Reading Borough Council v Younis

MR JUSTICE CRANSTON:

Introduction

This is an appeal by way of case stated from a decision of the Berkshire Justices sitting at Newbury. The appellant is the Reading Borough Council, ("the Council") and it appeals against the decision of the magistrates of January last year to dismiss informations preferred against the respondent, Nadeem Younis, on the basis that they could not be sure that he was a "trader" and therefore caught by the relevant regulatory provisions.

The prosecution had brought five informations against Mr Younis on 25 September 2012, relating to the sale of a Ford Ka motor vehicle to a Ms Maribic Benito. Four of those informations alleged breaches of the Consumer Protection from Unfair Trading Regulations 2008 SI 1277 ("the 2008 Regulations"), in that being a trader in motor vehicles he committed offences under those regulations. The fifth information was that contrary to the Fraud Act 2006 he had made a false representation to the effect that he was a private seller, whereas he was not. The magistrates heard the informations on 21 and 22 October 2013. Because the time they took to hear the case exceeded the two day time estimate it was not concluded until 31 January. The magistrates dismissed the five informations.

Mr Younis is represented today by Mr Anthony Montgomery who came late to the case, but has nonetheless made powerful representations on Mr Younis's behalf. In addition to the case stated is a document entitled "Supplement To Case" dated yesterday, which sets out a number of findings of fact by the justices. I understand that a draft was available some time ago but the court was not able to finalise it because of the retirements by some of the justices.

Background

The facts giving rise to the preferment of the informations are set out in the document "Supplement To Case". They are that on 8 August 2011, Mr Younis purchased the Ford Ka motor vehicle; that he registered ownership of that vehicle under the name of "Brookvale"; that he submitted it to an MOT test on 10 August, which had failed; but that it passed when resubmitted on 22 August.

The findings of fact continue that Mr Younis advertised the motor vehicle for sale on Autotrader.co.uk on 25 August and that Ms Benito went to his house to examine it on 7 September 2011. She paid for it the following day and collected it on 9 September 2011. There were concerns about water leaks. She had a radiator hose repaired on 24 September, and then on 1 October she wrote to Mr Younis rejecting the vehicle. She had collected a receipt from him at some stage dated 7 September which was in the name "Brookvale". Mrs Benito then complained to the Council's Trading Standards Department. They left a card at Mr Younis' home on 12 October 2011, but he was not interviewed until the following May, 2012.

In the Case Stated the justices set out the main points for the prosecution and the main points for the defence. In relation to the main points for the prosecution they outlined Ms Benito's evidence. There was a reference in Ms Benito's evidence of a recovery truck she saw at Mr Younis' house. There was also evidence from a Ms Brown, from Autotrader, who explained that Mr Younis had advertised twenty times in the period between 4 August 2009 and 25 August 2011, the last advertisement being for the vehicle which Ms Benito purchased. Ms Brown's evidence was that anyone placing five advertisements in a rolling 12 month period was categorised as a trader for the fifth and the subsequent vehicle advertised. Ms Brown also gave evidence that some sixteen of the twenty advertisements Mr Younis placed had been in the name of 'Brookvale' or 'Brookvale Motors'.

Under the heading "Main Points for the Defence" the justices outlined Mr Younis's evidence, that he had operated a recovery company, Brookvale Motors, but that it had ceased business in 2011. The recovery truck was not in use and there were two statutory off-road notices (SORNs) dated 1 September 2010 and 31 August 2011. His evidence was also that he did not do repairs. He said that he was unemployed and that he was very interested in motor vehicles, changing them frequently. His evidence was also that eleven of those on the Autotrader list were his, but he did not consider himself to be a trader since he had no involvement with any business that bought and sold cars. He said he bought his cars through Autotrader, Gumtree or on-line similar sites. Mr Younis also stated that in his meetings and discussions with Ms Benito he made clear that it was a private sale and that he did not give any three month warranty.

The magistrates under the heading "Conclusion" said this:

The Case Stated then set out the Council's contentions and Mr Younis's contentions and stated:

The document entitled "Supplement To The Case" contains findings of fact: that before Mr Younis met Ms Benito, he had offered for sale on Autotrader.co.uk nineteen cars between February 14 2009, and 20 August 2011; that he had operated a small scale vehicle recovery business from his home prior to 2011 and had a tow truck for such recovery; that he bought some vehicles, kept them for a few months and then sold them; that he had purchased several sports cars, modified them and sold them; and that he had used the name 'Brookvale' in connection with his Autotrader advertisements. A further finding of fact was that between 10 September 2011 and July 2013 he did not sell any cars.

