No: 9702349/X2, No: 9702356/X2, No: 9702438/X2
Neutral Citation Number: [2000] EWCA Crim 3530
IN THE COURT OF APPEAL
CRIMINAL DIVISION
Royal Courts of Justice
The Strand
London WC2

Date: Friday 6th March 1998
 
B E F O R E :

LORD JUSTICE MANTELL
MRS JUSTICE EBSWORTH
and
HIS HONOUR JUDGE STEPHENS QC
(Acting as a Judge of the Court of Appeal Criminal
Division)
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R E G I N A

‑ v ‑
Adrian John MARSHALL
Robert Peter COOMBES
Birol EREN
‑ ‑ ‑ ‑ ‑ ‑ ‑ ‑ ‑ ‑ ‑ ‑
‑ ‑ ‑ ‑ ‑ ‑ ‑ ‑ ‑ ‑ ‑ ‑

MISS L MCCALL appeared on behalf of the first and second appellants
MR J SIMPSON appeared on behalf of the third appellant
MR R SMART appeared on behalf of the Crown

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JUDGMENT

Lord Justice MANTELL: 

This appeal could have implications for all ticket touts and even for the ordinary motorist who passes on the benefit of an unexpired parking ticket.  

In late 1996 each of the three appellants was video recorded obtaining underground tickets or travel cards from members of the public passing through the barriers and re-selling them to other potential customers.  By so doing it is accepted that each of them was committing a bye-law offence.  However they were each separately indicted for theft.   

The matter came before His Honour Judge Hardy on 13th March 1997.  On that date the judge heard legal argument as to whether or not the appellants were liable to be convicted of theft on the basis of certain agreed facts.  He ruled that all the components of theft were present save for the question of dishonesty which was a matter for the jury.  In consequence, on 20th March each of the appellants pleaded guilty to the 
indictment.  Marshall asked for 78 other offences to be taken into consideration, Coombes for 59 and Eren for 47.  Marshall and Coombes were placed on probation and Eren was ordered to serve 40 hours community service.  With the leave of the single judge each of the appellants now seeks to have his convictions set aside on the ground that the judge’s ruling was erroneous..  

The agreed facts on which the learned Judge was invited to rule were hardly more comprehensive than already indicated.  However we set them out for the sake of completeness.  

As part of an operation by London Underground Limited at Victoria Station the appellants were observed and videoed obtaining used travel tickets from passengers leaving the underground and selling them at a reduced rate to persons intending to travel.   The tickets, which had been issued by London Underground Limited remained valid in the sense that their usefulness had not been exhausted.  Thereby London Underground Limited was deprived of revenue which it might have expected to receive from those persons who had bought the tickets.  

A number of submissions were made to the learned Judge.  The first was that the travel tickets were not the property of London Underground Limited within the meaning of section 1 of the Theft Act 1968.  The judge rejected the submission ruling that although the tickets had passed into the possession and control of the customers, London Underground retained a proprietary right or interest in the tickets which  were to be regarded therefore as the property of London Underground pursuant to section 5 (1) of the Act.  As a secondary reason for rejecting the submission he referred to the express term on the reverse of each ticket to the effect that it remained throughout the property of LRT, of which of London Underground Limited is a part.  
A second submission was made that in the circumstances there had been no appropriation so as to bring the case within the basic definition of theft.  In rejecting the submission the judge referred to section 3 (1) which  reads,
"Any assumption by a person of the rights of an owner amounts to an appropriation, and this includes, where he has come by the property (innocently or not) without stealing it any later assumption of right to it by keeping or dealing with it as owner."

and to the decision of the House of Lords in R -v- Morris (1984) AC 320 HL in which it was held that it was not necessary to demonstrate an assumption by the accused of all the owners rights, simply to show the assumption of some of the rights of the owner of the goods in question.  The learned Judge considered that the use of the ticket to the detriment of London Underground was inconsistent with London Underground’s rights and consequently that the actions of the appellants amounted to an appropriation in law.
  
