England and Wales Court of Appeal (Criminal Division) Decisions

(1) Michael Villiers was the principal orchestrator and financier of the fraud; he had opened accounts with LCB and, through his company called World Wide Trade, sold goods, on which duty was payable, to fictitious companies; arranged for hauliers to collect such goods, pursuant to fax instructions from the fictitious companies to LCB, and caused the goods to be diverted to Villiers’ own premises in River Road, Barking or to the United Kingdom market without duty being paid; much of the merchandise was moved speedily to cash-and-carry destinations such as The Nestings in Windsor and A&J Imports and Bendalls in the Midlands. The goods were usually paid for from the bank account of JWS Holdings a name used by John Sewell, said to be Villiers’ right hand man. This account was funded, on at least one occasion when Sewell was on honeymoon, from an off shore trust account operated by Villiers in the name of Orion at ANZ Bank. Money from sales was paid into the JWS Holdings account and thereafter into the account of World Wide Trade; it was then drawn out by either Michael Villiers, or his son, Darren Villiers, the only two signatories on the account; Michael Villiers, in particular, had an expensive lifestyle which, said the Crown, could only have been funded by evasion of Customs duty;

(2) John Sewell was a henchman of Villiers responsible for the day to day arrangements for purchase, sale and transport of duty suspended goods; he set up bogus companies; he operated the accounts of World Wide Trade and of JWS Holdings; he did not make as much money as Villiers and, said the Crown, could not have run the fraud on his own; when first arrested in September 1996 he blamed an entity called “Ridgewell”; shortly thereafter he informed LCB that deliveries were henceforth to be in the name of “Stockton Group”. Both Ridgewell and Stockton were fictitious companies;

(3) Terence Ford was a haulier who took loads from LCB over a period of months to premises of Villiers at River Road in Barking. He first used the name T Ford Transport and then the name Bronco Transport, which was never registered as either a trade name or a company. He must have known that the goods he was carrying were released from a bonded store, were ostensibly destined to go abroad, but were in fact delivered to domestic destinations. He received documentation, including AADs, which he must have known were false. After a while he ceased to carry goods from LCB to their domestic destination and started to carry them from that destination to cash-and-carry outlets such as The Nestings in Windsor;

(4) Carl Hutchinson was a further haulier who came on the scene after the fraud had begun. He had premises at Lingwood Road, Trafford Park, Manchester. He initially took goods over from one of Villiers’ haulage companies, Abdee Haulage, but from September 1996 carried goods directly from LCB and delivered them to Abdee Haulage and also to cash and carry operations. He was arrested and bailed on 28th February 1997. Thereafter on 1st July 1997 a van was detained outside the Lingwood Road premises and officers went to Hutchinson’s address. When he was stopped from running away he said his name was Robert Brown and cases of spirits on which duty had not been paid were found. It was also alleged that he was more than a mere haulier, since documents found at his premises showed sales of spirits and transfer through an account operated by Hutchinson. An address-book, asserted to be his, contained entries for both Michael and Darren Villiers, Sewell and the next defendant;

(5) Atul Patel was also concerned in the diversion and distribution of spirits from LCB. At his premises were found stocklists from and other documents referring to bonded warehouses and invoices for non-existent companies with forged or fraudulent stamps purporting to show export of goods; an envelope was found mentioning “Carl” and “transport”. He tried to distance himself from any conspiracy and put the blame on his cousin Sanjay Patel. He made a lying written statement, refused to sign a handwriting sample and declined to account for the apparently incriminating documents found at his home.

In broad terms, the defence of all defendants was that, while fraud and diversion of duty occurred at LCB at the relevant time, it was nothing to do with them and they knew nothing about it.

Grounds of Appeal

All the appellants complained of what they said was extensive non-disclosure by the Crown both before and during the trial and submitted that such non-disclosure vitiated the fairness of the proceedings. It is important to be aware that the prosecutions began before the Criminal Procedure and Investigations Act 1996 came into force and, therefore, that the principles set out in R v Keane [1994] 1 WLR 746 apply to these appeals. The alleged non-disclosure was in relation to six separate matters:-

(1) The status, as informants, of Mr Alfred Allington, the owner and manager of LCB, and his younger brother Mr Edward Allington, who were called as witnesses for the prosecution. The appellants alleged that both brothers were participating informants but were not registered or handled in accordance with Home Office guidelines relating to informers;

(2) The fact that Customs had at all material times not merely known that fraud was occurring at LCB but had actively requested and encouraged the Allington brothers to allow goods to leave the warehouse without duty being paid in order, as it was said, to enable them (the Customs) to catch bigger fry than the hauliers;

(3) The fact that Mr Alfred Allington had received substantial inducements from the Customs to act as an informant;

(4) The fact that Mr Alfred Allington had lied on oath in previous proceedings when he asserted that he did not know that fraud was going on at LCB and that he was an innocent dupe of those committing that fraud;

(5) The fact that Mr Alfred Allington was known by Customs to have received substantial bribes from his customers;

(6) The untruth of the assertion by Mr Alfred and Mr Edward Allington in their statements that the documentary proof of the fraud, in the formal documents such as the forged AADs, came out of their own files, when the truth of the matter was that many of the AADs were taken away by Customs before they ever got into LCB’s files.

