Act: Forbes; Balfour & Manson, Edinburgh - for Sattar;

Shead; Pinsent Masons, Edinburgh - for Decker

Alt: McNeill, A.D.; Crown Agent

15 May 2007

The Background Circumstances

[1] The appellants have been indicted on a charge of contravention of section 72(1) of the Value Added Tax Act 1994, involving the fraudulent evasion of payment of Value Added Tax in cumulo in the sum of £37,060,178.04. Each appellant has lodged a devolution minute in which he avers that his right to a "fair and public hearing within a reasonable time", under Article 6(1) of the European Convention for the Protection of Human Rights and Fundamental Freedoms has been infringed. It is contended in these devolution minutes that the taking of the indictment served upon the appellants to trial would be ultra vires of the Lord Advocate, by virtue of section 57 of the Scotland Act 1998.

[2] The chronology of the criminal proceedings against the appellants has been set out in detail in document A in the folder of documents furnished by the Crown. The dates of the relevant events were not controversial. The principal features of that chronology are that on 21 May 2001, the appellants were charged by officers of, as they then were, H.M. Customs and Excise, which date was agreed to be the starting point for a consideration of the question of whether the time occupied and to be occupied by the proceedings was reasonable. On 3 March 2003, the case was reported to the Crown Office by Customs and Excise. On 2 April 2004, petition warrants were issued by the Sheriff at Glasgow with respect to both appellants. On 27 May 2004 they appeared on petition. Thereafter they have been served with a number of indictments. At the time of the appearance of the appellants on petition, a provisional date for trial was identified as 29 November 2004. However, it subsequently became clear that the appellants would not be ready for trial on that date and a revised provisional date was identified. The case was indicted to a sitting of the High Court of Justiciary on 14 February 2005. The appellants were not ready for trial at that time, in consequence of which the case was deserted pro loco et tempore. At that stage, defence counsel anticipated being ready for trial in October 2005. However, in June 2005, the second named appellant instructed new solicitors. When the case was re-indicted in August 2005, it became subject to the new High Court procedural arrangements, which had come into force in May 2005. Accordingly, it was indicted to a preliminary hearing on 9 September 2005. The preliminary hearing was continued on a defence motion and a further continuation was granted under section 75A of the Criminal Procedure (Scotland) Act 1995. On 17 March 2006, the case was again deserted pro loco et tempore because the Crown wished to consider the appropriateness of the charge in the indictment in the light of further consideration of the implications of what has come to be known as the Bondhouse case. While the precise details of this case were not explained to us, it involved proceedings emanating from a V.A.T tribunal in England, which were the subject of an appeal to the High Court and subsequently a referral of a question by that Court to the Court of Justice of the European Union. In April 2006 a fresh indictment was served for a preliminary hearing on 22 May 2006. That hearing was continued to 24 July 2006, when the Court was advised that the Crown had recently made available a revised report by a forensic accountant. At that stage, counsel for the first named appellant indicated that he then wished to instruct a forensic accountant. The second named appellant had already instructed such an accountant, but wished time to allow the expert to consider the revised Crown report.

[3] The case came before the Judge of First Instance on 23 August 2006 at a hearing on the devolution issue minutes and also at an adjourned preliminary hearing. At that hearing, the Crown accepted that the period of time which had elapsed since the appellants had been charged gave grounds for "real concern". Accordingly, following the decision of the Judicial Committee of the Privy Council in Dyer v Watson 2002 S.C. (P.C.) 89, it became necessary for him to look into the detailed facts and circumstances of the case and for the Crown to explain and justify any lapse of time which appeared to be excessive.

[4] As the Judge of First Instance observes, in his Report to this court, in the course of the hearing on 23 August 2006, it became clear to him that certain of the information being provided by the Crown as to the history of the case was vague and unsatisfactory. That situation was not corrected following an adjournment to 24 August 2006. Faced with that situation, the Judge of First Instance then indicated that he expected the Crown to provide affidavit evidence to cover the periods between 21 May 2001 and 3 March 2003 and between 3 March 2003 and 2 April 2004. He had been satisfied that he had received sufficient reliable information to allow him to form a view with respect to the period after 2 April 2004.

