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England and Wales Court of Appeal (Criminal Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Criminal Division) Decisions >> Ghosh, R. v  EWCA Crim 2 (05 April 1982)
Cite as:  2 All ER 689,  QB 1053,  1 QB 1053,  EWCA Crim 2,  3 WLR 110
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B e f o r e :
MR. JUSTICE LLOYD
MR. JUSTICE EASTHAM
| R E G I N A
|DEB BARAN GHOSH
Whitefriars Street, Fleet Street, London, EC4Y 8BH. Telephone Number: 01-583 7635.
Shorthand Writers to the Court. )
MR. J. DRINKWATER, Q. C. and MR. A. GLASS appeared on behalf of the Crown.
Crown Copyright ©
THE LORD CHIEF JUSTICE: This is the judgment of the Court.
On 29th April 1981 before the Crown Court at St. Albans, this appellant was convicted on four counts of an indictment laid under the Theft Act 1968; on count 1, attempting to procure the execution of a cheque by deception; on count 2, attempting to obtain money by deception; on counts 3 and 4, obtaining money by deception. Count 1 was laid under section 20(2) and the remainder under section 15(1). He was fined the sum of £250 on each count with a term of imprisonment to be served in default of payment.
At all material times the appellant was a surgeon acting as a locum tenens consultant at a hospital. The charges alleged that he had falsely represented that he had himself carried out a surgical operation to terminate pregnancy or that money was due to himself or an anaesthetist for such an operation, when in fact the operation had been carried out by someone else, and/or under the National Health Service provisions.
His defence was that there was no deception; that the sums paid to him were due for consultation fees which were legitimately payable under the regulations, or else were the balance of fees properly payable; in other words that there was nothing dishonest about his behaviour on any of the counts.
The effect of the jury's verdict was as follows: as to count 1, that the appellant had falsely represented that he had carried out a surgical operation and had intended dishonestly to obtain money thereby; that as to count 2 he had falsely pretended that an operation had been carried out under the National Health Service; that as to count 3 he had falsely pretended that money was due to an anaesthetist; and as to count 4 that he had obtained money by falsely pretending that an operation had been carried out on a fee-paying basis when in fact it had been conducted under the terms of the National Health Service.
The grounds of appeal are simply that the learned Judge misdirected the jury as to the meaning of dishonesty.
What the Judge had to say on that topic was as follows:
"Now, finally dishonesty. There are, sad to say, infinite categories of dishonesty. It is for you. Jurors in the past and, whilst we have criminal law in the future, jurors in the future have to set the standards of honesty. Now it is your turn today, having heard what you have, to consider contemporary standards of honesty and dishonesty in the context of all that you have heard. I cannot really expand on this too much, but probably it is something rather like getting something for nothing, sharp practice, manipulating systems and many other matters which come to your mind. "
The law, on this branch of the Theft Act 1968 is in a complicated state and we embark upon an examination of the authorities with great diffidence.
When the case of R. v. McIvor (1982) 1 All E. R. 491 came before the Court of Appeal, there were two conflicting lines of authority. On the one hand there were cases which decided that the test of dishonesty for the purposes of the Theft Act 1968 is, what we venture to call, subjective — that is to say the jury should be directed to look into the mind of the defendant and determine whether he knew he was acting dishonestly: see R. v. Landy and Others (1981) 72 Cr. App. R. 237, where Lord Justice Lawton giving the reserved judgment of the Court of Appeal said at page 247 of the report:
"An assertion by a defendant that throughout a transaction he acted honestly does not have to be accepted but has to be weighed like any other piece of evidence. If that was the defendant's state of mind, or may have been, he is entitled to be acquitted. But if the jury, applying their own notions of what is honest and what is not, conclude that he could not have believed he was acting honestly, then the element of dishonesty will have been established. What a jury must not do is to say to themselves: 'If we had been in his place we would have known we were acting dishonestly so he must have known he was."
On the other hand there were cases which decided that the test of dishonesty is objective. Thus in R, v. Green and Greenstein (1975) 61 Cr. App. R. 296, the Judge had directed the jury:
"..... there is nothing illegal in stagging. The question you have to decide and what this case is all about is whether these defendants, or either of them, carried out their stagging operations in a dishonest way. To that question you apply your own standards of dishonesty. It is no good, you see, applying the standards of anyone accused of dishonesty otherwise everybody accused of dishonesty, if he were to be tested by his own standards, would be acquitted automatically, you may think. The question is essentially the one for a jury to decide and it is essentially one which the jury must decide by applying its own standards. "
The Court of Appeal, in a reserved judgment, approved that direction.
