KembaraXtra – Case Law

Mavji (1987) CA

Facts

The defendant, Mavji, was the director of a company dealing in gold.

VAT was charged on the gold transactions, but Mavji failed to account for and pay the VAT to Customs and Excise.

He was charged with the common law offence of cheating the public revenue.

Legal Issue

The issue was whether the offence of cheating the public revenue could be committed by an omission, rather than only through a positive act of deception.

In particular, the court considered whether Mavji’s failure to pay VAT, despite being under a statutory duty to do so, could amount to criminal liability.

Held

The Court of Appeal held that the offence of cheating the public revenue consisted of fraudulent conduct which diverted money from the Revenue and deprived it of money to which it was entitled.

The offence could be committed:

• by a positive act of deceit; or
• by an omission, where the defendant was under a legal duty to act.

Mavji was under a statutory duty to pay VAT under s 38(1) of the Finance Act 1972.

His failure to fulfil that duty was therefore capable of amounting to a criminal omission.

Legal Principle

A criminal offence may be committed by an omission where the defendant is under a statutory duty to act.

Where legislation imposes a duty on D to make a payment or take a particular step, deliberately failing to perform that duty may amount to the actus reus of an offence.

Complete — What Mavji Establishes

Mavji establishes that:

• criminal liability can arise from an omission where there is a statutory duty to act;
• cheating the public revenue does not require a positive act of deception;
• fraudulent failure to pay money legally due to the Revenue can amount to the offence; and
• a statutory duty can provide the legal basis necessary for liability for an omission.

What Is Not Complete / Limits of the Rule

Mavji does not mean that every failure to pay tax automatically amounts to cheating the public revenue.

The prosecution must still establish the necessary elements of the offence, including fraudulent or dishonest conduct.

A mere accidental mistake, administrative error, or innocent failure to pay would not automatically amount to the common law offence simply because a statutory duty existed.

The important point is that there must be both:

1. a legal duty to act; and
2. the required fraudulent conduct or state of mind for the offence.

Importance

Mavji is important in the law of criminal omissions because it demonstrates that a duty created by statute can form the basis of criminal liability for failing to act.

It is therefore an example of the principle that statutory duties can create liability for omissions.

Key Rule

Where D is under a statutory duty to act, a deliberate and fraudulent failure to perform that duty may amount to a criminal omission. An offence such as cheating the public revenue can therefore be committed by omission as well as by a positive act.