Thompson, R v [2013] EWCA Crim 988

Case No 201202915 C2[2013] EWCA Crim 988
IN THE COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM Plymouth Crown Court
Recorder Levene
T20110017
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 25/06/2013
Before
LORD JUSTICE FULFORDMR JUSTICE WILKIEMR JUSTICE KING
Between
ReginaCrownJayne Ann ThompsonDefendant
Mr Sapiecha (instructed by Devon County Council Trading Standards Department) for ProsecutionMr Tregilgas-Davey (instructed by Kelcey and Hall Solicitors) for DefenceHearing Hearing dates : Friday 24 th May 2013
JudgmentLord Justice Fulford :Introduction
[1]On 20 April 2012, in the Crown Court at Plymouth, the appellant was convicted by a jury of two counts of fraud, contrary to sections 1 and 2 of the Fraud Act 2006 by dishonestly making false representations. These were counts 1 & 2 of the indictment before the jury.[2]The particulars of the offence for count 1 were: Eaglerock Associates Limited Between 1st day of March 2009 and the 26th day of May 2009 dishonestly made false representations to Rachel and Simon Ballamy by invoices that stated that Value Added Tax totalling £5907.15 was due, when in fact Eaglerock Associates Limited were not VAT registered and no monies arising out of the invoices was to be accounted to Her Majesty’s Revenue and Customs AND furthermore that Jayne Anne Thompson and William Henry George White being a director, manager, secretary or other similar officer of Eaglerock Associates Limited or a person purporting to act in such a capacity and the offence being committed with their consent or connivance are also guilty of the offence by virtue of Section 12 Fraud Act 2006.[3]Count 2 was a like offence, save that the date of the offence was “on or around 31 August 2009”, the victim was Howard Barnes and the amount was £652.17.[4]On 25 June 2012 the trial judge, Mr Recorder Levene, sentenced the applicant on each count to a concurrent suspended sentence order, comprising 6 months imprisonment, suspended for 12 months, with an unpaid work requirement of 120 hours.[5]Additionally she was disqualified from acting as a company director for a period of 10 years, pursuant to the Company Directors Disqualification Act 1986.[6]William White, her co-accused,pleaded guilty to one count under the Unfair Trading Regulations and to the two counts of fraud set out above. He was sentenced in total to a suspended sentence order comprising 6 months imprisonment, suspended for 12 months, with a requirement to carry out 120 hours of unpaid work. He was also disqualified from acting as a company director for 10 years.[7]The single judge granted leave to appeal the conviction and sentence. Given we are allowing the appeal against conviction, it is unnecessary to address the submissions that are advanced as regards sentence, save in one important respect. We wish to indicate our disquiet that the judge told the appellant’s counsel in unambiguous terms that he was minded to follow the recommendation of the Pre-Sentence Report – a community order – thereby obviating the need to hear mitigation, and yet he immediately thereafter (within a matter of a few minutes) imposed a suspended sentence of imprisonment. We have no doubt that it is simply wrong for a judge to depart materially from a clear indication as to sentence without first telling counsel that he was reconsidering the position and providing an opportunity for submissions before arriving at a final decision.

The Background

[8]Eaglerock Associates Limited, which operated in the building trade, was incorporated in 2004 and its registered office (39 West Avenue Exeter) was the home address of the appellant and White. The appellant was the sole company director and 99% shareholder. Her co-accused, who was also her partner, was a qualified accountant and he ran the company. However, he was not a director because he was an undischarged bankrupt when the company was created. Additionally, the appellant was the sole director of a company called Rosswell Associates Limited, which undertook the same kind of work as Eaglerock. The two companies were formed at about the same time and the only substantive difference between them was that Rosswell was registered for VAT, whereas Eaglerock was not (although both companies used the same VAT number). Rosswell went into liquidation on 17 April 2008. On 1 September 2010 the appellant and White entered into disqualification undertakings of 6 and 8 years respectively in respect of their conduct as directors of Rosswell Associates. The reasons were the failure to maintain proper accounting records, leading to an inability to identity the company’s VAT, tax and other liabilities, along with the company’s sale figures and assets, and the reasons for its insolvency. Eaglerock is also in liquidation.

