DPP v Gomez, HL decision

R v Gomez

Legal Citation:

DPP v Gomez [1993] A.C. 442, House of Lords

HOUSE OF LORDS DECISION IN DPP V GOMEZ

3 December. 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 Reg. v. Lawrence (Alan) [1972] A.C. 626 and Reg. v. Morris (David) [1984] A.C. 320. The question has given rise to much debate in subsequent cases and in academic writings.

The facts of this case are that the defendant, 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 defendant 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 defendant to confirm with the bank that the cheque was acceptable, and the defendant 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 defendant paid the cheque into the bank, and a few days later Ballay took possession of the goods, the defendant 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 defendant, 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 defendant 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 Act. The trial judge rejected this submission, whereupon the defendant 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 defendant appealed to the Court of Appeal (Criminal Division) (Lord Lane C.J., Hutchison and Mantell JJ.) [1991] 1 W.L.R. 1334 which on 22 April 1991 quashed the convictions. Lord Lane C.J., delivering the judgment of the court, after considering Reg v. Lawrence and Reg. v. Morris, said, at p. 1338:

"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 [defendant] 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] A.C. 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."

"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."

The court later granted a certificate under section 33(2) of the Criminal Appeal Act 1968 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 [interference] with or usurpation of some right of the owner?"

"4(1)`Property’ includes money and all other property, real or personal, including things in action and other intangible property."

"7. A person guilty of theft shall on conviction on indictment be liable to imprisonment for a term not exceeding 10 years."

It is to be observed that by section 26 of the Criminal Justice Act 1991 the maximum sentence for theft was reduced from ten to seven years. The section 15(1) penalty was left unchanged.

The facts in Reg. v. Lawrence [1972] A.C. 626, 627-628, as taken from the speech of Viscount Dilhorne, were these:

"The appellant was convicted on 2 December 1969 of theft contrary to section 1(1) of the Theft Act 1968. On 1 September 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 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) [1971] 1 Q.B. 373 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 pp. 631-633:

"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. 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. 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."

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] A.C. 320 involved two cases of price label switching in a supermarket. In the first case (Anderton v. Burnside) the defendant 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 Act of 1968. In the second case (Reg. v. Morris) 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) [1983] Q.B. 587 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, referred, at p. 331, to Reg. v. Lawrence [1972] A.C. 626 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 [1984] A.C. 320, 331-333:

"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.’

that on a fair reading of the subsection 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 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, [Lord Lane C.J.] 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.

"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

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 receptacle, 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, at p. 335:

"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 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 Roskill 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, at p. 332, 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, Reg. v. Lawrence [1972] A.C. 626 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 Reg. v. Lawrence and Reg. v. Morris [1984] A.C. 320 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 was placed on Lord Roskill’s statement in Reg. v. 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."

"The difficulties caused by the apparent conflict between the decisions in Reg. v. Lawrence [1972] A.C. 626 and Reg. v. Morris (David) [1984] A.C. 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 [Appellate] 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 Reg. v. 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 pp. 283-284:

"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 [1972] A.C. 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 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 [1972] A.C. 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 [1984] 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: `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 [1984] A.C. 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, at p. 285, Parker L.J. quoted this passage from the speech of Lord Roskill in Reg. v. Morris [1984] A.C. 320, 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 . . .’"

"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 [1972] A.C. 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."

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 [1984] A.C. 320. Since, however, the House in Reg. v. Morris considered that there had plainly been an appropriation in Reg. v. Lawrence [1972] A.C. 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 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 defendant in the present appeal that Dobson v. General Accident Fire and Life Assurance Corporation Plc. [1990] 1 Q.B. 274 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 Reg. v. Morris [1984] A.C. 320 with

the ruling in Reg. v. Lawrence [1972] A.C. 626 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 Act of 1968. 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 on Theft and Related Offences (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 12 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 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 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 question 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) [1991] 1 W.L.R. 1334 from a decision of that court on 22 April 1991 allowing the appeal of the respondent defendant, 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 two years’ imprisonment, and quashing those convictions.

