England and Wales Court of Appeal (Criminal Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM KING'S LYNN CROWN COURT
(HIS HONOUR JUDGE CURL)

		Royal Courts of Justice Strand, London, WC2A 2LL
		12 December 2003

Mr. Justice Silber:

I Introduction

1. On 11 April 2003, Linda Joan Briggs was convicted at the King's Lynn Crown Court of one count of theft (Count 1), two counts of forgery (Counts 3 and 4), two counts of dishonestly obtaining social security benefits (Counts 5 and 6) and one count of obtaining services by deception (Count 7).
2. The Single Judge gave the appellant leave to appeal against conviction in respect of Count 1, the theft count, so as to challenge first the trial judge's ruling rejecting a submission of no case to answer on that count and second, his direction to the jury on that count. The Single Judge refused to grant leave to appeal to the appellant on other grounds. She renews that application to us but we will first consider her appeal on Count 1.

II Appeal on Count 1

3. In 1997, Mr. and Mrs. Reid, who were then respectively in their 90s and late 80s decided to sell their house at 4 Ascot Drive, Felixstowe, so that they could move near to their great-niece, the appellant, who found a suitable house, Welwynd Lodge, for the Reids. It was in the same village as that in which the appellant and her husband lived. The sale of 4 Ascot Drive was handled on behalf of Mr. and Mrs. Reid by Bentons, a firm of licensed conveyancers in Cambridge for whom the appellant had worked briefly and whom she had recommended to the Reids. Although Bentons wrote on occasions to Mr. and Mrs. Reid, Bentons' telephone contact was solely with the appellant.
4. The appellant handled the purchase of Welwynd Lodge herself while Messrs. Metcalf, Copeman and Pettifer ("Metcalfs") acted for the vendor. On 6 October 1997, the appellant wrote to Bentons enclosing a letter of authority in the appellant's handwriting but which was signed by the Reids. In it, the Reids instructed Bentons on completion of the sale of 4 Ascot Drive to send £49,950 of the sale proceeds of that house by telegraphic transfer to Metcalfs' bank account and to remit the outstanding balance of the sale price to the Bank account of Mr. and Mrs. Reid. After the sale of 4 Ascot Drive was completed on 13 November 1997, Bentons complied with these instructions and the sum of £49,950 was used to complete the purchase of Welwynd Lodge. The title in that property was transferred to and was subsequently registered in the name of the appellant and her father, Mr. West. The first count on the indictment, which is an allegation of theft, relates to the transfer to Metcalfs of the sum of £49,950, which had been received by Bentons as part of the proceeds of sale of Ascot Drive.
5. The central issue on this count was whether there was an "appropriation", which is a necessary ingredient for the offence of theft. Mr. Barry for the prosecution contends as he did at the trial that the credit balance was appropriated by the appellant when she caused Bentons to transfer the sale proceeds to Metcalfs for her own purposes. Those purposes were to pay the purchase price of Welwynd Lodge, which, against the wishes of the Reids was then transferred into the name of the appellant and her father. Miss. Felix on behalf of the appellant submits that such a payment cannot amount to an "appropriation", as it was made in accordance with and as a result of the Reids' instructions.
6. Section 3(1) of the Theft Act 1968 (as amended) provides that "Any assumption by a person of the rights of an owner amounts to an appropriation". There was evidence that the Reids' consent to the transfer of £49,950 to Metcalfs was induced by fraud as they believed that this money would be used to ensure that Welwynd Lodge was conveyed to them.
7. The trial judge dealt with the issue of appropriation in his summing up on count 1 by saying:-

"I direct you that there may be an appropriation of the credit balance in count 1 notwithstanding that it was transferred with the Reids' consent, if that consent was induced by fraud. The prosecution say that this is such a case in that the entire transaction was fraudulent – in other words, the prosecution say that the [appellant], throughout, intended to use the proceeds from the Reids' Felixstowe property to purchase Welwynd Lodge and put the latter in her name and her father's without Mrs. Reid's knowledge or consent and knowing Mrs. Reid would not consent if she had known". It is for you to decide whether the Reids' consent was induced by fraud. If you are sure it was, then there can be an appropriation notwithstanding the Reids' consent to the transfer" (pages 8G-9B of the transcript).

