Kappler, R. v

On 14th October 2003 in the Crown Court at Teeside, the appellant, Volker Rolf Kappler, was convicted on two counts of kidnapping and blackmail and sentenced to 10 years imprisonment on each count. He received a 12 month consecutive sentence for breach of a suspended sentence imposed on 19th November 2002 for the offence of false accounting. He now appeals with the leave of Wilkie J; his leave is limited to four grounds of appeal. He also seeks an extension of time (of more than 2 years) for a further ground of appeal together with an application to adduce new evidence. The facts, as recounted by the complainants, were horrific indeed.

The complainants, Mr Wood and Mr Langhorne said they were at business premises owned by Wood in Hartlepool on 14th March 2003. Shortly after 2.00 pm three men entered the premises purporting to be from the Customs and Excise Investigation Squad. Wood and Langhorne said that they were cautioned, told they were being arrested, handcuffed and removed to the rear of a transit van which was parked outside the premises.

After they were placed in the rear of that vehicle it very quickly became apparent that the three men were not Customs and Excise officials. They assaulted Wood and Langhorne and informed them that they were going to be taken to Liverpool. They were subjected to threats of violence and for most of the journey had a pillowcase over their heads. They were driven to North Wales and were led, blindfolded, into a factory where they were forced to undress, sit naked for a time and were given a quantity of brandy, clothing and training shoes to wear. They were then led separately into an office of the unit where they were forced to sit in a chair and there was a conversation, the pillowcases having been removed.

They both alleged that they recognised the appellant, Kappler, being a person well known to both of them and with whom they had had business dealings. Putting it shortly, the demand which the appellant made was that they pay to him £600,000, a sum which they were able to afford because of recent VAT repayments, received by companies controlled by them, about which he had come to know. The sum of £600,000 was alleged to be a sum owed to Kappler by a Mr Thompson, a business associate of Wood and Langhorne, a debt owed by Thompson to Kappler arising out of some business in relation to the purchase of plastic for piping to be sold in Dubai. The allegation was that Wood was given a piece of paper (Exhibit 1 at the trial) with details of the bank account that was to receive the money. That bank account was an HSBC bank account held by a company, Flextrade Limited, or a business, Flextrade, which was the appellant’s.

It was common ground that a telephone call had been made from the appellant’s business premises in North Wales, at about 7.36 pm that night, to the HSBC customer care line. After the demand had been made, Wood and Langhorne were allegedly driven for about 45 minutes in the van again and dumped in a field in the Wirral. They contacted their relatives and friends, including Mr Thompson, and another person, Mr Golightly, who were both witnesses at the trial. Golightly drove with Thompson as passenger to the Wirral to collect Wood and Langhorne from Birkenhead police station where they had been taken, the police having been alerted by Wood and Langhorne by telephone. Both Wood and Golightly gave evidence that, after they had returned to Hartlepool, they together sent a fax giving instructions to transfer £600,000 to Flextrade. No copy of such fax as sent or its cover sheet was ever found or produced at trial, although there was what purported to be a plain copy. The defence said no such fax was ever sent. The only fax ever produced was a later fax purporting to countermand the original instruction.

The issue at the trial was a stark one. Kappler said that the whole thing was a fabrication and that Wood and Langhorne wanted him out of the way for various nefarious reasons of their own. Effectively the allegation was that there was no kidnapping, there was no blackmail, that Wood and Langhorne had either invented the incident or, if it had happened, they were wrongly blaming the appellant. It was common ground between the Crown and the defence that Wood and Langhorne (and indeed Thompson) were persons who had been involved in serious VAT fraud. This fraud was made possible because Thompson’s company, VPS UK Ltd (“VPS”) acquired material for plastic piping (from Superflexibles, a company owned by the appellant) paying VAT on that material. VPS then manufactured the piping and sold it partly to Asgard UK Ltd (Wood’s company) and partly to Formel Ltd (Langhorne’s company) for a sale price plus VAT. These companies then purported to export the piping to Tazar Industries in the United Arab Emirates which was, however, Thompson under another name. No VAT is chargeable on exports and all 3 companies submitted claims for VAT repayment. The fraud itself was more complex but no further recitation of it is called for here. Wood/Asgard received about £1.25 million and Langhorne/Formel about £0.5 million,

Not surprisingly, the Crown were concerned to bolster the evidence by any independent evidence they could present. One apparently independent witness was Golightly who was not suggested to be part of the VAT fraud who said he had seen Exhibit 1 and had been told by the complainants that the appellant was the kidnapper and the blackmailer as soon as he had met them. He also said that he had sent the missing fax, on Wood’s behalf, from his own fax machine.

