R v Carass (Clive Louden)

JurisdictionEngland & Wales
CourtCourt of Appeal (Criminal Division)
JudgeLord Justice Waller
Judgment Date19 December 2001
Neutral Citation[2001] EWCA Crim 2845
Docket NumberCase No:2001/4788/S3
Date19 December 2001

[2001] EWCA Crim 2845




Under section 9(11) Criminal Justice Act 1987

Royal Courts of Justice


London, WC2A 2LL


Lord Justice Waller

Mr Justice Rougier and

Mr Justice Stanley Burnton

Case No:2001/4788/S3

Clive Louden Carass

Christopher M Batty and Guy A Kearl (instructed by CPS Northallerton for the Crown)

John Lodge and Nicholas Johnson (instructed by Hutchinson & Buchanan 77 North Street Ripon HG4 1DS for the Appellant)

James Eadie (instructed by Legal Services Group 10 Victoria Street London SW1H ONN for the Department of Trade and Industry)

Lord Justice Waller

The appellant is to face trial at Teesside Crown Court in February 2002 before His Honour Judge Bowers. He has been charged under two indictments the first containing a count alleging conspiracy to defraud the creditors of a company ABS Leeming Ltd (ABS). On that indictment Michael Williamson and Timothy Horner are co-defendants. On the second indictment there are four counts alleging the concealing of debts of ABS in anticipation of winding up, contrary to section 206(1)(a) of the Insolvency Act 1986.


On 13 August 2001 Judge Bowers initially ruled that the two indictments should be joined. He was then asked to rule on severance. The basis on which an application for severance had been made was that, in relation to any offence charged under section 206(1)(a) of the Insolvency Act 1986, by section 206(4) it is provided:

"(4) It is a defence —

(a) for a person charged under paragraph (a) or (f) of subsection (1) …. to prove that he had no intent to defraud, ….".


The argument in favour of severance was that a jury would be confused by having to consider the conspiracy count without any reverse burden provision at the same time as four counts under section 206 in relation to which it was a defence for the appellant to prove no intent to defraud. As will appear however the hearing at which the judge made the above ruling was in reality designed to bring up before this court the question whether section 206(4) was incompatible with Article 6 of the European Convention on Human Rights.



The first question that arises is whether this court has any jurisdiction to entertain this appeal. As already indicated the Crown wished to join all counts in one indictment. The appellant's advisers seem to have taken the view that if section 206(4) was incompatible with Article 6, that would provide an answer to those counts so far as the appellant was concerned. The lawyers acting for the appellant recognised that Judge Bowers had no jurisdiction to make declarations of incompatibility. Their aim was to devise a basis on which such a declaration might be made by the Court of Appeal. The prosecution also seem to have been persuaded by the validity of that course and Judge Bowers was also prevailed upon to assume the validity of that course.


Unfortunately, two fundamental errors were being made. It is possible that they would not have been made if more attention had been paid to the decision of the House of Lords in R v Lambert [2001] 3 WLR 206 which it seems had been brought to the attention of all but only a short time prior to the hearing.


The first fundamental error was to fail to appreciate that any declaration of incompatibility could make no difference so far as the appellant was concerned. Section 4(6) of the Human Rights Act 1998 ( HRA) preserves in being the provision in relation to which such a declaration is made pending legislative change and declares such a declaration not to be binding on the parties to the proceedings in which it is made. Thus, as Lord Hobhouse recognised in R vDPP Ex p Kebilene [2000] 2 AC 326 at 395G-H:

"… irremediable incompatibility would not assist [the appellant in that case]."


The second fundamental error was not to have appreciated the possibility of reading down section 206(4) in reliance on section 3 of the HRA as the House of Lords in Lambert had done in relation to sections 28(2) and (3) of the Misuse of Drugs Act 1971. An appreciation of that possibility would have involved the judge considering the incompatibility of section 206(4) with Article 6(2) of the Convention, not for the purpose of making any declaration of incompatibility (in relation to which of course he had no jurisdiction) but in relation simply to construing section 206(4).


