Judgments - R v. H (Appellant) (On Appeal from the Court of Appeal (Criminal Division))

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    52.  Since the preparatory hearing is meant to achieve one or more of the purposes listed in section 7(1), it is no surprise to find that the powers which section 9 confers on the judge at such a hearing are all indeed designed to achieve those purposes. Orders made under section 9(4) and (5) - which can be made before the hearing by virtue of section 9A as inserted by the 1996 Act - will help to identify the matters in contention between the parties. This should not only help to identify the issues which are likely to be material to the verdict of the jury (section 7(1)(a)), but should, more generally, save time and so expedite the proceedings before the jury (section 7(1)(c)). An order under section 9(4)(b) will, hopefully, assist the jury in their comprehension of the material issues (section 7(1)(b)). Determining any of the points specified in subsection (3) before the jury are sworn should expedite the proceedings once the jury have been sworn (section 7(1)(c)). Overall, the exercise of these various powers should assist the judge in his management of the trial (section 7(1)(d)). In short, the common factor which unites the powers in section 9 is that they are all powers which it may be beneficial for the judge to exercise in advance but which, under the law as it stood before sections 7 and 9 were enacted, he could only exercise at the trial proper.

    53.  Since the powers in section 9 are designed to achieve the purposes in section 7(1), in practice a judge who is considering whether to hold a preparatory hearing need only ask himself whether exercising any of these powers at such a hearing, rather than at the trial when the jury have been sworn, is likely to result in substantial benefits. For instance, will determining a question of the admissibility of evidence - whether under section 76 of the Police and Criminal Evidence Act 1984 or otherwise - or any other question of law relating to the case at a preparatory hearing save a significant amount of time which the jury would otherwise waste while the matter was resolved in their absence? The potential benefits are described by Lord Bingham of Cornhill in R v Shayler [2003] 1 AC 247, 265, para 16:

    "Jurors and witnesses, summoned to court for the trial, can be spared hours or days of frustrating inaction while issues of law are argued out in their absence. The risk of sudden adjournments to deal with unforeseen contingencies can be reduced."

    Of course, there may be other desirable benefits. For instance, if a confession is held to be inadmissible under section 76 in a voire dire at a preparatory hearing, might this also knock out one of the counts and so narrow the range of issues to be opened to the jury - thereby both shortening the opening and assisting in identifying the issues which are going to be material to their verdict? Similarly, would it be beneficial to settle the form of any evidence or explanatory material in advance, rather than leaving it to the trial proper - with the consequential risk that an adjournment might be necessary for the judge's instructions to be carried out? In short, looking at the overall picture, would holding a hearing and dealing with the various matters then, rather than during the trial proper, be likely to result in substantial benefits? If so, the judge can order a preparatory hearing and exercise those of his powers under section 9 which he thinks are likely to achieve those benefits. In so far as any decision of the Court of Appeal is inconsistent with this approach, I would overrule it.

    54.  It follows, in particular, that the mere fact that the question of the admissibility of evidence or the question of law has not been raised by the prosecution or the defence in order to further one of the purposes in section 7(1) is irrelevant. What matters is whether, by deciding the question at a preparatory hearing rather than at a later stage, the judge is likely to achieve a substantial benefit in respect of one or more of those purposes.

    55.  For the appellant, Mr Rees QC submitted that, since section 8(1) provides that the trial is to begin with the preparatory hearing, in the context of that preparatory hearing the judge must be able to exercise all the common law and other powers, including the power to order disclosure, which he can exercise at any stage in the trial. Subject to what I say in a moment, I reject that argument. In my view, as subsection (1) indicates, in section 9 Parliament has specified the powers which the judge is to be able to exercise at a preparatory hearing. They have been chosen because they are designed to achieve the purposes set out in section 7(1). In these circumstances I see no room for inferring that Parliament envisaged that under section 9 the judge would be able to exercise other powers. If that had been the intention, Parliament would have used some such formula as "without prejudice to any other powers conferred by common law or under statute".

    56.  On behalf of the Crown Ms Korner QC submitted that, while the only powers which the judge could exercise in the preparatory hearing were those set out in section 9, nevertheless he could, simultaneously, exercise other powers. In effect, there would be another form of hearing going on at the same time as the preparatory hearing and in that other hearing the judge could exercise his other common law and statutory powers. In particular, I understood her to argue that in those parallel proceedings he could determine any application for an order for disclosure under section 8(2) of the 1996 Act.