8. Miss. Felix submits that this direction, which accords with the trial judge's reason for rejecting an earlier application there was no case to answer, was wrong because a party does not appropriate an item if by fraud he or she induces the owner to part with that item. In support of this, she relies on the statement of Hutchison LJ giving the judgment of this court in Naviede [1997] Crim L R 662, where he explained that:-

"We are not satisfied that a misrepresentation which persuades the account holder to direct payment out of his account is an assumption of the rights of the account holder as owner, such as to amount to an appropriation of his rights within section 3(1) of the 1968 Act."

9. A similar approach has been suggested by the late Professor Sir John Smith in his cogent and persuasive commentary on Naviede [1997] Crim L R 665 where he explained that:-

"In Archbold News (Issue 9, November 14, 1996) I considered the question and, referring to my commentary Caresana [1996] Crim L R 667, doubted whether it could be theft "because the diminution in V's thing in action is effected by V or by V's agents and it is not easy to discern the necessary act of appropriation. The opinion of the court [in Naviede quoted in paragraph 8 above] seems to be exactly the same…

I distinguished the case where D induces V to make a telegraphic transfer from that where D dishonestly presents a cheque drawn on V's account causing it to be debited. This, it is submitted, does amount to an appropriation of the thing in action belonging to V … In the telegraphic case it is true that D procures the whole course of events resulting in V's account begin debited; but the telegraphic transfer is initiated by V and his voluntary intervening acts break the chain of causation. It is the same as if V is induced by deception to take money out of his safe to pay to D. D does not at that moment 'appropriate' it – V is not acting as his agent. D commits theft only if and when the money is put into his hands".

10. In response, Mr. Barry contends that there was an appropriation in this case as is illustrated by the decision of this court in Hilton [1997] 2 Cr App R 445, which was a case in which a defendant on a theft charge, who was one of the designated signatories to a bank account had caused monies to be transferred out of that account to other accounts. This Court held that the instructions of the defendant had caused the bank to make the transfers and therefore the defendant had appropriated the charity's credit balance by assuming the charity's right to the balance.
11. In that case, we consider that there was a clear act of appropriation because, in the words of the late Professor Sir John Smith in the case note on Naviede to which we have already referred:-

"There, [the defendant] had direct control of a bank account belonging to a charity. He caused payments to be made from that account to settle his personal debts. That was a completely straightforward case of theft of a chose in action belonging to another".

12. We also agree with his further comment that that is a totally different case from the situation in cases such as Naviede, which "were all concerned with [the defendant] by deception induces [the victim] to initiate a transaction whereby [the victim's] bank account is debited and that of the [defendant] is credited" ([1997] Crim L R at 666). In other words, we consider that where a victim causes a payment to be made in reliance on deceptive conduct by the defendant, there is no "appropriation" by the defendant".
13. We are fortified in coming to that view by three further factors. First, no case has been cited to us where it has been held that an "appropriation" occurs where the relevant act is committed by the victim albeit as a result of deception. Second, if Mr. Barry was correct, there would be little need for many deception offences as many acts of deceptive conduct would be covered by theft but it is noteworthy that the Theft Act 1968 (as amended) contains deception offences to deal with the case where a defendant by deception induces a person to take a step which leads to the wrongdoing of gaining property by deception (section 15) or obtaining a money transfer by deception (section 15A) or obtaining a pecuniary advantage (section 16). Third, we have already referred to the explanation of the word "appropriation" in section 3(1) of the Theft Act 1968 and it is a word which connotes a physical act rather than a more remote action triggering the payment which gives rise to the charge. The Oxford English Dictionary defines "appropriation" as "to take possession for one's own, to take to oneself". It is not easy to see why an act of deceiving an owner to do something would fall within the meaning of "appropriation".
14. Indeed, we consider that in this case the appropriate charge might have been for an offence of deception. Our conclusion is that the conviction on count 1 must be quashed as there was no appropriation by the appellant of £49,950.

