[2006]JCA152
COURT OF APPEAl
25th October 2006
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Before :
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The Hon. M.J. Beloff, Q.C., President;
P.D. Smith, Esq., Q.C. and;
Dame Heather Steel
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Peter Wilson Michel
And
Simone Anne Gallichan
-v-
The Attorney General
Advocate D.F. Le Quesne for Michel.
Advocate S. Fitz for Gallichan
C.E. Whelan, Esq., Crown Advocate.
JUDGMENT
Smith JA
Introduction
1.
On the day
the oral arguments on these applications for leave to appeal against conviction
concluded we informed the parties that the Court had decided that the
applications must be dismissed and that we would furnish our reasons in due
course. This we now do.
2.
The
applications arise out of the prosecution of the applicants on charges of
assisting another to retain the benefit of criminal conduct contrary to Article
32 of the Proceeds of Crime (Jersey) Law 1999 ("the
Law"). The applicants pleaded
not guilty to all of the charges.
On 3 July 2006
the trial opened in the Royal
Court before the Inferior Number, Sir Richard
Tucker KBE, Commissioner, presiding.
At that time the indictment comprised ten counts. However, on 7 July 2006, the fifth day of the trial, the
Commissioner decided that it should proceed in respect of only one count,
namely count 4. This count reads as
follows:
Statement of Offence. Assisting another to retain the benefit
of criminal conduct, contrary to Article 32(1) (a) of the Proceeds of Crime
(Jersey) Law 1999
Particulars of Offence. Peter Wilson Michel and Simone Anne Gallichan (formerly RABET) between 1st July 1999
and 8th July 2001 in the Island of Jersey, knowing or suspecting
that Mark Stuart Allan, Bernadette Gills and Elsa Goncalves were persons
engaged in criminal conduct, namely, cheating the UK Public Revenue and/or
theft, were concerned in an arrangement whereby the retention or control on
behalf of Mark Stuart Allan, Bernadette Gills and Elsa Goncalves of their
proceeds of criminal conduct, namely credit balances in accounts at HSBC and
National Westminster Bank (now Royal Bank of Scotland), St. Helier in the name
of Morgan Marketing Services Limited, Byford Limited, Westfield Properties
Limited and Newgrove Overseas Developments Limited and other entities, other
property in the United Kingdom and elsewhere, and cash, was facilitated.
3.
The
material portion of Article 32(1) of the Law reads as follows:
"… if a person enters
into or is otherwise concerned in an arrangement whereby –
(a) the retention or control by or on behalf of
another (in this Article referred to as "A") of A's proceeds of
criminal conduct is facilitated (whether by concealment, removal from the
jurisdiction, transfer to nominees or otherwise); …
knowing or suspecting that A is a person who is engaged in criminal
conduct, he or she is guilty of an offence."
4.
"Criminal
conduct" is defined in Article 1(1) of the Law as meaning "… conduct, whether occurring before or after Article
3 comes into force, that - (a)
constitutes an offence specified in Schedule 1; or (b) if it occurs or has
occurred outside Jersey, would have constituted such an offence if occurring in
Jersey.” Schedule 1
(which is headed "Offences for which confiscation orders may be
made") reads:
"Any offence in Jersey for which a person is liable on conviction to
imprisonment for a term of one or more years (whether or not the person is also
liable to any other penalty), but not being –
(a) a
drug trafficking offence; or
(b) an
offence under any of Articles 15-18 of the Terrorism (Jersey)
Law 2002."
5.
The
reference to Article 3 (which deals with confiscation orders) in the definition
of criminal conduct is at first blush rather odd, but it was not disputed
before us that the definition must be interpreted as meaning that the criminal
conduct relied on may have occurred before the coming into force of Article 32
(1 July 1999) as, according to the prosecution was indeed, for the most part,
the case.
6.
At the
trial Mrs. Gallichan, besides asserting that the prosecution had failed to
prove the requisite elements in Article 32(1)(a) against her, sought to
establish two defences provided for in Article 32(4)(a) and (b) of the
Law. The effect of those provisions
is that, although a defendant may enter into or be otherwise concerned in an
arrangement as described in Article 32(1)(a) of the Law and may know or suspect
that the other person is engaged in criminal conduct, he or she is nevertheless
entitled to be acquitted if they establish on the balance of probabilities that
they did not know or suspect that the arrangement related to any person's proceeds
of criminal conduct (Article 32(4)(a)) or if he or she establishes to the same
standard that they did not know or suspect that by the arrangement the
retention or control by or on behalf of the other person was facilitated
(Article 32(4)(b)) (the Crown accepted that the provisions are to be read
disjunctively). The Jurats'
verdict of guilty in respect of Mrs. Gallichan meant that she had failed to
establish either defence.
The Factual
Background
7.
Count 4
related to a company in England
called Travco Limited ("Travco"). Its business was to act as ground
handlers for tour operators which, for the most part, involved selling them
room reservations in Europe which they in turn
sold to the public through travel agents.
