LAW04: Criminal Law (Offences against Property) Fraud and Making off without Payment

LAW04: Criminal Law (Offences against Property) Fraud and Making off without Payment

1. Fraud by false representation. This is defined in s. 2 Fraud Act 2006 as "The offence of fraud by false representation is committed if D; a) dishonestly makes a false representation; and b) intends, by making the representation - i. to make a gain for himself or another, or ii. to cause a loss to another or to expose another to the risk of loss."

In order for the actus reus to be satisfied the D must make a representation which is false. For the mens rea the D must be... 1. dishonest; 2. know or believe the representation to be untrue or misleading; 3. have an intention to make a gain or cause a loss.

Representation. This is defined in s. 2(3) FA2006 "Representation means any representation as to fact or law, including making a representation as to the state of mind of - a) the person making the representation, or b) any other person."

What is a representation as to fact? It is where someone uses a false identity, says they own property when they don't, changes the mileage on a car etc. What is a representation as to law? The D states the law knowing that what they have said is untrue. What is a representation as to state of mind? A customer saying that they will pay their bill when they have no intention to etc. s. 2(4) FA2006 states that a representation can be express or implied.

Representations to machines. The representation can be made to a person or a machine. s. 2(5) FA2006 "A representation may be regarded as made if it (or anything implying it) is submitted in any form to any system or device designed to receive, convey or respond to communications (with or without human intervention)."

What situations does this cover? Any situation where it is possible to obtain property via a machine or the internet. cash from a cash machine; "speaking" to an automated telephone service; ordering goods off the internet; putting a fake coin into a vending machine

Express representations. There is no limit on how the representation could be expressed. It could be written, spoken, posted on a website etc. A written statement could include things such as using a fake identity card or providing a false reference. An express representation could also include giving an excessive quotation for work, especially where it is represented that more work is needed than is actually necessary.

Silverman (1987) The D gave an excessive quote to 2 old sisters for work on their flat. He'd done work for them before and built up some "mutual trust". By giving them an inflated quote he was deceiving them as to the true cost of the work and the amount of profit he was making.

Hamilton (2008) V's son bought some fence panels that were the wrong size and left them at the side of the house until he could replace them. D told V that he had come to collect payment for the panels (they had already been paid for) and then he would arrange for replacements to be delivered. V paid D 60. This was an express representation as D had told V the fence panels hadn't been paid for when they had.

The offence could also be carried out by "phishing". This is where a person sends out an email to a large number of people falsely representing that the email has been sent by a bank. The email then asks for personal information so that the "phisher" can gain access to the Vs' accounts.

Implied representations This is where the representation is made even though the D has not expressly stated it. For example, this may be through the D's conduct.

Barnard (1837) The D went into a shop in Oxford wearing the cap and gown of a "fellow commoner" of the university. He also stated he was a fellow commoner. As a result the shopkeeper gave him goods on credit. It was stated obiter that the D would have been guilty even if he'd said nothing. The wearing of the cap and gown was a "false pretence".

There is no definition of an implied false representation in the Fraud Act 2006 but the explanatory notes of the act state... "An example of a representation by conduct is where a person dishonestly uses a credit card to pay for items. By tendering the card, he is falsely representing that he has the authority to use it."

Lambie (1981) The D had a credit card with a 200 limit. She exceeded this limit and the bank wrote to her and asked her to return the card. She agreed to return it on 7th Dec 1977, but didn't. On 15th Dec 1977 she bought goods worth 10.35 on the card. This is an example of an implied representation by conduct.

Other examples of an implied representation could be... 1. Ordering and eating a meal (there is an implied representation that you will pay for it); 2. Paying by cheque (there is an implied representation that the bank will honour it); 3. Use of a cheque guarantee card (there is an implied representation that the user has the bank's authority to use it).

Intention to pay for a meal. DPP v Ray (1973) The D went to a restaurant with 3 friends. D didn't have enough money to pay but one of his friends agreed to lend him enough to pay for the meal. After eating they all decided not to pay and when the waiter went into the kitchen they all ran off. Their conduct of ordering and eating the meal was an implied representation that they would pay.

Paying by cheque. Gilmartin (1983) The D, a stationer, paid for supplies with post-dated cheques that he knew would not be met. He was impliedly representing that there would be funds in his account to meet the cheques.

Use of a cheque guarantee card. Metropolitan Police Commander v Charles (1976) The D had an overdraft of 100 and a cheque guarantee card that guaranteed cheques worth up to 30. D wrote out 25 cheques for 30 to buy gambling chips and backed each cheque with his card. He knew the cheques would be honoured so there was no fraud relating to the casino.

However, he knew he didn't have enough money in his account and that he would exceed his overdraft limit. D had also been told by his bank manager not to use the card to cash more than one 30 cheque per day. The HL stated there was a false representation that he had the bank's authority to use the card in the way that he did.

False. False is defined in s. 2(2) FA2006 as... "A representation is false if: a) it is untrue or misleading, and b) the person making it knows that it is, or might be, untrue or misleading."

So, it doesn't matter whether anyone believes the lie or not and it doesn't matter whether the D gains any advantage from the representation. It is a matter of fact whether something is true or not.

