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Judgment | Title: | Director of Public Prosecutions v Casey | | Neutral Citation: | [2019] IESC 7 | | Supreme Court Record Number: | 159/2017 | | Court of Criminal Appeal Record Number : | 2016/244 & 258 | | Date of Delivery: | 21/02/2019 | | Court: | Supreme Court | | Composition of Court: | O'Donnell Donal J., MacMenamin J., Dunne J., Charleton J., O'Malley Iseult J. | | Judgment by: | Charleton J. | | Status: | Approved | | Result: | Appeal dismissed | | | |
An Chúirt Uachtarach
The Supreme Court
O'Donnell J MacMenamin J Dunne J Charleton J O'Malley J Supreme Court appeal number: S:AP:IE:2017:000159 [2019] IESC 007 Court of Appeal record number: 2016 nos 258 and 244 [2017] IECA 250 Circuit Criminal Court bill number: DU529/2014 Between
The People (at the suit of the Director of Public Prosecutions)
Prosecutor/Respondent
- and -
Denis Casey
Accused/Appellant Judgment of Mr Justice Peter Charleton of Thursday 21 st of February 2019 1. After a six month trial before Judge Martin Nolan and a jury, in the Dublin Circuit Criminal Court, the accused Denis Casey was convicted on 9 June 2016 of conspiracy to defraud and subsequently sentenced to two years and nine months imprisonment. The underlying crime concerned the accounts of Anglo Irish Bank plc and the misstatement of seven transactions as showing a positive balance of €7.2 billion as a deposit. This was that bank's own money routed through Irish Life Assurance and Irish Life & Permanent plc, of which the accused was chief executive, so as to appear as a deposit from an outside source. The events occurred in the months leading up to the collapse of Anglo Irish Bank, nationalised in January 2009, and the government support, from September 2008 onwards, to Irish Life Assurance and Irish Life & Permanent. At trial, the accused raised numerous defences challenging any contention that the content and presentation of the accounts was at all misleading. Among the accused's answers to the charge was that he had official authorisation for this form of misleading accounting. His multiple grounds appeal to the Court of Appeal was refused by judgment of Ryan P of 30 June 2017. By determination of 29 June 2018, this Court certified the following as a point of general public importance, later amended on 15 October 2018 at case management: whether the defence of "officially induced error" or "entrapment by estoppel" is available in this jurisdiction and, if so, what its parameters are and whether it was open to the applicant on the evidence in this case.
Charge 2. The charge on which a conviction was recorded to the jury and which is relevant to this appeal was cast in the following form: Denis Casey, did between the 1st of March 2008 and 30th of September 2008, both dates inclusive, within the County of the City of Dublin, conspire with John Bowe, Peter Fitzpatrick, William McAteer and others to defraud by engaging in transactions between Anglo Irish Bank Corporation plc., Irish Life & Permanent plc and Irish Life Assurance dishonestly to create the false and misleading impression that deposits from a non-bank entity to Anglo Irish Bank Corporation plc during the year ending 30 September 2008 were approximately 7.2 billion larger in amount than they really were, with the intention of inducing existing and prospective depositors with, existing and prospective investors in, and existing or prospective lenders to Anglo Irish Bank Corporation plc to make decisions concerning their deposits or investments in, or loans to the Bank on the assumption that the said Bank received larger deposits from a non-Bank entity during the year ending 30 September 2008 than it really did. 3. Section 149(1) of the Companies Act 1963, now replaced by such provisions as sections 282 of the Companies Act 2014, obliges those in control of a company to prepare accurate accounts. Accounts must show the real picture of the state of a company's financial health. The statutory obligation, the one applicable here, from 1963 states: Every balance sheet of a company shall give a true and fair view of the state of affairs of the company as at the end of its financial year, and every profit and loss account of a company shall give a true and fair view of the profit or loss of the company for the financial year. 4. Other accounting obligations arise for financial institutions under relevant legislation; section 32J of the Central Bank Act 1942 as inserted by the Central Bank Reform Act 2010 provides that banks "shall keep all proper accounting records of all its transactions." The fundamental legal requirement, however, is most elegantly stated as the necessity for a company in its accounts to give a true and fair view of the financial health of that company. That obligation remains the fundamental duty of every company and every individual working in the preparation of financial statements. While at trial, it was advanced on behalf of the respective accused persons that the accounting treatment of this transaction was appropriate, that matter was determined at trial by the verdict of the jury. Consequently, this appeal must be approached on the basis that the accounts as presented created a false and misleading impression in respect of the relevant transactions. An appeal, the question for the Court is whether by reason of the matters advanced by the accused that trial should have been permitted to proceed. 5. On the appeal, the circumstances leading to the ultimate nationalisation of Anglo Irish Bank, and its later and still ongoing liquidation, were described by counsel for the accused as unprecedented. As a matter of history, however, many banks collapse. The accused at trial put forward that what was involved was merely the presentation of accounts in their most favourable light, in accordance with legal and professional standards, in order to make them ready for any snapshot examination. Given the accused's argument that accounts are a snapshot as of particular time, it was argued that it was commonplace for businesses to take any steps that were permissible to make sure that the picture taken was as favourable as it could be. He claimed that the Financial Regulator was concerned that the accounts of his bank showed significant reliance on foreign borrowing, out of kilter with the mean for other European financial institutions. The case made by the accused was that the Financial Regulator was promoting support between Irish banks, a green jersey agenda, as it was called, and thus putting forward that each bank here assist the others. In transferring the funds, as of 30 September 2008 and on prior dates, it was asserted on the accused's behalf that the transactions were promotional support and not ones intended to be described, or thought of, as being of direct, or perhaps real, benefit. That, he claimed, was his state of mind; that such transactions were permitted and that as these were subsequently not challenged, as he claimed, by those in officialdom who would otherwise have been expected to react, this affirmed his contention of official sanction, at least after the event. His point of view, as asserted at trial, was that after the transactions up to 30 September 2008, and the publication as of December the same year, a challenge might have been expected; and that consequently he could regard it as a tenable conclusion that no challenge by the Financial Regulator was equivalent to approval. 