Neutral Citation Number: [2014] EWCA Crim 692
Case No: 2013/01196/C2
IN THE COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM THE CROWN COURT AT BLACKFRIARS
His Honour Judge Marron QC

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 10/04/2014
Before :

LORD CHIEF JUSTICE OF ENGLAND AND WALES
MR JUSTICE KEITH
and
MR JUSTICE ROYCE
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Between :

	Regina	Respondent	
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	Rohan Anthony Pershad	Applicant	

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Mr David Perry QC and Mr Rupert Jones (appearing pro bono) for the Applicant
Mr Andrew Marshall for the Respondent

Hearing date: 5 March 2014
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Judgment
Lord Thomas of Cwmgiedd, CJ : 
The issues
1.	On 11 February 2013 the applicant, then a practising Queen’s Counsel, was convicted of cheating the public revenue in the Crown Court at Blackfriars before HH Judge Marron QC and a jury.  On 26 February 2013 he was sentenced to three years and six months imprisonment.  His application for leave to appeal was referred by the Registrar to this court.  That application contained two principal grounds:
(i)	During the cross-examination of the applicant by the prosecution documents not previously disclosed nor adduced as part of the prosecution case were put to the applicant and he was cross-examined on them.
(ii)	The summing-up was unbalanced, unfair and defective.
The non-payment of VAT by the applicant
2.	The applicant was a practising barrister, having been called to the Bar in 1991.  He became a tenant at the chambers of Christopher Purchas QC, at Crown Office Row in the Temple.  He became a registered trader for VAT with effect from 1 January 1993.  Although his compliance with the requirements of VAT registration was not unblemished, he accounted for his VAT.
3.	In 1999 he left Crown Office Row and joined chambers at 39 Essex Street, London, a well-known set of chambers.  He practised there principally in the fields of professional and clinical negligence.  He took silk in 2011.
4.	Between 1999 and 2011 he had an obligation to account for the VAT received on the fees he charged, to complete VAT returns and pay over the VAT due.  In that period he charged VAT on his applicable fees, he received the VAT payments made to him by his professional clients, but he failed to account for that VAT to HM Customs & Excise/HM Revenue & Customs.  The unpaid VAT was in the region of £600,000-£620,000.
The defence case
5.	It was the applicant’s case that, while he accepted that the VAT had not in fact been paid, his belief at the material time was that it was being paid on his behalf by his chambers at 39 Essex Street as part of the contribution he paid to chambers for accommodation and expenses.  He also relied on a conversation with Nigel Cheshire, the fees clerk who had been employed at 39 Essex Street, whom he claimed had told him that chambers looked after and paid the VAT.
6.	He said he had written within days of his move to 39 Essex Street, informing both the Revenue & Customs and HM Inspectors of Taxes of his change of address.  His move to 39 Essex Street received publicity in the trade press of the legal professions.  He had not received returns and assessments from HM Customs & Excise relating to the August and December 1999 quarter returns as they had been sent to his previous address; he did not recall receiving Form 484 in 2002 at his new address.  He did not look at his fees notes; he took the cheque and threw the fees note away.  The documents sent to him by chambers recorded his fees and VAT; he did not ask for a reduction in his contribution for overseas work that did not attract VAT as chambers were obtaining that work for him.  In short he had a genuine belief that his chambers at 39 Essex Street were paying VAT on his behalf.  This was being funded by Chambers from his chambers contribution which he made each quarter.  He concentrated on being a barrister and not being a business man.
The prosecution case
7.	The response of the prosecution to the defence case was:
(i)	He had not paid VAT for 12 years.
(ii)	The VAT payments that the applicant received were not declared as part of his overall income to the Inland Revenue; this excluded the possibility of an honest mistake arising from a misconceived accounting practice.
(iii)	Upon joining 39 Essex Street, he failed to carry out his statutory duty to notify a change of principal place of business to the Revenue & Customs.
(iv)	Neither 39 Essex Street nor any other chambers paid individual barristers’ VAT out of contributions by members to chambers.  In the experience of all of those who gave evidence, a barrister could not expect his chambers to pay the barrister’s VAT out of the contributions that individual barristers made to chambers.  There was evidence from Mr Christopher Purchas QC, the head of the chambers at Crown Office Row, that member barristers personally accounted for their VAT.
