England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
ADMINISTRATIVE COURT
DIVISIONAL COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		9th October 2002

Lord Justice Brooke : This is the judgment of the court.

1. This is an appeal by the Department for the Environment, Food and Rural Affairs (“DEFRA”) by way of case stated from the decision of justices sitting at Penrith Magistrates’ Court on 9th November 2001 to acquit Brendon Atkinson and Robert Hughes of a number of offences relating to veterinary medicinal products. All the alleged offences were said to have been committed at Penrith. At the end of the prosecution case the justices held that there was no case to answer. They therefore discharged the defendants.
2. Mr Hughes was charged with three categories of offences:

(i) Selling by retail on 20 occasions between 13th October 1998 and 29th April 1999 veterinary medicinal products containing a substance as specified in Schedule 1 of the Medicines (Veterinary Drugs) (Prescription Only) Order 1991 (“the 1991 Order”) without a prescription given by an appropriate practitioner. These alleged offences were said to contravene sections 58(2)(a) and 67 of the Medicines Act 1968 (“the 1968 Act”) and the 1991 Order.

(ii) Counselling and procuring Mr Atkinson between 1st January and 29th April 1999 to have in his possession for the purpose of placing on the market veterinary medicinal products in respect of which no marketing authorisation had been granted.

(iii) Placing on the market between 1st January and 29th April 1999 veterinary medicinal products in respect of which no marketing authorisations had been granted.

3. The offences alleged in (ii) and (iii) above were said to contravene regulations 3 and 16 of the Marketing Authorisations for Veterinary Medicinal Products Regulations 1994 (“the 1994 Regulations”) and section 2(2) of the European Communities Act 1972.
4. Mr Atkinson, for his part, was charged with committing offences in three similar categories of offences, in his case between 1st January and 29th April 1999. In the first category of charges he was charged with aiding and abetting Mr Hughes to commit the offences referred to in (i) above on six occasions. In the second he was charged with aiding and abetting Mr Hughes to commit the offence referred to in (iii) above. In the third he was charged with the substantive offence in relation to which Mr Hughes was charged with aiding and abetting him in (ii) above.
5. The case stated shows that the justices heard undisputed evidence from 13 different farmers. Eight of them said that they had obtained drugs from Mr Hughes either personally or through the post, and that they used him because he was up to 70% cheaper than their own vets. The other five said that they were in the habit of placing orders for drugs either with Mr Hughes or Mr Atkinson. They would collect their orders from Mr Atkinson’s farm in person. The attraction of using this source of supply, rather than their own vet, was a similar saving of up to 70%.
6. It was not in dispute that all these farmers were responsible and caring towards their animals. They would never do anything to harm them. So far as they were concerned, all the drugs they bought from Mr Atkinson or Mr Hughes were the same as were supplied by their own vets. The reason why they maintained this belief was that all the drugs were in similar containers, with the same types of label, as they were familiar with. One of the farmers said that Mr Atkinson told him that the drugs were from an Irish licensed supplier and that anyone could go to Ireland and buy them legally.
7. The justices also received undisputed formal evidence of the search and seizure procedure at the two defendants’ farms, from which all the products before the court had been seized.
8. Mr Haycroft, a civil servant employed in the Licensing Branch of the Veterinary Medicines Directorate, told the justices that he was involved in the administration of the “Unauthorised Products Section”. He said that the matters subject to the charges did not have marketing authorisation. He was unable, however, to say that the products were actually what they claimed to be, since they had not been scientifically tested, and he would not rely only on what was written on the label.
9. At the end of the prosecution case the justices upheld a defence submission that there was no case to answer.
10. The justices found certain facts, which they expressed in the following terms:

“(a) All the exhibits produced to the court were seized at the addresses of the two respondents following authorised searches of their farms.

(b) During 1998 and 1999 both respondents were concerned in the possession and supply of like products.

(c) During the same period 13 farmers from around the country bought like products either directly from the respondent Mr Hughes, or indirectly from him through the respondent Mr Atkinson.

(d) All the exhibited products bore labels indicating that they were veterinary medicines of the type that can only be sold by prescription only or be in a person’s possession if granted a marketing authorisation.

