Rottman v Governor of HMP Brixton & Anor

The applicant, Michael Rottmann, applies for a writ of habeas corpus ad subjiciendum. He is the subject of an extradition request made by the government of Germany (“Germany”). Following the unification of Germany in 1989, the majority of state-owned businesses in Eastern Germany were placed under the control and ownership of the Treuhandanstalt (“THA”). THA would then sell the majority of businesses to private buyers. Rottmann is accused, with others, of stripping the assets of a company called WBB Wärmeanlagenbau GmbH (“WBB”). THA formed WBB out of a previously state-owned company. Its business had been the installation of electric power and heating facilities. At the time it was privatised it had considerable cash assets (approximately DM 150,000,000) and other allegedly valuable properties.

The applicant, with some of his co-accused, used a company registered in Switzerland, Chematec AG (“Chematec”) to purchase the shares of WBB. He and his co-accused were directors of Chematec. On 1^st March 1991 Chematec purchased the shares of WBB from the THA. From that period until 31^st December 1993, WBB was owned by Chematec, which was effectively under the control of companies and trusts of which the applicant was shareholder or beneficiary.

Germany alleges that the applicant, with others, dishonestly purchased the shares of WBB at an undervalue and thereafter dishonestly stripped it of its assets before winding it up in a manner which defrauded its creditors.

It is contended that from the outset that the applicant and his co-accused never intended to run WBB as a going concern. In order to acquire WBB for less than its real value, it is alleged that his co-accused, Langner and Voigt who were directors of WBB’s state-owned predecessor, undervalued its assets. In order to pretend that there was an intention to run WBB as a going concern, it is alleged that he and other co-accused misrepresented the financial stability and prospects of Chematec. Having acquired WBB they intended merely to strip its assets for their own personal gain.

Once they had acquired WBB, it is alleged that the applicant and other co-accused used a number of methods to strip it of its assets. Firstly they entered into unnecessary agreements for consultancy services obtaining, by way of substantial fees, remuneration to which they were not entitled. Secondly, it is alleged that they arranged for loans to be made by WBB to PCE Holding AG at terms which were disadvantageous to WBB to enable PCE Holding, of which two of the co-accused were directors, to buy shares in Chematec. Thirdly, WBB sold real estate to Chematec associate companies at less than its true value. Fourthly, WBB purchased worthless assets from Chematec associate companies at inflated prices.

On 14^th March 2002 at Bow Street Magistrates Court, District Judge Eleri Rees committed the applicant on twelve charges pursuant to Section 9(8) of the Extradition Act 1989 (the 1989 Act).

The applicant’s central submissions are founded upon this court’s jurisdiction, both to review the decision of the District Judge under Section 9(8) of the 1989 Act and under its original jurisdiction to discharge the applicant pursuant to Section 11(3) of the 1989 Act. In particular, in relation to Charges 1-7, he contends that the courts in Germany have concluded that there was no criminal wrongdoing in relation to the conduct which underlies the extradition request. Their decision is the equivalent of an acquittal of the applicant. The applicant further relies upon an expert in German law, Professor jur. Dr Wagner, in relation to the effect of the judgment of the courts in Germany. He further contends in relation to specific committal charges (5,7,8-10) that no offence under English law is disclosed. The applicant also contends that in relation to Charges 3 and 12 no extradition crime is disclosed because the offence of fraudulent trading requires the relevant company to be an English registered company. Finally, the applicant relies upon the lapse of 12 years since the alleged offences which, he contends, renders it unjust or oppressive to return him to Germany.

By Section 1(1) of the 1989 Act:

“Where extradition procedures under Part III of this Act are available as between the United Kingdom and a foreign state, a person in the United Kingdom who –

(a)

is accused in that state of the commission of an extradition crime….may be arrested and returned to that state in accordance with those procedures”.

By Section 2(1) an “extradition crime”, for the purposes of the instant application, means conduct in the territory of Germany which, if it had occurred in the United Kingdom, would be punishable with imprisonment for a term of 12 months or more and which, however described in Germany, is punishable under German law for a term of 12 months or more. Thus, the jurisdictional fact that the applicant is accused of an extradition crime must be established and that crime must constitute an offence both in England and in Germany.

Section 7 of the Act identifies the particulars which the requesting company shall be required to furnish (Section 7(2)) and confers power on the Secretary of State to issue an authority to proceed (Section 7(4)). The authority to proceed must identify the offences under United Kingdom law which appear to the Secretary of State would be constituted by equivalent conduct in the United Kingdom (see Section 7(5)). By Section 9(8):-

“Where an authority to proceed has been issued in respect of the person arrested and the Court of Committal is satisfied, after hearing any representations made in support of the extradition request on behalf of that person, that the offence to which the authority relates is an extradition crime, and is further satisfied:

a)

where that person is accused of the offence, unless an order in council giving effect to a general extradition arrangements under which the extradition request was made otherwise provides, that the evidence would be sufficient to make a case requiring an answer by that person if the proceedings were the summary trial of an information against him……the court…..shall commit him to custody or on bail

(i)

to await the Secretary of State’s decision as to his return.”

Both Germany and the United Kingdom are signatories to the European Convention on Extradition and an Order in Council (2001 No. 962) has been made. Accordingly Germany is exempted from the obligation to provide the evidence described in Section 9(8)(a) and the District Judge was not required to examine whether there was evidence sufficient to make a case requiring an answer against the accused.

