England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT

		Royal Courts of Justice
		2nd November 2017

SIR BRIAN LEVESON P:

1. This is an appeal by way of case stated from a decision dated 27 February 2017 of the magistrates sitting in Great Yarmouth dismissing, on the basis that there was no case to answer, two charges of theft, each of £140, on 27 February 2016 and 4 March 2016 respectively brought against Vicky Patterson, the respondent. The question posed for this court is whether they were correct so to find.
2. The facts are set out in the case. In short, from August 2015, the respondent worked for Simply Holidays Ltd as a cleaner. That company owned property including two caravans at Beach Holiday Park, Kessingland, in Suffolk. Within the first couple of weeks of her employment the respondent was handed £500 in cash for the rent, and in communications on Facebook she was asked by the managing director of the company, Samuel Burton, whether he was meant to have sent her his bank details.
3. In a reply to him, dated 15 August, she explained that she had taken her children to a local park, and that the money had been lost or stolen. She stated that she had also lost her phone. She continued working for the company at a reduced rate to repay the £500 but made it clear in a message that she did not want the responsibility of handling money. It was then agreed that in future she would not receive cash payments from tenants.
4. In March 2016 the Arkle family was renting a property from the company. Payment was to have been made by card over the telephone for two weeks at £140 a week. No payment was received by the company, and Mr Burton checked with the respondent to see if payment had been made to her. He left various messages with no initial response.
5. On 13 March, however, he received what he described as a long-winded message in which the respondent said, "If you send me some kind of account I will pay weekly". Mr Burton took this to be an admission that she had received the money, and later messages from the respondent repeated the request for an account number to repay the money.
6. Mr Burton did not immediately respond on the basis that he had already provided the information, but in evidence accepted that he may have been wrong about that. He also said that the respondent did not categorically confirm that she had taken the money, but rather had avoided the question. At the end of an exchange of messages on 13 March, he said, "If you didn't take it, that's fine. It's not your problem." He continued to offer her work up to the end of the year.
7. Not surprisingly, Mr Burton was under pressure from the owner of the property for the rent and was given 24 hours to sort out the payment or, alternatively, to involve the police. The respondent invited him to call the police but Mr Burton thought that this was a hollow threat as she tried to goad him. He gave evidence that he had doubts about whether the respondent was dishonest because she never admitted that she had received the money and he did not know whether it had been lost or stolen. A further message on the same day was ambiguous and, as to the money, simply said, "I haven't got it for sure".
8. The magistrates concluded that there was no definite answer in that message and it was unclear whether or not she was saying she had had the money. When interviewed by the police, however, the respondent admitted that she had received the money and had intended to pay it into Mr Burton's account. She said that she had placed it in her rucksack but when she went to retrieve it, the money was missing. She had lost it but was in the process of paying it back.
9. That is not the entirety of the material on this aspect of the case because the case stated includes reference to the Preparation for Effective Trial form, in which it was admitted that the money had been given to the respondent, the issue at trial being identified in terms:

"No dishonesty. The [respondent] took the money in good faith and intended to pay the money back to Sam Burton. Her partner spent the money, believing it was joint money."

I ought to add, as is clear from the case, that Mrs Kyra Arkle was due to appear in the trial but did not attend, so that the case proceeded without her evidence.

10. On behalf of the respondent, at the close of the prosecution case it was argued that there was no case to answer on the basis that the prosecution had failed to establish either dishonesty generally or, more specifically, the lack of intention to repay. The prosecution submitted that both elements could be inferred from the surrounding circumstances. It was open to the court to conclude that when the respondent took the money she had no intention of passing it on, thus permanently depriving her employer of it.
11. Equally, if she deliberately appropriated the money at some later stage with that intention, she was guilty of theft. That led to a conclusion that there was at least a prima facie case that the respondent had been dishonest. The justices acceded to the submission that there was no case to answer, explaining that they did so because:

"(a) On a previous occasion when money had gone missing, the respondent had continued working for the company at a reduced rate in order to pay the money back;

"(b) In cross-examination Mr Burton stated that he had doubts as to whether the respondent was dishonest and that he did not know whether the money had been lost or stolen. Bearing in mind Mr Burton's involvement with the respondent throughout her employment with his company, we found this to be powerful first-hand evidence and we placed considerable weight on it.

"(c) Mr Burton also conceded that if the respondent had ever had his bank details, it was very likely they had been lost when she lost her phone;

"(d) In the last Facebook exchange which took place on March 13th, 2016 the respondent asked for Mr Burton's account details on three separate occasions;

"(e) In the police interview which took place on Friday 29th, 2016 the respondent still expressed a willingness to pay the money back."

