Manning, R v [1998] EWCA Crim 2074 (24th June, 1998)

This appeal involves a question of some difficulty as to the correct approach to part of the definition of false accounting in section 17 of the Theft Act 1968 [the 1968 Act]; and a question of very considerable difficulty and general importance in relation to the jurisdiction of the English courts to try offences that have an international element.

Although the trial occupied some seven weeks the basic facts and allegations are comparatively simple. Mr Manning ran his own maritime insurance business, called Scott Lee Insurance and Financial Consultants, from his home in Saffron Walden in Essex. He obtained instructions to place insurance on ships, which he did through two brokers, a man called Sherman and a man called Cavallis. The case against Manning was that he obtained the premiums for the clients but then either failed to place the cover at all; or placed cover only for a lesser percentage of the risk than instructed; or placed the cover with unacceptable insurers, falsely stating that acceptable companies had accepted the risk. A particular example was that to which counts 1-6 on the indictment related, where Manning had been instructed by a Greek company, Concorde Marine, in which a Captain Tingas was the active force, to place insurance for one of the company's vessels. The prosecution case was that Manning placed insufficient cover, through Sherman, and falsely stated to Tingas that certain respectable companies had accepted the full risk.

The various counts can be summarised as follows. Counts 1-6 related as we have said to instructions given by Tingas. Counts 7-11, the remainder of the indictment, related to instructions given to Manning by Sherman to place insurance on behalf of various of Sherman's clients. Manning purported to place the risk through Cavallis. Again, details given to Sherman of the companies that had accepted the risk were incorrect.

In more detail, counts 1-3 charged false accounting, by the cover notes given to Tingas having contained false information. Counts 4-6 charged procuring the execution of a valuable security contrary to section 20(2) of the 1968 Act; based on the fact that Tingas, in Greece,issued cheques to pay Manning on the basis of the false cover notes sent to Greece by Manning. Counts 7-9 were again charges of false accounting, the false cover notes in this case having been sent by Manning to Sherman. Counts 10-11 were charges of forgery, Manning having created documents purporting, wrongly, to bear the company stamps of the insurance companies with which he falsely claimed to have placed the insurance, with a view to Sherman sending them on to his clients.

Mr Manning's case was that there had been no dishonesty or deception, because Sherman, Tingas and Cavallis had been aware of the true position, in particular as to the companies with which the insurance purported to have been placed, and that there had in fact been insurance in place albeit not necessarily with the companies shown on the documents produced by Manning. The jury by its verdicts, which convicted Manning on all counts, rejected that case.

We dispose first of a ground of appeal which, it is fair to say, did not feature in the forefront of the argument of Mr Malcolm QC for the appellant. It was from the start recognised that the trial would be a comparatively long one, since although the essential issue was simple it was apparently thought that it could only be proved by the scrutiny of a considerable number of documents. The judge thought that the trial might continue to the end of June, and in the selection of the jury sought to ensure that all the jurors would be available until then. He was not, however, successful in that endeavour, since it became apparent, we do not know when, that at least one juror would not be available in the week beginning 2 June 1997, because he had to take examinations in that week. In the event the jury retired on Thursday 29 May. Because of the problem in the following week, the judge decided to ask them to be ready to deliberate, if necessary, on the Saturday of that week. It then transpired that two jurors had unassailable reasons for not being available on the Saturday: that is the sort of problem that cannot possibly be covered in the pre-selection of a jury. After lengthy discussion with counsel, the judge decided that he would stick to his decision to ask the jury to deliberate on the Saturday, therefore necessarily discharging the two jurors if verdicts had not been reached by Friday night.

The complaint that is made is that the judge, knowing that two jurors would have to be discharged on the Friday evening, should the case continue that far, should have discharged the two jurors from the beginning. It is said that the danger of the form that the jury's deliberations in the event took was that in their discussions after the discharges the opinions of those who had left might continue to affect their former colleagues, possibly in a form that if still present they might not have recognised or agreed with. Such a fear is at the best hypothetical. As a ground for finding a conviction to be unsafe it is also inconsistent with the decision of this court in Hornsey [1990] Crim LR 731, which held that a jury did not have to be discharged just because one juror was discharged after retirement, albeit that the cause in that case was illness rather than unexpected unavailability. In that case also the danger feared in this case, if a ground for finding a conviction unsafe, is necessarily present.

The judge took the greatest care in dealing with a difficult situation, and discussed the possible options with counsel at considerable length. He very properly took into account the need to consider the interests of the jurors, at the end of a long and no doubt for them burdensome trial, as well as the interests of the accused. This is just the sort of situation that it is for the trial judge to deal with, with the benefit of immediate knowledge of the situation on the ground. The judge's decision in this case fell very far short of irrationality of the order that would have to be shown before this court could interfere. This ground of appeal fails.

All the documents to which the false accounting counts were directed were Scott Lee cover notes. The prosecution decided, for no good reason that it was able to relate to us, not to proceed under these counts in respect of the debit notes furnished by Scott Lee to the client, the information on which was drawn from, or at least had to be consistent with, the cover notes. The sole issue before us was whether it had been sufficiently established before the jury, in terms on which the jury could act, that the cover notes were required for an accounting purpose. It is well accepted that such purpose can be merely an incidental, and not necessarily the principal, purpose of the document: A-G's Reference (No 1 of 1980) 72 Cr App R 60.