(v)	In the first quarter in his new chambers at 39 Essex Street there was no basis for his new chambers to account for the VAT earned on fees in his old chambers.  He could not therefore have believed that somehow his new chambers would discharge that liability.
(vi)	He must have received forms from Revenue & Customs which must have made it clear to him that VAT was not being accounted for.
(vii)	39 Essex Street had never had a system under which any barrister had his VAT paid for out of his chambers contribution.
a)	The senior clerk of 39 Essex Street had made clear in his evidence that if members paid 22.5% chambers contribution on their net fees and the bulk of that was used to pay VAT at 17.5%, then the remaining 5% would not be sufficient to pay for the building lease, let alone anything else.
b)	When the applicant joined 39 Essex Street the relative rates of contribution were 22.5% for chambers and 17.5% for VAT.  In later periods, when VAT became 20%, the contribution was 22%.  If the applicant’s belief had been correct, that would have only left 2% as a contribution to the expenses of chambers.
c)	Members of other chambers gave evidence that in no case was VAT paid from members’ contributions; some chambers provided differing levels of administrative support, but in all cases it was the barrister who personally signed the VAT return and paid the liability.
d)	Nigel Cheshire expressly denied that the applicant’s account of the conversation with him; he left about 6 to 8 weeks after the applicant joined.  The applicant never checked the matter with more senior members of chambers
e)	The Chief Executive of 39 Essex Street gave evidence that the applicant had complained in chambers’ meetings about the high rate of chambers’ contribution; whilst that was a complaint that might have been valid in respect of a chambers’ contribution of 22%, it was unsustainable if, according to the belief advanced by the applicant, the rate had only been, after the payment of VAT, 2% or 4½%.
(viii)	The applicant at times worked abroad; on such work VAT was not charged.  Therefore it must have followed on his account that no VAT liability would arise for the applicant’s chambers to discharge in respect of that work.  Nonetheless chambers charged the same contribution on his net fees from overseas work.
The case advanced by the prosecution was formidably powerful.
8.	In this court Mr David Perry QC and Mr Rupert Jones appeared pro bono on behalf of the applicant.  Accepting the formidable case against the applicant, Mr Perry QC contended that the conviction was unsafe on two principal grounds which we now turn to consider.
9.	We wish to pay particular tribute to the exceptional thoroughness with which Mr Perry QC and Mr Jones prepared the appeal.  The work undertaken by them was careful and meticulous.  The application was presented with characteristic eloquence and fairness.
Ground 1 of the appeal: submission of undisclosed documents during cross-examination
Factual background
10.	In the course of his cross-examination, the applicant was questioned upon the content of two documents in the possession of the prosecution which had not been disclosed.  The two documents were:
(i)	A note by the investigating officer of what had happened on 24 September 2011 when the applicant was first informed of the investigation when investigators visited his home address at Virginia Water.
(ii)	The divorce financial settlement agreement of 2009 concerning the applicant and his former wife.
1	The note of the visit to the applicant’s home on 24 September 2011
(a)	The visit
11.	On Saturday 24 September 2011 two officers of the Revenue & Customs visited the applicant’s home address in Virginia Water to hand deliver a letter dated 24 September 2011 in relation to the applicant’s failure to pay VAT.  The letter requested the applicant to attend a police station for interview under caution prior to 12 October 2011.
12.	One of the officers made a note in his notebook.  The note recorded that the applicant read the letter and then said: “It’s fine”.  In contrast when interviewed two weeks later on 11 October 2011, the applicant had said he was shocked.  The note was not produced at the interview and the account he gave at interview that he was shocked was not challenged during the interview.
13.	The fact that the entry had been made was referred to in the unused material disclosure schedule; it was marked not disclosable.  The reason advanced by the prosecution was that there was nothing about the contents of the notebook that passed the disclosure test, the contents did not undermine the prosecution case nor did it assist the defence case.
14.	The letter inviting the applicant for interview described him as a missing trader and dealt with some of the background. 
(b)	The examination-in-chief and cross-examination of the applicant 
15.	When the applicant was asked in his examination-in-chief about his reaction at the time he said he was horrified, absolutely horrified and he was completely shell-shocked – an account similar to that given in his interview.
