This paper will summarise Zach Leggett’s points of view on the Darroux case, based on his article “Theft: appropriation through submitting false claims? Darroux v R”. The key arguments outlined by the author will be identified and then critically analysed. For this purpose, the facts of the cases of Gomez and Hinks will be summarised briefly, and by emphasizing the similarities and differences, their decisions will be compared with the judgment in the Darroux case. Both narrow and wide approaches taken in various cases of the Court of Appeal (CA) will be contrasted by analysing the reasons for the judgment in Darroux. Then the differences between theft and fraud will be explained, along with the policy discussions when the Fraud Act was introduced. The issues presented where there were convictions for cases that should have been fraud rather than theft will be analysed, concentrating on why remoteness is important to distinguish them. It will pinpoint the reasons why the prosecution should charge the correct way to avoid issues with convictions. Also, the leading case R v Preddy will be summarized concentrating on the problems created by this decision. Another leading case, R v Williams will be contrasted accentuating on how this decision remedies the problem created by the decision in Preddy. The essay will discuss Catherine Elliot’s views in her article “Theft: appropriation and remoteness”, and focus on the reasons why the decision in R v Williams closed off some of the problematic loopholes created in Preddy. The judgment of the Court of Appeal in the Darroux case will be analyzed with a focus on why it departed from the decision in R v Williams and what is the difference between the two decisions. The opinion of the author of this essay will be expressed all the way through the paper while comparing it to the points of view of the authors of the legal articles subject to this analysis.
R v Daroux is a modern-day criminal law case where between 2011 and 2014 the D had falsely claimed from her employer overtime, on-call and holiday payments amounting to £49,465. She was charged with nine counts of theft contrary to s.1 of the Theft Act. D was found guilty of six of them and was sentenced to 16 months imprisonment. Consequently, she appealed on the grounds that theft was an unsuitable indictment, and although the jury had found her to be dishonest, The Court of Appeal judged that the D had not done anything which constitutes an appropriation in the sense defined by law because she did not keep the money permanently. Therefore her conviction was quashed and the Court concluded that there was no appropriation. The Court of Appeal criticised the trialling court’s decision that D was charged under s.1 of the Theft Act 1968 and accepted that a charge under ss. 1 and 2 of the Fraud Act 2006 would have been more appropriate (at ). However, D was not charged contrary to the Fraud Act.
In his article “Theft: appropriation through submitting false claims? Darroux v R” Zach Leggett who is a Senior Lecturer in Law at the University of Sunderland, reflects upon the approach of the Court of Appeal when deciding on the fine distinction between theft and fraud. Departing from the decision in R v Darroux Leggett criticizes such an interpretation by the judges and in his opening argument he maintains that “the court takes a narrow view of appropriation”. This sounds like a strong surmise because quite often stealing is associated with physically picking up something and assuming the owner’s right. The law differentiates between tangible and intangible property and s.4 of the Theft Act provides that “things in action” also constitute property. D has stolen “chose in action” which is something intangible and although it cannot be seen it still can be appropriated. However, by merely filling out the relevant and fraudulent claim forms, D was not assuming any rights of the owner concerning the bank account. Therefore, the prosecution should have given an alternative to the jury but instead, they only charged D with theft.
The second key argument advanced by Leggett is that a narrow view of appropriation “sits uneasily with cases such as Gomez and Hinks”. In the case DPP v Gomez D was an assistant manager at a shop. Knowing that a customer was shopping using stolen cheques D convinced the manager to allow the sale. Consequently, the cheque was not honoured. D was charged with theft and was found guilty. He appealed arguing that it was his manager who approved the sale, but the House of Lords held that the permission had been obtained fraudulently and therefore it upheld the previous decision judging that even acts done with the owner’s consent can constitute appropriation. Gomez is a leading case for dishonest appropriation, but that decision dates back thirteen years before the Fraud Act came into existence. Similarly, in the case R v Hinks, the judgment of the Court of Appeal had been made eight years before the Fraud Act. In this case, D appropriated £60,000 from V, a person of low intelligence, who had been influenced by D in such a way that within seven months V had been withdrawing monies out of his savings and depositing them into D’s bank account. Although this happened with V’s consent D was charged with theft, was convicted, and then appealed arguing that she was receiving gifts from V. The Court of Appeal upheld her conviction and held that appropriation may occur even with V’s consent. Comparing the judgements of these three cases, it looks that the court did take a narrow view in the Darroux case in contrast with the wider view in Gomez and Hinks. Both Ds were convicted of theft because at the time the Fraud Act did not exist. However, in Darroux the Act was available, therefore D should have been charged with fraud.
