Case No: 2002 06987-9/B2
ON APPEAL FROM SOUTHWARK CROWN COURT
HH Judge Hardy
Royal Courts of Justice
Strand, London, WC2A 2LL
Before :
LORD JUSTICE THOMAS
LORD JUSTICE GAGE
and
HH JUDGE RICHARD BROWN DL
(Sitting as a Judge of the Court of Appeal Criminal Division)
Between :
THE QUEEN | Respondent |
- and - | |
K, G & M | Appellants |
Jeffrey V. Pegden QC, instructed by Reynolds Dawson, for the Appellant K
Dorian C. Lovell-Pank QC, instructed by Peters and Peters, for the Appellant G
Stephen Walters, instructed by Hodge, Jones & Allen for the Appellant M
Bobbie Parmjit Cheema and Christopher Foulkes, instructed by the Crown Prosecution Service, for the Prosecution
Hearing date: 16 July 2004
JUDGMENT
LORD JUSTICE THOMAS :
On 23 October 2002, after a trial of 133 days (including submissions before the jury were empanelled), the appellants were convicted of conspiracy to defraud. The appellant G was sentenced to a term of 2 years imprisonment and the appellant M was sentenced to a community punishment order of 200 hours. Although it is now a considerable time since the conclusion of the trial, the appellant K has not yet been sentenced; that is a matter for the trial judge to consider and not for us. Each appellant appeals by leave of the single judge on one ground and each renews the application for leave on other grounds.
The ground on which leave was given and, in our judgment, the only arguable point on the appeal, related to the application to the offence of conspiracy to defraud of the principle that the jury must be unanimous on the ingredients of the offence. It is necessary briefly to set out the factual background.
THE FACTUAL BACKGROUND
The fraud alleged against the appellants was a relatively simple one through which investors were induced to invest money in a company called [H] plc. Although at the trial none of the appellants admitted that the investors had been deceived, it was obvious that there had been a fraud; the only real issue in the case was whether and, if so, in what way, any of the appellants had been involved in it.
[The Court summarised the facts, the incorporation of [H] plc (subsequently renamed [H] International plc), its ostensible purpose for acquiring a product or process known as C, the preparation of a prospectus and the employment of professional advisers, the inducement of investors to purchase shares, the diversion of money and the insolvency of the company without it having acquired the rights to the product or process known as [C]].
It was the prosecution’s case that [H] was a hollow shell with no assets; the appellants and their co-conspirators had defrauded the investors either by selling shares to the investors or by participating in the operation of the company in the knowledge that shares were being sold at a time when they knew that [H] never had acquired the rights to the product or process known as [C], that it was therefore a hollow shell and that there was no prospect of a flotation.
[The Court summarised the defence case – a genuine intention to acquire the rights to [C] which was defeated by the sellers, the honest conduct of each of the appellants and the very different role of the appellants].
The prosecution called over 40 witnesses, 24 of whom were investors. M and G gave evidence and called 7 witnesses. K did `not give evidence.
We therefore turn to the only issue for which leave to appeal has been granted.
ON WHAT WAS THERE A NEED FOR UNANIMITY?
(a) The ruling by the trial judge on the indictment and the summing up
The indictment on which the appellants were charged alleged that the appellants between 1 June 1995 and 31 December 1997 conspired with F, [L] and others unknown
“to defraud shareholders of a company known as [H] plc and [H] International plc by falsely representing:
a. that the said company owned the rights to a product known as[C]
b. that the said company was formed to develop the product
that the said company would market and develop the product
that licences to market the product would be sold
that the said company was to be imminently launched on the Alternative Investment market
that the said company was oversubscribed before the launch on the Alternative Investment Market
that after the launch the share value would be many times the price
that the said company was solvent
that the shareholders’ purchase money would be used for the benefit of the company
that the said company was supported by reputable advisers
the extent of their shareholding
the nature of their personal investment”
During the course of the trial submissions were made on behalf of the appellants about the indictment culminating in the submission that the jury were not entitled to convict any of the appellants unless they were unanimous not only that that appellant was a party to the conspiracy to defraud the shareholders but also unanimous that that appellant had been party to an agreement to make at least one of the specific representations set out in the particulars to the indictment. During the course of the trial, the appellants had made submissions in respect of the indictment which the Judge had rejected.