The questions posed by the magistrates are as follows:

Submissions

The Council contends that the justices' reasons are inadequate and that in the passage entitled "Conclusion" they did not properly address the issue of whether Mr Younis was a trader. The prosecution case was put on two bases, first that Mr Younis had engaged in selling a number of vehicles over a period, and secondly because of the particular circumstances surrounding the sale of this vehicle to Ms Benito. The justices' reason fell short because they do not grapple with the issues identified in the prosecution case or explain how they reached their conclusions.

The relevant principles governing a court's reasons were enunciated by Beatson J in Northumberland County Council v PR Manufacturing Ltd [2004] EWHC 112 (Admin):

That passage was endorsed by Sullivan J in R (on the application of) Woking Borough Council v Keenan [2005] EWHC 979 (Admin), in a case where the justices had rejected the clear and crucial evidence of one of the witnesses. Sullivan J held that their decision was perverse and they had not given adequate reasons for rejecting that evidence. It therefore followed that they had given inadequate reasons for their decision. As a result their decision was quashed.

In submissions on behalf of Mr Younis, Mr Montgomery accepted that the justices' reasons in this case were not perfect. However, the Council's case on the nineteen sales between February 2009 and August 2011 must have been at the forefront of their consideration. It was a simple issue whether Mr Younis was a trader, an uncomplicated case. It must be that the justices had decided that, notwithstanding those sales they could not be sure that Mr Younis was a trader. In the passage entitled "Conclusion" they had said expressly that they had considered all the evidence. That Mr Younis had made the nineteen sales was clearly part of the evidence, indeed it was undisputed evidence because Mr Younis had conceded as much.

In relation to the circumstances surrounding the sale to Ms Benito, the second limb of the prosecution case, Mr Montgomery contended that in effect the prosecution, disgruntled at the outcome, was now seeking to advance its best points and attempting to flesh out its case. For example, the prosecution now claimed that the fact that Mr Younis had not sold vehicles after the sale of the Ford Ka to Ms Benito was self-serving since he knew he was being investigated. Mr Montgomery contended that that issue not only had not been put in cross-examination. In fact, he submitted, the absence of sales after the sale to Ms Benito was a matter which did have a bearing on the issue of whether Mr Younis was a trader when he sold the vehicle to her. As to the issue of the use of the name 'Brookvale' and the fact that the receipt had that name, Mr Montgomery submitted that was because of the Autotrader requirements. The fact that Mr Younis was subsequently unemployed and the fact that the recovery truck business was no longer operating were relevant to the magistrates' decision. While the reasoning of the justices on these points was not as complete as might be, Mr Montgomery submitted that this could constitute what he termed "heavy duty criticism".

Discussion

In my view there is a gaping hole in the magistrates' decision. The authorities make clear that regularity of dealing is relevant to whether a person is a trader. The 2008 Regulations, in Regulation 2, define trader to mean:

The leading authority under the Trade Descriptions Act 1968 is Davies v Sumner [1984] 1 WLR 1301 (HL). That was a case of a sale of a motor vehicle by a self-employed courier. He had used the vehicle for his business and then sold it in part exchange for a new vehicle in the course of which he applied a false trade description. In giving the decision of the Appellant Committee, Lord Keith of Kinkel said that the words in the Trade Descriptions Act 1968 "in the course of trade or business" were intended to apply to transactions which had some degree of regularity so that they formed part of the normal practice of a business. The absence of established practice by the defendant of buying and selling cars justified the decision that he was not a trader.

In the course of his speech, Lord Keith referred to Havering London Borough Council v Stevenson [1971] 1 WLR 1375, which enunciated the proposition that in certain circumstances the sale of goods may be in the course of trade or business, notwithstanding that the trade or business of the defendant did not consist of dealing in profit of goods of that (or indeed of any other) description. Lord Keith also stated that the need for some degree of regularity did not, however, mean that a one off adventure in the nature of trade carried through into profit would not fall within what was at issue in that case under section 1 of the Trades Descriptions Act 1968.

The key issue before the justices, as they recognised, was whether Mr Younis was a trader. The authorities such as Davies v Sumner(supra) make clear that an issue they needed to address was the sale of some nineteen cars between February 2009 and August 2011 and whether there was a degree of regularity which made Mr Younis a trader. That issue was never addressed. To use the words of Sullivan J in Keenan(supra), the justices "skirted around that particular issue". In my view the fact that they failed to address that key issue means that their reasons are flawed. I would allow the appeal and answer the questions posed to this court as "no" to question 7(1) and "no" to question 7(2). In my view it is unnecessary to address any of the other questions.

