Redcar v Dady & Ors

Introduction

On 22 August 2012, at Teesside Magistrates’ Court, the three defendants were sent for trial under section 31 of the Crime and Disorder Act 1998 to Teesside Crown Court. The first defendant, Marc Dady, was charged with an offence of conspiracy to defraud (Count 1) and both Marc Dady and his parents, Carole and Graham Dady, were charged with related money-laundering offences (Counts 2 and 3).

The defendants sought to dismiss the charges. The application to dismiss was heard by Judge Armstrong, at Teesside Crown Court, on 2 November 2012. In a lengthy reserved judgment, handed down on 18 December 2012, the judge dismissed the charges.

The Crown now applies to prefer a voluntary Bill of Indictment, repeating the same three counts. In essence, they say that Judge Armstrong was wrong to dismiss the charges. The application was received in my last week on circuit at Newcastle Crown Court, and had to be dealt with subsequently, at a hearing in London, on 1 March 2013. I am very grateful to all four counsel for coming down to London to make their helpful submissions and to answer my questions.

The Correct Approach

Whilst the procedure for preferring a bill of voluntary Indictment is usually engaged when the magistrates fail to commit a case to the Crown Court, there was no serious dispute that the same process can also be utilised when the judge at the Crown Court dismisses the original charges. Authority for that proposition can, I think, be gleaned from paragraphs 1-288 and 1-289 of Archbold2013 and is confirmed at paragraph 8 of the judgment of the Court of Appeal (Criminal Division) in R v Glyn Thompson and Brian Hanson [2006] EWCA Crim 2849, which reads:

“It follows…that, since the respondents had not yet been arraigned, the dismissal of the charge and quashing of the count did not amount to a formal acquittal of the respondents; and that a voluntary bill of indictment could be sought.”

Authorities on the proper approach to such an application are sparse. In Brooks v DPP [1994] 1 AC 568, the Privy Council, dealing with a dismissal in committal proceedings, said that the decision of the magistrates should be treated with the greatest respect, and stressed that there must be exceptional circumstances to warrant a prosecution. The burden of demonstrating the necessary exceptional circumstances must lie with the Crown.

As to the lay-out of this Judgment, I adopt, and do not here repeat, Judge Armstrong’s helpful summary of the facts. In addition, it seems to me that it is unnecessary to set out in great detail Judge Armstrong’s reasons for dismissing the charges. That is partly because some of the submissions before me as to the governing law were rather different to those made to the judge. But his approach can be succinctly summarised: he considered that there was at least one relevant statutory offence which might have been charged, but to which the defendant might have had a defence; he therefore concluded that, in all the circumstances, it would be wrong in principle for the wider allegation of conspiracy to defraud at common law to be maintained.

I should also say at the outset that it was agreed before Judge Armstrong, and accepted before me, that the two money laundering counts (Counts 2 and 3) are entirely parasitic upon Count 1, the charge of conspiracy to defraud. Accordingly, it was agreed that, if I concluded that there should be no voluntary Bill in respect of Count 1, then the whole application should fail.

The Essential Nature of the Crown’s Case

Marc Dady, personally and in conjunction with his companies Live Sport Network Limited (“LSN”) and M.Dady Limited, ran a website, www.free-football.tv, which, for a £10 fee, facilitated the illegal downloading of Sky’s Premier League football matches by his subscribers. The matches in question were being “streamed” or illegally re-broadcast over the internet from abroad. The website www.free-football.tv had not been licensed to broadcast, stream or otherwise make available audio visual footage of matches, the copyright of which is owned by Football Association Premier League Limited (“FAPL”), nor had they been authorised by any of FAPL’s licensees to do so.

Count 1 of the Voluntary Bill reads as follows:

During the course of his submissions, Mr Mitchell, for the Crown, sought to persuade me that this case would be easy to open to the jury. He argued that he would say to the jury that, by charging a fee to his subscribers, Marc Dady was taking money that belonged to Sky and the Premier League. That amounted to a criminal offence. He would say that whether or not Marc Dady, or his subscribers, thought that they might have been acting legally was ultimately irrelevant.

