England and Wales High Court (Administrative Court) Decisions

3. Committal proceedings were held before Mr Nicholas Evans, a Metropolitan Stipendiary Magistrate, on 1st and 11th February 1999. The magistrate refused to commit on the theft and obtaining by deception which had been alleged by the Government of the United States of American (whom I shall refer to as "the Government"), but drafted for himself a different theft allegation and committed on that together with the fraudulent trading that the Government had alleged.

4. Mrs Kline brings an application for habeas corpus on two grounds. First, through Mr Colin Nicholls QC, she submits that her conduct in the United States did not amount to the English offence of fraudulent trading because at the material time, namely 1980, that offence had to have been committed contrary to section 332(3) of the Companies Act 1948, which required that it be in connection with the winding up of a company. The Government, it was submitted, could not rely on the amendment effected by section 458 of the Companies Act 1985, which removed the need for the offence to have been committed in connection with winding up, since that could not apply retrospectively. The Magistrate relied on the decision of this court in ex parte Pinochet in which Lord Bingham, CJ, had stated that what was material was whether the conduct in question amounted to an offence under English law at the time of the extradition request. The House of Lords in ex parte Pinochet (No 3) [1999] 2 WLR 827 made it clear that that was wrong and that the conduct in question had to have been an offence in England at the time it was carried out. In those circumstances, Mr Brierley on behalf of the Government, has conceded that the committal for the offence of fraudulent trading cannot stand.

5. Secondly, Mr Nicholls submits that the Magistrate had no power to substitute for the offences alleged by the Government one he considered appropriate. The Government had not sought the addition of any new offence and indeed had resisted the Magistrate's suggestion that such an application should be made. This submission is based largely upon the language of the statutory provisions which govern extradition and in particular on the amendments made by the Criminal Justice and Public Order Act 1994.

6. Faced with this application the Government obtained permission to seek judicial review of the Magistrate's decision not to commit on the two offences which it had preferred. As will become apparent that application involves an attack on the correctness of the observations of Lord Goff in R v Preddy [1996] AC 815 and of their application by the Court of Appeal in R v Graham (1997) 1 Cr App R 302 as to the criminality involved in obtaining cheques dishonestly.

7. I should first set out the relevant statutory provisions. I start with the Extradition Act 1989. Section 1(3) provides:

"Where an Order in Council under section 2 of the Extradition Act 1870 is in force in relation to a foreign state, Schedule 1 to this Act (the provisions of which derive from that Act and certain associated enactments) shall have effect in relation to that state, but subject to the limitations, restrictions, conditions, exceptions and qualifications, if any, contained in the Order."

8. There is such an Order in Council in force in relation to the United States of America and accordingly it is necessary to look to Schedule 1 to the Extradition Act 1989. The following paragraphs are relevant:

"4(1) A requisition for the surrender of a fugitive criminal of any foreign state, who is in or suspected of being in the United Kingdom, shall be made to the Secretary of State by some person recognised by the Secretary of State as a diplomatic or consular representative of that foreign state.

(2) The Secretary of State may by order signify to a metropolitan magistrate that such a requisition has been made, and require him to issue his warrant for the apprehension of the fugitive criminal ...

5. (1) A warrant for the apprehension of a fugitive criminal, whether accused or convicted of crime, who is in or suspected of being in the United Kingdom, may be issued --

(a) by a metropolitan magistrate on receipt of the order of the Secretary of State, and on such evidence as would in his opinion justify the issue of the warrant if the crime had been committed or the criminal convicted in England or Wales."

9. Paragraph 6 deals with the hearing of the case and paragraph 6. (1) reads:

"When a fugitive criminal is brought before the metropolitan magistrate, the metropolitan magistrate shall hear the case in the same manner, and have the same jurisdiction and powers, as near as may be, as if the prisoner were brought before him charged with an indictable offence committed in England or Wales."