The original jurisdiction of this court is conferred by Section 11(3) which provides:-

“Without prejudice to any jurisdiction of the High Court apart from this section, the court shall order the applicant’s discharge if it appears to the court in relation to the offence, or each of the offences, in respect of which the applicant’s return is sought, that

(a)

by reason of the trivial nature of the offence; or

(b)

by reason of the passage of time since he is alleged to have committed it or to have become unlawfully at large, as the case may be; or

(c)

because the accusation against him is not made in good faith in the interests of justice,

it would, having regard to all the circumstances, be unjust or oppressive to return him.”

The applicant submits that, in order to identify the alleged extradition crimes, it is necessary to look at a warrant of arrest issued by the local court at Tiergarten on 27^th December 1996, a warrant of arrest issued by the Regional Court of Berlin on 23^rd February 2001, designed to override limitation periods in German law, and the decision of the Regional Court (Landgericht) in Berlin dated 15^th January 2002 exercising a criminal jurisdiction and the Civil Berlin Court of Appeals (Kammergericht), a partial judgment executed on 2^nd July 2002. It is, therefore, necessary to examine the United Kingdom committal charges, the German charges disclosed in the warrants of arrest and the decision of both criminal and civil courts in Germany.

(We shall refer to the committal charges as counts, to distinguish them from the charges in the German warrant of arrest). Count 1 of the committal charges alleges a conspiracy to defraud THA by dishonestly misrepresenting the worth of Chematec and undervaluing the assets of WBB so as to conceal the fact that the conspirators never intended to keep WBB as a going concern, but rather to enrich themselves by stripping WBB of its assets. Count 1 reflects German Charge 1. It reads:-

“Charge 1: MICHAEL KARL ROTTMANN, between 29^th day of August 1990 and the 28^th day of February 1991, conspired together with others named KESSLER, HAEBERLIN, LANGNER and VOIGT to defraud the board of management of the Treuhandanstalt by acquiring from it the share holding in WWB Warmeanlagenbau GmbH at a price that was substantially below the true market price by:

(i)

dishonestly misrepresenting the commercial value, size and stability of the purchasing company, namely Chematec AG; and

(ii)

dishonestly causing the board of management of the Treuhandanstalt to materially under-value the equity capital of WWB Warmeanlagenbau GmbH.

The warrant of arrest issued by the Regional Court of Berlin in February 2001 provides a clearer description of the conduct alleged against this applicant than that issued earlier by the Tiergarten Court. In those circumstances we shall refer only to that warrant. In relation to Count 1, it particularises the misrepresentation in relation to the size and worth of Chematec. False assertions as to the number of active companies and the staff were designed to show that WBB’s business operation would continue and 750 jobs would be preserved. Further, it alleged that two of the other conspirators, Langner and Voigt, undervalued WBB’s real property by some 50m DM. The warrant describes the intention of the conspirators to sell shares in Chematec to a new holding company PCE Holding and so as to extract through the holding company considerable profit for each of the conspirators. It is alleged that the financing of these transactions was to be achieved by transferring the real property of WBB to the holding company PCE at an undervalue and to use that property for further borrowings. It is alleged that THA was unaware of the false pretence to continue the business of WBB or the intention of the conspirators to reduce jobs “on a large scale” and enrich themselves personally by undermining WBB and subsequently liquidating it. The charge records that THA sold the business shares of WBB to Chematec for only 2mDM and that Chematec was not even in the position to raise those funds for the purchase price.

Three of the applicant’s alleged fellow conspirators were tried before the Regional Court in Berlin over a period of 61 days. Langner was sentenced to a total of three years imprisonment on six counts of embezzlement and Voigt to two years on four grounds of embezzlement; his sentence was suspended. The third defendant was acquitted. In relation to Count 1, the court was not satisfied that the prosecution had established deceit in relation to the alleged conspirators (referred to as partners) intention to continue the company. On the contrary the court accepted that the partners did intend to continue the business of WBB and referred to an undisclosed partnership agreement designed to restructure the business into separate profit centres (see pages 63-64 of the judgment). The court doubted whether the defendants intended to deceive THA as to the ability of the persons behind the transactions to continue the business of WBB (see pages 65 to 66). It was not satisfied that THA’s assets were diminished as a consequence of the sale of WBB (see page 66). It rejected the contention that WBB’s assets had been undervalued. The method of valuation adopted a recognised formula and recorded that other property holdings of state owned industries had been sold for a nominal sum and that valuation had not played a role in the negotiations for sale of the business of WBB (see page 68). In short, the Regional Court rejected the central allegation of this conspiracy, namely that there was no intention to continue the business of WBB and that its assets had been dishonestly undervalued.

In the Civil Berlin Court of Appeal, the successor to the THA had brought civil proceedings again the applicant and his alleged fellow conspirators including Langner, Voigt and Chematec. The court took the view that the real-estate values did not influence the price to be paid for the business of WBB during the negotiations (see page 79 of the judgment). In any event, it concluded that the defendants did not deceive THA in relation to the intention to continue the business operations of WBB. The evidence did not establish that the applicant and his fellow defendants had the intent from the outset to discontinue WBB, to appropriate its assets and to exploit it for that purpose (see page 81). On the contrary it concluded that there was an intention to establish WBB in the free market economy after restructure and modernisation (see page 82). The court, further, rejected the contention that there had been misrepresentations in relation to the size of Chematec. It concluded that there was no misrepresentation at the time (see page 87). There was no deceit in relation either to the intention or capacity to invest. (See page 90).

