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CRIMINAL CASES REVIEW COMMISSION v. MICHAEL JOHN HUNT, R v. [2000] EWHC Admin 307 (21st March, 2000)

IN THE HIGH COURT OF JUSTICE CO/3098/99
QUEENS BENCH DIVISION
CROWN OFFICE LIST
Norwich Crown Court
Tuesday, 21st March, 2000
BEFORE
THE HON. MR. JUSTICE OWEN
B E T W E E N:
REGINA
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CRIMINAL CASES REVIEW COMMISSION
Respondent
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MICHAEL JOHN HUNT
Applicant

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(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 180 Fleet Street
London EC4A 2HD
Tel No: 0171 421 4040, Fax No: 0171 831 8838
Official Shorthand Writers to the Court)
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Mr. Robert Rhodes QC and Mr. Simon Stafford-Michael,
instructed by Messrs, Wakefields, Thames House, London,
appeared for the Applicant.

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Judgment
As Approved by the Court
Crown Copyright ©

1. This Applicant seeks permission to review judicially two decisions of the Criminal Cases Review Commission each dated the 27th May 1999. The first was a refusal to refer pursuant to s.9 of the Criminal Appeal Act 1995 and the second was a refusal to refer pursuant to s.14(3) of the Act.
2. The circumstances in which he makes his application are:
(1). On the 25th and 26th June 1991 officers of the Inland Revenue applied to and obtained from His Hon. Judge Lowry at the Central Criminal Court warrants to search premises including those of the Applicant.
(2). On the 29th January 1992 the Applicant and another were arrested by police without warrant and charged with conspiracy to cheat the Revenue. The cheat alleged was the creation by Nissan U.K., of which the Applicant was an Assistant Managing Director, of inflated and sham freight charge expenses which resulted in the company paying some £55,000,000 less in tax than was properly due for the one year in respect of which the Applicant was eventually found guilty.
(3). Their cases were committed for trial by the Worthing Justices. From the date of their first appearance before the Justices, the prosecution was conducted by the Inland Revenue. The trial was at Southwark Crown Court. The indictment was prepared by the Inland Revenue solicitor. There were five charges [see pp.34 to 37]. The prosecution was conducted by the Inland Revenue.
(4). The Applicant was represented by Michael Sherrard QC and Ian Mayer QC. The Applicant did not give evidence. The Applicant was convicted of Count 3 i.e. Hunt and Shannon, conspiracy to cheat (1982 - 1991).
(5). The summing up is copied at pp.330 to 409. After a retirement of over 15 hours the jury convicted the Applicant by a majority of 10 to 2. On the 30th June 1993 the Applicant was sentenced to 8 years imprisonment.
(6). The Applicant appealed using different counsel and solicitors (new counsel were Alan Jones QC, Kevin de Haan and Campaspe Lloyd-Jacob). The twelve Grounds of Appeal against conviction are copied at pp.411 to 454. Although counsel could not challenge in the Court of Appeal the existence at common law of an offence of cheating the Revenue the Skeleton Argument gave notice that if possible that question would be raised in the House of Lords.
(7). On the 5th May 1994 the Court of Appeal (Stuart-Smith LJ, Ian Kennedy and Gage JJ.) dismissed the appeal [pp.505 to 554]. The Court observed [p.513] that "there was no dispute at the trial that there had been a fraud. The issues before the jury on each pair of Counts were:
(i). Had the prosecution proved that the fraud was upon the U.K. Revenue or might it have been a fraud on the Japanese authorities?
(ii). If it was a fraud on the U.K. Revenue was the Appellant a party to it?"
At p.530 Stuart-Smith LJ quoted the trial Judge's directions to the jury [pp.332/3]. At p.536 he listed some of the "ample evidence in addition to Shannon's plea that the fraud was on the U.K. Revenue."
(8). On the 7th August 1997, the Applicant, having again changed his solicitors and counsel, made application to the Criminal Cases Review Commission [pp.1-27]. The Grounds for this application are set out at pp.1-2:
"(a). The trial and conviction of the Applicant was a nullity because:
(i). The Inland Revenue have no power to institute or continue such proceedings on indictment absent the consent of the Attorney General; and/or
(ii). In circumstances where the Applicant was charged by a police officer, it was incumbent on the Director of Public Prosecutions or the Director of the Serious Fraud Office to conduct the proceedings by virtue of s.3(2) of the Prosecution of Offences Act 1985.
