O & H, R v

For Theft Act 1968, section 17(1)(b), a mortgage or loan application made to a commercial lender may be a document required for an accounting purpose. A jury may infer this without direct evidence of the lender’s accounting practices where a successful application will result in an account recording the lender’s payments and the borrower’s credits. The question remains sensitive to the nature of the document and transaction. The prosecution must also prove that the false or misleading particular was material.

The Crown appealed against a terminating ruling by HHJ Carr at Wood Green Crown Court that there was no case to answer on eleven counts.

Counts 1 to 7 alleged that O, and in two instances H, had furnished false information in mortgage application forms contrary to section 17(1)(b) of the Theft Act 1968. Counts 8 to 11 concerned criminal property under the Proceeds of Crime Act 2002 and depended on the alleged mortgage offences.

The judge held that the Crown had called no evidence that the lenders required the mortgage applications for an accounting purpose. The central issue was whether that requirement could be inferred from the nature of a mortgage application to a commercial lender.

1. The Crown’s appeal was allowed. The ruling that there was no case to answer on counts 1 to 11 was set aside.

2. Section 17(1)(b) of the Theft Act 1968 required proof that the mortgage application was a document made or required for an accounting purpose. The provision does not require the false information itself to be directly connected with that accounting purpose.

3. The court held that, without further direct evidence of a lender’s accounting practices, a jury could conclude that an application for a mortgage or loan made to a commercial institution was required for an accounting purpose. If the application succeeded, it would lead to the opening of an account recording payments made by the lender and sums received from the borrower. Those entries were capable of being inferred to form part of the lender’s accounting records.

4. The authorities showed that the issue is a mixed question of law and fact and may turn on the document’s precise nature and contents. The absence of direct evidence is not invariably fatal. The court regarded mortgage and loan applications to commercial institutions as documents from which the necessary accounting purpose could be inferred.

5. The court nevertheless stressed that the prosecution must prove materiality. The allegedly false or misleading particular must be material for the purposes of section 17.

• Court of Appeal (Criminal Division): The Crown was granted leave to appeal. The court allowed the appeal and set aside the terminating ruling: [2010] EWCA Crim 2233.

• Crown Court at Wood Green: HHJ Carr ruled on 20 May 2010 that there was no case to answer on counts 1 to 11 because there was no evidence that the mortgage applications were required for an accounting purpose.