10. That is the paragraph as originally enacted by the Extradition Act 1989. I have read it in those terms because it has an important bearing upon the argument made by Mr Nicholls. As amended by the Criminal Justice and Public Order Act 1994 section 158, paragraph 6(1) now reads:

"When a fugitive criminal is brought before the metropolitan magistrate, the metropolitan magistrate shall have the same powers, as near as may be, including power to adjourn the case and meanwhile to remand the prisoner either in custody or on bail, as if the proceedings were the summary trial of an information against him for an offence committed in England and Wales; ..."

11. Then paragraph 7(2) read:

"In the case of a fugitive criminal alleged to have been convicted of an extradition crime, if such evidence is produced as (subject to the provisions of this Schedule) would, according to the law of England and Wales, prove that the prisoner was convicted of such crime, the metropolitan magistrate shall commit him to prison, but otherwise shall order him to be discharged."

12. Finally paragraph 20 defines "extradition crime" in these words:

"... in relation to any foreign state, is to be construed by reference to the Order in Council under section 2 of the Extradition Act 1870 applying to that state as it had effect immediately before the coming into force of this Act and to any amendments thereafter made to that Order."

13. The Order in question is the United States of America Extradition Order (1976 No 2144). The Schedule to that Order contains the terms of the extradition treaty between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the United States of America. Article III of the treaty reads by paragraph (1):

"Extradition shall be granted for an act or omission the facts of which disclose an offence within any of the descriptions listed in the Schedule annexed to this Treaty, which is an integral part of the Treaty, or any other offence, if:

(a) the offence is punishable under the laws of both Parties by imprisonment or other form of detention for more than one year or by the death penalty;

(b) the offence is extradictable under the relevant law, being the law of the United Kingdom or other territory to which this Treaty applies by virtue of sub-paragraph (1)(a) of Article II [essentially that is extending it to the Channel Islands, Isle of Man and any territory for whose international relations the United Kingdom is responsible]; and

(c) the offence constitutes a felony under the law of the United States of America."

14. The Schedule contains a list of offences specified in general terms. Number 13 is "theft, larceny, embezzlement". Paragraph 17 reads:

"Obtaining property, money or valuable securities by false pretences or other form of deception."

15. There are in all 29 separate offences set out in the Schedule, ranging from murder through various sexual offences, drug offences, burglary, robbery and receiving, other offences of fraud, bribery, arson and ending with unlawful seizure of an aircraft.

16. It is clear that the magistrate who hears the proceedings can take into consideration the facts which have resulted in the conviction in the United States of America. So much is clear from paragraph 12 of Schedule 1 to the 1989 Act and the decision of this court in re Parkyn-Jackson [1988] Crim LR 745. In that case at page 4 of the transcript, with which we have been provided, Glidewell LJ said:

"Of itself the certificate relating to the conviction of that offence does not show that the applicant committed the offences of theft or of obtaining property by deception."

17. The charge of which the appellant in that case had been convicted, I interpolate, was a wire fraud which involved, in the terms of the American provisions, having:

"Devised or intended to devised a scheme or artifice to defraud or for obtaining money or property by means of false or fraudulent pretences, representations or promises transmitted or caused to be transmitted by means of wire, radio or television communication; in interstate or foreign commerce any writing signs, signals, pictures or sounds for the purpose of executing such scheme or artifice".

18. Then a penalty is provided.

19. Going back to the quotation, Glidewell LJ continued:

"Mr Alun Jones argues that the certificate is the only document at which the court may look to prove the conviction. In my view, the certificate does prove the conviction of the American offence. What is in issue is not whether he was convicted, but whether the facts disclosed on the conviction amount to the English offences referred to in the committal by the magistrates."

20. Thus it was decided that the court was entitled to look at the material that was placed before it which established what were the facts of the individual conviction.

21. It is to be noted that in Parkyn-Jackson the magistrate had, following the hearing, committed the applicant upon the following charge:

"On 26th April, 1984 at the United States Court for the District of Colombia, Bruce Parkyn-Jackson was convicted of the crimes of theft and obtaining by deception and sentenced to three and a half years suspended and four years probation with special conditions imposed. Mr Jackson broke the conditions and is now liable to serve the suspended sentence."

