APPEAL COURT, HIGH COURT OF JUSTICIARY
	[2014] HCJAC 69
Lady Paton Lord Drummond Young Lady Clark of Calton	Appeal Nos: XJ60/14, XJ61/14 and XJ62/14   OPINION OF LADY PATON   in   APPEALS AGAINST CONVICTION BY STATED CASE   by   (FIRST) PETER FITZPATRICK; (SECOND) JAMES JOHN McFEELEY; and (THIRD) MARK PHILLIPS   Appellants;   against   PROCURATOR FISCAL, KILMARNOCK   Respondent:   _______

First Appellant: Wallace, Solicitor Advocate; Capital Defence Lawyers

Second Appellant: C Smith; Paterson Bell

Third Appellant: I Paterson, Solicitor Advocate; Paterson Bell

Respondent: Prentice QC (sol adv) AD; Crown Agent

 

8 July 2014

 

Introduction
[1]        On 20 August 2013 at a summary trial in Kilmarnock Sheriff Court the appellants were found guilty of forming a fraudulent scheme to defraud Transport Scotland of sums totalling about £14,100 during a period 5 February 2010 to 23 November 2010.  The appellants were bus-drivers who worked for a small bus company called Harte Buses.  The company operated three buses on one route, Largs to Braehead via Johnstone.  At the relevant time there were 8 drivers: 3 full-time employees; 3 part-time employees; and the two Harte brothers who owned the business.  The modus operandi of the scheme involved scanning lost or stolen concessionary travel cards into Harte Buses’ electronic ticket machines, thus creating fictitious trips.  Harte Buses then received payment for those fictitious trips from Transport Scotland.

[2]        The appellants now appeal against conviction.

 

The Crown evidence
[3]        The evidence led by the Crown is summarised in each stated case.  Only a brief outline is given here.

(a)        Transport Scotland’s staff: Witnesses from Transport Scotland stated that certain patterns emerged from their records, suggesting the use by Harte Buses of concessionary bus cards which had been lost by or stolen from passengers.  The passengers had received replacement cards, but the original cards had not been de-activated.  Transport Scotland’s records showed that cards reported lost or stolen had previously been used on many bus routes, but from certain dates were used solely on Harte buses on the one route, often many times on the same day.  Transport Scotland decided to carry out a “field operation” investigating Harte Buses, and focusing upon 24 “suspect cards” which, according to their records, had been lost or stolen.  In particular it was decided that their staff would board the three Harte buses en route at roughly the same time on 23 November 2010.  They would then make inquiries of the bus-drivers, guided by a list of questions provided by Mr Mellis, Transport Scotland’s operations manager.  Mr Mellis gave his staff a briefing, including a suggested introduction on boarding the bus, and the words of the common law caution.

Details of the evidence relating to the investigation carried out on 23 November 2010 are contained in the stated cases.  The first appellant made no admissions and no cards were recovered from him or on his bus.  The second appellant, in response to a question, handed over 7 concessionary bus cards and admitted scanning them into his electronic ticket machine that day, in the absence of the relevant passengers.  His interview included the following passage (page 97 of his stated case):

“Q       Of the 7 cards, how many used today?

A         All 7 at some point.

Q         Why?

A         To keep numbers up (passengers)  To keep himself in job.

Q         Were you asked to do this?

A         No.

Q         What gain is there to yourself?

A         None, don’t want to lose my job.

Q         Has there been any hint that you would lose your job if you didn’t?

A         No.

Q         How long have you been carrying out this conduct?

A         Two weeks – a month.

Q         Is anyone else in the company aware that you do this?

A         No.”

 

The third appellant handed over 3 cards, and told the Transport Scotland staff that he had got them in the company office, and had been asked to “put a couple of extra ones through”.

(b)        Bus passengers: Seven of the bus passengers whose lost or stolen cards were used on the Harte Buses route gave evidence.  Each confirmed having lost his or her card and having received a replacement card.  Each denied ever travelling on a Harte bus.

(c)        Robin Harte of Harte Buses: Mr Robin Harte, one of the two brothers who owned the bus company, gave evidence.  The sheriff noted at pages 36-37 of the first appellant’s stated case:

“…       The only witness whose credibility and reliability gave me cause to doubt was a Robin Harte who claimed to have worked for his brother’s limited company.  He confirmed the company had ceased trading in May 2012, but was vague as to his own specific job title and duties.

