Counsel had argued that the effect of the decisions in R v Lawrence and R v Gomez was to reduce the actus reus of theft to a "vanishing point".
Steyn was unconvinced by these arguments and maintained that the House of Lords had not overlooked the consequences in its previous decisions.
Lord Steyn pointed out that the mental requirements of the law of theft offer adequate protection from the injustice that would otherwise result from a broad interpretation of the word "appropriates".
He also declined to accept the counsel's alternative argument that "appropriates" should be interpreted as if the word "unlawfully" preceded it.
He held that it was contrary to common sense that a person who receives property as a gift could be said to be acting dishonestly, regardless of the moral reprehensibility of accepting it.
His Lordship drew further support for this argument from Viscount Dilhorne’s judgment in R v Lawrence, and that of Pill LJ in R v Mazo [1997] 2 Cr App R 518.
While his Lordship agreed that such contractual principles should be confined to their own spheres and that criminal liability should not hinge upon them, he stated that where the mental incapacity of the donor is concerned it is necessary for the jury to consider that matter.
He held that the defendant could only be guilty if (1) the donor did not have the mental capacity to make a gift and (2) the donee knew of this incapacity.
He was also of the view that the conclusions of the court in R v Mazo and R v. Kendrick and Hopkins [1997] 2 Cr App R 524 could be reconciled with this principle.