R v Leicester Crown Court, ex parte Commissioners of Customs and Excise
| Jurisdiction | England & Wales |
| Judge | THE LORD CHIEF JUSTICE,MR JUSTICE NEWMAN |
| Judgment Date | 24 January 2001 |
| Neutral Citation | [2001] EWHC 33 (Admin) |
| Docket Number | CO/1748/2000 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 24 January 2001 |
THE QUEEN
On The Application of
[2001] EWHC 33 (Admin)
The Lord Chief Justice of England and Wales
(The Lord Woolf of Barnes) and
Mr Justice Newman
CO/1748/2000
IN THE HIGH COURT OF JUSTICE
DIVISIONAL COURT
QUEEN'S BENCH DIVISION
MR DAVID BARNARD and MR JOHN LAW (instructed by the Solicitor for HM Customs & Excise) appeared on behalf of THE APPLICANT
MR NICHOLAS PURNELL QC and MR IAN HUTTON (instructed by Messrs Bridge McFarland, Lincoln LN5) appeared on behalf of THE SECOND RESPONDENT
MR JAMES GOUDIE QC and MR EDWARD MORGAN (instructed by Messrs Brabner Holden Banks, Preston PR1 8AN) appeared on behalf of THE THIRD RESPONDENT
MR RICHARD WHITTAM (instructed by HM Attorney General) appeared as AMICUS CURIAE
Wednesday 24 January 2001
: This is an application for judicial review in respect of an order for costs made against the Commissioners of Customs and Excise by His Honour Judge Mayor QC at Leicester Crown Court on 18 February 2000, in relation to proceedings brought by the Commissioners of Customs and Excise against a Mr Watchorn and a Mr Wilson. The order for costs was made under section 19(1) of the Prosecution of Offences Act 1985 and the Costs in Criminal Cases (General) Regulations 1986. The relevant part of Regulation 3 reads as follows:
"(1) Subject to the provisions of this regulation, where at any time during criminal proceedings —
…
(b) the Crown Court is satisfied that costs have been incurred in respect of the proceedings by one of the parties as a result of an unnecessary or improper act or omission by, or on behalf of, another party to the proceedings, the court may, after hearing the parties, order that all or part of the costs so incurred by that party shall be paid to him by that other party.
….
(3) An order made under paragraph (1) shall specify the amount of costs to be paid in pursuance of the order."
The background facts to the making of that order were as follows. On 6 August 1999, Mr Watchorn and Mr Wilson were committed to stand trial at the Crown Court in respect of charges under section 170(2) of the Customs and Excise Management Act 1979, and of one charge of conspiracy to cheat the public revenue. The details of the different charges are not relevant for present purposes, but count 1 gives a flavour of the allegations which were being made by the Commissioners of Customs and Excise. Each defendant was charged on count 1 as follows:
"Being knowingly concerned in the fraudulent evasion of the duty chargeable on goods, contrary to section 170(2) of the Customs and Excise Management Act 1979.
PARTICULARS OF OFFENCE
Robin Watchorn and Stephen John Wilson between the 2nd October 1995 and the 6th January 1996 were in relation to certain goods, namely a quantity of ammonium nitrate on board the vessel 'Ivan Silver', knowingly concerned in the fraudulent evasion of Anti-Dumping Duty chargeable thereon by virtue of Council Regulation (EC) No 2022/95, by causing entries to be submitted to Her Majesty's Customs falsely declaring the Customs value of the goods, by submitting commercial invoices falsely purporting to show the price actually paid for the goods when sold for export to have been £84.92 per metric tonne and by falsely completing a Declaration of Particulars relating to Customs Value by stating that the buyer and seller were not related persons."
That was a charge alleging dishonest and fraudulent conduct on the part of the defendants.
The charges against the defendants arose out of allegations that they made various false statements. It was alleged by the Customs that the defendants had overstated the price that they had had to pay for the goods.