Initially on examination in chief, he stated he had questioned all 3 drivers about scanning cards when the passenger was not present, but on re-examination stated he had got it wrong, and had not questioned the drivers, nor had he been given any explanation.

He accepted that lost cards should have been returned to Transport Scotland instead of being kept in the office.  He claimed to have little knowledge of the concessionary travel scheme, or of the payments received from Transport Scotland which he said were a matter for his brother Peter from whom we did not hear.

He conceded that the 3 appellants were the company’s main drivers, but later was inconsistent, stating that Mr J McFeeley [the second appellant] spent more time in the garage as a mechanic.  In November 2010 he stated the main drivers were Peter Fitzpatrick [the first appellant], Stewart Crichton, and Mark Phillips [the third appellant].

All in all he was extremely shifty and evasive, and eager to avoid being pinned [down] in any way whatsoever.  I could place no reliance on any aspect of his evidence which was clearly tailored to principally exculpate him in any wrong doing …”

 

[4]        The questions posed by the sheriff in each stated case are:

1.         Was I entitled to admit evidence of all 3 appellants’ interviews with employees of Transport Scotland?

2.         In the light of the evidence led, was I correct in repelling all 3 appellants’ submissions of No Case to Answer?

3.         On the facts stated, was I entitled to convict all 3 accused?

 

Submissions for the first appellant
[5]        Mr Wallace submitted that the sheriff had erred in rejecting the submission of no case to answer in respect of the first appellant.  The first appellant had made no admissions.  No suspect cards were found in his possession or on his bus.  While the electronic machine on his bus revealed that 7 suspect cards had been scanned that day (23 November 2010), only one card-holder, John Campbell, had been led in evidence to confirm the loss of his cards in 2010 (two in number) and the fact that he had not made a journey on the Harte bus on 23 November 2010.  No other card-holder named on the remaining suspect cards gave evidence.  The only evidence relating to those cards came from Transport Scotland’s witnesses and records, to the effect that the cards were recorded as having been reported lost.  The possibility that the cards had subsequently been found by or returned to the card-holders had not been excluded by the evidence led by the Crown.  Nor had the Crown evidence excluded the possibility that someone other than the first appellant had scanned the cards that day.  There was simply insufficient evidence for a conviction.  The appeal should be allowed and the conviction quashed.

 

Submissions for the second appellant
[6]        On behalf of the second appellant, Miss Smith advanced 5 arguments.

[7]        Ground 1: The contents of the interview were inadmissible:  The evidence of the interview was inadmissible.  The test was fairness, and what occurred was not fair.  This was not a question of an “excusable irregularity” (Stone v HM Advocate 2009 SCCR 71; HM Advocate v Higgins 2006 SLT 946).  It had not been made clear to the second appellant that this was an investigation into the criminal offence of fraud which might lead to court proceedings in which the second appellant might be a primary suspect.  To a layman, fraud was not a uniquely criminal offence.  It could arise in the context of employment, where (at worst) disciplinary measures might follow, or where the targets of censure might be the owners of the company.  Indeed it was not clear whether the second appellant was being spoken to as a witness, or as a suspect.  Questions from uniformed police officers might alert someone to the fact that a crime was being investigated, but a casual visit by Transport Scotland staff would not necessarily do so.  The location of the questioning was also important:  it was the second appellant’s place of work, his bus.  He was not invited to attend at another building, or the office of Transport Scotland, which might have given him a sense of the importance of the answers he gave.  While it was accepted that he had been given a common law caution, that was of little help if he did not understand the use to which his answers might be put, and in what context.  What had been said by way of introduction and caution could apply equally to an employment situation, or to a Transport Scotland internal investigation.  If the second appellant had been unaware of the importance and implications of the questioning, he would be less likely to request that his solicitor be present.  The second appellant had no understanding of the nature and extent of the questioners’ authority.  For example, he did not know that they had no power to detain him, or to search him or his vehicle;  that he was free to leave at any time;  or that he could change his mind about having a solicitor present – which might be relevant if the interview became increasingly serious.  The completed pro forma form which the second appellant was asked to sign at the end of the interview was headed “witness statement”.  He was plainly being invited to regard himself as a witness, yet it would appear that he was being interviewed as a suspect because of the previous analysis of Transport Scotland’s records and in particular the patterns of activity which had emerged.  Thus the evidence of the second appellant’s answers should have been excluded from evidence.  Without that evidence, there was a real possibility that the sheriff would have reached a different verdict.  The Crown’s apparent fall-back position based on Lawrie v Muir 1950 JC 19 did not render the answers admissible.  A miscarriage of justice had occurred.  The second appellant’s conviction should be quashed.