(e) Neither respondent is a veterinary surgeon or practitioner.

(f) No evidence was adduced before us to prove that the products actually contained prescription only veterinary medicines.

(g) On 24th March 1999 Mr Hughes confirmed that veterinary medicines relating to his business were recovered from his farm.

(h) On 28th April 1999 Mr Atkinson admitted in interview that; (i) he had bought prescription only medicines from Mr Hughes because he was cheaper than his vet; (ii) he knew his vet would not approve; (iii) a business relationship had then developed whereby one of his garages was used by Mr Hughes as a store for his medicines; (iv) that either Mr Hughes would come to the garage to pick up medicines, or Mr Atkinson would, deal directly with farmers; (v) he was not responsible for collecting any money himself from the farmers.”

11. The prosecutor argued that the justices were entitled to draw reasonable inferences from the labels on the products, and since the labels were of the conventional and recognisable type, they should infer that the products contained what was stated on the labels. Similarly, the justices were entitled, it was said, to draw reasonable inferences that the products were what they purported to be from the farmers’ general evidence and the extent of Mr Hughes’s commercial business.
12. It was also argued that if any matter, irrespective of origin, was being presented for the treatment or prevention of disease in animals, it was a veterinary medicine regardless of its precise chemistry. If it did not have marketing authorisation, then an offence under regulations 3 and 16 of the 1994 Regulations was committed. The justices’ attention was drawn in this context to Article 1 of Council Directive 65/65/EEC and Article 1 of Council Directive 81/851/EEC. The prosecutor argued that he had done sufficient to establish the primary facts and that he had produced enough evidence for the justices to say that there was a case to answer.
13. The defendants argued that only a scientific analysis of the contents of the products was admissible as prima facie evidence of those contents, and that the statement on the label had to be proved by admissible evidence if it was to be relied upon to found an offence. The prosecution had adduced no evidence to prove the statement on the label, which by itself was hearsay in any event. It was argued that the prosecution had to prove that the products contained prescription only medicines and were veterinary medicinal products, but their own expert witness had said he could not be sure as to the contents.
14. In these circumstances it was submitted that knowledge of the actual contents of the bottles was vital when considering whether the regulations and/or the directions and/or the exemptions applied, and that in the absence of analysis it was impossible to say. The prosecutor had conceded that there was no evidence on the question whether the exemptions applied or not. It was said to be an essential element of the prosecution case to prove the contents of the products. Because no scientific analysis had been done, the court could not be satisfied that this essential element had been proved. The prosecution had therefore failed to establish a prima facie case.
15. The justices’ reasons for upholding the defence submission that there was no case to answer were set out in these terms:

(a) The court is entitled to the best evidence available to assist in its decision-making. The best evidence in this case would be the scientific analysis of the contents of the products produced. That is what happens in controlled drugs and excess alcohol cases.

(b) When products are bought by prescription in a controlled environment, then it is safe to infer that they contain what is stated on the label. However, products bought by unconventional methods at reduced prices are usually of a lesser quality and sometimes counterfeit. We do not believe it is safe to draw the same inference in these circumstances. The labelling is no more than hearsay and does not prove the contents are as described.

(c) We do not believe it is safe to infer that these products are veterinary medicines simply because they were being presented for the treatment or prevention of disease in animals. The word ‘presented’ in this context we believe implies that the contents do include ingredients efficacious in the treatment or prevention of disease, and that the origin and precise chemistry is therefore an essential element which must be proved by the prosecution.

(d) We also believe the contents of the exhibits to be crucial when we looked to the EEC directives and the question of exemptions. Without appropriate analysis, it is impossible to say whether they fall within any of the exempt categories.

(e) The best evidence we have about the products exhibited in this court is that they probably came into this country from Southern Ireland, but their origin and content have not been established. Mr Haycroft admits he cannot be sure the label is a true statement.

(f) We believe it is crucial to the case that the prosecution establish the contents of the products, as an essential ingredient in every charge is ‘prescription only veterinary medicinal products’, each one named specifically. The quality of these products, for the purpose of all charges, is in their content, which would determine:

(i) whether they are veterinary medicinal products;

(ii) whether they contain a prescription only substance.

