Act: Forrest; Semple Fraser

Alt: Bain, QC, AD; Crown Agent

24 July 2009

[1] The appellant has been charged on summary complaint that

"on 20 February 2008 at Upper Soroba Quarry, Oban, Argyll you JOHN MACLACHLAN being a Director in the companies Oban Skip Hire Limited, John MacLachlan Limited, John MacLachlan Quarries Limited and West Highland Gas Limited did knowingly cause controlled waste, namely cardboard, plastics, metals, wooden pallets, tyres, material and an oily fluid to be disposed of in or on said land otherwise than in accordance with a Waste Management Licence in that in that (sic) controlled waste was disposed of by way of burning;

CONTRARY to the Environmental Protection Act 1990, section 33(1)(b)".

Another individual, Susan Helen Maclachlan, understood to be the appellant's wife, appeared on the same complaint charged with exactly the same offence and in her capacity as a director of the four companies referred to in the charge against the appellant.

[2] On 23 February 2009 the appellant challenged the competency and relevancy of the complaint against him, at a hearing, which took place before Sheriff W. D. Small and which focused upon the meaning and effect of three statutory provisions, the terms of which may be conveniently set out at this stage. The first provision in question is section 143 of the Criminal Procedure (Scotland) Act 1995 and in particular sub-sections (1)-(3) which are 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; ..."

The second of the two relevant statutory provisions is section 33(1)(b) of the Environmental Protection Act 1990. That section was, at the time of the alleged offence, in the following terms:

"Subject to sub-section (1A), (1B), (2) and (3) below and, in relation to Scotland, to section 54 below, a person shall not -

....

(b) treat, keep or dispose of controlled waste, or knowingly cause or knowingly permit controlled waste to be treated, kept or disposed of -

(i) in or on any land, or

(ii) by means of any mobile plant

except under and in accordance with a waste management licence."

The last of the three statutory provisions is section 157(1) of the Environmental Protection Act 1990 which is in the following terms:

"Where an offence under any provision of this Act committed by a body corporate is proved to have been committed with the consent or connivance of, or to have been attributable to any neglect on the part of, any director, manager, secretary or other similar officer of the body corporate or a person who is purporting to act in any such a capacity, he as well as the body corporate shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly."

Before the Sheriff it was argued on behalf of the appellant that the complaint was incompetent as it sought to prosecute the appellant as a director of various companies without the companies, or any or one of them, having been previously convicted of the offence libelled or, alternatively, without the company appearing as a co-accused on the complaint. This submission, as the sheriff observes in his Note to this court, proceeded on the footing that the provisions of section 157 of the 1990 Act "prevailed" over section 143 of the Criminal Procedure (Scotland) Act 1995. As regards the offence libelled in this case under section 33 of the 1990 Act, it was contended that an individual company director could only be the subject of a prosecution, in relation to such an offence, if simultaneous proceedings were being taken against the company or if the company had already been the subject of a finding of guilt of the offence in question. The contention was that in a case like the present it was incompetent to proceed against a company director in circumstances where the relevant company was not being proceeded against or where that company had not already been convicted of the "relevant offence". It was said, on behalf of the appellant, that it was the clear intention of Parliament in drafting the 1990 legislation that a director could only be criminally liable if the company of which he was a director had been found guilty of an offence or alternatively if that company was simultaneously prosecuted. Reference was made to the speech of Lord Hope in R v Chargot Ltd (t/a Contract Services & Ors) [2009] 1 WLR 1 para 32, Douglas v Phoenix Motors 1970 SLT (Sh. Ct.) 57, Stair Memorial Encyclopaedia Reissue 7 (in the section dealing with Enforcement of Environmental Law) at para. 113.

[3] Before the sheriff it was furthermore submitted that, in any event, the complaint was irrelevant in that it was so deficient in law as not to "justify calling upon the accused to plead to the charge". The submission went on, as noted by the sheriff, to the effect that if the accused were to be prosecuted in his capacity as a director he should be prosecuted under section 157 of the Environmental Protection Act and not section 33(1)(b). Any relevant complaint libelling a breach of section 157 would require to libel that the company had committed an offence "with the consent and connivance of the director".

