Case No: 96/4066/Z2, 96/4072/Z2, 96/5100/Z2
IN THE COURT OF APPEAL
CRIMINAL DIVISION
Royal Courts of Justice
The Strand
London WC2

Date: Thursday 7th November 1996

B E F O R E:

LORD JUSTICE HENRY

MR JUSTICE POTTS

and

THE RECORDER OF LIVERPOOL

(Acting as a Judge of the CACD)

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R E G I N A

‑v‑

CHARLES ADRIAN MARLOW
TRAVIS HENRY TILEY
DAVID LLOYD
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Computer Aided Transcript of the Palantype Notes of
Smith Bernal Reporting Limited
180 Fleet Street, London EC4A 2HD
Tel No: 0171 831 3183 Fax No: 0171 831 8838
(Official Shorthand Writers to the Court)
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MR T OWEN appeared on behalf of the CROWN

MR N PURNELL QC and MR WINTER appeared on behalf of the APPELLANT

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JUDGMENT

LORD JUSTICE HENRY: This case was a mortgage fraud.  For reasons given in the judgment handed down, the appeal will be allowed in Mr Marlow's case and the applications for leave to appeal against conviction in the other two cases are refused.  Copies of that judgment are available from the court.
		The question remains as to a retrial in the case of Mr Marlow.  We will hear submissions.
		We think that there should be a retrial on Counts 4, 7,8, 9 and 10.  We take the view that there is no jurisdiction for ordering a retrial on Count 6.  Accordingly, we allow the appeal.  We quash the conviction.  We direct that a fresh indictment be preferred.  We direct that the appellant be released on bail with the same condition, to attend court when required to do so.  We order legal aid for the retrial, solicitor and counsel.  We feel that this trial should be heard soon; there has been too much delay already.  We also think it should not be heard before the same judge.  We order expedition and that it be relisted for directions.
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LORD JUSTICE HENRY:  On 15th May 1996, in the Crown Court at Maidstone before His Honour Judge Rogers QC, the appellants/applicants were convicted and on 17th June and 15th July sentenced as follows:

	MARLOW	
Count	Offence	Sentence (17 June)	
4	Conspiracy to defraud	9 months imprisonment concurrent	
6	Obtaining by deception	15 months imprisonment concurrent	
7	Conspiracy to defraud	15 months imprisonment consecutive	
8	Conspiracy to defraud	15 months imprisonment concurrent	
9	Conspiracy to defraud	15 months imprisonment concurrent	
10	Procuring execution of valuable security by deception	9 months imprisonment concurrent	
	TOTAL SENTENCE 30 months imprisonment	
	TILEY	
Count	Offence	Sentence (15 July)	
7	Conspiracy to defraud	6 months imprisonment concurrent	
8	Conspiracy to defraud	6 months imprisonment concurrent	
9	Conspiracy to defraud	6 months imprisonment concurrent	
	TOTAL SENTENCE 6 months imprisonment	
	LLOYD	
Count	Offence	Sentence	
2	Procuring execution of valuable security by deception	2 years imprisonment concurrent	
3	Conspiracy to defraud	2 years imprisonment concurrent	
4	Conspiracy to defraud	2 years imprisonment concurrent	
5	Obtaining by deception	2 years imprisonment concurrent	
6	Obtaining by deception	2 years imprisonment concurrent	
7	Conspiracy to defraud	2 years imprisonment concurrent	
9	Conspiracy to defraud	2 years imprisonment concurrent	
	TOTAL SENTENCE 2 years imprisonment	