(1) Status of Allington brothers as informants

“I knew exactly how the fraud was operated and I can say that it would not have taken place unless Customs & Excise had told us to let it happen”

In paragraph 14 of his supplementary statement of 11th October 2001 Mr Edward said:-

“In signing the AAD for a bogus load we were aware that the load would leave our bond and was going to be diverted. The fact that Customs through Bernie Small had full knowledge of each company and load meant that I had no concerns about releasing the duty suspended goods. If it had not been for this neither Alf nor I would ever have done what we did because the role we played would have made us a central figure in the fraud. We still were essential to the fraud but neither of us acted dishonestly because Customs knew what we did.”

Handling by Customs of the Brothers/Participating Informants?

“A CONFIDENTIAL INFORMANT (CI)

Is an individual who may have a criminal history, habits or associates, who gives information about crime or persons associated with criminal activity, whether or not for financial reward or other advantage. That individual has the expectation that his/her identity will be protected.

PARTICIPATING INFORMANT (PI)

Is an individual who has been registered as a Customs and Excise informant, in the knowledge that he may play a part in a crime or its preparation. His role will be disclosed to the defence and he will be expected to give evidence.

CONFIDENTIAL INFORMANT (PARTICIPATING)

Is a participating informant who has been authorised by the CIO to play a minor role in a crime or its preparation. A confidential informant (participating) will not give evidence or be disclosed to the defence. However, the role of the CI(P) will be fully disclosed to the trial judge”

It then defines a Handler as “the officer who is responsible for dealing with and control of the informant” and states:

“Controller

Is an officer of at least SIO grade and always of a grade higher than the handler and co-handlers. The controller supervises the actions of the handler in his relationship with the informant.

A controller, as the effective tactical supervisor, is at the operational centre of the system and will be directly responsible for the day to day supervision of the handler.”

Under the heading Informant Handling, the document continues:

“Two basic principles which are paramount to the effective management of any information handling and management system are supervision and control.

It should be anticipated that most informant generated actions and operations will incur problems, primarily due to the character of the informant whose knowledge of criminal activities is usually gained as a result of active involvement with crime and criminals.

As working with informants involves risks for both HM Customs and Excise and Informants the following basic system principles apply:-

No member of HM Customs and Excise and no Customs and Excise informant is to counsel, incite or procure the commission of a crime.

An informant is always a resource of HM Customs and Excise and never the property of an individual officer.

An informant must be registered at the earliest practical opportunity, with the appropriate ACIO.

Informant handlers and co-handlers must be accountable to their controllers.

The informant must be accountable to the handler. All the informant’s intelligence gathering activity must be directed and controlled by the handler. Wherever possible all proposed meetings/contacts with an informant must be submitted to the controller for prior authorisation.”

There is also an important sub-paragraph under this heading:-

“The informant’s involvement must remain within legally defined limits and nothing must be done that could in any way mislead the department’s legal advisers or the court.”

“Information for the protection of the revenue

(1) The occupier or the proprietor shall furnish the Commissioners with any information relating to any relevant business or activity of his which they specify or information which they think it is necessary or expedient for them to be given for the protection of the revenue.”

In the light of Mr Edward’s evidence to this court about the general pervasiveness of Customs activity at LCB, as well as his evidence about what he himself knew of Mr Alfred’s activities as proprietor of LCB, it is an inevitable conclusion that Mr Alfred gave considerably more information to Customs than is casually recorded in Mr Small’s record of information provided by Mr Edward. In so doing, he went well beyond what he was obliged to do under regulation 24. It was, in our judgment, a clear breach of the Home Office Guidelines not to have registered Mr Alfred as an informant. This breach should have been disclosed to the trial judge who could then have come to an informed conclusion as to whether Mr Alfred was a participating informant.

“She [Mrs Lesley Dearing] recalls that an NIS representative mentioned that it was better to allow the warehouse keeper (Alf Allington) to continue as a paid informant to the NIS. This ensured that if a suspect trader approached LCB Alf would accept their business at face value and notify the NIS so that further investigation could take place. Ordinarily a warehouse keeper would be liable for the duty in fraudulent diversion cases. However, Lesley had learned prior to the meeting, that Alf Allington was protected by an indemnity.”

Even if only the substance (as opposed to the detail) of Mrs Dearing’s recollection is correct, it is clear that Mr Alfred was often passing information to Customs and was working with them so closely as apparently to have an agreement that neither he nor LCB would themselves be liable for any missing duty. On the evidence and information available to us, we conclude that Mr Alfred was a participating informant and his status as such should have been revealed to the trial judge together with the facts (1) that he was not registered, (2) that no controller had been appointed to supervise Mr Small in his dealings with Mr Alfred, (3) that no proper records were kept of Mr Alfred’s dealings with either his customers or with HM Customs.

(2) Customs knowledge of and encouragement of LCB’s participation in the occurrence of diversion frauds

“As you are aware our company carry out numerous exports on a weekly basis from stock initially received from approximately ten customers, all of this information is passed to HM C&E and has been for a considerable period of time.”

This is in no way denied by Mr Snugg.

“But this is largely due to the work that the NIS encourages him to do.”

Mr Pratt of Romford also wrote a contemporaneous memo to his senior officer saying that it was about time some decision was made whether LCB “should still be encouraged to take on suspect customers and to despatch goods under bond to dodgy destinations”. On 22nd October 1997 Mr Hobley expressed his frustration about the activities of NIS at LCB to personnel at the Excise Policy Group saying:-

“We have long had difficulty in gaining access to this trader because of NIS involvement. Indeed, we have to contact them for permission before we can visit our own trader. . . The NIS encourage the warehouse keeper to accept business from suspect customers and use him as an informant.”

