|Judgments - Hinks (On Appeal From The Court of Appeal (Criminal Division)
Therefore, if it was part of the Crown case that, apart from any issue of influence or coercion, any gifts made by Mr. Dolphin to the appellant were void because he was mentally incapable of making such gifts, I consider that the summing up was defective as the jury were not given adequate directions as to the degree of mental incapacity which makes void a gift or gifts of large sums of money. But it may be that no such directions were given because the point in relation to mental capacity was not advanced as a separate and distinct point by the Crown.
Therefore I consider that in this case:
(1) It was necessary for the judge to make clear to the jury that if there was a valid gift the defendant could not be found to be dishonest no matter how much they thought her conduct morally reprehensible.
(2) If the Crown were making the case that the gifts were invalid because Mr. Dolphin was mentally incapable of making a gift, it was necessary for the judge to give the jury a specific direction as to what degree of mental weakness would, in the light of the value of the gifts and the other circumstances of the case, make the donor incapable of making a valid gift.
(3) The jury should have been directed that if they were satisfied that Mr. Dolphin was mentally incapable of making a gift, they should not convict unless they were satisfied that what the defendant did was dishonest by the standards of ordinary decent people and that the defendant must have realised this.
(4) If the Crown were making the case that the gift was invalid because of undue influence or coercion exercised by the defendant, it was necessary for the judge to give the jury a specific direction as to what would constitute undue influence or coercion.
(5) The jury should have been directed that if they were satisfied that the gifts were invalid by reason of undue influence or coercion, they should not convict unless they were satisfied that what the defendant did was dishonest by the standards of ordinary decent people and that the defendant must have realised this.
The conduct of the defendant was deplorable and it may be that if the issues had been more clearly defined a jury would have been entitled to convict, but in my opinion the summing up was defective in the ways which I have described and the convictions should not stand. I consider, with respect, that the Court of Appeal erred in the present case because at  1 Cr.App.R. 1, 7F-G it rejected the appellant's submission as to dishonesty by referring to the separate issue of appropriation.
Accordingly, for the reasons which I have stated, I would allow the appeal and quash the convictions.
LORD HOBHOUSE OF WOODBOROUGH
This appeal comes before your Lordships in order to settle yet another point of contention under the Theft Act 1968. The point certified - "Whether the acquisition of an indefeasible title to property is capable of amounting to an appropriation of property belonging to another for the purposes of s.1(1) of the Theft Act 1968?" - is very similar to that certified on the appeal to your Lordships' House in R v Gomez  AC 442 but with the substitution of the words "acquisition of an indefeasible title" for the words an acquisition of property "with the consent of the owner . . . obtained by a false representation".
Your Lordships have already referred to the facts which gave rise to the prosecution of the appellant. The case which was presented against her was based upon the allegation that she had coerced or unduly influenced Mr Dolphin into parting with his money and the television set. The case against her was largely circumstantial but was nevertheless very strong. Her conduct was on any view deplorable. It is not surprising that she was convicted by the jury.
The complication which arose was that the prosecution had also alleged that Mr Dolphin lacked the mental capacity to make gifts or otherwise dispose of his property. The expert and other evidence on this question was arguably equivocal. Dr Fuller's assessment was that Mr Dolphin was extremely naïve and gullible and it would be easy for anyone to take advantage of him. Mr Dolphin would be capable of making a gift and understood the concept of ownership but if he decided to divest himself of money it was unlikely that he would make that decision alone. The trial judge, rightly, rejected a submission of no case to answer but when he came to sum up he seems to have discarded the way in which the prosecution had founded their case and directed the jury that they could convict the appellant of theft on the simple basis that she had been the recipient of a valid gift provided that the jury were satisfied that the conduct of the appellant fell short of the standards of ordinary and decent people and the appellant realised this. The key passage is:
It must be noted that the direction specifically involves the jury deciding that Mr Dolphin was "mentally incapable". In the context, this was probably intended to mean mentally incapable of deciding to make a gift. If this was so, then there would not have been an "indefeasible" gift and the question certified would not arise.
