England and Wales High Court (Administrative Court) Decisions

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

		Royal Courts of Justice Strand, London, WC2A 2LL
		14/12/2010

MR JUSTICE RODERICK EVANS :

1. This is an appeal by way of case stated against a decision of Her Honour Judge Cameron and Justices sitting at the Crown Court at Croydon on 23 February 2010 allowing an appeal against conviction by Pinch a Pound (UK) Ltd, to whom I shall refer as "the Defendant".
2. I shall briefly set out the underlying facts of the case, as found by the Court, which I take from the case stated.
3. On Saturday 8 November 2008, Trading Standards Officers, employed by the London Borough of Croydon, to whom I shall refer as "the Prosecution", were conducting a series of test purchases in shops within the borough of Croydon which were known to sell knives and other bladed articles. The sale of such articles is restricted as a result of s141A of the Criminal Justice Act 1988, as amended, which provides:

"(1) …..any person who sells to a person under the age of 18 years an article to which this section applies shall be guilty of an offence …

(2) … this section applies to

(a) any knife, knife blade or razor blade …"

4. The Officers were being assisted by two 15-year old youths, who acted as test purchasers. The purpose of the exercise was to ascertain whether stores in the borough were correctly refusing to sell restricted products to persons under the age of 18.
5. The Defendant runs a long-established corner shop on the High Street in Croydon. The shop sells a wide variety of goods and has an unblemished record after trading for about 35 years. Shortly after 1.20pm on 8 November, a Trading Standards Officer, Lisa Ewen, entered the shop closely followed by the two test purchasers. The two young boys went to a display of tools and selected a Rolson utility knife (an item with a retractable blade similar to a Stanley knife) from an open display. They made their way to the till, which was operated by an employee of the Defendant, named Lisa Grover. The test purchase, which was observed by Lisa Ewen, was completed without challenge by Lisa Grover.
6. Following the purchase, Lisa Ewen spoke to Peter Dunning, the manager of the shop and Lisa Grover. Peter Dunning's brother, Roger Dunning, the Director of the Defendant Company, was not present at the shop. When what had happened was pointed out by Lisa Ewen, Miss Grover said "Sorry Pete", and Mr Peter Dunning explained that knives were kept behind the counter of the shop. Notices were left with Mr Dunning and Miss Grover which outlined the nature of the offence which the Prosecution alleged had been committed, and they were asked to contact the Prosecution within 5 days to arrange an interview under caution. No one on the Defendant's behalf attended an interview under caution, but in correspondence solicitors acting for the Defendant took issue with whether Lisa Grover was the person who had dealt with the transaction on behalf of the Defendant.
7. In due course, a summons was issued against the Defendant, alleging breach of s141A and the trial in the Magistrates' Court took place on 14 and 21 August 2009. At that hearing, the Defendant was convicted and fined. The Defendant appealed to the Crown Court against that conviction, and the appeal was heard on 22 and 23 February 2010. The appeal was allowed, and it is against that decision that the Prosecution appeals.
8. The issue before the Magistrates, and on appeal, was whether the Defendant could avail itself of the statutory defence provided by s141A(4), which states:

"It shall be a defence for a person charged with an offence under subsection (1) above to prove that he took all reasonable precautions and exercised all due diligence to avoid the commission of the offence."

9. The burden of proving the statutory defence, on the balance of probabilities, falls upon the defendant, and the hearing on appeal, as did the trial in the magistrates' Court, focussed on evidence relating to signs displayed in the shop, the training of staff and a "Refusals Book" in which sales of restricted items which had been refused by the Defendant's staff were to be recorded. I shall return to look at the evidence on these matters later in this judgment, but the Crown Court, having considered the evidence, concluded (paragraph 91 of the Case Stated) as follows:

"We were of opinion that the [defendant] had just persuaded us that it had exercised all due diligence and taken all reasonable precautions and accordingly we acquitted them and allowed the appeal."

