Factual and Procedural Background
This opinion addresses a series of appeals and applications heard together in the Court of Appeal Criminal Division, prompted by the House of Lords decision in R v Preddy. The appellants were convicted of offences relating to obtaining property by deception, involving mortgage loans, grants, and obtaining cheques by deception. The convictions were challenged following the House of Lords’ ruling that certain types of property obtained through deception, specifically new choses in action created by financial transactions, do not constitute "property belonging to another" under section 15 of the Theft Act 1968. Several appellants had not given notice of appeal within the statutory time, and applications for extension of time were made. The court considered the safety of the convictions in light of Preddy and whether alternative offences could be substituted under section 3 of the Criminal Appeal Act 1968.
Legal Issues Presented
- Whether the convictions for obtaining property by deception remain safe following the House of Lords decision in R v Preddy, considering the nature of the property involved in mortgage and financial transactions.
- The role and approach of the Court of Appeal in determining the safety of convictions under the amended Criminal Appeal Act 1995.
- The scope and application of the Court’s power under section 3 of the Criminal Appeal Act 1968 to substitute convictions of alternative offences.
- The identification and applicability of relevant alternative offences that might be substituted for the offences charged.
- The circumstances under which the Court may order a retrial following quashing of convictions.
- The appropriateness of extending time for lodging appeals where appellants failed to act within statutory limits.
Arguments of the Parties
Appellants' Arguments
- The appellants contended that their convictions for obtaining property by deception were unsafe following the House of Lords’ ruling in Preddy, which clarified that the property obtained in mortgage fraud cases is a new chose in action and not property belonging to another.
- Some appellants argued that the indictment was defective or the trial judge’s directions were inadequate.
- Applications were made for extensions of time to lodge appeals where statutory deadlines had been missed, relying on changed legal understanding post-Preddy.
Prosecution's Arguments
- The Crown submitted that the convictions should be upheld or, if quashed, that the court should substitute convictions for alternative offences under section 3 of the Criminal Appeal Act 1968.
- The prosecution contended that alternative offences such as furnishing false information, procuring the execution of a valuable security by deception, obtaining services by deception, or conspiracy to defraud might be appropriate substitutes.
- They argued that the Court should be cautious in substituting offences, requiring that the jury could have found the alternative offence on the indictment and must have been satisfied of facts proving it.
- The Crown maintained that the amendment to section 2 of the Criminal Appeal Act 1968 did not change the substantive law on miscarriage of justice and the Court should avoid undue technicality.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| R v Preddy [1996] 3 WLR 255 (House of Lords) |
Clarification that a borrower does not obtain property belonging to another when receiving a mortgage loan; new chose in action created is property of borrower’s bank account. |
Formed the basis for quashing convictions for obtaining property by deception in mortgage fraud cases. |
| R v McHugh (1977) 64 Cr App R 92 |
Technical misdescription of offence does not necessarily amount to miscarriage of justice under previous law. |
Referenced to illustrate the prior approach to conviction safety and proviso application. |
| R v Molyneux (1981) 72 Cr App R 111 |
Omission of statutory reference in indictment did not cause miscarriage of justice. |
Used to show past tolerance of technical errors in indictments. |
| R v Ayres [1984] AC 447 |
Misdescription of conspiracy offence did not cause miscarriage of justice. |
Illustrated distinction between misdescription and unsafe conviction under new law. |
| R v Pickford [1995] 1 Cr App R 420 |
Guilty plea to an offence unknown to law could be upheld if alternative charge was available. |
Referenced regarding the court’s approach to convictions and alternative charges. |
| R v Caslin (1961) 45 Cr App R 47 |
Section 3 power to substitute verdict depends on whether jury must have been satisfied of facts proving alternative offence. |
Guided the court’s cautious approach to substitution of verdicts. |
| R v Deacon (1973) 57 Cr App R 688 |
Court cannot substitute verdict on general grounds; substitution only if alternative verdict would have been inevitable. |
Reinforced the strict conditions for substitution under section 3. |
| R v Lillis [1972] 2 QB 236 |
Section 6(3) Criminal Law Act 1967 allows alternative verdicts where indictment includes other offences expressly or by implication. |
Explained statutory basis for alternative verdicts and inclusion of offences. |
| R v Wilson [1984] AC 242 |
Explained express and implied inclusion of offences in indictment for alternative verdicts. |
Applied to assess whether offences charged included alternative offences for substitution. |
| R v Savage [1992] 1 AC 699 |
Followed Wilson on alternative verdicts. |
Supported the legal framework for considering alternative offences. |
| R v Mandair [1995] 1 AC 208 |
Applied principles from Wilson and Savage on alternative verdicts. |
Further authority on the scope of alternative offences. |
| R v Mallett [1978] 1 WLR 820 |
