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You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> Hinks v. R [2000] UKHL 53; [2000] 3 WLR 1590 (26th October, 2000)
URL: http://www.bailii.org/uk/cases/UKHL/2000/53.html
Cite as: [2001] 1 Cr App Rep 18, [2001] Crim LR 162, [2000] 3 WLR 1590, [2001] 1 Cr App R 18, [2000] UKHL 53, [2001] 2 AC 241, [2000] 4 All ER 833, (2001) 165 JP 21

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JISCBAILII_CASES_CRIME

Hinks v. R [2000] UKHL 53; [2000] 3 WLR 1590 (26th October, 2000)

HOUSE OF LORDS

Lord Slynn of Hadley Lord Jauncey of Tullichettle Lord Steyn Lord Hutton Lord Hobhouse of Wood-borough

OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT

IN THE CAUSE

REGINA

v.

HINKS

(APPELLANT)

(ON APPEAL FROM THE COURT OF APPEAL (CRIMINAL DIVISION)

ON 26 OCTOBER 2000

LORD SLYNN OF HADLEY

My Lords,

I have had the advantage of reading in draft the speech prepared by my noble and learned friend Lord Steyn. For the reasons he gives I would dismiss the appeal. I do not consider it right in this case to depart from decisions of the House in Reg. v. Lawrence [1972] AC 626 and Reg. v. Gomez [1993] AC 442. Nor do I think it appropriate for the House to review the judge's summing up on dishonesty in this case but not doing so is not to be read as an approval of it.

LORD JAUNCEY OF TULLICHETTLE

My Lords,

I have had the advantage of reading in draft the speech prepared by my noble and learned friend Lord Steyn. For the reasons which he has given, I too, would dismiss the appeal.

LORD STEYN

My Lords,

1.

Since the enactment of the Theft Act 1968 the House of Lords has on three occasions considered the meaning of the word "appropriates" in section 1(1) of the Act, namely in Reg. v. Lawrence [1972] AC 626; in Reg. v. Morris [1984] AC 320; and in Reg. v. Gomez [1993] AC 442. The law as explained in Lawrence and Gomez, and applied by the Court of Appeal in the present case (Regina v. Hinks [2000] 2 Cr. App. Rep. 1) has attracted strong criticism from distinguished academic lawyers: see for example, J.C. Smith, [1993] Crim. L.R. 304 and [1998] Crim. L. R. 904; Edward Griew, The Theft Acts, 7th ed., (1995) 41-59; A.T.H. Smith, "Gifts and the Law of Theft," 1999 C.L.J. 10. These views have however been challenged by equally distinguished academic writers: Glazebrook, 1993 C.L.J. 191-194; Gardner, Property and Theft, [1998] Crim. L.R. The academic criticism of Gomez provided in substantial measure the springboard for the present appeal. The certified question before the House is as follows:

Whether the acquisition of an indefeasible title to property is capable of amounting to an appropriation of property belonging to another for the purposes of section 1(1) of the Theft Act 1968.

In other words, the question is whether a person can "appropriate" property belonging to another where the other person makes him an indefeasible gift of property, retaining no proprietary interest or any right to resume or recover any proprietary interest in the property.

Before the enactment of the Theft Act 1968 English law required a taking and carrying away of the property as the actus reus of the offence. In 1968 Parliament chose to broaden the reach of the law of theft by requiring merely an appropriation. The relevant sections of the Act of 1968 are as follows:

"1. Basic definition of theft

(1)

A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it; and "thief" and "steal" shall be construed accordingly.

2. 'Dishonestly'

(1)

A person's appropriation of property belonging to another is not to be regarded as dishonest - (a) if he appropriates the property in the belief that he has in law the right to deprive the other of it, on behalf of himself or of a third person; or (b) if he appropriates the property in the belief that he would have the other's consent if the other knew of the appropriation and the circumstances of it; or (c) (except where the property came to him as trustee or personal representative) if he appropriates the property in the belief that the person to whom the property belongs cannot be discovered by taking reasonable steps.

3. 'Appropriates'

(1)

Any assumption by a person of the rights of an owner amounts to an appropriation, and this includes, where he has come by the property (innocently or not) without stealing it, any later assumption of a right to it by keeping or dealing with it as owner."

These provisions, and in particular the word "appropriates" in section 1(1), read with the explanatory provision in section 3(1), have been authoritatively interpreted by the House in Lawrence [1972] AC 626 and Gomez [1993] AC 442. It will be a matter for consideration whether such earlier rulings are dispositive of the question of law before the House. In the meantime, it is necessary to give a narrative of the background and the proceedings below.

II.

In 1996 the appellant was 38 years old. She was the mother of a young son. She was friendly with a 53 year old man, John Dolphin. He was a man of limited intelligence. The appellant described herself as the main carer for John Dolphin. It is not in dispute that in the period April to November 1996 Mr. Dolphin withdrew sums totalling around £60,000 from his building society account and that these sums were deposited in the appellant's account. During the summer of that year Mr. Dolphin made withdrawals of the maximum permissible sum of £300 almost every day. Towards the end of this period Mr. Dolphin had lost most of his savings and moneys inherited from his father. In 1997 the appellant was charged with six counts of theft, five counts covering moneys withdrawn and one count a television set transferred by Mr. Dolphin to the appellant. In November 1977 the appellant stood trial on these counts in the Wolverhampton County Court before Judge Warner and a jury. It was the prosecution case that the appellant had influenced and coerced Mr. Dolphin to withdraw the moneys from his building society account, which were then deposited in her account. A substantial volume of evidence was led during the trial which lasted five days. A police analyst produced documents summarising the flow of funds from Mr. Dolphin's account to that of the appellant. Building society employees testified about the daily visits by the appellant and Mr. Dolphin to effect withdrawals. The thrust of their evidence was that the appellant did most of the talking and would interrupt Mr. Dolphin if he tried to say something. Dr. Fuller, a consultant psychiatrist, assessed Mr. Dolphin's I.Q. as in the range between 70 to 80 (the average being 90 to 110). He said that Mr. Dolphin was able to live a normal if undemanding life. Mr. Dolphin had worked as a packer in a dairy for some 30 years. Dr. Fuller described him as naïve and trusting and having no idea of the value of his assets or the ability to calculate their value. Dr. Fuller accepted that Mr. Dolphin would be capable of making a gift and understood the concept of ownership. He thought that Mr. Dolphin was capable of making the decision to divest himself of money, but that it was unlikely that he could make the decision alone. Two police officers testified that after cautioning the appellant she denied "having any money" from Mr. Dolphin except for a single cheque which she said represented a loan. In a nutshell the prosecution case was that the appellant had taken Mr. Dolphin for as much as she could get.

The defence made a submission that in law there was no case to answer. The defence argument was that the moneys were a gift from Mr. Dolphin to the appellant, that the title in the moneys had passed to the appellant, and that there could therefore be no theft. The defence cited the writings of Professor Sir John Smith, Q.C. The judge rejected the submission and held that a gift was capable of amounting to an appropriation.

The appellant gave evidence. She did not dispute the fact of the withdrawal of moneys from the appellant's account and the deposit of the sums in her account. She admitted that she had accepted Mr. Dolphin's television set. She said that Mr. Dolphin had handed the moneys, as well as the colour television set, as gifts to her or her young son or as part of a loan. She denied the account of what she allegedly said to the police officers. She asserted that she had acted honestly throughout.

The judge then summed up to the jury. His direction on appropriation was as follows:

He directed the jury on dishonesty as follows:

The remainder of the summing up is not material to the certified question.

The judge had withdrawn one count of theft from the jury. On the remaining 5 counts of theft the jury returned unanimous verdicts of guilty. The judge sentenced the appellant to terms of 18 months imprisonment on each of the 5 counts, such terms to run concurrently. It is common ground that the jury must have accepted the prosecution case and must have rejected the appellant's explanations as untruthful.

III.

The appellant appealed to the Court of Appeal. The Court of Appeal (Rose L.J., Vice President, Douglas Brown and Dyson JJ.) dismissed the appeal: Reg. v. Hinks [2000] 1 Cr. App. R. 1. In giving the judgment of the Court of Appeal Rose L.J. pointed out that, leaving aside the judge's ruling on a gift being capable of constituting an appropriation, and the related directions in his summing up, complaint was only made of two subsidiary aspects of the summing up. The Court of Appeal rejected those two grounds and they have not been renewed in the House. It is therefore only necessary to deal with the judgment of the Court of Appeal on the point of law comprised in the certified question. After an accurate review of the case law, and in particular the decisions of the House in Lawrence [1992] A.C. 626 and Gomez [1993] AC 442 Rose L.J. concluded, at p. 9:

Lawrence

Gomez,

Gomez

This was the view of a strong Court of Appeal, experienced in this class of criminal work.

