097-NLR-NLR-V-54-M.-E.-A.-COORAY-Appellant-and-THE-QUEEN-Respondent.pdf
LORD POUTER— Cooray v. The Queen
4Q9
[In the Privy Council]
1953 Present: Earl Jowitt, Lord Porter, Lord Tucker, Lord Asquith ofBishopstone and Mr. L. M. D. de SilvaM.35. A. COOEAY, Appellant, a?ul THE QUEEN, RespondentPkivy Council Appeal No. 38 of 1952
G. A. Appeal 56 of 1950—M. G. Colombo, 43,770
Criminal breach of trust as an agent—Agency business—Necessary ingredient—“ Inthe way of his business ”—Penal Code, ss. 388, 389, 392.
Interpretation—Words in enactment similar to words in English statute—Construction—Binding force of English decisions.
The offence of criminal breach of trust as an agent contrary t6 section 35)2.of the Penal Code is limited to the case of a person who carries on an agencybusiness and does not comprehend a man who is casually entrusted with moneyeither on one individual occasion or on a number 6f occasion#,- provided theevidence does not establish that he carries on an agency business.
Where an enactment has been passed by the legislature in Ceylon in tiresame terms as an English statute, the Courts should adopt the constructionput upon the words by a long established decision Or by a series of decisionsover a period of years by the English COurts.
.^LPPEAL by special leave from a judgment of the Cburt ofCriminal Appeal reported in (1951) 53 N. L. It. 73.
Sir Frank Soskice, Q. C., with Dingle Fool and Carl Jayasifigke, forthe accused appellant.
Sir Hartley Shawcross, Q.G., with Frank Gahan, Q.G., and WalterJayawardene, for the Crown.
Cur. adv. will.
March 2«, 1953.[Delivered by Lord Porter.]—
This is an appeal by special leave from a judgment of the Court ofCriminal Appeal of Ceylon which dismissed an appeal by the appellantfrom a conviction in the Supreme Court of Ceylon following a trial tyjudge and jury. The conviction was for criminal breach of trust as anagent contrary to section 392 of the Ceylon Penal Code and resulted in asentence of five years rigorous imprisonment,
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LORD PORTER—Cooray v. The Queen
After a previous trial the circumstances of which are now irrelevant theappellant was retried on an indictment which after amendment chargedhim with having committed criminal breach of trust between the 1st May,1947, and the 30th April, 1948, in respect of a sum of Rs. 155,576-93,entrusted to him by the managers of the Moratuwa and PiliyandalaCo-operative Wholesale Depots of the Salpiti Korale Stores Societies UnionLtd. in the way of his business as an agent, to be deposited to the creditof the same Union at the Colombo Co-operative Central Bank and therebycommitted an offence punishable under section 392 of the Penal Code.
It was established in evidence that the appellant was the president ofthe Salpiti Korale Union, a body which supplied goods to retail stores ofthe Union through wholesale depots. The method by which the businesswas carried on was that the Colombo Co-operative Central Bank advancedmonies to member business societies to enable them to buy their stocks.These advances were repaid weekly and except in the case of small sumsshould have been so paid by money orders and cheques and not in theshape of cash. The Central Bank in its turn paid in the money orders,cheques and any cash which might have been received in that firm to itsaccount with the bank of Ceylon.
The Union supplied its member Societies through three depots, viz.:—Moratuwa, Piliyandala and Polgasovita.
In addition to his presidency of the Union the appellant was presidentof the committee which controlled the depot at Moratuwa and vicepresident of the Co-operative Central Bank. No question now arisesas to the depot at Piliyandala, but it appears that the appellant secured theappointment of a certain Ranatunga to be manager of the Moratuwadepot. Through him as manager payments of sums due from that depothad to be made to and deposited promptly with the Co-operative CentralBank.
The appellant appears to have instructed Ranatunga, instead of follow-ing out the prescribed routine, to collect large sums from the retail storesin cash and hand them over to bim to betransmitted to the bank. Rana-tunga acted upon those instructions and transferred the cash which he hadcollected to the appellant, who instead of paying it over appropriated thecash and substituted for it his own cheques for the amount due.