[5] On 25 September 2006 a series of affidavits was lodged; however, for reasons related to the availability of the Advocate depute who had been conducting the case and defence counsel, the continued hearing did not take place until 13 December 2006. On that occasion the Judge of First Instance dealt with the issues arising in connection with the devolution issue minutes and also conducted the preliminary hearing which had been continued under section 75A of the 1995 Act to the same date. At that preliminary hearing, it was indicated on behalf of the first named appellant that, as a result of the instruction of a forensic accountant, a list of items, recovery of which was sought from the Crown was being produced. The Judge of First Instance was concerned about those requirements and accordingly continued the preliminary hearing until 17 January 2007, in order to allow the Crown to respond to the list of items, recovery of which was sought. However, on 18 December 2006 the Judge of First Instance refused the appellants' devolution issue minutes, but granted leave to appeal. An appeal against that decision has now been brought by both appellants before this court.

Submissions for the First Named Appellant
[6] At the outset of the hearing before us, counsel for the first named appellant drew attention to the grounds of appeal tabled on behalf of his client. These grounds are in the following terms:

"(a) It is respectfully submitted that the learned Judge erred in attaching too much weight to the complexity of this case. Whilst it is accepted that the case against the appellant involves a significant number of witnesses and to date 239 productions, with more added by the Crown by way of further section 67 Notices on 18 December 2006, it is nonetheless submitted that this case, whilst complex, is not exceptional in the scheme of offences of this type. In Dyer v Watson 2002 S.C. (P.C.) 89, at paragraph 53, Lord Bingham states: 'But with any case, however complex, there comes a time when the passage of time becomes excessive and unacceptable.'

(b) It is respectfully submitted that the learned Judge erred in failing to take into consideration a relevant factor namely the absence of explanation by the administrative and judicial authorities as to why the case was not accorded the necessary priority given the passage of time which elapsed during their investigations. The affidavits produced to the Court by the Crown demonstrate that the Crown were in control of the case from an early stage and as a result were directing the investigations by HM Customs and Excise. However, none of the said affidavits indicate that there was any recognition by those involved that 'the clock was ticking'. In the said case of Dyer v Watson at paragraph 55, Lord Bingham states: 'But a marked lack of expedition, if unjustified, will point towards a breach of the reasonable time requirement....'".

[7] Counsel went on to draw our attention to the observations of Lord Bingham of Cornhill in Dyer v Watson at paragraphs 52 to 55. There was no dispute concerning the legal criteria which had to be applied in a case such as this.

[8] Thereafter, counsel alluded to document A, setting out the detailed chronology of the case. He pointed out that the appellants had been charged as long ago as 21 May 2001. On 9 May 2001 there had been a meeting between officials of H.M. Customs and Excise and those of the Crown Office, who had been involved at a very early stage. The terms in which the chronology were stated were not wholly accurate; the case had not been put on hold between 3 March 2003 and 14 July 2003, but a ruling in the Bondhouse case had been awaited. Nevertheless work on the preparation of the case had continued. On 15 January 2004 the relevant petition had been sent in error to the Procurator Fiscal in Paisley; the correct destination would have been the Procurator Fiscal in Glasgow. However, by 7 March 2004 the error had been discovered. Thereafter, further delay occurred in consequence of the fact that the appropriate charge against the appellants was not available as a style in the Crown Office computer system, that being necessary for the making of preparations for the putting of the appellants on petition. Nevertheless, on 2 April 2004 the petition had been granted. Following arrest, the appellants appeared in court on petition on 27 May 2004.

[9] Counsel submitted that the period between 15 January and 2 April 2004 was of particular significance. What had occurred during that period, he claimed, demonstrated a lack of expedition on the part of the prosecuting authorities, in circumstances in which it should have been obvious to them that expedition was necessary, having regard to the delay which had occurred during the previous year. During this period the papers had been sent in to the Procurator Fiscal's office in Paisley, when they should have been sent to that office in Glasgow. In this connection reference was made to the affidavits of Kenneth William Donnelly and John Lewis Balfour. The events of the period founded upon were symptomatic of the Crown's handling of the case. While it was agreed that there had been a reason to await the Bondhouse ruling, the fact that waiting for it had caused time to elapse meant that expedition was thereafter necessary. No special efforts had been made to recover the time lost. In connection with these matters counsel relied upon the affidavits of Elizabeth Munro and Alastair Stuart Kennedy. Much of the responsibility for the case had been in the hands of John Lewis Balfour, an inexperienced employee, who required to be supervised. While it was accepted that there had been activity during the period in question, the case had not been prioritised, although the "clock was ticking".

