England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL
CRIMINAL DIVISION

		Royal Courts of Justice Strand London, WC2
		7th July 2006

1. LORD JUSTICE MAURICE KAY: The applicant, to whom we shall refer as H, is charged with offences of fraud and corruption, the trial of which is due to begin on 25th September.
2. The prosecution is being undertaken by the Serious Fraud Office and the provisions of Part 1 of the Criminal Justice Act 1987 apply.
3. The preparatory hearing began on 23rd May 2006. At that time there was before the court an application by the defence for disclosure, pursuant to the Criminal Proceedings and Investigations Act 1996. It came about in this way. The prosecution case is there had been a series of invoice frauds whereby H and another defendant (her husband), through five companies controlled by them, had been paid for supplying far more goods to the victim company than had in fact been delivered. The prosecution also alleged that corrupt payments had been made by H and her husband, to three employees of the victim company in order to facilitate the fraud. Initially, it was asserted by the prosecution that the sums fraudulently obtained totalled some £15 million or thereabouts. Later, the accountant witness relied upon by the Serious Fraud Office concluded that that was an excessive figure and the true figure was more in the region of £8 million, mainly because of deficiencies in the victim company's book keeping and accounting systems.
4. The requested disclosure relates to dealings between other suppliers and the victim company. What H seeks to establish is the possibility that the shortcomings of the system in the victim company may show that in relation to the other suppliers, in respect of whom no fraud is alleged, there may be comparable discrepancies.
5. The decision of the judge is to be found in this short paragraph from his written reasons for refusing to order disclosure:

"I do not consider that the defence can show that they have reasonable cause to believe that the material requested might reasonably be expected to assist the defence and for that reason, I agree that this is a trawl by the defence to see if anything might come from the enquiry."

6. H now seeks to appeal that decision. The judge refused leave to appeal and the Registrar referred the matter to this Court, as presently constituted, to consider leave to appeal and to determine the appeal, if leave be granted.
7. The written submissions of the parties in advance of the hearing were limited to the merits of such an appeal. However, at the commencement of the hearing we raised with counsel the question as to whether we had jurisdiction to hear such an appeal. At this stage it is necessary to have regard to the statutory provisions. Section 7(1) of the Criminal Justice Act 1987 provides:

"Where it appears to a judge...that the evidence on an indictment reveals a case of fraud of such seriousness or complexity that substantial benefits are likely to accrue from...a preparatory hearing... for the purpose of-

(a) identifying issues which are likely to be material to the verdicts of the jury...;

(b) assisting their comprehension of any such issues;

(c) expediting the proceedings before the jury;

(d) assisting the judge's management of the trial, or

(e) considering questions as to the severance or joinder of charges, he may order that such a hearing shall be held."

8. Section 9(1) provides that at the preparatory hearing the judge may exercise any of the powers specified in section 9. Section 9(3) provides:

"He may determine ...

(b) any question as to the admissibility of evidence;

(c) any other question of law relating to the case; (d) any question as to the severance or joinder of charges."

9. Appeals from interlocutory rulings made pursuant to those powers are governed by section 9(11), which provides:

"An appeal shall lie to the Court of Appeal from any order or ruling of a judge under subsection (3)(b) or (c) above, but only with the leave of the judge or the Court of Appeal."

10. The authorities on the interplay between those provisions demonstrate that a strict approach has been taken to the question of what does and does not fall within a preparatory hearing and what can and cannot therefore be said to give rise to an interlocutory appeal. The same is true of the corresponding provisions in the Criminal Proceedings and Investigations Act 1996. It is necessary to refer to some of the authorities.
11. The tone was set in the case of R v Gunarwardena [1990] 91 Cr App R 55. That concerned an attempt to appeal a refusal to stay a prosecution as an abuse of process. It was held by this Court that such a refusal had not occurred within the preparatory hearing and was therefore not within section 7(1), which was a necessary precondition to the jurisdiction of this Court under section 9. Watkins LJ said this at page 60:

"In our judgment the words of section 7, 8 and 9 themselves plainly demonstrate the object of Parliament in creating the preparatory hearing. It must have been, according to the language used, we think, the intention of Parliament, in introducing this novel procedure- novel in that it has not been introduced in respect of any other kind of criminal trial- to ensure that it be used for a specific purpose or purposes. It deliberately so enacted, in our view, the provisions of subsection (1) of section 7 in order to make it clear that it was creating this new and very valuable procedure for the specified purposes and no other.