Still, it would not be helpful to dismiss the appeal on that ground. The respondent did not submit that we should. It was not the ground upon which the Court of Appeal dismissed her appeal. Rose LJ said  1 Cr.App.R. 1 at 9:
The dismissiveness of this reasoning is in itself remarkable but the proposition which needs particularly to be examined is that which I have emphasised bearing in mind that the Court of Appeal draws no distinction between a fully effective gift and one which is vitiated by incapacity, fraud or some other feature which would lead both the man in the street and the law to say that the transfer was not a true gift resulting from an actual intention of the donor to give. Another aspect of the Court of Appeal's reasoning which also has to be examined is the relationship of that proposition to the concept of dishonesty. It is explicit in the Court of Appeal judgment that the relevant definition of the crime of theft is to be found in the element of dishonesty and R v Ghosh  QB 1053 and that this is to receive no greater definition than consciously falling below the standards of an ordinary and decent person and may include anything which such a person would think was morally reprehensible. It may be no more than a moral judgment.
The reasoning of the Court of Appeal therefore depends upon the disturbing acceptance that a criminal conviction and the imposition of custodial sanctions may be based upon conduct which involves no inherent illegality and may only be capable of being criticised on grounds of lack of morality. This approach itself raises fundamental questions. An essential function of the criminal law is to define the boundary between what conduct is criminal and what merely immoral. Both are the subject of the disapprobation of ordinary right-thinking citizens and the distinction is liable to be arbitrary or at least strongly influenced by considerations subjective to the individual members of the tribunal. To treat otherwise lawful conduct as criminal merely because it is open to such disapprobation would be contrary to principle and open to the objection that it fails to achieve the objective and transparent certainty required of the criminal law by the principles basic to human rights.
I stress once more that it is not my view that the resort to such reasoning was necessary for the decision of the present case. I would be reluctant to think that those of your Lordships who favour dismissing this appeal have fallen into the trap of believing that, without adopting the reasoning of the Court of Appeal in this case, otherwise guilty defendants will escape justice. The facts of the present case do not justify such a conclusion nor do the facts of any other case which has been cited on this appeal.The Act:
The Theft Act 1968 was passed in an attempt to simplify the law of theft and remove excessive and technical complications which arose from the concepts used in the Larceny Act 1916 and its predecessors. One source of complication had been the fact that larceny was a possession based crime and used the criteria "takes and carries away" and "without the consent of the owner" in the definition of stealing. The Theft Act on the other hand defines theft in a deceptively simple way - "A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it." (s.1(1))
In order to try and limit the number of separate offences under the Act, the Theft Act, in contrast with the Larceny Act, adopts the approach of a single short definition of "theft" and then expands that definition so that it can cover a wide range of more complex situations. Thus, sections 2 to 6 have been included in the Act to amplify and extend the meaning of the expressions used in the s.1 definition. Section 2 deals with "dishonestly", s.3 with "appropriates", s.4 with "property", s.5 with "belonging to another" and s.6 with "with the intention of permanently depriving the other of it". These provisions, although each given a distinct title are in their terms interlinked and implicitly cross-refer to each other. They cannot be construed or applied in isolation. Some are used to qualify the definition of theft and give it a different meaning to that which would have been understood by the simple definition standing alone. It is therefore imperative, as is specifically required by s.1(3), to have regard to these sections when construing s.1(1).