They had contended that the particulars lacked precision. In rejecting this submission, the trial judge held:
“.. the particulars are not meant to be regarded as essential ingredients to be proved by the prosecution… the essence of this case is the alleged agreements (sic) and not the precise details in paragraphs (a)-(l) and I find no further clarification necessary.”
As part of the submission of no case to answer, the appellants contended that there was insufficient evidence of an agreement given that no representation was precisely the same. The judge rejected that submission in these terms:
“The agreement the prosecution have to prove is to defraud shareholders and the exact means are not meant to be found in paragraphs (a)-(l) of the indictment as I have already ruled earlier. Those paragraphs merely delineate the general ball park area in which the Crown may operate during the trial in suggesting what sort of agreement it was. As Miss Cheema said, ‘the crime is the agreement, not the particulars’.”
When he came to sum up to the jury, the Judge directed them:
“What is alleged here in this case by the prosecution is a dishonest agreement, or plot, entered into by these three defendants, together with others to defraud the shareholders of [H] plc and/or [H] International plc. The way they did that, say the Crown, is by falsely representing that a certain state of affairs about the company existed which in truth it did not. That state of affairs is encompassed in the twelve particulars set out at paragraphs (a) to (l) on the indictment. That does not mean to say that you have to find each and every representation there set out proved before you could convict. Those twelve representations are set out by the prosecution so that the court, the defendants and you the jury can see from the start of the trial the area, as it were the ball park, in which the alleged agreement is set. It is the agreement itself dishonestly to persuade potential shareholders to part with their money with the intention of carrying it out which must be proved rather than any precise particular set out in paragraphs (a) to (l).”
(b) The submissions of the appellants
It was submitted to us by Mr Lovell-Pank QC, on behalf of all the appellants, that the judge had been wrong in his rulings and misdirected the jury in his summing up; the jury had to be unanimous, before convicting any one of the appellants, that he had been party to an agreement that at least one of the representations set out in the particulars to the indictment would be made. The submissions can be summarised:
It was well established that a jury could not convict a defendant unless they were unanimous as to each ingredient of the offence.
The agreement which had to be proved for the purposes of establishing a conspiracy to defraud had to be sufficiently certain and precise; the description of the agreement given by the judge in the summing up as set out at paragraph 11was insufficiently precise or certain.
The agreement had been specified in the indictment by reference to the particulars which we have set out at paragraph 9; proof of the agreement so specified was therefore an essential element of the offence.
The jury had not been directed that they must be unanimous as to at least one of the elements of the agreement so specified in the particulars.
There had therefore been a misdirection to the jury.
(c) The requirement for unanimity on each ingredient of the offence
It is well established that a jury cannot convict a defendant of an offence unless they are unanimous on each ingredient of that offence. In Brown (1984) 79 Cr App R 115, the defendant was charged with fraudulently inducing investments contrary to s.13(1) of the Prevention of Fraud (Investments) Act 1958 by inducing persons to enter into agreements to buy shares by making misleading statements about the company. Each count of the indictment set out particulars of each false statement alleged to have been made to the individual investor; for example one of the counts set out as particulars (i) the statement alleged to have been made about the staff employed by the company (ii) the statement alleged to have been made about the assets of the company (iii) the statement alleged to have been made that there had been no material change of position or the prospects of the company (iv) the statement alleged to have been made that the company was absolutely entitled to the assets and (v) the statement alleged to have been made that the defendant was not aware of any matter which would affect the decision to invest. The jury were directed that it was sufficient if all of the members of the jury were agreed that there was a dishonest statement which induced the investment, even if they differed as to which of the statements had been made or relied on; it did not matter some thought that one representation had been made out and others thought that another had been made out. This Court held that this was a misdirection; as was made clear by this Court, it was a fundamental principle that in arriving at their verdict, the jury, even if they were not agreed as to part of the evidence, had to be unanimous that each ingredient necessary to constitute the offence had been established; that the making of a false statement was an essential ingredient of the offence charged in that case. The position was summarised by Eveleigh LJ at page 119:
“1.Each ingredient of the offence must be proved to the satisfaction of each and every member of the jury (subject to majority direction). 2. However, where a number of matters are specified in the charge as together constituting one ingredient in the offence, and any one is capable of doing so, then it is enough to establish the ingredient that any one of them is proved; but (because of the first principle above) any such matter must be proved to the satisfaction of the whole jury. The jury should be directed accordingly, and it should be made clear to them as well that that they should all be satisfied that the statement upon which they are agreed was an inducement as alleged.”