(b). The conviction was unsafe by reason of the failure of the learned trial Judge to give any or any adequate directions to the jury on the following matters:
(i). Cheating the Revenue;
(ii). Dishonesty as an essential ingredient of 'intent to defraud'."
(9). Despite the attention this case has received none of these Grounds was raised at the trial or at the appeal. Accordingly the Applicant is not caught by the provisions of s.13(1)(b) or s.13(1)(c) of the Criminal Appeal Act 1995. It was and is the contention of the Applicant that "putting it at its lowest" there is "a real possibility" that the conviction would not be upheld if a reference were to be made to the Court of Appeal under the provisions of s.9 of the Act.
(10). Michael Aspinall, legal adviser to the Commission, asked Professor Leigh, a Commissioner and professor of Criminal Law in the University of London, to act as overseer [p.740].
(11). By letter dated the 10.12.98 [p.742] solicitors for the Applicant wrote "we are advised by counsel that the delay in this case is entirely attributable to the approach of the Commission and is based on a fundamental misunderstanding as to the proper exercise of their powers under the Act." It seems that counsel were arguing that the decision to call in Professor Leigh was unlawful for the reasons stated at p.742 including "(iv). It substitutes the opinion of a single Commissioner (concerning the points of law) for that of a properly constituted Committee." This was incorrect [p.744], neither Professor Leigh nor the legal adviser had any say in the eventual decision of the Commission.
(12). The Commission provided a provisional Statement of Reasons [pp.764-825]. The Applicant made further submissions on the 23rd March 1999 [pp.826-860]. The Commission issued its final Statement of Reasons on the 27th May 1999 [pp.861-889].
(13). The Applicant applied for leave by a form dated the 21st July 1999 [the first document in the first bundle].
(14). The Applicant, seemingly irrelevantly, complains of delay. I have not received any communication from the Commission, which may well dispute the allegation, but I note that the Applicant recognises that the Commission is a recently constituted body and has the burden of allocating its limited resources to a very substantial number of cases.
3. Before considering the grounds upon which permission to apply for judicial review is sought it will be necessary to consider the function, power and discretions of the Commission.
4. The Commission has a discretionary power under s.9 of the Criminal Appeal Act 1995 to refer to the Court of Appeal. The test which it must apply is set out in s.13(1) which provides:
"13. Conditions for making references
(1) A reference of a conviction, verdict, finding or sentence shall not be made under any of sections 9 to 12 unless -
(a) the Commission consider that there is a real possibility that the conviction, verdict, finding or sentence would not be upheld were the reference to be made,
(b) the Commission so consider -
(i) in the case of a conviction, verdict or finding, because of an argument, or evidence, not raised in the proceedings which led to it or on any appeal or application for leave to appeal against it, or
(ii) in the case of a sentence, because of an argument on a point of law, or information, not so raised, and
(c) an appeal against the conviction verdict, finding or sentence has been determined or leave to appeal
against it has been refused."
5. Both (b) and (c) were satisfied. The question for consideration was whether, if a reference were to be made, there would be a real possibility that the conviction would not be upheld. The Applicant contended that where, as here, the arguments raised included points of law the Commission should determine;
(1) whether (a) the argument is properly arguable - here, he argues, the Commission should apply mutandis mutatis the test for obtaining leave to appeal and;
(2) if the argument were to succeed, that there would be a real possibility that the conviction would be quashed.
It is the Applicant's primary case that it is not the task of the Commission to decide whether the arguable point of law will or will not succeed. This is a matter for the Court of Appeal. The final submission on this matter and at this stage was "that it would be quite wrong for the Commission, constituted necessarily by lay persons, to substitute its view of the law for that of the Court of Appeal and/or to deprive the Court of Appeal (and if appropriate, the House of Lords) of jurisdiction to consider the merits of any argument of law." [p.733].
