4th May 2020

Dishonesty following Barton & Booth [2020] EWCA 575 – what has really changed? Nicholas Clarke takes a look…

Somewhere in a box in my garage is a collection of postcards. Originally blank but many years ago they were despoiled with my scribbling, since it was my invariable practice, when learning about Criminal Law or Torts or Trusts, to try to condense my revision onto a collection of these postcards, which I would carry around and glance at to remind me of that which may come up in the exams. One of those postcards contained the direction delivered by the Court of Appeal in R v Ghosh [1982] 3 WLR 110.

Dr. Ghosh was a surgeon, prosecuted for the theft of money that he had claimed for operations that he had not carried out. It was his defence that he would, as a consultant on those cases, have been entitled to the money anyway. The judge in his trial directed the jury as follows:

“…finally dishonesty. There are, sad to say, infinite categories of dishonesty. It is for you – jurors in the past and jurors in the future…to set the standards of honesty. Now it is your turn today…to consider contemporary standards of honesty and dishonesty in the context of all that you have heard. I cannot really expand on this too much, but probably it is something rather like getting something for nothing, sharp practice, manipulating systems and many other matters which come to your mind…”

Dr. Ghosh complained to the Court of Appeal that the jury should have concentrated on his state of mind, rather than theirs. The Court of Appeal agreed, to an extent, that there should be a subjective test as well as an objective one and thus the Ghosh direction was born:

“…a jury must first of all decide whether according to the ordinary standards of reasonable and honest people what was done was dishonest. If it was not dishonest by those standards that is the end of the matter and the prosecution fails.

“If it was dishonest by those standards then the jury must consider whether the defendant himself must have realised what he was doing was, by those standards, dishonest.”

This direction has been the subject of trenchant academic criticism for most of the 35 years that it has existed. The arguments have largely centred around the potential for leaving what is actually a question of law: the definition of dishonesty, to the deciders of the facts. This would (say the academics), undoubtedly, lead to different juries reaching different decisions on identical facts, which would result in acute problems in respect of the principles of legal certainty.

Despite that chorus of disapproval, the Court of Appeal (Criminal Division) has not really been troubled by the issue, in view of the fact that such a direction need only be given in the rarest of cases – it is applicable only where the defence assert that the defendant did not realise that others would see his conduct as dishonest. I wondered, parenthetically (and topically since it was recently covered on TV), whether such a direction would have been given in the trial of Major Charles Ingram? I concluded that it would not as it would only have applied if the Major’s defence statement had read– “Yes, I had Tecwen Whittock give (cough) me the correct answers but what’s wrong with that?”

It was the Civil Division of the Court of Appeal and, thereafter, the House of Lords that examined the Ghosh test in a series of civil cases. In those cases, the House of Lords decided that the test of dishonesty (in the civil sphere) was purely objective. In Barlow Clowes International Ltd. v Eurotrust International Ltd [2005] UKPC 37, [2006] 1 WLR 1476, Lord Hoffman expressed his view:

“Although a dishonest state of mind is a subjective mental state, the standard by which the law determines whether it is dishonest is objective. If, by ordinary standards, a defendant’s mental state would be characterised as dishonest, it is irrelevant that the defendant judges by different standards.”

Consequently, there came to exist a divergence of views between criminal barristers and civil barristers about the definition of “dishonesty”. There followed, for the next decade or so, no real opportunity for the Criminal Appeal Judges to examine the test. When they were given the opportunity to do so, as in R v Hayes [2015] EWCA Crim 1944, they rather swerved the topic, although it could be said that the test was somewhat diluted since the Court of Appeal suggested that where the “dishonesty” was said to have occurred in a professional context – in this case investment banking – it was not relevant to the objective limb of the Ghosh test.

It was while the criminal definition was still uncertain that the House of Lords (again in the context of a civil case) sought to overturn the principle completely. It is fair to say that the judgment in Ivey v Genting Casinos [2018] AC 391 is, for lawyers and non-lawyers alike, an interesting read.

Phil Ivey was a well-known professional gambler. On this particular occasion he was at a Mayfair Casino playing Punto Banco Baccarat which, simplistically, is a card game where the object is to bet on the hand, either the player’s (punto) or the banker’s (banco) that the player thinks is closest to 9 or that they will be the same. It is said that this is a game for “high rollers”, as bets of tens of thousands of pounds on a single hand are not uncommon. It is not perhaps so surprising, therefore, that in a single night Mr. Ivey won £7.7 million. He won, however, by using a technique called “edge-sorting”, which involved memorising the minute differences in the edges of the cards – no mean feat as each shoe of cards in Punto Banco contains 7 or 8 packs. In addition, Mr. Ivey persuaded the croupier not to change those cards and to return other cards, claiming to be superstitious.

The casino found out about his technique and refused to honour the bet. Phil Ivey sued. The High Court and the Court of Appeal both refused to make Mr. Ivey a millionaire claiming, in the simplest of terms, that Mr. Ivey had cheated. The case could have gone to the Supreme Court via either the High Court (as it did) or the Crown Court, as the question revolved around the definition of cheating contained in s.42 of the Gambling Act 2005 (an offence having a maximum sentence of two years). The casino could have involved the police. A person cheats at gambling if the action:

“…consists of actual or attempted deception or interference in connection with the process by which gambling is conducted…”

In a unanimous judgment, delivered by Lord Hughes, the Supreme Court refused to interpret cheating in this sense as being necessarily connected to dishonesty. Whilst “honest cheating” would appear to be an oxymoron it is feasible, as Mr. Ivey claimed. The expression used by the judge in the original Ghosh trial was – “sharp practice”. An analogy may be found in professional football: – Diego Maradona, if asked today, still believes that he did not act dishonestly in cheating to help eliminate England from the 1986 World Cup – he was simply using every opportunity to score and, if that was missed by the officials, then so what?