[4] On behalf of the Crown the procurator fiscal conceded that before a director could be convicted under section 33 of the 1990 Act, the Crown would require to prove that an offence had been committed by the body corporate of which the accused was a director. The Crown's position was that at the time of the offence libelled in the complaint the appellant was a director in all four companies specified in the charge. Accordingly, if an offence was proved to have been committed by any one of the four companies then, as a director, the accused would be responsible under the provisions of section 33(1)(b) of the 1990 Act. It was not, it was submitted before the sheriff on behalf of the Crown, incumbent upon the Crown to raise proceedings against a company in the same complaint nor was it necessary for any of the four companies to have been previously convicted of an offence. It was submitted that it was sufficient for the Crown to prove in the context of the prosecution that an offence had been committed by one of the companies. If the Crown were unable to prove an offence by one of the four companies then, as noted by the sheriff, the Crown accepted that "very likely a defence submission of 'no case to answer' would succeed". The point was made by the procurator fiscal that if proceedings could only be instigated against an individual director in circumstances where there had been a conviction against the company or if the company appeared on the same complaint, then it would be "quite impossible" to proceed against an individual director where the company had gone into liquidation. This, it was submitted, could not have been the intention of Parliament.

[5] The sheriff repelled the pleas taken on behalf of the appellant both as to the competency and relevancy of the charge. In doing so he said that he was satisfied that section 33(1)(b) of the Environmental Pollution Act stood on its own and that he did not consider that the prosecution required also to be in terms of section 157 "which in any event deals with offences committed by a company with the consent or connivance etc of a Director". It was the sheriff's view that section 157 did not have the effect of requiring that the company must be prosecuted as well as a director in any complaint against a director. In his note to this court he concludes by saying,

"I was satisfied that the provisions of section 143(3)(b) of the Criminal Procedure (Scotland) Act 1995 meant that proceedings could be taken against the Accused as an individual in his capacity as a Director of one of the four Companies specified in the complaint and provided the Crown were able to establish during the course of the prosecution that an offence had been committed by one of the companies specified, then the accused could be convicted of the offence."

[6] Before this court, counsel for the appellant renewed, in substance, the submissions made to the sheriff and rejected by him. As regards the attack on the competency of the complaint the matter, it was said, could be presented in terms of two propositions. The first of these was that section 157 of the Environmental Protection Act 1990 prevailed over section 143 of the 1995 Act. The second of the propositions was that in order for a charge under the 1990 Act, brought on summary complaint, to be competent as against a director of a company, there was a prerequisite namely a prior conviction of the company of the offence in question brought under the 1990 Act or a prosecution of the company on the same complaint as the director. The effect of these two propositions, it was submitted, was that the complaint was neither competent nor relevant.

[7] It was accepted, by counsel for the appellant, that section 143 of the Criminal Procedure (Scotland) Act 1995 was, as she put it, an enabling provision to allow for the prosecution of companies. But, it was said, regard had to be paid to the opening words of section 143(1) namely "without prejudice to any other or wider powers conferred by statute". The effect of those words, it was contended, was that once a statute, like the Environmental Protection Act 1990, which created offences contained a provision such as section 157(1), that provision, as it was put, "prevailed over" section 143 and meant that if a director, manager, secretary or other similar officer of a body corporate was to be prosecuted for an offence under the legislation in question there was no longer any place for proceeding under section 143 of the 1995 Act. As counsel for the appellant pointed out, the point taken is one which, if sound, has an application beyond the 1990 Act. Provisions for all practical purposes identical to that contained in section 157(1) of the 1990 Act are to be found, for example, in the Companies Act 2006, section 1255; the Insolvency Act 1986, section 432; the Financial Services and Markets Act 2000, section 400; the Competition Act 1998, section 72; the Health and Safety at Work Act 1974, section 37. In support of these submissions counsel for the appellant referred to the passage from the Stair Memorial Encyclopaedia which had been cited to the sheriff. In that passage the writer said:

"Obviously personal liability can arise if an offence is committed by an individual or a sole trader. However, if a body corporate commits an offence, it is clearly guilty of the offence but that does not necessarily mean that any personal liability will arise. However, partly no doubt to encourage better environmental management by corporate officers, all environmental statutes provide for the personal liability of certain corporate officers in specified circumstances if the company is convicted of an offence".