6. The real possibility test was considered in R.v. Criminal Cases Review Commission ex parte Pearson [1999] 3 A.E.R.498. There the test was explained as satisfied when the Commission judges that there is at least a reasonable prospect of a conviction, if referred, not being upheld. There the case was likely to turn on the willingness of the Court of Appeal to receive fresh evidence and the court held that the Commission had to try to predict the response of the Court of Appeal and it could not do so without making its own assessment of the considerations to which the Court of Appeal would be obliged to have regard and of how it would be likely to exercise its discretion. Subject to the possible effect of s.14(3) (considered later) I consider that the Commission is required to make a similar approach when considering, as here, arguments based on law. In addition it is necessary to contradict the factual statement [p.733]. This is wrong. The Commission is a body of not fewer than eleven members, of whom at least one-third are to be legally qualified and at least two-thirds are to have knowledge or experience of the criminal justice system. The procedures of the Commission, by paragraph 6(1) of Schedule I to the Act are such as it may determine.
7. On the Commission's powers under s.9, Bingham LCJ, in ex parte Pearson, said:
"The exercise of the power to refer accordingly depends on the judgment of the Commission, and it cannot be too strongly emphasised that this is a judgment entrusted to the Commission and to no-one else."
In these circumstances I reject the Applicant's arguments as presented at pp.733/4.
8. The Applicant also refers to s.14(3) which provides that:
"In considering whether to make a reference, the Commission may refer any point on which they desire the assistance of the Court of Appeal."
The Commission's refusal to make such a reference is the second decision in respect of which this application is made.
By the subsection, it is argued by the Applicant, the Act contemplates that matters of law are to be referred to the Court of Appeal. It is, however, to be noted that the power under s.14(3) is permissive and discretionary. Whether a reference is made under s.14(3) is for the Commission to decide and nobody else. There is no substance in the Applicant's complaints about this decision.
9. Criticism, necessarily not made in the original application to the Commission, is now made of the appointment of Professor Leigh as overseer. The complaint is that the Commission relied on the opinion of Professor Leigh on the merits of the points of law, and, that step being taken because of the complexity to the points raised, was unlawful in that it had the effect of substituting the opinion of the overseer (concerning the points of law) for that of a properly constituted committee as required by paragraph 6 of Schedule I. The short answer to this complaint is that Mr. Aspinall's letter [p.744] makes clear that there was no delegation. The appointment of Professor Leigh was to act as Mr. Aspinall's "assigned commission member to review what I have done and to see if there is any further work required" [p.744]. That letter also makes clear that "it is the Committee that will make any decision and neither Professor Leigh nor the legal adviser will have any say in that decision." I see no reason to think this was not done.
10. A subsidiary complaint raised by the Applicant is that the decision of the Commission "relied on the assistance given to it by Professor Leigh on the merits of the points of law advanced by the Applicant" and "in those circumstances permission to apply for judicial review should be granted so as to enable the Courts to review decisions on points of law that affect the rights of the subjects." I see no reason to think that the scheme of the Act had any such compulsion in mind.
11. It is also said that although the Applicant made demands to see the advice given by Professor Leigh the Commission refused to send a copy and thereby the Applicant was denied an opportunity which he should have had to comment on and meet the arguments in that advice. There are, I consider, two answers to this contention. The first is that it is for the Commission to decide its own procedure and, whilst it might, in some circumstances, be more sensible for such reports to be passed to applicants, I could not say that here a failure to do so was such as to render the decision unlawful or improper. The second answer is that whatever was contained in the report had no administrative effect. The decision, which is reasoned, is to be seen in the preliminary and final Statement of Reasons so that any error, whether it comes from a textbook, a conversation with an academic friend or from the Professor may be seen and challenged. In these circumstances I do not accept this complaint.
12. The Commission decided each point of law against the Applicant. Finally, and before me, the Applicant submits that thereby the Commission committed errors of law in the face of the record because each of these decisions was wrongly decided. The errors of law alleged against the Commission are:
a. The Inland Revenue had no power to prosecute upon the indictment offences of cheating the Revenue;
b. There was a statutory duty on the Crown Prosecution Service to prosecute; and
c. The summing up was defective in failing to give adequate directions on
(i) cheating the Revenue;
(ii) dishonesty as an essential ingredient of an intent to fraud.