    57.  At first sight the approach advocated by counsel for the Crown may seem like a recipe for confusion. But, if there are indeed issues which the judge has power to decide at that stage, even though they do not fall within the scope of section 9, there are obvious practical advantages in the judge being able to resolve them on the same occasion. There is, moreover, no reason in principle why two hearings should not be held on the same occasion provided that all concerned keep clearly in mind the distinction between the two hearings and between the issues which the judge can determine in each. First, there are those matters which the judge has power to decide under section 9 in the preparatory hearing - some of which will be appealable under section 9(11); secondly, there are any other matters, such as an application for bail, which the judge could have decided at that stage, even if sections 7 and 9 had not been enacted. The judge can deal with all these matters on the same occasion, but only the matters falling within section 9(3) will give rise to a possible appeal under subsection (11). Because the right of appeal is limited in this way, as Lord Scott of Foscote points out, the difference of opinion between my noble and learned friends, Lord Nicholls of Birkenhead and Lord Scott, and the remainder of your Lordships on the range of powers, beyond section 9(3), which can be exercised at a preparatory hearing is likely to be largely academic.

    58.  Understandably, at the hearing of the appeal before the House counsel for both parties tended to focus on whether there was a right of appeal under section 9(11) against the determination of an application for disclosure. But again, as is implicit in what I have just said, there are really two separate questions. The first is whether a judge has power under section 9 to determine an application for disclosure under section 8(2) of the 1996 Act. The second is whether, if he does, an appeal lies under section 9(11) of the 1987 Act from the judge's decision on that application.

    59.  As far as the first of these issues is concerned, it is apparent both that an application for disclosure could only fall under section 9(3) and that it does not fall under section 9(3)(aa) or (b). So, under section 9(3) the judge would have power to determine the application only if it were a "question of law relating to the case" under (c). An application for disclosure is not a question of law. In my view, therefore, in any normal use of the English language it cannot be said that a judge who sits to determine an application for disclosure is sitting to determine "a question of law relating to the case". The mere fact that, when considering such an application, the judge must correctly identify the scope of his powers and duties and apply the correct test cannot mean that, when he orders or declines to order disclosure, he is determining a "question of law relating to the case" in terms of section 9(3)(c). Such a broad interpretation would not only make paragraphs (aa) and (b) redundant but would also turn any application to a judge, whatever its nature and whether under statute or at common law, into a question of law for the purposes of paragraph (c). Again, if Parliament had intended the judge to have this sweeping power to determine any application at all in a preparatory hearing, it would have found easier and clearer ways of saying so.

    60.  Such a broad interpretation of section 9(3)(c) would also run counter to the view of Lord Bingham in R v Shayler [2003] 1 AC 247, 265, para 17, that the limitation to questions "relating to the case" must be strictly observed. The kinds of questions relating to the case which the provision was designed to cover can be seen from paras 6.97-6.98 of the Report of the Fraud Trials Committee chaired by Lord Roskill (HMSO, 1986) which gave rise to the 1987 Act. In particular, the committee urged that defence counsel should be required to raise at a preparatory hearing "points of law which go to the root of the case or any point of law relating to the admissibility of the evidence as disclosed on the papers" - foreshadowing paragraphs (b) and (c) in section 9(3).

    61.  The report of Lord Roskill's committee is helpful in another way. In para 6.25 the committee indicated that, in their view, the pre-trial review should be regarded as a "preparatory part of (not preparatory to) the trial." They continued:

    "The trial should in effect be in continuous session, subject to necessary adjournments, from the start of the pre-trial review onwards. The practical importance of this is that it would help to reinforce the need to have the trial judge and counsel attending throughout and for the relevant essential work of preparation to be completed in advance of the pre-trial review."

In order to emphasise that this review was to be considered as part of the trial, the committee recommended that it should be referred to as "preparatory hearings", the terminology which was adopted in the 1987 Act. Consistently with this approach, the preparatory hearing marks the start of the trial for the purposes of the relevant custody time-limits: section 22(11A) of the Prosecution of Offences Act 1985 as amended by section 21 of the 1996 Act.

    62.  The point to notice at present is that the committee envisaged that any preparatory hearing would take place after the relevant essential work of preparation for the trial had been completed. Therefore the judge would determine questions of law relating to the case, as fully prepared for trial, not questions of law relating to the essential preparations for the trial of the case.

