REGINA v MICHAEL THREAPLETON [2001] EWCA Crim 2892

[2001] EWCA Crim 2892Case No Case No: 200004759 Y1
Between
REGINAMICHAEL THREAPLETON
Before
Lord Justice WallerMr Justice RougierMr Justice Stanley BurntonPeter Binder for the AppellantNicholas Dean for the CrownDate 19 December 2001
[1]Mr Justice Stanley Burnton: The Court has before it:(a) the appellant’s appeal, with leave of the single Judge, against a costs order made against him by HH Judge Heppel QC on 4 August 2000, ordering him to pay the sum of £15,000 towards the costs of the prosecution;(b) an application by the appellant for leave to appeal against a confiscation order made under the Criminal Justice Act 1988 by HH Judge Heppel on 26 January 2001 in the same sum of £15,000.[2]At the conclusion of the hearing of the appeal and the application for leave to appeal, we stated that the appeal against the costs order would be allowed and we refused leave to appeal against the confiscation order. We said that we would give our reasons in writing, and we now do so. The proceedings in the Crown Court[3]On 27 th July 2000 at Hull Crown Court the appellant was convicted at a retrial before HH Judge Heppel Q.C. of corruptly giving a bribe to a Roger Dearnley, an employee of Doncaster Metropolitan Borough Council. The particulars of the offence specified in the indictment as amended were as follows:
“Michael Threapleton, on or about 5 February 1993 corruptly gave Roger Dearnley who at that time held public office in the employment of Doncaster Metropolitan Borough Council, a gift, reward or advantage namely a Fiat Uno motor car, registration number J640 AWB, as a reward for business contracts on behalf of Doncaster Metropolitan Borough Council being awarded to Executive Security Limited by Roger Dearnley or with his assistance or as an inducement to Roger Dearnley to award or assist in awarding further contracts to Executive Surveillance and Security Limited.”
[4]The appellant was sentenced to 18 months imprisonment, subsequently reduced by the Court of Appeal to 12 months. His co-accused Roger Dearnley was also convicted of corruption. The other, Roger Bodill, had been acquitted at an earlier trial.[5]On 4 th August 2000 Judge Heppel made the costs order against the appellant referred to above.[6]On 19 th December 2000 the full Court allowed the appellant’s appeal against sentence to the extent of reducing the term of imprisonment to one of 12 months. His appeal against the costs order was adjourned pending the conclusion of the confiscation proceedings.[7]On 26 th January 2001 Judge Heppel made the confiscation order referred to above. The Facts[8]About September 1990 Dearnley began work as a principal valuer for the Doncaster Metropolitan Borough Council (“Doncaster MBC”). He reported to a Chief Valuation Officer, but still had important responsibilities for property managed by Doncaster MBC. One of the properties Dearnley managed was known as the Mexborough Business Centre, and he was responsible for letting out business units, collecting rent and security services. In June 1991 Dearnley had instructed one of his staff to invite tenders for security services at the Mexborough Business Centre and a number of companies were approached. Executive Security Contracts Limited (ESC), run by a man named Dack was not approached. The parent company of ESC was EFM Holdings Group, and Threapleton was a director.[9]On 2 August 1991, Doncaster MBC received a letter from ESC addressed to Dearnley quoting a rate of £4.00 per hour. The previous company, which had been charging £3.60 per hour, was dismissed and ESC were appointed to take over the security contract. No formal contract ever seemed to be drawn up, and ESC simply began to invoice Doncaster MBC for the services they provided. At the time ESC were expecting to invoice Doncaster MBC for about £36,000 per annum, but the amounts paid grew each year. In the year 1991/1992 Doncaster MBC paid £52,000, in 1992/1993 that grew to about £130,000 and in 1993/1994 to about £385,000. Dearnley was involved in authorising much of that expenditure.[10]Once ESC started working for Doncaster MBC it was well placed to take on other work offered by the Council. From August 1991 Doncaster MBC paid ESC and ESSL approximately £1million. Beyond invoices the business generated little by way of documentation or formal agreements.[11]By late 1992 and early 1993 Dearnley had built up a close link with ESC and he proposed that a more sophisticated security system be set up at the Mexborough Business Centre. It was about this time that Dearnley was introduced to Threapleton, who was planning to set up Executive Surveillance and Security Limited (“ESSL”).[12]At about this time Dearnley had a car which he described as “a banger”. He could not afford to buy a new car, but was entitled to apply to Doncaster MBC for a loan to purchase a car. In December 1992 he applied for a loan, which was supported by an invoice from Imola Sports Limited. This was another company in the EFM Group, which was run by Bodill. On 4 December 1992, Dearnley signed an agreement with Doncaster MBC to borrow £5,445 to purchase a Fiat Uno motor car. He returned the cheque and a second cheque was issued. In February 1993, Threapleton purchased a Fiat Uno motor car from GT cars and arranged payment of a finance agreement through his personal bank account. He gave the vehicle to Dearnley who paid nothing for the vehicle or the use of it. When Dearnley was required to provide information regarding his purchase of the car he maintained the pretence that he had used the loan to purchase the Fiat Uno. He in fact used the money obtained to clear a number of debts.