IV.

My Lords, counsel for the appellant has not expressly asked the House to depart from the previous decisions of the House. He did, however, submit with the aid of the writings of Sir John Smith that the conviction of a donee for receiving a perfectly valid gift is a completely new departure. Relying on the academic criticism of the earlier decisions of the House counsel submitted that their reach should not be extended. Counsel cited as evidence of the true intention of the draftsman a passage from a note by Sir John Smith on the decision in Hinks: 1998 Cr. L.R. 904. The passage reads as follows 904-905:

Sir John Smith returned to this point in "The Sad Fate of the Theft Act 1968", an essay in The Search for Principle, Essay in Honour of Lord Goff of Chieveley, ed. by W. Swadling and G Jones, p. 97, 100-101. While this anecdote is an interesting bit of legal history, it is not relevant to the question before the House. Given counsel's use of it, as well as aspects of Sir John Smith's writing on the point in question, which have played such a large role in the present case, it is necessary to state quite firmly how the issue of interpretation should be approached. In Black-Clawson International Ltd. v. Papierwerke Waldhoff-Anschaffenburg A.G. [1975] AC 591, 613 Lord Reid observed:

This does not rule out or diminish relevant contextual material. But it is the critical point of departure of statutory interpretation. It also sets logical limits to what may be called in aid of statutory interpretation. Thus the published Eighth Report of the Criminal Law Revision Committee on Theft and Related Offences (1966) (Cmnd. 2977), and in particular para. 35, may arguably be relevant as part of the background against which Parliament enacted the Bill which became the Act of 1968. How far it in fact takes one is a matter considered in Gomez [1993] AC 442. Relevant publicly available contextual materials are readily admitted in aid of the construction of statutes. On the other hand, to delve into the intentions of individual members of the Committee, and their communications, would be to rely on material which cannot conceivably be relevant. If statutory interpretation is to be a rational and coherent process a line has to be drawn somewhere. And what Mr. Fiennes wrote to the Larceny Sub-Committee was demonstrably on the wrong side of the line.

V.

The starting point must be the words of the statute as interpreted by the House in its previous decisions. The first case in the trilogy is Reg. v. Lawrence 1971 [1972] AC 626 . The defendant, a taxi driver, had without objection on the part of an Italian student asked for a fare of £6 for a journey for which the correct lawful fare was 10s 6d. The taxi driver was convicted of theft. On appeal the main contention was that the student had consented to pay the fare. But it was clear that the appellant had not told the student what the lawful fare was. With the agreement of all the Law Lords hearing the case Viscount Dilhorne observed [at 631F-632G]:

Lord Dilhorne expressly added that belief that the passenger gave informed consent (i.e. knowing that he was paying in excess of the fare) "is relevant to the issue of dishonesty, not to the question whether or not there has been an appropriation": at p. 632D. The appeal was dismissed. The ratio decidendi of Lawrence, namely that in a prosecution for theft it is unnecessary to prove that the taking was without the owner's consent, goes to the heart of the certified question in the present case.

The second decision of the House was Reg. v. Morris in 1983 [1984] AC 320, a consolidated appeal involving two cases in each of which the defendant attached a price label to goods in a supermarket which showed a price lower than that which was properly payable for the goods. The defendant intended to pay the lower price at the checkout. In the first case the defendant's deception was detected at the checkout point and in the second he paid the lower prices at the checkout. He was convicted of theft in both cases. The House concluded that the defendant had been rightly convicted of theft on both counts. In each case the certified question was the rolled-up one whether there had been a "dishonest appropriation" of goods. These questions were answered in the affirmative. However, in the single substantive judgment Lord Roskill made an observation, which was in conflict with the ratio of Lawrence and had to be corrected in Gomez. Lord Roskill said, at p. 332D:

It will be observed that this observation was not necessary for the decision of the case: absent this observation the House would still have held that there had been an appropriation. Lord Roskill took the view that he was following the decision in Lawrence. It is clear, however, that his observation (as opposed to the decision in Morris) cannot stand with the ratio of Lawrence. And as his observation, cast in terms of "the honest customer", shows Lord Roskill conflated the ingredients of appropriation and dishonesty contrary to the holding in Lawrence.

The third decision of the House was in Reg. v. Gomez in 1992 [1993] AC 442. The defendant was employed as an assistant shop manager. He agreed with two accomplices that goods would be supplied by the shop in return for cheques which he knew to be stolen. He told the manager of the shop that the cheques were as good as cash. The Court of Appeal held that there was a voidable contract between the owner of the shop and the dishonest receivers of the goods; that the transfer was with the consent of the owner; and that accordingly there was no appropriation. The Court of Appeal quashed the conviction arising from a plea of guilty. The following question was certified at, p. 444B:

By a majority (Lord Lowry dissenting) the House answered branch (a) of the certified question in the affirmative and branch (b) in the negative. In crystalline terms Lord Keith of Kinkel speaking for all the numbers of the majority ruled at p. 464 C-D: (1) The meaning of the relevant provisions must be determined by construing the statutory language without reference to the report which preceded it, namely the Eighth Report of the Criminal Law Revision Committee on Theft and Related Offences (1966) (Cmnd. 2977). (2) The observations of Lord Roskill in Morris [1984] AC 320 were unnecessary for the decision of that case; that they were in clear conflict with the ratio of Lawrence [1972] AC 626; and that they were wrong. (3) Lawrence must be accepted as authoritative and correct, and "there is no question of it now being right to depart from it." At the same time Lord Keith, at p. 463 H, endorsed the judgment of Parker L.J. in the civil case of Dobson v. General Accident Fire and Life Assurance Corporation Plc. [1990] 1 Q.B. 274 where Parker L.J. highlighted the conflict between Lawrence [1972] AC 626 and Morris [1984] AC 320 and chose to follow Lawrence. (4) Any act may be an appropriation notwithstanding that it was done with the consent or authorisation of the owner. In Gomez [1993] AC 442 the House was expressly invited to hold that "there is no appropriation where the entire proprietary interest passes": at 448B. That submission was rejected. The leading judgment in Gomez was therefore in terms which unambiguously rule out the submission that section 3(1) does not apply to a case of a gift duly carried out because in such a case the entire proprietary interest will have passed. In a separate judgment (with which Lord Jauncey of Tullichettle expressed agreement) Lord Browne-Wilkinson observed, at pp. 495H-496A:

Lawrence

Morris

In other words it is immaterial whether the act was done with the owner's consent or authority. It is true of course that the certified question in Gomez referred to the situation where consent had been obtained by fraud. But the majority judgments do not differentiate between cases of consent induced by fraud and consent given in any other circumstances. The ratio involves a proposition of general application. Gomez therefore gives effect to section 3(1) of the Act by treating "appropriation" as a neutral word comprehending "any assumption by a person of the rights of an owner." If the law is as held in Gomez, it destroys the argument advanced on the present appeal, namely that an indefeasible gift of property cannot amount to an appropriation.

VI.

Counsel for the appellant submitted in the first place that the law as expounded in Gomez and Lawrence must be qualified to say that there can be no appropriation unless the other party (the owner) retains some proprietary interest, or the right to resume or recover some proprietary interest, in the property. Alternatively, counsel argued that "appropriates" should be interpreted as if the word "unlawfully" preceded it. Counsel said that the effect of the decisions in Lawrence and Gomez is to reduce the actus reus of theft to "vanishing point" (see Smith and Hogan, Criminal Law, 9th ed., (1999) p. 505). He argued that the result is to bring the criminal law "into conflict" with the civil law. Moreover, he argued that the decisions in Lawrence and Gomez may produce absurd and grotesque results. He argued that the mental requirements of dishonesty and intention of permanently depriving the owner of property are insufficient to filter out some cases of conduct which should not sensibly be regarded as theft. He did not suggest that the appellant's dishonest and repellent conduct came within such a category. Instead he deployed four examples for this purpose, namely

(1)

S makes a handsome gift to D because he believes that D has obtained a First. D has not and knows that S is acting under that misapprehension. He makes the gift. There is here a motivational mistake which, it is submitted, does not avoid the transaction. (Glanville Williams, Textbook, 1st ed, at p. 788).