[8]        Ground 2: The bus cards recovered during the interview were likewise inadmissible:  Transport Scotland staff asked the second appellant for cards, and the second appellant handed some over.  But the shortcomings tainting the interview also tainted these recoveries and they were also inadmissible (cf Chalmers v HM Advocate 1954 JC 66; HM Advocate v P 2011 SCCR 712).  Transport Scotland staff had no power to search for or to take items.  If the second appellant had been aware of that, he might not have handed cards over.  What had occurred was unfair, and the evidence provided by the cards should be excluded.  There would then be a real possibility that the sheriff would have reached a different verdict.  A miscarriage of justice had occurred, and the conviction should be quashed.

[9]        Ground 3: There was no evidence of criminal activity on the part of the second appellant during 5 February to 22 November 2010: If the evidence of the answers to the questioning and the recovery of the bus passes was admissible, that evidence pointed to a period of criminal activity for a period of about a month, from about 23 October to 23 November 2010 (as the second appellant admitted to having scanned cards in such a way for a period of about a month).  But in relation to the remainder of the period in the libel, there was no evidence other than that of Mr Robin Harte, one of the owners of the company.  His evidence suggested that even if the second appellant had indeed been working for the company during that period, he had spent much of his time as a garage mechanic rather than as a bus-driver.  Thus there was no evidential basis for a conviction relating to the period 5 February 2010 to 22 October 2010.

[10]      Ground 4: No concert had been proved: There was no evidence that the three appellants had formed a common plan or fraudulent scheme with each other.  There was no evidence that the appellants even knew each other or had spoken to each other. 

[11]      Ground 5: There was no case to answer: If the answers at interview, and the bus passes recovered, were excluded, there was a sufficiency of evidence only for 23 November 2010.  In relation to the 7 bus cards scanned on that day, only one card-holder gave evidence.  The pattern of use of the cards (7 scanned at 9.53, 4 of these at 12.22 of which 3 were again scanned at 13.39) was arguably sufficient to give rise to a suspicion of fraudulent activity.  Even if the court took the view that Grounds of Appeal 1 and 2 were not well-founded, the court was invited to look at all the grounds cumulatively, and to conclude that there were too many errors and unsatisfactory features in the case, and that a miscarriage of justice had occurred.

[12]      Conclusion: The second appellant’s conviction should be quashed; alternatively the conviction should be restricted to 23 November 2010.

 

Submissions for the third appellant
[13]      Mr Paterson for the third appellant adopted the submissions made on behalf of the first and second appellants.  The intention of Transport Scotland was a field operation, a preconceived plan, with a briefing in advance.  As at 23 November 2010, the drivers were regarded as suspects.

[14]      Ground 1: The interview evidence was inadmissible: The tactic adopted by Transport Scotland staff was a relaxed and informal process.  What occurred was not fair and the evidence of the interview was therefore inadmissible.

[15]      Grounds 2 and 3: There was no evidence of criminal activity on the part of the third appellant during 5 February to 22 November 2010; no concert had been proved: There was no evidence that the third appellant had used any of the buses or bus-cards prior to 23 November 2010.  The sheriff’s conclusion at the foot of page 37 of the third appellant’s stated case was wrong:  it was not possible to infer, from the fact that someone had been found with suspect cards on 23 November 2010, that this had been going on for months.  There was no inference of concert which could be drawn. 

[16]      Ground 4: There was no case to answer: The contents of the interview, and any cards recovered in the process, were inadmissible in evidence.  Such evidence as was left was insufficient for a conviction.  The appeal should be allowed and the third appellant’s conviction quashed.

 

Submissions for the Crown
[17]      There was no challenge to any of the findings-in-fact.  That was significant.  It could be seen from findings-in-fact 1, and 9 to 12 (common to each stated case) that the three appellants were bus-drivers employed by Harte Buses;  the suspect cards (whose owners had reported them lost or stolen and had been issued with replacement cards) were used only on the Harte buses;  anyone using those suspect cards had no right to do so (finding-in-fact 10);  the legitimate owners of those cards travelled widely, on various buses, and not just on Harte buses.  Thus there was evidence that the cards in question ought not to be being used by anyone.

