England and Wales Court of Appeal (Criminal Division) Decisions

Royal Courts of Justice

Strand

London WC2A 2LL

Thursday 12th December 1996

B e f o r e:

LORD JUSTICE PILL

MR JUSTICE DOUGLAS BROWN

and

THE RECORDER OF LONDON

(Acting as a Judge of the CACD)

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R E G I N A

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NEIL BRADSHAW

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(Handed Down Transcript of Smith Bernal Reporting Limited

180 Fleet Street, London EC4A 2HD

Tel: 0171 831 3183

Official Shorthand Writers to the Court)

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MR A MITCHELL (MR S PATEL 12.12.96) appeared on behalf of the Appellant

MR M MONTGOMERY appeared on behalf of the Crown

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J U D G M E N T

(As Approved by the Court)

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Crown Copyright

Thursday 12th December 1996

JUDGMENT

LORD JUSTICE PILL:

On 29th May 1995 in the Crown Court at Liverpool before His Honour Judge Ian Campbell and a jury, Neil Bradshaw was convicted of five counts of theft. On 23 June 1995 he was sentenced to three years imprisonment on the first two counts, the sentences to run concurrently, and to three years imprisonment on each of the other counts the sentences to run concurrently with each other but consecutive to those on counts 1 and 2. The total sentence therefore was one of six years imprisonment. Bradshaw was also disqualified from being a director or involved in the promotion, management or formation of a company for a period of ten years. He appeals against the sentence of imprisonment by leave of the Full Court.

With another, the appellant set up an investment corporation in 1982 and in 1983 it became known as Consolidated Stirling Deposits. Its claimed purpose was to obtain investments from the public and to advance funds to West Coast Securities (UK) Ltd who would invest the money in real property and obtain a return by way of mortgage lending. West Coast Securities was a wholly owned subsidiary of Hughes Flint Corporation of which the appellant and his son were directors and Michael Dunning the day to day manager. Through two other companies, one called Page Associates, the appellant offered bonds to members of the public and represented them as fully secured and guaranteed.

The prosecution case was that the appellant knew the investments were not fully secured and money was not invested in property but passed through other companies and used for the benefit of the appellant, his family and his company or to repay maturing bonds of other investors. Many of the investments were obtained at trade union seminars for people receiving redundancy or early retirement lump sums.

In 1990, Page and Associates ceased to trade and no new investments arose to pay off maturing bonds. FIMBRA directed the company to cease trading with a sum of over £3,000,000 owing to a total of over 400 investors. The prosecution claimed that, since 1987, monies had not been invested but passed through companies in five jurisdictions before being re-transferred to California to be treated in the United States as tax exempt offshore funds. The funds were eventually placed in accounts controlled by the appellant.

Following police inquiries, arrests of those involved were made. The appellant was extradited from the United States of America on two charges of conspiracy and 138 individual charges of theft. Dunning and others were charged with conspiracy. It was intended that the appellant should stand trial as a conspirator but it was found, for reasons which need not be explored, that the extradition upon the conspiracy charges was invalid. He was charged with five counts of theft and his application that he should have a separate trial was granted. Upon conviction of conspiracy, Dunning was treated as the appellant’s lieutenant and was sentenced to five years imprisonment, a term reduced on appeal to this Court to four years. In reducing the sentence on Dunning the Court, Kennedy LJ presiding, was influenced by the fact that the appellant had been sentenced to a term of six years imprisonment and believed that Dunning should have received a “significantly lesser sentence”.

The five counts of theft upon which the appellant was convicted each involved a specific sum received from a specific investor. By way of example, Count 3 alleged that the appellant had “On the fifth day of June 1989 stolen £10,000 belonging to Richard Hughes”. That was a sum Hughes had received on retirement and he received no payments on it. The total sum specified in the five counts was £97,000. Two of the sums were obtained in 1988 and three in 1989. There was a factual distinction between the two years to the extent that in December 1988 the appellant instructed Dunning to terminate the lending activities of West Coast Securities. From that date, the appellant must have realised, the prosecution claimed, that assets available to support any security for investors would inevitably decrease.