The facts are as follows. The defendant 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 the defendant, and the defendant agreed, to supply goods from the shop in exchange for two undated building society cheques for £7,950 and £9,250, which both Ballay and the defendant knew to be stolen and worthless cheques. The defendant 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 the defendant paid the cheque into his employers’ bank and on 23 September Ballay took possession of the listed goods. The defendant 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."

The defendant, 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 the defendant 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 the defendant appealed, the Court of Appeal upheld that submission and quashed his convictions. In order to restore those convictions, the Crown must say that the Act of 1968 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.

"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 Reg. v. Lawrence [1972] A.C. 626 where, having noted the absence from the subsection of the words "without the consent of the owner," he said, at p. 632:

"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."

"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 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, (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 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 Act of 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:

"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. (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(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. (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 (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."

"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 10 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. (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

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 subsection 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 to 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 Reg. v. Morris [1984] A.C. 320, 332h. For present 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 paragraphs (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, for the defendant, 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 ten to seven years, thereby distinguishing theft from obtaining by deception, the maximum term for which remains at ten 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) 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-Aschaffenburg A.G. [1975] A.C. 591 and the example of Lord Ackner in Reg. v. Kassim [1992] 1 A.C. 9, 16, where the construction of section 20(2) of the Act of 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 on Theft and Related Offences.

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 Act of 1968, which was based 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(1)(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.

"In addition to the division of misappropriation into three main offences the distinction between larceny and obtaining by false pretences contrary to [the Larceny Act 1916, section] 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 [the Larceny Act 1916, section] 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 theft the committee proceeded in what may be seen as a key paragraph.

"30. The essence of the offence of fraudulent conversion under [the Larceny Act 1916, section] 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 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 section 20(1)(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 Act of 1901 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."

"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 [the Larceny Act 1916, section] 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 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 Act of 1916. 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 [ A General View of the Criminal Law of England (1863), 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 other person’ in the definition of fraudulent conversion under [the Larceny Act 1916, section] 20(1)(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 section 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 [the Larceny Act 1916, section] 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 21-25. 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 [see paragraph 1] 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 [the Larceny Act 1916, section] 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 Act of 1968 and has got rid of some defects and difficulties which had arisen from section 32 of the Act of 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 Act of 1968 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 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 [the

Larceny Act 1916,] section 44(3) that a person charged with larceny may be convicted of obtaining by false pretences and the provision in section 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 section 44(3) mistakenly convict him of obtaining by false pretences, the Court of Criminal Appeal cannot substitute a verdict of guilty of larceny under section 5(2) of the Criminal Appeal Act 1907; 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]’ (Rex v. Fisher (1921) 16 Cr.App.R. 53). Again, a person charged with attempted larceny cannot be convicted of attempting to obtain by false pretences (Rex v. Gallagher (1929) 21 Cr.App.R. 172). The provision in section 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 [the Larceny Act 1916, section] 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 emphasised, but I think the sense is that the accused can be 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 indorsed the committee’s point of view. While not forgetting the observations in Black-Clawson International Ltd. v. Papierwerke Waldhof-Aschaffenburg A.G. [1975] A.C. 591 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. 623:

"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 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 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, Reg. v. Lawrence [1972] A.C. 626, Reg. v. Morris [1984] A.C. 320 and Dobson v. General Accident Fire and Life Assurance Corporation Plc. [1990] 1 Q.B. 274, a decision of the Court of Appeal in a case where a policy holder was insured against "loss or damage caused by theft." Reg. v. Lawrence is reported in the Court of Appeal (Criminal Division) [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 Act of 1968 a requirement that the dishonest appropriation must be without the consent of the owner of the property. Megaw L.J. then said, at p. 377:

"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 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 Reg. v. 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. 378:

"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 Criminal Law Revision Committee (Cmnd. 2977) 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 Megaw L.J. 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.