16.	He reiterated that his reaction was shock, absolute shock in the initial stages of his cross-examination.  He added that he thought as if his whole world had fallen apart and it must be a mistake.  When his cross-examination resumed on the following day, counsel for the Crown asked the applicant why he had not said to them that chambers paid the VAT.  Counsel then said to the applicant, “You never protested at all” to which the applicant answered, “Nonsense”.  He added that he had said something, “I don’t know what this is about”.  He did not recall saying, “It’s fine”.
(c)	The prosecution case as to the late disclosure of the note
17.	When the applicant said what he had said, the prosecution considered that the note of the conversation was made relevant by the answers, as prior to that time there appeared to be no issue as to his recollection at the time and his answer, “It’s fine” and his failure to mention that his chambers had paid the VAT.
(d)	The applicant’s case
18.	It was contended on behalf of the applicant that this court had made clear that it was a general principle of practice, though not a rule of law, requiring that all evidential matters that the prosecution wished to rely on as probative of guilt should be adduced before the close of the prosecution case.  That was because the defendant had to know the case he was to meet before he gave his answer to the case or decided to go into the witness box:  see R v Rice [1963] 1 QB 857 at 867; R v Phillipson (1990) 91 Cr App R 226 at 235.  
19.	The applicant also contended that the conversation was subject to Code C:11:13 of the Code of Practice under PACE which provides:
“A written record shall be made of any comments made by a suspect, including unsolicited comments, which are outside the context of an interview but which might be relevant to the offence.  Any such record must be timed and signed by the maker.  When practicable the suspect shall be given the opportunity to read their record and to sign it as correct or to indicate how they consider it inaccurate.”
It was also contended that no opportunity was given to the applicant as required by Code:11:13 either at that time or when he was interviewed under caution on 11 October 2011.  If proper notice had been given to adduce the detail of that conversation, it would have been inadmissible as being unfair in the consequence of the failure of the investigators to comply with C:11:13.
20.	It was contended that questioning the applicant upon the contents of the note carried with it the danger that the jury might attach significance to answers given as recorded in a document on which the applicant had been given no opportunity to consider and approve.  Furthermore it was clear that the Crown was trying to use the document to undermine the credibility of the applicant.
(e)	Our conclusion
21.	We have little doubt that the document should have been disclosed and been relied on by the prosecution as part of its case; there was a contrast, on the basis of the note, between his initial reaction and what he said in his interview and in his evidence at trial.  As what he said in interview was no different to what he said at trial, it is therefore difficult to accept the prosecution submission that it only became relevant when he gave evidence.
22.	However, the important point was, in our view, the fact that he did not tell the investigators that his VAT had been paid by his chambers and that there had been a terrible mistake.  Furthermore, bearing in mind the seriousness of the position once he had been told on 24 September 2011 by the officers of their allegation, the applicant did not take immediate steps over the weekend to contact his chambers and ascertain the position. 
23.	Thus although, in our view, the prosecution did not act as it should have done, the error on its part did not have any material effect either on the fairness of the trial or on the safety of the conviction.
2	The divorce financial settlement agreement
(i)	The applicant’s matrimonial position
24.	In 2007 the applicant separated from his first wife whom he had married in 1990.  In July of that year they purchased a property in Somerset in joint names; his first wife continues to live there.  In August 2007 they purchased the property at Virginia Water in joint names; the applicant lived there until it was sold.
25.	Divorce proceedings began with a divorce petition in March 2009 and a divorce was granted in 2010.  A formal financial settlement agreement was made between the applicant and his former wife.
26.	It was clear that the applicant still owed £600,000 or thereabouts as outstanding VAT.  In addition the applicant owed considerable amounts of income tax.  In June 2012 the applicant paid £250,000 to HM Revenue & Customs behalf of the applicant; the applicant’s evidence was that he thought that this was to be applied to pay the VAT.  His accountants allocated that sum towards his income tax liabilities rather than the VAT liability.  
27.	In November 2012 the house in Virginia Water was sold when the applicant could no longer afford the mortgage payments.  The applicant explained in evidence how he paid some of the proceeds of the sale of the house in Virginia Water to discharge the mortgage on the house in Somerset in which his former wife lived.
