Supreme Court of Ireland Decisions

 


THE SUPREME COURT

NO. 18/2004

Denham J.

McGuinness J.

Hardiman J.

IN THE MATTER OF THE EXTRADITION ACTS, 1965 TO 2001

BETWEEN/

THE ATTORNEY GENERAL

APPLICANT/RESPONDENT

AND

ANTHONY KARL FRANK BAIRD HILTON

RESPONDENT/APPELLANT

Judgment delivered on 30^th day of July, 2004 by Denham J. [Nem Diss]

1. This is an appeal by Anthony Karl Frank Baird Hilton, the respondent/appellant, hereinafter referred to as the appellant, from the judgment and order of the High Court (Peart J.) delivered on 13^th January, 2004 granting an order for the rendition of the appellant to England.

2. Essentially, two issues arose on this appeal. First, it was submitted that there was an absence of correspondence, that there is no corresponding offence in Ireland of cheating the public revenue. Secondly, it was submitted that, in any event, the revenue offence exception was not repealed, although it has since been repealed by the European Arrest Warrant Act, 2003.

3. The warrant from the jurisdiction of England and Wales, which is before the court, states:

"WHEREAS ANTHONY KARL FRANK BAIRD HILTON formerly of Glasnacardoch Hotel, Glasnacardoch, Mallaig, Invernesshire, Scotland stands indicted in the Crown Court at Southampton charged with the following offence (at Southampton Hampshire, England), namely;

That he on divers days between the 1^st day of January 1991 and the 1^st day of June 2001, in his capacity as director of Hilton Transport Services Limited, Tony Hilton Plant Hire Limited, Southampton Bulk Terminal Limited, Southampton Bulk Transport Limited, Tarhaven Limited, Marchwood Wharfage Limited and Coastal Aggregates Limited and also in his capacity as sole proprietor of Tony Hilton Marine Contracting, having knowledge of his obligation to pay Crown debts and with intent to defraud and to the prejudice of Her Majesty the Queen and the Commissioners of Customs and Excise and the Commissioners of Inland Revenue, failed to pay sums of Value Added Tax, Pay As You Earn Contributions and National Insurance Contributions by;

(i) deliberately allowing companies under his control and management to continue trading whilst unable to pay debts as they fell due at the expense of the Crown knowing he had no right to do so;

(ii) deliberately setting-up new companies with the objective of defrauding the Crown of monies to which it was entitled;

(iii) deliberately delaying the submission of end of year Pay As You Earn returns in order to hide the magnitude of the debts to the Inland Revenue in the knowledge that the debts could not be paid;

(iv) deliberately manipulating the Value Added Tax system by claiming inputs of input Value Added Tax on one registration under his control, whilst delaying the submission of the corresponding Value Added Tax returns declaring the corresponding output tax for the associated company also under his control, in the full knowledge that this Value Added Tax would never be paid;

(v) deliberately failing to pay Crown debts even when he had the money available to do so;

(vi) personally benefiting from company monies and assets to the detriment of the Crown;

and thus cheated the public revenue.

Contrary to Common Law.

AND WHEREAS the said Anthony Karl Frank Baird Hilton, having been released on bail subject to a duty to surrender to the custody of the Crown Court at Southampton on the 19^th day of April 2002 at 10.30 am, has failed to surrender as required.

ALL CONSTABLES in England and Wales are ordered to arrest the said Anthony Karl Frank Baird Hilton and bring him forthwith before the Crown Court or a Magistrates Court in England or Wales to appear at the Crown Court at Southampton there to surrender himself into custody."

4. On the issue of the corresponding offence, the High Court held the Irish corresponding offence to be the common law offence of cheating the public revenue. Peart J. stated:

"The Criminal Justice (Theft and Fraud Offences) Act has specifically excluded the offence of cheating the public revenue from the abolition of the offence of cheating. This court must therefore conclude that the legislature did so for a particular purpose, and that purpose must include the possibility that a person can still be charged with such an offence."