We cannot bring ourselves to believe that Parliament can possibly, by using the clear words which they have used in section 7 and 9, to allow a preparatory hearing to commence for a certain specified purpose have intended to permit, once a preparatory hearing for that purpose is in being, arguments to range around all manner of issues which cannot be said to relate to any specified purposes."

That approach was to inform the judgment of a differently constituted Court in the case of R v Moore (unreported, 5th February 1991). That concerned pre-trial rulings which had included a refusal to quash a count in the indictment and a refusal to put the prosecution to its election as between two counts. Lord Lane CJ, said this (page 60):

"Can it be said that the matters sought to be raised by the defendants in the present case fall within the ambit of section 7(1)? ... It seems to us that the fact that a possible incidental effect of the purposes of the application does find itself within those subdivisions (a) to (d) is not one of the purposes of those provisions. It is the word 'purpose' by which the situation is governed. In our judgment, it is improper and a misconstruction to redraft the wording so as to substitute some words such 'consequences' for the word 'purpose'. So far as the motion to quash is concerned, it does not, in our judgment, come within those four subdivisions. Basing ourselves on Gunarwardena, by which we are bound and with which we respectfully agree, in our judgment the prosecution's argument succeeds. There is no jurisdictional basis upon which this Court consider can entertain the appeal."

12. Thus far the authorities had not addressed the jurisdictional problem in the context of a case where the decision sought to be appealed was a decision concerning disclosure. That appears to have arisen for the first time in the case of R v Maxwell (unreported, 9th February 1995). In that well-known trial, the trial judge had declined to order disclosure of documents which were in the possession, not of the Serious Fraud Office but of the firm of accountants who were the administrators of a number of companies in the Maxwell Group.
13. On appeal to this Court, the jurisdictional point was taken. Swinton Thomas LJ said at pages 7 to 8 of the transcript:

"... as Lord Lane pointed out in Moore, the court is not looking to possible consequences but to the purpose of the order. In our judgment it is quite impossible to conclude that an application by a defendant for discovery of documents or an order of the court on such an application has one of those purposes. An application for disclosure of documents is a matter which is incidental to very many criminal trials. We do not speculate as to the purpose of the defence in applying for disclosure of such documents as have not already been disclosed to them. However, at its best, it must be in the hope that they might show something which is favourable to the defence... it is not the purpose of the defence which governs the operation of s 7. The relevant purpose is that of the court or the judge. The court's purpose in adjudicating on an application for disclosure of documents cannot, certainly in the circumstances of this case, fall within any of the provisions set out in section 7(1). The Court's purpose was to determine whether the Serious Fraud Office should be compelled to disclose to the defence documents in the possession of the [accountants]."

14. What these authorities illustrate, among other things, is the fact that whilst there was a preparatory hearing in being, not every ruling that is sought to be made at that time technically forms part of the preparatory hearing. Further authority for that proposition and a further example of the strict approach can be seen in R v Hedworth [1997] 1 Cr App R 421.
15. The most recent consideration of the jurisdictional problem is to be found in R v Crown Prosecution Service [2005] EWCA Crim 2342. That was a disclosure case, in the sense that the order sought to be appealed was in the form of a refusal to require the transcription of a huge amount of material that was in the possession of the prosecution. Giving the judgment of this Court, Rose LJ said at paragraphs 15 to 16:

"In our judgment the clear purpose of the ruling in July 2004, as expressed by the judge at the beginning of the ruling and later in its course, was to procure a fair trial by prescribing the manner in which disclosure should be made by the prosecution. This was an approach to which the judge in his May 2005 ruling expressly adhered, when rejecting the prosecution contention that there had been a material change of circumstances within section 40(5).