But this structure of sections 1 to 6 has had an unfortunate by-product. It has led to a practice (started by Megaw LJ in the Court of Appeal in Lawrence) of construing each of the words or phrases in s.1(1) as if they were independent and not part of a single complex definition. The words and phrases have an inter-relation, the one affecting the meaning of another and of the whole. Lord Browne-Wilkinson warned against this in his speech in R v Gomez  AC 442 at 495:
Another point which has arisen from the general intention of the Act and its drafting is the assumption that all questions arising in connection with the law of theft should now be capable of answer without involving any concept or rule derived from the civil law or using any technical legal terminology. Whilst there can be no doubt about the general intention of the Act, to proceed from such a general intention to that assumption is simplistic and erroneous. It is, of course, part of the duty and function of the judge at the criminal trial to separate the questions of law from the questions of fact and only direct the jury on matters of law so far as the issues in the case make it necessary for them to know the law in order to decide the issues of fact and determine the defendant's guilt or innocence; but, when there are relevant questions of law, they must be recognised and the jury directed accordingly.
The truth is that theft is a crime which relates to civil property and, inevitably, property concepts from the civil law have to be used and questions answered by reference to that law. Lord Roskill (expressing sentiments similar to those voiced by others before and since) was no doubt right in R v Morris  AC 320 at 334 to warn in general terms against introducing into the criminal law questions whether particular contracts were void or voidable on the ground of mistake or fraud or whether any mistake was sufficiently fundamental to vitiate a contract. But the Act at times expressly requires civil law concepts to be applied. Section 1(1) uses the expression "belonging to another". Thus, in some criminal cases, it may be necessary to determine whether the relevant property belonged to the alleged victim or to the defendant. In R v Walker  Crim.L.R. 112 the case turned upon whether the article in question had been rejected by the buyer so as to revest the title to it in the seller, the defendant. (See also per Bingham LJ in Dobson v General Accident, Fire and Life Assurance Corporation Plc  1 QB 274) This was an issue which had to be answered by reference to the civil law and about which the criminal law had nothing to say except to pose the question. (Another case which illustrated the same need to recognise and give effect to the civil law is R v Preddy  AC 815 and the consequence of having failed to do so was that the Court of Appeal had then to reconsider a considerable number of wrongly based convictions.)Section 5: 'Belonging to Another': Section 5: 'Belonging to Another': "5(1) Property shall be regarded as belonging to any person having possession or control of it, or having in it any proprietary right or interest (not being an equitable interest arising only from an agreement to transfer or grant an interest). (2) Where property is subject to a trust, the persons to whom it belongs shall be regarded as including any person having a right to enforce the trust, and an intention to defeat the trust shall be regarded accordingly as an intention to deprive of the property any person having that right. (3) Where a person receives property from or on account of another, and is under an obligation to the other to retain and deal with that property or its proceeds in a particular way, the property or proceeds shall be regarded (as against him) as belonging to the other. (4) (5) Where a person gets property by another's mistake, and is under an obligation to make restoration (in whole or in part) of the property or its proceeds or of the value thereof, then to the extent of that obligation the property or proceeds shall be regarded (as against him) as belonging to the person entitled to restoration, and an intention not to make restoration shall be regarded accordingly as an intention to deprive that person of the property or proceeds. Property of a corporation sole shall be regarded as belonging to the corporation notwithstanding a vacancy in the corporation."
Section 5 qualifies and defines the expression "belonging to another" and specifically makes use of a number of civil law concepts. Under subsection (1) the jury may have to decide who had the possession of the article or whether someone other than the defendant had a "proprietary right or interest" including an equitable interest (subject to the stated exception) and receive the requisite direction as to the civil law. Subsections (2) and (3) necessitate the consideration of the law of trusts and the rights of beneficiaries and the law of bailment and agency. Subsection (4) makes provision for the situation "where a person gets property by another's mistake". The criterion which the subsection then applies is whether or not the recipient came under an obligation to make restoration of the property (or its value or proceeds). This is a sophisticated criterion wholly dependant upon distinctions to be drawn from the civil law. Unless the criterion is satisfied this constituent of the crime of theft has not been proved.