6. Neither the actual mechanism of the misleading transactions nor the appropriate accounting practice is fully admitted by the accused on this appeal. It is thus necessary to summarise. Anglo Irish Bank took its own money, by which is meant funds of depositors or such funds which were available through inter-bank borrowings, including liquidity available through subsidiaries, and routed it to Irish Life & Permanent on the basis that it would be almost immediately redeposited under a guise which would indicate to those scrutinising the Anglo Irish Bank accounts that some €7.2 billion of independent investors' money had improved that bank's balance sheet. It is unnecessary and inappropriate to comment on other practices. These manoeuvres did not in fact cause the loss of €7.2 billion to the bank but neither did it amount to the gain of that amount. The money went around in a circle, in and out of the same place but appearing as an investment or deposit. Even on the appeal, the accused was prepared to have argued on his behalf that it was a matter of opinion as to whether this kind of misleading circular transaction, dressed up as an investment, should or should not be the subject of a specific note on the bank's accounts. This is of central importance in terms of his claimed resort to a form of response to this criminal charge which is based upon assurances from authority that this transaction was valid. By law, accounting is not a matter for argument: it consists of the imperative to truly and fairly demonstrate the state of financial health of a company. 7. In terms of evidence at trial, the relevant professional accounting standard, stated in argument as IFSR 32, but in fact based on IAS 32, was promulgated to establish rules for presenting financial instruments as either liabilities or equity and for the proper presentation of offsetting financial assets and liabilities. These rules, the prosecution asserted, were not abided by in the accounts published by Anglo Irish Bank on 3 December 2008. In terms of the mechanism of the actual deception, effected through separate transactions, taking either hours or in some cases a few days, these were effected as of 30 September 2008; hence the date on the indictment. Actual accounts, however, were not published until December. Available evidence 8. On this appeal, it has been argued on behalf of the accused that a pattern of tolerance, amounting to acquiescence, was established at trial on behalf of the Irish Financial Services Regulatory Authority, or Financial Regulator, which was from May 2003 to October 2010 the single regulator of all financial institutions in Ireland. While then, as a matter of law, the Financial Regulator was a constituent part of the Central Bank of Ireland, it was for these purposes reasonably regarded as independent and would have been so regarded until absorbed into the Central Bank on 1 October 2010 when its board structure was replaced by the Central Bank of Ireland Commission. 9. Concisely put, the accused points to meetings with the Financial Regulator which involved the expression of official concern at the level of exposure of that institution to borrowings from the European Central Bank and the prominence of such liabilities in the accounts of Anglo Irish Bank. A strategy of mutual support by Irish banks was regarded as essential since borrowings on either short or long-term bases, or the mutual purchase of financial instruments, interrelated their individual liquidity. Phrases such as "wearing the green jersey" or "donning the green jersey" refer in Ireland to more than playing for a national team in international sport. Essentially, references to the green jersey properly connote the desirability or need to support national interests, whether in business or in ordinary diligent application to work. In a conversation with the Financial Regulator in early March 2008, it is claimed by the accused that this "green jersey agenda" was pointed out to the accused. This was allegedly taken to mean that it was necessary to present balance sheets in a way that downplayed the matters of concern to the Financial Regulator. 10. Among the documents pointed to as evidence of the advisability in official terms of pursuing that strategy is an email of 17 April 2008 from the chief financial officer of Irish Life & Permanent to Denis Casey following discussions with the Central Bank. This is a hearsay account of a meeting, but evidence from a person present would be admissible if relevant to a potential defence. That email refers to a €7.5 billion exposure to the European Central Bank standing "out like a sore thumb" as other financial institutions in Europe tended to have a mean exposure of less than €0.5 billion. Funding was a real concern, with ideas being tossed around as to international investors. The financial exposure of the institution was concerning: the plans to increase investment, if fulfilled, would put it in a position of approaching other investors with more confidence, on the stated basis of "he who has money, will get more". The email continued: Everyone nodded!! I went through all of the other actions which we are taking to increase funding including donning the Green Jersey with the other Irish Banks …. on this point we highlighted that [Bank of Ireland] and AIB [Bank] seemed to have limited appetite for bilateral arrangements. It is very clear that some of the funding strategies adopted by Anglo [Irish Bank] (which they had heard about …. so no surprise) were a cause of concern. It was made clear that highly artificial transactions such as back to backs were not what the C[entral] B[ank] had in mind when encouraging Irish Banks to cooperate. I highlighted our appetite for Retail and Commercial deposits and our various plans including the point that we have a broker Bond being issued and that I needed to have a conversation with the F[inancial] R[egulator] concerning the Life Regulations. 11. Nothing, it may now be noted, in this report of a conversation with an official could possibly provide official sanction for the transactions in question. In addition, however, the accused points to regulatory conversations in October 2008 where it is claimed that the additional €7.2 billion was pointed out to officials as not being "a real number", instead being short-term and with the corresponding obligation to repay. The accused relies on this conversation as showing both an awareness of the transaction on the part of the Financial Regulator and, as he alleges, acceptance of it or as having no objection to it. Another way of looking at this, however, is that the official was querying a kind of transaction not seen before and not notified in advance and therefore one that could not possibly have received prior authorisation. In this, and in subsequent alleged interactions, the point relied upon is the lack of official protest from the Financial Regulator. Thus reference is made on behalf of the accused to a meeting with the Financial Regulator on 28 November 2008 for a review of the accounts of Anglo Irish Bank, which involved no mention, so is alleged, of the fraudulent transaction. This is claimed on behalf of the accused to support some type of official sanction point. Meetings on 28 October and 3 December 2008, which involved no protest as to the accounting practice, are said to provide evidence after the fact that, before the fact, this transaction could be regarded in the mind of a reasonable person as subsequently condoned by the Financial Regulator. On this argument, thus, the non-prosecution or investigation of a crime is to be taken as official justification that the crime was committed in the first place. In its unreality, that is an unattractive proposition. 12. Also pointed to on behalf of the accused is an official memo from an official financial regulatory source of January 2009 which expresses various worries in the context of the then turbulent financial situation, reading, in part: There is also information available that could amount to a defence against accusations of Market Abuse, specifically in relation to knowledge of the Financial Regulator/Central Bank, but also more generally in relation to the role of the Department of Finance, Central Bank and Financial Regulator encouraging institutions to co-operate with each other in extremely difficult markets where the very existence of the Irish financial system was in some doubt.