MR MONTGOMERY: My Lord, as far as I can ascertain, the appellant cannot obtain costs from a legally aided respondent. I have asked my instructing solicitors for instructions in relation to that. What I have said is that I would ask the court whether I could have apply to in relation to costs in the event that we are able to unearth the anything further but I think it is highly unlikely, and indeed those instructing me may not wish to make an application for costs in all of the circumstances.

MR BLACKFORD: My Lord, there is something to be said for having certainty. The results of your Lordship's decisions want simply to be communicated to Mr Younis, but there ought also to be a rider that there is a complete question mark over costs and at liberty for any uncertain indefinite period might be revisited.

MR MONTGOMERY: Could I say that in terms of Mr Younis, it is not his fault that there was a shortcoming on the part of the magistrates in identifying reasons and thus making their decision flawed and susceptible to an appeal at all.

So, his question was quite separate from his Legal Aid status, which one would assume would be a reason for him not to be made a subject of an order for costs; but the injustice in the case, in the sense that this has absolutely nothing to do with him, this question: this is not case where the position is that there is a direction. As I say, sometimes it is to convict, because the matter at issue was conclusive of guilt or innocence, conclusive of guilt. So therefore the whole proceedings were resolved against it, because of course if there is to be a resumption of the case in the Magistrates' Court because your Lordship directed a re-hearing as a corollary order to allow an appeal, the outcome of that is completely unknown.

Of course the cost would be an issue in relation to that and any subsequent proceedings.

So I would ask your Lordship not to make any order in relation to my learned friend's application where he seeks -- could I mention one other matter, which is separate from that which is this and I do apologise, it is my ignorance, as I am very familiar in the Court of Appeal Criminal Division and do judicial reviews but am somewhat new to cases stated.

I asked at the General Office and because he is a recipient of a representation order (which he just been granted as I mentioned when as it was relevant earlier) but dates back to just 25 September, it is still not long ago, there are two modest -- so in the view of the layman, in other words, there are two modest bills.

The General Office said that if they are prepared, more than anything, those can be, I was told, handed into the judge. I expressed some surprise at that but if that is the procedure, I do not know whether your Lordship has any involvement whatsoever. I see (laughs) that no, they just must be handed into the General Office, I suppose but I was -- I did not comment, I was not sceptical about what I heard, although I was personally rather doubting it. Could I revert to that initial point, then?

MR JUSTICE CRANSTON: Yes, of course.

MR MONTGOMERY: And request whether my Lord is with me on that?

MR BLACKFORD: My Lord, the respondent has opposed the appeal and he has lost the case. In the ordinary course of events, costs should simply follow the event, it is as simple as that. The matter is heavily complicated by the fact that he has Legal Aid.

In those circumstances, I have indicated that I have not been able to find a way in which we would succeed, practically speaking, in getting costs but I ask your Lordship to leave the matter open.

MR JUSTICE CRANSTON: In my view finality is important. No order as to costs.

MR MONTGOMERY: My Lord, will your Lordship say that the case should be remitted to the justices?

MR BLACKFORD: My Lord, although that is the usual -- I query whether that should be the order in this particular case, because although the matter is only one -- this fell in the judgment of magistrates at the first hurdle. Whether it is in the public interest having regard to, for instance, the antiquity of the alleged offences, because of course they date back to 2011, and here we are in 2015 -- one does not want to minimise any criminal offences; but there is the antiquity, and then the fact that the outcome of the trial is uncertain because the point about the trader is just one of other aspects would have to be proved, even if a fresh set of magistrates hearing the trial were satisfied.

It is not always the case, as night follows day, even if is the usual position where an appeal by case stated is not that but it is remitted for a rehearing, plus I will submit, the antiquity, coupled with the fact extra issues to be resolved in combination (to use my learned friend's expression in this case) that the cumulative effect of those points militates in favour of not making an order for the rehearing. This case has served a purpose in that there is this extra authority which confirms the necessity of magistrates to give their reasons.

In my respectful submission, it is not in the interests of justice to order that there be a rehearing in particular of such an old case.

MR MONTGOMERY: My Lord, I am not saying that.

MR JUSTICE CRANSTON: Notwithstanding the antiquity of this matter and notwithstanding my surprise that it has taken so long to wend its way through the courts, it ought to be remitted to the magistrates.

MR BLACKFORD: So be it, my Lord. Thank you.

MR JUSTICE CRANSTON: Thank you very much.