England and Wales Court of Appeal (Criminal Division) Decisions

IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM THE CROWN COURT READING
HIS HONOUR JUDGE RISIUS, CB
T20087067-2

		Royal Courts of Justice Strand, London, WC2A 2LL
		25/01/2011

Lord Justice Rix :

1. On 17 July 2009 in the Crown Court at Reading before HHJ Risius CB and a jury, the applicant, Thomas Wilson, was convicted (by a majority of 11-1) of conspiracy to defraud. He now applies for an extension of time (of approximately 7 months) and for leave to appeal against conviction. His applications were referred to the full court by the Registrar. At the hearing of these applications, which were not opposed by the Crown, this court granted the extension of time requested, and leave to appeal, and allowed the appeal. These are now our reasons for those decisions.
2. Mr Wilson was charged with his co-defendant, Lee Cutler, with conspiring to defraud Mr Wilson's employer, Costain Ltd, the well-known construction company. Mr Wilson was an accountant who had joined the company in about 1990 as an assistant accountant and had risen to become a regional accountant. Mr Cutler was a sub-contractor who ran a plant hire operation, Cutler Plant Ltd, supplying plant to Costain. On 21 February 2006 Mr Wilson was presented by Neil Robinson, a divisional accountant at Costain, with evidence of a suspicious invoice from Mr Cutler. Mr Wilson admitted the invoice was false. Investigations revealed further false invoices. Mr Wilson said that he had become involved with a "gang of four" at Costain whom he was unwilling to name for fear of reprisals. Mr Wilson resigned on 28 February 2006. On 12 September 2006 he was arrested. He was interviewed a number of times: he agreed the invoices put to him were false, but said that he had been acting on the instructions of four senior Costain employees whom he continued to refuse to name. The money would be paid to Cutler Plant and returned to him in cash by Mr Cutler (less 50% to fund Cutler Plant's VAT and other taxes). He would hand the cash over to project managers and did not benefit personally. He was told that the cash was spent on entertaining staff and clients and also the purchase of computers and the like for use on site. When he complained, he was threatened: was it worth taking a risk when he had a wife and child?
3. Ultimately Mr Wilson and Mr Cutler were charged with 20 false invoices issued between 2002 and 2003 (totalling £391,253.54) and with a further 21 false invoices issued between 2004 and 2005 (totalling £598,962.06) issued in connection with a project for the Meteorological Office, and with 2 further false invoices (totalling £64,947.87) in connection with a Harwell project.
4. Costain brought civil proceedings against Mr Wilson and Mr Cutler. On 13 March 2007 Costain obtained summary judgment against Mr Wilson in the sum of £283,722. Costain has not, however, so far sought to enforce the judgment. A settlement was reached between Costain and Mr Cutler whereby Mr Cutler agreed to pay Costain's costs and all further civil proceedings against Mr Cutler were stayed.
5. The trial of Mr Wilson and Mr Cutler began on 10 December 2008 before Judge Risius, however a lengthy delay then developed which caused the judge to discharge the jury. In Mr Wilson's defence statement dated 11 August 2008, he had said that he was approached by a senior Costain manager, whom he refused to name, to raise money in this way. He said that this method of raising money was common within Costain and was part of the culture of its management. The money was passed on to a total of four senior Costain employees. He had acted at all times under duress: at first from his situation within the company and later as a result of both implied and direct threats of violence against himself and his family.
6. The second trial began on 7 July 2009. The prosecution called evidence to the effect that there had been no plot against Mr Wilson, no evidence that the group of four existed, and no culture at Costain of schemes to generate off-balance sheet funds. An important prosecution witness at trial was David Jenkins, a Costain director. He said that he had investigated Mr Wilson's allegations and that the Group Audit Committee had taken the matter very seriously. No evidence had been found to support the allegations. Costain operated a whistle-blower policy. Entertainment was met from budgets. There was no cover-up. The civil proceedings had been pursued openly.
7. Mr Cutler's defence was that he had at all times been innocent of any intention to defraud. He handed back everything less sums to ensure that he did not lose money by the need to pay taxes. He considered that the money was going back to Costain for company purposes. It was a matter for Costain that this was the way in which they wanted to raise funds for entertainment and the like. Mr Wilson supported Mr Cutler's evidence with his own.
8. Both Mr Wilson and Mr Cutler were men of previous good character.
9. There was discussion between counsel at trial and the judge as to whether it would be possible to have different verdicts in the case of the two defendants. The judge's initial ruling was that it was. He told the jury (summing-up at 21B):

"If you are sure that there was an agreement between Mr Cutler and Mr Wilson which had the effect of defrauding Costain, but one defendant may have been acting honestly and you are sure that the other was dishonest, it is possible to find one defendant guilty and the other not guilty."