		Marlow appeals against conviction by leave of Butterfield J, who granted legal aid for leading and junior counsel.  He referred the application for leave to appeal against sentence to the Full Court.
		Tiley renews his application for leave to appeal against conviction and for legal aid after refusal by Butterfield J.
		Lloyd renews his application for leave to appeal against conviction and for legal aid after refusal by Butterfield J.
	Of the co-accused:
Peter Allen pleaded guilty on 12th March to counts 1/4 and 6/10, and was sentenced to a total of 3 years imprisonment.  Count 5 was left on the file;
Leslie Weller was acquitted (on counts 2/7 and 9);  and
Martin Gilbert pleaded guilty on 12th March to counts 5 and 8 and was given 250 hours community service concurrent.  Count 4 was left on the file.
		This was a two-month trial for a mortgage fraud, following the familiar pattern of sham purchases, or misrepresentation as to the proposed mortgagor's income, occupation and value of the security.  Marlow was a solicitor, Tiley a surveyor, and Lloyd an unqualified accountant.
		Allen was the principal mover in this.  He was a property speculator, who recruited the others.  He lied to obtain loans that would otherwise not have been granted, and made extensive use of his associate, Gilbert, who posed as a purchaser.  Weller was a chartered accountant whose firm, the Crown alleged, had authenticated Lloyd's bogus accounts, necessary because the lending institutions required proper accounts.  The essence of the case against Marlow, was that he did the conveyancing with knowledge of the deception, which he covered up notwithstanding his duty to ensure the true picture was presented to the lender when he was acting for both parties.  Tiley was accused of producing false valuations to justify the amount of the loan sought.
		Marlow relied on two principal grounds of appeal.  First, the circumstances arising from the fact that his co-defendants Allen and Gilbert pleaded guilty in the presence of the jury at the conclusion of the Crown's opening.  Second, in relation to Count 6, Marlow relies on a "Preddy" point (see R -v- Preddy, Slade and Dhillon [1996] 3 AER 481).
		We deal with the sequence of events which led to Allen and Gilbert's pleas of guilty being taken after they and the other defendants had been put in the charge of the jury.
This trial was conducted under the serious fraud regime laid down by the Criminal Justice Act, 1987.  His Honour Judge Croft was the judge who conducted the preparatory hearing.  Unfortunately he became ill shortly before the trial, and His Honour Judge Rogers QC stepped in at short notice, just before the jury section of the trial was due to commence.
		Allen had a particular reason for being interested in the possibility of pleading.  When first bailed, he had absconded, and after his recapture had, unsurprisingly, been remanded in custody.  That meant by the time that the trial commenced, he had all but served the equivalent of a 3 year sentence.  Therefore, if a sentence of 3 years or less was an appropriate sentence on a plea, successfully contesting the case would not get him out of prison any sooner:  indeed, it could delay his release.  So a formal approach was made to Judge Rogers to sound him out on his views as to the correct sentence in the case.
		The question was originally raised on Tuesday 5th March.  Quite understandably, the judge did not feel himself sufficiently familiar with the case to give Mr Sallon QC the indication he was seeking.  His suggested solution was that the application should be made to him after he had heard the Crown's opening (which he already had on paper).  He understandably felt that after hearing the opening and being taken through the relevant documents, he would be better placed to consider whether to give the indication requested.
		Mr Purnell QC for Marlow was very concerned as to the prejudicial effect on his client if Allen were to plead in this way.  The counts on which he was jointly charged with Allen were essentially joint enterprises or conspiracies, and he feared for the effect on his client, as the concept of A being guilty with B, but not B with A is not an easy one for a jury.  So he opposed the suggestion.  He indicated that he felt that, in the event that the pleas did follow the opening, he would have to make an application for the jury to be discharged.  But he suggested a simple solution:  that for the education of the judge the case against the two defendants who might plead should be opened by counsel for the Crown in the absence of the jury.

		Mr Cassell QC, counsel for the Crown, indicated a reluctance to open the case twice, and said that if it were opened to the jury and Allen pleaded thereafter, he would resist any suggestion that the jury should be discharged.
		The judge acceded to the suggestion that the case should be opened to the jury before he gave his indication.  He said:   "We cannot really get away from the ordinary procedure".  So the jury was sworn on Thursday 7th, and the opening began;  it occupied the remainder of Thursday, all of Friday, and it would seem, part of Monday.
		On the Monday, after the opening, the judge sat in chambers, heard submissions as to the right level of sentencing from Mr Sallon QC, and indicated that in his view on a plea three years was "... absolutely dead right on the authorities".  That sentence would result in Allen being released in approximately three weeks time and so was acceptable to him, as the sentence proposed in respect of Gilbert was to him.  The programme proposed was to have the pleas on the next day, and the sentencing the day after, protected by reporting restrictions.  The judge asked Mr Purnell whether there was likely to be an application for a new jury, and Mr Purnell was at that stage non-committal.  The judge said:
"I am doing all I can to block such an application being made".

He added:
"It seems to me we can probably get away without it, [presumably the discharge of the jury] in the circumstances of this case, but I could be wrong.  Again, the trouble is that one does not really bother to assess the pros and cons of a situation of that sort until it happens."

		Mr Purnell reasonably complains of the last sentence - as there was an obvious alternative course for the case against those two defendants being heard in the absence of the jury, a look ahead to the next stage in considering the position would not have come amiss before the case was opened to the jury.  We will revert to the pros and cons then existing.  The next day Mr Purnell made his application to discharge the jury.  He pointed out that but for Judge Croft's illness:
"This situation would never have arisen, and this jury would not know now of the pleas of guilty of Allen and [Gilbert] without the consent of [Marlow], without the consent of the Defence for all those that remain in the dock."

		That was because Judge Croft would have been in a position to give an indication before the opening, so the pleas would have come before the opening, and so, absent the Defence consent (which would not have been forthcoming) the jury would not know of them.  He dealt with the prejudice:
"That the change of pleas can only have been taken as an acknowledgement of the force of the opening; that the allegation was of an overall conspiracy, which required a compliant and dishonest solicitor to work; that the sight of Allen and Gilbert in the dock had itself been prejudicial, because Allen was a broken man, and did not look sufficiently confident and plausible to be the rich and successful that Mr Marlow said that he had assumed him to be.

		He made the point, which has never been challenged, that neither Allen nor Gilbert's pleas of guilty were admissible evidence against him, and therefore did not fall within the purview of Section 74 of the Police and Criminal Evidence Act.