The point as raised at trial 13. The point as to allegedly officially induced error arose during the trial in this way. The defence proposed to reference in cross-examination, or to call evidence on some of the above material. The initial proposal appears to have been to claim that the accused was the victim of some kind of a setup whereby the excusatory defence in criminal law of entrapment might arise. Since a consensus emerged that, whatever might have been said, no one ever intended to either set up some kind of a sting operation or to prosecute any wrongdoing that might emerge, this line of defence faded. From it emerged or morphed the possibility of running a claim of officially induced error. After hearing evidence in the absence of the jury, including evidence from the accused as to what he knew, as to what he was allegedly told, and as to what his state of mind was claimed to be, Judge Nolan ruled that there was nothing which could potentially amount to any form of answer to the charge or any legitimate bar to prosecution and consequently excluded any mention of it in evidence. 14. Judge Nolan ruled that any plea of officially induced error did not arise. In a statement given to the gardaí prior to trial, the accused referred to conversations around what was called the green jersey agenda as being in "very broad terms" which did not involve directions or approvals and stated, indeed, that "no specific mechanisms were discussed" in any meeting with officials. Some of the roundabout circular transactions involving this kind of back to back deception had occurred as early as March 2008. But, there was no evidence of prior official advice that such deceit accorded with law. Under examination by his own counsel, the following exchange with the accused occurred before the trial judge: Question: Did you ask the regulator in advance of the transaction?
Answer: No, I did not, but the regulator in its dealings with any institution I found was always extremely cautious not to share information across institutions. They regularly cited their legal obligation under I think section 33, which bound them to confidentiality in relation to their dealings with institutions.
Question: That would cover enquiries about Anglo, but did you make any enquiry on your own right or alert them even that you were contemplating or doing the transaction?
Answer: No, I did not. Not -- not before the 30th of September, no.
Question: And was there any particular reason for that?
Answer: The transaction wasn't going to affect my balance sheet. I believed that it was a transaction focused around Anglo's year-end results and that Anglo were clearly discussing their year-end balance sheet and their year-end results with the regulator in advance of public -- in advance of their year end and clearly well in advance of publishing any results.
15. A further exchange concerning the March 2008 transactions also illustrates the complete absence of any official advice to engage in this series of misleading manoeuvres: Question: In relation to the March transactions, was the regulator ever aware of those transactions before they occurred?
Answer: I'm not aware, certainly I had no discussion with the regulator about the March transactions in advance of them occurring. In fact, the -- in fact I had no conversation at any stage with the regulator about the March transactions, even as late as January of 2009 when the regulator raised concerns with me on the 21st of January 2009 in relation to the September transactions, there was no reference whatsoever, at that meeting to the March transaction. 16. Similar answers were given to the effect that the accused had "had no conversation with the Financial Regulator about the September transactions before they occurred", despite conceding that he had met officials "on a number of occasions between the 15th of September and the end of September of that year". Judge Nolan thus declined to have the defence run in front of the jury. Judgment of the Court of Appeal 17. Giving judgment upholding the trial judge's ruling, the Court of Criminal Appeal at paragraph 50 considered that nothing in the evidence could amount to any form of officially induced error: This is a jurisprudence that developed in Canada and there is an analogous legal principle based on estoppel in the United States. The trial judge did not make positive "findings" in relation to this matter but he did indicate a general disposition as to the testimony he had heard but was not going to rule on. His passing references to documents and to earlier different transactions (the fact that they were different was not in dispute) show that he was speaking in broad, general terms. An accused who is seeking to rely on this principle to stop the prosecution going ahead must establish that he expressly or by implication sought information as to the legality of what he was doing and was provided with information that would have entitled him to reach a conclusion that his conduct was legal. That is missing in the present case. There is no suggestion and no basis for saying that Mr. Casey or Mr. Bowe actually sought any reassurance. Neither was there any information available to them which could give them the impression that this particular transaction was legitimate or lawful. It is unreasonable to suggest that the Financial Regulator could be taken to approve of this transaction and to confirm that it was not unlawful in circumstances that Mr. Casey and/or Mr. Bowe were entitled to rely upon. The Canadian cases are quite strict in their requirements and the American authorities are no less rigorous in the application of the defence. Entrapment-type assertions 18. Asserted defences involving some kind of alleged official involvement can be argued to have arisen on the available court decisions from common law countries in broadly three ways. Firstly, where a person claims, on asserted reasonable grounds, to have been acting as an agent of the State, a defence may be floated that actions by the State can be lawful and so can actions by their agents. What in the United States of America is colloquially referred to as the ‘CIA defence' would, however, ordinarily require some specific statutory exemption allowing State actors and their agents to break the law. Otherwise, the law binds all concerned. No comment is made as to this kind of unlikely allegation. It is unnecessary for the purposes of this appeal to analyse the second kind of alleged defence, that of entrapment, or to define how it is to be approached by a trial judge before whom it is raised. No comment is made here as to whether it is an excusatory defence or whether it involves an assertion that because of particular circumstances, a trial in due course of law under Article 38.1 of the Constitution could not take place. Nor is there any issue as to the there applicable burden and standard of proof live on this appeal. It suffices to note that The People (DPP) v Mills [2015] 4 IR 659, a case typical of the kind where such a defence might be raised, was considered by the Court of Appeal and the conviction upheld. In analysing several authorities, the Court of Appeal ruled out the applicability of any such defence where all that was done, undercover, by police authorities was to give opportunities for the commission of a crime that the accused was already intent on engaging in. It is, rather, the creation of crime by State authorities, for the purpose of ostensible detection and later prosecution, in circumstances where the commission of that crime would otherwise not likely exist, that is of the essence of entrapment. Quoting Smyth J in R v Bellingham [2003] NICC 2 at paragraph 19, the Court of Appeal in Mills regarded the following part of that judgment as a useful summary: The court should look at the nature of the offence, the reason for the police operation, the presence or absence of malice, and the nature and extent of the police participation in the crime. The greater the inducement held out by the police is, and the more forceful or persistent the police overtures are, the more readily may a court conclude that the police overstepped the mark. It will not, however, normally be regarded as objectionable for the police to be behave as would an ordinary customer of a trade, whether lawful or unlawful, being carried on by the defendant. If having considered all these matters, the court adjudges that this amounts to "State created" crime then the prosecution will be stayed or, less frequently, the evidence excluded under Article 76. On the other hand, where it is not such an affront the matter goes to mitigation of sentence if that is a relevant consideration.