22. The reason I cite that is because the crimes are described in the general form as in the Schedule, namely, theft and obtaining by deception, without any further particulars being given.

23. The facts leading to Mrs Kline's conviction are conveniently set out in the judgment of the Texas Court of Criminal Appeal which is reported as Kline v State 737 South Western Reporter 2d Series 895. They can be summarised in this way.

24. The Mexican National Oil Company, Petroleos Mexicanos or Pemex, desired to purchase an oil pipe line. Mrs Kline was the sole owner of a company called Frankenburg Import-Export Ltd which was registered in Kansas and was known as Frankenburg Kansas. Frankenburg Kansas agreed to act as purchasing agent for Pemex and to purchase the pipe line on the world market. Pemex vested a purchase order in Frankenburg Kansas for that purpose. They were unable to find a pipe line at the price which Pemex was prepared to pay. Mrs Kline then formed a second company, again called Frankenburg Import-Export Ltd, but this time registered in the Cayman Islands, and known as Frankenburg Cayman. In this she only had a 50 per cent share, the remaining 50 per cent being owned by a consortium of businessmen based in Houston, Texas. Pemex agreed to offer more money for the purchase of the pipe line through Frankenburg Cayman. The purchase was then negotiated by Frankenburg Cayman with the Nissho-Iwai American Corporation. That Corporation duly supplied it to Pemex.

25. There was a payment arrangement concluded between Frankenburg Cayman, Pemex and Nissho-Iwai. It was called a "Lock Box Agreement". It provided in brief that Pemex would issue a cheque made payable to the order of Frankenburg Cayman and send it to a Lock Box in New York under the control of the bank of Tokyo Trust Company.

26. Prior to obtaining the payment which Mrs Kline eventually did obtain, she executed what was described as an assignment and security agreement on behalf of Frankenburg Kansas granting Nissho-Iwai a security interest in any monies she might receive from Pemex pursuant to the Pemex purchase order. In essence the agreement provided that any monies she received she would hold as trustee for Nissho-Iwai and would deliver to Nissho-Iwai without commingling those monies, presumably with any other monies of her own.

27. What in fact happened was that instead of the Lock Box Agreement arrangement Mrs Kline persuaded Pemex to pay Frankenburg Kansas in accordance with the original arrangement that had been made between Frankenburg Kansas and Pemex. A cheque in the sum of something over $5.5 million was issued on 7th August 1980. On the next day, the 8th August, she picked up the cheque from the Houston office of Pemex and took it to New York where she deposited it in an account of Frankenburg Kansas. She later withdrew sums of money from that account and used them for her own purposes.

28. The fact that the proceeds were appropriated in New York led Mrs Kline to raise a jurisdiction point on appeal that the offence had been committed in New York and not in Texas. The Texas Court of Criminal Appeal dealt with this argument in the right hand column of page 897 of the report thus:

29. It is perfectly plain that the jury's verdict was based on not only the final dishonest dissipation in New York but also upon the acts preparatory to that dissipation which had taken place in Texas. Thus the magistrate was entitled to have regard to her overall conduct.

30. Although there is nothing in the statute or any subordinate legislation which requires it, it is the practice for the Government to set out in the form of what are described as charges the offences which would have been committed in England and Wales as a result of the allegations in an accusation case or the conviction in a conviction case. In this case they are described as committal charges and are in the following terms:

"1. On or about the 7th day of August 1980 dishonestly obtained from Petroleos Mexicanos (Pemex) a valuable security, namely a cheque drawn on the account of Petroleos Mexicanos (Pemex) in the sum of $5,584,392 with the intention of permanently depriving Petroleos Mexicanos (Pemex) thereof by deception namely by falsely representing that: --

(i) she was lawfully entitled to receive the said valuable security;

(ii) the whole of the funds represented by the said valuable security would be applied for the payment of a pipeline to be supplied to Petroleos Mexicanos (Pemex).