		At the conclusion of Mr Purnell's submissions the judge simply asked counsel for the Crown whether he would have changed a word of his opening if Allen and Gilbert had not been in the dock.  Mr Cassell replied that he would not have, and the judge then indicated that he did not want to hear any more from him.  The judge ruled as follows:
"In the circumstances I regard the argument ... as being technical and having little foundation or merit.  I simply do not accept that the pleas of those two people at the time it came caused any prejudice to your client and in those circumstances the trial will proceed."

		That is the ruling challenged, but that challenge is wrapped up in a general complaint that the defence should never have been put in the situation where such a challenge was necessary because these pleas should have been taken before the case was opened to the jury.  Had that been done, the jury would never have known of the pleas.
		This is because it is common ground that, as the jury were told, the pleas of guilty were not admissible against Marlow (or the other defendants) because they were not relevant to any issue in those proceedings.  Therefore, the fact of the pleas (if taken pre-trial) were not admissible under Section 74 of the Police and Criminal Evidence Act 1984.  Nor has it been contended that they could have been mentioned in the opening under the common law (and we rather doubt on the facts before us whether Section 74 leaves any room for any such common law discretion).  The defence would not have agreed to the jury being told of those pleas.  In those circumstances we subscribe to what Archbold refers to as:
"the predominant and more cautious [judicial] view" that the jury should not be told of the convictions without the other defendants' consent (see the commentary in Archbold 1995 1-264 and 9-83/92).
		So knowledge of the pleas would only get before the jury if the pleas were subsequent to the arraignment.  Once the co-accused is in the charge of the jury, the jury must know of and act on his pleas.  And it was not necessary for the pleas to await the opening to the jury:  the object of the opening was properly to inform the judge, and that could be expeditiously and efficiently done by the Crown opening the case affecting those defendants to the judge in private (or the judge himself going through the opening with the documents).  Neither course would have taken more than two or three hours and we see no disadvantage to the trial process in either course being followed.
		On the other hand, the course that was followed obviously and predictably would provoke a challenge to the integrity of the trial.  The rules of evidence are there to prevent prejudicial matter getting before the jury save where the public interest in all conspirators or joint venturers being tried together requires it.  Here the defence were deprived of their right to keep the fact of the pleas from the jury for no reason justified by that public interest.  We regard that as a clear irregularity in these trials, and the issue in our view is whether that irregularity casts doubt on the safety of these verdicts.
		We have no hesitation in concluding that it does.
		First, the conduct of the defence would have been quite different if the jury had not started by having seen the principal conspirator dramatically change his plea after a powerful opening (and they were not to know - and were never told - that this decision was rendered much less momentous by reason of the time in prison that he had already served and the mathematics of his release date).  Second, however often they were told that the plea was an irrelevance, and that B may be guilty of conspiring with A while A may not be guilty of conspiring with B, the jury may not (however well instructed) be impressed by so fine a point, and the risk of prejudice in this situation has often been judicially acknowledged (eg the cases requiring consideration in both Sections 74 and 78 of the Police & Criminal Evidence Act, for instance R -v- O'Connor 85 CAR 298 and R -v- Fedrick 1990 CAR 403).  Third, Counsel for the Crown sought to build on the jury's sight of Allen by suggestion that his appearance in the dock (5 years after the offences and after a long time in prison) cast doubt on the defence picture of him as a successful and plausible businessman.  Fourth, the irregularity was one easily avoided and deliberately incurred in the teeth of foreseeable defence objection.  There was simply no justification for requiring the defence to run the risk of the prejudice outlined.  Leading counsel told us that for him the reality of the prejudice he felt in conducting the defence exceeded the fears on which he has asked for the jury to be discharged and we are not surprised.  In the circumstances, warnings and instructions to the jury may not have been enough.  There was no justification for compelling the defence to run this risk.  Marlow's appeal should succeed on this point.
		The appeal should also succeed on Count 6, a conviction shown by the House of Lords in Preddy (supra) to be unsupportable in law, because the transfer alleged (a telegraphic transfer) was not of "property" as defined in the Act.  But we would not have been persuaded that the failure of the conviction in that count affected the validity of the convictions in the other counts.  But that point is academic in relation to this appellant having regard to our conclusion on the first point.
		As the point is also live in the application of Lloyd (renewed on a non-counsel basis, having been refused by the single judge) we add this by way of amplification.  What was alleged in the Preddy count could have been charged as a conspiracy.  Had it been so charged, on the view of the honesty of the defendants that this jury took, they would have been convicted.  Thus while the appeal on the Preddy counts must succeed, it is unreal to go further and suggest that that evidence should not have been before the jury, and consequently undermines all convictions.
		We heard orally and refused Tiley's renewed application for leave to appeal against conviction.  The dishonesty alleged was over-valuations of property.  The principal point taken was that there had been no case to answer because in some instances the Crown had called no evidence of the value of properties in a new development, only as to their list price.  Mr Tiley had contemporaneously valued the properties, 2 at approximately 50% above list price and 1 at 27% above.  It seemed to us clear that there had been evidence before the jury entitling them to convict as they did.
		We would not grant leave to appeal against conviction to either Lloyd or Tiley on any grounds contained in their present applications for leave to appeal (other than in formally quashing the "Preddy" counts).  We will however wish to hear submissions as to whether there should be a new trial in the case of Marlow.