Smith, R v

On a reference by the Criminal Cases Review Commission, the Court of Appeal has the powers it would have on an ordinary appeal. It may revisit a point decided on an earlier appeal only in exceptional circumstances, including a material development in the law.

For cross-border fraud, jurisdiction is not confined to the place where the final element of the offence occurred. It exists where substantial criminal activities occurred in England and Wales, unless international comity requires trial elsewhere.

Under section 3 of the Criminal Appeal Act 1968, a conviction for obtaining property by deception may be replaced with one for obtaining services by deception where the indictment and jury findings necessarily establish the alternative offence. A repo is, in substance, secured lending and can constitute financial services.

Smith was convicted at the Central Criminal Court of fraudulent trading and two counts of obtaining property by deception arising from repo transactions. The dishonest arrangements were made from London, but the money was paid into a New York bank account.

An earlier appeal, Smith No. 1 [1996] 2 CAR 1, had dismissed the convictions and held that the English court had jurisdiction. The Criminal Cases Review Commission later referred the convictions under section 9 of the Criminal Appeals Act 1995. The decision in Preddy [1996] AC 815 meant that the two deception convictions could not stand.

The issues were whether the court could revisit the prior jurisdiction ruling, whether England and Wales had jurisdiction, and whether convictions for obtaining services by deception could be substituted.

1. Appeal allowed on counts 3 and 4. The court quashed the convictions for obtaining property by deception and substituted convictions for obtaining services by deception under section 1 of the Theft Act 1978. The concurrent sentences were equally appropriate for the substituted offences.

2. A reference under section 9 of the Criminal Appeals Act 1995 is an appeal for all purposes. The court therefore has its ordinary appellate powers. A point aired on an earlier appeal may be advanced again, but departure from the court's earlier reasoning should ordinarily be confined to exceptional circumstances. A later conflicting Court of Appeal authority required the court to decide which statement of the law was correct.

3. The court followed Smith No. 1 rather than Manning [1999] QB 980. Harden [1963] 1 QB 8 established that the place of obtaining can found jurisdiction, but did not provide the exclusive basis of jurisdiction. English courts also have jurisdiction where substantial activities constituting the crime took place here, provided international comity does not point elsewhere. That flexible common-law approach was justified by modern international fraud and was consistent with legislative developments and the broader approach to conspiracy and attempts.

4. A repo was properly characterised as a form of secured lending. The bank's agreement to provide the repo, payment of the money and eventual resale of the bonds were financial services capable of amounting to services under section 1(2) of the Theft Act 1978. The jury's findings on the original counts necessarily established the alleged deception, the repo arrangement and the obtaining of those services. Section 3 of the Criminal Appeal Act 1968 therefore permitted substitution.

• Court of Appeal (Criminal Division): on a reference by the Criminal Cases Review Commission, allowed the appeal on counts 3 and 4, quashed those convictions and substituted convictions under section 1 of the Theft Act 1978.

• Court of Appeal (Criminal Division): Smith No. 1 [1996] 2 CAR 1 dismissed the earlier appeal against conviction and certified two points of law of general public importance.

• House of Lords: refused leave to appeal from Smith No. 1.

• Central Criminal Court: on 24 February 1994, convicted Smith of fraudulent trading and two counts of obtaining property by deception, imposing concurrent six-year sentences.