19. It is unnecessary to comment on this decision or on the approach of courts in other jurisdictions to these two categories of defences; see R v Latif [1996] 1 WLR 104 and Fox v Attorney General [2002] 3 NZLR 62, and for discussion, see John Irving - The Defence of Public Authority, or Entrapment by Estoppel … or Something Like That (2016) ABA Committee Newsletter. The third category of potential response to a criminal charge, the one asserted on this appeal, arises where a person, doubtful as to the legality of what is to be engaged in, seeks legal advice from an official mandated to enforce the law and that official advises the accused, where it is reasonable to accept that advice, to proceed as what is proposed complies with the law. That argument, as advanced here, mandates that the law have exceptions grafted on to it not through legislation, but at the apparent fiat of officials charged with the law's implementation. Obedience to the law 20. Under Article 15.2.1° of the Constitution, it is the Oireachtas which has the "sole and exclusive power of making laws for the State" and "no other legislative authority has power to make laws for the State." Entrenched in the common law, carried over under Article 50 of the Constitution, is the principle that ignorance of the law cannot provide a defence to lawbreaking; R v Coote (1872) LR 4 PC 599. Traditionally, the justifications for this rule are that a plea of ignorance as an excuse is an encouragement to others to act similarly and that both the regulatory function of the law, of which the criminal law is the central pillar, would be undermined. To those reasons may be added that since the people have come together under a constitutional structure to assure social order, as the Preamble to the Constitution declares as one of the capstone principles of their democratic assent, the nullification of the law through a plea of ignorance is to constitute both an impermissible exception to the rule of law and also the establishment of the individual as a potential myriad of legislatures choosing non-compliance through deliberate ignorance. 21. The constitutional obligation of the people is to obey the law; whether ignorant of the law or not. Law not only defines the parameters of conduct by means of rules but also sets up structures of authority for the enforcement of law. Legitimate and honest resort to the authorities for the purpose of knowledge as to the legitimacy of a properly specified proposed action, prior to that action taking place and for the purpose of ensuring that such action is in compliance with the law, may make it unjust, if the declaration of law by the authority is in error, that an accused in honest and reasonable reliance on the advice should be convicted. If there can be such an exception, then a definition of the precise circumstances of the exception, together with an appropriate procedure for disposal at trial is necessary because otherwise the law's foundation in certainty and universal application would be undermined. 22. The 1922 edition of Archbold - Criminal Pleading, Evidence and Practice (26 th edition, London, 1922) at page 24 admits of a mistake of fact, provided this is "honest and reasonable", as being a defence in some circumstances, but rules out mistake of law since: "Ignorance of the law will not excuse from the consequences of guilt any person who has capacity to understand the law. 1 Hale, 42 : R. v. Crawshaw , Bell, 303; 30 L. J. (M. C.) 58; 8 Cox, 375." Reasonable mistake can negative the mental element of some offences depending on the circumstances, for instance taking someone else's article reasonably believing it to be one's own, but mistake of law can have nothing whatever to do with the definitional elements of the offence. 23. Earlier cases illustrate why a clearly circumscribed exception based on resort to authority might justly be an exception to the rule that all must be liable for any breach of the law, whether known or unknown. In Surrey County Council v Battersby [1965] 2 QB 194 , a woman had an agreement with parents to undertake the care of their two children, although the children would stay with their parents frequently at weekends. The woman was advised that the children were not foster children and consequently that she did not have to give notice to the local authority under the relevant legislation. She was then prosecuted for failing to give notice and, despite those facts, she was convicted on the basis that ignorance of the law was no defence. The appeal court directed that she be convicted. Sachs J recognised, however, at page 203 that "prosecution has taken place despite the respondent having acted bona fide … on the advice of an official of the Surrey County Council." In Minear v Rudrum (2001) 33 MVR 119, a learner driver committed a traffic infringement and was notified that his permit was cancelled. His mother, on telephoning the licensing authority, was erroneously told that only on collection of the probationary licence was the cancellation operative. On an appeal against his conviction for unlicensed driving, the Court of Appeal of Western Australia held that advice of law, as opposed to advice as to fact, could not alter or affect his legal liability. In R v Campbell (1972) 21 CRNS 273, an exotic dancer had previously been prosecuted for naked dancing and acquitted by a judge on the basis that a performance was not immoral if it did not have the undue exploitation of sex as its dominant characteristic. When she was prosecuted on a subsequent occasion, her reliance on the earlier trial court's ruling was held to be no defence. Kerans DCJ justified the "principle that ignorance of the law should not be a defence in criminal matters" not on the basis that "it is fair", but rather "it is justified because it is necessary, even though it will sometimes produce an anomalous result." Fairall and Barrett - Criminal Defences in Australia (5 th edition, 2017) nonetheless states at paragraph 3.34 that: "A person who acts upon the express advice of an authority empowered with the administration of the law should not suffer for the incompetence of the authority concerned." 24. There can be cases where, depending on the definition of the crime, an error may mean that an accused lacks the mental element specific to the offence. There is nothing that challenges the legal order in that since it is for the legislature to define the external and mental elements constituting the crime. But such a defence depends expressly on fitting to an absence of an element of an offence. Thus, a director of a company who does not appreciate a scheme is one to aid the purchase of the company's own shares may lack a requirement of culpability that the accused act knowingly and wilfully; McL v Flavel (1985) 21 A Crim R. Similarly, for an accused to state his electoral qualifications in the manner directed by an electoral committee may be to nullify the mental element of the offence of falsely stating electoral qualifications; R v Dodsworth (1837) 173 ER 467 at 469. Lord Denman CJ's statement in that case may be the germ on which subsequent flowerings of an official advice defence have been generated. This was that a person should not be convicted who has acted bona fide and has "been guided in his conduct in a matter of law by persons who are conversant with law". Entrapment estoppel 25. As these cases illustrate, a situation of potential injustice arises where a public official, ostensibly cloaked with the authority of the law