Charge 2 covers the period after WBB had been acquired by the named conspirators. It is a general charge reflecting the German Counts 2 to 12. The English committal charge alleges:-

Charge 2: MICHAEL KARL ROTTMAN, between the 26^th day of February 1991 and the 16^th day of December 1994, conspired together with others named KESSLER, HAEBERLIN, LANGER, VOIGT, SCHÃFER and PORUBA to defraud the shareholders of and investors in WBB Warmeanlagenbau GmbH by:

(i)

dishonestly entering into contracts on behalf of the company which were disadvantageous to the company;

(ii)

dishonestly divesting the company of its assets by lending company funds at terms which were disadvantageous to the company;

(iii)

dishonestly divesting the company of its assets by selling company properties at substantially less than true market value of those properties; and

(iv)

dishonestly making purchases on behalf of the company at prices substantially in excess of the true market value of the items so purchased.

Committal Charge 3 is the substantive equivalent of Charge 2 but it also covers the German Charges 5 and 6. It alleges that the applicant:-

“Between the 26^th day of February 1991 and the 16^th day of December 1994, was knowingly a party to the carrying on of the business of (WWB) for a fraudulent purpose, namely to achieve unlawful personal enrichment at the expense of the company by…….”

The particulars are identical to those referred to in committal Count 2.

The warrant of arrest issued by the Regional Court of Berlin refers in Count 2 to a management consultation agreement entered into on 27^th December 1990 before the sale of WBB between Chematec and the alleged co-conspirators Voigt, Langner and another. It alleges that Chematec invoiced WBB 556007 SFR from 19^th March 1991 for consultation services. It alleges that that money was passed over to the applicant as well as his fellow alleged conspirators without any legal reason. The applicant received, it alleges, 168,125 DM and 146,903 SFR.

The Regional Court warrant refers to a later management consultation agreement, dated 20^th March 1991, between WBB and PEC Holding AG. The warrant alleges that WBB paid PEC Holding sums for alleged expenses although no performance was rendered under the agreement. It alleges the agreement served to satisfy the claims of the applicant under the management consultation agreements and that the applicant received 1,655,500 SFR and 300,000 DM. The charge under the German warrant No. 2 is the equivalent of the substantive Count 4 in the committal charges which alleges theft of the sums the applicant is alleged to have received under the guise of the 1990 management agreement and Charge No. 3 in the Regional Court’s warrant (4 in the Tiergarten warrant) is the equivalent of Count No. 6 in the committal charges alleging theft of money under the guise of consultancy services.

The Regional Court, in its decision in relating to the other defendants, Langner and Voigt, concluded that no consulting services had in fact been provided (see pages 73 and 74 of its judgment). Nevertheless whilst it accepted that the defendants had jeopardised WBB assets the court concluded that “the concealed capital withdrawal” did not fall within Section 266 paragraph 1 of the German Criminal Code. There was no direct impairment of share capital. On the contrary the defendants were directly entitled to WBB’s assets up to the limit of the share capital even though the sums withdrawn were incorrectly described for the purposes of concealment (see page 94 of the judgment which refers back to the decision at pages 92 and 93).

Charge No. 4 in the Regional Court’s warrant is the equivalent of committal Count 5 alleging theft. It refers to payments under the guise of three loan agreements between WBB and PEC Holding so as to ensure that PEC Holding could remit to the applicant and his “partners” consideration for the sale of Chematec shares to PEC Holding. No security for repayment was stipulated and interest was payable only after WBB had terminated the loan agreement and demanded that PEC Holding repay the loan. The Regional Court concluded in its judgment in relation to Langner and Voigt that although the capital withdrawal was disguised there was no breach of the German code because there was no direct impairment of WBB’s share capital. The partners were entitled to remove a portion of WBB’s assets; no intention to erode could be proven (see judgment at page 128 – 129).

Charges 5 and 6 in the Regional Court’s warrant are embraced within Counts 2 and 3 of the committal charges. Charge 5 refers to the sale of real property by WBB to PEC Holding for 14,551,000 DM whereas the applicant knew that the market value was at least 87,721,069 DM. The warrant records that, once the balance sheet had been undermined, the sale contract was cancelled just over one month later at the end of July 1991. Charge 6 of the Regional Court warrant refers to a sale of shares in PEC Holding AG to WBB for a price of 34m SFR. That sum was then paid into an account opened for that purpose in the name of a Liechtenstein letterbox company in Vaduz. That account was opened on the very day that the loan agreement referred to in Charge Number 4 was cancelled namely 12^th September 1991. The warrant alleges that the purpose of the contract of sale of the shares in PEC Holding to WBB was to deprive WBB of the price paid for the shares in favour of the applicant and his parties.

The Regional Court, in its judgment in relation to the criminal charges against Voigt and Langner, concluded that there was no direct and specific impairment to WBB’s share capital. The defendants and their partners, it held, were entitled to withdraw assets provided there was no impairment of WBB’s share capital (see page 140 of the judgment). It was unable to conclude that there was an intent to erode WBB (see page 141). In short, absent any threat to the solvency of WBB, no offence had been committed. A similar conclusion was reached by the Berlin Court of Appeal in the civil action.

