Case No 96/6490/Y5
IN THE COURT OF APPEAL
CRIMINAL DIVISION

Royal Courts of Justice
Strand
London WC2A 2LL

Date: Friday 7th March 1997

B e f o r e:

LORD JUSTICE EVANS

MR JUSTICE CLARKE

and

THE RECORDER OF LEEDS
HIS HONOUR JUDGE BRIAN WALSH QC
(Acting as a Judge of the CACD)
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R E G I N A

- V -

PETER ARNOLD HILTON

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(Handed-down judgment of Smith Bernal Reporting Limited
180 Fleet Street, London EC4A 2HD
Tel: 0171 831 3183
Official Shorthand Writers to the Court)
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MR P CATTAN (MR M MAHER 7/3/97) appeared on behalf of the Appellant

MR J WISHART appeared on behalf of the Crown
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J U D G M E N T

LORD JUSTICE EVANS:  The appellant is Peter Arnold Hilton.  He was convicted on 23 July 1996 after trial in the Crown Court at Bolton before His Honour Judge Lakin and a jury on three counts of a six-count indictment.  Each count was a charge of theft, and for Counts 4, to 6 on which he was convicted he was sentenced to two years imprisonment, concurrent in respect of each count.

	He now appeals against conviction by leave of the single judge.  During the trial the House of Lords gave judgment in Preddy (now reported at [1996] A.C. 815).  That decision related to charges of obtaining property by deception, brought under section 15(1) of the Theft Act 1968, and no such charges were made here.  The issue raised by this appeal is whether the reasoning in Preddy affects the validity of the conviction of the appellant on the charges of theft.

	The appellant was chairman of the Abbeyfield (Worsley) Society, which effectively is a local branch of a national charitable organisation which provides residential care.  The Society had its bank account with Barclays and at all material times there was a credit balance on the account.  The appellant and three others were designated signatories for transfers out of the account, and two such signatures were required.

	In common parlance, the appellant stole three sums of money from this account.  He caused £25000 to be transferred to an account held by the Royal Bank of Scotland for Eversheds, the firm of solicitors who in this transaction were acting for the R.B.S. itself.  Instructions for this transfer to be made were given by a letter which the appellant faxed to Barclays signed only by himself.  The lack of a further signature meant that the instruction was not one upon which the bank was obliged or even entitled to act, but nevertheless the transfer was made.

	The second transaction involved the transfer of £4000 to the Trustee Savings Bank for the credit of an account in the name of a company called Oaktree Corporation.  The instruction was again given by fax, and on this occasion the letter was signed by the appellant and by an authorised co-signatory also.  She said in evidence that the appellant had told her that the funds were for the use of the Society in some way.  Oaktree Corporation was an off-the-shelf company of which the appellant's wife was at that time the company secretary.

	The third transfer out of the Society's account was by virtue of a cheque for £1500 in favour of a plant hire company called Academy Leasing, with which the appellant had done business.  That company presented the cheque to its own bank, also Barclays, who then collected payment from the Society's account in the usual way.

	Each of these payments was made in order to settle personal obligations of the appellant.  His financial situation was in a desperate state.  He owed the Royal Bank of Scotland more than £125000.  They instructed Eversheds to recover this amount, and a bankruptcy notice was issued.  They agreed to accept £25000 in settlement, and the first transfer was made in order to discharge his undertaking to pay them that amount.  His defence was that the payment was made in order to preserve for the Society the right to acquire his own home for conversion into a further residential home which the Society could operate, but the jury by their verdict rejected this explanation and were satisfied that the appellant was dishonest.

	Similarly, the second and third transfers were made in order to settle personal obligations.  The appellant said that the payments represented obligations of the Society rather than himself, but this too was rejected.

	The appellant was charged with theft of these three amounts, in Counts 4, 5 and 6 of the indictment.  Originally, and at the outset of the trial in July 1996 the particulars of offence referred simply to the sum of money involved, so that Count 4 alleged that he "stole £25000 belonging to Abbeyfield (Worsley) Society Ltd."  This was amended to read "stole a credit balance of £25000", with corresponding amendments to Counts 5 and 6, in recognition of the fact that the House of Lords' judgment in Preddy emphasised the need to identify the chose in action, meaning the debt owed by the bank to the Society and represented by the current account, as the property which was alleged to have been stolen.

