England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT

		Royal Courts of Justice Strand London WC2A 2LL
		9th May 2008

1. MR JUSTICE OUSELEY: Focus (DIY) Limited is a retailer of substance in DIY goods. On 10th August 2004, the prosecuting authority, the London Borough of Hillingdon, carried out a test purchase of a 3.13 metre aluminium extending ladder of the type Hailo HVS from one of the defendant's stores. The prosecutor concluded, following test failures, that the ladder did not comply with the standards which it was held out as complying with and told the defendant so. On 21st October 2004, an officer of the prosecuting authority purchased another ladder of that same type from the defendant, tested it and again concluded that it failed the tests. Accordingly, an information was laid against the defendant alleging that on this latter occasion it had sold an item to which a false trade description applied, namely that the ladder complied with Standard EN 131 when in fact it did not so contrary to section 1(1)(b) of the Trade Description Act 1968.
2. The Magistrates heard the case over five days, 5th and 6th March, 24th and 29th May and 4th June 2007, after a number of preliminary hearings. They convicted the defendant, fined it £4,500 and ordered it to pay costs of £44,357.
3. The defendant new appeals by case stated on the following grounds: (1) the court should have interpreted the relevant standard as requiring tests to be carried out in a way in which they were not carried out in two respects; (2) the destruction of the ladder in testing meant that the prosecution should have been halted as an abuse of process; (3) the written evidence of two German witnesses should have been admitted; (4) the prosecution evidence as to the way in which the tests were carried out should have been ruled inadmissible; and (5) the order for costs was unlawful because it was grossly disproportionate to the fine. I should add that that is not the order in which the questions in the case stated are put. The Justices found the following about the testing body:

"Attached to both ladders were labels indicating that they complied with standard EN 131. This is the European standard specifying the general features, requirements and test methods for ladders. The Respondent sent the ladders to British Standards Institution Products Services (BSI) to test the ladders to see if they did comply with the Standard. The British Standards Institution is the independent national body responsible for preparing British Standards. It is also the body responsible for preparing the UK view on standards in Europe and at international level. BSI Product Services, the testing arm of the British Standards Institution, is accredited by UKAS to carry out the test procedures in this case. UKAS is recognised by the Department of Trade and Industry as the national body responsible for assessing and accrediting the competence of organisations in the fields of calibration, testing, inspection and certification of systems, products and personnel."

4. The appellant's first contention related to clause 3.9 of the Standard EN 131. The Justices rejected the interpretation contended for by the appellant that, as a matter of the true interpretation of the standard, the ladder for certain purposes had to be tested in the vertical position and that a failure in the horizontal position could not therefore be evidence that that requirement of the standard had not been met. Clause 3.9 provides:

"Extending ladders are not intended for being used as standing ladders. They shall be so designed that the top angle between the legs shall not be more than 10 degrees, if the ladder is wrongly put up as a standing ladder."

There was no dispute but that BSI conducted this test with the ladders in the horizontal rather than vertical position and that that was the procedure accredited by UKAS.

5. In my judgment, the Justices were right to interpret clause 3.9 in the way they did. The Standard clearly does not require the test to be carried out in a vertical position. It requires that the performance of a ladder, were it erected wrongly as a standing ladder, be tested. The question therefore is not one of interpretation but one of expert evidence as to whether a test in the horizontal position suffices for that purpose. As a matter of evidence, the test procedure in the horizontal position was accredited by UKAS and the challenge was not to the ability of the horizontal test procedure to meet the requirements of the standard if the interpretation put forward by the defendant was wrong.
6. The second contention in relation to test methods related to clause 4.2. Clause 4.2 is as follows:

"Strength test of the ladder

The test shall be carried out on the complete ladder. In the case of extending ladders and sectional ladders the test shall be carried out on the complete extended ladder. A pre-load of 500N [newtons] shall be applied for a duration of one minute. The position of the ladder after removal of the pre-load is the origin for measurement. A test load F of 1000N shall be applied for a duration of one minute. The measurement shall be taken one minute after removal of the test load. The permanent deformation f of the ladder shall not exceed 1‰ of the distance l between the supports."