10. The parties are agreed that, of the three questions contained in the Case Stated for the opinion of the High Court, the third question adds nothing to the first two. I agree that that is the case. The remaining questions are as follows:

"1. Were we entitled to find on the evidence that the [Defendant] had exercised all due diligence and undertaken all reasonable precautions to prevent the commission of the offence?

2. Were we entitled to rule that the essential question [we] needed to answer was whether the [Defendant] company had been negligent and their state of mind reprehensible?"

11. I intend to address the questions in reverse order to consider first whether the Crown Court applied the correct test and, secondly, to consider whether the evidence the Crown Court heard justified the conclusion it reached.

The Test

12. Nowhere in the Case Stated is there clearly set out the test which the Crown Court applied to the evidence in this case. Although the wording of the question suggests that the test applied was to ask whether the defendant had been negligent and whether its state of mind was reprehensible the Case Stated contains no express statement to that effect. However, both parties ask this court to assume that the test which the court below applied is that referred to in the question and I proceed on that basis.
13. The wording of the question derives from the speech of Lord Diplock in Tesco Ltd v Nattrass [1972] AC 153. That case involved a prosecution for offences created by the Trades Description Act 1968, s24(1)(b) of which provides a "due diligence" defence in precisely the same terms as s141A Criminal Justice Act 1988, as amended. Lord Diplock considered in some detail the position of an employer in the course of whose business an offence contrary to consumer protection legislation or health and safety legislation is committed due to the acts or omissions of an employee and what an employer has to prove to avail himself of the statutory "due diligence" defence.
14. Having set out the justification for creating offences of strict liability which make an employer criminally liable as a result of offences committed in the course of his business by an employee Lord Diplock said at page 194E-G:

"But this rational and moral justification does not extend to penalising an employer or principal who has done everything that he can reasonably be expected to do by supervision or inspection, by improvement of his business methods or by exhorting those whom he may be expected to control or influence to prevent the commission of the offence…….What the employer or principal can reasonably be expected to do to prevent the commission of an offence will depend upon the gravity of the injury which it is sought to prevent and the nature of the business in the course of which such offences are committed"

At page 196A he continued:

"…..the person charged must….prove under paragraph (b) that he did all that could reasonably be expected of him to prevent offences of that kind being committed by himself or by any person under his control….."

15. At page 197F, again speaking of the position of an employer he said:

"There is no injustice in requiring him to lay down a reasonably effective system and in treating any failure to do so as a criminal offence. If … the principle is able to identify a person to whose act or default the offence was actually due, he still has to show that he himself exercised due diligence to devise an effective system to avoid such acts or defaults on the part of his servants and to satisfy himself that such system was being observed.

What amounts to the taking of all reasonable precautions and the exercise of all due diligence by a principal in order to satisfy the requirements of paragraph (b) of section 24(1) of the Act depends upon all the circumstances of the business carried on by the principal. It is a question of fact for the magistrates in summary proceedings or for the jury in proceedings on indictment."

16. At page 199C-E, in the context of Lord Diplock's looking at the words "due diligence", the passage upon which the test applied by the Crown Court appears:

"To constitute a criminal offence, a physical act done by any person must generally be done by him in some reprehensible state of mind. Save in cases of strict liability where a criminal statute, exceptionally, makes the doing of an act a crime irrespective of the state of mind in which it is done, criminal law regards a person as responsible for his own crimes only. It does not recognise the liability of a principal for the criminal acts of his agent because it does not ascribe to him his agent's state of mind. ………

Due diligence is in law the converse of negligence, and negligence connotes a reprehensible state of mind – a lack of care for the consequences of his physical acts on the part of the person doing them. To establish a defence under s24(1)(b) of the Act, a principle need only show that he personally acted without negligence."