The charges

[9]The underlying circumstances of the present case concern works that Eaglerock undertook at two properties. Simon and Rachael Ballamy, of 51 Ashburton Road, Newton Abbott, were charged £45,000 for building works at this property which were alleged to have been of a notably substandard quality, leaving it in a dangerous condition. The Ballamys obtained a civil judgment against the Company for £40,000 in respect of these poorly executed works but the judgment was never satisfied because the company went into voluntary liquidation. There was a similar complaint concerning works carried out at a property owned by Howard and Patricia Barnes, which again were of significantly substandard quality. In each instance the company agreed to carry out building works for a sum of money that was agreed and paid in advance of the works being completed.[10]As set out in the particulars of the offences, the two counts before the jury did not concern the poor quality of the work but instead it was alleged that the VAT element claimed in the invoices provided by Eaglerock was dishonest (£5907.15 for count 1 and £652.17 for count 2). Therefore, the prosecution caserevolved around the suggested fraudulent misrepresentations in the invoices that VAT would be paid to HM Revenue and Customs when the company was not VAT registered. It was alleged that the appellant was, at least in part, responsible for providing the invoices to Mr and Mrs Ballamy and Mr and Mrs Barnes, and a potentially notable piece of evidence in this regard was that some of the invoices for the company bore the appellant’s initials, JAT.[11]To prove the role and the involvement of the appellant, the prosecution called Rachel Ballamy, who gave evidence, inter alia, of conversations with the appellant about the judgment the Ballamys obtained in the County Court. The appellant, who maintained she had no personal liability, told her that it would not be paid and Mrs Ballamy should “go away and study some law”.[12]Howard Barnes also gave evidence, and he saidthat when he engaged the services of the company, William White and the appellant made representations to him about the company’s solvency and reliability. The appellant attended the site frequently and he formed the impression she was involved with the company and its decisions.[13]By way of further support for the appellant’s suggested active involvement in the company, the prosecution relied on certain banking evidence, which demonstrated that monies paid to the company were immediately transferred to her personal bank account.[14]The appellant declined to answer the questions put to her by the prosecution in writing as part of the investigation.[15]The appellant, in support of her defence that she did not act dishonestly, said she was a director in name only and that she was a mere cipher; she gave evidence that she had no knowledge of the invoices and instead she had simply carried out the instructions of White, whom she trusted to run the company, given his accountancy background. Her case was that she had become a director at his request, because he was an undischarged bankrupt. She averred she had been occupied in other ways, particularly running her many properties; she had not undertaken clerical work for the company and she had no skill with computers; she was not involved with the banking arrangements, and she had not seen her own bank statements. She testified that when she visited the sites and met with the customers of the company, she did so in the role of the co-accused’s partner.[16]Although she denied telling Rachel Ballamy to “learn some law”, she relied on the latter’s account that all the letters and invoices were signed and handed to the customers by White. She also highlighted evidence from Mr Barnes that her role in the contractual negotiations was extremely limited, and essentially comprised making a single representation. Otherwise, he said she simply made coffee. Mr Barnes also indicated that White was in charge of presenting the invoices, collecting payments and managing the building works. Some of the company employees gave evidence that the appellant did not know how to switch on a computer and they had not seen her writing letters or generating invoices.[17]White testified during the appellant’s trial, and he said that he had run Eaglerock and Rosswell. His testimony as to the invoicing arrangements was, at least to an extent, inconsistent with his guilty plea. He claimed some of the invoices were generated by someone called Jane Ann Tasker using the initials JAT, whom he said was an employee who had left on bad terms.[18]The appellant was of good character, save for an offence of shoplifting in 1977, driving offences in 1997 and 1999 and her voluntary disqualification as a director in connection with Roswell Associates.[19]Against that background, the central issue for the jury was whether they were sure the appellant, as company director, knew about the fraudulent misrepresentations on the invoices.

The Grounds of Appeal against Conviction

[20]The appellant has deployed a number of separate grounds in support of her appeal against conviction. We shall address them separately (save for the suggested deficiencies in the judge’s direction in law as to dishonesty and whether there should have been a “Ghosh direction”, given that ground was abandoned in advance of the hearing of the appeal).

