SCOTT
v.
COMMISSIONER OF POLICE FOR THE METROPOLIS
(On Appeal from the Court of Appeal (Criminal Division))
Lord Reid
Viscount Dilhorne
Lord Diplock
Lord Simon of Glaisdale
Lord Kilbrandon
Lord Reid
my lords,
For the reasons given by my noble and learned friend, Viscount Dilhorne,
I would dismiss this appeal.
.
Viscount Dilhorne
MY LORDS,
In October, 1973, the Appellant was arraigned with nine others at the
Central Criminal Court on an indictment which contained 36 counts. He
was charged in 15, of which six charged him with conspiracy.
The first count was as follows:
” Statement of Offence ” 1st Count Conspiracy to Defraud
” Particulars of Offence
” Terence John Avery, Reginald James Thomas Corrigan, Robin
” Graham Osborne, Donald Issatt, Raymond Frederick Watson,
” Anthony Peter James Scott, Arthur Cyril Whiting, Thomas Herbert
” Chatwin, Arthur Henry Turner and Donald Edward Falaise-Hodson
” on diverse days between the 1st day of January 1971 and the 30th day
” of December 1972 conspired together and with other persons to
” defraud such companies and persons as might be caused loss by the
” unlawful copying and distribution of films the copyright in which
” and the distribution rights of which belonged to companies and
” persons other than the said persons so conspiring and by divers other
” subtle crafty fraudulent means and devices.”
The 7th count charged him with conspiracy to contravene the provisions
of section 21 (1)(a) of the Copyright Act, 1956.
During the course of the opening of the case for the prosecution Mr.
Blom-Cooper, who represented the Appellant, said that the Appellant was
prepared to admit, and the Appellant did admit, the following facts, namely,
that he
” Agreed with employees of cinema owners temporarily to abstract,
” without permission of such cinema owners, and in return for payments
” to such employees, cinematograph films, without the knowledge or
” consent of the owners of the copyright and/or of distribution rights
” in such films, for the purpose of making infringing copies and
” distributing the same on a commercial basis “.
On these admitted facts Mr. Blom-Cooper submitted the Appellant could
not be convicted on the first count. His contention that there could not
be a conspiracy to defraud unless there was deceit was rejected by Judge
Hines and the Appellant then pleaded guilty to the first and seventh counts
and was sentenced to two years imprisonment on count one and one year’s
imprisonment on count two.
The Appellant appealed against his conviction on count one and the
sentences imposed on him. Mr. Blom-Cooper’s submission that, in the
absence of deceit, the conviction for conspiracy to defraud could not stand
2
was rejected by the Court of Appeal but the sentence passed on count one
was reduced to one year’s imprisonment.
The Court of Appeal certified that a point of law of general public
importance was involved in the decision to dismiss the appeal against con-
viction on count one, namely,
” Whether, on a charge of conspiracy to defraud, the Crown must
” establish an agreement to deprive the owners of their property by
” deception; or whether it is sufficient to prove an agreement to
” prejudice the rights of another or others without lawful justification
” and in circumstances of dishonesty “.
Before the House Mr. Blom-Cooper put forward three contentions, his
main one being that which he had advanced unsuccessfully before the Court
of Appeal and Judge Hines that there could not be a conspiracy to defraud
without deceit. He further contended that the Theft Act, 1968, had
abolished with effect from the 1st January, 1969, when the Act came into
operation, the offence of conspiracy to defraud. He also contended that a
charge of the common law offence of conspiracy to defraud would not lie
in respect of a conspiracy to commit a summary offence created by statute.
The man who had conspired to contravene the provisions of section 21(l)(a)
of the Copyright Act, 1956, could not, he submitted, be convicted of
conspiracy to defraud.
The answer to this last submission is to be found in section 33 of the
Interpretation Act, 1889, which enacts:
” Where an act or an omission constitutes an offence under two or more
” Acts, or both under an Act and at common law, whether any such
” Act was passed before or after the commencement of this Act, the
” offender shall, unless the contrary intention appears, be liable to be
” prosecuted and punished under either or any of those Acts or at
” common law, but shall not be liable to be punished twice for the same
” offence.”