The defendant did not give evidence. The trial lasted four months, there being considerable investigation of and cross-examination upon the methods of trading and the appellant’s alleged involvement, and upon the accounts and records. The appellant was 59 years old and of previous good character.

When sentencing the appellant, Judge Campbell stated that “There is no doubt that these bonds were being sold dishonestly and they were sold dishonestly to a large number of, again perhaps in inverted commas, investors over the years, or they hoped, they thought they were making investments. In fact the scheme really was not an investment at all.” The judge added that “Behind the facade of guaranteed and secured, there was actually no security at all.” The appellant had “orchestrated everything that took place and the dishonesty went on for years”. The judge added:

“The monies that have been involved from these five people in respect of whom you have been convicted it was used, it was part of the sum that was used of course to subsidise your lifestyle and that of your family and those associated with you. I have no doubt that you liked to pose as the millionaire in your area of life.”

He also stated:

“The background to this matter, although, as I say, I am only going to sentence you in regard to the individual offences of which you were convicted, is that in the end there was over £3,000,000 that this scheme, designed by you, was left outstanding.”

For the appellant, Mr Mitchell, who did not appear at the trial, submits that the sentence was too long. The maximum sentence for theft is seven years. Consecutive sentences were inappropriate (a submission with which we agree). While the five counts were said to be specimen counts of a larger theft totalling about £3,000,000, the sentencing powers of the judge were confined to sentencing for the theft of the £97,000 mentioned in the charges. The judge was not entitled to sentence on the basis that the offences form part of a fraud involving £3,000,000. If the prosecution had chosen to “under prosecute” by charging five thefts and not 138 thefts, the judge could not make good that deficiency when imposing sentence. The sentence of six years was out of scale with a theft of under £100,000 ( Goring [1986] 8 Cr App R (S) 243), even allowing for aggravating factors such as the use to which the money was put and the effect on the victims.

Mr Mitchell relied upon McKenzie [1984] 6 Cr App R (S) 99. The prosecution claimed that the counts in the indictment were only specimens of fraudulent dealings which involved a sum larger than that charged. Giving the judgment of the Court, Mustill J stated:

“So it is now said on the appellants behalf on this appeal that the sentence of four and a half years in totality is explicable only on the basis that the learned judge must have given weight when asserting the gravity of the offences to those numerous other allegations which the defendant has refused to accept.

We feel constrained to say that this was an inappropriate course and the appellant should have been sentenced for the offences in respect of which he was convicted, leaving it to the authorities, if they thought fit, to prosecute him on a subsequent occasion in respect of the outstanding matters ¼ .”

In Mills and Price (1979) 68 Cr App R 154, Geoffrey Lane LJ presiding, on the other hand, Price was convicted of a single offence of accepting £50 corruptly. In his evidence Price put forward the same excuse for that payment as for many others he had received, namely that money was received for work done in a private capacity as a consultant. The Court upheld a sentence imposed on the basis that the jury had by their verdict in those circumstances convicted him of corruptly accepting the other payments.

The authorities were considered in this Court in Clarke [1996] CLR 448. The appellant was tried on an indictment containing a single count charging indecent assault on a male person the count being put forward as a specimen count representing a series of indecent assaults allegedly committed by the appellant with the same boy. Giving the judgment of the court, Henry LJ stated:

“Now it is clear that when the jury convicts of an offence such as, say, dangerous driving, then the judge is entitled to form his own opinion on the evidence as to the various aggravating features going into that driving, including the presence of drink, speed, and matters of that sort. He can do this despite the fact that there is no express finding from the jury in respect of them. But is seems to us that it is one thing to permit the judge to sentence on his view of the gravity of the ingredients of the offence of which they jury have convicted (even if some of those ingredients were capable of being free-standing criminal offences), and quite a different thing to allow him to sentence on the basis that unproved, separate and distinct offences “aggravate” the offence of which he is convicted.”

