England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL
CRIMINAL DIVISION

		Royal Courts of Justice Strand London, WC2 Tuesday, 2nd December 2003

1. LORD JUSTICE KENNEDY: On 21st January 2003 in the Crown Court at Inner London, this appellant was convicted of conspiracy to defraud and on 14th February 2003 he was sentenced to a community punishment order for 120 hours. He appeals against conviction by leave of the Single Judge on two related grounds, namely, first, whether on a count of conspiracy, limited to two parties, the judge erred in ruling that there can be separate and differing verdicts, and secondly, if there can be separate and differing verdicts, whether it is then necessary to direct the jury as to the process of reasoning by which it is possible to reach different verdicts for each defendant.

2. The appellant is 34 years of age and a native of Tunisia who, since 1991, has traded as A and T Decorators. He specialised at the material time in eradicating mould, particularly from domestic premises. The London Borough of Lambeth had a contract with a firm called A E Williams for the upkeep of their council housing stock. A E Williams subcontracted to others including the appellant. A man named Carl Gordon, who is now 44 years of age, was employed by the London Borough of Lambeth as a housing assistant in their West Stockwell office. Count 1 in the indictment, the only count with which this Court is concerned, alleged that between 20th February 2001 and 28th March 2001 the appellant and Carl Gordon conspired together to defraud the council by (i) overstating the size of rooms that were to be decorated and/or repaired, hence obtaining a greater payment for doing the same; (ii) applying for authorisation to carry out work which did not need to be done and (iii) not carrying out work properly or at all as specified in the invoice. The case related to 14 properties and it was said that if the fraud had succeeded the borough would have lost £57,613 because in reality very little work was done.

3. The system which led to this criminality operated thus. When a tenant reported a defect to the council housing office a council surveyor would inspect the premises and, if he authorised work, he would enter it on the council computer system which was called Saffron. He would use his identification code number and would also use identification codes to indicate the type of work to be done. It would then appear on the computer of the main contractor, that is to say A E Williams. They would then give the work to a suitable subcontractor such as (in the case of mould) the appellant. When the subcontract had finished, he would invoice A E Williams who in turn would invoice the council. The procedure involved payment within 30 days of the 25th of any month after the invoice was submitted. After completion the work was supposed to be inspected by A E Williams and by council officials like Mr Gordon. Mr Gordon also had some authority to allow variations up to a limit of £2,500 but he could not properly authorise variations in respect of mould eradication. In theory variations went through the principal contractors Williams. In practice, a subcontractor who needed a variation could contact a council official, such as Mr Gordon, and obtain the variation he required.

4. Thus, the reality was that in practice, though not apparently in theory, Mr Gordon was in a position on occasions to authorise work to be done in the first place. Secondly, to authorise variations and thirdly to approve work after it had been carried out. Suspicions were raised in relation to a property at 9 Chessington House and there was then an investigation. When the investigation was carried out Mr Gordon's name appeared on original and variation orders in relation to that property. Discrepancies emerged of the type particularised in the indictment, that is to say it became apparent on investigation that rooms had been overstated as to size and repairs had been authorised consequently, which were in excess of the amount which ought to have been payable. Furthermore, there had been authorisations given for work which did not need to be done and invoices had been submitted in relation to work which had either not been carried out at all or had been carried out improperly.

5. That having been discovered, on 31st March 2001 the appellant was instructed to stop work forthwith. On 11th December 2001, he and Mr Gordon were arrested and both were interviewed. They denied any dishonest conspiracy and said: yes, mistakes had been made under pressure as to time and in relation to work. Mr Gordon said he had been used by the appellant who he had expected to be an honest tradesman. The appellant said that as to room sizes and so forth. He went by the information he received from the principal contractor Williams. He only himself resorted to the local authority to sort out problems. He blamed an official of A E Williams for pressing him to get invoices in by the 25th of each month in order to ensure that they were paid as soon as possible.

6. At trial, both men gave evidence broadly along those lines. The Crown's case was that the conspiracy was the brain child of the appellant and that Mr Gordon was recruited to play an important but lesser role.