Other evidence focused on the clothing which Wood and Langhorne were wearing when they were picked up by the police and in which they said they had been placed by the kidnappers, after being stripped naked. The Crown sought to demonstrate by various means that the clothing had been purchased that afternoon from an ASDA shop nearby and to that end sought to link that purchase with the appellant in two ways. It was common ground that the purchases had been made just after 4.00 pm and had been made by two different persons at different tills at almost the same time. There was evidence in the form of video and photographic stills of a person, apparently at about that time, making a purchase and evidence was called from an expert Joanna Morley with a view to asking her to compare the clothing shown being worn by that person with clothing which it was accepted was being worn by the appellant when he purchased some petrol at a service station near to Chester, approximately an hour and 20 minutes later.

Her evidence included a description of clothes and a statistical analysis of the numbers of persons she said she saw in ASDA. She used given degrees of certainty, ranging from being certain down to not being able to say. She pitched her conclusion that the clothes being worn by the appellant at the service station were the same as or similar to the ones seen worn by the person at ASDA, as being at about the middle of those five degrees of certainty.

As far as the second person whom it was said was purchasing the clothes at about that time, there was video evidence which was said to show a black man making a purchase at one of the ASDA tills at almost the same time. There was no further evidence called in respect of that person. The appellant had admitted that he had been in the company of a friend of his, Lloyd Simpson, at some point during that afternoon. Mr Simpson is a black man and was described as being 6 foot 1 tall and of heavy build. The police had interviewed Mr Simpson and had taken a statement from him.

At the plea and directions hearing the prosecution decided that they did not propose to call him. Notwithstanding that decision, the prosecution nonetheless continued to present the case on the basis that it could be inferred from his general appearance and description that the man purchasing the goods at ASDA at about the same time as the appellant was Mr Simpson and that from that coincidence it could be further inferred from the evidence that it was the appellant who was in ASDA making the purchases of clothing which subsequently Wood and Langhorne were forced to wear. An application was made that the evidence of the video relating to the black person should be excluded. That application was refused.

On 10th November 2004 Wilkie J granted leave to appeal on four grounds only. The first ground of appeal was based on the misapprehension that the Crown only said that they were not prepared to call Lloyd Simpson as a witness when the trial was about to start. Now that it is apparent that the Crown made their position plain at the plea and directions hearing, this ground is no longer pursued. Grounds 2-4 are as follows:-

“(2)

The learned judge erred in law in failing to exclude reference to the video footage of the black man purchasing the trainers;

(3)

It was inappropriate to allow the Crown to speculate that the black man in the video footage was Mr Simpson when the Crown had not called him as a witness;

(4)

The learned judge erred in law when refusing the defence application to discharge the jury”

Indications that other grounds, refused by Wilkie J, might be renewed were not pursued before us.

Since the matter was before Wilkie J the appellant has privately instructed a chartered accountant Mr Kevin Mawer to prepare a report of his investigations into VPS. He had been first appointed by Customs and Excise on 7th February 2003 to assist in their investigations into the VAT fraud perpetrated by VPS, Asgard and Formel and he was later appointed liquidator of VPS to recover what he could for the creditors after it was wound up on 12th August 2003.

For the appellant, Mr James Sturman QC did not formulate any grounds of appeal in relation to the way the judge summed up the evidence to the jury. He pointed out, however, that the judge was not entirely loyal to the spirit of the Crown’s formal admission that Messrs Wood, Langhorne, Thompson and their companies VPS, Asgard and Formel were full participants in the VAT scam. This was, no doubt, because as the judge recorded in para. 83 of his summing-up, Messrs Wood and Langhorne stoutly denied any wrongdoing. As a result the judge felt compelled to put the matter somewhat less bluntly than he could (and perhaps should) have done at the beginning of his summing-up (para. 43) in the following way:-

“If they – Wood, Langhorne and Thompson – were all in a crooked scheme together, if they were, does that make it less likely that the Defendant was doing what they say he was? Does it begin to provide a reason why they should frame him as opposed to the real kidnapper? If that part of the case and the VAT fraud disclosed anyone else who might want to do to Wood and Langhorne what was done to them well so be it, then it is clearly highly, highly relevant. On the other hand does the whole thing backfire on the Defendant?”