(2)

P sees D's painting and, thinking he is getting a bargain, offers D £100,000 for it. D realises that P thinks the painting is a Constable, but knows that it was painted by his sister and is worth no more than £100. He accepts P's offer. D has made an enforceable contract and is entitled to recover and retain the purchase price. (Smith and Hogan Criminal Law, 9th ed., p. 507-508).

(3)

A buys a roadside garage business from B, abutting on a public thoroughfare; unknown to A but known to B, it has already been decided to construct a bypass road which will divert substantially the whole of the traffic from passing A's garage. There is an enforceable contract and A is entitled to recover and retain the purchase price. The same would be true if B knew that A was unaware of the intended plan to construct a bypass road. (Compare Lord Atkin in Bell v. Lever Brothers [1932] AC 161, 224.)

(4)

An employee agrees to retire before the end of his contract of employment, receiving a sum of money by way of compensation from his employer. Unknown to the employer, the employee has committed serious breaches of contract which would have enabled the employer to dismiss him without compensation. Assuming that the employee's failure to reveal his defaults does not affect the validity of the contract, so that the employee is entitled to sue for the promised compensation, is the employee liable to be arrested for the theft the moment he receives the money? (Glanville Williams: "Theft and Voidable Title" [1981] Crim. L.R. 666, 672).

My Lords, at first glance these are rather telling examples. They may conceivably have justified a more restricted meaning of section 3(1) than prevailed in Lawrence [1972] AC 626 and Gomez [1993] AC 442. The House ruled otherwise and I am quite unpersuaded that the House overlooked the consequences of its decision. On the facts set out in the examples a jury could possibly find that the acceptance of the transfer took place in the belief that the transferee had the right in law to deprive the other of it within the meaning of section 2(1)(a) of the Act. Moreover, in such cases a prosecution is hardly likely and if mounted, is likely to founder on the basis that the jury will not be persuaded that there was dishonesty in the required sense. And one must retain a sense of perspective. At the extremity of the application of legal rules there are sometimes results which may seem strange. A matter of judgment is then involved. The rule may have to be recast. Sir John Smith has eloquently argued that the rule in question ought to be recast. I am unpersuaded. If the law is restated by adopting a narrower definition of appropriation, the outcome is likely to place beyond the reach of the criminal law dishonest persons who should be found guilty of theft. The suggested revisions would unwarrantably restrict the scope of the law of theft and complicate the fair and effective prosecution of theft. In my view the law as settled in Lawrence and Gomez does not demand the suggested revision. Those decisions can be applied by judges and juries in a way which, absent human error, does not result in injustice.

Counsel for the appellant further pointed out that the law as stated in Lawrence and Gomez creates a tension between the civil and the criminal law. In other words, conduct which is not wrongful in a civil law sense may constitute the crime of theft. Undoubtedly, this is so. The question whether the civil claim to title by a convicted thief, who committed no civil wrong, may be defeated by the principle that nobody may benefit from his own civil or criminal wrong does not arise for decision. Nevertheless there is a more general point, namely that the interaction between criminal law and civil law can cause problems: compare Beatson and Simester, "Stealing One's Own Property" (1999) 115 L.Q.R. 372. The purposes of the civil law and the criminal law are somewhat different. In theory the two systems should be in perfect harmony. In a practical world there will sometimes be some disharmony between the two systems. In any event, it would be wrong to assume on a priori grounds that the criminal law rather than the civil law is defective. Given the jury's conclusions, one is entitled to observe that the appellant's conduct should constitute theft, the only available charge. The tension between the civil and the criminal law is therefore not in my view a factor which justifies a departure from the law as stated in Lawrence and Gomez. Moreover, these decisions of the House have a marked beneficial consequence. While in some contexts of the law of theft a judge cannot avoid explaining civil law concepts to a jury (e.g. in respect of section 2(1)(a)), the decisions of the House of Lords eliminate the need for such explanations in respect of appropriation. That is a great advantage in an overly complex corner of the law.

VII.

My Lords, if it had been demonstrated that in practice Lawrence and Gomez were calculated to produce injustice that would have been a compelling reason to revisit the merits of the holdings in those decisions. That is however, not the case. In practice the mental requirements of theft are an adequate protection against injustice. In these circumstances I would not be willing to depart from the clear decisions of the House in Lawrence and Gomez. This brings me back to counsels' principal submission, namely that a person does not appropriate property unless the other (the owner) retains, beyond the instant of the alleged theft, some proprietary interest or the right to resume or recover some proprietary interest. This submission is directly contrary to the holdings in Lawrence and Gomez. It must be rejected. The alternative submission is that the word "appropriates" should be interpreted as if the word "unlawfully" preceded it so that only an act which is unlawful under the general law can be an appropriation. This submission is an invitation to interpolate a word in the carefully crafted language of the Act of 1968. It runs counter to the decisions in Lawrence and Gomez and must also be rejected. It follows that the certified question must be answered in the affirmative.

VIII.

In his judgment my noble and learned friend Lord Hutton concluded that the trial judge's summing-up on dishonesty was materially defective in particular respects which he lists and that the appeal should be allowed on this ground. In reluctant disagreement with Lord Hutton I take a different view. The House is clearly not confined to the certified question. I agree that in the interests of justice one must look at the matter in the round. It is, however, relevant to bear in mind the context in which the points arise. First, the trial judge was not invited to give such special directions. Secondly, these points were not contained in the written grounds of appeal before the Court of Appeal. Thirdly the points of criticism were not contained in the Statement of Facts and Issues or in the printed cases. Fourthly, the House has not seen transcripts of evidence. The relevance of this factor is that the House is inadequately informed as to the way in which the defence case was deployed before the judge and jury. And a summing-up must always be tailored to the particular circumstances of each case.

My Lords, for my part the position would have been different if I had any lurking doubt about the guilt of the appellant on the charges for which she was convicted. In the light of a fair and balanced summing up and a very strong prosecution case, the jury accepted the prosecution case and rejected the appellant's account as untruthful. They found that she had acted dishonestly by systematically raiding the savings in a building society account of a vulnerable person who trusted her. Even if one assumes that the judge ought to have directed more fully on dishonesty I am satisfied that the convictions are entirely safe. In these circumstances it is not necessary and indeed undesirable for the House to pronounce upon what directions should be given on dishonesty in cases akin to the present.

IX.

My Lords, I would dismiss the appeal to the House.

LORD HUTTON

My Lords,

Section 1(1) of the Theft Act 1968 provides:

Section 2(1) provides:

Section 3(1) provides:

In Reg. v. Lawrence [1971] 1 Q.B. 373, 376G Megaw L.J. stated:

The facts of the present case have been set out in the speech of my noble and learned friend Lord Steyn and on those facts there were two issues for the jury to consider: (1) had the appellant appropriated the money and, if so, (2) had she appropriated the money dishonestly? In relation to appropriation the judge told the jury:

The certified question relates only to this issue, and for the reasons given by my noble and learned friend Lord Steyn I agree that the answer to this question should be "Yes", but I consider that two issues then arise as to the element of dishonesty. The first issue is whether this element should be considered by the House. If so, the second issue is whether the judge's summing up as to dishonesty constituted a misdirection.

What the judge said was as follows:

In a criminal case this House is not confined to the certified question and can consider other points if it is necessary to do so in the interests of justice: see Attorney-General for Northern Ireland v. Gallagher [1963] AC 349. Therefore the question arises whether it is appropriate in this case for the House to consider the element of dishonesty. In relation to this point I would observe that a submission on dishonesty was advanced to the Court of Appeal on behalf of the appellant as an issue separate and distinct from the issue of appropriation. This appears from the following passage of the judgment of the Court of Appeal delivered by Rose L.J. at [2000] 1 Cr.App.R. 1, 7D:

Lawrence

And at p. 9G the Court of Appeal stated:

It is also apparent from the judgments of the Court of Appeal in Reg. v. Mazo [1997] 2 Cr.App.R. 518 and Reg. v. Kendrick and Hopkins [1997] 2 Cr.App.R. 524 that difficult issues can arise both as to appropriation and dishonesty where the defendant raises the defence that money or property was received as a gift, and in the present case the trial judge observed that dishonesty was a central issue in the case. Therefore I think it is appropriate that this House should consider the judge's directions on dishonesty.

