Fraud Act 2006

Question 1

What does s.1(1) of the Fraud Act 2006 say?

Answer 1

A person is guilty of fraud if they are in breach of any of the sections listed in subsection (2), which provides for different ways of committing the offence.

Question 2

What does s.2(1) of the Fraud Act 2006 say?

Answer 2

s. 2(1) provides that a person is in breach of s.2 if he:
(a) dishonestly makes a false representation, and
(b) intends by making the representation
(i) to make a gain fro himself or another, or
(ii) to cause loss to another or to expose another to a risk of loss

Question 3

What are the elements of the offence?

Answer 3

1. D makes a representation
2. That is false
3. The representation is voluntary
4. D knows that the representation is untrue, or that it might be untrue or misleading
5. D dishonestly makes the false representation
6. D intends, by the false representation to gain fro himself or another, or cause loss to another, or expose another to risk of loss

Question 4

What is the difference between the old law and new?

Answer 4

Fraud is now a conduct crime, which means there’s no need to show that any particular crime ensued. The actus reus consists of the making of a false representation. There is no need for a result (old law) to occur as a result of the false representation.

Question 5

What is a representation/

Answer 5

s. 2(3) provides that any representation as to fact or law, including a representation as to the state of mind
(a) the person making the representation, or
(b) any other person

Question 6

What is an implied and express representation?

Answer 6

A representation may arise from words or conduct and as s.2(4) makes clear, may be express or implied
For example…
If D offers to sell a painting (even though he does not own it) he is limpidly representing that he has a right to sell it.

Question 7

What does intention detail?

Answer 7

A statement of present intention is a representation as to state of mind and is also a statement of fact.
For example…
if D asks V for money to fund his University course, his intention being to use the money to bet on a horse, he would be falsely representing his state of mind.

Question 8

What case illustrates that a statement of intention may be implied from D’s conduct?
What did Lord MacDermott and Reid say?

Answer 8

DPP v Ray [1975]

• D ordered a meal at a restaurant with the intention to pay
• After finishing the meal he changed his mind and no longer wanted to pay
• He waited until the waitress went elsewhere and he then left the restaurant
• The House of Lords held that there was deception

Lord MacDermott “the initial representation that he would pay, implied by ordering the meal, was a continuing one which remained live and operative until he left the restaurant.

Lord Reid “The implied representation that a customer will pay for his meal is a continuing representation, it continues until he leaves the restaurant in the normal course of events.

Question 9

What was the facts in Rai [2000]

Answer 9

• D applied to the council for a grant to install a bathroom downstairs in his house
• For the use of his infirm mother
• The grant was approved but two days later his mother died
• D did not inform the council and the building work went ahead
• D was convicted of obtaining services by deception on contrary to s.1(1) of the Theft Act
  The local authority continued to believe that the property would be occupied by his mother

Question 10

What happens in cases of Contract of services?

Answer 10

Where a contract of service or for the sale of property are involved, the provider of the service may charge whatever he likes. An excessive quotation may consitiute a false representation where a situation of mutual trust exists between D and his customer or, perhaps, where D knows that his customer is naive or inexperienced and is relying on D’s expertise and honesty.

Question 11

What is a case that speaks on contract of false with false representation?

Answer 11

Silverman [1987]

• D a builder, had done work for two elderly sisters for any years
• Charging them grossly excessive prices
• In this situation of mutual trust, the implied representation was that his charge was fair and proper, which D knew to be untrue
• The court of appeal found that ‘his silence on any matter other than the sums to be charged was as eloquent as if he had said that he was going to make no more than a modest profit”

Question 12

What about the use of cheques, cards and credit cards?

Answer 12

Where D draws a cheque in favour of P )e.g. in payment for property supplied by P), the art of drawing the cheque involves certain implied representation.

First, D is representing that he has an account with the bank upon which the cheque is drawn. If D has stolen the cheque, his conduct in drawing it in favour of P will involve a false representation.

The representation would be true provided that

(1) D believes that there are currently sufficient funds in the account to meet the cheque
(2) he intends to pay sufficient funds

Question 13

What are the facts in Metropolitan Police Commissioner v Charles [1977]?

Answer 13

• D, obtained gambling at a casino in return for 25 cheques, for £30 each
• All supported by a cheque card
• D knew his account was withdrawn and that he had no authority to overdraw and thus no authority to draw further cheques
• The conditions on the cards, however, had been observed so D could not be Quilty of a deception in representing that each cheques would be honoured by his bank
  In upholding D’s conviction for obtaining a pecuniary advantage by deception contrary to s.16(1)
  HOUSE OF LORDS:
  Held the D’s representation of the cheque card involved the implied representation that he had the authority of the bank to use the card so as to create a contractual relationship between the bank and the payee

Question 14

What are the facts in Lambie [1982]?