Mr. Ivey was found to have cheated, in short, because he had taken positive steps to “fix” the deck of cards.

Having disposed of the appeal, Lord Hughes took the opportunity to explore the concept of dishonesty. His analysis was wide ranging and concentrated on the law and judgments that existed prior to the Theft Act 1968. He effectively rewrote the legal definition of dishonesty at paragraph 74:

“When dishonesty is in question the fact-finding tribunal must first ascertain (subjectively) the actual state of the individual’s knowledge or belief as to facts. The reasonableness or otherwise of his belief is a matter of evidence (often in practice determinative) going to whether he held the belief, but it is not an additional requirement that his belief must be reasonable; the question is whether it is genuinely held. When once his actual state of mind as to knowledge or belief as to facts is established, the question whether his conduct was honest or dishonest is to be determined by the fact finder by applying the (objective) standards of ordinary decent people. There is no requirement that the defendant must appreciate that what he has done is, by those standards, dishonest.”

As a result of Ivey, the authors of the Crown Court Compendium – the selection of precedents for Judges’ summings up – updated the “dishonesty” section, deleting the Ghosh direction and replacing it with Lord Hughes’ words.

It was to those updated paragraphs that HHJ Everett would have turned when he finally, after nearly a year, started to sum up the case of Barton and Booth. That was a case which involved, according to the prosecution (and largely agreed with by the jury), the systematic plundering by Mr. Barton of the vulnerable, wealthy and elderly residents of his luxury Birkdale residential home. Rosemary Booth was Mr. Barton’s general manager and, said the Crown, was his eyes and ears in the home. The defence asserted that the money and legacies that they received from the residents were simply tokens of appreciation – gifts willingly provided by the various lucid residents.

They were convicted and sentenced to 21 years and 6 years respectively.

An appeal was launched, the central plank of which complained of the fact that the Judge had used the Ivey directions, rather than Ghosh. The Court of Appeal panel of seven, headed by the LCJ, delivered their judgment this week. For scholars of jurisprudence it contains much to admire.

The question was raised as to whether Lord Hughes’ redefinition of dishonesty was applicable in the criminal sphere? Ghosh had not been overturned and so the Judge should have directed the jury on Ghosh. There were two reasons put forward as to why Ghosh should be preferred: firstly, the comments of Lord Hughes were made in the context of a civil claim as secondly that the paragraphs on dishonesty formed part of the “obiter dicta”, that is to say – those parts of a judgment which represent the judge’s thoughts or illustrations and are outside the ambit of the judgment.

In truth, such arguments were never going to carry a great deal of weight. Before Barton, Sir Brian Leveson in DPP v Patterson [2017] EWHC 2820 stated that he thought “…that it would be difficult to imagine any future Court of Appeal preferring Ghosh to Ivey…”. In addition, the definition in Ivey was starting to become the preferred choice in professional discipline cases too – Wingate v SRA [2018] EWCA Civ 366.

To counter the fact that Lord Hughes’ comments on dishonesty had been obiter, the LCJ used not only the reference to Patterson ante, but also agreed with the Crown’s submission relying on R v James; R v Karina [2006] QB 588 whereby any decision of the Supreme Court should bind all Courts in England and Wales, irrespective of their division.

The Court also emphasized that their approach to stare decisis or precedent is much looser than the civil division and the Court was, in accordance with James, bound to follow what was, in effect, an instruction from the Supreme Court in Ivey, even though it was obiter. The LCJ went on, at paragraphs 107 – 109, to state that the Court are not following Ivey simply because of the Supreme Court’s decision. The LCJ emphasised what is contained within paragraph 74 of Ivey, whereby the fact finders must consider the “..actual state of mind as to knowledge or belief as to the facts…”, that is knowledge known to the accused, including the experience and intelligence of an individual defendant.

There is also a helpful analogy of an individual failing to pay for a bus journey believing it to be free (as some are in Manchester) – he or she would be no more dishonest that someone leaving a shop who has forgotten to pay. Magistrates or a jury would first establish the facts and then apply the objective standard of honesty to those facts.

Other parts of the judgment in Barton deal with supplemental issues that are beyond the remit of this blog but are worth reading.

So, what has changed? In reality, probably very little, since the formulation postulated by Lord Hughes in Ivey and adopted by the LCJ in Barton probably represented what most jurors would have thought anyway, irrespective of the direction given. It provides a little certainty and gives the academics an excuse to claim that they were right all along.

For those who would wish for a full analysis of the consequential issues following Ivey, I would recommend the article by Professor David Ormerod QC and Karl Laird, from the UK Supreme Court Yearbook which has been of considerable assistance in writing this article.

As for the use of postcards for the purposes of revision, students will now have to learn the Ivey direction, and know by heart paragraph 74 of Lord Hughes’ speech. My postcard, like the majority of the contents of my garage, is worthless.

Nicholas Clarke is head of the Criminal Department at 18 St John Street. If you have any queries about this or any other related subject, please feel free to contact us on our usual contact details and we will be delighted to assist you.