In one sense, Mr Mitchell’s submission that this was a relatively straightforward case was enhanced by the fact that there were at least one, and possibly two, statutory provisions which indicated that a criminal offence had been committed by Marc Dady. Those provisions were:

However, a short review of the authorities makes plain that the Crown’s case is, unhappily, not nearly as straightforward as Mr Mitchell contends.

The Complications

I accept Mr Mitchell’s broad division of the statutory provisions, namely that s.107(2A) is concerned with copyright, while s.297 is concerned with encryption.

The authorities demonstrate three potential problems with any claim against Marc Dady arising out of s.107(2A):

For these three reasons, Mr Mitchell made plain that he did not rely on s.107 in the present case. I consider that, given the law as it now stands, that was a proper concession.

There was a rather different sort of complication which arose in respect of the charge of common law conspiracy. One of the principal reasons why Judge Ticehurst in Rock and Overton, and Judge Armstrong in the current case, dismissed the fraud charges was because they considered it to be misconceived that the Crown should rely on a general common law charge of conspiracy, when there were statutory provisions which, on one view at any rate, covered the alleged criminal activity, but which had not been charged. In reaching that conclusion, both judges relied on the words of Lord Bingham in R v Rimmington and R v Goldstein [2005] UKHL 63 at paragraph 30. There he said:

“There is in my opinion considerable force in the appellants' second contention under this head. Where Parliament has defined the ingredients of an offence, perhaps stipulating what shall and shall not be a defence, and has prescribed a mode of trial and a maximum penalty, it must ordinarily be proper that conduct falling within that definition should be prosecuted for the statutory offence and not for a common law offence which may or may not provide the same defences and for which the potential penalty is unlimited…It cannot in the ordinary way be a reason for resorting to the common law offence that the prosecutor is freed from mandatory time limits or restrictions on penalty. It must rather be assumed that Parliament imposed the restrictions which it did having considered and weighed up what the protection of the public reasonably demanded. I would not go to the length of holding that conduct may never be lawfully prosecuted as a generally-expressed common law crime where it falls within the terms of a specific statutory provision, but good practice and respect for the primacy of statute do in my judgment require that conduct falling within the terms of a specific statutory provision should be prosecuted under that provision unless there is good reason for doing otherwise.”

It seems to me, therefore, that the court must look, first, at whether there is a relevant statutory offence and, if so, how and why the Crown has chosen not to prefer conspiracy charges by reference to that offence, and whether it is proper in all the circumstances to allow the common law allegation of conspiracy to defraud to be maintained.

The Case Based on Section 297

Mr Mitchell maintained that, in other circumstances, Marc Dady could either have been charged under s.297 of the Act or, rather more plausibly, with an offence of conspiracy to commit offences under s.297. Indeed at one point, he said that his argument was built around s.297 and the right which it reflected.

However, it is common ground that, if Mr Dady had been charged with an offence of conspiracy to commit offences in breach of s.297, a number of things would have been different. Section 4 of the Criminal Law Act 1977 imposes restrictions on the institution of proceedings for conspiracy to commit statutory offences. Any conspiracy proceedings would have had to have been started within six months of the offence, and the permission of the DPP would have been required. The offence would have been summary only and therefore the maximum prison sentence available would have been a term of six months. Indeed as Mr Mitchell said, the normal operation of s.297 would have led, in all probability, to the imposition of a fine, possibly calculated by reference to the number of subscribers.

For these reasons, Mr Mitchell said that, in the present case, given the scale of Mr Dady’s offending, s.297 “simply did not do the job”. It was as a result of the practical difficulties, created by section 3 of the 1977 Act, that the Crown wished to be allowed to prefer the voluntary Bill making an allegation of common law conspiracy to defraud.