(ii)	His explanation in his evidence as to his intention to pay VAT and the use of the Virginia Water proceeds
28.	In his evidence-in-chief the applicant said that he always wished to pay his VAT but circumstances had prevented him doing so.  He also mentioned the sale of the house in Virginia Water.
29.	The prosecution in their cross-examination of the applicant sought to show that when he used the proceeds of sale to discharge the mortgage on his former wife’s house in Somerset, he was preferring help to his former wife to discharging debts to the Revenue.  The prosecution asked him about the distribution of the sale proceeds of the Virginia Water house in 2012 and why he had not used the proceeds to discharge the VAT that was due.
30.	He said that under the financial settlement agreement after his divorce it had been agreed that when the Virginia Water house was sold, half of the equity would be provided to his former wife so that she would then be able, after 18 years of marriage, to pay off her mortgage to leave her in the position where she did not have a mortgage.  That had been agreed.  He then said that half of it was paid to his wife as agreed and he had half of it which he had spent on other items.  When asked further about the agreement with his wife he said the agreement was made when the divorce took place.  He was asked to produce it.  On the following day he repeated in similar but different terms what he had said.
31.	A copy of the divorce petition which had been obtained by the Revenue & Customs during the course of the investigation was then put to him.  He confirmed the document contained no provision about the discharge of his former wife’s mortgage on the Somerset property or the distribution of the equity in the Virginia Water house.  He then said it was not the complete financial agreement; he had promised his wife he would buy her a house and she would end up having that mortgage free when the Virginia Water house was sold.  No document evidencing that agreement was produced.
32.	He was next cross-examined about a document provided by Intelligent Finance dated 30 January 2013 which the applicant had put before the jury.  That showed the Somerset property was still subject to mortgage but he accepted that the mortgage had been paid off as a result of the sale of the Virginia Water property.
33.	It was the prosecution case that, if they had not asked those questions, the jury would have been left with documents that were misleading and a declaration that was misleading, namely that the applicant had done what he could to pay the VAT off.
34.	The position was, in fact, that:
(i)	The released equity in the Virginia Water house was £554,000.
(ii)	£222,000 had been paid to his former wife to discharge the outstanding mortgage on the Somerset property.
(iii)	As to the balance of £332,000, £166,000 had been provided to his former wife and £166,000 retained by himself.
(iv)	The effect of this was that out of these assets (quite apart from other sums paid to his former wife) the applicant had received £166,000 and his former wife £388,000 after the applicant had been made the subject of criminal proceedings.
(iii)	The applicant’s case on appeal
35.	It was submitted that the cross-examination was irrelevant as it related to a period after the VAT claim.  It also carried the implication that the applicant preferred to pay his wife than VAT; that he was untruthful about the agreement and his intention ever to pay the VAT due; that it was implying a dishonest state of mind by preferring his former wife to the Revenue and by showing his statement that he intended to pay was not true.
36.	The judge had exacerbated the difficulty by mentioning the issue in his summing-up as the fifth of six issues to which we refer at paragraph 49 below.  He told the jury that the prosecution did not have to prove that the applicant was wrong to send the monies for the sale of the Virginia Water house to his former wife to discharge the mortgage on the property in Somerset.  He said:
“That is not what the crown have to do.  I am not for a moment suggesting that all of these matters do not assume relevance.
It is a matter for you to decide whether they do or not.  That is why you decide the facts, but do not conclude that the crown in order to succeed in this prosecution have to prove any of those matters.  The point for you to address is has he deliberately and dishonestly failed to pay his VAT at any time during that 12-year period.”
37.	The judge was simply wrong, Mr Perry QC submitted, in telling the jury it was for them to decide relevance; relevance was a matter upon which the judge should have directed the jury.  Mr Perry QC also submitted the judge was in error in being so imprecise when using the term “wrong” as it could either mean morally wrong or unlawful.
38.	We accept Mr Perry QC’s submission that relevance was a matter on which the judge should have directed the jury.  The judge should have directed them to decide whether the conduct in 2012 was dishonest or not, and, if he had been dishonest in 2012, its relevance to the offence with which he had been charged, which had occurred earlier.  We shall return to this part of the summing up at paragraph 49 during the course of our consideration of the second ground of the appeal.
