Scottish High Court of Justiciary Decisons

At advising on 3rd October 1980,—

LORD CAMERON .—This is an appeal at the instance of the Prosecutor against the decision of the Sheriff at Dumbarton dismissing as incompetent a complaint at the appellant's instance against the respondents who, as their designation shows, are a limited company, charging them at common law with the offence of "shameless and indecent conduct." The complaint libelled that in premises occupied by them at a certain address in Dumbarton and on a specified date they conducted themselves "in a shamelessly indecent manner in respect that they did sell, expose for sale and have for sale 64 indecent and obscene magazines as specified in an annexed schedule which magazines were likely to deprave and corrupt the morals of the lieges and to create in their minds inordinate and lustful desires. As the Stated Case narrates, but the Minutes of Procedure do not disclose as they should, pleas both to competency and relevancy of the complaint were stated on behalf of the respondents and on 31st October 1979 both pleas were supported in argument by counsel on their behalf. Having heard argument the Sheriff sustained the plea to competency and dismissed the complaint. There was no formal disposal of the plea to relevancy, though it appeared that this plea was argued by counsel for the respondents. From the Sheriff's note however, it would seem that the plea was originally supported on the ground that no crime known to the common law of Scotland was disclosed in the complaint. Counsel subsequently limited his attack to a submission that such a common law charge as that in the complaint could not be competently libelled against a limited company, with a subsidiary submission that it was essential to the relevancy of the complaint, assuming it were competent, that there should be specification of the person or persons within the organisation of the company said to be directly responsible for the actings complained of.

The Sheriff, however, having disposed of the issue of competency, did not consider it necessary further to consider an apparently otiose plea to the relevancy of an incompetent complaint though indicating that he would not have sustained it.

The issue of competency as presented in argument is short, substantial but not simple: it is whether by the law of Scotland a fictional person can be guilty of the common law offence libelled. It is of course a matter of necessary concession and of everyday practice, that such persons can be guilty of statutory offences even of those offences where proof of knowledge or even intention on the part of the accused is an essential element in proof of guilt.

Before I come to deal with the arguments which were presented by counsel I think it is desirable to set out in the simplest form what it is that the respondents are alleged to have done—it is the sale or exposure for sale as a transaction of commerce, presumably in shop premises occupied by them for the purpose of their business, of certain specified magazines. It is the alleged quality of these particular magazines and their consequent effects or potential effects on the minds of the purchaser and reader which constitute the criminal character of what would otherwise be a very ordinary everyday commercial transaction. Such prosecutions in the case of individual shopkeepers are not uncommon and the recent case of Robertson v. Smith 1980 J.C. 1 makes it clear that sale to the public or exposure for sale of such literature constitutes a criminal offence in the common law of Scotland.

One obvious consequence of the Sheriff's decision would be that if an individual shopkeeper were to transfer the control of such a business as was conducted by the appellant in Robertson v. Smith from himself as an individual to a limited company controlled by him he could escape the penal consequences of his action. I make this observation because, while the present appeal is concerned with the affairs of a large company with, as is well known, many trading outlets, the issue is equally applicable to a "one-man company" operating in a back street in Glasgow.

The submissions for the appellant were presented by the Advocate-Depute in a careful and able argument in which his broad submission was that those directing and controlling the activities of a limited company, being its responsible officers, are persons capable of supplying the "will" of the company sufficient for the company to be able to possess the mens rea required for a common law offence and in particular the offence with which this company is charged in this complaint.

In elaboration of this submission the Advocate-Depute drew attention to the nature of the offence here charged as that has been identified in Watt v. Annan 1978 J.C. 84 and Robertson v. Smith 1980 J.C. 1. The general question of the capacity of a corporate entity or fictional person to exercise a will and to form and carry into effect an intent had for long been settled in Scotland as in England. In Gordon v. British & Foreign Metaline Co. (1886) 14 R. 75 the capacity of such a "person" to act with malice was affirmed, and the classic authority of Lennard's Carrying Co. Ltd. v. Asiatic Petroleum Co. Ltd. [1915] A.C. 705 left no room for doubt as to how the law would approach the question of a company's capacity to commit a common law offence and therefore to form the necessary wicked intent. A company's capacity to be guilty of malicious defamation was also recognised in English law: cf. Triplex Safety Glass v. Lancegaye Safety Glass (1934) Ltd. [1939] 2 K.B. 395, per du Parcq L.J. at p. 408, while the case of D.P.P. v. Kent and Sussex Contractors [1944] K.B. 146 showed that in England a company could be convicted of making statements which they knew to be false "with intent to deceive." This was a case of breach of regulation but that did not affect the principle.

There was ample authority in Scotland for the proposition for which he contended—cases such as Clydebank Co-operative Society v. Binnie 1937 J.C. 17, Mackay Bros. v. Gibb 1969 J.C. 26, MacNab v. Alexanders of Greenock 1971 S.L.T. 121 and Readers Digest Association Ltd. v. Pirie 1973 J.C. 42 were all illustrative of the principle that a fictional body could exhibit an intention to act contrary to law and had the capacity to form such an intent and therefore to incur criminal liability, albeit in matters of statutory breach. The case of Tesco Ltd. v. Nattrass [1972] AC 153 illustrated the manner in which the "brain" of a company would be held to operate and how its will and intention would be expressed and demonstrated in action.

Upon the issue of relevancy, in his reply to Mr Kerrigan's attack, the Advocate-Depute maintained that the complaint was sufficiently specific, the time, place and character of the offence being stated there could therefore be no need for any further specification.

This was not a case of vicarious but of direct responsibility, and therefore on the issue of relevancy there was no need to specify in the complaint that the offence had been committed by the hand of a servant. There is no vicarious criminal responsibility at common law, and if his argument on competency were correct, that specification which Mr Kerrigan demanded was irrelevant and unnecessary—whatever might be the difficulties of ultimate proof.

The passage cited by Mr Kerrigan from the opinion of the Lord Justice-Clerk in the case of City and Suburban Dairies v. MacKenna 1918 J.C. 105 at p. 110 had been taken out of its context—a prosecution for breach of Regulation—was therefore obiter and had not in any event been followed since 1945. Further, even in the case of statutory prosecutions against a company where the charge involved a failure to take some required action it was in many cases obviously impracticable to name any person whose individual failure had led to the breach. The rule of the common law being clear there was therefore no basis for the respondents' first argument on relevancy. So far as the second contention was concerned there was no need to specify particular passages, all or part of the scheduled articles were libelled and that was of itself sufficient notice. What was in issue here was a policy decision to expose them for retail sale in knowledge of their contents and of the character of these contents—and of these magazines in particular. The appeal should be sustained and the questions answered accordingly.

Mr Kerrigan opened his submission by disclaiming any intention to place reliance on the case of Miles v. Finlay or the passage in Green's Encyclopaedia to which the Sheriff referred and on which he relied. It is not therefore necessary to express any concluded opinion on the authority of that case or of the statement in Green beyond indicating that in my view the judgment in the case of Miles v. Finlay is clearly expressed in terms which are in any event too wide and cannot stand in light of statutory developments since 1831.

The broad proposition which Mr Kerrigan advanced was that as there was no reported case which decided that a limited company could be liable to a charge of criminal conduct at common law; the corollary of that proposition was that so to charge a limited company was by clear inference incompetent. The remedy lay not with the Court but with the legislature. For this Court to decide that a common law charge would lie against a limited company would be to make new law and in effect to create a whole catalogue of new offences; this was beyond the competence of the Court.