[10] Turning to consider the terms of the Report of the Judge of First Instance, counsel submitted that he had given too much weight to the alleged complexity of the case. It was what was known as a "carousel fraud". The Crown Office had had previous experience of such cases, which were not novel in any respect. While it was accepted that a sum of £35m was involved, that there were 290 documentary productions extending to 6000 pages, that there was a foreign element and that forensic accountants had been involved, these features did not make the case exceptional. It was not contended that the Judge of First Instance had misdirected himself in any particular respect; the submission was that he had given undue weight to certain features of the case. Counsel accepted that there was no other period than that specified by him that showed lack of appropriate expedition.

Submissions on behalf of the Second Named Appellant
[11] Counsel moved the Court to allow the appeal. He drew attention to a passage in the speech of Lord Rodger of Earlsferry in Dyer v Watson, at paragraph 161. Albeit that that passage indicated that an Appeal Court would not disturb a decision by a Judge of First Instance in a matter such as this because it might have itself reached a different view, in the present case there were grounds to disturb that decision. He invited the Court to examine the whole period of time that had elapsed since 21 May 2001, when the appellants had been charged. In particular it was necessary to consider when a trial would proceed, if the present appeals failed. The Judge of First Instance had erred in regarding the period from 2 April 2004 as of little consequence. That was not justified. There were issues relating to disclosure. The Crown's indictments had been remodelled more than once which had necessarily brought about a lapse of time.

[12] Counsel drew attention to the grounds of appeal for the second named appellant. There was no dispute that the period of time which had elapsed since the appellants had been charged was such that the Crown required to provide an explanation. There was no suggestion that the conduct of the appellants themselves had contributed to the delay. Certain parts of the grounds of appeal had to be emphasised:

"It is accepted that the case was complex and that of necessity would take some time to prepare for trial. Nevertheless, it is submitted that the period viewed as a whole was one which represented a breach of the right referred to.

Affidavits lodged by the Crown served to demonstrate that from the earliest stage of the case it was being directed by Crown officials. Notwithstanding their involvement, it is submitted that the case was not progressed with the necessary expedition and such information as was provided to the Court about the progress of the case was insufficient to explain satisfactorily the lapse of time."

Those grounds reflected the second named appellant's position.

[13] As regards the conclusion of the proceedings, the prediction was that the trial diet would take place towards the end of 2007, or possibly early in 2008. Recognition of that exacerbated the situation. One of the particular difficulties that the second named appellant's advisers had faced had been created by the remodelling of the Crown case. The Crown did not appear to know what its case should be. The Bondhouse ruling was a "red herring". There would have been no difficulty from the first in formulating the charge against the appellants as one of common law fraud. It had to be recognised that the Crown Accountant's Report itself had been remodelled, causing further delay. Counsel drew our attention to Her Majesty's Advocate v Morton & Others 2003 S.C.C.R. 305 at page 308, paragraph 11; also Mellors v The United Kingdom 2003 S.C.C.R. 407, a decision of the European Court of Human Rights. It was evident from this latter case and particularly paragraphs 34 and 35 at page 427 that that court was prepared to isolate particular periods during the history of proceedings which themselves might be productive of a breach of the obligation created by Article 6(1). It was not appropriate to ignore the need for some time to devoted to the preparation of the defence case. The Judge of First Instance had misdirected himself, particularly in regard to the period since 27 May 2004; in effect, he had ignored that period, upon the view that it had occurred on account of the requirements of the defence.