39.	However, no complaint can properly arise out of the failure to disclose the financial settlement agreement relating to his divorce.  It was his document, the document did not in any event on his evidence contain the entire agreement and its materiality only became of marginal importance during his cross-examination.
Ground 2: Deficiencies in the summing up
40.	There were four complaints to which we will turn.  Mr Perry QC accepted that the judge was under no obligation to rehearse all the arguments made by counsel and that brevity was a virtue.  However, as he submitted, a judge was bound to give the correct directions in point of law, and a fair and accurate review of the facts. 
(i)	The structure, content and judicial comment in the summing-up effectively negated the directions given to the jury that they were the finders of fact.
41.	Mr Perry QC relied on various passages in the summing-up.  His first submission was that the judge made comments adverse to the applicant’s case which carried the implication he was guilty.  Mr Perry QC pointed to the start of the summing-up in which the judge described the conduct alleged as the applicant allowing “himself to be sucked into a vortex of dishonesty”; he submitted that this was unfair.
42.	He pointed to the judge’s comment on the evidence of the applicant where the judge highlighted the prosecution point that the applicant was complaining at a chambers meeting about the high percentage contribution.  He drew attention to the prosecution case that, if the applicant was complaining about that, then the rate must have been higher than he was telling the jury in evidence.  Mr Perry QC pointed out that despite the fact that the applicant denied the assertion in his evidence and provided an explanation, the judge did not mention it.
43.	Mr Perry QC next referred to the concluding passage of the judge’s summary of the applicant’s own evidence where the judge drew attention to the fact that a trader collecting VAT was collecting it on behalf of Revenue and Customs.  He contrasted this with the applicant’s evidence that he believed he was entitled to claim the whole of his chambers’ contribution (which on the applicant’s case included VAT) as a legitimate expense he could set off against his income tax.
44.	Mr Perry QC submitted that if these passages were considered together, it was clear that at the beginning and end of the summing-up the jury were left with strong adverse judicial comment which did not fairly reflect the state of the evidence.
45.	We cannot accept this criticism.  Although the start of the summing up was, as the judge himself said, unconventional, it was not unfair.  The other points were significant points that told against the applicant.  It was not unfair to make them.
(ii)	The good character directions and the direction as to the evidence of character adduced by the defence before the jury failed to put the issue fairly before the jury
46.	The judge’s direction on good character was as follows:
“Mr Pershad is of manifest good character.  That is relevant and significant in two independent ways.  First of all, the man I think in his 40s.  He has not done anything dishonest before and because of that he is entitled to ask you to factor that into the equation in assessing his credibility.  But it is also relevant in an independent way that he had not done anything dishonest before, he is not inclined that way and in the context of propensity, he can ask you also to take that into account.
It does not take me to tell you ladies and gentlemen that good character is not a defence.  We all start off in life with a good character, whether we end up at the end of life with a good character depends on what we do between birth and death is it not, but it is a matter which you should consider in the context in which I have described it.”
It was submitted that the direction did not adequately explain the nature of credibility and the likelihood the applicant was telling the truth when giving evidence.  The direction did not adequately explain the meaning of propensity, namely whether it was likely that the applicant would act dishonestly as alleged by the prosecution.  The jury, it was submitted, were not directed that they must have regard to good character in both contexts as required by the law.
47.	Mr Perry QC emphasised the importance of the issue of character in the case, as the whole case turned on the credibility of the applicant in relation to his explanation as to why he had not paid VAT.  He complained that there was no mention in the summing-up that the applicant was a respected member of the Bar who had worked himself to a senior position as Queen’s Counsel.  Nor did the judge set out the applicant’s evidence to the effect he would not do anything to jeopardise his career.  The judge did not say anything about his upbringing, education, employment or his disorganisation.  The judge did not mention the character evidence that had been called on the applicant’s behalf, save for his former wife and a brief mention of one solicitor who had given evidence in person.  