Legget’s further arguments are that the Court of Appeal “is minded to create a distinction between theft and fraud”, and that it is “reluctant to use s. 1 of the Theft Act 1968 as a catch-all offence.” Theft and fraud (by false representation) have their statutory definitions accordingly under s.1 of the Theft Act and s.2 1968 of the Fraud Act 2006.” Both offences are similar to some extent and before 2006 they were charged under the Theft Act 1968. However, while fraud includes dishonest behaviour aiming to gain property, theft is a dishonest appropriation of property that belongs to somebody else. There is a fine distinction between these offences and charges under the same Act led to criticism and debates. One of the problems was the overlap between theft and fraud because theft implies there is no consent when a property is appropriated whereas in fraud there is consent and the victims voluntarily give their property to the fraudsters. For example, in Gomez and Hinks which are cases before the Fraud Act, the victims consent to the appropriation but yet they were charged with theft. Therefore, the Law Commission recommended that a new statutory law should be introduced and the Fraud Act came into existence. Before that fraud offences were charged as result offences but now the new law distinguishes between result crimes and conduct offences. This way larger criminal conduct is covered, however, there was concern that the statutory definition was lacking detail and needed further clarification. Since theft is no longer a catch-all offence the prosecution should charge the correct way to avoid issues with convictions. The charges should correspond to the seriousness of the offence which will enable the courts to make the correct judgment. In Darroux the defendant walked away as a free person. Should she have been charged with the correct offence – fraud by false representation, depending on the culpability level, she should have been sentenced to a maximum of 10 years imprisonment and a fine. Another reason that is worth pointing out is that the length of the sentence for fraud is longer. If not charged correctly it could lead to many guilty pleas for theft which is a shorter imprisonment term. Therefore, Zach Leggett’s arguments that the courts willingly distinguish between theft and fraud, and reluctantly use s.1 of the Theft Act as a catch-all offence are well-grounded and make sense. The charges should be done correctly, and the new law provides all the prerequisites for that.
Legget’s final argument is that “Whereas R v Williams closed off some of the problematic loopholes created in Preddy, the strict approach in Darroux is potentially opening them back up again.” In R v Preddy the defendants submitted mortgage applications that contained false data and Ds knew that these statements were false. Subsequently, they were charged with theft under s. 15(1) of the Theft Act 1968. They appealed on the basis that no property had been obtained and the issue of appropriation stands out. The Court of Appeal had to judge whether the debiting of the defendants’ bank accounts and reciprocally the crediting of the victims’ bank accounts constituted appropriation under the Theft Act. In his judgement Lord Goff answered in the negative, stating:
“When the bank account of the defendant (or his solicitor) is credited, he does not obtain the lending institution’s chose in action. On the contrary that chose in action is extinguished or reduced pro tanto, and a chose in action is brought into existence representing a debt in an equivalent sum owed by a different bank to the defendant or his solicitor. In these circumstances, it is difficult to see how the defendant thereby obtained property belonging to [the lender].”
This decision created problematic loopholes considering chose in action making it possible to steal property that does not belong to the defendant. Such property could be cheques or bank transfers, or other transactions which are not physically tangible. This strict approach in Preddy opened the door for more problems. This case “had created unnecessary loopholes for defendants to avoid criminal liability” because while the monies in the bank account constitute a property, with things in action it is tricky to prove appropriation. However, the decision in R v Williams closed this problematic loophole – the court held that D obtained money dishonestly by overvaluing his work. Moreover, the court identified the moment when the appropriation happened, and it was at the time D tried to cash in the cheques. Such a decision restricted Preddy’s reach. The bank account balance and the transaction constitute property belonging to the victim. When D withdraws money from V’s account he is actually stealing, and it is enough for a strong theft conviction. The Court departed from two cases related to the appropriation of bank balances where the conviction for theft of a balance in a bank account was upheld. The major concern of the judges was the language used and they were inclined to take a narrow view by differentiating between the words “obtaining” from “appropriation”. My opinion on this matter is that the narrow approach works well because when an issue is framed into stricter limits there is less room for interpretation and the law is clearer. However, the strict approach would lead to the absurd result that chose in action would not amount to appropriation. Therefore, the strict approach should be preferable where certain offences should be caught with Theft Act. This approach does not reflect the modern-day level of development of our society. Our lives have been transferred into the virtual world of the world wide web and the products and services we use there are intangible. In the future, this sector will develop even more innovations which means that more products and things in action will be introduced and the law should be able to respond to this challenge. Applying a strict approach contrasts with the decision in Preddy and makes it easier for other cases to “fail” on the same principles. As much as I agree with the narrow viewpoint, I think that courts should be flexible and a mix of the two concepts with the narrow one prevailing will be the best option.