Bad character

[21]It is submitted that the Recorder erred in ruling that the appellant’s voluntary disqualification as a company director was admissible as part of the prosecution’s case as evidence of bad character, although it was accepted that her conviction for shoplifting and her driving offences were properly in evidence because the appellant intended to introduce evidence of “good character”, whether or not she gave evidence herself. Furthermore, the defence accepted that the Crown was entitled to introduce aspects of the affairs at Rosswell, and particularly the winding-up order made on 17 April 2008.[22]However, the appellant contended that the prosecution was not entitled to call evidence as part of its case that on 23 October 2009 the Secretary of State gave directions to the Official Receiver to issue proceedings against her under section 6 of the Company Directors Disqualification Act 1986 and that on 1 September 2010 she entered into a disqualification undertaking for six years in respect of her conduct as a director of Rosswell Associates Limited. The unfit conduct included the allegation that she had failed to ensure the company maintained proper accounting records, she failed to preserve the records or she failed to deliver up such records that were maintained, and as a result the Official Receiver was unable to establish the company’s true VAT liability.[23]Defence counsel, Mr Tregilgas-Davey (who appeared on this appeal), accepted that if the appellant gave evidence all of this material (including the voluntary disqualification) could legitimately form part of her cross examination, and in any event, as just set out, he did not object to other issues relating to Rosswell being introduced during the prosecution case in order to put matters “into context” (save for the disqualification, the relevance of which he challenged not least because it post-dated the period of the indictment).[24]The prosecution argued before the judge that in light of the appellant’s contention that she had not acted dishonestly on the basis that she had no knowledge of the VAT arrangements, it was relevant to inform the jury that at the time of the present offences she was under investigation vis-à-vis another company over problems concerning VAT and had been interviewed in this regard on 17 April 2008, the year before the instant offences.[25]The judge, during discussions with counsel, decided that since the jury were to hear that in 2008 the Official Receiver was unable to determine the correct VAT liability, “it would be artificial to let the jury hear about everything else, but not hear about the undertaking”. The judge also observed that there was likely to be a considerable overlap between the proper subject matter of cross-examination and the evidence that the prosecution could legitimately introduce as part of its case. The judge failed to give a separate ruling on this issue, but instead he simply provided this indication at the end of his exchanges with counsel.[26]In support of the general submission that the judge’s reasoning and his later direction to the jury were flawed and inadequate, the appellant submits, first, that since the basis for granting the application to introduce the evidence was, at least in part, that it would form the proper subject matter of cross examination of the appellant, the reasoning was flawed because it was uncertain whether or not the appellant would testify. Second, the judge failed to give any adequate reasons for admitting the evidence, most particularly as regards the “gateway” through which this evidence was admitted. Third, it had no probative value because the disqualification came after the period covered by the indictment in the present case. And, fourth, the judge erred in his formulation of the following direction to the jury:
“The weight which you attach to her character is entirely up to you although it is harsh it is true as Mr Sapiecha says, we are all born with good characters and if that were the end of it no-one would ever get a conviction. But although it will add weight it cannot decide whether or not the Defendant did as alleged. So far as the disqualification is concerned members of the jury I am not speaking as a company lawyer here. I am merely speaking as someone giving you practical guidance on how to approach the various matters in front of you. If I were you I should hold that that had nothing to do with anything you have to decide. It is clear that both companies were not well run, did not trade particularly efficiently and there is criticism to be made, we will stick with the Defendant on this, there are criticisms to be made of the way in which she discharged her duties as a company director and that is really all that the voluntary disqualification has to do with anything. It does not have anything to do with the issue of dishonesty or anything with which she was charged on this indictment.”
[27]It is observed that this explanation was at variance with the reasons originally given for admitting this evidence, namely that it had probative value in relation to the charges as opposed to tangential matters. Additionally, it is suggested that the guidance on the relevance of this material was confused, and although the Recorder said that it was connected to the criticisms of the way she discharged her duties as a director at another company, he went on to suggest that it was irrelevant to the issue of dishonesty and the present charges. Moreover, he advised – rather than directed – the jury that it had nothing to do with the issues they had to decide.[28]Mr Sapiecha, for the Crown, submits that the voluntary disqualification of White and the appellant “was important probative evidence”. The investigation into Rosswell occurred throughout the time when the appellant was claiming she was a mere figurehead in Eaglerock, thus arguably bringing to her attention the need “to be on top” of the companies in relation to which she acted as company secretary, as opposed to relying on White. Furthermore, the VAT element made it of particular significance, given in her 2008 interview regarding Rosswell it was clear that the company was unable to explain the VAT position, and monies were moving from the company into relevant private bank accounts. The prosecution submits that the defence, by conceding it was appropriate material for cross-examination, was effectively accepting it was admissible in any event. The prosecution suggests that although the disqualification was only entered into after the relevant events, it involved an element of acceptance on her part in relation to the Roswell investigation.[29]Although not identified by the judge, the prosecution argues this evidence came within section 101 (1) (d) Criminal Justice Act 2003 (“CJA”) (one of the Act’s “gateways” to admissibility) because it related to important matters in issue between the defendant and the prosecution, namely i) the appellant’s role in Eaglerock and the state of her awareness and knowledge of the affairs of the company, and ii) the approach of the two companies of which the appellant was a company director/secretary to VAT issues and her attitude regarding her own obligations concerning VAT.[30]As to the judge’s direction to the jury, Mr Sapiecha submits that it was, in the event, unjustifiably favourable to the appellant. He argues the jury should have been invited to consider this evidence when assessing whether or not she had been aware that VAT had been improperly claimed in this case, in part because the events leading up to her disqualification would have alerted her to the need to be more pro-active in Eaglerock’s affairs. It is suggested that her voluntary disqualification potentially acted as proof that she accepted she had knowledge of what was occurring at Rosswell, although Mr Sapiecha acknowledged it might have amounted to no more than an acceptance that she had not informed herself as to her duties as a director.[31]Finally, it is contended by the Crown that the court should be slow to interfere in cases where there has been a failure to give a direction that is no more than common sense (R v Campbell [2007] 2 Cr App R 28).[32]We regret that the Recorder failed to provide any substantive reasons for admitting this evidence. These applications usually do not require lengthy judgments, but the competing arguments require a sufficient, if brief, explanation and analysis, as do the reasons for utilising the particular gateway(s) to admissibility, along with an evaluation of any factors relevant to fairness. A few sentences will often be sufficient. Simply stating that the jury should be given the complete picture, certainly in this case, did not constitute sufficient reasons for admitting evidence of bad character (see s.110 CJA).[33]Most particularly, what was lacking as regards the instant application was any analysis of whether a voluntary disqualification that occurred after the period of the indictment was capable of providing probative bad character evidence regarding earlier events at another company, and the judge should have investigated whether the jury could properly conclude that a disqualification in these circumstances involved an admission by the appellant that she had been aware of the VAT failings at Rosswell at the relevant time, or whether it was, or may have been, simply an acknowledgment that she had failed to be informed as to her responsibilities for what occurred during her directorship. If the latter was the position, that would have been a relevant (possibly determinative) consideration as regards admissibility.[34]Furthermore, the directions to the jury lacked logic. The voluntary disqualification was relevant – if it was relevant to anything – to the issue of whether the appellant was truthful when she said that she was a mere cipher and had no knowledge of the VAT affairs of Eaglerock. That was the reason for introducing this evidence, and for the concession by Mr Tregilgas-Davey that the other Rosswell material should go before the jury. However, the Recorder told the jury that whilst the disqualification was relevant to the Rosswell VAT issues it was irrelevant to the question of dishonesty (and to the issues on the indictment) and, in consequence, in our view it should have been excluded, or, having been introduced, the jury should have been directed to ignore it. Instead, it was left to the jury, although they were “advised” (as opposed to instructed) to ignore it, against the background that the judge had removed from their consideration the only aspect of the case to which it was potentially relevant.[35]This was self-evidently unsatisfactory. However, notwithstanding this failure to give the jury an appropriate direction, we are confident the verdict is not rendered unsafe as a result: what the judge said had the effect of withdrawing this evidence from their consideration and in any event the fact of the disqualification did not materially add to the other evidence the jury had before them by agreement regarding the VAT affairs at Rosswell.[36]Nonetheless, this history demonstrates the importance of approaching bad character applications logically and carefully, in order to ensure that there is a proper factual and legal basis for admitting the evidence and juries must be given appropriately tailored directions as to its relevance and any other discrete issues that need to be addressed (e.g. those relevant to weight and prejudice).