13. In the Skeleton Argument [p.9] it is claimed that in making its decision the Commission relied on the three errors of law there identified. It is now necessary to consider these three grounds separately.
1. The trial was a nullity because the Inland Revenue had no power to institute or continue such proceedings on indictment absent the consent of the Attorney General.
The Applicant refers to three cases where, he concedes, the Inland Revenue has been accepted as a prosecuting authority. Indeed, he accepts that the generally stated law is that the Inland Revenue is a prosecuting authority. However, Mr. Rhodes, for the Applicant, complains that the basis for this accepted wisdom has not been analysed and that analysis indicates that these statements are wrong in law. The historical position, it is argued, is that proceedings for fraud against the Revenue could either be determined summarily by the Commissioners or before a Justice of the Peace or before a jury at the suit of the Crown by leave of the Attorney General. The ability to collect taxes, he claims, is a prerogative right of the Crown that is now entirely vested in Parliament. That prerogative is regulated by statute and prerogative rights may not be enlarged.
14. However, the Commission rely, in part, on an article by David Ormerod at [1998] Criminal Law Review 427 which states:
"The law reports show that there is a considerable number of cases in which the Revenue has brought a prosecution, whether under the Revenue Offences, at common law, or under the relevant Theft Act offences."
To this Mr. Rhodes counters that the Inland Revenue has no separate legal personality it is, for all intents and purposes, the Crown and it can, as a matter of definition, being a creature of statute, have no common law powers.
15. An argument upon which the Commission particularly relied is that s.4(2) of the 1890 Inland Revenue Regulation Act provides that the Inland Revenue's collectors and officers "shall have full power to execute the duties of their respective offices and to enforce in the execution thereof, all laws, regulations, penalties and forfeitures relating to Inland Revenue." At 10.48 of its Statement of Reasons [p.877] the Commission states:
"it is clear that Parliament's intention was to give the Commissioners full power to the 'enforcement of all laws' relating to Inland Revenue." "All" has an ordinary meaning and therefore shows that the enforcement powers are not restricted to statutory laws. It cannot be logically argued that an offence of cheating the Revenue is not related to Inland Revenue."
For the Applicant however, it is argued that "the prosecution of offenders cannot reasonably be said to be the 'enforcement of laws' creating criminal offences relating to Inland Revenue."
16. Whilst I am far from saying that I am satisfied on the arguments put forward by Mr. Rhodes I am certainly willing to say that this ground is arguable. If he were to succeed in showing that he is correct he would be likely to show that the prosecution was a nullity. In those circumstances it is arguable that although the Statute requires the Commission to make the decision required by s.13 it cannot, in making that decision, rely on an error of law and accordingly, there should be a declaration that the Commission should reconsider the matter.
2. There was a statutory duty on the Crown Prosecution Service to prosecute. The Prosecution of Offences Act 1985 s.3(2) provides that:
"It shall be the duty of the Director (a) to take over the conduct of all criminal proceedings ....... instituted on behalf of a police force."
In R.v. Ealing Justices ex parte Dixon [1989] 2 A.E.R. 1050 Woolf L.J. held that the charging of a person by a police officer was the institution of proceedings. In that case the Court held that the Federation against Copyright Theft was not entitled to prosecute committal proceedings. There are two other cases to which reference is made; R.v. The Staffordshire Justices ex parte Customs Commissioners [1990] 3 W.L.R.656. There Watkins L.J. declined to follow Dixon and held that the Customs could prosecute because proceedings could only reasonably be said to have been instituted on behalf of a police force where the police force had investigated and arrested the suspect and brought him before the custody officer. The other reported case was R.v. Croydon Justices ex parte Holmberg [1992] Criminal Law Review 892. Again a decision of Watkins L.J. in which he may be said to have followed his earlier decision.
17. Mr. Rhodes claims that on a proper analysis the proper ratio of the Watkins L.J. decisions was that because the Customs and Excise (Dixon) and the Local Authority (Holmberg) were prosecuting authorities by reason of express statutory provision the charging of the offenders could not have been other than on behalf of those bodies. However, he argues, as the Inland Revenue has no express powers to prosecute indictable only offences "it is difficult to see on whose behalf, other than the police, the proceedings were instituted."