It is relevant to look at this example further because it is an example of a person who has acquired a defeasible title. Where the transferor has made a mistake, the mistake can be so fundamental that the transferee acquires no rights at all in respect of the chattel transferred as against the transferor. But there may be cases where the mistake does not have so absolute an effect and the transferor may only have equitable rights (cf subsection (1)) or restitutionary rights against the transferee. If, however, the transferee has already had validly transferred to him the legal title to and possession of the chattel without any obligation to make restoration, a later retention of or dealing with the chattel by the transferee, whether or not 'dishonest' and whether or not it would otherwise amount to an appropriation, cannot amount to theft. However much the jury may consider that his conduct in not returning the chattel falls below the standards of ordinary and decent people, he has not committed the crime of theft. The property did not belong to another.
Section 5 and, particularly, s.5(4) demonstrate that the Theft Act has been drafted so as to take account of and require reference to the civil law of property, contract and restitution. The same applies to many other sections of the Act. For example, section 6 is drafted by reference to the phrase "regardless of the other's rights" - that is to say rights under the civil law. Section 28, dealing with the restoration of stolen goods, clearly can only work if the law of theft recognises and respects transfers of property valid under the civil law, otherwise it would be giving the criminal courts the power to deprive citizens of their property otherwise than in accordance with the law.
Section 5 shows that the state of mind of the transferor at the time of transfer may be relevant and critical. Similarly, the degree of the transferee's knowledge will be relevant to the s.5 question quite independently of any question under s.2. For instance, where there has been a mistake on the part of the transferor, the position under s.5(4) can be different depending on whether or not the transferee was aware of the mistake.
Further, it will be appreciated that the situations to which s.5 is relevant can embrace gifts as well as other transactions such as transfers for value. The prosecution must be able to prove that, at the time of the alleged appropriation, the relevant property belonged to another within the meaning given to that phrase by s.5. Where the defendant has been validly given the property he can no longer appropriate property belonging to another. The Court of Appeal does not seem to have had their attention directed to s.5. The question certified on the grant of leave to appeal is self-contradictory. The direction of the trial judge approved by the Court of Appeal is inadequate. There is no law against appropriating your own property as defined by s.5.Section 2: 'Dishonestly':
Section 2(1), rather than expanding the s.1(1) definition, limits it. It illustrates the point made by Lord Browne-Wilkinson as to the inter-relation of the words "dishonestly" and "appropriates" used in s.1(1). (It does however raise difficulties for the later steps in his reasoning to which I will have to revert.) Section 2(1) reads:
"(1) A person's appropriation of property belonging to another is not to be regarded as dishonest -(a) if he appropriates the property in the belief that he has in law the right to deprive the other of it, on behalf of himself or of a third person; or (b) if he appropriates the property in the belief that he would have the other's consent if the other knew of the appropriation and the circumstances of it; or (c) (except where the property came to him as trustee or personal representative) if he appropriates the property in the belief that the person to whom the property belongs cannot be discovered by taking reasonable steps."
Although s.2 is headed "Dishonestly", this quotation shows that it is as much involved with the application of the concepts "appropriation" and "property belonging to another". (a) contemplates that the defendant believes that he has the right to appropriate the property and (b) his belief that he would have the consent of the person to whom the property belongs to appropriate it. If belief in such a right or such consent can prevent the defendant's conduct from amounting to theft (whatever the jury may think of it), how can it be said that his knowledge that he has such a right or the actual consent of the person to whom the property belongs is irrelevant? How can it be said that the right of the defendant to accept a gift is irrelevant - or the fact that the transferor has actually and validly consented to the defendant having the relevant property? Yet it is precisely these things which the judgment of the Court of Appeal would wholly exclude.
