Attorney General v Young, Cantrade Private Bank Switzerland (C.I.) Ltd, Stoneman and Williams

• Jurisdiction: Jersey
• Court: Royal Court
• Judge: Le Quesne, Commr.:
• Judgment Date: 12 January 1998
• Date: 12 January 1998

ROYAL COURT

Le Quesne, Commr.:

C.E. Whelan, Crown Advocate, for the Crown;

D.F. Le Quesne for the first defendant;

A.R. Binnington and D.R. Wilson for the second defendant;

M.M.G. Voisin for the third defendant;

S.J. Young for the fourth defendant.

Cases cited:

(1) Att. Gen. v. R, 1995 JLR 315, applied.

(2) R. v. Linnell, [1969] 1 W.L.R. 1514; [1969] 3 All E.R. 849; (1969), 53 Cr. App. R. 585; 133 J.P. 707; 113 Sol. Jo. 812, distinguished.

(3) R. v. Markus, [1976] A.C. 35; [1964] 3 All E.R. 705; [1974] Crim. L.R. 603; (1974), 118 Sol. Jo. 809; on appeal, sub nom. Trade Secy. v. Markus, [1976] A.C. 35; [1975] 1 All E.R. 958; [1975] Crim. L.R. 716; (1975), 61 Cr. App. R. 58; 119 Sol. Jo. 271, considered.

Additional cases cited by counsel:

Att. Gen. v. Ahier, 1981 J.J. 29.

Att. Gen. v. Pennington, 1970 J.J. 1349.

Brooks v. Bagshaw, [1904] 2 K.B. 798.

Chiltern D.C. v. Hodgetts, [1983] 1 All E.R. 1057.

Hughes v. Trapnell, [1963] 1 Q.B. 737.

Lapidus v. Att. Gen., 1987-88 JLR N-7.

R. v. Enfield Magistrates, ex p. Caldwell, Queen's Bench Division, Transcript No. CO/4003/95, unreported.

R. v. Mackinnon, [1959] 1 Q.B. 150.

R. v. Wimbledon JJ., ex p. Derwent, [1953] 1 All E.R. 390.

Thorpe v. Priestnall, [1897] 1 Q.B. 159.

Legislation construed:

Depositors and Investors (Prevention of Fraud) (Jersey) Law 1967, art. 12: The relevant terms of this article are set out at page 42, lines 3-11; lines 37-39.

Law Reform (Miscellaneous Provisions) (Jersey) Law 1978, art. 2(2): The relevant terms of this paragraph are set out at page 27, lines 13-18.

Criminal Procedure—institution of proceedings—when proceedings instituted—proceedings instituted when charges formally put to accused, either orally or in writing—unnecessary that plea entered or that defence given opportunity to read charges at that stage

Criminal Procedure—charges—indictment—unnecessary that indictment against defendant verbally identical to charges in summons—need only be sufficiently similar for defendant to know substance of allegations

Criminal Procedure—institution of proceedings—powers of Attorney General—Attorney General has power to decide whether evidence sufficient to bring prosecution—no presumption that charges containing some general allegations show Crown has insufficient evidence to proceed—further particulars only necessary at later stage

Financial Services—investor protection—fraudulent inducement to investors—fraudulent inducement to take part in arrangements under Depositors and Investors (Prevention of Fraud) (Jersey) Law 1967, art. 12(c) committed by act of inducement—offence then completed and no continuation merely because investor remains in scheme

Criminal Procedure—institution of proceedings—prescription—charges apparently prescribed not necessarily struck out if possible that when allegations particularized, proceedings in fact instituted within limitation period

The defendants were each charged with a number of counts of inducing various persons to take part in arrangements with respect to the management of property by statements known to be misleading, false or deceptive, by the dishonest concealment of material facts or by recklessly making misleading, false or deceptive statements contrary to art. 12(c) of the Depositors and Investors (Prevention of Fraud) (Jersey) Law 1967.

