R v Beck

JurisdictionEngland & Wales
Judgment Date02 December 1981
Judgment citation (vLex)[1981] EWCA Crim J1202-3
CourtCourt of Appeal (Criminal Division)
Docket NumberNo. 4965/B2/79
Date02 December 1981
Barry Alexander Beck

[1981] EWCA Crim J1202-3


Lord Justice Ackner

Lord Justice Dunn


Mr. Justice Michael Davies

No. 4965/B2/79



Royal Courts of Justice

MR. ROBERT RHODES appeared on behalf of the Appellant.

MR. BRIAN LETT appeared on behalf of the Crown.


On 15th November, 1979 in the Crown Court at Snaresbrook, after a trial lasting some 6 weeks, the appellant was convicted of a conspiracy to defraud. The substance of the charge was that he, together with one Mayze, conspired to defraud Coach House Finance Ltd and First Fortune Holdings Ltd by falsely representing that sums of money were payable by Coach House to Safe Glaze Ltd by the submission of false satisfaction notes and by the making of false entries in the accounts of Coach House. On the 5th November, 1981 we dismissed his appeal against conviction but reduced his sentence from 3 years 9 months to 2 years imprisonment. We now give our reasons for dismissing the appeal against conviction.


Although the case was a long and complicated one, having regard to the course taken when the appeal was argued, the facts can be stated somewhat more shortly than otherwise would have been the case. The appellant was an accountant who had been active in various business ventures. Count 5, the count of the indictment upon which he was tried, concerned the period 1st February, 1974 to June 1975. From 1971 the appellant had been managing director of, and in effective control of Safe Glaze (trading as "All Seasons Home Improvements"). The company was based in London and its business was the installation of double glazing and electrical central heating.


Central to the proceedings was the appellant's relationship with one Raymond George Mayze, his co-accused. Before February 1974 Mayze had been running a company called Colchester Investments Ltd from an address in Colchester. The Company operated as finance brokers arranging finance for the purchase of cars, for home improvements, etc., through larger institutions. One such was Rathmines Midland Finance Ltd (RMF). The appellant first met Mayze in about 1972 and as a result began to pass substantial amounts of business to Colchester Investments. By February 1974 the appellant and Mayze had thus been associated in business for some time. The new company, Coach House Finance, was formed on 1st February 1974, supplying money in its own right to finance home improvements, etc., but otherwise effectively replacing Colchester Investments. It was set up by First Fortune Holdings, an American owned company, another of its subsidiaries being RMF. Mayze became managing director and most of his staff went with him. The appellant transferred Safe Glaze business to Coach House. It is convenient at this stage to refer to the directors of First Fortune. The Chairman was Mr. Turnbull and the Deputy Chairman was Mr. Knight. The Finance Director was Mr. Hochenberg and the Group Development Director was Mr. Noble. Mr. Turnbull, Mr. Knight, Mr. Hochenberg and Mr. Noble were also directors of Coach House.


Having referred to the start of Coach House we can come straight to its collapse. It happened in this way. In March and April 1975 the "That's Life" programme on BBC television mentioned Safe Glaze and Coach House. The contents of the programme were not before the jury but it was apparent during the trial that satisfaction notes signed by customers at the time they gave their orders and therefore long before the satisfactory installation of the double glazing were referred to. The programme was highly critical of this and alleged shortcomings in the service given to customers. There was a detailed investigation by Mr. Jorg, the Chief Auditor of the American owners, and this revealed that Coach House were involved in a loss of over £130,000 on Safe Glaze business.


The foundation of the prosecution's case against the appellant (Mayze changed his plea to 'Guilty' after the start of the trial and gave evidence against the appellant), was that the principal means of defrauding First Fortune was the obtaining of satisfaction notes signed by the customer thereby creating the inference that all the contract work had been carried out and accordingly that the trader, that is Safe Glaze, could be properly paid out, leaving the customer to reimburse Coach House by instalments, plus the payment of substantial interest. Safe Glaze used door-to-door salesmen who, apart from securing orders for double glazing, would press the customer to accept finance, which Safe Glaze would arrange through Coach House. At the time of securing the order the salesman would persuade the customer to sign the bottom copy of the satisfaction note, telling him it was being provided "as a means of checking" when the work was satisfactorily executed, the customer retaining the top satisfaction note and a couple of copies.