This could have been established by simple scientific analysis, but without knowledge of their content, sufficient for us to say that a court could determine that they are (i) or (ii), we cannot conclude that a court would convict, even on taking the prosecution case at its best and highest.

(g) The prosecution had not made out a prima facie case. We found no case to answer and dismissed all summonses against both the Respondents.

16. The justices added that if the case had proceeded they would have wanted to be satisfied beyond all reasonable doubt so that they were sure of the contents of the products exhibited, and to hear further evidence to assist them in deciding whether they were “prescription only” and “veterinary products” or not.
17. The four questions the justices posed for the opinion of this court were expressed in these terms:

(a) In the absence of any admissible evidence to establish the contents of the products, were we right to find no case to answer, particularly in view of the comments made by Mr Hughes on 24th March 1999 and Mr Atkinson on 28th April 1999?

(b) Is the label itself in these circumstances to be deemed an admission at common law as to the statements contained on it?

(c) With reference to Regulation 3 of the Marketing Authorisations for Veterinary Medicinal Products Regulations 1994, Article 1 of Council Directive 81/851/EEC and Article 1 of Council Directive 65/65/EEC, were we right to find that the articles, the subject matter of the charges, were not medicinal by presentation?

(d) Whether on a charge of selling by retail a prescription only veterinary product the prosecution must adduce expert evidence as to the chemical composition of that product in order to establish a case to answer?

18. We will start with the offences which related to the absence of a marketing authorisation. For this purpose we will first refer to the three provisions mentioned in the justices’ third question, because they provide the definitions of the products which are at the centre of this part of the case. Regulation 3 of the 1994 Regulations (see para 3 above) provide that it is an offence for a person to place on the market, or have in his possession for placing on the market, any veterinary medicinal product unless a marketing authorisation has been granted and the product is placed on the market in accordance with that authorisation.
19. For the meaning of the phrase “veterinary medicinal product” we are taken via regulation 1(4) of the 1994 Regulations to Article 1(2) of Council Directive 81/851/EEC which defines that phrase as

“any medicinal product intended for animals.”

And for the meaning of “medicinal product” we are taken via Article 1(1) of that directive to Article 1(2) of Council Directive 65/65/EEC which contains these two definitions:

“Any substance or combination of substances presented for treating or preventing disease in human beings or animals.

Any substance or combination of substances which may be administered to human beings or animals with a view to making a medical diagnosis or to restoring, correcting or modifying physiological functions in human beings or in animals is likewise considered a medicinal product.”

Not surprisingly the European Court of Justice has held that:

“Directive 65/65 provides two definitions of the term ‘medicinal product’: one relating to presentation, the other to function. A product is medicinal if it falls within either of those definitions.”

20. In this case DEFRA relied on the first definition. In this context the European Court of Justice has held that the concept of presentation should be broadly construed. In Case C-227/82 Van Bennekom [1983] ECR 3883, 3900 at para 17, it said:

“It should be observed that the directive, by basing itself, in the first Community definition of a medicinal product, on the criterion of the product’s ‘presentation’ is designed to cover not only medicinal products having a genuine therapeutic effect but also those which are not sufficiently effective or which do not have the effect which consumers would be entitled to expect in view of their presentation. The directive thereby seeks to preserve consumers not only from harmful or toxic medicinal products as such but also from a variety of products used instead of the proper remedies. For that reason, the concept of the ‘presentation’ of a product must be broadly construed.”