Travco had three directors:
Mark Stuart Allan, Elsa Goncalves and Bernadette Gills. Between them they held all of the issued
shares. Allan and Goncalves gave
evidence at the trial on behalf of the prosecution. They said that Travco was very
successful. In the early 1990s the
accountant acting for the company had advised them that (as Mr. Allan put it)
"we were making far too much money." He put them in touch with Mr. Michel,
the principal in Michel & Company, a firm of chartered accountants and
financial advisers in Jersey. With his assistance the directors moved
money out of Travco, which was then made available to the directors or used for
their benefit.
8.
This was
effected in a number of ways. A
company called Morgan Marketing Services Limited ("Morgan Marketing")
was incorporated in Jersey by Mr. Michel. It was beneficially owned by the
directors of Travco. It purported
to introduce customers to Travco which were already its customers and it
received fees for doing so. Dynamic
Tours Limited ("Dynamic Tours") was incorporated in Jersey
by Mr. Michel. It was partly
beneficially owned by the directors of Travco. The company purported to convert dollars
received from an American company with which Travco genuinely did business into
European currencies. For this it
charged commission. In fact the
dollars were not converted by Dynamic Tours but were simply passed on to Travco
minus the bogus commission. Dynamic
Tours also
received a commission on the business done between the American company and
Travco on the pretence that it had introduced the two companies. In the course of its legitimate business
Travco received travellers' cheques from time to time. These were sent to Michel & Co. and
cashed for the benefit of the Travco directors.
9.
In July
1999 the Jersey company set up by Michel &
Co. and beneficially owned by the Travco directors, Byford Limited
("Byford"), sold premises at 92-94 Paul Street, London
to Travco. Byford had purchased the
premises some years earlier. The
purchase had been funded by monies the directors of Travco had extracted from
that company with Mr. Michel's assistance.
For some years the building had been let by Byford to Travco at a
commercial rent. When it was sold
in 1999 Byford made a large profit and this was made available to the directors
of Travco by Michel & Co.
10. Mrs. Gallichan started work for Michel &
Co. in 1991. From 1993 until July
2001 (when the police raided the premises of Michel & Co.) she was in day
to day charge of the office. Mrs.
Gallichan was a director of companies which Mr. Michel either formed or
acquired for the Travco directors.
She dealt personally with many of the documents relevant to the
extraction of money from Travco and it being made available to the directors or
for their benefit. At the trial the
prosecution pointed to evidence, which clearly the Jurats found persuasive,
that both Mrs. Gallichan and Mr. Michel continued to be concerned in the
arrangement whereby the retention or control on behalf of the Travco directors
of their proceeds of criminal conduct was facilitated after 1 July 1999, the
date when Article 32 of the Law came into effect.
The Applications for Leave to Appeal
11. A number of grounds were put forward by each of
the applicants which, although differently expressed, were either common to
both cases or were so similar in their nature that it is convenient to deal
with them together. It is to these
grounds which we turn first. They
fell under the following headings:
(i)
Appearance
of bias: The prosecution opening;
(ii) Appearance of bias: The Commissioner;
(iii) The Commissioner applied the wrong tests when
considering whether there was a case to answer;
(iv) There was no case to answer on the evidence of
the prosecution;
(v) The verdicts were unreasonable/cannot be
supported having regard to the evidence.
Appearance of
Bias: The Prosecution Opening
12. As we have said, when the trial opened on 3 July 2006 there were ten
counts before the Jurats. Some days
before the trial started the prosecution, on the direction of the Commissioner,
furnished copies of its opening to both applicants and to the court. It appears from a remark made by the
Commissioner on the first day that the Jurats duly read the opening. This document dealt in great detail with
all of the counts. For the most
part (besides count 4 there was evidence relating to counts other than count 4
which was admitted on a similar fact basis) its contents became irrelevant when
the indictment was severed on day 5.
In addition, the Crown case pertaining to all ten counts was opened
orally to the Royal Court
although not at the same length.
The applicants contended that applying the correct test for appearance
of bias (see Magill -v- Porter [2001] UKHL at para. 67 per Lord Hope of
Craighead) the Commissioner ought to have ruled that the circumstances were
such as to lead a fair-minded and informed observer to conclude that there was
a real possibility that the Jurats were biased by reason of the irrelevant and
prejudicial material they had read and heard. In the circumstances the Commissioner
ought to have discharged the Jurats.
13. Advocate D F Le Quesne, who appeared for Mr.
Michel, argued that the Commissioner applied the wrong test. We do not agree. It is true that when the defence first
applied for the discharge of the Jurats on this ground the Commissioner did
base his rejection of the application on his own subjective judgment of whether
the opening of the extraneous material would influence the Jurats or not. But on a second occasion, later in the
trial, when Magill -v- Porter was opened to him by Mr. Le Quesne, the Commissioner
clearly purported to base his refusal to discharge the Jurats on the correct
test as adumbrated in that case. In any event it is for us to determine
whether, in application of the correct test, such appearance of bias flawed the
trial and the verdict.
