CRIMINAL

Admissibility - bad character - co-defendants - observations as to issues of bad character

R v (1) Stewart Dean Edwards (2) Tony Rowlands; R v Michael McLean; R v David Reginald Smith; R v (1) Kevin James Enright (2) Rosalind Gray: CA (Crim Div) (Lord Justice Scott Baker, Mr Justice Gross, Mr Justice Ramsey): 21 December 2005



The court had to determine four separate appeals in which the issue of the bad character provisions of sections 98 to 112 of the Criminal Justice Act 2003 had to be considered. Each of the appellants appealed against their convictions, raising issues relating to the bad character provisions in section 98 of the Act, and the court made some general observations on those provisions and their application.


K Davey for the appellant Edwards; M Roochove for the appellant Rowlands; A Shaw for the Crown in Edwards and Rowlands; J Stanniland for the appellant McLean; L Matthews for the Crown in McLean; T Moores for the appellant Smith; S Foster for the Crown in Smith; I Wade for the appellant Enright; no appearance or representation for the appellant Gray; J Weeks for the Crown in Enright and Gray.


Held, often the first enquiry of the court was whether it was necessary to go through the bad character gateways at all. In this regard, section 98 was not to be overlooked. It excluded from the definition of bad character evidence that had to do with the alleged facts of the offence, or evidence of misconduct in connection with the investigation or prosecution of that offence. While difficult questions could arise as to whether evidence of background or motive fell to be admitted under section 98, or required consideration under section 101(1)(c), it did not follow that merely because the evidence failed to come within the section 101(1)(c) gateway, it would be inadmissible. Where the exclusions in section 98 were applicable, the evidence would be admissible.


Applications to admit bad character evidence might well arise at an early stage, causing real difficulty for the trial judge. Some applications, for example, under section 101(1)(b), could not be refused, while others, for instance, brought under section 101(1)(e), might be difficult to refuse. The parties were advised to reflect, at the time of the application, as to the use to which such evidence was likely to be put. There could be difficulties for the judge in summing up when bad character evidence that had been admitted turned out to have had only marginal relevance to the issues before the jury.


It was apparent that Parliament intended that evidence of bad character would be put before juries more frequently than had previously been the case. The judge's role was to determine admissibility under the statutory gateways and any questions of exclusion. Once evidence of bad character was admitted questions of weight were for the jury, subject to the judge's powers under section 107 and the judge's direction as to relevance and to other matters, R v Hanson (Nicky) [2005] EWCA Crim 824, [2005] 1 WLR 3169 and R v Highton (Edward Paul) [2005] EWCA Crim 1985, [2005] 1 WLR 3472 considered.


Where evidence of bad character was admitted, the judge's direction was likely to be of the first importance. It would need to cover matters canvassed in Hanson and Highton, and may also need to pull threads together on an issue where the ground may have shifted considerably since the evidence was admitted. In an appropriate case, the judge's direction might need to underline that, given the course taken by the trial, the evidence of bad character was by then of little weight.


Simply because an application to admit evidence of bad character was made by a co-defendant, the judge was not bound to admit it. The gateway in section 101(1)(e) had to be gone through. Sections 101(1)(d) and (e) gave rise to different considerations. In determining an application under section 101(1)(e), analysis with a fine-tooth comb was unlikely to be helpful. It was the context of the case as a whole that mattered. Section 112 made that clear by its definition of what amounted to an important matter in issue.


The gateways under section 101(1)(d) and (e) were not open to co-defendants because only prosecution evidence was admissible. Section 104(1) was not exhaustive of the scope of section 101(1)(e). It limited evidence relevant to a defendant's propensity to be untruthful. Whether a defendant's stance amounted to no more than a denial of participation, or gave rise to an important matter in issue between a defendant and co-defendant, would inevitably turn on the facts of the individual case.


When considering the effect of section 109 in relation to an issue under section 101(1)(d), the mere making of an allegation was capable of being evidence within section 100(1), R v Bovell (Kelvin Anthony) [2005] EWCA Crim 1091, [2005] 2 Cr App R 27 considered. This was an area in which it was important to guard against satellite litigation. Furthermore, it was appropriate to proceed with caution and with due regard to the judge's discretion to exclude evidence.