There are numerous other decisions on this issue; we were referred to some of these. It is, we think, only necessary to refer to two. In R v Mitchell [1994] Crim LR 66, the defendant was convicted of a count of unlawful harassment in which a number of different acts was alleged, each amounting to unlawful harassment. The judge had not directed the jury that they each had to be sure in respect of the same act. In allowing the appeal, Simon Brown LJ, giving the judgment of the court set out three principles to be derived from Brown and the cases that had followed it:
“(1) Where a number of different matters are set out in a single count, the judge should consider whether he should give the jury a direction that they must all be agreed upon the particular ingredient which they rely upon to find the defendant guilty of the offence charged (Brown (1984) 79 Cr.App.R. 115).
(2) That such a direction will be necessary only in comparatively rare cases. In the great majority of cases, particularly cases alleging dishonesty, and cases where the allegations stand or fall together, such a direction will not be necessary. It is of first importance that directions to the jury should not be overburdened with unnecessary warnings and directions which serve only to confuse them. (Price [1991] Crim.L.R. 465 and R. v More (1988) 86 Cr.App.R. 234 (HL).
(3) However, in an appropriate case where there is a realistic danger that the jury might not appreciate that they must all be agreed on the particular ingredient on which they rely to found their verdict of guilty on the count, and might return a verdict of guilty as charged on the basis that some of them found one ingredient proved and others found another ingredient proved, so that they were not unanimous as to the ingredient which proved the offence, a direction should be given that they must be unanimous as to the proof of that ingredient. (Lord Ackner in More (1988) 86 Cr.App.R. 234.)
Second and more recently, in R v Morton [2003] EWCA Crim 1501 a number of the decisions were reviewed. The defendant had been charged with murder; the case against him was that he had either himself caused the fatal injury or been party to a joint attack. It was contended that the judge should have directed the jury that they had to be unanimous as to whether he was guilty as the principal who had caused the injury himself or unanimous that he was guilty on the basis of secondary liability as a party to the joint attack. In rejecting that contention, Rix LJ held:
“In our judgment a Brown direction may be required in principle in all cases where a single judge or juror could not satisfy himself of guilt without improperly aggregating the factual allegations necessary to guilt. Thus in the context of Brown a single judge could not say to himself: I am not satisfied as to fraudulent dishonesty in the case of any single one of the statements relied on by the prosecution, but there is sufficient suspicion arising from the alleged statements in aggregate to satisfy me of guilt. In the context of Carr a single judge could not say: I am not sure that the defendant is the man who delivered the kick, nor I am satisfied that the defendant was acting unreasonably in defending himself with that punch, but I am satisfied in all the circumstances that he was guilty of manslaughter. If in such contexts a single judge could not convict a defendant, then a jury cannot any the more do so by aggregating the split votes of their body, if perchance some only (less than a required majority) were satisfied of any such route to guilt. But, in a case, say, of ‘Who did it?’, just as a single judge might be satisfied that the defendant was the culprit by seven out of the ten pieces of evidence relied on by the Crown, or by any other combination of such evidence, so a jury would not need to be unanimous as to the particular pieces of evidence which satisfied them of guilt, provided that all (or at least all in the majority on a majority verdict) were.”
The principle is, in our view clear, and we turn to consider its application to the offence of conspiracy to defraud.
(d) The wide ambit of the offence of conspiracy to defraud
Conspiracy to defraud is a common law offence; a helpful definition was given by Viscount Dilhorne in Scott v Metropolitan Police [1975] AC 819 at 1039 as
“An agreement by two or more by dishonesty to deprive a person of something which is his or would be or might be entitled, or … an agreement by two or more dishonestly to injure some proprietary right”
Nothing need be done in pursuance of the agreement, provided that the agreement encompasses an agreement to carry it into effect: Mulcahy v R (1868) 3 HL 306 at 317.