7. At the conclusion of the evidence, counsel for the appellant submitted that the judge should direct the jury that they should either convict both defendants or acquit both. Counsel for Mr Gordon and counsel for the prosecution disagreed. They submitted that it was open to the jury to return differing verdicts and the judge so ruled. He referred to section 5(8) of the Criminal Law Act 1977 and to two decisions of the Court of Appeal (Criminal Division), the first being that of R v Longman & Cribben [1981] 72 Cr App 121, where the Lord Lane CJ said at page 125:

   "Where at the close of the prosecution case the evidence against one of the defendants is such that it would be unsafe to ask any jury to convict, then it goes without saying that the judge should so rule, and the case can then continue against the other defendant.

   There will, however, be cases where the evidence against A and B is of equal weight or nearly so. In such a case there may be a risk of inconsistent verdicts, and the judge should direct the jury that because of the similarity of the evidence against each, the only just result would be the same verdict in respect of each: that is to say, both guilty or both not guilty. He must be careful to add, however, that if they are unsure about the guilt of one, then both must be found not guilty.

   Whether he gives such a direction will, of course, depend on the way the evidence has emerged. The test is this. Is the evidence such that a verdict of guilty in respect of A and not guilty in respect of B would be, to all intents and purposes, inexplicable and therefore inconsistent? If so, it would be an occasion for the 'both guilty or both not guilty' direction. If not, then the separate verdict direction is required."

   Six years later, in the case of R v Roberts [1987] 78 Cr App R 41 Lawton LJ, giving the judgment of the Court, returned to the same topic. At page 47 he said this:

   "Our reading of the relevant passage in the judgment of LONGMAN'S case (supra) really comes to this. When a judge has to sum up in a conspiracy case, involving only two accused, he has to make up his mind, on the evidence, whether or not it is possible, as a matter of law, for one of the accused to be convicted and the other acquitted. That must necessarily be a matter for the judge to decide. Once he has decided it, he must direct the jury accordingly. When he comes to decide it, a factor he should keep in mind is whether the two cases are different to a substantial degree; but that is a matter for his assessment and not for the jury's. If it were otherwise, there would be a danger of the jury becoming confused by being invited consider two different approaches to their task. Confusion is liable, in the experience of this court, to lead to inconsistent verdicts."

8. The learned judge, having considered those two authorities, concluded his ruling in relation to the present matter in this way:

   "At the end of the day, I have concluded here that it is appropriate for me to direct the jury that there is a markedly different position between that of a subcontractor, on the one hand, who is in charge of the jobs involved in this case, and who has every incentive to behave dishonestly, should he be so minded, and the position of a Council officer, of the status of Mr Gordon, and in the circumstances in which Mr Gordon found himself, on the evidence, on the other.

   In my judgment, a verdict... of guilty against Mr Testouri,...and a verdict of not guilty on behalf of Mr Gordon, would not be inconsistent or inexplicable.

   In my judgment, it could be readily explained by the fact that the jury, although they were sure that Mr Testouri was dishonest, on the one hand, and had the intention to defraud, were not sure that Mr Gordon, although he agreed to do what he did, had himself a dishonest mind."

   The learned judge directed the jury accordingly.

9. There is some support, on the face of it, to be found for the approach adopted by the learned judge in a decision of this Court in the case of R v Ashton [1992] Crim LR 667, of which we had an opportunity to read the transcript. In that case this Court came to the conclusion that the learned judge was wrong in directing the jury that it was a situation in which they must return the same verdict in relation to each of the co-accused. But in commenting upon that decision, in the Crim LR, Professor Sir John Smith said:

   "If the evidence admissible against A proves that A and B conspired together, A may be convicted of conspiracy with B, even though B, his co-defendant, is acquitted because there is no sufficient evidence admissible against him. The usual case is that where A has made a confession which is evidence against him but not against B. The present case, however, was not like that. The tape-recordings were not of admissions or confessions but of steps taken by the parties in pursuance of the alleged conspiracy and were equally admissible against both: Blake and Tye (1844) 6 QB 126. W was entitled to rely on A's evidence at the trial that he (A) never intended the murder to take place. The jury could not be satisfied that this evidence was untrue so far as W was concerned while finding that it was, or might be, true so far as A was concerned. It was the same evidence. The jury either believed it or they did not. If they believed it, neither defendant was guilty, if they disbelieved it, both were guilty. It is submitted that the trial judge's direction to the jury was correct."

