R v Klineberg and Marsden [1999] 1 Cr App R 427
FACTS: The defendants (K and M) set up a company to buy a timeshare development under construction in Lanzarote and to sell the timeshares. The purchasers were told that their money would be paid to a stake-holding trust company to be held on trust until the development had been completed and was ready for occupation. Various purchasers paid a total of £500,000 for timeshares of which only £233 was paid to the trust company. The rest was paid into the company's bank account and 'lost' when the company went into liquidation. K and M were convicted of ten counts of theft. They appealed against their convictions, arguing that once the money was paid into the company's account, it no longer belonged to the customers. HELD: The Court of Appeal dismissed the appeal in part and upheld six of the ten convictions. They stated that K and M's express assurances that the money would be safeguarded by payment to a stake-holding trust company meant that they were under a legal obligation to do just that. The prosecution had proved that on six counts that the defendants were under an obligation to deal with the money in a particular way. Accordingly, under the TA 1968, s 5(3) the money would be deemed to belong to the purchasers.