The standard of proof

The Recorder directed the jury as follows:

“So the prosecution brings the case. The prosecution has to prove it and the prosecution has to prove it so that you are sure. Simple word. Nothing less than being sure will do. If you are sure the Defendant is guilty your verdict is guilty. If you are sure the Defendant is innocent your verdict is not guilty. But if you are not sure, if you are not sure that the Defendant is guilty then your verdict is not guilty.”
[38]It is suggested by the appellant the second formulation (“if you are sure the defendant is innocent…”) reverses the standard of proof, or has a tendency to create that impression, in a way that this is not cured by the following sentence (“but if you are not sure that the defendant is guilty …”). The prosecution suggests this argument lacks any substantive merit.[39]We do not accept the appellant’s criticisms. Although on a strict analysis if the impugned sentence is taken on its own it may lead to a question as to whether it is for the defendant to prove his innocence, the summing up contained a sufficient number of other references that made it clear the burden rested on the prosecution:
“Now it is essential to bear in mind again as I am sure you know that the prosecution bring this case and the prosecution have to prove it. The Defendant does not have to prove anything and I will come back to that point when we come to that letter that was sent to her asking for her answers to a few questions. But she does not have to prove anything. The prosecution has to prove the lot. Remember that the prosecution have to prove this case by adducing evidence […] The Defendant I should remind you, does not have to prove anything […]”
Remember that the prosecution have to prove this case by adducing evidence […] The Defendant I should remind you, does not have to prove anything […]”

Remember that the prosecution have to prove this case by adducing evidence […]

[40]In our judgment the effect, overall, of these directions was to ensure that the jury understood where the burden of proof lay. We observe, however, that it is usually sufficient for the judge to direct the jury that they will only convict if they are sure that the defendant is guilty, and that if they are not sure they must find him not guilty. Further elaboration is generally unnecessary, and indeed it runs the risk of confusing what is otherwise an extremely straightforward concept.[41]However, that is not the end of the matter. The appellant contends that later directions created a real risk of serious misunderstanding as to the standard of proof:
“I will say right at the beginning if you think and different words have been used, if you think she was a mere figurehead, if you think she was a stooge, if you think that she knew nothing and merely did what she was told then although company directors do have responsibilities and she may well have been closing her eyes to them she was not dishonest and she was not consenting or conniving because she knew nothing and if you think she knew nothing that is the end of it. When you are considering who to believe and what to believe there is no magic in this. You are bring your, the 12 of you your collective, your collective experience of life to bear. You look at the witnesses, you look at the facts, you use common sense, you discuss it and in due course with a bit of luck you reach a consensus about who to believe and who not to believe.”
[42]It is argued that the test was put too high in this passage, because instead of using the formula “if you think she was a mere figurehead, if you think she was a stooge” the judge’s direction should have been “if you think she was, or may have been, a mere figurehead, if you think she was, or may have been, a stooge”, and this form of words should have been repeated throughout this passage (viz. “may have known nothing”;“may have done what she was told”), particularly since these possibilities – on the facts of this case – went to the heart of the appellant’s defence. It is argued that in the context of this trial and a direction on a central issue, it should have been made clear that the appellant was entitled to be acquitted not only if the jury concluded that one or more of these things had been established but also if the relevant fact may have been the case. Put otherwise, the full effect of this direction was to dilute the cardinal principle that a defendant is entitled to the benefit of the doubt rather than merely being entitled to the benefit of facts that have been positively established in his or her favour. Furthermore, the approach adopted by the judge may have had the effect of confusing the burden of proof, because it arguably tended to indicate that the defendant needed to prove some or all of the factors that are the subject of the direction.[43]It is undoubtedly appropriate for judges to use the formula for which the appellant contends, thereby reflecting the true nature of the standard (and the burden) of proof – that the prosecution must make the jury sure of guilt, and that if they are unsure of any of the factors that are in a real sense determinative of the case, the defendant should receive the benefit of the doubt. That is undoubtedly a sensible and accurate approach to take. However, that said, we do not conclude that the form of words the judge used resulted in the convictions being unsafe. Given the standard of proof had been clearly set out earlier, notwithstanding the fact that the judge’s formulation did not precisely reflect the questions the jury needed to address, we are confident that they would have clearly understood the need to give her the benefit of any real, as opposed to fanciful, doubt. Therefore, looking at the impact of these directions in the context of the summing up overall, the way the judge put the matter did not have the effect of undermining the safety of the verdict.[44]The same is true of a somewhat difficult passage at the end of the summing up on the issue of the references that had been read into evidence on the appellant’s behalf:
“Then counsel read out to you a number of references. Of those references I will say nothing because I have already dealt with the question of the Defendant’s character. All I will say is that you will give those references and there are a lot of them and they are from people who speak very highly of her and it is quite right, they know her better than you do. It is up to you to say what weight you will give to the references that you have heard read to you but it is not the end of the matter to say they know her better than you do. They have not listened to the evidence and you have and it is your decision how much weight you attach to those references. If you think having listened to those references, I really have real doubt about whether she is the sort of person either to dishonestly make false representations or to consent or connive, to or connive in the making of those misrepresentations if you think it makes it less likely then there will be a doubt, there may well be a doubt and the verdict is not guilty.”
[45]It is contended that this direction should not have contained a reference to the possibility of the jury “really having a real doubt” and instead the question, in light of the evidence as to her character, was their assessment of its impact as regards her credibility, along with the need to decide whether the evidence made her less likely to have behaved as alleged in this case. By suggesting it should only be acted on if it led the jury to “really have a real doubt” it arguably created an impression of a test that is higher than that which in fact applies.[46]Once again, we stress that it is usually appropriate simply to refer the jurors back to the central and straightforward question that they need answer, namely whether on all the evidence in the case (including the conclusions they have reached on the character evidence, whether good or bad) they are sure of the defendant’s guilt. If, on the facts of a particular case, the judge decides that it is nonetheless helpful to pose the question as to whether the members of the jury have a “real” doubt, it may also be helpful to explain that this expression is used simply to distinguish “real” from “fanciful” doubts. But there are no hard-and-fast rules in this context because it will be a matter of judicial discretion as to the most appropriate language to be used in order to explain the particular issue under consideration.[47]Furthermore, the judge posed the wrong question: the defendant was no more entitled to be acquitted because the jury were unsure as to whether “she was the sort of person” to act dishonestly than she was liable to be convicted because the jury were sure she was that “sort of person”. Good character is not a defence to a charge, in the way the judge seemed to be implying in this direction.Instead, the jury’s view of the defendant’s good character is one of the factors (it may be an important factor) to be taken into account when they are deciding if they are sure of the defendant’s guilt, because it potentially demonstrates he or she was less likely to have behaved as alleged. That said, the question as posed for this jury on this occasion was more favourable to the appellant than it should have been, and as a consequence it did not cause unfairness.[48]Accordingly, although this direction was not expressed with particular precision and clarity and the test was not formulated accurately, we are confident it did not undermine the safety of the verdict. Overall, the jury would have understood sufficiently the true impact of the impact of the character references.

