England and Wales Court of Appeal (Criminal Division) Decisions

Royal Courts of Justice

The Strand

London WC2

Friday 23rd January 1998

B E F O R E :

LORD JUSTICE BUXTON

MR JUSTICE MAURICE KAY

and

MR JUSTICE MOSES

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R E G I N A

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GURMIT SUNDHERS

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Computer Aided Transcript of the Stenograph Notes of

Smith Bernal Reporting Limited

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MR R TURNER appeared on behalf of the Appellant

MR W RICKARBY appeared on behalf of the Crown

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JUDGMENT

( As Approved by the Court )

Crown Copyright

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JUDGMENT

LORD JUSTICE BUXTON: This appeal by Mr Gurmit Singh Sundhers concerns convictions that were recorded against him in the Crown Court at Wolverhampton on 21st March 1997 on four counts of furnishing false information contrary to section 17(1)(b) of the Theft Act 1968 (the 1968 Act). He was, in respect of those counts, fined a total of £250 in each count.

The facts are in short compass and not in dispute. The allegation on the part of the prosecution was that the appellant had taken out home insurance policies with three separate insurance companies and had submitted claim forms to each of those companies in respect of the same damage. The forms stated that he had not made a claim of a similar nature within the last five years and that he did not have other insurances for the items claimed: when in fact he already had insurance policies on which he had made claims in 1991, 1992 and 1994.

The issue at the trial was whether the appellant had been dishonest in acting as he did. The prosecution case was that he well knew that the arrangements that he had made were inconsistent with the requirements of the insurance companies, and that he had the necessary knowledge of the English language and of the general practice of insurance. His case was that he had misunderstood the question of whether he could take out more than one policy, and more particularly claim on more than one policy, and also that his lack of familiarity with English had caused him to misunderstand the implications of the forms. The jury, by their verdicts in the case, must have rejected that part of his case.

The appeal turns on a short but not wholly straightforward point on the evidence that is required to establish a charge under section 17(1)(b) of the 1968 Act. That section reads:

"Where a person dishonestly, with a view to gain for himself or another or with intent to cause loss to another-

...

(b) in furnishing information for any

purpose produces or makes use of any

account, or any such record or

document as aforesaid, which to his

knowledge is or may be misleading,

false or deceptive in a material

particular,

[shall be guilty of an offence.]"

The expression "any such record or document as aforesaid" is a reference to section 17(1)(a) "a record or document", and this is the important phrase in this case, "made or required for any accounting purpose."

At the end of the prosecution case the defence submitted that the claim forms upon which the prosecution relied had not been shown by the prosecution to be made or required for an accounting purpose. Before us today it has not been disputed, and rightly not disputed, that firstly a document may be required for an accounting purpose even though it has other purposes as well; and secondly that the falsity complained of does not necessarily have to be in the material that demonstrates in that document that accounting purpose. Those propositions are to be drawn from the case of Attorney General's Reference No.1 of 1980 [1981] 1 WLR 34.

What was complained of in this case was that the prosecution evidence was insufficient to establish that the claim form had in any way been required or was required for an accounting purpose. The learned Recorder ruled on that matter as follows, in his ruling at page 2F:

"...it seems to me that the evidence that is before the jury, namely that claim forms were completed making claims in respect of certain amounts of money in relation to damaged good or other items of loss, and that those claims forms were at least part of the basis upon which the insurance companies decided whether to make payment and how much, of itself constitutes evidence to go before the jury and from which the jury could, if it is so minded, properly infer that the documents were required at least in part for an accounting purpose, and so for those reasons I am not able to withdraw these counts from the jury."