Charge 7 of the Regional Court’s warrant of arrest is the equivalent of Count 7 of the committal charges which alleges theft. Count 7 alleges that the applicant and his partners, through WBB, purchased “moratorium claims” from a company called Promessa for 56m DM. It alleges that those claims had no value but served to deprive WBB of its assets so that they could accrue to the applicant and his partners. It records that 26m was transferred to the account of WBB so that the applicant and the others could fulfil WBB’s obligation to purchase the shares in PEC Holding referred to in Count 6. The Regional Court in its judgment in the criminal case against Voigt and Langner concluded, as it had in relation to other charges, that there was no actual impairment of WBB’s share capital at the time of the transaction in March 1992 and that in any event the partners were entitled to withdraw capital (see pages 143 – 144 of the judgment).

It is convenient at this stage to consider the impact of the Landgericht on the warrant of arrest issued by that court (the Regional Court of Berlin) relating to the first 7 committal charges. Miss Montgomery QC, on behalf of the applicant, contends that it is the duty of this court to consider the decision of the Landgericht in relation to the applicant’s fellow accused Langner and Voigt. The decision of the German court, it is contended, discloses that no crime was committed under German law by the applicant in relation to Count 1 of the committal charges in relation to the purchase of WBB from THA or under Count 2 or 3 in so far as they concern the substantive offences under 4, 5, 6 and 7 of the committal charges.

Miss Montgomery QC submits that the decision of both the Landgericht and Kammergericht are relevant in two ways. Firstly, they are relevant to the question which this court must consider as to whether the warrant of arrest discloses extradition crimes. The court must consider that question either on review of the magistrate’s decision under Section 9(8) of the 1989 Act or because the question whether extradition crimes are disclosed is a factual condition precedent under Section 1(1) which this court must decide in determining whether the magistrate had jurisdiction to commit. Miss Montgomery QC contends that this court should not accord higher status to the prosecution allegations, as identified in the warrant than should be accorded to the authentic decisions of properly constituted courts who have heard the evidence and arguments. This court cannot be obliged to ignore the decisions of a foreign state. The requesting state, Germany, speaks not merely through the warrant but also through the decisions of the courts. The request for extradition is made by the state not by the prosecution. The judgments of the court are likely to be more reliable and cannot be ignored.

The courts in Germany have decided that no offence has been committed under German law.

Examination of the decision of the courts in Germany shows that there was no intention to cease to run WBB as a going concern (see in particular the decision at page 63). Moreover once WBB had been purchased it was open to the applicant as owner and controller of WBB, with his partners, to distribute capital provided he did not render WBB insolvent (see particularly the judgment of Landgericht at pages 92 – 93).

This court, it is contended, must identify the conduct and intention of the applicant in order to decide whether an extradition crime is disclosed. The decisions of the Landgericht and Kammergericht (in relation to Count 1 as to intention) are the most recent descriptions of such conduct and intention. Moreover, the German courts’ conclusions have been tested after evidence and argument. They provide the best statements of conduct and intention, of greater authority than the statements in the warrant.

The starting point must be the European Convention on Extradition which came into force as part of the law of this country originally under S.I. 1990 No. 1507 but now, on 17^th April 2001, by virtue of the European Convention on Extradition Order 2001 (2001 Number 962). Subject to the reservations contained in Schedule 2 which by Article 2 repeat the provisions of Section 11(3) of the 1989 Act,:-

“The Contracting Parties undertake to surrender to each other, subject to the provisions and conditions laid down in this convention, all persons against whom the competent authorities of the requesting party are proceeding for an offence …” (Article 1).

Thus the United Kingdom is under an obligation to surrender to Germany those persons against whom the German prosecuting authorities are proceeding for an offence. There is no doubt but that, despite the decisions of the Landgericht and Kammergericht, the German prosecuting authorities intend to prosecute the applicant for the offences set out in the warrant of arrest. The Convention is designed to provide a speedy and simple system for extradition.

The reach of the magistrate’s jurisdiction under the 1989 Act was explained in Re Evans [1994] 1WLR 1006. In that case Lord Templeman, with whose speech all their other Lordships agreed, concluded that the magistrate, sitting as the court of committal, was not entitled to admit evidence. The material before him would consist of information in English consisting of:-

“(1). Particulars of the conduct which constitutes an offence in the requesting state;

(2)

Particulars of the law of the requesting state under which the conduct is punishable;

(3)

The warrant of arrest issued by the requesting state.

(4)

The authority to proceed issued by the Secretary of State specifying the offence under the law of the United Kingdom…(1013b)”

Lord Templeman continued:-

“For the purposes of the court of committal, the conduct or facts are those set forth in the request for extradition; the relevant law of the requesting state is that set forth in the request for extradition; the relevant law of the United Kingdom is pointed out in the authority to proceed…. The accused cannot adduce evidence about foreign law. The text of the foreign law as presented and translated by the information furnished with the extradition request by the foreign government. The accused may submit that under the law of the United Kingdom and under the law of the foreign state as established by the extradition request the conduct alleged against him would not amount to a serious crime in either country. It is for the magistrate to accept or reject that submission. Evidence of foreign law is irrelevant. If the accused is extradited it will be for the foreign court to decide whether in fact foreign law has been broken.” (See page 1013 d-f).

