Director of Public Prosecutions (Appellant)
v.
Gomez
(On Appeal from the Court of Appeal (Criminal Division))
JUDGMENT
Die Jovis 3° Decembris 1992
Upon Report from the Appellate Committee to whom was
referred the Cause Director of Public Prosecutions against Gomez,
That the Committee had heard Counsel as well on Monday the 20th
as on Tuesday the 21st and Wednesday the 22nd days of July last
upon the Petition and Appeal of the Director of Public
Prosecutions of 4/12 Queen Anne’s Gate, London SW1H 9AZ, praying
that the matter of the Order set forth in the Schedule thereto,
namely an Order of Her Majesty’s Court of Appeal (Criminal
Division) of the 22nd day of April 1991, might be reviewed before
Her Majesty the Queen in Her Court of Parliament and that the
said Order might be reversed, varied or altered or that the
Petitioner might have such other relief in the premises as to Her
Majesty the Queen in Her Court of Parliament might seem meet; as
upon the case of Edwin Gomez lodged in answer to the said Appeal;
and due consideration had this day of what was offered on either
side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and
Temporal in the Court of Parliament of Her Majesty the Queen
assembled, That the said Order of Her Majesty’s Court of Appeal
(Criminal Division) of the 22nd day of April 1991 complained of
in the said Appeal be, and the same is hereby, Set Aside and that
the convictions at Isleworth Crown Court of the 20th and 24th
days of April 1990 be, and the same are hereby, Restored: And
it is also further Ordered, That the Cause be, and the same is
hereby, remitted back to the Court of Appeal (Criminal Division)
to do therein as shall be just and consistent with this Judgment.
Cler: Parliamentor:
Judgment: 3.12.92
HOUSE OF LORDS
DIRECTOR OF PUBLIC PROSECUTIONS
(APPELLANT)
v.
GOMEZ
(RESPONDENT)
(ON APPEAL FROM THE COURT OF APPEAL
(CRIMINAL DIVISION))
Lord Keith of Kinkel
Lord Jauncey of Tullichettle
Lord Lowry
Lord Browne-Wilkinson
Lord Slynn of Hadley
LORD KEITH OF KINKEL
My Lords.
This appeal raises the question whether two decisions of
your Lordships’ House upon the proper construction of certain
provisions of the Theft Act 1968 are capable of being reconciled
with each other, and, if so, in what manner. The two decisions
are Lawrence v. Metropolitan Police Commissioner [1972] AC 626
and Reg. v. Morris [1984] AC 320. The question has given rise
to much debate in subsequent cases and in academic writings.
The facts of this case are that the respondent, Edwin
Gomez, was employed as assistant manager at a shop trading by
retail in electrical goods. In September 1987 he was asked by an
acquaintance called Jit Ballay to supply goods from the shop and
to accept payment by two stolen building society cheques, one for
£7,950 and the other for £9,250, which were undated and bore no
payee’s name. The respondent agreed, and prepared a list of
goods to the value of £7,950 which he submitted to the manager,
Mr. Gilberd, saying that it represented a genuine order by one
Johal and asking him to authorise the supply of the goods in
return for a building society cheque in that sum. Mr. Gilberd
instructed the respondent to confirm with the bank that the
cheque was acceptable, and the respondent later told him that he
had done so and that such a cheque was “as good as cash.” Mr.
Gilberd agreed to the transaction, the respondent paid the cheque
into the bank, and a few days later Ballay took possession of the
goods, the respondent helping him to load them into his vehicle.
Shortly afterwards a further consignment of goods to the value of
£9,250 was ordered and supplied in similar fashion (apart from one
item valued at £1,002.99 which was not delivered), against the
second stolen building society cheque. Mr. Gilberd agreed to this
transaction without further inquiry. Later the two cheques were
returned by the bank marked “Orders not to pay. Stolen cheque.”
The respondent, Ballay and another employee of the shop,
named Rai, were arrested and later tried on an indictment the
fourth and fifth counts in which charged all three with theft
contrary to section 1(1) of the Theft Act 1968 in respect of the
two transactions. After evidence had been led for the prosecution
counsel for the respondent submitted that there was no case to
answer on the theft charges because the manager of the shop had
authorised the transactions, so that there had been no
appropriation within the meaning of section 1(1) of the Theft Act.
The trial judge rejected this submission, whereupon the respondent
pleaded guilty to count 4, but defended himself on count 5 on the
basis that he had acted under duress. The jury, however,
convicted him on this count, and he was sentenced to two years’
imprisonment on each count to run concurrently. The respondent
appealed to the Court of Appeal (Criminal Division) which on 22
April 1991 (Lord Lane C.J., Hutchison and Mantell 33.) quashed the
convictions: ([1991] 1 W.L.R. 1344). Lord Lane C.J., delivering the
judgment of the court, after considering Lawrence v. Commissioner
of Metropolitan Police [1972] AC 626 and Reg. v. Morris [1984]
A.C. 320, said at p. 1338:
“What in fact happened was that the owner was
induced by deceit to agree to the goods being transferred to
Bailey. If that is the case, and if in these circumstances
the appellant is guilty of theft, it must follow that anyone
who obtains goods in return for a cheque which he knows
will be dishonoured on presentation, or indeed by way of any
other similar pretence, would be guilty of theft. That does
not seem to be the law. Reg. v. Morris [1984] AC 320
decides that when a person by dishonest deception induces
the owner to transfer his entire proprietary interests that is
not theft. There is no appropriation at the moment when
he takes possession of the goods because he was entitled to
do so under the terms of the contract of sale, a contract
which is, it is true, voidable, but has been avoided at the
time the goods are handed over.”
And later, at p. 1339:
“We therefore conclude that there was de facto, albeit
voidable, contract between the owners and Ballay; that it
was by virtue of that contract that Ballay took possession
of the goods; that accordingly the transfer of the goods to
him was with the consent and express authority of the
owner and that accordingly there was no lack of
authorisation and no appropriation.”
The court later granted a certificate under section 1(2) of the
Administration of Justice Act 1960 that a point of law of general
public importance was involved in the decision, namely
“When theft is alleged and 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,
has (a) an appropriation within the meaning of section 1(1)
of the Theft Act 1968 taken place, or (b) must such a
passing of property necessarily involve an element of
adverse inference with or usurpation of some right of the
owner?”
– 2 –
The Crown now appeals, with leave granted here, to your
Lordships’ House.
The provisions of the Theft Act 1968 principally relevant
are these:
Section 1(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.”
Section 3(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.”
Section 4(l)
“‘Property’ includes money and all other property, real or
personal, including things in action and other intangible
property.”
Section 7
“A person guilty of theft shall on conviction on indictment
be liable to imprisonment for a term not exceeding ten
years.”
Section 15(1)
“A person who by any deception dishonestly obtains property
belonging to another, with the intention of permanently
depriving the other of it, shall on conviction on indictment
be liable to imprisonment for a term not exceeding ten
years.”
It is to be observed that by section 26 of the Criminal Justice
Act 1991 the maximum sentence for theft was reduced from 10 to
7 years. The section 15(1) penalty was left unchanged.
The facts in Lawrence v. Metropolitan Police Commissioner
[1972] AC 626, as set out in the speech of Viscount Dilhorne,
were these:
“The appellant was convicted on December 2, 1969, of theft
contrary to section 1(1) of the Theft Act 1968. On
September 1, 1969, a Mr. Occhi, an Italian who spoke little
English, arrived at Victoria Station on his first visit to this
country. He went up to a taxi driver, the appellant, and
showed him a piece of paper on which an address in
Ladbroke Grove was written. The appellant said that it was
very far and very expensive. Mr. Occhi got into the taxi,
took £1 out of his wallet and gave it to the appellant who
then, the wallet being still open, took a further £6 out of
– 3 –
it. He then drove Mr. Occhi to Ladbroke Grove. The
correct lawful fare for the journey was in the region of 10s.
6d. The appellant was charged with and convicted of the
theft of the £6.”
The conviction was upheld by the Court of Appeal (Criminal
Division) which in granting leave to appeal to your Lordships’
House certified the following questions as involving a point of law
of general public importance:
“(1) Whether section 1(1) of the Theft Act 1968 is to be
contrued as though it contained the words ‘without the
consent of the owner’ or words to that effect and (2)
Whether the provisions of section 15(1) and of section 1(1)
of the Theft Act 1968 are mutually exclusive in the sense
that if the facts proved would justify a conviction under
section 15(1) there cannot lawfully be a conviction under
section 1(1) on those facts.”
Viscount Dilhorne, whose speech was concurred in by Lord
Donovan, Lord Pearce, Lord Diplock and Lord Cross of Chelsea,
after stating the facts, and expressing some doubts as to what Mr.
Occhi had meant when he said that he “permitted” the taxi driver
to take £6, continued, at p. 631:
‘The main contention of the appellant in this House
and in the Court of Appeal was that Mr. Occhi had
consented to the taking of the £6 and that, consequently,
his conviction could not stand. In my opinion, the facts of
this case to which I have referred fall far short of
establishing that Mr. Occhi had so consented.
“Prior to the passage of the Theft Act 1968, which
made radical changes in and greatly simplified the law
relating to theft and some other offences, it was necessary
to prove that the property alleged to have been stolen was
taken ‘without the consent of the owner’ (Larceny Act 1916,
section 1(1)).
“These words are not included in section 1(1) of the
Theft Act, but the appellant contended that the subsection
should be construed as if they were, as if they appeared
after the words ‘appropriates.’ Section 1(1) reads as
follows:
‘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.’
“I see no ground for concluding that the omission of
the words ‘without the consent of the owner’ was
inadvertent and not deliberate, and to read the subsection as
if they were included is, in my opinion, wholly unwarranted.
Parliament by the omission of these words has relieved the
prosecution of the burden of establishing that the taking was
without the owner’s consent. That is no longer an ingredient
of the offence.
– 4 –
“Megaw L.J., delivering the judgment of the Court of
Appeal, said [1971] 1 Q.B. 373, 376 that the offence created
by section 1(1) involved four elements; ‘(i) a dishonest (ii)
appropriation (iii) of property belonging to another (iv) with
the intention of permanently depriving the owner of it.’
“I agree. That there was appropriation in this case is
clear. Section 3(1) states that any assumption by a person
of the rights of an owner amounts to an appropriation.
Here there was clearly such an assumption. That an
appropriation was dishonest may be proved in a number of
ways. In this case it was not contended that the appellant
had not acted dishonestly. Section 2(1) provides, inter alia,
that a person’s appropriation of property belonging to
another is not to be regarded as dishonest 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. 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. The appellant, if he believed that Mr. Occhi,
knowing that £7 was far in excess of the legal fare, had
nevertheless agreed to pay him that sum, could not be said
to have acted dishonestly in taking it. When Megaw L.J.
said that if there was true consent, the essential element of
dishonesty was not established, I understand him to have
meant this. Belief or the absence of belief that the owner
had with such knowledge consented to the appropriation is
relevant to the issue of dishonesty, not to the question
whether or not there has been an appropriation. That may
occur even though the owner has permitted or consented to
the property being taken. So proof that Mr. Occhi had
consented to the appropriation of £6 from his wallet without
agreeing to paying a sum in excess of the legal fare does
not suffice to show that there was not dishonesty in this
case. There was ample evidence that there was.
“I now turn to the third element ‘property belonging
to another.’ Mr. Back Q.C., for the appellant, contended
that if Mr. Occhi consented to the appellant taking the £6,
he consented to the property in the money passing from him
to the appellant and that the appellant had not, therefore,
appropriated property belonging to another. He argued that
the old distinction between the offence of false pretences
and larceny had been preserved. I am unable to agree with
this. The new offence of obtaining property by deception
created by section 15(1) of the Theft Act also contains the
words ‘belonging to another.’ ‘A person who by any
deception dishonestly obtains property belonging to another,
with the intention of permanently depriving the other of it’
commits that offence. ‘Belonging to another’ in section 1(1)
and in section 15(1) in my view signifies no more than that,
at the time of the appropriation or the obtaining, the
property belonged to another, with the words ‘belonging to
another’ having the extended meaning given by section 5.
The short answer to this contention on behalf of the
appellant is that the money in the wallet which he
appropriated belonged to another, to Mr. Occhi.
– 5 –
“There was no dispute about the appellant’s intention
being permanently to deprive Mr. Occhi of the money.
“The four elements of the offence of theft as defined
in the Theft Act were thus clearly established and, in my
view, the Court of Appeal was right to dismiss the appeal.”
In the result, each of the certified questions was answered in the
negative.
It will be seen that Viscount Dilhorne’s speech contains two
clear pronouncements, first that it is no longer an ingredient of
the offence of theft that the taking should be without the owner’s
consent and second, that an appropriation may occur even though
the owner has permitted or consented to the property being taken.
The answer given to the first certified question was in line with
those pronouncements, so even though Viscount Dilhorne was of
opinion that the evidence fell short of establishing that Mr. Occhi
had consented to the taking of the £6 it was a matter of decision
that it made no difference whether or not he had so consented.
Reg. v. Morris [1984] AC 320 involved two cases of price
label switching in a supermarket. In the first case the defendent
had removed the price label from a joint of meat and replaced it
with a label showing a lesser price which he had removed from
another joint. He was detected at the check-out point before he
had paid for the joint and later convicted of theft contrary to
section 1(1) of the Theft Act. In the second case the defendant
had in similar manner switched price labels on goods in a
supermarket but was not arrested until after he had passed the
check-out point and paid the lesser prices for the goods. He was
charged with two counts of theft contrary to section 1(1) and one
count of obtaining property by deception contrary to section 15(1).
The jury convicted him on the counts of theft, but by directions
of the recorder returned no verdict on the section 15(1) count.
Appeals against conviction by both defendants were dismissed by
the Court of Appeal (Criminal Division) and by this House. Lord
Roskill, in the course of a speech concurred in by Lords Fraser of
Tullybelton, Edmund-Davies, Brandon of Oakbrook and Brightman,
at p. 331 referred to the Lawrence case with apparent approval as
having set out the four elements involved in the offence of theft
and as having rejected the argument that there could not be theft
within section 1(1) if the owner of the property had consented to
the defendant’s acts. He observed that in Lawrence the House did
not have to consider the precise meaning of “appropriation” in
section 3(1) and continued:
“Mr. Denison submitted that the phrase in section 3(1)
‘any assumption by a person of the rights’ (my emphasis) ‘of
an owner amounts to an appropriation’ must mean any
assumption of ‘all the rights of an owner.’ Since neither
defendant had at the time of the removal of the goods from
the shelves and of the label switching assumed all the rights
of the owner, there was no appropriation and therefore no
theft. Mr. Jeffreys for the prosecution, on the other hand,
contended that the rights in this context only meant any of
the rights. An owner of goods has many rights – they have
been described as ‘a bundle or package of rights.’ Mr.