and regarded reasonably as a source of what is within or without the law, is specifically asked about a proposed action and opines compliance. Such an apparently officially sanctioned error is not a defence which impacts on the proof of the external elements or mental elements of an offence. The point of the defence is that the accused acts to commit the offence in accordance with its definition, but has done so in circumstances where it has been passed to him by public authority that the specific unlawful conduct is lawful. Among the earliest expression of this kind of answer to a criminal charge occurred in the United States of America against the backdrop of the House Un-American Activities Committee in Congress, a body which famously searched for Communist infiltrators and spies in the 1950s. In Raley v Ohio (1959) 360 US 423, the state of Ohio had set up its own committee to discover communists. Those called before it were told by its chairman that the privilege against self-incrimination applied, despite a negativing Ohio statute. Brennan J, at page 427 for the majority, regarded the conviction for refusal to answer questions as an "affront to the Due Process Clause" and as a form of entrapment. Citing the leading case, Sorrells v United States (1932) 287 US 435, he stated: While there is no suggestion that the Commission had any intent to deceive the appellants, we repeat that to sustain the judgment … on such a basis after the Commission had acted as it did would be to sanction the most indefensible sort of entrapment by the State - convicting a citizen for exercising a privilege which the State clearly had told him was available to him. 26. Similarly, in Cox v Louisiana (1965) 379 US 559, a conviction for picketing near a courthouse with intent to obstruct justice was overturned where the place of the picket was moved on the direction of the police to across the street; see also United States v Pennsylvania Chemical Corporation (1973) 411 US 655 concerning an assurance on permits and the kind of effluent that might be discharged into a river. United States v Weitzenhoff 35 F 3d 1275 (9 th Cir 1993) involved the claimed misinterpretation by the accused of a permit. Ruling that a person desirous of complying with the law would have sought counsel from a city official, Fletcher J for the Court of Appeals, Ninth Circuit, issued this principled outline of the potential defence: Entrapment by estoppel applies when an authorized government official tells the defendant that certain conduct is legal and the defendant believes the official. United States v. Brebner , 951 F.2d 1017, 1024 (9th Cir. 1991). To invoke the entrapment by estoppel defense, the defendant must show that he relied on the official's statement and that his reliance was reasonable in that a person sincerely desirous of obeying the law would have accepted the information as true and would not have been put on notice to make further inquiries. United States v Lansing , 424 F.2d 225, 227 (9 th Cir. 1970). 27. According to United States authority, that defence is carefully circumscribed. It is required to seek specific advice and to rely on it only where it is reasonable and where no further enquiries are warranted. This is not vague; the prosecuting authorities cannot be bound by anything other than a specific assurance. There is a parallel here with estoppel in commercial law. Thus, in private transactions an estoppel operates where there is a "clear and unequivocal promise or assurance" intended to affect legal relations which is relied upon to such a degree as to render it inequitable to allow it to be withdrawn; see McMullan Brothers Limited v McDonagh [2015] IESC 19 and Snell's Equity (32 nd edition, London, 2010) at paragraph 12-009. Thus in United States v Giffen (2006) 473 F 3d 30 (2 nd Cir), the indictment alleged the payment by the accused, an American citizen, of more than $80 million to Kazakh officials in order to obtain mineral fuel mining contracts, conduct forbidden by the Foreign Corrupt Practices Act. Claiming that he had discussed the matter with federal agencies, the accused moved to seek discovery prior to trial. He alleged that he had revealed his conduct in a general way, with advice to "stay close to the President and continue to report". This was held by the Court of Appeals not to involve anything that would be sufficient to be reasonably understood as "authorization to engage in bribery and fraud." To invoke the defence, the court held, a defendant must "remain within the general scope of the solicitation or assurance of authorization" as "this defense will not support a claim of an open-ended license to commit crimes in the expectation of receiving subsequent authorization"; citing United States v Abcasis , 45 F 3d 39 (2 nd Cir 1995) at pages 43-44. Leval J stated: In our view, based on the allegations in the proffer, Giffen is not entitled to assert the defense of entrapment by estoppel. As discussed above with respect to the defense of actual public authority, Giffen did not disclose the conduct alleged in the indictment. The government's response, therefore, instructing Giffen, without restrictions, to "stay close to the President and continue to report," even assuming it could be construed as encouragement to continue doing what he had revealed, was not a solicitation or encouragement of the commission of the charged crimes. … The district court seemed to assume that, with respect to any crime, a defendant may raise a defense "that he honestly, albeit mistakenly, believed he was committing the charged crimes in cooperation with the government." We have great difficulty with this proposition, which would swallow the actual public authority and entrapment-by-estoppel defenses. "Such an unwarranted extension of the good faith defense would grant any criminal carte blanche to violate the law should he subjectively decide that he serves the government's interests thereby. Law-breakers would become their own judges and juries." United States v. Wilson, 721 F.2d 967, 975 (4th Cir. 1983).
28. This view accords with a proper construction of the defence. On this appeal, the accused points to subsequent alleged toleration by the Financial Regulator. Even if made out in evidence, the Financial Regulator merely not raising the transactions in meetings with the accused is not toleration. In any event, there is not such principle as approbation by the authorities of crimes already committed. For a policeman not to ask someone about a crime, even a murder where a body is discovered, is not to ratify the unlawful taking of life. Advice must be from an official who is charged, at least ostensibly, with authority. Vague propositions do not suffice. The example given by O'Malley J during the hearing was that a statement from the Garda Commissioner that he wanted "all drug dealers off Dublin's streets" could not be used as an authorisation for members of An Garda Síochána to shoot or illegally arrest suspects. 29. Subsequent United States authorities confirm the principles in Giffen . United States v Corso 20 F 3d 521 (2 nd Cir 1994) provides a warning through Restani J, at page 528, as to the misuse of the defence: It has been said that
[t]he courts invoke the doctrine of estoppel with great reluctance. The only circumstances justifying the use of the doctrine are those which add up to the conclusion that it does not interfere with underlying government policies or unduly undermine the correct enforcement of a particular law or regulation.
