England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL
CRIMINAL DIVISION

		Royal Courts of Justice
		3 May 2024

LADY JUSTICE WHIPPLE:

1. The applicant was convicted on 22 May 2023 of fraud by false representation, fraud by abuse of position and converting criminal property following a trial at Southwark Crown Court before HHJ Griffith. He was sentenced to a total of five years and six months' imprisonment. He now renews his application for leave to appeal against conviction following refusal by the single judge, Sir Nigel Davis. He also seeks an extension of time of three days in which to make that application. The reasons for seeking that extension are set out in the solicitor's email dated 15 March 2024 and are not attributable to any failure by the applicant personally.
2. The appeal relates to certain evidence which the trial judge ruled admissible. That evidence comprised a series of emails from Mr Tool, a solicitor, to the applicant. The applicant argued at trial that those emails should be excluded on the basis that they were covered by legal professional privilege. The basis for that assertion was that Mr Tool was jointly instructed by the applicant and a company called Collateral (UK) Limited ("CUL"). The judge disagreed with the applicant's argument and ruled that Mr Tool's emails were admissible as evidence in the case.

Facts

3. Given the narrow compass of the grounds of appeal, the facts can be relatively shortly stated. They are set out in some detail in the Criminal Appeal Office summary which the applicant and his advisors have seen. CUL was involved in peer-to-peer investing which was run by the applicant and his brother. The applicant was prosecuted by the Financial Conduct Authority ("FCA") who alleged that CUL did not have FCA authorisation to conduct the type of lending that it offered.
4. At the time CUL was incorporated, the applicant had a consumer credit licence for another company called Regal Pawnbroker Limited ("Regal"). Regal's licence had been granted by the Office of Fair Trading in February 2013 and only permitted Regal to make short-term loans to individuals secured against the assets that they provided. On 1 April 2014, the FCA took over responsibility for the supervision of Regal's licence. From that point forward, Regal was required to obtain permission to trade from the FCA.
5. Whilst the application for full permission was being completed, Regal obtained an interim permission ("IP"). When Regal applied for IP the applicant was the named contact. The FCA confirmed by email that Regal had been granted IP and that Regal should apply for full authorisation by 31 March 2016. Regal was given a reference number 656714 for use on the Interim Permission Consumer Credit Register ("the IP Register"). Firms with IP could log onto the online portal, connected to the IP Register, to make changes to their details.
6. The prosecution alleged that the applicant sold Regal, that on 6 October 2015 new directors were appointed to Regal, that on 8 October 2021 the applicant's login details were used to change Regal's registered address to the address of the new owners and that on 25 November 2015 Regal's name was formally changed to Fitzwilliam Black but the IP Register was not updated to reflect this change of ownership or name.
7. On 12 December 2015, the applicant's login details were used to change the IP Register so that Regal's name was changed to CUL and the registered address was changed to an address in Manchester. The changes suggested that CUL had IP and was authorised by the FCA.
8. On 14 December 2015, the applicant represented to a prospective investor that CUL had IP. On 15 December 2015, the applicant told an external advisor that CUL had IP and the applicant provided a screenshot from the FCA website, forwarding to the advisor the email from the FCA which referred to Regal and the applicant stating in his email:

"You will notice it was for Regal Pawnbroker. We have since restructured the company and have changed the trading name to Collateral."