	The trial proceeded on this basis and in the course of his summing-up the judge gave what could be regarded as a model direction as to the issues of law which were involved.  He said this :-

	"If you have a bank account, members of the jury, you have the right to withdraw from that account the amount in that account or up to the level of any agreed overdraft ..... That right, members of the jury, to withdraw funds from a bank account is regarded, in law, as property ..... ".

	Dealing with the offence of theft, he said that the prosecution first had to prove that what the defendants stole was property belonging to another.  The defendant admitted that there was a credit balance which covered the amounts in question, and there was no dispute that the credit balance belonged to the Society.  He continued :-

	"The prosecution also have to prove that the defendant appropriated that credit balance.  That means that he took the credit balance for his own use.  Again, members of the jury, there is no dispute about that.  If you draw a cheque on a bank account and you present that cheque for payment, by doing that you are taking the credit balance referred to in the cheque for your own use."

	Finally, he said that the defendant did not dispute (except as regards count 4) that it was his intention that the Society should permanently lose the credit balance in question.  So, as regards the charges of theft, "The prosecution, with the defendant's agreement,  .... are over all of the hurdles to prove an allegation of theft bar one and that is the fundamental one of dishonesty because the prosecution must prove that when the defendant took that credit balance for his own use he did so dishonestly".

	Those directions were given in relation to Counts 1, 2 and 3, of which the appellant was acquitted, but they applied also to Counts 4-6 though with some additional issues that were raised.  First, the transfers under Counts 4 and 5 were brought about by the defendant sending a faxed letter to the bank requesting that the transfer be made.  The judge said this :-

	"..... just as drawing a cheque on an account and presenting it for payment amounts to an appropriation - taking the credit balance for you own use - so does the sending of a faxed instruction to the bank to make a transfer.  In reality, there is no difference.  In practical terms, there is no difference."

	As regards Count 4, two further questions arose.  First, the faxed letter was not signed by a co-signatory, as was required by the terms of the Society's mandate to its bank, and secondly, the appellant disputed that he had the intention of permanently depriving the Society of the sum of £25000, which he said he intended to return to the Society together with a higher rate of interest than the Society was obtaining from its bank.

Appeal

	We now come to the appeal against conviction.  The Single Judge gave leave on 13 December, when he also granted the appellant bail pending the hearing of the appeal.  Mr Cattan, counsel for the appellant, advised on 2 August 1996 that in his view, after reading the published report of Preddy in [1996] 3 E.L.R. 481, the convictions under the Amended Indictment could not be challenged as a matter of law, but presciently he added "I do not feel that as the law stands the Indictment was defective but would reserve my position in the event of another case coming before the Court of Appeal that casts any doubt on the point so far as theft is concerned".

	Such a case was R. v. Graham, Ali and others where the Court, presided over by The Lord Chief Justice, dealt with a number of problems that were left in the wake of the Preddy decision.  One of the appellants, Ali, had been convicted of attempted theft in circumstances where he presented to the head office of the National Bank of Pakistan four banker's drafts each for £250000 drawn on the National Westminster Bank.  These drafts had gone missing from N.W.B. and the purported signatures on behalf of N.W.B. were both forged.  As in the present case, the original Indictment charged Ali and his co-defendant simply with attempting to steal "One million pounds belonging to National Westminster Bank plc", but this was amended by the insertion of the words "a credit of" before the figure of one million pounds.  The judgment refers to the state of evidence as follows :-

	"No evidence was called by the prosecution as to the mechanism by which the draft would have been dealt with if it had been valid.  No evidence was called as to the existence or identity of any account which held a credit balance which could have been appropriated."

	Asking "Is the conviction safe?", the Court held :-

	"The conviction of attempting to steal "a credit of £1000000 belonging to" N.W.B. cannot stand in the light of Preddy.  The reasoning in Preddy demonstrates why the reference to " a credit of £1000000 belonging to" N.W.B. does not identify "property belonging to another".  The appellant could not in law be guilty of the offence charged on the facts relied on."

	When he saw this judgment, soon after 25 October, and after reading the Law Commission Report No. 243 on Offences of Dishonesty ; Money Transfers (14 October 1996), which recommended remedial legislation, Mr Cattan advised further that "the convictions in respect of the electronic transfers of money [Counts 4 and 5] would appear to fall within the ruling in Preddy and also the cheque .... There would appear to be no substitute offence available for any of his convictions."