All cheques received by the Co-operative Central Bank should have beenimmediately sent to the Bank of Ceylon for collection. The appellanthowever as vice president of the Central Bank ensured that in manyinstances his cheques were not sent forward for collection, with the resultthat when ultimately his activities were discovered some thirty-five chequeshad not been presented. These cheques were some of those which theappellant had substituted for the cash which he had received fromRanatunga and it was for misappropriation of Rs. 57,500 being part oft.hia cash that the appellant was ultimately convicted for criminal breachof trust as an agent.
In these circumstances their Lordships have first to determine whetherthe facts disclosed constituted a criminal breach of trust as agent andsecondly if not whether there can and should be substituted a convictionfor some other offence.
LORD PORTER—Oooray v.-The Queen
•ill
Having regard to the wide field over which the argument ranged theirLordships think it desirable to set out fully the provisions of the PenalCode of Ceylon dealing with criminal breach of trust. They are asfollows :—
PENAL CODE.
“ Of Ortmtn at. Breach of Trust. ”
Sections :
“ 388. Whoever, being in any manner entrusted with property, orwith any dominion over property, dishonestly misappropriates ©r con-verts to his own use that property, or dishonestly uses or disposes ofthat property in violation of any direction of law prescribing the modein which such trust is to be discharged, or of any legal contract, expressor implied, which he has made touching the discharge of such trust,or wilfully suffers any other person so to do, commits “ criminalbreach of trust ”.
Whoever commits criminal breach of trust shall be punishedwith imprisonment of either description for a term which may extendto three years, or with fine, or with both.
Whoever, being entrusted with property as a carrier,wharfinger, or warehouse-keeper, commits criminal breach of trustin respect of such property, shall be punished with imprisonment ofeither description for a term which may extend to seven years, andshall also be liable to fine.
Whoever, being a clerk or servant or employed as a clerk orservant, and being in any manner entrusted in such capacity withproperty, or with any dominion over property, commits criminalbreach of trust in respect of that property, shall be punished withimprisonment of either description for a term which may extend toseven years, and shall also be liable to fine.
Whoever, being in any manner entrusted with property, or withany dominion over property, in his capacity of a public servant or inthe way of his business as a banker, merchant, factor, broker, attorney,or agent, commits criminal breach of trust in respect of that property,shall be punished with imprisonment of either description for a termwhich may extend to ten years, and shall also be liable to fine.
392a. Whoever, being entrusted with or having the dominion of anymoney in his capacity as a public servant, fails forthwith to pay overor produce when required to do so by the head of his department orby the Chief Secretary, Auditor-General, Assistant Auditor-General, orany officer specially appointed by the Governor to examine theaccounts of his department, any money or balance of any moneyshown in the books or accounts or statements kept or signed by himto be held by or to be due from him as such public servant,or to duly account therefor, shall be guilty of the offence of criminalbreach of trust, and shall on conviction be subject to the penaltyprovided by Section 392.
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LORD PORTST3r*=Qooray v. The Queen
392b. Any person who, acting or purporting to act as the agent ofany other person, receives from a postal officer any postal article fordelivery to such' other person and—
wilfully throws away, destroys, keeps, or secretes ; or
without reasonable excuse (the burden of proving which shall
lie upon him) fails to account for such article, or unduly delayssuch delivery,'
shall be deemed guilty of criminal breach of trust, and shall be liableto the punishment prescribed therefor. ”
It will be observed that the widest and most general provision is thatcontained in seetion 388 inasmuch as it applies to all members of thepublic.
On the other hand sections 390 to 392 (A) apply to limited classes, treattheir behaviour as more heinous and impose a heavier penalty. The finalsection 392 (35) which like 392 (A) is a later addition, creates a differentcrime and treats it as subject to the same penalties as those prescribed byseetion 389.
The question for their Xiordships therefore is in the first instance whetherthe appellant is a member of the class or one of the classes embraced insection 392, or otherwise included amongst those referred to in the section.
It was held in the Courts of Ceylon and is maintained by the respondentthat the appellant was entrusted with property in the way of his businessas an agent and converted it to his own use and consequently comesdirectly within the words of the statute.
On the other hand the appellant maintains that the offence is limitedto the case of one who earries on an agency business and does not compre-hend a man who is casually entrusted with money either on one individualoccasion or indeed on a number of occasions, provided the evidence doesnot establish that he earries on an agency business.
In the present case, it is maintained, no agency business was carriedon : the appellant merely received certain sums of money and kept themtemporarily, having provided for their ultimate payments by the encash-ment of his cheques.
The correctness of these contentions depends upon the true constructionof the language quoted.