The truth is that Wood, Langhorne and Thompson were undoubtedly involved in a crooked scheme together and it might have been as well if that had been clearly stated.

It was against this background that Mr Sturman formulated a new Ground of Appeal (Ground No 11) in the following terms:-

“The evidence of Mr Mawer and the documents he has produced give such concern about the honesty and credibility of the witnesses that the conviction should be quashed.”

He sought an extension of time and leave to present this additional ground. He explained that the substance of this ground related to Mr Jonathan Golightly’s evidence. His evidence was important because, although he claimed to know Wood and Thompson as friends, he said he had no or no substantial business dealings with them. It was not suggested that he had participated in the VAT scam or derived any personal benefit from the fraud. Nevertheless in the light of his close friendship with Mr and Mrs Wood, when he received a telephone call from Wood at Wood’s house asking for both the complainants to be fetched from the Wirral, he took Thompson with him because he did not want to go alone; he saw Exhibit 1 implicating the appellant and claimed that he had sent the fax to Dubai asking for £600,000 to be paid to Flextrade with immediate effect. Mr Sturman said that in two separate places, the judge’s summing-up tended to promote this evidence as being almost independent evidence, separate from the possibly tainted evidence of Wood, Langhorne and Thompson.

Thus in para. 109 the judge naturally told the jury that if they found that Messrs Wood, Langhorne and Thompson had told serious material lies in their evidence, it would not be safe to convict the appellant unless the parts of their evidence which implicated him were supported by independent evidence. In para. 110 the judge said that there was evidence capable of being independent evidence and the first example he chose in para. 111 was:-

“Where was the blackmail money going? If you accept Mr Golightly, Mr Golightly said he was present and sent the fax transferring the money to Flextrade. The sole account holder for Flextrade is Mr Kappler.”

The judge returned to this matter in para. 327 on the following day of his summing-up referring to a part of Mr Golightly’s evidence:-

“. . . . He [Mr Golightly] said ‘We were going to go to my house and use my lap-top. He used my lap-top to write a fax to someone in Dubai to transfer a sum of money quickly but any questions were be to be by ‘phone as soon as possible. I saw the document that was then faxed. The system is that a hard copy’ – that is a piece of paper document – ‘is created and then that is put through the fax machine and I actually sent the fax’, and he said, ‘I saw the fax’.

328.

He was asked to look at the document which you have got, JAW4 which is our Exhibit 2 and I would like you to look it up, please. It is behind divider number nine. There should be a few documents behind that divider and the one that I want you to look at is marked JAW4.

329

That document was shown to Mr Golightly and he said, ‘That is the fax that was sent by Mr Wood. I actually sent it.’ Now, if that is right, it is important evidence because what does it say? It is telling Mr Devan Balsara, the account manager, to ‘transfer £600,000, Great British pounds, from my account number’, such and such, ‘to Flextrade Plastics, account number’, such and such, sort code such and such, swift code such and such, ending ‘ZZ’. ‘The transfer must be with the customer by Tuesday, 18th March at latest. Please instruct the customer’s bank as soon as the money is despatched. The matter is very urgent, so please act quickly so I can reach my deadline. Any problems right me on mobile’. So if Golightly is right when he says, ‘that is the fax that I sent’, it is very important evidence, is it not?

In the light of what Mr Mawer has now discovered about Golightly we thought it right to grant the appropriate extensions of time and leave to present the new Ground 11. We also thought it right to read Mr Mawer’s report, so far as it related to Golightly (and, indeed, generally) even though the evidence relating to him was not in a strictly admissible form at this stage. This was because we were satisfied that any relevant evidence, which Mr Mawer could give, could be put in admissible form without difficulty.

We were also furnished with a transcript of Golightly’s evidence. Apart from the matters we have already summarised, he said:-

(1)

he was a close personal friend of Wood but had never been in business with him;

(2)

he was on friendly terms with Thompson and in December 2002 had borrowed £105,000 from him to buy a coal washing plant for a Welsh mine in which he had an interest;

(3)

the money was paid to one of his companies Courtney Industries Ltd and then transferred to one of Wood’s companies in Dubai, S A Holdings Ltd;

(4)

the money was repaid by Golightly, on Thompson’s instructions, to a Mr Collier because Thompson said he was no longer in charge of VPS and Mr Collier was;

(5)

he knew nothing about any VAT scam or any dealings between VPS, Asgard, Formel and Tazer.