Admissibility and use gave rise to different questions. The feel of the trial judge was important and there would only be interference where the conviction was unsafe.


Judgment accordingly.





FAMILY


Documents - financial provision - inspection - letters of request - non- parties

John Robert Charman v Beverley Anne Charman: CA (Civ Div) (Sir Mark Potter (President Fam), Lords Justice Lloyd, Wilson): 20 December 2005


The appellant husband (H) appealed against orders that had been made on the application of the respondent wife (W), for the issue of a letter of request to the Bermudian court to cause his Bermudian solicitor to produce documentation and be orally examined, and for his English accountant to attend court for an inspection appointment. H and W had separated after 27 years of marriage. H had relocated to Bermuda, and W had remained in England and had commenced divorce and financial provision proceedings. During the marriage, H had made a fortune in the insurance market in London.


H had conceded that the assets that fell for division amounted to £59 million but W alleged that the relevant assets were worth £126 million and that the difference between the figures was represented by the assets of a Bermudian trust. W sought and obtained orders for oral examination of H's Bermudian solicitor, who was director of the sole trustee of the trust, and for H's English accountant to produce documents in relation to the trust for inspection. The central issue in the financial proceedings was whether H had 'immediate access to the funds' of the trust, so as to be considered a financial resource for the purposes of section 25(2)(a) of the Matrimonial Causes Act 1973. H argued that the applications had been impermissible because they were in aid of a 'fishing' expedition; some of the documents had not been proved to exist as required by section 2(4)(a) of the Evidence (Proceedings in Other Jurisdictions) Act 1975; the orders were unnecessary; the orders were disproportionate; the orders were oppressive; and the orders were too wide.


Barry Singleton QC, Deborah Eaton (instructed by Withers) for the appellant; Martin Pointer QC, Daniel Hochberg, James Ewins (instructed by Manches) for the respondent.


Held, insofar as they sought production of documents, the orders for the letter of request and for the inspection, appointment could not lawfully have been made if they represented an attempt to go 'fishing'. Insofar as the letter of request sought the taking of oral evidence, the consideration was whether the intention was to obtain the Bermudian solicitor's evidence for use at trial and there was reason to believe that he had knowledge of matters relevant to issues at trial. W was not fishing for documents. Her request was not part of a search for material that might enable her to raise an allegation; she was seeking further evidence to support her existing allegation that the capital of the trust was available to H, Re State of Norway's application [1987] 1 QB 433, Netbank v Commercial Money Center [1994] Bda LR 46 and Zakay v Zakay [1998] 3 FCR 35 considered.


In financial proceedings following divorce, there was no need to limit the production of documents by a non-party to those that could be proved to exist or to have existed. In such proceedings, the wife would seldom have the knowledge with which to prove the existence of a document. It was not mandatory to construe section 2(4)(a) of the 1975 Act as prohibiting a request for 'conjectural' documents in a special type of proceedings in which it would largely deprive the jurisdiction to secure the production of documents of its efficacy. The court should in principle be receptive to an application where there was good reason to suppose that evidence of assistance to the court in carrying out its quasi-inquisitorial role under section 25 of the 1973 Act might be obtained. In this case, the documents sought were sufficiently identified and described to satisfy the requirement for particularity in section 2(4)(b) of the 1975 Act. The fact that the existence of some of the documents was 'conjectural' did not defeat the application, Panayiotou v Sony Music Entertainment (UK) Ltd Independent, July 24, 1994 considered.


The judge had correctly concluded that the production and inspection of the documents was necessary for disposing fairly of the application or for saving costs. Any question of proportionality was overcome by the magnitude of the trust assets in question. It was not oppressive for the professionals to be required to provide information and documentation. The letter of request should be modified slightly but there was no appealably excessive width in the terms of the order for the accountant's attendance at the inspection appointment.


Appeal dismissed.