Answer 14

• D’s credit limit was £200
• Knowing she had exceeded his limit and that authority to use the card had been withdrawn
• D purchased goods from a shop using the card
• The shop complied with the relevant conditions so that a valid transaction was concluded which the credit card company was bound to honour
• The House Lords held that in presenting the credit card, D was representing (falsely) that she had the authority of the credit card company to use the card

Question 15

When is a representation false?

Answer 15

s.2(2) provides that a representation is false if it is untrue or misleading and D knows that it is, or might be so.

Question 16

When is a representation made? And does it have to be heard?

Answer 16

When D communicates it to the person he is seeking to decide. The Act, however, does not impose any requirement that the representation be heard or received by another.

If D speaks to V and makes a false representation with the necessary mens rea, the offence is complete even though V is deaf and did not hear D’s representation

Question 17

What about machines - with or without human agent?

Answer 17

s.2(5) makes express provision for the situation where the representation D makes is made to a machine and no human agent is involved in receiving or perceiving it.

This section provides that for the purpose of this cation a representation may be regarded as made if it is submitted in any form of any system or device designed to receive, convey, or respond to communication.

Question 18

What does the case of Hands [1887] say on Machine - and old law?

Answer 18

• D used a brass disc instead of a coin in cigarettes vending machine
• A machine could not be derived as a machine is not human
• D was not guilty

OLD LAW v NEW LAW:
Now there’s no need for the human mind as long as D made a representation
The main purpose of this provision is cover the situation where D makes a representation to a machine and a response can be produced without any need for human involvement

Question 19

The mens rea element?

Answer 19

There are three elements to the mens rea of this offence namely

1. Knowlege
2. Intention
3. Dishonesty

(i) knowing the representation is, or might be false
For D to be found guilty it must be proven that he either knew that the representation he made was untrue or misleading or he knew that it might be so (s.2(2)(b) of the FA 2007

What is required is actual knowledge or the representation might be untrue or misleading and a decision to make it, nonetheless

Question 20

Intention to make a gain or cause loss

Answer 20

The offence is one of ulterior intent s.2(1) provides that a person is in breach of the sections if he

1) intends, by making the representation -
i) to make gain gain fro himself or another, or
ii) to cause loss to another or to expose another to a risk of loss

Question 21

Does V need to suffer any loss?

Answer 21

As the actus reus is complete upon a false representation being made, there is no need that anyone suffer any loss, or be exposed to the risk of loss, or that D, or another, actually make gain.

Question 22

The element of dishonesty - The Old test

Answer 22

s.2(1) provides that a person only commits the offence of fraud by false representation when he dishonestly makes a false representation

Ghosh test:

(1) Whether D’s conduct would be regard as dishonest by the ordinary stands of reasonable and honest people
(2) Whether D was aware that his conduct would be regarded as dishonest

Current test
Ivey v Gentling Casinos UK [2017]
(1) Whether the conduct is dishonest is to be determined by applying the objective standards of ordinary decent people
(2) What was D’s genuine knowledge/belief of the facts

Question 23

key cases?
Jeff v Bassett [1966]
Weeman [2013]
Barnard [1937]
MacDermott [2008]

Answer 23

Jeff v Bassett: D said in their opinion the roof needed repairs. This was a statement of fact because D knew that the works weren’t necessary

Weeman: D made a false representation to elderly persons regarding the state of their properties and in his opinion, the need for repairs.
HELD: Such statements of of opinion will continue to be seen as statements of facts

Barnard; In order to gain credit in a shop, D expressly told the shop-keeper that he was an Oxford university student, when he was not

MacDermott: D stole clothing from a department store, D returned it to recover a refund of £79, D lied and said he had paid for it

Question 24

Key cases continued 
Robinson [1884]
Doukas [1978]
Morris [1984] 
Dpp v Stonehouse [1978]

Answer 24

Robinson: D wore a badge that suggested he could accept bets at a race-course

Doukas: A wine waitress employee at a hotel impliedly represented by pouring that was his own, not his employer

Morris: A customer in a supermarket who tenders goos to the cashier impliedly represents that the voice is that which he believes to be authorised by the store

App v Stonehouse: D impliedly represented that he was dead via his conduct of leaving his clothes on a beach and disappearing, D actually fled to Australia, The fraud was only discovered because at the time Lord Lucas had gone missing