Attorney General's Reference (No. 7 of 2000)

JurisdictionEngland & Wales
JudgeTHE VICE PRESIDENT
Judgment Date29 March 2001
Neutral Citation[2001] EWCA Crim 888
Date29 March 2001
CourtCourt of Appeal (Criminal Division)
Docket NumberNo: 200006945/S3

[2001] EWCA Crim 888

IN THE COURT OF APPEAL

CRIMINAL DIVISION

Royal Courts of Justice

The Strand

London WC2

Before:

The Vice President

(Lord Justice Rose)

Mr Justice Rougier and

Mr Justice Mccombe

No: 200006945/S3

No 7 of 2000

Attorney General's References
(P)

MR J EADIE appeared on behalf of the Attorney-General

MR D PERRY & MR G PATTERSON appeared on behalf of the Respondent

THE VICE PRESIDENT
1

There is before the Court a point of law referred for the Court's consideration and opinion under section 36 of the Criminal Justice Act 1972. The point, which requires expeditious resolution because of the number of cases dependent on it, is this:

"Does the use by the Crown in the prosecution of a bankrupt for an offence under Chapter VI of Part IX of the Insolvency Act 1986 (the 1986 Act) of documents which (a) were delivered up to the Official Receiver (OR) under compulsion (pursuant to the duty imposed on the bankrupt by section 291 of the 1986 Act, which is backed by the contempt sanction in section 291(6) of the 1986 Act) and (b) do not contain statements made by the bankrupt under compulsion violate the bankrupt's rights under Article 6 of the European Convention on Human Rights (the Convention) ?"

2

In order to understand that question it is, first of all, necessary, briefly, to summarise the material provisions of the Insolvency Act 1986. By section 264, creditors or an individual himself can present a bankruptcy petition. By section 283, the bankrupt's estate is defined. By section 287, there is provision for the appointment of an official receiver, following the presentation of the petition, but prior to the appointment of a trustee in bankruptcy. By section 289, it is the duty of the official receiver to investigate the conduct and affairs of the bankrupt.

3

Section 291 provides as follows:

"Where a bankruptcy order has been made, the bankrupt is under a duty-

(a) to deliver possession of his estate to the official receiver, and

(b) to deliver up to the official receiver all books, papers and other records of which he has possession or control and which relate to his estate and affairs (including any which would be privileged from disclosure in any proceedings)."

4

It follows that the official receiver has to ascertain what is in the estate, and to investigate the bankrupt's affairs to see what caused the bankruptcy. Section 291(6) provides a sanction against a bankrupt who fails to comply with his obligations under section 291, namely, that he is in contempt of court, and is punishable with up to 2 years' imprisonment.

5

Section 333 imposes a similar duty of co-operation, vis a vis the trustee in bankruptcy.

6

Chapter VI of the Act indicates a number of offences, the penalty for which, by virtue of section 350(6), is liability to imprisonment, or a fine. Those who do not comply with their duty to co-operate and those who deal with matters inappropriately preceding the bankruptcy may commit an offence. Section 362 identifies one such offence, in these terms:

"(1) The bankrupt is guilty of an offence if he has-

(a) in the 2 years before petition, materially contributed to, or increased the extent of, his insolvency by gambling or by rash and hazardous speculations…"

7

The penalty for that offence, by virtue of schedule 10 of the Act, is, again, 2 years, or a fine, or both, or, in certain circumstances, a 7 year period of imprisonment for a failure to co-operate.

8

Section 433 of the Act provides:

"In any proceedings (whether or not under this Act) -

(a) a statement of affairs prepared… and (b) any other statement made in pursuance of a requirement imposed by or under any such provision or by or under rules made under this Act, may be used in evidence against any person making or concurring in making the statement."

9

The regime under the Insolvency Act, Mr Eadie on behalf of the Attorney-General submits, is designed, among other things, to discover how the bankruptcy came about. Therefore, inroads into the bankrupt's rights in relation to self-incrimination, in particular, are a price to be paid for the benefits which may accrue to the bankrupt, by virtue of the bankruptcy regime. So, submits Mr Eadie, section 291 overrides the general principle against self-incrimination.