Before doing so it is appropriate to refer to the Statement of Facts before the House where it is stated:

prosecution

defence

In the trial judge's lengthy summing-up there is no direction to the jury in relation to influence or coercion being a ground upon which any gifts by Mr. Dolphin to the appellant would be void or voidable. The judge referred to a different point when he said at p. 6 of the summing up:

I therefore turn to consider dishonesty where the defendant contends, as in this case, that she received the money or property as a gift. My Lords, it appears contrary to common sense that a person who receives money or property as a gift could be said to act dishonestly, no matter how much ordinary and decent people would think it morally reprehensible for that person to accept the gift. Section 2(1)(b) of the Act recognises this common sense view by providing:

It follows, a fortiori, that a person's appropriation of property belonging to another should not be regarded as dishonest if the other person actually gives the property to him. Thus in Reg. v. Lawrence [1972] AC 626, 632C Viscount Dilhorne said:

Therefore I consider that in Reg. v. Mazo [1997] 2 Cr. App. R. 518 after referring to a sentence in the above passage of the speech of Viscount Dilhorne, Pill L.J. was right to say at p. 521C: "It is implicit in that statement that if in all the circumstances there is held to be a valid gift there can be no theft." The reason why there is no theft is because there is no dishonesty.

But the simple proposition that a person who receives property as a gift is not to be regarded as dishonest becomes more difficult to apply where the prosecution alleges that the gift was void or voidable by reason of circumstances known to the defendant. This situation was discussed by Megaw L.J. in Lawrence [1971] 1 Q.B. 373, 377C:

b

There was no difficulty in applying that concept in the case of Lawrence itself because, as Viscount Dilhorne observed at p. 632C and E, it was not contended that the defendant had not acted dishonestly, and there was ample evidence of dishonesty.

In Reg. v. Morris [1984] AC 320, 334C Lord Roskill stated:

I respectfully agree, but I think that in a case where the prosecution contends that the gift was invalid because of the mental incapacity of the donor it is necessary for the jury to consider that matter. I further consider that the judge must make it clear to the jury that they cannot convict unless they are satisfied (1) that the donor did not have the mental capacity to make a gift and (2) that the donee knew of this incapacity.

In Reg. v. Mazo [1997] 2 Cr.App. R. 518, where the accused had received large sums of money from an elderly lady and claimed that they were gifts, I consider that the Court of Appeal was right to quash the conviction because the trial judge had not directed the jury adequately on the issue of the lady's capacity to make a valid gift, Pill L.J. stating at p. 522E- 523A:

inter vivos

In contrast, in Reg. v. Kendrick and Hopkins [1997] 2 Cr.App.R. 524 there was clear evidence that the owner of the monies and investments, who was aged 99, was mentally incapable of managing her own affairs and was thus incapable of making a gift. Therefore I consider that in that case the Court of Appeal was right to uphold the conviction for conspiracy to steal by the managers of the residential home where the owner lived and who had acquired large sums of money which had belonged to her and which they claimed were gifts. Ebsworth J., delivering the judgment of the Court of Appeal, rejected the submission of defence counsel that the judge had failed to indicate sufficiently to the jury the level of mental incapacity which would be necessary to cause the donor to be incapable of making a gift and stated at p. 538A:

Mazo

Therefore there was an appropriation in that case and there was dishonesty because the defendants knew that the elderly lady was mentally incapable of making a gift.

My Lords, in the present state of the law relating to theft when the defendant claims that he or she received the money or property as a gift, a Crown Court judge faces a difficult task in summing-up to a jury. In this case the judge gave a fair and careful summary of the evidence. In the passage which I have set out he rightly told the jury that the mere fact that they disapproved of what the defendant did, or thought that it was morally reprehensible, did not necessarily mean that it was dishonest. It is also clear that the third and fourth paragraphs in the passage of the summing-up which I have set out above were based on the guidance given by the Court of Appeal in Reg. v. Ghosh [1982] 1 QB 1053.

But in my opinion in a case where the defendant contends that he or she received a gift, a direction based only on Ghosh is inadequate because it fails to make clear to the jury that if there was a valid gift there cannot be dishonesty, and in the present case there is the danger that, if the gift was not void for want of mental capacity, the jury might nevertheless convict on the basis that ordinary and decent people would think it dishonest for a younger woman to accept very large sums of money which constituted his entire savings from a naïve man of low intelligence, and that the woman would have realised this.

Immediately after giving the part of his direction based on Ghosh the judge said at p. 6:

But this part of the charge was defective because it linked the issue of mental incapacity to what ordinary and decent people would regard as dishonest. Moreover in summarising the evidence of the consultant psychiatrist who had examined Mr. Dolphin on behalf of the Crown and who was called as a prosecution witness the judge said at p. 15:

And towards the end of his summing-up the judge said at p. 49:

Therefore, if it was part of the Crown case that, apart from any issue of influence or coercion, any gifts made by Mr. Dolphin to the appellant were void because he was mentally incapable of making such gifts, I consider that the summing up was defective as the jury were not given adequate directions as to the degree of mental incapacity which makes void a gift or gifts of large sums of money. But it may be that no such directions were given because the point in relation to mental capacity was not advanced as a separate and distinct point by the Crown.

Therefore I consider that in this case:

(1) It was necessary for the judge to make clear to the jury that if there was a valid gift the defendant could not be found to be dishonest no matter how much they thought her conduct morally reprehensible.

(2) If the Crown were making the case that the gifts were invalid because Mr. Dolphin was mentally incapable of making a gift, it was necessary for the judge to give the jury a specific direction as to what degree of mental weakness would, in the light of the value of the gifts and the other circumstances of the case, make the donor incapable of making a valid gift.

(3) The jury should have been directed that if they were satisfied that Mr. Dolphin was mentally incapable of making a gift, they should not convict unless they were satisfied that what the defendant did was dishonest by the standards of ordinary decent people and that the defendant must have realised this.

(4) If the Crown were making the case that the gift was invalid because of undue influence or coercion exercised by the defendant, it was necessary for the judge to give the jury a specific direction as to what would constitute undue influence or coercion.

(5) The jury should have been directed that if they were satisfied that the gifts were invalid by reason of undue influence or coercion, they should not convict unless they were satisfied that what the defendant did was dishonest by the standards of ordinary decent people and that the defendant must have realised this.

The conduct of the defendant was deplorable and it may be that if the issues had been more clearly defined a jury would have been entitled to convict, but in my opinion the summing up was defective in the ways which I have described and the convictions should not stand. I consider, with respect, that the Court of Appeal erred in the present case because at [2000] 1 Cr.App.R. 1, 7F-G it rejected the appellant's submission as to dishonesty by referring to the separate issue of appropriation.

Accordingly, for the reasons which I have stated, I would allow the appeal and quash the convictions.

LORD HOBHOUSE OF WOODBOROUGH

My Lords,

This appeal comes before your Lordships in order to settle yet another point of contention under the Theft Act 1968. The point certified - "Whether the acquisition of an indefeasible title to property is capable of amounting to an appropriation of property belonging to another for the purposes of s.1(1) of the Theft Act 1968?" - is very similar to that certified on the appeal to your Lordships' House in R v Gomez [1993] AC 442 but with the substitution of the words "acquisition of an indefeasible title" for the words an acquisition of property "with the consent of the owner . . . obtained by a false representation".

Your Lordships have already referred to the facts which gave rise to the prosecution of the appellant. The case which was presented against her was based upon the allegation that she had coerced or unduly influenced Mr Dolphin into parting with his money and the television set. The case against her was largely circumstantial but was nevertheless very strong. Her conduct was on any view deplorable. It is not surprising that she was convicted by the jury.

The complication which arose was that the prosecution had also alleged that Mr Dolphin lacked the mental capacity to make gifts or otherwise dispose of his property. The expert and other evidence on this question was arguably equivocal. Dr Fuller's assessment was that Mr Dolphin was extremely naïve and gullible and it would be easy for anyone to take advantage of him. Mr Dolphin would be capable of making a gift and understood the concept of ownership but if he decided to divest himself of money it was unlikely that he would make that decision alone. The trial judge, rightly, rejected a submission of no case to answer but when he came to sum up he seems to have discarded the way in which the prosecution had founded their case and directed the jury that they could convict the appellant of theft on the simple basis that she had been the recipient of a valid gift provided that the jury were satisfied that the conduct of the appellant fell short of the standards of ordinary and decent people and the appellant realised this. The key passage is:

(Later he added -

It must be noted that the direction specifically involves the jury deciding that Mr Dolphin was "mentally incapable". In the context, this was probably intended to mean mentally incapable of deciding to make a gift. If this was so, then there would not have been an "indefeasible" gift and the question certified would not arise.

Still, it would not be helpful to dismiss the appeal on that ground. The respondent did not submit that we should. It was not the ground upon which the Court of Appeal dismissed her appeal. Rose LJ said [2000] 1 Cr.App.R. 1 at 9:

A gift may be clear evidence of appropriation.