As to the former, before 1968 robbery was a felony at common law and, according to Archbold, Criminal Pleading Evidence Practice, 36^th ed. (1966), p. 644, para. 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 Reg. v. Desmond [1965] A.C. 960, 980 et seq. by Lord Morris of Borth-y-Gest. Section 8(1) of the Act of 1968 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 Reg. 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 (Reg. v. Lawrence [1971] 1 Q.B. 373, 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" (Reg. v. Lawrence, at p. 377c) calls for a further observation which will also be apt when I consider Dobson v. General Accident Fire and Life Assurance Corporation Plc. [1990] 1 Q.B. 274. 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, 36^th ed., this time at p. 549, para. 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. Buckley L.J. said, at p. 479:

"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: Reg. 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. (Reg. v. Lawrence [1971] 1 Q.B. 373, 377c), 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 in the judgment of the Court of Appeal, at p. 377d, 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 Criminal Law Revision Committee (rightly, in my opinion) has deliberately given it.

In The Law of Theft, 6^th ed. (1989), ch. II, Professor J. C. Smith discusses the difference between larceny by a trick and obtaining by false pretences and continues, at p. 20, para. 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."

"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 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 section 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 Reg. v. Lawrence [1972] A.C. 626 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, at p. 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. 631, 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. 628. 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 Reg. v. 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 Act of 1968 "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" (sc. "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. 631a. 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, at 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." If "taken" there signifies a permitted change of ownership, I respectfully cannot agree.

In Reg. v. Morris [1984] A.C. 320, 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 Reg. v. Lawrence) if the charge had been laid under section 15(1) and, as in Reg. v. 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. 593:

"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. 597:

"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 Reg. v. 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:

"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] A.C. 626, does not allow us to adopt this solution."

This House, having granted leave to appeal, affirmed the Court of Appeal’s decision in Reg. v. Morris [1984] A.C. 320, 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 v. General Accident Fire and Life Assurance Corporation Plc. [1990] 1 Q.B. 274, 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 Act of 1968. 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, in so far as those cases were in conflict. The plaintiff 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. 279, 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. 280:

"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.)

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 Reg. v. Lawrence [1972] A.C. 626 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, Parker L.J. said, at pp. 280-281:

"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 Reg. v. Morris [1984] A.C. 320 and said, at p. 281:

"The difficulties caused by the apparent conflict between the decisions in Reg. v. Lawrence [1972] A.C. 626 and Reg. v. Morris [1984] A.C. 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."

Then, having stated the facts, he criticised in some detail the reasoning in Morris, at 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 v. General Accident Fire and Life Assurance Corporation Plc. [1990] 1 Q.B. 274, Parker L.J. rightly observed that the insurers’ main arguments were negatived by Lawrence and concluded, at p. 286:

"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 [1972] A.C. 626 and the equally clear statement in Reg. v. Morris [1984] A.C. 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 pp. 287-288:

"This analysis appears to me to have been authoritatively adopted by the House of Lords in Reg. v. Lawrence [1972] A.C. 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.’"

"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 [1984] A.C. 320. Since, however, the House in Reg. v. Morris considered that there had plainly been an appropriation in Reg. v. Lawrence [1972] A.C. 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 Bingham L.J.’s rationalisation of the failure ofMorris 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’s case 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 [1990] Crim.L.R. 271, 273-274 on Dobson v. General Accident Fire and Life Assurance Corporation Plc. [1990] 1 Q.B. 274.

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. 1338:

"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] A.C. 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."

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.

"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."

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. B.O.A.C. [1955] A.C. 169, 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 on Interpretation of Statutes, 12^th ed. (1969), 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 v. General Accident Fire and Life Assurance Corporation Plc. [1990] 1 Q.B. 274 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 Reg. v. Lawrence [1972] A.C. 626 and Reg. v. Morris [1984] A.C. 320, but a large number of cases on section 1(1), have furnished the material for animated and often 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, 6^th ed., ch. II, pp. 13-14, para. 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 [Theft Act 1968] to abolish. It is not a reason for giving to the word `appropriate’ a meaning narrower than it would naturally bear.