Jeffreys contended that on a fair reading of the subsection
– 6 –
it cannot have been the intention that every one of an
owner’s rights had to be assumed by the alleged thief before
an appropriation was proved and that essential ingredient of
the offence of theft established.
“My Lords, if one reads the words ‘the rights’ at the
opening of section 3(1) literally and in isolation from the
rest of the section, Mr. Denison’s submission undoubtedly has
force. But the later words ‘any later assumption of a right’
seem to me to militate strongly against the correctness of
the submission. Moreover the provisions of section 2(1)(a)
also seem to point in the same direction. It follows
therefore that it is enough for the prosecution if they have
proved in these cases the assumption by the [defendants] of
any of the rights of the owner of the goods in question,
that is to say, the supermarket concerned, it being common
ground in these cases that the other three of the four
elements mentioned in Viscount Dilhorne’s speech in Reg. v.
Lawrence (Alan) had been fully established.
“My Lords, Mr. Jeffreys sought to argue that any
removal from the shelves of the supermarket, even if
unaccompanied by label switching, was without more an
appropriation. In one passage in his judgment in Morris’s
case, the learned Lord Chief Justice appears to have
accepted the submission, for he said [1983] Q.B. 587, 596:
‘it seems to us that in taking the article from the
shelf the customer is indeed assuming one of the
rights of the owner – the right to move the article
from its position on the shelf to carry it to the
check-out.’
“With the utmost respect, I cannot accept this
statement as correct. If one postulates an honest customer
taking goods from a shelf to put in his or her trolley to
take to the checkpoint there to pay the proper price, I am
unable to see that any of these actions involves any
assumption by the shopper of the rights of the supermarket.
In the context of section 3(1), the concept of appropriation
in my view involves not an act expressly or impliedly
authorised by the owner but an act by way of adverse
interference with or usurpation of those rights. When the
honest shopper acts as I have just described, he or she is
acting with the implied authority of the owner of the
supermarket to take the goods from the shelf, put them in
the trolley, take them to the checkpoint and there pay the
correct price, at which moment the property in the goods
will pass to the shopper for the first time. It is with the
consent of the owners of the supermarket, be that consent
express or implied, that the shopper does these acts and
thus obtains at least control if not actual possession of the
goods preparatory, at a later stage, to obtaining the
property in them upon payment of the proper amount at the
checkpoint. I do not think that section 3(1) envisages any
such act as an “appropriation,’ whatever may be the meaning
of that word in other fields such as contract or sale of
goods law.
– 7 –
“If, as I understand all your Lordships to agree, the
concept of appropriation in section 3(1) involves an element
of adverse interference with or usurpation of some right of
the owner, it is necessary next to consider whether that
requirement is satisfied in either of these cases. As I have
already said, in my view mere removal from the shelves
without more is not an appropriation. Further, if a shopper
with some perverted sense of humour, intending only to
create confusion and nothing more both for the supermarket
and for other shoppers, switches labels, I do not think that
that act of label switching alone is without more an
appropriation, though it is not difficult to envisage some
cases of dishonest label switching which could be. In cases
such as the present, it is in truth a combination of these
actions, the removal from the shelf and the switching of the
labels, which evidences adverse interference with or
usurpation of the right of the owner. Those acts, therefore,
amount to an appropriation and if they are accompanied by
proof of the other three elements to which I have referred,
the offence of theft is established. Further, if they are
accompanied by other acts such as putting the goods so
removed and relabelled into a receptable, whether a trolley
or the shopper’s own bag or basket, proof of appropriation
within section 3(1) becomes overwhelming. It is the doing
of one or more acts which individually or collectively
amount to such adverse interference with or usurpation of
the owner’s rights which constitute appropriation under
section 3(1) and I do not think it matters where there is
more than one such act in which order the successive acts
take place, or whether there is any interval of time
between them. To suggest that it matters whether the
mislabelling precedes or succeeds removal from the shelves
is to reduce this branch of the law to an absurdity.”
The answer given to the question certified by the Court of Appeal
was this:
“There is a dishonest appropriation for the purposes of the
Theft Act 1968 where by the substitution of a price label
showing a lesser price on goods for one showing a greater
price, a defendant either by that act alone or by that act
in conjunction with another act or other acts (whether done
before or after the substitution of the labels) adversely
interferes with or usurps the right of the owner to ensure
that the goods concerned are sold and paid for at that
greater price.”
In my opinion Lord Roskill was undoubtedly right when he
said in the course of the passage quoted that the assumption by
the defendant of any of the rights of an owner could amount to
an appropriation within the meaning of section 3(1), and that the
removal of an article from the shelf and the changing of the price
label on it constituted the assumption of one of the rights of the
owner and hence an appropriation within the meaning of the
subsection. But there are observations in the passage which, with
the greatest possible respect to my noble and learned friend Lord
Roskill, I must regard as unnecessary for the decision of the case
and as being incorrect. In the first place, it seems to me that
the switching of price labels on the article is in itself an
– 8 –
assumption of one of the rights of the owner, whether or not it is
accompanied by some other act such as removing the article from
the shelf and placing it in a basket or trolley. No one but the
owner has the right to remove a price label from an article or to
place a price label upon it. If anyone else does so, he does an
act, as Lord Roskiil puts it, by way of adverse interference with
or usurpation of that right. This is no less so in the case of the
practical joker figured by Lord Roskill than in the case of one
who makes the switch with dishonest intent. The practical joker,
of course, is not guilty of theft because he has not acted
dishonestly and does not intend to deprive the owner permanently
of the article. So the label switching in itself constitutes an
appropriation and so to have held would have been sufficient for
the dismissal of both appeals. On the facts of the two cases it
was unnecessary to decide whether, as argued by Mr. Jeffreys, the
mere taking of the article from the shelf and putting it in a
trolley or other receptacle amounted to the assumption of one of
the rights of the owner, and hence an appropriation. There was
much to be said in favour of the view that it did, in respect that
doing so gave the shopper control of the article and the capacity
to exclude any other shopper from taking it. However, Lord
Roskill expressed the opinion that it did not, on the ground that
the concept of appropriation in the context of section 3(1)
“involves not an act expressly or impliedly authorised by the owner
but an act by way of adverse interference with or usurpation of
those rights.” While it is correct to say that appropriation for
purposes of section 3(1) includes the latter sort of act, it does not
necessarily follow that no other act can amount to an
appropriation and in particular that no act expressly or impliedly
authorised by the owner can in any circumstances do so. Indeed,
Lawrence v. Commissioner of Metropolitan Police is a clear
decision to the contrary since it laid down unequivocally that an
act may be an appropriation notwithstanding that it is done with
the consent of the owner. It does not appear to me that any
sensible distinction can be made in this context between consent
and authorisation.
In the civil case of Dobson v. General Accident Fire and
Life Assurance Corporation plc [1990] 1 Q.B. 274 a Court of
Appeal consisting of Parker and Bingham L.JJ. considered the
apparent conflict between Lawrence and Morris and applied the
former decision. The facts were that the plaintiff had insured
property with the defendant company against inter alia “loss or
damage caused by theft.” He advertised for sale a watch and ring
at the total price of £5,950. A rogue telephoned expressing an
interest in buying the articles and the plaintiff provisionally agreed
with him that the payment would be by a building society cheque
in the plaintiff’s favour. The rogue called on the plaintiff next
day and the watch and the ring were handed over to him in
exchange for a building society cheque for the agreed amount.
The plaintiff paid the cheque into his bank, which informed him
that it was stolen and worthless. The defendant company denied
liability under its policy of insurance on the ground that the loss
of the watch and ring was not caused by theft within the meaning
of the Act of 1968. The plaintiff succeeded in the county court
in an action to recover the amount of his loss, and the decision
was affirmed by the Court of Appeal. One of the arguments for
the defendants was that there had been no theft because the
plaintiff had agreed to the transaction with the rogue and reliance
– 9 –
was place on Lords Roskill’s statement in Morris at p. 332 that
appropriation
“involves not an act expressly or impliedly authorised by the
owner but an act by way of adverse interference with or
usurpation of those rights.”
In dealing with this argument Parker L.J. said, at p. 281:
‘The difficulties caused by the apparent conflict between
the decisions in Reg. v. Lawrence (Alan) [1972] AC 626
and Reg. v. Morris (David) [1984] AC 320 have provided,
not surprisingly, a basis for much discussion by textbook
writers and contributors to articles to law journals. It is,
however, clear that their Lordships in Reg. v. Morris did not
regard anything said in that case as conflicting with Reg. v.
Lawrence for it was specifically referred to in Lord
Roskill’s speech, with which the other members of the
Judicial Committee all agreed, without disapproval or
qualification. The only comment made was that, in Reg. v.
Lawrence, the House did not have to consider the precise
meaning of ‘appropriation’ in section 3(1) of the Act of
1968. With respect, I find this comment hard to follow in
the light of the first of the questions asked in Reg. v.
Lawrence and the answer to it, the passages from Viscount
Dilhorne’s speech already cited, the fact that it was
specifically argued ‘appropriates is meant in a pejorative,
rather than a neutral, sense in that the appropriation is
against the will of the owner,’ and finally that dishonesty
was common ground. I would have supposed that the
question in Reg. v. Lawrence was whether appropriation
necessarily involved an absence of consent.”
Parker L.J. then said that he found other difficulties in Lord
Roskill’s speech in Morris, and after setting out the facts of the
case and quoting a long passage from that speech at p. 332 and
also the answer to the certified question he continued, at p. 283:
“In the passage at p. 332 Lord Roskill, as it seems to
me, impliedly envisages that mere label switching could be
an appropriation and that this is so is confirmed by the
answer to the certified question which specifically uses the
words ‘either by that act alone.’ What then is it which
would make label switching alone something which adversely
affects or usurps the right of the owner? At p. 332 it
appears to be envisaged that it will depend upon the
question whether the label switching was dishonest and
coupled with the other elements of the offence of theft or
was due to a perverted sense of humour. This, however,
appears to run together the elements of dishonesty and
appropriation when it is clear from Reg. v. Lawrence (Alan)
[1972] AC 626 that they are separate. That the two
elements were indeed, at any rate to some extent, run
together is plain from the fact that the answer to the
certified question begins with the words ‘There is a
dishonest appropriation.’
“Moreover, on general principles, it would in my
judgment be a plain interference with or usurpation of an
– 10 –
owner’s rights by the customer if he were to remove a label
which the owner had placed on goods or put another label
on. It would be a trespass to goods and it would be
usurping the owner’s rights, for only he would have any
right to do such an act and no one could contend that there
was any implied consent or authority to a customer to do
any such thing. There would thus be an appropriation. In
the case of the customer with a perverted sense of humour
there would however be no theft for there would probably
be no dishonesty and certainly no intent permanently to
deprive the owner of the goods themselves.
“The case of the customer who simply removes goods
from the shelves is of course different because the basis on
which a supermarket is run is that customers certainly have
the consent of the owner to take goods from the shelves
and take them to the checkout point there to pay the
proper price for them. Suppose, however, that there were
no such consent – in, for example, a shop where goods on
display were to be taken from the shelves only by the
attendant. In such a case a customer who took from the
shelves would clearly be usurping the right of the owner.
Indeed he would be doing so if he did no more than move
an item from one place on a shelf to another. The only
difference appears to be that in the one case there is
consent and in the other there is not. Since, however, it
was held in Reg. v. Lawrence (Alan) [1972] AC 626 that
consent is not relevant to appropriation there must, one
would have supposed, be no difference between the two
cases on that aspect of the offence.
‘There are further matters in Reg. v. Morris (David)
A.C. 320 in which I find difficulty. I mention only two.
The first is the observations made on Reg. v. McPherson
[1973] Crim.L.R. 191. That was a case in which the
defendant took two bottles of whisky from the shelves and
put them in her shopping bag. The sole question in issue
was whether there had been an appropriation. It was held
in the Court of Appeal that there had been. As to this
Lord Roskill said, at p. 333:
‘That was not, of course, a label switching case, but
it is a plain case of appropriation effected by the
combination of the acts of removing the goods from
the shelf and of concealing them in the shopping bag.
Reg. v. McPherson is to my mind clearly correctly
decided as are all the cases which have followed it.
It is wholly consistent with the principles which I
have endeavoured to state in this speech.’
“Reference to the transcript of the judgment in that
case however reveals that the decision did not turn on
concealment in the shopping bag but was expressly upon the
ground that the goods were appropriated when they were
taken from the shelves. This indeed was recognised in
Anderton v. Wish (Note) (1980) 72 Cr.App.R. 23, 25, where
Roskill L.J. giving the judgment of the court said:
– 11 –
‘The Court of Appeal . . . held . . . they were guilty
of theft because when the bottles were taken there
was a dishonest appropriation. If that decision is
right and, with respect, it seems to me plainly right .
“Furthermore in Reg. v. Morris (David) [1984] AC 320 Lord
Roskill said, at p. 334: ‘ . . . I understand all your
Lordships to agree that Anderton v. Wish . . . was rightly
decided for the reasons given.”‘
Later Parker L.J. quoted this passage from the speech of
Lord Roskill in Morris, at p. 334:
“without going into further detail I respectfully suggest that
it is on any view wrong to introduce into this branch of the
criminal law questions whether particular contracts are void
or voidable on the ground of mistake or fraud or whether
any mistake is sufficiently fundamental to vitiate a
contract. These difficult questions should so far as possible
be confined to those fields of law to which they are
immediately relevant and I do not regard them as relevant
questions under the Theft Act 1968.”
And continued:
“After anxious consideration I have reached the conclusion
that whatever Reg. v. Morris did decide it cannot be
regarded as having overruled the very plain decision in Reg.
v. Lawrence (Alan) [1972] AC 626 that appropriation can
occur even if the owner consents and that Reg. v. Morris
itself makes it plain that it is no defence to say that the
property passed under a voidable contract.”
On this ground Parker L.J. dismissed the appeal.