Mr. Blom-Cooper’s main submission was based on the well known dicta
of Buckley J. in In re London and Globe Finance Corporation, Limited [1903]
1 Ch. 728 at p. 732.
” To deceive is, I apprehend, to induce a man to believe that a thing is
” true which is false, and which the person practising the deceit knows
” or believes it to be false. To defraud is to deprive by deceit: it is by
” deceit to induce a man to act to his injury. More tersely it may be
” put, that to deceive is by falsehood to induce a state of mind ; to defraud
” is by deceit to induce a course of action “.
Mr. Blom-Cooper, while not submitting that an intent to defraud neces-
sarily includes an intent to deceive, nevertheless submitted that a man could
not be defrauded unless he was deceived. Buckley J’s. definition was, he
said, exhaustive and as the conspiracy charged in count one did not involve
any deceit of the companies and persons who owned the copyright and the
distribution rights of the films which had been copied, the conviction on that
count could not, he submitted, stand.
In a great many and it may be the vast majority of fraud cases the fraud
has been perpetrated by deceit and in many cases Buckley J’s. dicta have
been quoted in charges to juries. It does not, however, follow that it is an
exhaustive definition of what is meant by ” defraud “. Buckley J. had to
decide when a prima facie case had been shown ” of doing some or one of the
“acts” mentioned in sections 83 and 84 of the Larceny Act, 1861, “with
intent to deceive or defraud “. He did not have to make or to have to attempt
to make an exhaustive definition of what was meant by ” defraud “.
Stephens’ History of the Criminal Law of England (1883) vol. II at p. 121
contains the following passage:
” FRAUD—There has always been a great reluctance amongst lawyers
” to attempt to define fraud and this is not unnatural when we consider
3
” the number of different kinds of conduct to which the word is applied
” in connection with different branches of law and especially in connec-
” tion with the equitable branch of it, I shall not attempt to construct
” a definition which will meet every case which might be suggested but
” there is little danger in saying that whenever the words ‘ fraud’ or
” ‘ intent to defraud’ or ‘ fraudulently’ occur in the definition of a crime
” two elements at least are essential to the commission of ‘the crime :
” namely, first, deceit or an intention to deceive or in some cases mere
” secrecy: and, secondly, either actual injury or possible injury or an
” intent to expose some person either to actual injury or to a risk of
” possible injury by means of that deceit or secrecy “.
Stephens thus recognises that a fraud may be perpetrated without deceit
by secrecy and that an intent to defraud need not necessarily involve an intent
to deceive. In vol. Ill of his History at page 121 he says that:
” Offences relating to property fall into two principal classes namely
” fraudulent offences which consist in its misappropriation and mis-
” chievous offences which consist in its destruction or injury. Theft is
” a typical fraudulent offence “.
The definition of the common law offence of simple larceny had as one of
its elements the fraudulent taking and carrying away (see Hawkins’ Pleas of
the Crown 6th ed. (1777) Book I, 134: East’s Pleas of the Crown, vol. II
(1803) 553). ” Fraudulently ” is used in the definition of larceny by a bailee
in section 3 of the Larceny Act, 1861 (24 and 25 Vict. C.96) and in the
definition of larceny in section 1 of the Larceny Act, 1916. Theft always
involves dishonesty. Deceit is not an ingredient of theft. These citations
suffice to show that conduct to be fraudulent need not be deceitful.
The Criminal Law Revision Committee in their Eighth Report on ” Theft
” and Related Offences (Cmnd. 2977) in paragraph 33 expressed the view
that the important element of larceny, embezzlement and fraudulent con-
version was ” undoubtedly the dishonest appropriation of another person’s
” property ” ; in paragraph 35 that the words ” dishonestly appropriates ”
meant the same as ” fraudulently converts to his own use or benefit or the
” use or benefit of another person ” and in paragraph 39 that ” dishonestly ”
seemed to them a better word than ” fraudulently “.
