No Case for Unsworn Evidence in Due Diligence Defence
The case of Havering (LB of) v Masters raises questions about the evidence which can or should be included in a case stated, the extent to which the court can look at other evidence and the relevance of due diligence and unsworn evidence to a submission of no case to answer. Victor Smith argues that the Divisional Court fell into a series of errors. First published in the Criminal Law & Justice Weekly (2017) 181 JPN 419.
Although the appeal in London Borough of Havering v. Masters [2017] EWHC 848 (Admin) ("Masters"), was rightly dismissed it is submitted that it was for the wrong reasons. The facts, although not always clear, were simple enough. M was the director of a company which, imported toys, including "Happy Dolls", from China. One such doll was test purchased by a Trading Standards Officer ("TSO"). Analysis revealed that it contained more than the permitted concentration of a particular type of the chemical "phthalate". In accordance with reg.31 Toys (Safety) Regulations 2011 ("TSR"), the TSO asked the company for copies of EC declarations of conformity and technical documentation for toys it had placed on the market. In response, M provided a witness statement from himself together with documents including two test certificates relating to dolls. Informations were subsequently laid against the company and M. They alleged, firstly, that the company had failed to comply with the reg.31 request, said to be an offence contrary to s.12(3) Consumer Protection Act 1987 ("CPA") and, secondly, that the company had placed Happy Dolls on the market which did not comply with the essential safety requirements in that they contained an excessive amount of phthalate, contrary to regs.5 and 26 TSR and s.12(1) CPA. The company was dissolved prior to the trial, but the prosecution continued against M pursuant to s.40(2) CPA it being alleged that, as a director, he was guilty of the offending by the company through his consent, connivance or neglect.
At the close of the prosecution's case, M made a submission of no case to answer contending that it would be impossible for him to be found guilty when there had been no finding of guilt against the company. The justices, not being "satisfied of any wrongdoing on the part of the company" dismissed the informations against M. The prosecution appealed.
The question in the case stated
The sole question posed in the case stated for the opinion of the High Court was: "Were we entitled to find, at the end of the prosecution case, that if the company was not guilty of an offence then there would be no case to answer in respect of [M]?" Haddon-Cave J held: "As a matter of construction, s.40(2) does not require an actual conviction of the company, but merely that the body corporate is 'guilty of an offence'." He clearly found that the answer to the stated question, which was predicated on a finding of guilt against the company rather than a conviction, was in the affirmative. The appeal should therefore have been dismissed at that stage.
In Lewin v Truebell plc (1997) CO/4456/96, unreported, ("Truebell") the justices dismissed an information which alleged that an advertisement for a "100 piece home tool kit" was misleading when it consisted of 61 tools and 39 terminal connectors. The prosecution appealed arguing that, even if the advertisement was literally true as representing that the goods were a tool kit consisting of 100 pieces, it was nonetheless misleading as it was likely to be read as meaning that all the 100 pieces were tools. The question posed for the High Court was: "Having found that the trade description was not false, were the justices correct in law for the purposes of s.3(2) Trade Descriptions Act 1968 in applying an objective test in deciding whether or not that trade description was misleading?" Brooke LJ said: "[T]he answer to that question must be 'Yes'. ... By answering that question 'Yes', no one is any the wiser as to whether the justices should have convicted or acquitted. ... It is important, if a prosecutor wishes to lodge an appeal for the opinion of this Court on a point of law, for him to ensure that the facts as stated by the magistrates and the questions as asked by the magistrates enable this Court to focus on the point of law the prosecutor wishes to have answered."
Just as in Truebell, the appellant in Masters appealed on a question the answer to which did not resolve the issue in the case. Haddon-Cave J, however, went on to consider whether on "the evidence" before the justices they were entitled to find that the company was not guilty of an offence and hence that there was no case for M to answer.
In Powys County Council v David Halsall International Limited [2006] EWHC 613 (Admin), Sullivan J said: "We are bound by the case to answer the question posed by the magistrates." The appellant in that case sought to go beyond the question raised and to argue that there was no evidence upon which the justices could have properly concluded that the defendant had made out a due diligence defence under s.39 CPA. Sullivan J pointed out that such consideration was not possible as r.81(3) Magistrates' Courts Rules 1981 provided that: "Unless one of the questions on which the opinion of the High Court is sought is whether there was evidence on which the magistrates' court could come to its decision, the case shall not contain a statement of evidence." A similar restriction can now be found in r.35.3 Criminal Procedure Rules. In breach of those rules, the case stated in Masters included an, albeit sparse and confusing, account of the evidence. That breach was compounded by Haddon-Cave J who allowed, and may even have invited, the appellant's counsel to expand on the account by giving his "best attempt" at clarification.