In Welham v DPP [1961] AC 103, a case now accepted to set out general principles and not merely principles confined to deceiving a person into acting contrary to his public duty (see Wai Yu-Tsang v R [1992] 1 AC 269 and R v Moses and Ansbro [1991] Crim App R 617) Lord Radcliffe set out the broad characteristics of the offence at page 123:
“ Now, I think that there are one or two things that can be said with confidence about the meaning of this word “defraud”. It requires a person as its object: that is, defrauding involves doing something to someone. Although in the nature of things it is almost invariably associated with the obtaining of an advantage for the person who commits the fraud, it is the effect upon the person who is the object that ultimately determines its meaning. This is none the less true because since the middle of the last century the law has not required an indictment to specify the person intended to be defrauded or to prove intent to defraud a particular person.
Secondly, popular speech does not give, and I do not think ever has given, any sure guide as to the limits of what is meant by “to defraud”. It may mean to cheat someone. It may mean to practise a fraud upon someone. It may mean to deprive someone by deceit of something which is regarded as belonging to him or, though not belonging to him, as due to him or his right. It passes easily into metaphor, as does so much of the English natural speech. Murray’s New English Dictionary instances such usages as defrauding a man of his due praise or his hopes. Rudyard Kipling in the First World War wrote of our “angry and defrauded young”. There is nothing in any of this that suggests that to defraud is in ordinary speech confined to the idea of depriving a man by deceit of some economic advantage or inflicting upon him some economic loss.
Has the law ever so confined it? In my opinion there is no warrant for saying that it has. What it has looked for in considering the effect of cheating upon another person and so in defining the criminal intent is the prejudice of that person: what Blackstone (Commentaries, 18th ed., vol.4, at p.247) called “ to the prejudice of another man’s right”. East, Pleas of the Crown (1803), vol.2, at pp.852, 854, makes the same point in the chapter on Forgery: ‘in all cases of forgery, properly so called, it is immaterial whether any person be actually injured or not, provided any may be prejudiced by it’. ”
(e) The practice in relation to indictments for conspiracy to defraud
From these well established principles, two issues were raised in the submissions made to us in relation to the application to the offence of conspiracy to defraud of the principles as to unanimity as set out in Brown and subsequent cases: (1) What degree of specificity of an agreement must the prosecution allege in the indictment and prove? (2) What was the agreement which the indictment in this case specified and which therefore had to be proved to the unanimous satisfaction of the jury (or the requisite majority)?
It is necessary before considering the first of those issues to set out the way in which practice in relation to indictments has developed as a result of the decision in R v Landy [1981] 1 W.L.R. 355; (1981) 72 Cr App R 237. The indictment in that case was in a form commonly then in use; it had charged the defendants with conspiracy:
“ to defraud such corporations, companies, partnerships, firms and persons as might lend funds to or deposit funds with Israel British Bank (London) Limited by falsely representing that the business of Israel British Bank (London) Limited was being conducted in an honest and proper manner, by knowingly employing such funds to the prejudice of the said lenders and depositors and contrary to the best interests of Israel British Bank (London) Limited, by fraudulently concealing that the said funds were being supplied and by divers other false and fraudulent devices.”
Lawton LJ in giving the judgment of the Court described the indictment in these terms:
“It is a form which is commonly used, particularly at the Central Criminal Court. In simple cases it may be adequate but in a complicated case it is not because it lacks particularity. There was nothing to show how the false representations were made or how the funds were employed to the prejudice of IBBL and its customers or what the nature of the concealment. Junior counsel for Landy asked for particulars at the beginning of the committal proceedings, the committal charge being the same as count 1 of the indictment. He was told that he would get all the information he needed from the leading counsel’s opening speech. Attempts to get particulars at later stages of the case were met with the same answer. We were told by counsel that this is the answer almost always given by prosecuting counsel. In our judgment particulars should have been given and for these reasons: first, to enable the defendants and the trial judge to know precisely and on the face of the indictment itself the nature of the prosecution’s case, and secondly to stop the prosecution shifting their ground during the course of the case without the leave of the trial judge and the making of an amendment. The words “ and by divers other false and fraudulent devices” are a relic of the past and should never again appear in an indictment. In criticising the form of indictment used in the case, we should not be taken to be adjudging that particulars of conspiracies to defraud should be set out in the same kind of detail as would be required in a statement of claim in an action for damages for conspiracy to defraud. What is wanted is conciseness and clarity.