No evidence was called by the Crown to explain the actual use made of such cover notes by the persons to whom they were sent; nor was such evidence sought to be elicited from Mr Manning in cross-examination. In his summing-up the judge, after properly directing them that the present question was one of fact, for them to decide, carefully took the jury through the cover notes that had been exhibited, and indicated the elements in them from which they could conclude, if so minded, that they were indeed required for an accounting purpose. The cover notes set out the assured and the insurer, the period and the interest covered. They also, however, state the rate to be paid and the dates at which premiums have to be paid: "within 45 days of due dates as per Debit Notes". We have no doubt that the cover notes would play a role in the accounting process of Scott Lee's clients: the question is whether the jury were entitled on the material before them to come to that conclusion.

A similar problem has been considered in two recent unreported cases in this court, Okanta (20 December 1996) and Sundhers (23 January 1998). We were particularly pressed with the latter case, since it involved an issue close to that before us. In Sundhers the dishonest document was a claim form under an insurance policy. The judge told the jury, as is the case, that such a form would on occasion be looked at by the auditors of the insurance company. There was, however, no evidence to that effect; and this court held that merely by looking at the claim form the jury could not be expected, by drawing on their general experience and knowledge of the world, to reach that conclusion for themselves.

The cover note is a different sort of document from a claim form. As we have said, it clearly sets out what the client has to pay and how he has to pay it. Although we have not found this issue an easy one, and regard it as being close to the borderline, we think on balance that it would be open in this case to a reasonable juror to conclude, simply by looking at the document, that it was required for an accounting purpose, in that it sets out what the client owes. It differs from the claim form in Sundhers, from which any such conclusion could not be drawn without knowledge of audit practice: which the jury cannot be assumed to possess without evidence to that effect.

We therefore reject this ground of appeal. We are bound to say, however, that such arguments can be avoided, and the use of court-time that they generate can be saved, by prosecutors calling evidence, of brief and probably unchallenged nature, as to how documents on which they rely under section 17(1)(a) are in fact used; and we hope that this prudent step will be taken in future cases of this type.

Counts 4-6 concerned the procuring by Mr Manning, in England, of the execution by Captain Tingas of cheques in Athens. The prosecutor sought to argue before us that the "procurement" on these facts could be argued to have taken place in England. That argument was however incorrect even on the definition of procurement in the 1968 Act that he adopted from the case in this court of Beck (1984) 80 Crim App R 355: to cause or bring about. There is no doubt that the procurement of the execution did not occur until Captain Tingas signed the cheques.

Accordingly, the jury having found Mr Manning to have been dishonest in that transaction, the only question in this appeal is whether the English court had jurisdiction to try him in respect of an actus reus that was completed in Athens. That would appear to be a comparatively simple issue, that should without question admit of the answer that, the dishonesty having occurred in this country, and in connexion with a dishonest scheme practised in this country, the courts of this country have a legitimate interest in prosecuting Mr Manning in respect of that part of the scheme also. Very regrettably, neither does the present state of the law permit of the matter to be dealt with in that short order; nor does it produce an answer that is in accord with justice, common sense, or the interests of the prosecution of international fraud.

We return at the end of this judgment to the wider implications of this case. At this stage we have to note that, for the immediate issues to be properly understood, it is necessary to descend into a consideration of the underlying law. We have striven to keep this exposition as short as is compatible with a proper approach to the question in the appeal.

Apart from the underlying need that the defendant should be physically within the jurisdiction, it was until recently thought that the further requirement of the common law was clear, albeit unsatisfactory. That was the "terminatory" or "last act" requirement: that the act needed to complete the actus reus , in this case the signing of the cheque, should take place within the jurisdiction. That rule was described by Lord Diplock in his judgment in Treacy v DPP (1970) 55 Cr App R 113 [Treacy ], at p139:

In his article in the Law Quarterly Review on "Venue and the Ambit of Criminal Law," which was referred to by the Court of Appeal in the instant case, Professor Glanville Williams used the contrasting phrases "initiatory" to describe that element or ingredient of a crime which consists of the physical acts of the accused, and "terminatory" to describe its subsequent consequences. He argues the case in favour of what he calls the "initiatory theory of jurisdiction," viz., that the accused can be tried for the crime only by the courts of the state in which the accused did the physical acts, but concludes that the English courts have adopted the "terminatory theory of jurisdiction," viz., that the accused can be tried for the crime only by the courts of the state in which the consequences of the accused's physical acts took effect. The Court of Appeal, in the instant appeal, was willing to assume that this was so.

"[W]e are willing to assume...that the last constituent element does determine the place where the offence is committed. Where then is the offence of making a demand completed?...The demand is not made when the threatening letter is written, because it may never be sent...But once the letter is posted, the demand is completed, and the offence of blackmail is committed."