If what the Crown is seeking in this case to do were, as Mr Kerrigan argued, to induce the Court to create a new offence or offences which were previously unknown to the law then I would think there was great force in his argument, but the absence of direct authority affirming the Crown's submissions as to the competency of this charge is not by itself authority for the contrary; in any event the offence here libelled is not new: it is well known and has been the subject of more than one prosecution. The question therefore is not one of the creation of new offences but the application of the existing law to a corporate body as that law applies to an individual. The width of Mr Kerrigan's argument is such that logically applied it would, in Scotland, apply equally to a partnership as to a limited company. But Mr Kerrigan's argument went much further. He drew a distinction between those mala prohibita the commission of which admittedly may involve the formation of a deliberate intent, but only in those areas or fields identified by Parliament, and mala in se; fictional persons as such could not be guilty of acts of moral turpitude, and it is that quality which is involved in the concept of a malum in se, and it is because of the nature of a company that the limits of its criminal liability require to be drawn by its creator i.e. Parliament. The nature of the offence here requires proof of dole, which while in substance the same as mens rea (cf. Hume on Crimes, Vol. 1, 25) differs in that dole infers a degree of moral obliquity. A company could not be charged with culpable homicide, though it might be guilty of libel or even of criminal libel in England. In any event this was an offence in a "subjective area" and there was no precedent for such a charge being brought against a company where the essence of the charge was of moral delinquency. Further, it was impossible to fasten the label of "shameless conduct" to a limited company. The capacity for a sensation of shame was not within the necessary category of those senses which could be credited to a company. Therefore it could not (in the absence of expressed parliamentary enactment to the contrary) be guilty of shameless conduct, it being incapable of any sense of shame. This was a matter which should be left to the consideration and decision of Parliament.

Mr Kerrigan's submissions on relevancy were:

1. (1) that the complaint was defective in failing to specify the person or persons by whose hands the sale or exposure for sale had taken place. There should be sufficient identification also of those who are alleged to be capable of rendering the company responsible. It was not enough to leave this as a matter of proof: the respondents were entitled to have notice of this matter. He cited City and Suburban Dairies v. Mackenna 1918 J.C. 105 and a passage from the Lord Justice-Clerk (Scott Dickson) at p. 110; and

2. (2) that there was no specification of which parts of the magazines were said to have the corruptive qualities. Both on grounds of competency and relevancy the Crown's appeal should be refused and the questions in the case answered accordingly.

In considering the arguments addressed to the competency of the charge in this case it is necessary to have its precise terms in mind; it is a charge of an offence against public decency as specified in the complaint and is a charge at common law. The arguments presented against the competency of the proceedings were not directed to the nature of the charge as being one unknown to the common law if committed by an individual, but solely to the competency of charging a limited company, being a fictional person, with a common law offence. The argument proceeded in three steps (1) that a fictional person could not be charged with a common law offence, that being a matter for Parliament; (2) that in any case the particular offence charged, being one involving subjective considerations, could not be competently charged, and (3) that, as it was impossible for a company to have or feel a sense of shame, this offence in which subjective shamelessness was an essential ingredient could not be competently libelled against the respondents.

While the arguments were presented in general terms on both sides of the bar, I think it is necessary to isolate the precise issue which arises on the competency of the present complaint. It is whether a limited company, acting within its statutory powers and in pursuit of its objects as prescribed by its articles, can be competently charged with an offence at common law. The case is not concerned directly with any wider question, but solely with whether a limited company acting in course of its ordinary and legitimate business can be prosecuted for a common law offence, where its action in its specific facts would in the case of an individual render him liable to prosecution for a contravention of the common law. I think it is particularly important to limit the field of decision in this case to such action as falls within the powers of the corporation. This complaint and the issues arising upon it are not concerned with actions which are ultra vires or in excess of the powers conferred on the corporation by its incorporating statutes or instruments or articles of association. The assumption here is that the sale or exposure was in course of the respondents' business.

The criminal law has long recognised that a corporate body may be guilty of breaches of statute and incur a penalty, and therefore be susceptible to prosecution as a person recognised in the eyes of the law. Further, the law has also recognised that an incorporation may be guilty of statutory offences the commission of which is the result of intended or deliberate action or inaction. It was not Parliament which specifically provided that corporate bodies such as limited companies should be subject to prosecution: the various statutes assumed that no distinction in capacity to offend should exist between natural and other persons recognised by law as legal entities with capacity to discharge certain functions and perform certain actions. The responsibility of both for breaches of statute is the same, and the individual and the company alike can be cited and charged in their own names. No doubt in section 333 of the Criminal Procedure (Scotland) Act 1975 provision is made for certain responsible individuals to be cited in the case of a firm or limited company: this provision is permissive and not mandatory, while the books are full of cases where firms and limited companies have been cited and charged in their own proper names without further addition or without reference to the hand or actions of a particular individual whose physical act or omission occasioned the breach. Thus the accountability of limited companies in the matter of statutory offences is beyond argument, and does not in any sense arise out of precise legislative provision to that effect. Section 333 which re-enacts earlier legislation makes no distinction between statutory and common law offences and in particular contains nothing to indicate that its provisions only relate to breaches of statute or regulations. If Parliament had intended that a company in its individual capacity should not be liable to prosecution in respect of common law offences it could have said so, and at the same time prescribed where and on what natural persons within the structure or employment of the company responsibility and consequent criminal liability should fall. But Parliament has not so provided, and the authorities cited by the Advocate-Depute illustrate the extent to which companies in Scotland can be and are rendered liable to criminal prosecution, even where commission of the offence libelled involves a conscious exercise of will or demonstration of intent. It would seem therefore to follow that there should be no obstacle in principle to the same liability to prosecution where the offence is malum in se and not malum prohibitum. This distinction lay at the root of Mr Kerrigan's argument that the question of common law liability was a matter for Parliament and not for the Courts. The fallacy of this argument however would seem to lie in the fact this is not a case of creating or declaring a new crime or offence which never existed before, nor of extending the boundaries of criminal responsibility to a group of legal persons on whose shoulders criminal responsibility had not been rested before. If therefore a limited company has the capacity to form an intention, to decide on a course of action, to act in accordance with that deliberate intent within the scope and limits of its articles, it is difficult to see on what general principle it should not be susceptible to prosecution where that action offends against the common law. It must no doubt be conceded that this principle could not be applied to a crime where the law prescribes only one and that a custodial penalty; but the fact that lex non cogit ad impossibilia in a particular instance does not imply that as a consequence it follows that lex non cogit ad possibilia in other instances where penalties for breaches of the common law can be effectively imposed. It has long been settled in our civil law that a company can be guilty of malice: malice implies a harmful intention deliberately directed against another person or persons. The parallel between malice in the field of defamation and the essence of this mens rea which is essential to criminal liability at common law appears to me close. What then is criminal intent ? While it is of course true that the "wicked intent"—(which is mens rea) is a matter of proof in which the burden of proof lies upon the Crown, "the wicked intent is an inference to be drawn from the circumstances of the deed, as well as from any explanations by the man. Although a man considers his deed meritorious, the law may hold him to have acted wickedly and feloniously. Whenever a person does what is criminal, the presumption is that he does so wilfully": MacDonald 5th edition p. 1. Further it was put by Hume in writing on the nature of dole thus "It is not material to the notion of guilt, that the offender have himself been fully conscious of the wickedness of what he did": Hume on Crimes, Vol. 1, 25. No distinction is drawn by Hume between the concept of "dole" and that of mens rea: dole being defined as "that corrupt and evil intention, which is essential…to the guilt of any crime" op. cit. Vol. 1, 21. These are general principles applicable to all common law crimes and offences and therefore it follows that the presumption of law is precisely the same in all cases—whatever the degree of moral obliquity involved in the commission of the offence. Therefore the bald submission that a company cannot in Scotland in any circumstances be guilty of a common law offence does not commend itself to me as sound in principle. It is without any authority and if it be argued that a company cannot possess the capacity to exhibit mens rea it can be sufficiently answered that mens rea is no more than that "wicked intent" which is the presumed element in all acts which are criminal at common law. It is trite law also that a company is legally capable of many deliberate actions within the limits of its powers as set out in its Articles of Association, these powers being exercised by those who are the "directing mind" or "will" of the company. In the case of Lennard's Carrying Co. Ltd. v. Asiatic Petroleum Co. Ltd. [1915] A.C. 705 at p. 713 Lord Chancellor Haldane, with whom his colleagues, including Lord Dunedin, concurred, at p. 713, in analysing the elements which taken together demonstrate the basis on which a company can be held responsible as an entity for deliberate acts or omissions where these acts or omissions are those at least in the field of civil liability, said "A corporation is an abstraction. It has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who for some purposes may be called an agent, but who is really the directing mind and will of the corporation, the very ego and centre of the personality of the corporation. That person may be under the direction of the shareholders in general meeting; that person may be the board of directors itself, or it may be, and in some companies it is so, that that person has an authority co-ordinate with the board of directors given to him under the articles of association, and is appointed by the general meeting of the company, and can only be removed by the general meeting of the company". This may well indicate that difficulties of proof will arise when a charge of criminal conduct at common law is brought against a limited company, but does nothing to suggest that such a charge may not be competently brought, and that without the necessity in all cases of specifying in the complaint or indictment which particular officer or employee of the company was in fact responsible for the act or omission charged. The argument put forward by Mr Kerrigan, who cast aside any support which he might get from Miles v. Finlay and the passage in Green's Encyclopaedia founded on by the Sheriff, that there is no reported authority in Scotland supporting the Crown's contention on competency does not seem to me to carry the matter very far: stood on its head the argument on the absence of direct authority is equally potent—that the absence of authority indicates that the matter is beyond argument. But the authorities demonstrate that a company can be guilty of mala prohibita even where the offence involves knowledge, intentional action or permission. Further, in the field of civil liability a company can be held liable in reparation for defamation where malice has to be established, while in England there is authority for the proposition that a company may be guilty of criminal libel. If a company can by law—by legal fiction, if you will—be endowed with a mind and will exerciseable by natural persons acting within the confines of the company's legal competence, and be held responsible for actings in pursuance of the exercise of that mind and will, then if those actings are contrary to the common criminal law, I find it difficult to see upon what basis of principle it can be said that the company is free of criminal liability, however this may be enforced. The wicked intent in all common law crimes is the intent to perform the criminal act. The motive or moral depravity of the actor is alike irrelevant to the quality of that act in the eye of the law. Therefore if the act is intentional, the criminal intent is presumed whatever the motive which inspired the actor.