In February 1998 the Deputy Chief Investigation Officer required all ACIOs to provide relevant information about LCB in the light of the fact that NIS had 33 pending investigations and prosecutions in which LCB was witnesses. This resulted in a note on co-operating warehouses from Mr Cedric Andrew, the Assistant Chief Investigation Officer at NIS. He was mainly concerned to address the problem of the amount of revenue lost to Customs and said:-

“We are . . . . looking at movements through LCB which appear to have been diverted but where no action has been taken by NIS . . . . it can and no doubt will be argued by the warehouse keeper that he is not liable for the duty because he co-operated with the NIS either by letting products leave LCB at our request, or by informing us of new, potentially ‘suspect’ customers for whatever action we chose to take.”

He added that in the light of what had been happening NIS would be responsible for all trading activities through LCB prior to 1st April 1998. This shows in our judgment the extent to which Customs, through NIS, were encouraging LCB to encourage the fraudulent activity taking place at LCB. It was subsequently agreed that a central record should be kept of witness statements made in respect of LCB, particularly those of Mr Alfred Allington.

“At no time was any trader, haulier or other business person recommended to LCB by NIS officers under my command, nor was LCB encouraged to accept business with any particular trader. There was no collusion or conspiracy between LCB and officers of NIS to create, facilitate or in any way improperly foster business that would not otherwise have occurred.”

Next to this document in our files is an undated memo from Mr Small himself in which he stated how he recruited Mr Edward Allington as a confidential intelligence source, registered as such, and that his work assisted the department in its investigations. He says that, through Mr Edward, he was introduced to Mr Alfred who, as the authorised warehousekeeper, was obliged to provide Customs with information about the company’s business. It was for this reason apparently that Mr Alfred was never registered as an informant. Mr Small says further that he benefited from Mr Alfred’s knowledge by using it to target investigations against criminal elements trading in excise goods and adds:-

“I regard Alfred Allington as a valuable source of trade information.”

We regard it as likely that these documents (together with a similarly undated memorandum from Mr Small to Mrs Dunn in similar terms) were produced for a prosecution which took place in early 1999 at Kingston-on-Thames before Judge Hucker and that they are the origin of the phrase “trade source” which was hereafter used to describe the status of Mr Alfred. In the light of the history we have set out, we consider that the two above memoranda and the use of the phrase “trade source” to describe Mr Alfred’s role to have been distinctly misleading.

“One of the key features of a number of NIS investigations was that the warehousekeepers co-operated with the NIS, both in alerting them to possibly fraudulent consignments and in letting such consignments leave the warehouse under NIS surveillance. Because of their co-operation, such warehousekeepers were, in effect, given indemnities releasing them from their liability for the duty and tax involved. In some cases, specific written or oral indemnities were given; in others, an indemnity was implicit in the Department’s wish to secure the warehousekeeper’s co-operation. One particularly significant group of cases involving such co-operation was that concerning the London City Bond (LCB), a warehouse in the East End of London which was targeted by criminal organisations and became the focal point for many of the frauds. The amount of excise duty lost through LCB is estimated to have been £352 million.”

(3) Inducements to Mr Alfred Allington to act as informant

(4) Previous Proceedings

(1) if a stamped AAD was returned, he would not know if there had been fraud;

(2) he had no discussion about an indemnity with Mr Small.

(1) he was not a Customs & Excise informant;

(2) he was not aware when goods left the bond, that some of them were being fraudulently diverted, although he had suspicions;

(3) he did not allow frauds to run with Customs’ connivance nor was he a party to any deals with Customs;

(4) he did not know that he would not be called on to pay the lost duty.

Customs personnel must have known that these answers were false.

(1) that Mr Alfred was an informant and had given sensitive and important information to Mr Small which played a possibly very significant role in the monitoring of the fraudsters in the case before him;

(2) that Mr Alfred had, with what he must have regarded as Customs encouragement, traded with customers whom he knew to be fraudulent over a lengthy period during which he supplied information to Mr Small, in return for the LCB guarantee not being invoked;

(3) that Mr Alfred had given untruthful or questionable evidence about his role in earlier court proceedings; and

(4) that an unexplained sum of £100,000 had been paid to Mr Alfred and then paid over by him to Customs.

He therefore decided that the defence in the case before him should be made aware of the detailed help Mr Alfred had given to Customs, that his role as an informant should be disclosed and that the facts surrounding the £100,000 should also be disclosed.

(5) Bribes

(6) Origin of documentation including AADs for the purpose of court proceedings

Disclosure to the Judge

The judge was told that Mr Edward Allington was an informant to Customs in relation to customers of the warehouse. He was taken through Mr Small’s contact sheets and daybooks. Although it was made clear that the sheets and books showed that on occasions information was passed on to Customs in relation to companies involved in the trial before him, it was not made clear that Mr Edward was a participating informant in the sense that he encouraged duty diversion to take place by signing false AADs and then informing Customs of the fraudulent loads.

The second trial began on 20th February 2000 and Mr Sewell pleaded guilty on 21st February. At that stage Mr Birkett knew nothing of what had been going on at the voir dire at Wood Green but, once Judge Maher ordered disclosure on 28th February and the case against the drivers collapsed on 1st March, events moved fast. Vast quantities of documents were couriered to Manchester, including a note from Mr Gompertz QC made at the conclusion of the Southwark trial and a further note from Mr Lucas about the concerns he had at Wood Green about Mr Alfred’s false evidence at Southwark.