The prosecution's case was that this was a dishonest method of trading designed to give the misleading impression referred to above and that although Mayze and some of the junior staff may have known that payment was being made prior to installation, this was not known by First Fortune, a fact which they allege was well known to the appellant. Mayze, in his evidence admitted that this dishonest system had started in July 1974 when the appellant approached him saying he had cash-flow problems and asking for payment in advance on a small number of contracts. Mayze agreed but thereafter Coach House began to get more and more complaints about Safe Glaze contracts. Mayze said he realised the customers were being asked to pay instalments before the work had been finished and sometimes before it had even been started. By November or December 1974 the arrears were very bad. He said he was too frightened to tell First Fortune staff about the abuse of the system and in fact he gave evidence that other devices were used to keep accounts open and to enable the appellant to go on claiming payment for work which had not been done.


The appellant on the other hand said that this method of trading, namely payment against contracts, had been the agreed modus operandi between him and Mayze even before Coach House began operating. It was carried out in a wholly open manner and must have been appreciated by Knight, Hochenberg, Noble and thus First Fortune would have known all about it. However, he was quite unable to give any justification for this odd system of using satisfaction notes relative to work which, so far from being carried out satisfactorily, had never been carried out at all. He said he operated this system, giving the necessary instructions to his salesmen, because he had been asked to do so by Mayze. He did not state that Mayze had given him any reason or justification for the system, nor had he asked for an explanation, and he could give no support for its commercial validity.


Jorg made a claim against the American insurers for losses arising out of Coach House activities, in the sum of £646,161. In Section 4 of the claim document there were listed seven factors which made the company unable to recover its money. Item (d) asserted:

"Personal loan documents were brought into use in July 1974. The company did not possess a moneylender's licence to handle this type of business and Mayze was aware of this. The result was that loans so made were unenforceable in Court. Unlicensed moneylending is a criminal offence in the United Kingdom."


It appears that Coach House's loan agreements would have been consumer credit agreements within Section 8 of the Consumer Credit Act 1974. A licence would have been required under Section 21, but no such licence had been obtained. Schedule 3, paragraph 5 of the Act exempts certain consumer credit businesses from this requirement before the specified date, but the Consumer Credit Act 1974 (Commencement Number 2) Order 1977 specified the 1st October 1977 as the "specified date" for this purpose. Jorg was cross-examined about First Fortune's directors' knowledge of the introduction of the personal loan scheme by mayze. He said he understood that they did not know about it. He said that Noble apparently did not know until he told him. He did not discuss the point with Knight but Hochenberg and Turnbull did not seem to know before Jorg spoke to them. Noble's evidence preceded Jorg's. He was not cross-examined on whether he had lied to Jorg. The evidence of Knight, Summerfield and Hochenberg came after Jorg's. Apparently the point was not put to the latter two witnesses. Knight in cross-examination did not recall telling Jorg that he did not know of the introduction of the personal loan documents until Jorg brought it to light. Much evidence and argument clearly centred around this collateral matter. The loan documents were introduced in July 1974, after considerable thought and legal advice. Kayze said that he discussed the matter with Knight and Noble before the documents were introduced. Knight said that the personal loan documents were introduced without the authority of First Fortune but he had known from march 1975 that they were in use and he had sanctioned them. Noble knew about the use of the documents in the last quarter of 1974 and considered that their introduction was a "commercial risk" in view of the imminence of the statutory provisions. Hochenberg also admitted that he knew about the documents in 1975.


A strong attack was mounted by the defence on the first Fortune directors to whom we have referred. It was alleged that they had lied to Jorg about their knowledge of the introduction of the personal loan documentation, that they were all prepared to be parties to an illegal form of...

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