Submissions on behalf of the Crown
[14] The Advocate depute moved the Court to refuse the appeals. The Judge of First Instance had reached the correct decision. It was proposed to deal with the case of the two appellants separately. Dealing first with the appeal of the first named appellant, counsel had founded on a very limited period from 15 January 2004 to 29 March 2004, during which he contended that unreasonable delay had taken place. That period was of two and a half months duration only. Furthermore, it could not be said that the Crown had been inactive during that period. There was no question of the case having been put on a shelf to gather dust. While an error had been made in sending the papers to Paisley in the first instance, that had been quickly corrected and on 27 January 2004 they had been redirected to the office of the Procurator Fiscal in Glasgow. The Advocate depute explained that the difficulty over the availability of a style for a charge appropriate to this case in the Crown Office computerised system was real, because of the way in which Sheriff Courts were now run. Any charge preferred by the Crown had to be capable of being recognised by the Sheriff Court computer system.

[15] The Bondhouse decision had been a matter of importance to the Revenue and Customs and to the Crown in this case. The issues arising in this case had had to be clarified before a final decision could be reached as to appropriate charges in the present one. Quite apart from that, the present case was a complex one; difficulties arising in it had to be dealt with as they arose.

[16] The Advocate depute relied on Reilly v Her Majesty's Advocate 2000 S.C.C.R. 879, a case involving embezzlement. In that case a period of inactivity had been identified from June to October, but that had not been seen as fatal to the position of the Crown. In the present case there was no basis for saying that the Judge of First Instance had overestimated the complexity of the case. It was truly a complex case for the reasons given by him in his report at pages 4, 7 and 8. It was the complexity of the case that explained the undoubtedly long time which it had taken to reach the stage of final preparation.

[17] The Advocate depute turned next to deal with the appeal of the second named appellant. Counsel for the second named appellant had focussed upon the period from April 2004 to the anticipated date of the trial. In principle, there was no difficulty about considering that period of time. It was entirely justified for the Judge of First Instance to conclude that the most substantial period of time between April 2004 and the contemplated trial date had been occupied by the making of arrangements for the defence. None of the procedure which had followed 27 May 2004 could be said to have been dilatory. The reality was that the core issue in this case was one of complexity. The Judge of First Instance could not be criticised for not postulating a trial date. He must have had in his mind the likely date of the trial. In all the circumstances this appeal should be refused.

The Decision

[18] Before us there was no dispute as to the legal principles to be applied to these appeals. They were to be gleaned from Dyer v Watson. In paragraphs 52 to 55 of the judgment of Lord Bingham of Cornhill, the relevant principles were explained. In paragraphs 52 and 53 he said this:

"In any case in which it is said that the reasonable time requirement (to which I will henceforwards confine myself) has been or will be violated, the first step is to consider the period of time which has elapsed. Unless that period is one which on its face and without more, gives grounds for real concern it is almost certainly unnecessary to go further, since the Convention is directed not to departures from the ideal but to infringement of basic human rights. The threshold of proving a breach of the reasonable time requirement is a high one, not easily crossed. But if the period which has elapsed is one which, on its face and without more, gives ground for real concern, two consequences follow. The first is that it is necessary for the Court to look into the detailed facts and circumstances of the particular case. The Strasbourg case-law shows very clearly that the outcome is closely dependent on the facts of each case. Secondly, it is necessary for the contracting state to explain and justify and lapse of time which appears to be excessive.

53 The Court has identified three areas as calling for particular inquiry. The first of these is the complexity of the case. It is recognised, realistically enough, that the more complex the case, the greater the number of witnesses the heavier the burden of documentation, the longer the time which must necessarily be taken to prepare it adequately for trial and for any appellate hearing. But with any case, however complex, there comes a time when the passage of time becomes excessive and unacceptable."

[19] In paragraphs 54 and 55 of his judgment Lord Bingham dealt with the second and third matter to which he referred in paragraph 53. The second was the conduct of the defendant. He expressed the view that a defendant could not properly complain of delay of which he was the author. In paragraph 55, he dealt with the third matter routinely considered by the Court in such cases, the matter of resources. A shortage of resources could not be blamed by contracting states for unacceptable delays, however, a court system and a prosecutor were entitled to prioritise the business with which they had to deal.