[18       Finding-in-fact 11 made it clear that “suspicion had not crystallised in relation to who was responsible for using the suspect cards”.  The Transport Scotland staff were not police officers; they had no power to search or seize items; they were performing a regulatory function.  The three appellants were spoken to contemporaneously on 23 November 2010.  There was evidence of the use of the suspect cards from the pool of 24 on their buses on 23 November 2010.  The Crown had not needed to exclude every explanation which might be advanced for the use of these cards.  It was enough at the “no case to answer” stage to have a sufficiency from which the inference of a fraudulent scheme could be drawn.

[19]      Further one could draw an inference of earlier use of the cards (cf authorities involving the uttering of cheques).  The inference might be displaced by evidence that a particular appellant was on holiday, or not working, at a particular time. 

[20]      It was clear that there was in place a common purpose to defraud Transport Scotland for the benefit of the company.  The evidence was sufficient to show that the appellants were part of that common purpose on 23 November 2010.  The company was a small one:  it would not matter whether the employers had approached each employee in isolation to procure his participation.  On any view, there was sufficient evidence of the scheme being operated on 23 November 2010; and an inference could be drawn of the past operation of the scheme.

[21]      As for the interviews:  the interviewee was not detained; he was free to leave at any time;  he was told that a “fraud” was being investigated; he was cautioned at common law; he was asked if he would like to have a solicitor; there were no special vulnerabilities to be catered for.  In summary, the interviews were fair.  The sheriff adopted the correct approach when he balanced personal interests and the public interest in seeing crime prosecuted (Miln v Cullen 1967 JC 21, approved in Ambrose v Harris 2012 SCCR 465).

[22]      The circumstances in the present case could be distinguished from those in Miller v Smith [citation], where the interviewee had not been told that any offence was being investigated, and where he was lulled into a false sense of security.  The interviews in the present case occurred before suspicion had crystallised upon any particular person(s).  The interviews were to obtain information, not to “trap” an appellant (cf Pennycuick v Lees 1992 SCCR 160, approved in Ambrose v Harris 2013 SCCR 169).  There was no suggestion of undue pressure or deception in any of the interviews.  The drivers were told at the outset of the purpose of the visit.  They were told that there was an inquiry into “fraud”.  They were given a common law caution.  Their right to have a solicitor was made known.  They were not placed in an intimidating environment.  No technical language was used.  They were not shown the form headed “witness statement” prior to signature.  Clear language was used in the form.  It could not be said that the appellants were deceived into thinking that the situation was other than it was.  Transport Scotland were investigating the illegitimate use of concessionary cards, in circumstances where suspicion had not crystallised on anyone (finding-in-fact 11 which was unchallenged).  The interviews were fair.

[23]      The court was invited to answer all three questions by the sheriff in the affirmative.  However if it was concluded that the libel had extended too far, the convictions should be restricted to 23 November 2010.

 

Discussion
Admissibility of the evidence of the interviews and the concessionary cards recovered
[24]      In finding-in-fact 11, referring to the field operation undertaken by Transport Scotland, the sheriff made a significant finding as follows:

“…  Suspicion had not crystallised in relation to who was responsible for using the suspect cards.”

 

That finding-in-fact is important, and was not challenged.  I therefore accept that the Transport Scotland staff who boarded the three buses on 23 November 2010 were carrying out a fact-finding exercise, rather than seeking to question suspects.  Transport Scotland’s decision to give each driver a clear indication of what the investigation was about (“a fraud in excess of £12,000”: finding-in-fact 19 in the first appellant’s stated case; a “fraud”: finding-in-fact 15 in the second appellant’s case; and a “fraud in respect of the concessionary travel scheme”: finding-in-fact 17 in the third appellant’s case) together with the offer of an opportunity to have the assistance of a lawyer rendered the questioning fair, in my view.  While I accept that the word “fraud” might be understood by a layman as having several meanings, one of the most obvious of those meanings is undeniably the crime of fraud, with all the consequences and implications of criminal behaviour.  The case of Miller v Smith 2013 SCCR 169 is, in my view, distinguishable.  In that case the appellant was a suspect.  One of the men who approached the appellant was a policeman but was dressed in plain clothes.  He had arrived in an unmarked police car.  No indication was given that a criminal offence was being investigated, or that the appellant might be a suspect.  Rather the impression was given that there would be a “constructive chat” about the management of a crow cage trap.  By contrast, in the present case, I consider that the introductory information given by the Transport Scotland staff was sufficient to alert an adult with no particular vulnerabilities to the fact that a serious crime was being investigated.  The offer of a solicitor, and the giving of the common law caution, emphasised, in my view, the gravity of the inquiry.

