When is Theft not Theft? When it’s fraud

A thief is not necessarily a fraudster, and a fraudster is not necessarily a thief. The difference may be pretty clear to most criminal practitioners, but it wasn’t so easy to distinguish for a handful of legal practitioners in a recent case which reached the Court of Appeal.

The appellant in Darroux v The Crown [2018] EWCA Crim 1009 was a senior member of staff, and very trusted. She managed a housing association charity which ran a residential care home for elderly people. In addition to her usual working hours, she was entitled to claim overtime and staff cover, as well as payment in lieu of holiday. The way her claims for payment were made were patchy and the evidence limited – not helped by changes in staff, and the involvement of an external company providing payroll services.

Following a breakout of Legionella at the care home, a report by the Care Quality Commission highlighted various administrative shortcomings within the Housing Association's operations, and the appellant was given notice of dismissal. A financial audit followed, the upshot of which a claim was made by the Housing Association that the appellant had defrauded the charity by submitting falsely inflated overtime/on call claims and claims in lieu of holiday entitlement to the value of £49,465.

What were the charges?
She was charged with nine counts of theft. However, she denied making any dishonest submission of claims for payment. She said she had been entitled to all the payments made to her, and her claims for payment were properly approved and processed. She was convicted of six counts, and sentenced to 16 months’ imprisonment, and she appealed.

Giving judgment, Davis LJ commented on the particulars of each count and said these “straightaway should have set alarm bells ringing. No one had ever suggested that the appellant had stolen cash in a till or in a safe. The ‘monies’ in question related to the Housing Association's (in credit) bank account. While in lay terms it is commonplace to talk of money in the bank, it is in legal terms elementary that a bank account constitutes a chose in action, representing the debt due from the bank to the account-holder. So on any view the counts were incorrectly particularised”.

The explanation by counsel for the prosecution that theft was the simpler and "more appropriate" charge – even though he conceded that matters could have been charged as fraud under the Fraud Act 2006 - was, said David LJ, “puzzling as it is unsatisfactory”.

What did the Court of Appeal decide?He set out the relevant law on theft, and fraud under sections 1 and 2 of the Fraud Act and associated case law. Notably, no sufficient facts were found to establish appropriation belonging to another for the purposes of theft. On the facts, Davis LJ ruled that the charges were not properly framed in theft, and that this was a clear potential case of fraud by misrepresentation. But that was not charged. The convictions were therefore quashed.

What does this mean?
This is an important case highlighting what should, arguably, have been a clear case of what the appropriate charges should have been on the facts. Criminal practitioners should note the court’s approach to differentiating between theft and fraud, particularly its analysis of appropriation, and how this was applied to the facts in this case.



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