England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM CROWN COURT LIVERPOOL
His Honour Judge Wright
T20127664

		Royal Courts of Justice Strand, London, WC2A 2LL
		10/12/2014

Lady Justice Rafferty :

1. On 23 July 2013 in the Crown Court at Liverpool Cheryl Fiona Henwood, 47, was convicted of twelve counts of being knowingly concerned in fraudulent activity to obtain payment of tax credits, contrary to Section 35(1) of the Tax Credits Act 2002 and sentenced to 12 months imprisonment, on each count, concurrently. She renews her application for leave to appeal against conviction after refusal by the Single Judge and seeks both an extension of time and leave to rely upon fresh evidence which was not before the Single Judge.
2. Between May 2004 and March 2011 she claimed Tax Credits. The Crown accepted she was entitled to assistance - she is a mother of three, all deaf. During the period of her claims she lived at 16 Heythrop Drive with her children. She is married to but, she asserts, separated from Gary Henwood. She had been claiming since 25 November 2002.
3. The Crown's case was that between 16 May 2004 and 11 May 2010 she dishonestly claimed £92,075.18 to which she was not entitled so as to fund an extravagant lifestyle which included holidays in Dubai and Disneyland. The fraud was said to have been committed by falsely declaring that two children had the Higher Care Component of Disability Living Allowance, when only one had. She also faced an allegation that she secured tax credits by misrepresenting her marital situation.
4. The Crown relied inter alia upon her phone calls to the Tax Credit helpline ("the helpline") on 1 April 2004, in which it alleged she falsely declared two of the children eligible and that her husband was not living at the family home, her Claim Form returned in May 2004 for the period April 2004 to April 2005 confirming the false declaration, her phone calls to the helpline on 7 June 2004 and 8 May 2005, repeating the false declaration, her assertion that she was single and that her husband was not living at the family home, when he was, on 25 October 2004 that she was "on her own with the children", on 8 May 2005 declaring no change to her circumstances failing to mention that her husband was living with her, and on or about 23 June 2005 and 11 August 2006 that she was living as a single adult at her address.
5. To prove they lived as a married couple, the Crown relied on inferences. Merseyside Police records showed that Gary Henshaw gave 16 Heythrop Drive as his home address between 10 December 1990 and 18 July 2011. His firearms certificate renewal in 2006 was registered to Heythrop Drive. Bills for the property, family holidays and business interests also suggested joint residence.
6. It led evidence from Social Services. Texts from her mobile it suggested confirmed the relationship. Husband and wife opened a joint bank account after they were said to have separated. She continued to declare her circumstances had not changed and that HMRC had the correct information, when she knew she had made false declarations. She made no comment when interviewed.
7. Evidence of her relationship the Crown argued was cross-admissible in respect of the higher rate disability allowance since all the claims were made in dishonest circumstances.
8. Her case was that though separated she and her husband lived in the same property to care for their children. She claimed what she believed she had been entitled to and had not acted dishonestly - she sought help from the helpline and had been advised to claim as a single person on the basis that she was still legally separated. Any claim based on the wrong higher rate disability allowance was also a mistake. She relied on her good character and gave evidence that some indicators of their being a couple were equally consistent with their living separate and functional lives, coming together for holidays with the children and other major events. She called Gary Henwood.
9. She relied on the absence of relevant notes, computer records and other documents in respect of her claims over the indictment period and that she had always paid council tax at the full rate and never claimed a single person's discount even when Gary Henwood was living in the property.
10. The central issue was summed up accurately and concisely:

"The heart of the prosecution case appears to have been not whether or not the marriage was stable, but whether or not the applicant acted dishonestly in not declaring that her husband was living at her address."

11. Grounds formulated and advanced by Mr Alastair Webster QC who did not appear below are:

"The convictions on each count of the indictment, are unsafe.

(a) The trial proceeded upon the basis that records had been destroyed and / or were missing when the relevant department of state held records which substantially undermined central planks of the prosecution case;

(b) The prosecution and/ or the investigators either failed to make proper enquiry so as to discover the said documents or failed to disclose them when it was obvious they would either undermine the case for the prosecution or assist that for the Applicant;

(c) Their availability for the Applicant to deploy was of fundamental importance.

