance at that date was nil (Count 33). 53 Again, police seized a copy of the true AMF yield fund annual statement and the false certificate from the respondent’s office on 23 June 2015. 54 On 15 November 2011, the respondent again communicated with Mr Ferrarone’s Italian accountant by email, copying Mr Ferrarone. Attached was a term deposit certificate from the Bendigo Bank in the name of First Rundle showing a balance of $1 million as at 19 November 2010, with funds invested for three months at a rate of 5.8 per cent. The certificate was false as the correct balance at that date was $700,000 (Count 43). -- 14 of 29 -- [2023] SASCA 15 The Court 13 55 Police seized a copy of a clearly manipulated term deposit certificate from the respondent’s office on 23 June 2015. 56 On 15 February 2012, the ANZ Bank issued to the respondent letters of demand concerning his personal debt and the debt of other businesses with which he was associated, together with demands under guarantee. 57 On 22 February 2012, the sum of $36,112.71 was deposited into the First Rundle bank account. This sum was remitted from the Elders Merino joint venture. 58 On 27 March 2012, the ANZ Bank wrote to the respondent claiming a total balance owed of $1.6 million and notifying that it intended to enforce its rights. 59 Between 16 and 26 April 2012, the respondent transferred First Rundle funds totalling $96,647.39 to his personal bank account or to accounts to which he had access, whether personally or through businesses with which he was involved (Counts 46 to 49). 60 On 7 May 2012, the respondent communicated with Mr Ferrarone’s Italian accountant by email and attached two documents. The first was a term deposit certificate from the Bendigo Bank in the name of First Rundle. It was dated 19 November 2011 and showed a balance of $1.055 million invested for three months at a rate of 5.5 per cent. That certificate was false, as the true balance was $272,456.32 (Count 50). The other document was a Sandhurst Trustees Adelaide Bank AMF yield fund annual statement in the name of First Rundle. This showed a balance of $1.23 million as at 31 December 2011. This statement was false as the account was closed on 15 December 2011. At the time of closure there was a nil balance (Count 51). 61 Amongst the documents seized by police from the respondent’s office on 23 June 2015 were accurate copies of the certificate and statement, as well as copies of the falsified documents. 62 On 11 June 2013, the respondent communicated with Mr Ferrarone’s son by email. Two documents were attached. The first was a term deposit certificate from the Bendigo Bank in the name of First Rundle dated 9 December 2012, showing a balance of $1.1 million invested for six months at a rate of 4.25 per cent. The certificate was false as the term deposit was closed on 19 December 2011 and, at the time of closure, there was a nil balance (Count 53). The second document was a Sandhurst Trustees Adelaide Bank AMF yield fund annual statement in the name of First Rundle showing a closing balance of $1.299 million as at 31 December 2012. That statement was false as the account was closed on 15 December 2011 and, at that time, it had a nil balance (Count 54). 63 Amongst the documents seized by police from the respondent’s office on 23 June 2015 were copies of the accurate certificate and statement from earlier periods as well as the falsified certificate and statement. -- 15 of 29 -- [2023] SASCA 15 The Court 14 64 In September and October 2013, Mr Ferrarone directed the respondent to produce $1 million of First Rundle funds to pay for a wool contract. Those funds were never produced. 65 In March 2014, Mr Ferrarone’s son met with the respondent in the presence of Mr Stephen Read of Elders to discuss the repayment of funds taken by the respondent from First Rundle. At that meeting, the respondent apologised and said words to the effect that he should be left alone to earn money so that he could repay the money over time. 66 As identified above, the Information has been particularised on the basis that the relevant owners of the property the subject of Counts 1 to 15 are First Rundle as Trustee and First Rundle B as beneficiary of the First Rundle Trust. Relevantly, for the balance of the counts of theft, the owners are particularised as First Rundle, First Rundle B and Mr Ferrarone. ‘Consent’ in the context of the respondent’s role 67 The trial judge held that the prosecution could never establish beyond reasonable doubt that in respect of Counts 1 to 15, First Rundle and First Rundle B did not consent to the transactions the subject of the charges.14 Critically, he reasoned:15 Evidence of whether the company consented or did not in the present case cannot be considered in the context of how a human would have viewed the matter. The applicant is the sole director and shareholder. Only he, or documents of the company, could cast light on whether the company consented to the transaction. There are no documents and it can be safely assumed that the applicant will not be giving evidence on behalf of the prosecution at the trial that the company did not consent. 