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Cite as: [2006] ScotHC HCJ_51, [2006] HCJ 51

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APPEAL COURT, HIGH COURT OF JUSTICIARY

Lord Nimmo Smith

Lord Drummond Young

C.G.B. Nicholson, C.B.E., Q.C.,

[2006] HCJAC 51

Appeal Nos: XJ130/06

XJ131/06

OPINION OF THE COURT

delivered by LORD DRUMMOND YOUNG

NOTE OF APPEAL

under section 174(1) of the Criminal Procedure (Scotland) Act 1995

JAMES ALISTER AITKENHEAD and ROBERT STANLEY STRANG STEEL

Appellants;

against

PROCURATOR FISCAL, Selkirk

Respondent:

_______

Act: Dewar, Q.C., Mitchell; Simpson & Marwick, Edinburgh

Alt: Clancy, Q.C., A.D.; Crown Agent

4 July 2006

[1] The appellants face a complaint at Selkirk Sheriff Court libelling two charges of contravention of the Health and Safety at Work etc Act 1974 and the Management of Health and Safety at Work Regulations 1999. Each charge is in two parts, libelled in the alternative. The charges arise out of the death of Douglas John Armstrong, who at the time was undertaking the duties of the head gamekeeper of the Philiphaugh Estate. The proprietors of the Philiphaugh Estate are the Philiphaugh Trust. It is a matter of agreement that the appellants are the trustees of that trust.

[2] The instance of the complaint, in its original version, bore to be against James Alister Aitkenhead, Robert Stanley Strang Steel and the Philiphaugh Trust. The part of the charges that is critical for the present appeal was identical in each of the charges; consequently the first alternative of the first charge may be taken as an example of all of the charges. In its original version, that charge was in the following terms:

"Between 18 October 2004 and 7 December 2004, both dates inclusive at Philiphaugh Estate, Harehead Hill, Selkirk, you JAMES ALISTER AITKENHEAD and ROBERT STANLEY STRANG STEEL as individuals and as trustees of the Philiphaugh Trust and the said PHILIPHAUGH TRUST being an employer within the meaning of the aftermentioned Act did fail to ensure the health, safety and welfare at work of your employees, so far as was reasonably practicable, in that you did did [sic] fail to maintain said place of work which was under your control in a condition that was safe and without risks to health in that you did not provide any means of communication to your lone workers nor have in place a safe system of work whereby your lone workers were in a position to contact you whilst undertaking their duties nor was there any system in place whereby you ensured the health and safety of your lone workers whereby there was no system to ensure that they safely returned from their duties each day and if they failed to do so an alarm could be raised, and in particular to the late Douglas John Armstrong in that on 18 October 2004 he undertook the duties of the head gamekeeper namely pheasant feeding and whilst doing so had an accident as a result of which he was severely injured and died from those injuries and he had no means of communicating with you and when he failed to return on 18 October 2004 no action was taken by you until 20 October 2004 when the head gamekeeper noted that he was missing and at that point a search was undertaken and he was found dead in the Road Field, Philiphaugh Estate, Selkirk on 20 October 2004;

CONTRARY to Section 2(1) and Section 33(1)(a) of the Health and Safety at Work Etc Act 1974".

As an alternative, the appellants were charged under section 3(1) of the 1974 Act with failure as an employer within the meaning of the 1974 Act to maintain a safe system of work. The second charge was under section 33(1)(c) of the Health and Safety at Work etc Act 1974 and regulations 3(1)(a) and 3(1)(b) of the Management of Health and Safety at Work Regulations 1999; it involved an allegation that the appellants, being an employer within the meaning of the Act, failed to make a suitable and sufficient risk assessment for their lone workers or alternatively failed to make a suitable and sufficient risk assessment for persons not in their employment for tasks arising out of the conduct of the appellants' undertaking. In each case, however, the manner in which the charge was made against each of the appellants and against the Philiphaugh Trust was identical.

[3] On 20 September 2005 the appellants intimated pleas to the competency and relevancy of the charges. It was submitted on their behalf that the appellants were not the employer of the late Mr. Armstrong and could not be charged in the capacity of employer. The plea was argued before Sheriff Gilmour on 29 November and 13 December 2005. On 17 January 2006 the Sheriff sustained the pleas in part, to the extent that they related to prosecutions against the appellants as individuals. He accordingly dismissed the complaint against each appellant as an individual. The Sheriff repelled the pleas to competency and relevancy in so far as they related to the prosecution of the appellants as trustees of the Philiphaugh Trust. In the light of that decision, on the unopposed motion of the procurator fiscal depute, the charges were amended by deletion of the words "as individuals and" on each occasion where they occurred. The charges accordingly took the form "...you JAMES ALISTER AITKENHEAD and ROBERT STANLEY STRANG STEEL as trustees of the Philiphaugh Trust and the said PHILIPHAUGH TRUST being an employer within the meaning of the aftermentioned Act did fail ...". At the same time the Sheriff issued a written Determination of his reasons for sustaining the plea in part.