It would seem that in making that ruling the Recorder considered at least at that stage of the trial, that the "accounting purpose" was a decision whether to make a payment in response to the claim forms. He did not have, because he could not have had, the benefit, of the unreported case in this court of R v Okanta decided on 20th December 1996. That was a case that concerned a reference or confirmatory letter sent to a building society in support of a loan application. In that case also the court was invited, in circumstances different from this case, to assume that that letter was required for an accounting purpose. The court said this at page 10:

"In relation to a criminal charge of this kind, we do not feel justified in making any assumption beyond the scope of the evidence called. If there were room for the making of any such assumption, we would be inclined to assume (in the absence of evidence on the topic) that, whereas a Building Society relies upon a 'reference' or confirmatory letter of the kind signed by the appellant for the purpose of deciding whether to make a loan (which we do not think amounts in itself to an accounting purpose), the calculation of the instalments for repayment or the rates of interest to be charged are based simply on customary or 'tariff' rates of the Society...."

We cite that passage for two reasons. First, because the court drew attention to a need for evidence upon which the jury can act; and secondly, the court took the view that a decision whether to make a loan, which appears to be the matter to which the Recorder was referring in his ruling in our case, did not in itself amount to an accounting purpose. That, however, is not the end of the matter because the Recorder necessarily had to return to this matter when he directed the jury. He properly directed them that it was a question for them, as a question of fact, whether the claim forms were required for an accounting purpose. He first of all said, as would no doubt be obvious, that from the policy holders' point of view they were the vehicle for claiming the amount allegedly owed under the policy. Then the Recorder said this at page 7D:

"From the insurer's point of view who is in receipt of it, it is obviously evidence of a claim made on it by a policy holder. It would be the justification for beginning some kind of investigation of the incident alleged to have taken place, and ultimately it would be part of the history justifying the payment of the policy holder's loss entitlement. It forms part of the basis of the assessment of his loss."

So far the Recorder had referred, as it seems to us, solely to the matters that he referred to in his ruling. He then went on, however:

"And if auditors or accountants or others need some evidence or to look at some records of why payments had been made out, why debits had been made in an insurer's accounts, made out, paid out to policy holders, the claim form would be perhaps quite an important part of the history showing why those payments had been made out. It starts the ball rolling, does it not, which culminates in a payment if the claim is justified...

I believe they all record the amounts claimed by the policy holder, sums of money, I think all four do."

In his concise and very helpful submissions Mr Rickarby for the prosecution draws the court's attention to that passage. He says that the claim forms of themselves were evidence from which the jury could conclude that they were required for an accounting purpose. He draws attention to section 221 of the Companies Act, which requires a company to keep accounting records, and requires in particular a record of all monies expended by the company and the matters in respect of which that expenditure takes place. He conceded, however, and in our judgement rightly, that the claim forms were not themselves part, or could not be assumed themselves to be part, of those records as stipulated by the Companies Act. They were however material upon which those records would be based, and material that the auditors or accountants might well wish to scrutinise as and when they checked the accuracy of those accounts. For those reasons he said it could be assumed, and it was right to leave to the jury, the question of whether or not those claim forms were required for that accounting purpose, that is to say required for the purpose of making up the books of the company. That is a purpose quite different from deciding whether to make the loan in the first place, and therefore does not fall under the view of this court in the case of Okanta that deciding whether to make a loan is not in itself an accounting purpose.

That was a sensible and robust submission which in common sense terms has a great deal to commend it. It also, in our judgement, represents what we believe - again without evidence but on the basis of experience - is in fact the case. It would be, it seems to us, almost certain that such records would be retained, one of the reasons for retaining them being to enable the books to be properly audited. The difficulty however is this. The question that the jury had to answer was, as is conceded, a question of fact, otherwise it would not be going to the jury at all. There was no actual evidence before the jury to demonstrate to them that that is what in fact is done with claim forms. We have to say that that is a matter that was put before them by the learned Recorder, and perhaps in one way understandably so. But it was not a matter that was based upon evidence, either evidence given by the representatives of the company concerned, who said no more than that the claim forms would be retained without stating for what purpose, nor of course was it the subject of any form of expert evidence. That means, therefore, that if the jury were to form a conclusion simply on the face of the claim form and of its nature, they could only form such a conclusion without specific evidence by drawing, as a jury often has to, on its general knowledge and experience of the world.