68 In challenging that conclusion, the appellant identified circumstantial evidence that it submitted was capable of establishing that First Rundle and First Rundle B did not consent to the dealings with the trust property the subject of Counts 1 to 15, that is, the transfer of the sums particularised to the respondent’s personal bank account. 69 First it relied on what may be described as evidence of the structural obligations of the respondent as director of First Rundle and First Rundle B. Broadly speaking, these were:  the purpose of the Trust as evidenced by Recital A, above;  the terms of cll 6.0, 10.2, 19.0, 23.0 and 24.0; 14 [2022] SADC 45 at [81]. 15 [2022] SADC 45 at [65]-[66]. -- 16 of 29 -- [2023] SASCA 15 The Court 15  the powers of the Trustee to be exercised in favour of the Eligible Beneficiaries and the covenant to exercise all due diligence and vigilance in protecting the Trust Fund (cl 24.0);  the absence of any variation to the Trust Deed that would permit the dealing;  the ‘ostensible authority’ of an officer of a trust company, which we understood to mean the respondent’s powers as director as circumscribed by the powers of the company as Trustee. We expand on these below; and  the legal and fiduciary obligations owed by a director of a trust company. 70 The appellant then identified inferences that could be drawn from the application of the trust funds the subject of each count, both individually and collectively. These were as follows:  the dealings subsequent to the transfer the subject of each count raised the inference that the trust funds specified in Counts 1 to 15 were applied to the respondent’s own purposes;  the evidence of the application of the funds the subject of each count, and the consequent diminishment of the trust funds, was admissible on all other counts as tending to show that the dealing on each was both dishonest and without consent; and  the exhaustion and significant depletion of the trust funds over time, by reason of the application of the funds to the respondent’s own purposes, supported the inference that the dealing on each count was not for the purposes of the trust, and thus was without consent. 71 The appellant then pointed to inferences arising from false representations the respondent made to Mr Ferrarone in respect of the investment of the funds, including the production of false documents, as identified above. These are the subject of some of the charges (Counts 30, 33, 43, 50, 51, 53 and 54); others are uncharged acts. As to these, the appellant submitted:  the uncharged false representations that the respondent made about the investment of the funds commenced on 14 October 2009 (between the dealings alleged on Counts 6 and 7). The trier of fact could infer, from these, dishonesty on the part of the respondent and a known absence of consent to act as he did in relation to the conduct preceding those representations;  the false representations evidenced an intention to maintain the ruse so as to allow the respondent to continue in his position, avoid being called to account for the funds, avoid being called to repay the funds and to allow him continued access to the funds for his own purposes and to hide his conduct; -- 17 of 29 -- [2023] SASCA 15 The Court 16  the false documents were created to hide the respondent’s dealings with the trust funds. They are evidence of dishonesty and a known absence of consent to the conduct that occurred prior to their creation. The first of these was created in around November 2009, between the alleged commission of Counts 10 and 11. 72 The appellant’s case that the companies First Rundle and First Rundle B, as owners, did not consent to the dealings is therefore circumstantial. The respondent accepted that these pieces of circumstantial evidence were relevant to whether the element of dishonesty (s 134(1)(a)) on his part was satisfied. That is because they are probative of his state of mind. Similarly, they are probative of the requirement that the respondent intended to deprive the owner of the property permanently. However, he submitted that none of this evidence was capable of proving the state of mind of the owner, the two companies, with respect to their consent. 73 The case law provides little exposition of the element of consent in s 134. The appellant referred to the observation of Blue J in R v Kerin, that s 134:16 is enacted in the context and assumes the application of the general law which comprises both common law and equity. Thus, the section applies to the theft of equitable property or an equitable interest in the property,17 equitable ownership of the property18 and theft by a trustee of property held on trust.19 Section 132(1) refers to consent but ultimately leaves the existence and scope of consent to be determined under the general law including equity. (Footnotes in original) 74 Similarly, in the previous Court of Criminal Appeal decision of R v Kerin, the Court said in respect of the approach to consent in s 134 in cases involving a power of attorney:20 In my view, the significance of the execution of a power of attorney in relation to the matter of consent is not to be addressed by reference to the mere words of the document alone. The circumstances surrounding the execution of such a document will involve a fiduciary relationship of some kind and, speaking generally, the words of a power of attorney executed in such circumstances will be interpreted as meaning that the donor consents to the donee exercising the powers recited in the power of attorney but only within the terms of the relationship subsisting between the donor and donee. It will be necessary to have regard to the precise nature of the fiduciary relationship in the particular case to delineate the precise content of the duty. However, in very broad and simple terms, it may generally be said that the donor consents only to the powers being used for the benefit or purposes of the donor and not for the benefit or purposes of the donee. 