[25]      In the result therefore I am not persuaded that the interviews or the recovery of the concessionary cards were unfair.  The sheriff was, in my opinion, correct to hold that the evidence was admissible.

 

Whether concert established
[26]      I consider that an inference of concert could be drawn inter alia from the following evidence:

• Harte Buses was a small company with few staff.
• The second and third appellants were employed by Harte Buses.
• The second and third appellants were, on 23 November 2010, using an identical modus operandi of scanning lost or stolen concessionary bus cards into their electronic ticket machines in the absence of the relevant passengers, thus creating fictitious trips.
• That modus operandi would, on the evidence, result in the fictitious trips being paid for by Transport Scotland, the payments being made to the central office of Harte Buses (and not to each individual driver), thus increasing the company’s income.
• The second appellant told the Transport Scotland staff that his aim in so doing was “to keep numbers up”, and that he did not want to lose his job.
• The third appellant told Transport Scotland staff that he had acquired the cards from Harte Buses’ office, and had been asked “to put a couple of extra ones through”.

[27]      I am satisfied that there was sufficient evidence from which an inference of concert could be drawn, with fraudulent acts being carried out by employees of Harte Buses on behalf of their employers, in order to increase the income of their employers’ company, Harte Buses.

 

Whether there was a case to answer in respect of each appellant
[28]      There was evidence that both the second and third appellants made self-incriminatory admissions:  see paragraph [3](a) above.  Suspect cards, which they admitted scanning into their electronic ticket machines in the absence of the relevant passengers on 23 November 2010, were recovered from them.  Transport Scotland witnesses described a pattern emerging from their records, showing suspect cards reported as “lost” or “stolen” by passengers being used on the Harte buses.  Some of the passengers named on the suspect cards gave evidence, confirming that they had never travelled on a Harte bus, and that they had not travelled on such a bus that day (23 November 2010).

[29]      In all the circumstances I consider that the sheriff was well entitled to hold that there was a case to answer against the second and third appellants.

[30]      The first appellant’s case was said to be different.  The evidence disclosed that he made no admissions regarding the wrongful use of lost or stolen cards.  No cards were recovered from him or his bus.  While the records from the first appellant’s electronic ticket machine showed that 7 suspect cards had been scanned on 23 November 2010, only one of the 7 lawful card-holders (John Campbell) gave evidence that he had lost two cards in 2010 and had not travelled on a Harte bus on 23 November 2010.  Thus there existed, as Mr Wallace submitted, at least a possibility of some explanation other than that the first appellant was a participant in a fraudulent scheme to defraud Transport Scotland and to generate extra income for Harte Buses.  For example, lawful card-holders might have re-discovered their original cards and used them.  Alternatively some perpetrator other than the first appellant might have fraudulently used a suspect card. 

[31]      I am unable to accept that submission.  Given the nature of the modus operandi operated by the second and third appellants (paragraph [26] above), the inference of concert which could be drawn (paragraphs [26] and [27] above), the fact that a card lost by John Campbell was scanned into the first appellant’s electronic ticket machine on 23 November 2010 when Mr Campbell was not a passenger on that bus (paragraph [5] above), and the considerable degree of unlikelihood that all six remaining suspect cards scanned that day had coincidentally been used on that bus on that day by lawful card-holders who had re-found them and/or by card-thieves and/or by some other employee of Harte Buses acting illegally, it seems to me that the irresistible inference from all the circumstantial evidence was that the first appellant was also engaged in the same fraudulent scheme as the second and third appellants.  I have therefore concluded that there was sufficient evidence against the first appellant at the stage of the “no case to answer” submission, and that the sheriff was correct to repel that submission.