Two companies ("Troy") invited investors to deposit money with them to be used for trading in foreign currency at a profit. This money was placed in the account of a third company ("TTSI") held at the second defendant bank. Troy was allowed credit by the second defendant for the purpose of the foreign exchange dealings, which were conducted by the first defendant. The advertising material of those companies assured potential investors that the first defendant's trading was safe and profitable. The bank sent regular and accurate statements to the first defendant, who then allegedly sent out false valuations to Troy. On the basis of these valuations, the investors were sent reports which showed that their investments were increasing in value, when in fact they were incurring substantial losses. The third defendant was a senior manager of the second defendant, who apparently knew about the losses but who nevertheless told the investors that their investments were safe and that the trading was profitable, and that he was monitoring the trading when in fact he was not. The fourth defendant was a chartered accountant who was alleged to have certified that on the basis of an independent audit, the accounts of the first defendant's trading were correct, knowing that no such audit had in fact taken place.

The first defendant had an agreement with Troy, of which the investors were not told, whereby he received 15% of the net profit from his trading. It was alleged that because his profits were based on the false figures, he obtained large sums to which he was not entitled, making personal profits whether the currency deals were profitable or not.

The defendants were subsequently charged under art. 12(c) of the Depositors and Investors (Prevention of Fraud) (Jersey) Law 1967 with having committed various fraudulent inducements on the companies and on the investors (in the case of the fourth defendant, the "TTSI Investors"). Because of the complex nature of the alleged frauds, the police investigation took a considerable time to establish precisely what had occurred, such as the exact dates on which the fraudulent inducements were said to have been made, and the persons said to have been induced to invest their money. By art. 2 of the Law Reform (Miscellaneous Provisions) (Jersey) Law 1978, the limitation period for prosecuting such offences was three years and apparently shortly before the expiry of this period, the defendants were charged accordingly. In the case of the first defendant, a warrant had been obtained for his arrest prior to his being charged.

It appeared that in the Magistrate's Court, the first, third and fourth defendants were handed written copies of 29 charges against them in writing, which were not read out and to which no pleas were entered because defence counsel had had no time to read the charges. At a subsequent hearing, a further 11 charges were put to them in writing and again no pleas were entered, although it was agreed to take them as read. The second defendant was summoned to appear before the Royal Court, the charges against it attached to the summons. It was then indicted on those charges and although the wording of the indictment was not identical to that contained in the charges, the offences alleged were substantially the same, with minor discrepancies over the precise dates of their commission and the persons alleged to have been induced to invest their money in the scheme.

The defendants submitted, inter alia, that most of the charges against them were prescribed, because (a) more than three years had elapsed between the dates of the alleged offences and the time when proceedings were instituted against them, which could not have been before all the charges had been properly put to them and their counsel given the opportunity to read them; and (b) time had started to run when the acts "inducing a person ... to take part or offer to take part in any arrangements" were done and the alleged offences under art. 12(c) did not continue to be committed after those acts had been completed merely because the investors left their money in the scheme. The second defendant also submitted that the indictment against it was invalid because it was not identical to the wording of the charges attached to the summons and contained discrepancies in the details of the offences alleged, so that it was impossible for it to be sure exactly what conduct was complained of. The fourth defendant submitted that (a) the allegation that it had induced the "TTSI Investors" to invest in the scheme was insufficiently precise and in any case was an abuse of process, the Crown having only made it in that form in order to be able to make the charges before the expiry of the limitation period; and (b) because of the imprecision, there arose an inference, which the Crown had to rebut, that the Attorney General did not have sufficient evidence to support the charges.

The Crown submitted in reply, inter alia, that (a) the prosecutions were not prescribed because (i) proceedings had been instituted within the limitation period, when the charges were first put to the defendants on each of the two occasions in the Magistrate's Court, and in the case of the first defendant, when the application was made for a warrant for his arrest; and (ii) under art. 12(c) of the 1967 Law, the offences of "inducing a person ... to take part or offer to take part in any arrangements" continued for as long as the investments made as a result of the inducements were held; this interpretation was supported by the difference between the wording of art. 12(c) and the rest of the article, which was indeed intended to penalize conduct relating to the initiation of investment only; (b) it was not necessary that the original charges and the indictment against the second defendant be verbally identical, as long as they were substantially the same and it was possible for the second defendant to know what conduct was alleged to have constituted the offences; (c) similarly, the slight lack of precision in the charges against the fourth defendant was irrelevant because it was clear what conduct comprised the alleged offences and any further details could be adduced prior to trial; in particular, the allegation concerning the "TTSI Investors" was sufficiently specific at this stage, those investors forming a definable and limited class; and (d) the court had no power to question the Attorney General's decision that there was sufficient evidence to bring the prosecutions.

Held, making the following ruling:

(1) Proceedings had been...