Thus it was that both sides proceeded on the basis that the judge should not consider any compatibility question and that a declaration of incompatibility in the Court of Appeal would assist the appellant in this case. Thus it was that the lawyers on each side gave consideration to the possibility that if a trial was allowed to proceed, and if the jury convicted the appellant on counts under section 206(1)(a), the appellant would be able to come to the Court of Appeal and get the convictions quashed. That would involve a substantial expenditure of public money which would be all for nothing if that were the correct view.


It was in those circumstances that consideration was given to the way in which the question whether section 206(4) was incompatible might be considered by the Court of Appeal prior to the trial. The answer appeared to be that if the judge would hold a preparatory hearing under section 7 of the Criminal Justice Act 1987, that would enable an appeal to be brought to the Court of Appeal under section 9 and allow the Court of Appeal to consider the compatibility or incompatibility of the relevant section.


Unfortunately, proper consideration was not given to the nature of a preparatory hearing and to the question whether, and in what circumstances, the Court of Appeal had jurisdiction to entertain an appeal. Section 7 of the Criminal Justice Act 1987 provides as follows:

"7. Power to order a preparatory hearing

(1) Where it appears to a judge of the Crown Court that the evidence on an indictment reveals a case of fraud of such seriousness or complexity that substantial benefits are likely to accrue from a hearing (in this Act referred to as a "preparatory hearing") before the jury are sworn, for the purpose of —

(a) identifying issues which are likely to be material to the verdict of the jury;

(b) assisting their comprehension of any such issues;

(c) expediting the proceedings before the jury; or

(d) assisting the judge's management of the trial,

he may order that such a hearing shall be held.

(2) A judge may make an order under subsection (1) above on the application either of the prosecution or of the person indicted or, if the indictment charges a number of persons, any of them, or of his own motion."


Section 9 of the Criminal Justice Act 1987 provides:

"The preparatory hearing

9. (3) He may determine

(b) any question as to the admissibility of evidence; and (c) any other question of law relating to the case.

(11) An appeal shall lie to the Court of Appeal from any order or ruling of a judge under subsection (3)(b) or (c) above, but only with the leave of the judge or of the Court of Appeal."


Thus it is only if the hearing is for one of the purposes identified in section 7(1) that a preparatory hearing can be convened. Furthermore, it is only if a point on admissibility of evidence or a point of law has been determined that the Court of Appeal has any jurisdiction to entertain an appeal.


The judge was persuaded by both sides that a preparatory hearing would assist in identifying issues which were likely to be material to the verdict of the jury. Both sides rightly submitted that he (the judge) had no jurisdiction to make a declaration of incompatibility. Argument then proceeded on the basis that, as submitted by counsel for both sides, section 206(4) imposed a legal burden of proof on the accused and not simply an evidential burden. The judge expressed his agreement with that view and did not consider whether, if that would make the section incompatible with Article 6 of the ECHR, that should lead to the section being "read down", following the House of Lords in Lambert.


On the assumption that the judge was making that section 206(4) imposed a legal burden, the judge decided that the counts should not be severed, albeit he did express some anxiety about compatibility and he indicated that he would keep the matter under review insofar as the effect of section 206(4) might be to compel the appellant to give evidence.


The judge gave leave to appeal. The appellant appeals to this court asking for the decision of the judge to be reversed but in addition asking the Court of Appeal to declare that section 206(4)(a) is incompatible with the Convention relying on Lambert (supra), and that it would be unfair for the appellant to be tried on those counts. The request for a declaration of incompatibility has led to the Department of Trade and Industry seeking to intervene, and indeed they appeared before us represented by Mr James Eadie.


The Secretary of State, and the Crown, represented by Mr Kearl, (possibly prodded by the intervention of the Secretary of State), took the jurisdiction point. The submission in short was that in reality there was no "preparatory" hearing since the provisions of section 7 were not complied with, and, in any event, it was submitted that the judge had not determined any question of law and thus the Court of Appeal had no jurisdiction to entertain an appeal. In addition, and in support of that point, both the Crown and the Secretary of State laid emphasis on the fact that the one thing that the judge could have done but had not done was to consider whether, by virtue of section 3 of the HRA, section 206(4)...

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