United States v Browning 630 F.2d 694, 702 (10 th Cir. 1983) cert. denied, 451 U.S. 988, 101 S.Ct. 2324, 68 L.Ed.2d 846 (1981). 30. See also United States v Howell 37 F 3d 1197 (7 th Cir 1994); United States v Georgescu 16-4159-cr (2 nd Cir 2017); and United States v Neville 82 F 3d 750 (7 th Cir 1996) where at paragraph 70, citing Howell, Harlington Wood Jr J provides a pertinent summary: The defense of entrapment by estoppel is rarely available. Howell, 37 F.3d at 1204. "In essence, it applies when, acting with actual or apparent authority, a government official affirmatively assures the defendant that certain conduct is legal and the defendant reasonably believes that official." Id. To employ this defense, we have required that the government official "actively mislead the defendant; and that the defendant's reliance be actual and reasonable in light of the identity of the agent, the point of law represented, and the substance of the misrepresentation." 31. For the defence to operate, the representation must be one of law. Clearly, law does not exist in a vacuum but is based on fact. Thus, to advise people to demonstrate across the road from, as opposed to in front of the courthouse, as in Cox , is a factual statement but it is one to the effect that the prohibition on demonstrating near a court building is not infringed in a particular place. In Ostrowski v Palmer (2004) 218 CLR 493, some members of the High Court of Australia were sceptical of the defence where a fisheries authority had provided the accused with an incomplete copy of regulations relating to where commercial lobster fishing could take place. As McHugh J stated, the accused believed that he was legally entitled to fish in a certain area when he was not, meaning that his mistaken belief was "not a mistake as to a fact or "state of things", but a mistake as to the operation of the law. ... It was ignorance of the law that caused him to make the mistake that he did." The High Court thus reinstated the respondent fisherman's conviction. Officially induced error 32. In Canada, while estoppel entrapment is known as officially induced error, the elements are substantively the same as in American law. In no sense is any form of officially induced error a justification for the commission of crime. Nor does it seem possible that the existence of the defence excuses the commission of the offence. For the defence to operate, all of the elements of the offence must be present, but a plea of fundamental unfairness is raised outside the parameters of the defences known to the criminal law. That plea is that, as a matter of constitutional fairness, a jury, or judge in summary cases, should not be permitted to proceed to record a conviction against the accused. In this jurisdiction, the principle would be that where all of the elements of the defence are present, the trial of the accused would not be one "in due course of law" under Article 38.1 of the Constitution were the trial judge to allow the case to proceed to a verdict. 33. The development of the defence in Canada may perhaps be traced to the difficulty in analysing liability in strict liability offences; in that country, the state of mind of a defendant is traditionally irrelevant for summary regulatory offences and the prosecution are only required to prove the external facts of the case; see R v City of Sault Ste Marie (1978) 2 SCR 1299. That case held that a combination of absolute liability, where even active attention to complying with the law does not suffice, and a potential penalty of imprisonment for infringement were contrary to the right to liberty under section 7 of the Charter of Rights and Freedoms. To imprison someone who committed an offence without fault due to being expressly misled by officialdom could give rise to similar issues; R v MacDougall [1982] 2 SCR 605 at 613. In R v Cancoil Thermal Corporation and Parkinson (1986) 27 CCC (3d) 295, Lacourcière JA at page 303 recognised the defence in strict terms which accord with the American analysis: The defence of "officially induced error" is available as a defence to an alleged violation of a regulatory statute where an accused has reasonably relied upon the erroneous legal opinion or advice of an official who is responsible for the administration or enforcement of the particular law. In order for the accused to successfully raise this defence, he must show that he relied on the erroneous legal opinion of the official and that his reliance was reasonable. The reasonableness will depend upon several factors including the efforts he made to ascertain the proper law, the complexity or obscurity of the law, the position of the official who gave the advice, and the clarity, definitiveness and reasonableness of the advice given.
34. In Cancoil, a safety official had approved the removal of a guard from a metal shearing machine in a factory on the basis that the build up of swarf behind the guard was a greater danger to human safety. An employee had been badly injured. The appeal court found that the trial judge had wrongly excluded officially induced error and ordered a new trial. The later case of R v Jorgensen (1995) 4 SCR 55 involved the prosecution of the owner of an adult video business for ""knowingly" selling obscene material "without lawful justification or excuse"". Eight videotapes had been purchased by undercover police agents, with three determined at trial to be obscene. The films in question had been given approval by the film censor's office. This led to a similar analysis by Lamer CJ: In order for an accused to rely on an officially induced error as an excuse, he must show, after establishing he made an error of law (or of mixed law and fact), that he considered his legal position, consulted an appropriate official, obtained reasonable advice and relied on that advice in his actions. When considering the legal consequences of his actions, it is insufficient for an accused who wishes to benefit from this excuse to simply have assumed that his conduct was permissible. The advice came from an appropriate official if that official was one whom a reasonable individual in the position of the accused would normally consider responsible for advice about the particular law in question. If an appropriate official is consulted, the advice obtained will generally be presumed to be reasonable unless it appears on its face to be utterly unreasonable. The advice relied on by the accused must also have been erroneous, but this fact does not need to be demonstrated by the accused. Reliance on the official advice can be shown by proving that the advice was obtained before the actions in question were commenced and by showing that the questions posed to the official were specifically tailored to the accused's situation.
