England and Wales Court of Appeal (Criminal Division) Decisions

On a Reference by the Criminal Cases Review Commission R v. Brian James Hemmings CLARK [2001] EWCA Crim 884 (5th April, 2001)

Case No: 00/1831/Y1

Neutral Citation Number: [2001] EWCA Crim 884

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL

(CRIMINAL DIVISION)

Royal Courts of Justice

Strand, London, WC2A 2LL

Thursday 5^th April 2001

On a Reference by the Criminal Cases Review Commission

R

v

Brian James Hemmings CLARK

The Vice President:

1. On 22 July 1982 (the ninth day of his trial), at Cardiff Crown Court before His Honour Judge Bruce Griffiths QC, the appellant pleaded guilty, on re-arraignment, to seven of the ten counts in the indictment. Counts 1 and 10 were obtaining pecuniary advantage, count 2 was theft, counts 4, 5 and 7 were obtaining property by deception and count 8 was false accounting. He was sentenced to two years' imprisonment concurrently on each count, with 12 months' suspended and, in addition fined £10,000 on count 1 with 12 months' imprisonment consecutive in default. He was made the subject of a Criminal Bankruptcy Order in the sum of £32,377 made up as to £13,500 on count 2, £2000 on count 4, £14,000 on count 5, £2221 on count 7, £100 on count 8 and £556 on count 10. He was disqualified from being concerned in or taking part in the management of a company for 4 years under s.188(1) of the Companies Act 1948.

2. On 3rd May 1983, the Full Court refused his renewed application for leave to appeal against conviction and sentence. He now appeals against conviction in relation to counts 4, 5 and 7 on a reference by the Criminal Cases Review Commission, on the basis that his pleas of guilty have given rise to unsafe convictions in the light of the decision of the House of Lords in R v Preddy (1996) AC 815. The real significance of the appeal lies in the fact that, if his convictions on those counts are quashed, the minimum threshold of £15,000 specified by s.39 of the Powers of Criminal Courts Act 1973 for the making of a Criminal Bankruptcy Order will not be reached, as the total of the amount under counts 2, 8 and 10 is only £14,156.

3. It is only very rarely and in exceptional circumstances that this court grants an extension of time and leave to appeal against conviction because of a change in the law following a plea of guilty. The reasons were explained by Lord Lane CJ in Mitchell (1977) 65 Crim App R 185 at 189-150 and by Lord Bingham CJ in Hawkins (1997) 1 Crim App R 234 at 240C-F and need not be repeated here. In this context, we respectfully agree with the view expressed by the Commission, in paragraph 10.4 of their statement of reasons, that s.9 (1)(a) of the Criminal Appeal Act 1995 confers on the Commission an element of discretion in relation to the making of references to this court. We also agree that that discretion must be used reasonably and fairly. It will, in our judgment, be only in rare and exceptional cases that reasonableness and fairness will require a reference in relation to conviction because of a change in the law many years after a plea of guilty. In the present case, because of the potential benefit to the appellant if the convictions on counts 4, 5 and 7 are quashed, we regard the Commission's decision to refer the convictions on those counts, if we may say so, as an entirely appropriate exercise of the Commission's discretion.

4. The facts can be very shortly stated. In early 1977 the appellant was appointed Group Managing Director of British Dredging Company. He obtained that position by making false representations as to his previous employment and by presenting a false picture of his professional experience. Count 4 involved a company called DG Schunker in which British Dredging had an 80% interest. Mr Schunker owned the other 20%. He owed British Dredging £2000. On the appellant's instructions, a cheque intended to discharge that debt was drawn on Schunker's account and made payable to the appellant personally rather than to British Dredging. The appellant was charged with obtaining the cheque in a sum of £2000. Count 5 related to a small speedboat owned by the appellant. In 1979 he purported to sell the boat to DG Schunker and Co after representing that it was worth £14,000 and he received a cheque for that amount. The boat was actually worth about £3000 when new and no more than £1000 in its then state. Later the boat was found to be unsuitable for British Dredging's purposes and was returned to the appellant upon his agreement to refund the money. He did not do so. He was charged with obtaining £14,000 by deception. Count 7 related to cheques drawn on the British Dredging account which the appellant used to finance his purchase of a BMW motor car. A friend of the appellant obtained the car for him at a cost of £10,214.20p. The appellant paid £2,221 of that sum without the knowledge of British Dredging's Board of Directors by falsely representing that five cheques drawn on British Dredging's account were to cover expenses at his London Office. He was charged with obtaining £2,221 by deception.

5. With regard to counts 5 and 7, the prosecution do not resist the appellant's contention that, in the light of Preddy, the convictions are unsafe and must be quashed. The property obtained by the appellant was not the same as that represented by the cheques but was a different chose in action from that owned by the drawer of the cheques. In the light of Horsman (1997) 2 Crim App R 418 it is not possible to substitute convictions of any other offence, because s3 of the Criminal Appeal Act 1968 only empowers such a substitution by this court by reference to the jury's apparent satisfaction of facts proving the guilt of the other offence. Although, in the present case, unlike Horsman, the jury returned verdicts against the appellant, they did so on the judge's direction. It is therefore impossible to say that the jury found facts which support any other offence.

6. The contentious issue before this court has been whether count 4 should be quashed similarly, bearing in mind that, unlike counts 5 and 7, the property there identified as having been obtained was the cheque itself rather than, as in the other counts, the sum for which the cheque was drawn.