14. Counsel for both applicants argued that despite
the careful direction given by the Commissioner to the Jurats in the course of
his summing up (the adequacy of which, as such, was not challenged) the
hypothetical observer could not but have concluded that there was a real
possibility of the Jurats being biased because of what they had read and
heard. As Advocate S E Fitz, who
appeared for Mrs. Gallichan in this court but not before the Royal Court, put it, it would have
required "an almost superhuman feat of intellectual gymnastics" for
them to have been able to put all of the highly prejudicial material out of
their minds. Crown Advocate C E
Whelan, who appeared for the Attorney General, on the other hand, pointed out
that it had been accepted on the applicants' behalf prior to the trial that all
ten counts could be tried together so that, if severance had not occurred, the
Jurats would have had all of the material complained of laid before them, the
risk of what might be called cross-contamination being effectively eliminated
by means of an appropriate direction from the Commissioner. Mr. Whelan argued that the Commissioner
had a discretion as to whether, in all the circumstances, the trial should
proceed. He was entitled to take
into account the fact that he would give an appropriate direction when summing
up, that it would be received by Jurats who are experienced judges of fact,
that the trial had commenced, that non-compellable key witnesses had travelled
to Jersey and that if the trial were to be aborted it would be necessary to try
and obtain the attendance of those witnesses for a second time. He referred us to the case of R. -v-
Azam and Others [2006] EWCA Crim 61 in which the Court of Appeal of England
and Wales upheld a decision of the trial judge to continue with the trial
notwithstanding that the main prosecution witness had made "wild, reckless
and intemperate allegations and assertions about the defendants, their
characters and their involvement in criminal activity.”
15. While it is true that in the Azam case
authorities on appearance of bias were opened to the court (although not, it
seems, Magill -v- Porter) and the appellants' counsel appears to have
accepted that what was in issue was the exercise of discretion by the trial
judge, it is difficult to see how the application of the Magill -v- Porter
test can be viewed in this light.
In our opinion there can only be one correct answer to the question of
whether the hypothetical observer would conclude that there was a real
possibility of bias. Moreover, the
circumstances to which it is applied cannot, in our view, extend to, for
example, difficulties that might be experienced in securing the re-attendance
of witnesses in the event of a retrial.
16. Counsel for the applicants argued that there
was a distinction to be drawn between the situation in which the judge rules
that there is no case to answer on certain counts at the end of the prosecution
case and what happened at the trial in this case. It was suggested that had the evidence
on those counts been led it could have been weakened by cross-examination. No doubt this is so; but, equally, it
could have appeared even stronger.
In our view, this is an essentially neutral factor to which the
hypothetical observer would have attached no great weight one way or the
other. In our judgment the crucial
issue in this case is how confident the hypothetical observer could reasonably
have been that the Jurats could and would have observed the direction to put
extraneous material out of their minds when considering count 4. In reaching a conclusion account would
have had to been taken of the quality of the tribunal charged with the
obligation of determining guilt, in this case two Jurats. In Snooks and Dowse -v- United
Kingdom 2002 JLR 475 at 484 the European Court of Human Rights recorded
that:
"Jurats are … elected by
a special electoral college whose members include the Bailiff, the Jurats,
Advocates and Solicitors of the Royal
Court and members of Jersey's
legislature, the States Assembly.
Jurats do not necessarily have a legal qualification, but are usually
individuals with a known history of sound judgment and integrity, which has
been consistently demonstrated throughout a lengthy professional, business or
civic life."
These remarks were quoted approvingly by
Lord Hoffmann when giving the decision of the Judicial Committee of the Privy
Council in Attorney General -v- Edmond-O'Brien 2006 JLR 133 at p.
140. To hold that Jurats (or even
juries) are incapable of obeying a proper direction would be inconsistent with
the assumptions upon which the criminal justice system in this Island is founded (see Turner –v- News Group
[2006] 4 All ER 613 at p 627 para. 46).
17. We are satisfied that the Commissioner made the
correct decision on this issue. In
our judgment the hypothetical observer would have taken the view that, properly
directed, the Jurats would have put the extraneous material out of their
minds. In the event, they were
properly directed.
Appearance of
Bias: The Commissioner
18. The prosecution introduced in evidence a number
of invoices purportedly raised by Travco in respect of introductions by Morgan
Marketing which they characterised as false on the basis that the work
reflected on them had not been done.
On the sixth day of the trial, in the course of hearing an application
in the absence of the Jurats, the Commissioner said of the invoices:
"Speaking
for myself - and I am not the fact-finding tribunal - I should have thought it
was as plain to anyone as could be what the nature of those documents was to
which the witnesses have spoken.
But that is not a matter for me to decide and I would be grateful if the
press would not report that observation and if need be I would sit in chambers. But there is the evidence. It is for the Jurats to make of it what
they will, but there is no difficulty."
19. Article 15(4) of the Royal Court (Jersey)
Law 1948 reads (in part):
“In all causes and matters,
civil, criminal or mixed, the Bailiff shall have a casting vote whenever the
Jurats –
(a) being
2 in number, are divided in opinion as to the facts …".
20. This provision means that in certain
circumstances the judge presiding on a criminal trial before the Inferior
Number does become part of the fact-finding tribunal. The applicants contended that applying
the Magill -v- Porter test the Commissioner's remarks gave rise to an
appearance of bias on his part.
21. In response Mr. Whelan contended that the
applicants' complaint on this point had no substance as neither had disputed
that the invoices were indeed false.
