Petkar & Anor, R. v

These are the appeals of Rafiq Petkar and Martin Farquhar who were convicted on 17 June 2002 in the Crown Court at Middlesex Guildhall before HH Judge Smith and a jury, at a re-trial, by majority verdicts of 11:1 on two counts of theft. On 28 June 2002 both were sentenced to 5 years imprisonment on each count concurrent. A third count against Petkar of concealing or transferring the proceeds of criminal conduct was left on the file.

Petkar appeals against conviction with the leave of the full court and renews his application for leave to appeal against sentence. Farquhar’s renewed application for leave to appeal against conviction came before us on 20 June 2003 at the same time as Petkar’s appeal. Since that renewed application raised in part the same ground as that on which Petkar had already been given leave to appeal, we granted leave to Farquhar for that (and two other) grounds and were compelled to adjourn the hearing of Petkar’s appeal part heard so that what had then become two linked appeals could be taken together. Fortunately, this court could be reconstituted without too much delay and we heard the two appeals together on 25 July 2003. We then gave leave for a further ground of appeal to be raised by both appellants, arising from the recent decision of this court in R v. Jones and Jenkins [2003] EWCA Crim 1966 (6 June 2003). At the close of the hearing we announced our decision that both appeals were dismissed with reasons to be reserved. We then proceeded to give Petkar leave to appeal against sentence and allowed that appeal, substituting a sentence of 4 years and 6 months for the original 5 years. Our reasons for these decisions are now contained in this judgment.

Petkar and Farquhar were both employees of the Industrial Bank of Japan (“IBJ”) in the City of London until October 1998 in the case of Petkar and December 1998 in the case of Farquhar. At that time Petkar was 37 years old and Farquhar 28. On 27 November 1998 Farquhar transferred £420,000 from IBJ to an account at Barclays Bank in the name of Graceland Investments Limited, of which Petkar was the sole director. Barclays sent the money back to IBJ’s account with the Midland Bank on 1 December, but while that was in train and before that had happened, on 30 November Farquhar transferred a further sum of £420,000 from IBJ this time to a personal account in the name of Petkar at the Halifax.

Farquhar did not dispute that he had made both transfers, nor did Petkar deny that he had received them. However Petkar’s case was that he believed that the money belonged to Farquhar himself and came from Farquhar’s own bank, the Jyske Bank, and had been transferred to him to invest on Farquhar’s behalf. Farquhar’s case, on the other hand, was that he knew the transfers were dishonest but that he acted under the duress of Petkar and his associates. Theirs was thus a full cut-throat defence, for each defendant’s evidence, if believed, was deadly to the other; but the failure of any one defence did not automatically put the co-defendant in peril. Farquhar’s defence of duress could fail absolutely without harming Petkar in the slightest. Similarly Petkar’s defence could fail without impinging on Farquhar’s case of duress.

Following the first transfer to Graceland’s account there was a same-day transfer over to Petkar’s personal account at Barclays. Following the second transfer, a total of £310,000 was taken out in cheques or drafts or electronic transfers on 1 December 1998, much of that in payments to gambling casinos. In the event the only sums recovered following Petkar’s arrest was a balance of £21,526 in Petkar’s Halifax account and a further sum of £91,762 to the credit of Petkar’s trading account with Refco Overseas, a broker based in Bermuda: a total of £113,288. That £91,762 with Refco was what remained of a total of £125,000 transferred by Petkar to Refco: the balance of £33,238 had gone to fund margin losses previously incurred by Petkar on his own trading. What had happened to the remaining £273,474? Petkar’s evidence was that £40,330 had been spent on himself, either in settlement of outstanding bills or in fresh spending: this sum could be substantiated by reference to documents. He also accepted a certain amount of cash spending. All in all, he accepted that £198,000 of the £420,000 had been either spent on himself or transferred to Refco, but he maintained that the balance of £222,000 had been given back to Farquhar, at his request, in cash, in stages between 3 and 13 December 1998. These transfers were not documented. Two cash withdrawals from the Halifax account of £18,000 on 3 December and £24,000 on 9 December were both said by Petkar to have been handed over to Farquhar as part of this process.

That was the evidence at trial. At the time of his arrest and first interview on 31 December 1998, however, Petkar told the police, when asked what had happened to the money, that it had all been returned to Farquhar. He explained that the money had been sent to him by Farquhar from Jyske to trade with, but that he had returned it all. He would have profited from the trades generated had the matter proceeded, but as it was all the money had been returned. He was also asked if he had had a written contract with Farquhar concerning the terms on which he was to deal with the money, and he said that he did not.

A fortnight later, however, on 15 January 1999, Petkar contacted the police to inform them that not all of the money had gone back to Farquhar. He then gave them the essentials of the information we have set out above and faxed them a copy of the statement of his Halifax account. The information that he then provided to the police remained his case at trial. The Crown did not dispute that some £222,000 or approximately half of the £420,000 had been provided in cash to Farquhar. Thus at trial Petkar accepted that what he had told the police originally about returning all the money to Farquhar was a lie. Farquhar denied receiving anything, and there was no direct evidence, other than Petkar’s, that he did.

Petkar also accepted that he had lied in telling the police on the day of his arrest that he had no contract with Farquhar. In fact a document dated 30 November 1998 and purporting to be signed by Farquhar (there was ambivalent evidence at trial from two handwriting experts called by the defendants respectively as to whether the signatures were genuine or not) was already at that time in the hands of Petkar’s solicitor, Mr Murrell, and had been since 21 December. Mr Murrell was to give evidence that the contract came to him in connection with a dispute between Petkar and Barclays over the return of the first transfer and Petkar’s subsequent closure of all his Barclays accounts. That contract was not, however, disclosed to the prosecution until April 2000.