[4] The appellants now appeal to the High Court by way of a note of appeal under section 174(1) of the Criminal Procedure (Scotland) Act 1995. The appeal is on two grounds. First, it is said that the Sheriff erred in failing to sustain the objection in that section 143 of the Criminal Procedure (Scotland) Act 1995, which deals with summary proceedings against bodies of trustees, only permits a summary complaint against a trust and not against its trustees. That applies to the trustees both in their capacity as individuals and in their capacity as trustees. Secondly, it is said that the Sheriff erred in that each of the offences libelled can be committed only by a person who is an employer, but there was no averment that either appellant was an employer. On either of the foregoing bases, it is said that the complaint is incompetent and irrelevant.

[5] The first ground of appeal raises the question of how a trust should be prosecuted in summary proceedings. The need for some mechanism to enable a trust to be prosecuted is perhaps obvious; either the ownership of property or the conduct of business by trustees may give rise to a wide range of statutory obligations, and breach of those obligations may call for prosecution. The Acts and Regulations dealing with health and safety at work are one example of such legislation. The statutory provision dealing with the summary prosecution of trustees is section 143 of the Criminal Procedure (Scotland) Act 1995. This is in the following terms:

"(1) Without prejudice to any other or wider powers conferred by statute, this section shall apply in relation to the prosecution by summary procedure of a partnership, association, body corporate or body of trustees.

(2) Proceedings may be taken against the partnership, association body corporate or body of trustees in their corporate capacity, and in that event any penalty imposed shall be recovered by civil diligence in accordance with section 221 of this Act.

(3) Proceedings may be taken against an individual representative of a partnership, association or body corporate as follows: --

(a) in the case of a partnership or firm, any one of the partners, or the manager or the person in charge or locally in charge of its affairs;

(b) in the case of an association or body corporate, the managing director or the secretary or other person in charge, or locally in charge, of its affairs,

may be dealt with as if he was the person offending, and the offence shall be deemed to be the offence of the partnership, association or body corporate; and in paragraph 3(b) of this subsection references to the managing director or the secretary, in relation to a limited liability partnership, are to any member of the limited liability partnership".

Section 143 is the successor to section 28 of the Summary Jurisdiction (Scotland) Act 1908. Section 28 was consolidated in section 333 of the Criminal Procedure (Scotland) Act 1975. So far as counsel's researches were able to discover, this is the first occasion when a court has had to consider the application of any of those provisions to trustees.

[6] Section 70 of the 1995 Act makes somewhat similar provision for solemn proceedings against bodies corporate. Unlike section 143, it makes no mention of trusts. We tentatively think that the conclusions set out in this opinion are likely to apply equally to cases on indictment against trustees. We did not hear argument on this point, however, and accordingly the opinion should be taken, at least for the time being, as relating solely to summary proceedings.

[7] Section 143(2) allows proceedings to be taken against a body of trustees "in their corporate capacity". The interpretation of that provision must in our opinion depend upon the legal nature of a trust. The essence of a trust is that one or more persons, the trustees, hold property in a fiduciary capacity for the benefit of other persons: see Wilson and Duncan, Trusts, Trustees and Executors, 2nd ed, paragraph 1-63. The existence of one or more trustees is of fundamental importance to the existence of a trust; all legal acts of the trust are carried out by the trustees and in their name. That applies to the holding and application of the trust property, and also to any external legal relationships, such as contracts concluded for trust purposes. The need for the trustees to perform all legal acts on behalf of the trust arises because the trust has no separate legal personality: Muir v City of Glasgow Bank, (1879), 6 R (HL) 21, per Lord O'Hagan at 38, per Lord Selborne at 39 and per Lord Blackburn at 43. On occasion the trustees may fail, through death or resignation or because a corporate trustee is struck off. In such a case the trust continues in existence and the trust property remains impressed with the trust purposes, but the trust is normally incapable of performing any legal acts without the appointment of new trustees, usually by the court. A further important feature of trustees is that they act as a single body; they have no capacity to act individually. In Scotland their decision to act as a body may be reached by a majority of the trustees, which is binding on the trust. Because the trustees are a single body, they hold trust property jointly rather than in common. The result is that if one trustee dies or otherwise ceases to act the trust property passes to the remaining trustees, and the executors or other successors of the trustee who ceases to act normally have no rights in the trust property. Likewise, the right of division and sale is excluded because the trustees have no rights as individuals in the trust property; their only rights in that property are as members of the body of trustees.