    63.  Today at least, sorting out problems relating to the disclosure of prosecution material forms an important part of the essential preparations for a trial. The material which is disclosed may well help to clarify and define the issues between the parties. So the parties may be unable to carry out their respective obligations under section 9(4)(a)(v) and (c) and section 9(5)(b)(i) and (iv) until the necessary disclosure has taken place. If the parties are unable to resolve any dispute about disclosure, the accused may apply to the court for an order requiring the prosecutor to disclose the appropriate material: section 8(2) of the 1996 Act. The application can be made at any time after the preconditions are satisfied - and, in my view, it should be made at the earliest possible opportunity. In that way the question can be resolved, and any material disclosed, before the judge has to decide whether it would be useful to order a preparatory hearing.

    64.  Although disclosure was not nearly so prominent an issue in the 1980s when the Roskill committee reported and the 1987 Act was passed, the discussion of the authorities in R v Maguire [1992] QB 936, 956-957, shows that points were arising even then. A few years later, the effects of the decision of the Court of Appeal in R v Ward [1993] 1 WLR 619 forced Parliament to step in to regulate the question of prosecution disclosure in sections 6 to 8 of the 1996 Act. Though seised of the question in this way, in the 1996 Act Parliament did not take the opportunity to amend section 9(3) of the 1987 Act so as to provide for applications for disclosure to be determined at the preparatory hearing. This was deliberate rather than an oversight: when enacting a similar system of preparatory hearings for other complex cases in Part III of the same 1996 Act, Parliament did not include applications for disclosure under section 8(2) in section 31(3), the equivalent of section 9(3) of the 1987 Act.

    65.  The appropriate conclusion is, accordingly, that the absence of applications for disclosure from section 9(3) of the 1987 Act is not a lacuna, but reflects a legislative intention that applications for disclosure should not be determined at, but preferably before, any preparatory hearing. This is consistent with Parliament adhering to the original view that preparatory hearings are designed to deal with matters which can be conveniently resolved once the essential preparations for the trial, such as prosecution disclosure, have been completed. Proceeding in this way minimises the potential delays. By contrast, including applications for disclosure in the matters which could be determined at the preparatory hearing, with the possibility of an appeal, would inevitably have led - as this case shows - to accused persons and their representatives postponing such applications until the preparatory hearing, in the hope of being able to appeal an unfavourable determination. If the application succeeded, there would then have been further considerable delays while disclosure was completed and the accused's lawyers studied the documents and perhaps carried out further investigations. All this would have been utterly inconsistent with any realistic idea of the preparatory hearing as the first stage of the trial. Moreover, it would have tended to undermine still further the protection which the relevant custody time-limits are intended to afford to remand prisoners. For the difficulties which section 22(11A) of the Prosecution of Crimes Act 1985 causes in any event, I refer to the speech of my noble and learned friend, Lord Hope of Craighead, in In re Kanaris [2003] 1 WLR 443.

    66.  Like Lord Hope and my noble and learned friend, Lord Mance, I conclude, accordingly, that a judge does not have power to determine an application for disclosure within the scope of a preparatory hearing. More particularly, in agreement with all your Lordships, I conclude that a judge has no power to determine such an application under section 9(3). But the judge does have power under section 8(2) of the 1996 Act to determine an application for disclosure, whenever it is made. There is, therefore, nothing to prevent a trial judge from determining that application on the same occasion as, but separately from, a preparatory hearing - which is, in substance, what the judge did in the present case. The important point, however, is that, if he does so, his decision on that matter does not fall within the scope of section 9 and no appeal lies under section 9(11). So the parties, and indeed the judge, gain nothing by delaying the determination of such applications until the time when any preparatory hearing is held.

    67.  The contrary view, that an application for disclosure is a "question of law relating to the case" in terms of section 9(3)(c), would inevitably mean that, subject to leave, an appeal would always be available under section 9(11), whatever the basis for the judge's decision on the application.

    68.  Moreover, a broad interpretation of section 9(3)(c), embracing applications for disclosure, would have the extraordinary effect that there would be no right of appeal from a judge's decision on an application for disclosure if it were made and decided before any preparatory hearing, but there would be a right of appeal if the application were made and decided at a preparatory hearing. I am unable to think of any good reason why Parliament would have intended to penalise an accused person who made a prompt application by denying him an opportunity to appeal which, on this hypothesis, would be available to a more sluggardly accused who waited until the preparatory hearing. In law, as in nature, the early bird should get the worm.

