R v Daniel (Anthony Lala)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Auld |
| Judgment Date | 22 March 2002 |
| Neutral Citation | [2002] EWCA Crim 959 |
| Court | Court of Appeal (Criminal Division) |
| Date | 22 March 2002 |
| Docket Number | Case No: 200002512/X4 |
[2002] EWCA Crim 959
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Auld
Mr. Justice Newman and
Mr. Justice Roderick Evans
Case No: 200002512/X4
Mr H Bowyer for the Appellant
Mr J Eadie for the Crown
On 29 th March 2000, before Mr. Assistant Recorder Kark in the Crown Court at Kingston-upon-Thames, the appellant was convicted of concealing, as a bankrupt, a debt due to him of £75,875.11, a debt in an amount that he was required to deliver to the Official Receiver, contrary to section 354(1)(b) of the Insolvency Act 1986. On 5 th May 2000 the Assistant Recorder sentenced him to 150 hours' community service. He appeals against conviction by leave of the single judge.
The issue raised in the appeal is the effect of section 352 of the 1986 Act which provides that a person is not guilty of an offence under section 354:
"if he proves that, at the time of the conduct constituting the offence, he had no intent to defraud or to conceal the state of his affairs."
More particularly, the issue is whether that provision imposes a legal or "evidential" burden of proof on a defendant. If the former, it would conventionally be on a balance of probabilities. If the latter, there is authority that a defendant could discharge it by adducing sufficient evidence to raise an issue that he had had no intent to defraud or conceal the state of his affairs.
The facts, in outline, are as follows. Between 1990 and 1992 the appellant did some work for Barings Securities ("Barings"). In 1992 he submitted invoices to a total sum of £75,875.11 for that work, which were not settled. In 1995 Barings was taken over by Bishopscourt and then put into liquidation. The appellant then re-submitted the invoices, this time to the liquidator of Barings. In February 1996 his accountant submitted a claim form to the liquidator. In November 1996 she replied informing the appellant that his claims might result in the payment to him of funds, though she did not know how much or when.
On 13 th May 1997 the appellant was made bankrupt on an unopposed petition of the Inland Revenue. In June of that year he answered a bankruptcy preliminary questionnaire, which included warnings about telling the truth and making full disclosure. He put a slash through a box asking whether money was owed to him and wrote "No" in answer to a further question "does anyone owe you money?" And on 6 th June he attended an interview with an examiner in insolvency in the Official Receiver's office in which he confirmed that he had "no assets of any description".
Nearly a year later, in May 1998, the liquidator of Barings wrote to all creditors inviting them to submit proofs of debt. The applicant, on 4 th June, submitted a proof claiming the invoiced sum of £75,875.11, requesting that any cheques be made out to him personally and sent to him at his home address. At about this time the Official Receiver informed the liquidator of the appellant's bankruptcy and she contacted him about it. He told her that he was, as he put it, "being threatened with" bankruptcy and followed the conversation with a letter to her stating that he had no knowledge of any bankruptcy order. The liquidator, by letter of 26 th June, replied stating that she had spoken to the Official Receiver and asked the appellant to contact him with a view to resolving the matter.
Within a few days after that, the appellant contacted Marks Bloom, a firm of licensed insolvency practitioners, ostensibly with a view to making an individual voluntary arrangement with his creditors. We say "ostensibly" with such a view because the prosecution case was that it just a charade to extricate him from the consequence of his lies to the Official Receiver and the liquidator. He did not, in the event, enter into any such arrangement.
The prosecution case was that from 6 th June 1997, when the appellant in his response to the Official Receiver's questionnaire stated that he was owed no money, he concealed a debt that he knew was owing to him. They asserted that, if as the appellant claimed, Barings' failure to pay him had caused the downfall of his business, their debt to him would have been uppermost in his mind.
The appellant did not dispute the facts alleged by the prosecution. His case was that provided by section 352, namely that he had had no intention to defraud or to conceal the state of his affairs. In his evidence he said that when he had completed the Official Receiver's questionnaire he had been confused and depressed and that the debt had not been in his mind at the time. He added that during the period covered by the indictment he had not been sure whether he would receive any of the money due to him, since he had not heard from the liquidator since November 1996.