If however the "last constituent element" is a continuing or complex act, the courts of this country have jurisdiction if any part of that act is committed in England and Wales. That was made clear in Secretary of State for Trade v Markus [1976] AC 35, a case concerning the offence of fraudulently inducing persons to "take part" in arrangements relating to property under section 13(1)(b) of the Prevention of Fraud (Investments) Act 1958. The participation had taken place partly in this country and partly abroad. Lord Diplock said, [1976] AC at p61F:

To answer this question in the instant case does not, in my view, call for any wide-roving inquiry into the territorial ambit of English criminal law. The offences with which the appellant was charged were "result crimes" of the same general nature as the offence of obtaining goods on credit by false pretences which was the subject of the charge in the case of Reg v. Ellis [1899] 1 QB 230. That case is well-established authority for the proposition that, in the case of what is a result crime in English Law, the offence is committed in England and justiciable by an English court if any part of the proscribed result takes place in England.

In recent years, however, an alternative theory or approach has been adumbrated, known as the "comity" theory. That theory is strongly based on other observations of Lord Diplock in Treacy, to which we shall have to return. The most extensive, indeed we are bound to say the only, exposition of the theory as a rule of decision is to be found in the judgment of the Supreme Court of Canada in Libman v The Queen (1985) 21 DLR (4th) 174 [ Libman]. The theory was referred to with strong approval by the Privy Council in the Hong Kong case of Liangsiriprasert v Government of the United States of America [1991] 1 AC 225 [ Liangsiriprasert]; and it was adopted as the governing rule in a case in this court in relation to charges of obtaining property by deception, contrary to section 15 of the 1968 Act, Wallace Duncan Smith [1996] 2 Crim App R 1 [ Wallace Smith ]. The comity theory provides, broadly, that any offence may be tried in this country even if the last act did not take place here, provided the court sees nothing contrary to international comity in its assumption of jurisdiction. In Wallace Smith , therefore, this court assumed jurisdiction in a case where the deception had taken place in this country but the last act, the obtaining, had taken place in New York.

It will be convenient to set out the issues and our conclusion on them at this early stage. We consider that we are bound by cases in this court directly relating to jurisdiction over the offence in this case, procuring the execution of a valuable security contrary to section 20(2) of the 1968 Act. We further consider that those and other cases demonstrate that the last act or terminatory theory remains the binding common law of England and Wales. We have carefully considered whether that position can be regarded as set aside by the decision of this court in Wallace Smith , but we have to conclude that that decision cannot stand against the authorities to which we have just referred. We are driven to that conclusion partly by analysis of the speech of Lord Diplock in Treacy, which we do not think propounded a rule of jurisdiction that replaced the last act rule as the governing rule. We should add that although there are manifest differences between the nature of the foreign element in our case and the nature of the foreign element in Wallace Smith , we do not feel able simply to distinguish the latter case on those grounds.

Our courts have no power to try a charge of entering into a conspiracy in England and Wales to commit a crime abroad: see the decision of this court in Cox [1968] 1 WLR 88. By contrast, our courts do have jurisdiction to try a conspiracy entered into abroad that is intended to result in the commission of a crime in England and Wales. The only issue that until recently remained undecided was whether there had to be any overt act pursuant to the conspiracy committed in England and Wales before the courts of this country had jurisdiction to try it. That was the question before the Privy Council in Liangsiriprasert. The Board decided that, conspiracy being an inchoate offence, no such act was required. That decision was applied by this court in the conspiracy case of Sansom (1991) 92 Cr App R 115; though that case was a fortiori of Liangsiriprasert, since there some overt act had occurred within the jurisdiction.

In Beck (1984) 80 Crim App R 355 stolen travellers' cheques were cashed in France and then presented through normal banking channels to a bank in England. The first and main ground of appeal was that no offence had been thereby committed within the jurisdiction of the Crown Court, because the "execution" of the valuable security, by its "acceptance", had taken place in France. Watkins LJ however said, at p359:

The court held that, on the facts of that case, that is what had happened, and therefore the court had had jurisdiction to try the case. The court did not expressly set out the rule of jurisdiction that it was applying, but it would not have had to enter into the long consideration that it gave to the meaning of the concepts of acceptance and execution unless it felt itself bound by the last act rule. If that rule had not been assumed to apply, very little of the judgment would have been necessary. And certainly the appeal would have been dealt with in very short order had it been thought that the only issue was one of comity.

Beck was distinguished, in the sense that the same rule was applied but with a different result on the facts, in Nanayakkara [1987] 1 WLR 265. There, US Treasury social security orders were stolen in the USA, and brought to London, where they were endorsed at a bank for payment in the USA. This court ruled that on those facts the "acceptance" of the bills could only have taken place in the USA, and therefore there was no jurisdiction to try charges of execution of the bills, by such acceptance, under section 20(2). It is true that that point does not appear in terms in the judgment of Lord Lane CJ. That in our clear view is because it was taken for granted that that was the issue. The detailed examination of the meaning of "acceptance" in section 20(2) was only required because the court saw itself as confronted, as had the court in Beck to whose judgment Lord Lane CJ refers at length, by the last act rule of jurisdiction.

Absent other binding authority, therefore, we are obliged by Beck and Nanayakkara to apply the last act rule in a further case, such as the present, under section 20(2) of the 1968 Act. We also observe, on a point to which we shall return, that both of those cases substantially post-dated the speeches in the House of Lords in Treacy. The speech of Lord Diplock in that latter case was indeed referred to by Lord Lane CJ in Nanayakkara, on a limited point, and without drawing from it the implications that have led to the adoption of the comity theory.