Parliament endorsed these views in the Theft Act, 1968, which by section
1(1) defined theft as the dishonest appropriation of property belonging to
another with the intention of permanently depriving the other of it. Section
17 of that Act replaces sections 82 and 83 of the Larceny Act, 1861, and
the Falsification of Accounts Act, 1875. The offences created by those
sections and by that Act made it necessary to prove that there had been an
” intent to defraud “. Section 17 of the Theft Act substitutes the words
” dishonestly with a view to gain for himself or another or with intent to
” cause loss to another ” for the words ” intent to defraud “.
If ” fraudently ” in relation to larceny meant ” dishonestly ” and ” intent
” to defraud ” in relation to falsification of accounts is equivalent to the
words now contained in section 17 of the Theft Act which I have quoted,
it would indeed be odd if ” defraud ” in the phrase, ” conspiracy to defraud ”
has a different meaning and means only a conspiracy which is to be carried
out by deceit.
In the course of the argument many cases were cited. It is not necessary
to refer to all of them. Many were cases in which the conspiracy alleged was
to defraud by deceit. Those cases do not establish that there can only be a
conspiracy to defraud if deceit is involved and there are a number of cases
where that was not the case.
In R. v. Orbell (1703) 6 Mod 42, 87 E.R. 804 the indictment stated that the
defendants had fraudulently and per conspirationern, to cheat J.S. of his
money, got him to lay a certain sum of money upon a foot race and
prevailed with the party to run ” booty “. No false representation was made
to J.S. and he was not led to believe something to be true which was in fact
false.
4
In R. v. Button (1848) 3 Cox C.C. 229 the defendants were charged with
conspiracy to use their employers’ vats and dyes to dye articles which they
were not entitled to dye, to secure profits for themselves and so to defraud
their employer of profit. There was no false pretence and no deceit of their
employer by inducing him to believe something to be true which was false.
In R. v. Yates (1853) 6 Cox C.C. 441 the defendant was charged with
conspiracy by false pretences and subtle means and devices to extort from T.E.
a sovereign and to cheat and defraud him thereof. There was no evidence
of any false pretence but Crompton J. held that the words ” false pretences ”
might be rejected as surplusage and held that the defendant might be
convicted of conspiracy to extort and defraud. Again, in this case, there was
no deceit of T.E. inducing him to believe something to be true which was
false.
In R. v. De Kromme [1892] 17 Cox C.C. 492 the defendant was indicted for
soliciting a servant to conspire to cheat and defraud his master by selling his
master’s goods at less than their proper price. Lord Coleridge C.J. said that
if the servant had sold the goods at less than their proper price, his employer
would have been defrauded. The conviction was upheld. The conspiracy
which the defendant was charged with inciting did not involve any deceit
of the employer.
In R. v. Quinn [1898] 19 Cox C.C. 78 the defendants were convicted of
conspiring to cheat and defraud the Great Northern Railway of Ireland of
fares by abstracting return half tickets and selling them to members of the
public. Again, there was no deceit of their employers.
In R. v. Radley [1973] (unreported) the defendants were convicted of
conspiring to defraud a company inter alia by stealing the property of that
company. The Court of Appeal upheld their conviction and it was never
suggested that the conviction was bad on the ground that no deceit of
the company was involved.
Indeed, in none of these cases was it suggested that the conviction was
bad on the ground that the conspiracy to defraud did not involve deceit of
the person intended to be defrauded. If that had been a valid ground for
quashing the conviction it is, I think, inconceivable that the point would
not have been taken, if not by counsel, by the court.
In Welham v. Director of Public Prosecutions [1961] A.C. 103, this House
had to consider the meaning of ” intent to defraud ” in relation to forgery,
in the course of his speech Lord Radcliffe said (at page 123):
” Now, I think that there are one or two things that can be said
” with confidence about the meaning of this word ‘ defraud ‘. It
” requires a person as its object: that is, defrauding involves doing
” something to someone. Although in the nature of things it is almost
” invariably associated with the obtaining of an advantage for the
” person who commits the fraud, it is the effect upon the person who
” is the object of the fraud that ultimately determines its meaning . . .