The guilty plea of the co-accused White

[49]White’s guilty pleas were before the jury. The only direction the jury received was as follows:
“You should have copies of the indictment in your bundle. Although the indictment is a formal, legal document what you have to decide is in this case pretty straightforward. The charge is fraud and the two counts are the same. I will not take you through the law on each of them. You do not need to consider Mr White because Mr White has pleaded guilty […]”
[50]The defence highlight that although his plea was known, the jury did not receive any direction as to how they should approach his conviction, and most critically they were not directed that his guilty plea did not mean the appellant was guilty as a result. It is argued that the need for a direction to this effect was heightened by the fact that White gave evidence during the trial, thereby inevitably causing the jury to focus on his position.[51]The prosecution suggests the issues in the case were clear and that a direction as to White’s pleas was not sought from the judge in advance of the summing up. In any event, it is argued the lack of a direction does not render the verdict unsafe.[52]Put generally, in many cases it is appropriate and helpful to give the jury guidance on the evidential significance of a co-defendant’s guilty plea (sometimes it is essential), and most particularly that the defendant they are considering is not to be convicted simply on the basis that a co-accused is guilty. However, this trial was in large measure conducted on the undisputed footing that the jury needed to determine whether the appellant as well as White was guilty. In consequence, as a matter of common sense his pleas did not determine the trial against the appellant. Therefore, the verdict is not unsafe because of the absence of a specific direction, although it would have been preferable if the Recorder had addressed the jury, albeit briefly, on this issue.

Incorrect defence

[53]During the summing up, the Recorder gave the following directions: “Now the defence say well they only got, they only paid what they thought they were going to pay. The prosecution say no. If you present someone with a bill for, for example £8,700 plus VAT of £1,300 you are making a representation and in this case it would be a false one because Eagle Rock was not registered for VAT, you are making a representation you are in effect saying £8,700 goes to me, £1,300 goes to the Government. That is the tax you are paying. You as the consumer. Clearly if they had said £8,700 to us. We are not VAT registered but we want £1,300 worth of VAT the customer would say on your bike. I’m not paying that. So say the prosecution the clear representation here is that there is VAT to be paid, that the company is VAT registered and the customers as you heard from Mrs Ballamy, the customers relied on that.” (Our emphasis)[54]The appellant suggests the issue “they only paid what they already knew they were going to pay” was never raised before the jury, although it was the subject of discussion with the judge in their absence. Accordingly, it is submitted that the Recorder was describing a defence argument that had never been raised, and he then proceeded to set out at length the way in which the prosecution met it.[55]The prosecution argues that the question of whether the customers got the contract for the price they had agreed was ventilated in cross-examination of the witnesses Ballamy and Heale. Although the defence was that the appellant had not been involved in this offending, this issue was nonetheless explored in questioning. In those circumstances, introducing the topic with the words “the defence say” was not unfair.[56]It seems to us that this argument for the appellant is without substantive foundation. Although the prosecution accepts the appellant did not advance this defence expressly, given she attempted to establish this possibility by way of cross-examination, it is artificial (certainly in the context of this trial) to distinguish between a defence that was expressly referred to by the defendant in evidence or by her counsel in his speech, on the one hand, and potentially exculpatory circumstances that were explored when defence counsel was questioning the witnesses, on the other. Either way, the jury would have appreciated that the defence was seeking to establish particular factors that provided a reason for acquitting the appellant. Therefore, although the judge’s introduction – “now the defence say” – was in a strict sense arguably incorrect, in reality it was an accurate proposition: the suggestions advanced in questioning could properly be viewed as reflecting an element of the defence case, along with the witnesses called on behalf of the defence and counsel’s speech to the jury.

