Olden, R. v

LORD JUSTICE DYSON: On 7th and 8th February 2006 at Cardiff Crown Court the appellant was convicted of three counts of obtaining property by deception (counts 1-3), 17 counts of obtaining a money transfer by deception (counts 4-10, 12, 15, 18-22 and 24-26) and two counts of obtaining services, namely the use of a bank account, by deception (counts 28 and 29).

On 4th April 2006 the appellant was sentenced as follows. On counts 1-3, 12 months' imprisonment concurrent, on counts 4-10, 12, 15, 18, 19, 20, 21, 22, 24, 25, 26, 28 and 29, 3 years' imprisonment on each count concurrent as between themselves and consecutive to the 12 months passed in relation to counts 1-3, making a total of 4 years' imprisonment.

The appellant appeals against conviction and sentence by leave of the single judge.

The appellant was born in 1956. On 17th March 1998 District Judge Jackson made a bankruptcy order against him at Brighton County Court. It was undisputed that he made an application for two false passports in the names of Trevor Paul Ellis (that was the subject of count 1) and Martin Dubrey (that was the subject of count 2), as well as a driving licence in the name of Terence Leslie Batters (that was the subject of count 3). Bank and building society accounts were set up and applications for mortgages, unsecured and secured loans were made by the appellant in the names of Dubrey, Ellis and Batters.

It was the Crown's case that the appellant obtained the false identities of these three persons by deception. He created false documents to support these identities, such as employer's references and P60s. These false identities were then employed to obtain various money transfers and to use bank accounts that the appellant would have been unable to obtain or use by means of his own true identity.

The appellant's case in relation to counts 1-3 was that the documents were supplied by a man called Mr Ellison. It was his case that he knew he was making applications in names other than his own given name, but that he was not being dishonest when he did so. In relation to the remaining counts, the defence case was that there was no direct evidence from any of the lenders as to the basis for the decision taken in any of the individual applications to grant the loans, or as to what their attitude to the false details would have been had they been aware of them. The appellant also said that he was not acting dishonestly in holding himself out as Batters, Dubrey or Ellis when making these applications, since they were names in which he held the properties concerned which he offered by way of security, and he said he was entitled to call himself what he liked.

The appellant was arrested in Aberystwyth on 5th August 2004 by a PC Lodwig. He was interviewed the following day and the various searches were carried out.

Counsel for the appellant, Mr Krolick, who has appeared before us today as he did below, made an application to the judge to exclude evidence of the appellant's police interview on 6th August. Counsel submitted that the arrest of the appellant by the police was unlawful because PC Lodwig had no reasonable grounds for suspecting that an arrestable criminal offence had been committed or that the appellant was a person who had committed such an offence. The judge conducted a voir dire and held that PC Lodwig had reasonably believed that the appellant had committed arrestable offences, namely multiple mortgage frauds, and that he had made the arrest in that reasonable belief.

The first two grounds of appeal concern the arrest. It is submitted that the judge erred in holding as we have just summarised. It is said that there was no or no sufficient evidence that PC Lodwig suspected that the appellant had committed any offence or that he had reasonable grounds for doing so. It is further submitted that the judge erred in law and exercised his discretion unreasonably under sections 76 and 78 of the Police and Criminal Evidence Act 1984, in failing to exclude evidence of the transcripts of the interviews conducted on 6th August 2004 and the documents seized by the police in the course of their search of the appellant's vehicle following his arrest. The essential question therefore is whether the arrest was lawful.

During 2004 DC Phillips of the South Wales Police Fraud Squad was investigating a series of apparent mortgage frauds by a person using the names Ellis, Dubrey and Batters. He suspected that the perpetrator was the appellant. There seems to be no question but that DC Phillips had reasonable grounds for his suspicion.