5. Thus the Irish offence for consideration is cheating the public revenue. It is, apparently, a common law offence in England. The question is whether it is a corresponding offence in Ireland.

6. The fact that it was a common law offence in Ireland prior to 1922 does not necessarily mean that it is a common law offence today. I am satisfied that there was an offence at common law of cheating, recognised in Ireland before 1922. Mr. E. Comyn S.C., counsel for the respondent, furnished to the court a copy of The Justice of the Peace for Ireland by Henry Humphreys, 8^th Ed., 1890, which, at p. 474, contained a reference to an indictable offence of cheating. It provided:

"Cheating – at play or by any other deceitful and illegal practice which may affect the public."

It is referred to as a common law offence, punishable by fine and imprisonment. However, it is notable that there is no reference to it as an offence of cheating the public revenue.

Counsel informed the court that there is no record of any person having been prosecuted in Ireland in the last 100 years for cheating the public revenue. However, the mere fact that there was not a prosecution does not necessarily mean that the offence does not exist, although it must be a weighty factor. It is indicative and a factor relevant to an analysis of the situation.

Counsel informed the court that the leading texts on the topic of the law of taxation in Ireland neither refer to, nor analyse, a common law offence of cheating the public revenue. (See Judge Irish Income Tax 1999-2000 by J. Ward, and K. Corrigan, Revenue Law).

On the other hand, Charlton, McDermott and Bolger, Criminal Law, 1^st Ed., (Dublin, 1999), at paragraph 10.22 states:

"At common law it is an offence for the accused to defraud or to endeavour to defraud another out of what is rightfully his. It appears that the cheat must be public in nature. In modern times the most common form of the offence is cheating the public Revenue. Typically, the accused falsely states the profits of his business to the Revenue or files a deliberately deceptive VAT return. The offence is committed where there is deliberate conduct by the accused to prejudice, or take the risk of prejudicing, the Revenue's right to the tax in question, knowing that he has no right to do so."

However, it appears that there has been no prosecution of this offence in the last century and no common law extant in this State.

At paragraph 10.23 of Charlton, McDermott and Bolger, it states:

"Tax cheating is a statutory offence. A large number of offences are set out in the Taxes Consolidation Act 1997. Typically, the accused files a false tax return or makes a pretence in a return that an allowance was payable for an expenditure, when in fact the expenditure was non-allowable."

It would appear that this is the framework in which Irish courts have heard cases of tax cheating in modern times.

In Quinn, Criminal Law in Ireland, 3^rd Ed., (Dublin, 1998), at p. 182 it is stated:

"Cheating is a misdemeanour at common law for which the penalty is imprisonment, it has been defined as '…deceitful practices, in defrauding or endeavouring to defraud another of his own right by means of some artful device, contrary to the plain rules of common honesty.'"

This offence had its roots in common law, probably the same roots as grounded the offence in England. In England it has been developed by case law in the last 100 years. However, even there, "the precise parameters of the offence are not entirely clear." In Blackstones Criminal Practice 2004, at B16.2, it is stated:

"The common-law offence of cheating the public revenue is triable only on indictment and punishable by a fine and/or imprisonment at large. It is a Group A offence for jurisdiction purposes under the CJA 1993, part I (see A8.4).

The precise parameters of the offence are not entirely clear, but it may be committed by dishonestly making false statements with intent to deceive or prejudice the Inland Revenue, HM Customs and Excise, or the Department of Social Security (Hudson [1956] 2 QB 252). Dishonest failure to declare a tax or national insurance liability may also suffice. In Mauji (1987) 84 Cr App R 34, Michael Davies J said (at p. 37): 'This appellant … had a statutory duty to make VAT returns and pay over to the Crown the VAT due. He dishonestly failed to do either. Accordingly, he was guilty of cheating … the public revenue. No further act or omission is required.' See also Redford (1988) 89 Cr App R 1 and Allen (No. 2) [2001] 4 All ER 768."

(The emphasis is added).

