Property offence - Fraud

Question 1

What is Fraud?

Answer 1

Fraud Act 2006 - S.1
A person is guilty of fraud if he is in breach of any of the sections listed in subsection 2 which provide for different ways of committing the offence

The sections are:

(a) section 2 (fraud by false representation) misrepresents the truth
(b) section 3 (fraud by failing to disclose information)
(c) section 4 (fraud by abuse of position) failure to safeguard the financial interests of another

Question 2

Fraud act 2006 - S.1

Answer 2

“A person is in breach of this section if he (a) dishonestly makes a false representation and (b) intends to make that representation (i) to make a gain for himself or another or (ii) to cause loss to another or to expose another to a risk of loss”

What are the actus reus elements and the mens rea elements of fraud?
Actus reus:
Makes a false representation

Mens rea:
Cause loss
Intention
Dishonesty

Question 3

Actus Reus

Making a false representation

Answer 3

Representation = the communication or presentation of info to others. (This might be words, conduct or a combination of the two)

Two elements of false representation

1) It must be untrue or misleading
2) It can be expressed or implied
- express is for example a random person coming into a classroom and saying that they are the teacher even though they aren’t - stating
- implied is for example a random person coming into a classroom but they set up the classroom as if they are the teacher but doesn’t say that they are the teacher. - putting yourself in a position to make it seem as if you are in a certain role

Question 4

Actus reus

Untrue or misleading

Answer 4

According to S.2(2)(a) of the Fraud Act 2006, a presentation is false if it is untrue or misleading. I.e. a false representation involves creating an impression in the mind of another that something false is true. This can be committed through words spoken or through conduct acted out.

Tip: When dealing with this actus reus, look at what the defendant has said and done and think about what impression that would have created in the mind of the observer.

Question 5

Actus reus

Expressed and implied

Answer 5

An express false representation is one in which the falsity is explicitly communicated to the target of the deception and it tends to involve a positive action

An implied representation tends to be more passive and will typically involve the defendant giving a false impression

Question 6

Mens rea

Answer 6

Remember: Merely making a false representation is not itself fraud - it has to be accompanied by a specific state of mind. This is because false representation can be made by accident:

Inadvertent false impression - a technician mounts the lecture platform and you assume he is the lecturer. He does not mean for you to assume this.

Mistake of fact - you say you have paid your university fees in the honest belief that you thought your parents had made the payment for you

Misunderstanding of the situation - you are a hotel guest and enter a room with a sign saying ‘Guests Only’. You are asked if you are a guest and say yes, believing that they meant guest of the hotel. They meant ‘guest of the wedding reception; that is occurring in his room. You receive a glass of Champaign not meant for you, as a result.

Question 7

Mens rea:

Answer 7

In each of these instances, at least one of the elements of men’s rea is missing. The men’s rea for fraud by false representation requires:

The knowledge that the representation is false
Dishonesty (the ‘Ivey’ test)
Intention to make a gain or cause a loss

Question 8

Mens rea:

How to work it all out

Answer 8

Example:
If you were aware that the champagne reception was for wedding guests only and told a deliberate lie to gain admittance, you would have fulfilled the requirements for the actus reus (as you made a false representation that you were a guest of the wedding).

You would also have fulfilled two of the 3 elements of the men’s rea for fraud: (as you are aware that the representation was false and this is likely to fall under the test for dishonesty).

So, your liability for Fraud would depend on your motivation for gaining admittance. If you were aiming at freeloading the champagne then intent to make a gain or cause a loss (of champagne) is established. However, if you just wanted to see what the bride was wearing, this final piece of men’s rea would not be established and you are not liable for fraud.

Question 9

Scenario:

Answer 9

A person goes into a restaurant, sits down and orders a meal with every intention of paying at the end of the evening. However, during the course of the evening, he has a change of heart and decides to slip out without paying. Subsequently, he gets up and sneaks out of the restaurant.

Questions:
1) Did he make a false representation (implied or explicit)?
He did not make a false representation, the reason for this is because as he entered the restaurant everyone would expect him to pay at the end of the

2) Did he act dishonestly?
3) Did he know that the representation was fake?
4) Did he intend to make a gain or cause a loss?

Question 10

Knowledge that the representation is false

Note: it is the point at which the false representation was made that defines liability for Fraud.

Answer 10

Therefore, if the person had every intention of paying for his meal when he entered the restaurant and ordered his meal, then he is not liable for Fraud.

In this instance, you would look to see whether his actions fall under the actus reus and mens rea for THEFT:

Actus reus:
Appropriates
Property
Belonging to another =

Mens rea:
Dishonesty
Intention to permanently deprive

Question 11

Knowledge that the representation is false

Note: it is the point at which the false representation was made that defines liability for Fraud.