17. Later at page 203C-Defendant Lord Diplock said:

"Where Parliament in creating an offence of "strict liability" has also provided that it shall be a defence if the person upon whom the duty is imposed proves that he exercised all due diligence to avoid a breach of the duty, the clear intention of Parliament is to mitigate the injustice, which may be involved in an offence of strict liability, of subjecting to punishment a careful and conscientious person who is in no way morally to blame. To exercise due diligence to prevent something being done is to take all reasonable steps to prevent it."

18. Lord Morris of Borth-y-Gest explained the test as follows at page 180F:

"The company had its responsibilities in regard to taking all reasonable precautions and exercising all due diligence. The careful and effective discharge of those responsibilities required the directing will and mind of the company. A system had to be created which could rationally be said to be so designed that the commission of the offences would be avoided."

19. The statutory defence requires proof of two elements: the taking of all reasonable precautions and the exercise of all due diligence. These are cumulative requirements although circumstances no doubt arise where they overlap. For example, all due diligence must be exercised in instituting a preventative regime whereby an employer takes all reasonable precautions to avoid the commission of the offence created by the act by his employees. However, the employer must go further and exercise all due diligence to ensure that the measures he put in place are maintained, adhered to by his employees and continue to be adequate in the context of the risk at which the statute is directed and of the nature of his own business. Helpful though Lord Diplock's explanation of the rational underlying offences of strict liability in this area of the criminal law and his interpretation of the statutory defence are, concentrating on due diligence, which is only one aspect of the defence, creates a danger of failing to have adequate regard to the other elements of the defence.
20. Furthermore, deciding whether a defendant has discharged the burden of proving the statutory defence by applying a test based on a need to prove both negligence and a reprehensible state of mind before a finding of guilt can be made runs the risk of importing into this area of the criminal law a mental element which is inappropriate.
21. The defence made available by the act is couched in ordinary language; the words used are readily understood. For my part, I consider that it will only rarely be necessary for a court to formulate the test in anything other than the language used in the statute.
22. Acknowledging, as I do, that the question posed refers to the "essential" question which the Court has to answer, I am not satisfied that the test we are asked to assume the court applied is the correct test; it does not fully reflect the requirements of s141A (4). My concern in this regard is heightened by the total absence from the Case Stated of any exposition of the reasoning the court adopted in applying the test or in reaching its conclusion that the statutory defence was proved. Accordingly I would answer the question in the negative.

The Evidence

Signage

23. Neither Lisa Ewen nor either of the young test purchasers saw any sign within the shop giving advice on restricted sales, and there was no such sign on the display that held the Rolson utility knives. However, the Defendant's solicitor attended the premises on 6 August 2009, some 9 months after the alleged offence, and took photographs of signs which he found within the store. The signs were handwritten and on pieces of paper taped to the counter; one, taped to the flat surface of the counter, faced the customers and two faced the staff behind the counter. The sign facing the customer read:
"Under 18 Sales We do not sell any items considered offensive to any person under 18. Please do not feel offended if asked for ID."
24. The signs facing the staff, and not visible to customers, read as follows:
"Ask for ID Please look closely at all under 18s + 16 yrs old Sales. Nothing at all offensive must be sold, if you have the slightest doubt ask for ID."

And:

"Ask for ID Please look closely at all under 18 Sales Nothing at all offensive must be sold, if you have slightest doubt don't sell."
25. Further signs written on star-shaped cardboard, either attached to, or near a Sugarman utility knife (not dissimilar to a Rolston knife), which was behind the till, read: "Not to be sold to anyone under 18" and "ID needed for purchase".
26. There was a further handwritten sign in the staffroom, not visible to customers, which read:
"Staff Notice Nothing remotely offensive can be sold to under 18s you know all the items, look at anything being sold to anybody remotely looking 18, Ask for ID If your [sic] not sure, don't sell it call for assistance."
27. Ashleigh Quintyne, a part-time shop assistant employed by the Defendant who worked only on Saturdays, gave evidence that Peter Dunning had added the words "+ 16 years" to the sign behind the counter.
28. The Crown Court acknowledged that, on the balance of probabilities, signs were in place at the time of the test purchase, but found that the "signs were homemade, colloquial, with no great base in law and needed to be updated in content and position. The signs needed to be fixed on the till and laminated to make them effective."