Thirdly and lastly it was submitted that on the agreed facts there was no evidence of an intention to permanently deprive.  That submission also was rejected, the learned judge taking the view that the provisions of section 6 (1) of the Theft Act covered the position.  It will be necessary to refer to the terms of the subsection later  in this judgment.  

  	Originally as it appears from the notices of appeal it had been proposed to challenge all three rulings.  As it turns out, however, the appellants now accept that the  Judge was correct in his rulings on the first two matters and it is only the third, therefore, which has survived for argument.  

Before considering, that  remaining ground we permit ourselves to make certain observations as to the procedure adopted in the lower court.  It is beyond question that an appeal will lie from a conviction entered upon a plea of guilty where that plea is a consequence of an earlier incorrect ruling in law.  (See DPP -v- Shannon  (1973) 59 CAR. 251.)  We were told that in this case the judge was asked to rule upon the relevant matters of law under section 40 (1) of the Criminal Procedure and Investigations Act 1996 at a pre trial hearing.  We were further told by counsel that little thought had been given to the procedure to be followed.  The statute enables rulings of law, binding unless and until discharged, to be made before a plea is entered or a jury sworn, which in appropriate cases is a great advantage.  It will however be important to ensure that the facts are fully and accurately before the Court, something which cannot always be achieved without oral evidence.  Where oral evidence is not required it is preferable, if not essential, for the agreed facts to be written down if only because the ruling may become the subject of an appeal.  As a minor illustration of the kind of difficulty which may arise if the facts are not recorded; it has not been entirely clear to us as to whether or not the judge was told that he was dealing with daily or weekly passes  which, unlike an unexhausted return ticket which is consumed or collected at the conclusion of the journey would not necessarily be returned into the possession of London Underground. As it happens and as will become apparent the question of whether or not the ticket was likely to be recovered by London Underground has had no bearing upon the outcome and we  have based our decision upon the facts as stated, which provide the most favourable foundation for the submissions which have been made.  We should also like to say that R -v- Vickers (1975) 61 CAR p.48 remains good law, and it is always desirable to put it no higher, for such a ruling as was requested in the present case, whether or not part of a plea and directions hearing, to be made after arraignment is complete and the plea entered.  The reason for following that course, rather than as was done here, are amply set out in the judgment of Vickers at p.51 and p.52.  	

As indicated, although a number of submissions were made to the learned Judge and subsequently reproduced  in the grounds of appeal, only one such has been pursued before this court.  It is set out in the skeleton argument of Mr Taylor of counsel who appears for the appellants Marshall and Coombes.  It was adopted by Mr Simpson on behalf of Eren. 
"It is submitted by the appellants that in the circumstances although there was an assumption of the rights of the owner contrary to section 3 of the Theft Act 1968 which amounted to an appropriation there was nevertheless no intention on their part to deprive London Underground Limited of the said ticket.  They intended either to return them directly to London Underground Limited or to do so through the third party buyer without resale to London Underground Limited and without any loss in the virtue of the ticket when returned”

The argument proceeds,

"The ticket forms are pieces of paper printed over with information about the ticket.  When returned to London Underground Limited they had no more and no less value than when they were originally purchased.  The return to London Underground, notwithstanding these intervening transactions involved no loss of virtue to London Underground Limited’s property."

It was submitted section 6 (1) of the Theft Act 1968 did not apply as that was only to be resorted to where there was a resale of the property to the original owner.  It was further submitted that the issuing of a travel ticket was analogous to the drawing of  a cheque and that as both were choses in action the reasoning in R -v- Preddy (1996) 3WLR 255 was equally applicable.

It will be seen that the submission made on what is accepted to be the single issue in the appeal depends in part upon the misapprehension that the ticket forms would necessarily find their way back into the possession of London Underground.  That was the factual basis upon which the learned Judge ruled.  As mentioned, we are content to deal with this appeal on a similar basis.

