TMI Blog1931 (11) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... his decision on that application till he had heard the opening of the case for the prosecution. The case having been opened by the learned Attorney-General for the prosecution, at the close of that opening the learned counsel for the appellant said: "With regard to the request I made earlier in the day. I have been following closely what the Attorney-General has said and I have his assurance that what he proposes to submit at the end, after the evidence is called, is what he has opened here. I think it is only reasonable to say that that gives me the particulars I am entitled to, and I do not wish to put the Crown to any further trouble." In order to appreciate the effect of that concession it is just necessary to look at one or two passages in the opening of the learned Attorney-General. He said:" Now, members of the jury, let me make this observation to you about that document" referring to the prospectus. "I am not for a moment going to consider detailed words and phrases. Think of the type of person to whom this was addressed. It was addressed to the prospective investor, and presumably the prospective investor of a more or less cautious type. This is not anything like a ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the outside public had not, particularly in view of the fact that in the profit and loss accounts for those years and previous years there had been some indication of what was called "an adjustment of taxation reserves," a somewhat abstruse expression, which gave rise to considerable discussion during this case. Now coming to count 3, on which the appellant was convicted, the prospectus in question was issued on June 29, 1928. The subscription list was opened on July 3 and closed on or before July 4. It was an issue of 5 per cent. debentures at 9210S., and in fact it was over subscribed. The material portions of that prospectus are first of all the statement of the capital issued and fully paid, of the existing debenture stock, and of the reserve fund of 1,450,000 and the insurance fund of 1,311,755; and on page 2 of the prospectus, after setting out the history of the company and stating that the object of the issue was to provide additional capital for a new freehold building and for the general purposes of the company, it proceeded: "The interest on the present issue of debenture stock will amount to 100,000 per annum. Although this company in common with other shipp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which it is complained were wrong, amounting to a wrong direction in law. These are long extracts, and they are, as I have said, only extracts. It will be necessary to refer to some other passages in the summing up to which exception is not specifically taken. These are the passages which are complained of, in which the learned Judge said, referring to the section : "These are the words which it is said require some consideration and I confess I think they do. It is those words : 'make, circulate or publish, or concur in making, circulating or publishing any written statement or account which he shall know to be false in any material particular.' What exactly does that mean ? The conclusion I have arrived at is this, that it is not limited to a case where you point to a written account or written statement and say : 'Here are certain figures, here are certain words which are false.' I think that is to narrow unduly the words: 'in any material particular.' It is perfectly true that in a criminal act, which carries with it the penalties of the criminal law, the Act must be strictly construed, but it must be reasonably construed and, in my judgment, to construe it in that way would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... false in the sense that it was concealing true facts. Then you have to show before you can get any further at all that it was a deliberately concocted instrument, the instrument of a definite scheme to defraud or to deceive, as the case may be, and therefore in order to prove a case of fraud of this latter type, fraud as it were by concealment, the intent of the parties must be established at the outset. But to construe section 84 so as to exclude from its ambit that type of fraud in a written statement of account is, in my judgment, to limit unduly the scope of the enactment, to exclude from it some of the most important types of false documents which in this class of case may have to be dealt with, and what I think is the guiding feature to do an injury to the language of the statute; for the language must be construed reasonably, and according to its natural meaning. In my view, having regard to the whole of this section, its purpose and its character, I think the construction which I have given to it is the true construction." Then there follows another long extract from the summing up of the learned Judge which it is not necessary to read in full, but which contains this pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invested on the faith of this document and in the belief that it contained all that it ought to contain, whereas if they had been told the true facts they would not have put money into this concern at all, because they would have wanted some guarantee as to the earning capacity of the company?" That passage that I have just read is followed by a further passage, in which the learned Judge said: "As we all know, though a debenture holder is in a sense secured, indeed in fact is secured on the assets which in cerain events he may realise; which he may enter into possession of in certain events, yet the man who takes debentures is not thinking of that: he wants to take a debenture which is secure as to the assets and which is also likely to be a useful debenture to him and yield him an income year by year, an income which will come in due course from the earnings of the company, and therefore it seems common sense that a man would not invest in a company at a time when it had a record of unfruitful working for some years past, however much it may have had of the special credits to keep it going and to provide dividends. That may be perfectly true but, as I say, you have to go a step ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at p. 391; [1900] A.C, at p.250): "My Lords, it is a trite observation that every document as against its author must be read in the sense which it was intended to convey. And everybody knows that sometimes half a truth is no better than a downright falsehood." Then he proceeds to deal with the facts of that particular case. In the case of Peek v. Gurney, Lord Chelmsford, in giving his opinion in the House of Lords, that being a case where the House was considering the effect of the prospectus of the company which was formed to take over the business of Overend and Gurney, said (43 L.J. Ch., at p. 31; L.R. 6 H. L., at p. 386): "It cannot be denied that if the condition of the firm of Overend and Gurney had been disclosed the result must have been their stoppage, and no hope could have been entertained of establishing a joint stock company upon the basis of a concern in such a state. The foundation of the projected company was therefore necessarily laid in concealment; and to render the scheme attractive to the public the promoters were not only compelled to hide the truth, but to give such a colour to the statements put forth in the prospectus as to render them (though perha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e head and front of it, was not subjected to an inquiry in a criminal court. But, be that as it may, the question before your Lordships now is whether the jury were justified in finding with these facts before them what they did find. It is said there is no specific allegation of fact which is proved to be false. Again I protest, as I have said, against that being the true test. I should say, taking the whole thing together, was there false representation ? I do not care by what means it is conveyed by what trick or device or ambiguous language : all those are expedients by which fraudulent people seem to think they can escape from the real substance of the transaction. If by a number of statements you intentionally give a false impression and induce a person to act upon it, it is not the less false although if one takes each statement by itself there may be a difficulty in shewing that any specific statement is untrue." Then a little later on he says, dealing with that particular case (65 L. J. P. C, at p. 60; [1896] A. C, at p. 284): "The whole of this transaction seems to me to have been fraudulent to the last degree, and I entirely concur with those learned Judges who in very p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was sufficient to satisfy the section. But the learned Judge told the jury in the passage that I have already read that upon this third count also they must find the intention to defraud, and he repeated this after the jury had retired and sent their written question to him. In these circumstances the jury must be taken to have found that what was done in this case was done with intent to defraud. In the result, we come without hesitation to the conclusion that in the summing up, regarded as a whole, there was no misdirection, that there was ample evidence upon which the verdict of the jury can be supported, and that this appeal must be dismissed. I intended to add, with reference to what took place after the jury had retired and asked a question of the learned Judge, that, in the opinion of the Court, the direction to the jury by the learned Judge was too favourable to the accused, and that he ought to have told them that on this third count it was sufficient if they found an intent to induce persons to subscribe or advance money to the company. As regards the appeal against sentence, we had considered this matter already, and having given the fullest consideration to every ..... X X X X Extracts X X X X X X X X Extracts X X X X
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