Later Lord Templemann said:-

“If the presentation of the law of the foreign state set forth in the request for extradition were inaccurate or incomplete in a relevant and material respect and the correct law could not be presented by agreement and then the accused could have his remedy in habeas corpus proceedings….

In my opinion where requests for extradition for alleged acts of violence, theft, fraud or the like courts should be slow to pay heed to any representations that such acts do not constitute offences under foreign law.” (See page 1014 c-f).

It must be acknowledged that the decision of the Landgericht was placed before the District Judge. But it does not follow that it forms part of the particulars of the law of the requesting state or the warrant of arrest issued by the requesting state. In short the judgment does not form part of the request for extradition or the particulars furnished with the request pursuant to Section 7(2) of the 1989 Act. It is important to analyse the purposes for which the applicant relies upon the judgment. He is seeking to rely upon a judgment on criminal charges laid against a fellow accused, not against this applicant. The applicant has produced an opinion from Dr Wagner. His opinion is that the judgments reveal that the applicant was not guilty of any criminal conduct or criminal intention under German law. But it is trite to observe that matters of foreign law are matters of fact for the English courts. When this court exercises its jurisdiction to review the decision of the magistrate, it is not open to the applicant, by way of defence, to rely upon the material contained in the opinion of Dr Wagner as to the effect of the foreign judgments. The applicant is, in reality, doing no more than seeking to rely upon factual material by way of defence. In performing its reviewing function, it is not open to this court to receive factual evidence which seeks to demonstrate that the applicant is not guilty of the charges set out in the warrant of the requesting state. We conclude that it is not permissible to use the opinion of Dr Wagner or the judgments to impugn the decision of the District Judge on committal on the exercise of this court’s reviewing jurisdiction.

There remains, however, the question as to whether the opinion and the judgments can be used when this court considers the jurisdictional fact as to whether there is an extradition crime within the meaning of Sections 1 and 2 of the 1989 Act. In our judgment it is not open to the applicant to rely upon such material in order to demonstrate that no extradition crime has been alleged. The allegation of an extradition crime is that which is contained within the warrant of arrest. Moreover, it must be emphasized that the decision of the German courts in so far as they describe the conduct and intention of the applicant can only form part of this court’s consideration through the medium of Dr Wagner’s opinion. Dr Wagner’s opinion is a question of fact on which the applicant relies by way of defence. It does not form part of the requesting state’s description of the conduct which, it is alleged, constitutes an extradition crime.

Further, the decision of the German courts is a decision relating to other defendants in a different trial. In English law the acquittal of other defendants, separately tried, would not be evidence upon which this defendant could rely. (See Hui Chi-Ming v R [1992] 1AC 34 in which, in reliance on Hollington v F. Hewthorn & Co Ltd [1943] KB 587 the Board ruled that evidence of the earlier acquittal of a co-accused was inadmissible in the later trial of the appellant). True it is, in this case the applicant has the advantage of a reasoned judgment. But nevertheless the conclusions of fact are not evidence in the case of the applicant. Further, the conclusions of law are based on those factual findings. The reality is that this applicant has not been tried in Germany. There has been no decision as to applicant’s conduct or criminal liability.

We conclude that the judgments have no effect upon this court’s consideration as to whether an extradition crime has been disclosed by Germany. It is not contended that the description of conduct and the law contained in the warrant of arrest does not disclose any criminal conduct under German law. I shall turn later to the question as to whether the warrant discloses criminal conduct under English law as is contended in relation to certain specific offences.

Miss Montgomery QC advanced, in the alternative, the proposition that in the light of the judgments of the German courts, there is no clear description of the facts upon which the requesting state relies to disclose an extradition crime. In support of this proposition, she referred to two decisions in Australia. In McDade v U.K. [1999] FCA 1868, the Federal Court of Australia emphasised the need, under equivalent statutory extradition provisions, for a clear statement setting out the acts constituting the offences. If the statement is so vague and general or disorganised that the relevant acts and omissions could not reasonably be identified, then the provision requiring a duly authenticated statement in writing setting out the conduct constituting the offence would be infringed (see in particular page 92). It does not seem to me that this proposition, which we accept, assists the applicant. Confusion could only arguably be said to arise if the judgments of the German courts are material upon which this court can rely in considering whether an extradition crime has been disclosed by the requesting state. For the reasons we have given, the judgments are not relevant to this issue.

The provisions of Section 11(3)(b) and (c) provide important protection to one against whom extradition is sought. This court has an original jurisdiction to discharge the applicant if either by reason of the passage of time or because the accusation is not made against him in good faith, it would, in all the circumstances, be unjust or oppressive to return him. The meaning of “unjust” and “oppressive” was explained by Lord Diplock in Kakis v Government of the Republic of Cyprus [1978] 1 WLR 779 at 782:

“Unjust” I regard as directed primarily to the risk of prejudice to the accused in the conduct of the trials itself, and “oppressive” as directed to hardship to the accused resulting from changes in his circumstances that have occurred during the period to be taken into consideration; but there is room for overlapping, and between them they would cover all cases where to return him would not be fair.”