The rules of law as to a company's capacity to exercise a conscious mind and will enunciated in the case of Lennard's Carrying Company have been further illustrated in the recent and important case of Tesco Ltd. v. Nattrass [1972] AC 153. No doubt the decision is concerned with a statutory charge and with the defences open to a company charged with a contravention of that statute, but in my view its importance lies in the extent to which the House of Lords held that a company could be susceptible to criminal proceedings whether under statute or at common law. In that case Lord Reid at page 171, after citing the passage I have quoted from the speech of Lord Haldane, went on to refer to a passage from the judgment of Lord Denning in H. L. Bolton (Engineering) Co. Ltd. v. T. J. Graham & Sons Ltd. [1957] 1 Q.B. 159 where he said at page 172 "A company may in many ways be likened to a human body. It has a brain and nerve centre which controls what it does. It also has hands which hold the tools and act in accordance with directions from the centre. Some of the people in the company are mere servants and agents who are nothing more than hands to do the work and cannot be said to represent the mind or will. Others are directors and managers who represent the directing mind and will of the company, and control what it does. The state of mind of these managers is the state of mind of the company and is treated by the law as such." Having quoted that passage Lord Reid went on to say "In that case the directors of the company only met once a year: they left the management of the business to others, and it was the intention of those managers which was imputed to the company. I think that was right." I draw particular attention to the word "intention." Later in his speech Lord Reid referred to the case of D.P.P. v. Kent and Sussex Contractors cited by the Advocate-Depute and also R. v. I.C.R. Haulage Ltd. [1944] K.B. 551 where it was held that a company can be guilty of common law conspiracy. Lord Reid added in relation to this latter case at page 173 "I think that the true view is that the judge must direct the jury that if they find certain facts proved then as a matter of law they must find that the criminal act of the officer, servant or agent including his state of mind, intention, knowledge or belief is the act of the company. I have already dealt with the considerations to be applied in deciding when such a person can and when he cannot be identified with the company. I do not see how the nature of the charge can make any difference."

No doubt the decision in the case of Tesco is one concerned with English criminal law, but the statute under which the prosecution was brought is a United Kingdom statute effective in Scotland and the judgment and opinions in the case, if technically not binding in this country, are necessarily to be treated with the highest respect. One thing may be taken as clear, that in England a charge of common law crime may be competently laid against a company, and while I agree that there is no reason why the criminal jurisprudence of the two countries should necessarily fall into line, at the same time I see no reason in principle why a different rule of law should operate in Scotland, the same statute governing the structure, powers and functioning of limited companies in both countries. In both countries the rules and principles governing the civil liabilities of companies are the same; in both countries the rules and principles governing criminal liability in respect of statutory offences are the same and it is therefore not easy to see upon what principle of Scots criminal law a company created by statute should not be amenable to the common law in matters criminal—the only authority for the contrary view which appealed to the Sheriff was thrown overboard by Mr Kerrigan and in my opinion rightly—particularly as in both countries the capacity of a company to form an intent, to carry it into effect, to exercise a will and to make a conscious choice of courses of action or inaction is undoubted and is precisely the same. In my opinion the competency of the present charge is not open to successful challenge on the broad general principle that a company cannot in Scots law be guilty of a common law offence.

