Mackie v Advocate (HM)
| Jurisdiction | Scotland |
| Judgment Date | 16 February 1994 |
| Neutral Citation | 1994 SCCR 277 |
| Date | 16 February 1994 |
| Docket Number | No. 21. |
| Court | High Court of Justiciary |
JC
LJ-G Hope, Lords Cowie, Mayfield.
Evidence—Sufficiency—Evidence from one witness in contradiction to evidence from pannel relative to particular meeting—No-one else present—Whether facts and circumstances could corroborate evidence of witness—Whether circumstantial evidence had to be more consistent with that evidence than pannel's version of events to provide corroboration
Procedure—Solemn procedure—Evidence—Sufficiency—No case to answer submission—Whether submission could succeed where it was directed to special capacity where Crown case dependent upon proof of that special capacity—Submission directed to part only of charge—Whether submission had to be directed to whole charge to succeed—Criminal Procedure (Scotland) Act 1975 (cap. 21), sec. 140A1
An investment analyst with a firm of stockbrokers (B) was charged with insider dealing in that he was in the special capacity of knowing unpublished, price-sensitive information relative to securities of a company listed on the Stock Exchange and had counselled and procured salesmen employed by B to deal in those securities contrary to the relevant legislation. The Crown case depended upon the pannel being told that a price-sensitive profits warning was to be made. The chairman of the company gave evidence of telling the pannel of this at a meeting where no-one but himself and the pannel were present. The Crown sought to corroborate the chairman's account by reference to circumstantial evidence. In particular, upon the pannel's return to his office after the meeting, he told the salesmen that, in view of what he had learnt from the chairman, he expected that there was to be little or no growth in the earnings per share of the company, which was not a price-sensitive issue; and that his advice to investors was to "top slice" their holdings as opposed to his earlier advice of "holding" them. The salesmen denied that the pannel told them that a profits warning was to be issued. The salesmen then sold or arranged to sell investors' shares on the basis of that advice. The pannel argued that there was no case to answer as no corroboration existed of the essential averment of the appellant having price-sensitive information. The Crown argued that the allegation that the pannel was told a profits warning was to be issued had to be looked at in the context of the whole discussion when a profits warning was mentioned, surrounded as it was by a number of other matters of importance to the company at the time. The temporary judge (McEwan, Q.C.) repelled a submission of no case to answer, on the basis that the pannel's submission related only to part of the offence libelled whereas the whole offence had to be looked at. The pannel denied that this information was relayed to him. The pannel then gave evidence denying that the chairman had told him about the profits warning; he had only informed him of the fact that there would be minimalistic earnings per growth. On being convicted, the pannel appealed on the basis that there was no corroboration of the chairman's account.
Held (1) that the trial judge had erred in rejecting the pannel's submission of no case to answer since an essential fact was whether the pannel had been told of the profits warning and was within the special capacity libelled, for if he was not then the whole charge fell; (2) that, although it was appropriate to look at the whole context and all the evidence for corroboration of the chairman's evidence, the question was whether the facts and circumstances, taken together, were more consistent with that evidence than with the pannel's evidence, circumstantial evidence equally consistent with the chairman's or the pannel's version being at best neutral; and (3) that, after the meeting with the salesmen, everything they said and did proceeded on the information which the pannel gave them, which was that he was downgrading his recommendations in regard to the company's shares, which, as it was information he was at liberty to disclose, was entirely neutral; and appeal allowed.
Dictum of Lord President Normand in O'Hara v. Central S.M.T. Co. Ltd.SC1941 S.C. 363 at p. 379 applied.
Observed (per Lord Cowie) that a trial judge should be slow to usurp the function of a jury in deciding to uphold a motion of no case to answer in circumstances involving the credibility of witnesses; and that it would have been open to the jury to disbelieve the explanations given by the witnesses of the facts and circumstances and to find in these facts and circumstances corroboration for the one credible witness.
Statutory offence—Company—Insider dealing—Counselling and procuring another to deal in securities—Whether that other dealing in securities when fellow-employees carried out dealings on behalf of clients of stockbrokers—Company Securities (Insider Dealing) Act 1985 (cap. 8), secs. 1(7), 8 and 13(1)1
Section 13(1) of the Company Securities (Insider Dealing) Act 1985 enacts, inter alia, that a person deals in securities if he buys or sells or agrees to buy or sell any securities.