Reasonableness 35. In all of the cases cited where a defence of this type has been analysed, the circumstances of the acceptance of the advice have been reasonable. There is no warrant for extending the defence outside the remit of how a reasonable person would have reacted. Thus, to take an extreme example, it could never suffice for a person to somehow garner advice that it was lawful to burn down a building in order to initiate an insurance claim. Unlikely as that is, the principle of reasonableness nonetheless emphasises that the defence potentially arises in circumstances of genuine unclarity in which an accused has resort to authority for guidance and precisely follows advice that particular conduct is lawful. Procedure 36. Any answer by an accused to a criminal charge that claims officially induced error is not regarded under a persuasively similar constitutional disposition as Canada as being substantive to the trial of guilt or innocence; tried there, as in this jurisdiction, by a jury where the allegation is of a serious offence. The doctrine cannot operate as if it were a defence at large; one raised by an accused by adducing sufficient evidence but where the burden of proof is on the prosecution to disprove its application on the facts; see The People (AG) v Quinn [1965] IR 366 at 382 and The People (DPP) v Gleeson [2018] IESC 53. Defences in criminal law are a matter for assessment, according to their nature and the burden and standard of proof attaching to same. 37. Officially induced error is not a substantive defence in criminal law. It is not a response to a criminal charge which justifies conduct, as does reasonable and proportionate self defence to a physical attack or one reasonably and immediately apprehended, or excuses conduct, such as where a person of reasonable courage acts under coercion of severe violence and where there is no available resort to law. It is a procedural issue. 38. The Constitution, at Article 34.1, in requiring justice to "be administered in courts established by law by judges appointed in the manner provided for in this Constitution" does more than lay down a procedural framework or merely set up a structure for the system of civil and criminal litigation. Rather, it devolves ultimate responsibility onto judges to ensure that what occurs in legal actions heard before the courts is the pursuit of justice through a diligent, reasoned, detached and proportionate search for the truth. Article 38.1, in requiring criminal offences to be tried in "due course of law", amounts to an imperative that courts pursue the aim of justice. In responding to a criminal charge with an account which asserts that while there has been a breach of the law, an outcome of a guilty verdict would amount to an affront to justice, an accused both admits the commission of an offence and also seeks the application of constitutional fairness. This is not an assertion which comes within Article 38.4, which provides that "no person shall be tried on any criminal charge without a jury." Rather, it is a plea within the judicial forum, and to that forum, that the law be diverted from its normal course. That arises because in some important respect, and unrelated to the elements of the offence, or to the capacity of the prosecution to adduce evidence in relation to such elements, the prosecution, or continued prosecution, of the charge would fall short of the constitutional administration of justice. It is a plea that a case not reach a jury. 39. In America, rule 12.3 of the Federal Rules of Criminal Procedure requires notice where "a defendant intends to assert a defense to actual or believed exercise of public authority on behalf of a law enforcement agency or federal intelligence agency at the time of the alleged offense". The defence is there classified as an affirmative defence. This means that the defendant in the United States must prove the elements of the defence by a preponderance of the evidence; United States v Burrows 36 F 3d 875, 882 (9 th Cir 1994) and United States v Baptista-Rodriguez 17 F 3d 1354 (11 th Cir 1994). In this jurisdiction, a response of official sanction prior to the commission of a crime is a legal objection to the indictment. It amounts to a plea equivalent to that recognised at common law that there are circumstances where a person should not be put in peril of conviction on the indictment; see Sandes - Criminal Law and Procedure in the Republic of Ireland (3 rd edition, Dublin, 1951) at pages 116-117. 40. Within the Canadian analysis, similarly there has been a consistent thread which places this defence not within the realm of a justificatory or excusatory defence in criminal law, but as a potential violation of fundamental right which requires a judicial ruling to stop the process of trial. Hence, in Jorgensen, Lamer CJ stated: There is no particular link between the phrase "without lawful justification or excuse" and officially induced error of law. Where an accused raises an officially induced error of law argument, the trial judge must assess whether the excuse is made out in law, regardless of the wording of the offence. Officially induced error is distinct from a defence of due diligence and is applicable to regulatory as well as criminal offences. … A successful application of an officially induced error of law argument will lead to a judicial stay of proceedings. As a stay can only be entered in the clearest of cases, an officially induced error of law argument will only be successful in the clearest of cases. Finally, the question of whether officially induced error constitutes an excuse in law is a question of law or of mixed law and fact. While a jury may determine whether the accused is culpable, and hence whether this argument is necessary, it is for a judge to determine whether the precise conditions for this legal excuse are made out and if a stay should be entered. The elements of officially induced error are to be proven on a balance of probabilities by the accused. 41. See also City of Lévis v Louis Tétreaul [2006] 1 SCR 420, R v Bacalzo (2013) ONSC 6326 and Durham (Regional Municipality) v Crupi & Sons Ltd (2015) ONCJ 488. 42. In this jurisdiction, there is a duty cast on the trial judge to ensure to the accused a trial that accords with the constitutional norm guaranteed in Article 38.1, one "in due course of law"; see Nash v DPP [2015] IESC 32. The duty of ensuring an outcome to a criminal trial that accords with the constitutional imperative of justice is placed upon the trial judge conducting the criminal trial. On a review of prior cases involving delay or missing evidence or missing witnesses, O'Donnell J in Byrne v DPP [2011] 1 IR 346 at 356 summarised the law thus:
In my view, having considered the decided cases, the position has now been reached where it can be said that, other than perhaps the very straight forward type of case as in Braddish v. Director of Public Prosecutions [2001] 3 IR 127, it would now require something exceptional to persuade a court to prohibit a trial. This, in my view, is in accordance with principle. The point was made in McFarlane v. Director of Public Prosecutions [2006] IESC 11, [2007] 1 IR 134 that the fact that an applicant was unsuccessful in judicial review proceedings did not detract from the power and duty of a court of trial to assess the case as it developed at the trial. At p. 147 of his judgment Hardiman J, (with Murray CJ, Geoghegan and Fennelly JJ concurring) stated that the court of trial "[34] … will be able to assess whether there is indeed a prima facie case at the appropriate stage. More than that it will be able to assess, on the evidence as it actually develops, whether there is any unfairness to the applicant, incapable of remedy by the trial court, for which the prosecution is responsible. Its powers in this regard are wholly unaffected by the result of the present application."
This, in my view, is an important observation. The constitutional right, the infringement of which is alleged to ground an applicant's entitlement to prohibit a trial, is the right to fair trial on a criminal charge guaranteed by Articles 38 and 34 of the Constitution. The manner in which the Constitution contemplates that a fair trial is normally guaranteed is through the trial and, if necessary, appeal processes of the courts established under the Constitution. The primary onus of ensuring that that right is vindicated lies on the court of trial, which will itself be a court established under the Constitution and obliged to administer justice pursuant to Article 34. It is, in my view, therefore, entirely consistent with the constitutional order to observe that it will only be in exceptional cases that superior courts should intervene and prohibit a trial, particularly on the basis that evidence is sought to be adduced (in the case of video stills) or is not available (in the case of CCTV evidence itself).