That is something that juries can usefully do when they are dealing with matters that do fall and can be assumed to fall within the general experience of the members of the jury. But we regret to say that that assumption cannot be made in respect of a matter such as accounting practice. It no doubt seems self-evident to lawyers, and possibly to most of the people sitting in this court, but for this approach to be justified we would have to be satisfied, and simply as a matter of common sense we feel we cannot be satisfied, that this was a matter, this matter of accounting practice, that the jury could draw on from their own knowledge and experience rather than by dint of evidence. In our judgement therefore there was not evidence before the jury from which they could properly conclude that these documents were required for an accounting purpose, nor could they draw that conclusion from such evidence as they did have, that is to say the nature and form of the claim forms. We well understand the difficulty that this point caused below, and certainly would not seek to criticise the learned Recorder for the approach he took, but we have to say that with the benefit of the further reflection and the benefit of the submissions that we have received both orally and in writing we cannot agree that he took the right approach.

For fear that it might be thought that the judgment of this court creates insuperable difficulties in the way of prosecutions in cases of this type under section 17, we will go so far as to say that really very little evidence, or certainly very little unchallenged evidence, as to the modus operandi of the company and as to the use of the claim forms once they had been submitted would no doubt have been sufficient to cure this point: if of course the jury was minded to accept it, which is a matter for them. Although we made reference earlier in this judgment to the question of there being no expert evidence, we of course do not suggest that this is a matter that needs to be the subject of expert evidence, or indeed is appropriately the subject of expert evidence, provided there is some evidence upon which the jury can act as to how the claim forms are treated in an accounting way within the companies with which they are concerned. For that reason and for that reason only therefore we are constrained to say that this conviction is based upon an incorrect approach and must be quashed.

The question was raised before us of whether there could nonetheless be substituted a conviction under section 20 of the 1968 Act for procuring the execution of a valuable security. It was pointed out, originally by prosecuting counsel, that as a matter of fact all the elements required for a conviction under that section were in fact present in the evidence at the trial. The difficulty of that submission, however, as Mr Turner pointed out (and Mr Rickarby for the Crown very properly told us that having had the benefit of Mr Turner's views he accepted them) is that the test for the substitution of a verdict under section 3 of the Criminal Appeal Act is that set out by Lord Bingham, Chief Justice, in the case of Graham (1997) 1 Cr App R 302. The first limb of that test, set out at page 313A, is:

It would be sufficient if looking at the indictment, not the evidence, the allegation in the particular count in the indictment expressly or impliedly included an allegation of offence B.

When we look at the indictment, without reference to the evidence as we are obliged to do under the ruling in Graham, it is plain from the indictment, taking count 2 as an example, that it would not have been possible at trial for the jury to convict of a section 20 offence on that unamended indictment. We need not, we think, go into detail, but say merely that there is no reference in the indictment to the obtaining of a valuable security, however much it was in fact the case that Mr Sundhers did succeed in obtaining such a valuable security in the shape of the cheque that he received. That that is the correct approach is reinforced by what the court in Graham said when it was dealing with one of the cases where it did consider that a conviction could be substituted, that is to say the case of Marsh. On page 333 of the report that we have referred to the court sets out in very helpful, if we may say so, tabular form a comparison between the count in the indictment in that case and the section 20(2) offence. It is an important point of comparison between the two that there is specific reference in the indictment in that case to a cheque, which of course is a valuable security. That possibility is not present here.

In the event therefore we allow the appeal. We are not able to exercise our powers under section 3 and so the appeal is allowed without the substitution of any other conviction. We only need to end by thanking both Mr Turner and Mr Rickarby for the extremely clear way in which this case has been presented both orally and in writing and for the interesting arguments that they have both put forward; and in particular how, in some cases, having given us the benefit of the possibility of those arguments, they decided on more mature reflection that although they were worthy of consideration by the court they could not be properly pursued to a final decision.