“Documents coming from business records compiled in the course of a business transaction when their creator can have no idea what is going to happen in the future can usually be treated as evidence of the facts disclosed.”

What neither the Judge nor counsel knew was that, in many cases, the creator of the AADs knew exactly what was going to happen in the future, viz that the goods would never be delivered to the destination set out in the AAD. Again the Judge summarised the evidence of Mr Alfred Allington and commented (26G):-

“The amount of paperwork must be enormous. A very small amount of it has found its way into this court . . . . If documents appear superficially to be in order, Members of the Jury, how easy must it be to fail to spot something going on.”

The truth of the matter was that neither Mr Alfred nor Mr Edward failed to spot what was going on. Not only did they know about the fraud but, with Customs encouragement, they facilitated it.

“You . . . were a frequent and trusted visitor at the bond. You were in a position to learn more about the workings at the bond than any others and to exploit any weakness, and they are undoubted in the system, to the detriment not of the bond, but of the public revenue.”

Mr Clegg, supported by all other counsel, submitted that the true status of both Mr Alfred and Mr Edward Allington as participating informants together with the extent of their participation (including the LCB immunity) should have been disclosed to the trial judge. He further submitted that it was not for this court to second guess what the trial judge would then have done and for this purpose he relied on Atlan v United Kingdom [2001] ECHR 36533/97 in which the European Court of Human Rights held that, if the defendant was deprived of a decision of the judge at trial in relation to disclosure because he was not given the correct information, the defendants did not have a fair trial; the position cannot be cured by the Court of Appeal coming to their own view of the matter.

Discussion and Conclusion

“simply another factor, albeit important, to be taken into account by the judge in balancing the public interest in keeping material confidential against the public interest in securing a fair trial.”

Judge Hammond was never given a proper opportunity in this case to conduct that balancing exercise or to weigh that important factor.

“wished to alert judges to the need to scrutinise with great care applications for disclosure of . . . details about informants. They would need to be astute to see that assertions of the need to know such details were justified because they were essential to running the defence. If they were not so justified the judge would need to adopt a robust approach in deciding to order disclosure.”

These dicta cannot, in our judgment, be invoked to justify a failure to disclose, even to the judge, participating informants whose existence have not been handled in accordance with Home Office guidelines, especially when Customs have themselves encouraged the informants in their participation in the offences and have afforded the participants an indemnity in respect of any duty lost to the Revenue; nor can they justify misleading the court into believing that the LCB was duped by the fraudsters when it was not so duped; nor can they justify false evidence being given by the informant denying his role. As Roch LJ said in R v Hickey 30th July 1997 (page 371 of the transcript):-

“This court is not concerned with the guilt or innocence of the appellants, but only with the safety of their convictions. This may, at first sight, appear an unsatisfactory state of affairs, until it is remembered that the integrity of the criminal process is the most important consideration for courts which have to hear appeals against conviction. Both the innocent and the guilty are entitled to fair trials. If the trial process is not fair; if it is distracted by deceit or by material breaches of the rules of evidence or procedure, then the liberties of all are threatened.”

“assuming the irregularities which we have identified had not occurred, would a reasonable jury have been bound to return verdicts of guilty?”

In R v Botmeh and Alami (1 November 2001) Rose V-P set out a similar test, in the course of deciding that this court could, if appropriate, itself look at new undisclosed material analogously to the ex parte procedure at the Crown Court. He said (para 25):-

“If this Court examines undisclosed material which was not, but should have been, shown to the trial judge and concludes that disclosure in an edited form would have been ordered by the trial judge, the test then to be applied by this Court is whether a reasonable jury, had edited disclosure been made, could have come to a different conclusion.”

We adopt this approach and conclude, with some reluctance, that we cannot be sure that, if the status of the Allington brothers as participating informants together with their encouragement by Customs and the consequent LCB immunity had been disclosed to the defence, the jury would have been bound to return verdicts of guilty. We accept that the material could have been deployed by the Defendants and that they should have been able to put forward their tenable cases in the best light, R v Agar (1990) 90 Cr App R 318.

Villiers had a further ground of appeal based on the Judge’s direction that the jury could hold his silence in interview against him. The circumstances of Villier’s silence were unusual inasmuch as, when he went with his solicitor to the police station for interview, his solicitor was arrested. Villiers was thus left, as many defendants are, to use the services of a duty solicitor. He gave a “No comment” interview. We saw no reason to criticise Judge Hammond’s direction in this matter and did not feel it necessary to call on Mr Birkett to answer the argument on this second ground of appeal.

Conclusion

LORD JUSTICE LONGMORE: Before I do anything else, I will say we have received a note from Mr Birkett in relation to some passages earlier on in the judgment which we will bear in mind, and indeed I think we will alter paragraph 10 of the script in the light of what Mr Birkett has said in his note but the detail of that we cannot deal with now, it will have to be left to us to consider what that note says and, if we think it right, incorporate such amendments as we think fit into the formal form of our judgment.PRIVATE 

MR BIRKETT: My Lord, we do have an application that the matter should be retried.

LORD JUSTICE LONGMORE: Very well I understand it is not opposed.

MR CLEGG: Not so far as Villiers is concerned.