In Asliturk v Government of Turkey [2002] EWHC 2326 (Admin), a decision dated 8 November 2002, this court was concerned with a dispute of fact. The applicant contended that the accusations were not made against her in good faith in the interests of justice because the request for removal was made for the purpose of prosecuting her on account of her political opinions and that she might be prejudiced at trial, punished, or detained because of those opinions contrary to the restrictions on return imposed by Section 6(1)(c) and (d) of the 1989 Act. The applicant gave evidence supported by her lawyer as to the political reasons for seeking her extradition. The requesting government, Turkey, cross-examined both the applicant and her lawyer before the magistrate but produced no evidence to counter the material advanced by the applicant and her lawyer. In those circumstances, there was nothing to gainsay the district judge’s conclusions that the extradition was sought for political reasons. Accordingly the Divisional Court ruled that the accusation was not made in good faith within the meaning of Section 11(see in particular, paragraph 24).

These decisions seem to me to be far removed from the circumstances of this case. Mr Hardy, on behalf of the Government of Germany, accepts that the opinion of Dr Wagner and the judgments of the German Courts are additional evidence relevant to the exercise of this court’s jurisdiction within the meaning of Section 11(4). But he emphasises that the applicant is forced to rely, not merely on the judgments of the courts, but on the opinion of Dr Wagner as to the effect of those judgments. This opinion is disputed by Germany. The Government of Germany relies upon the opinion of a prosecuting lawyer Herr Hiesig in a letter dated 20 February 2003. Mr Hiesig asserts that in respect of the acquittal of Dr Voigt and Herr Langner the judgment is not final. The public prosecutor’s office in Berlin has lodged an appeal on which the Federal Supreme Court has not yet reached a decision. Moreover, despite that acquittal, he asserts that it does not follow that the applicant is no longer “under strong suspicion of having committed a criminal offence”. He states that the division of the Landgericht Berlin, “ responsible for the applicant” has to re-examine the strong suspicion of a criminal offence in the light of the judgment which is not yet final and the findings against the accomplices. He states that the court has conducted that re-examination but:-

“Has reached the conclusion that there is still strong suspicion of a criminal offence for all the cases in the warrant of arrest”.

Further, the Government of Germany relies upon an opinion from public prosecutor Frau Cipulis-Levits dated 19 February 2003, challenging the opinion of Dr Wagner. Dr Wagner has responded in a letter dated 3^rd March 2003 pointing out that the findings of the Landgericht can only be challenged on points of law or on grounds of violation of procedural law.

Although none of the expert witnesses were cross-examined, We are satisfied that no injustice or oppression has been established in the light of the judgments of the German Courts whether through the gateway of Section 11(3)(b) or Section 11(3(c). We are satisfied that there is no basis for saying that the applicant will not be convicted if returned to Germany. As we have already remarked, the applicant was not a defendant before the Landgericht which acquitted Langner and Voigt. We are quite satisfied that it is open to the Landgericht, exercising an inquisitorial jurisdiction, to obtain evidence and act upon that evidence in relation to the conduct and intentions of this applicant as described in the warrants of arrest. If and insofar as the applicant may contend that the decision of another division of the Landgericht in relation to other defendants prevents a trial against this defendant, that seems to us a matter for the courts in Germany. It is clear that the prosecutor and a different division of the Landgericht maintain that there is still a strong suspicion of a criminal offence for all the cases in the warrant of arrest against this applicant. In those circumstances, it is not possible to say that the applicant will be acquitted on return to Germany, thus rendering the extradition academic. In the light of the possibility of conviction, we are wholly un-persuaded that the continuing request for extradition discloses any lack of good faith.

Further, we are satisfied that the decision of the Civil Appeal Court, the Kammergericht, does not have any binding effect on the criminal courts (see letter from Frau Cipulis-Levits dated 19 February 2003). Different rules of evidence apply in civil proceedings. The proceedings before the civil court are adversarial. The evidence is limited to that which is advanced by the respective parties. The court undertakes a function, which is wholly distinct from the inquisitorial function of a criminal court (see the letter from Heisig dated 15 October 2002).

In those circumstances, despite the conflict of evidence between the experts, we are satisfied that the material contained in the judgments of the German courts as explained by Dr Wagner does not establish such a likelihood of acquittal as to make it unjust or oppressive to return the applicant for trial in Germany. For the reasons we have given we conclude that the applicant’s contention under Section 11(3) in relation to Counts 1-7 of the committal charges fail. There remain, however, specific contentions in relation to particular counts in the committal charges to which I now turn.

Both Counts 3 and 12 of the committal charges allege fraudulent trading. Count 3, which I have already cited, alleges that the business of WBB was carried on for a fraudulent purpose. Count 12 alleges that the applicant:-

“Between the 7^th day December 1994 and 16^th day of December 1994, was knowingly a party to the carrying on of the business of WBB with intent to defraud creditors”.

The applicant contends that the conduct underlying those accounts does not amount to an extradition crime because the offence of fraudulent trading requires the involvement of an English registered company. Under English law, the crime is created by Section 458 of the Companies Act 1985. Section 458 provides:

“If any business of a company is carried on with intent to defraud creditors of the company…or for any fraudulent purpose, every person who was knowingly a party to the carrying on of the business in that manner is liable to imprisonment……”.

“Company” is defined by Section 735(1)(a) of the 1985 Act:-

“”Company” means a company formed and registered under this Act, ……”.