In our opinion the particulars of the count charging conspiracy to defraud should have been in some such terms as these:
Particulars of offence
Harry Landy, Arthur Malcolm White, Charles Kay and Peter Lynn on divers days between September 30, 1968 and July 12, 1974, conspired together and with the late Walter Nathan Williams, Joshua Bension and the late Isaac Cohen to defraud such corporations, companies, partnerships, firms and persons as might lend funds to or deposit funds with Israel British Bank (London) Limited (“the Bank”) by dishonestly (i) causing and permitting the Bank to make excessive advances to insubstantial and speculative trading companies incorporated in Liechtenstein and Switzerland, such advances being inadequately secured, inadequately guaranteed and without proper provision for payment of interest (ii) causing and permitting the Bank to make excessive advances to its parent company in Tel Aviv, such advances being inadequately secured, inadequately guaranteed and without proper provision for payment of interest (iii) causing and permitting the Bank to make excessive advances to individuals and companies connected with the said Walter Nathan Williams and his family, such advances being inadequately secured, inadequately guaranteed and without proper provision for payment of interest (iv) causing and permitting the Bank’s accounts and Bank of England returns to be prepared in such a way as (a) to conceal the nature, constitution and extent of the Bank’s lending and (b) to show a false and misleading financial situation as at the ends of the Bank’s accounting years (v) causing and permitting the bank to discount commercial bills when (a) there was no underlying commercial transaction (b) the documents evidencing the supposed underlying transactions were false and (c) the transactions were effected in order to transfer funds to the Bank’s parent company in Tel Aviv.
Such particulars would have avoided such terms as “falsely representing” and “to the prejudice” which are imprecise and likely to confuse juries and would have made everyone aware of what the prosecution were alleging”
Since Landy, indictments have in general followed the form understood to have been suggested by Lawton LJ in that they gave more detailed particulars.
(f) The specificity of the agreement that has to be proved for the purposes of a conspiracy to defraud.
Having set out the practice of giving particulars understood to have been derived from Landy in relation to indictments, we turn to the first of the questions which we identified in paragraph 19 - the degree of specificity of the agreement that had to be alleged and proved by the prosecution.
It was submitted by Mr Lovell Pank QC on behalf of the appellants that a conspiracy which simply alleged an agreement to take money from victims by making misrepresentations was too vague; similarly an agreement as to the general form of the misrepresentations to be made would be too vague if formulated “by making misrepresentations about the economic health of the company and the interests in it”. It was necessary for the agreement alleged to be more specific. Taking an example from the facts of this case, it would not have been sufficient for them to agree to make misrepresentations about the assets owned by [H] plc; they would have had to agree to make misrepresentations about the rights to the product or process known as [C]. As therefore the agreement had to be specific as the misrepresentations to be made, then it was necessary for the jury to be unanimous that they had agreed to make at least one of those specific misrepresentations. It was no different to the position in Brown where the jury had to be unanimous as to the representation made.
However, the essential ingredients of the offence of conspiracy are the agreement to defraud a person of something, as we have set out at paragraphs 17 and18. The offence is quite different to the offence considered in Brown where the ingredient of the offence comprises the making of a specific statement; the appellants were not charged with the offence charged in Brown, but the wider charge of conspiracy to defraud.
