Craig Whyte v. Her Majesty’s Advocate [2017] HCJAC 14

Appeal under section 74 of the Criminal Procedure (Scotland) Act 1995:- The appellant was indicted to Glasgow High Court in relation to a common law charge of fraud and a charge under sections 678 and 680 of the Companies Act 2006. A plea to the relevancy of the charges was repelled at a preliminary hearing on 22 December 2016 and leave to appeal was granted in relation to the common law charge only. The basis of the plea and argument before the preliminary hearing judge was that the indictment did not aver a definite practical result of the kind which was an essential element in a charge of fraud and as such the charge was irrelevant. The decision of the judge at the preliminary hearing was based on the case of Adcock v Archibald 1925 JC 58 in which Lord Justice General Clyde stated at page 61 that:- “It is … a mistake to suppose that to the commission of fraud it is necessary to prove an actual gain by the accused, or an actual loss on the part of the person alleged to be defrauded. Any definite practical result achieved by the fraud is enough.” The preliminary hearing judge followed the decision of Adcock. It had been submitted on behalf of the appellant that the case was wrongly decided and should be reviewed by a larger court. Here it was submitted on behalf of the appellant that there must be some significant prejudice suffered and the person whom had been duped must have suffered some actual loss. On behalf of the appellant it was submitted that the case of Adcock could be distinguished as:- (1) Adcock did not reflect what was modern commercial practice, which had altered significantly since 1925; and (2) the opinion in the case was short and difficult to understand. It was submitted on behalf of the appellant that Adcock was at odds with Hume’s definition of fraud and other case law, for example, Lord Justice Gneral Inglis’ opinion in HMA v Witherington (1881) 4 Coup. 475. In addition, Gordon on Criminal Law, (4th Edition) suggested that the practical result should at least involve some legally significant prejudice. On behalf of the Crown it was submitted that in the present case the sale of the majority of the shares in the Club was a definite practical result and that the sale would not have taken place but for the false pretences and the seller had done some act which he would not otherwise have done in the absence of that false pretence. It was submitted on behalf of the Crown that what was clear from the authorities was that the essential elements of the crime were that there was a false pretence, a definite practical result and a causal link between the two. Here the court refused the appeal. The court observed that the principle in Adcock has been applied in Scottish courts for over 90 years without any difficulty. The court reiterated that the offence of fraud is the dishonest misrepresentation of fact which is designed to bring about the practical result which then occurs and that definite practical result is causally connected to the pretence. The court made clear that no economic loss is required to be proved and a definite practical result was sufficient. The court observed that the question of loss, or lack thereof, may be a relevant issue in the event that guilt were to be established and may be reflected in any sentence to be passed.