7. On behalf of the appellant, Mr Campbell-Clyne conceded that that part of Lord Goff''s speech in Preddy (835C to 837B), in which their Lordships' reasoning with regard to telegraphic and electronic transfers is applied to cheques, was obiter. Cheques did not fall within the scope of the three questions posed for their Lordships' house (see 835C) and none of the appellants was charged with obtaining the cheques (835D). Preddy was followed in Graham (1997) 1 Crim App R302 and convictions quashed where the particulars of the offence of obtaining property by deception identified a cheque as the property obtained. (see 331F and 332A). Mr Campbell-Clyne accepted that, in Parsons (1998) 2VR 478, the Supreme Court of Victoria declined to follow Preddy on the grounds that the decision in relation to cheques was obiter (see 485 line 18 ), the criminal conduct in Preddy was in the nature of obtaining credit by fraud rather than obtaining property belonging to another (see 485 lines 41, 43) and the reasoning based on the notion that a cheque is not a form of physical property has not escaped criticism, notably by Professor Sir John Smith in (1997) Crim Law Review 396. The Victoria Supreme Court found Professor Smith's reasoning persuasive (see 487 line 41) and in accordance with practical reality (see 488 lines 27 to 32). But, Mr Campbell-Clyne submitted, as another Division of this court in Graham has followed Preddy in relation to cheques, so too should this court.

8. Further, so far as the facts in relation to count 4 are concerned, Mr Campbell-Clyne submitted that there was no intention to deprive Schunker of the cheque. Once the appellant had paid the cheque into his account it would be returned to the drawer's bank. But there was no intention on the part of the appellant to permanently deprive the drawer of the cheque form which, on presentation, would be returned to the drawer via his bank (see per Lord Goff in Preddy at 836H to 837A). Furthermore, it was never envisaged that the appellant would give the cheque to British Dredging: the mis-representation was that he would apply it to extinguish the debt owed by Schunker to British Dredging and that related not to the cheque but to the debt owed by the appellant's bank to him. This was different from the debt owed to Schunker by its bank and it was never suggested that the appellant had represented that he would endorse the cheque to alter the payee.

9. On behalf of the Crown, Mr Houlder QC submitted that the decision in Preddy was obiter in relation to cheques; that, in Graham, the court had followed Preddy without there having been any argument to the contrary on behalf of the Crown (though it is to be noted that the same leading and junior counsel appeared for the Crown in Preddy and Graham as appear before us); that the views of Professor Smith in the article referred to and in a further comment on Horsman in (1998) Criminal Law Review at 129 to 130, are critical of Lord Goff's speech in relation to cheques on the basis that a cheque form is a tangible thing as well as a potential chose in action when completed, and the House of Lords' reliance on Danger (1857) 7 Cox CC 303 was misplaced in view of the subsequent history in the courts of Danger (as outlined by Professor Smith in his 1997 Criminal Law Review article) of which the House of Lords in Preddy were unaware. Mr Houlder invited this court to adopt the views of Professor Smith, to follow the lead of the Victoria Supreme Court and to follow certain, admittedly obiter, observations by Lord Justice Mantell in Marshal (1998) 2 Crim App R 282 at 288C.

10. Mr Houlder further submitted that the terms of s6 (1) of The Theft Act 1968, which was not referred to by Lord Goff in Preddy, affords a basis for upholding the conviction on count 4. S6(1) provides

"A person appropriating property belonging to another without meaning the other permanently to lose the thing itself is nevertheless regarded as having the intention of permanently depriving the other of it if his intention is to treat the thing as his own to dispose of regardless of the other's rights"

In this respect, Mr Houlder took us to the judgment of Lord Lane CJ in Lloyd (1985) 81 Crim App R 182 at 188 cited by Auld LJ in Fernandes (1996) 1 Crim App R 175 at 187F and the conclusion of Auld LJ at 188E that

"s6 may apply to a person in possession or control of another's property who dishonestly and for his own purpose deals with that property in such a manner that he knows he is risking its loss".

11. So far as Mr Houlder's reliance on s6 is concerned, there are, as it seems to us, three difficulties. First, as is apparent from the Report of the argument in Preddy at 825G, s6 was relied on by the Crown in that case, so it cannot be said that the House of Lords was unaware of its possible significance. Secondly, although s6 is relevant to intention, it does not, in our judgment, assist in identifying the nature of the property being appropriated: it may be for this reason that no reference is made to it in Lord Goff's speech. Thirdly, the appellant was not treating this cheque "as his own to dispose of regardless of the other's rights". He was, as Schunker anticipated, paying it into his own account.

12. So far as Mr Houlder's primary contention is concerned, we confess that, were the matter free from authority, we, like the Supreme Court of Victoria, would find Professor Smith's analysis highly persuasive. It seems to us that a cheque form has a value, however modest, and is property capable of appropriation. This is so entirely independently of the questions posed by electronic transfers resulting from the choses in action which arise after the cheque has been made out. But we think that it would be wholly inappropriate for this court, in view of the way in which the speech of Lord Goff in Preddy is expressed, to treat the House of Lords' decision in relation to cheques as merely obiter, particularly as that decision has been followed in Graham by a constitution of this court in which the then Lord Chief Justice Lord Bingham of Cornhill presided. We agree with Mr Campbell-Clyne that, if the law is to be different in relation to cheques, it should be the House of Lords rather than this court which so decrees. In any event, on the facts of the present case, we accept Mr Campbell-Clyne's submission that there was no intention to deprive Schunker of this cheque which everyone contemplated would, in due course, return to Schunker's bank.

13. Accordingly, this appeal is allowed. The appellant's conviction on counts 4, 5 and 7 are quashed. In consequence, the Criminal Bankruptcy Order made against him is likewise quashed.