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You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> DPP v Gomez [1992] UKHL 4 (03 December 1992)
URL: http://www.bailii.org/uk/cases/UKHL/1992/4.html
Cite as: [1993] AC 442, [1992] UKHL 4, [1993] 1 All ER 1

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JISCBAILII_CASE_CRIME

    Parliamentary Archives,
    HL/PO/JU/18/252

    Director of Public Prosecutions (Appellant)

    v.

    Gomez
    (On Appeal from the Court of Appeal (Criminal Division))

    JUDGMENT

    Die Jovis 3° Decembris 1992

    Upon Report from the Appellate Committee to whom was
    referred the Cause Director of Public Prosecutions against Gomez,
    That the Committee had heard Counsel as well on Monday the 20th
    as on Tuesday the 21st and Wednesday the 22nd days of July last
    upon the Petition and Appeal of the Director of Public
    Prosecutions of 4/12 Queen Anne's Gate, London SW1H 9AZ, praying
    that the matter of the Order set forth in the Schedule thereto,
    namely an Order of Her Majesty's Court of Appeal (Criminal
    Division) of the 22nd day of April 1991, might be reviewed before
    Her Majesty the Queen in Her Court of Parliament and that the
    said Order might be reversed, varied or altered or that the
    Petitioner might have such other relief in the premises as to Her
    Majesty the Queen in Her Court of Parliament might seem meet; as
    upon the case of Edwin Gomez lodged in answer to the said Appeal;
    and due consideration had this day of what was offered on either
    side in this Cause:

    It is Ordered and Adjudged, by the Lords Spiritual and
    Temporal in the Court of Parliament of Her Majesty the Queen
    assembled, That the said Order of Her Majesty's Court of Appeal
    (Criminal Division) of the 22nd day of April 1991 complained of
    in the said Appeal be, and the same is hereby, Set Aside and that
    the convictions at Isleworth Crown Court of the 20th and 24th
    days of April 1990 be, and the same are hereby, Restored: And
    it is also further Ordered, That the Cause be, and the same is
    hereby, remitted back to the Court of Appeal (Criminal Division)
    to do therein as shall be just and consistent with this Judgment.

    Cler: Parliamentor:

    Judgment: 3.12.92

    HOUSE OF LORDS

    DIRECTOR OF PUBLIC PROSECUTIONS
    (APPELLANT)

    v.

    GOMEZ

    (RESPONDENT)

    (ON APPEAL FROM THE COURT OF APPEAL
    (CRIMINAL DIVISION))

    Lord Keith of Kinkel
    Lord Jauncey of Tullichettle
    Lord Lowry
    Lord Browne-Wilkinson
    Lord Slynn of Hadley


    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 Lawrence v. Metropolitan Police Commissioner [1972] AC 626
    and Reg. v. Morris [1984] AC 320. The question has given rise
    to much debate in subsequent cases and in academic writings.

    The facts of this case are that the respondent, 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 respondent 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 respondent to confirm with the bank that the
    cheque was acceptable, and the respondent 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 respondent paid the cheque
    into the bank, and a few days later Ballay took possession of the
    goods, the respondent 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 respondent, 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 respondent 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 Theft Act.
    The trial judge rejected this submission, whereupon the respondent
    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 respondent
    appealed to the Court of Appeal (Criminal Division) which on 22
    April 1991 (Lord Lane C.J., Hutchison and Mantell 33.) quashed the
    convictions: ([1991] 1 W.L.R. 1344). Lord Lane C.J., delivering the
    judgment of the court, after considering Lawrence v. Commissioner
    of Metropolitan Police
    [1972] AC 626 and Reg. v. Morris [1984]
    A.C. 320, said at p. 1338:

    "What in fact happened was that the owner was
    induced by deceit to agree to the goods being transferred to
    Bailey. 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] AC 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 been avoided at the
    time the goods are handed over."

    And later, at p. 1339:

    "We therefore conclude that there was 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 1(2) of the
    Administration of Justice Act 1960 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 inference with or usurpation of some right of the
    owner?"

    - 2 -

    The Crown now appeals, with leave granted here, to your
    Lordships' House.

    The provisions of the Theft Act 1968 principally relevant
    are these:

    Section 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."

    Section 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."

    Section 4(l)

    "'Property' includes money and all other property, real or
    personal, including things in action and other intangible
    property."

    Section 7

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

    Section 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 ten
    years."

    It is to be observed that by section 26 of the Criminal Justice
    Act 1991 the maximum sentence for theft was reduced from 10 to
    7 years. The section 15(1) penalty was left unchanged.

