D, R. v (Rev 1)

For fraud by failing to disclose information under section 3 of the Fraud Act 2006, there must be an existing legal duty to disclose it. A statutory liability to pay money does not, without more, create a legal duty to notify the creditor of facts relevant to that liability.

A court will not imply a general notification duty into a statutory scheme merely on grounds of public policy or common sense. In the council tax scheme, the local authority may request information, while notification duties are imposed expressly in defined circumstances. The absence of a general duty therefore prevents a prosecution for fraudulent non-disclosure based solely on failure to report continued residence.

The prosecution appealed under section 58 of the Criminal Justice Act 2003 against a Crown Court terminating ruling on count 6 of a six-count indictment against R v D.

The prosecution alleged that D, the freehold owner of a dwelling, had continued to live there while avoiding full council tax. Counts 1 to 5 alleged fraud by false representation. Count 6 alleged fraud by failing to disclose continued residence, contrary to sections 1 and 3 of the Fraud Act 2006.

The Crown Court ruled that no legal duty required D to notify the billing authority of her residence. The central issue was whether such a duty could be implied from the council tax legislation.

1. The prosecution appeal was dismissed. The Crown Court was right to terminate the count alleging fraud by failing to disclose information.

2. Section 3 of the Fraud Act 2006 requires a legal duty to disclose the relevant information. Such a duty may arise from a recognised legal source, including statute, contract, fiduciary obligation or an obligation of utmost good faith. The prosecution could identify no statutory, common-law, equitable or other obligation requiring this defendant to notify the billing authority of continued residence.

3. Under section 6 of the Local Government Finance Act 1992, a resident freehold owner could be primarily liable for council tax. That liability did not itself impose a separate obligation to notify the authority of residence. It was wrong to equate a duty to pay with a duty to notify.

4. The statutory scheme positively militated against the proposed implication. Schedule 2 and regulation 3 of the Council Tax (Administration and Enforcement) Regulations 1992 enabled the authority to require information by written request. Regulation 16 imposed notification expressly where a notified discount assumption was believed to be wrong. Those express provisions showed that notification duties were not left to general implication.

5. Public policy and common sense could not justify creating a broad, undefined criminal notification duty for all persons within the statutory hierarchy of council-tax liability. The authority retained powers to seek information and recover unpaid tax civilly. Where the facts permitted, it might also rely on fraud by false representation, including an implied representation, under section 2 of the Fraud Act 2006.

• Court of Appeal (Criminal Division) Dismissed the prosecution appeal brought under section 58 of the Criminal Justice Act 2003.

• Crown Court Made a terminating ruling on count 6 after holding that the defendant was under no legal duty to notify the billing authority of her residence for council-tax purposes.