	It was necessary to obtain an extension of time within which to seek leave to appeal, and this extension was granted by the Single Judge pursuant to the earlier judgment of the Lord Chief Justice in Hawkins (31 July 1996).

	We would like at this stage to pay tribute to Mr Cattan, not only for his conscientious approach to the problems created by the changing state of the law, but also for his presentation of the issues raised by the appeal.  We should also record that Mr Wishart, counsel for the respondent, also assisted us greatly by his thorough and fully researched skeleton argument.

	The story of Ali's case did not end with the judgment given on 25 October.  When Graham, Ali and others was restored for further hearing on 6 December, the further judgment by The Lord Chief Justice included the following :-

	"Mr Houlder on behalf of the Crown has very properly informed the Court that the judgment which we delivered on 25 October has in professional circles caused some doubt as to whether the Court was intending to cast doubt on the decision of Lane, L.J. (as he then was) in R. v. Kohn (1979) 69 Cr.App. R. 395 at 404-405.  We would wish to make it as clear as we can that we did not intend to cast doubt on that decision and nothing in our judgment should be understood as doing so.  We wish to make it clear that nothing we said intended to cause doubt on the principle that theft of a chose in action may be committed when a chose in action belonging to another is destroyed by the defendant's act of appropriation as defined by section 3(1) of the Act.  We hope in that way the scope for misunderstanding will be eliminated.  We would add by way of footnote that on 25 October we were endeavouring to give judgment on the cases argued before us and not to write a new textbook."

	It will be necessary to refer below to the judgment in Kohn.  In the light of this further judgment, Mr Cattan accepts that he cannot challenge the validity of the conviction under Count 6 which involved a cheque.  His submission essentially is that Counts 4 and 5 involved the electronic transfer of funds between the Society's bank and another bank, which was brought about by instructions given directly to the Society's bank, no cheque or other form of valuable security being involved.

	In our judgment, there are two aspects to Mr Cattan's submission.  First, is there a necessary parallel to be drawn between Ali's case and the present?  If so, then as he submits the fact that Ali was not guilty of the offence of theft (in his case, attempt only) should mean that the appellant is not guilty also.  Secondly, was the appellant rightly convicted of theft in the present case, and in particular, does the judgment in Kohn stand unimpaired by Preddy and the more recent decisions?

(1)	As to the first of these questions, we have no doubt that Ali was a different case, and this for the reason which was emphasised by The Lord Chief Justice in his judgments.  Here, the property which was stolen was part of the credit balance in the Society's account with its bank.  In law, this represents a debt owed by the bank to the Society, and the property in question is the Society's right as creditor to recover this debt from the bank.  The essence of the Preddy decision is that "property" has to be defined in this legal sense, in accordance with the general principles of statutory interpretation, which leaves no room for the more general concepts of "money" or "funds" which ordinary parlance might otherwise suggest.  Property, therefore, which was capable of being stolen undoubtedly existed in this form in the present case.

	In Ali, however, as the judgment pointed out, there was no evidence "of any account which held a credit balance which could have been appropriated".  The fact that the document in question was a banker's draft explains why this was so.  If the forged signatures had been genuine, each draft was an undertaking by the bank itself to pay the stated sum to the payee.  The payment, which normally would be made between banks either by electronic means or through the CHAPS settlements system, would be made out of what can loosely be described as the bank's own funds.  No doubt, in the ordinary course of business, and if the draft had been genuine, then the bank would have obtained or secured the funds for itself by debiting its customer's account, and it might be possible in such a case to say that the draft was used as a means of obtaining funds from that account, which was the property of the customer.  But that consideration did not arise in Ali's case, where the drafts were forged.  Therefore, Preddy having underlined the need to identify "property" in terms of a legal chose in action, it followed that no such property had been identified by the evidence in Ali's case.  This, as we respectfully understand it, was the meaning of the judgment given on 25 October ; the appellant could not in law be guilty "of the offence charged" and "on the facts relied on".  This is entirely consistent with what was said in the second judgment as to the continued authority of Kohn.

