Gladstone Plc v Manchester City Magistrates' Court & Anor

MR JUSTICE LEVESON: This is an application for judicial review of a decision of District Judge (Magistrates) Alan Berg, sitting at Manchester City Magistrates' Court to the effect that Bradley Lee, on behalf of Gladstone PLC, had no right or authority to lay an information alleging that Mr Norman Guiver had assaulted Mr Benjamin Merrett, contrary to section 39 of the Criminal Justice Act 1988.

Before embarking on an analysis of the facts, it is appropriate to deal with one preliminary issue. These proceedings were served both on the Magistrates' Court and on solicitors who had been acting for Mr Guiver in the criminal prosecution as an interested party. Mr Guiver completed an Acknowledgment of Service, setting out the grounds upon which he resisted this claim and identifying that he was acting in person. Unfortunately, details of his representation were not transferred onto the Administration Court database and the order of the single judge was sent only to his former solicitors. This error came to light 15 days later when Mr Guiver contacted the court for an update. He now argues that the Acknowledgment of Service cannot have been before the single judge with the result that permission was granted when it would not otherwise have been. Although the error is to be regretted, and the Court Service apologised to Mr Guiver, it did not have the effect which he suggests. As the order of the single judge makes clear, he considered both the documents lodged by the claimant and the Acknowledgment of Service filed by the interested party. Mr Guiver has not been prejudiced in any way in relation to the judicial consideration given to his defence to this application.

Turning to the merits, the facts can be summarised very shortly. Mr Guiver is a shareholder of Gladstone PLC, with very strong views as to the way in which the company has been managed or, as he would contend, mismanaged. On 21st March 2003 Mr Guiver attended the company's Annual General Meeting, during the course of which, it is alleged, and I underline that it is an allegation only, there was a scuffle in which Mr Guiver assaulted the Chief Executive, Mr Merrett. That afternoon there was a meeting of the board of directors for the purpose of Mr Merrett seeking advice as to the action which the company should take. The Chairman and other director present agreed that the company should be "resolute in its approach to shareholders who act in the manner described", and approved payment by the company of all reasonable expenses incurred by Mr Merrett in relation to prosecuting the case. The company wrote to solicitors whom they believed acted on behalf of Mr Guiver, but not having obtained any response, took legal advice. The upshot of that advice was that the solicitors advised the company, and Mr Merrett, to instruct them to commence proceedings in respect of the assault. So it was that on 24th June 2003 the solicitors wrote to Manchester Magistrates' Court. This is an important letter, which I set out:

"Dear Sirs.

Gladstone PLC v Norman Guiver

We are instructed by the above-named prosecutor, Gladstone PLC, and wish to lay the following information before the court.

Date of offence: 21st March 2003.

Name of the accused: Mr Norman Guiver.

Address of the accused: [His address is provided. It is not necessary to include that detail within this judgment].

Alleged offence: Common assault, contrary to section 39 of the Criminal Justice Act 1988.

Name of informant: Mr Bradley Lee.

Address of informant: Lawrence Stephens Solicitors [and that address is provided].

Telephone number of the informant: [That is also provided].

We enclose three copies of the appropriate summons in respect of the above information and look forward to receiving duly signed copies of the summons in due course. We also forward to hearing from you in respect of the listing of a return date that is mutually convenient to both the court and the prosecutor."

The summons is addressed to Mr Guiver, issued out of the Manchester Magistrates' Court, and reads:

"Informations this day being laid before me by Bradley Lee of Lawrence Stephens Solicitors ... acting on behalf of the prosecutor, Gladstone PLC, who states that you on 21st March 2003 at the offices of Brewin Dolphin Securities Limited ... Assaulted Ben Merrett, common assault contrary to section 39 of the Criminal Justice Act 1988."

A statement of facts then alleges that during the course of the Annual General Meeting of the company, of which Mr Guiver was a shareholder, he "assaulted Ben Merrett, the Chief Executive officer of the company, by kneeing him in the groin".

It is the summons which ultimately came before the District Judge at which both prosecution and defendant were represented by leading counsel. At the beginning, Mr Baughan QC and Mr Mitchell, on behalf of Mr Guiver, submitted that the information was invalid on the basis that Gladstone PLC had no right or authority to lay information and thus no locus. It was also argued that the prosecution was an abuse of process. The District Judge did not deal with this latter argument, and I say no more about that. He did, however, rule as follows:

"1.

In the circumstances of this case which concerns an incident at a private annual meeting to which access is restricted to a limited class of persons I do not consider that it is a matter of public policy or utility or one which concerns public morals and therefore the power to lay an information is not open to 'any person'. (See footnote 2 in Stones to Rule 4(1) of Magistrates' Courts Rules 1981)

2.