Such a purpose may have one or more of the consequences referred to in section 29(2). But it does not, in our judgment, give rise to any right of appeal under section 35. Rulings to procure a fair trial come in many guises and may be made under the court's inherent jurisdiction before or during a trial of any case, whether complex or not. But they do not give rise to a right of appeal before the end of the trial. If it had been Parliament's intention that they should, it could and no doubt would have said so; there would have been no need to specify the four particular purposes in section 29(2) to which reference has already been made; and it would not have been necessary to add to section 29(2), by subsequent amendment by the Criminal Justice Act 2003 section 310(4), the fifth purpose to which we have not previously referred in relation to questions of severance or joinder, because a ruling for such a purpose would clearly be within the ambit of a general purpose to achieve a fair trial. We conclude that we have no jurisdiction to entertain this appeal.In our judgment, the clear purpose of the ruling in July 2004, as expressed by the judge at the beginning of the ruling and later in its course was to procure a fair trial by prescribing the manner in which disclosure should be made by the prosecution. This was an approach to which the judge in his May 2005 ruling expressly adhered when rejecting the prosecution contention that there had been a material change of circumstances under section 45. Such a purpose may have one or more of the consequences referred to in section 29(2). But it is does not in our judgment give any rise to any right of appeal under section 35 ruling to procure a fair trial, come in many guises and may be made under the court's inherent jurisdiction before or during a trial of any case, whether complex or not. But they do not give rise to a right of appeal before the end of the trial. If it had been Parliament's intention that they should, it could and no doubt would have said so. There would have been no need to specify the four particulars purposes in section 29(2) to which reference has already been made, and it would not have been necessary to add section 29(2) by subsequent amendment by the Criminal Justice Act 2003, section 310(4), the fifth purpose to which we have not previously referred in relation to the questions of joinder a ruling for such a purpose clearly been the ambit of general purpose to achieve a fair trial. We conclude that we have no jurisdiction to entertain this appeal."

(This was a case under the provisions of the Criminal Procedure and Investigation Act 1996).

16. On behalf of H, Mr Rees QC recognises that these authorities present him with a difficult task. He seeks to distinguish Maxwell by emphasising the words in the passage which we have set out - "certainly not in the circumstances of this case". He submits that the case is not authority for the more broadly stated proposition at the beginning of the passage. We do not consider that the judgment read as a whole is susceptible to that interpretation. Moreover, that conclusion is fortified by the decision in the Crown Prosecution Service case. Mr Rees endeavours to find a way through his difficulties by formulating the purpose of the hearing and the ruling with which it concluded on the issue of disclosure as being one for the purpose of "assisting the judge's management of the trial." He also seeks to rely on subparagraphs (a) and (b) of section 7(1).
17. Towards the end of his submissions he focused increasingly on the relationship between disclosure and case management and invited us to consider the present matter in the context of a change of culture evidenced by, among other things, The Control and Management of Heavy Fraud and Other Complex Cases Protocol, issued on 22nd March 2005 and The Disclosure Protocol for the Control and Management of Unused Material in the Crown Court, issued on 20th February 2006. He also referred to the Criminal Procedure Rules 2005. We entirely accept that there has been a cultural change. However, what it has not brought about is any relabelling of what is and is not part of a preparatory hearing.
18. We have come to the conclusion that the approach in the authorities to which we have referred, especially Maxwell and Crown Prosecution Service, together with a very brief comment of Rose LJ in the case of R v G and B [2004] 2 Cr App R 37 at paragraph 3, establish, beyond doubt, that we do not have jurisdiction to hear the proposed appeal. Quite simply the decision sought to be appealed did not form part of the preparatory hearing, as that has been construed in the authorities to which we have referred. Accordingly, given the interplay of section 7 and section 9, we are without jurisdiction. In those circumstances we were first minded to refuse leave to appeal. However, upon reconsideration and for reasons that will become obvious, we shall grant leave but dismiss the appeal.
19. We are concerned at the relative elusiveness of this jurisprudence. As we have indicated, it was only when we raised the subject at the outset this morning that experienced counsel on both sides, with the assistance of their supporting casts, familiarised themselves with Maxwell and the difficulties that have arisen. One of the reasons for this may be that the passages in Archbold dealing with the matter are, to some extent, understated. In particular, they do not specifically address the issue of disclosure when they are addressing other subjects where jurisdiction will be absent. We draw this to the attention of the editors.
20. MR REES: My Lord, I do have instructions to apply to this Court to certify a point of law of general public importance in this matter and ask the Court for leave to appeal to the House of Lords. The question is a simple question and can be framed in various ways; we framed it in this way:

"Can an order made pursuant to an application under section 8 of the Criminal Procedure and Investigations Act 1996 be subject to appeal under section 9 of the Criminal Justice Act 1987?"