Adverse inferences

[57]It is submitted the Judge erred in ruling that an adverse inference direction should be given under Section 34 of the Criminal Justice & Public Order Act 1994 and it is argued that the direction he gave was in any event flawed and inadequate.[58]In a letter dated 17 March 2011, the Head of Trading Standards of the Trading Standards Service put the following questions to the appellant following a 34 caution (“You do not have to say anything. But it may harm your defence, if you do not mention when questioned something which you later rely on in court. Anything you do say may be given in evidence”): 1. Why was the VAT number 838 0516 26 placed on the documents in question? 2. Do you accept that the VAT number 838 0516 26 belongs to your former business, Rosswell Associates Ltd? 3. Why do the documents in question claim that VAT was being paid by Mr and Mrs Ballamy and collected by Eaglerock Associates Ltd when that was clearly not the case? 4. Into which bank account was (sic) the cheques made out by Mr and Mrs Ballamy paid? Please supply the account number and sort code. 5. If Eaglerock Associates Ltd was never registered for VAT purposes then please explain what happened to the payments collected from Mr and Mrs Ballamy? 6. Do you accept that the (VAT) payments collected by Eaglerock Associates Ltd from Mr and Mrs Ballamy were not paid to HMRC? 7. Do you accept that Mr and Mrs Ballamy would never have handed over the sums of money that they did had they been aware that Eaglerock Associates Ltd were not registered for VAT? 8. Is there anything else that you wish to add?[59]The Recorder directed the jury as follows: “Then she is asked the questions and what she told you was this, not that she took legal advice but that she asked Mr White what she should do about these questions and whether he told her giving her his own personal advice or whether he told her because he went off and asked a solicitor and passed on what the solicitor had said or whether he merely told her that he had spoken to a solicitor, the fact remains that the answering of questions like that is always the responsibility of the person who is asked them. However the Defendants say, sorry, the prosecution say she could have given answers on day one. What she has done is she has waited until the trial to come out with it. The first question for you to consider is whether she could reasonably have been expected to answer the questions. It is a matter for you but sometimes “I do not know, I can’t remember, I haven’t go a clue” is a perfectly acceptable answer. Certainly one I often give myself. What were the circumstances prevailing at the time? Well she had received that letter. She presumably knew that there was trouble afoot with the company. It was her legal right to remain silent and she had been told of that and she is perfectly entitled to decline to it. Usually you might expect an innocent person to give her response as soon as possible. So she was told that it might harm her defence if she failed to mention when questioned something which she later relied on in court. The point of the caution is to remind her of her rights and to explain how her silence could count against her. You need to consider whether the case was sufficiently strong to demand a response from her. Well you can read the whole letter and you can decide whether or not there was a case for her to answer. You may ask yourself was that the reason why she did not answer because you need to consider her reason for remaining silent. She has told you why she remained silent. It is up to you to say whether you think that that is good enough. End of the matter. Or whether it is something which indicates that there was something more than that behind it. I have to say members of the jury these questions are very general and in fact we now know the answers and most of the answers are I do not know and some of the answers are not in dispute in any event. Do you accept that VAT was not paid? No-one is suggesting that it was. So you need to consider whether it would be reasonable in all the circumstances prevailing at the time for her to have mentioned those matters in reply to that letter. If you are sure it would have been reasonable for her to do so then you are entitled to consider what conclusion if any that pushes you towards. Having considered her explanation it is open to you to conclude I am not saying you should conclude it, open to you to conclude that the only sensible reason for her silence is at the time she had no answer to the questions put to her or none that would stand up to scrutiny. If you think that, then you may also conclude that the defence now put forward is a later invention and false. That is quite a big step but it is one that is open to you to take. You should only reach the conclusion that she knew that she had no answer if you are sure that it is a fair and proper conclusion to draw and you should not convict just because or even mainly because she chose to make no comment. Remember that the prosecution have to prove this case by adducing evidence and silence might be evidence but it can be ambiguous evidence and she has given her reason to you for the silence.” (our emphasis)[60]The appellant argues that in 2010 the Official Receiver had interviewed Ms Thompson as regards her role as a director and she answered all the questions put to her, in effect saying that she knew nothing of the running of the company and that Mr White did everything. As set out above, in the letter dated 17 March 2011, the appellant and White were invited to answer questions under caution as regards the fraud allegations by Trading Standards. They declined to attend on “legal advice”.[61]The appellant avers that her stance at trial no more than mirrored her interview in 2010 and that as a result an adverse inference direction under section 34 was unwarranted. Furthermore, it is suggested the Recorder failed to give an adequate direction as regards legal advice, and the statement “usually you might expect an innocent person to give her response as soon as possible” was unfair.[62]Mr Sapiecha submits that the official receiver does not bring this prosecution and the prosecuting authority had provided a list of questions in writing accompanied by the section 34 caution which the appellant declined to answer (in writing). Instead she gave evidence at the trial, claimed she had a minimal role and then identified others who it was suggested worked for the company (whose existence could not at that late stage be investigated).[63]It is argued that a section 34 direction was needed (the six factors set out in R v Argent [1997] 2 Cr.App.R.27 at 32-33 were present) and that the direction, taken as a whole, was adequate. The object of section 34, Mr Sapiecha submits, is to deter the late fabrication of defences and to encourage the early disclosure of genuine defences.[64]As the prosecution has contended, the jury needed to decide if, when the defendant was questioned under caution, she failed to mention a fact later relied on in her defence at trial which in the circumstances then prevailing she could reasonably have been expected to mention. The judge identified the letter setting out the questions she failed to answer, along with the defence that she had not explained in response to that letter, namely that she was a cipher and that she was ignorant of the matters referred to in the questions. The judge also described in the highlighted passage of the direction set out above, the inferences or conclusions which it was suggested might be drawn from the failure to mention the facts relied on at trial. Although in one sense late fabrication was problematic, given the similar account the appellant had given in response to questions on earlier occasions, nonetheless she may have believed her account would not stand up to scrutiny and she may have added critical elements to her defence subsequently, such as the existence of an ex employee who shared her initials, as found on some of the invoices (as set out in the next section of this judgment).[65]Accordingly, this was a sufficient direction. Furthermore, the observation “usually you might expect an innocent person to give her response as soon as possible” was not unfair in the context of the other directions by the judge on this issue, particularly since it described part of the overall objective of this statutory provision.