(d) In directing the jury as to whether the Applicant and her husband were a couple, the judge misdirected the jury in that he failed to pay heed to the terms of s. 3(5) Tax Credits Act, 2002;

(e) The jury was led to act under a false premise, i.e. that there were no more records available relevant to the issues"

The suggested error in the summing-up as to tax credits.

The statutory framework.

12. S.3 (5) Tax Credits Act, 2002, defines a couple as follows:

"a man and a woman who are married to each other and are neither:

i) Separated under a court order;

ii) Separated in circumstances in which the separation is likely to be permanent."

13. The judge said:

"Is that a difficult concept? If you're married, or a man and woman living together you must claim jointly. Why? Let's think about this, and it's entirely a matter for you. But the tax authorities aren't concerned about whether you share a bed and have sexual intercourse on a frequent basis. This form's about money. And when you're talking about money and when you're seeking to get a tax credit in respect of money, the State's concerned about money, isn't it? Your money. And if you're a mum on your own, there's your money. You declare it. If you're married you know as a legal consequence of being married there are obligations of maintenance that arise, therefore money is either because you are actually living together, pooling of money, therefore your husband, if you're married, or your partner, if you're living together, is there as an available resource to provide money and the State would want to know that before giving you a tax credit. As I say, if you are married there are legal obligations which can apply if you're living with your spouse, you are there to provide it, but if you are living somewhere else you have a legal obligation, and so the State would want to know what your means are, because whether it's child benefit or child maintenance, or whatever it is, the State would want to know about it. So these aren't prying into personal lives; it's about money, isn't it? And that's why you may think - but it's a matter for you - that the form makes the difference between marriage -- you've got to claim jointly -- or, if you're not married but you're living with someone, you have to claim jointly."

14. This passage is criticised as emphasising matters extraneous to the statutory definition and which might mislead the jury.
15. The difficulty Mr Webster faces in making good that point is the earlier part of the summing-up in which the judge directed the jury:

"But what about the other words "knowingly concerned in a fraudulent activity" and "dishonest completion" and "falsely declaring"? Where does that factor in? Well as I have said to you the one core issue that underlines the bulk of the evidence in this case – it is not the exclusive issue but the core one – is about her relationship with her husband and whether they were a couple or were separated, living in the same household"

16. That passage is not criticised, nor could it be. Consequently any divergence, if any were established, from it by the later extract must be seen in context as coming after an impeccable direction.
17. There is nothing in that ground.

Fresh Evidence

18. It was not in issue before us that records, discovered post-Single Judge by both parties, were capable of clearing the hurdle for admission as fresh evidence. We made that assumption.
19. It was the Applicant's case that over the phone she had discussed with HMRC whether she and her husband's living separate lives in the same house would affect her entitlement. The Crown's case was that although not all recordings were available those of later contacts undermined her suggestion. It alleged she was lying.
20. Parties agreed that the judge accurately summarised competing arguments when he said:

"And, she said "I was advised to claim as an individual because I was separated. And, as I said to you when I went through the indictment, members of the jury, if you're sure that she got that advice, then she can't have been acting dishonestly, whether it was right or wrong advice. If you think she may have got advice to that sort which she acted upon, then, again, you can't be sure she was acting dishonestly, you find her guilty (sic). It's only if you are sure that she's invented this to justify what she did, you reject her evidence on this aspect, that you can come to the conclusion that she knowingly, deliberately, dishonestly made these claims that then, and only in those circumstances, that you find her guilty."

21. Mr Webster QC relied upon a number of screen prints, dated entries on the computer systems of the helpline and of the Tax Credit Processing Office ("TPO") in Cardiff. He submitted that they variously gave the lie to the integrity of the Crown's case and/or supported that of the Applicant.
22. He accepted that, even if available at trial, the Crown would have submitted that the screen prints were inadmissible. We have considered what information might be derived therefrom so as to adopt a position of optimum benefit to the Applicant.
23. Mr Webster QC concentrated much of his firepower upon one record, of 20/4/04. His submitted that it sustains the Applicant's case that pursuant to a 26/3/04 letter seeking confirmation that her ex-partner was permanently resident, on 20/4/04 she told the department that he had moved in. That said, all his arguments on documents now available were in the context that events are some ten years ago and the Applicant struggles to recall them with precision. The screen prints Mr Webster describes are no more than of help in preparing a defence case, potentially strengthening her position had she had them at trial.
24. We considered transcripts of parts of the evidence which reveal the following extracts, upon which Mr Webster said he could not improve:

"The Crown ("C") "……….at no stage at any section on this form did you confirm that you were married, there's nothing relating to your marriage on this form is there?"