The court in Wallace Smith was shown the decisions in Harden (1962) 46 Cr App R 90; Governor of Pentonville Prison ex p Klubchandani (1980) 71 Cr App R 241; and Thompson (1984) 79 Cr App R 191. We are therefore puzzled as to why the court is reported as saying, at p 19F of the report, that Wallace Smith raised for the first time before this court the question of jurisdiction under section 15. Both of Klubchandani and Thompson (the latter a case in this court) directly addressed that question; both of the courts concerned regarded the question as concluded by the necessary application of the last act rule.

We first, however, refer to Harden, a case of obtaining property by false pretences under the predecessor statute to the 1968 Act, section 32(1) of the Larceny Act 1916. The appellant, in England, sent false hire purchase agreements to a company in Jersey, who posted back cheques to him. This court analysed the transaction in contractual terms, and held that as the post office was the appellant's agent to carry the cheques they had in law been "obtained" by him in Jersey. As to the issue of jurisdiction this court said, at p96 of the report:

It appears from ELLIS [1899] 1 QB 230, that the gist of the offence of obtaining by false pretences lies in the act of obtaining, and that if this act is done within the jurisdiction it matters not that the false pretence was made abroad. To support the charge, the obtaining relied upon must be an obtaining of the property in the thing charged, and not merely possession or control of it; and when this principle is applied to a cheque, it means that the accused obtains the cheque, when the victim makes actual delivery of it to him, or makes constructive delivery by handing the cheque to an agent duty appointed by the accused to receive it on his behalf.

In the present case the cheques charged did not come into the physical possession of the appellant until they were received by him in the post at Eastbourne and [counsel for the appellant's] submission must fail unless the Postmaster can properly be regarded as the agent of the appellant for the purpose of accepting delivery of the cheques in Jersey.

I see no reason for doubting the correctness of the decision in Reg v. Harden [1963] 1 Q.B. 8 if it was in that case right to conclude that the cheques were obtained in Jersey. The court in that case held, in my view correctly, following Reg. v. Ellis [1989] 1 Q.B. 230, that the gist of the offence lay in the obtaining, and as that in their view had occurred outside the jurisdiction, the convictions were quashed. It was not suggested in that case that the making of the false pretences in England gave the English courts jurisdiction. I doubt, however, whether it was right to hold that the jurisdiction of the English courts in respect of criminal offences depended on the narrow ground that the Post Office was the agent of the maker of the false pretences to obtain on his behalf the fruits of his fraud. Neither he nor the company in Jersey are likely to have considered or contemplated that the Post Office was acting as agent for one or other of them. The Post Office was just the vehicle for the transmission of the false pretences and the fruits of the fraud.

I can find no authority for the proposition that the English courts have jurisdiction in a case where the false pretences were made in this country and the obtaining of goods or money in consequence thereof occurred outside the jurisdiction. That the law might have so provided and that Parliament might make that the law, I acknowledge but I do not think that it is the law now.

The terminatory theory has been acted on as a ground of jurisdiction since it was first laid down in Reg. v. Ellis [1899] 1 QB 230, a case where the false representation were made in Scotland but the property was obtained in England. As I ventured to point out Reg. v. Treacy [1971] A.C. 537, there is no reason in principle why the terminatory theory should have the effect of excluding the initiatory theory as an alternative ground of jurisdiction, though this was held to be so in Reg. v. Harden [1963] 1 Q.B. 8; but since in the instant case all the physical acts of the accused himself on which the prosecution rely were done in the United States, your Lordships are not concerned to consider whether Reg v. Harden was rightly decided.

In the same case Lord Edmund-Davies did say, [1978] AC at p82G, that jurisdiction to try persons in this country in respect of acts committed abroad rests upon the international rules of comity, citing the observations of Lord Diplock in Treacy. However, in determining the issue of jurisdiction that was thought to arise in Stonehouse as a preliminary to the different issue of jurisdiction to try allegations of attempt, Lord Edmund-Davies, [1978] AC at p83E, relied on the observations of Lord Diplock in Markus which, as we have sought to demonstrate, applied the last act rule.

We pass to cases directly on the new provision, section 15 of the 1968 Act. In Kubchandani the Divisional Court in a case under the Fugitive Offenders Act 1967 had to consider whether certain conduct, part of which took place in Ghana, would, mutatis mutandis , have constituted an offence over which the English court had jurisdiction. Its observations on the state of English law were therefore part of the ratio of the decision. The Court said, at p246 of the report:

The present state of the English law is that where a deception is made in this country, but the property is obtained outside the jurisdiction, there is no offence under the English law either under the Larceny Act 1916 or section 15 of the Theft Act 1968. The authority for this proposition is to be found in Harden 46 Cr App R 90, a decision of the Court of Criminal Appeal in which the Court was presided over by Lord Parker CJ and which has been followed and applied in Tirado 59 Cr App R 80. Although both Lord Reid and Lord Diplock have on occasion and by way of obiter dicta expressed reservations about the correctness of that decision, ranged against them are the opinions of Viscount Dilhorne, Lord Parker CJ and Lord Widgery CJ. In any event if this Court were minded to query the decision, it cannot do so and it is binding upon this Court.