There appears to be a question about the necessity of an "artful device", which historically appears to have been a part of the offence in Ireland.

The modern common law in England is set out in Archbold 2004 at paragraph 25-385a:

"Common law

To make a false statement (whether written or not) relating to income tax with intent to defraud the Revenue, or to deliver or cause to be delivered a false document relating to income tax with similar intent, amounts to a common law offence and is indictable as such: R v. Hudson [1956[ 2 Q.B. 252. Hudson was applied in R. v. Mauji, 84 Cr. App. R. 34, in which the Court of Appeal held that a deception is not a necessary ingredient of the offence of cheating the public revenue. Cheating could include any form of fraudulent conduct which resulted in diverting money from the Revenue and depriving the Revenue of money to which it was entitled. In Mauji, the appellant had had a statutory duty to make VAT returns and to pay over to the Crown the VAT due: he had done neither. Accordingly, he was guilty of cheating the Crown and the public revenue. No further act or omission was required to be alleged or proved. The court said that notwithstanding the existence of a statutory offence of fraudulently evading the payment of VAT (Value Added Tax Act 1994, s.72(1), post, §25-510), the common law offence may properly be charged for serious and unusual offences rather than conventional cases of value added tax fraud. In such cases, punishment remains at large and the court will not be inhibited by the statutory maximum from upholding what would otherwise be a proper sentence.

Mauji was applied in R. v. Redford, 89 Cr. App. R. 1. The Court of Appeal held that the common law offence of cheating the public revenue was still indictable, even though statutory offences might have been available on the facts: see the Theft Act 1968, s. 32(1), ante, § 21-337. The offence was satisfied by matters of omission. As Lord Mansfield said in R. v. Bembridge (1783) 22 St. Tr. 1 at 155: 'So long ago as the reign of Edward III, it was taken to be clear that an indictment would lie for an omission or concealment of a pecuniary nature, to the prejudice of the King.' Thus, the failure of the appellant to register for VAT and make the requisite returns and payments to the Commissioners of Customs and Excise when due was enough to constitute the offence. Hudson and Redford were also applied in R. v. Mulligan [1990] Crim. L.R. 427, citing Hawkins, Pleas of the Crown (8^th ed.), p. 1322, that 'all frauds affecting the Crown and public at large are indictable as cheats at common law.' In R. v. Hunt [1994] Crim. L.R. 747, CA, it was held that cheating the Revenue is a "conduct" offence and so there is no requirement to prove resultant loss."

There is no similar modern common law in Ireland.

I found it interesting that in the Law Reform Commission Report on The Law Relating to Dishonesty, 1992, there was no description of such an offence as cheating the public revenue in Ireland. It described four principle types of cheats, which have been dealt with in the cases, as being (1) those against public justice; (2) those relating to false weights, measures and tokens; (3) the provision of unwholesome food; and (4) frauds on the revenue authorities. As to frauds on the revenue, the offence appears to be grounded on the concept of defrauding the king of his revenue, as the Law Reform Commission Report states at p. 88

"(4) Frauds on the Revenue Authorities

7.7 Courts in Northern Ireland and England have held that it is an offence at common law to defraud the revenue authorities. In the Northern Ireland decision of 'J', Andrews LJ said:

'In my opinion, it is a common law offence to defraud the King of his revenue. It has always been a misdemeanour to make a false statement for the purpose of depriving the King of any part of his revenue; and making deliberately a false return for the purpose of defrauding the revenue is, merely, what I may call a modern illustration of that principle. It is an offence under the common law, quite apart from any created by Act or Parliament.'

It may be that the courts will prove willing to range beyond revenue offences to embrace within the common law offence of cheat 'all such acts or attempts as tend to the prejudice of the community.' Certainly Andrews LJ showed no fear of recognising such a principle. And in Hudson, Lord Goddard CJ appeared willing to bring within the offence any false representation 'used to defraud the Sovereign, because that is a fraud on the public. The Crown and the public are really synonymous terms.'"