75 Whether the evidence is capable of demonstrating that the conduct of the respondent was without the consent of First Rundle and First Rundle B therefore requires consideration of the duties and obligations the respondent held as director 16 [2014] SASC 19 at [277] (Blue J). 17 See definition of “property” in Criminal Law Consolidation Act 1935 at s 130. 18 See definition of “owner” in Criminal Law Consolidation Act 1935 (SA) at s 13. 19 See example in Criminal Law Consolidation Act 1935 (SA) at s 134(3)(b). 20 (2013) 116 SASR 316 at [149] (Peek J, Nicholson J agreeing). -- 18 of 29 -- [2023] SASCA 15 The Court 17 and shareholder of each of the companies in the First Rundle group. These duties and obligations may be summarised as follows: 1. The respondent was the sole director and shareholder of the Trustee of the First Rundle Trust, First Rundle. In his capacity as director, he owed various duties to that company, including fiduciary duties.21 When exercising his powers as director, he was required to do so having regard to the role of the company as Trustee. As Trustee, the company was obliged to observe and adhere to the terms of the Trust Deed,22 and to maintain and preserve the assets of the Trust for the beneficiaries of the Trust. However broadly the discretion of the Trustee is expressed, it is always subject to the dominant duty of recovering, securing and duly applying the trust fund.23 2. The respondent was also the sole director and shareholder of First Rundle B, the beneficiary of the First Rundle Trust. As director, the respondent owed various duties and obligations to the company, including fiduciary duties. Those duties had to be exercised in a context where the respondent was not the ultimate beneficial owner of the shareholding. Mr Ferrarone was the ultimate beneficial owner of the shareholding of the beneficiary. 3. Whether in his capacity as a director of the beneficiary or, more obviously, in his capacity as a director of the Trustee, the respondent was obliged to prefer the interests of the companies, and ultimately the Trust, over his own interests. An aspect of his fiduciary duties was that he was prohibited from preferring his own, personal interests over those of the companies or the Trust. He could not use his powers as a director to confer a personal benefit upon himself. That is a classic example of an improper use of power as a director.24 76 Against that framework of duties and obligations, MacLeod v The Queen25 then assists with how to approach the question of consent of a company to a dishonest taking by a director and shareholder for that person’s own benefit. That case concerned charges pursuant to s 173 of the Crimes Act 1900 (NSW), which provided: Whosoever, being a director, officer or member of any body corporate, or public company, 21 Multinational Gas & Petroleum Co v Multinational Gas & Petrochemical Services Ltd [1983] Ch 258 at 288 (Dillon LJ); [1983] 2 All ER 563 at 585. See also Mills v Mills (1938) 60 CLR 150 at 186-188; Percival v Wright [1902] Ch 421; Clarkson v Davies [1923] AC 100 at 111. 22 A-G (UK) v Downing (1767) 97 ER 1 at 9; Raby v Ridehalgh (1855) 44 ER 41 at 43; Youyang Pty Ltd v Minter Ellison Morris Fletcher (2003) 212 CLR 484 at [32]. 23 Elder’s Trustee and Executor Company Limited v Higgins (1963) 113 CLR 426 at 449 (Dixon CJ, McTiernan and Windeyer JJ); ss 7 and 9 of the Trustee Act 1936 (SA); Low v Bouverie [1891] 3 Ch 82 at 99 (Lindley LJ, Bowen LJ agreeing). 24 Mills v Mills (1938) 60 CLR 150 at 175 (Starke J), 185 (Dixon J); Phipps v Boardman [1967] 2 AC 46 at 123 (Lord Upjohn). 25 (2003) 214 CLR 230. -- 19 of 29 -- [2023] SASCA 15 The Court 18 fraudulently takes, or applies, for his own use or benefit, or any use or purpose other than the use or purpose of such body corporate, or company, or fraudulently destroys any of the property of such body corporate, or company, shall be liable to penal servitude for 10 years. 