43. In the context of factual assertions that necessarily require an adjudication on oral evidence, the place to conduct a judicial assessment is at trial in the absence of the jury. As O'Donnell J pointed out in James Wall v The DPP [2013] 4 IR 309 at paragraph 212: Scrutiny by way of judicial review in anticipation of a trial has obvious practical and unhelpful consequences both in terms of the delay of any trial, and the consequential increase in burden upon the Superior Courts. It thus requires to be justified. However, even assuming a perfectly resourced system both in trial and appellate courts — and that is an ideal unlikely ever to be achieved in practice — there are other significant problems with the system of judicial review when used to determine issues relating to missing or lost evidence. Judicial review is a system designed, or at least intended, to provide a speedy determination of issues relating to the jurisdiction of inferior courts. It is well adapted to determine precise issues of law. It is poorly adapted for the resolution of factual matters, particularly when those issues are to be determined in advance of a trial and through the imperfect lens of affidavits necessarily drafted by professional advisers and which, perhaps understandably, seek to maximise that party's case while exercising caution about revealing testimony capable of being deployed against the party in the event that a trial might ensue. Looked at from the vantage point of function and efficiency, it might be thought that the examination of facts and the impact of the presence or absence of such facts upon the fairness of a trial should take place in the trial court with the possibility of review on appeal. However, currently, such claims are addressed by judicial review. If the Constitution or more general principles of fairness demand that this be so, then it must indeed be so. But it is a process which, at a minimum, requires justification. 44. MacMenamin J at paragraph 284 was of the same view: I would wish to re-emphasise the distinction between the function of a court in judicial review, on the one hand, and that in criminal trial, on the other. This relates both to the onus and standard of proof. In judicial review proceedings, the focus will be on an objective assessment as to whether, as a matter of reality, the prejudice alleged is so truly exceptional as to warrant intervention by reason of the real likelihood of an unfair trial. This test is not subjective, based on the appellant's concerns, nor can it be based on mere bald assertion regarding the degree of prejudice allegedly suffered. I do not suggest that is the position here. But no criminal trial proceeds on the basis that the investigation beforehand has been such that every conceivable hypothesis can be explored at trial in the light of an infinite range of evidence gathered to meet every possible contingency or potential line of defence. Judicial review applications exist only to deal with exceptional cases; where the evidence of prejudice, that is the failure to obtain identifiably relevant evidence, is so plain as to warrant prohibition. The duty of this court is to adjudicate on the basis of the now well established jurisprudence under which it is claimed the appellant's constitutional right to a fair trial is placed at real risk. No form of relief, other than prohibition, is sought. 45. In a clear and simple case, one not requiring a contest on oral evidence, a plea of officially induced error could appropriately be decided, perhaps within the realm of judicial review. Ordinarily, a contest requiring oral evidence is within the realm of the trial judge. As an appeal to adjudication in terms of justice which might bypass the application of the law, it has the potential to be misunderstood as a judicial nullification of an offence. It is not. Instead, it is equivalent to a demurrer; a special written plea on notice to the prosecution which asserts through both an appropriate recitation of the facts asserted and the reasons why officially induced error should answer the charge that no adjudication of guilt ought to go to the jury, or in summary cases the judge as tribunal of fact on the issue of guilt. It follows that it is the duty of the accused to raise the defence of officially induced error before the trial judge in the absence of the jury. That must be done on written notice. Such an adjudication can take place in front of a judge of the court of trial but before a jury is sworn to try the indictment. 46. This amounts to an application to end the criminal process: it is not a substantive defence. It follows that the accused bears the burden of proving the elements of that plea in bar to the judge trying it. Were the defence to be run as a judicial review to prohibit the trial, the accused would have both the requirement of written notice and the burden of demonstrating the probable existence of the elements of his or her claim. To run such a point within the context of a criminal trial requires that those same judicial review elements apply: the pleader of the demur to continued prosecution bears the burden of proof, and that burden is only discharged on the balance of probabilities; O'Donnell v Dún Laoghaire Corporation [1991] ILRM 301. 47. In raising the demur before the judge in the absence of the jury, or before the jury is sworn within the relevant court having jurisdiction, the accused must accept the ruling of the trial judge. If the defence is ruled proven, that ends the trial. If the defence fails, the facts underlying it become irrelevant to any aspect of the criminal trial run in front of the jury. As to whether, however, an accused acted foolishly or mistakenly may, as is always the case, be pleaded in mitigation of sentence; but it is a matter for the trial judge as part of the sentencing process as to what weight is to be put on any such plea in the light of the evidence. Summary 48. Since the stated purpose of the leave granted to appeal to this court was implicitly a clarification of the existing law, it may be useful to attempt a summary. 49. An answer to a criminal charge of officially induced error is an exception to the rule that ignorance of the law, or mistake as to the law, cannot excuse criminal conduct. For officially induced error to be accepted as to bar the continuation of a criminal prosecution, the accused must prove that he or she went in good faith to seek legal advice from the authority that a reasonable person would see as possessing ostensible authority to advise on whether a proposed course of conduct was or was not lawful. In seeking advice, it is not enough that an accused give a vague outline to that authority of what he or she proposes. Instead, the proposal about which legal advice is sought must be specific, describing accurately that conduct which is the subject matter of the later criminal charge. What the official advises must be specific and must amount to legal advice, or advice of mixed law and fact, in a manner which clearly and unequivocally authorises the conduct as a matter of law. It is not sufficient for the advice to be such as to reasonably put the accused on notice to make further enquiries. The advice must cover the situation in issue. That advice must be accepted honestly by the accused and must be such that a reasonable person would be likely to act on it. It follows that in the commission of the offence, there must be no deviation from the apparently authorised conduct. To raise the defence, the accused must precisely describe before the trial judge what he or she did rather than evading responsibility through not admitting conduct. 50. Officially induced error is not a justificatory or excusatory defence in criminal law: rather, it amounts to a legal objection to the continuation of the criminal process. The principle that an accused should not be convicted in the circumstances described in the prior paragraph is rooted in Article 34.1 and Article 38.1 of the Constitution: it is founded on justice and on due process. Notice in writing of both the nature of the answer to an offence charged and how it is claimed to be applicable is part of the proper administration of justice in this regard. The proof of elements of unfairness leading to the trial judge staying a prosecution must be established by the accused on the balance of probabilities. The applicability of this plea in demur is a matter of law for the trial judge. The assessment of whether the accused has met the burden of proof on the facts and whether the legal exception is applicable is ordinarily for a judge of the court of trial to decide. Result 51. An answer to a criminal charge of officially induced error, in practice indistinguishable from entrapment by estoppel, is available in this jurisdiction. Its parameters have been described in this judgment. 52. That plea to demur a prosecution was not open to the applicant on the evidence in this case. There was nothing in the evidence before the trial judge which would have enabled any plea of officially induced error to succeed. The trial judge was correct in ruling out any mention of any such defence before the jury. It follows that the Court of Appeal correctly dismissed the appeal and that the conviction should stand. | |
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