In McIvor the Court of Appeal sought to reconcile these conflicting lines of authority. They did so on the basis that the subjective test is appropriate where the charge is conspiracy to defraud, but in the case of theft, the test should be objective. We quote the relevant passage in full:
"It seems elementary, first, that where the charge is conspiracy to defraud the prosecution must prove actual dishonesty in the minds of the defendants in relation to the agreement concerned, and, second, that where the charge is an offence contrary to section 15 of the Theft Act 1968 the prosecution must prove that the defendant knew or was reckless regarding the representation concerned. The passage in my judgment in R. v. Landy to which we have referred should be read in relation to charges of conspiracy to defraud, and not in relation to charges of theft contrary to section 1 of the 1968 Act. Theft is in a different category from conspiracy to defraud, so that dishonesty can be established independently of the knowledge or belief of the defendant, subject to the special cases provided for in section 2 of the Act. Nevertheless, where a defendant has given evidence of his state of mind at the time of the alleged offence, the jury should be told to give that evidence such weight as they consider right, and they may also be directed that they should apply their own standards to the meaning of dishonesty."
The question we have to decide in the present case is, first, whether the distinction suggested in McIvor is justifiable in theory, and secondly, whether it is workable in practice.
In Scott v. Metropolitan Police Commissioner (1975) A C 819, the House of Lords had to consider whether deceit is a necessary element in the common law crime of conspiracy to defraud. They held that it is not. It is sufficient for the Crown to prove dishonesty. In the course of his speech Viscount Dilhorne traced the meaning of the words "fraud", "fraudulently" and "defraud" in relation to simple larceny, as well as the common law offence of conspiracy to defraud. After referring to Stephen. History of the Criminal Law of England and East's Pleas of the Crown, he continued at page 836 of the report as follows:
"The Criminal Law Revision Committee in their Eighth Report on 'Theft and Related Offences' (1966) (Cmnd., 2977) in paragraph 33 expressed the view that the important element of larceny, embezzlement and fraudulent conversion was 'undoubtedly the dishonest appropriation of another person's property'; in paragraph 35 that the words 'dishonestly appropriates' meant the same as 'fraudulently converts to his own use or benefit, or the use or benefit of any other person', and in paragraph 39 that 'dishonestly' seemed to them a better word than 'fraudulently'.
"Parliament endorsed these views in the Theft Act 1968, which by section 1(1) defined theft as the dishonest appropriation of property belonging to another with the intention of permanently depriving the other of it. Section 17 of that Act replaces sections 82 and 83 of the Larceny Act 1861 and the Falsification of Accounts Act 1875. The offences created by those sections and by that Act made it necessary to prove that there had been an 'intent to defraud'. Section 17 of the Theft Act 1968 substitutes the words 'dishonestly with a view to gain for himself or another or with intent to cause loss to another' for the words 'intent to defraud'.
"If 'fraudulently' in relation to larceny meant 'dishonestly' and 'intent to defraud' in relation to falsification of accounts is equivalent to the words now contained in section 17 of the Theft Act 1968 which I have quoted, it would indeed be odd if 'defraud' in the phrase 'conspiracy to defraud' has a different meaning and means only a conspiracy which is to be carried out by deceit."
Later on in the same speech Viscount Dilhorne continued as follows:
"As I have said, words take colour from the context in which they are used, but the words 'fraudulently' and 'defraud' must ordinarily have a very similar meaning. If, as I think, and as the Criminal Law Revision Committee appears to have thought, 'fraudulently' means 'dishonestly', then 'to defraud' ordinarily means, in my opinion, to deprive a person dishonestly of something which is his or of something to which he is or would or might but for the perpetration of the fraud be entitled. "
In Scott the House of Lords were only concerned with the question whether deceit is an essential ingredient in cases of conspiracy to defraud; and they held not. As Lord Diplock said at page 841, "dishonesty of any kind is enough". But there is nothing in the case of Scott which supports the view that, so far as the element of dishonesty is concerned, "theft is in a different category from conspiracy to defraud". On the contrary the analogy drawn by Viscount Dilhorne between the two offences, and indeed the whole tenor of his speech, suggests the precise opposite.