In Hancock [1996] 2 Cr App R 554, this Court considered this same issue. The indictment charged the defendants with conspiracy to defraud people invited to become agents of a company called STVC by dishonestly and falsely representing a number of matters relating to the company and its intended business which were set out in particulars (i) to (ix) to the indictment; for example, one of the particulars stated “misrepresenting that [STVC] was a successful company, was sound financially, had no bank overdraft, and was ‘cash rich’”. The sole ground of appeal was that the judge had been in error in not directing the jury that they should reach unanimity (or the requisite majority) upon at least one of the particulars in the indictment. In giving the judgment of the Court, Stewart Smith LJ held at page 559:
“The question therefore is whether each of the particulars in the count constitute an essential ingredient of the offence charged, such that if any one of the particulars was proved the accused is guilty of the offence. Or as Mr. Farrer Q.C. put it: is there a real risk of different jurors convicting of different offences encompassed within the single count? The answer in our judgment is plainly ‘No’. The essential ingredients of the offence of conspiracy to defraud, or what the Crown had to prove to establish the actus reus of the offence is that each of the accused has entered into an agreement to defraud the agents. It was necessary to prove that there was an agreement to act dishonestly to prejudice the agents and that each of the accused was party to that agreement.
Since the case of Landy, in a case where conspiracy to defraud is alleged, the Crown are required to set out sufficient particulars of the offence to enable the defence and the judge to know precisely, and on the face of the indictment itself, the nature of the prosecution case and to stop the prosecution shifting their ground during the course of the case. But simply because particulars of an offence are given does not mean that those particulars are an essential ingredient of the offence. In a case such as this the particulars do no more than specify the nature of the case the prosecution seek to prove and the principal overt acts upon which they rely to invite the jury to infer that there was a dishonest agreement and that a particular defendant was a party to it.
We do not accept the submission that the agreement alleged was to represent STVC as a successful company, financially sound with no bank overdraft.., each particular being in effect a separate agreement.
We are fortified in our view that this was not a case where a Brown direction was required, because that was the view of all the experienced counsel in the case at trial….”
That decision was subsequently followed in R v Fussell and Mendoca [1997] Crim LR 812, where the indictment was in a similar form, without any further analysis of the position. However, the importance of that decision to the argument of the appellants was the commentary in the Criminal Law Review of the late Professor Sir John Smith upon which the appellants’ submission to this court was grounded:
“The decision in Hancock, to which the Court refers, seems much more doubtful. There the indictment alleged a conspiracy to defraud by dishonestly making 10 specified representations. It was held that a Brown direction was unnecessary. But if the appellants had been charged with the offences of obtaining property by deception and obtaining services by deception, which was the substance of the allegations, the case would have been indistinguishable from Brown. The Court, however, stated [as set out at paragraph 25 above].
The proposition that the particulars of the offence are not an essential ingredient of it is extraordinary. What is the offence if it does not consist in the particulars? What then if the jury (as distinct from the individual jurors) was not satisfied about any of the 10 specified allegations? If the court was correct in holding that a Brown direction was unnecessary, it follows that they could, nevertheless, properly convict. On what basis? That there were other, unspecified ‘overt acts’? Or (more likely perhaps) that they were satisfied in a general way that the appellants were a dishonest lot, up to no good? Neither basis seems at all satisfactory. First, an accused is entitled to know as precisely as possible what allegations he has to meet and it would be misleading if, having specified in some detail 10 such allegations, the prosecution were to rely on any others. Secondly, it is fundamental that the prosecution must prove its case to the satisfaction of the jury (subject to any majority direction, the whole jury) beyond reasonable doubt. It would be enough that the jury was satisfied as to one allegation, but it should be made clear to them that this, at least, is necessary.
It appears that at the trial, all the counsel were agreed that this was not a Brown case. By the time of the appeal defence counsel had changed their minds. It is submitted that the second thoughts were best, but their original opinion “fortified” the Curt of Appeal in their decision”
As far as the researches of counsel have gone, no challenge has been made to the correctness of the decision in Hancock, despite the criticisms of the late Professor Sir John Smith; indictments have, as in the present case, in many cases continued to follow the form understood to be required by the decision in Landy.