Staff Training

29. Ashleigh Quintyne, Lisa Grover and a further shop assistance Sharon Whitfield, all gave evidence that they had been trained in relation to sales of restricted products by Peter Dunning or Roger Dunning. At the time of the test purchase, Peter Dunning would be at the shop three or four days a week, and Roger Dunning perhaps twice a week. Peter Dunning had given evidence before the Magistrates and Roger Dunning had not. Before the Crown Court Peter Dunning was said to be unwell and, therefore, did not give evidence. However Roger Dunning did. He said that he and his brother Peter were responsible for training staff. Members of staff were trained separately and they were relied upon to use their common sense. No training was given in written form and no record of training was kept. He had trained his staff on the nature of identification that was acceptable, and he would speak to his staff on many occasions about restricted sales and ask them questions such as what they thought was an "offensive" item, and to pick items out of a display in the shop which they thought were harmful.
30. He and his brother Peter had discussed placing the display of knives for sale behind the counter to prevent theft, but they were concerned that such a move would reduce sales. However, they had decided to move knives and corkscrews to behind the counter, as they considered them to be dangerous. Any item considered "offensive" was placed behind the counter. As far as utility knives were concerned, they had retractable blades and were, therefore, classified by Mr Dunning as tools rather than as knives. Mr Dunning stated that he obtained his knowledge on what were or were not restricted items from what he had read in newspapers or seen in other shops. He did not know that Trading Standards had a website to assist shopkeepers, and he had never called the Local Authority to seek guidance in relation to restricted sales, as he did not think they would answer the telephone; it was not, in his view, a practical course to adopt. He acknowledged the obvious point that he could not train staff on matters of which he had no knowledge himself.
31. Miss Grover did not know the relevance of "+16 years" on the sign, as she had been told that restrictions applied to customers under 18 years. Miss Quintyne, however, said in evidence that restriction on sale of lighter gas applied to those under 16, whereas in fact it applies to those under 18. Miss Quintyne said that her understanding arose from what she had been told by Peter Dunning. She, too, thought that a Rolson utility knife was a tool not a knife.
32. Miss Quintyne said that she had no recollection of the test purchase; the shop had been busy and she described the day as "chaotic". Miss Grover, however, said that she and Miss Quintyne had been working at the till, and "we knew the boys were under age, but did not ask them for identification". She assumed that the boys were with an adult.
33. The finding of the Crown Court was that "some training had taken place, but the [Defendant] needed to recognise that managers had to be confident about legislation and to pass this down effectively to staff members, including those who work on Saturdays. Implementation had to be updated regularly so there could be no recurrence." As to the display of restricted items, some of which were kept behind the counter and some on general display, the Crown Court concluded that "all restricted items … needed to be kept behind the counter rather than displayed in a piecemeal, confused and cavalier way, which had led to confusion in the minds of staff members."