The failure of the defence to call Jane Ann Tasker as a witness

[66]As already rehearsed, some of the invoices bore the initials JAT. On this issue White said:
“JAT is Jane Ann Tasker. He said that Jane Ann Tasker parted company with Eagle Rock on bad terms and took him to an employment tribunal. All other tings being equal I suppose it would be possible to call Hane Ann Tasker here and ask her to produce her passport or ask her what her name is. There are ways of getting witnesses to court. However you have had no document to put before you with Jane Ann Tasker’s name on it that I know of and you will have to decide simply on he basis of what other witnesses tell you that there was somebody who had something to do with the paperwork in the company and generation of invoices whose initials were JAT as well as the Defendant and as did Gerent Meredith confirmed that the Claimant had a, that the Defendant had a busy lifestyle.”
[67]After discussion with counsel, shortly afterwards he corrected this, as follows: “Members of the jury one remark I made to you I should not have made. It was this: you remember I said we had not heard any evidence from Miss Chalice whose married name, married surname does not matter what it was began with a T? The Defendant I should remind you does not have to prove anything and in particular she does not have to call any particular witness to prove anything. There may be a perfectly good reason why she is not calling Miss Chalice. Do not speculate about that.” (page 27)[68]The defence suggests irretrievable damage had been done notwithstanding this correction.[69]The prosecution submits that the appellant had raised the possible existence of Jane Ann Chalice during questioning, in order to prove that a Jane Ann Tasker had worked for the company, but she was not called and no proof of her existence or her connection with the company was established.[70]The prosecution is correct in suggesting that in certain circumstances comment of this kind may be permissible. We do not intend to rehearse the various authorities on this issue (see Archbold 2013 edition paragraph 4-459) because the judge, as we have just indicated, gave a further direction, before the jury’s deliberations began, which ensured that the failure to call this witness did not count against the appellant. We do not accept that the judge’s original remarks constituted a misdirection that could not be cured. After a short pause and before the jury’s deliberations began, the judge corrected his error. As a result, no substantive unfairness resulted and the safety of the conviction was not undermined.[71]Thus far the directions to the jury have not led us to conclude that the verdict is unsafe. However, the same cannot be said of the directions on the next two issues: inferences/circumstantial evidence and pressure of time.

Inferences and circumstantial evidence

[72]During the summing up the Recorder commented “almost everything you have to decide is a matter of inference” and shortly afterwards he set out the following passage from the evidence of Mrs Ballamy:
“He realised it was me and Jayne took control of the conversation. I wanted to reach agreement for the balance to be paid in full or in part. Mr White answered. He was on the phone for a matter of seconds and then he put the Defendant on the phone. She was speaking with authority. She was quite firm, quite firm. She knew the situation about the judgment that we had obtained against the company and she made it clear she had no intention of paying. I got the impression that Jayne took the phone off Bill. I was in mid sentence. She was quite aggressive from the start. Now members of the jury none of us was there to see when any of these documents was generated. There is no CCTV or anything like that. Almost everything you have to decide is a matter of inference and so you will look at perhaps minor episodes like the telephone conversation and decide whether it helps you in working out what it was that the Defendant was doing and what her role was in this company and there is one episode, the telephone conversation on which the prosecution rely.”
[73]It is complained that the judge did not then go on to address how the jury should approach the process of drawing inferences. The prosecution suggests there was nothing further that needed to be said on this subject.[74]As to circumstantial evidence, the direction was at the end of the summing up was as follows:
“Now before checking with counsel I will remind you of this: you have to be sure and you have to be careful in a case where there is very little if any direct evidence. Sometimes in assault cases we see what happens on a CCTV. Sometimes we have evidence of somebody actually being caught forging a document. That, this is not one of these cases. You have got little bits of evidence here and there and it is up to you to work out what you think has been going on. I as the judge am very pleased that it is not my job. Now is there anything that counsel would like to raise? ”
[75]The defence suggests that this provided inadequate assistance for the jury whilst the prosecution argues it was sufficient.[76]In our judgment, the judge’s directions in this context were materially defective. The Judicial College in Directing the Jury (Chapter 5) has conveniently summarised the main issues that need to be addressed in relation to circumstantial evidence, as follows: A circumstantial case requires judicial scrutiny and care. It is frequently the case that circumstances, proved or admitted, are of equivocal effect in the absence of a clinching or explanatory piece of evidence. In such cases the judge should assist the jury to identify the evidence of circumstances upon which the cogency of the prosecution case depends. […] Directions should include:(1) an explanation of the nature and elements of the circumstantial case;(2) a summary of the evidence in support of that case;(3) a direction that the jury must decide what evidence they are sure they accept;(4) a summary of the defence case as to the disputed evidence, the identification of evidence which may rebut the inference of guilt, and the disputed inferences;(5) an explanation that speculation, or attempting to fit the evidence to a particular theory (by either side), is not the same as drawing an inference from reliable evidence; and(6) a direction that the final question for the jury is whether the evidence they accept leads them to the conclusion, so that they are sure, that the defendant is guilty.