Farquhar, however, denied receiving any of the money. He had tendered his resignation to IBJ on 27 November 1998, the date of the first transfer, but had been asked to work out his notice. His last day at IBJ was 9 December. He left for Ireland on 12 December and arrived unannounced at the home of his girlfriend, Karen Sweeney, in Dublin on 13 December. He was later to say that he left to escape the attention of Petkar. He did not return to England until April 2001, nearly two and a half years later, after learning, as he said, from a friend who had watched the Irish equivalent of “Crime Watch” that he was wanted in connection with “something about London or the UK” but he did not know what. At that time Petkar was shortly due to stand trial.

Following his return he contacted the police through his solicitor and was interviewed. He began by denying any knowledge whatsoever of the two transfers of £420,000. (They had been made using the passwords of colleagues at IBJ.) Indeed, he claimed not to have known Petkar other than through limited contact within the work setting and denied any friendship or association with him. He denied asking Petkar to invest money on his behalf. He denied receiving any money from Petkar. When, however, the police informed him that they held transcripts of phone calls between him and Petkar and wished to question him about them, he declined on the advice of his solicitor to answer any further questions. Thus he made no admissions and said nothing about duress at that time.

His defence of duress was first exposed at a plea and directions hearing on 13 June 2001.

On 15 July 2001 there was an alleged incident at his home, where pellets holes were found in his front door. The next-door neighbour had heard nothing, but the next day a cartridge case was found. The police attended. On 25 September 2001, the night before he was due to give evidence at the first trial – which had been adjourned to accommodate him being prosecuted together with Farquhar – there was another alleged incident involving Farquhar and his car: three discharged rounds were found in the road, one bullet was found in the car’s head rest, another bullet had gone through the head rest, and a third bullet mark was found in the road. The police again attended. As a result the first trial had to be aborted: hence the need for a retrial. There followed a police investigation, conducted independently of the police force involved in the prosecution, into whether the shootings were the responsibility of Petkar, as Farquhar alleged, or whether they were arranged by Farquhar himself in an attempt to pervert the course of justice. The investigation proved inconclusive and led to no prosecutions. At the retrial the Crown therefore considered itself required to take an entirely neutral attitude to these events, and cross-examined neither defendant about them. However, the officer in charge of the investigation, DS Beverley Mills, was tendered for cross-examination and each defendant gave evidence and was cross-examined on behalf of the other about these incidents; and in all other respects the Crown clearly set before the jury its evidence that Farquhar had been a willing actor not driven by duress.

Among that evidence were the tape recordings and transcripts of telephone conversations between the two defendants in the period between 26 November and 5 December 1998. Their voices were identified. Thus on 27 November at 1631 Farquhar is talking to a friend by the name of Mike and says: “Going, everything is gone to plan, mate…I just resigned…There’s a lot going on, I’ll tell you when I see you.” When asked whether he had another job, Farquhar replied: “Yea, and some other things as well.” 27 November was the day of the first transfer and Farquhar’s resignation. On 30 November, the day of the second transfer, Petkar telephones Farquhar at 1054 and says: “Go into another room and call me back. I have a small problem, they’ve returned the 420 back to Midlands [IBJ’s bankers].” At 1140 the same day Petkar rings Farquhar again and says: “I just spoke to Barclays again this morning, just a few minutes ago, and they have returned the funds this morning, so they definitely will show up this morning or this afternoon or during the day some time.” Farquhar replied: “Yea so you still want me to make them do the thing again today…” At 1447 Farquhar called Midland Bank, asked if the £420,000 paid to Barclays the previous Friday was back into the IBJ account with the Midland and gave new instructions for the second transfer. On 1 December at 0906 Farquhar rang the Midland to chase whether the first transfer had come back. At 1016, during a conversation between Petkar and Farquhar, there is a reference to “everything is fine” and “you know our money”.

We will refer to other aspects of the evidence below.

The main ground of appeal in the case of both appellants relates to the judge’s directions pursuant to section 34 of the Criminal Justice and Public Order Act 1994. At the conclusion of the evidence and prior to final speeches during a discussion on the law the judge indicated that he intended to give the jury a Lucas direction on lies and a section 34 direction in respect of both defendants. There was no objection at that stage. During final speeches the Crown, then as now represented by Mr Milne, did not deal with the question of adverse inferences; but Mr Roche, then as now counsel on behalf of Petkar, did, giving them reasons why they should not hold Petkar’s lies in interview about the existence of the contract and the return of all the money against him. It is not clear what Farquhar’s counsel, then as now Mr Clarke, said on this subject in his final speech, but we will assume, with some hesitation, that he took the same line. On 14 June 2002, after final speeches but immediately before the summing up, Mr Roche on behalf of Petkar addressed the judge to the effect that he should direct the jury not to draw adverse inferences, alternatively to be precise as to the adverse inferences which might be in play. The judge rejected the first submission, and said he would be guided by the model direction set out in Archbold which Mr Milne drew to his attention. In the course of discussion, however, the judge had expressed concern about the multiplication of merely possible inferences. He said:

Two grounds of appeal are shared by both appellants. The first, which I shall call ground 1, is, as we have just indicated, that the judge’s section 34 direction was defective. Five complaints are made:

that the judge failed clearly to identify the relevant inferences which the jury might draw;

that the judge failed to warn the jury that they should not convict wholly or mainly on the strength of an adverse inference;

that the judge failed to direct the jury that they could only draw an adverse inference if satisfied that the prosecution had established a prima facie case;

that the judge failed to direct the jury that they could only draw an adverse inference if they concluded that the only sensible explanation for the defendant’s failure to mention the salient fact was that he had no answer at the time or none that would stand up to scrutiny; and

the judge failed to remind the jury of the explanations given by the appellant for the appellant’s failure to mention facts.

In all, it was submitted on behalf of both appellants that these defects either singly or in combination fundamentally flawed the judge’s section 34 direction.