Bingham L.J., at p. 287, plainly took the view that a
customer in a supermarket assumes some of the rights of an owner
when he takes goods into his possession and exercises control over
them by putting them in a basket or trolley, and thus appropriates
them. Later, at p. 289, he mentioned that in Lord Roskill’s
speech in Morris no reference was made to Viscount Dilhorne’s
ruling in Lawrence that appropriation might occur even though the
owner has permitted or consented to the property being taken, and
continued:
“I do not find it easy to reconcile this ruling of Viscount
Dilhorne, which was as I understand central to the answer
which the House gave to the certified question, with the
reasoning of the House in Reg. v. Morris (David) [1984] A.C.
320. Since, however, the House in Reg. v. Morris
considered that there had plainly been an appropriation in
Reg. v. Lawrence (Alan) [1972] AC 626, this must (I think)
have been because the Italian student, although he had
permitted or allowed his money to be taken, had not in
truth consented to the taxi driver taking anything in excess
of the correct fare. This is not wholly satisfactory
reconciliation, since it might be said that a supermarket
consents to customers taking goods from its shelves only
– 12 –
when they honestly intend to pay and not otherwise. On
the facts of the present case, however, it can be said, by
analogy with Reg. v. Lawrence, that although the plaintiff
permitted and allowed his property to be taken by the third
party, he had not in truth consented to the third party
becoming owner without giving a valid draft drawn by the
building society for the price. On this basis I conclude that
the plaintiff is able to show an appropriation sufficient to
satisfy section 1(1) of the Theft Act 1968 when the third
party accepted delivery of the article.”
It was argued for the respondent in the present appeal that
the case of Dobson was wrongly decided. I disagree, and on the
contrary find myself in full agreement with those parts of the
judgment of Parker L.J. to which I have referred. As regards the
attempted reconciliation by Bingham L.J. of the reasoning in
Morris with the ruling in Lawrence it appears to me that the
suggested basis of reconciliation, which is essentially speculative, is
unsound. The actual decision in Morris was correct, but it was
erroneous, in addition to being unnecessary for the decision, to
indicate that an act expressly or impliedly authorised by the owner
could never amount to an appropriation. There is no material
distinction between the facts in Dobson and those in the present
case. In each case the owner of the goods was induced by fraud
to part with them to the rogue. Lawrence makes it clear that
consent to or authorisation by the owner of the taking by the
rogue is irrelevant. The taking amounted to an appropriation
within the meaning of section 1(1) of the Theft Act. Lawrence
also makes it clear that it is no less irrelevant that what
happened may also have constituted the offence of obtaining
property by deception under section 15(1) of the Act.
In my opinion it serves no useful purpose at the present
time to seek to construe the relevant provisions of the Theft Act
by reference to the Report which preceded it, namely the Eighth
Report of the Criminal Law Revision Committee (1966) Cmnd.
2977. The decision in Lawrence was a clear decision of this
House upon the construction of the word “appropriate” in section
1(1) of the Act, which had stood for twelve years when doubt was
thrown upon it by obiter dicta in Morris. Lawrence must be
regarded as authoritative and correct, and there is no question of
it now being right to depart from it.
It is desirable to say a few words about the cases of Reg.
v. Skipp 1975 Crim.L.R. 114 and Reg. v. Fritschy 1985 Crim.L.R.
745. In the first case the defendant, posing as a haulage
contractor, was instructed to collect consignments of goods from
three different places and deliver them to a certain destination.
He collected the goods and made off with them. The Court of
Appeal, on his appeal against his conviction for theft upon one
count covering all three consignments, on the ground that the
count was bad for duplicity in that there were three separate
appropriations, held that there had been no appropriation until the
last of the goods were loaded, or probably until the defendant
deviated from the route to the proper destination. In the second
case the defendant was instructed by the owner to collect a
quantity of Krugerrands in London and deliver them to a safe
deposit in Switzerland. Although the short report is not very clear
on the matter, it seems that the defendant, having collected the
– 13 –
coins, took them to Switzerland and there made away with them.
The trial judge directed the jury if at the time he collected the
coins the defendant had formed the dishonest intention of keeping
them for himself he was guilty of theft. The Court of Appeal
overturned the resultant conviction for theft on the ground,
following Morris, that there had been no appropriation in England
because the defendant had there taken possession of the
Krugerrands with the owner’s authority. In my opinion both these
cases were inconsistent with Lawrence and were wrongly decided.
There were cited to your Lordships a number of cases
involving the abstraction of moneys from a limited company by a
person who was in a position to give the consent of the company
to the abstraction. It is sufficient to say that I agree with what
my noble and learned friend Lord Browne-Wilkinson has to say
about these cases in the speech to be delivered by him, and that
in my opinion a person who thus procures the company’s consent
dishonestly and with the intention of permanently depriving the
company of the money is guilty of theft contrary to section 1(1)
of the Act of 1968.
My Lords, for the reasons which I have given I would
answer branch (a) of the certified question in the affirmative and
branch (b) in the negative, and allow the appeal.
LORD JAUNCEY OF TULLICHETTLE
My Lords,
I have had the advantage of reading in draft the speeches
of my noble and learned friends, Lord Keith of Kinkel and Lord
Browne-Wilkinson, and for the reasons which they give I agree that
the appeal should be allowed and the questions answered in the
way in which my noble and learned friend, Lord Keith of Kinkel,
proposes.
LORD LOWRY
My Lords,
This is an appeal brought by the Director of Public
Prosecutions with the leave of the Court of Appeal (Criminal
Division) from a decision of that court on 22 April 1991 allowing
the appeal of the present respondent, Edwin Gomez, against his
convictions on 20 and 24 April 1990 at Isleworth Crown Court on
two counts of theft, for which he received concurrent sentences of
2 years’ imprisonment, and quashing those convictions.
The facts are as follows. Gomez was the assistant manager
of the Ealing Branch (“the shop”) of a chain of retail electrical
goods shops trading as “Bennetts Retail”. On 14 September 1989
an acquaintance, Jit Ballay, asked Gomez, and Gomez agreed, to
supply goods from the shop in exchange for two undated building
– 14 –
society cheques for £7,950 and £9,250, which both Ballay and
Gomez knew to be stolen and worthless cheques. Gomez then
prepared and submitted to the manager of the shop, Mr. Gilberd, a
list of goods to the value of £7,950, telling him that the list
represented a bona fide order placed by one Johal and asking him
to authorise the supply of the goods against a building society
cheque for that amount. On being told by the manager to check
with the bank, he pretended to have done so and assured the
manager that the cheque was “as good as cash”, whereupon the
manager authorised the transaction. On 20 September Gomez paid
the cheque into his employers’ bank and on 23 September Ballay
took possession of the listed goods. Gomez helped to load the
goods into Ballay’s van. A further consignment of goods was
ordered and supplied against the second stolen cheque, Mr. Gilberd
having agreed to the transaction without further inquiry.
The judge’s note of Mr. Gilberd’s evidence when he was
cross-examined at the trial included the following:
“I was involved in both transactions. Exceptionally high
orders. I would expect to be consulted as I was. I
authorised discount. I authorised release. I expressly
authorised this.”
The manager at all times believed that the stolen cheques were
genuine. On 5 October 1989, however, both cheques were returned
by the bank marked “Orders not to pay. Stolen cheque.”
Gomez, Ballay and Jatindur Rai, another employee of
Bennetts Retail, were arrested and jointly tried on an indictment
alleging two counts of handling the stolen cheques against Ballay
(counts 1 and 2), one count of conspiracy (count 3, which was not
proceeded with) and two counts of theft of the electrical goods
against all the defendants (counts 4 and 5). All three were found
guilty as charged, save that Gomez had pleaded guilty to count 4
after a ruling against him on a legal submission. He had
continued to plead not guilty in respect of count 5, but the only
defence made after the legal ruling was the defence of duress,
which was rejected by the jury and with which the Court of
Appeal was not concerned.
Under the law before 1968 the facts of this case would
have led to charges, to which there would have been no defence,
of obtaining goods by false pretences. Since the passing of the
Theft Act 1968 the accused could equally well have been
prosecuted successfully for obtaining property by deception
contrary to section 15 of the Act. Under the old law they could
not have been found guilty of larceny, because the seller agreed to
transfer the property in the goods to Ballay, and the fact that the
seller’s agreement was obtained by a fraud does not affect that
conclusion. Indeed, if the seller’s consent could have been vitiated
in that way, Parliament would never have needed to create the
statutory offence of obtaining by false pretences. The accused in
this case, however, were prosecuted for theft under section 1(1) of
the Act and were convicted notwithstanding the submission of
counsel for the defence to the effect that the crime for which the
accused were indicted did not amount to theft because the seller
had consented to sell the property, albeit consent had been
obtained by fraud, as alleged. When Gomez appealed, the Court
– 15 –
of Appeal upheld that submission and quashed his convictions. In
order to restore those convictions, the Crown must say that the
Theft Act has altered the law in such a way (among others) that
anyone who, by a false representation such as a worthless cheque,
induces an owner to sell property is thereby guilty of stealing.
Section 1(1) of the Theft Act 1968 provides:
“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.”
This appeal turns on the meaning in that subsection of the word
“appropriates” and will involve the consideration, among other
things, of conflicting statements in this House, which I shall come
back to at a later stage. One was by Viscount Dilhorne in R. v.
Lawrence [1972] AC 626 (“Lawrence”) where, having noted the
absence from the subsection of the words “without the consent of
the owner”, he said at p. 632A:
“Parliament by the omission of these words has relieved the
prosecution of the burden of establishing that the taking was
without the owner’s consent. That is no longer an
ingredient of the offence.”
Lord Roskill, on the other hand, in R. v. Morris [1984] AC 320
(“Morris”) said at p. 332D):
“In the context of section 3(1), the concept of appropriation
in my view involves not an act expressly or impliedly
authorised by the owner but an act by way of adverse
interference with or usurpation of those rights.”
The certified question in this appeal is –
“When theft is alleged and that which is alleged to be
stolen passes to the defendant with the consent of the
owner, but that consent has been obtained by a false
representation, has
-
-
-
an appropriation within the meaning of section 1(1) of
the Theft Act 1968 taken place, or -
must such a passing of property necessarily involve an
element of adverse interference with or usurpation of some
right of the owner?”
-
-
I can say now that I would answer (a) “No” and (b) “No, because
such a passing of property does not involve an appropriation”.
Since the question turns on the meaning of the word
“appropriates” in section 1(1) of the Theft Act 1968, the problem
is therefore one of statutory interpretation and it will be helpful
to start by setting out the immediately relevant provisions of the
Act:-
“Definition of ‘theft’
– 16 –
“l.-(l) 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.) It is immaterial whether the appropriation is made
with a view to gain, or is made for the thief’s own benefit.
(3.) The five following sections of this Act shall have
effect as regards the interpretation and operation of this
section (and, except as otherwise provided by this Act, shall
apply only for purposes of this section).
“2.-(l) A person’s appropriation of property belonging
to another is not to be regarded as dishonest –
-
-
-
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 -
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.
(2) A person’s appropriation of property belonging to
another may be dishonest notwithstanding that he is willing
to pay for the property.
“3.-(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.
(2) Where property or a right or interest in property is
or purports to be transferred for value to a person acting in
good faith, no later assumption by him of rights which he
believed himself to be acquiring shall, by reason of any
defect in the transferor’s title, amount to theft of the
property.
“4.-(1) ‘Property’ includes money and all other
property, real or personal, including things in action and
other intangible property.
(2) A person cannot steal land, or things forming part of
land and severed from it by him or by his directions, except
in the following cases, that is to say –
(a) when he is a trustee or personal representative, or is
authorised by power of attorney, or as liquidator of a
company, or otherwise, to sell or dispose of land belonging
to another, and he appropriates the land or anything forming
part of it by dealing with it in breach of the confidence
reposed in him; or
– 17 –
(b) when he is not in possession of the land and
appropriates anything forming part of the land by severing it
or causing it to be severed, or after it has been severed; or
(c) when, being in possession of the land under a tenancy,
he appropriates the whole or part of any fixture or
structure let to be used with the land.
For purposes of this subsection ‘land’ does not include
incorporeal hereditaments; ‘tenancy’ means a tenancy for
years or any less period and includes an agreement for such
a tenancy, but a person who after the end of a tenancy
remains in possession as statutory tenant or otherwise is to
be treated as having possession under the tenancy, and ‘let’
shall be construed accordingly.
. . .
“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).
. . .
“6.-(1) A person appropriating property belonging to
another without meaning the other permanently to lose the
thing itself is nevertheless to be regarded as having the
intention of permanently depriving the other of it if his
intention is to treat the thing as his own to dispose of
regardless of the other’s rights; and a borrowing or lending
of it may amount to so treating it if, but only if, the
borrowing or lending is for a period and in circumstances
making it equivalent to an outright taking or disposal.
(2) Without prejudice to the generality of subsection (1)
above, where a person, having possession or control (lawfully
or not) of property belonging to another, parts with the
property under a condition as to its return which he may
not be able to perform, this (if done for purposes of his
own and without the other’s authority) amounts to treating
the property as his own to dispose of regardless of the
other’s rights.
…”
Fraud and blackmail
“15.-(1) A person who by any deception dishonestly
obtains property belonging to another, with the intention of
permanently depriving the other of it, shall on conviction on
indictment be liable to imprisonment for a term not
exceeding ten years.
(2) For purposes of this section a person is to be treated
as obtaining property if he obtains ownership, possession or
control of it, and ‘obtain’ includes obtaining for another or
enabling another to obtain or to retain.
– 18 –
(3) Section 6 above shall apply for purposes of this
section, with the necessary adaptation of the reference to
appropriating, as it applies for purposes of section 1.
(4) For purposes of this section ‘deception’ means any
deception (whether deliberate or reckless) by words or
conduct as to fact or as to law, including a deception as to
the present intentions of the person using the deception or
any other person.”
To be guilty of theft the offender, as I shall call him, must
act dishonestly and must have the intention of permanently
depriving the owner of property. Section 1(3) shows that in order
to interpret the word “appropriates” (and thereby to define theft),
sections 1 to 6 must be read together. The ordinary and natural
meaning of “appropriate” is to take for oneself, or to treat as
one’s own, property which belongs to someone else. The primary
dictionary meaning is “take possession of, take to oneself,
especially without authority”, and that is in my opinion the
meaning which the word bears in section 1(1). The act of
appropriating property is a one-sided act, done without the consent
or authority of the owner. And, if the owner consents to transfer
property to the offender or to a third party, the offender does not
appropriate the property, even if the owner’s consent has been
obtained by fraud. This statement represents the old doctrine in
regard to obtaining property by false pretences, to which I shall
advert presently.