In those circumstances, the applicant submits that if the conduct of which he is accused had taken place in the United Kingdom, such conduct would not constitute the offence of fraudulent trading in the United Kingdom because WBB is not a company formed and registered under the 1985 Act. Miss Montgomery QC contends that the offence of fraudulent trading is not universal in character. The 1985 Act creates a specific offence local to the United Kingdom. If the business of WBB was being conducted in the United Kingdom for a fraudulent purpose, no offence under English law would be committed.

In support of that submission, she draws attention to the decision of the House of Lords in Cox v Army Council [1963] AC 48. The House of Lords was concerned with the question whether a soldier had committed a “civil offence”, an act punishable by the law of England or which, if committed in England, would be punishable by that law (see Section 70 of the Army Act 1955 cited at page 66). He had been accused of driving without due care and attention on a road in Germany. It was argued that no equivalent offence would have been committed in England because “a road” under the Road Traffic Act means a road in England. Viscount Simonds accepted that it was not possible to formulate any overarching qualification to guide Courts-Martial. He concluded that:-

“The essence of the offence lies in driving without due care and attention on a road to which the public have access. I see no difficulty in at least this degree of translation. Nor should the issue be confused by saying that in England and (say Germany) the traffic regulations are different. A driver shows due care and attention by observing the regulations, which prevail in the country where he is driving. Nor, again, does it appear to be relevant that the Road Traffic Act contains numerous provisions in which “road” can only have a sensible meaning if it is confined to roads in England, and other provisions, for example, in regard to the Menai Bridge, which by their nature can have no application except to a particular subject matter. It appears to me that here at least in the negative sense is the test of the applicability of the section. If the act is of its nature one that can only be committed in England, the section cannot operate. I need say no more than that it is otherwise with such acts as driving without due care……all such acts have what for want of a better expression, I will call a character of universality”. (See page 68).

Lord Reid said:-

“(Section 70 of the Army Act 1955) must require that we can imagine another act committed in England which is similar in all relevant respects. With many types of offence, that is easy. For example, murder and theft are the same all the world over. At the other end of the scale there are acts or omissions so closely connected with the conditions which are peculiar to England, or at least which are absent in the place where the act was committed, that it will be impossible to find the necessary degree of similarity between the act or omission committed abroad and any act or omission which could be committed in England.” (Page 72).

Lord Radcliff said:-

“First, it is, in my opinion, an abuse of language to say that in this statute a “road means English road” as a “matter of construction”. It means, I think, road pure and simple as defined by the Road Traffic Act and the more correct proposition is to say that the statute itself has no application except to acts done on the roads of England. But secondly, it is just because the Road Traffic Act, in common with virtually every other offence-creating enactment, has this limited application that Section 70 requires the making of a hypothesis that the act, which did not in fact take place on an English road, was committed in England or where what takes place on the roads is subject to the provisions of the Road Traffic Act.”

We should pause to observe that road was defined in the Road Traffic Act 1960, Section 257(1) as:

“Any highway and any other road to which the public has access” Lord Radcliff continued “….the application of the law was limited to English roads, not by reason of any definition within the Road Traffic Act but rather by reason of the general limitation of the jurisdiction of an English statute to events taking place within England.”

Miss Montgomery further relies upon obiter dicta in R v Secretary of State for the Home Department ex parte Norgren [2000] QB 817. In that case Lord Bingham CJ doubted whether insider trading on the New York and Pacific stock exchanges, even if conducted in England and Wales, would constitute a crime punishable under the law of the United Kingdom (see page 835).

It must be accepted that the offence of fraudulent trading contrary to Section 458 can only be committed in respect of a company registered under the 1985 Act. The question is whether the offence of fraudulent trading is by its nature, one that can only be committed in England. That would be the position if the law required only some companies to be registered whereas others could be operated lawfully without such legislation. But in England, all companies formed here must be registered. WBB was formed in Germany and regulated by German law. It seems to us that in order to examine whether there is a necessary degree of similarity between the acts committed abroad and similar acts, in England, the statutory hypothesis under Section 2 requires one to imagine a company formed and registered within the United Kingdom. It does not require the court to postulate the undertaking of the business of WBB within the United Kingdom. As we have said, were the business of WBB to be conducted in a fraudulent manner within the United Kingdom no offence would be committed. But what is alleged to have occurred is a fraudulent trading taking place in a country through the medium of a company formed in that country and regulated by the laws of that country. The equivalent is fraudulent trading in England through the medium of a company formed and registered in England. The equivalent conduct is not fraudulent trading in one country through the medium of a company formed and regulated by the laws of another country. The essential nature of the offence is the carrying on, for a fraudulent purpose, of a business of a company in the country where that company was formed. Underlying Miss Montgomery QC’s clear and cogent argument lies the proposition that this court is required to suppose fraudulent trading in England through the medium of a foreign company formed in Germany. But that is not the equivalent of the conduct alleged against this applicant in Germany. He is accused of fraudulent trading in Germany in respect of a German company not a foreign company. In our judgment the error in Miss Montgomery QC’s argument lies in failing to reproduce the equivalent in this country of the conduct alleged to have taken place in Germany. In those circumstances we conclude that the committal Charges 3 and 12 do amount to extradition crimes within the meaning of Section 2(1)(a) of the 1989 Act.