The pannel was an investment analyst with a firm of stockbrokers and was charged with insider dealing, in contravention of secs. 1(7) and 8 of the Act in that he counselled and procured two salesmen employed by the stockbrokers to deal in shares in respect of which he had price-sensitive information. The sales were effected by other employees of the stockbrokers but undertaken for clients on the instructions of the salesmen. The pannel's appeal against conviction was successful on another ground but a question arose as to whether the salesmen "dealt" in the securities in question within the meaning of sec. 13 of the Act.
Opinion that the salesmen were dealing with the securities in terms of sec. 13 notwithstanding the fact that fellow-employees actually effected the sales.
Thorold Mackie was charged on an indictment at the instance of the Rt. Hon. The Lord Rodger of Earlsferry, Q.C., Her Majesty's Advocate, the libel of which set forth that: "[B]eing an investment analyst with Bell Lawrie White & Co. Ltd., Norloch House, 36 King's Stables Road, Edinburgh (hereafter “B.L.W.”) and being an individual who had information which you knew to be unpublished price-sensitive information in relation to securities, namely information regarding the forthcoming issue of a profits warning by Shanks & McEwan Group plc, Woodside Place, Glasgow (hereafter “S.M.E.”), which you had knowingly obtained from H. L. I. Runciman, a director and, more particularly, the chairman of S.M.E., an individual connected with S.M.E. whom you knew or had reasonable cause to believe held said information by virtue of being so connected, and you knew or had
reasonable cause to believe that, because of the said H. L. I. Runciman's connection and position, it would be reasonable to expect the said H. L. I. Runciman not to disclose said information except for the proper performance of the functions attaching to that position, and thus being an individual for the time being prohibited by subsec. (4) of the aftermentioned section from dealing on a recognised stock exchange in securities of S.M.E. [you] did, between 6th and 12th September 1991, both dates inclusive, at 7 Drumsheugh Gardens, Edinburgh, counsel and procure Allan Gilmour Thom and Colin McLeod Telfer, both salesmen with B.L.W., to deal in those securities, knowing or having reasonable cause to believe that said Allan Gilmour Thom and Colin McLeod Telfer would deal in them on a recognised stock exchange and they did thus deal on the Stock Exchange, London, in such securities and did sell 1,951,400 shares of S.M.E. on behalf of clients of B.L.W. at prices ranging from £3.04 to £3.18 and did thus avoid the consequent reduction in share prices after said profits warning was issued on 19th September 1991, the highest and lowest prices and the mid-price quoted at close of business on said date following the issue of said profits warning being £2.70, £2.28 and £2.39 respectively, and they did thus sell such shares at prices which realised £1,396,642 or thereby in excess of the prices which would have been realised if said shares had been sold following the issue of said profits warning: contrary to the Company Securities (Insider Dealing) Act 1985, secs. 1(7) and 8."
The pannel pled not guilty. The cause called for trial before the Temporary Judge (R. G. McEwan, Q.C.) and a jury in the High Court of Justiciary in Edinburgh. The jury convicted the pannel and he subsequently appealed by way of note of appeal against conviction.
The grounds of appeal were in the following terms, inter alia:"(1) The trial judge erred in law in refusing the submission in terms of sec. 140A of the Criminal Procedure (Scotland) Act 1975 that the appellant had no case to answer in respect of the charge on the indictment. In particular he so erred in respect that the Crown failed to prove by corroborated evidence that the appellant was in possession of unpublished price-sensitive information, namely information regarding the forthcoming issue of a profits warning, and accordingly failed to prove that the appellant was an individual prohibited from dealing in terms of sec. 1(4) of the Company Securities (Insider Dealing) Act 1985. (2) The trial judge failed to give adequate directions to the jury as to what were the essential facts which required to be proved to establish the charge and failed to direct properly that each of such facts required to be proved by corroborated evidence. … (4) The trial judge erred in directing the jury that there was sufficient corroborated evidence to enable them to convict the appellant of the charge. (5) The trial judge … erred in directing the jury as to what they could hold amounted to corroboration. He erred in his directions as to what would be sufficient for them to be entitled to hold that the offence had been committed .... He failed properly to direct the jury...
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