News: UK Supreme Court aligns with Australian High Court on criminal dishonesty

The United Kingdom’s Supreme Court is not shy about changing course on major legal issues, such as complicity law and (just last week) state immunity. On Wednesday, it dropped another criminal law bombshell. The case in question was a civil dispute between a champion poker player, Phil Ivey, and a London casino, on whether Ivey was entitled to 7.7 million pounds he seemingly won at Baccarat over two days. The issue was whether Ivey’s method, which included tricking the croupier into turning particular cards around and then making plays by relying on his ability to tell which cards had been turned from the pattern on their back, was cheating. The Court upheld lower court rulings in favour of the casino, surprising those who thought it took the case to hold that Ivey’s (undisputed) belief that his play was an honest ‘advantage’ one meant that he was no cheat . Instead, the Court not only found for the casino, but overturned the 1982 Court of Appeal decision, R v Ghosh, that held that criminal dishonesty requires proof that the defendant knew others would regard his or her actions as dishonest. The Supreme Cuurt’s ruling not only reversed thirty-five years of English theft and fraud law, but also seemingly left Ivey to prosecution for criminal cheating (not that any such prosecution is on the cards.)

While Ghosh‘s many fans in the academy are currently working their way through the five stages of grief, some Australian High Court judges may be feeling quite different emotions. In 1998, the High Court allowed an appeal by a Melbourne solicitor, Philip Peters, who allegedly facilitated sham property transactions for a client to hide funds (seemingly from drug dealing) from the tax office. In a complex split judgment, the majority sternly rejected the Ghosh test, holding that it was enough if the prosecution proved that ordinary people regarded the defendant’s actions (in context) as dishonest. The UK Supreme Court’s Ivey judgment seemingly agrees with the Peters approach, albeit without any acknowledgments. Perhaps because the UK Court knew nothing of the Australian judgment (as the correctness of Ghosh was not in issue before it) or maybe it opted not to note that Australia’s apex court got the law ‘right’, in light of the High Court’s repeated recent refusals to follow the law set out by the Supreme Court.

Inter-apex-court relations aside, the UK Supreme Court’s ruling will not have any immediate effect on Australian law. The High Court’s approach already determines both Australia’s common law and how the words ‘dishonesty’ and ‘fraudulently’ are interpreted in Australian statutes (unless those words are used in a mysterious ‘special sense’), with Queensland ditching Ghosh in favour of the High Court approach in 2015. As well, the Ghost test will remain the law for many offences in federal statutes and in the ACT, NSW and South Australia, which deliberately eschewed Peters with the following statutory definition:

dishonest means:

(a) dishonest according to the standards of ordinary people; and

(b) known by the defendant to be dishonest according to the standards of ordinary people.

But it is possible that UK shift (accompanied by a lengthy critique of Ghosh much like the High Court’s) may undermine the policy case for such statutory provisions, which have never been much liked by prosecutors or judges. It remains to be seen, though, whether UK academics and lawmakers may seek to reverse the Ivey holding (seemingly reached without full argument before the Supreme Court) by statute.

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About Jeremy Gans

Jeremy Gans is a Professor in Melbourne Law School, where he researches and teaches across all aspects of the criminal justice system. He holds higher degrees in both law and criminology. In 2007, he was appointed as the Human Rights Adviser to the Victorian Parliament's Scrutiny of Acts and Regulations Committee.

3 thoughts on “News: UK Supreme Court aligns with Australian High Court on criminal dishonesty

  1. One advantage of the Ivey test is that it brings English criminal law in line with its civil law – clearly an important consideration in the view of the Supreme Court. The law of “dishonestly” assisting a breach of fiduciary duty had previously, after some deviations, settled on what is now the Ivey test.
    The civil law comparison is not relevant to Australian law where liability for assisting a breach of fiduciary duty does not depend on proof of dishonesty but on applying a knowledge test.

    • Michael, for me (and I expect many crims), this is a bug, not a feature. Criminal law (especially, in this context, theft) has a much broader scope than civil law, as well as generally harsher remedies. Usually, this is justified by the criminal law’s tougher test for responsibility (see the UKHL decision in Hinks, 2001) but Ivey seems to remove that (specifically, Ghosh’s ‘fault element’ for the civil ‘physical element’ of dishonesty.) It’s a surprising step, especially from a five-judge court in a civil case where the correctness of Ghosh was never disputed. (I do understand from Twitter though that there is now a lively debate about whether Ivey or Ghosh remains binding on lower courts, given that England lacks our doctrine about ‘well-considered dicta’.)

  2. England lacks a doctrine about “well-considered dicta”? I haven’t been following developments in the FCP (Former Colonial Power) closely since 1986, but I do remember that in WB Anderson & Son v Rhodes (Liverpool) Ltd [1967] 2 AllER 850,857 a question about negligent misrepresentation arose. 3 years earlier the House of Lords had decided the famous Hedley Byrne v Heller. The actual decision in that case was that the plaintiffs lost because the defendants had covered themselves with an express disclaimer, but all 5 Law Lords wrote long essays, technically obiter, about the liability for negligent misrepresentation in the absence of such self-protection. In WB Anderson Cairns J said “When five members of the House of Lords have all said, after close examination of the authorities, that a certain type of tort exists, I think that a judge of first instance should proceed on the basis that it does exist.” But as said above I haven’t bothered about English cases on precedent since we kicked them out of our appellate system (and since I escaped from teaching first year subjects).

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