[13]In February 1993, Threapleton set up ESSL and took with him many of the staff from ESC and a number of their existing clients, including Doncaster MBC. No formal tendering process took place.[14]In June 1993 two elderly persons homes closed. At the instigation of Dearnley ESL took over guarding those premises. The rate paid to ESSL, as agreed and arranged through Dearnley, was higher than the rate paid to the previous companies. Dearnley also helped ESSL obtain the contract for a video surveillance system at Mexborough Business Centre. Only ESSL quoted for the work. As part of wider investigations, the police began to look at ESSL’s dealing with Doncaster MBC.[15]The appeal against the costs order is put on two bases. The first is that the order was unlawful: it is submitted that no costs order should have been made until after the making of the confiscation order, if any.[16]Section 72 (5) of the Criminal Justice Act 1988 reads as follows: “Where a court makes a confiscation order against a defendant in any proceedings, it shall be its duty, in respect of any offence of which he is convicted in those proceedings, to take account of the order before-(a) imposing any fine upon him, or(b) making any order involving any payment by him other than an order under section 35 of the Powers of Criminal Courts Act 1973 (compensation orders); or(c) …. but subject to that shall leave the order out of account in determining the appropriate sentence or other manner of dealing with him.[17]The order for costs in this case was an order for payment by him within section 72(5)(b).[18]Section 72(5) is modified by section 72A in cases where the court postpones the determinations that are required by section 71 (namely whether the defendant has benefited from any relevant criminal conduct and the amount to be recovered in his case) for specified periods as permitted by section 72A, and sentences the defendant before making a confiscation order as permitted by section 72A(7). The Court proceeded under section 72A in the present case, and the Court proceeded to sentence the appellant before making the confiscation order. Section 72A(8) and (9) are as follows: 8. Where the court has so proceeded – a) subsection (1) of section 71 above shall have effect as if the words from “before sentencing” onwards were omitted; b) that section shall further have effect as references to an offence that will be taken into consideration in determining any sentence included references to an offence that has been to taken into account; and c) section 72(5) above shall have effect as if after “determining” there were inserted “in relation to any offence in respect of which he has not been sentenced or otherwise dealt with”. 9. In sentencing, or otherwise dealing with, the defendant in respect of the offence, or any of the offences, concerned at any time during the specified period the court shall not –(a) impose any fine on him; or(b) make any such order as is mentioned in section 72(5)(b) or (c) above. “The specified period” is the period, following conviction, of the postponement of the determinations of the defendant’s benefit and the amount to be recovered from him: section 72A(1).[19]Mr Binder submitted that the confiscation order must be made before any order for costs. Here it was made afterwards. The judge was accordingly unable to fulfil his duty under section 72 (5) by taking it into account when making the order for costs. More obviously, the order was made in breach of the prohibition in section 72A(9). He also submitted that the costs order was a wrongful exercise of the judge’s discretion.[20]Mr Dean conceded, as was inevitable, that the judge should not have made the costs order before making the confiscation order. It follows that the order was one that could not lawfully have been made, and that it must be quashed: c.f. R v Ross [2001] CLR 405.[21]We mention that the relevant provisions of the 1988 Act were not brought to the judge’s attention by counsel. We emphasise that it is the duty of counsel for both the prosecution and the defence to bring such provisions to the attention of the Court, and they should have done so on 4 August 2000 when the judge raised the possibility of his making an order for costs before dealing with confiscation.