INSOLVENCY



Administrative receivers - debentures - declaratory orders - limited liability partnerships - locus standi - members' powers and duties

Cabvision Ltd v (1) Leonard Paul Feetum, (2) Stephen Richard Marsden, (3) Simon Alan Smith: CA (Civ Div) (Lords Justice Ward, Jonathan Parker, Sir Peter Gibson): 20 December 2005


The appellant (C) appealed against the decision ([2005] EWHC 349 (Ch), [2005] 1 WLR 2576) that C's appointment of administrative receivers of a limited liability partnership was prohibited by section 72A of the Insolvency Act 1986, and thus invalid, because in the circumstances the exception in section 72E of the 1986 Act to the general prohibition did not apply. C had carried on the business of generating revenue from advertising in taxicabs. It had developed a computer software system for the display of information and advertising in the passenger compartment of the cab. The partnership had been incorporated under the Limited Liability Partnerships Act 2000 as a vehicle for raising finance for the business. The respondents (F) were three of the founder members of the partnership and members of its board. The partnership had raised sums by subscription and by bank borrowing under a facility agreement and had entered into a licence agreement with C to allow it to exploit C's software.


C had given an indemnity in respect of the bank borrowing, and the partnership in turn had given an indemnity to C secured by a debenture. C purported to appoint administrative receivers under a power contained in the debenture on the basis that an 'insolvency event' as defined in the debenture had occurred. F's action challenged the validity of that appointment and sought a declaration that it was invalid and F had obtained summary judgment.


C submitted that the rule in Foss v Harbottle [1843] 2 Hare 461 applied to the limited liability partnership so that the proper claimant in respect of a wrong done to it was the partnership and F lacked standing to sue; the judge had wrongly construed section 72E(2)(a) of the 1986 Act in holding that the project was not a 'financed project'; the judge should have found that the power to appoint an administrative receiver granted by the debenture amounted to 'step-in rights' within paragraph 6 of schedule 2A to the 1986 Act.


John McDonnell QC, Mark Watson-Gandy (instructed by Jens Hills & Co) for the appellant; Paul Girolami QC, Siward Atkins (instructed by Salans) for the respondents.


Held, the rule in Foss did not apply and the partnership was not the only proper claimant. F were not prosecuting a cause of action that was vested in the partnership and were not seeking to obtain relief in respect of an injury suffered by the partnership. Rather, they were concerned to know whether in their personal capacities as designated members they were obliged to comply with the receivers' requests. Accordingly, no question arose of a derivative action. Nor should declaratory relief be refused on the footing that F were seeking declaratory relief as to the effect of a contract to which they were not parties. The power to appoint a receiver under the debenture was more than a mere contractual power since it had important statutory consequences under the 1986 Act. Accordingly, F were not just interested in the validity of the appointment but affected by it, and they had the necessary standing to bring the proceedings. Gouriet v Attorney-General (1977) 121 SJ 543 and Meadows Indemnity Co Ltd v Insurance Corporation of Ireland Ltd [1989] 2 Lloyd's Rep 298 applied, Re S [1995] 3 WLR 78, Secretary of State for Trade & Industry v Jabble sub nom in Re McIvor Spirits Ltd and in Re Company Directors Disqualification Act 1986 [1998] BCC 39 and Re Kaytech International Plc [1999] 2 BCLC 351 considered.


As a matter of construction, section 72E(2)(a) applied to an agreement 'under' or by virtue of which a project company incurred a debt of at least £50 million or, when the agreement was entered into, was expected to incur such a debt. The words 'expected to incur' related merely to the expected quantum of the obligation that was assumed by the project company under the relevant agreement. On that construction, the judge had been right that the relevant agreement had been the facility agreement and not the licence agreement, and that the date for determining whether the requisite expectation existed was the date when the facility agreement was entered into. A power for a financier to appoint an administrative receiver did not amount to step-in rights within paragraph 6 of schedule 2A to the 1986 Act. Since the project did not include step-in rights, it did not fall within the exception in section 72E. It followed that the general prohibition on the appointment of administrative receivers in section 72A applied and the receivers' appointment was invalid.


Appeal dismissed.