On this point the judge ruled as follows:
"I am satisfied that the essence of section 6 of the Theft Act 1968 is whether there was an intention to treat the tickets as their own regardless of the owners rights.  Mr Taylor has drawn my attention in particular to the cases of Duru (1972) 58 CAR 151 and Preddy & Others (1996) WLR p. 255 and referred me to the commentary by Professor Smith to the case of R -v- Mitchell (1993) CLR p.788.  I note that all these cases involved cheques and for my part I am not prepared to extend to the underground what the High Court have found in relation to cheques."

For the reasons which follow we consider that the judge was right. 

Section 6 subsection (1 ) of the Theft Act 1968 provides:
"A person appropriating property belonging to another without meaning the other permanently to loose the thing itself is nevertheless to be regarded as having the intention of permanently depriving the other of it if his intention is to treat the thing as his own to dispose of regardless of the others rights; and borrowing or lending of it may amount to so treating it, but only if the borrowing or lending is for a period and in circumstances making it equivalent to an outright taking or disposal."

On its face the subsection would seem apt to cover the facts of the present case.  The ticket belongs to London Underground.  It has been appropriated by an appellant.  It is the exclusive right of London Underground to sell tickets.  By acquiring and re-selling the ticket the appellant has an intention to treat the ticket as his own to dispose of regardless of London Underground’s right.  However Mr Taylor and Mr Simpson have reminded us of what was said by Lord Lane, Lord Chief Justice in the case of R -v- Sidney Douglas Lloyd , Ranjeet Bhuee & Mohammed Chaukal Ali (1985) 81 CAR 182 at p.188.  
"Bearing in mind the observation of Edmund Davis LJ in Warner (1970) 55 CAR 93, we would try to interpret the section in such a way as to ensure that nothing is construed as an intention permanently to deprive which would not prior to the 1968 Act have been so construed.  Thus the first part of section 6 (1) seems to us to be aimed at the sort of case were a defendant takes things and then offers them back to the owner for the owner to buy if he wishes.  If the taker intends to return them to the owner only upon such payment, then, on the wording of section 6 (1) that is deemed to amount to the necessary intention permanently to deprive;"

It is submitted, therefore, that the subsection is to be construed narrowly and confined to the sort of case of which Lord Lane gave an example and of which the present is not one.  However this court had to consider a similar situation in the case of R -v- Fernandez (1996) 1CAR 175 where at p.188 Lord Justice Auld giving the judgment of the court said this:

"In our view section 6 (1), which is expressed in general terms, is not limited in its application to the illustrations given by Lord Lane CJ in Lloyd.  Nor in saying that in most cases it would be unnecessary to refer to the provision, did Lord Lane suggest it should be so limited.  The critical notion, stated expressly in the first limb and incorporated by reference in the second is, whether a defendant intended to “treat the thing as his own to dispose of regardless of the others rights “The second limb of  subsection (1) and also subsection (2) are merely specific illustrations of the application of that notion.  We consider that section 6 may apply to a person in possession or control of another’s property who, dishonestly and for his own purpose, deals with that property in such a manner that he knows he is risking its loss.”  

In our judgment and following Fernadez the subsection is not to be given the restricted interpretation for the which the appellants contend. 

The principal submission put forward on behalf of the appellants is that the issuing of the ticket is analogous to the drawing of a cheque in that in each instance a chose in action is created which in the first case belongs to the customer and in the second to the payee.  So by parity of reasoning with that advanced by Lord Goff in R -v- Preddy & Others (1996) 2 CLR 524 the property acquired belonged to the customer and not London Underground and there can have been no intention on the part of the appellant to deprive London Underground of the ticket which would in due course be returned to the possession of London Underground.  Attractive though the submission appears at first blush we do not think that it can possibly be correct.