77 In that case, the appellant, who was a director and officer of a body corporate, and its sole beneficial shareholder, was charged with offences under s 173. That section did not have a separately articulated element of lack of consent on the part of the company. However, the appellant argued that the reference to ‘fraudulently tak[ing] or appl[ying]’ imported a requirement that the accused did so without the consent of the putative victim.26 The Court examined the development of reforms in England and New South Wales that ‘implemented a legislative intention that criminal liability should extend to fraudulent dealings by agents, trustees, directors and others in property which had been entrusted to them for a particular purpose’.27 The plurality continued:28 That expansion of criminal liability left no room for the proposition, which appeared to inform the common law, that a limited expression of consent on the part of the owner, or the possessory interest of the trustee or bailee, provided an answer to a charge of a fraudulent dealing which travelled beyond that consent or interest, The new statutory offences invariably were expressed in terms of a fraudulent dealing carried out in furtherance of some personal use or benefit, or for any purpose other than the purpose authorised by the owner. Thus, to a significant degree, liability under the provisions depended upon the pursuit, to the prejudice of the owner, of benefits personal to the accused and in derogation of the purposes of the owner, rather than upon the identification of expressions of “consent” by the owner or the possessory interests of the accused. 78 The High Court observed that as the concept of the separate legal identity of a corporation emerged,29 the scope and operation of criminal provisions also developed, such that the rights, duties and interests of a company differed from those of its directors, officers and members, with the conduct and state of mind of those directors, etc, not always to be attributed to the company.30 79 The High Court rejected a submission that the ‘consent’ of a single shareholder company would cure what would otherwise be a breach of s 173, holding that ‘[t]he self-interested “consent” of the shareholder, given in furtherance of a crime committed against the company, cannot be said to represent the consent of the company’.31 80 MacLeod, along with earlier, English authorities,32 establishes that a lack of consent to the actions of a director can exist notwithstanding the existence of an 26 MacLeod v The Queen (2003) 214 CLR 230 at [26]. 27 MacLeod v The Queen (2003) 214 CLR 230 at [27]. 28 MacLeod v The Queen (2003) 214 CLR 230 at [27]. 29 Salomon v Salomon & Co Ltd [1897] AC 22. 30 MacLeod v The Queen (2003) 214 CLR 230 at [28]. 31 MacLeod v The Queen (2003) 214 CLR 230 at [30]. 32 See Attorney-General’s Reference (No 2 of 1982) [1984] QB 624. -- 20 of 29 -- [2023] SASCA 15 The Court 19 identity between the director and shareholder of the company. Then, in the case of a power of attorney, R v Kerin33 frames the inquiry as to whether a donor of power consented to a particular exercise of power, by reference to the scope of the power conferred. Peek J in that case held that the trial judge had erred when directing the jury, by substituting an element of misuse of powers for that of a lack of consent.34 Bearing in mind that this was a power of attorney case, Peek J went on to say:35 His Honour should have directed the jury that the prosecution was required to prove that the relevant dealing was not consented to by Ms Fahey. His Honour should have directed the jury that the prosecution was required to prove that the relevant dealing was not consented to by Ms Fahey. He should have further directed that such relevant dealing performed by the appellant occurred during a period of legal incompetency of Ms Fahey and was not performed with reasonable diligence to protect her interests (s 7 of the POA Act). 81 The respondent submitted, however, that there was no allegation in the present matter that the respondent had done anything contrary to the terms of the Trust Deed. The Trustee has been conferred with a discretion in the widest possible terms, as set out above. It followed, in his submission, that the charged acts of transferring funds to a different account cannot amount to acting beyond the power of the Trustee in that role. 82 The respondent accepted that the evidence of him communicating with Mr Ferrarone requesting direction as to how to invest the funds, the subsequent correspondence by which Mr Ferrarone instructed him and his non-compliance with those instructions was capable of establishing a misuse of powers, as contemplated by s 134(3)(b). However, he submitted, relying on the observation of Peek J in Kerin, above, that this did not and could not equate to the company not consenting. 83 It is one thing to say that it would be an error to equate a misuse of powers with a lack of consent and thereby substitute an element of the offence. It is quite another to recognise that evidence of misuse of powers is capable of proving, circumstantially, a lack of consent. 84 The impugned dealings were capable of amounting to a misuse of the respondent’s powers as a director, that is, that by making the transfers he was preferring his interests over those of both First Rundle and First Rundle B. 85 Clause 24.0 of the Trust Deed, set out above, then specifies that the Trustee ‘covenants to exercise all due diligence and vigilance in protecting the Trust Fund’. This clause circumscribes the relationship between Trustee and beneficiary. It is evidence of a limit to the powers of the director of the Trustee, to which each of the Trustee and Beneficiary has consented. It is not the only evidence. As identified 33 (2013) 116 SASR 316. 