    69.  Situations can, of course, be envisaged where material in the hands of the prosecution may or may not have to be disclosed, depending on the admissibility of certain evidence or on some point of law relating to the case, such as the scope of one of the counts in the indictment. In situations of that kind, the question of the admissibility of the evidence or the question of law relating to the count in the indictment will naturally fall within section 9(3) and (11). When the question is finally determined within the framework of section 9, this will also, incidentally, determine whether the material should be disclosed and, hence, the outcome of any parallel application for disclosure. I respectfully agree with what Lord Hope says on this point in para 24 of his speech.

    70.  I am conscious, first, that the conclusion which I have reached is contrary to the view expressed obiter by Lord Bingham in R v Shayler [2003] 1 AC 247, 265, para 16. He clearly envisaged that applications for disclosure would fall within the scope of section 9(3). It is also the case that the appeal on a matter of public interest immunity which the House decided in R v H [2004] 2 AC 134 arose out of an application for disclosure which was made at a preparatory hearing. The simple fact, however, is that in neither case was the jurisdiction of the court to hear an application for disclosure under section 9(3) in issue. The present appeal is the first occasion on which the House has required to confront the point directly.

    71.  For these reasons I would hold that, while the judge had power to determine the appellant's application for disclosure, he had no power to do so under section 9(3) of the 1987 Act. It follows that no appeal lay to the Court of Appeal under section 9(11).

    72.  I would accordingly answer the third of the questions contained within the certified point of law of general public importance in the negative. Since the other two questions are based on a misconceived interpretation of sections 7 and 9 of the 1987 Act, I would decline to answer them.

    73.  The appeal to your Lordships' House should accordingly be dismissed.

LORD MANCE

My Lords,

    74.  The applicant was a co-owner of five companies supplying goods to IKEA for retail. She is, together with co-defendants, charged with conspiracy to defraud and associated charges of making and receiving corrupt payments, by dishonestly inducing IKEA by false invoicing to pay sums that were not due and owing between 1st January 1998 and 31st December 2000.

    75.  IKEA's original assessment was that invoices rendered by the five companies, and paid by IKEA, in respect of 44 types of article exceeded actual supplies in this period by some £15 million. The Serious Fraud Office took the matter up. Its forensic accountant, Mr McDonald, examined the documentation, made allowances in favour of the five companies for missing documents and inadequacies in IKEA's accounting system, eliminated from consideration 10 of the 44 articles and on that basis reported an apparent shortfall of some £7 million. The prosecution relies on Mr McDonald's report.

    76.  The appellant's defence is that the whole of the apparent shortfall in the indicted period can be explained by gaps and inadequacies in IKEA's documentation and systems. She has identified five other companies supplying IKEA in relation to which no suggestion of fraud has been made, and has requested the prosecution to disclose records of IKEA's trading with those suppliers during the relevant period. She maintains that expert analysis of such records would confirm her defence, by disclosing an apparent shortfall corresponding to that in relation to which she is charged. The prosecution have rejected the request, on the ground that the records are irrelevant. Although the records requested were IKEA's, the prosecution did not, in rejecting the request, take any point that they were not in its possession. The prosecution has at all material times had in its possession a number of MHS tapes containing IKEA records, and (whether or not those contain all the material requested) has been content to address the request on the basis that it relates not to third party material, but to material already in the prosecution's possession. After the prosecution rejected her request, the appellant applied under section 8 of the Criminal Procedure and Investigations Act 1996 for an order requiring the prosecution to disclose the records requested.

    77.  At hearings in March and April 2006, the intended trial judge, HHJ Hodson, ordered that the preparatory hearing under section 7(1) of the Criminal Justice Act 1987 should be held first on 22nd to 24th May 2006. He agreed that the section 8 application should be heard within the context of that hearing. Evidently, in delaying the hearing of the section 8 application, he was (rightly or wrongly) influenced by a defence submission that this would enable an appeal if he ruled against the defence. At the commencement of the preparatory hearing, the appellant and her co-defendants were arraigned. In the ruling that he gave on 24th May 2006 HHJ Hodson said that it seemed to him "important to look at this application from the position of IKEA" and attached significance to the absence of any evidence of corrupt payments to the other five suppliers identified by the appellant. He held that the appellant had failed to show "reasonable cause to believe that the material requested might reasonably be expected to assist the defence" and further that the defence request was not proportionate in that the trial (fixed to last six months) was about her five companies, not others, and "should not be allowed to be deflected". He refused leave to appeal.