Discussion

	The doubts caused in professional circles by the first Ali judgment were exemplified, Mr Wishart told us, by the Note by Professor Sir John Smith Q.C. in Archbold News (Issue 9, 14 November 1996).  Professor Smith commented :-

	"The Court thought that, generally, the reasoning in Preddy is likely to be fatal to a conviction of theft and held that it was fatal in the case of Kansal.  In the Preddy situation, the thing in action belonging to V at the beginning of the transaction is certainly capable of being stolen.  The only question is whether there is an appropriation."

	The second judgment will have removed much of the reason for the concern that was felt, and in our view the circumstances in which the charge of theft can be made out are not as restricted as Professor Smith (before the second judgment) suggested.  As regards the case of Kansal, which was one of the others decided with Graham and Ali, the Court held :-

	"We do not consider that theft ..... would have been appropriate charges on the facts.  As to theft the reasoning in Preddy as to "property belonging to another" applies equally in the case of section 1 of the Theft Act 1968."  (p.36).

We understand this as meaning, consistently with what was said with regard to Ali, that there was no evidence in Kansal (see the facts set out at pages 31-4) of an existing credit balance representing a chose in action which qualifies as "property" under the Preddy decision.

	Professor Smith then dealt with the question of appropriation, and he distinguished between cases where a cheque is involved, where he submitted that there clearly is an appropriation, and others where the funds are transferred by telegraphic transfer or CHAPS.  In such cases, he said, "the matter is less clear because the diminution in V's thing in action is effected by V or by V's agents and it is not easy to discern the necessary act of appropriation by D : Caresana [1996] Crim. L.R. 667".

	We are not clear why this distinction was made, nor could counsel enlighten us, although we appreciate that the fault may be ours.  `Appropriation' is defined in section 3(1) of the Act, as follows :-

		"3(1) Any assumption by a person of the rights of an owner amounts to an appropriation ..... ",

and in R. v. Gomez  [1993] A.C. 442 the House of Lords approved the view that it is sufficient that any, not necessarily all, of the rights of the owner are assumed by the thief.  When a cheque is involved, the defendant appropriates or attempts to appropriate the credit balance held in, here, the Society's account by drawing the cheque and handing it to the payee, so that it may be presented at the payee's bank for collection from the Society's bank in the normal way.  The transfer of funds out of the Society's account and to the payee's bank will almost always be made by electronic transfer or through some form of settlement system.  That transfer is brought about by the defendant's act of appropriation, but it is not done by the defendant himself.  If it is brought about by other means, as for example by direct fax letter instructions to the Society's bank, as in Counts 4 and 5 here, then the relevant act of appropriation is different, but the relevant property, and the relevant transfer, are exactly the same.

	The reference to Caresena and the Crim. L.R. Commentary on it is instructive.  The offence charged was the theft of the "U.S. $1,770,994.84 belonging to the National Westminster Bank plc".  Forged shipping documents were presented to the N.W.B. in Leeds against a letter of credit which it had opened.  Any funds or credit balance to which the defendant was entitled there was defeasible on account of this fraud (cf. Thompson (1984) 79 Cr. App. R. 191).  The bank was induced to arrange a transfer of the dollar amount from N.W.B. New York to Deutsche Bank New York.  The Court held, in short, that the offence charged was not committed "for the simple reason that no money was appropriated as the result of the actions of [the appellant's associate] [in Leeds]".  The judgment quoted Professor Smith's work on the Theft Act (7th Edition, 1993 at page 29) :-

	"..... merely to cause P to become indebted to Q, however dishonestly, is not to steal from P".

	In his Commentary, Professor Smith raised a further difficulty, "probably insuperable", which was to discern an appropriation by the defendant where "the only act that has been done has been done by V [the owner of the credit balance] himself, and he has not done it as the agent of D" ([1996] Crim. L.R. at 669).

	We can see the force of this point where the defendant, by deception, has induced the owner of the property in question to make some disposition of it himself.  This could have some application where a bank is induced to make a transfer of what can be regarded, colloquially, as its own funds, as where a draft is concerned and thus in, for example, Ali's case.  But this does not provide any basis for distinguishing between those cases where a cheque is used as the means of instructing a bank to make a transfer out of a customer's account - as Professor Smith puts it, where the cheque is the "key which enables D to exercise the rights of an owner over V's bank balance" - and other cases, where the same instruction is given in a different form, as here by the faxed letters which set in motion the transfers out of the Society's account.