This undoubtedly seems to have been the case as far as Mrs. Gallichan is
concerned and, therefore, it does not seem to us to be open to her to rely on
this ground. However, Mr. Le Quesne
asserted that Mr. Michel had never accepted that the work to which the invoices
related had not been done and that, therefore, viewed at the point in time when
the Commissioner made the remarks complained of, the hypothetical observer
would have been bound to conclude that there was a real possibility that the
tribunal of fact (of which by reason of Article 15(4) of the 1948 Law the
Commissioner was a component) was biased against his client.
22. In our view, the Magill -v- Porter test
does not properly fall to be applied at the point in time when the Commissioner
made the remarks complained of.
This is because at that point in time he had no role in the
determination of the guilt of either applicant. Such role would only have been
engaged if and when it became apparent that the Jurats could not reach
agreement. In fact the Jurats were
unanimous in their verdicts. In MacKenzie
-v- Attorney General 1995 JLR 9 this Court held that in such circumstances
the judge's attitude is not a relevant matter unless it can be established that
he allowed it to influence the Jurats in a material way. Notwithstanding that the Commissioner
retired with the Jurats, no such claim was even suggested in the present
case. It follows that the
Commissioner's attitude to the invoices could not have given rise to an
appearance of bias in any meaningful sense.
The Commissioner applied the wrong tests when
considering whether there was a case for the applicants to answer
23. Each applicant put their arguments under this
heading in a slightly different way.
Mr. Le Quesne criticised the Commissioner for approaching the
application of no case to answer on the basis that the so-called
"predicate offences" were cheating the United Kingdom revenue and
theft within the meaning of the English Theft Act 1968 whereas they were fraud
as defined by this Court in Foster -v- Attorney General 1992 JLR 6 and
fraudulent conversion. It is true
that it does appear from the transcript of the trial that when dealing with the
applications of no case to answer the Commissioner did focus on the nature of
the offences the Travco directors would have committed in England rather than
the offences they would have committed in Jersey if their conduct had occurred
here. It seems likely that he was
led into this error by the unhappy wording of the particulars in count 4. In our view it was a recipe for
confusion to describe the criminal conduct as "Cheating the UK Public
Revenue and/or theft" when what the Jurats had to decide was whether the
conduct of the directors would have constituted an offence falling within
Schedule 1 of the Law if it had occurred in Jersey. Bearing in mind that the Law does not
require the conduct in question to have constituted an offence in the place
where it occurred, it seems to us that the prosecution case would have been
much better appreciated if the offences which it was alleged would have
occurred in this jurisdiction had been clearly stated in the relevant count in
the indictment.
24. However, notwithstanding these matters we do
not accept that when one looks at the terms of the arguments advanced to him
the Commissioner mistook the relevant legal principles. We say this because the debate did not
turn on what might be described as the interstices between cheating the UK Revenue/
"Foster" fraud and theft/fraudulent conversion. Two propositions were advanced to the
Commissioner. The first was that
there was insufficient evidence of fraudulent intent or dishonesty on the part
of the Travco directors and the second that because between them they wholly
owned Travco in extracting money from it they could not have been guilty of any
offence. As to the first
proposition, it is clear from the transcript of the Commissioner's ruling that
he did address his mind in an appropriate way to the submissions that had been
made to him.
25. We will deal with the question of whether there
was sufficient evidence of fraudulent intent or dishonesty when we come to the
next heading (see paragraphs 32 to 34 below). As to the second proposition, it was
argued before us in a different way on behalf of each of the applicants. Mr. Le Quesne pointed out that an
essential element in the offence of larceny is that the taking is "without
the consent of the owner" with the implication that as the directors
"owned" Travco their consent to the taking negatived the offence alleged. Miss Fitz, on the other hand, relying on
the decision of this court in Marriott -v- Attorney General 1987-88 JLR
285 and a passage from the judgment of the Royal Court delivered by the Deputy
Bailiff in In re Esteem Limited 2003 JLR 188, argued that the mischief
to which the offence of fraudulent conversion is directed is the use by someone
of the property of another, whether natural or corporate, which has been
entrusted to him or her. As Miss
Fitz put it: "All funds paid by Travco to Morgan Marketing or Byford were
ultimately from the beneficial ownership of Allan, Goncalves and Gills for the
beneficial ownership of Allan, Goncalves and Gills." Travco’s money
was not the property “of another.” The directors could not sensibly
be said to have stolen property from themselves or to have fraudulently
converted their own property.
26. In our judgment both arguments are fatally
flawed. The Crown relied on
fraudulent conversion as defined in Section 20(1)(ii) of the Larceny Act 1916
which reads as follows:
"Every person who - … being
a director, member or officer of any body corporate or public company,
fraudulently takes or applies for his own use or benefit, or for any use or
purposes other than the use or purposes of such body corporate or public
company, any of the property of such body corporate or public company …
shall be guilty of a misdemeanour … "
It will be noted that this definition makes
no reference to the consent of the owner and does not include the word
"entrusted." Marriott's
case concerned Section 20(1)(iv) of the Larceny Act which does use the word
"entrusted" but deals
with a type of fraudulent conversion quite different from that with which we
are concerned. In our opinion Marriott's
case is of no assistance to the applicants.