    The facts in Lawrence v. Metropolitan Police Commissioner
    [1972] AC 626, as set out in the speech of Viscount Dilhorne,
    were these:

    "The appellant was convicted on December 2, 1969, of theft
    contrary to section 1(1) of the Theft Act 1968. On
    September 1, 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

    - 3 -

    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) 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 p. 631:

    '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.

    - 4 -

    "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.

    - 5 -

    "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."

    In the result, each of the certified questions was answered in the
    negative.

    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] AC 320 involved two cases of price
    label switching in a supermarket. In the first case the defendent
    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 Theft Act. In the second case 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) 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,
    at p. 331 referred to the Lawrence case 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:

    "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.' Mr.
    Jeffreys contended that on a fair reading of the subsection

    - 6 -

    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 (Alan)
    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, the learned Lord Chief Justice 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.

    - 7 -

    "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 mere 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 receptable, 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 this:

    "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

    - 8 -

    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 Roskiil 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 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,
    Lawrence v. Commissioner of Metropolitan Police 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 Lawrence and Morris 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

    - 9 -

    was place on Lords Roskill's statement in 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."

    In dealing with this argument Parker L.J. said, at p. 281:

    'The difficulties caused by the apparent conflict between
    the decisions in Reg. v. Lawrence (Alan) [1972] AC 626
    and Reg. v. Morris (David) [1984] AC 320 have provided,
    not surprisingly, a basis for much discussion by textbook
    writers and contributors to 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."

    Parker L.J. then said that he found other difficulties in Lord
    Roskill's speech in 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 p. 283:

    "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 (Alan)
    [1972] AC 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

    - 10 -

    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 (Alan) [1972] AC 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 (David)
    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:

    - 11 -

    '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 (David) [1984] AC 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 Parker L.J. quoted this passage from the speech of
    Lord Roskill in Morris, at p. 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."

    And continued:

    "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 (Alan)
    [1972] AC 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."

    On this ground Parker L.J. dismissed the appeal.

    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 (David) [1984] A.C.
    320. Since, however, the House in Reg. v. Morris
    considered that there had plainly been an appropriation in
    Reg. v. Lawrence (Alan) [1972] AC 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

    - 12 -

    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 respondent in the present appeal that
    the case of Dobson 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
    Morris with the ruling in Lawrence 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 Theft Act. 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 (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 twelve 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 the cases of 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

    - 13 -

    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 questions 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) from a decision of that court on 22 April 1991 allowing
    the appeal of the present respondent, 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
    2 years' imprisonment, and quashing those convictions.

    The facts are as follows. Gomez 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 Gomez, and Gomez agreed, to
    supply goods from the shop in exchange for two undated building

    - 14 -

    society cheques for £7,950 and £9,250, which both Ballay and
    Gomez knew to be stolen and worthless cheques. Gomez 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 Gomez paid
    the cheque into his employers' bank and on 23 September Ballay
    took possession of the listed goods. Gomez 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."

    Gomez, 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 Gomez 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 Gomez appealed, the Court

    - 15 -

    of Appeal upheld that submission and quashed his convictions. In
    order to restore those convictions, the Crown must say that the
    Theft Act 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.

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

    "A person is guilty of theft if he dishonestly appropriates
    property belonging to another with the intention of
    permanently depriving the other of it; and 'thief and 'steal'
    shall be construed accordingly."

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

    "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."

    Lord Roskill, on the other hand, in R. v. Morris [1984] AC 320
    ("Morris") said at p. 332D):

    "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."

    The certified question in this appeal is -

    "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

    1. an appropriation within the meaning of section 1(1) of
      the Theft Act 1968 taken place, or

    2. 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 Theft Act 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:-

    "Definition of 'theft'

    - 16 -

    "l.-(l) 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.-(l) A person's appropriation of property belonging
    to another is not to be regarded as dishonest -

    1. 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

    2. 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

    - 17 -

    (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.

    ...”

    Fraud and blackmail

    "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 ten 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.

    - 18 -

    (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 present intentions of the person using the deception or
    any other person."

    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 sub-section 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 on 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 R. v. Morris [1984] A.C. at p. 332H. For present

    - 19 -

    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
    paragraph (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 Q.C., for the respondent, 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
    10 to 7 years, thereby distinguishing theft from obtaining by
    deception, the maximum term for which remains at 10 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) of the Theft Act 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-Aschaftenburg A.G.
    [1975] AC 591 and the example of Lord Ackner in R. v. Kassim"
    [1992] 1 A.C. 9 at p. 16, where the construction of section 20(2)
    of the Theft Act 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, "Theft and Related Offences" (1966)
    (Cmnd. 2977).