10. However, following their retirement, the jury sent the judge a note which raised their concern about such a situation. The precise terms of the note are not before us. In further discussions with counsel, Mr Curtis-Raleigh, who was appearing for the Crown, made clear to the judge that the prosecution accepted the burden of proving a conspiracy to defraud involving a dishonest meeting of minds to defraud (at 67H). He explained: "What would not be enough is an agreement to process invoices if one party thought that was entirely legitimate" (at 75D). The judge then redirected the jury as follows:

"If the agreement between Mr Cutler and Mr Wilson was to use false invoices to enable Costain to use a different budget to pay for entertainment, then both are not guilty because in those circumstances there would be no conspiracy to defraud, irrespective of the fact that Mr Wilson knew the true reason.

If the agreement between Mr Cutler and Mr Wilson was to use false invoices in order to take money from Costain, then there would be a conspiracy to defraud. If there was a conspiracy to defraud, the jury must decide in the case of each defendant whether he was being dishonest."

That direction appears to have left the jury with no realistic opportunity to find different verdicts in respect of the co-defendants.

11. In the result, the jury returned a majority verdict convicting Mr Wilson, but was unable to return any verdict on Mr Cutler. Mr Wilson's sentencing was adjourned until after Mr Cutler's retrial, which was scheduled for 26 January 2010.
12. Shortly before that date, however, fresh material came into the hands of the prosecution which caused them grave concern both about the possibility of continuing the trial against Mr Cutler and about the safety of Mr Wilson's conviction. This was because the fresh material met the test for disclosure for the purposes of Mr Cutler's trial, and yet the prosecution felt unable to disclose it, and obtained a public interest immunity ("PII") order from the judge in respect of it. In the event, therefore, the Crown elected to offer no evidence against Mr Cutler, and he was acquitted.
13. The prosecution also considered that if this material had been available prior to the trial of Mr Wilson, the Crown would have offered no evidence against him as well.
14. Indeed, that conclusion seems to us in any event to follow from the position always adopted by the Crown at the trial in July 2009, namely that it needed to prove that both co-defendants had conspired with dishonest intent.
15. The prosecution wrote to Mr Wilson's solicitors shortly before the re-trial of Mr Cutler to inform them that they needed to attend court on 26 January 2010, as a significant issue had arisen. On that date Ms Harvey (newly instructed on behalf of Mr Wilson, as his trial counsel had been elevated to the bench) attended and merely learned that Mr Cutler's trial had been adjourned. Then on 12 March 2010 the prosecution wrote to Mr Wilson's solicitors to inform them that they would be offering no evidence at the retrial of Mr Cutler, that in the light of the new information they were no longer satisfied that the conviction of Mr Wilson was safe, and that they would support an application for leave to appeal out of time and would not oppose that appeal.
16. We have had available to us the new information which has come into the hands of the prosecution. We are satisfied as a result of it that the conviction of Mr Wilson is unsafe, and we therefore allowed his appeal. In the circumstances of the PII order (although that does not bind this court) and the matters which have been explained to us in camera by Mr McGrath on behalf of the Crown about the reasons for its making, we are limited in the amount that we can say: but in the light of the history of these proceedings it is only fair to Mr Wilson that we have sought to give as full a judgment as possible consistent with the public interest: see R v. Guney [2003] EWCA Crim 1502.
17. In the circumstances, it is sufficient to add that as a result of further enquiries conducted by Costain, in which it has reviewed the internal investigation that led to the prosecution of Mr Wilson and Mr Cutler, it has concluded that it is no longer satisfied with the integrity of that investigation. In the light of that information, it seems to us that the evidence of Mr Jenkins is itself called into question. We agree with the prosecution that in the circumstances the conviction of Mr Wilson is unsafe. It would in any event be unfair for him to be in a different situation from Mr Cutler.
18. Fortunately, Mr Wilson has never been sentenced and now will not be. There is, however, the civil judgment outstanding against him. As we were informed, that has not been enforced against him. We are not here concerned with those civil proceedings, but we trust that it will not be.