27. Turning to In re Esteem, in the passage
on which Miss Fitz relied the Deputy Bailiff contrasted the powers of a
shareholder in a company with those of the settlor of a trust. In the course of doing so he said the
following:
" … if a sole beneficial
owner directs the directors to give away the company's assets, they may do so
subject only to being satisfied that creditors are not prejudiced. In other words the control of a
shareholder is a lawful control conferred upon him by company law which enables
him quite legitimately to procure that the company acts as he wishes (subject
only to any duty owed to creditors)."
28. The authority on which the Commissioner based
his ruling is DPP -v- Gomez (1993) 96 Cr. App. R. 359. In that case Lord Browne-Wilkinson dealt
(at pp. 396 and 397) with the argument that there can be no theft, within the
meaning of Section 1 of the Theft Act 1968, from a company by those who, by reason of being the
controlling shareholders or otherwise, are "the directing minds and will
of the company". Such persons,
so the argument ran, should be treated as having validly consented on behalf of
the company to the appropriation of the company's property, irrespective of
whether or not there has been compliance with the formal requirements of
company law. His Lordship (with
whom the other Law Lords, except Lord Lowry who dissented, agreed) concluded
that the approach implicit in the argument was wrong. We refer, in particular, to two passages
at p. 397:
“Where a company is accused
of a crime, the acts and intentions of those who are the directing minds and
will of the company are to be attributed to the company. That is not the law where the charge is
that those who are the directing minds and will have themselves committed a crime
against the company …
The pillaging of companies by those
who control them is now all too common.
It would offend both common sense and justice to hold that the very
control which enables such people to extract the company's assets constitutes a
defence to a charge of theft from the company. The question in each case must be
whether the extraction of the property from the company was dishonest, not
whether the alleged thief has consented to his own wrongdoing."
29. It is true that Lord Browne-Wilkinson was
referring to theft as defined in the Theft Act and not to fraudulent
conversion as defined by Section 20(1)(ii) of the Larceny Act. But in our opinion his Lordship's
conclusion applies with equal force to both crimes. Accordingly, the Commissioner was right
to rely on and apply Gomez case.
We do not dispute the accuracy of the passage from the Deputy Bailiff's
judgment in In re Esteem on which Miss Fitz relied, but that case dealt
with issues very different from those before us in these applications and there
is no suggestion that the Royal Court was intending to question the validity of
Lord Browne-Wilkinson's dicta in the particular context in which they were
expressed.
30. Miss Fitz made a further point to us based on
the decision of the Court of Appeal of England and Wales in R. -v- Ghosh and
ors.[1982] 3 WLR 110. For
convenience we deal with this and a related submission later in this judgment.
There was no case to answer on the evidence of the
prosecution
31. At the end of the Crown case Mr. Le Quesne
submitted that fraudulent intent, as he put it, was a necessary element in the
criminal conduct alleged against the Travco directors and that there was
insufficient evidence of this to go to the Jurats. Counsel for Mrs. Gallichan made a
similar application limited to the Foster fraud allegation which Miss
Fitz reiterated before us.
32. In our view there was ample evidence of
fraudulent intent or, as it is more appropriately described, dishonesty on the
part of the directors. To give some
examples, it was admitted by Mark Allan in the course of his evidence that
draft invoices were furnished to Michel & Co. for completion in the name of
Morgan Marketing and submission back to Travco in respect of commissions for
which nothing had been done by Morgan Marketing. He further admitted that Travco had
requested Michel & Co., to follow up the invoices with chaser letters
pressing for payment. Mr. Allan
admitted that Dynamic Tours had done nothing for the Travco money paid to that
company. Mr. Allan admitted that
travellers' cheques, the property of Travco, had been forwarded to Michel &
Co., to be cashed for the benefit of the directors.
33. It is true that the directors who gave evidence
did not in terms admit that they had acted dishonestly. However, on the other hand, they did not
profess to have acted honestly, merely suggesting that they had inquired from
Travco's accountant whether what he proposed was legal and he had responded
that everyone was doing that sort of thing. Miss Fitz argued that the concept of
honesty in the context of tax avoidance schemes should be applied with
care. She sought to draw a
distinction between under declaration of income supported by fictitious
documents (fraudulent) and the situation in which a person is advised that a
scheme is legal but knows that the records shown to the tax authorities are not
an accurate reflection of what has taken place (not fraudulent).
34. We doubt very much the validity of the premise
underlying this proposition but it is sufficient for us to say for the purposes
of this case that it would have been open to the Jurats on the basis of the
admissions made by the Travco directors to which we have referred, and other
aspects of their evidence, to conclude beyond reasonable doubt that those
persons were perfectly well aware that what they were doing was dishonest.
35. Furthermore, we reject Miss Fitz' complementary
proposition (unsupported by authority) that insofar as the directors who gave
evidence declined explicitly to admit their own criminality the Crown was
"bound by that evidence."
In our opinion the Crown is entitled to rely on those parts of the
evidence of its witnesses that support the Crown case and disavow reliance on
evidence that conflicts with it. If
it were otherwise many prosecutions which ought to succeed would fail.
