The King on the application of Chapter 4 Corporation Dba Supreme v The Crown Court at Southwark
| Jurisdiction | England & Wales |
| Judge | Lord Justice William Davis,Mr Justice Jeremy Baker |
| Judgment Date | 08 June 2023 |
| Neutral Citation | [2023] EWHC 1362 (Admin) |
| Docket Number | Case No: CO/3547/2022 |
| Court | King's Bench Division (Administrative Court) |
and
[2023] EWHC 1362 (Admin)
Lord Justice William Davis
and
Mr Justice Jeremy Baker
Case No: CO/3547/2022
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Nicholas Bacon KC and Mr Rupert Cohen (instructed by Howard Kennedy LLP) for the Claimant
Ms Florence Iveson and Ms Harriet Wakeman (instructed by GLD) for the Defendant
Hearing date: 16 March 2023
Approved Judgment
This judgment was handed down remotely at 10.30am on 8 June 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
Lord Justice William Davis and
This is the judgment of the court.
Introduction
The Claimant company, to whom we shall refer throughout as Chapter 4, in January 2019 acting as a private prosecutor, brought criminal proceedings against Michele di Pierro and IBF Ltd, a company with which he was associated. In June 2019 Chapter 4 brought further criminal proceedings against Marcello di Pierro. Both sets of proceedings related to the sale in many countries worldwide of counterfeit goods purporting to have been made by Chapter 4. In June 2021 Michele and Marcello di Pierro and IBF Ltd were tried in the Crown Court at Southwark (Judge Beddoe and a jury). They were convicted of conspiracy to defraud and fraud.
Following the conviction Chapter 4 applied for the costs of the prosecution to be paid from central funds. At the sentencing hearing on 25 June 2021 the judge ordered that Chapter 4's costs should be paid from central funds. Subsequently, after an issue was raised by the Legal Aid Agency as the body responsible for the assessment of claims for prosecution costs, the judge on 19 July 2022 made a further order which was not in the same terms as the order made on 25 June 2021.
Chapter 4 with the permission of Mr Justice Swift now apply for judicial review of the decision made by the judge on 19 July 2022. They argue that the judge had no jurisdiction to make the further order. As is customary the Crown Court has played no part in these proceedings. The Lord Chancellor as interested party opposes Chapter 4's application, the Legal Aid Agency being an executive agency sponsored by the Ministry of Justice.
We have received written and oral submissions from Mr Nicholas Bacon KC and Mr Rupert Cohen on behalf of Chapter 4; and written submissions from Ms Melanie Cumberland and Ms Harriet Wakeman, and oral submissions from Ms Florence Iveson and Ms Harriet Wakeman on behalf of the Lord Chancellor. We are grateful to all of them for their assistance.
Factual background
Chapter 4 is a US company which sells high quality clothing and accessories. It trades in many countries across the world. It operates retail outlets at a limited number of sites in the US and Europe (including London). It sells its merchandise via its various websites. The company operates in the UK by way of a British company called 1994 INC Ltd. The identifying trademark of Chapter 4 is a red and white logo with the single word “Supreme”. This is the logo which is used on the retail outlets as well as the websites.
Over a number of years Michele and Marcello di Pierro traded in counterfeit “Supreme” branded goods. They opened retail outlets in Spain and in China bearing the red and white logo identical in appearance to those affixed to the genuine outlets operated by Chapter 4. They set up websites which had every appearance of being genuine. They had offices and warehouses in San Marino and Bulgaria. Their operation was sophisticated and complex. They incorporated IBF Ltd in 2018 as part of their fraud.
Chapter 4 instituted civil proceedings in a number of jurisdictions. These proceedings failed to stop the fraudulent activity. Chapter 4 then determined to commence the criminal proceedings to which we already have referred. They instructed their London solicitors, Howard Kennedy LLP, who already had been involved in civil action against the di Pierros. Howard Kennedy instructed leading counsel. Consideration was given to referral of the alleged criminal activity to the police or the Crown Prosecution Service. Leading counsel advised that neither had the resources and/or the expertise to take on the conduct of the proposed prosecution. No approach was made to the police or the Crown Prosecution Service.