LANDLORD AND TENANT


Break clauses - interpretation - leases - correcting drafting error

(1) Colette Celine Littman, (2) Andrew Hylton Young v Aspen Oil (Broking) Ltd: CA (Civ Div) (Lords Justice May, Longmore, Jacob): 19 December 2005


The appellant tenant (T) appealed against the determination ([2005] EWHC 1369 (Ch)) of a preliminary question of the construction of a lease in favour of the respondent landlords (L). The lease was of commercial premises in London for a term of five years. Clause 10 of the lease provided that either party could terminate the lease at the end of the third year of the term by giving not less than six months' notice in writing, provided that up to the termination date 'in the case of a notice given by the landlord', the tenant had paid the rent and duly observed and performed the tenant's covenants. T purported to bring the lease to an end pursuant to that clause. L disputed the effectiveness of that notice on the grounds that T was in breach of its obligations under the lease as at the termination date, and contended that the words 'in the case of a notice given by the landlord' were nonsensical and should be read as if they said 'in the case of a notice given by the tenant', or 'in the case of a notice given to the landlord'. The judge held that the word 'landlord' in the proviso to clause 10 should be read as 'tenant'; alternatively, if that were wrong, that clause 10 should be rectified to that effect.


On appeal, T accepted that the clause as it stood was commercially nonsensical. T submitted that the substitution of landlord for tenant in the clause was not the only possible mistake and that it was possible to hypothesise another reasonable drafting error with the result that the clause was void for uncertainty if it could not be rectified.


Christopher Pymont QC, Andrew Ayers (instructed by DLA Piper Rudnick Gray Cary) for the claimants; Timothy Fancourt QC, Andrew Bruce (instructed by Boodle Hatfield) for the defendant.


Held, as a matter of construction, the word 'landlord' in clause 10 of the lease had to be construed as 'tenant'. That was what the parties must have intended; to give the word 'landlord' its normal meaning would be absurd. There had been a mistake in drafting the clause. It was the kind of mistake that could easily be made by any draftsman. T's alternative hypothesis, which required a mistake in relation to whole lines of text rather than a single word, was fanciful. It was not necessary to decide whether the judge was right to hold that the clause should be rectified but the majority inclined to the view that the four conditions for the rectification of a unilateral mistake were made out and that in the circumstances it did not matter that, unlike any previous case, the result of rectification would be to put the parties in a contractual position that they had never agreed since T's deliberate attempt to take advantage of the other side's obvious drafting error was inequitable, Thomas Bates & Son Ltd v Wyndhams (Lingerie) Ltd (1981) 125 SJ 52 considered.


Appeal dismissed.





IMMIGRATION


Citizenship - foreign nationals - public policy - registration - terrorism - third countries

R (on the application of Hicks) v Secretary of State for the Home Department: QBD (Admin) (Justice Collins): 13 December 2005


The claimant (H) applied for judicial review of the defendant secretary of state's refusal to grant him British citizenship.


H was an Australian citizen who was being held by the US authorities in Guantanamo Bay on suspicion of giving active support to terrorists. H hoped to be registered as a British citizen as the Australian government was not prepared to take any steps to help secure his release. In contrast, the British government had negotiated the return of British citizens held by the US. H was eligible to be registered as a British citizen as he satisfied the conditions of section 4C of the British Nationality Act 1981. However, the secretary of state took the view that although he would grant registration, as the conditions of section 4C were satisfied, he would immediately make an order under section 40 of the Act, as originally enacted, depriving H of that citizenship.


The secretary of state submitted that, although H met the conditions that entitled him to be registered as a British citizen, he could refuse to register H on the grounds of public policy. H submitted that as a matter of law and on a true construction of the relevant statutory provisions, it was not open to the secretary of state to deprive him of citizenship. H also argued that he had not been treated fairly as he had not been given the opportunity to know what was alleged against him or to answer the allegations, and that he was being treated in a manner that discriminated against him and was inconsistent with the treatment of British citizens who had been released and not deprived of their citizenship.


Michael Fordham (instructed by Bindman & Partners) for the claimant; Philip Sales, Tim Eicke (instructed by Treasury Solicitor) for the defendant.


Held, Parliament could have included a good character condition in section 4C, which would have made it clear that a person's behaviour could be relied on to prevent him obtaining citizenship. That it did not do so strongly suggested that such behaviour could not be relied on either to prevent a person obtaining citizenship or to deprive an individual of citizenship. The secretary of state was not entitled to rely on what H had allegedly done to deprive him of citizenship under the original section 40(3), and could not therefore rely on the section as amended by section 4 of the Nationality, Immigration and Asylum Act 2002.