Directions should include:

[77]The jury in this case received little assistance on these matters. There was no explanation of the nature and elements of the circumstantial case; there was no summary of the evidence in support of the prosecution or the defence case as to the disputed evidence; there was no identification of the evidence which may rebut the inference of guilt or the disputed inferences; critically, there was no explanation that speculation, or attempting to fit the evidence into a particular theory, is not the same as drawing an inference from reliable evidence and there was no direction that the jury – as part of the final question – must consider whether the (circumstantial) evidence led them to the conclusion, so they were sure, that the defendant was guilty. The direction they received instead – “[y]ou have got little bits of evidence here and there and it is up to you to work out what you think has been going on” – did not approximate to a sufficient direction. We consider the deficiencies were fundamental as regards the safety of the convictions on this indictment. This was a case in which it was necessary to ensure the jury did not convict on suspicion alone, given – on any view – the circumstances clearly demonstrated markedly suspect behaviour on the part of the appellant as regards both companies, and the true significance of the positive pieces of evidence against and for her needed to be weighed and their effect assessed with care (particularly given the lack of direct evidence).[78]Our concerns over the judge’s misdirection on inferences and circumstantial evidence reinforces our conclusion as to the effect of the pressure of time the judge created for the jury to return a verdict (as set out hereafter): the failure by the judge to explain properly (or, in reality, at all) the approach the jury needed to take to inferences and circumstantial evidence adds to the apprehension that the jury may not have reached safe verdicts in the brief period they were permitted to deliberate at the end of a Friday afternoon (which coincided with the natural end of their period of jury service).

The pressure of time on the jury to reach a verdict

[79]Once the direction had been corrected concerning as regards the absence of Jane Tasker/Jane Chalice (see above), the jury bailiff was sworn at 15.20 on the Friday afternoon and the jury retired. As just set out, the jury had been drawn from a panel that finished its ordinary period of two-weeks’ jury service on that day. After the jury had been sent out, counsel invited the judge to reassure the jury that they should not feel under pressure of time. In the event, he gave a direction that tended to the opposite result. The jury were brought back into court at 15.33 and what the judge said was:
“Members of the jury do not bother about sitting in your places. If you could just move in because we are only going to be here for two seconds. I am very sorry to have to drag you all the way back over here and I hope it will be the last time. It has been drawn to my attention that we are now getting on to the end of the day and the week and this is also I understand your second week of jury service. Is that right? So you are not going to be here next week. It may not be what you want to hear but you are under no pressure of time. Take all the time you need because this is clearly a serious matter and if you can put out of your minds the time of the day and the day of the week that it is. You will not be, God willing, brought back here on Monday to finish the case but do not rush your deliberations. And that is all I wanted to say, thank you very much. ”
[80]The jury then retired again at 15.43. They convicted at 17.05.[81]The prosecution accepts that these were not well-formulated directions. Mr Sapiecha had wanted the judge to reassure the jury that if they could not reach a verdict within a reasonable time on the Friday, they would be able to return on the Monday. However, he argues that although this could have been better expressed, the possibility of returning on the Monday was left open to them. The defence suggests the overall effect was to put the jury under improper pressure of time to reach a verdict on the Friday afternoon.[82]In our judgment although what the judge said to the jury was ambiguous, the burden of his remarks could easily have been interpreted as meaning that the jury were expected to complete their deliberations that afternoon:
“[s]o you are not going to be here next week” and “[y]ou will not be, God willing, brought back here on Monday to finish the case”
. In these circumstances, the judge’s exhortation not to rush their deliberations and the statement that they were under no pressure of time did not cure the effect of his other words that may well have created pressure in their minds to reach a verdict that afternoon. On the Wednesday and Thursday the jury had left court between 16.15 and 16.30 and yet on the Friday at 17.00 they were still in retirement having been told it was not expected they would be returning to complete their deliberations the following week. In the result, there is too great a risk that they would have concluded that they were expected to remain at court until they had reached a verdict.[83]No jury should be put under pressure of this kind because it runs the risk that their decision will be rushed and ill considered. At a minimum, the judge should have i) ensured the jury were in a position, if necessary, to continue their deliberations on Monday without undue difficulty; ii) reassured them that they would be sent home on the Friday at a reasonable time; and iii) directed them, as a result, that they were not under any pressure of time. By failing to take any of these steps, and bearing in mind the directions the jury received instead, the verdicts are unsafe.

Conclusions

[84]The convictions are unsafe as a result of the judge’s directions as regards inferences/circumstantial evidence and the pressure of time the jury were put under, and in the result they are quashed.