2.1 Section 15 of the Theft Act 1968 provides in part:

(1) A person who by any deception dishonestly obtains property belonging to another, with the intention of permanently depriving the other of it, shall on conviction on indictment be liable to imprisonment for a term not exceeding ten years.

2.2 Section 4(1) of the 1968 Act (applied to section 15(1) by section 34(1) of the Act) provides that property "includes money and all other property, real or personal, including things in action and other intangible property".

2.5 Having dismissed the appeals in PREDDY and Slade(4) and DHILLON,(5) the Court of Appeal (Criminal Division) certified the following questions as points of law of general public importance:

(1) Whether the debiting of a bank account and the corresponding credit of another's bank account brought about by dishonest misrepresentation amounts to the obtaining of property within section 15 of the Theft Act 1968?

(2) Is the answer to (1) above different if the account in credit is that of a solicitor acting in a mortgage transaction?

(3) Where a defendant is charged with obtaining intangible property by deception, namely an advance by way of a mortgage, is his intention to redeem the mortgage in full relevant to the question of permanent intention to deprive or only to dishonesty?

2.6 Although all three questions fell to be considered by the House of Lords, the first was regarded by Lord Goff to be the most important.(6)

The first question: whether the debiting of a bank account and the corresponding credit of another's bank account brought about by dishonest misrepresentation amounts to the obtaining of property within section 15 of the Theft Act 1968?
2.7 Lord Goff was not troubled by the notion that a credit entry in a bank account should be construed as property for the purposes of the 1968 Act. Unlike the Court of Appeal, however, which had taken the view that a sum of money represented by a figure in an account constituted "other intangible property" under section 4(1) of the Act,(7) Lord Goff was of the opinion that such a credit entry fell within a different part of the section 4(1) definition of property, namely a chose in action belonging to an account-holder and exercisable against the institution where the account had been placed.(8)

2.8 In Lord Goffs view, the appeal turned on whether the appellants could be said to have obtained (or attempted to obtain) property belonging to another. In short, he concluded that they could not; that what they had, in fact, obtained was property (namely a chose in action) which had come into existence at the time of the dishonest transaction and which could not, therefore, have belonged to anyone prior to that time.(9)

2.9 The kernel of each appellants dishonest conduct was that he had, dishonestly, induced a lending institution by deception to make a mortgage advance in his favour: in effect, therefore, on Lord Goffs analysis, the lending institutions chose in action represented by the credit balance(10) standing in its account had been extinguished (to the extent of the sum of the advance) when the advance was made, and a corresponding chose in action created in favour of the appellant and represented by the credit balance standing in the account of the appellant (or his solicitor), when the advance was received. Lord Goff describes the difficulty in applying section 15 of the 1968 Act in these circumstances and, in particular, in satisfying the requirement that the property should have belonged to another:

when the bank account of the defendant (or his solicitor) is credited, he does not obtain the lending institutions chose in action. On the contrary that chose in action is extinguished or reduced pro tanto, and a chose in action is brought into existence representing a debt in an equivalent sum owed by a different bank to the defendant or his solicitor.

In truth the property which the defendant has obtained is the new chose in action constituted by the debt now owed to him by his bank, and represented by the credit entry in his own bank account. This did not come into existence until the debt so created was owed to him by his bank, and so never belonged to anyone else.(11)

2.10 On that vital reasoning, the House of Lords answered the first certified question in the negative.(12)

The second question: is the answer to (1) above different if the account in credit is that of a solicitor acting in a mortgage transaction?
2.11 Some criticism was levelled at the broad way in which the second question had been framed, and certain assumptions were made by Lord Goff as to the part played by the solicitor in the mortgage transaction. He cast doubt on the applicability of section 15 to the circumstance in which a solicitor receives a mortgage advance in the capacity of an agent of the lending institution, where that institution retains control over the money while it is in the solicitors hands. In any event, he said,

the same difficulties arise as they do where the money has been paid direct to the mortgagor by electronic transfer, or by cheque. [A]ny chose in action which comes into existence by the crediting of the solicitors bank account (simultaneously with the debiting of the lending institutions bank account), or by the receipt by the solicitors of a cheque from the lending institution, can never have belonged to the lending institution or its bank and so can never have belonged to another as required by section 15(1).(13)

The third question: where a defendant is charged with obtaining intangible property by deception, namely an advance by way of mortgage, is his intention to redeem the mortgage in full relevant to the question of permanent intention to deprive or only to dishonesty?
2.12 The law lords did not address this question.(14)