The judge directed the jury, as we have set out at paragraph 11, that they had to be sure that there was an agreement dishonestly to persuade potential shareholders to part with their money by false representing that a certain state of affairs about the company existed which in truth did not. Was that a sufficient agreement to establish a conspiracy? We consider that it was on the facts of this case. One way of approaching the question is to ask was there sufficient certainty for there to be an agreement? We consider that there was sufficient certainty; if the conspirators agreed to make dishonest representations about the company to induce investors to buy shares, that was sufficient to constitute a certain agreement; it was not necessary that the conspirators agreed more specifically on the misrepresentations that were to be made; the precise nature of the representations to be made or made do not, in contrast to the statutory offence considered in Brown, constitute ingredients of the offence of conspiracy to defraud.
(g) The agreement set out in the indictment
However, it was next contended by Mr Lovell-Pank QC on behalf of the appellants, in an attractive submission, that even if that were so, nonetheless the prosecution had in the indictment in this case set out a more specific agreement and having alleged that more specific agreement; proof of that agreement therefore became an ingredient of the offence on which the jury had to be unanimous; they relied on the decision of this court in Bennett (6 May 1999, 98/02782/Z3).
In Bennett, the agreement alleged in the indictment set out three specific stages of involvement by the conspirators:
“to defraud computer companies by:
dishonestly obtaining the account details of credit card holders
falsely purporting to be in possession of those details
dishonestly using such details to obtain goods and services”
As the court observed, the first stage might be done by someone with the opportunity to copy out the numbers on the credit card, though he may not have been a party to the second or third stage which involved the dishonest use of the credit card details so ascertained to obtain goods and services. The judge’s direction to the jury in summing up was not considered by the court to be clear; it might have been understood as directing them that a defendant would be guilty if he knew only one part of the agreement and did not know and agree to the other two parts. In giving the judgment of the Court, Henry LJ said:
“As a conspiracy is an agreement, and the parties to that agreement are the conspirators, so, with a criminal conspiracy the indictment must define the conspiracy and the summing-up must spell out the agreement alleged. Here as we have seen the agreement was particularised in the indictment as including the three stage of involvement set out above.
After setting out the direction to the jury, the Court concluded:
“We feel that we cannot be sure that the jury after this confusing direction would have understood that to be convicted a conspirator must have agreed to all three stages. We fear that the jury would or might have concluded that the agreement to take part in the first phase only would have been sufficient.”
Since that decision the editors of Archbold have pointed out (see paragraph 34-44 of 2004 edition):
“Care should be taken to differentiate between particulars which define the agreement which the Crown seek to prove, as in Bennett (…) and those which set out the overt acts from which the Crown invite the jury to infer the existence of an agreement. Some counsel have begun to limit the particulars to the terms of the agreement to be proved, followed by voluntary particulars which set out the principal overt acts relied upon. This practice, it is submitted, has the advantage of clarity and precision”
The last two sentences were added in the 2004 edition.
The question for us to determine is what was the agreement specified in the indictment preferred against these appellants. In doing so, we must have regard to the distinction between the ingredients of the offence and the particulars which give reasonable information as to the nature of the charge in this form of indictment as required by the decision in Landy. As Lawton LJ pointed out the purpose of the particulars was to set out the nature of the case and to prevent the prosecution shifting its ground. In Hancock, it was made clear that the particulars given in an indictment in the form in common use did not mean that those particulars became ingredients of the offence. The purpose of giving particulars is also made clear in the Indictments Act and the Indictment Rules: s.3 (1) of the Indictments Act 1915 provides that:
“Every indictment shall contain, and shall be sufficient, if it contains, a statement of the specific offence or offences with which the accused person is charged, together with such particulars as may be necessary for giving reasonable information as to the nature of the charge”
Rule 5 (1) of the Indictment Rules 1971 provides:
“Subject only to the provisions of Rule 6 of these Rules, every indictment shall be sufficient if it contains a statement of the specific offence with which the accused person is charged describing the offence shortly, together with such particulars as may be necessary for giving reasonable information as to the nature of the charge”
Rule 6 provides:
“Where the specific offence with which an accused person is charged in an indictment is one created by or under an enactment, then (without prejudice to the generality of Rule 5 of these Rules)
…..
the particulars shall disclose the essential elements of the offence….”