12. Mr Simon Heptonstall on behalf of the Crown Prosecution Service argued that there was a clear prima facie case, based on the inference from the facts, that the respondent had been told and had agreed not to take money from clients. When she did so on the first occasion (i.e. the first payment of £140), she did not report receipt of the money or initiate any process for transmission, but kept it despite the previous pattern of frequent communication and transfers to her account. Second, that remained so for almost a week until, again, she received money from the same client and made no report, only acknowledging that she had done so when pressed by her employer, at which stage she was evasive and sought to dissemble. Third, belated offers of repayment were only made when challenged, but still without explicit acceptance of receipt. Fourth, in interview she asserted she had lost the money, but a different explanation was advanced on the case management form to the effect that her partner had taken it. Finally, it could be added that this was all against a backdrop of an earlier occasion when £500 had gone missing which, at the very least, served to underline the critical importance of careful dealing with clients' money.
13. As for the reasoning expressed by the justices, its terms are expressed in terms of finality ("The prosecution had failed to establish ...") which was appropriate to the conclusion of the case, not to a ruling on a submission of no case. This was underlined by their expression as to the weight they attributed to particular evidence and the absence of the inferences which could be drawn, as opposed to those which the advocate for the respondent sought to argue.
14. In addition, it is by no means clear on what basis the opinion of the employer, Mr Burton, as to his belief in the honesty or otherwise of his employee was relevant. In that regard, he did not know whether the money had gone missing or been stolen, yet at the time of the trial it was not to be in issue that it had been stolen, albeit by the respondent's partner. Far from being "powerful first-hand evidence" which deserved "considerable weight", it was arguably inadmissible and in any event based on partial knowledge of the facts, usurping the assessment of the justices on the entirety of the evidence. Although not articulated in this way, the subjective view of the respondent on the issue of dishonesty has to be treated with care.
15. In R v Ghosh [1982] QB 1053, the approach to dishonesty was twin tracked. First, the fact-finder must ask whether in its judgment the conduct complained of was dishonest by the lay objective standards of ordinary reasonable and honest people. Second, if so, whether the defendant must have realised that ordinary honest people would so regard his behaviour. That test is very different from that which is used in civil proceedings, and the law on this topic both in civil and criminal law was exhaustively analysed in the recent decision of the Supreme Court in Ivey v Genting Casinos (UK) Ltd t/a Crockfords [2017] UKSC 67. Having done so Lord Hughes (with whom Lord Neuberger, Lady Hale, Lord Kerr and Lord Thomas agreed) made it clear at para.74:

"74. These several considerations provide convincing grounds for holding that the second leg of the test propounded in Ghosh does not correctly represent the law and that directions based upon it ought no longer to be given. The test of dishonesty is as set out by Lord Nicholls in Royal Brunei Airlines Sdn Bhd v Tan and by Lord Hoffmann in Barlow Clowes: …. When dishonesty is in question the fact-finding tribunal must first ascertain (subjectively) the actual state of the individual's knowledge or belief as to the facts. The reasonableness or otherwise of his belief is a matter of evidence (often in practice determinative) going to whether he held the belief, but it is not an additional requirement that his belief must be reasonable; the question is whether it is genuinely held. When once his actual state of mind as to knowledge or belief as to facts is established, the question whether his conduct was honest or dishonest is to be determined by the fact-finder by applying the (objective) standards of ordinary decent people. There is no requirement that the defendant must appreciate that what he has done is, by those standards, dishonest."

16. These observations were clearly obiter, and as a matter of strict precedent the court is bound by Ghosh, although the Court of Appeal could depart from that decision without the matter returning to the Supreme Court. This much is clear from R v Gould [1968] 2 QB 65, in which Diplock LJ observed at 68G that:

"In its criminal jurisdiction, ... the Court of Appeal does not apply the doctrine of stare decisis with the same rigidity as in its civil jurisdiction. If upon due consideration, we were to be of opinion that the law has been either misapplied or misunderstood in an earlier decision of this court or its predecessor, the Court of Criminal Appeal, we should be entitled to depart from the view expressed in that decision …"

Given the terms of the unanimous observations of the Supreme Court expressed by Lord Hughes, who does not shy from asserting that Ghosh does not correctly represent the law, it is difficult to imagine the Court of Appeal preferring Ghosh to Ivey in the future.

17. For purposes of this case it is unnecessary to go further. We have no doubt that the approach adopted by the justices erred in principle. Although some questions as to Mr Burton's approach to what he was told may in certain circumstances be admissible his views on the ultimate issue of dishonesty, unburdened with full knowledge of the facts, were irrelevant and in our judgment could play no part in the justices' consideration of the facts. Beyond that error, standing back, we have no doubt that there was a case to answer. But given that the case must be remitted to be heard by a fresh bench, we do not feel it is appropriate to elaborate. The answer to the posed question is in the negative and in my judgment this appeal should be allowed.

MRS JUSTICE MCGOWAN: I agree.