7. The defendant contended that "permanent deformation" was a term of art which meant the deformation of the ladder not after a minute, which would be called "residual deflection" but after a much longer period in which the deflection might recover to some extent before it reached the permanent state of deformity. That period could be as much as 24 hours and so testing permanent deformation after just one minute could not satisfy the requirements of the standard.
8. The Justices concluded that "permanent deformation" and "residual deflection" were used interchangeably in the standard and that the standard clearly only required one measurement one minute after the test load of 1000N had been removed. In my judgment, they were clearly right on this. The Standard sets out a detailed sequence of pre-test and test loads and precise timings for the measurements. It is clear that the standard did not then leave some further undefined period to elapse, lasting so long as it might take to achieve "permanent deformation", whatever that might mean. "Permanent deformation" for these purposes in clause 4.2 is clearly the degree of deformation or deflection which is found on the ladder one minute after the test load is removed.
9. The third ground relates to abuse of process because of the destruction of the ladder. The ladder was cut up for the purposes of a test under clause 4.9 of the standard, which required a test of the strength of the hooks of the extendable parts of the ladder. The ladder was cut so that the test could be carried out in the rig operated by BSI, which was too small to take the full length of the ladder. The ladder passed this test. The appellant complains that BSI could have used a larger rig, costing no more than £2,000, and could thus have avoided cutting up the ladder. Although the consequence of the cutting up of the ladder did not deprive the appellant of the chance of testing the strength of the hooks, just as the prosecutor had done, it meant that the defendant could not replicate on it the other tests which it had failed.
10. The defendant said that this meant that the prosecutor had breached section 30 of the Trade Descriptions Act 1968, which provides:

"Where any goods seized or purchased by an officer in pursuance of this Act are submitted to a test, then -

...

(b) if the goods were purchased and the test leads to the institution of proceedings for an offence under this Act, the officer shall inform the person from whom the goods were purchased, ... of the result of the test;

and shall, where as a result of the test proceedings for an offence under this Act are instituted against any person, allow him to have the goods tested on his behalf if it is reasonably practicable to do so."

11. The defendant said that it was reasonably practicable to preserve the ladder by the purchase and use by BSI of a test rig at modest cost which would have avoided cutting up the ladder to fit into the particular rig which they had. The Justices found that there was no abuse of process, that the tester could choose the length of ladder tested and that it had to be cut to fit into the BSI rig. They also found that there would have been no value in testing the ladder even if uncut because the permanent deformation test could not be performed again on the same, but by now deformed, ladder. This latter point was disputed but no question of law was raised as to the evidential basis of that finding or its rationality in the case stated, whatever may have been urged to the Magistrates or in the skeleton argument.
12. As to abuse of process, first, on the true construction of section 30, the requirement to allow the person from whom the goods were purchased to have the goods tested where that is reasonably practicable only arises after the tests have been carried out by the prosecutor. There is no requirement in section 30 that the tests only be carried out in such reasonably practicable manner, that the goods are available in pristine form for retesting by the defendant. That could severely limit the range of tests for compliance with standards or other forms of description which might leave permanent changes to the item in question.
13. Second, the appellant relied on the provisions of the code for prosecutors made under Part 2 of the Criminal Procedure and Investigations Act 1996. He did not rely on it before the Magistrates. Paragraph 5(1) provides in the first sentence:

"The investigator must retain material obtained in a criminal investigation which may be relevant to the investigation."

There are a number of other specific provisions under that head. This does not advance the appellant's case. It does not deal with items which have to be tested for forensic evidence in a way which can lead to destruction, still less with the testing of items where the very essence of the offence is that testing shows that they fail certain tests. If a question had been raised in the case stated about the conclusion that the ladder could not be re-tested under clause 4(2), as a result of the 4(2) test carried out, there might have been something to consider under that head, but it would have required the specific evidence to be recited and a challenge mounted to the facts found. Even then, it does not have the probable character of an act sufficient to cause the continuance of the prosecution to be an abuse of process. Mere breach of duty to preserve does not result in a trial being an abuse of process as an inevitable consequence. That relates to the third reason.