He said that he had written the letter to the liquidator stating that he was unaware that he was bankrupt, but had not sent it and that someone else in his office must have done so. And he explained that he had wanted the liquidator to settle the Barings' debt direct to him so that, through Marks Bloom, he could secure a better deal for his creditors. He relied upon letters in that context sent to him after the period covered by the indictment.
At the beginning of the trial counsel for the appellant invited the Judge, when he came to sum up the matter to the jury, to direct them that the section 352 burden on the appellant of proving that he had had no intent to defraud or to conceal the state of his affairs was evidential since, otherwise the provision would be incompatible with Article 6(2) of the European Convention of Human Rights. Although, the Human Rights Act 1998 had yet to come into force, many Courts and legal practitioners were anticipating the advent of Convention rights to our domestic law. The argument was that to impose a legal burden on the appellant would offend the spirit of Article 6(2), which provides that everyone charged with a criminal offence is to be presumed innocent until proved guilty according to law. Such a burden, counsel submitted, would be almost impossible for the appellant to discharge because he would have to prove a negative, that is, that throughout the year covered by the indictment, he had had no intent to conceal the debt.
The Assistant Recorder accepted that when the Human Rights Act 1998 would come into force on 2 nd October 2000, it would have retrospective effect and that he should, therefore, consider the submission that the Convention was already part of our domestic law. He said that, although he had no power to make a declaration of incompatibility, he was bound, under section 3 of the 1998 Act, to interpret it, so far as it was possible, in a way compatible with Convention rights. However, he rejected the need for recourse to such an interpretative aid in the context of these provisions, in particular to direct the jury that section 352 imposed on the appellant merely an evidential burden. He said:
"… that is not … what Section 352 provides. In my view, the prosecution have the responsibility of proving the essential elements of the offence, and only if they do so need the defendant consider availing himself of the defence set out in section 352."
The Assistant Recorder in his summing-up to the jury directed them that the prosecution had to prove three elements to make out the offence of concealment of property under section 354(1)(b): first, that at the material time the appellant was bankrupt, which was not in dispute; second, that he had concealed, in the sense of deliberate hiding, the debt from the Official Receiver; and third, that it was a debt which he was duty bound to deliver up to the Official Receiver. He emphasised that it was only if the jury were sure of all those three elements that they had to consider whether the appellant had made out his defence under section 352 by proving on a balance of probabilities that he had had no intent to defraud or to conceal the state of his affairs.
Before turning to the submissions of counsel on this appeal we should consider more closely the offence created by section 354 and the relationship to it of the defence provided by section 352. We should also say something about the law on provisions expressing a reverse burden of proof in criminal proceedings.
Section 354, the heading of which is "Concealment of property", is one of a number of offence creating provisions under the general heading in Chapter VI of the 1986 Act of "Wrongdoing by the bankrupt before and after bankruptcy". The offences created by the various provisions fall broadly into three categories. The first, into which section 354(1)(b) falls, are those which by the very act made criminal, are concerned with conduct calculated to deceive the Official Receiver, but where, despite the terms of some of the section headings, the prosecution is not required to prove fraud. Thus, section 353 is concerned with non-disclosure of property, section 354(1) and (2) with concealment of property, section 355 with concealment and falsification of books and papers, section 356(1) with material omissions in statements, section 357 with disposal of property, section 358 with absconding and section 359 with disposal of property obtained on credit. The second category is concerned with conduct expressly described as fraudulent and where the prosecution is required to prove fraud. Thus, section 356(2) is concerned with false statements made with a fraudulent intent, The third category is concerned with conduct which may fall short of deceitfulness, such as section...
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Subject Index
...App R 195... 172, 173–7, 180, 181, 182, 183, 184R v Daly [2001] EWCA Crim 2643,[2002] 2 Cr App R 201 .....................37R v Daniel [2002] EWCA Crim 959 ... 59R v Darrach [2000] 2 SCR 443 ............89R v Davis, Johnson and Rowe (1993) 97Cr App R 110.................................. 11......
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Court of Appeal
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