The facts in the case stated
Even if the question in the case stated had asked whether the justices were entitled to make their finding "on the evidence", it would not have been open to Haddon-Cave J to look outside the case. As Stanley Burnton J said in Skipaway Ltd v Environment Agency [2006] EWHC 983 (Admin): "There is a surprisingly common misconception that once an appeal by way of case stated is before the court, the parties may refer to evidence, or at least undisputed evidence, that was before the lower court in addition to that set out in the case. … On an appeal by way of case stated, the Court is confined to the facts set out in the case." This was similarly held in Focus (DIY) Limited v London Borough of Hillingdon [2008] EWHC 1152 (Admin). Furthermore, Cranston J held in Central Bedfordshire Council v Shah (Tasir) [2013] EWHC 536 (Admin), that where justices give a reason for their decision in a case stated "it is not possible ... to go behind that reason to infer words or meanings."
In Masters, Haddon-Cave J found that "on the evidence" a number of things were "clear" and yet the case stated recited very little evidence. In particular it did not say what documents were provided by the company save to the extent that it enigmatically refers to the TSO having considered "the report", which had a missing page. It also alludes to two test reports, (one of which referred to a "Barbie doll" rather than a "Happy Doll") and to two invoices. Notably, the case stated makes no reference to M having provided a statement or as to its contents. Nonetheless, the content of M's unsworn statement is set out, and was heavily relied upon, in Haddon-Cave J's judgment.
Consideration of due diligence defence in determining no case to answer
The justices' stated their opinion to be that the company had "no knowledge" of the phthalates in the Happy Dolls before placing them on the market. From that, Haddon-Cave J deduced that the justices had found both the company and M to have had a due diligence defence under s.39 CPA. He then explored whether they had been entitled to do so. The appellant contended that the justices should have waited for the defence to deploy their due diligence defence before determining whether it was made out. Haddon-Cave J, however, referring to the informations as "counts" said that approach was "misconceived". "If the magistrates at the end of the prosecution case were not satisfied on the evidence that the prosecution case had been made out on either count, then the magistrates were entitled to dismiss the counts on the facts."
His Lordship's ruling fails to take into account that it is not for the prosecution to disprove any possible statutory defence in order to make out its case. As Neil LJ put it in Amos v Melcon (Frozen Foods) Limited (1985) 149 JP 712: "The onus of proof is … placed quite firmly on the defendant. ... It was not for the prosecution, either by means of anticipation or indeed by cross-examination, to counter defences which had not been properly formulated".
In Balding v Lew-Ways Limited (1995) 159 JP 541, Pill LJ said: "I would not exclude the possibility that there could be circumstances in which the defence under s.39 is made out upon the basis of evidence called by the prosecution." What is plain, however, is that a due diligence defence has to be proved by "evidence" and that necessarily means by "admissible evidence".
Value of unsworn evidence
Haddon-Cave J concluded that "on the evidence" the justices were entitled to find that both the company and M "had taken all reasonable steps and exercised all due diligence to avoid committing either the documentary or the phthalate offence". In so deciding he was heavily influenced by the fact that the justices "had before them" M's unsworn statement in which he had set out "the detailed steps" he had taken "to satisfy himself that he was importing dolls which had been properly tested and certified". It is clear from previous authorities that the justices, and hence his Lordship, were wrong to have taken that "evidence" into account.
In Hicks v Grewal (1985) 4 Tr L 92, Stephen Brown LJ held that the justices, in finding that the defendant, who had not given evidence, had proved the due diligence defence in s.24 Trade Descriptions Act 1968 upon the basis of his unsworn statement, "had erred in law".
In R v Keane [2001] FSR 63, the defendant asserted that the case against him should have been withdrawn at halftime on the basis that the prosecution had not rebutted the defence he had given in his police interview. Mance LJ said that was a hopeless submission. "The interview, if it has any weight in this sense, has extremely little weight." The onus was on the defendant "to adduce positive evidence of [his] defence."
Wrong offence, wrong defence
The "documentary offence" in Masters was said to have been contrary to s.12(3) CPA. That provision relates to information which is prohibited or required to be given about goods. It was s.12(4) CPA which provided for the offence of failing to provide information required by a person such as the TSO. The first information therefore alleged the wrong offence. That error lay undiscovered throughout both the trial and the appeal. Significantly, by virtue of s.39(5) CPA, the due diligence defence does not apply to s.12(4) which has its own built in defence. The offence is one of "failing without reasonable cause" and the burden of proving "reasonable cause" (not dealt with by M in his statement) lies on the defendant by virtue of s.101 Magistrates' Courts Act 1980.
See also, Holmes v Ministry of Agriculture Fisheries and Food.