The mens rea for fraud by false representation is provided by section 2(2)(b) states that the defendant must know that the statement is or might be untrue or misleading, it is clear that Nina knows that her statement about vegetable oils is ‘untrue’. However, it is unknown whether Nina truly believes that her burgers are ‘the best’, but it is likely that she thought they might be untrue or misleading, which is sufficient to constitute for the mens rea of the offence. Furthermore, another aspect of mens rea is it must be shown that the defendant intended to make a gain for themselves or another or to cause loss to another or to expose another to a risk of loss. The gains must be through monetary or property terms by the representation, clearly Nina intended to gain from the representation of the ‘best burgers’ by attracting more customers and therefore money through their purchases and her vegetable oil claim could also be intention to make a gain for herself, as she is increasing her customer base to vegetarians, as Prafal’s case, and more health conscious eaters. Gardner argues that “street venders do not mean for their false representations to be taken literally and relied on by their customers.” Moreover, there must be dishonesty in false representation, D Ormerod says that dishonesty is the central mens rea for all three forms of fraud as it is the principle determinant of criminal liability given the other key elements being so wide. However, the Fraud Act 2006 contains no definition of ‘dishonesty’. The Law Commission and Home Office intend that the Ghosh test, not Section 2 of the Theft Act 1968, should apply, and the Law Officers confirmed this in Parliament. Simester and Sullivan describe the failure to replicate the Section 2 defence as ‘regrettable’. The Ghosh test is both subjective, did the defendant know she was being dishonest, and objective, “according to the ordinary standards of reasonable and honest people was what was done dishonest”. Nina’s actions would fulfill both of these aspects of the test, as she clearly knew she was being dishonest through her advertising, and any reasonable person would also reach this conclusion.
From all of this analysis, it is possible to conclude that Nina has committed an act of fraud under Section 2(a) of the fraud Act 2006 with her sign for her burger bar, as she has dishonesty and knowingly expressed a false representation that was untrue and misleading with a view to gain a monetary profit from this act. It is arguable as is shown below that a case for fraud by failing to disclose information is viable, but fraud by false representation was a more logical and obvious argument to pursue.
Quince – Fraud by failing to disclose information
This is not theft as shown by AG Reference (No.1 of 1985), as the concept of theft by importing the equitable doctrine of constructive trust is so abstruse and so far from ordinary people's understanding of what constitutes stealing that it should not amount to stealing.
There appear to be considerable overleap between sections 2 and 3, therefore for both Nina and Quince it is arguable that both sections are applicable, but the best solution must be chosen. Very often when the defendant fails to disclose when he or she is legally required to disclose this could be an implied deception under section 2 or a failure to disclose under section 3. However, I would prefer to pursue section 3 over section 2 in concurrence with the idea that is proposed by Ormerod, “in some cases there will be obvious advantages in presenting the case under s.3 to focus the jury's attention on the existence of the duty rather than straining to persuade them of a relevant representation”. I think that, although there is a false representation in that the can was Quince’s not Nina’s, the legal duties that Quince is under as an employee to provide Prafal with Nina’s wares, rather than her own, and if she did replace it, to inform Prafal of this, is a much stronger and more obvious aspect.
The offence under section 3 has many of the elements already discussed. Quince’s actions satisfy subsections 1, 2 and 3 of section 2 of the Fraud Act, as she has acted in a dishonest manner by falsely and misleadingly representing her own can of lemonade as one of Nina’s, with a view to gain, which is confirmed when she keeps the money that he receives from the sale. This offence deals with ‘deception by silence’. The important element in this situtation is that, according to s2(4), for a fraud by false representation, the “representation may be express or implied”. As such the omission by Quince to mention that the can was hers, and not from Nina’s van as Prafal would have undoubtedly assumed, could constitute an implied representation.
However, the offence is only committed when there is a legal duty’ for the defendant to disclose appropriate information to another. If it is viewed that Quince, by her actions, “dishonestly fails to disclose to another person information which she is under duty to disclose”, then she has fulfilled section 3(1a). Obviously, this needs to be disconstructed into its various parts.
Firstly, there is the element of dishonesty, which is determined by the Ghosh test already outlined. Her claim that “although most people would regard what she had done dishonest, she thinks that a lot of people would not”, suggests her recognition that the majority would find her actions dishonest. In Hinks Lord Hobhouse a dissenting judge said “to treat otherwise lawful conduct as criminal merely because it is open to moral disapprobation would be contrary to principle and open to the objection that if fails to achieve the objective and transparent certainty required of the criminal law by the principle basic to human rights”. So it must be shown that her actions are unlawful or it may be uncontroversial and cause arguments similar to those against Hinks to be risen. Her action in providing her own can to make money for herself, and hence denying Nina a potential sale and monetary gain, would be viewed by a reasonable honest person as being dishonest, the objective element.
