Facts
- Hall, a travel agent, accepted deposits from customers for flights.
- These deposits were placed into Hall’s general business account rather than kept in a separate account.
- When the business failed, customers lost their deposits.
- Hall was charged with theft of these customer deposits.
Issues
- Whether money received for a specific purpose is held by the recipient on trust for the payer.
- Whether Hall’s actions in mixing customer deposits with general business funds amounted to theft under the Theft Act 1968.
- Whether an intention or plan to keep funds separate is required to establish a trust over the money received.
Decision
- The Court of Appeal held that the essential issue was whether Hall intended to keep the deposits separate for the designated purpose.
- There was no evidence that Hall intended to segregate the funds or create a trust.
- As a result, no trust existed; the deposits became Hall’s business assets.
- The conviction for theft was overturned.
Legal Principles
- Money received for a specific purpose does not automatically constitute a trust; a clear plan or intention to keep the funds separate is required.
- The recipient’s intent regarding the funds can be explicitly stated or inferred from conduct but must be supported by evidence.
- In the absence of such intention, the payer’s funds become part of the general assets of the recipient and are not protected by a trust.
- The case distinguishes itself from situations like Davidge v Bunnett, where a trust arose due to a clear duty to apply the money only for a particular use.
Conclusion
R v Hall clarified that accepting money for a specific purpose does not, by itself, create a trust unless there is evidence of intent to keep the funds separate; lacking such intent, the money forms part of the recipient’s general assets, and liability for theft does not arise under these circumstances.
