PATRICK JACOB OSOBA (APPELLANT)
THE QUEEN (RESPONDENT)
(1961) All N.L.R. 1
Division: Federal Supreme Court
Date of Judgment: 9th January, 1961
Case Number: FSC 193/1960
Before: Ademola, C.J.F.; Brett, Taylor, F.J.J.
The appellant was the managing director of the Merchants Bank, Lagos; he had authority to approve overdrafts up to £100; beyond that the approval of the Board of Directors was required. The appellant was also managing director of the Nigerian Shipping Co. Limited, which he controlled.
The Merchants Bank had money in London on deposit with the Australia and New Zealand Bank, Limited; it was invested in Treasury Bills on behalf of the Merchants Bank.
On 8th March, 1959, the appellant caused a telegram, signed "Merchantbank" (which is the telegraphic address of the Merchants Bank), to be sent to the Australia and New Zealand Bank, Limited in London, instructing them to realise, £35,000 and pay it to Hambros Bank in London to the account of a Finnish Company. That was done in London on the 9th, but ultimately the credit with Hambros was in the joint names of the Nigerian Shipping Co. Limited and the Finnish Company; it was by way of deposit on a ship which the Nigerian Shipping Co. had agreed to buy from the Finnish Co. Neither the appellant nor the Nigerian Shipping Co. had a credit balance of £35,000 in the Merchants Bank; nor had he the authority of the Board of Directors for what he did. He acted with secrecy. He did not make nor cause any entry to be made in the books of the Merchants Bank debiting any customer's account with the £35,000. The matter came to light. The Nigerian Shipping Co. refused to accept liability. The Merchants Bank was not able to recover the money. The appellant was convicted:-
(1) of stealing £35,000, the property of the bank;
(2) of an offence under section 435(1), in that he received the money but neither made nor had an entry made, with intent to defraud.
In each count he was charged as the Managing Director of the Merchants Bank and both offences were laid as having been committed in Lagos in March 1959.
On the count of stealing it was argued for the appellant that the offence was committed wholly outside the jurisdiction of the court; also that it was a case of obtaining in England, money by false pretences, in view of the implied pretence in the telegram to the Australia and New Zealand Bank Limited; that the instructions in it were authorised by the Board of the Merchants Bank Directors; and that the initial element of the offence, if it was stealing, was the delivery of the telegram in London:
On the count under section 435(1), it was argued that the appellant did not receive the money as a Director of the Merchants Bank but as a Director of the Shipping Co.
(1) This was not a case of false pretences but of stealing: the appellant, as Managing Director of the Merchants Bank, caused the Australia and New Zealand Bank Limited, as innocent agents, to convert the money to his use and benefit.
(2) The despatch of the telegram from Lagos, being the act that set in train the course of events which led directly to the conversion of the money, was the initial element of the offence; the requirements of section 12A(2) were satisfied.
(3) The inference of law from the facts proved was that the appellant received the money in a dual capacity: his relations with the Shipping Co. were such that the receipt by that Company was a receipt by him; at the same time, it was only possible for him to receive the money because of his position as Director of the Merchants Bank.
Cases referred to:-
McLeod v. A.G. of New South Wales, 1891, A.C. 455.
R. v. Ellis, 1899, 1 Q.B., 230.
R. v. Holmes, 1883, 12 Q.B.D., 23.
Archbold, 34th ed., paragraph 92 (on "venue").
R. v. Grubb, 1915, 2 K.B. 683.
APPEAL from High Court, Lagos.
Williams, Q.C. (with him Moore, Akinrele and Makanju), for Appellant.
Kazeem, Senior Crown Counsel (with him Esin), for the Crown.
Brett, F.J.:- Delivering the Judgment of the court:-The appellant was convicted in the High Court of Lagos on the two counts of an information. The first charged him, being the managing director of the Merchants Bank Limited, with stealing the sum of £35,000, the property of the Bank, contrary to section 390(7) of the Criminal Code. The second charged him, in the same capacity, with receiving the sum of £35,000, the property of the Bank, and with intent to defraud omitting to make or cause or direct to be made a full and true entry thereof in the books and accounts of the Bank, contrary to section 435(1) of the Criminal Code. Both offences were laid as having been committed in Lagos in the month of March 1959.
The appellant was at all material times managing director of the Merchants Bank, which had its office at 13-15 Custom Street, Lagos. It was his practice to keep the mail-bag key in his own custody, and to open all incoming letters himself, dealing with some and passing others on to the manager, Mr Soremekun, to be dealt with. He also kept the key of the strong-room where the cash reserve was stored. In his absence from Lagos he used to delegate these functions to one Olu Akinsoroju, who was described as his personal assistant, and who was not, in fact, an employee of the Bank at all, but secretary of the Nigerian Shipping Company Limited, another company of which the appellant was managing director. The only other material fact about the appellant's position in the Bank is that he was authorised to approve overdrafts of up to £100 on his own responsibility, but that overdrafts in excess of that sum required the approval of the Board of Directors. The normal rate of interest on an overdraft was 10 per cent per annum.