On 5th August 2004 DC Phillips travelled to Aberystwyth with the intention of arresting the appellant for the purpose of interviewing him. He did not know the appellant's location, but he learnt that he was driving a Mitsubishi motor vehicle with a known registration number. DC Phillips had not obtained a warrant for the arrest, but he spoke to Detective Sergeant Howells of the Aberystwyth Police. DC Phillips gave evidence at the voir dire and Detective Sergeant Howells did not. He said that he told Detective Sergeant Howells that he wanted Ronald Olden, who was the driver of a Mitsubishi vehicle, arrested on suspicion of multiple mortgage frauds. DC Phillips said that he told Detective Sergeant Howells that this was a multiple mortgage fraud, involving a number of different lenders and properties, where the person responsible had used a number of falsely-obtained identities. He said that he told the sergeant that it was his intention to arrest and interview him. At about lunchtime DC Phillips left for Cardiff. There appears to have been no evidence as to the subsequent movements of Detective Sergeant Howells.

At 2.00pm PC Lodwig came on duty with PS Evans. They both gave evidence at the voir dire. They were given a briefing about the case by DS Richards, who did not give evidence. There was no direct evidence as to what DS Howells had told DS Richards about the case. PC Lodwig said that he and PS Evans were told by DS Richards to keep observation for a silver Mitsubishi Shogun. They were given its registration number and told that the driver was Ronald Olden. The man was to be arrested on suspicion of fraud on behalf of the South Wales Police.

In his evidence in chief PC Lodwig was unable to recall any other details. In cross-examination he said that he could not remember any of the details of the alleged fraud, but in response to a question from Mr Krolick in cross-examination he agreed that the Mitsubishi and "a lot of other things were mentioned".

PS Evans produced the custody records for the appellant's detention at the police station. These recorded the appellant's arrest in these terms:

In response to a question from the judge, Sergeant Evans said that he recalled what he recorded in the custody record "being in the briefing". This was obviously a reference to the briefing by DS Richards.

The judge recorded this about Sergeant Evans:

It is common ground that the judge was wrong to say that Sergeant Evans spoke to DC Phillips before the 2 o'clock briefing. The conversation took place on the telephone at about 6.00pm, some time after the arrest.

On this evidence the judge concluded as follows:

At the time of the arrest the material provisions of the Police and Criminal Evidence Act were these. Section 24:

It is the appellant's case that the judge's conclusions cannot be supported. The leading authority in this area is O'Hara v Chief Constable of the Royal Ulster Constabulary [1997] 1 Cr App R 447. That was a decision on section 12(1) of the Prevention of Terrorism (Temporary Provisions) Act 1984, which is in these terms:

The House of Lords decided that the arresting officer must himself or herself have the necessary suspicion and reasonable grounds for such suspicion. The mere fact that the arresting officer has been instructed by a superior officer to effect the arrest is not of itself capable of amounting to such reasonable grounds (see per Lord Steyn at page 452G-453D and Lord Hope at page 458C-E and 463B).

What affords reasonable grounds for suspicion will depend on all the circumstances of the case. It is certainly not necessary for the arresting officer to require from his superior officer who conducts the briefing a detailed account of the evidence on which the superior officer's suspicion is based. In many cases the barest outline of the alleged offence will be enough to give rise to a suspicion on reasonable grounds in the mind of the arresting officer.

We think that there is some assistance to be derived from the decision of the Court of Appeal, Civil Division, in Hough v Chief Constable of Staffordshire Police [2001] EWCA Civ 39. In that case a motor vehicle was stopped by a police patrol car, the officers being concerned that the vehicle had a damaged windscreen. In the course of their enquiries a routine check was made with the police national computer. The computer entry read:

At paragraphs 16 and 17 Simon Brown LJ said:

But before we come to the question whether PC Lodwig had reasonable grounds for suspecting that the appellant had committed the offences for which he was arrested, we must consider whether the officer had the suspicion at all. In both O'Hara and Hough there was no doubt that the arresting officer did suspect the person arrested of having committed an arrestable offence. In the present case, PC Lodwig was not asked whether he suspected the appellant of having committed the mortgage frauds for which he was instructed by DS Richards to make an arrest. The emphasis of the argument before the judge and in his ruling was on the question whether PC Lodwig had reasonable grounds for suspecting that the appellant had committed the offences. The passage we have cited from his ruling shows that the judge was dealing only with the information that was communicated to PC Lodwig. In an earlier passage, where he summarised the evidence of PC Lodwig, he said that the officer had conceded that he was acting on orders to arrest the man on behalf of the South Wales Police. It is true that towards the end of the passage that we have quoted from the ruling, the judge did refer to the strengthening of "Lodwig's suspicion" and in the last paragraph he said that Lodwig "reasonably believed" that the appellant had committed an arrestable offence. But the judge did not explain why he was able to find that PC Lodwig held the suspicion or belief. A bare assertion to that effect is no substitute for a reasoned finding, particularly in a case where in our view there was no evidence upon which such a finding could be based. PC Lodwig did not say that he believed or suspected that the appellant had committed the offences. As the judge recorded in his ruling, and as we had said, he did concede that he was acting on orders.