2. On or about the 7th day of August 1980 stole a valuable security, namely a cheque drawn on the account of Petroleos Mexicanos (Pemex) in the sum of $5,584,392."

31. Then 3 is the fraudulent trading charge which I do not need to read.

32. The magistrate after hearing argument committed Mrs Kline on the third charge, the fraudulent trading, and a theft charge which he substituted and which read:

"On or about the 8th day of August 1970 stole $5,584,392 or the proceeds thereof belonging to the Nissho-Iwai Corporation."

33. Before us Mr Brierley has accepted, although at the time he did not, that the magistrate was right to regard the appropriate offence as being theft of the proceeds of the cheque which Mrs Kline held as fiduciary for Nissho-Iwai. Mr Nicholls submitted that that was the only appropriate offence since the acts or omissions, the facts disclosed by the offence of which she was convicted, were those which involved the dishonest appropriation of the proceeds of the cheque.

34. However, the judgment of the Texas Court of Criminal Appeal, to which I have already referred, shows that that submission cannot be maintained since the jury clearly must have accepted that she was acting dishonestly in obtaining the cheque. But Mr Nicholls accepted, as he must, that theft was committed by Mrs Kline substantially in the way described by the magistrate.

35. He submits that it was not open to the magistrate to commit on a charge which was different to those set out in the committal charges. He accepts that until 1994 there would have been no objection because in committal proceedings a magistrate was entitled to commit on any offence disclosed in the evidence before him. But since 1994 by the amendment which reflected the proposed abolition of committal proceedings the magistrate has to proceed, as near as may be, as if he were hearing a summary trial of an information, and, submits Mr Nicholls, the information is what is contained in the committal charges.

36. It is obviously right that the fugitive offender should know what precisely he faces and so full particulars of the offences which are alleged to have been committed by the conduct in question are given. In accusation cases this is clearly necessary since the requesting state can only prosecute for those offences upon which the fugitive is committed. But in conviction cases the position is somewhat different. The fugitive has been convicted because his acts or omissions have constituted an offence in the relevant foreign country. The only question for the magistrate is whether those acts or omissions constitute an extradition offence in England and Wales. If they do he will commit, otherwise he will not. There is no question in this case but that Mrs Kline's conduct was dishonest and did constitute an offence here. Indeed it would be a disgraceful defect in our law if it did not. The magistrate in the course of his judgment directed himself as follows, paragraph 9:

"Anyone, reading the recital of facts, and knowing that Mrs Kline had been convicted in the criminal courts in Texas with the misapplication of fiduciary property for which she received the sentence of 14 years imprisonment, would be astounded if they were told that similar conduct, had it occurred in the United Kingdom, would not have constituted any criminal offence in the United Kingdom. However, it is not my task to determine whether that conduct would constitute any UK criminal offence, but rather whether it would constitute one or more of the proposed committal charges, or any substitute charge(s) within the ambit of the order to proceed. Thus there is no point in my considering the UK offence of, e.g., 'dishonestly procuring the execution of a valuable security', as that offence is not within the ambit of the order to proceed."

37. He decided that the two charges of theft and obtaining by deception which had been preferred by the Government could not be sustained because of the decision of the House of Lords in Preddy. Accordingly he drafted the new theft charge and committed Mrs Kline on it.

38. Mr Nicholls submits that the magistrate had no power to do that because he would not have had power to prefer a new charge if he was conducting a summary trial, at least where the prosecutor did not apply for such a charge to be preferred or for an existing charge to be amended. It is, submits Mr Nicholls, for the Government as prosecutor to choose what charges to prefer and it is not for the magistrate to decide that a different charge is appropriate on the material which is put before him.

39. Before the amendments made in 1994 the magistrate could have committed on any charge which he considered was disclosed by the material before him. Thus the amendments had, if Mr Nicholls is correct, an effect which I am sure was not intended by Parliament and which seem to me not to accord with the requirement to ascertain whether the acts or omissions which led to the conviction constitute an offence here.