The references in sections 2, 3 and 4 qualify but do not
impair the meaning of the words “appropriates” and “appropriation”,
as they are used in section 1. Section 2(1) does not change the
meaning of appropriation but it tells us when appropriation is not
to be regarded as dishonest (and so does not amount to stealing).
Paragraphs (a), (b) and (c) of the sub-section all describe
unilateral, though honest, acts of the appropriator, who takes the
property for himself and treats it as his own. For the benefit of
those who would suggest that section 2(1)(b) shows that
appropriation is something which can be done with the consent of
the owner, I would paraphrase that provision by saying “if he
appropriates the property in the belief that he would have the
other’s consent if the other knew what he had done and the
circumstances in which he did it.” The opportunity for confusion
arises from the use of the word “appropriates” in a clearly
unilateral sense followed by the word “appropriation” (describing
what the appropriator has unilaterally done) hypothetically linked
to the idea of consent.
Coming now to section 3, the primary meaning of
“assumption” is “taking on oneself”, again a unilateral act, and this
meaning is consistent with subsections (1) and (2). To use the
word in its secondary, neutral sense would neutralise the word
“appropriation”, to which assumption is here equated, and would
lead to a number of strange results. Incidentally, I can see no
magic in the words “an owner” in subsection (1). Every case in
real life must involve the owner or the person described in section
5(1); “the rights” may mean “all the rights”, which would be the
normal grammatical meaning, or (less probably, in my opinion) “any
rights”: see R. v. Morris [1984] A.C. at p. 332H. For present
– 19 –
purposes it does not appear to matter; the word “appropriate” does
not on either interpretation acquire the meaning contended for by
the Crown. Still looking at section 3(1), I point out that “any
later assumption of a right to it” (that is, a right to the property)
amounts to an appropriation of a right to it and that normally “a
right to it” means a right to the property and not a right in it”.
Section 3(2) protects an innocent purchaser from an accusation of
theft when, having bought in good faith from someone with a
defective title, he later treats the property as his own.
Section 4(2) lists three exceptions to the general proposition
that a person cannot steal land etc. The word “appropriates” in
paragraph (a), (b) and (c) is thoroughly consistent with unilateral
action.
Section 6(1) introduces a deemed intention of permanently
depriving the owner of his property when the person appropriating
the property “for the time being”, as one might say, intends “to
treat the thing as his own to dispose of regardless of the other’s
rights”. Here again the offender’s act is unilateral and the same
can clearly be said of section 6(2).
Mr. Hacking Q.C., for the respondent, also drew attention to
sections 24(4) and 28(6) of the Theft Act, which can be required
only on the basis that section 15, in at least some respects is not
dealing with theft. He also pointed out the amendment in section
26 of the Criminal Justice Act 1991 (effective from 1 October
1992) reducing the maximum term of imprisonment for theft from
10 to 7 years, thereby distinguishing theft from obtaining by
deception, the maximum term for which remains at 10 years.
Accordingly, reading sections 1 to 6 as a whole, and also
taking into account sections 24(4) and 28(6) and the 1991
amendment, the ordinary and natural meaning of “appropriates” in
section 1(1) is confirmed. So clear is this conclusion to my mind
that, notwithstanding anything which has been said in other cases,
I would be very slow to concede that the word “appropriates” in
section 1(1) of the Theft Act is in its context ambiguous. But, as
I have indicated, the Crown case requires that there must be
ambiguity and further requires that the ambiguity must be resolved
against the ordinary meaning of the word and in favour of the
neutral meaning preferred and required by the Crown’s argument.
Therefore, my Lords, I am willing for the purpose of argument to
treat the word “appropriates” as ambiguous in its context and, on
that basis, following the principles enunciated in Black-Clawson
International Ltd. v. Papierwerke Waldhof-Aschaftenburg A.G.
[1975] AC 591 and the example of Lord Ackner in R. v. Kassim”
[1992] 1 A.C. 9 at p. 16, where the construction of section 20(2)
of the Theft Act 1968 was the question at issue, I turn, for such
guidance as it may afford, to the Eighth Report of the Criminal
Law Revision Committee, “Theft and Related Offences” (1966)
(Cmnd. 2977).
While the Report may not completely resolve the question
for your Lordships, it provides in the first place a very useful
summary of the state of the law in 1966. It also discusses in
some detail the shortcomings of the law in regard to theft and
kindred offences, as they appeared to the Committee, and it
proposes remedies. A reading of the Theft Act, which was based
– 20 –
on the draft Bill annexed to the Report, leads me to the
conclusion that, when using the very words of the draft,
Parliament intended to implement the Committee’s thinking. Of
course, if the words of the Act clearly achieve a different result
from that which seemed to be intended by the Committee, it is
the words which must prevail and strained constructions must not
be adopted in order to give effect to the Report.
In paragraph 15 the Committee discuss “the chief defects in
the existing law of larceny”, including its failure to deal with
certain kinds of dishonesty. In paragraph 16 they point out that
the defects stem from regarding larceny as a violation of
possession and not of rights of ownership, with the offence
depending on a taking of the property. The notion of taking had
been extended both judicially and by statute and examples of
statutory extension by way of sections 17(l)(b) (embezzlement) and
20(1)(iv) (fraudulent conversion) of the Larceny Act 1916 are given
in paragraph 17. The Committee observed at paragraph 18 that
the fact that misappropriation of property was dealt with under
the three separate heads of larceny, embezzlement and fraudulent
conversion inevitably made for difficulty and complication.
Paragraph 19 introduces what will be seen as a specially relevant
topic.
“19. In addition to the division of misappropriation into
three main offences the distinction between larceny and
obtaining by false pretences contrary to 1916 s. 32 is
sometimes very subtle. A person commits the latter
offence if he
‘by any false pretence . . . with intent to defraud,
obtains from any other person any chattel, money, or
valuable security, or causes or procures any money to
be paid, or any chattel or valuable security to be
delivered to himself or to any other person for the
use or benefit or on account of himself or any other
person’.
‘The essential difference between this offence and larceny is
that in larceny the victim does not part with the ownership
but in obtaining by false pretences he does. But since
“obtaining the possession by any trick’ amounts to a taking
for the purpose of larceny, it is notoriously difficult to draw
any logical distinction between larceny by a trick and
obtaining by false pretences and to decide whether a
particular case amounts to the one offence or the other.
The matter is made worse by the fact that the two
offences are construed as being mutually exclusive; and the
resulting difficulties are not entirely overcome by the
provisions in 1916 s. 44 as to the verdicts open to the jury
when they find that the accused committed an offence
different from that charged (cf. paragraph 90).”
Paragraph 21 exposes a gap, pointing out that an innocent
acquisition followed by a dishonest decision to keep or dispose of
the property was in general not larceny and that larceny by
finding was committed only where at the time of the finding the
finder believed that the owner could be discovered by taking
reasonable steps. After discussing various loopholes in the law of
– 21 –
theft the Committee proceeded in what may be seen as a key
paragraph.
“30. The essence of the offence of fraudulent conversion
under 1916 s. 20(1)(iv) (referred to in paragraph 17) is
misappropriation of property by a person who has possession
on behalf of somebody else. The offence was created by
the Larceny Act 1901 (c. 10) in order to provide for cases
of dishonest misappropriation which were not covered by
larceny (in particular because there was no taking) or
embezzlement (because the offender was not a clerk or
servant) or by other statutory offences of fraudulent
conversion which depended on the offender being in a
special position, for example a trustee. The language of s.
20(l)(iv)(b) is wide enough to cover larceny by a bailee or
part owner and embezzlement; but it is a matter of dispute
whether it does so or whether it is limited to those types
of misappropriation, originally not criminal, for which the
1901 Act was intended to provide. Whichever is the true
view, the general offence of fraudulent conversion has
proved valuable, covering as it does in clear language a
wide range of circumstances in which property may be
misappropriated. As will be seen (paragraph 35), the idea
contained in the words ‘fraudulently converts to his own use
or benefit, or the use or benefit of any other person’
corresponds to what we propose should be the essence of
the new offence of theft.”
Paragraph 33 states an important conclusion:
‘The committee generally are strongly of opinion that
larceny, embezzlement and fraudulent conversion should be
replaced by a single new offence of theft. The important
element of them all is undoubtedly the dishonest
appropriation of another person’s property – the treating of
‘tuum’ as ‘meum’; and we think it not only logical, but right
in principle, to make this the central element of the
offence. In doing so the law would concentrate on what the
accused dishonestly achieved or attempted to achieve and
not on the means – taking or otherwise – which he used in
order to do so. This would avoid multiplicity of offences.
Accordingly clause 1(1) of the draft Bill provides that –
‘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, ‘steals’ and ‘stolen’ shall be construed
accordingly.’
“This will be the main provision in the definition of theft,
replacing the definition in 1916 s. 1(1). There are ancillary
definitions in clause 1 and in clauses 2-5 which are referred
to in the notes. The more important elements of the
definition of the new offence are referred to in paragraphs
34-58.”
This conclusion, in order to create a single comprehensive offence
in place of larceny, embezzlement and fraudulent conversion,
makes “appropriation” (the treating of “tuum” as “meum”) the key
– 22 –
element in place of taking, and it is the activity expressed by the
word “appropriation” which dispenses with the need for the phrase
“without the consent of the owner”, which preceded the words
“takes and carries away” in the old definition of larceny in section
1(1) of the 1916 Act. The opening lines of paragraph 34 further
elucidate the Committee’s thinking:
“We hope, and believe, that the concept of ‘dishonest
appropriation’ will be easily understood even without the aid
of further definition. But there is a partial definition of
‘appropriates’ in clause 3(1), which is included partly to
indicate that this is the familiar concept of conversion but
also for particular reasons later to be mentioned. Clause
3(1) provides that –
‘Any assumption by a person of the rights of an
owner amounts to an appropriation . . .’
“It seems to us natural to refer to the act of stealing in
ordinary cases as ‘appropriation’. We see no reason why the
word should seem strange for more than a short time. It is
moreover not a new word to use in connection with theft.
Sir James Fitzjames Stephen (afterwards Stephen J.), in his
‘General View of the Criminal Law’ (1863 edition, p. 129),
suggested as a definition of theft:
‘To steal is unlawfully, and with intent to defraud, by
taking, by embezzlement, by obtaining by false
pretences, or in any other manner whatever to
appropriate to the use of any person any property
whatever real or personal in possession or in action,
so as to deprive any other person of the advantage of
any beneficial interest at law or in equity, which he
may have therein.’
“Sir James Stephen added:
‘The effect of adopting this definition would be to
include under one description all the cognate offences
which at present make up the crime of theft. Its
terms would include larceny, embezzlement, false
pretences, larceny by bailees, fraudulent breaches of
trust, and offences by factors, agents, and bankers,
and thus five or six useless and intricate distinctions
between cognate crimes would be abolished’.”
(I digress for a moment to point out that, while this proposal
would have included obtaining by false pretences within the
definition of stealing, that was not the option preferred by the
Committee, as your Lordships will have noted.)
The next four paragraphs are important in the Committee’s
scheme of things and I must ask your Lordships’ indulgence while I
quote them in full:
“35. The idea of dishonest appropriation which underlies
the new offence of theft corresponds, as mentioned in
paragraph 30, to the idea in the words ‘fraudulently converts
to his own use or benefit, or the use or benefit of any
– 23 –
other person’ in the definition of fraudulent conversion under
1916 s. 20(l)(iv). The new offence will in fact consist of
the present offence of fraudulent conversion without the
requirement that the offender should, at the time of the
conversion, be in possession of the property either in the
circumstances mentioned in s. 20(1)(iv) or at all. With the
removal of this requirement the offence will extend to
ordinary stealing by taking property from another’s
possession. The effect will be as if fraudulent conversion
were widened to include the whole of larceny and
embezzlement; the new offence will indeed include conduct
which may not be criminal under the present law such as
the dishonest appropriation by a parent of things taken and
brought home by a child under the age of criminal
responsibility (cf. Walters v. Lunt (1951), 35 Cr. App. R.
94). The expression ‘dishonestly appropriates’ in clause 1(1)
means the same as ‘fraudulently converts to his own use or
benefit, or for the use or benefit of any other person’ in
1916 s. 20(1)(iv); but the former expression is shorter and,
we hope, clearer. There is an argument for keeping the
word ‘converts’ because it is well understood. But it is a
lawyers’ word, and those not used to legal language might
naturally think that it meant changing something or
exchanging property for other property. ‘Appropriates’
seems altogether a better word.
“36. The offence will also cover cases of dishonest
retention or disposal after an innocent acquisition such as
are mentioned in paragraphs 21-5. This result is probably
implicit in the concept of appropriation (or ‘conversion’); but
it is made explicit by the provision in clause 3(1) that a
person’s assumption of the rights of an owner ‘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’. It seems natural to
regard dishonestly keeping or dealing with the property as
theft (as it is now in the case of bailees). This has the
advantage that the cases referred to will be brought within
the single concept of dishonest appropriation. If taking
were to be kept as the basis of the offence, it would be
necessary to create a separate offence of dishonest
retention or disposal in order to deal with these cases.
“37. We propose however that there should be a special
exception for one case. A person may buy something in
good faith, but may find out afterwards that the seller had
no title to it, perhaps because the seller or somebody else
stole it. If the buyer nevertheless keeps the thing or
otherwise deals with it as owner, he could, on the principles
stated above, be guilty of theft. It is arguable that this
would be right; but on the whole it seems to us that,
whatever view is taken of the buyer’s moral duty, the law
would be too strict if it made him guilty of theft. Clause
3(2) accordingly ensures that a later assumption of ownership
in such circumstances will not amount to theft.
“38. The sub-committee for a considerable time proposed
that the general offence of theft should be made to cover
the present offence of obtaining by false pretences under
– 24 –
1916 s. 32(1). It might seem appropriate to extend theft in
this way in order to make it cover as many ways as
possible of getting property dishonestly. But in the end the
sub-committee gave up the idea (to the regret of some
members), and the full committee agreed. In spite of its
attractions, it seemed to the majority of the committee
that the scheme would be unsatisfactory. Obtaining by false
pretences is ordinarily thought of as different from theft,
because in the former the owner in fact consents to part
with his ownership; a bogus beggar is regarded as a rogue
but not as a thief, and so are his less petty counterparts.
To create a new offence of theft to include conduct which
ordinary people would find difficult to regard as theft would
be a mistake. The unnaturalness of including obtaining by
false pretences in theft is emphasized by the difficulty of
drafting a satisfactory definition to cover both kinds of
conduct. The examination by Mr. Griffith-Jones’s sub-sub-
committee, mentioned in paragraph 3, showed also that it
would be difficult to frame an indictment charging theft by
false pretences.”