At the core of the common law offence in England is the concept of depriving the Crown. The offences cited in the warrant in this case refer to the Crown, thus "at the expense of the Crown", "of defrauding the Crown of monies", "failing to pay Crown debts", "to the detriment of the Crown", and thus cheated the public revenue. This relationship to the Crown is a relevant factor.

The test for determining "correspondence" when analysing an offence of another jurisdiction is well established in Irish law. The court looks to the alleged acts of the person sought as stated on the warrant and considers whether they would constitute an offence in this jurisdiction. The Irish offence the court was referred to in this case is the common law offence of cheating the public revenue – so the kernel of the case is whether the offence of cheating the public revenue exists in Ireland.

Counsel for the State referred to s. 3 (2) of the Criminal Justice (Theft and Fraud Offences) Act, 2001. This provides that any offence at common law of larceny, burglary, robbery, cheating (except in relation to the public revenue), extortion under colour of office and forgery is abolished. Thus, it was submitted, the common law offence of cheating was abolished by that Act, except in relation to the public revenue. I am not satisfied that by this alone the offence is "saved." Section 3 (2) of the Act of 2001 refers to "any" offence. This infers that if any such offences existed, they were abolished, with the exception named. The statute is non-committal as to whether the offence exists. The section occurs in circumstances where there is no evidence that the offence was used in the previous 100 years in Ireland, or in this State. The section was clearly an attempt to rationalise the common law and abolish ancient common law offences. The reference to the exception does not create or revive an offence. The fact that the neighbouring jurisdiction has developed such common law is not relevant to its existence in this jurisdiction.

Considering the factors set out above, the situation in Ireland as to an offence of cheating the public revenue is vague and unclear. It appears to have fallen into obsolescence. The reference to the offence of cheating the public revenue in the Act of 2001 is not so precise as to create an offence, an offence which may have ceased to exist prior to the statute. The offence was not utilised in prosecutions over the last 100 years. Nor has it been the subject of academic analysis. Consequently, its constituent parts are not clear. This is a critical factor.

In criminal law the constituent parts of offences should be clear. The law must be certain. If there is ambiguity, it is rendered to the advantage of an accused. It is a fundamental principle that the criminal law must be clear and certain. The constituents of an offence must be clear and certain. The "possibility" that such an offence exists in our common law is insufficient clarity of the situation. The ambiguity as to its constituent parts is relevant. These are most relevant factors.

Analysis of the possibility that the offence is extant has to be conducted in light of the practice of the last 100 years. This offence is submitted to be in our common law. Common law is judge-made law. Yet counsel could not bring before the court a judicial decision by any judge of this State on such an offence. This must be a relevant factor.

It has been the practice that offences of this type have been prosecuted by way of statutory offences. This is the modern practice. This is a relevant factor.

The statutory reference in the Criminal Justice (Theft and Fraud Offences) Act, 2001 is couched in a negative format. It abolished "any offence at common law of … cheating" with the saver "except in relation to the public revenue." It is a vague and ambiguous reference. This is a relevant factor.

If the offence of cheating the public revenue were extant, it would appear that there were many opportunities for it to have been used extensively by the Revenue Commissioners over the last decades. Yet it was not. This absence of use may be for many reasons – including the fact that the offence was not understood to exist in the criminal law of the State.

There is a degree of fantasy in this case. The court was referred to an offence which probably existed in the late 1890s. It has not been utilised in Irish prosecutions since. It has not been the subject of common law in this State. It has not been the subject of academic analysis. The statutory reference to the exception to the abolition of the common law offence of cheating is vague. It refers to the situation of "any" offence. Into this miasma we must venture to seek the constituents of the offence of cheating the public revenue. Not wishing to adopt an Alice in Wonderland approach, or to legislate, I am satisfied that the law is so vague and uncertain as to lead to the only possible conclusion being that no Irish common law offence of cheating the public revenue, however admirable such an offence might be, exists.

Consequently, on the issue of the corresponding offence raised by the State, I would allow the appeal on this ground.