It is now submitted that Mr Mawer’s report presents facts which tend to show that it is arguable that Golightly was a beneficiary of the fraud and therefore, to that extent at least, a participant in the fraud. If that is so, then it is said to be further arguable that Golightly should not have been presented to the jury as being able to provide independent evidence of the kidnapping and the blackmail. In short if what is known now had been known at trial, the trial would have taken a significantly different shape and the summing-up would have been in a significantly different form.

Relevant information from Mr Mawer’s investigation is as follows:-

(1)

Courtney was incorporated on 15th or 18th August 2002 but has never filed any audited accounts or company returns; according to Golightly the company’s bank account was closed in early 2003 but he is unable to provide any bank statements for the company;

(2)

the address recorded for Mr Collier at the time he allegedly became a director of VPS is the same address as that of Golightly, 5 Cestria Way in Woodham Lee;

(3)

when asked to explain how it was that a further payment of £2,048.00 was made by VPS to Courtney on 13th January 2003, Golightly initially said in a letter of 4th December 2003 that it was rent received from Mr Collier for the period September-December 2002; in later correspondence he claimed the payment related to PVC resin;

(4)

in evidence during the trial Thompson and Golightly both said that interest of £15,000 was payable on the loan from VPS to Courtney; to Mr Mawer Golightly stated that interest was only payable if the coal washing plant was actually bought in Dubai;

(5)

not only did the sum of £105,000 lent to Courtney by VPS end up first in S A Holdings (one of Wood’s companies) but it was apparently then transferred to Tazar, one of Thompson’s companies;

(6)

in a letter of 4th December 2003, Golightly says he met Mr Collier once only (for some reason at Scotch Corner, in spite of the common address) to repay £105,000 in cash which took 3 days to collect. A letter to Golightly from his bank of 3rd February 2004 records, however, that he withdrew sums totalling £90,000 over a period of two weeks between 30th April and 14th May 2003. when Mr Mawer asked Golightly for his authority to enable the bank to give information directly to Mr Mawer, Golightly refused;

(7)

despite requests Golightly has never provided any proof that any coal washing plant in Dubai ever existed; in his evidence at trial he said it was not purchased because the vendors increased the price; to Mr Mawer he said it was because an important element of the plant was missing. A plant was bought in the UK on 4 February 2003;

(8)

it must be doubtful whether Golightly ever paid £105,000 to Mr Collier; there is no evidence that Mr Collier ever existed.

In the light of all this material Mr Sturman submitted that the likelihood is that Mr Collier never existed, or if he did, he was a mere nominee for Golightly who has benefited from the fraud to the tune of £105,000. Had all this material been available to trial counsel, it would certainly have been put to Golightly with some plausibility that he knew about the VAT fraud or at least profited from it in an unexplained way and that his evidence could not have been presented as being evidence independent of Wood, Langhorne and Thompson.

Mr Peter Johnson for the Crown submitted that most of the evidence unearthed by Mr Mawer was available to the appellant’s then counsel, that the only really new information is that Collier and Golightly shared the same address and that that is too slender a basis for quashing a conviction reached by the jury after a 3 week trial when the issue was a straight swearing-match between Wood and Langhorne on the one hand saying that it was indeed the appellant who was present during the kidnapping and who made the demand for £600,000 and the appellant who denied it on the other. This is a forceful submission but the fact remains that, in the light of the freshly available material, it is too simplistic to say that the only fresh fact is the common address of Golightly and Collier. Taken together the 8 considerations set out in paragraph 20 above do mean that Golightly’s evidence has to be seen in a different way from that in which it was presented at trial. Items (3)-(7) contain matters which are genuinely new evidence which could not have been available at trial. In the light of that new evidence, we cannot feel sure that the jury would necessarily have convicted.

It is fair to add that Mr Mawer’s report is not by any means confined to considerations of Golightly’s evidence. Mr Sturman did not find it necessary to address oral submissions about his conclusions in relation to Wood, Langhorne and Thompson and we do not rest our judgment on those conclusions. Some of them do, however, have some force if they remain unanswered.

Mr Johnson also submitted that the judge had not presented Golightly as capable of giving evidence which the jury could rely on as independent. We can only say that in our view the judge did do just that. We hasten to say that he is not to be criticised in any sense for so doing since it is only in the light of the new material that any serious doubt can be cast on its independence.

Mr Sturman recognised that even if the conviction were quashed, there would have to be a new trial and, unless the Crown urges otherwise, we will so order.

In the light of this conclusion we can deal with the other grounds of appeal briefly.

Grounds 2 and 3

Ground 4

Conclusion