Criminal Misappropriation of Property

CRIMINAL MISSAPPROPRIATION OF PROPERTY AND CRIMINAL BREACH OF TRUST

by Dr. Aspalella A. Rahman UUM COLGIS

Introduction Criminal Misappropriation of Property Criminal Breach of Trust - In any manner entrusted - Dominion - Dishonestly misappropriate, convert, use or  dispose 

Introduction Offences against property which do not involve threats or the use of violence in the commission of the offence: i. Criminal misappropriation of property; ii.Criminal breach of trust; iii.Cheating 

Criminal Misappropriation of Property s403 PC states: ‘whoever dishonestly misappropriates or converts to his own use, or causes any other person to dispose of any property, shall be punished with imprisonment for a term which shall not be less than six months and not more than five years and with whipping and shall also be liable to fine.’

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Cont’ ‘misappropriate’ and ‘conversion’ are not defined under the PC. Sohan Lal v Emperor  ‘misappropriate’ means to set apart for or assign to the wrong person or a wrong use and this act must be done dishonestly. Winfield’s case ‘conversion’ refers to any act in relation to the goods of a person which constitute an unjustifiable denial of his title to them. If  denial of title is justified, there is no conversion. 

Cont’ Dishonesty is the essential ingredient of the offence.   The key factors in determining criminal crimin al liability would generally be the nature and value of the property in question.   The offence is committed when the property prope rty is misappropriated or converted by the accused to his own use or when the accused causes any person to dispose of the property. A dishonest misappropriation for a time only is a misappropriation within the meaning of  the section. 

Cont’ No criminal misappropriation of things which have been abandoned.   The property must have its owner to render rende r a person guilty of misappropriation. Where the property is abandoned, anyone finding and taking it acquires a right to it which will be good even as against the former owner. H/e, when a thing is accidentally lost, the property is remains in the owner who lost it. 

Criminal Breach of Trust See s405 PC Elements of s405: i. Being in any manner entrusted with property or with any dominion over property either solely or jointly with any other person; ii.Dishonestly misappropriated or converted to his own use that property, or dishonestly used or disposed of that property; 

Elements of s405 (cont’) iii. The dishonest use or disposal of the property was in violation of any discretion of law prescribing the mode in which such trust is to be discharged or of any legal contract, express or implied, which he made touching the discharge of such trust; or iv. Willfully suffers any other person so to do.

s406 PC-punishment of CBT Whoever commits CBT shall be punished with imprisonment for a term not exceeding ten years and with whipping and shall also be liable to fine.

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In any manner entrusted  The offender is lawfully entrusted entrus ted with the property and he dishonestly misappropriates the same or willfully suffers some person to do so, instead of discharging the trust attached to it. ‘entrust’ includes that person handling over the property must have confidence in the person taking the property so as to create a fiduciary relationship between them. Entrustment includes bailments. 

Entrustment PP v Husin Mohd Rejab [1994] 3 CLJ 93 R , the Chairman of a company was charged under s409 PC. Held: Although there had been some degree of interference or influence exercised by R over his staff, the evidence did not necessarily imply the element of entrustment. Unless the contrary is shown, the proper authority having control over a company’s assets, including cash, is the BOD and not any one director in his individual capacity.

Entrustment may be gratuitous Gratuitous- without return benefit. Chin Wah v PP [1940] MLJ 292 A had borrowed jewellery for use at a party but failed to return it despite frequent requests. Held: The essence of the offence of CBT is the ‘dishonest’ misappropriation or conversion by a person of property entrusted to him. The fact that the entrusting of the property was gratuitous is immaterial. The point is did the accused dishonestly convert to his own use the property of which he was the bailee?

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Dominion  The property in respect of which the offence is alleged to have been committed must have been entrusted to the offender or that he has dominion over the property.   The factor to determine whether there is entrustment of or dominion over property is in the degree of control exercised by the offender. 

PP V YEOH TECK CHYE  The 1st accused was the deputy general manager and the 2nd accused, the manager of  a bank. The 2nd accused, with the knowledge of the 1st accused, had granted overdraft facilities for amounts in excess of the approved limit to the third accused and he had no such authority. Held: There had been entrustment to or dominion over the property of the bank and that the 2nd accused had no authority to allow the overdrawn amounts.

Tan Liang Chew v PP  The 1st A had been charged under s409 PC in respect of a RM350,000 housing loan to Tan Eng Hong, who was not eligible for the loan and which house belonged to the 1 st A. The evidence showed that the 1 st A had sat on committee meeting that recommended housing loan applications for approval by the BOD. Held: Dominion over the property lay with the BOD and that the 1st A had no power to approve housing loans.

Dishonestly misappropriate, convert, use or dispose Dishonest intention is the gist of the offence.   The offender must dishonestly dishon estly misappropriate, convert or dispose or willfully suffer any other person to do so in order that an offence of CBT is committed. 

Sathiadas v PP CBT is complete when there is dishonest misappropriation or conversion to one own’ s use, or when there is dishonest use in violation of a direction, express or implied, relating

Cont’  There must be a sufficient positive posi tive act of  dishonesty.

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Cases: Lim Teik Kai v Hallam Nominees Ltd  Mohamed Adil v PP PP v Rokiah Suhaili  Tong Keng Wah v PP PP v Muthu Lingam

Cont’ PP v Wong Kim Fatt  ‘to establish dishonestly, it is not necessary that the prosecution should establish an intention to retain permanently the property misappropriated. An intention wrongfully to deprive the owner of the use of property for a time is sufficient. It is not necessary to prove in what precise manner the money or property was misappropriated. The essential thing to be proved is that the accused was actuated by dishonest intention.’

s407 PC- CBT by carrier, etc ‘whoever being entrusted with property as a carrier, wharfinger or warehouse-keeper, commits CBT in respect of such property, shall be punished with imprisonment for a term which shall not less than one year and not more than ten years and with whipping, and shall also be liable to fine.’

s408 PC- CBT by clerk or servant ‘ whoever, being a clerk or servant, or employed as a clerk or servant, and being in any manner entrusted in such capacity with property, or with any dominion over property, commits CBT in respect of that property shall be punished with imprisonment for a term which shall not be less than one year and not more than fourteen years and with whipping, and shall also be liable to fine.’

s409 PC – CBT by public servant or agent ‘whoever, being in any manner entrusted with property, or with any dominion over property, in his capacity of a public servant or an agent, commits CBT in respect of that property, shall be punished with imprisonment for a term which shall not be less than two years and not more than twenty years and with whipping, and shall also be liable to a fine.’