9. The application for full FCA authorisation for CUL was submitted on 23 March 2016. The application stated that the IP for CUL was 656714, the reference number to which we have already referred, and that CUL had IP for consumer credit transactions. During the application process CUL also retained the services of the law firm DWF Law LLP ("DWF") and within that firm a solicitor named Richard Tool.
10. By January 2018 the FCA had discovered that the name on the IP register had been changed from Regal to CUL. The FCA wrote to the applicant on 29 January 2018 to tell the applicant that CUL did not have IP and it could not conduct regulated activities until it was authorised to do so. The FCA confirmed that CUL was a separate legal identity from Regal and CUL could not use Regal's IP. The FCA gave notification that CUL must remove all references to being authorised from its website and promotional material. On 8 February 2018, the applicant confirmed to the FCA his intention to withdraw CUL's application for authorisation.
11. On 12 February 2018, the FCA wrote to the parties that it had concluded that CUL's trading had been in breach of the general prohibition in conducting regulated activities without authorisation. The FCA instructed CUL to cease all lending activities through its website with immediate effect and notified CUL that carrying out regulated activity without authorisation was a criminal offence. That was basis of count 1, namely, the court of fraud by false representation.
12. On 14 February 2018, Andrew Currie, the applicant's brother, was reappointed as director of CUL. The following day, £275,000 was removed from CUL's client account and paid to a company named Auri Developments ("Auri"). Auri was owned by Andrew Currie's partner, Sarah Gayton. At the time of the payment the applicant was the sole signatory to the CUL bank accounts. Auri was not named as either an investor or borrower by the administrators for CUL. The prosecution alleged that the £275,000 was utilised to purchase two properties and the rest was spent by Sarah Gayton. This was the basis of count 2, fraud by abuse of position.
13. Between 13 and 26 February 2018, shortly before CUL entered into administration, the applicant and his brother transferred a total of £372,299.52 from CUL's Santander bank accounts to personal accounts held by Andrew Currie with Halifax, Bank of Scotland and Lloyds. The payment references stated these transfers were "broker fees" or "BF" and each referred to loans held on the CUL platform and were for approximately two per cent of the loan value. The prosecution alleged that, in fact, these payments were the proceeds of the criminal conduct represented by count 1.
14. CUL appointed Gordon Craig of Refresh Recovery to put CUL into administration. CUL entered administration on 28 February 2018. The FCA was not informed. Subsequent investigation by the FCA revealed that the applicant and the appointed administrator were known to each other; in fact, they were listed as friends on social media. Bank statements showed a payment of £88,000 from CUL's company account to Refresh Recovery. The FCA subsequently and successfully applied to the High Court to overturn the administrators' appointment and BDO were then appointed as the administrators. These facts gave rise to count 3, converting criminal property.

The Ruling

15. The judge ruled on the defence submission to exclude Mr Tool's emails on 18 April 2023. The defence had submitted that email conversations between Mr Tool and the applicant were protected by joint legal professional privilege as the advice was given by Mr Tool to the applicant both in his capacity as the company's representative and as an individual. The judge was referred to the guidance in R (on the application of Ford) v Financial Services Authority (defendant) and Johnson and another (interested parties) [2011] EWHC 2583 (Admin) which both parties agreed was the leading authority. The defence submitted in the alternative that the emails should be excluded under s.78 of the Police and Criminal Evidence Act 1984 because they were more prejudicial than probative. Counsel for the prosecution submitted that the advice given by Mr Tool was given to the applicant acting only as the company's agent so that no joint privilege existed and that, in any event, the probative value of the material outweighed any possible prejudice so that s.78 should not operate to exclude that material.
16. In his ex tempore ruling, the judge ruled that the test set out in Ford was not met. He concluded from the emails that the advice being given by Mr Tool was on how the company should proceed with regard to there being any action by the FCA. There was no documentary evidence to support the defence submissions. Mr Tool had not given a statement to the FCA. Mr Tool was a solicitor of some standing and if he had thought at any time that he was acting for the applicant in an individual capacity he would have known that and said so, but he had not said that. There was no letter of engagement. The judge concluded:

"So my view is that, applying the test in Ford, it has not been made out to my satisfaction at all on the civil standard that this was a lawyer acting for Peter Currie when giving that advice… it is a long way short of that, in my decision."

17. The judge rejected the defence's application to exclude the emails under s.78. The judge concluded that the reference made by Mr Tool to the applicant in the first of those emails, namely that "you are going to find it difficult to run the line that this was an honest mistake" could be properly dealt with by giving a suitable direction to the jury. Taken as a whole, he concluded that the emails were more probative than prejudicial, showing the state of mind of the applicant and his brother at the material time, particularly in the context of counts 2 and 3. The judge agreed with the Crown's case and refused the application under s.78.
18. The judge went on. He addressed the defence submissions that they wished to cross-examine Mr Tool, noting that Mr Tool had never been on the Crown's list of witnesses and that the defence could have called Mr Tool themselves but had not sought to do so.
19. When he gave his legal directions the judge directed the jury on the evidence in terms which are not now the subject of any challenge (noting that the draft directions had been circulated between counsel in advance of being delivered to the jury). The judge told the jury that the only relevance of the emails was to show that Mr Tool was not aware of the name change on the IP Register until he was told about it by the FCA and that that was all.