Easily stated but not easily, in our submission, answered. As your Lordship said earlier in today's argument, disclosure is such an important matter when considering the question as to whether if it intended to be incorporated the House of Lords -- Parliament would have changed section 7 to incorporate. Those are my instructions, I make that application.

21. LORD JUSTICE MAURICE KAY: Have you anything to say, Miss Korner?
22. MISS KORNER: No, my Lord.
(The Bench Conferred)
23. LORD JUSTICE MAURICE KAY: I do not think we question the House of Lords has jurisdiction in a suitable case.
24. MR REES: One of the reasons I make the application at this stage, my Lord, and we seek from your Lordship is that we have to petition the House of Lords and that clearly would cause a problem with the trial date.
25. LORD JUSTICE MAURICE KAY: Indeed the argument against you is there is now stacked up a fairly consistent line of authority in this Court. In those circumstances, can it properly be said to raise a point of general public importance?
26. MR REES: All I would say is that disclosure is becoming increasingly important and a wrong decision by a trial judge prior to trial in front of the jury can have serious repercussions, very serious repercussions. It could result in the whole of the proceedings in long complex cases being rendered in effect invalid and therefore there is a matter of general public importance specifically in relation to matters of disclosure. I cannot take it any further than that. Your Lordship referred to the jurisprudence and the general nature of the importance of the matter.
27. LORD JUSTICE MAURICE KAY: Miss Korner, do you want to say anything?
28. MISS KORNER: My Lord, I think I ought to say something now. It is, in our submission, clear that the question of whether disclosure does come within the provisions, each of the appeal sections has been considered, as your Lordship pointed out on at least two if not three occasions by differently constituted courts. Each time the answer has been Parliament had intended for disclosure to come within the section they would have said so. In those circumstances we would submit, particularly in respect of the fact that this trial is now due to start after 4 years on September 23 that this is not a case where leave -- not a matter of public importance.
29. MR JUSTICE CRANE: Those are perhaps reasons against leave to appeal, but do they make it a less important issue?
30. MISS KORNER: My Lord, I can only say this. In one sense disclosure is being thrown back as it was originally under the new protocol to the prosecution, as opposed to the judge. It is the prosecution who make the decision and the judge is only brought into it now if there is a real argument about it. How important it is, my Lord we say it is really a matter should be dealt with on the normal appeal process. If the learned judge at trial makes an error, then one form or other, that will be subject of an appeal at the end of trial. That is we would submit probably where it belongs. It is not an easy decision I can say that. My sympathies are somewhat to an extent that it should be or could be part of the appeal process from preparatory hearing but it is clear, had Parliament intended it should happen, it would have said so.
31. MRS JUSTICE DOBBS: In effect this decision has not shut them out in any event.
32. MISS KORNER: No, exactly.
33. LORD JUSTICE MAURICE KAY: We will just retire.
(Short Adjournment)
34. LORD JUSTICE MAURICE KAY: Mr Rees, we feel that we would be wrong to refuse you a certificate. We are not happy with the question that you have phrased. It seems to us that the question rather than being exclusively disclosure phrased, ought to address the conceptual approach in Moore and the later cases. What we would like is if you and Miss Korner consider the question and come up with another draft, with a view to submitting it on paper within the next seven days and then we would reconvene early one morning the following week to give you our decision. It will not come to you as any surprise that we certainly will not be giving you leave to appeal. We do not feel able to deny you a certificate as whilst the line of authority is consistent, there may be another way of looking at it, and it has not been considered in the House of Lords before. Although, in H a disclosure issue was considered on the interlocutory appeal in the House of Lords, no point was taken as to jurisdiction in that case, either in this Court, or there.
35. MR REES: We may argue it is because the wording is plain and it does cover such matters.
36. LORD JUSTICE MAURICE KAY: Somebody else may argue that sometimes counsel do not read all the authorities.
37. MR REES: We will seek to agree a question with the prosecution, perhaps we can make a start on the first draft.
38. LORD JUSTICE MAURICE KAY: If you will do that and we give you until next Friday to submit the question or two if you are disagreeing and there will be a morning the following week where we do not anticipate receiving any further submissions, but the matter has to be pronounced in open court, so we shall convene one morning when personal attendance will not be necessary. If you are elsewhere, no doubt somebody will be here. Thank you very much.