The Applicant ("A") I spoke to the [helpline] who again I shared my circumstance with her and I told her I was married, I'm separated and had three disabled children that we needed help with.

C "You don't mention in [that call]… anything about the relationship restarting temporarily do you?

A……..there must be another call because I do remember …….making a couple of calls around that time.

C "You're talking about a temporary arrangement you say whilst he gets over an illness and you appreciated that that was something you needed to let HMRC know about?

A Yes………But I had let them know in another call as well I remember.

C "……….that conversation you say took place some time before you started claiming tax credits because you wanted to make sure you were putting the right information down on the form?

A Yes

C And we know from the agreed facts…..the first call came in …14^th January 2003?....

A No I remember having a conversation in 2004 and I remember having several around the time I did put the claim form in whether they were before or just after I remember it was around 2004 that I did make calls…………

The judge ("J") …your case is that ………there was a call when you discuss "well I'm married my husband's in the same house as me but we're separate and apart in the same house"…..and that person said "oh well you can put yourself down as a single respondent in those circumstances"?......Was that a conversation that happened once or did you raise it and someone said "Well I don't know"?

A I did raise it in 2004

J ………you said there was a conversation before January 2003….when you raised this topic…….and when you spelt [it] out……..what was the answer ……?

A …….I think…she advised me to claim as an individual and that was on the first claim………

J So your predicament about how you dealt with the situation was unanswered you say by the helpline adviser?

A Yes

J Why did you raise it again?........Even though you'd already got firm advice of what you should do in the first telephone call?

A This was a new claim in 2004

C …….nowhere in that call do you suggest that your husband was …living with you but in the arrangement that you have now told the jury about?

A Not on this one but it was ..around the February that I ran through the circumstances.…

C You make no reference either……to …a conversation with somebody previously in which you have explained your circumstances in the way you're now telling the jury?

A ……….I remember bringing it up with an adviser that I'd spoke to someone several times……I just remember getting quite…annoyed really that I kept on having to phone up checking that my circumstances have not been changed ………..I didn't go through my change of circumstances every time because…on a couple of occasions…someone had advised me to claim single and I accepted that and I didn't need to raise it again.

C …….you did discuss that on a number of occasions?

A I think I did it in the first claim and I did it in around …….January February with the second claim…..I may have phoned up a couple of months later about another change of circumstances and to get advice……..I know I made the phone calls…..and I was led to believe it would be in my file or computer system….I know I made these phone calls….

C Where are the calls dealing with the moving in and out?

A …I did speak to an adviser around that time and I remember saying he had moved back in ..and she said……you don't have to tell us unless you become a couple……It was around about the February…….the time just before this or around that May………"

25. What Mr Webster described as the crux of his application is seen on a screen print dated 20^th April 2004. It must be read in the context of those of 24^th and 26^th March 2004. That of 24^th reads:

"GENERAL Unable to contact by phone. Case b/f…"

26. That of 26^th reads:

"(i)…Phoned app but no reply. LFC sent requesting confirmation that ex-partner is now permanently resident. Mc TPO CDF"

27. That of 24^th April reads:

"Ex partner moved in. Household breakdown.TC600 sent for fresh claim – TPO Cardiff."

28. The office in Cardiff cannot receive but can make calls. This concession, which Mr Webster was obliged to make, confronts him with a difficulty. The Applicant maintained throughout her trial that it was she who had initiated contact with the Revenue and that the undisclosed material now available would sustain that assertion. Those calls labelled "Cardiff" are not capable of so doing.
29. Invited to identify any advantage to his client of the now revealed material, he submitted that it was capable of providing to a jury a fuller picture than that which it had seen. The Respondent, he contends, seeks to interpret the disclosed material in a fashion advantageous to its case, but before a jury he would have been able to counter its construction. If it achieved nothing else the now disclosed material would have alerted the defence to a plausible line of enquiry – a fuller picture – much earlier, and who knows what that might have thrown up?
30. Mr Webster did all he could before us for his lay client. However, his submissions faced intractable problems. A screen print dated 25^th October 2004 reads:

"App cld to query the amount of awards she has received advise if she is not happy to put it in writing."