The dismissiveness of this reasoning is in itself remarkable but the proposition which needs particularly to be examined is that which I have emphasised bearing in mind that the Court of Appeal draws no distinction between a fully effective gift and one which is vitiated by incapacity, fraud or some other feature which would lead both the man in the street and the law to say that the transfer was not a true gift resulting from an actual intention of the donor to give. Another aspect of the Court of Appeal's reasoning which also has to be examined is the relationship of that proposition to the concept of dishonesty. It is explicit in the Court of Appeal judgment that the relevant definition of the crime of theft is to be found in the element of dishonesty and R v Ghosh [1982] QB 1053 and that this is to receive no greater definition than consciously falling below the standards of an ordinary and decent person and may include anything which such a person would think was morally reprehensible. It may be no more than a moral judgment.

The reasoning of the Court of Appeal therefore depends upon the disturbing acceptance that a criminal conviction and the imposition of custodial sanctions may be based upon conduct which involves no inherent illegality and may only be capable of being criticised on grounds of lack of morality. This approach itself raises fundamental questions. An essential function of the criminal law is to define the boundary between what conduct is criminal and what merely immoral. Both are the subject of the disapprobation of ordinary right-thinking citizens and the distinction is liable to be arbitrary or at least strongly influenced by considerations subjective to the individual members of the tribunal. To treat otherwise lawful conduct as criminal merely because it is open to such disapprobation would be contrary to principle and open to the objection that it fails to achieve the objective and transparent certainty required of the criminal law by the principles basic to human rights.

I stress once more that it is not my view that the resort to such reasoning was necessary for the decision of the present case. I would be reluctant to think that those of your Lordships who favour dismissing this appeal have fallen into the trap of believing that, without adopting the reasoning of the Court of Appeal in this case, otherwise guilty defendants will escape justice. The facts of the present case do not justify such a conclusion nor do the facts of any other case which has been cited on this appeal.

The Act:

The Theft Act 1968 was passed in an attempt to simplify the law of theft and remove excessive and technical complications which arose from the concepts used in the Larceny Act 1916 and its predecessors. One source of complication had been the fact that larceny was a possession based crime and used the criteria "takes and carries away" and "without the consent of the owner" in the definition of stealing. The Theft Act on the other hand defines theft in a deceptively simple way - "A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it." (s.1(1))

In order to try and limit the number of separate offences under the Act, the Theft Act, in contrast with the Larceny Act, adopts the approach of a single short definition of "theft" and then expands that definition so that it can cover a wide range of more complex situations. Thus, sections 2 to 6 have been included in the Act to amplify and extend the meaning of the expressions used in the s.1 definition. Section 2 deals with "dishonestly", s.3 with "appropriates", s.4 with "property", s.5 with "belonging to another" and s.6 with "with the intention of permanently depriving the other of it". These provisions, although each given a distinct title are in their terms interlinked and implicitly cross-refer to each other. They cannot be construed or applied in isolation. Some are used to qualify the definition of theft and give it a different meaning to that which would have been understood by the simple definition standing alone. It is therefore imperative, as is specifically required by s.1(3), to have regard to these sections when construing s.1(1).

But this structure of sections 1 to 6 has had an unfortunate by-product. It has led to a practice (started by Megaw LJ in the Court of Appeal in Lawrence) of construing each of the words or phrases in s.1(1) as if they were independent and not part of a single complex definition. The words and phrases have an inter-relation, the one affecting the meaning of another and of the whole. Lord Browne-Wilkinson warned against this in his speech in R v Gomez [1993] AC 442 at 495:

Another point which has arisen from the general intention of the Act and its drafting is the assumption that all questions arising in connection with the law of theft should now be capable of answer without involving any concept or rule derived from the civil law or using any technical legal terminology. Whilst there can be no doubt about the general intention of the Act, to proceed from such a general intention to that assumption is simplistic and erroneous. It is, of course, part of the duty and function of the judge at the criminal trial to separate the questions of law from the questions of fact and only direct the jury on matters of law so far as the issues in the case make it necessary for them to know the law in order to decide the issues of fact and determine the defendant's guilt or innocence; but, when there are relevant questions of law, they must be recognised and the jury directed accordingly.

The truth is that theft is a crime which relates to civil property and, inevitably, property concepts from the civil law have to be used and questions answered by reference to that law. Lord Roskill (expressing sentiments similar to those voiced by others before and since) was no doubt right in R v Morris [1984] AC 320 at 334 to warn in general terms against introducing into the criminal law questions whether particular contracts were void or voidable on the ground of mistake or fraud or whether any mistake was sufficiently fundamental to vitiate a contract. But the Act at times expressly requires civil law concepts to be applied. Section 1(1) uses the expression "belonging to another". Thus, in some criminal cases, it may be necessary to determine whether the relevant property belonged to the alleged victim or to the defendant. In R v Walker [1984] Crim.L.R. 112 the case turned upon whether the article in question had been rejected by the buyer so as to revest the title to it in the seller, the defendant. (See also per Bingham LJ in Dobson v General Accident, Fire and Life Assurance Corporation Plc [1990] 1 QB 274) This was an issue which had to be answered by reference to the civil law and about which the criminal law had nothing to say except to pose the question. (Another case which illustrated the same need to recognise and give effect to the civil law is R v Preddy [1996] AC 815 and the consequence of having failed to do so was that the Court of Appeal had then to reconsider a considerable number of wrongly based convictions.)

Section 5: 'Belonging to Another': Section 5: 'Belonging to Another': "5(1) Property shall be regarded as belonging to any person having possession or control of it, or having in it any proprietary right or interest (not being an equitable interest arising only from an agreement to transfer or grant an interest). (2) Where property is subject to a trust, the persons to whom it belongs shall be regarded as including any person having a right to enforce the trust, and an intention to defeat the trust shall be regarded accordingly as an intention to deprive of the property any person having that right. (3) Where a person receives property from or on account of another, and is under an obligation to the other to retain and deal with that property or its proceeds in a particular way, the property or proceeds shall be regarded (as against him) as belonging to the other. (4) (5) Where a person gets property by another's mistake, and is under an obligation to make restoration (in whole or in part) of the property or its proceeds or of the value thereof, then to the extent of that obligation the property or proceeds shall be regarded (as against him) as belonging to the person entitled to restoration, and an intention not to make restoration shall be regarded accordingly as an intention to deprive that person of the property or proceeds. Property of a corporation sole shall be regarded as belonging to the corporation notwithstanding a vacancy in the corporation."

Section 5 qualifies and defines the expression "belonging to another" and specifically makes use of a number of civil law concepts. Under subsection (1) the jury may have to decide who had the possession of the article or whether someone other than the defendant had a "proprietary right or interest" including an equitable interest (subject to the stated exception) and receive the requisite direction as to the civil law. Subsections (2) and (3) necessitate the consideration of the law of trusts and the rights of beneficiaries and the law of bailment and agency. Subsection (4) makes provision for the situation "where a person gets property by another's mistake". The criterion which the subsection then applies is whether or not the recipient came under an obligation to make restoration of the property (or its value or proceeds). This is a sophisticated criterion wholly dependant upon distinctions to be drawn from the civil law. Unless the criterion is satisfied this constituent of the crime of theft has not been proved.

It is relevant to look at this example further because it is an example of a person who has acquired a defeasible title. Where the transferor has made a mistake, the mistake can be so fundamental that the transferee acquires no rights at all in respect of the chattel transferred as against the transferor. But there may be cases where the mistake does not have so absolute an effect and the transferor may only have equitable rights (cf subsection (1)) or restitutionary rights against the transferee. If, however, the transferee has already had validly transferred to him the legal title to and possession of the chattel without any obligation to make restoration, a later retention of or dealing with the chattel by the transferee, whether or not 'dishonest' and whether or not it would otherwise amount to an appropriation, cannot amount to theft. However much the jury may consider that his conduct in not returning the chattel falls below the standards of ordinary and decent people, he has not committed the crime of theft. The property did not belong to another.

Section 5 and, particularly, s.5(4) demonstrate that the Theft Act has been drafted so as to take account of and require reference to the civil law of property, contract and restitution. The same applies to many other sections of the Act. For example, section 6 is drafted by reference to the phrase "regardless of the other's rights" - that is to say rights under the civil law. Section 28, dealing with the restoration of stolen goods, clearly can only work if the law of theft recognises and respects transfers of property valid under the civil law, otherwise it would be giving the criminal courts the power to deprive citizens of their property otherwise than in accordance with the law.

