Problem Question: Criminal Law, No.3

Problem Question:

Andy, the director of an investment company, convinces Barack to make a £5 million high-risk investment, ensuring him that his capital will be doubled within a matter of weeks. In fact, both Andy and Barack know that nothing is certain in the financial market. As it turns out, Barack loses half of his capital because the stock in which he invests loses a great deal of its value.

Candy is an antiques dealer. She acquires a painting, which she thinks is an original Vermeer although she cannot be sure because the person who sold it to her did not have any documentation of originality or provenance. Candy tries to sell the painting to Delia, telling her that it is an original Vermeer. Delia decides not to buy the painting.

Rajiv is a volunteer for a Non-Governmental Organisation, which provides children in the developing world with books. He is so committed to the NGO's cause that he occasionally steals books from bookshops and sends them to schools in Africa. He feels that children there need them much more than booksellers need the money and that this is a way of delivering global social justice. One day Rajiv walks into the Books U Like bookshop. He sees a book, which he thinks would be excellent for African schools. He picks up the book but, hearing the shop assistant coming towards him, he puts it back on the shelf. He then leaves the bookshop.

Discuss the criminal liability of Andy, Candy, and Rajiv.

Andy's Criminal Liability

Fraud

Andy could be liable for fraud under the Fraud Act 2006, specifically under the provision related to false representation.

• Dishonesty: Andy was aware that nothing is certain in the financial market, yet he assured Barack that his investment would double. This assurance was dishonest, as it knowingly misrepresented the truth.

• False Representation: Andy’s statement that Barack’s capital would double constitutes a false representation. The fact that both Andy and Barack understood the inherent risks in the market does not negate the falsity of the claim.

• Intent to Make a Gain or Cause a Loss: Although Andy may not have directly intended to make a gain for himself, he exposed Barack to the risk of a substantial financial loss, which is sufficient to meet the requirement for fraud.

• Encouragement and Assistance: By persuading Barack to invest based on false information, Andy could be seen as encouraging and assisting in the fraudulent activity. The case of Armstrong (2000) suggests that the success of the fraud is not required for liability—merely the act of exposing someone to risk through dishonesty could be sufficient.

Candy's Criminal Liability

Fraud

Candy could also be liable for fraud under the Fraud Act 2006 due to her attempt to sell the painting to Delia by falsely representing it as an original Vermeer.

• Dishonesty: Candy was uncertain about the painting’s authenticity, yet she presented it as an original Vermeer to Delia. This is dishonest behaviour since she knew there was a possibility it might not be genuine.

• False Representation: By stating that the painting was an original Vermeer, Candy made a false representation. Even though Delia decided not to purchase the painting, the offence of fraud does not require the false representation to be acted upon for it to be criminal.

• Exposure to the Risk of Loss: Candy’s false representation exposed Delia to the risk of financial loss, which satisfies the criteria for fraud under the Act.

Rajiv's Criminal Liability

Theft

Rajiv’s criminal liability primarily concerns the offence of theft under the Theft Act 1968.

• Appropriation, Property Belonging to Another, and Intention to Permanently Deprive: Rajiv occasionally steals books from bookshops, which meets the basic criteria for theft—appropriating property belonging to another with the intention to permanently deprive the owner of it.

• Dishonesty: Rajiv’s actions raise the question of dishonesty, especially given his belief that the theft is justified by the greater good. Section 2 of the Theft Act 1968 states that a person is not dishonest if they believe they have a right to deprive the other of it. However, Rajiv's act of putting the book back on the shelf when he hears the shop assistant coming suggests that he knew his actions were dishonest, contradicting any claim of moral justification.

• Objective Test for Dishonesty: Under the Ivey test, Rajiv’s conduct is likely to be judged as dishonest by the standards of ordinary decent people, despite his subjective belief in the morality of his actions.

Conclusion

• Andy: Likely liable for fraud due to his dishonest and false representation regarding the investment.

• Candy: Likely liable for fraud for dishonestly misrepresenting the authenticity of the painting to Delia.

• Rajiv: Likely liable for theft, as his actions satisfy the elements of the offence, including dishonesty.