R v Nicholas Gary Liam Kearns [2002] EWCA Crim 748

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CRIMINAL DIVISION)
[2002] EWCA Crim 748Case No Case No: 2001/2319/X3Venue Royal Courts of Justice, Strand, London, WC2A 2LL
Between
RNicholas Gary Liam Kearns
Before
Lord Justice KennedyMr JUSTICE AIKENSMr JUSTICE PITCHFORDMarc Willers for the appellantJames Eadie for the CrownHearing date : 8th February 2002Date 22 March 2002
[1]Mr Justice Aikens: This appeal concerns the issue of whether section 353(3)(a) of the Insolvency Act 1986, by its terms, contravenes the right of a person to have a fair trial pursuant to Article 6 of the European Convention on Human Rights (“ECHR”), as scheduled to the Human Rights Act 1998. The issue was raised at the outset of a trial before HHJ McNaught on 26 March 2001. Mr Kearns faced four counts on the Indictment. The Particulars of Offence on Count 3 alleged that: “ Nicholas Gary Liam Kearns, between 11 September 1998 and 18 August 1999, being a bankrupt and having been required to do so by the Official Receiver, failed without reasonable excuse to account for the loss of a substantial part of his property, namely the sum of £22,400, incurred in the period between the presentation of the bankruptcy petition on 17 September 1998 and 11 November 1998, contrary to section 354(3) (a) of the Insolvency Act 1986”.[2]At the outset of the trial the Judge heard argument on the issue. He held, in an admirably concise ruling, that the terms of section 354(3)(a) of the Insolvency Act 1986 (“the 1986 Act”) did not offend Article 6. Therefore Mr Kearns could have a fair trial on Count 3. Following that ruling the appellant pleaded guilty to Count 3. He was subsequently sentenced to a Community Punishment. The maximum sentence for the offence if convicted on Indictment is 2 years imprisonment and/or a fine.[3]The appellant has appealed with the leave of the single judge. The Court heard argument on Friday 8 February 2002 and announced that the appeal would be dismissed for reasons to be given at a later date. We now give those reasons. The Facts[4]The appellant, Mr Kearns, was the owner and operator of some JCB tractors. On 17 September 1998 Her Majesty’s Customs and Excise presented a petition for the bankruptcy of Mr Kearns. On 11 November 1998 the appellant was adjudged bankrupt.[5]Following the bankruptcy adjudication the Official Receiver was appointed to administer the bankruptcy. The Official Receiver demanded to see the appellant’s accounting records. Some were produced but the Official Receiver was not satisfied that he had the full picture. In particular he was not given any independent record of the money received or expended by the business on a day to day basis. The Official Receiver contacted the National Westminster Bank Account Management Centre to enquire about National Westminster Bank Account No 9890889. That account was in the name of Nicholas Gary Liam Kearns trading as NGK Plant Hire. The records showed that in the period between the presentation of the bankruptcy petition and the date of the bankruptcy the sum of £22,400 had been withdrawn from this account by cheques made payable to “cash”. Further, between 11 November 1998 and 30 November 1998 Mr Kearns withdrew an additional sum of £12,700 from the account by cheques that were also made payable to “cash”.[6]Sometime in mid 1999 the appellant was given a form BB4.18 by Joanne Melhado, acting on behalf of the Official Receiver. This form is headed:
“ Statement of Affairs and Other Information-Receipts and Payment Account/Goods Account (Affidavit Form)”
. With this form the appellant was given a schedule of the cheques about which further information was sought. He was also given blank forms on which to complete information about payments that were made from 19 June 1998 to 23 November 1998. The form required Mr Kearns to complete an affidavit on the topics identified.[7]On 6 September 1999 a completed copy of the affidavit was received from Mr Kearns. But no information about receipts or payments was provided either in or with the affidavit. As a result, the appellant was charged with the offence set out in Count 3 of the Indictment that we have set out above. The regime under the Insolvency Act 1986[8]Under section 287 of the 1986 Act after the presentation of a bankruptcy petition and before the appointment of a trustee in bankruptcy, an official receiver can be appointed. By section 288 of the 1986 Act a bankrupt is under a duty to submit a statement of affairs to the appointed official receiver within a certain time. Under section 289 it is the duty of the official receiver to investigate the affairs of every bankrupt and to make such report (if any) as the Court thinks fit. Under section 291 of the 1986 Act once a bankruptcy order has been made, the bankrupt is under a duty to deliver possession of his estate to the official receiver. The bankrupt is also obliged to deliver up to the official receiver all books, papers and other records of which the bankrupt has possession or control and which relate to his estate and affairs: see section 291(1). Section 291 also sets out other obligations of the bankrupt. If the bankrupt, without reasonable excuse, fails to comply with any of the obligations set out in the section, then he is guilty of contempt of court and may be punished accordingly: section 291(5).[9]Section 354 of the Act imposes further duties on the bankrupt and states that if the bankrupt does not perform them, he will be guilty of an offence. That section provides as follows:
“354. Concealment of property (1) The bankrupt is guilty of an offence, if - (a) he does not deliver up possession to the official receiver or trustee, or as the official receiver or trustee may direct, of such part of the property comprised in his estate as is in his possession or under his control, and possession of which he is required by law so to deliver up, (b) he conceals any debt due to or from him or conceals any property the value of which is not less than the prescribed amount and possession of which he is required to deliver up to the official receiver or trustee, or (c) in the 12 months before petition, or in the initial period, he did anything which would have been an offence under paragraph (b) above if the bankruptcy order had been made immediately before he did it. Section 352 applies to this offence. (2) The bankrupt is guilty of an offence if he removes, or in the initial period removed, any property the value of which was not less than the prescribed amount and possession of which he has or would have been required to deliver up to the official receiver or the trustee. Section 352 applies to this offence. (3) The bankrupt is guilty of an offence if he without reasonable excuse fails, on being required to do so by the official receiver or the court - (a) to account for the loss of any substantial part of his property incurred in the 12 months before petition or in the initial period, or (b) to give a satisfactory explanation of the manner in which such a loss was incurred”
