Let the husband beware!
A recent landmark decision of the District Court in Rockhampton has established that in certain circumstances, the spouse of an employee who steals from her employer may be forced to repay some of the stolen monies, even if that spouse claims to have no knowledge of the criminal conduct.
Shannon Parry was a highly paid group manager with the Zebra Group of companies. Parry was responsible for the financial operations of the group and as such, she held a significant position of trust & responsibility within the organisation.
Over a period of about 13 months, Parry stole approximately $220,000.00 from her employer using a series of elaborate schemes to cover her tracks.
The long arm of the law eventually caught up with Parry. Following her criminal trial in late October 2015, she was convicted of theft and imprisoned for 5 years 4 months.
Prior to her criminal conviction, Parry’s employer commenced civil proceedings in the District Court to attempt to recover the stolen funds from Parry and her husband.
As against her husband, it was alleged that he had benefited from his wife’s fraud as some of the stolen money had passed through their joint bank account.
At the trial of the action, Wayne Parry maintained that his wife had complete control of their household finances and that he had no knowledge of his wife’s fraud committed during her employment at Zebra.
However, during the course of the trial, he conceded that he and his wife were “skint” at the time that she started working for Zebra as their general manager.
His legal team maintained that it was irrelevant that some of the stolen monies had ended up in their joint account.
Unfortunately for Mr Parry, evidence was given at the trial that he and his wife had purchased a beauty salon in Yeppoon during her employment with Zebra which was partly paid off by large cash payments with Mr Parry acting as the bagman.
At the end of the day, the District Court found in favour of Zebra against Mr Parry.
There was no finding that Mr Parry knew that his wife was a thief who was defrauding her employer and depositing some of the stolen monies into their joint bank account.
However, the Court found that Mr Parry had “constructive knowledge” that his wife had deposited some of the stolen money into their bank account. Mr Parry should have become suspicious about the source of the funds after purchasing the beauty salon.
The Court ordered him to repay the amount of money that had passed through their joint bank account after the beauty salon business was purchased.
The Court found that a reasonable person in Mr Parry’s position, armed with this “constructive knowledge”, would have made inquiries about their financial situation given that they had gone from being “skint” to shelling out large amounts of cash within a short period of time.
Such knowledge was sufficient to make Mr Parry liable to repay the stolen funds received into their joint bank account.
The case demonstrates that a spouse who chooses to turn a blind eye rather than make reasonable inquiries about the source of the unexplained funds, does so at their own peril and may ultimately be held to account by the defrauded party.