Catherine Elliott identifies a serious issue in her article – the Court of Appeal is inclined to “create a boundary between theft and fraud.” Therefore the judges are looking at some acts as physical appropriation while others are remote. According to Elliot, such an approach would “set the law back 200 years (at ) which “sits uneasily with the existing case law such as Hinks (at )”. As for remoteness, she considers that the judgment places considerable emphasis on the issue of remoteness, primarily to distinguish theft from fraud offences. It also identifies that the difference between theft and fraud is finer because “the ruling that the consent of the owner to the taking of their property is irrelevant.” The leading cases of Hinks and Gomez which set out this precedent should be reconsidered while bearing in mind that attempts to differentiate theft from fraud based on remoteness should be artificial. In Darroux the judges departed from the precedent of Briggs, which did not meet the requirement that an act should be done and considered D’s actions as too remote. However, in Darroux since the defendant did not have direct control over the bank account this does not constitute an appropriation. The question of when the stealing of the chose in action has taken place makes this case even more onerous. The Court of Appeal considers that the appropriation cannot take place once the money has arrived in D’s bank account because at that moment it constituted a property that no longer belonged to another.
Leggett is asking the rhetorical question of whether we are going back to the days when “appropriation” was only a dictionary meaning? The dictionary definition refers to a “taking”’, but the attitude of the Court of Appeal suggests that it is not necessary that physical “taking” needs to happen for there to be an appropriation. Certain acts will be treated as too remote to amount to an appropriation but the cut-off point between those acts that can amount to an appropriation and those that cannot because they are too remote is not sufficiently clear, for example in the case of Briggs mentioned in Elliott’s article where V receives a payment by deception and there is no appropriation by the D.
Considering the importance of differentiating between theft and fraud especially in more sophisticated cases, involving things in action, I agree with most of the key arguments of Zach Leggett and Catherine Elliot. The Court of Appeal did take a narrow view of appropriation when deciding on the Darroux case because stealing is no more just the physical picking up of something and claiming the rights of ownership over it. Nowadays such a narrow view of appropriation sits uneasily with cases such as Gomez and Hinks because technologies have advanced, and we possess property and products which are intangible. Although we cannot see them or physically touch them, they can be appropriated. There is a fine distinction between theft and fraud and the Court of Appeal is reluctant to rely on s. 1 of the Theft Act 1968 as a catch-all offence. Preddy opened problematic loopholes which were consequently closed by R v Williams, however, Darroux reopened them again due to the approach of the Court of Appeal. Leggett’s arguments are convincing and well-grounded, supported by reasonable facts.
Word count: 3143, 2760 (excluding footnotes and bibliography)
Table of legislation
Theft Act 1968, s 1
Theft Act 1968, s 4
Fraud Act 2006, s 2
Theft Act 1968, s. 15(1)
Table of Cases
DPP v Gomez  AC 442 House of Lords
Hilton  2 Cr App R 445
Kohn (1979) 69 Cr App R 395
R v Briggs  Crim LR 495
R v Darroux (Pamela)  EWCA Crim 1009;  2 Cr. App. R. 21 (CA (Crim Div)
R v Hinks  EWCA Crim 2105
R v Preddy  A.C. 815
R v Williams  1 Cr App R 23
Clarke M. A., Hooley R. J. A., Munday R. J. C., Commercial Law: Text, Cases, and Materials (OUP Oxford; 5th edn 2017)
Elliott C, Theft: appropriation and remoteness, J. Crim. L. 2004, 68(2), 103-105
Law Commission, Fraud (No 276, 2002)
Leggett Z, “Theft: appropriation through submitting false claims? Darroux v R”  The Journal of Criminal Law, vol. 82, 4: pp. 287-291. , First Published August 27, 2018
Sentencing Counsil, “Fraud” (1 October 2014 ) <https://www.sentencingcouncil.org.uk/offences/magistrates-court/item/fraud/> 12 April 2022