Scottish High Court of Justiciary Decisons

APPEAL COURT, HIGH COURT OF JUSTICIARY

[2015] HCJAC 71

HCA/2014/3827/XC

Lord Justice Clerk

Lady Paton

Lord Menzies

OPINION OF THE COURT

delivered by LORD CARLOWAY, the LORD JUSTICE CLERK

in

APPEAL AGAINST CONVICTION

by

MALIK IQBAL

Appellant;

against

HER MAJESTY’S ADVOCATE

Respondent:

Appellant:  N Allan, Solicitor Advocate; John Pryde & Co SSC

Respondent:  Farquharson AD; the Crown Agent

30 July 2015

Introduction

[1]        On 5 August 2014, after a trial lasting 5 days at Edinburgh Sheriff Court, the appellant was found guilty of a charge of fraud and an associated contravention of section 328(1) of the Proceeds of Crime Act 2002.  The fraud charge originally libelled that between 1 March and 28 June 2012, at his shop, namely Eight Days a week, and certain Royal Bank of Scotland addresses, he opened up an online banking facility “under [his] sole control” and allowed it to be used by others, who paid in a total of about £103,330 by means of some 23 cheques.  The cheques were accompanied by pay-in slips bearing the appellant’s numerical bank account details, even although the payees’ names on the various cheques were, with one exception, those of other people, who may or may not have existed.  All of the cheques were in due course dishonoured, but not before the amounts had, under a banking scheme designed to improve business cash flow, been credited to the appellant and rapidly transferred to the accounts of several other persons and dissipated.  On 2 September 2014 the appellant was sentenced to 15 months’ imprisonment.

The evidence and objections
[2]        The Crown case consisted, amongst other things, of testimony from Craig Reid, a business relationship manager at the Bernard Street, Leith, branch of RBS.  He spoke to a business account being opened by the appellant in 2009 and a further tax saver account in 2012.  The appellant would have been provided with a debit card in relation to the business account.  Prior to speaking about a document, which related to the appellant’s registration for online facilities, objection was taken to Mr Reid’s evidence on the basis that the date on the document was 1 March 2012, in contrast to that on the indictment.  There was some suggestion from the appellant that he could have had an alibi for the particular date, but, as the sheriff reports, this seemed to be something less than a positive assertion. 

[3]        The procurator fiscal depute moved the sheriff to amend the libel by altering the date from 3 March to 1 March.  The sheriff allowed the amendment and consequently repelled the objection.  He reasoned that the amendment cured a variance between the evidence and the charge.  Although it was central to the fraud that the appellant had online facilities, the sheriff did not consider it to be essential that these facilities should have been opened within the period libelled.  Mr Reid went on to refer in general to the use of a card reader in the context of online facilities.  There was some cross-examination by the appellant on that topic.

[4]        A further witness was Patricia Paterson, who was employed by RBS as a fraud investigator.  She spoke to what was required in order to pay funds to third parties using online facilities.  She described how the account holder would log onto the RBS website by providing his customer identification details, entering three numbers from his four digit PIN and three letters from a password, which could consist of up to eight letters.  By doing that, the account holder could transfer funds between his own accounts and pay sums to those to whom he had previously made payments.  However, in relation to payments to third parties, hitherto unknown to the account, the account holder would have to use a card reader supplied by RBS.  The account holder would place his debit card into the reader and enter his PIN.  The website would display a number which would then have to be entered into the card reader.  The reader would in turn display another number, which required to be typed into the website.  It was only once that procedure had been done correctly, that the funds would be transferred. 

[5]        Ms Paterson testified that the relevant transfers in this case had been made using the card reader procedure.  As she embarked upon that evidence, however, the appellant objected to its admissibility on the basis of non-disclosure and the absence of a libel relative to the card reader procedure.  The sheriff repelled this objection, reasoning that the libel was wide enough to encompass the use of the card reader.  He recorded that, in any event, Mr Reid had previously spoken about the card reader and the appellant had not objected to his evidence.  It was not suggested at the time that the defence would be unable to deal with the unexpected evidence.  In due course, the defence expert did deal with the card reader in his evidence, although it is now contended that he was unable to do so fully.  It was also not suggested that the Crown had material in their possession about the card reader which they had failed to disclose.