The second ground shared by both appellants (“ground 2”) is that the judge failed to give the jury an appropriately structured, or indeed any, warning about the danger of relying on the evidence of each defendant as against the other: see Jones and Jenkins.

The other two grounds concern only Farquhar. One relates to the way in which the judge introduced in his summing up the evidence which Farquhar’s grandmother, Mrs Winifred Wells, gave by way of statement admitted, following her death, under section 23 of the Criminal Justice Act 1988. The judge said that her statement “is not accepted and has not been tested in court”. Mr Clarke submits that the judge was wrong to say that the statement was not accepted in circumstances where, although it was not accepted by Petkar, the Crown was merely neutral (“ground 3”).

Finally, Farquhar relies on some new evidence of Petkar’s accounts which only emerged after conviction in the course of confiscation order proceedings against him. A previously undiscovered personal account of Petkar came to light at the Royal Bank of Scotland (“RBS”), Ealing branch. Investigation showed that between October 2000 and June 2002 a total of some £177,000 had passed through this account. Mr Clarke submitted that these sums could explain the disappearance from sight of (at any rate a large part of) the £222,000 which Petkar said he had handed over to Farquhar in December 1998; and that if the jury had known of these sums they might have been more willing to accept Farquhar’s case that he had received none of the stolen money (“ground 4”).

Before we turn to each of these four grounds in turn, we need to say something further about the evidence given at trial.

Witnesses from the IBJ gave evidence about the two defendants and the bank’s operations. Petkar had been employed as a consultant from 1996 to 31 October 1998, when his contract expired, working on complex derivative problems. Farquhar worked in a different department, known as the cash management team, which was concerned with backroom preparation of accounting journals and matching of payments. He had commenced work with the bank on 6 July 1998 as a temporary, became a permanent member of staff shortly thereafter, and resigned, as we have said, on 27 November 1998. He was regarded as intelligent and hard working. He was not authorised to make payments.

A witness from Barclays Bank, Mr Sones, gave evidence about the first transfer and the circumstances in which that was returned. Barclays was suspicious about it, and Mr Sones spoke to Petkar requesting its return. By the time that Mr Sones had been advised that it could not be refused, Petkar said he had made alternative arrangements and wished to close his Barclays accounts, which he did on 30 November. In the circumstances all the arrangements which Petkar had made to deal with the money had to be reversed or alternatively were not acted on. Among those arrangements were instructions dated 30 November to make the following transfers: £100,000 to Petkar’s account with Citibank; £100,000 to Petkar’s account with the Halifax; £150,000 to Refco for “margin requirements”; and £26,000 in repayment of two loans. A critical question in the light of Petkar’s defence was whether there was any evidence that he knew that the first transfer had come from IBJ and not Jyske. Mr Sones said he was aware that the money had come from IBJ but was unable to say whether that had been discussed with Petkar. However, a letter generated by these transactions, which also involved sending a cheque to Petkar, referred to IBJ. Petkar accepted receiving the cheque, but not the letter. The letter was not found at Petkar’s home; but Mr Sones was confident that he had sent it with the cheque: it was the letter which carried Petkar’s address in a window envelope. A Barclays bank statement for the Graceland account, dated 2 December, detailing the transfer as coming from IBJ was found at Petkar’s home: but Petkar said he would have filed it without even looking at it.

There was also evidence about Petkar’s visits to casinos. These had increased in early December, and on one occasion he had Farquhar with him as his guest. And on 3 December he had bought himself a Mercedes and paid £4,000 as a deposit, using the transferred funds to do so among other use of those funds for his spending, and debiting his Halifax account for future instalments due in respect of finance for the car.

Ms Sweeney’s statement was also admitted under section 23 of the 1988 Act, because she had refused to come over from Ireland to give oral evidence. She said that Farquhar had turned up on 13 December 1998 and stayed about a fortnight. She expressed surprise that he had left his job at IBJ, and he said that he had a claim, but she was not sure what that was a reference to. He paid six months rent in advance for an apartment and was flashing money around. He suggested she should tell her mother that if the police came looking for him, she did not know him.

There was also evidence that in Ireland Farquhar opened a TSB account in the name of Mark Holland, assisted by a false job reference, a copy of a non-existent account in Rotterdam, a false accountant’s report and a copy of a false passport. He then changed his name on 25 February 2000 by deed pole to Ferguson, using an accommodation address in Croydon and used that name in forming a publishing company. He subsequently reverted to the name of Mark Holland in buying a house on 29 January 2001.

Petkar said that he had worked for some years in trading in financial markets. He had set up two companies of his own, one (Gracelands) for trading in derivatives and the other (Magenta Forex) for trading in foreign exchange. He had dealings with Refco. He had got to know Farquhar at IBJ. They talked about trading: Farquhar was interested and wanted to become a dealer. Farqhuar told him that he had money “outside” which he wanted Petkar to invest for him. Petkar gave him details of his bank accounts. A week before 27 November 1998 Farquhar phoned him (Petkar had left IBJ by then) to say that he was going to transfer £420,000 of his own money to him, from Jyske. He was pressed on how he could have thought that a young man in a relatively junior position at IBJ had so much money of his own: he replied that Farquhar had told him that he was just killing time at the bank and that he believed him.

As for the contract, Petkar said that was signed by Farquhar on 30 November in a bar in Piccadilly. Its termination date reflected the fact that the money would be needed for at least a year.

He was asked why the first transfer to Graceland had been transferred immediately to his personal account. His answer was that it was much easier to transfer money that is one’s own rather than a company’s. He was asked to explain the payment instructions generated by the first transfer: he said that having missed a projected deal because of the trouble with Barclays, he was going to use the money himself, and would repay Farquhar “from some fund or other”. Farquhar would probably have objected, but would have accepted it after he had explained how it would come back from a future trade. “I would have repaid every penny. I had the whole thing on a spreadsheet in my computer, which the police took, and now it is no longer accessible.”