This however is not an end of the matter. It must necessarily be conceded that certain criminal conduct cannot be ascribed to a company. Thus, where the only penalty prescribed or permitted by law is custodial or personally physical, it may be presumed that no charge will lie, but no such objection could be levelled here and that is a question that does not arise in the present case. The narrower question is whether this charge can be brought against a limited company, and it is to this particular aspect of the matter that Mr Kerrigan's subsidiary argument was directed. Whatever might be the general liability of a limited company, this charge, it was submitted, was not one which could be competently brought. Mr Kerrigan's argument in brief was that as this charge involved as a critical element an accusation of "shamelessness" it went far beyond any acceptable limits. His argument could be put in very simple form. He said that "shame" or a "sense of shame" was something which could not be attributed to a fictional person. Therefore a fictional person could not possess the capacity to act "shamelessly." But the charge was one of "shameless" conduct. The accused was a fictional person, therefore the charge lacked its essential content because no fictional person could have a sense of shame. The simplicity of the argument thus presented is attractive. But the "shameless" quality of the conduct here libelled is essentially an objective and not a subjective quality. It is of the essence of this offence that the conduct be directed towards some person or persons with an intention or in the knowledge that it should currupt, or be calculated or be liable to corrupt or deprave in the manner libelled, those towards whom the conduct is directed. It is this which determines the shameless quality of the act, with which the moral obliquity of the actor—if any—has nothing to do. In the present case the qualification of the conduct is that the exposure for sale or sale to persons, members of the public, was done with the knowledge or intention of the company—knowledge of the calculated consequences or those liable to follow or intention that such consequences should follow. Now the respondents here are primarily a commercial company concerned in the sale of inter alia magazines. It may be presumed that the selection of stock is not a matter of accident but at least dictated to some extent by commercial considerations and in the hope and expectation that the articles exposed will be attractive and saleable and that the selection is at the will and intention of the seller. The transactions under consideration therefore represent conduct which is directed and deliberately directed to members of the public to influence them to purchase articles for sale. In these circumstances I do not see why that conduct directed, as it admittedly would be, towards members of the public as potential purchasers, should not be capable of bearing the qualitative description which the Crown seeks to put upon it. In effect, the test of criminality is objective and not subjective and it is here that Mr Kerrigan's subsidiary or "subjective" argument appears to me unsound, because it is ill-founded. The question is not whether a company is an entity which is endowed with a conscience to be appeased or a capacity for moral sensation or an absence of a sense of shame or even a capacity to overcome a sense of shame by the prospect of financial profit. It may well be that the offence libelled is one which falls within the category of offences against public morals, but in order to commit it the offender does not require to be possessed of capacity to feel a sense of personal shame or even to lack it. What however is of the essence of the offence is that the action itself of an indecent character should be directed towards a person or persons with certain intentions or knowledge of the consequences or likely consequences to that person or those persons—the intention or knowledge that it should corrupt or be calculated or liable to corrupt or deprave those towards whom the conduct is directed. If these matters can be established by relevant and sufficient evidence then the qualification and therefore the criminal character of the actions themselves are also proved.

In my opinion therefore Mr Kerrigan's two main attacks on the competency of this charge as directed against the respondents fail. By libelling this offence against the respondents it cannot be said the prosecutor is seeking to create a new offence. The offence is one known to the common law, as Mr Kerrigan conceded. Further I do not think that he succeeded in demonstrating that a company cannot possess a capacity in law to intend its actions and therefore be incapable of forming the wilful intent essential to the commission of a common law offence, and as I have already indicated, I think his argument on "shamelessness" of conduct was misconceived. I do not intend to imply however that a limited company is in law to be regarded as capable of the commission of any and every common law offence, other than those for which the only penalty is custodial, or of offences—such as rape—which are obviously and necessarily physical acts of a natural person. In my opinion, and as at present advised, so to hold would go much further than is necessary for a decision as to the competency of libelling this offence against a limited company. Having considered the arguments presented in this case I am of opinion that a company may competently be charged with an offence at common law, where that offence consists of action purposely taken by the company within its statutory powers and in pursuance of its objects as defined and set out in its articles, and where such action if taken by a natural person would constitute a common law offence.

Thereupon I consider that a charge of this nature—i.e. shamelessly indecent conduct in the particulars libelled—may be competently and relevantly libelled against a company. But the question which then remains is, assuming the competency of libelling this offence against a company, whether this complaint relevantly and sufficiently libels it against these respondents.

As this is a common law charge, this is not a case to which vicarious criminal liability can be attached to the respondents. It is not therefore essential to relevancy that there should be specification of the individual or individuals whose actions are to be imputed to the company. The observations of Lord Justice-Clerk Scott Dickson in the case of City and Suburban Dairies v. MacKenna 1918 J.C. 105 at p. 110 founded on by Mr Kerrigan were made in a case of alleged breach of regulations and not in a common law charge, and to this extent the observations were obiter. In any event, it is clear from the opinion of Lord Dundas in the same case that anything said in the case was not intended to be applicable to common law charges. In the earlier case of Gair v. Brewster 1916 J.C. 36 at p. 38 the Lord Justice-General expressed the governing principle thus—"the doctrine of vicarious responsibility has no place in our criminal jurisprudence." Consequently I do not think Mr Kerrigan's argument on the alleged necessity for specification of the name of the servant or servants of the company actively concerned with the sale of the magazines is well founded. Equally I think his second submission as to lack of specification of the precise portions of the scheduled magazines said to be offensive is unsound. The Crown's allegation covers all or part of the magazines or any of them and in my opinion this is sufficient notice to the accused. These were the only two points on which the relevancy of this complaint was challenged and therefore if these fail, as I think they do, the relevancy of the charge is not open to further attack. No doubt the complaint is in the barest possible form, but the necessary notice of time, place and modus is contained within its four corners and by implication of statute—Criminal Procedure (Scotland) Act 1975, section 48—the charge implies that what is alleged to have been done was done "knowingly." Therefore it is the company's knowledge which has to be established, and the Advocate-Depute in his argument on relevancy conceded that the Crown, in order to succeed must prove, on this complaint, that these specified magazines were being sold and exposed for sale as a result of a "policy decision" to buy them in for retail sale in the knowledge of their contents—and that a "policy decision" meant a management decision to acquire magazines of this type and those magazines in particular. I think that the Advocate-Depute was correct in his assessment of what the prosecution would be put to prove on this complaint, but I do not think that this concession—a necessary concession in my opinion—affects the relevancy of the complaint. In my view, assuming the competency of such a common law charge as is here made, the relevancy of its statement, in the absence of further attack than that made by Mr Kerrigan, which I have already rejected, should be affirmed. Whether it will be possible for the Crown to discharge so heavy a burden of proof in respect of so narrow an issue of fact is quite another matter on which I express no opinion, except to point out once again that there is no vicarious liability in respect of a common law offence in Scotland: this is not a field in which the hand of the servant is the hand of the master and consequently it is the responsibility and knowledge of those who in the words of Lord Denning in H. L. Bolton (Engineering) Co. Ltd. v. Graham [1957] 1 Q.B. 159 at p. 172 "represent the directing mind and will of the company, and control what it does" which will have to be established in respect of those scheduled magazines and no other, which will have to be proved if conviction under this complaint is to be secured.

The concession made by the Advocate-Depute—both necessary and proper in my opinion—that, in order to succeed the Crown must establish a policy decision in respect of the particular magazines specified in the schedule makes it quite clear that mere proof of exposure, or possession for sale would not be enough to warrant conviction.

Whether it will be possible for the prosecution, within the limits which the Crown has drawn for itself in this complaint, to establish the charge is another matter. To establish, on this complaint, a "policy decision" in respect of these particular issues of these specified magazines—and this is what the Crown by concession has to succeed in proving—not only suggests that the difficulties may be so formidable as to be insurmountable but also that the wisdom and (I will not use a harsher term) of the course taken and supported by the Crown in so limiting the scope of the charge may be open to doubt. However, for the reasons I have endeavoured to set out and in light of the arguments submitted by the respondents both on competency and relevancy of this complaint, I would answer the questions (1) in the negative and (2) in the affirmative and direct the Sheriff to proceed as accords.