14. Thirdly, the appellant relied on the case of Leatherland v Pritchard v Powys County Council [2007] EWHC 148 (Admin); [2007] CTLC 192. That case concerned an animal welfare prosecution where carcasses, upon which the court appeared to think the prosecution case was based, had been destroyed under certain other regulations. They could not be tested to see whether what the prosecutor said about them was correct. Owen J held that the failure of the prosecutor to retain at least a representative sample of the carcasses for examination by the defendant meant that the defendant was severely handicapped in mounting a challenge to the prosecution evidence and that they could not therefore fairly be tried. The only fair course, he concluded, would have been to exclude the prosecution's evidence with the consequence that there would have been no case to answer. Owen J saw that as a wholly exceptional case.
15. I have reservations about much of the reasoning in that case and the overall balance struck in the light of the Justices' findings as to the lack of value in freezing the carcasses and the evidence relating to the live animals, but be that as it may, it is readily distinguishable from the present case. There, the representative sample of carcasses which should have been kept were of sheep which had been through the journey to market, the particular journey in the course of which they suffered the particular hardship. Here, there were plenty of other samples of this particular type of ladder for the defendant to test. The positive results of tests on a number of those other ladders of the same particular type could have been effective evidence that there was something wrong with the testing method or of the results of the prosecutor's tests, even though it could not have directly contradicted the results of those tests on that specific ladder. But it would have become necessary for the prosecutor to argue in those circumstances that the ladder which it happened to purchase was a peculiar example of the type of ladder.
16. Fourthly, applying the test in R (Ebrahim) v Feltham Magistrates' Court [2001] EWHC Admin 130; [2001] 1 WLR 1293, it is possible in our judgment for the defendant to have had, as he did have, a fair trial notwithstanding the cutting up of the ladder. There was nothing about the prosecutor's conduct which made it unfair for him to be tried. There was no question of serious fault, let alone bad faith, and no breach of the duty to preserve the ladder has been shown.
17. I turn to the fourth question, which concerns the exercise by the Justices of their discretion under the Criminal Justice Act 2003 to refuse to admit evidence in the form of witness statements from two German witnesses. Both witnesses were physically in Germany. Both applications were made out of time. Notices under section 116 of the 2003 Act were served on 21st May 2007 during the course of the trial at the stage when the defendant's experts were being cross-examined. The circumstances relating to each application differed. The Magistrates refused to hear the application in relation to Mr Holicka, whose statement had been available to the defence since September 2004. The case stated is silent as to what the purpose of that statement was. Mr Philpott told us that it was in effect to call a further expert because the expert on the stand had not been doing as well as hoped in certain respects. For understandable reasons, that is not quite how it was put to the Magistrates, but rather, as it is put in the skeleton argument, the court might have been assisted by his evidence.
18. The application in relation to Mr Mertmann related to the defendant's evidence. The application was made when it was because an issue was said to arise in cross-examination which precluded the application being made earlier. The case stated is silent as to what this issue was. Mr Philpott told us, however, that the issue that arose in cross-examination was why all the ladders of this type had been withdrawn from sale and only put back in the defendant's stores after the relevant parts of the ladder has been strengthened. In neither instance had the defendant ascertained the willingness or availability of either witness to come and give evidence in time without an adjournment. Nor was any adjournment sought to enable them to come. The Magistrates in my view were quite right to exercise their discretion the way they did and certainly no question of any perverse exercise of their discretion, or of its exercise on a wrong basis, arises. The mere fact that the two witnesses were in Germany is not a weighty point as merely one of distance. The written testimony which could not be cross-examined upon would obviously prejudice the prosecutor. The defendant had failed to take elementary steps to ensure that in that respect its application had any groundings for success.
19. The fifth question relates to the admissibility of the evidence of Mr Brennan, the man at BSI who actually carried out the tests on the ladders. The appellant contends, as he did below, that the evidence was inadmissible under section 9 of the Criminal Justice Act 1967. His statement was a short statement, which produced a fairly short report on the tests on the ladder carried out by him. This issue is brought before the court in a wholly unsatisfactory manner for the point which Mr Philpott actually wishes to raise. His essential contention is that the prosecutor had withdrawn the evidence of Mr Brennan when it decided to call Mr Wackett instead, another officer at BSI, and so the evidence of Mr Brennan had never been before the Magistrates in law, even though physically, as he knew, it was in their bundles, was referred to in the prosecutor's opening and remained before the Magistrates throughout the trial without any objection to that ever being explicitly raised.
20. An alternative way in which Mr Philpott put the point was that it was only ever agreed that Mr Brennan's evidence could be given in the form of a section 9 statement because Mr Wackett could also give, it was thought by the defence, direct evidence about the carrying out of the actual tests. When it was discovered in cross-examination of him on the second day of the trial that he could not do so because he had not actually been present during the tests, although he had countersigned the report, the section 9 statement of Mr Brennan, with its attached reports, became inadmissible hearsay. It was then for the prosecutor to make the appropriate application under the 2003 Act or to call Mr Brennan.
21. Mr Philpott raised the issue at the start of his closing submissions before the Magistrates, taking Mr Heller, for the prosecutor, by surprise. Mr Heller submitted to the Justices that it had been agreed that the section 9 statement and reports should be received in evidence and that, even if the statement was or had become hearsay, he should be allowed to reopen his case so as to call Mr Brennan. In the event, the Justices concluded that the defendant had agreed to the section 9 statement going in and so the question of calling Mr Brennan did not arise.
22. However, little of this appears in the case stated. There are no findings of fact about how the whole issue arose or about any of the factual differences between the parties about the rights, wrongs and expectations induced by the conduct of the other. The defendant has not asked for the case stated to be amended to include any such findings. What the Justices thought is to be found in the summary of the submissions on this point and in their opinion, which simply says:

"The evidence of Mr Brennan had been agreed by the Appellant and so was admissible. The evidence had been served in compliance with section 9 Criminal Justice Act 1967, and the appellant had not notified the Respondent that the attendance of Mr Brennan was required. Therefore the Appellant had, at the very least, implicitly agreed that Mr Brennan was not required for cross-examination, and the trial had proceeded on this basis. Moreover, the Respondent had had every opportunity to raise the issue from the first day of the trial on 5 March 2007. By waiting until the close of the evidence, the Appellant was attempting to benefit from an ambush defence. The Appellant's application was contrary to the objectives of the Criminal Procedure Rules 2005."

23. The question posed in the case stated in relation to that is this:

"Were we correct to hold that the evidence of Mr John Brennan contained in his witness statements and reports exhibited thereto was admissible under section 9 Criminal Justice Act 1967?"

On the basis of the finding or opinion, such as it is, only one answer is possible to that question and that is yes. Had the defendant wished to take issue with the facts, it was for the defendant to seek to have the facts found so that the evidential basis for the conclusion could be challenged. In appeals by case stated, the court is confined to the facts found in it. Even if the factual contentions which the defendant wished to raise had been supported by affidavit as opposed to the contention simply appearing as assertions in the grounds of appeal or in skeleton arguments, the court would still have been confined to the case stated. No application to send it back for further findings was made at any stage and for my part I would not have acceded to it now had such an application been made.