On 20 October 1999, an application to fix a date for a preliminary argument on an application to stay came before His Honour Judge Mayor. He had been appointed as being the appropriate judge to hear the matter in accordance with the practice for dealing with fraud offences of this nature. The judge fixed the hearing of the application for 14 February 2000. On that day there was an application to stay the proceedings as being an abuse of process made on behalf of the defendants. The basis of the application was that, under the appropriate regulations which dealt with the form of activity in which the defendants were said to be engaged, there should have been a preliminary inquiry by the Commissioners of Customs and Excise prior to the prosecution. It was said that to prosecute without conducting a preliminary investigation amounted to an abuse of process.
Matters became more complicated before the judge because an issue arose as to whether the Commissioners of Customs and Excise, as prosecutors, had failed to disclose certain documents to the defendants. The approach of Customs with regard to non-disclosure was that the documents, first of all, were not relevant, and secondly, if they were relevant and therefore should have been disclosed, they were documents in respect of which they were not obliged to make disclosure on the grounds of public interest immunity.
Prior to making the order for costs, which is the subject of the present application, Judge Mayor ruled that, first, the documents were relevant, and, secondly, that they should have been disclosed. On 17 February, the hearing was left on that basis. On the following day, 18 February, the judge ruled that an order for costs should be made against the Commissioners of Customs and Excise under Regulation 3. In order to understand how the judge came to make that order, it is necessary to refer to the transcript. It appears that the judge having indicated the order which he made with regard to the documents, the Commissioners of Customs and Excise decided, instead of complying with the order, that they would offer no evidence in support of the prosecution. In those circumstances the proceedings against the defendants came to an end. They were duly acquitted and formal verdicts of not guilty were entered in their favour under section 17 of the Criminal Justice Act 1967.
The defendants having been acquitted, the question of the substantial costs which had been incurred was very much in the mind of those who were representing them. They wished to recover those costs. They could have sought to have the costs paid out of central funds, in which case all the costs which were properly payable to them under an order of that nature would have been paid long ago. However, based on the contention that there had been an abuse of process by the Commissioners, the defendants chose to seek an order under Regulation 3. Mr Purnell QC, on behalf of Mr Watchorn, referred Judge Mayor to Director of Public Prosecutions v Denning [1991] 2 QB 532, and sought the order for costs against the Commissioners.
Mr Barnard, who represented the Commissioners of Customs and Excise before Judge Mayor (as he represents them before us today), said to the judge as follows:
"Your Honour, may I say that I am instructed to oppose the order and I do oppose the order, but inasmuch as it seems to me that this order sought is said to be the appropriate and really inevitable consequence of the rulings which your Honour made yesterday and this morning, I could not address argument, it seems to me, properly to you, because such argument would have to be on the basis those rulings were wrong and I am certainly not going to address that sort of argument.
So for the record I oppose the order but I do not think I can properly advance submissions in support of my opposition."
Judge Mayor said:
"Then the court orders that in respect of both defendants those costs which they have personally incurred in respect of these proceedings shall be paid to them by the prosecuting authority, namely Her Majesty's Customs & Excise, as being costs incurred as a result of an unnecessary or improper act or omission by the prosecution in this case.
I shall be kind to the extent of leaving the order in the alternative as to whether it is unnecessary or improper.
As to the legal aid costs incurred by Mr Wilson, arrears will be remitted and contributions made will be returned to him.
The amount of costs will be assessed or taxed, I confess I do not know which is the present proper word to use in the criminal jurisdiction, by the appropriate officers."
The judge clearly did not have in mind the precise terms of Regulation 3. It will be seen that a general order which the judge made on that occasion was not the type of order which was contemplated by Regulation 3. However, that was not drawn to the judge's attention. The words of the regulation require, first, that the order should specify the amount of costs to be paid. That was not done. Secondly, it is a requirement that before an order is made, it must be shown that the costs result from an unnecessary or improper act or omission by the party against whom the order is to be made. In this case the improper conduct was never identified. No doubt the judge had in mind that the prosecution should have disclosed the documents which he had indicated were relevant, and secondly, that they should have disclosed those documents notwithstanding that they were seeking to claim public interest immunity in respect of them.
What constitutes an unnecessary or improper act or omission by or on behalf of a party to proceedings is not entirely clear. So far as the authorities are concerned, help is provided by Nolan LJ (as he then was) in Director of Public Prosecutions v Denning (above). The meaning of Regulation 3 appears in the headnote:
"The word 'improper' in section...
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