He explained the large amounts of money paid to casinos out of the second transfer in the form of drafts as a device to enhance his credit, especially with potential clients: he denied that it was an attempt to launder the money.

He said that large amounts of cash had been paid to Farquhar. Despite the request to invest the £420,000 on Farquhar’s behalf, Farquhar had within a day or two of the second transfer requested him to return £100,000 in cash. The first tranche was handed over on 3 December, the same day he had withdrawn £18,000 from his account in cash. £143,000 of cash was generated from the casinos. He met Farquhar several times at night, mostly at his own flat, to hand the cash over, in all £222,000.

He was asked about a letter he had written to the Financial Services Authority (FSA) on 15 December, in which he said that he had only one client (a Mr Zimmerman). He said nothing about Farquhar. He admitted that was a lie.

On 30 December he wrote another letter, this time to the Halifax, in which he said that the £420,000 was a short-term loan from Farquhar, since repaid. He admitted that was also a lie.

It was only on 31 December that he discovered that the money had come from IBJ. That morning, after finding that his Halifax account had been frozen, he phoned head office and learned that that had been done at the request of IBJ. So he spoke to IBJ, who told him that the money had come from it. He spoke to a senior manager, Kevin Merry, at IBJ several times that day. He told him that he had returned all the money to Farquhar and that he had nothing to do with it. At that very time he still had over £100,000 of IBJ’s money. On the same day he was arrested and interviewed by the police and also told them that he had returned all the money to Farquhar, and that he had no contract with him, only a verbal arrangement. All this were also lies.

Why had he lied? The judge summed up his explanations as follows (at 49/50):

As for Farquhar’s defence of duress, he denied it. He denied having anything to do with the holes in Farquhar’s front door or with the car. He was never called for a police interview in respect of these incidents.

Farquhar said he had always worked in financial markets since leaving school, and wanted to become a dealer in shares and options. He got to know Petkar, was impressed by the Reuters screen that he had on his desk, and let him know of his ambition to become a trader. Petkar said he would put in a good word for him. They visited bars in the West End together, and went to casinos some three or four times. One night Petkar introduced him, albeit not by name, to a couple of black guys, who he thought were called Gary and Ritchie. He told him they were proper criminals, and had been involved in armed robbery. The week before 27 November Petkar had invited him to his flat. Gary and Ritchie were there.

Petkar led the conversation, talking about an investment scheme. After a while Gary interrupted: “Fucking tell him!” At this Petkar said that he wanted him to transfer money from IBJ for a few days, when it would be returned. He refused, not sure whether it was some kind of personality test. Gary took out a knife and started chopping cocaine, then waved the knife in front of him, threatening him if he did not do what was asked. Petkar explained that it would only be for a few days, and it was his job to tidy up the paperwork afterwards. Before he left, Gary grabbed him by the hair and threatened him again. A few days later he saw the two men outside his home, where he lived with his 82 year old grandmother, Mrs Wells, and was again threatened.

All the details of the two transfers were given to him by Petkar, albeit the decision to use his colleague’s password was his own idea: “I did not want my name all over the payments.” He resigned not out of fear of Petkar, but as a way of getting out of the problem. He was pleased to learn that the first transfer had failed. However, Petkar spoke to him on his mobile, ranting and raving, to get him to make the second transfer and threatening to send “the boys” to kick shit out of his nan. As for the transcribed phone-calls, Petkar could make himself sound nice, and he, Farquhar could sound brave.

He went to Ireland to get away from Petkar, but also as the one place “where you could find me”. The false names he used there thus had nothing to do with hiding from the police: to get a house it was necessary to use a “credit package” in the name of Mark Holland, and the change to Ferguson was because he did not like the name Farquhar. He never told Ms Sweeney to tell her mother that she did not know me.

As for his police interview on his return to England, he merely wished to say as little as possible, to be non-committal.

Section 34 provides:

This provision has given rise, in the light of authority, to a model direction recommended by the Judicial Studies Board of some elaboration, which is set out in Archbold, 2003, at para 15-334 as follows:

The fifth paragraph deals with an alternative or additional paragraph to deal with the situation where legal advice to remain silent has been relied upon, as it was in the case of Farquhar. In the present case, however, no complaint is made on behalf of Farquhar about the judge’s direction from this point of view, although it was much briefer than the model direction.

The judge, following a direction on lies which Petkar had sought to make in itself the subject matter of a ground of appeal, but on which he did not obtain leave to appeal, gave a section 34 direction in the following terms:

It will be straightway observed that the judge did not in that direction refer to the matters of explanation relied on by the defendants for their silence or lies, as per para 4 of the JSB model. He did, however, refer to them elsewhere, in summing up each defendant’s evidence as a whole (see paras 35 and 41 above). It is submitted on behalf of the appellants that that is not good enough.