[8] In view of the features of a trust described in the last paragraph, we are of opinion that the expression "in their corporate capacity", as used in section 143(2), indicates that the trustees must be prosecuted as a body, and not as individuals. That reflects the primary meaning of the word "corporate". It is also in accordance with the principle that trustees must act as a body rather than as individuals. The word "corporate" clearly does not refer to separate legal personality, because it is used in respect of both a trust and an association, neither of which has separate legal personality. It must therefore refer to the notion that in law the trustees constitute a single entity. In our opinion that gives the word a content that is quite intelligible, and is in accordance with the standard legal analysis of trusteeship. The notion that the trustees form a single entity is also reflected in section 141(2)(c) of the Criminal Procedure (Scotland) Act 1995, which provides that citation may be effected on a body of trustees if it is left with any one of them who is resident in Scotland, or their known solicitor in Scotland; there is no need to serve on each trustee individually.

[9] We are further of opinion that the trustees must be named in any complaint brought in accordance with section 143(2). As explained above, the existence of trustees is fundamental to the existence of a trust, and all legal dealings of the trust must be in the name of the trustees. This means that there is no alternative to naming the trustees in the complaint, albeit solely in their capacity as trustees. In civil litigation it is the invariable practice to institute proceedings in the form "A and B as trustees of the X trust". This reflects the underlying legal reality, which is that the trustees represent the trust in all juridical acts. In our opinion the same procedure should be followed in criminal proceedings brought under section 143(2). While the rules of civil practice cannot be transferred automatically to criminal practice, in this area of law they represent the essential legal nature of a trust, and that is something that is equally applicable to civil and criminal proceedings. One difference does exist, however, between civil and criminal proceedings. In civil proceedings where the trustees are personally liable for their acts, it is normal to describe them as "A and B as trustees of the X trust and as individuals". This reflects the fact that, when trustees conclude a contract on behalf of the trust, they assume personal liability unless such liability is expressly or impliedly excluded. Likewise, trustees are normally personally liable for any delicts of the trust: Mulholland v Macfarlane's Trs, 1928 SLT 251. In summary criminal proceedings, however, we are of opinion that the trustees are not personally liable for the acts of the trust. This is a consequence of the provision in section 143(2) that proceedings may be taken against trustees in their corporate capacity; that seems to us to exclude personal liability.

[10] The exclusion of personal liability is also reflected in the form of penalty that is prescribed by section 143(2). The concluding words of the subsection provide that any penalty imposed shall be recovered by civil diligence in accordance with section 221 of the Act. The reference to civil diligence excludes the possibility of imprisonment. Any penalty must be monetary in nature, and can only be recovered out of the trust assets; there is no recourse against the trustees' personal assets.

[11] It follows from the above that the charges in a summary complaint against trustees should name the trustees but indicate that the prosecution is against them in their capacity as trustees of a specified trust. The prosecution is against the trustees collectively and not individually, and this should be reflected in the wording used. To that end, all of the trustees should be named, and their names should be followed by wording specifying the trust in question. The wording used to specify the trust should take the form "as trustees of the X trust"; in this way it is made clear that the charges relate to the named trustees collectively and only in their capacity as trustees. The specification of the trust may take a number of different forms. The present trust is known by the name of the Philiphaugh Trust, but it will normally be preferable to insert a reference to the trust deed under which the trustees act; that is the normal way of describing trustees in other legal documents. Thus the normal form of designation should be along the following lines: "A and B, the trustees acting under the Deed of Trust granted by X dated... and registered in the Books of Council and Session on...". Once the trustees have been described in this manner, however, the trust should not be named separately as a subject of the charge because it has no legal existence independently of the trustees, apart from the shadowy interregnum when there is a failure of trustees. Similar principles should be followed in the instance. The trustees must be named, but it should be made clear that they are prosecuted in their capacity as trustees of a specified trust. As in the charges, the trust should not be further named, because it has no independent legal existence. If the trustees are convicted, the conviction should make it clear that it relates to the named persons collectively and only in their capacity as trustees. This means that wording similar to that used in the charges should be followed. The conviction does not relate to the trustees as individuals, and nothing in the form of wording used should suggest the contrary. It follows that in any schedule of previous convictions the trustees should not appear as individuals but only collectively, in the form "A and B as trustees of the X trust". The conviction should not appear in any schedule of previous convictions relating to an individual trustee.

[12] Counsel for the appellants submitted that the trustees should not be named in the complaint, but that proceedings should be brought against the trust alone. In this connection, he submitted that a body of trustees was given the character of a body corporate for one specific purpose, summary prosecution. In our opinion this argument is misconceived. The fundamental point is that trustees are not in law a body corporate, and we can see no reason for giving them that status for the purpose of summary prosecution. The expression "in their corporate capacity", as used in section 143, means in our opinion that the trustees must be prosecuted as a body and not individually. That accords with their ordinary legal status. If the trustees are prosecuted as a body, however, it is clear that they must be named; otherwise the body cannot be identified. For this reason we reject the suggestion that the trustees should not be named in the complaint; we can see no alternative to naming them.