    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 Theft Act, which was based

    - 20 -

    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(l)(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.

    "19. In addition to the division of misappropriation into
    three main offences the distinction between larceny and
    obtaining by false pretences contrary to 1916 s. 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 1916 s. 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

    - 21 -

    theft the Committee proceeded in what may be seen as a key
    paragraph.

    "30. The essence of the offence of fraudulent conversion
    under 1916 s. 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 (c. 10) 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 s.
    20(l)(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
    1901 Act 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."

    Paragraph 33 states an important conclusion:

    '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 1916 s. 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

    - 22 -

    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 1916 Act. 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 his
    'General View of the Criminal Law' (1863 edition, 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

    - 23 -

    other person' in the definition of fraudulent conversion under
    1916 s. 20(l)(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 s. 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
    1916 s. 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 21-5. 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 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

    - 24 -

    1916 s. 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 Theft Act and has got rid of some defects and
    difficulties which had arisen from section 32 of the Larceny Act
    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 Theft Act 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

    - 25 -

    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 1916 s. 44(3) that a person charged with larceny
    may be convicted of obtaining by false pretences and the
    provision in s. 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 s. 44(3) mistakenly
    convict him of obtaining by false pretences, the Court of
    Criminal Appeal cannot substitute a verdict of guilty of
    larceny under s. 5(2) of the Criminal Appeal Act 1907 (c.
    23); 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]' (Fisher (1921), 16 Cr. App. R. 53).
    Again, a person charged with attempted larceny cannot be
    convicted of attempting to obtain by false pretences
    (Gallagher (1929), 21 Cr. App. R. 172). The provision in s.
    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 1916 s. 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 underlined, but I think the sense is that the accused can be

    - 26 -

    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 endorsed the Committee's
    point of view. While not forgetting the observations in Black-
    Clawson International
    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. 623D:

    "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

    - 27 -

    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 learned 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, Lawrence, Morris and Dobson v. General Accident plc [1990]
    1 Q.B. 274 ("Dobson"), a decision of the Court of Appeal in a case
    where a policy holder was insured against "loss or damage caused
    by theft". Lawrence is reported in the Court of Appeal (Criminal
    Division) at 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 Theft Act a requirement that the dishonest
    appropriation must be without the consent of the owner of the
    property. Megaw L.J. then said at p. 377A-F:

    - 28 -

    "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

    - 29 -

    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 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. 378C-E:

    "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
    C.L.R.C. 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 the Lord Justice 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.

    - 30 -

    As to the former, before 1968 robbery was a felony at
    common law and, according to Archbold 36th edition (1966)
    paragraph 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 Smith
    v. Desmond
    [1965] A.C. 960 at p. 980 et seq. by Lord Morris of
    Borth-y-Gest. Section 8(1) of the Theft Act 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 Smith 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 (at p. 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" at p. 377C calls for a
    further observation which will also be apt when I consider Dobson.
    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
    36th edition, this time at paragraph 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.
    At p. 479 Buckley L.J. said:

    - 31 -

    "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: R. 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., 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 at p. 377D of the
    judgment in the Court of Appeal 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
    C.L.R.C. (rightly, in my opinion) has deliberately given it.

    In Chapter II of The Law of Theft, 6th edition, Professor J.
    C. Smith discusses the difference between larceny by a trick and
    obtaining by false pretences and continues at paragraph 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."

    His further comment at paragraph 39 is also valuable, in my
    opinion:

    "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

    - 32 -

    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 s. 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 Lawrence 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 (page 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. 631E-F, 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. 628C. 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 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 Theft
    Act "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" (sell, "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. 631 A). 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 on 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."

    - 33 -

    If "taken" there signifies a permitted change of ownership, I
    respectfully cannot agree.

    In Morris, 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 Lawrence) if the charge had been laid
    under section 15(1) and, as in 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. 593D:

    "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. 597C:

    "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 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 (p. 599D):

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

    - 34 -

    This House, having granted leave to appeal, affirmed the
    Court of Appeal's decision in Morris, 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, 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 Theft Act. 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, insofar as those cases were in conflict.
    The respondent 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.
    279F 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. 280D:

    "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.)

    - 35 -

    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 Lawrence 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, the Lord Justice said at p. 280H:

    "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
    Morris and said at p. 281C:

    "The difficulties caused by the apparent conflict between
    the decisions in Reg. v. Lawrence (Alan) [1972] AC 626
    and Reg. v. Morris (David) [1984] AC 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."