Nor is there anything in R. v. Landy itself which justifies putting theft and conspiracy to defraud into different categories. Indeed the Court went out of its way to stress that the test for dishonesty, whatever it might be, should be the same whether the offence charged be theft or conspiracy to defraud. This is clear from the reference to R. v. Feely (1973) Q. B. 530, which was a case under section 1 of the Theft Act. Having set out what we have for convenience called the subjective test, the Court in R. v. Landy continue:
"In our judgment this is the way the case of Feely should be applied in cases where the issue of dishonesty arises. It is also the way in which the jury should have been directed in this case..... "
In support of the distinction it is said that in conspiracy to defraud the question arises in relation to an agreement. But we cannot see that this makes any difference. If 'A' and 'B' agree to deprive a person dishonestly of his goods, they are guilty of conspiracy to defraud: see Scott's case. If they dishonestly and with the necessary intent deprive him of his goods, they are presumably guilty of theft. Why, one asks respectfully, should the test be objective in the case of simple theft, but subjective where they have agreed to commit a theft?
The difficulties do not stop there. The Court in McIvor evidently regarded cases under section 15 of the Theft Act as being on the subjective side of the line, at any rate so far as proof of deception is concerned. This was the way they sought to explain R. v. Green and Greenstein. In that case, after directing the jury in the passage which we have already quoted, the Judge continued as follows;
"Now in considering whether Mr. Green or Mr. Greenstein had or may have had an honest belief in the truth of their representations, ..... the test is a subjective one. That is to say, it is not what you would have believed in similar circumstances. It is what you think they believed and if you think that they, or either of them, had an honest belief to that effect, well then of course there would not be any dishonesty. On the other hand, if there is an absence of reasonable grounds for so believing, you might think that that points to the conclusion that they or either of them, as the case may be, had no genuine belief in the truth of their representations. In which case, applying your own standards, you may think that they acted dishonestly and it would be for you to say whether it has been established by this prosecution that they had no such honest belief..... ".
The Court of Appeal in R. v. Green and Greenstein appear to have approved that passage. At any rate they expressed no disapproval.
In R. v. McIvor the Court reconciled the two passages quoted from the Judge's summing up as follows:
"It seems clear that those two passages are concerned with different points. The first, which follows and adopts the standards laid down in R. v. Feely is concerned with the element of dishonesty in section 15 offences, whilst the second is specifically concerned with the mental element in relation to the false representation the subject matter of the charge. Clearly, if a defendant honestly believes that the representation made was true the prosecution cannot prove that he knew of, or was reckless as to, its falsity. "
The difficulty with section 15 of the Theft Act is that dishonesty comes in twice. If a person knows that he is not telling the truth he is guilty of dishonesty. Indeed deliberate deception is one of the two most obvious forms of dishonesty. One wonders therefore whether "dishonestly" in section 15(1) adds anything, except in the case of reckless deception. But assuming it does, there are two consequences of the distinction drawn in McIvor. In the first place it would mean that the legislation has gone further than its framers intended. For it is clear from paragraphs 87-88 of the Criminal Law Revision Committee's Eighth Report that "deception" was to replace "false pretence" in the old section 32(1) of the Larceny Act 1916, and "dishonestly" was to replace "with intent to defraud". If the test of dishonesty in conspiracy to defraud cases is subjective, it is difficult to see how it could have been anything other than subjective in considering "intent to defraud". It follows that, if the distinction drawn in McIvor is correct, the Criminal Law Revision Committee were recommending an important charge in the law by substituting "dishonestly" for "with intent to defraud"; for they were implicitly substituting an objective for a subjective test.
The second consequence is that in cases of deliberate deception the jury will have to be given two different tests of dishonesty to apply: the subjective test in relation to deception and the objective test in relation to obtaining. This is indeed what seems to have happened in R. v. Green and Greenstein. We cannot regard this as satisfactory from a practical point of view. If it be sought to obviate the difficulty by making the test subjective in relation to both aspects of section 15, but objective in relation to section 1, then that would certainly be contrary to what was intended by the Criminal Law Revision Committee, For in paragraph 88 they say:
"The provision in clause 12(1) making a person guilty of criminal deception if he 'dishonestly obtains' the property replaces the provision in the 1916 Act, section 32(1) making a person guilty of obtaining by false pretences if he 'with intent to defraud, obtains' the things there mentioned. The change will correspond to the change from 'fraudulently' to 'dishonestly' in the definition of stealing (contained in section 1)".
We feel, with the greatest respect, that in seeking to reconcile the two lines of authority in the way we have mentioned, the Court of Appeal in McIvor was seeking to reconcile the irreconcilable. It therefore falls to us now either to choose between the two lines of authority or to propose some other solution.