Mr Crowther submits that PC Lodwig's suspicion can be inferred from the nature of the information that he was given and from the fact that, as the judge found, PC Lodwig is a conscientious officer. In our view, however, neither of these factors could justify drawing the necessary inference that PC Lodwig must have formed his own suspicion. They were equally consistent with the possibility that PC Lodwig acted as he did solely because he had been instructed to do so by DS Richards on behalf of the South Wales Police. We conclude that the judge did not address his mind to the question of PC Lodwig's state of mind, and that had he done so he should have concluded that he did not have material on which to find that PC Lodwig had the necessary suspicion. It follows in our view that the arrest was unlawful and that the interview and searches that resulted from the arrest were also unlawful.

Since the material that was discovered by the police in the interview and by the searches was of considerable importance in the case, the appeal must succeed. Mr Crowther may well have had his reasons for not asking PC Lodwig questions directed to the officer's state of mind at the time of the arrest. This case shows that taking such a course in the course of a trial where questions as to the lawfulness of an arrest are or may be in issue is fraught with danger from the prosecution's point of view. In view of our decision on this point it is not strictly necessary to deal with the other issues that have been argued before us, but in view of those arguments we shall deal with the other points, although in less detail than we would otherwise have done.

If PC Lodwig had suspected the appellant of having committed the mortgage frauds, would he have had reasonable grounds for doing so? The facts of O'Hara are of some significance here. Lord Steyn summarised the facts as follows, starting at page 449C:

At page 455G-456B Lord Hope said much the same. Lord Hope too described the evidence about the matters that were disclosed at the briefing session as scanty (see page 463C), but he said that the trial judge was entitled to weigh up that evidence:

The only basis for the finding that the arresting officer had reasonable grounds for suspicion was that at a briefing session he was told by the superior officer that the appellant had been involved in the murder and the judge's inference that further details must have been provided.

In answer to a question from Mr Justice Crane, Mr Krolick conceded that if the information about the appellant's offences which DC Phillips gave to DS Howells had been passed on to PC Lodwig, that would have afforded PC Lodwig reasonable grounds to suspect that the appellant had committed the offences.

In the light of the authorities and the fact that the information had come from the investigating officer of another police force, we think that this concession was rightly made. In our view the judge was entitled to infer that DS Richards obtained the information provided by DC Phillips, and that he communicated the essential elements of it to PC Lodwig and PS Evans. To some extent this is borne out by the evidence of the officers Lodwig and Evans themselves. If we had concluded that PC Lodwig had suspected that the appellant had committed the offences, we would have decided that he had reasonable grounds for doing so.

We cannot leave this part of the case without observing that it was an unsatisfactory feature of it that neither DS Howells nor DS Richards gave evidence. So far as we are aware, no explanation was given for this. It meant that the judge was placed in the position of having to rely heavily on inferences for his findings of fact, when, so far as we can see, this should not have been necessary.

We turn to grounds 3-5. These grounds of appeal all concern decisions made by the judge purporting to limit the way in which the defence could put its case in relation to the mortgage fraud counts. The Crown applied for leave to adduce evidence from Mr Oliver as to the lending criteria for the financial institution which was the subject of count 11. The application was opposed on the grounds that the evidence was hearsay and should not be admitted. In the course of his ruling the judge said:

The judge noted that the amended defence statement, which had been served in September 2003, specifically requested disclosure of the lending criteria of all the lending institutions, including that involving count 11, and that this had not been done. He nevertheless ruled that it was in the interests of justice that the prosecution should be permitted to adduce the evidence, provided that they complied with the relevant procedures, i.e. serving hearsay notices etc. (We interpose that we entertain very serious doubts as to whether the written material that was the subject of this application was indeed hearsay evidence at all.) But the lending criteria or policies of the institutions were set out in documents that proved not to be available. This led the judge to rule during the evidence of Ms Douds that neither the prosecution nor the defence should be permitted to ask questions about lending policies or criteria unless the document was produced in evidence. No document was produced.