The Refusals Book

34. A Refusals Book had been kept for about 18 months prior to the test purchase, following a suggestion from Peter Dunning. Peter Dunning's partner ran a newsagent's shop, and she kept a refusals book, so Peter Dunning thought it would be a good idea to keep one. The purpose of the book was to record details of sales of restricted items which the shop had refused and the details to be entered included the date of the rejected sale, the nature of the restricted item, and a description of the potential purchaser. Estimates of the frequency of rejected purchasers varied. Miss Quintyne stated that, on average, she would refuse a sale once a day. However, the book contained only one entry made by Miss Quintyne and, therefore, if her estimate of the frequency of rejected sales was correct, she had failed to enter details of approximately 20 sales since she had started working at the shop. She said she would forget to make an entry if Peter Dunning asked her to do something else, and she stated that Peter Dunning did not check whether the Refusals Book had been completed appropriately. Miss Grover identified the relevance of the Refusals Book as making sure that staff did not sell restricted items to underage customers. She thought a description of the customer was required to remind staff of the customers if they came back, but she acknowledged that there were no descriptions of the customers in the Refusals Book. Sharon Whitfield said that it was rare to refuse a sale: it would occur roughly once a month, and she identified entries in the Refusals Book which she had made. Entries she made were in terms such as "young girl lighter" and "screwdriver set" and, although there were no descriptions of the potential customers in the Refusals Book, she stated that the purpose of the book was to ensure that staff would remember if the same customer kept coming back.
35. Roger Dunning said that refused sales were few and far between, but he would look at the Refusals Book at about 5.30pm each evening. He had noted that the Refusals Book had been incorrectly completed on a number of occasions and he had asked staff to write down a description of the potential customer. Again he said he relied on the common sense of staff members.
36. Although there is no legal requirement to maintain a record of refused sales, the Crown Court concluded that "the refusals register was adhered to in a less than effective way and not implemented fully. The system needed to be considerably strengthened to be a source of assistance to management and staff."
37. Both parties agree that the Crown Court was entitled, on the evidence it had heard, to make the findings it did on those three aspects of the evidence. It is notable, however, as I have already mentioned, that there is no explanation in the case stated of how the Court, having made those findings, each of which is critical of the precautions taken and/or the way they were implemented, reached its final conclusion that it was "just persuaded" that the Defendant came within the statutory defence.
38. The fact that a restricted item has been sold to an underage customer is not, of itself, a bar to the Defendant's relying on the statutory defence. Neither is a defendant prevented from coming within the terms of the defence by reason only of the fact that a precaution not in place at the time of the prescribed sale was implemented after the sale had taken place. In this case, for example, it does not appear that there was in place in this shop a "Think 21" policy (which requires proof of age from any customer who looks under 21 years of age) was in place in November 2008; such a policy was introduced after Trading Standards distributed leaflets about such a policy in December 2009. Such a post-sale additional precaution does not, of itself, disentitle the Defendant from relying on the defence. Similarly, not every possible precaution has to be taken, only all reasonable precautions, and once the Crown Court found that some precautions had been taken, it was for that Court to decide whether that amounts to all reasonable precautions and whether all due diligence had been exercised, bearing in mind, in this case, public concern at the currency of knives in society and the incidence of knife-related offending on the one hand, and the nature and size of the Defendant's business on the other.
39. The test in this Court is not whether I, having heard the evidence which the Crown Court heard, would have reached the same or a different conclusion. Rather, the test is one of perversity: that is, whether a reasonable Bench in the Crown Court, applying the correct test to the evidence before it, could have reached the conclusion that it did and acquit the Defendant. The Crown Court identified serious shortcomings in the precautions taken in this case and in the way they were implemented. On a correct application of the test under s141A(4), the findings of the Crown Court are, in my view, inconsistent with the acquittal of the Defendant on the basis that the statutory defence had been proved.
40. Accordingly, I would allow the appeal, and send this case back to the Crown Court with a direction to convict the Defendant and to proceed to sentence.

LORD JUSTICE PILL :

41. I agree that the issues are as stated by Roderick Evans J at paragraph 11 of his judgment and also that it is appropriate to deal with them in reverse order.
42. For the respondent, Miss Cutts QC relied on the passage in Lord Diplock's speech in Tesco Ltd v Nattrass [1972] AC 153 at page 199D, cited by Roderick Evans J at paragraph 16:

"Due diligence is in law the converse of negligence, and negligence connotes a reprehensible state of mind – a lack of care for the consequences of his physical acts on the part of the person doing them."

Miss Cutts's submission to the Justices, and to this court, relied on the expression "reprehensible state of mind". Miss Cutts submitted that mens rea was required.