10. In our judgment, the principle which has to be followed in relation to cases of this kind is easy to state but not always easy to apply. In any case where what is alleged is a conspiracy to defraud, in which only two defendants are alleged to have participated, the judge should ask himself two questions. First: whether there is evidence of conspiracy to defraud? That means there must be evidence of an agreement to achieve a criminal purpose. If there is no evidence of that because, for example, on one view of the evidence only one defendant can be shown to have been dishonest then, if that view of the evidence is taken, both defendants must be acquitted and the jury must be so directed. The authority for that proposition is to be found in Yip Chieu-Chung v The Queen [1995] 1 AC 111. Secondly: whether there is any evidence admissible against only one defendant? If that evidence is or could be critical, in that without it that defendant cannot be shown to have been a party to the conspiracy alleged, then it will be necessary to explain to the jury how they may reach the conclusion that although the case is proved against that defendant, it is not proved against the defendant in relation to whom the evidence may not be admissible. Where there is no such evidence the jury must be told that it is not open to them to return different verdicts in relation to two defendants. That, as it seems to us, is in practical terms what is meant by the authorities to which we have referred when they speak of evidence being of unequal weight.

11. Another way in which to approach this difficult problem is for the judge to ask himself or herself what the position would be if one or other of the two defendants were standing in the dock alone. If that approach is adopted, it seems to us that the learned judge, again, will have considerable assistance in coming to a conclusion, one way or the other, as to the form of direction he should give to the jury, whether they are entitled, in the particular circumstances of the case and having regard to the provisions of the 1977 Act, to come to a conclusion that there will be a different verdict in relation to each of the two defendants or whether the case is one where the same verdict must be applied to each.

12. In our judgment, this case was a case where the same verdict had to be returned in relation to each. As the jury was not satisfied in relation to the defendant, Gordon, that his guilt was proved they should therefore have acquitted this appellant. Accordingly we allow this appeal against conviction.

13. MR DAVIES: My Lord, may I just invite you to consider when you were rehearsing the document, under paragraph 2, you omitted read in the transcript the word "only".

14. LORD JUSTICE KENNEDY: Sorry, yes.

15. MR DAVIES: "Whether there is any evidence only against one".

16. LORD JUSTICE KENNEDY: Thank you it was meant to be there, it was just an oversight.

17. MR MOLL: Would you consider leave to appeal on these two conflicting authorities, obviously prefer one to the other.

18. LORD JUSTICE KENNEDY: No, I think not. I should say that in coming to that conclusion we have been assisted by our attention being drawn to what is currently in paragraph 34-53 of the 2004 edition of Archbold, which shows that although in practice where a count of conspiracy is included in an indictment together with substantive counts, the Crown should be required to elect whether to proceed on the substantive counts or on the conspiracy count, where only two persons are alleged to have conspired together, and there are substantive counts on the indictment, then the situation may well arise where it would be appropriate to allow the Crown to proceed on the indictment which contains also substantive counts so as to allow for the possibility that one of the alleged conspirators will be acquitted. In that situation, the jury should have the opportunity to consider the criminality disclosed by the evidence as a whole. If you wish to put the matter again to us in some other form you can do so. In order to obtain permission to go elsewhere what you have to do first is to identify a point of law of general public importance. You can certainly draft one and we will look at it. You would then have to obtain leave from us. You may take it for granted that you would not get leave, but if you want to formulate the point we will look at it in writing.

19. MR MOLL: Very well thank you.

20. LORD JUSTICE KENNEDY: That is really also to ensure that nobody need attend on any other occasion.