III Substitution of Deception Conviction in Count 1

15. During the course of argument, we invited Mr. Barry to consider whether this would be an appropriate case for invoking the court's powers under section 3 of the Criminal Appeals Act 1968 to substitute a verdict of guilty of a deception offence. This provides:-

1. This section applies only on an appeal against conviction, where the appellant has been convicted of an offence and the jury could on the indictment have found him guilty of some other offence, and on the finding of the jury it appears to the Court of Appeal that the jury must have been satisfied of facts which proved him guilty of the other offence.

2. The court may, instead of allowing or dismissing the appeal, substitute for the verdict found by the jury a verdict of guilty of the other offence, and pass such sentence in substitution for the sentence passed at the trial as may be authorised by law for the other offence, not being a sentence of greater severity.

16. Mr. Barry suggested that a verdict of guilty of a deception offence should be substituted. It is noteworthy that the section 3 power arises only where the verdict of the jury is sufficient in itself to demonstrate that "the jury must have been satisfied of facts which proved him guilty of the other offence", which in this case would be a deception offence.
17. In Graham and Others [1997] 1 Cr App R 302, Lord Bingham CJ giving the judgment of this Court pointed out a difficulty about substituting verdicts because "the fact that the jury did not have a proper direction as to [the proposed substituted offence] is a highly relevant consideration, as is the question whether there are reasonable grounds for precluding that the conduct of the defence would have been materially affected if the appellant had been charged with the offence [proposed to be substituted]" (page 313B-C). He explained that the power under section 3 has usually been exercised in relation to offences of violence or public order by substituting a lesser offence for the offence charged as in those areas there was a clear hierarchy of offences of common law or by statute.
18. Miss. Felix submits that in this case, we cannot be sure that "the jury must have been satisfied of facts which proved the appellant guilty of [a deception] offence". In addition, Mr. Barry candidly told us that the prosecution decided to proceed on a theft charge in relation to the payment of the sum of £49,950 and not to rely on deception offences in this case because they were concerned that to obtain a conviction on a deception offence, they would have had to rely on the evidence of Mrs. Reid, who was elderly. In other words, the prosecution had been seeking to gain a forensic advantage by not charging deception. That is not a source of criticism of the prosecution but a perfectly legitimate decision. We consider that as a deliberate decision had been made by the prosecution not to charge deception, we should not substitute a verdict of guilty of a deception offence.
19. In all those circumstances, we have concluded that the conviction on count 1 of theft should be quashed and that no alternative conviction should be substituted. We now turn to consider the renewed application for leave to appeal.

IV Renewed Application for leave to appeal

(i) Counts 3 and 4

20. Counts 3 and 4 are forgery counts which relate to a tenancy agreement, which was drawn up by the appellant either in 1997 or in 2000. There were two versions of the shorthold tenancy agreement in respect of Welwynd Lodge showing the tenant as "Mrs. N. R. Reid, 2 Ascot Drive, Felixstowe". One version, which is the subject of count 3, was signed by the appellant in March or April 2000 and it was sent to Kings Lynn Borough Council in support of an application for Housing Benefits.
21. Count 4 relates to another version of the tenancy agreement found by the police on the appellant's premises. It was signed "N. R. Reid". The documents which formed the basis of counts 3 and 4 were, according to the particulars of offences, intended to induce someone to accept them as genuine and "by reason of so accepting do some act to that person or some other person's prejudice".
22. In April 2000 the appellant wrote to Kings Lynn Borough Council enclosing an application for Housing Benefit. This was in respect of rent which, according to the application, Mrs. Reid had been paying to the appellant even though by this stage Mrs. Reid was being cared for in a residential home. The application forms were in the handwriting of the appellant and they were signed by Mrs. Reid and the appellant. The forms recited that Mrs. Reid did not own the property but that the appellant allowed Mrs. Reid to live there. The forms were sent together first with the tenancy agreement referred to in count 3 to which I have referred and second with a rent schedule detailing rental payments of £60 per week. In fact, no rent was ever paid by Mrs. Reid.
23. Miss. Felix contends that the fact that the documents referred to in counts 3 and 4 contained lies did not make them false within the meaning of the Forgery and Counterfeiting Act 1981 as they did not tell lies about themselves. We are unable to agree because both of the documents indicated that an agreement had been made with Mrs. Reid by which she agreed to pay rent. Thus both tenancy agreements did tell lies about themselves. There is the additional point in respect of count 4 because the tenancy agreement which is the subject of count 4 states that it was witnessed by Karen Parker of TSB in Felixstowe, but no Karen Parker worked at that office. That lie would be an additional reason why there was a case to answer on that count.