Having considered s 2(2)(a) of the Criminal Justice Act 1991 (The 1991 Act), Henry LJ added:

“Therefore, under the Statute, the appellant stands to be sentenced only on the basis of the offence of which he has been convicted, namely one indecent assault.

The Court considered what, in sexual cases, should be done and added:

“We regret that we can do no better than to suggest that prosecutors charge sufficiently fairly to reflect the criminality of the offending.”

Reference was made to the decision of the House of Lords in Anderson v DPP [1978] AC 964 which is a case involving a criminal bankruptcy order and turned upon the construction of the expression “Offences ¼ which the Court takes into consideration in determining his sentence” in s 39(2) of the Powers of Criminal Courts Act 1973. That expression was stated by Lord Diplock to be a “well known term of legal art. It refers to a practice which apparently has existed since the turn of the century”. It did not include offences which the defendant did not admit even if they were of the same character and nature as the offences charged. (p 977D).

We agree with the Court in Mills and Price in not regarding Anderson as determinative of the present issue. While it is also not determinative of the issue, it is worth noting that Lord Wilberforce contemplated a reconsideration of the relevant provisions and Lord Salmon stated at p 978E:

“I wish only to emphasise that, in cases such as the present, nothing in [Lord Diplock’s] speech would justify the prosecution increasing the number of counts included in the indictment. In my opinion far too many indictments contain far too many counts; and this leads to wholly unnecessary prolongation of trials, resulting in a shocking waste of public time and money.”

If Mr Mitchell is right, a very large number of counts would be necessary in a case such as the present to achieve a result appropriate to the scale of the operation which was not only alleged but by agreement investigated at the trial.

In the present case, the counts in the indictment were at all times presented without objection as specimen counts.. In itself, that does not avoid the principle in C larke. Consideration must however be given to the manner in which the case was presented and contested. Without objection, a schedule was put in evidence giving particulars of the 138 investors involved in the alleged fraud and their losses. From 1987, the losses totalled over £3,000,000. Counsel for the Crown has, without dissent, put it in this way:

“The evidence before the jury necessarily covered the entirety of the overall course of conduct, since it was impossible to present individual instances in isolation from the general picture. It covered in minute individual detail the losses of all the investors concerned, in particular the complex exhibited schedules and accountancy analyses. Moreover, in addition to the investors actually named in the indictment, a further 11 investors were called to illustrate the general scheme. No objection was taken to the admission of any of this very large volume of evidence.”

We are told that very few of the investors were cross-examined. The case with respect to each of the 138 was the same save as to time and date, and any or all of them could have been the subject of counts in the terms of the five named. Guilty verdicts on the five counts, we are told, would inevitably have involved guilty verdicts in relation to all the other victims had counts been present in the indictment. The only possible issue could have been as to the date prior to the scheduled period when dishonesty began.

This situation is different from Clarke where the verdict of guilt of indecent assault on one occasion can never necessarily involve guilt on a different occasion. That would apply in most other situations and the principle in Clarke will apply but we need to consider whether there are situations, and Mills and Price may be one of them, where a finding of guilty on the counts charged necessarily involves a guilt wider than that charged in those counts.

We would not expect the law to require that in circumstances such as the present the charging of 138 counts is necessary to achieve a sentence commensurate with the seriousness of the appellant’s conduct. While accepting the artificiality of the situation, Mr Mitchell submits that the law requires a sentence on the basis of a theft of under £100,000 resulting from five transactions in the course of an otherwise honest business involving very many transactions and millions of pounds.

In our judgment, the law does not require us in circumstances such as the present to follow that course. S 2(2)(a) of the 1991 Act provides that “The custodial sentence shall be for such term (not exceeding the permitted maximum) as in the opinion of the court is commensurate with the seriousness of the offence, or the combination of the offence and one or more offence associated with it”. The five counts in the indictment are plainly associated offences within the meaning of that term in s 41(2) of the Act. S 3(3) of the Act provides that:

“In forming any opinion as is mentioned in sub-s (2) of s (1) or (2) above a court -

(a) shall take into account all such information about the circumstances of the offence (or as the case may be) of the offence and the offence or offences associated with it, (including any aggravating or mitigating factors) as is available to it”.