For the appellant his submission is put in two ways. Firstly it is saidthat whatever might, have been the result if the words “ in his business ”were omitted, their presence excludes the possibility of anyone who doesnot carry on an agency business coming within the section inasmuchas no one can misappropriate money “ in his business ” unless he isengaged in a business of some sort : a man may casually misappropriatemoney and be guilty under sections 388 and 389 but he cannot beincluded in the limited classes struck at in 392 unless he is a memberof one of the categories referred to.
Such a construction is, it is said, in conformity with the general schemeof the fasciculus of sections in which 392 is found. 390 applies tocarrier, wharfinger, or warehouse keepers, and to no one else, 391 toclerks and servants or persons so employed and 3.92A to public servants.
LORD PORTER—Oooray v. The Queen
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Similarly 392 refers to several classes, it is true, but is confined to thosetypes of persons who are members of the categories set out. Banker andmerchant are well known types as indeed are factor and broker.Attorney, their Lordships are told, is not a term naturally applied to asolicitor in Ceylon and might there apply to anyone holding a power ofattorney, but in their Lordships’ opinion it would be unsafe to drawany definite conclusion from this circumstance since the section is derivedfrom an earlier English Act where an attorney forms one of a class andbefore its enactment in Ceylon was already to be found in use in India.
The learned Judge of first instance took the view that the accused mancould be found guilty of criminal breach of trust as an agent if beingentrusted with property on behalf of some other person on one occasiononly he dishonestly misappropriated it, and he so instructed the jury.He says : “In the way of his business ” does not necessarily meanthat the Crown must prove that the accused carried on some sort ofbusiness in which he undertook to act as an agent for various people.It is sufficient if on the particular occasion he acts as an agent ofanother, and again he says in effect—If you have no doubt that it iscriminal breach of trust you will go on to consider whether he was actingas the agent of the manager of the Moratuwa Depot when he got thecollection into his hands to deposit in the bank …. On thatquestion again it is not necessary that there should be any express wordsuttered by anybody to constitute him an agent. If there was a collectionat the depot which according to the arrangement between the union andLthe bank must be deposited by the manageirfrom time to time at the bankand he used the services of someone else to deposit the money in the bank,then that other would be acting as the manager’s agent.
When the case came before the Court of Criminal Appeal in Ceylonthe point was fully argued and the view of the Judge of first instanceaffirmed. In that Court it was contended that banker, merchant, brokerand attorney all referred to those persons who carried on business inthose various capacities and that the description agent must be construedas also applying to a person carrying on the business of an agent andto no other even if the words “ in his business ” had been omitted, butthat the insertion of those words made it clear that the accused manmust he-carrying on the business of an agent and that if he was not,he could not be guilty of an offence within the section.
The Court of Criminal Appeal rejected the argument on the groundthat not all the categories of persons comprised in the section of necessityincluded those only who were engaged in a particular class of business.The term “ banker or merchant ”, they said, might be descriptive ofand confined to one engaged in the business of banker or merchantbut a man might be described as a broker though he acted as suchon one occasion only^ and the word attorney (in Ceylon at any rate)would mean one who was not a lawyer but had been given a power ofattorney even for one purpose, and on one occasion only. Similarly it wassaid the term “ agent ” was apt to comprehend anyone who was acting asagent in the matter in which he had misappropriated money though hehad not been acting in that capacity on any other occasion.
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LOUD PORTER—Cooray v. The Queen
The argument that the subsection comprehends only those engaged in•a particular occupation does not lack authority in England.
It is supported by three cases spread over a period of time from R. v.Prince 1 to R. v. Portugal2 and R. v. Kane3.
