Judgments - Hinks (On Appeal From The Court of Appeal (Criminal Division)

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(1)

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

(2)

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

(3)

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

(4)

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

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

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

VII.

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

VIII.

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

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

IX.

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

LORD HUTTON

My Lords,

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

    "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 2(1) provides:

    "A person's appropriation of property belonging to another is not to be regarded as dishonest—(a) if he appropriates the property in the belief that he has in law the right to deprive the other of it, on behalf of himself or of a third person; or (b) if he appropriates the property in the belief that he would have the other's consent if the other knew of the appropriation and the circumstances of it;"

Section 3(1) provides:

    "(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."

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

    "Theft, under the terms of section 1(1) involves four elements: (i) a dishonest (ii) appropriation (iii) of property belonging to another (iv) with the intention of permanently depriving the owner of it."

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

    "The second ingredient is appropriates, dishonestly appropriates. You must be sure on any count that the property referred to in that count passed from Mr. Dolphin to Miss Hinks so that she acquired it and treated it as her own to deal with. That can include, obviously, members of the jury, a straightforward taking or transfer of the property concerned. It can also include acquiring it by way of gift, either for herself or on behalf of her young son."

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

    What the judge said was as follows:

    "I am now going to move on to deal with that word that I mentioned at first, that very important word, dishonestly, because, as I have said, it's one of the central questions that you've got to decide, whether or not this defendant acted dishonestly. And, of course, it's entirely a matter for you, as the jury, to decide. But please bear in mind the fact that if you don't like something that the defendant did, or the mere fact that you don't approve of it, or the mere fact that she did something that you think was morally reprehensible does not necessarily mean that it is dishonest. For the Prosecution to make you sure that she's dishonest, they've got to make you sure of two things. They've got to make you sure that what she did was dishonest by the standards of ordinary and decent people. Now, in this regard, members of the jury, you must form your own judgment of what those standards are. That's why we have a jury here. And if it was not dishonest by those standards, then the Prosecution fails. That would be an end of the matter. But if it was dishonest by those standards, then you have to decide and be sure that the defendant herself must have realized that what she was doing was dishonest by the standards of ordinary and decent people. And in order to decide this question you must consider the defendant's own state of mind. If, having taken into account all the evidence, that you are sure that she must have realized this, then the element of dishonesty is proved. If you are not sure that she realized it, she is not guilty. Now, what is the position in relation to gifts? The defendant says that Mr. Dolphin made gifts to her and that those were for her son. If any payment, or the transfer of the TV for instance, was or might have been a gift, then you would have to consider whether she was dishonest in accepting it. The relevant question in relation to any gift would be this. Was Mr. Dolphin so mentally incapable that the defendant herself realized that ordinary and decent people would regard it as dishonest to accept that gift from him?"

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

    "Mr. Lowe's submission is twofold. First, that by virtue of the definition of dishonesty in section 2(1)(b) of the Act, which we have already read, a person cannot be regarded as dishonest if he believes he would have the owner's consent if the owner knew of the appropriation. In the present case, there was no evidence to prove that Mr. Dolphin was not consenting to appropriation, and therefore, there could not be dishonesty. Mr. Lowe is in consequence critical of the direction given by the learned judge in the summing-up, which appears at page 6C:

    [the learned Lord Justice then set out the final paragraph in the passage of the summing-up which I have set out above]

    "It seems to us that the first part of Mr. Lowe's submission encounters very serious difficulties in the form of Lawrence. That is emphasised when one turns to consider the second part of his submission, in relation to appropriation."

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

    "The direction which we have already cited from p. 6 of the summing-up was, in our judgment, an entirely appropriate and accurate direction as to dishonesty."

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

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

    "1.4 It was the prosecution case that between April 1996 and November 1996 the appellant somehow influenced or coerced Mr. Dolphin to withdraw moneys totalling about £60,000 from his Building Society accounts, the moneys subsequently being deposited into the appellant's own account. She was also alleged to have taken a colour television (Count 6) belonging to Mr. Dolphin, using similar means.

    "1.5 It was the defence case that the cash and property had been handed over to the appellant either as a gift to her or a gift to her young son or as part of a loan."

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

    "The relevant question in relation to any gift would be this. Was Mr. Dolphin so mentally incapable that the defendant herself realized that ordinary and decent people would regard it as dishonest to accept the gift from him?"

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

    "(1) A person's appropriation of property belonging to another is not to be regarded as dishonest— . . . (b) if he appropriates the property in the belief that he would have the other's consent if the other knew of the appropriation and the circumstances of it;"

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

    "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."

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

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

    "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."

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

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

    "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."

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

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

    "Undoubtedly in this case there was evidence which, if the jury believed it and made the necessary inferences, could have found a conviction for theft. There was evidence to suggest, though it was in issue, that Lady S.'s mental capacity was such that she could not make a valid gift. The prosecution case being that there was no gift because there was no capacity to give, it was essential that the jury be confronted plainly with the issue which arose upon her ability to make a valid gift. It was necessary for the jury, before convicting, to consider the state of mind of the donee and the circumstances of the transfer, but it was also essential to prove that the donor had no sufficient degree of understanding to make a valid gift. The jury were never given a plain direction to that effect … It is, in the judgment of the court, as important upon the present criminal charge as it is in a civil case involving a transfer inter vivos to consider the state of mind of the donor and whether a valid gift can be and is made."

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

    "It was, in our judgment, a case in relation to Mrs. Clare's mental capacity, very different on its facts from Mazo and the judge in summing-up, in our view, made it wholly clear to the jury, for the purposes of the law, what the evidence was in relation to the level of mental capacity. There is nothing in the summing-up, and nothing in the evidence, as it appears from the summing-up, which could have resulted in a jury being confused as to whether Mrs. Clare was somebody who is just 'not quite up to it', with reduced mental capacity, which was what was said of Lady S., or lacking the capacity to manager her affairs. There is, both for reasons of a strict reading of the law and, in our judgment, on the way in which it was put to the jury, no basis upon which there was either a misdirection or anything which could have rendered the verdict of the jury unsafe."

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

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

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

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

    "If any payment, or the transfer of the TV for instance was or might have been a gift, then you would have to consider whether she was dishonest in accepting it. The relevant question in relation to any gift would be this. Was Mr. Dolphin so mentally incapable that the defendant herself realized that ordinary and decent people would regard it as dishonest to accept that gift from him?"

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

    "Dr. Fuller said that he would be capable of making a gift and understand that he was giving the property to someone else. He would be capable of understanding the fact that the property he was giving belonged to him. He would be capable of understanding that someone shouldn't simply come in and take his television set. He would be capable of understanding that the daily visit to the building society, he would understand that the money that he had in the building society belonged to him."

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

    "And Mr. Morse [counsel for the Crown] ended his cross-examination by saying to her that she had taken him for as much as she could get, which in one sense, in a nutshell, is what the prosecution are saying in their case, and she said that was not true."

 
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