Section 5 shows that the state of mind of the transferor at the time of transfer may be relevant and critical. Similarly, the degree of the transferee's knowledge will be relevant to the s.5 question quite independently of any question under s.2. For instance, where there has been a mistake on the part of the transferor, the position under s.5(4) can be different depending on whether or not the transferee was aware of the mistake.

Further, it will be appreciated that the situations to which s.5 is relevant can embrace gifts as well as other transactions such as transfers for value. The prosecution must be able to prove that, at the time of the alleged appropriation, the relevant property belonged to another within the meaning given to that phrase by s.5. Where the defendant has been validly given the property he can no longer appropriate property belonging to another. The Court of Appeal does not seem to have had their attention directed to s.5. The question certified on the grant of leave to appeal is self-contradictory. The direction of the trial judge approved by the Court of Appeal is inadequate. There is no law against appropriating your own property as defined by s.5.

Section 2: 'Dishonestly':

Section 2(1), rather than expanding the s.1(1) definition, limits it. It illustrates the point made by Lord Browne-Wilkinson as to the inter-relation of the words "dishonestly" and "appropriates" used in s.1(1). (It does however raise difficulties for the later steps in his reasoning to which I will have to revert.) Section 2(1) reads:

"(1) A person's appropriation of property belonging to another is not to be regarded as dishonest -

(a) if he appropriates the property in the belief that he has in law the right to deprive the other of it, on behalf of himself or of a third person; or (b) if he appropriates the property in the belief that he would have the other's consent if the other knew of the appropriation and the circumstances of it; or (c) (except where the property came to him as trustee or personal representative) if he appropriates the property in the belief that the person to whom the property belongs cannot be discovered by taking reasonable steps."

Although s.2 is headed "Dishonestly", this quotation shows that it is as much involved with the application of the concepts "appropriation" and "property belonging to another". (a) contemplates that the defendant believes that he has the right to appropriate the property and (b) his belief that he would have the consent of the person to whom the property belongs to appropriate it. If belief in such a right or such consent can prevent the defendant's conduct from amounting to theft (whatever the jury may think of it), how can it be said that his knowledge that he has such a right or the actual consent of the person to whom the property belongs is irrelevant? How can it be said that the right of the defendant to accept a gift is irrelevant - or the fact that the transferor has actually and validly consented to the defendant having the relevant property? Yet it is precisely these things which the judgment of the Court of Appeal would wholly exclude.

Section 2(1) is cutting down the classes of conduct which the jury are at liberty to treat as dishonest. They qualify the Ghosh approach and show that in any given case the court must consider whether it is adequate to give an unqualified Ghosh direction as the Court of Appeal held to be sufficient in the present case.

Gifts:

The discussion in the present case has been marked by a failure to consider the law of gift. Perhaps most remarkable is the statement of the Court of Appeal that "a gift may be clear evidence of appropriation". The making of a gift is the act of the donor. It involves the donor in forming the intention to give and then acting on that intention by doing whatever it is necessary for him to do to transfer the relevant property to the donee. Where the gift is the gift of a chattel, the act required to complete the gift will normally be either delivery to the donee or to a person who is to hold the chattel as the bailee of the donee; money can be transferred by having it credited to the donee's bank account - and so on. Unless the gift was conditional, in which case the condition must be satisfied before the gift can take effect, the making of the gift is complete once the donor has carried out this step. The gift has become the property of the donee. It is not necessary for the donee to know of the gift. The donee, on becoming aware of the gift, has the right to refuse (or reject) the gift in which case it revests in the donor with resolutive effect. (See Halsbury Laws: Gifts, vol. 20, paras 48-49 and the cases cited.)

What consequences does this have for the law of theft? Once the donor has done his part in transferring the property to the defendant, the property, subject to the special situations identified in the subsections of s.5, ceases to be "property belonging to another". However wide a meaning one were to give to "appropriates", there cannot be a theft. For it to be possible for there to be a theft there will have to be something more, like an absence of a capacity to give or a mistake satisfying s.5(4). Similarly, where the donee himself performs the act necessary to transfer the property to himself, as he would if he himself took the chattel out of the possession of the donor or, himself, gave the instructions to the donor's bank, s.5(1) would apply and mean that that constituent of the crime of theft would at that time have been satisfied.

If one treats the "acceptance" of the gift as an appropriation, and this was the approach of the judge and is implicit in the judgment of the Court of Appeal (despite their choice of words), there are immediate difficulties with s.2(1)(a). The defendant did have the right to deprive the donor of the property. The donor did consent to the appropriation; indeed, he intended it. There are also difficulties with s.6 as she was not acting regardless of the donor's rights; the donor has already surrendered his rights. The only way that these conclusions can be displaced is by showing that the gift was not valid. There are even difficulties with s.3 itself. The donee is not "assuming the rights of an owner": she has them already.

Section 3: 'Appropriates':

This is the shortest of the explanatory sections. Its purpose is undoubtedly to get away from some of the technicalities of the law of larceny which arose from the need for the defendant to have taken the property. It uses a different concept which does not require an acquisition of possession. The concept is any assumption of the rights of an owner (which has been held to mean 'the assumption of any of the rights of an owner': R v Morris). The second part of subsection (1) clearly has to be read with s.5.

Subsection (2) deals with the purchase for value of a defective title and provides a further illustration of two of the points I have already made. It is drafted by reference to the position under civil law. It cross-refers to factors which are primarily relevant to honesty - "good faith" and what the defendant "believed" he had acquired - so demonstrating again the intimate inter-relationship of the drafting of one section with another and with the definition in s.1(1) as a whole.

Section 3 does not use any qualitative expression such as "misappropriates" nor does it repeat the Larceny Act expression "without the consent of the owner". It has thus been read by some as if "appropriates" was a wholly colourless expression. This reading declines to draw any guidance from the context in which the word is used in the definition in s.1(1) and the scheme of sections 2 to 6. It also declines to attach any significance to the use of the word "assumption". This led some curious submissions being made to your Lordships.

It was for example suggested that the garage repair mechanic employed to change the oil of a car would have appropriated the car. The reasoning is that only the owner has the right to do this or tell someone to do it therefore to do it is to assume the rights of the owner. This is an absurdity even when one takes into account that some of the absurd results can be avoided by other parts of the definition of theft. The mechanic is not assuming any right he is merely carrying out the instructions of the owner. The person who accepts a valid gift is simply conforming to the wishes of the owner. The words 'appropriate' [property belonging to another] and 'assume' [the rights of that other] have a useful breadth of meaning but each of them in its natural meaning includes an element of doing something which displaces the rights of that other person. The rights of that other [the owner] include the right to authorise another [the defendant] to do things which would otherwise be an infringement of the rights of the owner.

For the sake of completeness, I should mention that it is not necessary for the present appeal to consider the questions of timing that may arise in relation to appropriation. A carrier may receive goods of which he intends to deprive the owner at a convenient moment. (R v Skipp [1975] Crim.L.R. 114, R v Fritschy [1985] Crim.L.R. 745.) If goods are entrusted to the defendant for one purpose and he takes possession of them for another, it may well be that he has then and there appropriated them since he is thereby assuming the rights of an owner not those of a bailee. This also helps with understanding the supermarket cases. Putting back an article which has been lifted off the shelf in order to read the label or packet does not without more assume any right of ownership. Nor does taking the article to the check-out in order to offer to buy it; that is merely to comply with an implicit request by the owner (the supermarket). On the other hand to interfere with the price label or to take the article with the purpose of smuggling it out of the shop without paying is an assumption of the rights of an owner. (R v Morris)

The considerations which I have discussed now at some length all lead to the conclusion that sections 1 to 6 of the Theft Act should be read as a cohesive whole and that to attempt to isolate and compartmentalise each element only leads to contradictions. This vice is particularly clear where alleged gifts are involved. In such a situation greater care in the analysis is required under sections 2, 3 and 5 and it will normally be necessary to direct the jury in fuller terms and not merely ask them if they think that the defendant fell below the standards of an ordinary and decent person and realised that such persons would so regard his conduct.

The Authorities: The House of Lords:

The appellant has submitted that your Lordships should, if needs be, over-rule R v Lawrence [1972] AC 626 and R v Gomez [1993] AC 442. I do not consider that either case should be over-ruled nor is it necessary for the decision of the present case. Neither is inconsistent with my analysis of the law. What appears to have happened is that some of the language used in the three successive House of Lords decisions (Lawrence, Morris, Gomez) has been misread without sufficient regard to the context in which the language in each case was used and without a constructive consideration of the intent of sections 1 to 6 as a whole.