MR BADENOCH: It is in respect of Terence Ford for these short reasons. In the interests of justice, I would respectfully submit that Mr Terence Ford ought not to be retried. I set out the following reasons: he was sentenced to 3 years' imprisonment; he has served 16 months. He was then released, properly, and he served 2 months on a tag. My Lord, he was on licence pending the hearing of this appeal.

My Lord, he therefore served the sentence, which was given to him. In those circumstances and having regard to the fact he is now 50 years of age, he is seeking to get on with his life. He is back working, as he has done before, and I would respectfully submit that it would be particularly onerous, upon Terence Ford, to expect him to attend Manchester once again, for a very long period of time, potentially, 3 to 5 months, to stand trial, once again, for something for which he has served his time.

LORD JUSTICE LONGMORE: We can follow that argument, yes.

MR BADENOCH: I simply submit that it is not in the interests of justice or the public interest at considerable expenditure to retry Terence Ford.

MR LAKHA: My Lords on behalf of Mr Sewell there is no opposition to the application.

MISS PILLING: I appear on behalf of Mr Patel. There is opposition for a retrial, for the same reasons as those advanced on behalf of Mr Ford. Mr Patel has also served the requisite portion of his 3 year sentence of imprisonment.

LORD JUSTICE LONGMORE: He was also sentenced to 3 years.

MISS PILLING: He was. He was released in June 2001, and served again 2 months under the electronic tagging scheme.

LORD JUSTICE LONGMORE: He also served 16 months, did he, actually in prison and then 2 months under the tagging scheme?

MISS PILLING: He is considerably younger than Mr Ford but he is a businessman and a family man, and since his release from prison he has been re-establishing his business. He runs a series of care homes in the North London area and has been re-establishing bonds with his very, very young two children. For the same reasons as those advanced by my learned friend Mr Badenoch, I respectfully submit that it is not in the interests of justice that this man be taken back out of his normal life to stand another lengthy trial in Manchester, when he has already served the requisite portion of the sentence imposed.

LORD JUSTICE LONGMORE: Yes. Thank you. There just remains counsel for Hutchinson. Is that right?

MR LEON: Mr Hutchinson has only, unfortunately, served 18 months, and the application is there should be a retrial and I accept we simply do not have the reasons which have been advanced by other counsel.

LORD JUSTICE LONGMORE: Is there anything further you would like to say Mr Birkett?

MR BIRKETT: I think it is a matter for the Court. I would only say this. Of course, the trial may take three months plus, I accept that, but there is a practice that has developed in this kind of case, for individual defendants, not necessarily to be present throughout, and this is a practice which was followed in this trial, and in the current trial in Manchester. Therefore it may very well be that applications would be successful if made to the judge on behalf of these defendants that they should only be there as and when the evidence affects them.

LORD JUSTICE LONGMORE: Thank you. We will consider that separately from anything else. We will just retire for a short time.

(Short Adjournment)

LORD JUSTICE LONGMORE: No, this Court has decided that there should be a retrial of all these defendants. The public interest does require that the guilt or absence of guilt of these defendants be established at a trial, and bearing in mind what Mr Birkett has said about the way, in which the burden of attending a trial can be alleviated, we do not think there would be any injustice in ordering a retrial in respect of all these defendants, including Mr Ford and Mr Patel.

MR BIRKETT: I imagine I think the questions of bail are going to be canvassed. Before that takes place, can I make two applications. My Lords, firstly can I ask for leave from this Court to prefer a fresh indictment?

LORD JUSTICE LONGMORE: Yes.

MR BIRKETT: That, as the Court will be aware, will be done forthwith and an appearance before the Manchester Crown Court will be arranged within the next 2 months.

LORD JUSTICE LONGMORE: I think we have to direct, do we not, that the appellants be re-arraigned on the fresh indictment that is to be preferred within 2 months? We will so direct.

MR BIRKETT: Can I also ask the Court to consider making an under order section 4 of the Contempt of Court Act to restrict publicity of this judgment until the retrial has been concluded, or until further order. I make this application in order to ensure that there is no matter published which may prejudice the fairness of those proceedings.

LORD JUSTICE LONGMORE: Yes, it has all been in public so far, has it not, apart from proper PII applications of course?

MR BIRKETT: My Lord, the detail of the Court's ruling and the criticism of the Crown and the details of the case, if published widely, may have a bearing on the fairness of the proceedings. That is my application.

LORD JUSTICE LONGMORE: Yes. Mr Clegg, I think you are going to address us on that I think.

MR CLEGG: It is really the question of whether there is a substantial risk that the interest of justice would be prejudiced by publicity now, in relation to a retrial, that for logistic reasons will almost certainly not take place before next summer and may not take place until next September.

I did not know this application was going to be made, but the Court may recall a recent case reported in the Criminal Appeal Reports of R v Stone, where it was held by this Court that publication of a defendant's previous convictions on the Internet and an eight page exposé in the sun newspaper under the headline giving the name Stone, reference to "hammer man had killed before" would not be such as to prejudice an English jury from approaching the matter in a fair and open way, and would not prevent a fair trial from taking place.

LORD JUSTICE LONGMORE: Mr Birkett would probably say the facts of Stone are rather removed.