The present case was presented and contested in such a way that the extent of the offending, although not admitted or proved by verdict, necessarily follows from the verdicts reached on the counts charged. In such a case, the Court is entitled to take into account the scale and multiplicity of offending as available information about the circumstances of the offences proved. Those offences were committed in the context of a fraud involving many victims and a very large sum of money, which in the present case should not be ignored. Provided the Court can adopt that approach, which in our view it can on the somewhat unusual facts of this case, the sentence of six years is appropriate.

We would propose to make a small reduction for a specific purpose. The learned judge purported to take into account the time spent in custody in the United States when imposing a total sentence of six years imprisonment. Surrender to the jurisdiction was voluntary after a period in custody which was the equivalent of a sentence of about six months. We are not satisfied that a sentence of six years does give credit for that time in custody.

The consecutive sentences imposed by the trial judge will be quashed. There will be substituted sentences of five and a half years imprisonment on each of the counts in the indictment, the sentences to run concurrently. To that extent the appeal is allowed.

MR PATEL: May it please, your Lordship. I appear on behalf of the appellant. My learned friend Mr Montgomery appears on behalf of the respondent. I rise because I wish to raise a concern which was expressed by Mr Andrew Mitchell, who argued before your Lordships on the substantive appeal. It concerns the concluding part of your Lordships' judgment which is the quashing of the sentences and the substitution of five-and-a-half years' imprisonment on each count.

The concern that Mr Mitchell has expressed to me is that in the manner in which your Lordships have dealt with the appeal it might well fall foul of section 11(3) of the Criminal Appeal Act 1968 which essentially states that the court has a general power to do what it may but it cannot deal more severely with the appellant than the Crown Court could have done. It is, in my respectful submission, arguable at the very least that the substitution of five-and-a-half years' imprisonment on each count might well be more severe on the appellant than actually envisaged.

LORD JUSTICE PILL: What is the authority? Six years is reduced to five-and-a-half on the face of it.

MR PATEL: Yes. My Lord, I do not have an authority because there does not seem to be an authority on the point. I refer to Archbold, volume 1 which----

LORD JUSTICE PILL: Which edition?

MR PATEL: Your Lordships it is the 1995 edition, volume 1, and the relevant section is found at Chapter 7, paragraph 136 to 137.

LORD JUSTICE PILL: Yes.

MR PATEL: At paragraph 137 there is subsection (3) which deals with the general power of the court to quash a conviction.

LORD JUSTICE PILL: Yes. Taking the case as a whole the appellant is not more severely dealt with on appeal.

MR PATEL: Yes. My Lord, the interpretation taking the case as a whole is a narrow one and that the appellant had benefited, then it would appear that there has been no impropriety. However, the concern that Mr Mitchell raises is that in the light of recent decisions in the calculation of sentences and terms of credit for a period spent in remand in custody and the confusion in respect of that and also the possible impact under the Rehabilitation of Offenders Act, it might well be that the appellant is worse off than would have been the intention of the court.

LORD JUSTICE PILL: Do you want to be more specific?

MR PATEL: I am sorry, your Lordship, I cannot be more specific because I am not in a position to present a complete argument on his behalf.

LORD JUSTICE PILL: Mr Montgomery, what do you say?

MR MONTGOMERY: My Lord, so far as the taking of the case as a whole is concerned obviously it is my submission that that is a wide term not intended to be construed. So far as the matter of the effect of the Rehabilitation of Offenders Act is concerned and remission, parole and that kind of matter, I am just not in a position to deal with it. These matters came to my attention about fifteen minutes ago for the first time.

LORD JUSTICE PILL: Are you asking for time?

MR MONTGOMERY: My Lord, if the court wishes the matter to be argued, then yes.