Reference was also made to the speech of Lord Hope of Craighead in the case of R. v Chargot Ltd [2009] 1 WLR 1 at para. 32. That case was concerned with the burden of proof upon the prosecutor in relation to statutory offences committed in terms of the Health and Safety at Work Act 1974. In relation to section 37 of the 1974 Act, which is in similar terms to section 157 of the 1990 Act, his Lordship said this:

"The prosecution of a director, manager, secretary or other similar officer under section 37 of the 1974 Act requires it first to be established that a body corporate of which he is an officer has committed an offence under one of the other provisions in that part of the Act.... The officer commits an offence under this section only if the body corporate committed it with his consent or connivance or its commission was attributable to any neglect on his part."

For the foregoing reasons the complaint, it was submitted, was incompetent.

[8] The alternative position advanced on behalf of the appellant was that, in any event, the complaint was irrelevant in that it did not specify that he was being prosecuted in a representative capacity and that the company had committed the offence in question with his consent or connivance or that the offence was attributable to neglect on his part.

[9] In reply the advocate depute submitted that the complaint was indeed competent. The Crown was seeking to prosecute the appellant in his representative capacity as a director of the companies. That was a procedure that was allowed for by the provisions of section 143 of the 1995 Act. It was important to note that in terms of section 143(3)(b) what was said was that persons such as the appellant, "may be dealt with as if he was the person offending and the offence shall be deemed to be the offence of the .... body corporate" (emphasis added). The effect of proceeding this way meant that if the prosecution was successful, that did not result in any finding of personal fault or guilt on the part of the appellant and any resulting conviction would not be recorded as a conviction of himself personally but would be a conviction of the company. Had the Crown, on the other hand, wished to have the appellant, as well as the company, personally convicted of the offence then it would have been necessary for them to proceed under section 157. In this respect, the advocate depute, submitted that the sheriff was wrong in one respect in what he said in his Note namely, that "provided the Crown were able to establish during the course of the prosecution that an offence had been committed by one of the Companies specified, then the accused could be convicted of the offence." That was a misunderstanding of the position: it was the company which could be convicted of the offence.

[10] The complaint was not only competent, but as framed, was relevant since the Crown were not seeking a conviction against the appellant as an individual but were proceeding against him in his representative capacity in order to obtain a conviction against the companies.

[11] We are of the opinion that the sheriff was correct in holding that the complaint was both competent and relevant. The thrust of the submissions made on behalf of the appellant was that the opening words of section 143(1) of the 1995 Act had the effect that it was either circumscribed in some significant way or rendered inapplicable if the offence being prosecuted was created by legislation which had a provision such as in section 157(1) of the 1990 Act. That submission depended, it seemed, in reading the words "without prejudice etc" as having the effect that provisions such as section 157(1) "prevail" over section 143. We cannot accept that. The expression "without prejudice" simply means without detriment or limiting effect on any other or wider power conferred by statute. It does not mean that another provision such as that conferred in section 157(1) 'trumps' section 143(1). The policy lying behind provisions, such as section 157(1), in relation to what might be described as corporate offences can, in our opinion, be readily discerned. It is to provide for personal liability by officers etc of companies as well as corporate bodies themselves, to encourage those who direct or control those bodies to promote the purposes of the legislation as a whole. The purpose of section 143, on the other hand, is to provide a general procedural measure, in summary cases, whereby an officer of the body in question may be prosecuted in a representative capacity, but where the offence, if established, does not fix him with personal liability, but is deemed to be the offence of the body in question. In that respect we entirely agree with the advocate depute's submission that the sheriff in his Note was wrong in saying that, provided the Crown were able to establish during the course of the prosecution that an offence had been committed by one of the companies specified then "the accused could be convicted of the offence."

[12] In our judgement the prosecutor, when considering circumstances which may constitute an offence in terms of section 33(1)(b), may opt, depending on the circumstances, to prosecute the corporate body alone, or to proceed against a responsible officer of the company or both. The provisions of section 157(1) do not make a complaint in terms such as that in the instant case, where the Crown is opting to proceed under section 143 of the 1995 Act, either incompetent or irrelevant. We should add that nothing said in the passage from the speech of Lord Hope of Craighead in the Chargot Ltd case is inconsistent with this being the position. His Lordship's decision in that passage was restricted to setting out the effects of the equivalent of section 157(1) in the Health and Safety legislation. So, too, nothing said in the passage from the Stair Memorial Encyclopaedia is inconsistent with the view we take of the matter.

[13] For the foregoing reasons the appeal falls to be refused.