Section 2(1) is cutting down the classes of conduct which the jury are at liberty to treat as dishonest. They qualify the Ghosh approach and show that in any given case the court must consider whether it is adequate to give an unqualified Ghosh direction as the Court of Appeal held to be sufficient in the present case.Gifts:
The discussion in the present case has been marked by a failure to consider the law of gift. Perhaps most remarkable is the statement of the Court of Appeal that "a gift may be clear evidence of appropriation". The making of a gift is the act of the donor. It involves the donor in forming the intention to give and then acting on that intention by doing whatever it is necessary for him to do to transfer the relevant property to the donee. Where the gift is the gift of a chattel, the act required to complete the gift will normally be either delivery to the donee or to a person who is to hold the chattel as the bailee of the donee; money can be transferred by having it credited to the donee's bank account - and so on. Unless the gift was conditional, in which case the condition must be satisfied before the gift can take effect, the making of the gift is complete once the donor has carried out this step. The gift has become the property of the donee. It is not necessary for the donee to know of the gift. The donee, on becoming aware of the gift, has the right to refuse (or reject) the gift in which case it revests in the donor with resolutive effect. (See Halsbury Laws: Gifts, vol. 20, paras 48-49 and the cases cited.)
What consequences does this have for the law of theft? Once the donor has done his part in transferring the property to the defendant, the property, subject to the special situations identified in the subsections of s.5, ceases to be "property belonging to another". However wide a meaning one were to give to "appropriates", there cannot be a theft. For it to be possible for there to be a theft there will have to be something more, like an absence of a capacity to give or a mistake satisfying s.5(4). Similarly, where the donee himself performs the act necessary to transfer the property to himself, as he would if he himself took the chattel out of the possession of the donor or, himself, gave the instructions to the donor's bank, s.5(1) would apply and mean that that constituent of the crime of theft would at that time have been satisfied.
If one treats the "acceptance" of the gift as an appropriation, and this was the approach of the judge and is implicit in the judgment of the Court of Appeal (despite their choice of words), there are immediate difficulties with s.2(1)(a). The defendant did have the right to deprive the donor of the property. The donor did consent to the appropriation; indeed, he intended it. There are also difficulties with s.6 as she was not acting regardless of the donor's rights; the donor has already surrendered his rights. The only way that these conclusions can be displaced is by showing that the gift was not valid. There are even difficulties with s.3 itself. The donee is not "assuming the rights of an owner": she has them already.Section 3: 'Appropriates':
This is the shortest of the explanatory sections. Its purpose is undoubtedly to get away from some of the technicalities of the law of larceny which arose from the need for the defendant to have taken the property. It uses a different concept which does not require an acquisition of possession. The concept is any assumption of the rights of an owner (which has been held to mean 'the assumption of any of the rights of an owner': R v Morris). The second part of subsection (1) clearly has to be read with s.5.
Subsection (2) deals with the purchase for value of a defective title and provides a further illustration of two of the points I have already made. It is drafted by reference to the position under civil law. It cross-refers to factors which are primarily relevant to honesty - "good faith" and what the defendant "believed" he had acquired - so demonstrating again the intimate inter-relationship of the drafting of one section with another and with the definition in s.1(1) as a whole.
Section 3 does not use any qualitative expression such as "misappropriates" nor does it repeat the Larceny Act expression "without the consent of the owner". It has thus been read by some as if "appropriates" was a wholly colourless expression. This reading declines to draw any guidance from the context in which the word is used in the definition in s.1(1) and the scheme of sections 2 to 6. It also declines to attach any significance to the use of the word "assumption". This led some curious submissions being made to your Lordships.
It was for example suggested that the garage repair mechanic employed to change the oil of a car would have appropriated the car. The reasoning is that only the owner has the right to do this or tell someone to do it therefore to do it is to assume the rights of the owner. This is an absurdity even when one takes into account that some of the absurd results can be avoided by other parts of the definition of theft. The mechanic is not assuming any right he is merely carrying out the instructions of the owner. The person who accepts a valid gift is simply conforming to the wishes of the owner. The words 'appropriate' [property belonging to another] and 'assume' [the rights of that other] have a useful breadth of meaning but each of them in its natural meaning includes an element of doing something which displaces the rights of that other person. The rights of that other [the owner] include the right to authorise another [the defendant] to do things which would otherwise be an infringement of the rights of the owner.