This case concerns an individual grievance and as such it is the aggrieved Mr Merrett (the victim of the alleged assault) who is the only person entitled to lay an information either personally or through his solicitor.

3.

A body corporate such as Gladstone plc is not a person 'individually aggrieved'.

4.

In any event if Gladstone plc could properly fall within the definition of a person individually aggrieved they had no authority, express or implied, to exercise any power to lay an information and were in effect acting ultra vires.

5.

Gladstone plc has no locus standi in the proceedings for the aforementioned reasons.

6.

The information is invalid and as such this Court has no jurisdiction to try the issue arising therefrom.

7.

The proper person to have brought proceedings is Mr Merrett. He is the aggrieved individual."

As a result, the learned District Judge dismissed the summons, going on to decide, perhaps somewhat oddly in the light of his decision, that the defence costs should be met out of central funds.

The claimant, Gladstone PLC, seeks both to quash the rulings and also seeks an order requiring the District Judge to reinstate the summons and continue the hearing. Mr Guiver, on the other hand, supports each of the findings of the District Judge, arguing that these are decisions of fact and should not be revisited by this court, not least because the claimant did not proceed by way of case stated with a shorter time limit, but rather by way of judicial review. In many cases, decisions of magistrates are appropriately challenged only by way of case stated because findings of fact are essential to the determination of the question in issue. In this case, notwithstanding Mr Guiver's contentions to the contrary, the facts are, in reality, comparatively clear. The issues are questions of law which, in my judgment, are susceptible to challenge by judicial review.

Although not in the order decided by the District Judge, let me first deal with the suggestion that Gladstone PLC have no power to institute, whether itself or by solicitors, criminal proceedings. First, the District Judge observed, there is no doubt that bodies corporate can prosecute, such proceedings being commenced by a duly authorised officer laying an information, as evidenced by the activities of such organisations as the Federation Against Copyright Theft (FACT), The British Phonograph Industry (BPI), both of whom represent the music industry, or, again, for example, the RSPCA. District Judge Berg rejected the argument that there was no difference. He said:

"The bodies referred to by way of example are trade organisations, one of whose main functions or objects is the protection of and the promotion of their members' welfare. I am satisfied that their ability to prosecute by way of laying information derives from it being a matter of public policy and one which concerns the public morals. It is not only to protect their members' financial interests or welfare, it is to protect unsuspecting members of the public from, eg, purchasing counterfeit or pirated goods. I do not believe that the same argument can be sensibly advanced as a basis for Gladstone plc to act in the manner they purported to in this case."

To consider that argument, it is necessary to analyse the purpose for which prosecutions can be brought or, to put it another way, whether there is any limitation on the right to bring a prosecution. I am content to take the statement of law identified in Stones Justice Manual 2004 Volume 2 paragraph 1-5933 at footnote 2 in these terms:

"Unless the information is required by statute to be laid by any particular person any person may lay it where the offence is not an individual grievance, but a matter of public policy and utility, and concerns the public morals (Cole v Coulton (1860) 24 JP 596; Back v Holmes (1887) 51 JP 693; Giebler v Manning [1906] 1 KB 709, 70 JP 181; Lake v Smith (1911) 76 JP 71). In the case of a police prosecution, the information should be laid by the officer reporting the offence, the chief constable, or some other member of the force who is authorised to lay an information (Rubin v DPP [1989] 2 All ER 241, 153 JP 289, DC)."

Thus, because it would be an individual grievance, there is no doubt that Mr Merrett could have instituted a prosecution. The question is whether a third party, in this case the company, can do so, for which purpose it is necessary to establish that it is a matter of public policy and utility and concerns public morals. To put it in modern language, the test can be restated by identifying a requirement that the prosecution establish a public interest and benefit, as opposed to a purely private interest in criminal proceedings.

Testing that principle against the examples given by the District Judge, prosecutions by those bodies clearly reveal a public interest in relation to protection of copyright on the one hand and animal welfare on the other. Similarly, subject to vires, bus or train companies which seek to protect their staff from violence are perfectly entitled to commence a prosecution in the event of the police declining to do so. Is there a difference here? In my judgment, there is not. The Annual General Meeting of a public company limited by shares and governed by the Companies Acts 1985 to 1989 is an important aspect of the governance of that company and it is in the public interest that such meetings are conducted in an orderly manner. There is, of course, a place for protest and legitimate dispute, but that falls short of the use of violence, although I emphasise that I deal in the generality and not in the specifics of this meeting. Subject to the company having the relevant authority to undertake a prosecution, I, for my part, see no reason for concluding that there is insufficient public interest in the management of general meetings of this type to justify the company, if it may, instituting criminal proceedings.

