One, two, three, fraud: Clarifying the elements of fraud in Western Australia

By Elizabeth Macknay, Christopher Hicks, Stephen Waddington and Annabel Beech

Cases concerning COVID-19 public health measures such as travel restrictions and vaccine mandates continue to provide interesting vehicles for the superior courts to develop points of criminal law.

In NVX v The State of Western Australia [2022] WASC 407, Tottle J of the Supreme Court restated and clarified the elements of the fraud offence in Western Australia.

In Western Australia, the fraud offence has three elements:

1. the accused must have an “intent to defraud”;
2. the accused must have engaged in “deceit” or employed “fraudulent means”; and
3. by that conduct, the accused must have, gained a benefit, pecuniary or otherwise, for any person (or brought about one of the other prescribed circumstances, such as obtaining property from, or causing detriment to, any person).

NVX attempted to fraudulently obtain a COVID-19 vaccination certificate, so he could continue to work as a fly-in fly-out mine worker without being vaccinated. Unusually, NVX was convicted of an offence even though the benefit he attempted to gain did not consist of money or property.

The case illustrates not only the creative ways in which some tried to avoid vaccine mandates, but also the broad way in which the fraud offence is applied in Western Australia.

The case at trial

In November 2021, the State Government issued emergency directions requiring fly-in fly-out and local workers on Western Australian mine sites to be vaccinated against COVID-19.

NVX attended a vaccination clinic. There, he twice offered a nurse $500 to ‘squirt the vaccine out’ but still register him as having been vaccinated. He said to the nurse ‘[i]f I had $500 in my pocket, would you mark that I had had it and squirt it out’.

The State prosecuted NVX in the Magistrates Court, alleging he had committed the offence of attempted fraud. The Magistrate rejected NVX’s ‘no case to answer’ submission and convicted NVX of the offence. The Magistrate delivered reasons confirming that:

1. notwithstanding the offer to pay $500 was couched in hypothetical terms, it revealed an intention to defraud;
2. by taking steps that were more than merely preparatory, NVX had attempted to employ fraudulent means to obtain the vaccination certificate; and
3. obtaining the vaccination certificate would constitute a “benefit” for the purposes of the fraud offence.

The case on appeal

NVX unsuccessfully sought leave to appeal from the Magistrate’s decision on two grounds.

NVX argued that the Magistrate’s verdict of guilty was unreasonable and/or not supported by the evidence as:

• the prosecution failed to establish to the requisite standard that obtaining a COVID-19 vaccination certificate was of actual or potential economic value to NVX; and
• therefore, it had not been proved that the accused had, by his conduct, attempted to gain a benefit, pecuniary or otherwise, for himself.

The Court affirmed that, in the context of the fraud offence, “benefit” has been given a broad construction and (unlike similar offences in other jurisdictions such as the United Kingdom) is not limited to money or property. The Court relied on a case, the facts of which are quite striking, where the General Manager of the City of South Perth fraudulently persuaded the Chief Executive Officer (who was on sick leave at the time) to resign from his position, so as to be able to apply for it himself. In that case, it was held that the opportunity to apply for the position (there being no certainty of getting it) could constitute a benefit for the purposes of the fraud offence.

Here, the Court held that obtaining a vaccination certificate would have conferred a benefit on NVX in that it would reduce the risk of him losing his employment as a fly-in fly-out worker. Contrary to NVX’s submission, it was not necessary to establish the actual or potential economic value of the vaccination certificate. Accordingly, NVX’s appeal failed.

In its analysis, the Court also confirmed that, for the purposes of the fraud offence, the deceit or fraudulent means (the second element) need not have been deployed against the same person who is the subject of the prescribed circumstance (the third element). That is, the offence may be established where a person is defrauded and a third party suffers a loss or makes a gain, provided there is a causal connection between these events. This mirrors the foreign bribery offence in most jurisdictions: The person who bribes the public official need not be the person who obtains the advantage.

Comment

As cases such as this demonstrate, the fraud offence can apply to a range of dishonest conduct, not just the typical case of obtaining money or property by deceit. The case also illustrates the creative ways in which people tried to circumvent COVID-19 public health measures. It is expected that cases relating to these measures will continue to make their ways through the superior courts, even as we learn to ‘live with COVID’.

Fraud is a challenging problem for business. It is thought to be more common than generally recognised and is often underestimated and unchecked, with the potential for significant financial and reputational consequences for victims and perpetrators alike. It is likely that challenges of COVID-19, including financial hardship, more flexible compliance processes, and employee dislocation, led to an uptick in fraudulent conduct which is yet to properly reveal itself.

Although NVX was a criminal case, fraud litigation is a burgeoning area of modern legal practice. It extends not only to civil claims for the tort of fraud, but analogous claims arising out of dishonesty such as deceit and misrepresentation, inducing breach of contract, unlawful interference, intimidation, injurious falsehood, bribery, conversion, breach of fiduciary duty/breach of trust and knowing receipt/knowing assistance. It also encompasses a wide range of potential remedies such as damages, recission, accounts of profits, compensation, forfeiture, proprietary claims (constructive trusts, tracing and following), injunctions, freezing orders, disclosure orders, search and seizure orders, receivership and contempt. For this reason, fraud litigation is an important tool for business, which serves to prevent fraudulent behaviour and recover ill-gotten gains.