As Parliament had not set down any precondition based on good character, it would be wrong to extend public policy to close what was regarded as an unfortunate gap. H had not done anything wrong to establish the necessary conditions to be registered as a British citizen, and the argument based on public policy could not avail the secretary of state. There was no power in law to deprive H of citizenship and he had to be registered.


Obiter, the secretary of state was entitled in the exercise of his discretion to distinguish between H and the other British citizens. It was a rational exercise of his discretion. Also, the reasons given by the secretary of state were sufficient to comply with the statutory obligation in section 40(5) of the 1981 Act. It was not necessary to give detailed and elaborate particulars due to the security considerations, which meant that many of the matters could not be disclosed to a claimant but would have to be dealt with by a special advocate, R v Secretary of State for Home Department, ex parte Swati [1986] 1 WLR 477 and Lim Lian Geok v Malaya [1964] 1 WLR 554 considered. If it had been found that the secretary of state was able to deprive H of his citizenship, the court would not have found in H's favour on the other grounds he relied on.


Application granted.





CIVIL PROCEDURE


Costs - directors - non- parties - reliefs - research and development - tax

BE Studios Ltd v Smith & Williamson Ltd: Ch D (Justice Evans-Lombe): 2 December 2005


The applicant accountants (S) applied for the second claimant (D) to pay the costs ordered to be paid by the first claimant company (B) after the failure of B's claim against S (see BE Studios Ltd v Smith and Williamson Ltd [2005] EWHC 1506 (Ch)). B, a computer software company, had retained S to provide taxation and accounting services. B claimed that it had suffered loss because S had negligently failed to advise it about new legislative provisions defining expenditure qualifying for research and development relief.


B's case was that it did not become aware of the provisions until two years later when an application was made for the consequent payment by the Revenue. In the meantime, B's business had declined and it had been 'mothballed'. S admitted negligence but argued that the Revenue had made payment on B's claims for the relief in error because B had never qualified for the relief or, if it had, only in respect of sums much smaller than it had actually received, and that consequently B, having received payment of their claim for the relief, albeit late, had suffered no loss resulting from S's admitted breach.


The judge held that B's claim failed and ordered B to pay four-fifths of S's costs on the standard basis. D, a director, shareholder and loan creditor of B, had been joined as second claimant for the purposes of the application by S under section 51(3) of the Supreme Court Act 1981 for D to pay those costs. D accepted that he had funded the litigation. D submitted that for the court to make a non-party costs order against a director, it was necessary to find that he had been guilty of some impropriety or bad faith in procuring the company to prosecute or defend a claim; or alternatively, even if impropriety or bad faith by the director was not a requirement of making an order, an order should not be made against D in this case because, although he had funded and controlled the litigation from which, if it had been successful, he (with others) would have benefited, the claim that B made had been in the interests of B, its shareholders and creditors.


Peter Irvin (instructed by Constant & Constant) for the claimant; Benjamin Pilling (instructed by Simmons & Simmons) for the defendant.


Held, it was not a requirement for the making of a non-party costs order against a director, who had funded and controlled litigation consequent on a claim brought by his company at his insistance, that impropriety had to be shown in the way that the claim was prosecuted, Dymocks Franchise Systems (NSW) Pty Ltd v Todd [2004] UKPC 39, [2004] 1 WLR 2807 and Goodwood Properties Ltd v Breen [2005] EWCA Civ 414 applied; Floods of Queensferry Ltd v Shand Construction Ltd [2002] EWCA Civ 918 not followed.


If that was wrong, the claim in this case could properly be described as 'speculative', so that D should pay the costs to the extent that they were not paid by B, Dymocks applied. The claim to the Revenue for tax relief was inappropriately prepared and grossly exaggerated. B's claim against S was based on that claim. Even if it had been possible to demonstrate that the amount of tax relief claimed was properly payable, there was never any reasonable prospect of recovering damages sufficient to realise a significant surplus for distribution to shareholders. The only realistic prospect was repayment of the loan creditors of whom D was by far the largest. D both funded and controlled the proceedings for B. He stood to benefit personally if they had succeeded. B could not realistically be regarded asthe real party interested in the result of the litigation.


Application granted.





