Law Report: Theft despite owner's consent: Regina v Gomez - House of Lords (Lord Keith of Kinkel, Lord Jauncey of Tullichettle, Lord Lowry, Lord Browne-Wilkinson, Lord Slynn of Hadley), 3 December 1992.

A person who by dishonest deception induces the owner of goods to part with them appropriates them and may be guilty of theft because an act may be an appropriation within section 1(1) of the Theft Act 1968 even though it is done with the consent or authority of the owner.

The House of Lords (Lord Lowry dissenting) allowed the Crown's appeal from the Court of Appeal's decision ((1991) 1 WLR 1344) to quash the defendant's convictions for theft.

Section 1(1) 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.'

The defendant, an assistant manager at an electrical shop, was asked by B to supply goods in exchange for two building society cheques which the defendant knew were stolen. The defendant obtained authority from the shop manager to supply the goods, without telling him the cheques were worthless. The defendant was charged with theft, contrary to section 1(1).

The trial judge rejected the defence submission that there was no 'appropriation' within the meaning of section 1(1) because the manager had authorised the transaction, whereupon the defendant pleaded guilty. On his appeal the Court of Appeal (Criminal Division) quashed the convictions on the ground that there was no appropriation.

Michael Austin-Smith QC and Philip Shorrock (CPS) for the Crown; Anthony Hacking QC and James Pavry (Vasallo & Dillon) for the defendant.

LORD KEITH said that in Lawrence v Metropolitan Police Commissioner (1972) AC 626, the House of Lords decided that it was no longer an ingredient of the offence of theft that the taking should be without the owner's consent and that an appropriation 'may occur even though the owner has permitted or consented to the property being taken'.

In R v Morris (1984) AC 320, the House of Lords decided that the concept of appropriation involved 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. However there were observations in Morris which were unnecessary and incorrect.

While it was correct to say appropriation included an act by way of adverse interference with or usurpation of the owner's rights, it did not necessarily follow that no other act would amount to an appropriation and in particular that no act expressly or impliedly authorised by the owner could do so. Lawrence was a clear decision to the contrary since it laid down unequivocally that an act might be an appropriation notwithstanding that it was done with the consent of the owner. The actual decision in Morris was correct but it was erroneous and unnecessary to indicate that an act expressly or impliedly authorised by the owner could never amount to an appropriation.

In a case where the owner of goods was induced by fraud to part with them to the rogue, Lawrence made it clear that the consent to or authorisation by the owner of the taking by the rogue was irrelevant. The taking amounted to an appropriation within section 1(1). Lawrence also made it clear that it was no less irrelevant that what happened might also have constituted the offence of obtaining property by deception under section 15(1). Lawrence must be regarded as authoritative and correct.

Accordingly, when theft was alleged and that which was alleged to be stolen passed to the defendant with the consent of the owner, but that had been obtained by a false representation, an appropriation had taken place within the meaning of section 1(1), and such a passing of property need not necessarily involve an element of adverse interference with or usurpation of some right of the owner.

LORD BROWNE-WILKINSON said in the company fraud cases, the re-establishing of the decision in Lawrence rendered 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 would have appropriated the property of the company.

The question would be whether the other necessary elements were present: was such appropriation dishonest and was it done with the intention of permanently depriving the company of such property? It would offend both common sense and justice to hold that the very control which enabled such people to extract the company's assets constituted 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 had consented to his own wrongdoing.

LORD JAUNCEY and LORD SLYNN agreed.

LORD LOWRY, dissenting, said that the word 'appropriate' bore the meaning 'take possession of, take to oneself, especially without authority'. The act of appropriating property was a one- sided act, done without the consent or authority of the owner. The absence of consent on the part of the owner was already inherent in the word 'appropriates' properly understood.

It was best to prosecute under section 15(1) in cases where deception was alleged to have been practised. In company fraud cases, the mistake was to say that a 'directing mind' accused was to be treated as having validly consented on behalf of the company to his dishonest taking of the company's property.

Ying Hui Tan, Barrister