 

The extent of the libel
[32]      The appellants were convicted of being involved in the fraudulent scheme for a period from 5 February 2010 to 23 November 2010.  It is not entirely clear from the sheriff’s report why a starting date of 5 February 2010 was selected for the libel.  Furthermore, there was no admission by any appellant to participation in the fraudulent scheme for the whole period noted above (although the second appellant admitted to two weeks, then to one month).  Evidence from Mr Robin Harte, albeit unreliable, suggested that the second appellant had spent more time as a garage mechanic than as a bus-driver.  Ultimately I was not persuaded that the findings-in-fact were sufficient to support convictions for the period 5 February 2010 to 23 November 2010.  I therefore propose that all three appeals be allowed only to the extent that the period “5 February 2010 to 23 November 2010” is quashed, and the date “23 November 2010” is substituted.

 

Decision
[33]      For the reasons given above, I would answer the questions posed by the sheriff as follows:

1.         Yes.

2.         Yes.

3.         Yes, but the convictions should be restricted to the date “23 November 2010”.

[34]      I therefore propose that we allow the appeals only to the extent that the period “5 February 2010 to 23 November 2010” is quashed, and the date “23 November 2010” is substituted.  The appeals against sentence should be continued to a date to be fixed, to be heard by the same bench.  In my opinion, this is not a case which merits custodial disposals.

 

APPEAL COURT, HIGH COURT OF JUSTICIARY
	[2014] HCJAC 69
Lady Paton Lord Drummond Young Lady Clark of Calton	Appeal Nos: XJ60/14, XJ61/14 and XJ62/14   OPINION OF LORD DRUMMONDYOUNG   in   APPEALS AGAINST CONVICTION BY STATED CASE   by   (FIRST) PETER FITZPATRICK; (SECOND) JAMES JOHN McFEELEY; and (THIRD) MARK PHILLIPS   Appellants;   against   PROCURATOR FISCAL, KILMARNOCK   Respondent:   _______

 

First Appellant:  Wallace, solicitor advocate;  Capital Defence Lawyers

Second Appellant:  C Smith;  Paterson Bell

Third Appellant:  I Paterson, solicitor advocate;  Paterson Bell

Respondent:  Prentice QC (sol adv) AD;  Crown Agent

 

8 July 2014

[35]      I agree with your Ladyship in the chair that these appeals should be allowed, but only to the extent of restricting the period of the libel in the manner proposed by your Ladyship.  In my opinion this is a case in which an inference of concert can be drawn from the various items of evidence relied on by the Crown;  the existence of a clearly established modus operandi is important in this respect.  I accordingly agree that the questions should be answered as proposed by your Ladyship.

[36]      As to the power of Transport Scotland to question the appellants, the sheriff finds that employees of Transport Scotland had a right to enter buses for the purpose of audit.  That authorizes their presence on the three buses.  Moreover, the concept of "audit" clearly implies in my opinion that they must be entitled to ask questions of persons on the buses, notably the driver.  They cannot compel an answer, but if they receive an answer that answer is in my opinion available as evidence in a criminal prosecution provided that the questioning is not tainted by unfairness.  In the present case the questioning was not in my opinion unfair;  the drivers were given a clear and simple explanation of what the underlying issue was, and the word "fraud" appears to me to indicate quite clearly that a criminal prosecution might be contemplated. 

[37]      The lack of an express power in Transport Scotland to ask questions is not in my view material.  Some agencies are given express power to ask questions;  examples, apart from the police, include HM Revenue and Customs and the Health and Safety Executive.  Nevertheless any person, whether working for an agency or not, is free to ask a question;  it is an answer to the question that cannot be compelled, and there is the further important qualification that if an answer is given it cannot be used in criminal proceedings unless it is obtained fairly.  These principles would apply to an ordinary member of the public, for example a businessman investigating a possible fraud against him, and the fact that a public agency is involved makes no difference except in cases, such as the police, where a statutory power to question is set out in detail.

[38]      Like your Ladyship in the chair, I agree that these cases do not merit custodial disposals.