Answer 11

Therefore, if the person had every intention of paying for his meal when he entered the restaurant and ordered his meal, then he is not liable for Fraud.

In this instance, you would look to see whether his actions fall under the actus reus and mens rea for THEFT:

Actus reus:
Appropriates
Property
Belonging to another =

Mens rea:
Dishonesty
Intention to permanently deprive

Question 12

Booth & Anor v R [2020]

Answer 12

Booth & Anor v R [2020] confirmed Supreme Court comments in Ivey v Genting Casinos (UK) [2017] that the new test for dishonesty, as set out in Ivey, is:

1) what was the defendant’s actual state of knowledge or belief as to the facts
2) was his conduct dishonest by the standards of ordinary decent people?

Question 13

Example

Answer 13

Warren is desperately short of money. He sneaks into his sister’s bedroom, removes the gold necklace that was given to her for her 21st birthday and takes it to a shop that buys second-hand jewellery, hoping to sell it. Warren tells the jeweller that the necklace was left to him by his grandmother and agrees to wait whilst it is being valued. He grows nervous because he thinks that the jeweller is looking at him suspiciously so he grabs the necklace and runs out of the shop.

Can we establish liability for fraud here?

Warren had a false representation, the reason for this is because of the fact that he had not only committed theft and stole the necklace after he had stolen it and taken it to the jeweller and told the jeweller a lie of how he had the necklace, shows that he had a false representation. This shows the fact that they have the actus reus.

To prove that Warren had the mens rea, we must show that he had dishonesty, knowing that the representation is false, as well as the intention to make a gain or cause a loss. He was being dishonest towards the jeweller, as he had lied about where he had gotten the necklace from. This shows that he has one of the mens rea. He also shows that he knows that he was showing false representation, as he knows where he had gotten the necklace from and as well as that he knew that he was going to cause a loss towards his sister, meaning that he had the actus reus for false representation. We also got to prove the last actus reus, this would be the intention to make a gain or cause a loss, when Warren had taken the necklace he had known that he was going to cause a loss towards his sister, and the fact that he will be stealing from her. The fact that he decided to take it to a jeweller to sell the item, shows that Warren had the intention to cause permanent loss.

Question 14

Answer to warrens case

Answer 14

Actus reus:
Warren had made a false statement by making out that the necklace was his to sell.

Men’s rea:
He is aware that this is a false representation as he knows it belongs to his stister
He intends to make a gain as he hopes to sell it.
It would be reasonable to conclude that he knew that selling property not belonging to him would be considered dishonest according to the ordinary standards of reasonable people. (Further evidence: (!) he ‘sneaks’ into his sister’s bedroom to take it, (2) he lies about its previous owner, (3) runs out of the shop when he thinks the jeweller is suspicious).

Question 15

Fraud act 2006 s.5(2) and s.5(3)

Answer 15

s.5(2)
‘Gain’ or ‘loss’ (A) extends only to gain or loss in money or other property (b) include any such gain or loss whether temporary or permanent and ‘property’ means any property whether real or personal (including things in action and intangible property).

s.5(3)
‘Gain’ includes a gain by keeping what one has as well as a gain by getting what one does not have.

Question 16

Warren

Answer 16

Even though he had not gained anything from selling his sister’s necklace, as he had taken it and ran out of the shop, he still had the intention to make a profit from selling her necklace. He still intended to sell them and gain something from selling the necklace.

It would be reasonable to conclude that he knew that selling property not belonging to him would be considered dishonest according to the ordinary standards of reasonable people.

Question 17

“A person who, knowing that payment on the spot for any goods supplied or service done is required to expected from him, his honestly makes off without having apid as required or expected and with intent to avoid payment of the amount due shall be guilty of an offence”

What are the actus reus elements and the mens rea elements of fraud here?

Answer 17

.Actus reus:
Goods supplied/services done
Making off from a spot where payment is required
Without paying as required expected

Men’s rea:
Dishonesty
Knowing that payment on the spot was required/expected
Intention to avoid making payment

Question 18

Making off without payment

Answer 18

This section was added to the theft act to close the loophole left by the ‘obtaining by deception’ offences as these required that the defendant practised a deception prior to obtaining the property.
In instances where the defendant obtained property with lawful intent but then decided to default on payment, there was no basis upon which to impose liability.