[22]Mr Dean submitted that although the order made on 4 August 2000 had to be quashed, the same order could lawfully have been made by the judge on 26 January 2001; that this Court has power under section 11(3) of the Criminal Appeal Act 1968 to make an order for costs that could have been made by the Crown Court on that occasion; that in view of the identity of the sums ordered to be paid as costs and under the confiscation order this Court could be confident that if no costs order had been made by the judge on 4 August 2000 he would have made the same order on 26 January 2001; and that this Court should therefore make the same order for costs as that made on 4 August 2000. Assuming that section 11(3) of the 1968 Act does confer such power on this Court, we do not think that it would be right to exercise it. To do so would be to condone the fact that the requirements of the 1988 Act were not complied with. Those requirements are not merely formal: they are intended to ensure that the determination of the amount payable under a confiscation order has priority over, in this case, an order for the payment of costs. The amount payable under the confiscation order depended on the realisable property of the defendant (or “the amount that might be realised at the time the order (was) made” (section 71(6)), and the effect of the statutory procedure is that that property should not have been depleted by an order for costs when the determinations required for the making of a confiscation order are made. Furthermore, we are not satisfied that if the correct procedure had been followed, the same order for costs would have been made. The judge would in all probability have determined that a greater sum by paid by the appellant under the confiscation order, since at that stage his realisable property had not been depleted by, or was not liable to be depleted by, any previous costs order.[23]In view of our decision on the first point, it is unnecessary to deal with the question of the judge’s exercise of discretion, other than to say that, apart from the failure to comply with the requirements of the 1988 Act, we see no basis for interfering with his decision. The confiscation order[24]The appeal against the confiscation order is put on the basis that the judge was bound to proceed on the basis of the version of the facts charged before the jury most favourable to the defendant. The way in which the count was left to the jury created alternative bases upon which the jury could convict. On the basis of the first alternative facts charged, the car was given as reward for business contracts awarded in the past to Executive Security Ltd, Mr Dack’s company. On this basis, it is argued, the appellant derived no benefit from the corrupt act, and indeed the Crown did not allege that he had. On the alternative facts charged, the appellant derived benefit from the moneys received by his company, ESSL, as a result of the corrupt gift of the car to Dearnley. Mr Binder submitted that since the judge had no way of knowing the basis of the jury’s verdict, he was required to adopt the view of the facts most favourable to the accused.[25]The judge decided he was bound as a matter of strict law to approach the question of whether or not the appellant benefited from the corruption and to what extent in the way that Mr Binder submitted, the way most favourable to the accused. He turned therefore to the argument that the appellant only intended to reward Dearnley for past favours done and that he therefore received no benefit from those favours.[26]The judge held that the test under section 71 (4) of the Criminal Justice Act 1998 is an objective one and the accused’s intention is therefore irrelevant: if any benefit in fact accrued to the accused, and the facts of the case taken globally pointed to a causal link between the offence and that benefit, then the accused had in fact benefited as a result of the offence within the terms of the section. He found that even if the car was given as a reward for past services to Executive Security it led to the promotion of the interests of Executive Surveillance and Security Ltd with consequential advantage to Mr Threapleton. He said, at page 8B of the transcript:
“Mr Grenfell (for the appellant) argues to the extent that the Defendant may have gained from the placing by the Council of contracts with Executive Surveillance and Security, he would not have gained those benefits from the commission of the offence as he intended it should be committed, that is to say simply by rewarding Dearnley for past favours done for Executive Security. In my judgment that approach is wrong in law. The test under Section 71, subsection 4, of the Criminal Justice Act, 1988, is a purely objective one. The way in which the Defendant may have intended to commit the offence, and whether he intended to get something out of it, or what he intended to get out of it, is irrelevant. If benefit in fact inures to the Defendant, and the facts globally taken in the case point to a causal link between the offence and the benefit, then in my judgment he has received benefit “as a result of” the offence. In my judgment, even if the car was given as a reward, or a thank you, to Dearnley for services to Executive Security, it did, on my findings of fact, lead to the promotion of the interests of Executive Surveillance and Security Limited, with consequential advantage to Mr Threapleton. In my judgment, the overwhelming thrust of the totality of the evidence pointed that way, particularly when one considers the time at which the car was given, in the context of the setting-up of the second company. And, indeed, to hold that no benefit flowed from the reward given to Mr Dearnley for past services would, in my judgment, be to fly in the face of common sense in the circumstances of this case.”