The Committee’s proposed remedies for the defects of the
law as they found it appear clearly from the foregoing paragraphs.
“Fraudulent conversion” is accepted as the starting point for the
new and comprehensive definition of theft and “dishonest
appropriation” is chosen as a synonym. Both expressions embody
the notion of an adverse unilateral act done to the prejudice of
the owner and without his authority; indeed, fraudulent conversion
can have no other meaning. Paragraph 38 shows that the
Committee considered the idea, once recommended by Sir James
Fitzjames Stephen, of making “theft” cover the offence of
obtaining by false pretences. But that idea was ultimately
abandoned for the reasons there mentioned.
The Committee’s philosophy with regard to obtaining by
false pretences and its near relation, larceny by a trick, is
expounded in paragraphs 86 to 90 of the Report. Draft clause 12
was enacted as section 15 (which I have reproduced above) and
section 16 of the Theft Act and has got rid of some defects and
difficulties which had arisen from section 32 of the Larceny Act
1916 and from judicial interpretations of that section. The false
pretence (or “deception”, to use the new term) was no long
confined to pretence about an existing fact and no longer excluded
a misrepresentation as to the offender’s intention. An important
point, with a view to interpreting the Theft Act and understanding
comments, both judicial and academic, which have been made
about it, is the fusion in clause 12 and section 15 of larceny by a
trick and obtaining by false pretences. I refer to paragraph 90:
“On the other hand clause 12(1) provides that
‘a person is to be treated as obtaining property if he
obtains ownership, possession or control of it …”
“This is a departure from the present law, which requires
that ownership should be obtained (Kilham [(1870) L.R. 1
C.C.R. 261], mentioned in paragraph 89; Ball, [1951] 2 K.B.
109; 35 Cr. App. R. 24). The extension of the offence to
include obtaining possession or control will have the result
– 25 –
that if Kilham, although pretending that he only wanted to
borrow the horse, had in fact intended to deprive the owner
permanently, he would be guilty under the clause, because
he obtained possession of the horse. The extension will also
have the effect that the offences of theft and criminal
deception will overlap and that conduct which under the
present law is larceny by a trick and that which is obtaining
by false pretences will be the same offence of criminal
deception. In practice, if there is any doubt whether it is
appropriate to charge theft or obtaining property by
deception, it will be natural to charge the latter; and in our
opinion it would be wise to do so, because this will be a
much easier offence to establish than is the present offence
of obtaining by false pretences, as it will be unnecessary to
show that the owner was deceived into intentionally passing
the ownership but sufficient to show that he was tricked
into parting with the possession. Theft should be charged
only in very clear cases. The new law will have the
advantage that the prosecution will not be in the present
difficulty (referred to in paragraph 19) of deciding which of
two mutually exclusive offences to charge. The existing
difficulties in this respect are considerably reduced by the
provision in 1916 s. 44(3) that a person charged with larceny
may be convicted of obtaining by false pretences and the
provision in s. 44(4) that a person charged with obtaining by
false pretences may be convicted of this offence even if the
evidence proves larceny. But these provisions are not
entirely satisfactory. If a person is rightly charged with
larceny, but the jury in reliance on s. 44(3) mistakenly
convict him of obtaining by false pretences, the Court of
Criminal Appeal cannot substitute a verdict of guilty of
larceny under s. 5(2) of the Criminal Appeal Act 1907 (c.
23); for the verdict implies an acquittal of larceny, so that
it cannot ‘[appear] to the Court of Criminal Appeal that the
jury must have been satisfied of facts which proved him
guilty of [larceny]’ (Fisher (1921), 16 Cr. App. R. 53).
Again, a person charged with attempted larceny cannot be
convicted of attempting to obtain by false pretences
(Gallagher (1929), 21 Cr. App. R. 172). The provision in s.
44(4) has been criticized on the ground that it is wrong in
principle that a person should be found guilty of an offence
which the jury find that he did not commit. It seems to us
that the Bill would be open to criticism if it had to rely on
provisions such as those in 1916 s. 44(3) and (4). But it
does not have to do so. Difficulties of the kinds provided
for by those subsections will not arise, because the
overlapping of the two offences under the Bill will have the
result that the accused can be convicted of whichever
offence is charged. It also seems right that the offence
under clause 12(1), as well as applying to obtaining
possession or control without ownership, should apply to
obtaining ownership without possession or control. For
ownership enables a person to pass the title to another in
fraud of the person from whom the property is obtained,
and this may make it difficult or impossible for the latter
to recover the property.”
(I am not entirely clear about the wording of the sentence which I
have underlined, but I think the sense is that the accused can be
– 26 –
convicted of obtaining by deception, whether the offence has taken
the form of larceny by a trick or obtaining by false pretences.) It
can be seen that the Committee continues to recognise the
difference between obtaining possession by a trick (that is, “by
deception” in its new wide sense) and obtaining ownership by false
pretences (again, “by deception”) but the Committee intended, and
it seems that Parliament has adopted the same approach in section
15, that, for the purpose of finding the accused guilty, it would
cease to matter whether the victim was deceived into transferring
ownership or into handing over possession. But the distinction
continues to matter to an innocent third party who has purchased
directly or indirectly from the offender.
My Lords, as I would submit, the Report contains a great
deal which confirms and nothing which contradicts the
interpretation of the word “appropriates” which I have preferred,
and a comparison of the Act with the draft Bill gives no support
to the contrary view. Clauses 1, 2 and 4 and the corresponding
sections exhibit very minor drafting differences. Section 6 is new
and I refer to it below. Sections 11 and 14 are new. They need
not concern your Lordships, but, with section 6, their presence
explains why clause 12 corresponds to section 15. Clause 12(1) is
matched by section 15(1) and (2). The provisions of clause 12(2)
and (3) are subsumed in a new section 16. “Deception” is
identically defined in clause 12(4) and section 15(4). Section 15(3)
is new:
“Section 6 above shall apply for purposes of this section,
with the necessary adaptation of the reference to
appropriating, as it applies for purposes of section 1.”
This provision stems logically from the new section 6, on which I
commented earlier, and the necessary adaptation of the reference
to appropriating is made by inserting a reference to obtaining
property.
The conclusion from this comparison of the draft Bill and
the Act is that Parliament has in all material respects adopted the
Committee’s approach and has thereby endorsed the Committee’s
point of view. While not forgetting the observations in Black-
Clawson International of Lord Reid at p. 614F, Lord Wilberforce at
p. 629C-G and Lord Diplock at p. 637D, where he wisely warned
against departing from the plain and natural meaning in favour of
a strained construction, I am much impressed by the more
adventurous but very logical pronouncements of Viscount Dilhorne
at pp. 622C-623E and Lord Simon of Glaisdale at p. 646E-G. In
particular, after stating the principles and citing authority,
Viscount Dilhorne said at p. 623D:
“While I respectfully agree that recommendations of a
Committee may not help much when there is a possibility
that Parliament may have decided to do something different,
where there is no such possibility, as where the draft Bill
has been enacted without alteration, in my opinion it can
safely be assumed that it was Parliament’s intention to do
what the Committee recommended and to achieve the object
the Committee had in mind. Then, in my view the
recommendations of the Committee and their observations
on their draft Bill may form a valuable aid to construction
– 27 –
which the courts should not be inhibited from taking into
account.”
Before going on to consider the cases and some of the
observations which the academic writers have made on section 1, I
should like to say something more about section 15. According to
the Crown’s argument, this provision seems to be unnecessary and
must have been included in the Act (and presumably also in the
draft Bill) as a mere matter of convenience. A possible
alternative theory is that the Committee, the responsible
Government Department and the learned Parliamentary Draftsmen
all thought that section 15 (clause 12) was needed, which turns out
to be a mistaken view when section 1 is properly understood. I
call this an alternative theory because it seems obvious to me that
the Committee did think that clause 12 was necessary – and I am
not simply referring to the definition of “deception”. The Crown
say that section 15 merely describes a particular type of theft and
that all stealing by means of deception can be prosecuted under
section 1 just as well as under section 15. I would point out that
section 15 covers what were formerly two offences, obtaining by
false pretences (where the ownership of the property is transferred
by the deceived victim) and theft (or larceny) by a trick (where
the possession of the property passes, but not the ownership). In
the former case, according to the interpretation which I prefer,
the offender does not appropriate the property, because the
ownership (in colloquial terms, the property) is transferred with the
owner’s consent, albeit obtained by deception. In the latter case
the offender does appropriate the property because, although the
owner has handed over possession by consent (which was obtained
by deception), he has not transferred the property (that is, the
ownership) and the offender, intending to deprive the owner
permanently of his property, appropriates it, not by taking
possession, but by the unilateral act, adverse to the owner, of
treating as his own and taking to himself property of which he
was merely given possession. Thus, the kind of obtaining by
deception which amounts to larceny by a trick and involves
appropriation could be successfully prosecuted under section 1, but
the old false pretences type of obtaining by deception could not.
Of course, unless the facts were absolutely clear, it would be
foolish to prosecute under section 1 an offence of obtaining by
deception, since something which at first looked like larceny by a
trick might turn out to have involved a transfer of the ownership,
in which case only section 15 would meet the prosecution’s needs,
if I am right. Some theft cases can be prosecuted under section
15, but it is fallacious, having regard to what I perceive as the
true meaning of appropriation, to say that all cases of obtaining
by deception can be prosecuted under section 1.
There are only three cases which I need to look at in
detail, Lawrence, Morris and Dobson v. General Accident plc [1990]
1 Q.B. 274 (“Dobson”), a decision of the Court of Appeal in a case
where a policy holder was insured against “loss or damage caused
by theft”. Lawrence is reported in the Court of Appeal (Criminal
Division) at 1971 1 Q.B. 373, where the main contention of the
defence, noted at p. 376H by Megaw L.J., who delivered the
judgment of the Court, was that there must be implied into
section 1(1) of the Theft Act a requirement that the dishonest
appropriation must be without the consent of the owner of the
property. Megaw L.J. then said at p. 377A-F:
– 28 –
“In our view, no such implication is justified. The words
contained in the former definition of larceny, in section 1
of the Larceny Act, 1916, ‘without the consent of the
owner,’ have been omitted, and, we have no doubt,
deliberately omitted from the definition of theft in the new
Act. If the owner does not resist the taking of his
property, or actually hands it over, because of, for example,
threats of violence, in one sense it could be said that there
is ‘consent’: yet the offence of robbery, as defined in
section 8(1) of the Theft Act, 1968, involves, as one of its
elements, theft. Again, the former offences of larceny by a
trick and obtaining property by false pretences, though
technically distinct offences under the old law, both involved
what in one sense could be described as ‘consent’ by the
victim. It was conceded by counsel for the defendant,
necessarily and rightly, that the old offence of larceny by a
trick is covered by section 1(1) of the Act of 1968, as well
as by section 15(1) to which we shall refer later, despite
what may be called the apparent consent of the victim.
Of course, where there is true consent by the owner of
property to the appropriation of it by another, a charge of
theft under section 1(1) must fail. This is not, however,
because the words ‘without consent’ have to be implied in
the new definition of theft. It is simply because, if there is
such true consent, the essential element of dishonesty is not
established. If, however, the apparent consent is brought
about by dishonesty, there is nothing in the words of section
1(1), or by reason of any implication that can properly be
read into those words, to make such apparent consent
relevant as providing a defence. The prosecution have to
prove the four elements already mentioned, and no more.
No inference to the contrary is to be drawn from the words
of section 2(1)(b), already quoted. That reference does no
more than show that the essential element of dishonesty
does not exist if the defendant when he appropriates the
property believes that the owner would consent if he knew
the circumstances. “The circumstances’ are, of course, all
the relevant circumstances. The belief is an honest belief.
That paragraph does not give rise to the inference that an
appropriation of property is not theft when there is a
‘consent’ – if it can be rightly so described – which is
founded upon the dishonesty of the defendant.
The primary submission on behalf of the defendant,
therefore, fails.”
My respectful view, for reasons which your Lordships will
have noted, is that both the contention of the defence and the
court’s refutation of it were misconceived: the absence of consent
on the part of the owner is already inherent in the word
“appropriates”, properly understood, and therefore the argument for
the defence got off on the wrong foot and the counter-argument
that the words specified by the defence cannot be read into
section 1(1) did not assist the prosecution. And the observation,
without further discussion, that the omission of the words “without
the consent of the owner” is deliberate seems to have led directly
to the erroneous conclusion that a supposed appropriation with the
– 29 –
consent of the owner is one of the four ingredients which are
required (and which suffice) to constitute theft. I do not propose
to restate the facts of Lawrence. It is enough to recall that the
Court of Appeal, accepting the defence submission on that point,
regarded it as an example, according to the old law, of obtaining
by false pretences; see p. 378B. But the court did not accept the
legal conclusion which the defence sought to draw from that fact,
since Megaw L.J. continued at p. 378C-E:
“The court sees no ground for saying that, for present
purposes, it makes the slightest difference whether under
the old law the offence would have been false pretences or
larceny by a trick. The old and unsatisfactory distinction is
not to be unnecessarily perpetuated where the language of
the Theft Act, 1968, does not so require. There is no
magic in the word ‘property’ in section 1(1) in view of the
definition in section 4(1) of the Act. In either case, the
fact that a charge could have been brought under section
15(1), which covers both, in no way operates to prevent the
charge being validly laid as theft under section 1(1) if the
prosecution can prove what they must prove, as previously
described, under that subsection. This is conceded in
respect of an offence which would once have been larceny
by a trick. It applies equally to what would once have been
obtaining by false pretences, if, as is here the case, the
requirements of section 1(1) are also satisfied. That
submission also fails.
“It may be that the result of our decision is that in any
case where the facts would establish a charge under section
15(1) they would also establish a charge under section 1(1).
The alternative, however, involves the writing back into
section 1(1) of words which the legislature, no doubt
deliberately omitted, and the re-introduction into the
criminal law of the distinction between larceny by a trick
and obtaining by false pretences.”
It is true that it would make no difference whether under the old
law the offence would have been false pretences or larceny by a
trick, provided the charge was laid under section 15(1). It was,
indeed, with the object of getting over that difference that the
C.L.R.C. proposed their clause 12(1). But the “old and
unsatisfactory distinction” continues to operate if the charge is
laid under section 1(1) and this is due to the true meaning in that
subsection of the word “appropriates”. That is why section 15(1) is
needed and why it is best to prosecute under that provision in
cases where deception is alleged to have been practised. It can
be seen that the entire reasoning of the passage I have just quoted
is based on a misconception of the meaning of the word
“appropriates”, and that misconception springs from the
misconceived argument and counter-argument at p. 377 of the
judgment.
