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Law Report: False statement about past services was an offence: Regina v Bevelectric Ltd and others - Court of Appeal (Criminal Division) (Lord Justice Staughton, Mr Justice McKinnon and Mr Justice Potter), 22 July 1992

Section 14(1) of the Trade Descriptions Act 1968 covers false statements as to the nature of services provided in the past, and not only false statements as to services which are being supplied or to be supplied, if the statements were made in the course of a business or trade.

The Court of Appeal allowed appeals by the appellants, Bevelectric Ltd, Norman NC Broad, and Stirling SC Broad, from their convictions of conspiracy to obtain property by deception but dismissed their appeals from convictions of making a false statement contrary to section 14(1) of the Trade Descriptions Act 1968.

Section 14 of the 1968 Act provides: (1)It shall be an offence for any person in the course of a trade or business . . . (b)recklessly to make a statement which is false; . . . as to any of the following matters . . . (ii)the nature of any services, accommodation or facilities provided in the course of any trade or business . . .'

The first appellant was a company carrying on the business of repairing washing machines for customers. The second and third appellants were a director of the company and an employee respectively.

The policy of the company was that if the motor of a customer's washing machine was not working for any reason, the customer would be advised that a new motor was required. The charge would be pounds 47 after allowing a credit for the old motor.

In each of three cases, the washing machine had a fault which could be easily corrected without obtaining a new motor. The prosecution alleged that pursuant to the first appellant's policy the third appellant did not examine the existing motor to discover what the fault was but would simply advise replacement.

The prosecution alleged deception in that the fault could be remedied at far less expense. The prosecution alleged the offences of 'making a false statement as to services' in that the statement that the existing motor should be replaced was likely to be taken as statement that genuine assessment had been been made of the extent of any necessary repair to the washing machine.

The appellants appealed against conviction on the grounds, inter alia, that there was a lack of a proper direction by the judge at the elements of the conspiracy offence and that the offences under section 14 were not made out.

John Blair-Gould (McMillan Bennett, Telford) for the first and second appellants; Michael Wood (Registrar of Criminal Appeals) for the third appellant; Robin Spencer (Trading Standards Department, Shropshire County Council) for the Crown.

LORD JUSTICE STAUGHTON, giving the judgment of the court, said that the judge was in error when he told the jury that the only issue on the conspiracy count was as to the ingredient of dishonesty. There was an issue as to whether the appellants agreed to make false statements at all, whether deliberately or recklessly, by representing to customers that it was necessary to fit replacement motors when it was not. The jury should have been told that if they were satisfied as to that, they should then consider whether the appellants might nevertheless have been agreeing to act honestly.

The jury did not have properly in mind that an agreement to make deliberate or reckless false statements was an essential element of the conspiracy count. The convictions on that count would be quashed.

Turning to the offences charged under the 1968 Act, the problem arose as to the meaning of 'provided' in section 14(1)(ii). It could be argued that the object of the Act was to prevent traders making false statements as to the services that they were offering to supply, and perhaps also services that they were in the course of supplying. Customers would not then be lured into contracting for services by misrepresentation.

On that construction the sub- section would not cover false statements as to the nature of any services provided in the past: a dry cleaner would not commit an offence if he falsely stated that he had removed all the stains from the customer's trousers in the previous week. However the court was not convinced that the sub- section could, as a matter of policy, only have been concerned with services presently being provided or to be provided in the future.

The cases showed that it had the effect of being aimed at false statements as to the nature of services provided in the past, if the statements were made not in casual conversation of a social nature but as part of a transaction in the course of a trade or business: see Parsons v Barnes (1973) Crim LR 537; Coupe v Guyett (1973) 1 WLR 669; Breed v Cluett (1970) 2 QB 459; R v Sunair Holidays Ltd (1973) 1 WLR 1105; Hall v Wickens Motors (Gloucester) Ltd (1972) 1 WLR 1418 and Fletcher v Budgen (1974) 1 WLR 1056.

The effect of the cases was that a false statement about services already provided was within section 14, if it was connected or associated with the supply of the services in question.

The statements in the present case, that motors needed to be replaced, with the implication that a genuine assessment had been made of the extent of any necessary repair, clearly were so connected or associated.

An offence under section 14(1) could be committed by implication or innuendo. Even if the statement that the motor needed to be replaced was one of opinion, the implication or innuendo that a genuine assessment had been made was one of plain unvarnished fact. The offences charged were covered by section 14.

The conviction on the conspiracy count would be quashed and the other appeals dismissed.