Nolan v HM Prison Holloway & Anor

Judgment

Mr Justice Royce :

The Charges

Charge 6

“Patricia Josephine Nolan on or about the 30 ^th July 1996 with a view to gain for herself or another, dishonestly procured the execution of a valuable security namely a wire transfer verification for the sum of US$1000 from Kenneth Schuster by deception by falsely representing that the money would be invested and would realise a return of $200 per $1 invested within approximately 4 weeks contrary to section 20(2) of the Theft Act 1968.”

Charge 8

“Patricia Josephine Nolan on or about the 10^th day of September 1996 with a view to gain for herself or another dishonestly procured the execution of a valuable security namely a wire transfer authorisation for the sum of US$100 from Nanci Pascoe by deception…….contrary to section 20(2) of the Theft Act 1968.”

The relevant evidence on Charge 6

6. Mr Schuster in his affidavit says “On or about July 30^th 1996 I invested US$1000 with the Nations Program/Malibu Trust. I wired $1000 from Capital Federal Savings located in Kansas to Patricia Nolan’s bank a/c #001.229478 at the Bank of Milpitas in California…..”

Annexed to his affidavit is a document, exhibit 12B (“the Schuster document”) It appears to be a printed out document as follows:-

User: CRYSTAL 15:17:23 07/30/1996 Funds Transfers Verify a Message V2.40.71 File: FLTRANF Record 9 New Status 10 Appl Seq: #000009 Queued for Transmission. Userid mode Status Crystal P FT OUTGOINGTRANSFER Rcvr typ asof-dt rsn ref-input-key 121141767 1000 sndr ref amt 381171285 $1,000.00 CAPITOL FED SAVING/ORG-KENETH SCHUSTER BK OF MILPITAS NYL/CTR/BNF = PATRICIA NOLAN/AC-001 229478”

7. FBI Special Agent Neiman in her affidavit says “In addition Schuster provided me a printout of a computer record which he received as verification of the transaction which confirms a $1000 amount of money sent from Schuster to Nolan on July 30^th 1996. This document is attached as Exhibit 12B.”

The relevant evidence on Charge 8

8. Nanci Pascoe says “On or about September 10^th, 1996 I invested another $100 with the Nations Program/Malibu Trust. I wired the $100 from the Oregon State University FCU located in Oregon to Patricia Nolan’s bank account number 0011256294 at Nevada State Bank in Nevada.”

Annexed to her affidavit is a document (“ the Pascoe document”) headed “Domestic Wire Request”. The upper section of it has been completed in handwriting with Nanci Pascoe’s name, address and account number.

There is then a section headed “Complete this section if Bank Branch is eligible for on line transactions. It contains the following:-

“Receiving Institutions Name; Nevada State Bank Bank Directory Page: 244 BA 9 digits: 122400779 Receiver short name: Nev St BK LV For Final Credit to: Beneficiary’s name: Patricia Nolan Beneficiary’s address: 208 Silverlake Dr. Milpitas CA95035Beneficiary’s account: 0011256294 Wire amount $100 Wire Fee $10 Total $110”

9. At the bottom of the document is a printed section “I authorize the above transaction and agree that OSU FCU shall not be liable for any claim loss or damage in connection with this transfer.

Members Signature:-

Date:

Wire sent by:

Wire and FRB Balance verified by:

This section has not been completed at all.

10. Paragraph 7(1) of Schedule 1 to the Extradition Act provides (as amended)

“In the case of a fugitive criminal accused of an extradition crime, if the foreign warrant of arrest authorising the arrest of such criminal is duly authenticated, and such evidence is produced as….would according to the law of England and Wales make a case requiring an answer by the prisoner if the proceedings were for trial in England and Wales of an information for the crime, the District Judge shall commit him to prison, but otherwise shall order him to be discharged.”

Mr Hardy for the applicant maintains in relation to charge 6 and 8 that the evidence is insufficient to show that the “document” in each case was

“(a) a valuable security or

(b) executed.”

11. Section 20 of the Theft Act 1968 provides:-

(2) A person who dishonestly, with a view to gain for himself or another or with intent to cause loss to another, by any deception procures the execution of a valuable security shall on conviction on indictment be liable to imprisonment for a term not exceeding seven years; and this subsection shall apply in relation to the making, acceptance, indorsement, alteration, cancellation or destruction in whole or in part of a valuable security, and in relation to the signing or sealing of any paper or other material in order that it may be made or converted into, or used or dealt with as, a valuable security, as if that were the execution of a valuable security.