. Section 351(b) of the Act defines “ the initial period” as being the period between the presentation of the bankruptcy petition and the commencement of the bankruptcy. The allegations against Mr Kearns and the argument before the Judge[10]The allegations made against Mr Kearns were that:(i) the official receiver had required Mr Kearns to account for the loss of the sum of £22,400 from the account in the National Westminster Account that was in Mr Kearns’ name;(ii) Mr Kearns had failed to do so, and had no reasonable excuse for this failure; and so(iii) he was guilty of an offence under section 354(3)(a) of the 1986 Act.[11]The argument on behalf of Mr Kearns before the judge was that section 354(3)(a) of the 1986 Act forced the bankrupt to give information to the official receiver and if he failed to do so, (without reasonable excuse), then he automatically committed an offence. This meant that the section was contrary to the bankrupt’s right to remain silent if he chose and contrary to his right not to incriminate himself. Those were both rights that had been recognised in judgments of the European Court of Human Rights as being inherently part of a person’s rights under Article 6. Further, the wording of section 354(3)(a) had the effect of presuming the bankrupt to be guilty of the offence unless he could account for the losses or he had a reasonable excuse not to give an account. That violated the presumption of innocence in Article 6(2) of the ECHR. Accordingly, section 354(3)(a) was incompatible with the ECHR and so violated Mr Kearns’ right to a fair trial.[12]As we have said, the judge rejected those arguments and then Mr Kearns pleaded guilty to Count 3 on the Indictment. Preliminary Matters on this appeal[13]Before we can address the principal argument raised by this appeal there are two preliminary issues that we must consider. The first is the more substantial. The appellant is challenging his conviction following his decision to plead guilty after Judge McNaught had given his ruling. At the hearing of the appeal Kennedy LJ asked Mr James Eadie, who appeared for the prosecution on the appeal, whether the fact that Mr Kearns had pleaded guilty after the ruling had any effect on the Court’s jurisdiction to hear the appeal pursuant to section 2(1) of the Criminal Appeal Act 1968 (“the 1968 Act”). Mr Eadie said that the prosecution took no point on the Court’s jurisdiction to hear the appeal.[14]He was right not to do for reasons we will now set out briefly. The argument on behalf of Mr Kearns before the judge was that, given the nature of the offence that section 354(3)(a) purported to create, it offended Article 6 of the ECHR. Once that argument had been lost, it was accepted that the defendant had no further legal or evidential basis on which he could argue he was not guilty of the offence charged. The issue raised on the appeal is whether the judge was correct to hold that section 354(3)(a) did not offend Article 6. If the judge was wrong and section 354(3)(a) did offend Article 6 , then in our view a conviction under section 354(3)(a) would be manifestly “unsafe”, within the meaning of section 2(1) of the 1968 Act. That is because we do not see how a conviction could be regarded as “safe” if the Court of Appeal determines that the conviction had been obtained in violation of a defendant’s right, under Article 6, to a trial that is procedurally fair.[15]We believe that this approach to the relationship between section 2(1) of the 1968 Act and Article 6 follows from the analysis of this Court set out in the judgment of Lord Woolf CJ in R v Togher [2001] 3 All ER 463 , in particular at paragraph 33. We also note that in Brown v Stott [2001] 2 WLR 817 at 825, Lord Bingham of Cornhill stated that there is nothing in Article 6 to suggest that the fairness of the trial itself may be qualified, compromised or restricted in any way; if the trial as a whole is judged to be unfair then a conviction cannot stand. Lord Steyn made a similar remark at page 840. Therefore we conclude that Mr Eadie was right to concede that, despite the guilty plea in this case, this Court has jurisdiction to consider the appeal on conviction on the ground advanced on behalf of Mr Kearns.[16]The other preliminary issue arises from the submission of Mr Marc Willers on behalf of the appellant that, if the Court accepts his argument that section 354(3)(a) is incompatible with the rights set out in Article 6, then this Court should make a declaration of incompatibility, pursuant to section 4(2) of the Human Rights Act 1998 (“the HRA”). However, section 5 of the HRA provides that if a court is considering whether to make a declaration of incompatibility, the Crown is entitled to notice and is entitled to be joined to the proceedings. Mr Eadie informed us that, for the purposes of section 5 of the HRA, he represented the Secretary of State as well as the prosecution. Mr Eadie said that that there would therefore be no application for the formal joinder of any other party to the proceedings and the Court could deal with the issue of incompatibility if necessary. The principal arguments on behalf of the Appellant[17]Before us Mr Willers submitted as follows:(i) the effect of section 354(3)(a) of the 1986 Act is that it requires the bankrupt to give an account of or explanation for the loss of his property during a specified period of time. If the bankrupt fails to give that account or explanation and he does not have a reasonable excuse for this failure, then, according to the statutory wording of section 354(3)(a) , he has committed an offence. Therefore, Mr Willers submitted, the offence is one of strict liability.(ii) Because of the obligation to give an account or explanation upon demand and that a failure to do so (without reasonable excuse) results in the commission of an offence, section 354(3)(a) amounts to an infringement of both a person’s right to silence and also his right against self incrimination.(iii) Moreover, as section 354(3)(a) of the 1986 Act makes it an offence if the bankrupt fails to account for a loss once he has been required to do so by the Official Receiver, (unless the bankrupt has a reasonable excuse for not doing so), then the effect of the section is that a bankrupt is presumed guilty unless he proves his innocence by demonstrating that he has a reasonable excuse for not accounting for the losses.[18]In argument Mr Willers emphasised the first of these submissions, i.e. that section 354(3)(a) infringed the right of silence and the right against self-incrimination. He relied on the decision of the European Court of Human Rights in Saunders v United Kingdom (1996) 23 EHRR 313 at para 68 for the proposition that, although the right to silence and the right not to incriminate oneself were not expressly mentioned in Article 6 of the ECHR , those rights were a part of the right to a fair trial granted in Article 6 . In that case the European Court of Human Rights had said that this was so because those two rights were generally recognised international standards which lie at the heart of the notion of a fair procedure under Article 6. Mr Willers submitted that the decisions of the European Court of Human Rights in the Saunders case; Funke v France (1993) 16 EHRR 297 ; and Heaney and McGuinness v Ireland (application No 36887/97, published on 21 December 2000) all confirmed the proposition that if the effect of particular legislation was to make it an offence if a person did not provide governmental (or other) authorities with information in his possession, then the legislation infringed the rights to silence and not to incriminate oneself.[19]Mr Willers submitted that in this case if Mr Kearns had given the official receiver the information he sought about the National Westminster bank account and the cheques drawn on it, then that information could be used to prosecute Mr Kearns for further alleged offences, e.g. stealing the money from the business. That is why section 354(3)(a) infringed the right to silence and the right against self-incrimination. The argument of the Crown[20]Mr Eadie submitted as follows:(i) the offence created by section 354(3)(a) was in the nature of a “sanction” offence. The sub-section creates a duty on the bankrupt to provide information when required by the Official Receiver and if the bankrupt did not provide it then, in the absence of a reasonable excuse, an offence was committed.(ii) The decision of the European Court of Human Rights in the Saunders case is narrowly confined. Mr Eadie submitted that in the Saunders case The European Court of Human Rights found that there had been a breach of Article 6 only because answers obtained compulsorily in non-judicial investigations by DTI Inspectors had been used to incriminate the accused in subsequent criminal proceedings concerning the same subject matter of the investigation. Therefore it was the use of the information in the later criminal proceedings that offended Article 6 , not the invocation of the statutory powers of the DTI Inspectors under section 434 of the Companies Act to demand information for the purposes of their investigation under the Companies Acts.(iii) None of the European Court of Human Rights’ decisions has held that a statutory provision that makes it an offence not to provide information when demanded by an authority offends Article 6. The cases draw a clear distinction between the statutory power to compel a person to give information for the purposes of an administrative or regulatory procedure and the subsequent use of such information in criminal proceedings against the person who was obliged to give it. On this point Mr Eadie relied on the analysis of the Saunders case made by Lord Hoffmann in Regina v Hertfordshire County Council ex parte Green Environmental Industries Ltd [2000] 2 AC 412 at page 423.(iv) In the current case when the official receiver demanded from Mr Kearns information about the losses from the National Westminster bank account, he was not seeking information or evidence to support or establish any independent criminal charge(v) Moreover, since the decision in the Saunders case, there had been a statutory prohibition on using information obtained pursuant to regulatory provisions such as section 354 so that such information could not be used in subsequent criminal proceedings. Therefore in providing the information demanded under section 354(3)(a), Mr Kearns was in no danger of any infringement of his rights to silence and not to incriminate himself. Analysis[21]We think that the following issues have to be considered:(1) What are the ingredients of the offence created by section 354(3)(a) of the 1986 Act ?(2) What is the scope of the principle, under Article 6 of the ECHR and in the light of the Strasbourg and UK cases , that a person has a right to remain silent or not to incriminate himself in circumstances where information is sought by a state or official authority?(3) Taking into account the Strasbourg and United Kingdom decisions, does section 354(3)(a) of the 1986 Act breach a defendant’s right to remain silent or not to incriminate himself, thereby rendering a trial for an offence under that section an unfair trial within the ambit of Article 6? The Ingredients of the offence under Section 354(3)(a)[22]We accept the submission of Mr Eadie that, in order to prove that an offence under section 354(3)(a) had been committed in this case, the prosecution had to prove:(i) the loss of any substantial part of the bankrupt’s property. In this case the relevant property was the £22,400 removed from the appellant’s bank account by cheques payable to cash;(ii) that the loss was incurred in the “initial period” as defined - (here that is the period from 17 September 1998 to 11 November 1998);(iii) a requirement by the Official Receiver (or the Court) that the bankrupt must account for such loss; and(iv) a failure of the bankrupt, without reasonable excuse, to give such an account.[23]We note two things about the offence created by this sub-section. First the sub-section creates an offence of strict liability. Thus the state of mind of the defendant is irrelevant to the question of whether the offence is committed or not. However, for reasons we give below, the fact that the offence is one of strict liability does not affect the issue of whether section 354(3)(a) offends Article 6.[24]Secondly, the burden of proving each of the points necessary to establish the offence remains on the prosecution throughout. Unless each of these matters is proved the defendant cannot be found guilty of an offence under section 354(3)(a). There is nothing in the wording of the section that indicates that the defendant has to prove that he has not done something before he can escape being convicted of a charge under this sub-section. Therefore this sub-section does not offend the general principle of English criminal law, confirmed by Article 6(2) of the ECHR, that a defendant charged with a criminal offence shall be presumed innocent until proved guilty, according to law. The scope of the right, under Article 6 and in the light of the Strasbourg and UK cases, to remain silent or not to incriminate oneself, faced with a demand for information by a state or official authority.[25]Article 6(1) and(2) of the ECHR provide as follows: “1. In the determination of his civil rights and obligations or any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interests of morals public order or national security in a democratic society where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice. 2. Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law”.[26]It will be noted immediately that there is nothing in the wording of Article 6 about the right to silence or the right not to incriminate oneself. But the European Court of Human Rights has recognised that, although not specifically mentioned in Article 6, the right to silence and the right not to incriminate oneself are “ generally recognised international standards which lie at the heart of the notion of a fair procedure under Article 6.” See: Saunders v United Kingdom (1996) 23 EHRR 313 at para 68.[27]The Saunders case is the leading case in the European Court of Human Rights on the right to silence and the right not to incriminate oneself. Mr Saunders had been convicted after a trial on counts of conspiracy, false accounting and theft in connection with a contested take-over bid. Prior to the criminal trial Inspectors had been appointed by the Secretary of State, under the Companies Acts, to investigate the bidder company of which Mr Saunders was the chief executive. The DTI Inspectors questioned Mr Saunders under powers conferred on them by section 434 of the Companies Act 1985 . That section enabled the Inspectors to compel a person to answer their questions. Further, by section 434(5) the answers obtained could be used in evidence in any subsequent proceedings. Transcripts of the evidence that Mr Saunders gave to the DTI Inspectors were used at his criminal trial. On his appeal to the Court of Appeal Criminal Division it was held that this process was lawful and that the wording of section 434(5) ousted the discretion of a judge (under section 78 of the Police and Criminal Evidence Act 1984) to exclude such statements.[28]The European Court of Human Rights held that the use of those statements in Mr Saunders’ criminal trial was in breach of his right to a fair trial under Article 6(1). It was in the context of the facts as we have recited them that the Court held that it was implicit in Article 6 that there was a right to silence and a right not to incriminate oneself. The Court said that the rationale for these rights was, amongst other things:
“ the protection of the accused against improper compulsion by the authorities thereby contributing to the avoidance of miscarriages of justice and to the fulfilment of the aims of article 6. The right not to incriminate oneself, in particular, presupposes that the prosecution in a criminal case seek to prove their case against the accused without resort to evidence obtained through methods of coercion or oppression in defiance of the will of the accused. In this sense the right is closely linked to the presumption of innocence contained in article 6(2) of the Convention”
. We note here (and we return to this point below) that after the European Court of Human Rights gave its decision in Saunders, Parliament subsequently amended section 434(5) of the Companies Act so that evidence obtained by DTI Inspectors could not be used in prosecutions for certain offences. Similar provisions in other statutes were also amended to the same effect: see section 59 and Schedule 3 of the Youth and Criminal Justice Act 1999.[29]The implied rights in Article 6 to remain silent and not to incriminate oneself are not, however, rights of an absolute character. This point was emphasised by the Privy Council in Brown v Stott [2001] 2 WLR 817 ; see the judgments of Lord Bingham of Cornhill at page 836; Lord Steyn at pages 841 and 844; Lord Hope of Craighead at page 853; Lord Clyde at page 859 and Sir Ian Kirkwood at page 862. In that case all the members of the Privy Council concluded that the rights to remain silent and not to incriminate oneself could be qualified or restricted by statutory provisions in appropriate circumstances. The Privy Council held that whether a particular statutory restriction on the rights to remain silent and not to incriminate oneself was compatible with the principal and express rights of Article 6 would depend on three factors. First, the particular social or economic problem being dealt with by the statute; secondly, the circumstances in which the qualification or restriction is imposed; thirdly, the precise scope of the qualification on those rights that is imposed by the statutory provisions. (See: the judgment of Lord Bingham in Brown v Stott at pages 836 - 7).[30]In Brown v Stott the social problem and the statutory powers dealing with it were, respectively, the problem of maintaining road safety and the power of the police (under section 172(2) of the Road Traffic Act 1972) to demand information from the keeper of a vehicle as to the identity of the driver of a vehicle, when the driver is alleged to be guilty of certain types of offences connected with driving vehicles on the road. The Privy Council held that the statutory power to demand information in section 172(2) , even coupled with the fact that it is a statutory offence to fail to provide the information (see section 172(3) ) , did not breach a person’s rights under Article 6. The Privy Council reached this conclusion notwithstanding that the information given could be used in evidence in a subsequent trial. The Privy Council also held that section 172(2) was a proportionate legislative response to the problems of maintaining road safety. Therefore it did not infringe the human rights of the individual that were protected by Article 6. (See: per Lord Bingham at page 837; per Lord Steyn at pages 842 – 3; per Lord Hope at page 854; per Lord Clyde at page 860; per Sir Ian Kirkwood at page 864).[31]The Saunders case and Brown v Stott were both dealing with a situation where there was a statutory power to demand information that was or could be used in subsequent criminal proceedings. In Saunders the European Court of Human Rights made it clear in its judgment that it was the subsequent use, at the criminal proceedings, of the information obtained by the DTI Inspectors that infringed the rights under Article 6. They held that the prior use of the power under section 434 to compel a person to give information to the Inspectors did not infringe Article 6 : see paragraph 67 of the judgment.[32]The decisions of the European Court of Human Rights (at least from the Saunders case) and the House of Lords’ decision in Reg v Hertfordshire County Council ex parte Green Industries Ltd [2000] 2 AC 412 have, in our view, drawn this distinction between two situations. The first is where a person is, by law, compelled to give information but it is not for use in a criminal trial; the second is where the person is compelled to give information that has been or could be used in a criminal trial. As we understand the cases, in the first of these situations neither the UK nor the European Court of Human Rights has held that there is a right to silence or a right not to incriminate oneself. That is consistent with the overall position that those rights are not absolute rights that are incapable of qualification or restriction. But in the second situation, the right to silence or not to incriminate oneself may be infringed. Whether it is will depend on the circumstances of the case and whether the statutory response to the particular social or economic issue is proportionate: see Brown v Stott.[33]Both Mr Willers and Mr Eadie took us through Strasbourg case law on the issue of the scope of the right to silence and the right not to incriminate oneself. We have already referred to the Saunders case. As we have noted above, that was a case where the information compulsorily obtained was used in subsequent criminal proceedings. It was those criminal proceedings that were held to be unfair. As we have also noted, the case did not impugn the right to make extra-judicial demands for information, even when production of the information is (by statute) compulsory and failure to produce it is an offence.[34]Of the Strasbourg cases to which we were referred, we note in particular the following: Funke v France [1993] 16 EHRR 297 ; JB v Switzerland (judgment of 3 May 2001); Heaney & McGuinness v Ireland (judgment of 21 December 2000); Quinn v Ireland (judgment of 21 December 2000).[35]In Funke the customs authorities searched Mr Funke’s house for documents in connection with investigations about overseas assets of Mr and Mrs Funke. The search and seizure did not result in any criminal proceedings under the relevant financial dealings legislation concerning such assets. However there were subsequent proceedings against Mr Funke for failing to provide the customs authorities with statements about overseas bank accounts. Mr Funke was convicted. He complained that his conviction infringed Article 6(1) and (2). The European Court of Human Rights held that there was an infringement of Article 6(1). The Court’s reasons are set out briefly at paragraph 44: “The Court notes that the customs secured Mr Funke’s conviction in order to obtain certain documents which they believed must exist, although they were not certain of the fact. Being unable or unwilling to procure them by some other means, they attempted to compel the applicant himself to provide the evidence of offences he had allegedly committed. The special features of customs law cannot justify such an infringement of the right of “anyone charged with a criminal offence” within the autonomous meaning of the expression in article 6, to remain silent and not to contribute to incriminating itself”.[36]Mr Willers relied particularly on this passage to support his proposition that a law that compels a person to give information and makes it an offence if he fails to do so when asked, can infringe the rights to silence and not to incriminate oneself. However, we agree with the comment of Lord Hoffmann in Reg v Herts CC ex p Green Industries Ltd [2000] 2 AC 412 at 424 (hereafter “ the Green case”), that there are obscurities in this laconic paragraph of the Court’s judgment. As Lord Hoffmann points out, Mr Funke never faced a trial for any offences relating to his overseas assets, so there could be no unfair trial on that score. So, was the Court holding that a law that obliged a person to give information and made it an offence to refuse to do so was automatically in breach of the right to remain silent or not to incriminate oneself? Or was the breach created by the fact that the information obtained under compulsion could be used for potential subsequent criminal proceedings, so that, for the purposes of Article 6, the applicant was to be regarded as being already “charged” with a criminal offence? Paragraph 44 of the Court’s judgment in Funke does not actually hold either of those things.[37]However, as Lord Hoffmann also pointed out in the Green case at page 424, in the subsequent Saunders case the European Court of Human Rights did not regard its statement in Funke as casting any doubt upon the clear distinction that the Court drew, in the Saunders case. That was between extra-judicial inquiries for information and the use of the material thereby obtained in a subsequent criminal prosecution.[38]In JB v Switzerland the Swiss tax authorities instituted tax evasion proceedings against Mr JB. He was requested to provide documents but he did not do so. As a result “disciplinary fines” were imposed on him. Mr JB alleged that those proceedings in which he was fined were unfair and in breach of Article 6(1) because they obliged him to submit documents that could have incriminated him. The Court accepted that submission. However it is clear from the Court’s reasons (in particular at paragraph 66 ), that the crucial factor creating unfairness was that the objective of the demand for documents was to use them against Mr JB in the existing tax evasion proceedings taken against him. In other words the proceedings leading to disciplinary fines were unfair because they were going to be used for another criminal trial process.[39]In Heaney & McGuinness v Ireland the applicants had been arrested in connection with a bombing incident in October 1990. They were required to account for their movements under section 52 of the Offences Against the State Act 1939. They had refused to do so and were prosecuted under section 52 for failing to account for their movements. They were also charged with membership of an unlawful organisation (the IRA) under section 21 of the same Act. A Special Criminal Court acquitted the applicants of the latter charge, but convicted them of the former charge. The applicants subsequently complained that section 52 violated both their rights to silence and also the right not to incriminate themselves. The applicants also asserted that section 52 inverted the presumption of innocence. Therefore they contended that they had not had a fair trial because of breaches of Articles 6(1) and (2).[40]At paragraph 42 of its judgment, the European Court of Human Rights considered that at the time that the applicants were requested to account for their movements under section 52, they were, for the purposes of Article 6(1), “substantially affected” and therefore “charged” with membership of the IRA and with some involvement with the bombing incident.[41]At paragraph 55 of its judgment, the Court held that:
“the “degree of compulsion” imposed on the applicants by the application of section 52 of the 1939 Act with a view to compelling them to provide information relating to charges against them under that Act, in effect, destroyed the very essence of their privilege against self-incrimination and their right to remain silent”
. In our view the Court was attaching importance to the fact that the purpose of obtaining information under section 52 was to provide evidence for other charges in criminal proceedings under section 21 of the 1939 Act.[42]The Court specifically considered and rejected an argument by the Irish government that at the time the answers were sought under section 52, they could not be used against the provider: see paragraphs 53 and 54 of the judgment. The Court also rejected an argument that section 52 was a proportionate response to the subsisting terrorist and security threats and the need to maintain public order and peace: see paragraphs 56 to 58.[43]The last Strasbourg decision that we note is Quinn v Ireland. The case also involved section 52 of the Offences against the State Act 1939 . Almost identical issues and arguments as in the Heaney & McGuiness case were raised. The Court came to similar conclusions: see paragraphs 42 and 53. No new principle was stated by the Court.[44]Next we consider two recent UK cases. First is the Green case, which is a House of Lords’ decision which analysed both the Funke and Saunders cases. In the Green case the two applicants were a company and its sole director. Large quantities of clinical waste were found on two sites that were used by the applicants, but the sites were not licensed for the deposit or storage of waste under section 33 of the Environmental Protection Act 1990: (“the 1990 Act”). The 1990 Act gave effect to a European Directive on Waste. When this unlicensed waste was discovered, the local authority served on the applicants a notice pursuant to section 71(2) of the 1990 Act. That requested them to provide particulars of all those people that had supplied clinical waste to the applicant company and various other facts. The local authority refused to give any undertaking that the answers given would not be used in subsequent proceedings against the applicants for infringing the 1990 Act. The applicants refused to provide the information and the local authority issued a summons in the magistrates’ court alleging a contravention of section 71(2) of the Act. The applicants sought judicial review to challenge the validity of the notice. The case was brought before the Human Rights Act 1998 came into force. Two arguments were advanced in the Divisional Court and the Court of Appeal. The first was that, as a matter of English domestic law, a notice under section 71(2) was invalid if compliance would entail the person giving the information in self-incrimination. That argument was rejected by both Courts and not pursued in the House of Lords.[45]The other argument, which was rejected by all three courts, was that as the 1990 Act gave effect to a European Directive, it had to be interpreted according to principles of Community law, including the doctrines of fundamental Human Rights. Those included the rights set out in the ECHR. The applicants argued that the procedure by which they were required to give information under a section 71(2) notice was illegal because it infringed the right to remain silent and not to incriminate oneself.[46]Lord Hoffmann gave the leading judgment. He reviewed the Strasbourg case law. He dealt in particular with the Funke case and the Saunders case, which he described as “ the leading case on the privilege against self-incrimination”. Lord Hoffmann noted (at pages 422 to 423) that the crucial points in the Saunders case were that(i) the European Court drew a distinction between the extra-judicial enquiry which demanded information and any subsequent criminal trial where such information was used; and(ii) it was the fact that the information had been used at the subsequent criminal trial that made the trial unfair, not the fact that information had been obtained in the first place. Lord Hoffmann concluded that the Saunders case confirmed that the Strasbourg jurisprudence was concerned only with the fairness of a trial and not concerned with extra-judicial enquiries. He held that a section 71(2) notice did not constitute any form of “adjudication”. Therefore Article 6 was not infringed by service of the notice.[47]Lord Hoffmann also dealt with a further argument. He characterised the local authority’s demand as one for factual information only, rather than a demand that the applicants should admit wrongdoing by them. Accordingly, as the notice under section 71(2) required only information to be given, as opposed to an admission of guilt, it did not infringe the right of a person not to incriminate himself: see pages 425 – 6.[48]Lastly we note a recent case in this court which also involved the Insolvency Act 1986: Attorney-General’s Reference (No 7 of 2000) [2001] EWCA Crim 888 ; [2001] 2 Cr App R 286. The defendant was declared bankrupt after his employer had obtained a civil judgment against him in the Chancery Division for millions of pounds. The judge, Neuberger J, found that the defendant had gambled away large amounts his employer’s money. The defendant was then charged with an offence under sections 362(1)(a) and 350(6) of the 1986 Act. Together those sections make it an offence if a bankrupt has, in the two years prior to the bankruptcy petition, materially contributed to or increased the bankruptcy by gambling. The punishment is either imprisonment or fine. Prior to these charges being made, the defendant had answered questions put to him by the Official Receiver. One question asked whether the defendant had lost money by gambling in the last two years. The defendant had answered “yes”. Subsequently he was required to produce documents to the Official Receiver pursuant to section 291 of the 1986 Act , which we have noted above. The bankrupt produced many documents that related to the defendants’ gambling activities. Those documents formed the basis of the prosecution case against the bankrupt in the criminal proceedings.[49]The defendant applied to stay the criminal proceedings against him as an abuse of process. As an alternative, he applied for a ruling that the documents that had been delivered up to the Official Receiver (under the compulsory powers we have noted) should be declared inadmissible; alternatively that the judge should exercise his powers under section 78 of the Police and Criminal Evidence Act 1984 to exclude such evidence. The judge agreed (at the suggestion of counsel) to treat the case as if the Human Rights Act was then in force, although it was not, in fact. The judge held the documents were inadmissible because their use at the trial would offend Article 6. A verdict of not guilty was then entered. The Attorney General referred a point of law to the Court of Appeal under section 36 of the Criminal Justice Act 1972.[50]The question posed in the Court of Appeal was (broadly) whether the use by the prosecution of documents delivered up to the Official Receiver under the powers set out in Chapter VI of Part IX of the 1986 Act, (which documents did not contain statements made by the bankrupt under compulsion), would violate Article 6. The Court of Appeal Criminal Division reversed the rulings of the judge below.[51]This Court analysed the Strasbourg cases (and the UK and Commonwealth cases) on the right to silence and the right not to incriminate oneself. In particular the court considered the Funke and Saunders cases. It noted (at paragraphs 32 to 35 and paragraphs 59 and 60 of the judgment), an apparent distinction between those two judgments on the question of whether the use of documents obtained under compulsion breached rights to remain silent or not to incriminate oneself. The Court contrasted, in particular, paragraph 44 of the former judgment with paragraphs 68 and 69 of the latter. The Court came to the conclusion that the Saunders case (at paragraphs 68 and 69) recognised a distinction between a statement of a defendant that had been made under compulsion and the production of pre-existing documents or other evidence under compulsory powers.[52]The Court concluded (in paragraph 59) that this distinction was valid; jurisprudentially sound and should be followed. In the Court’s view legitimate objection might be made to evidence that a defendant had been forced to create by the use of compulsory powers. However if the evidence was already in existence and the only effect of the use of the compulsory powers was to bring such evidence to the attention of the court, then its production could not be so objectionable. That is because the existence and quality of such evidence are independent of any order to produce it that is made against the will of the accused person. Therefore the production of such pre-existing and “independent” evidence could not render a trial unfair and so breach Article 6.[53]What conclusions can be drawn from the Strasbourg cases and the UK cases on the scope of the right to silence and the right not to incriminate oneself? In our view the following is clear:(1) Article 6 is concerned with the fairness of a judicial trial where there is an “adjudication”. It is not concerned with extra-judicial enquiries as such.(2) the rights to silence and not to incriminate oneself are implicit in Article 6. The rationale for the implication of those rights in criminal cases is that (a) an accused should be protected against improper compulsion by the authorities, which would militate against a fair procedure; and (b) the prosecution should prove their case against the accused without using evidence obtained through methods of coercion or oppression in defiance of the will of the accused. Otherwise the principle of the presumption of innocence ( Article 6(2)) is impugned.(3) The rights to silence and not to incriminate oneself are not absolute, but can be qualified and restricted. A law which qualifies or restricts those rights is compatible with Article 6 if there is an identifiable social or economic problem that the law is intended to deal with and the qualification or restriction on the rights is proportionate to the problem under consideration.(4) There is a distinction between the compulsory production of documents or other material which had an existence independent of the will of the suspect or accused person and statements that he has had to make under compulsion. In the former case there was no infringement of the right to silence and the right not to incriminate oneself. In the latter case there could be, depending on the circumstances.(5) A law will not be likely to infringe the right to silence or not to incriminate oneself if it demands the production of information for an administrative purpose or in the course of an extra-judicial enquiry. However if the information so produced is or could be used in subsequent judicial proceedings, whether criminal or civil, then the use of the information in such proceedings could breach those rights and so make that trial unfair.(6) Whether that is the case will depend on all the circumstances of the case, but in particular (a) whether the information demanded is factual or an admission of guilt, and (b) whether the demand for the information and its subsequent use in proceedings is proportionate to the particular social or economic problem that the relevant law is intended to address. Do either the Strasbourg or the United Kingdom cases support the proposition that section 354(3)(a) of the Act breaches a defendant’s right to remain silent or not to incriminate himself, thereby rendering a trial for an offence under that section an unfair trial within the ambit of Article 6?