In December 1958, after negotiations between the appellant and Mr Rewane, Chairman of the Western Region Development Corporation, the corporation made a deposit of £100,000 with the Bank, paying the money to the Bank's London agents, the Australia & New Zealand Bank Limited. The deposit was to carry interest at the rate of 3½ per cent per annum, and was to be repayable in Lagos on 42 day's notice. The appellant attended personally to all dealings with the Australia & New Zealand Bank in respect of this deposit, and instead of using the general bank code for telegrams concerning it he devised a special code, which consisted in prefixing the figures "02" to the message. The sum of £100,000 was originally invested in Treasury bills on behalf of the Bank, and when the Western Region Development Corporation gave notice of withdrawal of £50,000, bills were sold and the money was duly refunded on the 18th February, 1959. On the 11th March, 1959, the Corporation gave notice of withdrawal of the remaining £50,000, but in the event, after a certain amount of prevarication on the part of the appellant, £15,000 only was paid on the 16th April, 1959, and the balance £35,000 was not paid until March 1960. The present proceedings arise out of the circumstances in which the Bank found itself unable to refund the full sum of £50,000 when it was demanded.
The facts are not disputed, and in view of the limited issues which have been argued in this appeal it is unnecessary to do more than summarise them. On the 8th March, 1959, the appellant caused a telegram to be sent from Lagos to the Australia & New Zealand Bank in London. The telegram was signed "Merchantbank", which is the telegraphic address of the Merchants Bank, and after beginning with the code sign "02" it instructed that £35,000 should be realised and paid to Hambros Bank, 41 Bishopsgate, to the account of Lovisa Rederi Aktiebolag of Lovisa Finland. These instructions were complied with on the 9th March, the day the cable was received, but the credit with Hambros Bank was ultimately in the joint names of the appellant's other company, the Nigerian Shipping Company Limited, and the Finnish Company. The payment was said by the appellant to be by way of a deposit on a ship which the Nigerian Shipping Company Limited had agreed to buy from the Finnish Company. It is not pretended that either the appellant or the Shipping Company had a credit balance of this amount with the Merchants Bank, or that the Board of Directors of the Bank had authorised the grant of an overdraft to either of them.
The appellant left Lagos for London on the day on which the telegram was sent, and gave certain further instructions, which are not now material, to the Australia and New Zealand Bank personally in London. About the 16th March, 1959, the Lagos manager of the Merchants Bank received a telegram from the Australia and New Zealand Bank inquiring about authority under Exchange Control legislation for the crediting of funds to an external account, but the telegram did not bear the code sign "02", and he had no information which should have led him to suppose that any improper transaction was concerned. When the Australia and New Zealand Bank's statement of account for the month of April 1959, was received in Lagos it came into the hands of the appellant in the first place, in accordance with the usual practice. The Lagos manager knew nothing of the sale of £35,000 worth of Treasury bills until he received the statement from the appellant towards the end of May 1959, and even then the statement merely recorded the sale of the bills and the transfer to Hambros Bank and did not show to whose credit the transfer to Hambros Bank was made. The Chairman of the Merchants Bank, Mr Shonowo, first learnt of the transaction when he called on the Australia and New Zealand Bank in May.
The appellant at no time either made or caused to be made an entry in the books of the Bank debiting any customer's account with the sum of £35,000. All he did was to instruct the Lagos manager on the 30th April, 1959, to debit the Shipping Company with £130-17s-9d, being interest at 3½ per cent from the 9th March to the 30th April on £35,000 deposited with Hambros Bank on joint account with Lovisa Rederi, and he refused to give an explanation of the entry. It only remains to add that the Shipping Company refused to accept liability and that up to the date of the trial the Merchants Bank had been unable to recover the sum of £35,000 either from the Shipping Company or from the appellant.
This being the substance of the facts, Chief Williams, while conceding, as regards the first count, that all the necessary elements except one of an offence contrary to the law in force in Lagos are disclosed, submits that the offence is not one which the High Court of Lagos has jurisdiction to try because it was wholly committed outside the jurisdiction of the court. In his argument in the court below, and in this Court, he treated section 12 of the Criminal Code as the section to be construed, but having regard to section 10A of the Code we are of the opinion that it is section 12A, rather than section 12, that applies to the offence charged in the first count. The point does not affect the argument, but we mention it in the interests of accuracy. We agree that neither section 12 nor 12A makes an offence wholly committed outside Nigeria or a Region punishable in Nigeria or the Region, and that if they had purported to do so they would have gone beyond the legislative authority of the legislature which enacted them, under the rule laid down in McLeod v. Attorney-General for New South Wales (1891) A.C. 455. The question to be decided is whether the offence charged in the first count was in fact committed wholly outside Lagos or whether the act or omission which in the case of an offence committed wholly in Lagos would have been the initial element of the offence occurred in Lagos, so as to bring the case within the wording of section 12A(2)(a) of the Criminal Code.