We have been referred to a number of authorities about the section 34 direction. Thus in R v. Condron and Condron [1997] 1 Cr App R 185 this court said at 195A that it was desirable that a direction should be given along the lines previously indicated in R v. Cowan Gayle and Riccardi [1996] QB 373 at 381 as necessary in a direction under section 35 of the same Act concerning a defendant’s silence at trial. Lord Taylor of Gosforth CJ had there identified five “essentials”:

In the light of Petkar’s 15 January 1999 disclosures to the police relating to the disposition of the £420,000 (correcting his earlier lie at interview that all the money had been returned to Farquhar) Mr Roche on behalf of Petkar drew our attention to the relevance of the following remark of Stuart-Smith LJ giving this court’s judgment in Condron at 197E:

In R v. Birchall [1999] Crim LR 311, a case on section 35, the judge had failed in his direction to remind the jury that they had to find a case to answer before drawing any adverse inference from the defendant’s silence at trial (the fourth of Lord Taylor’s five essentials in Cowan). The appeal was allowed, since after the consideration of new evidence this court did not consider the Crown’s case called for an answer. However, this court, presided over by Lord Bingham CJ, referred, in the language of the report’s extract, to the model directions in these terms:

In R v. Chenia [2002] EWCA Crim 2345 (1 November 2002) on the other hand, where a section 34 direction again failed to contain the fourth essential relating to a case to answer, Clarke LJ said this (at para 53):

In the light of the current model JSB direction, it might be said that, in addition to or else in amplification or clarification of the statutory conditions emphasised in Argent and the five essentials emphasised in Cowan and Condron, the following matters should be set before a jury in a well-crafted and careful direction:

We now turn to the five defects of which complaint is made by Petkar, and mutatis mutandis by Farquhar (see para 16 above). We immediately observe that no complaint is made about Lord Taylor’s first two essentials, or Lord Bingham’s fifth and sixth statutory conditions, or points (i), (iv), (vi), or (viii) which we have derived from the model direction. Complaints are, however, made about Lord Taylor’s third, fourth and fifth essentials, and about points (ii), (iii), (v) and (vii) above.

The first complaint, which reflects point (ii) above, is that the judge failed clearly to identify the inferences which the jury might draw. In this connection Mr Roche and Mr Clarke (the latter, for efficiency, essentially adopted the submissions of the former) relied on R v. J.O. (CACD, 9 June 2000, unreported) where Tuckey LJ said (at paras 20/22):

J.O. was a case where the accused of 16 had given a no comment interview on the advice of his solicitor. At trial the accused waived privilege and his solicitor gave evidence that the accused had given him before interview a very similar account of the incident to that which the defendant had himself given the jury at trial. The judge failed to tell the jury that they should only draw an inference against him if it was something which he could reasonably have been expected to mention. That was the critical defect found in the direction, but there was also the failure to identify the relevant inference referred to in the citation above. In the circumstances, it is not perhaps surprising that this court there found the conviction to be unsafe.

In the present case, however, we do not think that there is force in this first complaint. The judge did illustrate as possible inferences that “he had not thought it up, he had not decided on his defence, he had not decided whether to make use of that particular thing”. However, he also said that he did “not wish to be specific here” and that ultimately any inference “is entirely a matter for you”. Possibly deliberately, he did not cite expressly the standard inferences which are found in both paragraphs 2 and 3 of the model direction, viz that “he had no answer at the time or none that would stand up to scrutiny”, which derive from within Lord Taylor’s fifth essential in Cowan. On reflection, we think that these inferences, which are evolved historically from the section 35 direction, are more suited to the case of a no comment interview than to the interviews given by either of the appellants here (although they would, we suppose, match Farquhar’s complete failure to suggest a defence based on duress). It can also be said that these standard inferences, perhaps for the very reason that they reflect a situation where an accused has effectively said nothing at all at his interview, if drawn, are likely to be particularly damning. In this case, on the other hand, the examples of inference cited by the judge well matched the significance of the appellants’ individual interviews seen against their ultimate cases at trial. The inferences suggested by the judge are of the kind which might contribute to a jury being satisfied of guilt, but are not in themselves so critical. Although the judge would have been entitled to have pointed out that Farquhar’s failure to mention a case of duress at his interview, if viewed by the jury as something which he could reasonably have been expected to mention, could well have invited the inference that “he had no answer at the time or none that would stand up to scrutiny”, there is always the problem in cases involving co-defendants of moulding a direction which does not expose one defendant more sharply than the other.

An example of a case in which the inference canvassed was not the standard “no answer then or none that would stand up to scrutiny” is R v. El-Delbi [2003] EWCA Crim 1767 (20 June 2003), where (at paras 79/81) this court accepted the inference of “had not had a chance to prepare his story” as being its equivalent.

We conclude that although it was unsatisfactory for the judge to leave other possible inferences in the air, this complaint, if it stood by itself, would not cause us to regard the direction as a whole as defective. However, it is closely connected with the fourth complaint, to which we come below.

The second complaint is that the judge failed to tell the jury that they should not convict wholly or mainly on the strength of an inference. This reflects Lord Taylor’s third essential, and point (iii) derived from the model direction. Mr Roche submitted that the judge’s language that “the prosecution must still prove the case against them and they have got to have something by way of evidence, other than merely…that the defendant did not mention part of his defence” was unsatisfactory and insufficient. If it is so, it is because of the absence of that “or mainly”. On balance we conclude that the language “must still prove the case against them” goes well beyond merely telling the jury that there must otherwise be a case to answer, and therefore that the judge’s direction in this respect meets the spirit of what is required.

The third complaint is that the judge had failed to direct the jury that they could only draw an adverse inference if they were satisfied that the prosecution had made out a prima facie case (see Lord Taylor’s fourth essential from Cowan). We consider that this requirement was well taken care of by that part of the judge’s direction which has been quoted in the previous paragraph. We reject this third complaint.

The fourth complaint is that the judge failed to direct the jury that they should only draw an adverse inference if they concluded that the only sensible explanation for the defendant’s failure to mention something was that he had no answer at the time or none that would stand up to scrutiny. Mr Roche referred to Lord Taylor’s fifth essential, to para 3 of the model direction (see point (v) above) and to R v. Daly [2001] EWCA Crim 2643, [2002] 2 Cr App R 14 at para 13, where Kennedy LJ said:

The essence of this complaint relates to that part of the direction which insists that no inference should be drawn (see under para 45 above as to the possible inferences) unless there is no sensible explanation for the relevant failure to mention facts subsequently relied on. In the present case there is nothing in the judge’s direction which reflects this requirement. And yet the defendants did put forward explanations for their failures, even if it would be understandable if the judge did not consider that they amounted to much. This complaint moreover goes together with the fifth complaint, which is that the judge should have reminded the jury of those explanations, which he only did in a separate part of his summing up where he dealt with the defendants’ evidence and without relating that material back to the earlier direction on the right to silence.

