Cornelius, R v

A conviction for fraud by false representation cannot stand where the representations alleged in the indictment, and left to the jury as false, are true on their proper construction. Standard conveyancing certificates must receive a consistent interpretation. Their technical language should retain its technical meaning, and liability cannot be imposed by an expansive reading unsupported by clear wording.

A registered mortgage for valuable consideration takes priority over an unprotected equitable interest. A substitution of an attempted-offence conviction under the Criminal Appeal Act 1968 requires that the jury must have found all facts necessary for that alternative offence. A court cannot infer the required dishonest intent from a verdict founded on a technically true representation.

The appellant, a solicitor, acted in eight property transactions in which he funded purchasers by bridging loans and obtained declarations of trust in his favour. He then acted for the purchasers and the mortgage lender, providing Certificates of Title in standard form. The lender would not have advanced the mortgage funds if it had known of his personal interest.

At Cardiff Crown Court, the appellant was convicted of eight fraud counts under the Fraud Act 2006, related money-laundering counts under the Proceeds of Crime Act 2002, and an offence of perverting the course of justice to which he pleaded guilty. He appealed principally on the adequacy of the direction on dishonesty. The Court of Appeal raised the prior question whether either alleged representation in the Certificates of Title was false.

1. Appeal allowed. The fraud and money-laundering convictions were quashed. On the proper construction of the Certificates of Title, neither representation alleged in the indictment was false. The guilty plea for perverting the course of justice was unaffected.

2. Standard Certificates of Title must be construed consistently. Their language was professionally drafted for routine conveyancing use and could not be extended by fine distinctions or by a general desire to protect lenders. Technical expressions retained their established conveyancing meanings. The court applied the approach in Barclays Bank plc v Weeks Legg & Dean [1999] QB 309 and Midland Bank plc v Cox McQueen [1999] PNLR 593.

3. Under section 29 of the Land Registration Act 2002, the registered mortgages took priority over the unprotected equitable interests created by the trust deeds. Those interests were neither entered on the register nor overriding interests. The lender therefore acquired a good and marketable title free from the trust interests, and the first certified representation was true. The appellant was not the person who granted the mortgages, so the second representation, limited by the words as mortgagor, was also true.

4. The court declined to substitute convictions for attempted fraud or attempted money laundering. Although section 3 of the Criminal Appeal Act 1968 permits substitution where the jury must have found facts proving the alternative offence, the jury’s verdict did not necessarily establish that the appellant intended dishonestly to make the technical representations in the Certificates.

5. The court did not need to determine the proposed challenge to Ghosh [1982] QB 1053, but stated that it remained good law. It refused a retrial because the Crown had charged the case on the wrong basis, the appellant had already spent almost a year in custody, and the remaining conviction was unaffected.

• Court of Appeal (Criminal Division) — allowed the appeal in [2012] EWCA Crim 500, quashed the fraud and money-laundering convictions, declined substitution or retrial, and left the guilty plea for perverting the course of justice unaffected.
• Cardiff Crown Court — following trial before His Honour Judge David Wynn Morgan, convicted the appellant on the fraud and money-laundering counts. He also pleaded guilty to perverting the course of justice.