LORD STOTT .—The respondents are charged on a summary complaint that at premises occupied by them in Dumbarton they conducted themselves in a shamelessly indecent manner in respect that they sold, exposed for sale and had for sale sixty-four indecent and obscene magazines which "were likely to deprave and corrupt the morals of the lieges and to create in their minds inordinate and lustful desires." From the schedule annexed to the complaint it appears that the magazines were four in number: Club International (27 copies), Mayfair Vol. 14 No. 1 (3 copies), Playgirl Nov. 1978 (3 copies) and Penthouse Vol. 13 No. 10 (31 copies). Objection was taken to the competency and relevancy of the complaint, and the learned Sheriff has dismissed it on the broad ground that it is incompetent to prosecute a company for a common law crime.

This conclusion was attacked by the Advocate-Depute in a powerful and closely argued submission. It is well settled, he said, that a company may competently be charged with a statutory offence, even when the offence is such as to require a measure of volition or intention. The principle being thus well established, there was no reason to suppose that a distinction fell to be drawn merely because an offence had been committed at common law rather than in contravention of a statute. Counsel for the respondents on the other hand submitted that companies are themselves creatures of statute and can have no liabilities, at all events in the realm of criminal law, other than what had been imposed on them by Parliament. He pointed out, as appears to be the fact, that in all the history of incorporated bodies there is no recorded instance in Scots law of a prosecution of a company for a crime or offence at common law. Counsel conceded that the case of Miles v. Finlay (1830) 9 S. 18, relied on by the Sheriff in support of his opinion, was of no assistance. The point raised in the Sheriff's ground of judgment is thus a completely novel one, and not without difficulty. It appears to me however that for the purposes of the present case it is unnecessary to decide it. It is sufficient for present purposes to determine whether the offence libelled in this complaint is one which can competently be charged against a company and I am of opinion that it is not.

It is I think self-evident that there are certain crimes and offences which cannot be committed by a corporate body. Murder is such a crime, not only, as the Advocate-Depute conceded, because a company cannot be imprisoned but because it is incapable of having that wicked intent or recklessness of mind necessary to constitute the crime of murder. Other examples which come to mind are reset and perjury. In my opinion the offence of conducting oneself in a shamelessly indecent manner falls into the same category.

There is I think no doubt that a company is held in law to be capable of some degree of delictual or criminal intent. A corporate body can be guilty of negligence in failing to provide a safe working place for its employees (M'Mullan v. Lochgelly Iron & Coal Co. 1933 SC (HL) 64). It can have an intent to deceive (D.P.P. v. Kent and Sussex Contractors [1944] K.B. 146). It can act in such a way as to infer malice in law (Gordon v. British and Foreign Metaline Co. [1886] 14 R. 75). It can permit the use of a vehicle on a road (Mackay Bros. v. Gibb 1969 J.C. 26). It can sell products by retail (Patterson v. Cam'nethan Oatmeal Ltd. 1948 J.C. 16). It can buy wild rabbits (Behling Ltd. v. Macleod 1949 J.C. 25). It can supply utility furniture to a customer (Muir v. Grant & Co. 1948 J.C. 42). On these and similar analogies it was argued by the Advocate-Depute that an allegation of selling and exposing for sale the obscene magazines may properly be made against a company. He conceded that it was not sufficient for the purpose of this charge for the Crown to prove that the company exposed obscene magazines for sale. Such conduct might be indecent, but as was made clear in Watt v. Annan 1978 J.C. 84 it is not the indecency of conduct which makes it criminal but the quality of "shamelessness." If that is the test (and I do not read the later case of Robertson v. Smith 1980 J.C. 1 as qualifying or detracting from it), it would follow in my opinion (and I understood the Advocate-Depute to assent to this) that not only must a publication be indecent but must be known to be indecent. It should be noted that the complaint does not relate to a type of magazine; it relates simply and solely to specified issues, and the relevant knowledge must therefore be knowledge of the allegedly indecent material comprised in these four issues. Furthermore, since there is no vicarious liability for crime, liability could arise only through the knowledge not of a mere employee or shop assistant but of a person or persons who may be regarded as the "directing mind and will of the company" (Tesco Supermarkets v. Nattrass [1972] AC 153; Readers Digest Association v. Pirie 1973 J.C. 42).

What the Crown therefore are seeking to prove (although unfortunately this does not appear ex facie of the complaint but from a gloss on the expression "shamelessly indecent") is that either the respondents' board of directors or (possibly a less spectacular flight of fancy) some senior officer, to whom had been delegated full responsibility for dealing with such matters, has perused the four magazines libelled, along with the other publications currently on sale in the respondents' branches, has observed in the contents of the four magazines something that he ought to have realised was obscene, and nevertheless had been so lost to any sense of shame as to authorise or at all events permit their sale in the respondents' shop at Dumbarton. The inference of shamelessness being thus brought home to a person or persons who may be looked upon as the controlling mind of the company must then be imputed to the company itself. Whatever may be thought about the earlier stages of this argument, and about the application (if any) to common law crime of the somewhat nebulous doctrine of "controlling mind," this final conclusion is to my mind a non sequitur and one which does not accord with realities. Many as are the attributes which have been imputed to a company, a sense of shame has never been regarded as one of them; and nothing that has been said by the Advocate-Depute has persuaded me that it must or could be so regarded.

It was submitted that as matter of public policy it would be unfortunate if a small shopkeeper or shop assistant were to be liable to prosecution on this charge whereas more culpable offenders could shelter behind the cloak of incorporation. I am not satisfied however that that would be a necessary consequence of our holding this complaint to be incompetent. To obtain a conviction, the Crown would have to bring home to the company the requisite degree of knowledge and intent. In order to do so, it would seem the Crown would require to identify the controlling person or persons by whom the knowledge was acquired and the intent conceived; and if they are in a position to do that they should be in a position to proceed against these persons as individuals. In any event I cannot think that it would be sound public policy to introduce an additional element of fiction into an area of law in which (as is perhaps indicated by the archaic and faintly ludicrous wording of the complaint) commonsense is not noticeably at a premium.

While reserving my opinion on the reasoning of the learned Sheriff, I respectfully agree with the conclusion which he has reached. I should answer the first question of law in the affirmative and refuse the appeal.

On the view that I take of the competency of the complaint, no question of relevancy can arise.

LORD MAXWELL .—The accused, a limited company, is charged on a complaint that "on 30th January 1979 at the premises occupied by you at 50 High Street, Dumbarton you did conduct yourself in a shamelessly indecent manner in respect that you did sell, expose for sale and have for sale sixty-four indecent and obscene magazines as specified in the Schedule annexed hereto which magazines were likely to deprave and corrupt the morals of the lieges and to create in their minds inordinate and lustful desires." The Schedule lists numbers of copies of four different named magazines. As regards three of the four it appears that each individual magazine was a copy of the same edition. As regards the fourth all that is stated is "twenty-seven Club International" and it is not disclosed whether all of the twenty-seven are copies of the same edition or not. No natural person is joined with the Company in the complaint and no reference is made therein to any natural person.

Arguments were submitted to the Sheriff on the competency and relevancy of the complaint. The Sheriff sustained the plea to competency. Appeal is now taken against that decision.