In most of the mortgage transactions the appellant had in his applications disclosed the fact that he was buying the subject property for the purpose of letting. Some of the institutions, for example Bristol & West Plc, knew that the appellant had multiple mortgages with them. It was the defence case that the only material factors in those circumstances, so far as the lenders were concerned, were (a) the market value of the security, (b) the fact that the rental valuation on letting justified the mortgage instalments, and (c) the track record of the appellant where other similar mortgages were known to the lender.

The applications were supported by professional valuations advising the lenders of the market value of the property and the rental value, and there is no evidence that these valuations were inaccurate. There was evidence from the letting officers that the rental was paid on the respective properties, and evidence by all the lending institutions that there were no arrears on the mortgage instalments and that all the mortgage conditions had been complied with. It was therefore the defence case that there had been no effective deceptions. This issue was raised in the defence statement. It was to this issue that the lending institutions' lending criteria and policies were said to be relevant.

It is submitted on behalf of the appellant that the effect of the judge's ruling was that the defence were not permitted to put to witnesses for the various institutions that the factors just mentioned were the only factors which dictated their lending decisions, and that the institutions were not interested in details about the appellant himself, for example details about his employer, his employment documents, his creditworthiness and so on.

At the close of the prosecution case the defence made a submission of no case to answer. Central to this submission was the absence of any evidence from the decision-makers who authorised the individual loans or the opening of the bank accounts. Reference was made to R v Laverty (1970) 54 Cr App R 495, 497, where Lord Parker CJ said:

We were referred to other authorities. It is only necessary to refer to R v Lambie (1981) 73 Cr App R 294 and the speech of Lord Roskill, who said at page 301, concerning credit card frauds and evidence of the effect of the alleged deceit on shop assistants:

Lord Roskill then referred to the decision of Sullivan and said:

Having referred to this passage from the speech of Lord Roskill, the judge in the instant case said this:

In our view the judge's statement of the legal position in the first part of that ruling was correct. It is true that in Lambie Lord Roskill referred to the situation where the person who could give direct evidence of having been deceived either has no recollection or is not available. But it seems to us that there is no rule of law to the effect that a jury may not be invited to draw an irresistible inference that a false representation operated on the mind of the party deceived unless the person allegedly deceived either is unavailable or has no recollection of the transaction in question. It may be a matter for the jury to decide on the evidence that is placed before it.

In our judgment, the judge was right to say that there was a case to answer on the evidence before the jury. There was evidence on all the counts on which the appellant was convicted from which the jury was entitled to draw the necessary irresistible inference that a lending decision based on a false identity, to a person who was or had been bankrupt and who made applications on forms which contained false statements was one procured by deception, that is to say that the deception operated on the mind of the lender. The prosecution called evidence of the institutions' decision-making processes. That evidence indicated that had the fact of a false identity and/or bankruptcy and/or that the application forms contained false statements been known, the loans would not have been made, or at least not at the point when the deception operated to cause them to be made. Details of those lenders and the witnesses who gave evidence as to their decision-making processes were summarised in the summing-up. It is unnecessary for us to refer to those summaries. It is true that the Crown did not call the persons who authorised the individual lendings. It is highly unlikely that those persons would have had a recollection of the particular transactions. If called they would probably have been able to give evidence as to the lending institution's policy, in relation to checking the accuracy of details provided by an applicant for a mortgage, and to say whether false information would have influenced the decision to make the loan or not. But that is the very kind of evidence that was adduced by the Crown from the witnesses whom they did call.

MR KROLICK: Would your Lordship therefore quash the convictions?

LORD JUSTICE DYSON: We will quash the convictions.

MR KROLICK: Can I say in my own defence in relation to the very first ground, although the learned judge only referred to, as it were, the second limb of O'Hara, there was argument before him by me that the officer had not actually suspected, although he did not refer to that in his ruling.

LORD JUSTICE DYSON: Thank you both very much.