10

A consequence of the decision of the European Court of Human Right in Saunders v The United Kingdom (1996) 23 EHRR 313, to which later we shall return, is that Parliament has amended the relevant legislation, by section 59 and schedule 3 paragraph 7 of the Youth Justice and Criminal Evidence Act 1999. The amendment is in these terms. Section 433 of the Insolvency Act has an additional subsection inserted in it:

"(2) However, in criminal proceedings in which any such person is charged with an offence, to which this subsection applies, (a) no evidence relating to the statement may be adduced and (b) no question relating to it may be asked by or behalf of the prosecution unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person."

11

Mr Eadie submits that there, in the clearest terms, Parliament has legislated, in relation to statements made of a self-incriminating nature and the impropriety of using them in criminal proceedings. But, no similar provision has been made by Parliament in relation to documents which are revealed as a consequence of statements made. That, submits Mr Eadie, is a reflection of the distinction made by the European Court in Saunders, between statements, on the one hand, and pre-existing documents on the other.

12

In that context, we turn, briefly, to the material facts in the present case. The defendant was made bankrupt on 18th August 1997, with an estimated total deficiency of £7.6 million, most of which consisted of sums owed to his former employer. An action was brought against him in the Chancery Division and Neuberger J gave judgment against him in that action. It was because of that judgment that the defendant filed his bankruptcy petition.

13

It is pertinent to note that, in the course of his judgment, Neuberger J made a number of findings including the fact that major gambling had been undertaken by the defendant.

14

The charge which was laid against the defendant was one of behaving contrary to section 362(1) (a) and section 350(6) which we have already rehearsed. The particulars of the allegation were that, in the 2 year period prior to his bankruptcy, he had materially contributed to, or increased the extent of, his insolvency by gambling.

15

In June 2000 the defendant applied to the Crown Court judge for a stay of the proceedings as an abuse of process, or for a ruling that documents delivered up by him to the official receiver under compulsion, should be ruled inadmissible or be excluded under section 78 of the Police and Criminal Evidence Act. The basis of that submission, in relation to the exclusion of the documents, was that, otherwise, the trial of the defendant would be unfair and in breach of the defendant's rights under Article 6 of the European Convention of Human Rights. The judge, at the invitation of the parties, dealt with the matter on the basis that the Human Rights Act was in force, although at that date it was not. The trial judge ruled that the documents obtained by the Official Receiver were inadmissible on the basis that their admission would give rise to a violation of Article 6. He further ruled that their admission would not be fair and he excluded them from admission under section 78 of the Police and Criminal Evidence Act. At that stage, at the invitation of prosecuting counsel, bearing in mind the possibility of a reference under section 36, he directed that a verdict of not guilty be entered.

16

The documents, in relation to which the judge ruled that their admissibility would give rise to a breach of Article 6 included cheque stubs, bank statements, returned cheques, a betting file headed "Ladbroke's betting" and some loose gambling statements. The gambling documents included a computer printout, produced by Ladbroke's in relation to the defendant's gambling, and a manuscript schedule of gambling by I Morris, a bookmaker, into neither of which documents the defendant had had any input. There were other documents, such as cheque stubs and cheques drawn on Jersey bank accounts into which the defendant had had an input.

17

The existence of those documents came to light in this way. On 2nd September 1997, the defendant had completed form B40.01, a preliminary questionnaire in his bankruptcy. The form made it clear that he was required to answer the questions posed and to do so truthfully. Question 19.1 was: "Have you lost money by betting, gambling or similar activities in the last 2 years?" To which the defendant answered "Yes". On 29th October 1997, following notices of the requirement to deliver up documents relating to his estate and affairs, as contained in the statutory powers to which we have earlier referred, the defendant delivered to the official receiver some six boxes of documents, including those to which we have referred. Many, if not all of those documents, were of a nature relating to the defendant's estate and affairs and, of course, included documents specifically relating to his gambling activities. Those documents formed the basis of the prosecution case against him, in relation to the charge under sections 362 and 350 of the Insolvency Act.

18

It is also pertinent to note that, in addition to the amendment of section 433 by the 1999 Act, the Attorney-General's guidelines also now reflect the ECHR decision in Saunders.

19

The submission which Mr Eadie makes, by...

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