“A ‘chose in action’ is a known legal expression used to describe all personal rights of property which can only be claimed or enforced by action, and not by taking physical possession."  (See Talkington -v- Magee  (1902) 2KB 427 per Channell at 230).  On the issuing of an underground ticket a contract is created between London Underground and the purchaser.  Under that contract each party has rights and obligations.  Theoretically those rights are enforceable by action.  Therefore it is arguable, we suppose, that by the transaction each party has acquired a chose in action.  On the side of the purchaser it is represented by a right to use the ticket to the extent which it allows travel on the underground system.  On the side of London Underground it encompasses the right to insist that the ticket is used by no one other than the purchaser.  It is that right which is disregarded when the ticket is acquired by the appellant and sold on.  But here the charges were in relation to the tickets and travel cards themselves and a ticket form or travel card and, dare we say, a cheque form is not a chose in action.  The fact that the ticket form or travel card may find its way back into the possession of London Underground, albeit with its usefulness or ‘virtue’ exhausted, is nothing to the point.  Section 6 (1) prevails for the reasons we have given.   

The appellants by their pleas having acknowledged that they were acting dishonestly it seems to us that there is no reason to consider the convictions unsafe and these appeals must be dismissed.

6th March 1998
 
LORD JUSTICE MANTELL: For the reasons contained in the judgment which has been handed down these appeals are dismissed.
      Who appears in this matter, please?  Any matters arising, Mr Simpson, on this?

MR SIMPSON:  My Lord, not withstanding the fact that the appellant, and I think I speak on behalf of Coombes and Marshall, not withstanding the fact that they entered a guilty plea but taking into 
account the fact that this matter is a particularly knotty problem and one that has no clear previous authority and certainly one that has far reaching implications for many members of the public if not millions.  I wonder whether my Lords ‑‑

LORD JUSTICE MANTELL:  Millions, Mr Simpson, as many as that?

MR SIMPSON: There are many that use carparks, there are many that buy tickets.

LORD JUSTICE MANTELL:  What is the application?

MR SIMPSON:  It is for the heart of this matter which is whether or not ‑‑

LORD JUSTICE MANTELL:  If you have a point of law which you wish to have certified it ought to be in writing.

MR SIMPSON:  My Lord, I am aware of this and I apologise now, albeit belatedly, I arrived late at court and I had hoped for time in order to draft a question.  I am thinking on my feet ‑‑

LORD JUSTICE MANTELL:  You have had weeks to do it, or a week or so anyway.

MR SIMPSON:  I had hoped to speak to my learned friend,  Mr Taylor.  He is not here this morning.  I been trying to communicate with him.  I wonder if I could ask for a short amount of time this morning ‑‑

LORD JUSTICE MANTELL:  No.  You can have so long as it takes for this constitution to finish its list, but that will only be a matter of minutes.

MR SIMPSON:  I ask for no more.  I would be grateful for that time.

LORD JUSTICE MANTELL:  If you can renew your application while the court is still sitting, by all means do, but otherwise this constitution will not be sitting again. Mention it again, Mr Simpson, at the end of the list, would you, please.

(9.35am)
(Break in proceedings)

(9.45am)
(Proceedings resumed)

MR SIMPSON:  My Lord, I am aware of that I have fallen foul of the requirement to provide written notification, and I have to certain extent explained if that could be waived and the question of the ‑‑

LORD JUSTICE MANTELL:  Is it possible for you to make a paper application?

MR SIMPSON:  I think I am within my rights, within the next 14 days to do so.

LORD JUSTICE MANTELL:  The court can consider it on paper, can it?

MR SIMPSON:  I would be grateful if the court would.

 LORD JUSTICE MANTELL:  No, has the court power, is what I am asking.

MR SIMPSON:  As I understand it, yes, my Lord.

LORD JUSTICE MANTELL:  Are you getting a nod from somewhere?  I think that may be your better course.

MR SIMPSON:  I would be grateful.

 
LORD JUSTICE MANTELL:  Formulate the question, shortly please.  That course is open to you whether you pursue it or not is a matter for you.  We give you no encouragement, Mr Simpson.

MR SIMPSON:  I am grateful for the indication.

LORD JUSTICE MANTELL:  Is there any other matter?

MR SMART:  My Lord, no.