(3) For purposes of this section “deception” has the same meaning as in section 15 of this Act, and “valuable security” means any document creating, transferring, surrendering or releasing any right to, in or over property, or authorising the payment of money or delivery of any property, or evidencing the creation, transfer, surrender or release of any such right, or the payment of money or delivery of any property, or the satisfaction of any obligation.”

12. Mr Hardy originally contended that the Schuster document was inadmissible as it had not been properly produced and it could not speak for itself. However in the light of R v Foxley (1995) 2 Cr.App R 523 he accepted that it could be admissible under sections 23 to 26of the Criminal Justice Act 1988. He nonetheless pointed out correctly that Neiman’s reference to it being “verification of the transaction” was hearsay.

His real contention was that without any admissible evidence from a witness explaining what exactly the document was it could not properly be found to be a valuable security. Furthermore there was no evidence that it had been “executed” in any proper sense.

13. Mr Colman for the Respondents points out that the definition of “valuable security” is very wide. He says the Schuster document is “a document…..authorising the payment of money or evidencing the payment of money” and is therefore within section 20(3). He contends that execution includes in section 20(2) the “making” of a valuable security and therefore once it is made it is executed. His contention is that it is unnecessary to look any further than the words in the section.

Similarly in relation to the Pascoe document he says it is a “document authorising the payment of money.” He maintains that the reference in section 20(2) to the “making”…..in whole or in part of a valuable security” means that a partially completed document such as the Pascoe document is a valuable security which has been “executed.”

14. The words of section 20(2) and (3) are very broad but they have not escaped judicial consideration.

In R v Bolton (1992) 94 Cr. App. 12. 74 Woolf L.J. at p81 said “Mr Evans submitted that the definition in section 20(3) is a very wide definition and, while it requires the creation of a document, what is a “document” has been given a wide interpretation in other contexts and this Court should decide that a telegraphic transfer is every bit as much a valuable security as a cheque. In support of this argument Mr. Evans referred to authorities which indicate the generous view which the courts now take of what is a document for the purposes of discovery in civil proceedings. He referred us to the case of Senior v. Holdsworth [1976] 1 Q.B.23. When the language of section 20(2) and (3) is examined, we find difficulty in accepting that submission. Despite its wide terms, to which we have already referred, section 20 does not in our judgment, within the offence of procuring “the execution” of a valuable security, include as a document all possible forms of electronic authority for a mortgage transaction passing between a building society and its solicitors as Mr. Evans contended in the course of argument.

15. In R v Manjdadria 1983 Cr.L.R73 the Court of Appeal considered in the context of section 20 a telegraphic transfer and associated documentation.

It was held, according to the brief report at p.74 “to succeed on an indictment under Theft Act 1968, s.20 the Crown had to prove that the document in question was a valuable security and that it had been executed. The evidence as to how the money was transferred was sparse because of the takeover of the bank. There were the bank’s instructions to make the advance, the telegraphic transfer to the appellants’ solicitor, an entry in the bank’s computerised ledger and the receipt of the further loan signed by the appellants. The last three could not come within the definition of valuable security. Whilst a cheque was a valuable security, no question of any cheque payment throughout the transaction had arisen; nor could the telegraphic transfer be characterised as a valuable security. Accordingly, there was no evidence of a valuable security being before the jury.”

16. In Peter Weiss v Government of Germany (2000) Cr.L.R 484 the Divisional Court sought to clarify Manjdadria.

It was held “that a document authorising a money transfer is capable of being a valuable security within section 20(3). In Manjdadria, the court did not intend to say that a document comprising authority to make a money transfer could not be a valuable security. In that case, no such document in fact existed (because the mortgagee had been taken over by another company, few documents evidencing the mortgage transaction case were available). Had the court intended to say that a document authorising a money transfer could not be a valuable security, it would not have done so without careful consideration of section 20(3). In fact, the court seems to have regarded the point as beyond argument, and no reasoning is set out, despite the fact that the definition of valuable security in section 20(3) covers a document which authorises the payment of money. The conclusion was that the court in Manjdadria was merely saying that the transfer itself, as opposed to the document authorising it, could not amount to a valuable security.”

