The Court of Appeal has today handed down judgment in R v Barton and Booth  EWCA Crim 575, holding that the objective test for dishonesty as set out in Ivey is to be used in criminal proceedings in preference to the two-stage dual objective/subjective test set out in Ghosh.
For over thirty years the approach to defining criminal dishonesty was the two-stage test laid down in R v Ghosh  QB 1053: was the defendant’s conduct objectively dishonest by the standards of reasonable and honest people, and if so did the defendant realise that his conduct was dishonest by the standards of those same people?
The Supreme Court in Ivey v Genting Casinos (UK) Ltd t/a Crockfords  UKSC 67 proceeded to dispense with the two-limb Ghosh test for criminal dishonesty in favour of a single objective test, as applied in the civil courts.
The test as formulated in Ivey is simply to ask whether the conduct was honest or dishonest when applying the objective standards of ordinary decent people, applying the facts as they were known by the defendant at the time.
The subject matter of Ivey was whether ‘cheating’ in a game of cards necessarily required an element of dishonesty on the part of the cheater, a question which the Supreme Court answered in the negative. Far from that being the end of the matter however, the judgment gave the Court the opportunity to upend the previously accepted Ghosh test in a passage that can only be said to be obiter and therefore non-binding on lower Courts.
The potential headache of whether the criminal courts should continue to apply the Ghosh test or to now follow the dicta of the Supreme Court in a civil judgment was subject to an attempted resolution by the then President of the Queen’s Bench Division, Sir Brian Leveson, in R v Patterson  1 Cr App R 28. He remarked:
These observations [of Lord Hughes] were clearly obiter, and as a matter of strict precedent the court is bound by Ghosh … Given the terms of the unanimous observations of the Supreme Court expressed by Lord Hughes, who does not shy from asserting that Ghosh does not correctly represent the law, it is difficult to imagine the Court of Appeal preferring Ghosh to Ivey in the future.
The Ivey test further appeared to have been accepted by Gross LJ in the slightly later case of R v Pabon  EWCA Crim 420 noting that a jury being directed on the question of dishonesty should be directed in terms of Ivey rather than Ghosh.
Barton & Booth:
The appellants were said to have exploited the vulnerable residents of the nursing home they worked at in order to profit in various ways, including by obtaining from them large gifts of money or charging grossly inflated fees to remain at the home. There was no suggestion that the victims were ill-treated, and indeed it appears to have been accepted that all of the transactions from which the appellants gained were entered into by the victims willingly. Amongst other counts, both defendants were charged with offences of conspiracy to defraud and theft.
Barton’s case was that the money he had received came from genuine gifts, or legitimate fees. He denied that he had been in any way dishonest, a claim mirrored by Booth. Both defendants were convicted after trial in the Crown Court, where the jury were directed using the Ivey definition of dishonesty.
On appeal, the Court of Appeal had to grapple with the status of the Supreme Court’s decision in Ivey and the position of the Ghosh test.
They held that:
(1) Whilst the decision in Ivey was strictly obiter, where the Supreme Court itself directs that an otherwise binding decision of the Court of Appeal should no longer be followed and proposes an alternative test that it says must be adopted, the Court of Appeal is bound to follow;
(2) Therefore, the test of dishonesty in all criminal cases is that established in Ivey.
Whilst the position is now clear as to which test for dishonesty should be applied, the law is now in a rather unsatisfactory place from the point of view of defendants.
The Court of Appeal was at pains to state in Barton that the Ivey test ‘remains a test of the defendant’s state of mind’ as the Ivey test incorporates all the facts as known by the defendant which lead them to act as they did. This interpretation is unconvincing however, as to accept that the new test incorporates the defendant’s view of what others thought was dishonest would render it a restatement of the second limb of the Ghosh test, not a rejection of it. It seems instead that the practical effect remains that a defendant can be convicted even where they genuinely believe their conduct was honest, simply because it falls below the standards that society would expect of them.
The objective nature of liability following the Ivey test also sits uneasily with the directions that would be given in other offences which retain the requirement of culpable mind, the most obvious example being that of the move from the objective recklessness of R v Caldwell  AC 341 to the subjective recklessness of R v G  1 AC 1034. The retrograde step that Ivey appears to be in comparison was not explored either by the Supreme Court in Ivey or by the Court of Appeal.
The Ivey test therefore gives a wider scope for conviction than Ghosh, and allows a conviction based on a shortfall in conduct and in the absence of culpability. This is of particular concern in cases such as Barton where the elements of theft or conspiracy to defraud aside from dishonesty had been made out, and (broadly) the issue for the jury was simply whether the defendants were dishonest, set against a factual backdrop that is difficult for the jury to have sympathy with.
Genesis of Ivey:
The approach of the Court in justifying the application of the Ivey test in criminal matters also gives rise to potential problems. The Court justified their adoption of the Ivey test on the basis that they were in a ‘strongly’ analogous position to that of the Court of Appeal in James  QB 588. There, the Court had to consider whether the correct definition of the law of provocation was to be found in R v Smith  1 AC 146 (a decision of the House of Lords) or in the decision of the Privy Council in Attorney General for Jersey v Holley  2 AC 580. In the latter case the Committee as a whole had agreed that their decision ‘definitively’ clarified the present state of English law.
In James the Court made the decision to follow Holley despite that decision not being explicitly binding as a matter of precedent, and laid down principles to assist in resolving future conflicts of a similar nature. These were adapted in Barton, and purport to allow departure from precedent where the Supreme Court itself directs that an otherwise binding decision should no longer be followed and proposes an alternative test that it says must be adopted.
Yet the situation faced by the Court in James was not ‘strongly’ analogous to that in Barton. In James the Court had the benefit of deciding between two decisions in which the various arguments as to the law of provocation had been firmly front and centre of the adversarial and appellate process.
In Barton however, the Court adopted obiter comments the substance of which do not appear to have been fully argued by counsel appearing before the Supreme Court. The process in which the Ivey test was formulated was therefore missing the detailed analysis and argument that one may otherwise expect a question of law that has reached the Supreme Court to have been subjected to, and which the decisions considered by James had benefited from.
Indeed Barton appears to somewhat recognise the disadvantages of adopting dicta which had not been the subject of full argument when it was noted that ‘there is, no doubt, a range of consequential issues that will need to be decided following the decision in Ivey’.
It seems therefore that Court in Barton were less justified in adopting the same approach as in James in this particular case and that the Ivey formulation could only have benefited from additional argument and analysis before the Supreme Court. Equally, leaving aside these pragmatic concerns, the Court’s approach as to when they can depart from otherwise binding decisions will likely give rise to further questions of whether they were justified in adopting the approach in James at all, given that this appears to amount to changing the rules of precedent unilaterally.
The question of whether dishonesty should be assessed using the Ivey or Ghosh tests is now definitively resolved to a defendant’s disadvantage. Yet the manner in which the Ivey formulation was arrived at and was subsequently adopted by the Court of Appeal without reference to the Supreme Court is likely to set the stage for further potential issues stemming from a lack of clarity as to what the ‘consequential’ issues identified by the Court of Appeal will be. Of particular interest will be further cases exploring the scope of precisely what ‘facts known by the defendant’ may be considered by a jury, and whether this will simply collapse into a reformulated version of the Ghosh test. In Barton an opportunity was missed by the Court of Appeal for clarity by having these matters properly and conclusively addressed and determined by the Supreme Court.
Blog | 30 Apr 20