Lloyd's Maritime and Commercial Law Quarterly
BANK ACCOUNTS, RESTITUTION AND THEFT
Attorney-General’s Reference (No. 1 of 1983)
Criminal cases not infrequently depend on complex points of civil law. An interesting application of the law of theft recently provided the occasion for an analysis of the property position concerning current banking accounts. Additionally, it also considered important restitutionary principles relating to mistaken payments in the banking system.
The matter arose in this way, in Attorney-General’s Reference (No. 1 of 1983).1 D was a woman police officer in London who worked overtime on Tuesday 28th July 1981, the day preceding the Royal Wedding between H.R.H. Prince Charles and Lady Diana Spencer. Through no fault of her own, D was incorrectly recorded as having worked on Wednesday 29th July 1981, which was a bank holiday. Duty on bank holidays was paid at double the normal rate and D was ultimately paid £74.74 in respect of this work she did not actually carry out. This sum was included in a sum of £883.14 gross, £614.11 net, transferred by direct debit from the bank of the Receiver of the Metropolitan Police to D’s bank. There was no evidence that D knew of the mistake at the time of the payment although there was some disputed evidence that she later became aware of it. However, D apparently took no steps to rectify the error, and the affair came to light after an anonymous letter to the Metropolitan Police Complaints Investigation Bureau. D was charged and tried on indictment with the theft of £74.74 from the Receiver, but acquitted on the direction of the judge at the close of evidence for the prosecution. The Attorney-General referred the case to the Court of Appeal under s. 36 of the Criminal Justice Act 1972. This does not provide for a prosecutor’s appeal against an acquittal but gives the Court of Appeal a chance to correct errors in a trial court ruling by discussing and deciding the point of law raised by the acquittal. The point referred in the present case was:
“Whether a person who receives overpayment of a debt due to him or her by way of a credit of his or her bank account through the ‘direct debit’ system operated by the bank and who knowing of that overpayment intentionally fails to repay the amount of the overpayment may be guilty of theft of the credit to the amount of the overpayment”.
The Court of Appeal was of opinion that a person could be guilty of theft in such circumstances, and reasoned as follows:
- (i) Section 1(1) of the Theft Act 1968 provides that “a person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it”.
- (ii) Section 4(1) of the 1968 Act provides that “‘property’ includes … things in action”.
- (iii) The debt owed to D by her bank, represented by her bank account, was a thing in action within s. 4(1) and hence property within s. 1.
- (iv) Section 5(4) of the 1968 Act provides that “where a person gets property by another’s mistake, and is under an obligation to make restoration (in whole or in part) of the property or its proceeds or the value thereof, then to the extent of that obligation, property or proceeds shall be regarded (as against him) as belonging to the person entitled to restoration and an intention not to make restoration shall be regarded accordingly as an intention to deprive that person of the property or proceeds”.
- (v) D obtained the debt owed her by her bank, her bank balance, by mistake.
- (vi) D was under an obligation to make restoration (in part) of the value of the debt to the Receiver.
- (vii) D intended not to make restoration.
- (viii) Accordingly, s. 5(4) applied, with the twin results that (a) the debt was (as against D) property belonging to the Receiver and (b) D intended to deprive the Receiver of the debt.
- (ix) It remained for the prosecution to prove that D had “appropriated” the debt and had done so dishonestly; the Court of Appeal did not pause to enquire whether the prosecution would have succeeded in this endeavour.
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