LORD JUSTICE PILL: We have formed a view on it and there it is, but when you say that you are taken by surprise you have your duties to and if----

MR MONTGOMERY: My Lord, so far as the first point is concerned, taken by

surprise or not, it is my submission in any event that that phrase "taking the case as a whole" means what it says and that does fit in with what your Lordships propose to do at the close of the judgment.

So far as the other matter in effect on remission is concerned that is not something that I know anything about and I am not sure the Crown would be of any great help on the matter. I came here really to assist the court, not as a party to the proceedings originally.

LORD JUSTICE PILL: Certainly, yes and we are grateful for your presence and assistance.

I am bound to say we are disappointed, not in respect of the Crown, but that a point is raised then left in the air like this. It really is not right for the court or the appellant, or anyone else.

MR PATEL: I can only apologise.

LORD JUSTICE PILL: We think there is nothing in the first point, but the second point is raised - I know of no authority on it and you have looked and have not found any. We are aware of the second point you have made and we are minded to give an opportunity for it to be developed, but a very short opportunity as this case must be dealt with promptly. I do not know whether the question of the presence of the appellant is involved as well. What about later today?

MR PATEL: I am not sure. I do not know if Mr Mitchell----.

MR JUSTICE DOUGLAS BROWN: Do you know Mr Mitchell's arrangements today?

MR PATEL: Yes, he is at the Crown Court at Snaresbrook. He apologises for not being here. The point which I raise is one that was expressed by him and raised by me this morning when I looked at the matter, especially the calculation of custody time and its possible impact----.

LORD JUSTICE PILL: The first question is whether the court, under this section, section 11(3), should have regard to what are administrative arrangements. That is the first point. The second one is whether in practice, if you cross the first hurdle, whether in practice it is arguable that the sentence falls foul of that section.

MR PATEL: It would be my application for seven days in order to construct a reasoned argument and if I am wrong or Mr Mitchell is wrong in any submissions----

LORD JUSTICE PILL: You cannot be right or wrong yet because you have not put anything before us.

MR PATEL: I put it on the basis that it is arguable and I ask for seven days.

LORD JUSTICE PILL: We must have regard to the commitments of the court and also I dare say the prison authorities will have arrangements to make. I will ask the prison officer whether there is anything he can say. Prison officer you have heard the point that is made that this case might have to be put in for further mention. You may not be aware of it, but are there any arrangements which need to be made or anything which I ought to canvass now as to when the case ought to be relisted?

THE PRISON OFFICER: No.

LORD JUSTICE PILL: Thank you very much. We shall adjourn the case at your request to be listed no later than Thursday of next week, but the date to be fixed to meet, of course, the commitments of the members of the court and also, if possible, Mr Mitchell's convenience - otherwise you or someone else will have to appear in his place. We should also have a skeleton argument. Mr Montgomery we need to ask for your presence too, or someone else in your place. This is a point which does not appear to have arisen before and we only grant this opportunity because we are aware of the recent judicial review decisions which could - and I put it no higher - but could have an impact upon sentences of this kind.

MR MONTGOMERY: I will be present or I will provide a substitute.

LORD JUSTICE PILL: The question then is what is the status of the document which you received yesterday. It is only this week, as you probably know, that this court has authority to hand down judgments, something which has been happening in the Civil Division for several years now. Authority was given this week so that it was handed to you yesterday and I believe the law reporters will have had it by now. What is your submission as to that?

MR PATEL: I ask for it not to be finalised until the conclusion of the appeal.

LORD JUSTICE PILL: It is only the last two sentences that are affected.

MR PATEL: It is simply the result and not the premise.

LORD JUSTICE PILL: Yes, I do not propose to place any embargoes. Mr Montgomery, did you want to say anything about that? It is a novel point?

MR MONTGOMERY: No, my Lord.

LORD JUSTICE PILL: In accordance with the practice it has been distributed and I see no reason why there should be any restriction, but of course it should be read in the light of the fact that the last two sentences are in effect suspended pending any further submissions that are made on behalf of the appellant.