Michel v the Queen

Not often is defence counsel, appealing against conviction on the grounds of an unfair hearing, able to turn the appeal court's feeling from initial rueful concern to eventual deep dismay simply by reference to the number and character of the judge's interventions in the course of the trial. Such, alas, is the position in this case and, overwhelming though the evidence against the appellant may appear to have been, the Board can see no alternative but to set his conviction aside.

The bare bones of the case are these. On 14 May 2007, after a 30-day trial before the Inferior Number of the Royal Court of Jersey (Sir Geoffrey Nice QC, Commissioner, and two Jurats), the appellant was convicted on nine counts of money laundering contrary to article 32 of the Proceeds of Crime (Jersey) Law 1999. On 18 June 2007 he was sentenced (by the Commissioner and five Jurats) to six years imprisonment. That sentence was imposed concurrently on all nine counts and concurrently also with a further such count on which the appellant had been convicted before a differently constituted Inferior Number (Sir Richard Tucker, Commissioner and two Jurats) on 18 August 2006 (a conviction from which leave to appeal had been refused on 25 October 2006). The Board will refer to this as "the earlier trial", the later proceedings simply as "the trial". On 19 October 2007 the benefit from the appellant's crime (found to total £9,730,152) was confiscated from him.

The appellant appealed against his conviction (but not against sentence or the confiscation order) on the trial of the further nine counts. That appeal was dismissed by the Court of Appeal of Jersey (Michael Birt QC, Deputy Bailiff, President, David Vaughan CBE QC and Geoffrey Vos QC) on 13 December 2007. By Special Leave of the Board, the appellant now appeals against the Court of Appeal's decision.

Given that the Board propose to advise that the conviction be quashed and the case be remitted to the Court of Appeal for them to decide whether to order a new trial, it is inappropriate, and in any event unnecessary, to rehearse the facts of the case in any detail. The following broad summary will suffice.

The appellant is an accountant who practised as Michel & Co in St Helier for over thirty years. His business was divided into two parts: local clients, in respect of whom no allegation of illegality was made by the prosecution; and offshore clients who were, the prosecution alleged, almost all tax evading criminals and, in at least one case, a thief.

The appellant employed a number of support staff, including Mrs Gallichan, who assisted him in administering his offshore clients' affairs. Mrs Gallichan (who had been convicted with the appellant at the earlier trial) was his co-accused on all but one of the nine further counts, albeit in the event acquitted on each of them.

It is convenient at this stage to set out article 32(1) of the 1999 Law:

"Assisting another to retain the benefit of criminal conduct

32(1)… if a person enters into or is otherwise concerned in an arrangement whereby

(a) the retention or control by or on behalf of another (in this Article referred to as 'A') of A's proceeds of criminal conduct is facilitated (whether by concealment, removal from the jurisdiction, transfer to nominees or otherwise); or

(b) A's proceeds of criminal conduct

• (i) are used to secure that funds are placed at A's disposal, or

• (ii) are used for A's benefit to acquire property by way of investment,

knowing or suspecting that A is a person who is or has been engaged in criminal conduct or has benefited from criminal conduct, he or she is guilty of an offence."

Count 1 was an omnibus charge which alleged, not that the appellant and Mrs Gallichan had entered into an arrangement with any particular client, but that from 1 July 1999 until 8 July 2001 they "were concerned together and with others [at Michel & Co] in an arrangement" ("a standing arrangement" as it was put) whereby stolen funds or funds chargeable to tax were transferred from fifty-three of Michel & Co.'s clients to bank accounts in Jersey and then delivered back to the clients in cash.