It appears that, so far as is known, this is the first occasion on which a body corporate has been charged in Scotland with a crime at common law. The Sheriff reached his decision on the broad principle that a body corporate, having no mind, cannot be guilty of a common law crime because of the requirement of mens rea or dole as an element of guilt in such a crime. In my opinion this is not a particularly appropriate case in which to attempt to decide that question as a generality. It is not necessary to do so. What is at issue is whether the particular crime charged here can competently be brought against a corporation. I should add, however, that I do not find the authorities on which the Sheriff relied convincing support for the general proposition which he sustained. Miles v. Finlay & Co. (1830) 9 S. 18 is more fully reported in (1830) 6 Faculty Decisions 11. The case concerned a complaint against a partnership. It was a complaint of contravention of statute. Lord Gillies merely said that he was clear "that a company cannot be convened in such a complaint as the present" and gave as his reasons certain aspects of partnership law which are no longer the law. In any event there has been much development of the law since 1830. The passage in Green's Encyclopaedia Volume 4 at page 138, on which the Sheriff also relied, is a bare statement that "a company can neither prosecute nor be prosecuted for a crime." It relies on Miles and I should have thought that the statement that a company cannot prosecute is plainly wrong. As to the problem raised by the requirements of mens rea as such, it may be that the Sheriff attached a larger meaning to that expression than it necessarily has, at least as regards some crimes (Gordon, Criminal Law, chapter 7).

The accused's counsel presented an argument to the effect that, as this was the first time a common law crime had been charged against a company, the Court was, in effect, being asked to make new law and in this area legislation ought to be by Parliament. I have sympathy for the view that, in the realm of what is in substance censorship of certain types of magazines, literature, films etc. on the grounds that they are socially unacceptable, it would perhaps be preferable that the matter be dealt with by statute rather than the existing common law, which was I think designed to meet rather different problems. I think that, in fairness, it might be better that conduct of the kind complained of should be controlled in appropriate cases by getting at the employer company rather than the employee, but I very much doubt whether, on this subject, any attempt to apply ancient common law principles to the activities of companies is likely to produce sensible results. However I do not think that counsel's argument as stated is sound. The fact that the question raised in this case has never been raised before does not absolve the Court from attempting to determine what the law now is. But I do think that the fact that the Crown here is seeking to do what it has never done before is of some significance in considering whether it is competent. In particular, while in theory a decision on competency does not necessitate a decision as to what would require to be proved to establish guilt, in my opinion it would be wrong to declare for the first time a particular kind of criminal responsibility without having a reasonably clear and precise idea of the circumstances in which that responsibility would arise.

The crime charged in my opinion has certain characteristics which have a bearing on the present problem. It is a charge of "shameless and indecent" conduct. This involves not merely, as in some crimes, the doing of a specific thing which the common law prohibits, but the doing of something which is defined by reference to a type of behaviour of which human beings alone are capable. I do not question the soundness of the decisions in Watt v. Annan 1978 J.C. 84 and Robertson v. Smith 1980 J.C. 1 that such human behaviour can be displayed by the purveying or exhibiting of indecent books, magazines or films, but I suppose that in the past the crime usually concerned actual physical conduct of the human body. The crime further involves to an exceptional degree a subjective judgment upon which reasonably held opinions can differ. It is true that in practice whether the crime has been committed will depend upon the subjective judgment of the judge or jury rather than of the accused, but a finding of guilt implies that the accused has used his judgment and discretion in an indecent and shameless fashion. The crime as charged also, in my opinion, necessarily involves knowledge of the contents of the particular magazines complained of. In the course of his argument the learned Advocate-Depute appeared to suggest that a general knowledge on the part of someone at an appropriate level in the accused's hierarchy of the contents of this "type" of material would be sufficient. I agree that the necessary knowledge might be inferred and proved in various ways, but I do not think that on the wording of this particular charge, anything less than knowledge of the contents of the particular magazines in question would suffice. There might be cases where magazines, in edition after edition, have displayed pictures or writing of a quality that would justify conviction, where a person could properly be charged with shameful and indecent conduct for selling any edition. That is not what is charged here and, for all I know, the case, if it proceeded, might turn on whether one particular and uncharacteristic picture or sentence went too far.

We were referred to a number of authorities both Scottish and English. While the English cases and particularly the House of Lords case of Tesco Supermarkets Limited v. Nattrass [1972] AC 153 (hereinafter referred to as "Tesco") must be treated with very great respect, I think that caution must be used in applying dicta in those cases in relation to a matter with which they were not concerned, namely the common law of Scotland relating to crime and to a rather special type of crime.

It is accepted by the Crown that the common law does not recognise vicarious criminal responsibility (Mackay Brothers v. Gibb 1969 J.C. 26 per Lord Justice-Clerk Grant at page 31) and that the complaint would not be competent unless the accused company, as such, could have committed the crime alleged. Whatever may be the position as regards other common law crimes, it is perfectly apparent that the company as a legal abstraction could not, as matter of fact, have the knowledge, exercise the judgment and conduct itself in the manner alleged in the complaint. Accordingly the complaint can only become competent by the employment of a fiction (Tesco per Lord Reid). Fiction has frequently been employed both in England and Scotland to attribute to a corporation human characteristics which it cannot have, but the fiction which has been employed is not always the same fiction. It seems to me that the approach of the Courts has been this. Where the plain requirements of justice, the express provisions of statute, or the presumed intentions of Parliament require human characteristics to be attributed to corporations the courts provide the necessary fictions tailored to give effect to those requirements, provisions, or intentions. In Tesco at page 197 Lord Diplock, after examining the statutory consumer protection provisions with which the case was concerned in a practical light, reached a construction of the provisions and stated that "So construed these sections provide for a rational and just system of enforcement of the penal provisions of the Act." Later at page 198 he stated that "to establish a defence under section 24 a principal who is a corporation must show that it ‘took all reasonable precautions and exercised all due diligence.’ A corporation is an abstraction. It is incapable itself of doing any physical act or being in any state of mind. Yet in law it is a person capable of exercising legal rights and of being subject to legal liabilities which may involve ascribing to it not only physical acts which are in reality done by a natural person on its behalf but also the mental state in which that person did them." He then rejected, as inapplicable in the context of the act in question, the fiction of an agent's state of mind being attributable to his principal and, along with the other Lords of Appeal, adopted as appropriate the fiction of what I might call for short "the controlling mind." This I think, though it is not entirely clear, is the fiction which the Crown argues is applicable in the present case. It was not, of course, a new fiction in 1972. It had in particular been developed by Lord Denning in H. L. Bolton (Engineering) Company Limited v. J. T. Graham & Sons Limited [1957] 1 Q.B. 159 in a well known passage likening a company to a human body. However, what Lord Diplock says in the passage I have quoted is that the exercise by a corporation of legal rights and the subjection of it to legal liabilities "may involve" the need to use a fiction. This seems to me a different thing from saying that for all purposes in law the controlling mind fiction or any other particular fiction has to be applied.

The circumstances in which the problem has arisen vary greatly. It has long been established that a company can be negligent so as to incur civil liability. We were, rightly, not afforded a detailed examination of the development of this fiction, but I suppose it was largely designed to overcome the rigidities of the law of common employment which had become intolerable with changing attitudes towards labour. This fiction, though in theory it ascribes a state of mind to a company, does not usually present much difficulty, since in practice, to give it effect, it is normally only necessary to show that something has not been done. If a safe system of working has not been set-up it is both unnecessary and pointless to enquire who it was who failed to set it up.