MR CLEGG: They are indeed. I use it only as it is the most recent case on publicity. One scarcely imagines more publicity. No question there, so far as this Court is concerned, that a fair trial would be prejudiced as a result of it. Here of course the prejudice is going to be, as I understand it, alleged against the Crown. I am not suggesting the defence is going to be prejudiced by this publicity, but somehow the Crown from having the truth published about what happened is going to be prejudiced in a trial next year. We would respectfully submit that it is difficult to see how it can really be argued that a jury is going to be unable to give the defendants a fair trial, if there was some publicity, presumably in the next few weeks about this judgment, bearing in mind the time that was before there is in fact a retrial. Freedom of the press is obviously something that is important and ought not to be restricted unless there is good reason. But, my Lord, that is all I would say so far as the question of publicity.

LORD JUSTICE LONGMORE: I suppose the one element of Mr Birkett's request goes to the fact that he wants the order to be until the conclusion of a retrial which would then prevent publicity being rehashed during the course of the retrial.

MR CLEGG: But the trial judge has the power to restrict publicity during the course of the trial, if it is there felt that there was any prejudice and the trial judge can make an order under section 4 to limit publicity during the course of the trial, if it is seriously thought that anybody would be anxious to publish anything any way and, if they were, that it would be likely to prejudice the trial itself.

LORD JUSTICE LONGMORE: Thank you. Do any other counsel wish to say anything about Mr Birkett?

MR LEON: Only that I support Mr Clegg's submission.

MR BIRKETT: Sewell has pleaded guilty. Ford and Patel have been convicted by the jury. It would be unfortunate if there was any publicity, from their point of view, I should have thought, concerning those matters which might find itself into the jury box when this matter is retried.

LORD JUSTICE LONGMORE: Counsel do not seem to have any such concern.

MR BIRKETT: No, our duty, if I may so rather pompously, is to ensure that this trial will be fair when it happens of course.

LORD JUSTICE LONGMORE: Of course.

MR BIRKETT: My Lord, the second matter is slightly tangential I fear. There are other trials going on around the country. The publicity in relation to the details of this appeal may prejudice those proceedings.

LORD JUSTICE LONGMORE: Yes thank you. I think we will not keep on going out, I think we will hear all applications now and deal with them altogether.

MR CLEGG: On behalf of the appellant, Villiers, we would make an application for a defendant's costs order, for the costs of these proceedings and the costs of the proceedings in the court below, to be paid out of central funds.

LORD JUSTICE LONGMORE: Yes. Mr Villiers has not been in receipt of legal aid at all, is that the position?

MR CLEGG: That is the position.

LORD JUSTICE LONGMORE: You would say that is the normal order which should follow the events that have happened.

MR CLEGG: The normal order and in fact there is a High Court restraint order in relation to his assets so that the money that is recovered pursuant to this order will in fact be held under the High Court Restraint Order, and will not be released to him until either that order is varied or he has a verdict in his favour by the jury. So, it is right that the Court should know there is, as it were, that protection to public money. If in fact he were to be convicted at the retrial, then that money would then be available for confiscation and/or other disposal for the court. It is, we submit, a normal and proper order now, for him to have his costs out of central funds for this Court and the court below.

LORD JUSTICE LONGMORE: Why should not any such order await the result of the retrial?

MR CLEGG: Because the trigger for him having his costs is the fact that he was, has now been, conviction now been quashed by this Court.

LORD JUSTICE LONGMORE: I follow that. That would be the normal case. If it in fact is going to be subject to a restraint order it seems a slightly pointless exercise, does it not?

MR CLEGG: It is not, with respect, because the restraint order may, for any number of reasons, may be varied, but the significance is that the costs that have been incurred up to and including today have been incurred by him, in fighting a trial that the Court has held was not fair, and in having that conviction overturned. So, at this moment in time, he is an acquitted defendant who has been found not guilty.

LORD JUSTICE LONGMORE: Using funds other than those restrained presumably.

MR CLEGG: In fact using those that were retrained that had been released by the court to pay for his legal costs.

LORD JUSTICE LONGMORE: The purpose of having such an order now would be so that an application could be made for the costs of a retrial.

MR CLEGG: That would certainly have one, that is one potential purpose of the funds. There are of course other assets that he has that require on going money spent on them in order to preserve their value for whoever it is ultimately receives them at the end of the trial. But, it is my submission that the trigger, as it were, for award of cost comes from the judgment today and the ordinary course would be for such an order to be made. He is somebody who has successfully overturned his conviction and therefore the order ought to follow.

LORD JUSTICE LONGMORE: I follow that.

The other appellants are all on legal aid. Is that correct?

MR BADENOCH: If I could speak first on behalf of Terence Ford. He was on legal aid but he did make significant contributions. I have scheduled those contributions as required by me and I have three copies. If I could hand those up (Same Handed).

LORD JUSTICE LONGMORE: Is that the sum that you want paid out of central funds?

MR BADENOCH: No, it is not paid out of Central Funds. I have set out at the bottom where the relevant powers are. For the order of repayment of contributions, I seek that order today from this Court, for this reason. He was legally aided in the Crown Court at Manchester. Your Lordships have ordered a retrial in respect of Terence Ford. He would of course now seek a fresh representation order, should that be appropriate. So this is effectively his last opportunity to seek repayment of the contributions which he made. Your Lordships have the sum set out there in.

LORD JUSTICE LONGMORE: Who makes the repayment?

MR BADENOCH: It comes back from the Legal Aid Board.

LORD JUSTICE LONGMORE: Rather than central funds.

MR LAKHA: There is no application on behalf of Mr Sewell.

MISS PILLING: Nor on behalf of Mr Patel.