Interpretation of Section 17 Theft Act 1968 regarding falsification of accounts. |
Used to clarify mens rea and elements of furnishing false information offence. |
| Attorney General's Reference (No.1 of 1980) (1981) 72 Cr App R 60 |
Mens rea for falsifying accounts does not include knowledge of purpose for which document is made. |
Clarified mental element for Section 17 offence. |
| R v Halai [1983] Crim LR 624 |
Mortgage advance not a service for purposes of Theft Act 1978 section 1. |
Discussed and ultimately overruled in this opinion as no longer good authority. |
| R v Widdowson (1986) 82 Cr App R 314 |
Hire purchase agreement regarded as obtaining services by deception. |
Distinguished from mortgage advances and supported broader interpretation of services. |
| R v Teong Sun Chuah [1991] Crim LR 463 |
Held Halai was decided per incuriam. |
Supported the court’s rejection of Halai in this opinion. |
| R v Manjdadria [1993] Crim LR 73 |
Telegraphic transfer is not a valuable security for section 20 Theft Act 1968. |
Applied to distinguish types of property involved in deception offences. |
| R v King [1992] QB 20 |
CHAPS order held to be a valuable security. |
Used to analyze the nature of valuable securities in financial transactions. |
Court's Reasoning and Analysis
The court began by acknowledging the binding effect of the House of Lords decision in R v Preddy, which held that the property obtained in mortgage fraud cases, being a new chose in action created in the borrower's bank account, does not constitute property belonging to another under section 15 of the Theft Act 1968. This reasoning extended to all appellants whose convictions depended on obtaining such property by deception, rendering their convictions unsafe.
The court analyzed the amended statutory framework governing appeals, emphasizing that the sole question is whether the conviction is unsafe. The court rejected reliance on technical errors or misdescriptions of offences as grounds to uphold convictions if the legal basis for conviction was invalid.
Regarding substitution of alternative offences under section 3 of the Criminal Appeal Act 1968, the court outlined the strict conditions: the alternative offence must be one the jury could have found on the indictment, and the jury must have been satisfied of facts proving it. The court examined the indictments and facts of each case to determine if substitution was appropriate.
For the first appellant, the court found no basis to substitute offences such as attempted theft or securing remission of liability by deception, but considered furnishing false information as a potential alternative. However, the indictment did not expressly or impliedly include this offence, and the evidence was insufficient to satisfy the jury on this offence. Thus, no substitution was made.
For the second appellant, the court similarly found that theft and securing remission of liability were inappropriate charges. The court considered furnishing false information and procuring execution of a valuable security. The latter was applicable for counts involving payable orders, but the court lacked evidence of the payable orders themselves and thus did not substitute verdicts. No substitution was made for furnishing false information due to lack of jury direction and evidence.
For the third appellant, the court quashed the conviction for attempted theft of a credit, applying Preddy’s reasoning. A proposed substitution of an attempt to steal a chose in action was rejected as inconsistent with the indictment. The court noted that the appellant might have been charged with an offence under the Forgery and Counterfeiting Act 1981 but did not consider substitution under that Act.
For the group of appellants convicted of obtaining or attempting to obtain cheques by deception, the court found their convictions unsafe under Preddy. The court ruled that convictions under section 15 should be quashed and substituted with convictions under section 20(2) of the Theft Act 1968 for procuring execution of a valuable security by deception, where cheques were obtained. The court reasoned that the indictment counts impliedly included this offence and that the defence would not have been materially affected by such a charge. Substitution was not made where only attempts were charged.
The court declined to order retrials in all cases, considering the interests of justice and the time elapsed. It granted extensions of time for appeals where appellants had missed statutory deadlines, noting the changed legal landscape post-Preddy.
The court expressed strong support for legislative reform to address anomalies exposed by Preddy and acknowledged the Law Commission’s prompt proposals for remedial legislation.
Holding and Implications
The Court quashed the convictions of all appellants for obtaining or attempting to obtain property by deception under section 15 of the Theft Act 1968, finding them unsafe in light of the House of Lords decision in R v Preddy.
For the group convicted of obtaining cheques by deception, the Court substituted convictions under section 20(2) of the Theft Act 1968 for procuring the execution of a valuable security by deception where appropriate.
The Court refused to substitute alternative offences in other cases due to failure to meet statutory conditions for substitution.
No retrials were ordered, and extensions of time for appeals were granted where necessary.
The decision directly affects the appellants by quashing unsafe convictions and, where applicable, substituting appropriate alternative convictions. The Court highlighted the need for legislative reform to clarify and modernize the law on deception offences involving financial transactions but did not set new precedent beyond applying existing authority.