Lawrence was the case of the deceitful taxi driver and the foreign student. It was decided shortly after the Theft Act came into force. The two questions certified were questions of the construction of the Theft Act. They both sought to perpetuate features of the Larceny Act and rightly received a robust response. The first was whether the words "without the consent of the owner" should be read into s.1(1). The second was whether s.1 and s.15 were mutually exclusive. The student had allowed the taxidriver to take £6 out of his wallet (making £7 in all) for a 10s. 6d. fare. The transaction was vitiated by the taxidriver's fraud; in truth the student never agreed to pay him £6. The taxidriver got the money as the result of a mistake of the student induced by the taxidriver's fraud. The facts of the case fell "far short" of establishing that the student had consented.

Viscount Dilhorne with whom the other members of the House agreed said, at p. 632:

A fortiori, a person is not to be regarded as acting dishonestly if he appropriates another's property believing that with full knowledge of the circumstances that other person has in fact agreed to the appropriation

This passage, including the important (but sometimes overlooked) sentence which I have emphasised, supports what I have said above in relation to s.2(1)(b). He added:

ie

If one asks the question "was there a dishonest appropriation?" the need to make the distinction disappears. The perceived difficulty only arises because the definition is fragmented. As I have pointed out in relation to s.5(1), where the defendant himself removes the property from the owner, he will be taking property belonging to another. The situation in Lawrence is not problematical. The whole transaction was driven and coloured by the taxidriver's fraud. It does not strain the language to describe what happened as an appropriation of property belonging to another. It was never a case of consent except possibly in a technical Larceny Act sense. The damaging legacy of the Lawrence judgment has been the adoption of the fragmented approach and the separation of the statement that consent was not relevant to appropriation from its context and from the accompanying statement that knowledge of actual consent is incompatible with dishonesty.

The second question was answered by saying that sections 1 and 15 were not mutually exclusive. This of itself should not have caused any further difficulty once an authoritative decision had been given. But a reluctance to leave behind the features of the law of larceny has meant that the inter-relation of those sections has been a recurring sub-plot in the decisions subsequent to Lawrence.

R v Morris [1984] AC 320 was a supermarket case. The defendant dishonestly switched the labels so as to show lower prices. He then acquired the goods by paying only the lower price at the check-out as was his intention throughout. The submission was that this fell outside s.1(1) and could only come within s.15(1), obtaining property by deception, and that the changing of the label was only relevant to the deception. (The significance of the distinction was apparently to the time at which the offence was committed and the consequences which flowed from that: pp.334-335.) The House unanimously agreed with Lord Roskill in rejecting the submission. He held that an assumption of any of the rights of an owner would suffice and answered the certified question by saying that such conduct did amount to a dishonest appropriation where it "adversely interferes with or usurps the right of the owner to ensure that the goods concerned are sold and paid for" at the full price. Lord Roskill clearly treated the phrase "dishonestly appropriates" as a composite one (a view which seems to have led him to distinguish the example of the practical joker: p.332).

In the Court of Appeal in Morris Lord Lane, CJ [1983] QB 587, 596 had expressed the opinion that merely taking the goods to the check-out in order there to pay the proper price was an appropriation. Lord Roskill disagreed [1984] AC 320, 332. It was not an assumption by the shopper of the rights of the supermarket.

Applying the same reasoning to the case of the dishonest shopper who removes goods from the shelf and hides them in her shopping bag intending from the very beginning to steal them, he approved the decision in R v McPherson [1973] Crim.L.R. 191 that in that situation there was an appropriation.

The contentious part of this decision was (or should have been) the treatment of the assumption of any right of an owner as sufficient for s.3. But, given their decision on that point, the decision is wholly consistent with the decision in Lawrence and is free from the influence of the language of Visct. Dilhorne which I have criticised. On the same basis, the decision and the speech of Lord Roskill correctly understood the intent of sections 1 to 6 of the Theft Act: this was clearly the view of the remainder of the House and is a view I respectfully share.

However, some of the language used by Lord Roskill itself gave rise to difficulty. It was believed that he had been saying that any consent to the act of the defendant necessarily negatived appropriation and that he was contradicting Lawrence: fraudulently induced consent would be as conclusive as any other form of consent or authorisation. This belief was only plausible if the reader of his speech was adopting the mind-set of the Larceny Act. It is clear that Lord Roskill was not intending to contradict the decision in Lawrence.

It was in these circumstances that the matter of consent and fraud was brought back before your Lordships' House nine years later in Gomez [1993] AC 442. The defendant, Gomez, an employee of a shop selling electrical goods, fraudulently accepted from an associate called Ballay cheques, which both of them knew to have been stolen, against an order by Ballay for goods. Ballay collected the goods a few days later after the shop manager, deceived by Gomez's fraudulent statements, had authorised the 'sale'. Gomez and Ballay were convicted of theft contrary to s.1(1). The argument was that, since the manager had authorised the transaction, there could not have been any appropriation. The Court of Appeal accepted this submission.

The certified question asked whether there has been an appropriation where "that which is alleged to be stolen passes to the defendant with the consent of the owner, but that has been obtained by a false representation". It therefore starts from the premise that there has been overt and directly relevant dishonesty and that the acquisition comes squarely within s.5(4) and (1). The significance of the argument would again seem to be to whether s.1 or s.15 was the relevant section, a point which had already been disposed of by Lawrence. The question also asked, puzzlingly in view of the premise, but obviously directed at Lord Roskill's choice of words: "Must such a passing of property necessarily involve an element of adverse [interference] with or usurpation of some right of the owner?". It might be thought that to obtain possession of another's goods by fraudulently causing him to allow you to do so would be a clear case of an adverse interference with his rights.

It was in this connection that Lord Keith of Kinkel said, at p.460:

in any circumstances

R v Lawrence

in this context

The context is consent or authorisation induced by fraud. That was the subject matter of the primary question asked. That this is the context to which Lord Keith is referring is confirmed by his reference to Lawrence. Lord Keith is emphatically not saying that consent or authorisation not induced by fraud cannot be relevant to the question of appropriation for the purposes of the definition of theft.

This reading is further confirmed by quotations from the judgment of Parker LJ in Dobson v General Accident Fire and Life Insurance Corporation Plc [1990] 1 QB 274 which Lord Keith agreed with and adopted at p.463H:

R v Morris

R v Lawrence

R v Morris

What Parker LJ, and through him Lord Keith, is doing is rejecting the misreading of Lord Roskill's speech. Neither is saying that consent and authorisation are irrelevant to appropriation but, rather, that they do not necessarily exclude the possibility of appropriation. The consent or authority may be limited in its scope and not cover the acts done by the defendant because the defendant has an unauthorised purpose (Parker LJ; and Morris) or the consent or authorisation may have been obtained by fraud (Lawrence; and Gomez). The fundamental argument which all these authorities are having to battle with is the resurrection of the former possession-based rule that consent negatived larceny, distinguishing between larceny by a trick and obtaining by false pretences. It is clear that the Theft Act declined to adopt that rule and defined theft in terms which were not dependant on it.

Lord Keith's speech includes language which is capable of giving rise to the same difficulties as that upon which I have commented in the speech of Visct. Dilhorne in Lawrence and it contains criticisms of the speech of Lord Roskill in Morris which for my part I do not consider to have been justified. But its main thrust is that consent or authorisation can be relevant to the question of appropriation though not in circumstances such as those in Lawrence and Gomez. It does not justify the decision of the Court of Appeal in the present case where ex hypothesi there is no fraud.

The speech of Lord Browne-Wilkinson is differently reasoned. He recognises that the Theft Act uses the composite phrase "dishonestly appropriates". But he then proceeds (it may be thought, inconsistently and with a lack of logic) from this to the adoption of a meaning of appropriate "in isolation" which is devoid of any content dependant upon the mental state of the owner or the accused. He goes further than Lord Keith. But he does not refer to any of the difficulties discussed earlier which would arise from that view nor does he consider the elaboration of the criterion 'dishonestly' which is necessary in order to preserve the contextual meaning of the composite phrase. If the criterion 'appropriates' is to become less discriminating, the criterion 'dishonestly' has to become more discriminating in order to retain the meaning of the composite phrase in its context in sections 1 to 6 of the Act.

The dissent of Lord Lowry is based upon the need in his view to preserve the same type of distinction between sections 1 and 15 of the Theft Act as formerly existed between sections 1 and 32 of the Larceny Act. If anything, that disagreement lends force to my reading of the speech of Lord Keith.

