Fraud answer scaffold PDF

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Summary

Fraud answer scaffold. Document can be used as a scaffold in the exam to answer problem questions. Document covers only the elements of the offence of fraud and does not include anything about general defences or complicity (that is a separate issue)....

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Fraud Introduction A. Since the reforms in 2010 there is one broad and general fraud offence outlined in s 192E of the Crimes Act 1900 (NSW) (‘Crimes Act’) B. The prosecution is required to prove the actus reus and mens rea of the offence beyond a reasonable doubt: Woolmington C. There are three types of Fraud according to the consequence caused by the accused’s deception: 1. Obtaining property from another; 2. Obtaining a financial advantage; or 3. Causing a financial disadvantage D. The actus reus and mens rea elements of the three different types of fraud are the same with the exception that the prosecution is required to establish an additional mens rea element of intention to permanently deprive where the accused has obtained property

Actus reus The actus reus of fraud is (a) the accused engaged in deception; (b) the accused obtained property or obtained a financial advantage or caused a financial disadvantage; and (c) the accused caused the consequence by the deception A. Deception 1. All forms of Fraud must be achieved by the accused engaging in deception 2. Deception is defined in s 192B of the Crimes Act 3. Deception must be “as to fact or law” a) This means that an expression of an opinion, an expression of an idea or broken promise cannot constitute deception 4. Deception includes obtaining an authorized response from a computer or ATM: s 192B(1) (b) a) This has the effect that all unauthorized uses of computer to dishonestly obtain property, a financial advantage or cause a financial disadvantage are capable of constituting fraud b) Similarly using another person’s ATM card and PIN would constitute a deception c) This contrasts with dicta in Kennison v Daire that suggested that a machine cannot be deceived in relation to the common law offence of larceny

d) Section 192B(1)(b) now covers situations as that in Kennison v Daire where an accused has used his bankcard without sufficient funds in his account e) The deception in such a case is that the accused had the authority to the card and was operating the account in accordance with the terms and conditions of use B. Causation 1. Having established that the conduct was deceptive, the prosecution must then prove that it caused one of the three consequences 2. The prosecution must establish a causal connection between the deception used and one of the three consequences of fraud: Ho and Szeto 3. The deception need not be the only cause, but it must be a factor that substantially contributed Deception by false statements: probably the most common form of deception is the making of a false statement 

Such statements may be outright lies, or may be partially true: M [1980]

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It is necessary to distinguish between a deception and statements that amount to no more than puffery (an exaggerated or enthusiastic description or claim intended to increase interest in the property): Bryan (1857); Patmoy (1944) a) Whether a statement amounts to deception of mere puffery will be a question of fact for the jury to determine: R v John Bryan

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The making of a true statement may constitute deception if by omitting material facts the true statement creates a false impression: Lee v Jones

Failure to correct: to engage in deception requires some kind of positive act 

The making of a true statement that later becomes false cannot constitute deception: Nelson

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If a person makes a representation that at the time is true, or not recklessly false, there is no obligation on that person to alert a victim to a change in circumstances that make the representation false: Nelson

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However in DPP v Ray [1974] it was held the accused was guilty of obtaining a pecuniary advantage by deception a) The court held that in ordering the meal the accused had, by his conduct, represented he would pay for it b) Although that was an honest representation at the time, by sitting at the table some time after making his decision not to pay, his conduct created the dishonest deception that he was an ordinary customer still intending to pay

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c) Lord Morris held: “By continuing in the same role and behaving just as before he was representing that his previous intention continued. That was deception because his intention, unknown to the waiter had become quite otherwise.” d) Lord MacDermott state that the representation covered “the whole transaction up to and including payment and must therefore be covered…as continuing and still active at the time of the change of mind” e) In dissent, Lord Reid stated: “So the respondent, after he changed his mind, must have done something intended to induce the waiter to believe that he still intended to pay before he left. Deception, to my mind, implies something positive. It is quite true that a man intending to deceive can build up a situation in which his silence is as eloquent as an express statement. But what did the accused do here to create such a situation? He merely sat still.” Deception by conduct and silence: conduct without words, that is, implied representations can amount to a deception: R v Benli 

it was well established under the law on false pretenses that conduct without words could amount to a form of false pretense or deception: Barnard (1837)

Indifference: If the representation is one to which the victim is indifferent there is no effective pretense, false promise or deception: Clemesha 

Where an activity does not have its intended effect on the mind of the person to whom it is addressed, because that person realizes that a deception is being practiced, the offence is not committed, even if property is handed over