"Misleading" is not defined in the Fraud Act 2006 but the Government in Fraud Law: Government Response to Consultation (2004) stated a representation was misleading if it was... "... less than wholly true and capable of interpretation to the detriment of the victim."

Gain or loss. The D must intend to make a gain for himself or another; or cause a loss to another; or expose another to the risk of loss.

There must be a gain or loss of money or property. Property is defined in s. 5 FA2006 as: "Any property whether real or personal, including things in action and other intangible property."

Gain means keeping what one has and getting what one doesn't have. Loss means not getting what one might get and parting with what one has. The gain and loss can be permanent or temporary.

Kapitene (2010) D was an illegal immigrant who applied for a job at a cleaning firm. He signed a declaration that he could work in the UK and showed them a passport that had a stamp stating he had indefinite leave to remain in the UK. He began work. D's gain was the wages he has paid. V's loss was the wages paid out.

MENS REA: Dishonesty. The explanatory notes state that the Ghosh test must be used to define dishonesty. 1. Is the D's behaviour dishonest by the ordinary standards of reasonable and honest people? and 2. Was the D aware that his conduct was dishonest by those standards?

Know or believe the representation to be untrue or misleading. The D must know the representation is untrue or misleading or that it might be... this is a purely subjective test (based on what the D believes).

Intention to make a gain or cause a loss. The gain or loss does not actually have to happen. The D only needs to intend for it to happen. It is also unnecessary to prove the false representation caused the V to part with the property.

2. Obtaining services dishonestly. This is defined in s. 11 FA2006 In order to satisfy the actus reus 4 things must be proved... 1. There must be an act. 2. Services must be... 3.... obtained and... 4.... not paid for or not paid in full.

Services. Services are not defined by the FA2006 but the explanatory notes do give examples. using a false credit card to obtain services on the internet; climbing over the wall of a football stadium and watching for free; using a bus pass to get a free/reduced price ride; falsely claiming to be under 14 to see a film for a cheaper price; using a stolen decoder card to receive satellite TV.

Obtains. The service must actually be obtained. This is different from fraud by false representation where only the intention was enough.

Not paid for. The offence is only committed if the D does not pay anything for the service or does not pay in full. If the D has made a false statement but has paid in full then there is no offence committed.

MENS REA: Dishonesty. This is not defined in the act and the explanatory notes do not state whether the Ghosh test should be used or not. But in practice the Ghosh test is used for this offence. 1. Is the D's behaviour dishonest by the ordinary standards of reasonable and honest people? and 2. Was the D aware that his conduct was dishonest by those standards?

Intention not to pay. The prosecution must prove that the D intended not to pay in full or not pay at all. If the D thinks someone else has paid already then the D will not be guilty.

3. Making off without payment. This crime was created after it became obvious that there were gaps in the law under the Theft Act 1968. One of these gaps can be seen in...

Greenburg (1972) The D filled his car with petrol and then drove off. The D was not guilty of theft because when he drove off the petrol belonged to him. Also, it could not be proved that the D was dishonest when he was filling up. D stated he only decided to drive off after he'd filled up. It is unacceptable that these situations exist and so the crime of making off without payment was created.

The offence of making off without payment is defined in s. 3(1) Theft Act 1978 "A person who, knowing that payment on the spot for any goods supplied or service done is required or expected from him, dishonestly makes off without having paid as required or expected and with intent to avoid payment of the amount due shall be guilty of an offence."

ACTUS REUS. 4 elements must be proven to satisfy the actus reus: 1. The D must make off; 2. Goods must have been supplied or a service done; 3. Payment must have been required/expected on the spot. 4. The D must not have paid.

D makes off. The D must have left the scene where payment was expected. This a question of fact...... did the D leave the scene or didn't he? Yes or No?

McDavitt (1981) The D argued with the manager of a restaurant and refused to pay the bill. D got up to walk out but was advised not to as the police had been called. So, he went into the toilet and stayed there until the police arrived. Had D "made off"? No. Why? The D had not left the restaurant.

Goods have been supplied/a service done. If the service is not complete then there is no offence.

Troughton v Metropolitan Police (1987) The D (who was drunk) hired a taxi to take him home but didn't give the driver his address. The driver stopped to get directions from D and an argument occurred. The driver drove to the nearest police station and when the taxi stopped the D ran away. Is D guilty? No. Why? The journey (the service) had not been completed. The driver was in breach of contract and the D did not have to pay the fare.

Payment required on the spot. Payment on the spot must be required or expected. If it is not expected or required then there will be no offence.

Vincent (2001) The D stayed at 2 hotels and didn't pay his bill. The D claimed that he had arranged with the owners to pay when he could. Is D Guilty? No. Why? Payment on the spot was not required or expected. Even if the D had been dishonest when he made the arrangement he still would not be guilty.

D has not paid. This is a matter of fact. Has the D paid or not? The payment must be for the amount due.

MENS REA: Dishonesty. The Ghosh test is used. 1. Is the D's behaviour dishonest by the ordinary standards of reasonable and honest people? and 2. Was the D aware that his conduct was dishonest by those standards?

Knowledge that payment on the spot is required. If the D doesn't know payment on the spot is required then he is not guilty.

Intention to avoid payment. The act only states "with intent to avoid payment of the amount due" but...... in Allen (1985) the HL stated that there must be intent to permanently avoid payment.