	Professor Smith goes on to raise the possibility that, even where the original credit balance has been destroyed, although replaced by a fresh credit balance in the defendant's favour - the analysis upon which the Preddy decision was based - nevertheless the owner of the original property may have some interest in the newly-created credit balance.  This does not arise for consideration in the present case, where no such offence was charged, and in Ali the Court held that this analysis was inconsistent with the Indictment that had been preferred in that case (see page 41).  Similarly here.  We do not read his further comments as casting doubt on the basic proposition that where property in the form of a credit balance is identified in accordance with the Preddy decision, then that property is stolen when an act of appropriation in accordance with section 3(1) of the Theft Act is established and the other requirements of theft are also present.

(2) Kohn

	We come, therefore, to the second question, which involves the present status of the judgment in Kohn.  The second judgment in Graham, Ali and others requires us to hold that its authority is unimpaired by anything that was said in the first judgment in that case, and it implies that it is unimpaired by the Preddy decision also.  Whether or not we are bound so to hold, that is our own clear view.

	The specific argument dealt with in the relevant part of the judgment (69 Cr. App. R. at 404-5) was that the offence of theft could not be committed when the act of appropriation had the effect of destroying the property that was stolen (see p. 405).  The judgment continued :-

	"It seems to us that the argument is quite untenable.  first of all, is there a thing in action, and the answer is undoubtedly yes.  Secondly, has the appellant appropriated it?  The answer is yes.  Was the intention  permanently to deprive the owner, and again there was ample evidence upon which the jury properly directed could come to the conclusion that it was.  Was it dishonest?  Again there was ample evidence on which the jury could come to that conclusion".

	The Court then cited the writings of the late Professor Griew ("the case is analogous to the theft of a chattel by destruction") and of Professor Smith, in both cases with the Court's approval.

	It seems to us that that analysis is entirely consistent with the reasoning in Preddy, and for these reasons we hold the offence of theft was made out as regards Courts, 4, 5 and 6, in the present case, subject only to the possible relevance of the absence of a co-signatory to the faxed letter which occasioned the transfer of £25000 under Count 4.

Unauthorised instruction

	We find here an apparent conflict in the authorities.  In Chan Man-Sin v. Regina (1987) 86 Cr. App. R. 303 the appellant had forged cheques and so caused the bank to debit its customer's account.  The argument for the appellant, which had an "appealing simplicity", was "founded upon the proposition that a bank is not entitled in law, as against its customer, to debit the customer's account with the amount of any cheque which the bank has not, in fact, the authority of the customer to honour" (p. 305).  Lord Oliver, giving the opinion of the Privy Council, referred to section 3(1) of the Theft Act 1968 and then said :-

	"The owner of the chose in action consisting of a credit with his bank or a contractual right to draw on an account has, clearly, the right as owner to draw by means of a properly completed negotiable instrument or order to pay and it is .... beyond argument that one who draws, presents and negotiates a cheque on a particular bank account is assuming the rights of the owner of the credit in the account or (as the case may be) of the pre-negotiated right to draw on the account up to the agreed figure" (p.306).

	It was clear, therefore, that "the transactions initiated and carried through by the appellant constituted an assumption of the rights of the owner, and consequently, an appropriation. ..... It is ... immaterial that the end result of the transaction may be a legal nullity .... " (p. 307).  Their Lordships approved of this Court's decision in Wille [1989] 86 Cr. App. R. 296, which is to the same effect.  There, the appellant was one of four directors of a company.  The company's mandate to its bank required cheques to be signed and counter-signed by two directors, but "from the start the bank honoured cheques signed by the appellant alone".  It was argued on appeal that there was no appropriation because, as the Court assumed, the bank had no authority to debit the company's account with the amount of the cheques (see  p. 300).  However, the Court approved the direction given by Judge Gower in his summing-up, which it felt "expresses the test in terms upon which it is not possible to improve".  The test was :-

	".... in drawing the cheque and issuing it he appropriated the debt which the bank owed to [the company] because he assumed in relation to it the rights of an owner by taking it upon himself to direct the bank in effect to pay out money, thus lessening the debt, and it matters not that the bank were acting contrary to the mandate, that is wholly irrelevant for this purpose, it is the drawing and the issuing of the cheque without authority which constitutes the appropriation".