All the remaining counts (just as the count on which the appellant and Mrs Gallichan had been convicted at the earlier trial) charged the appellant (and in all but one case Mrs Gallichan) with being concerned in "an arrangement" in the same period with a particular named client, each of which arrangements was said to have facilitated the evasion of tax or VAT save count 5 which alleged that the crime facilitated was theft by a client (Mr Gerald Smith) from settlors of trusts he administered, and count 8 which alleged unspecified criminal conduct by the relevant client (Mr Krejzl). In each instance it was alleged that the appellant and Mrs Gallichan set up companies or trusts for the clients using false or nominee beneficial ownership or settlor details, and that they would place funds on deposit and then either purchase property for them, meet their expenses or physically return the funds in cash to them while maintaining their anonymity. It was said that they arranged for payments to be layered in and out of deposit accounts through the appellant's client account.

The appellant and Mrs Gallichan did not dispute most of the facts alleged by the prosecution. They accepted that they provided all these various services to their clients: setting up trusts or companies, putting funds on deposit, buying property, meeting expenses and delivering cash. Their defence, however, was that they did not know or suspect that any of their offshore clients were criminals or that they were dealing in the proceeds of crime. The appellant gave evidence to this effect; Mrs Gallichan exercised her right to silence.

There was undisputed evidence that between January 1993 and July 2001 £5.6m in cash was made available to 52 clients. Of this sum, £1.5m was made available after 1 July 1999, when section 32 came into force. Of the £1.5m, £1.2m was hand-delivered by the appellant in England by taking the money over from Jersey in person. Some £2.6m of the £5.6m total came from clients (cash which was never banked but simply kept in a pot for use as and when needed for delivery to other clients), some £3m from various pooled accounts at banks (some £1.6m of which was withdrawn in cash over the years in sums of £9,950).

So much for the evidence. The Board turn at once to the central ground of appeal as to the fairness of the trial, focused as this is entirely on the Commissioner's conduct of the hearing: his continual interruptions of the evidence, of prosecution witnesses as well as the appellant himself, of evidence in chief as well as cross examination. During the Crown's case the Commissioner time and again asked questions damaging to the defence case which prosecuting counsel could never have asked—for example cross-examining the appellant's clients to suggest both that they had behaved criminally and that this must have been obvious. During the appellant's own evidence the Commissioner intervened with substantive questions on no fewer than 273 occasions, 138 of them during evidence in chief. Generally this was with a whole series of questions, taking up in all just over 18% of the appellant's eight and a half days in the witness box. So much for the bare statistics. Of altogether greater significance than the mere number and length of these interruptions was, however, their character. For the most part they amounted to cross-examination, generally hostile. By his questioning the Commissioner evinced not merely scepticism but sometimes downright incredulity as to the defence being advanced. Regrettably too, on occasion the questioning was variously sarcastic, mocking and patronising.

The Board will give but a single, brief illustration of this, taken from the transcript of the appellant's examination-in-chief. The appellant was being questioned about his knowledge of a particular client's transactions. The Commissioner intervened:

"There is no question, is there, of his having snooked just a teeny-weeny bit of his money, £49,000, out without paying tax on it, or anything like that?"

And a little later: "We just want a picture of where, in his case, this minute quantity of cash went."

No one has found it possible to defend the Commissioner's conduct of this trial. As the Court of Appeal record in its judgment (para 45), junior counsel then appearing for the Attorney-General accepted that "a significant part [of the interventions] amounted to cross-examination, sometimes apparently hostile or incredulous in tone. [They were also] much too frequent, especially during examination in chief of the applicant."

The Court of Appeal (at para 71) expressed its own view thus:

"The Court has found it very surprising that the Commissioner should have intervened to the extent which he did. The Court has no hesitation in agreeing with both counsel that the nature and extent of the Commissioner's interventions were improper. He asked far too many questions and, although many were perfectly proper, a significant proportion were in the nature of cross-examination designed to test the evidence, particularly that of or favourable to the applicant. It is perfectly proper— indeed it is his duty—for a judge to intervene for the purposes described by Rose LJ in Tuegel [ R v Tuegel 2002 Cr App R 361 where Rose LJ referred to the judge's 'duty to ask questions which clarify ambiguities in answers previously given or which...