[27]The Judge calculated the benefit by reference to the evidence led at trial on behalf of the appellant that the contracts placed by the council with ESS amounted to 25 % of the company’s turnover. During the period from the gift to arrest the prosecution calculated the benefit to the company, to Mr Threapleton, as £308,000. This comprised partly consultancy fees and part payments to the company for purchases that were to the benefit of the appellant personally. The judge, adopting a broad-brush approach, reduced this sum to £260,000, of which 25 per cent were derived from trading with the local authority resulting from the corrupt gift. The judge therefore calculated the appellant’s benefit as the sum of £65,000. That calculation is not challenged on behalf of the appellant: the submission made on his behalf is that no such calculation was permissible. Having considered the assets available (i.e., the relevant realisable property of the appellant), the judge took account of the costs order he had made and the legal costs the appellant had incurred in his defence, and made an order for the payment of the sum of £15,000.[28]We reject the submission that in making a confiscation order the Judge is bound to approach the case on the version of the facts before the jury most favourable to the defendant. The case of R v Efionayi (1995) 16 Cr App R (S) 380, relied upon by Mr Binder, was concerned with sentencing in the strict sense of the word, i.e. a sentence of imprisonment. The principle applied in the context of that case does not apply in the present context. Section 71 of the 1988 Act imposes a duty on the court to make the determinations specified in subsections (1A), (1B) and (6), i.e., whether the defendant has benefited from any relevant criminal conduct, the amount of that benefit and the amounts that might be realised at the time the order is made. In the case of the Crown Court, the Court there means the trial judge, and does not include the jury. The same determinations fall to be made under section 72A, where the determinations are postponed. The fact that the determinations are separate from the trial process itself is emphasised by section 71(7A) of the 1988 Act, which provides that the standard of proof required to determine any question arising under Part VI of the Act is that applicable in civil proceedings.[29]In any event, however, the question required to be answered in this case was not whether the car was a gift for past favours or an inducement for future favours, but whether the offender benefited from the conduct of which he was found guilty, and if so, by subsection (6), the amount of that benefit and the amount appearing to the court to be the amount that might be realised when the order was made. Those are the questions that the judge addressed. The jury were not concerned whether, if they found that the car was given as a reward for past services, its gift had resulted in subsequent financial benefit for the appellant, or whether, if they found that the car was given as an inducement to Dearnley to award or assist in awarding further contracts to ESSL, Dearnley had in fact awarded or assisted in awarding such contracts to ESSL, and if he did whether and to what extent the appellant benefited from that.[30]The question required to be determined by the Judge was not whether the car was a gift for past favours or an inducement for future favours, but whether the offender benefited from the conduct of which he was found guilty, i.e., the corrupt gift of the car to Dearnley, and if so, by subsection (6), the amount of that benefit and the amount appearing to the court to be the amount that might be realised when the order is made. Those are the questions that the judge addressed. In doing so, he assumed that a valid costs order had been made against the appellant; but that incorrect assumption led to a smaller confiscation order than would otherwise have been made.[31]It follows that there are no grounds for impugning the confiscation order.

Cited in 2 later judgments