    - 36 -

    Then, having stated the facts, he criticised in some detail the
    reasoning in Morris (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, the Lord Justice rightly observed
    that the insurers' main arguments were negatived by Lawrence and
    concluded at p. 286F:

    "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 (Alan)
    [1972] AC 626 and the equally clear statement in Reg. v.
    Morris (David)
    [1984] AC 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
    p. 287F:

    'This analysis appears to me to have been authoritatively
    adopted by the House of Lords in Reg. v. Lawrence (Alan)
    [1972] AC 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."'

    Turning to Morris, the Lord Justice said at p. 289A:

    - 37 -

    "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 (David) [1984] A.C.
    320. Since, however, the House in Reg. v. Morris
    considered that there had plainly been an appropriation in
    Reg. v. Lawrence (Alan) [1972] AC 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 the Lord Justice's rationalisation of the failure of
    Morris 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 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 on Dobson at [1990] Crim.L.R.
    pp. 273-4.

    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. 1338E:

    "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] AC 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."

    - 38 -

    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.

    Having reviewed the judgment in Dobson, the Lord Chief
    Justice said at p. 1339H:

    "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."

    I respectfully agree.

    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. BOAC
    [1955] A.C. 169 at p. 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,
    Interpretation of Statutes 12th edition 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 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 Lawrence and Morris, but a large number of cases
    on section 1(1), have furnished the material for animated and often

    - 39 -

    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"
    6th edition Chapter II paragraph 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 1968 Act to abolish. It is not a reason for
    giving to the word 'appropriate' a meaning narrower than it
    would naturally bear. The Larceny Act itself provided for
    an alternative form of stealing - 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 s.
    20(1)(iv) of the Larceny Act, 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 1916 Act 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 Theft Act should not be similarly construed.

    "In Morris the House of Lords held that

    'In the context of s. 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."

    - 40 -

    To the same effect is Professor Smith's comment on R v.
    Shuck
    [1992] Crim.L.R. 209, 211-3. In paragraph 32 of Chapter II
    ibid, referring to Lawrence, he says:

    "One of the questions of law of general public importance
    which the House was required to answer was-

    'Whether s. 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 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
    CLRC 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 at p. 289F:

    "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 QB 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

    - 41 -

    that the Morris 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:

    "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, 64OA.) Of course, if the principle
    enunciated in Lawrence 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] AC 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 was referred for the opinion of the Court of Appeal:

    - 42 -

    "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) (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] AC 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. 640A.)

    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. 642B:

    "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) does not
    depend on Lawrence for the undoubted validity of its conclusions
    and is consistent with Morris. Again, R. v. Philippou (1989) 89
    C.A.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
    Philippou were justified in reconciling Morris with Lawrence, but
    they were correct in following Attorney-General's Reference (No. 2

    - 43 -

    of 1982) and could have reached their conclusion without relying
    on Lawrence.

    Philippou disapproved of the decision in R. 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 Theft Act), the
    necessary element of appropriation required proof of adverse
    interference with or usurpation of some right or rights of the
    owner (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, accepted Attorney-
    General's Reference (No. 2 of 1982)
    and would have upheld the
    conviction, even assuming that Morris should be followed (pp. 526-
    527). In fairness I must add that he endorsed 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. It is clear that, whether they succeeded or
    not, both the Committee and the draftsman must have intended to
    give the word one meaning, which would be the same in the Act
    as in the 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 respondent 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,

    - 44 -

    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 Lawrence at p. 632A that
    Parliament, by omitting the words "without the consent of the
    owner" from section 1(1) of the Theft Act, has "relieved the
    prosecution of the burden of establishing that the taking was
    without the owner's consent" and at p. 632E 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 on p. 632 as
    obiter dicta. Secondly, it follows that Dobson, 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 Morris, 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 on 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 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 4th edition Volume 26 paragraph 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

    - 45 -

    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 Lawrence v. Metropolitan Police Commissioner [1972]
    A.C. 626 Megaw L.J. in the Court of Appeal 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] AC 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
    this 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

    - 46 -

    substantial overlap between section 1 and section 15, section 15 is
    not otiose.

    Turning to the company cases, the dictum in Morris has lead
    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: 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 R. v. Roffel [1985] V.R. 511; R. 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 Lawrence, 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 R. v. Roffel and the statements of
    principle in R. v. McHugh at p. 393 are not correct in law and
    should not be followed. As for the case of 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 R. v.
    Philippou
    (1989) 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.

    - 47 -

    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.

    - 48 -


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