Grounds of Appeal

20. In their written grounds of appeal Mr Aylott KC and Mr Hendren advance two grounds of appeal that:

1. the judge erred in refusing the application to exclude the emails between Tool and the applicant; and, in the alternative

2. the judge erred in refusing the application to exclude the emails under s.78 of PACE.

In helpful oral submissions before us this morning, Mr Aylott KC has elaborated these points. He has focused, in particular, on the content of an email dated 30 January 2018, which he says demonstrates the expansion of the retainer from having been a single retainer in favour of CUL to being a joint retainer for Mr Tool to advise both CUL and the applicant in his individual capacity. Mr Aylott has taken us through the content of that email in some detail.

21. This appeal is resisted by the Crown. They have lodged a respondent's notice and Mr Coke-Smyth has appeared before us today.
22. We thank all counsel involved in this case for their admirable focus on the core issues in this case.

Conclusion

23. The single judge concluded that the judge was justified in reaching the conclusion that there was no joint privilege established on the evidence in this case and that it was within the judge's discretion not to exclude the emails. In short, we agree with the single judge and with the reasons put forward by the Crown.
24. In relation to ground 1 and the question of joint privilege, the leading authority is Ford. That case distinguishes at para.40 between advice given to an individual as a client on the one hand and advice given to another but in which the first individual is interested because it impacts on his personal position on the other. The judge correctly identified this distinction. He applied the test in Ford and found the facts, if anything, to fall within the latter category in that the advice was given to CUL, although it was of some interest to the applicant in his personal capacity, but still there was a single retainer in favour of the company.
25. The applicant was unable to establish that he had communicated with Mr Tool, or sought his advice, in a personal capacity and not merely as the representative of CUL. Certainly, Mr Tool did not indicate in any evidence that was before the court that he understood the instruction to be a joint instruction from CUL and the applicant. Mr Tool was not called to give evidence to establish that fact, nor did the applicant give evidence to establish that fact. The judge was left with the documentary evidence, such as it was, from which he was asked to draw the inference of joint instruction. The judge concluded that the material fell far short of that and that in consequence the applicant had failed to meet the burden of establishing the joint instruction to the civil standard.
26. In our judgment, it is not realistically arguable that the judge was at fault in reaching the evaluation that he did on the basis of the material that was before him. This was quintessentially a matter for the judge. The applicant would face a high hurdle in overturning the judge's finding on appeal.
27. In submissions today, Mr Aylott has suggested that the absence of attendance notes by Mr Tool is itself significant, and is something the judge should have taken into account. In our judgment, that argument fails at the first hurdle because the applicant has offered no evidence that there were other meetings and occasions when Mr Tool was present and offered advice, to substantiate the allegation that material which should have been disclosed is missing. There was no sound basis on which the judge could have concluded that material was missing or, indeed, could draw any inference to the effect that the absence of that material was significant.
28. For those reasons, put in summary, we refuse leave on the first ground.
29. In relation to ground 2, there was clear probative value to the prosecution case in Mr Tool's emails. Their importance was in showing that the applicant had not told Mr Tool that he had altered the IP Register in advance of Mr Tool receiving notification of that from the FCA; further, that CUL was, to the applicant's personal knowledge, advised at an early stage of the seriousness of the issues that were being raised by the FCA, yet the applicant remained involved in the transfer of money out of CUL, which transfers are highly relevant to counts 2 and 3 (those transfers took place after 30 January 2018).
30. The issue which the judge had to weigh in considering the application under s.78 was whether the prejudice to the applicant outweighed the probative value. With the foresight of legal directions to the jury on the way that they could use the emails, he concluded that any possible prejudice would be mitigated. The fact that CUL had received that advice was an important point for the prosecution case.
31. In all the circumstances, the judge was entitled to conclude that the emails were properly admissible and should not be excluded on the basis of their possible prejudicial effect under s.78.
32. In any event, we have considered the wider picture. In our judgment, there was substantial other evidence to support this prosecution and we do not doubt the safety of this conviction.
33. We refuse this application for leave to appeal. In those circumstances, there is no reason to extend time and we also refuse that application also. If we considered there to be merit in the grounds of appeal, we would have been willing to extend time.
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