On this critical element of the application, I am not able to accept Mr Mitchell’s submissions. I consider that s.297 catches precisely the criminal conduct which is now alleged against Mr Dady. He was providing his subscribers, for a fee, with a means to get round the encryption. For present purposes, I am prepared to accept that this amounted to a conspiracy to breach s.297. In those circumstances, it seems to me that his offending should have been charged as such. The matters of difficulty created by s.3 of the Criminal Law Act 1977, such as the six month time limit and the need for permission from the DPP, are procedural safeguards which were plainly regarded by Parliament as important. In my judgment, it would be wrong to allow the Crown now to ignore these safeguards, and to charge what would otherwise be a precise statutory offence under the wide common law offence of conspiracy to defraud.

In addition, of course, to allow the Crown to prefer this voluntary Bill would be contrary to Lord Bingham’s guidance in R v Rimmington, because it would be depriving the defendant of the protection of being charged with an offence which was summary only. That was a point that exercised Judge Ticehurst in Rock and Overton, and exercised Judge Armstrong here. I respectfully agree with both judges. To put the point another way, I am not persuaded that there is good (or any) reason to allow the broad conspiracy allegation to be maintained, in view of the failure to pursue counts of conspiracy referable to s.297.

Of course, I do not need to go as far as to say that every conspiracy prosecution which fits s.297 should be charged as such and that there is never room for a common law conspiracy count. Each case must depend on its own facts. But here, where I am rightly enjoined to show the greatest respect to Judge Armstrong’s decision, and where the preferment of a voluntary Bill of Indictment would be an exceptional course, I am bound to conclude that, in all the circumstances, there is no good reason to follow the approach suggested by the Crown. For these reasons, I conclude that Count 1 of the voluntary Bill in this case should not be preferred. As already noted, if Count 1 falls then so do Counts 2 and 3.

Section 107 of the Act

It is unnecessary for me to spend too long on s.107(2A) of the Act. In one sense this is slightly surprising, given that, at the time that Mr Dady was arrested and charged, it was the copyright element of the case, and not the encryption element, which was at the forefront of the Crown’s investigation. It was also a matter to which Judge Armstrong devoted a good deal of his judgment. However, it now seems to me to be largely immaterial, because Mr Mitchell has made it plain, for the reasons set out at paragraphs 14 and 15 above, that he no longer pursues the argument that this conspiracy to defraud can rely, or reflect, s.107.

As I put to counsel during argument, it seems to me that, in those circumstances, it is unnecessary for me to analyse s.107 in any detail. However, since I have considered the arguments, it is appropriate if I make one comment.

Judge Armstrong considered that the conspiracy charge, in so far as it related to s.107(2A) of the Act, should not be permitted because it deprived the defendant of a defence along the lines successfully argued in Rock and Overton, namely that he was a mere conduit and had taken no steps to make the copyrighted work available to his subscribers. With respect, I do not think that is right on the particular facts of Marc Dady’s case. The critical point here was that Marc Dady was charging his subscribers a fee for the use of his services. That is, I think, selecting those subscribers who were to receive the copyrighted material. Thus, if that had been the only point in the case, I would have decided it against Marc Dady. However, for the reasons that I have explained, it is not, and the matter is therefore immaterial to my decision.

Other Matters

Counsel’s arguments ranged over a wide variety of points in connection with copyright, encryption, and illegal downloads. However, given the approach that I have adopted, it seems to me that those matters were not ultimately relevant to my decision.

Conclusions

Exceptional circumstances are required to reverse the effect of Judge Armstrong’s ruling. And good reasons are required to permit a common law conspiracy charge to be maintained in the absence of a charge of conspiracy under s.267. In my view, neither are present here. Accordingly, for the reasons which I have set out, I refuse this application to prefer a voluntary Bill of Indictment. In those circumstances, Mr Mitchell properly accepts that the restraint orders imposed in May 2011 should be discharged.

It would, I think, be difficult to leave this case without expressing surprise and disquiet that the combination of United Kingdom and European case law on this topic has got into such a muddle. It is to be hoped that Parliament can amend the relevant statutory provisions to bring them in line with market (mal) practices.