[13] Counsel for the appellant presented a number of further arguments in support of his contention that the trustees' names should not appear in the complaint. In the first place, he submitted that the Crown might not know who all of the trustees were. The answer to this, however, is that the Crown has the means of obtaining that information, and it should normally ensure that all of the trustees are named in the complaint as trustees of the particular trust. In the second place, counsel submitted that the individual trustees might require separate representation, perhaps because they took different attitudes to the complaint; one might plead guilty and another not guilty, or trustees might instruct separate lines of defence. We accept that this might cause practical difficulties in some cases. Nevertheless, this is a matter for control by the Sheriff in an individual case. Generally speaking, because the trustees are prosecuted as a body, a single plea must be entered on their behalf. That plea could be determined by a majority of the trustees; that decision would bind the minority, in accordance with the ordinary rule followed by Scots law. In some cases deadlock might occur. In that event, the presumption of innocence clearly demands that the plea should be not guilty, and the defence to the action should be instructed by the trustee or trustees who favour such a plea. In the third place, counsel submitted that one trustee might be acquitted and another convicted. Because the trustees must be prosecuted as a single body, this is impossible; a single verdict must be reached against the whole of the trustees.

[14] In the fourth place, counsel submitted that the names of the trustees should not appear in the complaint because it was important that individuals should be willing to accept office as trustees; he drew attention to the fact that most trustees acted gratuitously. It is obviously desirable that persons should be willing to act as trustees. Nevertheless, we do not think that the fact that such persons will be named in the event of a prosecution against the trust is likely to prove a serious disincentive to accepting office as a trustee. The safeguards referred to in paragraph [11] above should go some way to protect persons who act as trustees. In any event, we can see no obvious alternative to naming those persons; they, in their capacity as trustees, are the trust, and it is obviously essential that trusts should be capable of prosecution. In the fifth place, counsel suggested that individual trustees might face particular difficulties in the event of a conviction. One of these was obtaining a visa to enter the United States where, we were informed, details of previous convictions are asked for. In our opinion the visa requirements imposed by other countries cannot be significant in determining how a trust is prosecuted in Scots law. In any event, as indicated above, the form of conviction recorded against trustees should make it clear that it is against the trustees collectively, as trustees of a specified trust, and not as individuals. That should indicate clearly the nature of any conviction.

[15] Towards the end of the hearing before us the Advocate Depute moved to amend the charges and the instance. In the charges, he moved to delete the reference to the Philiphaugh Trust in its own right and to describe the trustees by reference to the trust under which they acted. In the instance, he moved to delete the independent reference to the Philiphaugh Trust and to make it clear that the two named individuals were referred to in their capacity as trustees of that trust. We decided to allow the amendment, under reservation in hoc statu of all questions of competency and relevancy of the complaint as so amended. We considered that the alterations were essentially matters of form, and that no prejudice was likely to result to the accused. The result of the Advocate Depute's amendments is that the charges now read as follows: "... you JAMES ALISTER AITKENHEAD and ROBERT STANLEY STRANG STEEL, the body of trustees acting under and in terms of the Deed of Trust granted by Sir Fiennes William Strang Steel dated 18th June 1966 and registered in the Books of Council and Session on 14th July 1966, being an employer within the meaning of the after mentioned Act did fail to ensure the health, safety and welfare at work of your employees...". The instance now takes the form

"JAMES ALISTER AITKENHEAD [designation]

and

ROBERT STANLEY STRANG STEEL [designation],

as trustees of the Philiphaugh Trust, herein designed".

In our opinion these amendments deal adequately with the difficulties with the original form of the charges, and are sufficient to satisfy the requirements of section 143(2).

[16] The second argument for the appellants was that the offences libelled can only be committed by a person who is an employer, but there was no averment that either appellant was an employer. In our opinion there is some force in this criticism of the charges in the form that they took before the Sheriff. We consider, however, that the amendments proposed by the Advocate Depute deal with this matter. It is apparent from the amended form of the charges that it is the body of trustees which is charged, and it is expressly averred that the body of trustees is the employer. That represents the true legal position.

[17] For the foregoing reasons, we are of opinion that the complaint as amended now meets the requirements both of section 143(2) of the Criminal Procedure (Scotland) Act 1995 and of the health and safety legislation that forms the basis for the charges. We will accordingly repel the appellants' pleas to the competency and relevancy of the complaint as amended. We will remit to the Sheriff to proceed as accords.