The decision of the House in Gomez set a new agenda. Instead of discussing what had been decided in Morris, the discussion now centred upon what had been decided in Gomez. It is to be hoped that the present appeal to your Lordships' House will not again have such an unproductive outcome, a consequence which I believe will be inevitable if this appeal is not allowed and a return made to construing sections 1 to 6 as a coherent whole.

The Later Authorities:

In R v Mazo [1997] 2 Cr.App.R. 518, the defendant had worked as the maid of an 89 year-old lady. The defendant received from the old lady a series of cheques and some valuables which the defendant said were gifts but the prosecution alleged she had stolen. She was convicted of theft. There had been evidence at the trial that the old lady was not mentally competent to make such gifts and that the defendant must have realised this. However, in his summing-up the trial judge directed the jury saying:

On her appeal against her convictions, the defendant submitted that the judge had failed to deal with her defence that she had received valid gifts which she was entitled to accept: had valid gifts been made by a donor competent to make them? The Court of Appeal allowed her appeal. Pill LJ giving the judgment of the Court said, at p.521:

Gomez

inter vivos

Gomez

Lawrence

A fortiori

Later in the judgment Pill LJ referred to the criteria for deciding whether such a gift was valid as explained in In re Beaney [1978] 1 WLR 770, having regard to lack of comprehension and mental incapacity. He concluded, at p. 523 with the timely warning that the summing-up created "a danger that the jury would take a view that the appellant's conduct was not of a moral quality of which they could approve and convict her on that ground rather than on the true basis of the law of theft"

In my judgment, my Lords, the explanation of the law in the judgment in Mazo is correct and accurately reflects the scheme and purpose of sections 1 to 6 of the Theft Act and demonstrates a correct understanding of the speech of Lord Keith in Gomez.

Mazo was distinguished and not followed in R v Kendrick and Hopkins [1997] 2 Cr.App.R. 524. There a residential home where a nearly blind 99 year-old lady was living took control of her affairs. They were given a power of attorney. They liquidated her assets and paid the proceeds into an account which they controlled. They drew out large sums, they said implausibly, with her consent and for her benefit. The defendants were charged with conspiracy to steal and convicted. On the basis of Mazo, the summing-up was criticised as not going sufficiently deeply into the question of validity. These criticisms were rightly rejected; the summing-up was not deficient. The appeal was dismissed.

However, the Court of Appeal also criticised the judgment in Mazo as not reflecting what was said in Gomez particularly by Lord Browne-Wilkinson: the concept of appropriation was distinct from the concept of dishonesty; appropriation could be looked at "in isolation"; other factors, including the incapacity of the donor and fraud only came in in relation to dishonesty; a simple Ghosh direction sufficed.

The Court of Appeal in the present case preferred to follow the judgment in Kendrick and Hopkins rather than that in Mazo. There was probably no conflict between the actual decisions in the two cases. The Court of Appeal in Kendrick and Hopkins were justified in dismissing the appeal and, on an overall assessment, rejecting the criticisms of the summing up in that case and upholding the safety of the convictions. They were in error in their adoption of Lord Browne-Wilkinson's view that appropriation should be looked at in isolation.

The Present Case - Conclusions:

The question certified demonstrates the further step which your Lordships are being asked to take beyond that involved in answering the question in Gomez. Does the primary question in Gomez receive the same answer if one deletes the words "obtained by false representation"? The Court of Appeal in the present case held that it should. Two strands of reasoning led them to this conclusion. The first was that s.3(1) should be construed in isolation from the remainder of sections 1 to 6. In this they followed the lead given by Lord Browne-Wilkinson and the Court of Appeal judgment in Kendrick and Hopkins. I have already explained why I consider that this is wrong.

The second was the view that Lord Keith and Parker LJ had ruled that consent of the owner is always wholly irrelevant to what acts amount to appropriation. They achieved this position only by standing on its head what Lord Keith and Parker LJ had said. What Lord Keith and Parker LJ confirmed was that 'consent' (in the Larceny Act sense) will not necessarily negative appropriation. What Rose LJ has derived from this is that consent can never negative appropriation. (The incomplete quotation by Rose LJ at [2000] 1 Cr.App.R.1, 8 from Parker LJ is revealing.) This leads Rose LJ directly to the position that a valid gift is fully consistent with theft, a proposition which is seriously inconsistent with the scheme of sections 1 to 6 and with other parts of the Act and which is not a proposition to be derived from any of the House of Lords decisions (with the possible exception of the speech of Lord Browne-Wilkinson in Gomez).

To say, as does Rose LJ at p.10, that "civil unlawfulness is not a constituent of the offence of theft" is of course true. That expression does not occur in s.1(1) and it is anyway not clear what it encompasses. But to proceed from there to the proposition that the civil law of property is irrelevant is, as I have explained earlier in this speech, a far greater error.

My Lords, if, contrary to my view, your Lordships are to travel down the route adopted by the Court of Appeal, your Lordships are faced with a choice between two options neither of which are consistent with dismissing this appeal. One option is to accept the 'Browne-Wilkinson' approach and adopt a sanitised concept of appropriation isolated from any context of or interdependence with the other parts of the definition and sections 1 to 6 (particularly sections 2 and 5) and then make the necessary qualifications of the concept of dishonesty when the factual issues raised by an individual case require it. The other is to revert to the law as stated by the majority in Gomez and by Visct. Dilhorne and, so far as still relevant, by your Lordships' House in Morris, and correctly understood by the Court of Appeal in Mazo. It is not an option to do neither as happened in the present case. The unqualified Ghosh approach cannot survive in conjunction with the 'Browne-Wilkinson' approach.

In my judgment the correct answer is that adopted by Pill LJ but if your Lordships are of a different opinion the least that should be done is to draw attention to and confirm the provisions of sections 2 and 5 and their implications for cases where the issue raised is whether the property alleged to have been stolen was transferred to the defendant as a gift. What must be erroneous is to treat as "belonging to another" property which at the time of the alleged appropriation belongs to the defendant in accordance with s.5(4). Similarly it must be wrong to treat as a dishonest "appropriation of property belonging to another" under s.2(1) an appropriation for which the defendant correctly knows (as opposed to mistakenly believes) he actually had (as opposed to would have had) the other's consent, the other knowing of the appropriation and the circumstances of it (as opposed to the other person only hypothetically having that knowledge).

My Lords, the relevant law is contained in sections 1 to 6 of the Act. They should be construed as a whole and applied in a manner which presents a consistent scheme both internally and with the remainder of the Act. The phrase "dishonestly appropriates" should be construed as a composite phrase. It does not include acts done in relation to the relevant property which are done in accordance with the actual wishes or actual authority of the person to whom the property belongs. This is because such acts do not involve any assumption of the rights of that person within s.3(1) or because, by necessary implication from s.2(1), they are not to be regarded as dishonest appropriations of property belonging to another.

Actual authority, wishes, consent (or similar words) mean, both as a matter of language and on the authority of the three House of Lords cases, authorisation not obtained by fraud or misrepresentation. The definition of theft therefore embraces cases where the property has come to the defendant by the mistake of the person to whom it belongs and there would be an obligation to restore it - s.5(4) - or property in which the other still has an equitable proprietary interest - s.5(1). This would also embrace property obtained by undue influence or other cases coming within the classes of invalid transfer recognised in In re Beaney.

In cases of alleged gift, the criteria to be applied are the same. But additional care may need to be taken to see that the transaction is properly explained to the jury. It is unlikely that a charge of theft will be brought where there is not clear evidence of at least some conduct of the defendant which includes an element of fraud or overt dishonesty or some undue influence or knowledge of the deficient capacity of the alleged donor. This was the basis upon which the prosecution of the appellant was originally brought in the present case. On this basis there is no difficulty in explaining to the jury the relevant parts of s.5 and s.2(1) and the effect of the phrase "assumption of the rights of an owner". Where the basis is less specific and the possibility is that there may have been a valid gift of the relevant article or money to the defendant, the analysis of the prosecution case will break down under sections 2 and 5 as well as s.3 and it will not suffice simply to invite the jury to convict on the basis of their disapprobation of the defendant's conduct and their attribution to him of the knowledge that he must have known that they and other ordinary and decent persons would think it dishonest. Theft is a crime of dishonesty but dishonesty is not the only element in the commission of the crime.

I would answer the certified question in the negative. But, in any event, I would allow the appeal and quash the conviction because the summing-up failed to direct the jury adequately upon the other essential elements of theft, not just appropriation.

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