(ii) Counts 5 and 6

24. In April 2000 the appellant wrote to Kings Lynn Borough Council enclosing an application for Housing Benefit which was in respect of rent which, according to the application, Mrs. Reid was paying to the appellant, notwithstanding that by this stage Mrs. Reid was being cared for in a residential home. The application forms were written by the appellant and they were signed by Mrs. Reid and the appellant. They recited that Mrs. Reid did not own the property but that the appellant was the landlord of it who had allowed Mrs. Reid to live there. The forms were sent together with the tenancy agreement to which I have referred and a rental schedule detailing rental payments of £60 per week. In fact, no rent was ever paid. Between April 2000 and March 2001 Kings Lynn Borough Council paid £3,051.72 in Housing Benefit to the appellant as a landlord and that forms the basis of count 5, which is a charge of dishonestly obtaining social security benefits.
25. On 19 March 2001, the appellant wrote to the council enclosing a renewed application for Housing Benefit. The appellant's letter stated that Mrs. Reid had revoked her power of attorney and that she had signed the application on Mrs. Reid's behalf. Between March 2001 and March 2002 the same council paid the appellant £3,111.68 in Housing Benefit as landlord. Mrs. Reid received none of this money and this forms the basis of count 6.
26. Miss. Felix contends that there was no case to answer on these counts as no representation which gave rise to a payment of Housing Benefit had been made by the appellant. This submission overlooks the fact that the appellant had written to the council enclosing the applications for Housing Benefit and indeed that would or could have constituted a representation that what was set out in the application forms was correct. This in itself was sufficient to show a case to answer.

(iii) Count 7

27. This count relates to a mortgage that the appellant and her husband applied for in August 2000 in respect of Welwynd Lodge. In order to make the application, the appellant arranged for her father's interests in the property to be transferred to her husband. The appellant and her husband stated in the mortgage application form that they were the freehold owners of Welwynd Lodge and that it was to be occupied by a relative and to be maintained by them. The appellant signed an occupier's consent form on behalf of Mrs. Reid using the power of attorney which Mrs. Reid had signed in 2000 whilst in hospital. A mortgage advance of £35,000 was duly sent to the appellant and her husband in September 2000 and Mrs. Reid received no part of it.
28. Miss. Felix contends that none of the representations made by the appellant in connection with the mortgage application were false. The mortgage advance application form contained a representation that the appellant and her husband owned Welwynd Lodge but there was clear evidence that it belonged to Mrs. Reid as she and/or her husband had paid for it. In addition, the appellant represented that the property would be maintained by her but it is quite clear that she had done no maintenance on the property and that it had all been done by Mrs. Reid. This must have been the clear intention of the appellant at the time when the agreement was made and therefore there was a case to answer.
29. We have considered the summing up to see if there are any valid criticism that could be made of it in the light of Miss. Felix's representations. We are quite satisfied that none can be made. We are also unable to accept a submission by Miss. Felix that if the submission of no case to answer on Count 1 had been upheld, she would have been able to make a successful application to discharge the jury because Count 1 was of such prejudicial nature. There would have been no need in those circumstances for the judge to discharge the jury as he could and would have told the jury when summing up to them to ignore any evidence adduced on Count 1 and the fact that the appellant had been charged with it. Thus, the application for permission to appeal must be refused.

Conclusion

30. For the reasons set out in relation to the appropriation point the conviction on count 1 is quashed and no alternative verdict will be substituted. The application for leave to appeal must be refused.