We think that there is substance in the combination of these complaints and that this amounts to a misdirection, even though this case was quite unlike Daly. There the accused made no comment at all in his interview, in circumstances where he was so advised by his solicitor and because his difficulty was that although he accepted presence and theft of some cards, he did not accept the theft of cash, nor any threat of violence.

The question therefore arises whether this misdirection undermines the safety of the convictions, but before we reach that question we will consider the other grounds of appeal.

The judge gave no direction at all to the jury about how they should regard, in the case of each defendant, the evidence of his co-defendant. He did, however, give a full direction about treating each of the defendants separately. He said:

At the time of this summing-up, the JSB model direction 26 headed “Defendant’s Evidence – Effect on Other Defendants” stated that where a defendant gives evidence in his own defence which damages a co-defendant’s case or tends to implicate a co-defendant in the commission of the offence for which he is being tried, the jury should be warned about that evidence in some such terms as the following:

Of course, where each of two co-defendants gives such evidence, it might on that basis be thought that the judge would have to mould his direction to give matching warnings in favour of B against the evidence of A, as above, and in favour of A against the evidence of B. However, note 2 to this model direction read as follows:

Prior to the Criminal Justice and Public Order Act 1994, it had been held that where one defendant gave evidence incriminating his co-defendant, just as in cases where an accomplice gave evidence for the prosecution, a full corroboration warning was desirable: R v. Prater [1960] 2 QB 464. That authority, however was questioned in R v. Knowlden and Knowlden (1983) 77 Cr App R 94, where it was held that that was not a rule of law but ultimately in the discretion of the judge: and that “the customary clear warning to examine the evidence of each co-defendant with care because each has or may have an interest of his own to serve” would in most cases suffice to ensure that the jury regarded the evidence in question with proper and adequate caution: per Watkins LJ at 100. In R v. Cheema (1994) 98 Cr App R 195, where the authorities were fully reviewed, Lord Taylor CJ said (at 202) that –

In Burrows, however, Cheema was distinguished. There two defendants were accused of possession of cocaine with intent to supply. The cocaine was inside a capsule within an Easter egg. Each defendant blamed the other for putting it there, and professed his own ignorance and innocence. Both were convicted and one appealed: his sole ground was that the judge had not warned the jury that particular care was required when one accused gave evidence against another. The brief report states:

A note on the case by Professor Birch analysed the judgment in Cheema and continued (at 49/50):

However, that two views of this are possible is indicated by the comment on Burrows of Archbold at para 4-404n:

Since then there has come the recent authority of Jones and Jenkins. There two defendants were convicted of murder. On the prosecution case it was joint enterprise; Jones’ case was that both had indeed attacked the victim, but had caused him only minor injuries and that the fatal injuries had been caused later, perhaps in a road accident; Jenkins’ case was that he had been present but not participant in any way, but in his evidence he acknowledged that the victim’s injuries were serious (at para 9). Auld LJ described these as “modified cut-throat defences” (para 3). One of the grounds of appeal raised by Jones (but not by Jenkins) was that the judge had failed to give the “conventional” warning of the danger of accepting possibly self-serving evidence of one defendant incriminating a co-defendant.

Auld LJ said as follows:

Mr Roche and Mr Clarke naturally relied strongly upon all of these remarks. Mr Milne sought to distinguish them, on the basis that the present case was covered by Burrows. He accepted that in this case, unlike Burrows, the judge had not even warned the jury to approach the evidence of each defendant against the other with extreme care: but he nevertheless submitted that the full warning suggested by this court in Jones and Jenkins (as to which it was only the third constituent that was missing in the present case) involved the jury in mental gymnastics with a consequent danger that the value of each defendant’s evidence in his own defence was watered down: this was particularly important to Farquhar, for only he could give evidence as to duress in his own defence. He submitted that the judge in this case faced the dilemma of the judge in Burrows and had given an adequate direction; and that in any event, although not stated explicitly, the fact that each defendant had an axe to grind must have been obvious to the jury.

We consider that there is much force in these submissions from Mr Milne, but also that it would be undesirable for us to depart, even if it were open to us to do so, from the decision of this court in Jones and Jenkins, and even though Auld LJ did qualify his remarks by reference to what justice demands on the particular facts of each case. We would, however, venture our concerns in this way. First, we would regard the danger of a warning regarding the evidence of cut-throat co-defendants not so much that which was canvassed and dismissed in Jones and Jenkins, namely that it may indicate to the jury that the judge had formed an adverse view as to their defences, but rather that it serves to devalue the evidence of both co-defendants in the eyes of the jury. It might be said that if the jury should regard the evidence of each defendant with a somewhat jaundiced eye on his “interest to serve” or his grinding axe, that goes far, in a real cut-throat defence, to undermine the defence of each.