Mr Cattan cites as contrary authority the Court's judgment in R. v. Doole [1985] Crim. L. R. 451.  That appeal was allowed on the basis that on the facts of the case there was no credit balance which was capable of being stolen.  That was because at the material time there was only a contingent debt.  The Commentary points out that it was not argued that the appellant's instruction that the money in the account be transferred to his own account was enough to constitute an appropriation.  Another question raised was whether an unauthorised instruction, because lacking a second signature, could lawfully result in the credit balance being reduced.  If and insofar as the Doole judgment suggests that unauthorised instructions are not capable of being an appropriation within section 3(1) of the Act, then in our view the later decisions in Wille and of the Privy Council have to be preferred.

	There remains, however, the question whether the offence is completed before the money is transferred out of the account.  Mr Cattan submits that it is not, and that if the bank was not obliged to honour the instruction, then even if the transfer is made, the bank's indebtedness to its customer remains unimpaired and no theft in fact has taken place.  Kohn is authority for the proposition that the theft of a credit balance by the dishonest use of a cheque "does not take place until the transaction has gone through to completion" (see the Commentary on Doole at 451), and Mr Cattan submits that if the offence is not completed in this way, so that the amount of the credit balance i.e. the debt owed by the bank is not reduced, then the defendant can only be convicted of an attempt.

	In our judgment, the answer to this contention is that the offence of theft is committed when there is a dishonest appropriation of the property in question (section 1(1)), and when the property consists of a credit balance, in the accepted meaning of that term, then the defendant appropriates it by assuming the rights of the owner of the balance and so causing the transfer to be made out of the account.  His instructions to the bank to make the transfer, whether given by cheque or otherwise, are the key which sets the relevant inter-bank (or inter-account) machinery in motion.  The fact that a transfer is made is enough to complete the offence, even if there remains an obligation on the bank (as debtor to its customer) to replenish the account.

	As Woolf L.J. (as he then was) said in Wille (1988) 86 Cr. App. R. 296 at 302 :-

	"..... it is hard to see what more he could do to assume the rights of the owner in respect of the account at Barclays Bank to the extent of the amount for which the cheques were drawn, than to draw a cheque, issue the cheque, and then take steps which were designed to achieve that the account of the company at the bank was debited with the amount of the cheque ....  what section 3 requires is that regard shall be had not to the consequences to the company of what is done, but what is done by the person who is alleged to be guilty of theft .... "

	We can see that it might be argued that the decision in Preddy makes it necessary to concentrate exclusively on the legal obligation owed by the bank to its customer, and that if this remains unaffected, because the cheque was forged or the instructions were not within the bank's mandate, then the transfer in fact made by the bank has to be ignored.  We are not prepared to hold, however, that the reasoning in Preddy should be taken this far.  It would not be right, in our view, to ignore the reality of the situation to this extent.

	If the appeal against conviction under Counts 4 and 5 had succeeded, then Mr Cattan would have argued that the conviction on Count 6 also should be regarded as unsafe.  His contention was that if the appellant was not guilty of the offences charged under Counts 4 and 5 then the jury would have been significantly less likely to have convicted him of dishonesty in relation to what would then be an isolated offence under Count 6.  He relied upon the judgment of this Court in Marlow, Tiley and Lloyd (Ref. 96/4066/Z2 etc. Judgment 7 November 1996).  We doubt whether this contention would have succeeded, but we need express no further view.

Summary

	We therefore hold that the appellant was rightly convicted of theft of (part of) the credit balance in the Society's account with its bank, on proof that dishonestly, and with the intention of permanently depriving the Society of that part of its property, he instructed the bank whether by cheque or otherwise to make a transfer of funds to another bank for the credit of another person's account held by it, and the transfer was made accordingly.  This was so, even if the instructions were outside the bank's mandate from the Society because the required second signatory was not present.  The decision in Preddy in our view does not affect the law which governs this offence, which remains as stated in Kohn (1979) 69 Cr. App. R. 395 at 404-5.  It remains true as a matter of law, as well as in ordinary parlance, that the appellant stole money from the Society's account.

	For these reasons, the appeal against conviction is dismissed.

Sentence

	The sentence of two years' imprisonment concurrent on each of these three counts was, in our view, amply justified.  The appellant was found guilty of an appalling breach of trust and he stole a significant sum of money entirely in order to alleviate his personal financial difficulties.  We take account of his previous good character and the substantial amount of personal mitigation.  The sentences of two years' imprisonment should stand, subject only to what we say below.