40. In my judgment, the amendments do not have the effect for which Mr Nicholls contends. The magistrate is empowered to issue a warrant for the apprehension of a fugitive criminal by virtue of the order made pursuant to paragraph 4(2) of Schedule 1 of the 1989 Act. When the warrant is executed paragraph 6(1) applies. Thus the equivalent to the information is the Secretary of State's order based on the requisition from the foreign state or, in a case covered by Part III of the 1989 Act, the authority to proceed under section 7 of the Act. What are called committal charges are in reality not charges at all but particulars of the equivalent offences which themselves are set out in general terms in the Schedule to the Order in Council.

41. The magistrate is constrained by the Secretary of State's order and cannot choose to commit on a different scheduled offence, for example false accounting, but he did not purport to do that. He decided that an offence of theft had been established, albeit the particulars differed from those alleged by the Government. Since this meant that an offence contained in the Secretary of State's Order was established the magistrate was entitled to act as he did. He was not preferring a new charge. He was merely identifying different particulars which did not affect the nature of the offence which he was considering.

42. Accordingly, I am satisfied that the magistrate was entitled to act as he did. So it is unnecessary to consider the argument put by Mr Nicholls analysing the powers of a magistrate to prefer or to amend charges. This decision also makes it unnecessary to consider the very interesting arguments raised in the judicial review proceedings. Mr Brierley, however, is anxious that if Mrs Kline obtained leave to take an appeal to the House of Lords he should be able to deploy his Preddy arguments in case their Lords overruled our decision. I have read the admirable skeleton arguments. Those show that there is a very persuasive case that Lord Goff's observations may not have analysed the old case of R v Danger (1857) 7 Cox CC 57 properly or have had regard to judicial criticism of that decision. Professor Sir John Smith has mounted a most cogent criticism of the conclusion of Lord Goff that a cheque could not be stolen or obtained by deception.

43. However, even if Lord Goff's observations on this point were obiter they were given after full argument and have been applied by the Court of Appeal in Graham. Thus in my judgment we could not have refused to follow them. I think we should formally dismiss the application for judicial review and certify a point of law of general public importance so that the House of Lords will be able, if they wish, to consider the argument should they allow Mrs Kline to appeal our decision.

44. I would, as Mr Brierley accepts is appropriate, refuse leave to appeal. If my Lord agrees with that conclusion we will hear counsel on an appropriate question or questions to certify.

45. LORD JUSTICE SEDLEY: I agree, for the reasons which my Lord, Collins J, has just given that the application for the issue of a writ of habeas corpus fails. I agree too that this makes idle for the present the potentially important and interesting arguments which are waiting to be advanced, if necessary, in the judicial review proceedings. Since we cannot say at the moment whether Mrs Kline will be given permission to renew her application for habeas corpus before the House of Lords the right course is formally to dismiss the judicial review proceedings on the grounds given by my Lord, leaving it to the Government of the United States, if it finds itself in the position of a respondent before their Lordships' House, to seek their Lordships' leave to pursue for the first time, as it will be, the arguments on Preddy.

46. Accordingly, I would agree with the course proposed in both respects by my Lord.

47. MR BRIERLEY: I have drafted two questions which my learned friend has seen and, subject to your Lordships' approval, these are agreed between the parties. They are in broad terms.

48. LORD JUSTICE SEDLEY: But although in broad terms they are nevertheless questions which would have to be decided to decide your judicial review application.

49. MR BRIERLEY: They are, my Lord, yes.

50. LORD JUSTICE SEDLEY: So they are broad but not inappropriately broad?

51. MR JUSTICE COLLINS: That is what the Lord Chief Justice in Graham has indicated, that this is the effect of Preddy that you cannot now steal dishonestly or obtain by deception a cheque.