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 section 20(1)(iv) of the [Act of 1916], 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 [Act of 1916] 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 [Act of 1968] should not be similarly construed.

"In Reg. v. Morris [1984] A.C. 320 the House of Lords held that `In the context of section 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."

To the same effect is Professor Smith’s comment on Reg. v. Shuck [1992] Crim.L.R. 209, 211-213. In The Law of Theft, 6^th ed., ch. II, p. 14, para. 32, referring to Reg. v. Lawrence [1972] A.C. 626, he says:

"One of the questions of law of general public importance which the House was required to answer 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.’ 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 (1992), 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 Criminal Law Revision Committee 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 v. General Accident Fire and Life Assurance Corporation Plc. [1990] 1 Q.B. 274, 289:

"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 Q.B. 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 that the Reg. v. Morris [1984] A.C. 320 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, post, p. 496F:

"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, 640a.) Of course, if the principle enunciated in Reg. v. Lawrence [1972] A.C. 626 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] A.C. 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, at p. 625, was referred for the opinion of the Court of Appeal:

"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) of the Act of 1968 (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] A.C. 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. 640).

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. 642:

"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) [1984] Q.B. 624 does not depend on Reg. v. Lawrence [1972] A.C. 626 for the undoubted validity of its conclusions and is consistent with Reg. v. Morris [1984] A.C. 320. Again, Reg. v. Philippou, 89 Cr.App.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 Reg. v. Philippou were justified in reconciling Morris with Lawrence, but they were correct in following Attorney-General’s Reference (No. 2 of 1982) and could have reached their conclusion without relying on Lawrence.

Reg. v. Philippou, 89 Cr.App.R. 290 disapproved of the decision in Reg. 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 Act of 1968), the necessary element of appropriation required proof of adverse interference with or usurpation of some right or rights of the owner (Reg. v. 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, at pp. 526-527, accepted Attorney-General’s Reference (No. 2 of 1982) and would have upheld the conviction, even assuming that Morris should be followed. In fairness I must add that he indorsed 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 of 1968. It is clear that, whether they succeeded or not, both the Criminal Law Revision Committee and the draftsman must have intended to give the word one meaning, which would be the same in the Act as in the committee’s 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 defendant 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, 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 Reg. v. Lawrence [1972] A.C. 626, 632 that Parliament, by omitting the words "without the consent of the owner" from section 1(1) of the Act of 1968, has "relieved the prosecution of the burden of establishing that the taking was without the owner’s consent" and 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 at p. 632 as obiter dicta. Secondly, it follows that Dobson v. General Accident Fire and Life Assurance Corporation Plc. [1990] 1 Q.B. 274, 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 Reg. v. Morris [1984] A.C. 320, 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 (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 Practice 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 of England, 4^th ed., vol. 26 (1979), p. 296, para. 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 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 Reg. v. Lawrence [1972] A.C. 626 Megaw L.J. in the Court of Appeal [1971] 1 Q.B. 373, 376 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] A.C. 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 there 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 substantial overlap between section 1 and section 15, section 15 is not otiose.

Turning to the company cases, the dictum in Reg. v. Morris [1984] A.C. 320 has led 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: Reg. v. 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 Reg. v. Roffel [1985] V.R. 511 and Reg. 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 Reg. v. Lawrence [1972] A.C. 626, 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 Reg. v.

Roffel [1985] V.R. 511 and the statements of principle in Reg. v. McHugh, 88 Cr.App.R. 385, 393, are not correct in law and should not be followed. As for 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 Reg. v. Philippou, 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.

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.

Appeal Allowed

Branch (a) of certified question answered in affirmative and branch (b) in negative.

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