The authorities to which we were referred included two in which it was held possible to ascribe to a corporation the peculiarly human failing of "malice". In Gordon v. British & Foreign Metaline Company (1886) 14 R. 75 a company was sued for damages for judicial slander alleged to have been made in a Sheriff Court process. The defenders pled "privilege," to which the pursuers answered "malice." The defenders argued unsuccessfully that they, having no mind, could not be guilty of malice. The result was hardly surprising. The defenders could not well claim privilege, but deny to the pursuers any possibility of establishing a qualification on the privilege. This case takes one no further in establishing the nature of the fiction required. Triplex Safety Glass Company Limited v. Lancegaye Safety Glass (1934) Limited [1939] 2 K.B. 395 established, as a necessary preliminary to certain English procedure, that a company could be guilty of a criminal slander which apparently involves malice. I doubt if this is of any assistance in the Scottish courts, but I get the impression from the judgments that the fiction there employed was not the same as the controlling mind fiction referred to in Tesco.

I turn next to some of the cases involving a fictional imputation of knowledge. In Clydebank Co-operative Limited v. Binnie 1937 J.C. 17 a company was charged with "permitting" an employee to use a vehicle as an express carriage without an appropriate licence as required by the Road Traffic Act then in force. There are two elements in permitting. One is knowledge and the other is, as with the civil law negligence cases, a sin of omission in respect of failure to prevent. Knowledge was the aspect at issue in the case. Lord Justice-General Normand held that the required knowledge was brought home to the company by the knowledge of the then transport manager who was in charge of their vehicle hiring establishment. Lord Fleming appears to have gone further and held that knowledge, not only of the transport manager, but even of so lowly an individual as the vehicle driver, was to be imputed to the company. I do not question the soundness of the decision in its statutory context but the fiction used for the purposes of imputing knowledge seems to have little relationship to the controlling mind fiction discussed in Tesco.

Mackay Brothers and Company v. Gibb 1969 J.C. 26 concerned a charge against a partnership of permitting a vehicle to be used with its tyres in a certain condition contrary to Motor Vehicle Regulations. For present purposes the question was whether the accused firm "knew" of the condition of the tyres. It was held that knowledge was brought home to them through "the wilful blindness" of their garage controller. The Lord Justice-Clerk appears to have considered that knowledge of any employee would have sufficed. Lord Wheatley, making it clear that he was proceeding on the presumed intention of Parliament, took the view, as I read his judgment, that the knowledge of any employee on a matter within the responsibilities delegated to him would be knowledge of the Company. A similar approach was taken by Lord Milligan. Again I do not question the decision in its statutory context but it is far from the controlling mind fiction as discussed in Tesco.

Smith of Maddiston Limited v. Macnab 1975 J.C. 48 is of little help, since it was concerned with the question of whether a statutory offence of causing or permitting a motor vehicle to be used in a certain way required knowledge of someone that the vehicle was not only being used, but was being used in a prohibited manner. In the earlier motor vehicle cases referred to an affirmative answer to this question had been assumed at least as regards "permitting." In Smith of Maddiston Limited the Court did not require to consider what was the appropriate fiction for the purposes of imputing knowledge to the company.

Readers Digest Association Limited v. Pirie 1973 J.C. 42 I think in substance involved the question of imputing a kind of knowledge, but it was concerned with a statutory qualification or defence on what would otherwise have inferred statutory guilt. The statute makes it an offence for a trader to demand payment for what are known to be unsolicited goods. The Court found it unnecessary to consider whether knowledge that the goods were unsolicited could be attributed to the company. The statute, however, qualifies the offence by providing that a person is only guilty if he is a person "not having reasonable cause to believe that there is a right to payment." Certain of the junior employees did "not have reasonable cause to believe that there was a right to payment," but policy and procedure had been laid down by someone in some managerial or higher position designed specifically to prevent demands for payment for unsolicited goods. It was a temporary breakdown in that policy and procedure caused by a combination of a computer failure and some inattentiveness on the part of junior employees which gave rise to the complaint. The Court held that the company was not a person "not having reasonable cause to believe." Their Lordships were to some extent guided by Tesco but, while they considered, as I understand it, that the intention of Parliament required a distinction to be made between those persons whose belief and cause to believe could or could not be imputed to the company. The circumstances of the case did not require any attempt to draw the dividing line and it does not follow that the Court, if it had had to make the attempt, would necessarily, for the purpose of the Act in question, have adopted the controlling mind fiction as defined in Tesco. Lord Milligan was evidently concerned to rationalise the distinction between the Readers Digest case and other cases where knowledge of an employee at more or less any level has been held imputable. He did so by observing a difference between "knowing" and "having cause to believe." With respect I find this a rather thin distinction and suggest the problem is more satisfactorily resolved by conceding that the appropriate fiction depends on the presumed intention of Parliament as ascertained by an examination of the statutory scheme in question.

One other Scottish case to which we were referred is M'Nab v. Alexanders of Greenock Limited and Another 1971 S.L.T. 121. A company and its sales manager were charged with the statutory offence of applying a false trade description by selling a motor car with a mileometer which gave an untrue reading. The statute provides a defence that the person charged took all or reasonable precautions and exercised all due diligence to avoid the commission of the offence. The statute in terms applies to companies and the Court held that the statutory offence was established on the simple ground that, on the facts, no precautions were taken and no diligence was exercised by anyone. As regards the appropriate fiction the case is accordingly similar to common law cases of negligence where it is unnecessary to impute to the company the actions of any particular individual or class of individuals.

Turning now to the English cases in which the controlling mind fiction has been developed, while the principle has been repeatedly stated by the highest authorities in relation to the cases under consideration, it appears to me that its practical application in relation to common law crimes in Scotland of the kind with which we are concerned would give rise to great difficulty. While the dicta are highly authoritative there appear to me to be differences in emphasis and degree. It was suggested in the course of the argument that once the possibility of the company being competently charged is accepted the rest is all matter of fact. I am not satisfied that this is wholly correct. Fiction by definition is not fact. Lord Reid in Tesco emphasised that it was a question of law and, as I have already stated, I find it difficult to hold that the present complaint is competent because of a fiction, without knowing with reasonable precision what the fiction is.

Lennard's Carrying Company Ltd. v. Asiatic Petroleum Co. Ltd. [1915] A.C. 705 was a civil claim for damages under the Merchant Shipping Act 1894. It was not disputed that the company could be liable and the question was whether the company had proved that the loss and damage arose without the company's "actual fault or privity." The defence failed. It was held that there was fault or privity of a person who was Managing Director of a company who managed the ship in question and who was also a director of the defendant company. The Lord Chancellor, Viscount Haldane, said at page 713 that the actions of persons who were "the directing mind and will of the corporation, the very ego and centre of the personality of the corporation" were to be treated as actions of the company. Lord Dunedin said at page 715 that it could not be that the only way one could find fault and privity in the company would be by a decision of the whole Board of Directors. This case was decided against a statutory background which gave no option but to find some circumstances in which actual fault and privity could be attributed to the company.

Rudd v. Elder Dempster and Co. Ltd. [1933] 1 K.B. 566 was a civil case under the Workmen's Compensation Act 1925. The question was whether there was "personal negligence" or a "wilful act" on the part of the company. Again the statute demanded a fiction. The fiction demanded could not be one which attributed to the company the act of any employee. Lawrence L.J. held at page 594 that there could be attributed to the company the acts of the managing director or general manager "or other person having authority from the board of directors to conduct the company's business." This last expression seems to me to go further than some of the judicial definitions of the controlling mind in, for example, Tesco. Greer L.J. on the other hand adopted, perhaps somewhat uncertainly "the directors of the defendant company (or possibly…the general manager)" (at page 599).