34 R v Kerin (2013) 116 SASR 316 at [180]-[186]. 35 R v Kerin (2013) 116 SASR 316 at [186]. -- 21 of 29 -- [2023] SASCA 15 The Court 20 above, ss 7 and 9 of the Trustee Act 1936 (SA) impose limits on the power of a trustee. The discretion:36 … is never an absolute one; it is always limited by the duty – the dominant duty, the guiding duty – of recovering, securing, and duly applying the trust fund. And no trustee can claim any right of discretion which does not agree with that paramount obligation. 86 There is then evidence of the respondent misusing his powers as director and dishonestly failing to cause the Trustee to comply with its obligations under the Trust Deed. That circumstantial matrix of evidence, set out above, includes the respondent’s communications with Mr Ferrarone, dishonestly concealing the true fate of the trust funds, and the continued depletion of the funds. Contrary to the respondent’s submissions, that matrix also includes evidence of what was done subsequently with the funds; subsequent conduct is capable of comprising circumstantial evidence that the impugned transactions were undertaken in breach of cl 24.0. 87 The analysis extends to the entirety of the respondent’s conduct in the context of the relationships within the First Rundle group, the terms of the Trust Deed and the statutory and equitable obligations of the respondent, and further having regard to the instructions received from Mr Ferrarone. It permits a conclusion of the dishonest misuse of director’s powers and, separately, that First Rundle and First Rundle B did not consent to the impugned transactions. 88 Returning to s 134(1), the elements of the charge of theft under the CLCA are:37 1. the defendant must deal with property; 2. the defendant must do so dishonestly; 3. the defendant must do so without the owner’s consent; and 4. the defendant must do so intending to deprive the owner permanently of that property or to make a serious encroachment on the owner’s proprietary rights. 89 In our view, there is circumstantial evidence capable of demonstrating that the dishonest misuse of director’s powers occurred without the owners’ consent. Neither company could consent to the dishonest appropriation of trust property by the respondent, in his capacity as director, for his personal benefit or for the benefit of businesses with which he was involved. An example of a misappropriation 36 Re Brogden; Billing v Brogden (1888) 38 Ch D 546 at 571 (Fry LJ), quoted with approval in Elder’s Trustee and Executor Co Ltd v Higgins (1963) 113 CLR 426 at 449 (Dixon CJ, McTiernan and Windeyer JJ). 37 R v Kerin (2013) 116 SASR 316; R v Kerin [2014] SASC 19 at [9] (Blue J). Note: Appeal allowed from decision of Blue J – see Kerin v The Queen [2022] SASCA 19 (Doyle, David JJA and Nicholson AJA). -- 22 of 29 -- [2023] SASCA 15 The Court 21 benefiting a third party is provided by Addstead Pty Ltd (in liq) v Liddan Pty Ltd,38 where a director misused his power and conferred benefits on others. 90 That conclusion is reinforced by s 134(3)(b), which makes clear that the respondent may be regarded as committing the theft of property by the misuse of his powers as director because it was by the use of those powers that allowed him to deal with trust property. 91 For these reasons, in our view the trial judge erred in holding that the prosecution could never establish beyond reasonable doubt that the companies did not consent to the transactions the subject of Counts 1 to 15. We allow the appeal on an issue antecedent to trial and set aside the stay. The cross-appeal 92 The respondent’s grounds of cross-appeal are as follows: a. The Court erred in holding, at [22], that where multiple owners of property are particularised by the Prosecution, the Prosecution need only prove lack of consent in one of the owners to establish the offence of Theft. The Court ought to have found that: i. where s 130 of the CLCA states that “if there are 2 or more owners of property, a reference in this Part to the owner is a reference to both or all of them”; ii. where s 134(1)(b) prescribes as an element to be proven by the Prosecution that the defendant has dealt with property “without the owner’s consent”; iii. where the Information laid by the Prosecution alleges multiple owners of the property for each charge; the Prosecution is required to prove at trial, for each charge, that each one of the alleged owners did not consent to the property being dealt with in the manner alleged. b. The Court erred in holding, at [97], that where the accused is a trustee of a blind discretionary trust and the property the subject of the charge are funds held by the trustee under that trust, the objective elements of the offence of theft can be established where the owner particularised by the Prosecution is only a potential beneficiary of that trust. His Honour ought to have found that: i. Where the alleged owner is only an “owner” pursuant to s 130 of the CLCA by reason of being a discretionary beneficiary of a Trust; ii. Where, pursuant to the Trust Deed, the trustee could never have been under any obligation to distribute any trust property to this particular discretionary beneficiary; the Prosecution will not be able to prove at trial