24. However, the court, in seeking to find if there was any common ground which could be agreed, heard from both counsel who had been at the trial. No objection was taken to the section 9 statement of Mr Brennan when it was served but it was clear from a pre-trial review that he would be called to give live evidence. The prosecutor thought, as a result of correspondence, that the real issue which the defendant wished to raise in Mr Brennan's evidence concerned the methodology of the tests and the extent to which what Mr Brennan said he did was appropriate for the tests in the standard. So it said that it would substitute Mr Wackett, who would be better able to deal with those points. But the prosecutor did not say that he could not answer questions about how the actual tests were carried out or recorded, although, of course, he would be familiar with how they ought to be carried out and with what BSI practice was. For its part, the defendant did not say that it wished to challenge whether Mr Brennan had done what he said he had done or had recorded accurately what he said he had recorded. So Mr Wackett was substituted.
25. The section 9 statement of Mr Brennan remained before the court as apparently a factually uncontentious description of the tests as the prosecutor thought or, as Mr Philpott said, potentially factually contentious but on the basis the questions about those factually contentious parts could be put to Mr Wackett. The suggestion that the section 9 was withdrawn and that Mr Brennan had ceased altogether to be a witness is ill-founded in the light of what the prosecutor's solicitor recorded being said at a PTR on 3rd November 2006, ie that the defendant agreed that the statement could be tendered, albeit that in doing so it may have laboured under a misapprehension as to the scope of Mr Wackett's knowledge.
26. When it was discovered in early cross-examination of Mr Wackett on day 2 that he could answer no direct question about what was actually done in the tests but could answer questions about practice and the general justification for the practice against the standard, no objection was raised by Mr Philpott to Mr Brennan's evidence remaining before the court and that remained the case throughout the rest of the trial. No point was taken that he wanted to ask questions of Mr Brennan after the conclusion of Mr Wackett's evidence or that he had been prejudiced or that the evidence was now inadmissible hearsay and that his consent had been given on a false understanding of the position. All that was made clear was that Mr Wackett had not been present at the test. I remain wholly unclear as to what point in reality Mr Philpott would have put to Mr Brennan which he could not put to Mr Wackett. He could only have suggested that Mr Brennan did not follow the method he described or take the measurement he found, both of which seem somewhat infertile grounds for the cross-examination of a BSI witness.
27. Even if, by the commencement of the cross-examination of Mr Wackett, the section 9 statement had been agreed only under a misapprehension and that meant there was no continuing agreement for the purposes of the proviso to section 9(2), its continued reception by the court, continued reliance on it by the prosecution, reference to the test by the defence witnesses and the absence of any objection to it or requirement for Mr Brennan to be called, showed that there was agreement in reality, an agreement reached after the cross-examination of Mr Wackett and made wholly clear by the conduct of the defendant in those circumstances.
28. In effect, this is the second basis for the Magistrates' finding and it is entirely right. There is no basis for saying that agreement cannot be inferred for the purposes of section 9(2) or indeed for the purposes of section 114 of the Criminal Justice Act 2003, from the clear overt acts and stance of the parties. It is wholly insufficient, in order to show that there is no agreement for those purposes, for objection to be left unvoiced until the very last.
29. I for my part reject the suggestion that it was clear that there was no consent or that the prosecution should have been clear that there was a problem or that there was no justification for the prosecutor to feel ambushed. The Magistrates on its findings was fully entitled to reach that latter conclusion. Indeed, as I have said, it is inevitable in those circumstances that, had the Magistrates rejected the implied conclusion of agreement, they would have permitted Mr Brennan to be called and it is difficult, as I say, to see what useful purpose in reality that would have served the defence case. I emphasise for my part that courts must not tolerate ambush defences, as I regard what happened as properly being stigmatised; see for example the strictures in Malcolm v DPP [2007] EWHC 363 Admin; [2007] 3 All ER 578.
30. Finally, costs. The defendant accepted that the costs claimed by the prosecutor were in fact incurred, and were reasonably incurred, in the advancement of the prosecutor's case and that could scarcely be otherwise in view of their own much larger costs. The defendant did not deny that it had the means to pay such costs, nor did it contend that it was being punished for defending itself or being punished further because the maximum fine of £5,000 was an inadequate penalty. Mr Philpott's suggestions that the prosecution was unnecessary or that a caution should have been offered is wholly without foundation, particularly in the light of the extent to which the case was contested. Mr Philpott's case relies simply on what is termed gross disproportion between the fine and the costs, the latter being some ten times greater than the former. Mr Philpott relies upon the principles in R v Northallerton Magistrates' Court ex parte Dove [1999] Crim LR 760, 25th August 1999, of which we were helpfully provided the transcript. Lord Bingham CJ set out the principles. It is the fourth which is relevant:

"While there is no requirement that any sum ordered by justices to be paid to a prosecutor by way of costs should stand in any arithmetical relationship to any fine imposed, the costs ordered to be paid should not in the ordinary way be grossly disproportionate to the fine."

Nothing else in the elaboration of that principle is of assistance here.