31. However the transcript of that call reveals this exchange:

"Adviser ("Ad") You haven't had a household breakdown or anything….have you"

A Yes I have I had one a couple of years ago.

Ad Yeah but when you've been claiming tax credits

A Yes I have …I've always been on my own with the children….Yes the whole time, my partner came back for a couple of weeks due to an illness and this was all rectified. I told the tax people it was for a couple of weeks. They stopped it because of that then they put it back in writing…………I told them in February March what was going on. I told them over the phone and I put it in writing to them…………it was about the end of February I cant remember the exact date."

32. We invited Mr Webster to explain how this helped him. Without more, it suggests that the Applicant was at that stage advancing a shorter period of reconciliation than she set out to the jury.
33. The screen print, which at first blush might appear to support her case, is a medium for abbreviated noting of exchanges. The full picture emerges from a reading of the transcript of the telephone call. Had this transcript been available the Crown would have cross-examined upon it and invited her comment on the discrepant accounts.
34. As is obvious, the content we have set out above presents her with an insurmountable difficulty.
35. As to the important date, 20^th April 2004, the Applicant maintains that she then provided information on her change of circumstances, that is that her husband had moved back in.
36. The Respondent argues that there was no call on 20^th April 2004 and supports its contention by explaining that all calls to the helpline would have been recorded as "Contact Centre". No such record is on the screen print.
37. However not only did the Applicant tell the jury that she made such a call but also as recently as 18^th July 2014 in a letter to the Registrar wrote;

"As evidenced now, I contacted HMRC helpline 20^th April 2004 and informed them of a change of circumstances those changes being that GH had moved in to 16 Heythrop Drive"

38. That is a clear assertion that the Applicant was the person who contacted the helpline.
39. Confronted with the difficulty of the screen print's silence, the position advanced before us was that she was not the maker of a call to the helpline but the recipient of a call from the TPO. Given her reliance upon the involvement of the TPO in Cardiff, she had no option but so to modify her submissions, since Cardiff cannot receive calls.
40. The position should be seen contextually and with that in mind, in more detail than is common in a renewed application we have set out the picture of what was provably happening at the time.
41. The transcripts of calls on 1^st April. 17^th May and 25^th October 2004 show incontrovertibly that her expressed position (and her case before the jury) was that her husband moved back in briefly in early 2004 as she repeatedly told the helpline, explaining the impermanence of the arrangement and that once recovered from an illness he moved out..
42. The list of outgoing and incoming calls from and to the helpline was formally admitted. On October 25^th there was one from her to it and one from it to her. Outgoing calls, when unsuccessful, are nevertheless recorded.
43. An analysis of the screen prints might, without more, have led the unwary reader to infer support for the Applicant's case. However, and perhaps ironically, contrast with the transcripts, which were before the jury, show that the Applicant is worse off after disclosure and the Respondent better.
44. There is nothing in this ground.
45. The final ground is that impermissible cross-examination as to her holiday went to an allegation of dishonesty absent an application to admit bad character.
46. We can take this shortly. The Respondent led details it said she had provided to Virgin Holidays in which she mentioned her wedding anniversary. She denied that she (or her husband) provided any information to Virgin on the topic and she told the jury that any advantage to the couple as a consequence of Virgin's recognition of the date was coincidental or simply impossible to explain.
47. The Applicant had always known that the Respondent disputed her version of this particular aspect.
48. She was cross-examined with the aim of making a link between this "dishonesty" and the Respondent's case on the tax credit counts.
49. We agree with Mr Webster that there should have been a bad character application. We do not agree however that its absence calls into question the safety of the conviction. There was ample before the jury upon which the Respondent could permissibly rely and that it took one step too far, that is in suggesting that dishonesty in relation to Virgin supported dishonesty in relation to tax credits, is neither here nor there.
50. Consequently, for the reasons given this renewed application is rejected.