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    29
    Aug

    What is a “financial advantage”?

    What is a “financial advantage”?

    A common charge in fraud matters is an allegation of dishonestly obtaining a “financial advantage” by deception.
     
     
    In NSW, this offence is found in section 192E of the Crimes Act 1900.
     
     
    Section 192E(1) provides:
     
    “A person who, by any deceptiondishonestly:
     
    (a) obtains property belonging to another, or
     
    (b) obtains any financial advantage or causes any financial disadvantage,
     
    is guilty of the offence of fraud.
     
    The offence is a serious one, carrying a maximum penalty of ten years imprisonment.
     
     
     

    Scope of the section

     
    While some over-zealous prosecutors may argue that all manner of dubious conduct falls under the scope of this section,
    this approach is misconceived.
     
    In allegations of fraud, the defence barrister or lawyer must carefully scrutinise the evidentiary case to assess whether the element of “financial advantage” can be established beyond reasonable doubt.
     
    Recently, I was briefed in matter involving s192E. The defendant had attended a bank with two fake identity documents and tried to open a bank account under a false name. The bank suspected that the identity documents were false and called the police. No bank account under the false name was opened.
     
     

    Statutory interpretation

    In advising on such matters, the starting point is the construction of the relevant legislation.
     
    The Crimes Act is not beneficial legislation. Offences created by it must be strictly construed according to their plain meaning.
     
    Had the legislature intended that the concept of “advantage” in s192E to be unrestricted, it would not have constrained it with the word “financial.”
     
    Section 192E can be contrasted with section 86 (kidnapping) of the Crimes Act. Section 86(1) provides:
     
    “A person who takes or detains a person, without the person’s consent:
     
    (a) with the intention of holding the person to ransom, or
     
    (a1) with the intention of committing a serious indictable offence, or
     
    (b) with the intention of obtaining any other advantage,
     
    is liable to imprisonment for 14 years” (emphasis added).
     
    This comparison demonstrates that the word “advantage” must be construed more narrowly under s192E as compared to s86.
     
     

    Coelho v Durban

     
    The NSW Supreme Court considered the term “financial advantage” in a matter involving the predecessor of s192E – s 178BA of the Crimes Act in Coelho v Durban[Supreme Court of NSW, 29 March 1993).
     
    In Coelho, the defendant possessed two Nissan Pintara cars. One was a 1986 model which was unregistered and seriously damaged. The other was a 1988 model which was also unregistered but undamaged.
     
    The defendant transferred the compliance plate from the 1986 vehicle to the 1988 vehicle. He then presented the 1988 vehicle for inspection for the purpose of securing registration.
     
    While dismissing the charge in Coelho, Badgery-Parker J stated relevantly (at pp 2-3):
     
    “…it does seem to me that the essence of the concept of financial advantage that the person alleged to have obtained such has obtained a benefit which can be valued in terms of money and a benefit which can be seen to be financial as distinct from benefits of another kind.”
     
     
     

    Did the submitting of false identities constitute a “financial advantage”?

     
    In the false identity matter that I appeared in, I submitted to the court that the defendant did not receive any benefit from trying to open the account using the false documents which could be measured in terms of money; and that accordingly he did not receive any “financial” benefit.
     
    The prosecutor argued that the defendant did receive a financial benefit. She cited the Victorian Supreme Court case of Mathews v Fountain [1982] VR 1045. In that case, defendant employer gave a cheque for $200 to an employee as payment for wages, knowing that there were insufficient funds in the employer’s bank account.  The court held that by knowingly proffering a valueless cheque, the defendant obtained a “financial advantage.” The advantage she obtained was that she got temporary relief from paying her employee.
     
    In support of her argument, the prosecutor put forward various speculative theories of how the defendant could have received an “advantage.”
     

    Stare decisis

    In response, I submitted that:
     
     
    a) Under the principle of stare decisis, the court was bound by the NSW Supreme Court decision. The court was not bound by the Victorian decision. Further, if there was a conflict between the Victorian court’s interpretation and the NSW court’s interpretation, the court was bound to follow the NSW decision.
     
    b) In any event, Fountain was distinguishable on its facts.
     
    Ultimately, the court had no option but to dismiss the charge.
     
     
     
     
     

    Further Reading

    A useful discussion on this type of fraud offence can be found in: A Steel, “Money for Nothing, Cheques for Free? The Meaning of ‘Financial Advantage’ in Fraud Offences” (2007) 31 Melbourne University Law Review 201.
    Disclaimer: Each case depends on its own facts. Solicitors or accused persons should obtain advice from suitably qualified counsel in the case of fraud matters.
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