Making off without payment was introduced and it tended to involve the initially lawful assumption of irretrievable property:
Petrol: mingles with the petrol already in the tank - thus is impossible to return
Restaurant food: cannot be returned after eating
Services: cannot be given back after they have been performed

Answer 19

If someone used a self-service pump to fill his car with petrol in the knowledge that he did not have the means to pay and with the intention of driving away without paying, then clearly he had made a false representation as is implied in his conduct that he is an honest customer. This would give rise to liability under s.2 of the Fraud Act 2006.

if the customer had filled his car with petrol fully intending to pay for it but then changed his mind and left without paying, he cannot be liable for fraud because there is no false representation - at the time that he presented by his conduct that he was an honest customer this was not false because he intended to pay.

As this does not fall within fraud, by false representation, the offence of making off without payment has survived to deal with this and similar situations.

Question 20

Making off without payment: Actus reus

Answer 20

Good supplies: property/services retain the same meaning

making off from the spot where payment is expected: this is usually obvious. In Aziz{1993], this ‘spot’ was held to be mobile in relation to taxi journeys - not just at the point of the defendant’s stated destination.

Without paying as required: making off does not require a dramatic exit (although these are often evidence of wrongdoing). The defendant must make no offer of payment: an agreement to return later, even if honest, defeats the offence (Vincent [2001]).

Question 21

Making off without payment: Mens rea

Answer 21

Dishonesty: uses the ‘Ivey; test.

The knowledge that payment on the spot was required: is closely linked with dishonesty. A defendant who thought, for example, that a friend would be paying the bill does not know that payment is required/expected, thus may not be considered to be dishonest if he left without making payment.

Intention to avoid payment: Requires intent to avoid payment permanently. (In Allen [1985], it was held that an intention to temporarily avoid payment will not suffice so a defendant who left a hotel owing a large bill which he genuinely hoped to be able to pay at a later date was not liable.

Question 22

Making off without payment: Mens rea

Answer 22

Dishonesty: uses the ‘Ivey; test.

The knowledge that payment on the spot was required: is closely linked with dishonesty. A defendant who thought, for example, that a friend would be paying the bill does not know that payment is required/expected, thus may not be considered to be dishonest if he left without making payment.

Intention to avoid payment: Requires intent to avoid payment permanently. (In Allen [1985], it was held that an intention to temporarily avoid payment will not suffice so a defendant who left a hotel owing a large bill which he genuinely hoped to be able to pay at a later date was not liable.

Question 23

Huw finds a wallet on a train on his way to a job interview. It contains £20 and a credit card. Huw uses the cash to buy himself lunch. Huw then decides to buy an expensive watch from an exclusive jewellers using the credit cared. He selects a watch costing £3,500 and hands the credit card to the sales assistant, but before the cared is swiped through the machine Huw loses his nerve. He shouts “I’ve changed my mind – that watch doesn’t suit me’ and runs out of the shop leaving the card behind. Unnerved by his experience, Huw is nervous during his job interview. He realises that the interview is going badly so he decides to lie about his exam results to improve his chances of getting the job. Huw tells the interviewer that he has 4 A grades at A Level and a first class degree in law. The interviewer does not believe him as Huw had already completed an application form on which he stated (truthfully) that he had 2 Bs and a C, and a lower second class degree. Huw is not offered the job.

Discuss Huw’s liability for property offences.

Answer 23

Huw had committed theft, as he had taken the wallet that was left in the middle of the train station, the reason why it is not robbery or burglary is because of the fact that there was no force that was included in the theft and as well as the fact that he wasn’t a trespasser in the train station. Huw had intended to take the wallet permanently from the person that had lost the wallet,

We will need to make sure that he had the both mens rea and the actus reus to be able to say that he had committed the offence. We need to make sure that he has the actus reus, appropriation and as well as property. We will need to make sure that he has mens rea as well of which are, dishonesty and intention to deprive.

Theft:
Appropriation:
As he Huw is using the property as his own he is then appropriating the owners right over the property. Even though he has found it and doesn’t know who the owner is of the property, does not mean that he is able to take the property and do what he pleases with it. He should of taken it to a help desk within the train station so then that property would be able to go get to the property back. He had no rights over the property meaning that he should had of taken it to go and use the credit card.

Belonging to another:
The fact that

Property:
He had stolen Personal property that belonged to someone else, its not the fact that he had found it of which makes it that he had committed theft, but what he does after that point of finding it.

Dishonesty:
Huw was dishonest as he had stolen that wallet with the card and the fact that he had used the card to buy himself lunch means that he was dishonest with who he is as that card doesn’t belong to him, this would be the courts and jury decision to decide whether or not he has been dishonest. Using the reasonable man we can see that someone who was reasonable would have taken the wallet to someone who would be able to keep hold of it and keep it safe. Or he could had tried to contact the owner of the wallet.

Intention to deprive:
Huw had the intention to deprive the wallet and money from the owner of the property. From taking the money and using it to buy lunch means that he has deprived him of the £20 as he had used it.

Fraud: