Ferdhaus, R. v [2010] EWCA Crim 220

[2010] EWCA Crim 220Case No 200804131 B4
IN THE COURT OF APPEAL
CRIMINAL DIVISION
Venue Royal Courts of JusticeDate Tuesday, 26th January 2010
Strand
London, WC2A 2LL
B e f o r e:
LORD JUSTICE MAURICE KAY
MRS JUSTICE SHARP DBE
SIR CHRISTOPHER HOLLAND
Between
R E G I N ACrownv
Between
MOHAMMED MAHEE FERDHAUS
Computer Aided Transcript of the Stenograph Notes ofWordWave International LimitedA Merrill Communications Company165 Fleet Street London EC4A 2DYTel No: 020 7404 1400 Fax No: 020 7404 1424(Official Shorthand Writers to the Court)
Mr M Lucraft QC appeared for AppellantMr B Fitzgerald appeared for Crown
J U D G M E N T

LORD JUSTICE MAURICE KAY:

[1]This appellant was convicted following a trial in the Crown Court at Croydon. He was convicted of five counts of conspiracy to defraud. There were other defendants before the court, including Wajid Hussain, who was convicted of 12 counts of conspiracy to defraud and one count of threatening to kill. The appellant now appeals against his conviction, the full court having granted limited leave.[2]The background to the case concerns this appellant and his car hire and accident management company called Prestige, which had offices in Walthamstow and Perivale amongst other places, and Hussain's accident management company, initially called Xclusive and then Premier, which was located in Edgware.[3]The prosecution case was that the appellant, Hussain and others were involved in fraudulent schemes whereby they obtained advantages from the AXA insurance company. The fine details of what went on over a significant period of time are not relevant to the narrow issue which arises on this appeal. In simple terms, the prosecution described the fraud in these terms in opening the case to the jury:(1) Someone would take out insurance on a car providing false details, such as false address, name, bank et cetera, over the telephone, so there was no need even to fill in even a proposal form. Payment could be made over the phone by credit card.(2) The requested insurance was limited to third party, fire and theft. This meant that in the event that the car was involved in an accident that was the fault of AXA's insured driver, he or she would not be covered for the damage to their own car. Damage to the third party's company was of course covered.(3) Not long after the insurance had been taken out AXA would be informed by its insured, giving false details, that a collision had occurred which was his fault and that a claim for damages would be made by the third party. This would typically involve the cost of repair of the third party's vehicle (or its pre-accident value if a total loss), the cost of recovery and storage whilst it was repaired, the cost of a replacement vehicle, such as a hire car, whilst the claim was being settled, and the cost of medical care if the third party or any of his or her passengers claimed to be injured.[4]Following the accidents that were reported, third party vehicles routinely ended up either at the premises of Hussain's company in Edgware or on the appellant's premises. All third party claims were then channelled through either Hussain's company or the appellant's company. It was an easy way to make money. Hussain and the appellant, through their companies, put in bills, most of which were paid, there being no real reason to dispute them until the pattern of the fraud later emerged. The simplicity of the scheme lay not only in the fact that AXA did business over the telephone, but also that as there was only ever a claim as regards the third party vehicle, there was only ever a need for the insurers to inspect that vehicle. There was no need for the insurers to examine their own insured vehicle because that vehicle was not the subject of any claim.[5]The case for the prosecution was that the transactions were fraudulent and arranged pursuant to false information and that the accidents were either staged or could not have taken place in the manner described in the claims.[6]At trial both the appellant and Hussain, although having minor convictions of some antiquity, were presented as defendants of good character. The prosecution remained content that that should be so. The aspect of the case which gives rise to this appeal is that Hussain, but not the prosecution, sought to adduce evidence of the appellant's bad character, not in the form of convictions, because there were no such relevant convictions, but in the form of evidence of previous fraudulent insurance claims involving false documents which had been investigated by insurance companies in the fairly recent past. Essentially the appellant and Hussain were running cut throat defences, and by the bad character application made on his behalf Hussain was seeking to establish that as between himself and the appellant the appellant was more likely to be a fraudulent party.[7]So far as their own cases were concerned, each of the two men sought to distance themselves from any dishonest involvement. The appellant's case was that his business was a very substantial one, employing 34 people, dealing with thousands of claims per year, and he had had no personal involvement with the transactions in question. He blamed Hussain for having used his company to make the fraudulent claims. Hussain, for his part, maintained that his identity had been stolen and that it was the appellant who was responsible for the fraud.[8]The application on behalf of Hussain to admit the bad character evidence was made pursuant to 101(1)(e) of the Criminal Justice Act 2003, which provides that a defendant's bad character is admissible if, amongst other things, "it has substantial probative value in relation to an important matter in issue between the defendant and the co-defendant". Unlike the situation that arises when bad character is admitted under subsections (1)(d) or (g), section 101 does not provide for exclusion of the bad character evidence on the basis that its admission would have such an adverse effect on the fairness of the proceedings that the court ought not to admit it. In view of the limited leave to appeal it is not necessary to say any more about the judge's decision to admit the bad character evidence. It is no longer challenged.[9]Essentially, the submissions made on behalf of the appellant in the light of the limited leave to appeal are that in his summing-up the judge gave inadequate directions to the jury about the bad character evidence, that his directions lacked clarity and that they were confusing. It is further submitted that the problems were exacerbated by the chronology of the trial, a matter to which we shall return.[10]In view of the narrowness of the issue between the parties, it is not necessary to include in this judgment citation of passages from the authorities. It is sufficient to record that in skeleton arguments we were referred to the cases of Hanson [2005] 2 Cr App R 21, Edwards & others [2006] 1 Cr App R 3 and Campbell [2007] 2 Cr App R 28. It is common ground that it is incumbent upon a judge to give appropriate directions in relation to bad character but that there is no rigid formula which has to be adopted.[11]Against that background it is necessary to set out what the judge actually said on the subject. His summing-up began on 25th June 2008. He summed up for most of that day. He concluded the summing-up on 2nd July. It was not a lengthy summing-up, but it was interrupted by the fact that the court was unable to sit on 26th, 27th and 30th June and 1st July because of personal matters relating to a juror. Accordingly, the summing-up lasted a day on 25th June and about an hour on 2nd July.[12]The first reference to bad character appears early in the summing-up at the point when the judge was giving directions in law on numerous relevant issues. He drew attention to the fact that the appellant and Hussain were each saying that they were not involved. He then referred to Hussain's case that the appellant's previous conduct made him the more likely fraudster. The passage at that point, slightly edited, reads as follows:
"Consider also Ferdhaus's previous conduct, laying emphasis on the claims history of Mr Muhid Mier's BMW, and it was the schedule in relation to that particular vehicle. I will return to that in a moment - it is L761 GYH. 'Because of those histories it is more likely that he was involved than I', says Mr Hussain through [his counsel]. History in this context means propensity; in other words, a tendency or inclination to behave in a particular way, to make fraudulent insurance claims. You should not conclude that Ferdhaus is guilty of any count on the indictment merely because he has been fraudulent in the past, if indeed you find to the relevant standard of proof beyond a reasonable doubt that he has, for that does not mean he committed the offences in this case. If you find he had a propensity to commit fraud, you are entitled to take that into account, but it is only one factor and you should assess its significance in the light of all other evidence in the case."
[13]Later that day the judge referred to the question of good character (page 47). He gave a conventional two-limbed direction on good character, about which no complaint is made as to its content. A point came, and it begins at page 61 in the summing-up, where the judge began to summarise and recount the evidence said to establish the appellant's bad character. He inserted this part of his summing-up, some 12 pages, in the part dealing with the case against and for Hussain. Soon after that there was a ten minute break, the judge having completed the Hussain part of his summing-up. Whilst the jury were out of court counsel on behalf of the appellant (not Mr Lucraft QC, who did not appear below) invited the judge to add to his direction on bad character evidence. He referred to an earlier stage of the trial at which point there had been discussion between the bar and bench as to the good character direction. On that occasion counsel for the appellant said that he would be inviting the judge to say that the bad character had limited, if any, relevance, not least because the alleged frauds, which were disputed as such, had not resulted in any convictions or police investigation, they were a long time ago and they were "far from proven". Counsel added:
"I would invite your Honour either to say that they are not relevant, or if your Honour is against me on that to say that they have limited relevance and the jury should approach them with care."
[14]When the summing-up resumed after the break to which we have referred, the judge began summarising the evidence of the appellant, and in the course of so doing he referred back to his earlier direction inviting the jury to treat the appellant as a person of good character. Later, in apparent response to the point raised by counsel during the break, he said:
"In relation to many of those documents, of course, they have been culled from records, and the people who are compiling, did compile the records, have not been called, and so just as you have to exercise care in considering statements which have been read not by agreement but by force of circumstances, so be careful in your approach to that material as well."
The reference to statements that had been read "not by agreement" was a reference to two witnesses relevant to the bad character evidence whose evidence was not agreed but whose statements had been read pursuant to the provisions of the 2003 Act, they being outside the jurisdiction at the time; indeed, one of them was in prison in Italy. In each case the judge had warned the jury or reminded them that, although the statements were being read, the contents were not accepted and that there would have been cross-examination if the witnesses had been present to give their evidence in court.[15]The primary submission advanced with clarity and succinctness by Mr Lucraft is that the summing-up in relation to the appellant's bad character was inadequate and insufficiently emphasised, especially in the light of the delay between the first and the second days upon which the summing-up took place. He submits that in all the circumstances the judge ought to have given clearer directions and ought to have revisited the subject of bad character on the second day of the summing-up, that being the day on which the jury retired. He further submits that the directions on bad character were confusing when considered in combination with the direction on good character.[16]We have given these submissions careful consideration. We do not consider that the directions on bad character were the best that could have been formulated in the unique circumstances of this case. Indeed, in his skeleton argument Mr Lucraft has proffered an alternative direction, and we do not hesitate to say that it is better in its contents than what fell from the judge. Nevertheless, we are satisfied that the judge's directions were adequate. Indeed, it was a telling moment in this morning's short hearing when Mr Lucraft conceded that it would be difficult to make robust criticism of the directions if it had not been for the delay in the summing-up and if the initial direction at page 8 of the transcript had been given or repeated on the second day.[17]One of the complaints made more in writing than in oral submissions is that the directions were deficient in not drawing attention to the fact that the bad character evidence, whilst it had given rise to insurance investigation, had not been taken forward by the police, had not resulted in any charges or convictions and was the subject of dispute. Of course, the judge could have made those points, but his failure to do so does not vitiate what is in other respects an adequate direction. In any event, we tend to agree with Mr Fitzgerald that those points, which were no doubt forcefully made to the jury by counsel for the appellant, were obvious matters in respect of which common sense, rather than further direction, was all that was called for.[18]We accept that the delay in and interruption of the summing-up was unfortunate. Written submissions expand the complaint about that because the very existence and late arrival of the bad character evidence caused significant delays at the commencement and soon after the commencement of the trial, and there were a number of days which resulted in the jury not being required while the parties and the judge went into the bad character evidence. However, at no stage were the jury told the reason for those delays. Whilst they were unfortunate, they were not caused by Hussain or his advisers, or indeed by the appellant or his advisers. Quite simply, the material had been disclosed very late before trial and it took a little time for it to be absorbed and for decisions to be taken as to what use might be made of it. Truly the delay point, so far as it relates to this appeal, can only refer to the delay during the summing-up and, repeating yet again that it was unfortunate, in our judgment it did not render it obligatory for the judge to return to the issue of bad character at the end of his summing-up.[19]For all these reasons, we have come to the conclusion that the grounds of appeal directed to the summing-up on bad character evidence are not substantiated and do not impact on the safety of the conviction.[20]We should refer very briefly to the complaint that the jury would have been confused by the combination of the bad character direction and the good character direction. We do not think that any real prejudice has been established in relation to that. In one sense, the appellant received more than he was entitled to. The judge would have been entitled to tell the jury that if they found the bad character evidence proven, then the reliance on the appellant's otherwise accepted good character might not have been so appropriate. However, he did not give such a direction, probably because at no stage did the prosecution ever seek to rely upon the bad character evidence. Accordingly, the appellant, as well as Hussain, in confronting the prosecution case against them had the benefit of a full character direction.[21]There was extremely powerful evidence against this appellant, and indeed against Hussain. We do not go into the details of it in view of the limited nature of the appeal. We are entirely satisfied that the appellant's convictions are safe and we dismiss his appeal.