It is of course a basic principle of our criminal law that no British subject can be tried under English law for an offence committed on land abroad, unless there is a statutory provision to the contrary. In so far as offences under section 15 of the Theft Act are concerned, it is accepted on both sides in this appeal that the question on the issue of jurisdiction in this territorial context is whether the obtaining of the property concerned occurred within the jurisdiction. If authority is required for that proposition it is to be found in HARDEN (1962) 46 Cr. App.R. 90; [1963] 1 Q.B. 8 and in Governor of Pentonville Prison, ex parte Khubchandani (1980) 71 Cr. App.R 241.

We venture to observe this court did not merely treat the point as having been conceded by agreement, but expressed its concurrence with the position taken by the parties, and cited authority in support of that view. We regard Thompson as clear authority of this court that the last act rule applies in respect of charges under section 15 of the 1968 Act.

The comity theory is strongly based on parts of the speech of Lord Diplock in the House of Lords in Treacy . It is not in issue that what Lord Diplock said was obiter. His observations, however, quite apart from the great respect that they would command in any event, were adopted by this court in Wallace Smith , and also by the Privy Council in Liangsiriprasert, a case that strongly influenced the decision in Wallace Smith . Before analysing those observations, however, it is necessary to draw attention to some features of the actual case in Treacy.

My Lords, all that has to be decided upon this aspect of the instant appeal is whether the appellant "made a demand" when he posted his letter to the addressee. In the course of the argument many other and ingenious ways in which a blackmailer might choose to send his demand to his victim have been canvassed....But unless the purpose of the new style of drafting use in the Theft Act 1968 is to be defeated they, too, should be decided by answering the question: re the circumstances of this case such as would prompt a man in ordinary conversation to say "I have made a demand?"

That was the issue on which the House divided. Lords Hodson, Guest and Diplock thought that as a matter of construction and ordinary language, a demand is "made" when the letter containing it is posted. Lords Reid and Morris of Borth-y-Gest by contrast thought that that construction was wholly artificial, and strained the language of the statute to breaking-point. They held that the demand is not "made" until it is received.

There is, in our view, no escaping from the conclusion that the House was, reluctantly, forced to this analysis because of the need, if the English court was to claim jurisdiction, to fulfil the requirements of the last act rule: the making of the demand, the act required to complete the crime as defined in the 1968 Act, had to take place in this country. The observations of Lord Reid are particularly striking (55 Cr App R at p 125):

The present state of the law is far from satisfactory. I refer in particular to the decisions in HARDEN [1963] 1 Q.B. 8, (1962) 46 Cr.App.R. 90; and BRIXTON PRISON GOVERNOR, Ex p. RUSH [1969] 1 W.L.R. 165. If a person in this country does all that he can to ensure that a crime is committed abroad so that he can reap the benefit here, I can see nothing contrary to legal principle in our law holding him guilty of a crime. If I were entitled to make law, I think I would draw some distinction between malum prohibitum and malum in se. The latter is or ought to be a crime everywhere, but opinion and practice differ as to the former. But changes of that kind are apt to have side effects which would elude us in any such examination of a problem as we can make in reaching a decision in a particular case.

The Parliament of the United Kingdom has plenary power, if it chooses to exercise it, to empower any court in the United Kingdom to punish persons present in its territories for having done physical acts wherever the acts were done and wherever their consequences took effect....what reason have we to suppose that Parliament intended any geographical limitation to be understood? The only relevant reason, now that the technicalities of venue have long since been abolished, is to be found in the international rules of comity which, in the absence of express provision to the contrary, it is presumed that Parliament did not intend to break (55 Cr App R at p140)

each sovereign State should refrain from punishing persons for their conduct within the territory of another sovereign State, where the conduct has had no harmful consequences within the territory which imposes the punishment. I see no reason for presuming that Parliament in enacting the Theft Act 1968 intended to make the offences which it thereby created subject to any wider exclusion than this. In my view, where the definition of any such offence contains a requirement that the described conduct of the accused should be followed by described consequences the implied exclusion is limited to cases where neither the conduct nor its harmful consequences took place in England and Wales.

It follows that even if the definition of "blackmail" in section 21 of the Act falls into the category of offences in which the physical acts of the accused must be followed by consequences occurring after completion of those acts, it is sufficient to constitute the offence of blackmail if either the physical acts are done or their consequences take effect in England and Wales (55 Cr App R at pp144-145)

First, that the matter is simply one of the construction of the statute creating the offence was a novel suggestion when it was made, and has not been repeated in any subsequent case, even in those cases such as Libman, Liangsiriprasert and Wallace Smith that have shown sympathy for Lord Diplock's approach. Even in Wallace Smith , the reference to Lord Diplock's views was to his general exposition of the rules of comity, rather than to the particular way in which, in Treacy, Lord Diplock held those rules to be applicable in determining, not jurisdiction, but the nature or definition of the offence itself: see the extract from Lord Diplock's speech cited in Wallace Smith at [1996] 2 Cr App R pp18-19. Second, the issue had always been thought, before Treacy, to be indeed one of jurisdiction, and not of the definition of the offence. The English courts had jurisdiction subject to two conditions: that the defendant was physically present before the court (a matter that cannot be affected by construction of the statute); and that he had completed the crime, as defined, within England and Wales. The latter was an overriding requirement that was applied in the light of, rather than which affected the terms of, the definition of the crime charged.