Applications were made to the magistrates' court to withdraw the summonses issued by the court in relation to Michele di Pierro and IBF Ltd and in respect of Marcello di Pierro. The applications in July and September 2019 were heard by different District Judges. Both were refused. Once the cases had been sent to the Crown Court, both di Pierros and IBF Ltd applied to dismiss the charges. On 10 March 2020 the applications were refused. A few weeks prior to the start of the trial Marcello di Pierro applied for a stay of the case against him for abuse of process. That application was refused. As we have set out above, the trial took place in June 2021. It occupied approximately three weeks of court time.
The hearing on 25 June 2021
The di Pierros and IBF Ltd were convicted on 24 June 2021. The sentencing hearing took place the next day, 25 June 2021. Prior to the hearing prosecution counsel, Jonathan Laidlaw KC and Lewis MacDonald, provided a written sentencing note to the judge. The concluding paragraphs of the note consisted of an application for payment of prosecution costs from central funds. The note set out the relevant parts of Section 17 of the Prosecution of Offences Act 1985, CPR 45.4 (as it then was, the rule subsequently having been amended) and paragraphs 1.3, 1.4, 2.6.1, 2.6.2 and 2.6.4 of Practice Direction (Costs in Criminal Proceedings) 2015. This material was followed by the following paragraphs:
“45. This has been a substantial prosecution. Whilst the trial was able to proceed quickly, that was the product of the condensing of vast quantities of material. The various defendants brought two fully argued applications to withdraw the summonses, applications to dismiss, and an application to stay. In those circumstances it is accepted a summary assessment will not be appropriate.
46. The court is invited to make a section 17 order with an assessment to take place under Part III of the Costs in Criminal Cases (General) Regulations 1986(a).”
Nothing was said in the note as to the amount of the costs for which application was being made. Save that it was implicit that the costs would be substantial, there was no reference to quantum in the course of the sentencing hearing.
During the morning of 25 June 2021 there was discussion between the judge and Mr Laidlaw about various aspects of the proceedings. This included inquiry by the judge about the application for costs. The judge at different stages of the hearing raised the following issues:
(i) Why were proceedings not brought in Italy, both individual defendants being Italian citizens who carried on the fraud from their domicile in Italy? The response from Mr Laidlaw was that there was concern about the effectiveness of proceedings in other jurisdictions and that it was considered that this jurisdiction would be the most effective way of bringing the defendants to justice.
(ii) Was any criminal complaint referred to the police or the Crown Prosecution Service or the Serious Fraud Office? If not, why not? That prompted this exchange:
“MR LAIDLAW: Well, I think recognising that the – those bodies firstly have different priorities and, secondly, would not be able to bring the resources to bear on the investigations which have been necessary of the sort that we have seen and, of course, we mustn't forget that Chapter 4 had already in place, through the civil proceedings, the work of Mintz and the like.
JUDGE BEDDOE: Well, that could have all been passed on.
MR LAIDLAW: Yes.”
(iii) Given that the prosecution appeared to have been brought primarily to protect the commercial interests of Chapter 4 and Chapter 4 was a US company, where did that company pay its taxes? Mr Laidlaw explained that Chapter 4 paid UK taxes on revenue flowing from any sales activity in the UK whether at retail outlet in London or online. He was not able to provide any detail of the amounts of tax involved.
The judge at one point asked for assistance in relation to the way in which Section 17 should be applied. He was directed to what was then the relevant paragraph in Archbold (6.31) which set out the principles governing the exercise of the court's discretion to order prosecution costs from central funds. The judge read that paragraph. No submissions were made by Mr Laidlaw in relation to its contents.
The hearing continued with submissions from the defence in relation to mitigation. At the conclusion of the morning's hearing, the judge adjourned to give himself time to consider his sentence.
On the afternoon of 25 June 2021 the judge delivered his sentencing remarks. Having sentenced the defendants, he turned to the issue of prosecution costs. He said this:
“I have…..been invited to make an order under Section 17 of the Prosecution of Offences Act 1985 in favour of the prosecutor. I have to say as I reflected on this yesterday, I was initially inclined not to make such an order. In coming to that preliminary conclusion, I was taking into account my conclusion that this prosecution was not brought so much to protect the rights of the consumer, but to protect the commercial interests of the prosecutor.
I was influenced by the fact that the prosecutor is essentially a United States company and I was also taking into account that the United Kingdom had provided that prosecutor with a forum conveniens...
To continue reading
Request your trial