Turning back to the earlier extract which I have quoted, I
note that the Lord Justice gives two examples in order to show
that theft may be committed, although the (so-called) appropriation
is made by the offender with the consent of the owner, (1) in the
case of robbery and (2) where there has been larceny by a trick.
– 30 –
As to the former, before 1968 robbery was a felony at
common law and, according to Archbold 36th edition (1966)
paragraph 1761, consisted “in the felonious taking of money or
goods of any value from the person of another, or in his presence,
against his will, by violence or putting him in fear.” The old
authorities, Coke, Hale, Hawkins and Blackstone are cited in Smith
v. Desmond [1965] A.C. 960 at p. 980 et seq. by Lord Morris of
Borth-y-Gest. Section 8(1) of the Theft Act was modelled on
clause 7(1) of the draft Bill and provides:
“A person is guilty of robbery if he steals, and immediately
before or at the time of doing so, and in order to do so, he
uses force on any person or puts or seeks to put any person
in fear of being then and there subjected to force.”
(I can see no sign of any intention to change the common law, as
declared in Smith v. Desmond.) When, in response to the
highwayman’s threat, “Your money or your life”, the victim
delivered up his money, he did so against his will and there was
no question of consent. The highwayman was guilty of an
aggravated form of stealing and did not obtain even a voidable
title. The same holds good today and it would be idle to suggest
that the victim of a robbery consents in any way to hand over his
property, much less to transfer its ownership, to the robber.
In the case of larceny by a trick, as I explained earlier, the
owner consents to hand over possession but he does not consent to
transfer ownership of his property, unlike the victim of what was
formerly known as false pretences, who does indeed consent to
transfer his ownership. That is the difference which makes it
irrelevant and misleading to say (at p. 377B) that both larceny by
a trick and obtaining by false pretences involved “consent” by the
victim, because what is involved is consent to two different things.
The reference to “true consent” at p. 377C calls for a
further observation which will also be apt when I consider Dobson.
The victim of false pretences does truly consent and acts of his
own volition, although his consent to transfer his property to
another has been obtained by fraud. I refer again to Archbold
36th edition, this time at paragraph 1479:
“Where the owner, of his own free will, parts not only with
the possession but also with the property in the goods taken,
the person taking the goods cannot be guilty of larceny,
however fraudulent were the means by which the delivery of
the goods was procured.”
At paragraph 1497 it is stated that in larceny the owner of the
thing stolen has no intention to part with his property therein to
the person taking it, although he may intend to part with the
possession; in false pretences the owner does intend to part with
his property in the money or chattel, but it is obtained from him
by fraud. Of the nine cases cited for this proposition I refer to
just one, Whitehorn Brothers v. Davison [1911] 1 K.B. 463, a
decision of the Court of Appeal to the effect that the false
pretences rule concerning the passing of a good title to an
innocent purchaser applied when the owner had been induced by
false pretences to deliver goods to the buyer on sale or return.
At p. 479 Buckley L.J. said:
– 31 –
“It is, I think, obtaining goods by false pretences where the
owner, being induced thereto by a trick, voluntarily parts
with the possession, and either intends to pass the property,
or intends to confer a power to pass the property. If he
gives, and intends to give, that power, and the power is
exercised, the person who takes under the execution of the
power obtains the property, not against, but by the authority
of, the original owner, and none the less because the
authority was obtained by fraud.” (emphasis supplied.)
Paragraph 1499 deals with larceny by intimidation (which has much
in common with one branch of robbery):
“Where a man, having the animus furandi (see ante, para.
1469), obtains possession of goods by frightening the owner,
as by threatening him with temporary imprisonment unless
he delivers up his goods, and the owner does deliver them
under the influence of the fear inspired by his threat, this
is considered such a taking (although there is a delivery in
fact) as to constitute larceny: R. v. Lovell (1881) 8 Q.B.D.
185.”
I have cited these passages in order to illustrate the
difference between larceny by a trick and obtaining by false
pretences and the important, if obvious, fact that the owner’s
consent to transfer the property prevents the offender from being
guilty of larceny, although the consent was obtained by fraud and,
in the words of Megaw L.J., is not a “true consent”. I say
“obvious” because, if this proposition did not prevail, the property
would not pass and the offender would be guilty of larceny, now
described as theft. Accordingly, the statement at p. 377D of the
judgment in the Court of Appeal to the effect that, if the
apparent consent of the owner is brought about by dishonesty,
there is nothing in the words of section 1(1) to make such
apparent consent relevant as providing a defence is, with respect,
erroneous in relation to a charge of theft (which was the relevant
charge) if the words “appropriates” bears the meaning which the
C.L.R.C. (rightly, in my opinion) has deliberately given it.
In Chapter II of The Law of Theft, 6th edition, Professor J.
C. Smith discusses the difference between larceny by a trick and
obtaining by false pretences and continues at paragraph 38:
“It may of course be perfectly proper for the court to put
on the Act an interpretation different from that intended by
the framers of it. The question is one of the proper
interpretation of the words enacted by Parliament and it
could be that the Act does what the Committee thought
was not practicable and what they did not intend to do. It
is submitted, however, that the right interpretation of the
Act is that intended by the Committee.”
His further comment at paragraph 39 is also valuable, in my
opinion:
“There is, however, a considerable degree of doubt about
this matter, because of the case of Lawrence. The Court
of Appeal in that case thought that the distinction between
larceny by a trick and obtaining by false pretences depended
– 32 –
on the presence in the Larceny Act of the words “without
the consent of the owner”, and, as these words do not
appear in the definition of theft, the distinction is gone; all
cases of obtaining by deception, contrary to s. 15, are also
theft. This argument, however, appears to give insufficient
weight to the notion of “appropriation” and to the words
“property belonging to another”.
The report of the argument in this House in Lawrence shows
that the appellant, understandably from his own point of view,
again approached the case as one of false pretences. That basis
would provide grounds for an acquittal of the charge of theft if
the word “appropriates” in section 1(1) connotes an absence of
consent by the owner, and the appellant presented his argument on
the meaning of that subsection (page 630A) in the same way as in
the Court of Appeal and with the same unsuccessful result. But
that was not all. Viscount Dilhorne at p. 631E-F, when reviewing
the evidence, expressed the opinion that the facts of the case fell
far short of establishing that Mr. Occhi, the Italian student who
was the victim of the taxi driver, had consented to the acquisition
by the appellant of the £6, as argued at p. 628C. On that footing
the taxi driver could have been guilty of larceny by a trick (in
old-fashioned terms), so as to be guilty of theft under any
interpretation of section 1(1). It has to be said, however, that the
way in which Mr. Occhi left the taxi at the end of the journey
without further question seems more consistent with his having
accepted that £7 in all was the fare to be charged and that he
had been induced by the driver’s false representations to part out
and out with all the money which he had passively allowed the
taxi driver to take from his wallet. It is of no assistance,
however, to your Lordships in the present appeal to debate the
finer points of Lawrence with a view to deciding whether the
decision in this House (although not that of the Court of Appeal)
can be justified on the special facts. What is important is the
unequivocal, but in my respectful opinion wrong, statement of the
law made by Viscount Dilhorne at p. 632A (to which I referred at
the outset of my speech) that Parliament by omitting the words
“without the consent of the owner” from section 1(1) of the Theft
Act “has relieved the prosecution of the burden of establishing
that the taking was without the owner’s consent.” He added ‘That
is no longer an ingredient of the offence” (sell, “of theft”.) The
reasoning which follows is based on the opinion, already inseparable
from what has been said, that appropriation is a neutral expression
and does not convey the sense of taking property for oneself
without the owner’s authority. As in the Court of Appeal, the
defence argument was primarily directed towards implying words
into section 1(1), a difficult task at best, and only secondarily
towards the meaning of “appropriates” (see p. 631 A). But the only
speech delivered did not consider this second point and the
summary treatment of the appellant’s argument is reflected in the
opinion expressed on p. 633 that the point certified and argued
was scarcely worthy of their Lordships’ attention. My Lords, I
have found nothing in Lawrence which affects my view of the
present appeal. The crucial statement, apart from what was said
at p. 632A, was at p. 632E:
“[Appropriation] may occur even though the owner has
permitted or consented to the property being taken.”
– 33 –
If “taken” there signifies a permitted change of ownership, I
respectfully cannot agree.
In Morris, the label-switching case, the facts to be
considered by the jury and subsequently by the Court of Appeal
([1983] Q.B. 587) were, like those of many supermarket frauds,
more complex than those of the present case. There would have
been no defence (just as in Lawrence) if the charge had been laid
under section 15(1) and, as in Lawrence and the present case, it
was the Crown’s resort to section 1(1) which alone gave rise to a
legal problem. Lord Lane, C.J. expounded the main points on each
side at p. 593D:
“As to the meaning of the word ‘appropriation’, there are
two schools of thought. The first contends that the word
‘appropriate’ has built into it a connotation that it is some
action inconsistent with the owner’s rights, something hostile
to the interests of the owner or contrary to his wishes and
intention or without his authority. The second school of
thought contends that the word in this context means no
more than to take possession of an article and that there is
no requirement that the taking or appropriation should be in
any way antagonistic to the rights of the owner. Support
can be found for each of those two points of view both in
the authorities and also amongst the textbook writers.”
He then reviewed a number of cases, concluding with Lawrence,
and, referring to Viscount Dilhorne, said at p. 597C:
“He stated tersely in terms, at p. 633:
‘The first question posed in the certificate was:
“Whether section 1(1) of the Theft Act 1968 is to be
construed as though it contained the words ‘without
having the consent of the owner’ or words to that
effect.” In my opinion, the answer is clearly No.’
That being the emphatic view of their Lordships, it
would, we think, be quite wrong in effect to re-import into
the offence the necessity of proving what amounts to
absence of consent on the part of the owner by saying that
the word “appropriates” necessarily means some action
contrary to the authority or interests of the owner and that
that is one of the requirements which the prosecution must
prove.”
Here again (understandably, since Lawrence was a decision of this
House) the misconceived argument and refutation, which were
related to the possibility of implying words into section 1(1), took
precedence. I am much attracted, as indeed the Court of Appeal
may have been, by Mr. Denison’s argument for the appellant which
Lord Lane, C.J. summarised at p. 599A-C. His comment was
significant (p. 599D):
“Whilst appreciating the simplicity of this approach, we
think, for the reasons already set out, that the wording of
the Act, coupled with the decision in Reg. v. Lawrence
[1972] AC 626, does not allow us to adopt this solution.”
– 34 –
This House, having granted leave to appeal, affirmed the
Court of Appeal’s decision in Morris, but reached its conclusion by
a different route, as explained in the speech of Lord Roskill, to
which I have already referred. I would respectfully agree with his
description, in relation to dishonest actions, of appropriation as
involving an act by way of adverse interference with or usurpation
of the owner’s rights, but I believe that the less aggressive
definition of appropriation which I have put forward fits the word
as used in an honest sense in section 2(1) as well as elsewhere in
the Act. The important feature, of course, which our definitions
have in common is that the appropriation must be an act done
without the authority or consent, express or implied, of the owner.
I do not consider that it would help towards the solution of your
Lordships’ present problem for me to discuss further the points
which arose in Morris (including the question whether it really is
an example of theft) or in the many other cases on section 1(1)
which have occupied the anxious attention of the courts and the
academic writers. I must, however, look at Dobson, which I
referred to above. That was the case in which the owner, Mr.
Dobson, sold his gold watch and diamond ring in return for a
building society cheque which turned out to be a stolen cheque and
worthless. When he tried to recover his loss, the insurers denied
liability on the ground that, whereas his policy insured him against
“loss or damage caused by theft”, the circumstances did not
disclose a theft within the meaning of the Theft Act. The owner
sued the insurers and obtained judgment in the county court for
£5,199.30. The insurers appealed to the Court of Appeal,
contending that there had been no appropriation of the property by
the buyer but that the owner had transferred the ownership of the
property to the buyer, who had obtained a voidable title. The
insurers also sought to distinguish Lawrence by contending that in
that case the student’s money had not passed to the taxi driver
and that the student had not conferred on the taxi driver the
rights of an owner. Furthermore, they contended, Morris should be
preferred to Lawrence, insofar as those cases were in conflict.
The respondent relied on Lawrence to show that an appropriation
could occur, even if the owner consented.
The Court of Appeal, dismissing the insurers’ appeal, simply
followed the Lawrence approach. Parker L.J. said correctly at p.
279F that on the basis of that case –
“The facts of the present case appear to establish that the
rogue assumed all the rights of an owner when he took or
received the watch and ring from the plaintiff.”
Having discussed certain arguments relating to the time when the
property passed (which were relevant to an additional and unsound
argument put forward by the insurers), he continued at p. 280D:
“Having regard to the terms of the contract, the conduct of
the parties and the circumstances of the case, I have no
doubt that the property was not intended to pass in this
case on contract but only in exchange for a valid building
society cheque, but even if it may be regarded as intended
to pass in exchange for a false, but believed genuine,
building society cheque it will not in my view avail the
insurers.” (emphasis supplied.)
– 35 –
I would respectfully join issue with this statement on two grounds.
(1) No doubt everyone who sells property in exchange for a cheque
intends to sell only in exchange for a valid cheque. But the buyer
has induced the owner to sell by the false pretence that the
cheque is good. Unless the owner stipulates to the contrary, the
property passes on delivery, if it has not already passed, and the
buyer obtains a voidable title. (2) On any hypothesis, unless the
statement in Lawrence is right, there was no theft, because the
property passed with the fraudulently obtained consent of the
owner and the buyer was guilty of obtaining by deception in the
false pretences sense.
Dealing with a further argument of the insurers as to when
the property passed, the Lord Justice said at p. 280H:
“If [the argument] were right, then the result would merely
be that the making of the contract constituted the
appropriation. It was by that act that the rogue assumed
the rights of an owner and at that time the property did
belong to the plaintiff.”
This observation merely perpetuates what I would call the
Lawrence fallacy and disregards the unilateral meaning of
appropriation.
Parker L.J. then turned to the argument derived from
Morris and said at p. 281C:
“The difficulties caused by the apparent conflict between
the decisions in Reg. v. Lawrence (Alan) [1972] AC 626
and Reg. v. Morris (David) [1984] AC 320 have provided,
not surprisingly, a basis for much discussion by textbook
writers and contributors of articles to law journals. It is,
however, clear that their Lordships in Reg. v. Morris did not
regard anything said in that case as conflicting with Reg. v.