that dealings with the trust property by the trustee could satisfy the element of s 134(1)(c) of the CLCA (intending to 38 (1997) 70 SASR 21. -- 23 of 29 -- [2023] SASCA 15 The Court 22 deprive the owner permanently of the property or to make a serious encroachment on the owner’s proprietary rights). Whether the prosecution must prove a lack of consent of each owner particularised 93 In response to a submission that it was necessary for the prosecution to prove a lack of consent on the part of each particularised owner, the trial judge held:39 In my view it is only necessary for the prosecution to prove lack of consent in one of the owners that it particularises. One of the reasons for the offence is to provide some sort of remedy to aggrieved entities whose ownership rights have been interfered with. Just because one of a number of entities nominated as an “owner” by the prosecution cannot establish that it did not give consent for the transaction ought not to mean that other entities nominated which can prove lack of consent to the conduct of the applicant should have their action fail. 94 The prosecution provided a marked up copy of the Information at the request of the trial judge, particularising the owners in respect of Counts 1-15 as First Rundle and First Rundle B and the owners in respect of the balance of the counts as First Rundle, First Rundle B and Mr Ferrarone.40 The respondent’s essential contention on the cross-appeal is that the prosecution is bound to its particularisation and must prove that the dealings were without the consent of each owner particularised. 95 The respondent pointed to the language of the particularisation (the word ‘owners’ in the plural and the use of the conjunctive, ‘and’), as well as the stipulation in the definition of ‘owner’ in s 130 of the CLCA, that ‘if there are 2 or more owners of property, a reference in this Part to the owner is a reference to both or all of them’. He submitted in writing that the element of theft in s 134 requiring that the dealing be ‘without the owner’s consent’ is a reference to the consent of all of the owners. However, in oral submissions he did not go so far to submit on appeal that the prosecution had to prove the lack of consent of all owners within the meaning of s 130, just those particularised on the Information. 96 The respondent further submitted that not to require the prosecution to prove the lack of consent of each particularised owner would render the Information duplicitous, in that a verdict would not be transparent as to which owner had not consented. 97 The respondent’s primary contention before the trial judge appears to have proceeded on the construction of s 130. The judge framed the question in the following way:41 39 [2022] SADC 45 at [22]-[23]. 40 Exhibit VDP4a on the voir dire. 41 [2022] SADC 45 at [9]. -- 24 of 29 -- [2023] SASCA 15 The Court 23 Is the “owner” only the entity(ies) particularised by the prosecution as the “owner” or is it comprised all [sic] the owners that one can conceivably think of that meet the definition of “owner” in the Act? 98 The judge then recorded the respondent’s contention that ‘owner’ in s 130 means every conceivable owner that meets the definition, regardless of whether it is particularised by the prosecution.42 He held that it was for the prosecution to nominate in its particulars the specific owner or owners in respect of which it intended to establish the necessary lack of consent. That conclusion does not appear to be challenged. The judge then considered the respondent’s alternative argument, that where the prosecution particularised more than one owner, it was necessary to prove the lack of consent of each particularised owner. It was this alternative contention on which the judge ruled in the terms set out above and on which the respondent seeks permission to appeal. 99 The effect of the respondent’s complaint appears to be that the judge’s ruling creates or crystallises a patent duplicity with respect to each count. Each count particularises more than one owner. If the prosecution need not prove a lack of consent of each owner, but only of one, the effect of the respondent’s contention is that there are separate offences disclosed with respect to each owner within the one count. Alternatively, the complaint might be characterised as one of latent duplicity, in that were the trial to progress, the respondent is in a position of uncertainty in that he does not know the identity of the owner on whose lack of consent the prosecution relies.43 100 In Walsh v Tattersall, the High Court approved of the following formulation of duplicity: 44 The indictment must not be double; that is to say, no one count of the indictment should charge the defendant with having committed two or more separate offences … This rule though simple to state is sometimes difficult to apply … Duplicity in a count is a matter of form, not evidence. 