Turning from the general to the specific, that organisations may be set up specifically to co-ordinate prosecutions does not go to whether the organisation can prosecute, which, as I say, depends upon the public interest involved, but rather to the vires of the authority vested in the company. In the case of Gladstone PLC, the company's objects include the following:

"L. To take part in the management formation, control or supervision of the business or operation of any company or undertaking and for that purpose to appoint and remunerate any directors, experts or agents.

Z. To do all such things as may be deemed incidental or conducive to the attainment of the above objects or any of them."

Paraphrasing, the company has within its objects the power to manage and control the operation of any company and do anything which may be considered conducive to attaining that end. The operation of the company includes complying with its statutory obligations to hold annual meetings and it is beyond argument that to do so includes the ability to control order at that meeting. Of course, such control may must be balanced in such a way as ensures for all and every shareholder the legitimate right to participate, but that goes to the way in which the power is exercised and not to its existence.

In my judgment, the company does have the power potentially to institute a prosecution and sufficient interest in the circumstances of this case to do so. Whether, as Mr Nicholls QC for the claimant now argues, any person could institute a prosecution is not a matter which necessarily falls for decision in this case, and I prefer to say no more about it. Much energy before the District Judge and, indeed, in the written submissions before this court, has been directed to whether the company has the power to lay an information and, in particular, to whether in Rubin v DPP, to which I have previously referred, Watkins LJ was correct to conclude that section 3(2)(a) of the Prosecution of the Offences Act 1985 should be construed so as to exclude a body corporate from within its terms. In R v Ealing Justices, ex parte Dixon [1990] 2 QB 91, Woolf LJ had reservations as to the reasoning, but did not consider it appropriate to indicate a final view, albeit commenting at page 101:

"I would regard it as preferable for an individual to be the informant albeit that he is acting on behalf of a body corporate."

In my judgment, it is unnecessary to enter into this debate. In this case the information was not laid by a company, but rather by Mr Bradley Lee, a solicitor with the firm instructed by Gladstone PLC. Both in the information and in the summons the position is clear. Further, Rule 4(1) of the Magistrates' Court Rules 1983 specifically visualises an information being laid by a prosecutor or by his solicitor. That leads me to the question whether Mr Lee was, in fact, authorised to issue this summons. Having recited the terms of the resolution of 21st March 2003, which I set out at the beginning of this judgment, the learned District Judge referred to the power to reimburse Mr Merrett for his expenses. He went on that, in his view, the intention was for Mr Merrett to take proceedings, and not necessarily criminal proceedings, which conclusion he believed was reinforced by a letter written by Mr Merrett and later by the company solicitors, the latter of which spoke of the solicitors having advised "our clients", ie, the company and Mr Merrett, of the remedies available under civil and criminal law and having advised "our clients", again in the plural, "to instruct us to commence proceedings ... in respect of the assault."

With respect, I do not agree with the District Judge that criminal proceedings were not then in anticipation. The letter specifically refers to remedies under the criminal law. By the resolution of 21st March the company agreed to underwrite the expense of Mr Merrett taking proceedings. By 24th June, when the solicitors were writing to the magistrates, matters had moved on. On the basis of the written information contained in the letter that solicitors had been instructed by the company and wished to lay the information, identifying Mr Lee as the informant, it does not appear to me to be an inappropriate inference that the solicitors were so authorised by the company. As I read the learned District Judge's judgment, he did not find to the contrary, and although Mr Guiver has argued before us that the terms of the resolution were not wide enough to justify that course, in my judgment there is sufficient authority in the documentation which has been provided to justify this information being laid by the solicitor.

In the circumstances, whilst I pay tribute to the clear and careful way in which the District Judge analysed the issues, I do not agree that he reached the correct conclusions in law. For my part, I would quash the decision of the District Judge, including his decision as to costs, declare the information valid, and direct that the summons be restored and the hearing resumed.

Before parting with the case, I would add this. Although I express absolutely no view on the alternative submission advanced to the District Judge, namely whether the prosecution constitutes an abuse of process, I consider it somewhat unfortunate that so much energy is having to be directed to this litigation, rather than in an effort to resolve the issues of principle which exist between Mr Guiver, a minority shareholder with entirely legitimate interests in the management of the company, on the one hand, and the board of Gladstone PLC on the other. In the long term, such an approach is likely to be a far more effective method of resolving the issues between the parties than pursuit of this prosecution.