21. The European Court of Justice has held that the presentation of a substance includes presentation by means of the labelling and/or packaging of that substance: see Case C-369/88 Delattre [1991] ECR 1-1487, 1536-7 at paras 40-41 and Case C-60/89 Monteil and Sammani [1991] ECR 1-1547, 1566-7 at paras 23-24.
22. The parties’ lawyers did not bring any of these propositions of European law very clearly to the attention of the justices. When Mr Kenneth Parker QC and Ms Kassie Smith, who appeared for DEFRA on this appeal, set them out in their skeleton argument, counsel for the two defendants readily accepted that if a product is presented for treating or preventing disease in animals by virtue of its labelling and/or packaging, it is a “veterinary medicinal product” for the purposes of the 1994 Regulations. As a consequence of this concession the argument on the appeal ranged rather more narrowly than the argument before the justices.
23. It is important, however, to dwell for a moment on the effect of the special meaning given to the phrase “medicinal product” by the European Community law because it reveals that the argument before the justices was conducted on an entirely misdirected basis. Because a product may be medicinal by presentation and not necessarily by function, the prosecutor does not have to adduce evidence of its ingredients as he would have to do if this alternative approach was not open to him. It is sufficient for him to show that the product was presented for treating or preventing disease, whether by its labelling or packaging or otherwise.
24. The preamble to Council Directive 81/851/EEC shows that the primary purpose of any rules for the production and distribution of veterinary medicinal products was the safeguarding of public health and that a marketing authorisation was to be refused where a medicinal product lacked therapeutic effect or where there was insufficient proof of such effect. In this context the concept of therapeutic effect was to be understood as being the effect proved by the manufacturers.
25. Turning to the way in which the production and distribution of veterinary medicinal products was to be regulated, Article 4(1) of that directive provides that no veterinary medicinal product may be marketed in a member state unless authorisation has previously been issued by the competent authority in that member state. The defendants rely on Article 2(2), which mentions products to which the directive was not to apply. For products covered by the directive Article 43 sets out the information which must appear in legible characters on containers and outer packages of the products. In addition to the name of the product in question, this information must include the marketing authorisation number.
26. The evidence on which DEFRA relied in what we have called the second and third category of offences was derived from the labels on containers seized from Mr Atkinson’s property. None of them bore a UK authorisation number. They each identified the product in the container. They all bore an Irish authorisation number. The justices did not consider that the contents of these labels were admissible in evidence. They thought that they constituted inadmissible hearsay.
27. It does not appear that the parties’ lawyers drew their attention to section 24(1) of the Criminal Justice Act 1988. This provides, so far as is relevant, that subject to certain immaterial considerations:

“a statement in a document shall be admissible in criminal proceedings as evidence of any fact of which direct oral evidence would be admissible, if the following conditions are satisfied –

(i) the document was created … by a person in the course of a … business … and

(ii) the information contained in the document was supplied by a person (whether or not the maker of the statement) who had, or may reasonably be supposed to have had, personal knowledge of the matters dealt with.”

28. Paragraph 5(1) of Schedule 2 to the Act contains the following definitions:

“‘document’ means anything in which information of any description is recorded;

‘statement’ means any representation of fact, however made.”

29. In Foxley [1995] 2 Cr App R 523 Roch LJ, giving the judgment of the Criminal Division of the Court of Appeal, held that Parliament’s intention clearly was that the court could draw such inferences as it thought proper from the documents themselves.
30. It follows that the prosecution produced admissible evidence to the effect that the products found on Mr Atkinson’s property were what the prosecution contended and that they had a market authorisation in Ireland. Although section 28(1)(b) of the 1988 Act envisages that a court may in its discretion exclude a statement admissible by virtue of Part II of the Act (which contains section 24), it was not suggested to the justices that they should exclude evidence which was prima facie admissible, and it is not at all clear that in the absence of any suspicious circumstances there were any grounds for excluding it.
31. The prosecution was therefore able to prove by admissible evidence:

(i) That Mr Hughes was in the business of selling drugs to local farmers, with Mr Atkinson’s assistance, which were intended for their animals;

(ii) That the products found on Mr Atkinson’s property were presented for treating disease in animals;

(iii) That all those products had a market authorisation in Ireland and not in this country;

(iv) That they were the products which were described on the labels on the containers.