Chief Williams' first submission is that the offence disclosed is obtaining by false pretences, not stealing, in which case he relies on the Judgments of Wills, J., and Hawkins, J., in R. v. Ellis (1899) I Q.B. 230, as authority for saying that since the obtaining of the money took place in England only the English courts have jurisdiction. In R. v. Ellis goods were obtained in England by means of false representations made in Scotland, and the court for Crown Cases Reserved held that a charge under section 11(13) of the Debtors Act, 1869, was triable in England. Not all the members of the court went as far as Wills and Hawkins, J.J., in favour of Chief Williams' submission, and there are dicta to the contrary effect in R. v. Holmes (1883) 12 Q.B.D. 23. At all events it seems to us doubtful whether R. v.Ellis decided more than that the English courts had jurisdiction; the Question whether an indictment would have lain in Scotland, where the false representations were made, as well as in England, where the goods were obtained, did not arise (as, indeed, Wills, J., pointed out) and was one on which, as a matter of judicial comity, an English Court would abstain from expressing an opinion unless it was unavoidable.
We find it unnecessary, in the present case, to decide what the position is as regards a charge of obtaining by false pretences under the law in force in Lagos, since we are satisfied that the facts proved amount to stealing under the Criminal Code, which, as will be remembered, includes acts which in English law would amount to fraudulent conversion under the Larceny Act, 1916. The only false pretence which was made was the implied pretence that the instructions contained in the telegram sent to the Australia & New Zealand Bank were duly authorised by the Board of Directors of the Merchants Bank, but it was not the duty of the Australia and New Zealand Bank to inquire into the authority of the managing director of the Merchants Bank to give instructions for what on the face of it was a perfectly legitimate transaction, and it cannot be said that the implied false pretence was the operative means by which the money was obtained. The true statement of what took place is that the appellant, as managing director of the Merchants Bank, caused the Australia & New Zealand Bank, as innocent agents, to convert the money to his use and benefit.
Chief Williams submits, however, that even if the offence was correctly treated as stealing, the "initial element of the offence", to quote the words of section 12A of the Criminal Code, was the delivery of the telegram to the Australia & New Zealand Bank in London. We are unable to accept this submission. The conversion was carried out by means of the telegram and the telegram alone, and although various human agencies intervened between the despatch of the telegram by the appellant in Lagos and its receipt by the Australia & New Zealand Bank in London, we regard it as clear that the despatch of the telegram, being the act which set in train the course of events which led directly to the conversion of the money, was the initial element of the offence. We have not found any direct authority on the point, but some confirmation for this view is to be found in the authorities cited in paragraph 92 of the 34th edition of Archbold's Criminal Pleading, which show what are to be regarded as the elements of an offence for the purpose of deciding venue, and in the decisions on what is a sufficiently proximate act to constitute an attempt to commit an offence. All the requirements of section 12A(2) of the Criminal Code are thus satisfied, and as regards the first count the appeal must fail.
As regards the second count, Chief Williams points out that section 435(1) of the Criminal Code deals with the person who "being a director or officer of a corporation or company receives or possesses himself as such of any of the property of the corporation or company", and submits that although there is evidence that the appellant received some of the property of the Bank, he did not receive it in his capacity as a director of the Bank, but as a director of the Shipping Company. There is no doubt that the appellant possessed himself of the property of the Bank as a director of the Bank, since it was by the abuse of his position as a director that he was able to convert the money, and if the second count had charged him with possessing himself of the property of the Bank no such question could have arisen. On the count as worded the position is less clear, and it is right to say that since the money was paid to the credit of the Shipping Company and not to that of the appellant personally it was only by relying on the control exercised by the appellant over the Shipping Company, and following the decision in R. v. Grubb (1915) 2 K.B. 683, that the trial Judge felt able to hold that the appellant personally had received the money within the meaning of section 435 of the Criminal Code. We consider, however, that on the evidence it may fairly be said that the appellant received the money in a dual capacity: his relations with the Shipping Company were such that the receipt by the Company was a receipt by him; at the same time, it was only possible for him to receive the money because of his position as director of the Bank.
This question was not argued before the trial Judge, and it is right to point out that in the course of his Judgment he said "It is not in dispute that the accused controls the Nigerian Shipping Company and in that capacity if he possessed himself of this money in the terms of the section he is guilty if the other elements of the offence are present." We consider, however, that the capacity in which the appellant received the money is a question to be answered by inference of law from the facts proved and that in holding that he received it in a dual capacity we are not going beyond the functions of a court of appeal and coming to a conclusion of fact to which the trial Judge refused to come.
The appeal therefore fails on both counts, and it is dismissed.