” Secondly popular speech does not give, and I do not think ever has
” given, any sure guide as to the limits of what is meant by ‘ to defraud ‘.
” It may mean to cheat someone. It may mean to practise a fraud
” upon someone. It may mean to deprive someone by deceit of some-
” thing which is regarded as belonging to him or, though not belonging
” to him, as due to him or his right “.
Later Lord Radcliffe said that he was unable to accept Buckley J’s
observations in In re London Globe Finance Corporation (supra), which he
said were obiter, as an authoritative exposition of words employed in a
subsequent Statute.
While the meaning to be given to words may be affected by their context
and Lord Radcliffe was only considering the meaning of intent to defraud
in section 4 of the Forgery Act, 1913, the passages which I have cited from
his speech are, I think, of general application ; and certainly those passages
and his speech lend no support to the contention that there cannot be a
conspiracy to defraud which does not involve deceit.
5
In the course of delivering the judgment of the Court of Appeal in R.
v. Sinclair [1968] 1 W.L.R. 1246, where the defendants had been convicted
of conspiracy to cheat and defraud a company, its shareholders and creditors
by fraudulently using its assets for purposes other than those of the company
and by fraudulently concealing such use, James J. said :
” To cheat and defraud is to act with deliberate dishonesty to the
” prejudice of another person’s proprietary right”.
Again, one finds in this case no support for the view that in order to
defraud a person, that person must be deceived.
One must not confuse the object of a conspiracy with the means by which
it is intended to be carried out. In the light of the cases to which I have
referred, I have come to the conclusion that Mr. Blom-Cooper’s main
contention must be rejected. I have not the temerity to attempt an exhaustive
definition of the meaning of ” defraud “. As I have said, words take colour
from the context in which they are used, but the words ” fraudulently ”
and ” defraud ” must ordinarily have a very similar meaning. If, as I think,
and as the Criminal Law Revision Committee appears to have thought,
” fraudulently ” means ” dishonestly ” then ” to defraud ” ordinarily means
in my opinion to deprive dishonestly a person of something which is his
or of something to which he is or would or might but for the perpetration
of the fraud, be entitled.
In Welham v. Director of Public Prosecutions (supra) Lord Radcliffe
at page 124 referred to a special line of cases where the person deceived is
a person holding public office or a public authority and where the person
deceived was not caused any pecuniary or economic loss. Forgery whereby
the deceit has been accomplished had, he pointed out, been in a number
of cases treated as having been done with intent to defraud despite the
absence of pecuniary or economic loss.
In this case it is not necessary to decide that a conspiracy to defraud may
exist even though its object was not to secure a financial advantage by
inflicting an economic loss on the person at whom the conspiracy was
directed. But for myself I see no reason why what was said by Lord
Radcliffe in relation to forgery should not equally apply in relation to
conspiracy to defraud.
In this case the accused bribed servants of the cinema owners to secure
possession of films in order to copy them and in order to enable them to
let the copies out on hire. By so doing Mr. Blom-Cooper conceded they
inflicted more than nominal damage to the goodwill of the owners of the
copyright and distribution rights of the films. By so doing they secured for
themselves profits which but for their actions might have been secured
by those owners just as in R. v. Button (supra) the defendants obtained
profits which might have been secured by their employer. In the circum-
stances it is, I think, clear that they inflicted pecuniary loss on those owners.
I now turn to Mr. Blom-Cooper’s second contention that the Theft Act,
1968, impliedly abolished the offence of conspiracy to defraud.
Section 31(1) of that Act so far as material is in the following terms:
” The following offences are hereby abolished for all purposes not
” relating to offences committed before the commencement of this Act,
” that is to say (a) any offence at common law of … and, except
” as regards offences relating to the public revenue, cheating . . . .”
This section does not refer to fraud or conspiracy to defraud. In the
Theatres Act, 1968. passed in the same year as the Theft Act, section 2
subsection (3) expressly provides that no person shall be proceeded against
for an offence at common law of conspiring to corrupt public morals. If
it had been Parliament’s intention to abolish conspiracy to defraud I would
have expected a similar provision in the Theft Act.