101 The trial judge rejected the respondent’s contention that the charges were duplicitous in their particularisation of more than one owner, in that the ‘nub of the action’ was dealing with property. Each count particularised only one dealing, even if it affected the property interests of more than one owner.45 102 The duplicitous incorporation of more than one offence within a count might be conjunctively or disjunctively expressed.46 Here, the ‘owners’ are expressed within each count conjunctively. However, this does not, by itself, create duplicity. The prosecution has determined to particularise, conjunctively, more than one 42 [2022] SADC 45 at [10]. 43 McDonald v Higgins (2013) 227 A Crim R 130 at [26] (Edelman J). 44 (1996) 188 CLR 77 at 84 (Dawson and Toohey JJ), citing Archbold, Criminal Proceeding, Evidence and Practice, 44th ed. (1995), Volume 1 at 75. 45 [2022] SADC 45 at [25]. 46 Romeyko v Samuels (1972) 2 SASR 529 at 553 (Bray CJ); McDonald v Higgins (2013) 227 A Crim R 130 at [25]-[26] (Edelman J). -- 25 of 29 -- [2023] SASCA 15 The Court 24 owner whose consent was lacking. That is what it must prove. The definition of ‘owner’ in s 130 is capable of accommodating that formulation of the charge. 103 However, the trial judge erred in holding that the prosecution need only prove one owner where more than one is particularised conjunctively. At the very least, that engenders uncertainty. It is insufficient to observe that the ‘nub of the action’ is dealing with property. That the ‘owner’ did not consent is a separate element of the offence. To take the example of Count 1, reproduced above, the prosecution has since particularised that the dealing was without the consent of First Rundle and First Rundle B. For the trial to proceed on the basis that the prosecution need only prove one would, in the absence of some further election by the prosecution, be productive of uncertainty about an element of the offence. 104 That is not the end of the matter. To conclude that the judge erred in holding that the prosecution need not prove that both or, where relevant, all three particularised owners did not consent, is simply to correct an erroneous interpretation of the relevant counts on the Information. However, the cross-appeal is against the failure to order a stay on the theft counts (other than Counts 1-15). Our conclusion that the prosecution must prove the lack of consent of each owner particularised provides no basis for granting a stay. Given our conclusion on the appeal that the circumstantial evidence is capable of proving a lack of consent of the particularised owners, the trial can (subject to the remaining ground of cross-appeal) proceed on that basis. 105 For that reason, while we consider that the trial judge erred in his conclusion as to what the prosecution was required to prove on the Information as particularised, we refuse permission to appeal on this ground of the cross-appeal. Whether the prosecution can prove that the respondent intended to deprive the owner permanently of the property or to make a serious encroachment on the owner’s proprietary rights (CLCA s 134(1)(c)) 106 As identified above, the prosecution has particularised Mr Ferrarone to be an ‘owner’ of the property the subject of the theft charges in Counts 16-29, 31, 32, 34 and 44-49. These charges concern the period from 2010 when Mr Ferrarone had, by the 2010 Deed of Variation, become a discretionary beneficiary of the First Rundle Trust. We read the particularisation of Mr Ferrarone as an ‘owner’ distributively in each count, such that it is charged in each case that the respondent intended to deprive Mr Ferrarone permanently of the property or to make a serious encroachment on Mr Ferrarone’s property rights. 107 The respondent submitted that Mr Ferrarone divested himself entirely of any ownership of the trust money upon the establishment of the Trust. Mr Ferrarone’s rights as a discretionary beneficiary of the Trust from 2010 amounted to no more -- 26 of 29 -- [2023] SASCA 15 The Court 25 than an ability to insist on the due administration of the Trust, which is an equitable chose in action.47 108 The respondent accepted that this brought Mr Ferrarone within the terms of the definition of ‘owner’ in s 130(b). However, he argued that for the purposes of s 134(1)(c), there could be no depriving Mr Ferrarone of his property or serious encroachment of his property rights (and therefore no intention to do so). Mr Ferrarone had lost nothing. His chose in action, being a right to insist on due administration of the Trust, remained notwithstanding the respondent’s dealings with the trust funds as alleged on the Information. 109 We reject that submission as a matter of statutory interpretation. Mr Ferrarone’s right of due administration of the First Rundle Trust from 2010 makes him an ‘owner’ under s 130(b) ‘in relation to property subject to [the] trust’. A discretionary beneficiary’s right of due administration extends to the capacity to insist upon the trustee acting in accordance with the terms of the Trust and the trustee’s duties, including the trustee’s fiduciary duties to the Trust and the beneficiaries. It does not exist in a vacuum. The concomitant obligations of the trustee, summarised above, arise in relation to the actual trust property. 