Secondly, we wonder whether Auld LJ’s third constituent to his direction (the warning) lies easily with his fourth constituent: and thus whether the distinction which a warning to be wary of a co-defendant’s evidence is really designed to elucidate is that between evidence in a co-defendant’s own defence (which has to be treated like that of any other witness) and evidence which incriminates the co-defendant. Of course, and this was the problem faced in Burrows, sometimes it is impossible to distinguish between the two. In this case, for instance, how could Farquhar give evidence in his own defence concerning duress inflicted on him by Petkar and his associates without thereby directly incriminating his co-defendant? And how could Petkar give evidence in his defence, namely that of innocent receipt of moneys to invest, without saying that Farquhar had told him that the moneys were his own to dispose of and thereby directly incriminating Farquhar? In other cases, however, the incriminating evidence may not be directly connected with a defendant’s defence, and, interestingly, the example that can be given comes from Jones and Jenkins itself. The evidence of Jenkins that he had not participated in the assaults on the victim did not incriminate Jones at all: it was not as if Jones was saying that he was not a participant and it was all down to Jenkins. Jones’ defence was rather that whatever he (and Jenkins) had done was not serious and not the cause of death. What incriminated Jones was Jenkins’ admission, presumably in cross-examination, that the victim had received serious injuries. But that was not a necessary or direct part of his defence at all; nor is it at all clear why that admission may have been seen as serving his interests or grinding his axe. In these circumstances it might have been said that a warning in favour of Jones against his co-defendant’s evidence might have been unfair to Jenkins. Considerations such as these suggest that the moulding of such warnings to the particular facts of each case are very difficult.

In sum, however, we consider there was a misdirection in failing to give any warning of any kind as to how to regard the evidence of each defendant in as much as it incriminated the other, albeit by no means as serious a misdirection as it might have been if this case had not been of a real cut-throat variety, in its own way not unlike Burrows.

This ground concerns only Farquhar. Mrs Wells had died between the first trial and the retrial. Her statement was therefore admitted into evidence under section 23 of the 1988 Act. What she there had to say was directed in support of Farquhar’s defence of duress. She told of a number of phone calls from a man asking after her grandson: on one occasion the man asked if he was in Ireland and then said: “I am coming round to see you. I think it is time we had a chat.” She replied that she would call the police. She was frightened and changed the locks. These phone calls ended in July 1999. She also told of an incident when she saw a man, whom some 11 months later in court on 13 June 2001 she claimed to recognise as Petkar, sitting in a parked car about 70 yards away. She told her grandson about these things after his return to England.

Farquhar’s complaint is that the judge introduced her evidence in his summing up with the words that it was “not accepted”, when that was true only on the part of Petkar, while the prosecution was merely neutral. It is submitted that the judge should have made this clear, especially as the burden of disproving the defence of duress lay on the prosecution. The judge said:

In our judgment, however, the judge was concerned to mark the difference between the statements read under section 23 (such as Mrs Wells’ and Ms Sweeney’s), where there had been an issue as to their admissibility argued under sections 25/26, and other statements which were in truth “accepted” as dealing with matters which were not in dispute and which were therefore read under section 9 of the Criminal Justice Act 1967. The judge had made clear in each case as the various statements were read their difference in status, and in his summing-up he briefly did the same. Thus when he got to Ms Sweeney’s statement, he said:

We think that in this context the judge’s description of Mrs Wells’ statement as “not accepted” is sufficiently accurate. It was not agreed. And even if the prosecution’s attitude to Mrs Wells’ evidence in itself was neutral, in as much as that evidence was relied on to support a case of duress the prosecution was certainly not neutral. We therefore reject this ground of appeal.

Petkar’s RBS account at Ealing showed the following. It was opened on 2 November 1999, with a deposit of £200. That was 11 months after the second transfer. The account then remained dormant until October 2000, when a further £50 deposit was made. It was now nearly two years after the transfers from IBJ. Then between October 2000 and 11 June 2002 there are 21 transfers into the account totalling some £177,000. Mr Clarke submits that these £177,000 may represent the greater part of the £222,000 which Petkar said went to Farquhar and which cannot otherwise be accounted for.

The 21 transfers fall into three main divisions. First, there were seven deposits between 19 October 2000 and 6 March 2001 of sums between a maximum of £7,500 and a minimum of £745.05 and totalling some £26,000, admittedly from unknown sources. Secondly, there then followed two much larger transfers of £30,000 each, one on 8 March 2001 and the other on 3 April 2001. These came from Petkar’s Magenta Forex accounts. There were two such accounts. One was opened on 25 March 1999, the other on 7 March 2001. These accounts had large sums paid into them by named individuals or companies: Mr Clarke does not rely on any of those deposits as being from an impugned source. Between 1 September 2000 and 7 March 2001, that is to say during the period of the first seven transfers into the Ealing account, the first Magenta Forex account was dormant, the other had not yet been opened. It would seem therefore that those seven transfers totalling some £26,000 perhaps came from some other account being operated by Petkar, which has not come to light. Thirdly, there were a further twelve deposits between July 2001 and June 2002 of sums between £20,000 and £509. These are in the main traceable to Petkar’s personal account at the National Irish Bank (“NIB”), which was opened on 8 June 2001 with a transfer of IR£359,000 from the second Magenta Forex account. In one or two instances the paperwork to render the NIB account as the source is missing, rendering the attribution less than certain, but the pattern suggests that these were also sourced from NIB and thus ultimately from the Magenta Forex accounts.

The court received a full file of accounting documents to explain these matters, together with a witness statement from DS Douglas Reeman, who conducted the police investigation into Petkar’s financial affairs for the purpose of the confiscation order proceedings. The court, and Mr Clarke, also had the opportunity of questioning DS Reeman.

The overall effect of this material, therefore, is that the most that can be said is that transfers of some £26,000 only are from an unexplained source, and even those transfers occur some two years or so after the IBJ transfers. The Ealing account itself remained dormant for almost two years after the IBJ transfers. The court is therefore satisfied that the new material relied on by Farquhar, when seen in the context of all the new material which has come forward as a result of the confiscation order proceedings against Petkar, does not afford any ground for allowing the appeal. We do not think that this material, if it had been available to the jury, would have affected their view of the case in the slightest.

We return therefore to the question of the safety of the appellants’ convictions, in the light of our findings that there have been misdirections under the first and second grounds of appeal discussed above.