Third, Lord Diplock's approach was contrary to existing authority which, although not of course binding on the House of Lords, was in our respectful view too long-established to be disturbed save by legislation: as Lord Reid recognised in the passage that we have already cited. In that regard, Lord Diplock dealt with the matter as follows (55 Cr App R at pp142-143):

The question whether the jurisdiction to try offences of obtaining property or money by false pretences is treated in English law as exclusive to the court of the country in which the property or money was obtained did not fall for decision until comparatively modern times in HARDEN (1962) 46 Cr. App.R. 90; [1963] 1 Q.B. 8. The only matter discussed in the judgment was as to where the accused obtained cheques which were posted in Jersey addressed to the accused in England as a consequence of his false pretences made previously in England. The Court of Criminal Appeal applied the legal fiction as to the Post Office being the agent of the offeror, which forms part of the English civil law of contract, and held that the cheques were "obtained" by the accused in Jersey. They assumed, but without giving any reasons, that this finding deprived an English court of jurisdiction to try the accused of the offence charged.. My Lords, this assumption was really one as to the intention of Parliament when it passed the Larceny Act 1916. As I have already indicated, I see no justification for it. HARDEN (supra) will, in my view, call for re-examination if a similar question should arise in connection with the new offence of obtaining property by deception under section 15 of the Theft Act 1968.

We have to make three comments. First, as the passage from the judgment of Widgery J in Harden that is cited above demonstrates, this court did not fail to give reasons for its conclusion in that case. Its reason was that it applied the last act rule, as contained in previous authority. The demands of that rule were precisely why the court had to engage in the otherwise sterile enquiry as to where the cheques came into the possession of the accused. Second, we cannot with respect find any justification in Harden for the contention that that case turned on an assumption as to the intention of Parliament when passing, that is to say turned on the construction of, the Larceny Act 1916. That matter is not mentioned in the judgment, nor is it a reasonable implication from the judgment that only a matter of construction was being addressed. Third, the element in Harden to which Lord Diplock took objection was that, in deciding where the cheques had been "obtained", the Court of Criminal Appeal adopted too narrowly contractual an approach. He did not hold that the case had been wrongly decided simply because it embarked on that enquiry in the first place.

Lord Diplock's speech has not subsequently been interpreted as laying down a new rule of decision to replace the last act or terminatory rule. That latter proposition was plainly not the view of this court in Thompson, Beck or Nanayakkara , all of them decided after Treacy. It was not the view of Lord Dilhorne in Stonehouse who said, in the passage cited above, that he can

Nor was it the view of this court in Treacy, as is demonstrated by the passage from the judgment of John Stephenson J that we cited above: a view from which Lord Diplock in the House of Lords did not express dissent. Nor, indeed, does it seem to have been the view of Lord Diplock himself. It is very difficult to see how he could have spoken as he did in the passages cited above from Markus and Stonehouse, both of which assume the continued force of the last act rule, if he thought that that had been replaced, or even that it should be replaced, as a rule of decision, by the comity theory that he adumbrated in Treacy.

Treacy was however referred to in this court in Tirado (1974) 59 Cr App R 80, where misrepresentations were made from this country to Morocco, inducing the recipients to pay money to a bank in Morocco, which then forwarded drafts to the appellant in Oxford. The case was decided on the basis that, unlike the factual or contractual analysis of a similar transaction adopted in Harden, the appellant had not constituted the Moroccan bank his agents to receive as opposed to transact the money, and there was therefore prima facie evidence of his obtaining the drafts in England and Wales. That this court had to engage in this factual analysis of the transaction in order to find that the court below had jurisdiction to try the counts of obtaining a valuable property by deception in itself demonstrates that the last act rule was applied. In addressing the general adopted in Harden, and the comments on it of Lord Diplock in Treacy, Lord Widgery CJ said (59 Cr App R at p83)

In the case of Treacy v DPP Lord Diplock in dealing with a somewhat similar case under the Theft Act referred to the case of Harden and he said this: " Harden will, in my view, call for re-examination if a similar question should arise in connection with the new offence of obtaining property by deception under section 15 of the Theft Act 1968". What Lord Diplock had in mind is that maybe in a case under the Theft Act a question does not arise any more as to precisely where the obtaining by deception occurred. In this case in the Court below the matter was fought entirely on the footing that the principle of Harden applied. The ruling in Harden is more favourable to the appellant than the ruling envisaged by Lord Diplock in Treacy, and we think that it would be wrong in all the circumstances if we allowed ourselves to be influenced by the doubts which Treacy may throw upon the decision in Harden. Like the Court below, we propose to approach this case on the footing that the judgment in Harden is right.

In Libman , in addition to counts of conspiracy, the substantive offence charged was one of "fraud", contrary to section 338 of the Canadian Criminal Code. The accused's accomplices, located as he was in Canada, telephoned residents of the USA and by misrepresentation induced them to purchase shares in Central American mining companies. The USA residents were directed to send their money to offices located in Central America, equally operated by accomplices of the accused, who in due course transferred the proceeds to him. As an introduction to its consideration of whether the Canadian courts had jurisdiction to try those offences, the Supreme Court of Canada entered upon a consideration of "the English legal background": whilst warning that the there had been differences in emphasis in the experience in the two countries (21 DLR(4th) at p178).