The verdicts were
unreasonable/cannot be supported having regard to the weight of the evidence
36. This heading is an allusion to Article 26(1) of
the Court of Appeal (Jersey) Law 1961
which (so far as is material) reads as follows:
"… on any appeal against
conviction, the Court of Appeal shall allow the appeal if it thinks that the
verdict should be set aside on the ground that it is unreasonable or cannot be
supported having regard to the evidence … "
In
the Edmond-O'Brien case, to which we have already referred, the Privy
Council emphasized the limitations in the scope of this Court's function in
appeals against conviction in criminal cases. Lord Hoffmann made it clear that in
considering whether the verdict "cannot be supported having regard to the
evidence" we must be careful not to usurp the function of the Jurats and
he quoted, with apparent approval, the passage in the judgment of Lord Goddard
CJ in R -v- Hopkins-Husson 34 Cr. App. R. 47 at p. 49 in which he said:
"If there is evidence to go to
the jury and there has been no misdirection, and it cannot be said that the
verdict is one which a reasonable jury could not arrive at, this Court will not
set aside the verdict of Guilty which has been found by the jury."
37. Against this background we turn to the
submissions made on behalf of the applicants not in order to sift through the
evidence and arguments as if we were the Jurats trying the case but in order to
see whether there was sufficient evidence to support the conviction or whether
either verdict can be said to have been unreasonable.
38. Mr. Le Quesne's contentions under this heading
involved two propositions:
(i)
That the
evidence did not support a finding to the criminal standard that the Travco
directors had the requisite guilty knowledge; and
(ii) That proof of mens rea on the part of Mr. Michel
was absent.
39. As we have already said two Travco directors in
the course of their oral testimony did not, in fact, give evidence as to
whether they thought that what they had done was honest or not. However, even if they had said in
evidence that they thought that it was this would not have been the end of the
matter. The Jurats would have had
to look at all of the relevant evidence in order to determine whether they had
the requisite guilty knowledge or not.
40. When one looks at the relevant evidence adduced
in this case the conclusion that the directors must have had guilty knowledge
is virtually inescapable. To take
some examples: as noted at paragraph 32 above Mark Allan admitted that at his
request invoices were issued by Morgan Marketing to Travco for services which
had not been provided and that those invoices did not tell the truth. Furthermore, he testified that at his
request backdated false correspondence between Morgan Marketing and Travco had
been created which appeared to show that the companies were haggling over the
scale of Morgan Marketing's fee whereas in truth it was "all completely
made up" in order to provide a paper trail "to make it look like it
was a proper arms-length company that was negotiating." Elsa Goncalves was rather less
forthright but she admitted, for example, that the backdated letters between
Morgan Marketing and Travco to which we have referred were not truthful, and
although she alleged that Morgan Marketing introduced some new clients to
Travco, she conceded that some of the clients already existed. Both witnesses admitted that
travellers’ cheques, the property of Travco, had been sent to Michel
& Co. to be cashed and the proceeds applied for the benefit of the
directors.
41. In our judgment there was ample material comprised
in the evidence of Allan and Goncalves which could have supported the
conclusion that the directors had guilty knowledge. In addition the Jurats had the
opportunity to see the witnesses give evidence. In our opinion they were entitled to
conclude that they were satisfied to the requisite standard on this point.
42. The same applies to Mr. Michel and his state of
mind. Mark Allan gave evidence that
the directors had discussed with Mr. Michel the arrangements for extracting
money from Travco and as to how it was to be dealt with on their behalf. The execution of these arrangements is
extensively evidenced in documents found on the premises of Michel & Co.
Mr. Michel contended that over a seven-year period he was not aware of false
and backdated documents created in his own office. The Jurats may have found
telling a fax to Michel & Co. dated 5 December 1991 from Mark Allan and addressed "Attn
Peter." It began:
"Can you please send me
over letters dated at the relevant dates below suggesting that we should
approach those clients as they would be interesting contacts …".
Sample wording then followed together with
a list of thirty clients and the "relevant dates". All of these dates predate 1991, the
year in which the directors were introduced to Mr. Michel and, indeed, the
incorporation of Morgan Marketing which, in due course, purported to issue the
invoices. This fax was seen by Mr.
Michel (he wrote a date on it).
Numerous other faxes relevant to the directors' criminal conduct were
sent to Michel & Co during the material period marked for Mr. Michel's
attention.
43. Another aspect of the evidence to which the
Jurats may have attached significance was the acceptance by Mr. Michel that he
delivered £328,000 in cash to the Travco directors in London over a period of some years. This method of delivering funds,
together with the way in which Michel & Co., gathered up the cash in Jersey, could readily have been viewed by the Jurats as
indicating that Mr. Michel knew perfectly well that the money was the product
of criminal conduct.
44. Mr. Le Quesne sought to characterise the
evidence against Mr. Michel tending to show that he had the requisite mens rea as circumstantial and suggested
that the Commissioner ought to have given a warning to the Jurats of the danger
of convicting on the basis of such evidence. We do not agree. The crucial evidence was direct evidence
of Mr. Michel making and executing the arrangement with the Travco
directors. The Jurats saw and heard
the relevant witnesses, including Mr. Michel, giving their evidence and being
cross-examined. It was a matter for
them to decide whether or not mens rea
had been proved to the requisite standard.
In our opinion there was more than enough evidence (we have given only
examples of it) to support their finding of guilt.
45. Mr. Le Quesne made two further points under
this heading which do not readily fall within its scope but with which, for the
sake of completeness, we should deal.