17. In R v King (1991) 93 Cr.App.R 259 a CHAPS order was held to be a valuable security because it created and transferred a right over property and because it was evidence of that creation and transfer. It was also signed.

18. The Schuster document and the Pascoe document have to be considered in conjunction with what those witnesses say about the transactions.

19. Considered in that context, and bearing in mind the very broad definition in section 20(3) I am prepared to accept each may be characterised as a “valuable security” – on the basis that they authorised the payment of money or evidenced the payment of money.

20. However the far more difficult hurdle for the Respondents is whether they were executed.

21. In R v Kassim 1992 1 AC9 the House of Lords decided that “execute” in section 20 could not mean “give effect to.” Lord Ackner at p18G said “It is however also clear from the legislative history of section 20(2) that “execution,” which is deemed to cover the various activities detailed in the subsection, has as its object a wide variety of documents including bills of exchange and other negotiable instruments. The subsection contemplates acts being done to or in connection with such documents. It does not contemplate and accordingly is not concerned with giving effect to the documents by the carrying out the instructions which they may contain, such as the delivery of goods or the payment out of money.”

In R v Johl 1994 Cr.L.R 522 the Court of Appeal allowed an appeal in the light of Kassim where the trial judge had held that a telex message requesting payment of £960,000 had been “executed” because it had been put into effect. Consideration was also given to the status of a letter confirming that payment had been made. It was held that: “A telegraphic transfer did not fall within the definition of a valuable security in section 20(3) - Manjdadria (August 4, 1992). Counsel for the prosecution had nonetheless sought to rely upon the proviso to section 2 (1) of the Criminal Appeal Act 1968 and Ayres (1983) 78 Cr.App.R 232 on the basis that the appellant would not have been prejudiced if the count had been amended to charge him with procuring the execution of two valuable securities, namely the telex and the letter. It was contended that both documents fell within the definition of valuable security. There were a number of formidable difficulties in the way of those submissions. The telex system involved the production of two copies; which would be regarded as the valuable security? The main difficulty was the essential link between the concept of valuable security and the concept of execution. In all of the authorities the width of the definition had been fully recognised. In King (1991) 93 Cr. App.R. 259 a CHAPS order was held to be a valuable security because it created and transferred a right over property and because it was evidence of that creation and transfer. The telex possessed neither of those characteristics. The CHAPS order was signed; neither of the documents recording the telex message was signed or had anything else “done to or in connection with it”. The Court could not accept that Larsen “made” the documents. Even if one or other of the telex documents could be regarded as a valuable security in the sense of an authority to pay money, in the light of dicta of Lord Ackner in Kassim their “execution” had not been and could not be established.”

22. I am unable to accept Mr Colman’s proposition that “making” equals “execution”. That would mean that the mere creation of a document would constitute execution of it.

There is no evidence in respect of the Schuster document to show that “any act” was “done to it or in connection with it” which could properly constitute execution. Indeed there is no direct evidence as to its precise nature and effect.

In respect of the Pascoe document the lower section was unsigned and left blank. It could not properly be said to have been “executed”.

23. For these reasons I conclude that the decision that the evidence adduced in support of charges 6 and 8 established a prima facie case was fatally flawed. In consequence the application in respect of these 2 charges must be granted.

Lord Justice Kennedy:

LORD JUSTICE KENNEDY: This is a decision of the court consisting of myself and Royce J, the leading judgment being that of Royce J. The applicant was committed at Bow Street on a total of nine charges to await the determination of the Secretary of State. This application for habeas corpus concerned only two of those charges -- charges 6 and 8. Paragraph 22 of the judgment of Royce J indicates that for the reasons set out in the body of the judgment, which has now been handed down:

"I conclude that the decision that the evidence adduced in support of charges 6 and 8 established a prima facie case was fatally flawed. In consequence the application in respect of those 2 charges must be granted."

And with that judgment, I agree.

MISS DOBBIN: My Lord, the claimant in this matter was not publicly funded. May I ask for a costs order from central funds?

LORD JUSTICE KENNEDY: Subject to the normal assessment, you may have the order.

MISS DOBBIN: I am grateful.

LORD JUSTICE KENNEDY: Thank you very much.