The Supreme Court of Canada commenced that enquiry by reverting to cases in the nineteenth century, a process that has not been thought appropriate in England and Wales because of the wealth of more recent authority. The Supreme Court of Canada does, however, draw attention (21 DLR(4th) at p182) to Ellis [1899] 1 QB 230, and also to Stoddart (1909) 2 Cr App R 217 as applying the last act rule. It may be appropriate to cite what was said, as a matter of ratio, in the latter case by Lord Alverstone CJ, 2 Cr App R at p236:

But, with respect, nothing could have been more inexpedient, from the point of view of effective law enforcement or control of fraud, than to apply the last act rule. The court did that in Harden not because it thought it expedient to do so, but because it thought itself obliged to do so by binding authority: in particular, Ellis. The Supreme Court of Canada then refers to Harden having been in Tirado "carefully confined to its own facts" (which was so, but only necessary because on the general rule the court thought itself bound by Harden); and followed in Klubchandani "but simply on the basis of stare decisis" (21 DLR(4th) at p185). No reference is made either to Beck or to Thompson, the reports of which may not have been available to the Court; nor, necessarily, to Nanayakkara, which was decided after Libman.

In Baxter the charge was attempting to obtain property by deception by posting letters from Northern Ireland to pools promoters in England. The court referred to Lord Diplock's statement of the comity theory, but said that cases of attempt were sui generis ([1972] 1 QB at p11G). In Baxter the demand had arrived in England and had been intended to do damage there. Accordingly

The attempt to obtain the money by deception in the shape of a letter can be likened to the demand by letter which was under consideration in the House of Lords [in Treacy]: and it appears that all their Lordships were disposed to hold that had it been a case of a demand dispatched abroad which had arrived in England, there would have been jurisdiction here to try the offence-indeed three of their Lordships specifically so stated ([1972] 1 QB at p13F)

In Wall the charge was fraudulent evasion of the restriction on importation of dangerous drugs. For that offence to be committed, the drugs in question must necessarily arrive in this country. The court referred to Baxter, and held that if sending a letter from abroad to England containing false pretences constituted an offence punishable here, so must taking part in the dispatch of drugs to England with a view to evading a restriction on their import. We would respectfully agree: but the offence is completed in each case in this country. In Markus, as we have sought to demonstrate, Lord Diplock appears to have assumed that he was dealing with a specific aspect of the last act rule.

In none of the three cases just reviewed was the issue dealt with in Libman specifically discussed. And what is conspicuously lacking from them is any suggestion that the observations of Lord Diplock in Treacy are being adopted as a rule of law to be used in deciding questions of jurisdiction. There is some suggestion in the judgment of the Supreme Court of Canada that problems of jurisdiction have since Treacy been resolved by treating the actus reus as a continuing act, starting in one jurisdiction but continuing in another. That was not how Lord Diplock rationalised the law in Treacy. And while that solution may be of assistance in cases of attempt, such as Stonehouse, and of conspiracy, such as DPP v Doot [1973] AC 807, it cannot be deployed in a case such as ours, where the procurement, as opposed to an attempt to procure, does not exist at all until the valuable security is executed.

We have considered the judgment of the Supreme Court of Canada at some length out of deference to the high authority of that court, and because Libman has been of influence in later cases. However, we feel driven to say that had the Supreme Court of Canada had the benefit of being shown Beck, Thompson and Nanayakkara; and had it been obliged, as would have been a court in this jurisdiction, to give close attention of the order that was paid by this court in Tirado to the status of those cases as binding precedent; then it might well have expressed itself in different terms.

Liangsiriprasert concerned extradition from Hong Kong to the USA. The question was whether a conspiracy entered into outside Hong Kong with the intention of committing the criminal offence of trafficking in drugs in Hong Kong was justiciable in Hong Kong although no overt act in pursuance of that conspiracy had yet taken place in Hong Kong. The Privy Council accepted that the law of conspiracy in Hong Kong was the same as the common law of England and Wales. At the date at which Liangsiriprasert was decided that question was thought to be uncertain in the law of England and Wales: see Doot [1973] AC 807; the analysis of that case in Archbold (43rd, edition, 1988) at paras 28-22 to 28-23; and most conspicuously in the opinion of Lord Griffiths in Liangsiriprasert itself, at pp 84-89. After that substantial review of the authorities on jurisdiction in respect of inchoate crime the Board referred, with strong approval, to the passage in the judgment of the Supreme Court of Canada in Libman in which that court concluded (21 DLR (4th) at p189):

The English courts have decisively begun to move away from definitional obsessions and technical formulations aimed at finding a single situs of a crime by locating where the gist of the crime occurred or where it was completed. Rather, they now appear to seek by an examination of relevant policies to apply the English criminal law where a substantial measure of the activities constituting a crime take place in England, and restrict its application in such circumstances solely in cases where it can seriously be argued on a reasonable view that these activities should, on the basis of international comity, be dealt with by another country.

Crime is now established on an international scale and the common law must face this new reality. Their Lordships can find nothing in precedent, comity or good sense that should inhibit the common law from regarding as justiciable in England inchoate crimes committed abroad which are intended to result in the commission of criminal offences in England.