The first concerned the fact that in his closing address Mr. Whelan
contended that the applicants had decided to divert the blame on to one
Charlotte Swanwick, and he continued "always to be deemed a safe bet when
the scapegoat is far away, long gone." Charlotte Swanwick had, it seems, worked
for Michel & Co., until about 1993 and, according to the applicants when
they gave their evidence at the trial, it was really Swanwick who had carriage
of the execution of the arrangement with the Travco directors in the early
years, the implication being that she may have known or suspected criminal
conduct but that she did not inform either of the applicants. In fact, although she was long gone in
the sense that by the time of the trial it was many years since she had worked
for Michel & Co. Mr. Whelan's remark as to her whereabouts did not sit
comfortably with the fact that she was named as a prosecution witness on the
billet and there had been no evidence that she was either far away or that her
address was unknown to the Crown.
46. Mr. Whelan's comment as to Swanwick's
whereabouts should not have been made.
But to suggest that what he said made the verdict against Mr. Michel
unreasonable or resulted in a miscarriage of justice is wholly untenable.
47. The second point was the implication that the
prosecution ought to have called as witnesses Swanwick and the Travco
directors' financial adviser who put them in touch with Mr. Michel. There is no substance in this
point. It was a matter for the
Crown to decide what witnesses to call at the trial. Neither applicant was in a position to
complain to us that they had required Swanwick to be tendered for
cross-examination and that the prosecution had failed to secure her attendance.
48. Turning to Mrs. Gallichan, Miss Fitz argued
that the evidence was insufficient to entitle the Jurats to be sure that her
client knew or suspected that the Travco directors were engaged in criminal
conduct. Mr. Whelan responded by
pointing out that the relevant Michel & Co. files revealed that over many
years she had been deeply involved in carrying out the arrangement made between
the directors and Mr. Michel. He
drew our attention to the extensive admissions Mrs. Gallichan had made when
interviewed by the police - for example:
that she had been involved in the preparation of false invoices for work
never done; that she had backdated correspondence; that she had sent bogus
chasing letters; that she did not query what she had been asked to do; that she
sent Travco documents to Mark Allan's home address; that viewed with hindsight
her own actions were not honest. It
is true that in her evidence at the trial she attempted to row back somewhat
from the admissions she had made to the police but it was a matter for the
Jurats having heard all the evidence, including Mrs. Gallichan's testimony, to
decide what Mrs. Gallichan did or did not know or suspect and it is not open to
us to take a different view.
Individual grounds: Gallichan
The Commissioner failed properly to direct the Jurats
on fraudulent conversion
49. Miss Fitz argued that having directed the
Jurats that "the question must be whether the extraction of the property
from the company was dishonest" the Commissioner ought to have gone on and
given them directions as to the meaning of "dishonest" and this he
did not do.
50. This submission is related to the submission
made by Miss Fitz, and based on R. -v- Ghosh and ors, in support of her
argument that the Commissioner applied the wrong test when considering whether
there was a case for her client to answer.
In Ghosh the Court of Appeal of England and Wales
considered the meaning of the word "dishonestly" in Section 1 of the Theft
Act 1968 and ruled that it was not intended to characterise a course of
conduct but rather a state of mind.
This meant that the test of dishonesty was subjective, although the
standard of honesty to be applied was the standard of honest and reasonable
people. As Lord Lane CJ put
it: "It is dishonest for a defendant to act in a
way which he knows ordinary people consider to be dishonest, even if he asserts
or genuinely believes that he is morally justified in acting as he did."
51. Miss Fitz contended that, although neither
"dishonestly" nor any cognate appears in a relevant definition of
fraudulent conversion in Section 20(1)(ii) of the Larceny Act 1916, the
Commissioner himself, having correctly identified dishonesty as an essential
ingredient of fraudulent conversion, ought to have directed the Jurats as to
what it meant and ought himself to have adverted to the Ghosh test when
deciding whether there was a case to answer.
52. In our view both these contentions must
fail. In Ghosh the trial
judge had directed the jury that it was for them to decide whether the
defendant had been dishonest by applying contemporary standards of honesty and
dishonesty in the context of all that they had heard in the case - an objective
test. In the instant case, when
dealing with this point in the course of his ruling on the application there
was no case to answer, the Commissioner made it clear that he was satisfied
that there was sufficient evidence of the directors' states of mind, viewed
subjectively, to permit the Crown case to go to the Jurats. Turning to his summing up on fraudulent
conversion the Commissioner posed the following question for the Jurats: "Did the three directors have a
deliberate fraudulent intention in their minds?" In our opinion this was, in the
circumstances, a perfectly adequate direction.
The Jurats were misdirected as to the proper approach
to be taken to the evidence of
Allan and Goncalves
53. The Commissioner considered that the two
directors who gave evidence should be regarded as accomplices of the
applicants. Without objection from
Mrs. Gallichan's then counsel he gave the Jurats a direction in the following
terms: "You should consider
[the evidence of Allan and Goncalves] with care, and I direct you that it would
be dangerous to convict the Defendants on their evidence alone, unless it is
corroborated; that is to say independently confirmed by other evidence. Nevertheless, if your view is that the directors'
evidence is not independently confirmed, and provided you bear in mind the
danger of convicting without it, you may rely on their evidence if you are sure
they are telling the truth."