Quince has a duty, as an employee, to provide Prafal the information that the can is not from Nina’s bar. However, she is also under a duty to tell Nina of the money that she gained from this transaction. As such, from this part of the definition, there could be two crimes; one count of fraud towards Prafal, and one towards Nina. Whilst the fraud with Nina has a definite duty, Prafal suffers no loss and is affected in no way.
However, the Act offers no guidance as to what constitutes a duty and so the issue must be one of general law. Presumably a judge will rely on civil law or statute to discover when such a duty arises. It remains to be seen how a court will deal with a case where there is clear dishonesty in failing to disclose.
Quince gains from the failing to disclose the information, so even though there is no loss to Prafal she stood to gain from her fraudulent behaviour and section 3(b) is an either/or situation. Furthermore, she causes Nina a loss by failing to disclose the information.
Quince – fraud by abuse of position
This is defined by section 4 of the Fraud Act 2006. This is rather broadly drafted offence. It will apply to trustees and those who owe a fiduciary relation to others. However, it is unclear whether it will apply more widely than this. Remarkably the Act fails to define ‘a position in which he is expected to safeguard, or not act against, the financial interests of another person.’ Again judges will need to refer to some rather complex civil law to determine whether a fiduciary relationship applies. The notice of abuse is also rather unclear. In particular whether it is intended to apply just to cases where under civil law there is a breach of trust or fiduciary duty or whether or not it is intended to be wider than this.
Quince is ‘expected’ to ‘not act against’ Nina’s interests as she is working for her. The mens rea element is the same as previous sections of fraud with regards to dishonesty and intention to gain or to cause loss to another. It is unclear how this would exactly be interpreted therefore; I am more inclined to advocate fraud by failing to disclose information, despite the apparent merits of this section with regards to this case. Therefore, I believe that Quince is guilty of fraud.
Prafal
A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it. It is clear the actus reus of the crime is reached in the case. Appropriation of a property is defined under section 3(1) as ‘any assumption by a person of the rights of an owner amount to an appropriation, and this includes, where he has come by the property (innocently or not) without stealing it, any later assumption of a right to it by keeping or dealing with it as owner’. Collins says that this is the paradigm of theft. He clearly did appropriate the property, as taking it away is a right only the owner has. Lawrence and Gomez makes it clear that consent to or authorisation by the owner of the taking by the rogue is irrelevant. In Hinks the House of Lords held that even if the property was handed over by the victim to the defendant as part of a valid gift under the law of property this could amount to an appropriation. The newspaper is a tangible object that Nina purchases, and so it is an undisputable fact that the newspaper is her property.
The mens reas is less clear. The meaning of dishonesty is a mixture of statute and common law. The starting point is section 2 of the Theft Act 1968, which set out various circumstances in which the defendant will not be dishonest. If the defendant is not dishonest under Section 2 that is the end of the case. He or she must be acquitted. If, however, the defendant is not covered by Section 2, then it is necessary to consider the Ghosh test. The Ghosh test has already been discussed above, regardless section 2 should be considered first. Under section 2 a mistake of law can provide a defence if it means that the defendant lacks the mens rea of the offence. Dishonesty is defined under section 2(1). Part (a) is that ‘the defendant’s belief that he has the right to deprive the owner of the property’, there is insufficient information to determine whether Prafal believes, however unreasonably, he is entitled to the newspaper. Part (c) “the belief that the person to whom the property belongs cannot be discovered by taking reasonable steps”, again there is insufficient information to determine Prafal’s views, it may have appeared to have been abandoned. However, since he returned it the next day it would appear that neither part (a) or (c) are true and that he knowingly took someone else’s property. However, part (b) is ‘the belief that he would have the other's consent if the other knew of the appropriation and the circumstances of it.’ The owner’s consent is not important, the key is the defendant’s belief, however unreasonable, that the victim would consent. It is quite likely that Nina may have been generous and let Prafal use it, but then again she may not have, and there is not enough evidence to determine this.
The final element of mens rea is the issue of intention to permanently deprive Nina of the newspaper. Prafal’s quick return of the newspaper suggests there was no intention to deprive Nina permanently. However, the definition of this issue under section 6(1) includes the possibility of borrowing in some form as an intention to permanently deprive, “a borrowing or lending of it may amount to so treating it if, but only if, the borrowing or lending is for a period and in circumstances making it equivalent to an outright taking or disposal”. Prafal returned the newspaper the very next day. In Lloyd the judge decided ‘borrowing is ex hypothesi not something which is done with an intention permanently to deprive.’ This subsection intended to make it clear that a mere borrowing is never enough to constitute the necessary guilty mind unless the intention is to return the "thing" in such a changed state that it can truly be said that all its goodness or virtue has gone”. Newspapers are daily so arguably the newspaper’s ‘virtue has gone’ and would not be particularly useful, as Nina would have had to buy another newspaper to find out the days news, he dprived Nina of her newspaper during it’s most useful period. However, it is still usuable after the day, so it should be concluded there was no intention to permanently deprive Nina of the newspaper and therefore no theft amounts from Prafal’s actions.