6
In East’s Pleas of the Crown, vol. II, at page 818 the author stated that
in his view the common law offence of cheating consisted in:
” The fraudulent obtaining of the property of another by any deceitful
” and illegal practice or token (short of felony) which affects or may
” affect the public “.
” It is not, however, every species of fraud or dishonesty in trans-
” actions between individuals which is the subject matter of a criminal
” charge at common law but in order to constitute it such … it must
” be such as affects the public, such as is public in its nature, calculated
” to defraud numbers, to deceive the people in general “.
In R. v. Wheatly (1761) 2 Burr 1127 97 E.R. 746, Lord Mansfield said:
” The offence that is indictable must be such a one as affects the
” public. As if a man uses false weights and measures and sells by
” them … in the general course of his dealing: so if a man defrauds
” another under false tokens “
The common law offence of cheating is, it appears, far narrower in
ambit than the offence of conspiracy to defraud and while Parliament may
by inadvertence do that which it does not intend to do, in my opinion it
would be wrong to construe section 31(1) of the Theft Act, 1968, in the way
Mr. Blom-Cooper submits. I therefore reject his second contention.
Reverting to the questions certified by the Court of Appeal, the answer
to the first question is in my opinion in the negative. I am not very happy
about the way in which the second question is phrased although the word
” prejudice” has been not infrequently used in this connection. If by
” prejudice ” is meant ” injure “, then I think the answer to that question is
yes, for in my opinion it is clearly the law that an agreement by two or
more by dishonesty to deprive a person of something which is his or to which
he is or would be or might be entitled and an agreement by two or more
by dishonesty to injure some proprietary right of his, suffices to constitute
the offence of conspiracy to defraud.
In my opinion this appeal should be dismissed.
Lord Diplock
MY LORDS,
I have had the advantage of reading the speech of my noble and learned
friend Viscount Dilhorne. I agree with it. The authorities that he cites
and others cited in the speeches in this House in the contemporaneous appeal
in R. v. Withers, in my view, established the following propositions.
-
-
-
Although at common law no clear distinction was originally drawn
between conspiracies to ” cheat” and conspiracies to ” defraud “, these
terms being frequently used in combination, by the early years of the
nineteenth century ” conspiracy to defraud” had become a distinct
species of criminal agreement independent of the old common law sub-
stantive offence of ” cheating “. The abolition of this substantive common
law offence by section 31(l)(a) of the Theft Act, 1968, except as regards
offences relating to the public revenue, thus leaves surviving and intact
the common law offence of conspiracy to defraud. -
Where the intended victim of a ” conspiracy to defraud” is a
private individual the purpose of the conspirators must be to cause the
victim economic loss by depriving him of some property or right, cor-
poreal or incorporeal, to which he is or would or might become entitled.
The intended means by which the purpose is to be achieved must be dis-
honest. They need not involve fraudulent misrepresentation such as is
needed to constitute the civil tort of deceit. Dishonesty of any kind is
enough.
-
-
7
(3) Where the intended victim of a “conspiracy to defraud” is a
person performing public duties as distinct from a private individual it is
sufficient if the purpose is to cause him to act contrary to his public duty,
and the intended means of achieving this purpose are dishonest. The
purpose need not involve causing economic loss to anyone.
In the instant case the intended victims of the conspiracy to defraud were
private individuals. The facts bring it squarely within proposition 2 above.
The dishonest means to be employed were clandestine bribery.
I would dismiss the appeal.
Lord Simon of Glaisdale
MY LORDS,
I have had the advantage of reading in draft the speech prepared by my
noble and learned friend, Viscount Dilhorne. I agree with it; and I would
therefore dismiss this appeal.
Lord Kilbrandon
MY LORDS,
I have had the advantage of reading the speech prepared by my noble
and learned friend, Lord Dilhorne. I agree with it, and would dismiss this
appeal.
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