54. Miss Fitz submitted that to describe the
directors as accomplices was wrong and that the direction given by the
Commissioner could only have served to confuse the Jurats. She went on to contend that the further
direction the Commissioner gave that the documents could provide evidence
capable of independently confirming the directors' testimony suggested that,
insofar as their oral evidence tended to exculpate Mrs. Gallichan, it could not
be relied on unless corroborated.
55. It is not necessary for us to decide whether
the directors and the appellants could properly be regarded as
accomplices. The direction as to
the danger of convicting on the basis of the directors' uncorroborated evidence
can only be regarded as having been in ease of the defence. There was nothing confusing about the
Commissioner's direction on this aspect of the case and what he said could not,
in our view, have been construed as suggesting that the oral evidence, insofar
as it was or may have been exculpatory, could not be relied on unless
corroborated.
The Commissioner misdirected the Jurats as to Mrs.
Gallichan's failure to mention Charlotte Swanwick's role in her police
interviews
56. We have already referred to the fact that in
his closing address Mr. Whelan contended that the applicants had decided to
direct the blame onto Charlotte Swanwick.
This was a reference to the evidence of the applicants at the
trial. Among other things, Mrs.
Gallichan was cross-examined on her answers to the police during her interviews
and it was pointed out to her that in the course of them she had not sought to
implicate Swanwick. Miss Fitz drew
attention to the Commissioner's comment in the course of his summing up that
Mrs. Gallichan "… did not, during those interviews, suggest that the
responsibility for doing all the relevant work lay with Charlotte
Swanwick." She argued that the
Commissioner ought to have gone on and given the Jurats elaborate directions as
to what they should do if they considered that Mrs. Gallichan had lied to them
on this issue in the course of her testimony. Miss Fitz relied on R. -v- Lucas
(1981) 73 Cr. App. R. 159, a decision of the Court of Appeal in England and Wales.
57. Mr. Whelan pointed out that at the trial Mrs.
Gallichan's then counsel had dismissed the suggestion that a Lucas
direction was required. We think
that she was right. Mr. Whelan
referred us to R. -v- Barnett [2002] EWCA 168; [2002] 2 Cr. App. R.
11. In that case the Court of
Appeal in England said that in the great majority of trials in which the
defendant gives evidence and the prosecution contend that the defendant is
telling lies a Lucas direction is inappropriate (see para. 20).
58. In Barnett the court referred, it seems
with approval, to "the four categories in Burge and Pegg" a
reference to an earlier Court of Appeal decision ([1996] 1 Cr. App. R.
163). These are the circumstances
in which a Lucas direction is usually required and they are as follows:
"1. Where the defence relies on an alibi.
2. Where
the judge considers it desirable or necessary to suggest that the jury should
look for support or corroboration of one piece of evidence from other evidence
in the case, and amongst that other evidence draws attention to lies told, or
allegedly told, by the defendant.
3. Where
the prosecution seek to show that something said, either in or out of court, in
relation to a separate and distinct issue was a lie, and rely on that lie as
evidence of guilt in relation to the charge which is sought to be proved.
4. Where
the prosecution have not adopted the approach to which we have just referred,
the judge reasonably envisages that there is a real danger that the jury may do
so."
The only category which might appear to
touch on the instant case is number 2.
But the Commissioner did not in any manner relate what Mrs. Gallichan
had not said in her police interviews about Charlotte Swanwick to the issue of
corroboration. All that he was
doing when he made the remark quoted was summarising what Mrs. Gallichan had
said in the course of those interviews.
In our opinion the directions contended for by Miss Fitz were not
required.
That taking all of the grounds advanced on behalf of
Mrs. Gallichan the conviction was unsafe
59. It has been pointed out repeatedly by this
Court that it is not open to us to apply this criterion. The Court is restricted to the statutory
criteria set out in Article 26 (1) of the Court of Appeal Law.
Conclusion
60. It was for those reasons that we dismissed the
two applications.
Authorities
Proceeds of Crime (Jersey)
Law 1999.
Terrorism (Jersey)
Law 2002.
Magill -v- Porter [2001] UKHL para.
67.
R. -v- Azam and Others [2006] EWCA
Crim 61.
Snooks
and Dowse -v- United Kingdom [2002] JLR 475.
Attorney
General -v- Edmond-O'Brien [2006] JLR 133.
Royal Court (Jersey)
Law 1948.
MacKenzie
-v- Attorney General [1995] JLR 9.
Foster
-v- Attorney General [1992] JLR 6.
Marriott
-v- Attorney General [1987-88] JLR 285.
In
re Esteem Limited [2003] JLR 188.
Larceny Act 1916.
DPP -v- Gomez (1993) 96 Cr. App. R.
359.
Theft Act 1968.
R -v- Ghosh [1982] 3 WLR 110.
Court of Appeal (Jersey)
Law 1961.
R -v- Hopkins-Husson 34 Cr. App. R.
47.
R -v- Lucas (1981) 73 Cr. App. R.
159.
R -v- Barnett [2002] EWCA 168; [2002]
2 Cr. App. R. 11.
Burge and Pegg [1996] 1 Cr. App. R.
163.