	The appellant was given bail after serving nearly five months of his sentence, entirely because of the uncertain legal situation which arose following the judgments in Preddy and on 25 October in Graham, Ali and others.  He remained on bail until the hearing of this appeal on 4 March.  He remains convicted of serious offences of dishonesty, but as he listened to the submissions on the appeal and as he reads this judgment he may well feel that his guilt of these offences, and for him the vital question of whether he shall return to custody to serve the remainder of his sentence, depends upon legal niceties rather than upon the substantial fact of his dishonesty.  The legal position has not changed throughout, so far as the offence of theft is concerned, but the shifting perceptions of what the law is during the past eight months has meant, for him, the abrupt change from custody to bail and now the prospect of returning to custody again.  The reasons for the lawyer's doubts are clear and understandable to the lawyers themselves, but we think that it is right to have regard to the public perception of what may appear to be an abstruse and even semantic debate.  We have asked ourselves whether it is necessary in the public interest that in these circumstances the appellant should be returned to custody, notwithstanding that the sentence of 2 year's imprisonment was undoubtedly correct when it was passed.  We have come to the clear conclusion that these are exceptional circumstances in which it not necessary for the balance of the sentence to be served, and we propose therefore to suspend the sentence to that extent.  If it is more convenient for administrative reasons for us to pass a fresh sentence of 14 months' imprisonment, on each count concurrent, suspended for a period of 1 year, then we will adopt that course.

LORD JUSTICE EVANS:  For the reasons given in the judgment which has been handed down and copies of which are available on request to the clerk, the appeal against conviction is dismissed.  It is our intention to suspend the sentences of imprisonment, subject to any applications which may be made.
 
MR MAHER:  My Lord, I have no application on behalf of the Crown.  I understand that Mr Cattan, counsel for the appellant, has been excused because of his inability to attend.
 
LORD JUSTICE EVANS:  But is there nobody here for the appellant?
 
MR MAHER:   Apart from his solicitor, Mr Kenyan.
 
LORD JUSTICE EVANS:  Mr Kenyan?
 
MR KENYAN:  I attend, my Lord.
 
LORD JUSTICE EVANS:  Why is counsel not present?
 
MR KENYAN:  My Lord, yesterday enquiries were made with the Court and we were informed that, as Mr Cattan could  not attend, provided I attended, that would be sufficient.  I apologise if that is not the case.
 
LORD JUSTICE EVANS:  I did not know anything about that, but we will certainly accept that and we are glad to see you.  There was a question mark left open at the end of the judgment; can you help us on that?  The point is this:  if we suspend the two‑year sentences, effectively the suspension would operate from today.
 
MR KENYAN:  Indeed.
 
LORD JUSTICE EVANS:  I do not know what the situation would be ‑‑ we are not suggesting that this would happen  ‑‑ if there had been any potential breach of the suspended sentence during the period when Mr Hilton has been on bail.  On the other hand, if we have a fourteen month sentence running from today, that question would not arise.
 
MR KENYAN:  Indeed.  I have read that already, my Lord, and I have no comment to make about that suggestion.
 
LORD JUSTICE EVANS:  What do you say, Mr Maher?
 
MR MAHER:  I am happy to go along with your Lordships' view on that.
 
LORD JUSTICE EVANS:  We have expressed both views.
 
MR MAHER:  I express no useful views for the Court, my Lord.
 
LORD JUSTICE EVANS:  In those circumstances, Mr Hilton, would you stand up?  We expressed the view that it might be more convenient for administrative reasons to pass a fresh sentence, but nobody has asked us to do that.  What we will do is suspend the existing sentences, which were for two years' imprisonment.  The effect of that order is you do not have to serve the balance of those sentences if you keep out of trouble for a period of twelve months from the date of the original sentence.  Do you understand?
 
THE APPELLANT:  Yes.
 
LORD JUSTICE EVANS:  If you do get into any further trouble, you will be liable to have to complete the sentence, in addition to any punishment that is imposed for the fresh offence.  Do you understand that quite  clearly?
 
THE APPELLANT:  Yes.
 
LORD JUSTICE EVANS:  We allow the appeal against sentence to the extent of suspending the sentences of imprisonment which were passed.