43. Roderick Evans J has cited other relevant passages from the speech of Lord Diplock in Nattrass and the speech of Lord Morris of Borth-y-Gest. The Justices also appropriately cited Lord Dilhorne's speech at page 186G. What the statute requires is due diligence. The citations illustrate the point. It is not appropriate to put a gloss on that expression. The Justices have not supplied reasoning to assist the court but it is likely that they required the prosecution to establish a positive fault on the part of the respondents if there was to be a conviction, rather than simply an absence of due diligence.
44. When Lord Diplock used the expression "reprehensible state of mind", he was in my judgment equating that, as his following words demonstrate, with a "lack of care" which, in the context of the statute, is the same as a failure to show due diligence. In this statutory context, it is reprehensible to fail to take all reasonable precautions and to exercise all due diligence.
45. In reading more into it than that, it is likely that the Justices approached the evidence on the basis that, in the absence of positive fault, the respondents had made out their defence. That view is supported by the conclusion they reached upon their findings of fact, to which I will turn. In the absence of reasoning, one cannot be sure, but it is, in my judgment, likely that the wrong test was applied.
46. On issue 1, Roderick Evans J has set out fully the evidence relied on by the Justices, reflecting the care with which they considered it. I refer to the Justices' findings of fact.

"7. The Respondent's show was a long established emporium of a corner shop, serving the community with a blemish free record.

8. The refusals register was adhered to in a less than effective way and not implemented fully. The system needed to be considerably strengthened to be a source of assistance to management and staff.

9. Signs were homemade, colloquial, with no great base in law and needed to be updated in content and position. The signs needed to be fixed on the till and laminated to make them effective. All restricted items in law needed to be kept behind the counter rather than displayed in a piecemeal, confused and cavalier way, which had led to confusion in the minds of staff members.

10. Some training had taken place, but the Respondent needed to recognise that managers had to be confident about legislation and to pass this down effectively to staff members, including those who work on Saturdays. Implementation had to be updated regularly so there could be no recurrence."

47. At paragraph 30, the Justices summarised evidence of Mr Roger Dunning, who played a major part in running the defendant company:

"In November 2008 the store sold almost everything except food, although they did sell sweets. The age restricted goods sold included knives, lighters, butane gas (although not in November 2008), pen knives, axes, Stanley knives and cutting knives. He stated that four years ago he had received a telephone call from his brother Peter as he was concerned that a steak knife had been stolen. They discussed placing the knives behind the counter to prevent theft but were concerned it would reduce sales down to a trickle. However they decided to move the knives and corkscrews behind the counter as they considered them to be dangerous. Any item considered offensive was placed behind the counter. The utility knives had retractable blades and were tools, used by lots of builders. Mr Dunning classified this as a tool, not a knife."

I need to comment that it is the statutory view of the classification and not that of Mr Roger Dunning which is relevant.

48. It is agreed that, on the evidence, the Justices were entitled to make the findings of fact they did. They concluded:

"The Respondent [Defendant] had been the author of its own misfortune and could have handled the matter in another way to avoid costs and delay, but the Court was just persuaded to allow this appeal. We disallowed the Respondent's application for costs."

49. In relation to the refusal register, the Justices found that it was adhered to in a "less than effective way and not implemented fully". "The system needed to be considerably strengthened". As to signs, they found that they were displayed in a "piecemeal, confused and cavalier way, which had led to confusion in the minds of staff members". As to training about legislation, they found that the respondents "needed to recognise" aspects of the matter, indicating that they had not already recognised them. These are serious shortcomings, as Roderick Evans J has found.
50. As stated in the Justices' question 1, the test is whether, on the evidence, they were entitled to find that the defendant had exercised all due diligence and undertaken all reasonable precautions within the meaning of section 141A(4). In my judgment, their conclusion is inconsistent with their findings of fact. On those findings, they could not properly make a finding that the defendant had proved that all reasonable precautions were taken and all due diligence exercised, and so avoid conviction of the offence.
51. I agree with the conclusion of Roderick Evans J and agree with the order he proposes.