18. The Commission's answer was factual and legal. As to the former they found [10.64 at p.880] the Revenue investigated both "the Applicant" and the affairs of the company. "They obtained warrants but sought police assistance in their execution". On this basis the Commission said: "As a question of fact it cannot be said that the proceedings were instituted on behalf of a police force and therefore s.3(2) does not apply. They also said that public policy favoured the Watkins L.J's decisions.
19. On behalf of the Applicant it is argued that the Commission did not adequately analyse the cases. However, I see no reason for thinking that the Commission were not entitled to find that "the decisions are clear and the issue is now settled and has been settled for 10 years." In my judgment, whether proceedings are instituted by the police is a question of fact in each case. Even given that a point of law might be found I have no hesitation in finding that the Applicant's contention here is not properly arguable.
3. The Summing up was defective.
The claim is that the conviction is unsafe by reason of the failure to give adequate directions on (1) cheating the Revenue; and (2) dishonesty as an essential ingredient of intent to defraud.
20. It was the Applicant's case that whether or not there was a fraud on either the Japanese or the U.K. tax authorities he was not knowingly a party to such a fraud. Accordingly, the argument goes that in the circumstances of this case it was necessary to prove an intention to defraud which itself includes proof of dishonesty. The Applicant's argument continues that it was in these circumstances necessary for the trial judge to give an appropriately tailored "Ghosh" direction. There was no such direction. The Judge identified two questions for consideration by the jury:
1. Has it been proved to you that there was a cheat on the Revenue, a conspiracy;
2. If so, has the prosecution proved to you that Mr. Hunt was a party to that conspiracy.
The Judge stuck to these two questions despite an invitation by prosecuting counsel to give express directions on the definition of cheating the Revenue, intention to defraud and on the "Ghosh" approach.
21. In the provisional Statement of Reasons the Commission stated that the trial judge had "put the relevant matters to the jury and a specific direction on dishonesty would not have assisted and might even have hampered the jury's deliberation of the matters in issue." As to this the Applicant complains that "no attempt has been made to analyse or address the detailed representations advanced by the Applicant". That there was a fraud was not at any time in issue but after the admission in evidence of Shannon's plea there can have been no doubt that the fraud was on the U.K. Revenue. However, that plea was to a conspiracy to cheat between 1985 and 1991 and Mr. Hunt was found not guilty of a conspiracy to cheat between 1975 and 1983 but guilty of such a conspiracy between 1982 and 1991.
22. In the preliminary Statement of Reasons the Commission said [10.85 at p.883]:
"it is clear that the jury were satisfied that Mr. Hunt was a party to the conduct articulated in Count 3. If they were so satisfied he could be found guilty. It was not incumbent on the Judge to direct the jury on dishonesty as it was never in issue that the agreement, if it was such, was a dishonest scheme to cheat the Inland Revenue or the Japanese Revenue. Thereafter the jury had to be satisfied that Mr. Hunt intended to agree that the scheme be carried out."
Mr. Rhodes argues that the Judge's direction left it open to the jury to convict on the basis of mere participation in the company's business although that participation might have been honest. However, this ignores the defence agreement [day 33; 15 and 16 at p.352] that there had in fact been a fraud somewhere. The Court of Appeal judgment [p.513] was that "there was no dispute at the trial that there had been a fraud. The issues before the jury on each pair of counts were:
1. Had the prosecution proved that the fraud was upon the U.K. Revenue or might it have been a fraud on the Japanese authorities?
2. If it was a fraud on the U.K. Revenue was the Appellant a party to it?
In my judgment the summing up was adequate and not misleading. The Judge sufficiently directed on cheating the Revenue and on dishonesty. I do not consider that an argument to the contrary is arguable.

23. In these circumstances I grant permission on the first ground only. It is, in my judgment, properly arguable on that one ground that the Commission acted on an error of law which was such that if corrected it would have led to a fundamentally different final result, namely a reference under s.9 rather than a refusal to refer under that section. I do not grant permission in respect of the refusal to refer under s.14(3).