Lawrence for it was specifically referred to in Lord
Roskill’s speech, with which the other members of the
Judicial Committee all agreed, without disapproval or
qualification. The only comment made was that, in Reg. v.
Lawrence, the House did not have to consider the precise
meaning of ‘appropriation’ in section 3(1) of the Act of
1968. With respect, I find this comment hard to follow in
the light of the first of the questions asked in Reg. v.
Lawrence and the answer to it, the passages from Viscount
Dilhorne’s speech already cited, the fact that it was
specifically argued ‘appropriates is meant in a pejorative,
rather than a neutral, sense in that the appropriation is
against the will of the owner,’ and finally that dishonesty
was common ground. I would have supposed that the
question in Reg. v. Lawrence was whether appropriation
necessarily involved an absence of consent.
Lord Roskill’s comment on Reg. v. Lawrence is, however,
not the only difficulty presented by his speech in Reg. v.
Morris, but before I consider other difficulties it is
necessary to set out in short form the facts of the two
cases considered in that speech.”
– 36 –
Then, having stated the facts, he criticised in some detail the
reasoning in Morris (pp. 282A-285D) and considered Reg. v. Skipp
[1975] Crim.L.R. 114 and Reg. v. Fritschy [1985] Crim.L.R. 745.
It is true that Morris contains no disapproval or qualification of
Lawrence, but, in my view, the main statements of principle in
these cases cannot possibly be reconciled and the later case
therefore must not be regarded as providing any support for the
earlier.
Coming back to Dobson, the Lord Justice rightly observed
that the insurers’ main arguments were negatived by Lawrence and
concluded at p. 286F:
“I am fully conscious of the fact that in so concluding I
may be said not to be applying Reg. v. Morris. This may
be so, but in the light of the difficulties inherent in the
decision, the very clear decision in Reg. v. Lawrence (Alan)
[1972] AC 626 and the equally clear statement in Reg. v.
Morris (David) [1984] AC 320 that the question whether a
contract is void or only voidable is irrelevant, I have been
unable to reach any other conclusion. I would therefore
dismiss the appeal.”
Bingham L.J., when considering the meaning of section 1(1),
attached importance to the omission of the words “without the
consent of the owner”. I have already commented on this point.
Having adverted briefly to supermarket offences, he then said at
p. 287F:
‘This analysis appears to me to have been authoritatively
adopted by the House of Lords in Reg. v. Lawrence (Alan)
[1972] AC 626. The first question certified was
‘Whether section 1(1) of the Theft Act 1968, is to be
construed as though it contained the words “without
having the consent of the owner” or words to that
effect.’
‘The House answered the question with an emphatic ‘No’,
requiring no argument from the prosecutor and expressing
surprise that the Court of Appeal (Criminal Division) had
certified the question as fit for the consideration of the
House. Although it appears that the Italian student who
was the victim in the case permitted or allowed the taxi
driver to take £6 from his wallet, Viscount Dilhorne (with
whose speech the other members of the House agreed) was
in no doubt that there had been an appropriation. He said,
at p. 632:
‘Belief or the absence of belief that the owner had
with such knowledge consented to the appropriation is
relevant to the issue of dishonesty, not to the
question whether or not there has been an
appropriation. That may occur even though the owner
has permitted or consented to the property being
taken.”‘
Turning to Morris, the Lord Justice said at p. 289A:
– 37 –
“Reference was not made to Viscount Dilhorne’s ruling that
appropriation may occur even though the owner has
permitted or consented to the property being taken.
I do not find it easy to reconcile this ruling of Viscount
Dilhorne, which was as I understand central to the answer
which the House gave to the certified question, with the
reasoning of the House in Reg. v. Morris (David) [1984] A.C.
320. Since, however, the House in Reg. v. Morris
considered that there had plainly been an appropriation in
Reg. v. Lawrence (Alan) [1972] AC 626, this must (I think)
have been because the Italian student, although he had
permitted or allowed his money to be taken, had not in
truth consented to the taxi driver taking anything in excess
of the correct fare. This is not a wholly satisfactory
reconciliation, since it might be said that a supermarket
consents to customers taking goods from its shelves only
when they honestly intend to pay and not otherwise. On
the facts of the present case, however, it can be said, by
analogy with Reg. v. Lawrence, that although the plaintiff
permitted and allowed his property to be taken by the third
party, he had not in truth consented to the third party
becoming owner without giving a valid draft drawn by the
building society for the price. On this basis I conclude that
the plaintiff is able to show an appropriation sufficient to
satisfy section 1(1) of the Theft Act 1968 when the third
party accepted delivery of the articles.” (emphasis supplied)
I consider that the Lord Justice’s rationalisation of the failure of
Morris to disapprove of Lawrence is of some significance. I have
already commented, when discussing the judgment of Parker L.J.,
on the seller’s expectation that he would receive a valid cheque.
In short, Dobson follows the erroneous interpretation which was
endowed with authority by Lawrence and was therefore, in my
respectful opinion, wrongly decided. I would refer with respectful
approval to Professor Smith’s note on Dobson at [1990] Crim.L.R.
pp. 273-4.
The judgment in the Court of Appeal in this case, which
was delivered by Lord Lane, C.J., is reported at [1991] 1 W.L.R.
1334. The matter is clearly put at p. 1338E:
“What in fact happened was that the owner was induced by
deceit to agree to the goods being transferred to Ballay. If
that is the case, and if in these circumstances the appellant
is guilty of theft, it must follow that anyone who obtains
goods in return for a cheque which he knows will be
dishonoured on presentation, or indeed by way of any other
similar pretence, would be guilty of theft. That does not
seem to be the law. Reg. v. Morris [1984] AC 320 decides
that when a person by dishonest deception induces the owner
to transfer his entire proprietary interests that is not theft.
There is no appropriation at the moment when he takes
possession of the goods because he was entitled to do so
under the terms of the contract of sale, a contract which
is, it is true, voidable, but has not been avoided at the time
the goods are handed over.”
– 38 –
Exception has been taken by some commentators to the words
“Reg. v. Morris decides“, but the proposition which is stated in the
judgment of the court follows inevitably from Lord Roskill’s
statement as to the meaning of appropriation.
Having reviewed the judgment in Dobson, the Lord Chief
Justice said at p. 1339H:
“We do not consider that the judgment in [Dobson] requires
or allows us to disregard what we have earlier in this
judgment sought to extract as the ratio of the decision in
[Morris]. We therefore conclude that there was a de facto,
albeit voidable, contract between the owners and Ballay;
that it was by virtue of that contract that Ballay took
possession of the goods; that accordingly the transfer of the
goods to him was with the consent and express authority of
the owner and that accordingly there was no lack of
authorisation and no appropriation. In the absence of any
charge under section 15 of the Theft Act 1968, this appeal
must therefore be allowed and the conviction quashed.”
I respectfully agree.
My Lords, to sum up, every indication seems to me to point
away from adopting a neutral meaning of the word “appropriation”.
I would reinforce that view by recalling that in George Wimpey &
Co Ltd v. BOAC [1955] A.C. 169 at p. 191 Lord Reid stated that
if the arguments are fairly evenly balanced (not that I believe
they are in this case), that interpretation should be chosen which
involves the least alteration of the existing law. Maxwell,
Interpretation of Statutes 12th edition states at p. 116:
“Few principles of statutory interpretation are applied as
frequently as the presumption against alterations in the
common law. It is presumed that the legislature does not
intend to make any change in the existing law beyond that
which is expressly stated in, or follows by necessary
implication from, the language of the statute in question.”
If the change in the law of theft which is signalled by
decisions such as that reached in Dobson has in reality occurred,
the position of insurers in that field has in the result been
prejudiced by legislation the effect of which was far from clear.
I come back to the word “assumption” in section 3(1). If it
is said that that word is capable of a neutral meaning, my answer
is that, in order to read section 3(1) harmoniously with section 1(1)
in its natural sense, “assumption” must receive a unilateral
meaning. So to limit the interpretation of the word would follow
the principle that words in a statute which have, or can have, a
general meaning may have to be given a specialised and narrower
meaning in order to make sense of the legislation and to avoid the
conclusion that changes have been made to the existing law which
cannot have been intended by Parliament. This principle must be
stronger when, as in the present case, the specialised and narrower
meaning is also the primary meaning.
Not only Lawrence and Morris, but a large number of cases
on section 1(1), have furnished the material for animated and often
– 39 –
penetrating academic discussion. I am encouraged to have seen
that submissions based on such discussion are increasingly made by
counsel and entertained by the courts and your Lordships have in
the present appeal benefited from counsel’s industry in this
respect. I could not possibly do justice in this speech to all that
has been written on the subject, but I hope that I have profited
from the many articles which I have read since the hearing.
Perhaps because his view on the main point is the same as mine,
but certainly because I consider it to be a clear exposition, I here
reproduce the statement of Professor Smith in “The Law of Theft”
6th edition Chapter II paragraph 31, on which Mr Hacking strongly
relied:-
“The Larceny Act 1916 required that the taking and carrying
away should be ‘without the consent of the owner’. The
absence of the owner’s consent was an essential feature of
the trespassory taking which had to be proved. The
omission of these words from the definition of theft lends
some support to the argument that an act may amount to
an appropriation although it is done with the consent of the
owner. The omission of the words is, however, sufficiently
accounted for by the fact that they were part of the
definition of the trespassory taking which it was a principal
object of the 1968 Act to abolish. It is not a reason for
giving to the word ‘appropriate’ a meaning narrower than it
would naturally bear. The Larceny Act itself provided for
an alternative form of stealing – larceny by a bailee who
‘fraudently converts’ the bailed goods. The section did not
say ‘converts without the consent of the owner’. That
would have been absurd because the word ‘converts’, itself
implied that the bailee had done something with the bailed
goods which was not authorised by the terms of the
bailment. Similarly, fraudulent conversion, contrary to s.
20(1)(iv) of the Larceny Act, required an act inconsistent
with the terms on which the property was received. Section
20(1)(iv) was the model for the definition of theft and
‘appropriate’ was intended to bear the same meaning. If
‘converts’ in the 1916 Act implied an unauthorised act,
notwithstanding its proximity to the definition of larceny
with its requirement of the absence of the owner’s consent,
there is, a fortiori, no reason why the word ‘appropriates’ in
the Theft Act should not be similarly construed.
“In Morris the House of Lords held that
‘In the context of s. 3(1), the concept of
appropriation . . . involves not an act expressly or
impliedly authorised by the owner but an act by way
of adverse interference with or usurpation of [the
owner’s] rights.”
This statement by Lord Roskill, with whom all their
lordships agreed, was probably an obiter dictum since there
was no doubt in that case that the act was done without
the consent of the owner. It is submitted that it is correct
in principle. It is in accord with the legal meaning of
‘converts’, and with the natural meaning of ‘appropriates’
which suggests ‘helping oneself to the property of another.
A person does not ‘assume’ the rights of an owner if the
owner has conferred those right on him.”
– 40 –
To the same effect is Professor Smith’s comment on R v.
Shuck [1992] Crim.L.R. 209, 211-3. In paragraph 32 of Chapter II
ibid, referring to Lawrence, he says:
“One of the questions of law of general public importance
which the House was required to answer was-
‘Whether s. 1(1) of the Theft Act 1968 is to be
construed as though it contained the words “without
having the consent of the owner” or words to that
effect.’
Viscount Dilhorne, with whom the whole House concurred,
dealt with the matter with extreme brevity. He said, ‘In
my opinion, the answer is clearly No.’ The answer to the
question played no part in the actual decision. Viscount
Dilhorne had already decided that the appeal should be
dismissed before he turned to it. The certificate asked the
wrong question and merited the short shrift which it
received. The expression ‘appropriates without the consent
of the owner’ would have been just as inept as ‘converts
without the consent of the owner’.
I also found helpful Professor Smith’s further comment on
Lawrence at paragraph 41. I would in addition commend to your
Lordships an article by Marianne Giles and Steve Uglow in The
Journal of Criminal Law Vol. 56 Part 2 p. 179 entitled
“Appropriation and Manifest Criminality in Theft”, which is
distinguished by its regard for principle and the absence of undue
deference to dubious judicial pronouncements.
My Lords, I think I have in passing taken account of most
of the points made in the pro-Lawrence academic contributions to
the debate. I feel no qualms about taking sides against these
contributions, nearly all of which seem to me to disregard the
CLRC Report and to neglect to analyse the meaning in its context
of the word “appropriate”. Moreover, they choose to disregard the
ordinary law governing the transfer of title, calling it the civil
law, as if to contrast it with the criminal law and thus render it
surplus to requirements. At least, Bingham L.J. refused to fall in
with this idea, saying in Dobson at p. 289F:
“But whether, in the ordinary case to which section 5 of the
Theft Act 1968 does not apply, goods are to be regarded as
belonging to another is a question to which the criminal law
offers no answer and which can only be answered by
reference to civil law principles.”
Accordingly, it is both proper and rational to rely on such
cases as Phillips v. Brooks Ltd. [1919] 2 K.B. 243 and Lewis v.
Averay [1972] 1 QB 198, 207G.
My Lords, having drafted this speech, I then had the
pleasure and advantage of reading in draft the speech to be
delivered by my noble and learned friend Lord Browne-Wilkinson
and concluded that I ought to refer to the company fraud cases
which were canvassed before your Lordships, lest it be thought
– 41 –
that the Morris statement of principle is inconsistent with a proper
approach to such cases. I fully agree with my noble and learned
friend’s observation that the dictum in Morris has led to confusion
and complication where those in de facto control have been
charged with theft from a company and I, too, consider, on the
basis (which he assumes only for the sake of argument) that the
Morris dictum is correct, that it would be wrong, when a person
who by virtue of his position in the company constitutes “the
directing mind and will of the company” is accused of stealing
from the company, to acquit that person on the ground that, in his
capacity as the company, he has consented to the taking (by
himself) of the company’s property, with the result that no
appropriation, and therefore no theft, has occurred. The reason
why acquittal would be wrong is explained by my noble and
learned friend:
“Where a company is accused of a crime, the acts and
intentions of those who are the directing minds and will of
the company are to be attributed to the company. That is
not the law where the charge is that those who are the
directing minds and will have themselves committed a crime
against the company.”