MR LEON: The position so far as Mr Hutchinson is concerned. He was legally aided since trial but prior to the granting of legal aid by the Registrar he and Miss Radcliffe were funding his appeal against conviction and sentence privately. There was a short period of time where he simply did not have legal aid and work was undertaken on his behalf by counsel and solicitors on a private basis. We simply ask for a defendant's cost order as Mr Clegg has invited your Lordships so to do.

LORD JUSTICE LONGMORE: For payments out of Central Funds for such sums as he has himself paid? Do we not have to have a specific sum?

MR LEON: I do not have a schedule in front of me, unfortunately at the moment. If your Lordship wanted a schedule no doubt my instructing solicitors would be able to provide such a schedule.

LORD JUSTICE LONGMORE: Yes, very well. Well Mr Birkett any observations on those submissions?

MR BIRKETT: It is a matter for the Court.

LORD JUSTICE LONGMORE: Very well, we note that as something we will rule on in due course.

MR CLEGG: I think, lastly, the question of bail. I understand that the appellant, Villiers, was on bail, prior to his trial, with one surety, it is believed for £20,000, and a condition that he surrender his passport. In view of the very considerable time that has now elapsed, most of which, when he has been on bail, both pre and post conviction, he had been granted bail in December of last year, by this Court, I would invite the Court to consider whether, in the circumstances, unconditional bail would suffice?

LORD JUSTICE LONGMORE: Yes. The surety at trial was

£20,000. The surety between trial and Court of Appeal was merely rather more.

MR CLEGG: Three-quarters of a million, may be a bit more. That was, as the Court will appreciate, unusual for any appellant to be granted bail, in this Court, and he was then a convicted person, serving a 12 year sentence. So different considerations applied. It is fair to say that the very substantial sureties were suggested and urged on the court, indeed by me, as a method of guaranteeing successfully, as it transpires, his attendance when called upon to do so to answer to his bail at the beginning of the appeal.

LORD JUSTICE LONGMORE: Yes. Thank you.

MR LAKHA: My Lord, there is an application for bail on behalf of Sewell as well. Prior to trial, as I understand it, there were only two conditions; in fact three sorry: residence, reporting to Barkingside police station and surrender of passport. Since the hearing in this matter there was a surety imposed by this Court of £30,000. That surety is his mother. My Lords, I invite bail on the grounds on the conditions which existed prior to trial which did not include a surety.

LORD JUSTICE LONGMORE: Yes, residence reporting and surrender of passport.

MR LAKHA: It may be that the reporting is unnecessary in the circumstances, particularly as we hear the timetable may be as long as a retrial taking place in the summer of next year. But, certainly there would be no objection to the surrender of passport and residence.

LORD JUSTICE LONGMORE: Thank you.

MR BADENOCH: On behalf of Terence Ford, I do not have specific instructions, but I am able to inform the Court that Terence Ford has been in continuous contact with those who instruct me. He is not here today because he is working today.

My Lord, I would invite the Court to place him on unconditional bail, having regard to the part he is said to play in this fraud, apart from anything else but also having regard to his own limited means. I have an address, which I can provide to the Court, should the court feel that a condition of residence would be appropriate.

LORD JUSTICE LONGMORE: Thank you.

MISS PILLING: On behalf of Mr Patel, he also has not attended today because he is working. Prior to trial, he was on conditional bail, with condition of residence and surrendering of his passport. I know that he remains at his family address, so a condition of residence would not pose any difficulty for him.

LORD JUSTICE LONGMORE: Thank you.

MR LEON: The position as far as Mr Hutchinson is concerned, he was subject to stringent conditions prior to his conviction and, upon his release by Grigson J, bail was set and sureties of £35,000, sureties being Miss Radcliffe and her father. I am instructed to ask your Lordship whether continuation of sureties is now appropriate.

LORD JUSTICE LONGMORE: You say he was on stringent conditions of bail before trial, what were those stringent conditions?

MR LEON: There was reporting, residence and surrender of passports. Could I say, so far as residence is concerned, he has been bailed to 96 Station Road, Swinton Manchester, but he wishes to reside at 105 Pioneer Street in Clayton which is the home of his former wife. The reason for this application is because relations between him and Miss Radcliffe have now deteriorated and he has now the opportunity, if your Lordship would not mind--

LORD JUSTICE LONGMORE: I am not sure we can go into particular addresses because we would not know whether they were necessarily satisfactory from the police point of view. I think we can only decide matters of principle really.

MR LEON: I am instructed to apply in respect of--

LORD JUSTICE LONGMORE: Have you given notice to the Crown?

MR LEON: We have given notice.

LORD JUSTICE LONGMORE: Perhaps it can be dealt with then.

MR LEON: Secondly, in respect of reporting, he was reporting to Swinton police station, between the hours 9.00 and 12 o'clock. Thirdly, in relation to the surrender of his passport, he was permitted his passport back in order to travel abroad during the Christmas period, prior to his trial. He would ask your Lordship to consider a similar application and be permitted to travel aboard this Christmas, as he was so committed to do it at the original trial.

LORD JUSTICE LONGMORE: Did he give any sureties against the surrender of his passport at that time?

MR LEON: No my Lord, I do not think so my Lord.

LORD JUSTICE LONGMORE: Where does he go for Christmas?

MR LEON: He goes to Grand Canaria. I have the address and full particulars have been sent to the Customs and Excise.

LORD JUSTICE LONGMORE: Yes very well, thank you. Yes Mr Birkett?