 

 

APPEAL COURT, HIGH COURT OF JUSTICIARY
	[2014] HCJAC 69
Lady Paton Lord Drummond Young Lady Clark of Calton	Appeal Nos: XJ60/14, XJ61/14 and XJ62/14   OPINION OF LADY CLARK OF CALTON   in   APPEALS AGAINST CONVICTION BY STATED CASE   by   (FIRST) PETER FITZPATRICK; (SECOND) JAMES JOHN McFEELEY; and (THIRD) MARK PHILLIPS   Appellants;   against   PROCURATOR FISCAL, KILMARNOCK   Respondent:   _______

First Appellant: Wallace, Solicitor Advocate;  Capital Defence Lawyers

Second Appellant: C Smith;  Paterson Bell

Third Appellant: I Paterson, Solicitor Advocate;  Paterson Bell

Respondent: Prentice QC (sol adv) AD;  Crown Agent

 

8 July 2014

 

[39]      I have had the opportunity of reading the opinion by Lady Paton, chairman of the court.  I have no difficulty in agreeing with her conclusion in paragraph 32 that “ultimately I was not persuaded that the findings in fact were sufficient to support convictions for the period 5 February 2010 to 23 November 2010”.  In consequence of that conclusion she found that the appellants should be convicted of being involved in a fraudulent scheme on one day only, namely 23 November 2010.  I agree with her conclusion that custodial disposals are not merited in the event that conviction is limited to the date of 23 November 2010 but I do not support conviction of the appellants in this case.

[40]      In my opinion there is a fundamental problem with the evidence reflected in the findings in fact.  That problem was highlighted by counsel for the second appellant in her very persuasive submissions, which are summarised in paragraphs 7 and 8 of the opinion by Lady Paton. 

[41]      In the stated cases prepared by the sheriff, there are no findings in fact about the powers of Transport Scotland or even a reference in the stated cases to the legislation under which the organisation was established.  In each stated case finding in fact 13 records that Transport Scotland staff had no powers of detention, “but only a right to enter a bus for the purpose of audit”.  There is nothing in the stated cases to explain under which statutory powers Transport Scotland has a right to enter a bus for the purpose of audit.  But taking that finding as it stands, I think it is fair to comment that there is nothing to explain under what legislative or other powers, employees of Transport Scotland purported to interrupt and question employees of a third party company lawfully at their place of work, carrying out their contractual employment duties, serving the public by driving buses to a timetable. 

[42]      There are examples of agencies within judicial knowledge which have investigation functions.  The police obviously have extensive powers to carry out investigations, including interviews, into fraud and other crimes.  In certain circumstances an employer may have powers and be entitled to carry out such an investigation and there may be special disciplinary provisions set out in the contract of employment which relate to that.  Individuals may also have certain common law powers particularly in relation to offences which they witness.  Some statutory bodies have been given specific powers under legislation to carry out investigations which may include the questioning of witnesses.  Examples are HM Customs and Excise and the Health and Safety Executive, but detailed statutory provisions apply.  In a particular case these provisions may require to be examined and assessed in considering admissibility if an attempt is made to use the results of such interviews in criminal trial proceedings. 

[43]      In this case, however, there is no explanation in the stated cases, and no findings in fact, in relation to the nature and powers of employees of Transport Scotland to carry out the nature and type of investigation into “fraud” which they embarked upon.  It appears that the Transport Scotland operations manager was a former police officer who provided staff with a briefing about the use of a proforma “witness” form, and gave guidance about the issue of a caution and questions to be asked.  The operation which took place in this case would be easily understood and assessed in the context of a police investigation.  It appears however that Transport Scotland had not handed over the investigation in this case to the police but had chosen to pursue the investigation themselves.  From the findings in fact it is not clear whether they considered they were carrying out an investigation into criminal activity or some kind of unspecified “audit”.

[44]      With such a background therefore I find myself in agreement with submissions made by counsel for the second appellant.  It was never made clear to any of the appellants by the employees of Transport Scotland that the caution given and the reference to the opportunity to get advice from a solicitor were all given in the context of an investigation which had the potential consequences of criminal prosecution, affecting each of the appellants, with the possibility of sanctions including imprisonment.  In my opinion the “audit” exercise by Transport Scotland had no clarity of objective and was carried out by staff who were not experienced in interviewing and explaining rights to witnesses and suspects.  Whatever was said to the appellants, and that includes the caution, there is no finding in fact that any of these appellants were told in terms that the investigations about “fraud” involved inter alia potential allegations involving each of them in behaviour unlawful under the criminal law and that any evidence elicited from them might be tendered as evidence against them in a criminal trial.

[45]      In my opinion, for the reasons advanced by counsel for the second appellant, I consider the interviews to be unfair and inadmissible and the recovery of the bus passes tainted and also inadmissible.  Without the foundation of that evidence there was insufficient reliable evidence to convict any of the appellants. 

[46]      For these reasons therefore, I am persuaded to allow the appeals in respect of all of the appellants.