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However, in these circumstances there will have been an attempted fraud

The consequence of fraud A. Obtaining property from another 1. Section 192C(1) defines the obtaining of property to include situations where the accused or a third party only gains control or possession of the property 2. This means that fraud covers those situations where the victim is tricked into temporarily handing over possession or control, but he does not intend to hand over the property permanently: Justelius 3. In s 4 of the Crimes Act property is defined to include both tangible and intangible property 4. The definition of property in s 4 includes not only possession but also control of the property 5. Given the availability of the far simpler financial advantage limb, it is unlikely that s 192E(a) will be used in instances beyond simple tangible property fraud B. Obtaining financial advantage

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1. Section 192D of the Crimes Act describes the offence of fraud through obtaining a financial advantage or causing a financial disadvantage 2. The term financial advantage should be given its ordinary meaning: R v Walsh 3. The term ‘financial advantage’ should be given its plain meaning and not narrowly construed so as to allow it to have the broadest scope possible: Vasic 6. The court has held that “financial advantage” has been deliberately left undefined so as to allow it to have the broadest scope possible: Vasic 7. A financial advantage can be obtained even though there is no financial disadvantage to be suffered by the victim: R v Walsh C. Causing a financial disadvantage 1. One issue which has caused significant difficulty for the interpretation of financial advantage offences is where the accused attempts to evade a debt: Matthews v Fountain; Fisher v Bennett 2. The enactment of s 192D of the Crimes Act in NSW avoids the difficulties that have historically arisen in cases of debt evasion as the accused can now be held liable for fraud on the basis of causing financial disadvantage 3. In a debt evasion case, the question of whether the debtor accrues an advantage is now no longer relevant as liability hinges on the disadvantage caused to the creditor by the dishonest failure to repay by the debtor: s 192D 4. This limb will also allow for liability where the accused engages in spiteful actions designed cause harm to a victim, irrespective of any gain to the accused (e.g. by withdrawing money from an account)

Mens rea The mens rea of the offence of fraud is that (a) the actions of the accused were intentionally or recklessly deceptive; and (b) it was dishonest to cause that consequence. The prosecution is required to prove an additional mens rea element of an intention to permanently deprive if the charge is one of obtaining property. A. Intentionally or recklessly deceptive 1. Historically, a false pretense had to be intentional, however, s 192B(2) extends the common law position to include recklessness 2. The prosecution must prove either that the accused intended to deceive, or that the accused was reckless as to the truthfulness of their statements 3. The accused need not know that his or actions constitute a deception; it is sufficient if the accused is reckless as to the truthfulness of the statements: s 192B(2)

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4. Due to the recent enactment of this part (2010) it is unclear as to what the definition of recklessness will be, however, it is likely that the applicable test will be if the accused recognized the possibility that the behavior is deceptive: Stokes and Difford B. Dishonestly 1. Section 192E requires that the accused “by any deception, dishonesty” obtain or cause one of the consequences of fraud 2. The grammatical order of the words is such that the element of dishonesty only applies to the obtaining or causing and not the use of deception: Salvo 3. Dishonesty is defined in s 4B of the Crimes Act as ‘dishonest according to the standards of ordinary people and known by the defendant to be dishonest according to the standards of ordinary people’ a) This definition imports a subjective requirements (that the accused recognizes he or she is being dishonest) and an objective element (the standards of ordinary people) 4. If the accused had a claim of right, then they will not be dishonest: Fuge C. Intention to permanently deprive 1. This mens rea element only applies where the consequence of the fraud is obtaining property from another 2. Section 192C(2) states that: A person does not commit an offence under this part by obtaining or intending to obtain property belonging to another unless the person intends to permanently deprive the other of the property 8. The mens rea element of an intention to permanently deprive mirrors that required for a charge of larceny under s 117 of the Crimes Act Claim of right: it is likely that the common law defence of claim of right will be implied as an element of the new fraud offences 

Under the now repealed offences, it was held that where D has a bona fide belief in a claim of legal right, this will negative an intention to defraud: Kastratovic

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In the Discussion Paper Crimes Amendment (Fraud and Forgery) Bill 2009 (NSW), department of Attorney-General and Justice, stated that NSW would continue to rely on the common law defence of claim of right under the proposed bill

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The issue is whether or not the accused believed they had a legal right to obtain the property, not whether there was a belief in a legal right to employ deception to obtain it: R v Saunders (1991)

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Temporal coincidence A. The requirement that the deception is either intentional or reckless imports a requirement that the accused had the necessary mens rea at the time of the deception: DPP v Ray

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