32. The defendants in these circumstances argued that there were a number of possibilities which the prosecution ought to have excluded to the criminal standard of proof:

(i) The products might have been medicated feedingstuffs;

(ii) The products might have been veterinary medicinal products based on radioactive isotopes;

(iii) The products might have been homeopathic medicinal products which were intended for administration to pet animals or exotic species whose flesh or products were not intended for human consumption:

(iv) The products might have been inactivated and non-activated immunological veterinary medicinal products which were manufactured from pathogens and antigens obtained from an animal or animals from a holding and used for the treatment of that animal or the animals of that holding in the same locality;

(v) The products might have been placed on the market (when there was no licensed product available) as veterinary medicinal products prepared extemporaneously by a person authorised to do under national legislation in accordance with the terms of a veterinary prescription;

(vi) The products might have been veterinary medicinal products placed on the market for use in medicinal and/or clinical tests on animals;

(vii) The products might have been veterinary medicinal products that already had an existing product licence under section 7 of the Medicines Act 1968;

(viii) An allowance might have been granted under the exceptional powers given to a state in the event of a serious disease epidemic;

(ix) A UK marketing authorisation might have been granted by UK ministers;

(x) A Community marketing authorisation might have been granted by the European Agency for the Evaluation of Medicinal Products.

33. The availability of these possible defences is derived from regulations 1(2), 1(3), 2 and 3 of the 1994 Regulations and from the provisions of EC directives which are mentioned in some of these regulations. During the course of argument we pressed Mr Parker to explain to us, so far as he could, why the general regulatory regime excluded the cases mentioned in (i) to (vii) above. For this purpose he showed us other directives which governed some of these exceptional cases. In others, such as (iii), the reason was fairly self-explanatory.
34. The course of the argument before us was originally complicated by the fact that Mr Parker started by arguing that a persuasive burden of proof rested on the defence to establish one of these defences on the balance of probabilities. In the end, however, he confined himself to contending that once the defence had satisfied the evidential burden involved in establishing a viable issue by way of defence, the prosecution had the familiar task of excluding that defence to the criminal standard.
35. In our judgment this is the correct position. In those circumstances, because of what the prosecution had proved by admissible evidence (including the fact that these were presented as veterinary medicinal products authorised by an Irish and not a UK market authorisation) and the fact that the defence had not raised any matters by the end of the prosecution case which called for specific attention in relation to the possibility that the Regulations did not apply, the justices ought not to have held that there was no case to answer on these groups of offences.
36. The other group of offences arose under section 58(2)(a) of the Medicines Act 1968 which provides, so far as is material, that:

“no person shall sell by retail … a medicinal product of a description, or falling within a class, specified in an order under this section except in accordance with a prescription given by an appropriate practitioner.”

37. For this purpose, the phrase “medicinal product” is defined by section 130(1) of that Act as meaning:

“any substance or article … which is … sold … wholly or mainly in either or both of the following ways, that is to say –

(a) use by being administered to one or more … animals for a medicinal purpose …”

38. The prosecution’s case in this respect was founded on the evidence of a number of the farmers whose names had appeared on the invoices produced to the justices. The invoices referred to “prescription only medicines” (set out in Schedule 1 to the Medicines (Veterinary Drugs) (Prescription Only) Order 1991), and the farmers all said that they had bought the drugs named on the invoices from Mr Hughes for their animals. The attraction to them of this source of supply was that the drugs were much cheaper than when they obtained them from their normal vets.
39. The justices found as a fact that each of the containers were labelled with a label identifying the drug mentioned on the relevant invoice. For the reasons we have explained this label constituted admissible evidence to the effect that the container contained the drug in question. There was therefore a case to answer in relation to these charges, too.
40. It follows that the answers to the questions posed by the justices are:

(a) There was admissible evidence to establish the contents of the product. Regardless of the comments made by the defendants the justices were wrong to find no case to answer

(b) The labels were admissible evidence pursuant to section 24 of the Criminal Justice Act 1988 as to the statements contained in them.

(c) The justices were not correct to find the articles, the subject matter of the charges, were not medicinal by presentation.

(d) Provided that the prosecution adduce other admissible evidence of the nature of the product sold, it is not obliged to adduce expert evidence as to its chemical composition.

41. This case must therefore be remitted to the justices to continue the hearing. Although we are willing to hear counsel on the point, if requested, we are at present disposed to take the view that each party should bear their own costs in this court. If DEFRA’s advocate had stated the applicable law clearly to the justices the hearing in this court would probably have been unnecessary. In addition, although its supplementary list of legal materials, served shortly before the hearing, included section 24(1) of the Criminal Justice Act 1988, it was only during the course of the hearing, upon the prompting of the court, that the provisions of this section moved to the forefront of its submissions.

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