PLANNING


Caravans - gypsies - indirect discrimination - right to respect for home - stop notices

Claire Wilson v Wychavon District Council & First Secretary of State (Interested party) (2005): BD (Admin) (Justice Crane): 20 December 2005


The claimant (W), who was a Romany gypsy, sought a declaration that section 183(4) of the Town and Country Planning Act 1990 was incompatible with article 14 of the European Convention on Human Rights.


A planning application had been lodged by a local authority and that land was subsequently occupied by W and other Romany gypsies. The authority issued enforcement and stop notices against W and the others. An injunction was granted against W but was stayed to give time for further proceedings. Section 183(4) provided that a stop notice should not prevent the use of a building as a dwelling house but did not provide the same protection to those dwelling in a caravan. The issue for determ-ination was whether section 183(4) was incompatible with article 14 to the extent that it had a disproportionate effect on Romany gypsies and Irish travellers.


Charles George QC, Marc Willers (instructed by Community Law Partnership) for the claimant; Philip Sales, Nathalie Lieven (instructed by Treasury Solicitor) for the defendant.


Held, a higher proportion of gypsies and travellers rather than any other relevant group were likely to be affected by stop notices under section 183. It was therefore indirectly discriminatory in effect in relation to a group protected by article 14, and there was therefore an onus on the state to objectively justify that provision, Carson v Secretary of State for Work and Pensions [2005] UKHL 3, [2005] 2 WLR 1369 considered. That provision could be objectively justified by the fact that usually a change of a building to a dwelling would cause less environmental damage than the stationing of a residential caravan, Chapman v United Kingdom (27238/95) (2001) 33 EHRR followed. In those circumstances, the 'bright line' rule in relation to dwellings only, leaving in place the possibility of the use of stop notices in the case of caravans, was proportionate. A regime including possible exemptions for caravans such as those that existed in the case of temporary stop notices under the Town and Country Planning (Temporary Stop Notice)(England) Regulations 2005 was not required by considerations of proportionality; a stop notice was only issued after a full balancing exercise had been carried out as required for an enforcement notice. Section 183(4) was not incompatible with the convention.


Judgment accordingly.





INTELLECTUAL PROPERTY


Protected geographical indications - registration

Northern Foods Plc v Department for Environment Food and Rural Affairs & Melton Mowbray Pork Pie Association (Interested party): QBD (Admin) (Mr Justice Crane): 21 December 2005


The claimant company (N) applied for judicial review of a decision of the defendant Department of the Environment, Food and Rural Affairs (DEFRA) to forward to the European Commission an application by the interested party (M) for the registration of 'Melton Mowbray Pork Pie' as a protected geographical indication under Council Regulation 2081/92. M marketed Melton Mowbray pies in places close to Melton Mowbray in Leicestershire. N produced Melton Mowbray pork pies in Wiltshire and Shropshire. In M's application for the registration of Mowbray pork pies, the 'geographical area' defined in the application covered a large area, including not only Leicestershire, but parts of Nottinghamshire, Northamptonshire and Lincolnshire. N submitted that DEFRA had been under a duty to check that the application was justified, and that it might be appropriate to seek a preliminary ruling from the European Court of Justice pursuant to article 234 of the EC Treaty (Maastricht); the defined geographical area had to be limited to Melton Mowbray and the immediate vicinity and not the larger area specified in M's application, as the 'defined geographical area' in article 2 of Council Regulation 2081/92 referred to a specific place and to the same geographical area.


Mark Hoskins (instructed by Walker Morris) for the claimant; Wendy Outhwaite (instructed by Treasury Solicitor) for the defendant; Michael Edenborough (instructed by Harvey Ingram) for the interested party.


Held, it was the duty of the instant court to rule on the lawfulness of DEFRA's actions, C269/99 Carl Kuhne GmbH & Co KG v Jutro Konservenfabrik GmbH & Co KG [2001] ECR 1-9517 applied. It was not appropriate to refer the matter to the European Court of Justice, R v International Stock Exchange of the UK and Ireland, ex parte Else Ltd [1993] 1 WLR 70 applied. (2) The 'defined geographical area' for the purposes of articles 2.2(b) and 4.2 of Council Regulation 2081/92 could be different from the specific place or region where the foodstuff originated. DEFRA was correct in its interpretation of article 2, that the 'defined geographical area' could be a wider area than the specific place or region in question. It was justified in forwarding the application from M to the commission.


Application refused.