52. MR NICHOLLS: That is how I read it finally.

53. MR JUSTICE COLLINS: That I think is what he says. I am just trying to find the passage.

54. MR NICHOLLS: Pages 31 and 32 of the judgment, I think. No, 331 and 332.

55. MR JUSTICE COLLINS: Perhaps it matters not but that is my understanding of the effect of Graham and it is on that these questions are based, I imagine.

56. LORD JUSTICE SEDLEY: We will certify in the terms that you seek, Mr Brierley, and for reasons we discussed yesterday we will refuse leave. Any other matters counsel wish to raise?

57. MR NICHOLLS: My Lord, yes. May I just say in respect of Collins J's judgment there are two very small points. The first is that the Parkyn-Jackson case is reported but we did not refer to the report because the transcript is so much better. So for the sake of the record I give your Lordships the reference, [1988] Crim LR 745. And another very minor point, when referring to the second charge, I use that word again, as preferred by the Government, your Lordship used words "pounds" and not "dollars". That is how I heard it.

58. MR JUSTICE COLLINS: I am sorry. I made the same mistake as the magistrate. That was a slip of the tongue.

59. MR NICHOLLS: The next matter I have to raise, may we have legal aid taxation in respect of both of these matters?

60. LORD JUSTICE SEDLEY: There is no certificate on the file.

61. MR JUSTICE COLLINS: She has dissipated on the 5 and a half million altogether, has she not?

62. MR NICHOLLS: I know that certainly there should be one because it was some time before one was given for leading counsel. We will -- not necessarily -- have to come back to your Lordships because we need to consider the question of leave to appeal on the habeas corpus. We need time for that. One matter which your Lordships will wish to consider is when you are both still available --

63. LORD JUSTICE SEDLEY: We cease to sit as a court at the end of this week. Mr Nicholls, we are appreciative of the fact that you do not ask for leave as of course and that you may want time to consider it. You would prefer to do that rather than, so to speak, put your best foot forward on leave now, would you?

64. MR NICHOLLS: May I just have one word? It would be very easy for me to apply for leave but it is a matter which I think I need to discuss with Mrs Kline.

65. LORD JUSTICE SEDLEY: Very well. It is simply this. One does appreciate a measured approach even to this. We have had the advantage of your presence in court while the judgment was delivered and all the issues fully gone through yesterday. If you were to assume for the present that you will be instructed to seek leave, which is the best-case scenario from this point of view, you could, I think, put your points quite rapidly to us for leave so that we could decide here and now. I think the additional expense of coming back would probably be unwarranted.

66. MR JUSTICE COLLINS: After all, Mr Nicholls, if you can go to your client and say that the court has indicated that it would grant leave, it would make your advice rather easier, would it not? Equally the other way round.

67. LORD JUSTICE SEDLEY: It also would make the Legal Aid Board's job rather easier.

68. MR NICHOLLS: Then I make the application. The basis of my application is that it is clearly an important point. It is one that has not arisen before and this question of what are the facts and what are not the facts is not always clear. If your Lordships granted leave in this case this might be an opportunity of solving this particular problem once and for all. I do not think there is anything else I can say.

69. LORD JUSTICE SEDLEY: We are grateful to you.

70. Mr Nicholls, we do not propose to grant leave in this case. The fact that the point is a simple one does not mean that it is unimportant, but it does seem to us that once it is accepted, as it has been throughout on authority, that the offence referred to in article 3(1)(a) of the Treaty is the conduct constituting the offence, then the proposition that committal charges are not properly so called but are simply particulars of the conduct which needs to amount to an offence in the law of England and Wales is very straightforward. It is not unimportant for the purposes of the people affected but we think that if anyone is to form the view that it is sufficiently important to merit their Lordships' attention, it is their Lordships.

71. MR NICHOLLS: On the question of legal aid taxation --

72. LORD JUSTICE SEDLEY: Lodge it by the end of the week and taxation will be conditional upon that.

73. MR NICHOLLS: That is exactly what I was going to ask.

74. LORD JUSTICE SEDLEY: We are indebted to both counsel for excellent presentations in a most interesting case.