31. Given that no arithmetical relationship determines the existence of gross disproportion, it is impossible to say that the mere fact that the fine is one tenth of the costs shows gross disproportion. However, given the satisfaction of the other requirements and the other principles laid down by Lord Bingham which I have already referred to, it is likely to require something which makes the costs obviously unfair in order for them to be grossly disproportionate under this head alone. In this case the fine was very close to the available statutory maximum: £5,000. It cannot be that that maximum sets the limit on the costs which can be properly incurred or recovered for what, as here, can be a very time consuming and expensive set of proceedings, hotly contested with much expert evidence. Were that otherwise, there would be a real deterrent to local authority prosecuting departments taking action justified in the public interest in consumer protection. In judging gross disproportion, the amount of the fine in relation to the maximum is important. It would be undesirable if prosecuting authorities felt they had to bring a sequence of prosecutions or a group of prosecutions, one per ladder for example, in order to increase the maximum fine available, a route which would be unlikely to achieve much joy in view of the totality principle anyway. Secondly, this case was hard fought over pre-trial reviews, correspondence, five days in court, with two experts on each side; necessarily such proceedings would cause significant costs to be incurred. The level of a fine cannot easily act as a break on significant costs as disproportionate unless the amount indicates that the work done and time spent were disproportionate to the case being pursued. Yet that was clearly not so here. It was important to both parties and mattered as well in the public interest in proper consumer protection. Accordingly, I would reject that ground of appeal as well.
32. The questions for the opinion of the High Court were:

"(1) Were we correct to hold that the evidence of Mr John Brennan contained in his witness statements and reports exhibited thereto was admissible under section 9 Criminal Justice Act 1967.

Yes:

"(2) i) Were we correct to refuse the Appellant leave to apply out of time to adduce the evidence of Herr Uwe Holicka?

ii) Were we correct to refuse to admit the evidence of Herr Heribert Mertmann under section 116 Criminal Justice Act 2003?"

Yes:

"(3) Were we correct in our interpretation of Clause 3.9 of BS EN 131 as regards the wording 'if the ladder is wrongly put up as a standing ladder?'"

Yes:

"(4) Were we correct in reaching the conclusion that the ladder did not comply with Clause 4.2 of BS EN 131 having regard to:

i) The distinction between the one minute tests and the expression 'permanent deformation'?

ii) The Appellant's expert evidence that a ladder of an identical type had passed the test?"

Yes:

"(5) Were we correct in refusing to stay the case as an abuse of process?"

Yes:

"Were we correct in awarding the Respondent their costs in the full sum claimed?"

Yes.

33. Accordingly, having answered each of the questions in the case stated "yes", I, for my part, would dismiss the appeal.
34. MR JUSTICE UNDERHILL: I agree.
35. MR PHILPOTT: My learned friend kindly provided a costs schedule and told me that he was going to ask for summary assessment. The total of the prosecution costs for this appeal was £6,003.60 and I take no objection to a summary assessment in that amount.
36. MR JUSTICE OUSELEY: That is very helpful, Mr Philpott. I am grateful. There will be an order for costs to be paid by the appellant to the respondent summarily assessed in the sum of £6,003.60.
37. MR PHILPOTT: I am obliged, my Lord. As far as I am concerned I would ask for a certificate. I appreciate your Lordships will refuse leave to appeal, although I formally ask for it, in respect of your Lordship's decision on section 30. The question I have written out is "does the test of reasonable practicability under section 30 of the Trade Descriptions Act 1968 include that which is done by or on behalf of the prosecutor before the institution of proceedings". I would ask your Lordships to certify that and, of course, decline leave to appeal.
38. MR JUSTICE OUSELEY: Thank you. (Pause) We are not going to certify that question, Mr Philpott. It seems to us a plain misconstruction.
39. MR PHILPOTT: I am grateful, my Lords.
40. MR JUSTICE OUSELEY: I should add, in view of the fact that Mr Heller is not here, notwithstanding that we are delivering judgment this morning for his benefit, that the London Borough of Hillingdon have liberty to apply on notice in relation to any matter that arises, but at present I do not see what that could be.
41. MR PHILPOTT: I am obliged, my Lords.
42. MR JUSTICE OUSELEY: Thank you.
43. MR TALBOT: My Lord, I apologise for coming late this morning. I was in fact sent here at very short notice. I understand there was a problem with the listing. I have taken a note of the judgment.
44. MR JUSTICE OUSELEY: Well, there was a problem with the listing, that is undoubtedly correct, Mr...?
45. MR TALBOT: Talbot.
46. MR JUSTICE OUSELEY: That is undoubtedly correct, but I think, as we had agreed to sit unless otherwise notified, I would have expected Mr Heller, for whose convenience we were siting, to have made just further efforts to make sure it was a genuine decision on our part that we could deliver judgment today as opposed to, as is sadly not unknown, a bit of a cock up.
47. MR TALBOT: Yes.
48. MR JUSTICE OUSELEY: Thank you.