[54]In our view they do not. We set out our reasons below. First, the demand for information by the Official Receiver under section 354(3)(a) of the 1986 Act was made in the course of an extra-judicial procedure. The Official Receiver was carrying out his statutory duty, under section 289 of the 1986 Act, to investigate (and if appropriate report to the Court) on the estate of the bankrupt. The demand was not made in order to provide evidence to prove a case against Mr Kearns by means of “ coercion or oppression in defiance of the will of the accused”: see the Saunders case at paragraph 68. Secondly, at the time that the demand was made there was no other “charge” against Mr Kearns, however widely that word is construed for the purposes of its “autonomous meaning” under Article 6. (Compare the Heaney & McGuinness case at paragraph 42). Therefore the information demanded under section 354(3)(a) of the 1986 Act was not being obtained to enable another charge to be proved “ contrary to the will of the accused ”: compare the Saunders case paragraph 68 . Thirdly, there was no possibility that any information that was obtained as a result of the statutory demand could be used in subsequent criminal proceedings against Mr Kearns. This is because of the steps that were taken in the United Kingdom following the decision in the Saunders case. In February 1998 the Attorney General issued guidelines as to the use that could be made, in subsequent criminal proceedings, of answers given under compulsion in an administrative or regulatory procedure. Generally there was a prohibition on such use. However paragraph 4 of the Guidelines did permit a prosecution where a person had failed to provide answers when he was subject to a statutory duty to do so. That exception applied to a failure to conform to a demand made under section 354(3)(a). But otherwise no other prosecution was permitted. Then Parliament amended section 433 of the 1986 Act, which in subsection (1) permits a statement made pursuant to a requirement imposed under a provision of the 1986 Act to be used in evidence against a person making such a statement. Section 59 and Schedule 3, paragraph 7 of the Youth and Criminal

Justice Act 1999 added a new subsection (2) and (3), which provide as follows:

“(2) However, in criminal proceedings in which any such person is charged with an offence, to which this subsection applies, (a) no evidence relating to the statement may be adduced and (b) no question relating to it may be asked by or on behalf of the prosecution unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person.

(a) an offence under section…354(3)…”

The amendment to the legislation following Saunders was therefore to the same effect as the Attorney-General’s Guidelines. There was, and remains, a prohibition on the use of answers given under compulsion under the 1986 Act in any subsequent criminal trial in the terms set out in section 433(2) . That prohibition is subject only to two exceptions. First, when the defendant himself relies on the answers. Secondly, where charges are brought against a person as a result of his failure to comply with the statutory requirement itself. Lastly, even if, as we would be prepared to accept, section 354(3)(a) does infringe an “absolute” concept of the right to silence and/or the right not to incriminate oneself, criminal proceedings brought for a failure to provide the Official Receiver with information do not infringe Article 6. As we have already pointed out, the rights to silence and not to incriminate oneself that are implicit in Article 6 are not absolute. They can be qualified or restricted if there is proper justification and if the restriction is proportionate.[55]In our view there is ample justification for the limited restriction in the right to silence and not to incriminate oneself that is imposed by section 354(3)(a). The relevant part of the Insolvency Act 1986 is designed to deal with the social and economic problem of bankrupts. It is in the public interest that the affairs of bankrupts should be investigated, that the assets are traced and got in, and that the assets are then distributed to creditors. The bankrupt has a benefit in this regime too, because after a specified period of time he obtains legal absolution from his debts. The bankrupt is frequently the only person who can provide the necessary information about the bankrupt estate. There is, in our view, an obvious need for a statutory regime that imposes a duty on a bankrupt to co-operate in providing full and accurate information to the person charged with administering the bankrupt’s estate. Equally clearly that duty should be backed up by appropriate statutory sanctions to ensure that the duty is carried out properly.[56]In our view the regime of section 354(3)(a) is a proportionate legislative response to the problem of administering and investigating bankrupt estates. The bankrupt is obliged to give information and to that limited extent he cannot exercise a right to silence or not to incriminate himself. But, because of the provisions of section 433(2) and (3) of the 1986 Act, even if the bankrupt does not give the information required under section 354(3)(a), he only incriminates himself to the narrow extent of committing the offence of failing to provide the information. The only function of section 354(3)(a) therefore, is to provide a necessary sanction to the regulatory regime that is set up by the Insolvency Act 1986 to ensure the efficient administration of bankrupt estates.[57]We have already noted that the offence of non-compliance is one of strict liability. But, in our view, that fact, taken with all the other points we have set out above, does not make any infringement of the rights to silence or not to incriminate oneself disproportionate in this case. Conclusion[58]For these reasons we have concluded that:(1) Mr Kearns could have a fair trial, within Article 6, of Count 3 of the Indictment, in which he was charged with an offence contrary to section 354(3)(a) of the 1986 Act.(2) Therefore section 354(3)(a) of the 1986 Act is compatible with Mr Kearns’ rights under the ECHR, in particular those under Article 6.(3) The trial judge was right to reach the conclusion that he did.(4) Therefore the conviction, after a subsequent change of plea to guilty, is safe. Accordingly the appeal must be dismissed.

Cited in 12 later judgments

and 3 more of the most senior