Bearing in mind the clear distinction which must be drawn between the ingredients of the offence and the particulars, we are satisfied that the agreement alleged in this indictment was that spelt out by the judge in his summing up. It was an agreement for a single specified purpose – to defraud potential shareholders to part with their money by making representations about the company that a certain state of affairs existed whereas in truth it did not. Particulars (a) – (l) were given only to provide reasonable information as to the nature of the charge and as to the principal matters upon which the prosecution would invite the jury to infer that there was an agreement to defraud and that each of the defendants was party to it; the particulars did not purport to define the agreement. The indictment and nature of the conspiracy alleged were quite different to the indictment and the nature of the conspiracy in Bennett where the indictment specified the agreement as having three particular stages and the involvement of the conspirators was referable to those stages.
We therefore see no reason to question the approach taken in Hancock nor, given the way in which this form of indictment has developed, to treat the particulars in any other way. We are mindful of the very forceful criticisms of the late Professor Sir John Smith. Although any criticism by such an authoritative commentator on the criminal law is entitled to the highest respect, we consider that his criticism of the decision in Hancock was misplaced; the principle in Brown is only applicable to the ingredients. The ingredients of the offence of conspiracy to defraud are different for the reasons given to the ingredients of the offence considered in Brown and the particulars in this indictment did not delineate one of the principal ingredients of the offence of conspiracy to defraud – the agreement. The rationale for the retention of the offence of conspiracy to defraud is that the criminality aimed at is the agreement, not the carrying out of the agreement; if a sufficiently certain agreement is made to defraud, that is the criminal conduct encompassed within the offence and no more need be proved; provided there is that certainty in the agreement, it matters not how the participants individually intended to go about or actually went about defrauding the intended victims of their money.
However, for the future, we agree with the editors of Archbold that much greater care needs to be taken in framing the indictment and especially in the definition of the agreement alleged. There must be a clear distinction between the agreement alleged and the reasonable information given in respect of it. If the form of the indictment set out by Lawton LJ is carefully considered it does not provide a precedent for the form of indictment used in Hancock or this case. In our view therefore, the indictment should identify the agreement alleged with the specificity necessary in the circumstances of each case; if the agreement alleged is complex, then details of that may be needed and those details will as in Bennett form part of what must be proved. If this course is followed, it should then be clear what the prosecution must prove and the matters on which the jury must be unanimous: see Bennett. Further particulars should be given where it is necessary for the defendants to have further general information as to the nature of the charge and for the other purposes identified by Lawton LJ in Landy. Such further particulars form no part of the ingredients of the offence and on these the jury do not have to be unanimous, as this court correctly decided in Hancock.
We are, for these reasons, therefore satisfied that there was no misdirection by the judge and therefore the sole ground on which leave to appeal was given fails.
Conclusion
For the reasons set out in the Appendix to this judgment [not released for publication] we refuse the renewed application for leave to appeal on all the other grounds advanced. We have considered the overall safety of the convictions of each of the appellants. We are satisfied that there was strong evidence on which each of the appellants were convicted of a serious fraud; we are satisfied that the convictions are safe. We therefore dismiss the appeal.
We were dismayed that the trial of what was a relatively simple fraud took 133 days; legal submissions at the outset occupied 24 days; the prosecution case took 64 days and the defence case 18; the balance was occupied in submissions, speeches, summing up and some days lost though illness. We are very grateful to counsel for their written observations as to why the case took so long. We have noted, with concern, that the legal arguments at the outset of the trial lasted 24 days; it is also a matter of regret that the position regarding the legal and commercial background to the formation of the company, its running and the proposed flotation were not agreed.
We cannot, however, on the materials before us determine the responsibility for the length of this trial or the time that was occupied in legal argument. However we must point out that this case is yet another example of a case which has taken far, far too long for what was a relatively simple fraud. It underlines yet again the urgent need for a different approach by the lawyers and advocates responsible for the preparation and conduct of this type of case and for adherence to the matters relating to the conduct of a trial summarised by the Lord Chief Justice in his Foreword to the Criminal Case Management Framework (July 2004).
There is one further point. The requisite forms in relation to the means of K and G for the purposes of representation orders had not at the time of the hearing of the appeal been lodged. We will consider such representations as may be advanced for the failure and the Orders as to defence costs which we should make when this judgment is handed down.