There was, indeed, no authority preventing that conclusion in respect of inchoate crimes, and much to support it. In the law of England and Wales the offence of conspiracy is complete as soon as it is entered into, as is for instance demonstrated by the terms of section 1 of the Criminal Law Act 1977. There is no need for there to be any overt act in pursuit of the conspiracy. Why then should that rule be differently applied just because the case is one of conspiracy entered into outside England and Wales, but in which this jurisdiction has a legitimate interest because that conspiracy is to commit crimes in this country?

The appellant was accused, inter alia, of obtaining by deception. The fraudulent representation was made in London, the only element in the transaction that occurred outside England and Wales being the crediting of a bank account in New York: which was assumed for the purpose of the judgment to have been the relevant "obtaining". The court summarised the two approaches that it considered to have been taken to questions of jurisdiction ([1996] 2 Cr App R at p18):

We discern in the authorities two different approaches to the basis on which jurisdiction exists: these can be shortly identified as "gist of the offence" and "comity". In the former, the English courts have assumed jurisdiction if the gist of the offence, for the present purposes the obtaining, was committed here. Harden and the other case on which [counsel for the appellant] relied demonstrate this approach.

The court then cited at length, and with approval, from the speech of Lord Diplock in Treacy, and the passage from the judgment in Libman that we have referred to in discussing Liangsiriprasert. The court reminded itself of the now international nature of fraud, as demonstrated by the case before it, and of the strong statements of the Board in Liangsiriprasert as to the need for the courts to adapt their processes to meet that threat, rather than become embroiled in technicalities such as where an obtaining had in law taken place. It then said ([1996] 2 Cr App R 20G):

In a more recent case in this court, Forsyth [1997] 2 Cr App R 299, on a charge of handling, Wallace Smith was referred to without comment as to its status as authority, but the court decided the jurisdiction issue by concluding that although the money the subject of the count had been handed over to a bank in Switzerland, the fact that instructions had been given for the sum to be credited to an account in London meant that the disposal or realisation that constituted the handling was not complete in Switzerland but continued in London. On that basis the Courts of England and Wales had jurisdiction to try the count.

First, as to Sansom, that case was, like Liangsiriprasert, solely about conspiracy, and did not address at all the last act rule as applied in cases of substantive offences. Further, we cannot agree that there is no difference in respect of jurisdiction between conspiracy and offences such as obtaining by deception. As we have sought to demonstrate, the line of authority in respect of each category has developed quite differently, and in no previous case has it been suggested that the law as to jurisdiction in cases of conspiracy can override or offset the existing authorities on obtaining by deception or procuring the execution of a valuable security.

Second, we cannot agree that the state of the authorities is such that this court is free to choose between the last act or "gist of the offence" rule; and a "comity" rule based on the general observations of Lord Diplock in Treacy. The latter has never been accepted as a rule of jurisdiction and, like this court in Tirado, we do not think that we are free to depart from the rule recognised in Harden, or, in the particular case before us, from the rule of jurisdiction applied in Thompson and Nadayakkara. In terms of reason and policy we fully agree with the court in Wallace Smith that such a step is highly desirable; but we respectfully cannot agree that it is open to this court.

We cannot leave this case without expressing our great concern at the present state of the law. We fully agree with the comments of the Privy Council in Liangsiriprasert and of this court in Wallace Smith as to the need for that law to be modernised in order to meet the growing threat of international fraud. It is deplorable that the law on what should be a straightforward question has been differently determined by two different constitutions of this court. We strongly agree in that connexion with the comment of this court in Forsyth, [1997] 2 Cr App R at p317F, that the amount of expensive time that has been occupied in investigating this question could have been much better spent. And it is deplorable that in this case we find ourselves forced to conclude that plainly dishonest conduct with a strong connexion with this country cannot be tried here.

In our view, however, these defects in the present law regrettably cannot be put right by action in this court, and probably cannot be put right at all save by legislation. That is indeed the view of Parliament, which took steps to reform the law in Part I of the Criminal Justice Act 1993. That was passed by Parliament to introduce a rational and comprehensive scheme that would give the courts of England and Wales jurisdiction over cases of international fraud that had a connexion with this country but which were not necessarily completed here. That legislation fully recognised the matters ventilated by Lord Diplock in Treacy, but as principles for legitimate legislation in an international context, rather than as a rule of decision. The legislative rules would have operated to give the courts of England and Wales jurisdiction, plainly and without argument, both in Wallace Smith and in the case before us. The legislation could not however be applied in either of those cases, or in Forsyth, because it has never been brought into operation. Failure to implement those provisions seriously undermines the role that the courts of England and Wales should be playing in the battle against international fraud. It causes a quite unjustifiable expenditure of public funds in litigation, as the present case amply demonstrates. And the failure to implement Part I of the Criminal Justice Act 1993 is the more surprising by reason of the fact that the almost identical provisions in respect of international offences involving computers, contained in sections 4-9 of the Computer Misuse Act 1990, have been in operation since the inception of that statute, as far as we know without any adverse consequences.

England and Wales Court of Appeal (Criminal Division) Decisions

JOHN LAWRENCE MANNING, R v. [1998] EWCA Crim 2074 (24th June, 1998)

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