In the current supplement to Archbold, paragraph 1460, the editors suggest that the observations on dishonesty by the Court of Appeal is R. v. Landy can be disregarded "in view of the wealth of authority to the contrary". The matter, we feel, is not as simple as that.
In R. v. Waterfall (1970) 1 Q. B. 148, the defendant was charged under section 16 of the Theft Act with dishonestly obtaining a pecuniary advantage from a taxi driver. Lord Parker, Chief Justice, giving the judgment of the Court of Appeal, said this:
"The sole question as it seems to me in this case revolves round the third ingredient, namely, whether what was done was done dishonestly. In regard to that the deputy recorder directed the jury in this way: 'If on reflection and deliberation you came to the conclusion that this defendant never did have any genuine belief that Mr. Tropp [the accountant] would pay the taxi fare, then you would be entitled to convict him.... '.
"In other words, in that passage the deputy recorder is telling the jury they had to consider what was in this particular defendant's mind: had he a genuine belief that the accountant would provide the money? That, as it seems to this court, is a perfectly proper direction subject to this, that it would be right to tell the jury that they can use as a test, though not a conclusive test, whether there were any reasonable grounds for that belief. Unfortunately, however, just before the jury retired, in two passages the deputy recorder, as it seems to this Court, was saying: you cannot hold that this man had a genuine belief unless he had reasonable grounds for that belief. "
Lord Parker then sets out the passages in question and continues:
".... the court is quite satisfied that those directions cannot be justified. The test here is a subjective test, whether the particular man had an honest belief, and of course whereas the absence of reasonable ground may point strongly to the fact that that belief is not genuine, it is at the end of the day for the jury to say whether or not in the case of this particular man he did have that genuine belief. "
That decision was criticised by academic writers. But it was followed shortly afterwards in R. v. Royle (1971) 1 W. L. R. 1764, another case under section 16 of the Theft Act. Lord Justice Edmund Davies giving the judgment of the Court said this:
"The charges being that debts had been dishonestly 'evaded' by deception, contrary to section 16(2)(a), it was incumbent on the commissioner to direct the jury on the fundamental ingredient of dishonesty. In accordance with R. v. Waterfall (1970) 1 Q. B. 148, they should have been told that the test is whether the accused had an honest belief and that, whereas the absence of reasonable ground might point strongly to the conclusion that he entertained no genuine belief in the truth of his representation, it was for them to say whether or not it had been established that the appellant had no such genuine belief. "
It is to be noted that the Court in that case treated the "fundamental ingredient of dishonesty" as being the same as whether the defendant had a genuine belief in the truth of the representation.
In R. v. Gilks (1972) 1 W L R 1341, which was decided by the Court of Appeal the following year, the appellant had been convicted of theft contrary to section 1 of the Theft Act. The facts were that he had been overpaid by a book-maker. He knew that the book-maker had made a mistake, and that he was not entitled to the money. But he kept it. The case for the defence was that "book-makers are a race apart". It would be dishonest if your grocer gave you too much change and you kept it, knowing that he had made a mistake. But it was not dishonest in the case of a book-maker.
The Judge directed the jury as follows: "Well, it is a matter for you to consider, members of the jury, but try and place yourselves in that man's position at that time and answer the question whether in your view he thought he was acting honestly or dishonestly. "
Lord Justice Cairns giving the judgment of the Court of Appeal held that that was, in the circumstances of the case, a proper and sufficient direction on the matter of dishonesty. He continued: "On the face of it the defendant's conduct was dishonest; the only possible basis on which the jury could find that the prosecution had not established dishonesty would be if they thought it possible that the defendant did have the belief which he claimed to have. "
A little later R. v. Feely came before a Court of five Judges. The case is often treated as having laid down an objective test of dishonesty for the purpose of section 1 of the Theft Act. But what it actually decided was (i) that it is for the jury to determine whether the defendant acted dishonestly and not for the Judge, (ii) that the word "dishonestly" can only relate to the defendant's own state of mind, and (iii) that it is unnecessary and undesirable for Judges to define what is meant by "dishonestly".
It is true that the Court said "Jurors, when deciding whether an appropriation was dishonest can be reasonably expected to, and should, apply the current standards of ordinary decent people." It is that sentence which is usually taken as laying down the objective test. But the passage goes on: "In their own lives they have to decide what is and what is not dishonest. We can see no reason why, when in a jury box, they should require the help of a Judge to tell them what amounts to dishonesty. "The sentence requiring the jury to apply current standards leads up to the prohibition on Judges from applying their standards. That is the context in which the sentence appears. It seems to be reading too much into that sentence to treat it as authority for the view that "dishonesty can be established independently of the knowledge or belief of the defendant". If it could, then any reference to the state of mind of the defendant would be beside the point.