Mr Roche and Mr Clarke pressed on us their submission that in the light of those misdirections the court ought to find the convictions to be unsafe. They were able to point to a number of authorities to illustrate that submission, for instance Gill at para 32 and Daly at para 13, and Jones and Jenkins itself.

In our judgment, however, the misdirections we have found do not affect the safety of these convictions (nor, we might say, although no separate argument has been raised by reference to article 6 of the European Convention of Human Rights, do they render the trial unfair): see R v. Francom [2001] 1 Cr App Rep 17 at para 50 and Chenia at paras 58/59. The evidence against the appellants was overwhelming and we are satisfied that on the whole of the facts and with correct directions of law the only reasonable and proper verdicts would have been ones of guilty.

Thus in the case of Petkar, he accepted that he was the recipient of £840,000 (twice £420,000, before the first transfer was returned). He must have known that these monies came from IBJ and could not have come from Farquhar’s own funds. Farquhar was only 28 and a relatively junior employee, who had not been working long at IBJ. The letter and statement from Barclays Bank told him that the money came from IBJ. On the basis that he was honest, he must have taken an interest in where so large a sum of money had come from, especially as he was concerned with the return of the first transfer. His explanation for the receipt of the money was that it was with him to invest for Farquhar for at least a year: nevertheless he immediately makes arrangements, in the case of both transfers, for spending large sums on himself or on repayment of his own debts, or for passing large sums through the hands of casinos. That in itself was wholly dishonest. Unaccountably, Farquhar requests the return of large sums, amounting in all to £222,000: those sums are returned in cash in such a way as to leave no trace. No receipts are obtained from Farquhar. The whole transaction, for not far short of half a million pounds, is done in the most unbusinesslike of ways, and without any documentation – other than may be found in the contract, whose terms are never carried out, and about which Petkar admits lying in his interview. In addition to that lie, there was the lie about having returned all the money to Farquhar, repeated to the Halifax, IBJ and the police.

Although this whole appeal has been premised on the basis that those lies amounted to failures to mention facts, they were in truth not so much failures to mention facts as lies about matters which were discussed. As such they were covered by a Lucas direction which has not been the subject matter of this appeal and which told the jury in terms that a lie was “only relevant if you are sure it was told because he realised he was guilty” and that “People may tell lies for reasons which have nothing to do with the offence”. The jury were reminded about the explanations given by Petkar for those lies, even if that was done as part of the facts rather than directions of law. In these circumstances we view the judge’s misdirection in connection with section 34 as being less serious than it might otherwise have been.

As for Farquhar, he admitted transferring the money and his only defence was duress. There is no complaint on this appeal about the directions regarding that defence. The evidence against him was equally overwhelming. The transcripts are wholly inconsistent with his acting under duress. Although he ascribed his departure to Ireland as an attempt to avoid Petkar, he did not so explain his use of a false name to open a bank account and buy a house or the change of his name to Ferguson. Moreover, Ms Sweeney’s evidence was also very damaging, although we bear in mind that she had refused to come to England to give evidence and was not available for cross-examination. He also had to admit many lies: his pretence that he knew nothing about the transfers, for instance, or that he barely knew Petkar. Such lies, apart from their significance in themselves as redolent of guilt, were inexplicable if his true defence was duress. One then comes to his failure to mention the subject of duress at his interview: that is perhaps the one true example of a failure to mention a fact relied on by way of defence, but it is in its context a damning one. He had been away in Ireland for nearly two and a half years when he chose to return. He did so voluntarily and in his own time, as he says, even if his return was provoked by learning of the television programme which mentioned him. It is he, through his solicitor, who contacts the police. He is an intelligent man. It is inconceivable, in the absence of evidence of some telling explanation, that after all that time, and with the assistance of legal advice, he did not mention duress at the outset of his interview and well before the raising of the recorded and transcribed telephone conversations brought his interview to an end on his solicitor’s advice. What then was his explanation for not then mentioning his defence of duress, even in outline? In effect there is no explanation at all: at most it is a pretence that he did not even know why the police had an arrest warrant for him, as he had heard, and that “I said as little as possible in the interview. I was pretty noncommittal”. This barely counts as an explanation, and goes very far to undermine the defect in the judge’s direction.

As for a Jones and Jenkins warning, even on the basis that one was needed, we think that on the facts of this case the absence of one was venial. As Professor Birch said in her note on Burrows: “there would have been no need for me to be warned that both men might be trying to save their own skins by landing the other in it”. It is inconceivable that the jury did not understand the situation in the same way. In any event, as they had been told, the real decisions they had to take, subject to the burden of proof, rested on the credibility of each defendant’s own evidence: in the case of Petkar whether he might have thought that Farquhar was an extremely wealthy young man who had really agreed to invest his own money with him for a year and then almost immediately asked for a little over half of it back; and in the case of Farquhar whether he might have been forced to steal from his employer against his will.

For these reasons we dismissed both appeals.

We therefore reached the renewal of Petkar’s application for leave to appeal against sentence. This was entirely based on the delay to Petkar’s trial which had arisen out of Farquhar’s absconding to Ireland. Farquhar had been hiding there for nearly two and half years, from December 1998 to April 2001. There was then a further delay, while a trial which was finally going ahead against Petkar alone was put back to accommodate Farquhar’s return from Ireland. In the event the trial was itself put back a further nine months for reasons connected with an alleged defence of duress on the part of Farquhar which failed. Mr Roche therefore submitted that there had been a delay of nearly three and a half years through no fault of Petkar’s own.

In R v. Clark [1998] 2 CAR 137 at 140E/F long delay “say, of over two years” between being confronted with dishonesty and the start of trial was cited as a matter of mitigation personal to an offender. We thought that there was sufficient in this point to merit a discount of 6 months in the case of Petkar on the five year sentence handed down to Petkar and Farquhar alike by the judge. We therefore gave leave to appeal and allowed the appeal to that extent.