MR BIRKETT: My Lords, in relation to Ford and Patel, if I can deal with those defendants first. The only condition we would invite the Court to attach to bail would be a condition of residence. Of course, with regard to some of the detail, I have little doubt, but when a trial has been appointed in Manchester there will be applications of one kind or another, concerning some of the details of the bail. But, at the moment, as a matter of principle, the conditions that we invite the Court to consider in relation to other defendants are these. Firstly, we invite the Court to admit Villiers to bail, subject to the same level of surety as has been given, pending his appearance here at the Court of Appeal. Secondly, we invite the Court to impose a condition of residence. Thirdly, we invite the Court to impose a condition that he reports once per week at a police station, and finally, we invite the Court to continue the order that the passport remains surrendered, it being understood that there will be applications which will be made, we understand, as have happened in the past, for the return of that passport. So those would be our submissions in relation to Mr Villiers.

In relation to Mr Hutchinson, similar conditions, we invite the Court to consider, should apply. Firstly, that the sureties should remain. Secondly, that there should be a condition of residence. Thirdly, that he reports to a police station once a week, and fourthly, that his passport also remains surrendered subject of course to applications being made.

So far as Sewell is concerned, we invite the Court to consider a similar package, if I can so describe it, a surety, residence, reporting once a week and the surrender of passport. Those are my applications.

LORD JUSTICE LONGMORE: Yes, I mean it could be said that the situation has been transformed a little as to the amount of surety, at any rate, in the light of an application being made by a convicted and sentenced prisoner to someone whose conviction has now been quashed.

MR BIRKETT: My Lord, I understand that argument, and I am not making submissions as to precise amounts.

LORD JUSTICE LONGMORE: Very well. Yes, that is the third matter we will consider then. Are there other matters we need to consider?

MR CLEGG: My Lord, may I just revert to bail for a moment or two, because I did not realise that the package was going to be proposed in these terms? I think, Mr Birkett began by suggesting that the value required by way of surety should be the same as required prior to today, not prior to conviction.

LORD JUSTICE LONGMORE: That is what I understood his submission was but when I queried it he said he was not making submissions as to particular amounts.

MR CLEGG: I would certainly submit that the appellant should not be any worse off than he was before conviction, in other words he cannot be worse off than he was pending his first trial. He is merely on bail now pending his retrial.

LORD JUSTICE LONGMORE: Pending his trial it was £20,000 you say?

MR CLEGG: Yes, as I understand it. Nor was there any requirement for him to report once a week. I appreciate it is not an unduly onerous condition, but it is going to 6 months.

LORD JUSTICE LONGMORE: Was reporting done in these cases by telephone or in person?

MR CLEGG: You have to physically go to the police station, queue up and sign some sort of ledger. It can take up to 3 hours. If he has a condition of residence and his passport is surrendered, with respect, I cannot see any purpose in it. One can go round the world twice in a between, signing on if you were minded to do so. It is not going to stop anybody with the sheer practicalities of it. It is not going to stop anybody who was minded to abscond absconding. I dare say nothing about the passport being surrendered. Application can be made to the trial, as Mr Birkett has already envisaged, for it to be returned if he wants to travel abroad. Everybody knows he has got properties in the West Indies.

LORD JUSTICE LONGMORE: As I say, we will consider that. Are there other applications we need to consider before we retire? Very well we will retire.

(Short Adjournment)

LORD JUSTICE LONGMORE: We will not make any restraint of publicity order; it does not seem to us to be either necessary or right to do so.

As far as costs are concerned, we will make an order in favour of Villiers for his costs, to be paid out of Central Funds, so he will have a defendant's cost order to be taxed. The same will apply to Mr Hutchinson. As far as Mr Ford is concerned, we will order repayment of his legal aid contributions in the sum of £2,795.

We have to determine conditions of bail pending retrial. The controversy has been the amounts of sureties that the court should require, the appellants saying that the amounts of surety should be what they were, if anything, before the trial, the Crown having submitted that it is more appropriate perhaps to have regard to the sums imposed by way of surety pending the hearing of the appeal.

We have determined to take a middle road in that respect, and we will admit Mr Villiers to bail, against surety in the sum of £100,000. We will say there should be a condition of residence. We will say there should be a condition of reporting, but we will make it once every 4 weeks instead of once every week and that also his passport be surrendered. We make it clear, in respect of all those conditions, that either the Crown or the defendants may apply to the Crown Court in Manchester, for variations on any particular ground. We do not intend that the conditions should be set in stone.

As far as Mr Sewell is concerned, he had no surety before the trial, and we will not require a surety in respect of him, but there will be conditions of residence, reporting once every 4 weeks and surrender of his passport.

As far as Ford and Patel are concerned, there will just be conditions of residence in their admission to bail.

As far as Mr Hutchinson is concerned, we will admit him to bail against a surety of £10,000, and a condition of residence, reporting once every 4 weeks and surrender of his passport. We do not propose to consider whether he should have it back for Christmas. That can be dealt with at the Crown Court in Manchester who, as we have said, can consider any variations that may seem right to that court to make.

As far as conditions of residence are concerned, in general terms, we say that those should be acceptable to the police. If any difficulty arises, then, again, the Crown Court at Manchester can resolve them. That being the outstanding matters, we will rise.

MR BIRKETT: I am awfully sorry. Do I understand the Court has given the Crown leave to prefer a fresh bill of indictment?

LORD JUSTICE LONGMORE: Certainly, yes.