110 The question is then whether it is possible to prove that the respondent, when engaged in the impugned dealings, intended ‘to make a serious encroachment on the owner’s proprietary rights’ within the meaning of s 134(1)(c). This element must be read together with s 130(b), which deems Mr Ferrarone to be an owner of the trust property. His ‘proprietary rights’ within the meaning of s 134(1)(c) can only be those rights he has as a deemed owner, that is, his right to due administration of the Trust on which the trust property is held. 111 That is a conclusion of statutory construction. On the general question of such a right being property, in Kennon v Spry, French CJ quoted with approval Lord Wilberforce in Gartside v Inland Revenue Commissioners:48 Each of the beneficiaries had the right to compel the trustee to consider whether or not to make a distribution to him or her and a right to the proper administration of the Trust.49 In Gartside v Inland Revenue Commissioners, Lord Wilberforce put it thus:50 “No doubt in a certain sense a beneficiary under a discretionary trust has an ‘interest’: the nature of it may, sufficiently for the purpose, be spelt out by saying that he has a right to be considered as a potential recipient of benefit by the trustees and a right to have his interest protected by a court of equity. Certainly that is so, and when it is said that he has a right to have the trustees exercise their discretion ‘fairly’ or ‘reasonably’ or ‘properly’ that indicates clearly enough that some objective consideration (not stated explicitly in declaring the discretionary trust, but latent in it) must be applied by the trustees and that the right is more than a mere 47 Kennon v Spry (2008) 238 CLR 366 at [75], [78] (French CJ), [126] (Gummow and Hayne JJ). 48 (2008) 238 CLR 366 at [74] (French CJ), quoting Gartside v Inland Revenue Commissioners [1968] AC 553 at 617-618. 49 Gartside v Inland Revenue Commissioners [1968] AC 553 at 617. 50 [1968] AC 553 at 617-618; see also Sainsbury v Inland Revenue Commissioners [1970] Ch 712 at 725. -- 27 of 29 -- [2023] SASCA 15 The Court 26 spes. But that does not mean that he has an interest which is capable of being taxed by reference to its extent in the trust fund's income: it may be a right, with some degree of concreteness or solidity, one which attracts the protection of a court of equity, yet it may still lack the necessary quality of definable extent which must exist before it can be taxed.” (Footnotes in original) 112 There are various statutory contexts, however, where the rights of a discretionary object are treated as property. In Kennon v Spry itself, the High Court concluded that a wife’s right to due administration of a Trust of which she was a discretionary object was property for the purposes of ss 4(1) and 79(1) of the Family Law Act 1975 (Cth).51 In Official Receiver in Bankruptcy v Schultz,52 a right of that nature was treated as property for the purposes of the Bankruptcy Act 1966 (Cth). 113 The extended definition of ‘owner’ of property in s 130(b) requires a conclusion that the right of a discretionary beneficiary to due administration of a Trust is a proprietary right for the purpose of s 134(1)(c). It would be problematic, however, to describe the actions of the respondent as depriving Mr Ferrarone permanently of his right to due administration of the Trust, within the meaning of s 134(1)(c)(i). He retains that right, which may support a civil cause of action against the Trustee on account of the dishonest depletion of funds contrary to the terms of the Trust Deed.53 114 As to the application of s 134(1)(c)(ii), difficulties can arise in valuing a chose in action of this nature.54 However, that does not mean that the transfers by which the funds were depleted have not rendered the right to due administration of the Trust less valuable or that this reduction in value cannot be quantified or described. In this case, at the relevant time, the two beneficiaries were First Rundle B and Mr Ferrarone. Logic dictates that the value of Mr Ferrarone’s right of due administration over the trust fund when it was worth millions was greater than when it was worth nothing. We do not accept the respondent’s contention to the effect that Mr Ferrarone’s subsisting right to due administration that attached to the Trust over these funds cannot have been thereby subjected to a ‘serious encroachment’. 115 The cross-appeal does not raise for consideration what more, if anything, would be required by way of evidence beyond the company documents and Trust Deeds to establish this element and, specifically, the degree of encroachment on Mr Ferrarone’s statutorily defined proprietary rights. For the purposes of the cross- appeal, it is sufficient to hold that the nature of Mr Ferrarone’s interest does not exclude this element of the offence from being established. 51 Kennon v Spry (2008) 238 CLR 366 at [78] (French CJ), [126] (Gummow and Hayne JJ). 52 Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306 at 314. 53 Gartside v Inland Revenue Commissioners [1968] AC 553 at 617. 54 See, e.g., Kennon v Spry (2008) 238 CLR 366 at [77]-[78] (French CJ). -- 28 of 29 -- [2023] SASCA 15 The Court 27 116 We grant permission to appeal on the second ground of cross-appeal but dismiss the cross-appeal. Conclusion 117 We allow the appeal and set aside the order staying the prosecution on Counts 1 to 15. We dismiss the cross-appeal. -- 29 of 29 --