48.	Again we accept that there is some force to the criticism of the way in which the judge approached this issue and it would have been much more helpful to the jury if the direction had been fuller.  However, the judge did set out the two essential parts of the direction and did draw to the jury’s attention the evidence of his wife as to the applicant’s disorganisation and the many statements of good character before the jury. 
(iii)	 The recitation of the six issues that the prosecution were not required to prove failed to explain how those issues might nevertheless be relevant to a consideration of the applicant’s state of mind
49.	We have referred at paragraph 36 to one of the six issues which the judge enumerated as issues that the prosecution did not have to prove; he said of them that he was not saying that all of the matters did not assume relevance; it was for them to decide whether they were relevant or not.  As we have already observed at paragraph 38, the judge should have directed the jury on relevance. 
50.	However, the sixth issue apart, they were not of material significance.  The sixth issue was of importance but although, as we have set out, he did not explain its relevance, the way in which the judge approached the issue was such as to make it clear that the jury should only be concerned with the question of whether the applicant had deliberately and dishonestly failed to pay his VAT. 
(iv)	The way in which the evidence overall was summarised provided an unbalanced picture of the evidence before the jury and effectively negated the evidence given by the applicant and his witnesses.  He did not properly put the defence case.
51.	The fourth point taken by Mr Perry QC was that the summary of the evidence was unbalanced in that it had the overall effect of negating the evidence given by the applicant and his witnesses.  It contained material inaccuracies.
52.	Mr Perry QC pointed to the defence issues, including the conversation with Mr Nigel Cheshire, the significant difference in the higher contributions charged by his new chambers, the fact he had written to both HM Customs & Excise and HM Inspector of Taxes on changing address, that he had never had any communication in the form of returns or correspondence from the Customs in relation to VAT, that throughout his time at 39 Essex Street he received no prompts from chambers as to paying VAT, that he was extremely disorganised in his personal life and his good character.  He did not refer to the fact that no complaints had ever been made about his work as a barrister.  Mr Perry QC, for example, complained that in relation to the evidence of Nigel Cheshire, the judge did not draw attention to the fact that his evidence was disputed; on the contrary the judge appeared to be endorsing the reliability of Mr Cheshire.  Mr Perry QC went on to say that the judge oversimplified and misstated the applicant’s defence.  He pointed to the inappropriateness of the following judicial comment.
“So on the basis of that one conversation, ladies and gentlemen, with the fees clerk, not the head of chambers or the senior clerk, the defendant did not do any returns or pay a penny of VAT himself for the ensuing 12 years.  Nothing occurred in that period to alert him that anything at all was wrong about what was allegedly occurring.”
53.	Another example put forward by Mr Perry QC was that the judge omitted to include the evidence that the applicant did not study his chambers’ bills with any care and would sometimes not even open them.
54.	Mr Perry QC also provided us with a schedule of inaccuracies in the summing up.  We regret to conclude that for the most part the schedule was well founded. 
55.	However, none of these inaccuracies made the summing up unbalanced or unfair when the summing up is read as a whole.  Nor did the omissions of the evidence have that effect.  There was one essential point in the case – had the prosecution proved that the account given by the applicant was untrue and that the failure to pay VAT was dishonest.  The summing up contained the essential points made by the applicant on that issue.
Our conclusion on the summing up
56.	The summing up was, we regret to conclude, one that was open to material criticism for the way in which it was constructed and the inaccuracies it contained.  This court does not expect a judge in this day and age to deliver a summing up in a case such as this which is not properly prepared and which fails to set out the evidence in a manner which is helpful to the jury.
57.	Nonetheless despite this criticism of the way the judge approached the preparation of this summing up, we do not think that this rendered the conviction unsafe.  The summing up contained directions of law which were essentially correct and a summary of the evidence which, although woefully organised and inaccurate in some respects, was not significantly inaccurate and was not in any way unfair.
Overall conclusion
58.	The application was presented to the court by Mr Perry QC and Mr Jones in a way which drew to the court’s attention to the case that properly and forcibly could be made as to why the conviction was unsafe.  However, the evidence against the applicant was formidable in its strength.  Despite our criticisms of the trial judge, there were more than sufficient grounds for the conclusion that the applicant’s explanation of his failure to pay VAT was incapable of belief.  The conviction is entirely safe.  The application for leave to appeal is therefore refused.