The principle is perhaps most clearly enumerated in the second ofthese cases at p. 490 where it is said :—
“ It was contended by the Crown that, although the prisoner wasnot either a banker, merchant, broker, or attorney, and although hewas not intrusted with either sum of money in any of those capacities,yet he came within the term, ‘ other agent intrusted with money orvaluable security ’ within the meaning of section 75. To this it wasanswered that, if that contention of the Crown be correct, the sectionshould have said, ‘ whosoever having been intrusted as agent withany money, ’ &c. : that no interpretation or effect would be givento the words ‘ banker, merchant, broker, or attorney ; ’ and that,
• . it was obvious that some effect must be given to those words, ifpossible, in construing the section, for otherwise the section might beheld to apply to everybody intrusted with money to be applied asby the section is provided. In this we agree. We notice that theLarceny Act, a portion of the 75th section of which we are calledupon to construe, after in earlier sections classifying various placesand things from and of which larceny may be committed,—seesections 31, 38, 40, 50, 60, 62 and 63—proceeds to specify certainclasses of persons who may be guilty of the offences therein described ;for instance, from section 67 to section 73, clerks, servants, or personsin the public service are classified ; in section 74, tenants and lodgersare classified ; and in section 75 and afterwards the class aimed atis that of agents, bankers, factors. In our judgment section 75 is' limited to a class, and does not apply to everyone who may happento be intrusted as prescribed by the section, but only to the classof persons therein pointed out. ”
So far the reasoning is directly applicable to the case under considera-tion subject to such immaterial variations as the provisions of the twoacts require. It is true that the learned judges who tried the case wenton to place some reliance on the fact that the English Act 24 & 25 Viet,ch. 96 s. 75 uses the words “ banker, merchant, broker, attorney, or otheragent ” and to draw the inference therefrom that the agent must, like thepreceding types, form one of a class. But this is only an additional groundfor their decision and is merely used as a support of the view which theyalready entertained. Kane’s case in the Crown Cases Reserved follows
R.v. Portugal (supra) though that Court was not bound by tne earlierdecision. Save to this extent it does not add any further support to it.
It was argued on behalf of the Crown that the word attorney had adifferent meaning in Ceylon from that which it bears in England and thatthe act now under consideration does not contain the word “ other Sofar as the second matter is concerned it is to be noted that the Ceylon
1 (1827) 2C. & B. 517.
(1901) 1 Q. B. 472.
16 Q. B. D. 487.
LORD PORTER—Cooruy v. The Queen
415
Penal Code does include the phrase “ in his business ” and in their Lord-ships’ view this expression is at least as important as the word “ other ”in the English Act.
So far as the word “ attorney ” is concerned their Lordships would pointout that the wording of the Ceylon Act is obviously taken direct from theLarceny Act, 1812 52 Geo. Ill ch. 63 sect. 2 which is repeated in 24 and.25 Viet. ch. 96 s. 75.
In an English Act the doctrine is well established that the interpretationput upon an earlier statute by the Courts should as a rule be followed in acase where similar words are used in a later statute. So in the case of aColonial Statute it has been held by this Board that in Colonies where anenactment has been passed, by the legislature in the same terms as anEnglish statute, the Colonial Courts should adopt the construction putupon the words by the English Courts—see Trimble v. Sill x.
It is true that in that case the decision referred to was one given by theCourt of Appeal and that the Courts which it was said should follow ifwere Courts of a Colony, but in their Lordships’ view English Courtsshould themselves conform to the same rule where there has been a long-established decision as to a particular section of an Act of Parliament andeven more so where there has been a series of decisions over a period ofyears. They accordingly are of opinion that in the case of the Courts ofa member of the British Commonwealth of Nations a similar course shouldbe followed.
In enunciating the construction which they have placed upon section392 they would point out that they are in no way impugning the decisionsin certain cases that one act of entrustment may constitute a man a factorfor another provided he is entrusted in his business as a mercantile agent,nor are they deciding what activity is required in order to establish that an.individual is carrying on the business of an agent. In the present case theappellant clearly was not doing so and was in no sense entitled to receivethe money entrusted to him in any capacity nor indeed had Mr. Ranatungaauthority to make him agent to hand it over to the bank.
Accordingly their Lordships have humbly advised Her Majesty to allowthe appeal. The appellant has however plainly been guilty of a criminalbreach of trust under section 389 of the Penal Code of which the jurycould have found him guilty in conformity with section 183 of the CriminalProcedure Code. The Court of Criminal Appeal on their part couldunder section 2 of the Court of Criminal Appeal Ordinance have sub-stituted a verdict of guilty under section 389 in place of that under 392,and should have done so if, as their Lordships think, the appellant hadclearly committed an offence under the earlier section.
The Board have therefore, as already indicated, humbly advised HerMajesty to allow the appeal, discharge the conviction under section 392and substitute for it a conviction under section 389. In respect of this■offence the appellant must serve a sentence of three years imprisonmentless the period of time during which he has been imprisoned under theconviction appealed from.
Conviction altered.
1 5 App. Cae. 342.