This brings us to the heart of the problem. Is "dishonestly" in section 1 of the Theft Act intended to characterise a course of conduct? Or is it intended to describe a state of mind? If the former, then we can well understand that it could be established independently of the knowledge or belief of the accused. But if, as we think, it is the latter, then the knowledge and belief of the accused are at the root of the problem.
Take for example a man who comes from a country where public transport is free. On his first day here he travels on a bus. He gets off without paying. He never had any intention of paying. His mind is clearly honest; but his conduct, judged objectively by what he has done, is dishonest. It seems to us that in using the word "dishonestly" in the Theft Act, Parliament cannot have intended to catch dishonest conduct in that sense, that is to say conduct to which no moral obloquy could possibly attach. This is sufficiently established by the partial definition in section 2 of the Theft Act itself. All the matters covered by section 2(1) relate to the belief of the accused. Section 2(2) relates to his willingness to pay. A man's belief and his willingness to pay are things which can only be established subjectively. It is difficult to see how a partially subjective definition can be made to work in harness with the test which in all other respects is wholly objective.
If we are right that dishonestly is something in the mind of the accused (what Professor Glanville Williams calls "a special mental state"), then if the mind of the accused is honest, it cannot be deemed dishonest merely because members of the jury would have regarded it as dishonest to embark on that course of conduct.
So we would reject the simple uncomplicated approach that the test is purely objective, however attractive from the practical point of view that solution may be.
There remains the objection that to adopt a subjective test is to abandon all standards but that of the accused himself, and to bring about a state of affairs in which "Robin Hood would be no robber". (See Green and Greenstein). This objection misunderstands the nature of the subjective test. It is no defence for a man to say "I knew that what I was doing is generally regarded as dishonest; but I do not regard it as dishonest myself. Therefore I am not guilty". What he is however entitled to say is "I did not know that anybody would regard what I was doing as dishonest". He may not be believed; just as he may not be believed if he sets up "a claim of right" under section 2(1) of the Theft Act, or asserts that he believed in the truth of a misrepresentation under section 15 of the Theft Act. But if he is believed, or raises a real doubt about the matter, the jury cannot be sure that he was dishonest.
In determining whether the prosecution has proved that the defendant was acting dishonestly, a jury must first of all decide whether according to the ordinary standards of reasonable and honest people what was done was dishonest. If it was not dishonest by those standards, that is the end of the matter and the prosecution fails.
If it was dishonest by those standards, then the jury must consider whether the defendant himself must have realised that what he was doing was by those standards dishonest. In most cases, where the actions are obviously dishonest by ordinary standards, there will be no doubt about it. It will be obvious that the defendant himself knew that he was acting dishonestly. It is dishonest for a defendant to act in a way which he knows ordinary people consider to be dishonest, even if he asserts or genuinely believes that he is morally justified in acting as he did.
For example, Robin Hood or those ardent anti-vivisectionists who remove animals from vivisection laboratories are acting dishonestly, even though they may consider themselves to be morally justified in doing what they do, because they know that ordinary people would consider these actions to be dishonest.
Cases which might be described as borderline, such as Boggeln v. Williams (1978) 2 All E. R. 1061, will depend upon the view taken by the jury as to whether the defendant may have believed what he was doing was in accordance with the ordinary man's idea of honesty. A jury might have come to the conclusion that the defendant in that case was disobedient or impudent, but not dishonest in what he did.
So far as the present case is concerned, it seems to us that once the jury had rejected the defendant's account in respect of each count in the indictment (as they plainly did), the finding of dishonesty was inevitable, whichever of the tests of dishonesty was applied. If the Judge had asked the jury to determine whether the defendant might have believed that what he did was in accordance with the ordinary man's idea of honesty, there could have only been one answer — and that is no, once the jury had rejected the defendant's explanation of what happened.
In so far as there was a misdirection on the meaning of dishonesty, it is plainly a case for the application of the proviso to section 2(1) of the Act.
This appeal is accordingly dismissed.
THE LORD CHIEF JUSTICE: Mr. Glass you want your costs out of central funds?
MR. GLASS: If your Lordship pleases.
THE LORD CHIEF JUSTICE: Mr. Francis, your client has a maximum contribution of £417. We are told the costs would be nothing like that. It will be more like £200. Subject to anything you say, we will make a contribution order of £200 or such lesser sum as the costs will be.
MR, FRANCIS: I do not think I can quarrel with that.