    78.  The matter came before the Court of Appeal Criminal Division on 7th and 21st July 2006. The Court raised with counsel the question whether, under section 9(11) of the 1987 Act, it had jurisdiction to hear the appeal. After hearing submissions, it concluded in the light of prior Court of Appeal authority that it did not. To enable leave to be sought to take the matter further to this House, the Court of Appeal gave leave to appeal to the Court of Appeal and certified three questions of law pursuant to section 33(2) of the Criminal Appeal Act 1968, as follows:

    "(a) For an appeal to lie to the court of Appeal under the provisions of section 9(11) of the Criminal Justice Act 1987 from an order or ruling made during the course of a preparatory hearing held under section 7(1) of the said Act, does the order or ruling itself have to be for one of the purposes set out in section 7(1) of the said Act?

    (b) If so, can an order or ruling in determination of an application for disclosure under section 8 of the Criminal Procedure and Investigations Act 1996 fall within one of those purposes?

    (c) In any event, can an order or ruling in determination of an application for disclosure under section 8 of the Criminal Procedure and Investigations Act 1996 be the subject of an appeal under the provisions of section 9(11) of the Criminal Justice Act 1987?"

    Leave to appeal to the House was on 12th October 2006 granted by the House.

    The legislation

    79.  The Criminal Justice Act 1987 was introduced to give effect to the Report of the Fraud Trials Committee chaired by Lord Roskill of 1986 (ISBN 0 11 380008 8). The radical nature of the reforms which the Act introduced may not always have been fully appreciated or accepted. The Serious Fraud Office ("SFO") was established (sections 1 to 3). Provision was introduced for transfer of proceedings against persons charged with serious and complex fraud to the Crown Court without committal, by decision of (among others) the Director of Public Prosecutions or the Director of the SFO (sections 4-5). Provision was at the same time made enabling any person charged to apply "at any time before he is arraigned …… to the Crown Court for the charge to be dismissed on the ground that the evidence which has been disclosed would not be sufficient for a jury properly to convict him of it" (section 6). Sections 7 to 9 are key to the present appeal. I set them out in paragraph 82 below, but in summary they provide as follows. By section 7 a Crown Court judge may order a preparatory hearing where it appears to him "that the evidence on an indictment reveals a case of fraud of such seriousness and complexity that substantial benefits are likely to accrue" from such a hearing before the jury are sworn for one or more of several specified purposes. Section 8 provides for the trial to begin with, and for arraignment to take place at the start of, any preparatory hearing so ordered. This reflects the Roskill Committee's recommendation that the "the pre-trial review should be regarded as being a preparatory part of (not preparatory to) the trial)" (paragraph 6.25 of the Report). Section 9 specifies powers which "the judge may exercise" at the preparatory hearing. Section 9(11), giving a right of appeal with leave from any order or ruling under section 9(3) (b) or (c) was the product of an initiative in committee in Parliament, where it was described by the sponsoring Minister (Mr David Mellor QC) as "a fundamental safeguard for the proper conduct of a preparatory hearing and …. a great boon to defendants if they should be subject to wrong decisions made at that time" (Standing Committee F, Hansard, 22 January 1987, col 246, also set out in The Decline and Fall of the Preparatory Hearing, Alun Jones QC, [1996] Crim LR 460, 461).

    80.  The Act has been amended in a number of respects, notably by the Criminal Justice Act 1988, the Criminal Justice and Public Order Act 1994, the Criminal Procedure and Investigations Act 1996 and the Criminal Justice Act 2003. The 1996 Act also contained in sections 29-31 and 35 provisions which parallel sections 7-9 of the 1987 Act but apply to other types of case of sufficient seriousness or length to justify a preparatory hearing. The amendments implemented by the 2003 Act came into force subsequent to the date (7th July 2004) when the present proceedings were sent to the Crown Court under section 51 of the Crime and Disorder Act 1998, and so do not apply to these proceedings.

 
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