[6]        The sheriff directed the jury, in respect of the evidence from the expert, as follows:

“There’s also … the defence evidence of Mr McLaren, the expert…. He was asked about the card-reader.  It’s obviously for you to say how much you thought he knew about the detail of the card-readers.  It’s obviously for you … generally to form a view and decide what you made of him as a witness.  He indicated that the accused’s debit card, if he had a debit card, could have been cloned.  …So it’s obviously for you, ladies and gentlemen, to come to a view about Mr McLaren’s evidence. “

The sheriff explains that, when Mr McLaren had spoken about card readers, it appeared to him that Mr McLaren thought that the account holder would attach the card reader to his computer, which was not the impression the sheriff had gained from the testimony of Ms Paterson about how the system worked.  It was upon that basis that he made the remark about the expert’s knowledge. 

[7]        The sheriff did not direct the jury that they could make deletions from the lengthy terms of the indictment.  In his view, it would not have been appropriate to do so.  Both the Crown and the appellant had approached the case on the basis that the question for the jury was whether the charge, as framed, stood or fell.  No suggestions about deletions had been made in the course of the speeches.  There was no dispute that there had been a fraudulent scheme; the question at trial was whether or not the appellant had participated in it.

Submissions
Appellant
[8]        The appellant appeals on four grounds.  He explained that the first and third grounds simply provided the context for the main second ground.  The fourth ground was a separate issue.

[9]        The first ground was that the sheriff had erred in permitting the Crown to amend the period of the libel to meet the objection by the appellant to the evidence of obtaining online banking facilities prior to the period libelled. The second ground was that the sheriff had erred in admitting evidence of the card reader, in the absence of any reference to such a device in the libel and any disclosure by the Crown of such evidence.  Without the evidence of the card reader, there would have been an insufficiency in relation to the charges.  The appellant’s defence had been that he could as readily have been a victim of the crime as a perpetrator of it.  It had been for the Crown to rebut that defence (Owens v HMA 1946 JC 119).  In the absence of the card reader evidence, there was nothing in the Crown case capable of providing a basis for such a rebuttal. 

[10]      The Crown had breached the right of the appellant to disclosure in relation to the card reader.  There was a real possibility that the jury would have arrived at a different verdict had the material been disclosed and the appellant’s expert had had the opportunity to carry out appropriate research and to give evidence about it accordingly.  As it was, the expert had only been able to provide general observations.  His evidence had been weaker than it might have been.  The expert had not been clear as to how the card reader system actually worked.

[11]      The third ground was that the sheriff had erred in directing the jury, in relation to the expert, by informing them that “it was for the jury to say how much they thought the expert knew about the detail of the card-readers”.  This direction had compounded the error made by the sheriff in relation to ground two.  He had failed to balance the statement by reference to the fact that the expert reports had been prepared on the basis of material disclosed by the Crown.

[12]      Finally, the fourth ground was that the absence of a direction on deletions was an error.  The jury had returned to court during their deliberations and had asked whether it was necessary for them to be satisfied that certain sub-heads of the libel had been carried out by the appellant himself, as distinct from in concert.  The sheriff had directed the jury that the libel was that the appellant had personally carried out the acts libelled.  Proper directions on that point, either within the charge or in response to the jury’s question, could have resulted in significant deletions. 

Crown

[13]      The advocate depute replied that the issue of amendment was generally one for the sheriff’s discretion in terms of section 96 of the Criminal Procedure (Scotland) Act 1995.  Whether to allow it was a matter of degree (Paterson v HM Advocate 2008 SCCR 605).  In this case, the amendment did not change the character of the offence, nor had the appellant been prejudiced by it.

[14]      The sheriff had not erred in admitting the evidence of the card reader.  There was no requirement to refer to a card reader within the libel.  The charge contained the necessary specification and it did not to need narrate the instruments used to transfer the funds.  Quite apart from the card reader, there was no reference within the charge to either the PIN or the password used to initiate the fraud, or of access by, and the use of, a computer or a mobile phone.  The appellant had been given fair notice of the crime and where, when and how the crime was said to have been committed (HM Advocate v Stewart 2010 SCCR 341). 

[15]      The Crown had met its disclosure obligations in terms of section 121 of the Criminal Justice and Licensing (Scotland) Act 2010.  The Crown accepted that there had been no references to card readers within the material disclosed to the defence.  The Crown had had no knowledge of card readers prior to the trial. 

[16]      Mr Reid had given evidence on 1 August.  He had referred to card readers being provided to customers as part of the online banking services.  Ms Paterson gave evidence on the morning of 4 August.  The appellant had only objected to her evidence at that point, by which time the existence of card readers was already before the jury.  Even if the sheriff had erred in repelling the objection, the part played by the card reader would have remained for the jury’s consideration.

[17]      The defence expert did not give evidence until the afternoon of 4 August.  There had been ample opportunity for him to have made the necessary enquiries into the impact which the need for a card reader would have had on his thinking.  No request for an adjournment to consider the evidence of the card reader further had been made.

