Whilst deciding a civil case involving casino winnings last week, Ivey v Genting Casinos [2017] UKSC 67, the Supreme Court disapproved the test for dishonesty which has been applied for the last 35 years in theft and fraud cases. On revisiting the test in Ghosh (R v Ghosh [1982] QB 1053) the Supreme Court has said that the civil test is the one to be applied.
The Court was concerned with whether card turning in a game of Punto Banco amounted to cheating and took the opportunity to reconsider the Ghosh test. The well-known test for dishonesty has both an objective and a subjective limb and requires the prosecution to prove firstly that the conduct complained of was dishonest by the lay objective standards of ordinary reasonable and honest people and secondly that the defendant must have realised that ordinary honest people would regard the behaviour as dishonest.
But following Ivey the second limb of the Ghosh test no longer needs to be proved. On the idea that someone must know they were being dishonest, Lord Hughes commented:
‘Just as convincing himself is frequently the stock in trade of the confidence trickster, so the capacity of all of us to persuade ourselves that what we do is excusable knows few bounds. It cannot by any means be assumed that the appropriators of animals from laboratories, to whom the court referred in Ghosh, know that ordinary people would consider their actions to be dishonest; it is just as likely that they are so convinced, however perversely, of the justification for what they do that they persuade themselves that no one could call it dishonest. There is no reason why the law should excuse those who make a mistake about what contemporary standards of honesty are, whether in the context of insurance claims, high finance, market manipulation or tax evasion. The law does not, in principle, excuse those whose standards are criminal by the benchmarks set by society, nor ought it to do so. On the contrary, it is an important, even crucial, function of the criminal law to determine what is criminal and what is not; its purpose is to set the standards of behaviour which are acceptable. As it was put in Smith’s Law of Theft 9th ed (2007), para 2.296: “… the second limb allows the accused to escape liability where he has made a mistake of fact as to the contemporary standards of honesty. But why should that be an excuse?”’ (para 59)
The new test for dishonesty is as follows:
‘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 the facts. The reasonableness or otherwise of his belief is a matter of evidence (often in practice determinative) going to be 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.’
The ruling on Ghosh may be obiter, but it will doubtless be followed.
The full judgment is available here: https://www.supremecourt.uk/cases/docs/uksc-2016-0213-judgment.pdf
PardoesSolicitors