LORD JUSTICE ROSE: I agree. On any view, criminal proceedings by a public company, rather than the police, against a shareholder for alleged assault on a director in the course of an Annual General Meeting are very rare indeed, and certainly outwith my 50 years of experience in relation to the criminal law. The evidence in relation to the alleged assault is not before this court. Accordingly, I have no view one way or the other as to the merits of that allegation. Clearly, a public company is entitled to take proper steps to ensure that its Annual General Meetings are conducted in an orderly fashion. Equally clearly, it is the right of a shareholder to make known his or her views on the running of a company, however contentious and however unpalatable to the board those views may be, and a shareholder may express those views in a proper fashion at an Annual General Meeting.

In the present case, it would be lamentable if the board of Gladstone PLC were seeking to suppress legitimate, albeit hostile, comment on their performance by having recourse to criminal process. Whether or not that is the position is not a matter which is before this court and, accordingly, I express no view on it. But for the reasons given by my Lord, I agree that the information in this case was valid and properly laid. The District Judge was wrong. His decision in that regard, and as to costs, is quashed. The case is remitted for the proceedings to continue.

Yes, Mr Nicholls?

MR NICHOLLS: My Lord, I do have an application for costs. The application is for the costs to be assessed if not agreed. We have not been able to provide proper documentation in respect of it, one of the reasons being that Mr Guiver is not represented in the matter, and would need to be considered in more detail between the parties.

LORD JUSTICE ROSE: Mr Guiver, can you say anything on the subject of costs?

MR GUIVER: I am not aware of what the situation is.

LORD JUSTICE ROSE: Mr Nicholls is asking for costs of this application to be awarded against you to be assessed if not agreed.

MR GUIVER: I was asked to submit information as an interested party. At no point was I told there were any costs.

LORD JUSTICE ROSE: Of course, you are not the defendant, are you?

MR GUIVER: Not yet.

LORD JUSTICE ROSE: Mr Nicholls, are you really pursuing this application?

MR NICHOLLS: May I take instructions?

LORD JUSTICE ROSE: Yes, please do.

MR NICHOLLS: The lay clients are not here.

LORD JUSTICE ROSE: Then you had better take instructions from whoever is here. (Pause)

MR NICHOLLS: My Lord, may I seek to assist the court to this extent. I have a difficulty in that the lay clients are not here and so there is no way that I can withdraw the application without them.

LORD JUSTICE ROSE: Would you like a little time to make a telephone call? Would that help?

MR NICHOLLS: My Lord, yes, it would help. Yes, my Lord. Thank you.

LORD JUSTICE ROSE: Shall we say a quarter to one?

MR NICHOLLS: My Lord, before revising my application, can I ask your Lordships to look at page 1543 of the white book.

LORD JUSTICE ROSE: Volume 1 or 2?

MR NICHOLLS: Volume 1.

LORD JUSTICE ROSE: 1543.

MR NICHOLLS: Your Lordships will be familiar with it, but I would just like to introduce that which I say on this basis. It says there as to costs that the Court has a discretion. Generally, it follows the event. The unsuccessful party is generally ordered to pay the costs. The defendant, that is the public body, whose actual decision or failure is under challenge, will normally be ordered to pay the costs of the successful claimant.

May I tell your Lordships this, that the claimant now does not pursue costs against Mr Guiver, but the claimant does seek costs against the defendant on the basis of what appears there in the white book.

LORD JUSTICE ROSE: That is against the Magistrates' Court, is it?

MR NICHOLLS: Against the Magistrates' Court. The public body whose actual decision, or failure to act, is under challenge.

LORD JUSTICE ROSE: We are grateful that you do not pursue the application in relation to the third party, but I should tell you that it is not the normal practice to make an order for costs against magistrates unless they take a part in the proceedings.

MR NICHOLLS: Then I cannot say more than I do at the moment. I do say it on this basis at the moment. Mr Guiver obviously was fortified by the decision of the District Judge and so, therefore, one can understand his contesting this application for judicial review. On the other hand, the claimant, being the successful party, has incurred costs and it is on that basis that this application is made. I appreciate that the Magistrates' Court has not appeared and taken a part in the proceedings, but that is a decision that has been made by the Magistrates' Court, and understandably so.

MR JUSTICE LEVESON: The Magistrates' Court might take the view that as the District Judge was acceding to submissions made to it by or on behalf of Mr Guiver they ought properly to leave him to provide any argument.

MR NICHOLLS: I can understand that. My Lord, I have made my application. The matter is at the Court's discretion.

LORD JUSTICE ROSE: Thank you very much. We shall make no order as to costs. Thank you.