[18]      In any event, even if the sheriff had erred in relation to the objection, there was still sufficient evidence for a conviction.  Having regard to the evidence as a whole, the inference could clearly be drawn that the appellant was a participant in the fraud.  The use of both of his bank accounts to transfer large sums of money over a short period of time, facilitated by online banking, which required personal and unique details known only to the appellant, alongside his apparent unconcern over the loss of a large sum of money from his accounts was “crying out for an explanation” (O’Neill v HM Advocate [2014] HCJAC 124) and led to an “irresistible inference” (Fitzpatrick v Harvie [2014] HCJAC 69) of the appellant’s guilt.

[19]      In relation to the third ground, the remark criticised was correct in its context.  The sheriff had simply outlined the expert’s testimony and directed the jury that it was a matter for them to consider.

[20]      Finally, it had been inappropriate to direct the jury on deletions.  The question for the jury had been whether the charge, as it was framed, stood or fell.  The components in the charge, including the various sub-heads, were all essential to proof of the completed fraud.  There was no meaningful deletion which could be made.  Had the jury had doubts about the personal participation of the appellant on any of the sub-heads, they would have been bound to acquit, given the sheriff’s directions.

Decision
[21]      Whether to allow an amendment to an indictment in terms of section 96(2) of the Criminal Procedure (Scotland) Act 1995 is primarily a matter for the court of first instance, provided that the amendment does not change the character of the offence.  If there is any perceived prejudice to the accused, the court is able to provide a remedy in many situations by way of adjournment.  In this case the altering of the date when the offence commenced did not change the character of the fraud.  In any event, no prejudice to the appellant has been demonstrated.  It is even doubtful whether the amendment was necessary.  The date of registration for online banking was not an essential part of the fraud.  It was the existence and use of the facility that was crucial.

[22]      There was no need for the libel to specify the precise devices which would have enabled the appellant to use the facility to transfer money from his account to those of the third parties.  The libel, that he did so using an account under his sole control, provided sufficient notice that the Crown intended to prove that he alone could have transferred the funds from what was undoubtedly his account.  The Crown did not, for example, require to state in the indictment that a PIN, or a password, had been used.  They did not need to make reference to a card reader. 

[23]      The use of a card reader in the context of online banking is widely known and is, and was at the time, a common method for authorising payments using internet banking facilities to hitherto unknown transferees.  Nevertheless, it is accepted that the procurator fiscal depute conducting the trial had been unaware of this.  There was no mention of card readers in the statements from the bank employees, although a printout of the appellant’s account transactions, which was a production, did contain the annotation “token challenge”.  This is a reference to the use of such a reader.  Since the Crown were unaware of the use of readers, it is difficult to argue that they were under any obligation to disclose their existence.  A person who would be aware of the need for a RBS card reader to transfer money would, of course, be a RBS digital banking account holder, such as the appellant.  In addition, the witnesses who spoke to the card reader were disclosed and could have been precognosced.  The defence experts might also have been expected to have been aware of their existence.  In all these circumstances, the court does not consider there has been any miscarriage of justice on the basis of non-disclosure.

[24]      The objection came too late.  The evidence of the use of a card reader had emerged during the evidence of Mr Reid and had been made the subject of cross-examination.  The sheriff was accordingly correct to repel an objection taken only later during Ms Patterson’s testimony.  In any event, had the appellant had any difficulty in dealing with this evidence, he could have sought an adjournment.  He did not do so, perhaps because there had already been ample opportunity between the testimony of the relevant witnesses to research the matter and to reach an appropriate conclusion.  There was a sufficiency whether or not the evidence about the card reader had been led.  The card reader was only one element in gaining access to the personal bank account; the others including the personal identification details, PIN number and the password. 

[25]      No fault can be attributed to the sheriff regarding his comment about the defence expert’s evidence.  The sheriff has adequately explained why he made the comment.  He expressly left it for the jury to determine the value of the expert’s testimony on the subject of card readers.

[26]      Finally, on the question of deletions, the indictment libels a fraud carried out by the appellant “while acting along with others”.  The specific sub-heads refer to acts committed by all those participating in the fraud and not necessarily carried out by the appellant personally.  The sheriff erred therefore in favour of the appellant in interpreting the indictment in a manner which suggested that the Crown required to prove that each sub-head of the libel had been carried out by the appellant himself.  That having been said, he was correct not to direct the jury that they would be able to delete elements of the libel, since any such deletion would have resulted in no completed crime being established.  The jury must be presumed to have followed the sheriff’s direction and thus they found it proved that it was the appellant himself had carried out the actions libelled.

[27]      The appeal must be refused.