[20] In the context of an appeal in relation to an issue arising out of Article 6(1) of the Convention, it is also appropriate to mention the observations of Lord Rodger of Earlsferry in paragraph 161 of the same case. There he said:

"In concluding these general observations and turning to the two cases under appeal by the Crown, I would note once more that the exercise which a court has to carry out when considering the reasonable time requirement in Article 6(1) involves ascertaining the relevant facts and applying the test described by the European Court to those facts. That exercise will require the judge to weigh and balance a number of different factors in coming to his conclusion. Where a judge has ascertained the facts and has applied the proper test, his decision will not be able to be challenged, even where the judges in any appeal court might themselves have reached a different decision. As Lord Nicholls of Birkenhead has recently observed in a very different context, courts of appeal are not intended to be forums in which unsuccessful litigants may have a second trial of the same issue by different judges under the guise of an appeal: Re B (A Minor), para. 17. An appeal court will be justified in disturbing a decision of a judge of first instance on the matter only if the judge has failed to take account of relevant facts or has taken account of irrelevant facts or has applied the wrong test. Your Lordships' Board must, of course, exercise equal restraint in the appeals that come before it."

[21] It was a matter of agreement before us and had been before the Judge of First Instance that the period of time which had elapsed in this case was indeed a cause of "real concern". Accordingly, it was necessary for an examination of the circumstances of the case to be conducted in detail with a view to seeing whether the reasonable time requirement had or had not been breached. The Judge of First Instance took the unusual course of obtaining several detailed affidavits from individuals who had been intimately connected with the preparation of the case with a view to reaching conclusions as to what had occurred. We feel able to rely upon his factual findings arrived at in that way.

[22] While the time which has elapsed since the starting point of 21 March 2001 has been long and plainly did require an explanation, having considered the detailed chronology which has been prepared by the Crown and the material in the affidavits obtained by them, we consider that the Judge of First Instance had material before him which was quite capable of explaining and justifying the lapse of time which had occurred. Had we ourselves been in his position, we do not consider that we would have reached any conclusion different from that which he reached. In particular, we are in complete agreement with his observations in the last paragraph on page 4 of his Report concerning the complexity of the case and its significance.

[23] Before us counsel for the first named appellant focused particularly on the period between 15 January 2004 and 2 April 2004, which he contended demonstrated a lack of expedition by the prosecuting authorities. While it is, no doubt, proper to consider the particular justification that may exist for that particular lapse of time, that particular period, we consider, has to be seen in the context of the time taken by these proceedings as a whole, starting from 21 May 2001 and running to the projected date of the trial. However, even if attention is focussed on the period of 15 January 2004 to 2 April 2004, we do not consider that what occurred during that period demonstrates that there was any serious lack of expedition or effort on behalf of the prosecuting authorities. It was readily acknowledged by the Advocate depute that the sending of the papers to the Procurator Fiscal's office in Paisley amounted to an unfortunate error, but that error was quickly corrected when, on 27 January 2004, they were redirected to the Procurator Fiscal's office in Glasgow, the appropriate destination. Thereafter, steps were taken to progress matters which required to be attended to. We were not persuaded that the difficulties arising from the lack of an appropriate style in the Crown Office computer programme amounted to a factor which was open to criticism. While no doubt a style could be prepared by any competent procurator fiscal, it was emphasised to us that it was necessary that a style should be inserted in the computer system, so that there could be appropriate liaison with the Sheriff Court authorities. Altogether we were not persuaded by counsel for the first named appellant that any sinister significance can be attributed to the period on which he, almost exclusively, based his appeal. In these circumstances we conclude that the Judge of First Instance did not err in refusing the appeal of the first named appellant.

[24] Turning to the position of the second named appellant, the criticism advanced on his behalf was of a more general nature. As we have already indicated, having examined the events which occurred during the undoubtedly prolonged period of time during which these proceedings have been live, we are not persuaded that the delay which has taken place is unreasonable in terms of Article 6(1). In connection with that appellant, we do not consider that the Judge of First Instance has erred. It cannot be said that he has ignored the period from 27 April 2004 to the projected date of the trial. Plainly he had regard to it, as appears from what he said at page 7 of his report, where he observed:

"It seemed to me that the sequence of event after the appellants appeared on petition was largely dictated by defence preparation and that the desertion in order to reconsider the charges was reasonable."

We do not think that that observation can be impugned. In all these circumstances the appeals are refused.