(I refer, on this point, to Attorney-General’s Reference (No. 2 of
1982) [1984] Q.B. 624, 64OA.) Of course, if the principle
enunciated in Lawrence is followed, the error identified above
cannot possibly arise, because the question whether the company
has consented to the taking of its property ceases to matter, so
long as the property is taken dishonestly with the intention of
permanently depriving the company of it. But the fact that the
Morris principle can be misapplied to a company theft case (and
that the Lawrence principle cannot be so misapplied) is not an
argument for saying that the Morris dictum is wrong and the
Lawrence dictum right. The mistake is to say that a “directing
mind” accused is to be treated as having validly consented on
behalf of the company to his own dishonest taking of the
company’s property. Provided that mistake is avoided, the Morris
principle poses no threat to a just outcome in company theft
cases.
The company and the person (or persons) constituting the
directing mind are two (or more) separate persons: Salomon v. A
Salomon & Co. Ltd. [1897] AC 22. That fact should be easily
appreciated when the company is the victim of the other person
(or persons). The “directing mind”, when taking the company’s
property, does a unilateral act, to the prejudice of the company,
which the company does not authorise or consent to. My Lords, If
I may revert to the proposition that a person cannot consent to
the theft of property from himself, it is absurd to suppose that a
company consents to the theft of its own property, merely because
the thief is for most purposes of the company its directing mind.
The act of the directing mind is here unilateral and not consensual
and bilateral.
In Attorney-General’s Reference (No. 2 of 1982) [1984] Q.B.
624, where the trial judge had directed an acquittal, the following
question was referred for the opinion of the Court of Appeal:
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“Whether a man in total control of a limited liability
company (by reason of his shareholding and directorship) is
capable of stealing the property of the company; and
whether two men in total control of a limited liability
company (by reason of their shareholdings and directorships)
are (while acting in concert) capable of jointly stealing the
property of the company.”
Kerr L.J., delivering the court’s affirmative answer, mentioned the
Crown’s arguments, which had included reliance on Lawrence, and
the defendants’ concessions that appropriation had occurred and (in
the light of Lawrence) that the absence of the owner’s consent
was no longer an essential ingredient of theft. But the court
rejected the submissions that, as the sole owners of the property,
the defendants could not steal from themselves and that they were
bound to succeed under section 2(1)(b) (appropriation in the belief
that the taker would have the owner’s consent). In these respects,
as your Lordships can see, the Lawrence principle was not
essential to the reasoning. Tesco Supermarkets Ltd. v. Nattrass
[1972] AC 153 merely showed that:
“in situations like the present the defendants ‘are’ the
company in the sense that any offences committed by them
in relation to the affairs of the company would be capable
of being treated as offences committed by the company
itself. The decision has no bearing on offences committed
against the company” (p. 640A.)
Then, having referred to the need for belief under section 2(1)(b)
to be an honest belief, Kerr L.J., delivering the judgment of the
court, said at p. 642B:
“Secondly, we do not consider that in circumstances such as
those alleged in the present case section 2(1)(b) has any
application; nor that it can provide the basis for any
defence. The essence of the defendants’ argument is the
alleged identity, in all respects, and for every purpose,
between the defendants and the company. It is said, in
effect, that their acts are necessarily the company’s acts;
that their will, knowledge, and belief are those of the
company, and that their consent necessarily implies consent
by the company. But how then can the company be
regarded as “the other’ for the purposes of this provision?
One merely has to read its wording to see that it cannot be
given any sensible meaning in a context such as the present,
where the mind and will of the defendants are also treated
in law as the mind and will of ‘the other.’ It is for this
reason that in such cases there can be no conspiracy
between the directors and shareholders on the one hand and
the company on the other: Reg. v. McDonnell [1966] 1 Q.B.
233.”
Accordingly, Attorney-General’s Reference (No. 2 of 1982) does not
depend on Lawrence for the undoubted validity of its conclusions
and is consistent with Morris. Again, R. v. Philippou (1989) 89
C.A.R. 290 was correctly decided by the Court of Appeal. For
the reasons which I have given above I do not think the court in
Philippou were justified in reconciling Morris with Lawrence, but
they were correct in following Attorney-General’s Reference (No. 2
– 43 –
of 1982) and could have reached their conclusion without relying
on Lawrence.
Philippou disapproved of the decision in R. v. Roffel [1985]
V.R. 511, where a husband and wife ran a small clothing
manufacturing business. They then formed a limited company of
which they became the sole directors and shareholders and sold the
business to the company. The price remained unpaid. The
company’s premises were destroyed by fire and the proceeds of
insurance were paid into the company’s bank account. The
company’s debts exceeded the proceeds of the insurance. The
husband drew cheques on the company’s account and was
prosecuted for theft from the company and convicted. The
Supreme Court of Victoria by a majority quashed the conviction on
appeal, holding that, under the Crimes Act 1958 (which in its
amended form corresponded closely with the Theft Act), the
necessary element of appropriation required proof of adverse
interference with or usurpation of some right or rights of the
owner (Morris). As the company was a separate legal entity, and
in the particular circumstances (through its directing mind and
will) had consented to the husband’s drawing the cheques, it could
not be said that he had appropriated the company’s property. The
decision must, with respect, be regarded as a misapplication of
Morris, since the majority relied on Tesco Supermarkets Ltd. v.
Nattrass for the directing mind doctrine and refused to apply
Attorney-General’s Reference (No. 2 of 1982), insisting that the
transaction between the husband and the company was
“consensual”. Brooking J., on the other hand, accepted Attorney-
General’s Reference (No. 2 of 1982) and would have upheld the
conviction, even assuming that Morris should be followed (pp. 526-
527). In fairness I must add that he endorsed the Lawrence
principle. The lesson, however, is, in my opinion, that the
company cases can be satisfactorily and justly resolved without
discrediting the Morris dictum.
In my opinion, any attempt to reconcile the statements of
principle in Lawrence and Morris is a complete waste of time.
And certainly reconciliation cannot be achieved by the unattractive
solution of varying the meaning of “appropriation” in different
provisions of the Act. It is clear that, whether they succeeded or
not, both the Committee and the draftsman must have intended to
give the word one meaning, which would be the same in the Act
as in the Report.
To simplify the law, where possible, is a worthy objective
but, my Lords, I maintain that the law, as envisaged in the
Report, is simple enough: there is no problem (and there would
have been none in Lawrence, Morris and the present case) if one
prosecutes under section 15 all offences involving obtaining by
deception and prosecutes theft in general under section 1. In that
way some thefts will come under section 15, but no “false
pretences” will come under section 1.
The respondent can already count himself lucky to have
received only a two-year sentence, having regard to the amount
involved and to the position of trust which he held. He will be
even more fortunate if he has his conviction quashed, since there
was against him an open and shut case under section 15. But, if I
am right in my analysis, one cannot simply be content to say that,
– 44 –
if his conviction is restored, the respondent will have suffered no
injustice. The right legal answer, based on the true meaning of
the Act, must be found and applied.
If my submissions are correct, the question finally remains
whether your Lordships are bound by the doctrine of precedent to
follow and apply the statements in Lawrence at p. 632A that
Parliament, by omitting the words “without the consent of the
owner” from section 1(1) of the Theft Act, has “relieved the
prosecution of the burden of establishing that the taking was
without the owner’s consent” and at p. 632E that “appropriation
may occur even though the owner has permitted or consented to
the property being taken”. I suggest not. In the first place,
Viscount Dilhorne had already expressed the opinion that the facts
of the case fell far short of establishing that the victim had
consented to the acquisition by the appellant of the money he was
alleged to have stolen. This line of reasoning (though not the
approach of the Court of Appeal in Lawrence) supports a
conviction for theft under section 1(1) on any view of the law and
enables your Lordships to regard the statements on p. 632 as
obiter dicta. Secondly, it follows that Dobson, the only case of
authority on the point which is at the heart of this appeal (which
case in any event is not binding on your Lordships), applied the
obiter dicta in Lawrence to reach an erroneous conclusion.
Thirdly, Lord Roskill’s statement in Morris, while it may be obiter,
contradicts Viscount Dilhorne’s.
Lastly, let me assume that Viscount Dilhorne’s statements
have the character of a “decision” as that word is used in the
Practice Statement on Judicial Precedent ([1966] 1 W.L.R. 1234),
which intimated that this House would depart from a previous
decision “when it appears right to do so”. Your Lordships might
then so elect. The Statement referred to “the especial need for
certainty as to the criminal law”, but there is ample proof that
both before and after Morris certainty has been lacking. The
cases on the Practice Statement are conveniently found in
Halsbury’s Laws 4th edition Volume 26 paragraph 577. A previous
decision should not be departed from merely because the House
considers it to be wrong and only rarely should questions of
construction be reconsidered. But the precise meaning of section
1(1) has not received serious judicial attention before.
Furthermore, your Lordships may feel that it is inconvenient and
undesirable for the criminal law as enunciated in Lawrence and
Dobson to be in conflict with the law affecting the title to money
and other kinds of property.
Accordingly, for the reasons already given, I would dismiss
the Crown’s appeal.
LORD BROWNE-WILKINSON
My Lords,
I have read the speech of my noble and learned friend Lord
Keith of Kinkel with which I agree. I only add a few words of
my own out of deference to the contrary view expressed by my
– 45 –
noble and learned friend Lord Lowry and to consider the cases on
thefts from companies to which we were referred in the course of
argument.
In Lawrence v. Metropolitan Police Commissioner [1972]
A.C. 626 Megaw L.J. in the Court of Appeal analysed the
constituent elements of the offence created by section 1(1) of the
Theft Act 1968 as being “(i) a dishonest (ii) appropriation (iii) of
property belonging to another (iv) with the intention of
permanently depriving the owner of it.” This analysis was adopted
and approved by this House and I do not intend to cast any doubt
on it. But it should not be overlooked that elements (i) and (ii)
(unlike elements (iii) and (iv)) are interlinked: element (i)
(dishonest) is an adjectival discription of element (ii)
(appropriation). Parliament has used a composite phrase “dishonest
appropriation”. Thus it is not every appropriation which falls
within the section but only an act which answers the composite
description.
The fact that Parliament used that composite phrase –
“dishonest appropriation” – in my judgment casts light on what is
meant by the word “appropriation”. The views expressed (obiter)
by this House in Reg. v. Morris [1984] AC 320 that
“appropriation” involves an act by way of adverse interference with
or usurpation of the rights of the owner treats the word
appropriation as being tantamount to “misappropriation”. The
concept of adverse interference with or usurpation of rights
introduces into the word appropriation the mental state of both
the owner and the accused. So far as concerns the mental state
of the owner (did he consent?), the Act of 1968 expressly refers
to such consent when it is a material factor: see sections 2(1)(b),
11(1), 12(1) and 13. So far as concerns the mental state of the
accused, the composite phrase in section 1(1) itself indicates that
the requirement is dishonesty.
For myself, therefore, I regard the word “appropriation” in
isolation as being an objective description of the act done
irrespective of the mental state of either the owner or the
accused. It is impossible to reconcile the decision in Lawrence
(that the question of consent is irrelevant in considering whether
this has been an appropriation) with the views expressed in Morris,
which latter views in my judgment were incorrect.
It is suggested that this conclusion renders section 15 of the
Act of 1968 otiose since a person who, by deception, persuades the
owner to consent to part with his property will necessarily be
guilty of theft within section 1 This may be so though I venture
to doubt it. Take for example a man who obtains land by
deception. Save as otherwise expressly provided, the definitions in
sections 4 and 5 of the Act apply only for the purposes of
interpreting section 1 of the Act: see section 1(3). Section 34(1)
applies subsection (1) of section 4 and subsection (1) of section 5
generally for the purposes of the Act. Accordingly the other
subsections of section 4 and section 5 do not apply to section 15.
Suppose that a fraudster has persuaded a victim to part with his
house: the fraudster is not guilty of theft of the land since section
4(2) provides that you cannot steal land. The charge could only be
laid under section 15 which contains no provisions excluding land
from the definition of property. Therefore, although there is a
– 46 –
substantial overlap between section 1 and section 15, section 15 is
not otiose.
Turning to the company cases, the dictum in Morris has lead
to much confusion and complication where those in de facto
control of the company have been charged with theft from it.
The argument which has found favour in certain of the authorities
runs as follows. There can be no theft within section 1 if the
owner consents to what is done: Morris. If the accused, by reason
of being the controlling shareholder or otherwise, is “the directing
mind and will of the company” he is to be treated as having
validly consented on behalf of the company to his own
appropriation of the company’s property. This is apparently so
whether or not there has been compliance with the formal
requirements of company law applicable to dealings with the
property of a company and even to cases where the consent relied
on is ultra vires: see R. v. Roffel [1985] V.R. 511; R. v. McHugh
[1988] 88 Cr.App.R. 385.
In my judgment this approach was wrong in law even if the
dictum in Morris had been correct. Where a company is accused
of a crime the acts and intentions of those who are the directing
minds and will of the company are to be attributed to the
company. That is not the law where the charge is that those who
are the directing minds and will have themselves committed a
crime against the company: see Attorney General’s Reference (No.
2 of 1982) [1984] Q.B. 624 applying Belmont Finance Corporation
Ltd. v. Williams Furniture Ltd [1979] Ch. 250.
In any event, your Lordships’ decision in this case, re-
establishing as it does the decision in Lawrence, renders the whole
question of consent by the company irrelevant. Whether or not
those controlling the company consented or purported to consent to
the abstraction of the company’s property by the accused, he will
have appropriated the property of the company. The question will
be whether the other necessary elements are present, viz. was
such appropriation dishonest and was it done with the intention of
permanently depriving the company of such property? In my
judgment the decision in R. v. Roffel and the statements of
principle in R. v. McHugh at p. 393 are not correct in law and
should not be followed. As for the case of Attorney General’s
Reference (No. 2 of 1982), in my judgment both the concession
made by counsel (that there had been an appropriation) and the
decision in that case were correct, as was the decision in R. v.
Philippou (1989) 89 Cr.App.R. 290.
I am glad to be able to reach this conclusion. The pillaging
of companies by those who control them is now all too common.
It would offend both common sense and justice to hold that the
very control which enables such people to extract the company’s
assets constitutes a defence to a charge of theft from the
company. The question in each case must be whether the
extraction of the property from the company was dishonest, not
whether the alleged thief has consented to his own wrongdoing.
– 47 –
LORD SLYNN OF HADLEY
My Lords,
I agree with my noble and learned friend, Lord Keith of
Kinkel, whose draft speech I have had the opportunity to read,
that for the reasons he gives the appeal should be allowed and the
questions answered in the way he proposes.
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