Count 5 of the committal charges refers to Charge number 4 within the Regional Courts warrant of arrest (confusingly, No. 3, in the original Tiergarten warrant of arrest). Miss Montgomery QC contends that the facts set out in the warrant of arrest show at most the equivalent of dishonest borrowing under English law. They do not disclose an accusation of the equivalent of theft. She contends that the loans of 5m SFR made by WBB to PCE Holding were, as the warrant discloses, returned when WBB terminated the loan agreement on 12^th September 1991 and demanded payment by return of 28m SFR from PCE Holding. There is, thus, on the face of the warrant, no basis for an allegation of outright taking. However, it is to be observed that Charge 4 of the warrant refers specifically to Charge 6. That charge records that on the very day that the loan agreement was terminated, namely 12^th September 1991 WBB remitted at the request of the applicant, 34m SFR to the account of a Liechtenstein letterbox company founded on the very same day, 12^th September 1991. In those circumstances the allegation is not of borrowing but of an outright taking for the dishonest purpose set out in Charges 4 and 6 of the warrant of arrest. The theft is alleged to have taken place on the occasion when the amounts of the loans were credited to PCE Holding AG to fulfil the financial obligations of PCE Holding towards the applicant and his partners. Charges 4 and 6 read together allege that in reality the sums were not loans but the loan agreements were a mere cover for an outright taking by the applicant and others of WBB’s money.

Miss Montgomery QC advances a similar argument in relation to the moratorium claims referred to in Charge 7 of the Regional Courts warrant of arrest. The price paid for those claims was 56m DM but 26m was retransferred to the account of WBB. However, that sum was, so the warrant alleges, used so that the applicant and the others could fulfil their obligation of repayment under the contract of purchase of shares dated 22^nd October 1991 under which WBB purchased shares from PCE AG Vaduz as described in Charge 6. In those circumstances, as in the case of Charge 5, the allegation is that 36m DM was dishonestly taken outright by the applicant albeit by a circuitous route. We reject the contention that no equivalent offence of theft is disclosed in the warrant.

Count 8 concerns the purchase by WBB of what was alleged to be a non-existent claim for damages in respect of restitution claims concerning WBB’s property at Wallstrasse 9-13. Miss Montgomery QC contends that there was, in fact, a valid claim against THA in respect of which WBB could have sued THA for breach of warranty.

Count 9 also concerns the purchase by WBB of what is alleged to be a non-existent claim. Miss Montgomery QC contends that this too was a valid claim brought by IAI.

Whether or no the applicant has a valid defence to the allegations in Charges 8 and 9 of the German warrant of arrest is beside the point. In considering whether an equivalent offence is made out under English law this court is confined to the accusations made in the warrant. The warrant in relation to Charge 8 alleges that the claim did not exist. A similar allegation is made in relation to Charge 9. Charge 8 asserts that WBB, having purchased Chematec’s warranty claim, assigned that claim to PCE Realtec but, surprisingly, agreed that WBB would have to reimburse PCE Realtec for the market value of the property in case of restitution “without the requirement of the claim for repayment to be set off against it”. Charge 9 of the warrant alleges that the contract of purchase of the claim is designed to enable the applicant and others to withdraw from WBB further assets without “any legitimate reason”. If the facts are proved, that, in our judgment, is the equivalent of an offence of theft.

This alleges that WBB transferred the property Wallstrasse 9-13 to PCE Realtec. The warrant recites that PEC Realtec undertook only a credit liability of 60M DM although the purchase price in the contract was 94M. It records that the actual profit yielded by PCE Realtec amounted to 43DM. There is, as Mr Hardy on behalf of Germany accepted, no evidence of any appropriation of property belonging to WBB. The allegation amounts to no more than an assertion of the transfer of a chose in action to the account of PCE Realtec. In those circumstances there is no allegation of theft of property belonging to another (see R v Preddy [1996] AC 815). Accordingly, I accept Miss Montgomery QC’s contention that no equivalent crime has been established of theft under English law for the purposes of identifying an extradition crime under Section 2 of the 1989 Act.

In those circumstances this court should order the deletion of Charge 10 of the committal charges from the list of offences in respect of which the District Judge committed the applicant. An argument arose as to the power of the court to discharge an applicant in respect of one out of a number offences under Section 11(3). In the light of our conclusions it does not seem to us that this issue arises. No question of a discharge is relevant in circumstances where, as I have concluded, the application under Section 11(3) fails. Our conclusion in relation to Count 10 is outwith the original jurisdiction of the High Court under Section 11(3). In concluding that there is no equivalent offence under English law in respect of Charge 10 we have not concluded that it would be unjust or oppressive to return the applicant in respect of that count but rather that it does not constitute an extradition crime within the meaning of Section 2(1)(a). In so concluding this court is exercising its ordinary jurisdiction of review in the light of what we have perceived to be an error of law by the District Judge in relation to that count.

We should record that the applicant also contends that since it is now twelve years from the date of the earliest of the alleged offences and over eight years since the last, delay is a free standing reason as to why he should be discharged under Section 11(3)(b) of the 1989 Act. We reject that contention. We are satisfied that having regard to the complexity of the facts underlining the charges, the delay was not unjustified and it would not be oppressive or unjust to return the applicant to face these charges in Germany. The last event occurred in December 1994 and the original warrant of arrest was issued in December 1996. The original warrant came to the attention of the applicant in January 1997 and he instructed lawyers in Germany to act on his behalf.

For the reasons we have advanced above, we dismiss this application.