Answer
FACTS: The defendants (B and H) were the directors of an insurance brokerage company, which placed insurance on behalf of clients with Lloyds of London, through Lloyds' brokers. They failed to keep funds given to them by clients separate from their private funds and the company's account. They did not pay the money into a separate client account. The money was used for unauthorised purposes and the defendants were charged with theft. The prosecution alleged that while the money was in the defendants' account, they were under a legal obligation to forward this money on to the insurance brokers. Accordingly, under the TA 1968, s 5(3), the money still belonged to the clients and the defendants were guilty of stealing it when they dishonestly used it for an unauthorised purpose. The trial judge ruled that the object of the TA 1968, s 5(3) was to avoid the effects of civil law regarding the passing of title in money. The TA 1968, s 5(3) would effectively and automatically apply when money was given with the expectation that it would be used for a particular purpose. The accused were convicted and appealed to the Court of Appeal against their convictions. HELD: The Court of Appeal held that the TA 1968, s 5(3) had no automatic application. It was for the trial judge to decide, in each individual case, whether the accused was under a legal obligation according to civil law, to deal with the property in a particular way. B and H's convictions were quashed.