Wheeler v. New Merton Board Mills Ltd. [1933] 2 K.B. 669 involved a statutory civil claim. The question was whether the presence of a dangerous machine was due to the wilful act of the employers. It was held that, as an obviously dangerous machine was in fact present, the company was guilty. It was not necessary to enter into any attempt to define the fiction and the case therefore resembles the cases on civil negligence.

D.P.P. v. Kent and Sussex Contractors Limited [1944] K.B. 146 was a charge under the war time emergency legislation concerned with producing false petrol rationing documents with "intent to deceive." In this case it appears to have been held that the knowledge and intention of the accused servants could be imputed. This was no doubt appropriate against the particular statutory background, but bears no relationship to the controlling mind fiction.

H. L. Bolton (Engineering) Company Limited v. J. T. Graham and Sons Limited [1957] 1 Q.B. 159 concerned civil proceedings under the Landlord and Tenant Act 1954 and the question was whether the landlords, as a company, had shown an "intention" to occupy certain premises for their own purposes. Denning L.J., after likening a company to a human body, said at page 172 "Some of the people in the company are mere servants and agents who are nothing more than hands to do the work and cannot be said to represent the mind or will. Others are directors and managers who represent the directing mind and will of the company, and control what it does." My anxiety as regards this fiction, so stated, as a test of criminal responsibility in respect of a crime of the kind with which this case is concerned is that the reference to "managers" introduces an element of uncertainty in that, particularly in large companies, there can be persons with managerial functions of a kind at many grades and levels and the concept gives no clear indication as to where in fact the line is to be drawn.

The matter was considered in great detail in Tesco.The statutory provision makes it an offence to offer to supply goods with an indication that they are being offered at a price less than that at which they are in fact being offered. There is then a provision that it shall be a defence for the person charged to prove (a) that the commission of the offence was due to, inter alia, the act or default of "another person" and (b) that "he" (i.e. the person charged) took all reasonable precautions and exercised all due diligence to avoid the commission of the offence. Despite the rubric, I have the impression that the issue before the House of Lords was not whether the local store manager, who was in default, was "another person" within the meaning of (a) above, but whether the accused company took all reasonable precautions. In any event it was a question, not of proof of guilt, but of establishment of a defence and it seems that the particular statutory scheme necessitated the finding of a dividing line below which a person's acts could not be said to be the acts of the company. Lord Reid said at page 71 that "Normally the board of directors, the managing director and perhaps other superior officers of a company carry out the functions of management and speak and act as the company. Their subordinates do not." This puts the dividing line somewhere slightly lower than the level of directors but higher than the level of any person with management functions. Lord Morris of Borth-y-Gest found it sufficient to determine that in any event the store manager was below the dividing line. Viscount Dilhorne at page 187 proposed, at least as one test, that the person whose acts by fiction are the acts of the company is "a person who is in actual control of the operations of a company or part of them and who is not responsible to another person in the company for the manner in which he discharges his duties in the sense of being under his orders." This, taken literally, would suggest drawing the line no lower than the directors. Lord Pearson, as I understand it, considered that if a company had one shop and appointed a manager, that manager might be the controlling mind, but that the same would not apply where a company had a number of shops and appointed a manager for each. Lord Diplock took a somewhat different line. He said at page 199 that "The obvious and the only place to look to discover by what natural persons its (a company's) powers are exercisable, is in its constitution." He referred to a provision in Table A which, where Table A applies, provides that a company is to be managed by directors and they may exercise all powers of the company other than those allocated exclusively at a general meeting. He concludes "what natural persons are to be treated in law as being the company for the purpose of acts done in the course of its business, including the taking of precautions and the exercise of due diligence to avoid the commission of a criminal offence, is to be found by identifying those natural persons who by the memorandum and articles of association or as a result of action taken by the directors, or by the company in general meeting pursuant to the articles, are entrusted with the exercise of the powers of the company." I do not find this, so to speak, constitutional approach to the problem reflected in other dicta and it puts the dividing line possibly at a higher level than at least some of the other dicta in the cases appear to suggest.

The uncertainty which appears to me to surround any attempt to extract from the authorities any one clear and precise fiction is increased by various possible propositions suggested by the learned Advocate-Depute at various stages of his address. This is not intended to be, and I hope will not be taken as being, a criticism. The Advocate-Depute was concerned to give the Court every assistance in a difficult and important matter and this he certainly did. According to my notes, and I apologise if I have mis-noted and therefore mis-quoted him, he suggested at different stages of his address inter alia (1) "if there is alleged against a company a common law crime of the present kind it must be proved that there is a policy decision of a company's directorate to sell the material." He went on to explain that, as question of fact, certain matters might be inferred. (2) "If it is a question for the company's decision as to what the company sells, the conduct and knowledge of those who are vested with the responsibility of selling the material and who acquire knowledge is the conduct and knowledge of the company." (3) "It must be proved that it was company policy to sell such things. I am not suggesting that if selection is left to managers as matter of policy that would involve guilt." Of these propositions No. 2 might in practical terms provide the most sensible basis for criminal responsibility. It seems to me that No. 2 is quite different from, and inconsistent with, Nos. 1 and 3.

In the light of the authorities cited to us I am not satisfied that the common law of Scotland recognises any clear single fiction which would, for purposes of criminal responsibility, in all matters attribute to a company the kind of human characteristics and conduct alleged in this complaint. It appears to me unrealistic to suggest that the accused company will be guilty if, but only if, some individuals or individual, whose status is not precisely defined, but who must be vaguely at or near director level, had knowledge of the contents of the magazines in question and acted in a shameless and indecent manner in deciding to sell them. That, however, seems to me to be the result of applying the controlling mind fiction. If some other fiction is to be applied I do not know what it is. I accordingly consider that the complaint here is incompetent. It may be that the criminal law of England would reach a different result (R. v. I.C.R. Haulage Limited [1944] K.B. 551). If so, it would not be the first time.

It was also submitted to the Sheriff and to us that, if the complaint was competent, it was irrelevant for lack of specification. Two points were taken. First it was said that the complaint ought to specify the precise parts of the magazines which were alleged to be indecent. In my opinion there is no substance in this submission. Second it was said that, assuming that the knowledge and conduct of some individual or individuals could be imputed to the company, the complaint ought to give some notice as to the identity of the individuals against whom the allegations are to be made in this case. We were referred to a dictum of Lord Justice-Clerk Scott Dickson in City and Suburban Dairies v. MacKenna 1918 J.C. 105 at page 110 as follows:

"It is quite true that, where a criminal offence is said to have been committed by a company, it is necessary to specify the individual through whom or by whom the company offended."

I do not think that that can be correct as a generalisation. We were referred to a number of cases of statutory offences which demonstrate that there is no consistent practice in this respect. The learned Advocate-Depute said, and I agree, that it is a question of fairness in every case. In my opinion fairness would demand such specification in this case. Assuming the complaint competent the accused is faced for the first time in Scotland with a common law charge based on a fiction which has not been clearly developed in Scots law and the precise lines of which may be in some doubt. In my opinion unless the complaint gave notice of the kind suggested, the accused company and its advisers would to an unfair extent be left in the dark as to what is alleged. In my opinion by our common law a person ought not to be charged with a common law crime unless it is reasonably clear from the charge, at least to that person's professional advisers, who is supposed to have done what. I do not think that, in the present state of the law, that condition is fulfilled in this case. I would answer question 1 in the affirmative. Had question 2 arisen I would have answered it in the negative, and I would refuse the appeal.