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	England and Wales High Court (Administrative Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> Ward & Anor, R (on the application of) v Criminal Cases Review Commission [2005] EWHC 1062 (Admin) (25 May 2005) URL: http://www.bailii.org/ew/cases/EWHC/Admin/2005/1062.html Cite as: [2005] EWHC 1062 (Admin)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
DIVISIONAL COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		25/05/2005

Mr Justice David Steel :

1. This is the judgment of the court. The claimants renew their application for permission to apply for Judicial Review following refusal by the single judge on 28 January 2005. The purpose of the application is to obtain permission to challenge the decision of the Criminal Cases Review Commission (the "Commission") dated 13 September 2004 not to refer to the Court of Appeal the claimants' convictions at Southwark Crown Court on 10 February 1995 for conspiracy to defraud by creating a false market in shares in European Leisure plc and for various counts theft of company funds.
2. Initially the claimants were sentenced to substantial hours of community service and ordered to pay compensation. However, the sentence was increased to terms of imprisonment on 21 March 1997 by the Court of Appeal (Criminal Division) on an Attorney-General's reference.
3. Both Mr Ward and Mr Howarth appeared in person before us with Mr Ward taking the leading role. We are grateful for their arguments which were presented both courteously and thoroughly. The Commission was not represented before us but had served a helpful response to the application in their Acknowledgement of Service.

The background

4. We take the background from an uncontroversial section of the Commission's Preliminary Statement of Reasons. Mr Ward was the Chairman and Chief Executive of a company called European Leisure (EL) which was engaged in the leisure industry. Mr Howarth was Deputy Chairman and Financial Director. The case arose out of the takeover bid by EL for Midsummer Leisure plc (Midsummer), another company in the leisure industry, in April/May 1990.
5. In 1988 EL acquired the Campden Palace Group and one of its Directors, George Hendry (who was a co-defendant), became a Director of EL in the following year. In October 1988 EL exchanged contracts for the acquisition of a company called Riverzest and after a number of legal disputes the purchase was completed on 30 June 1989. One of Riverzest's Directors, a Mr Quadrini, became a Director of EL in November 1989. One of Riverzest's assets acquired with the company was a floating nightclub, the Tuxedo Princess, which was a converted car ferry moored in Glasgow. Shortly after the acquisition relations between Mr Quadrini and EL deteriorated rapidly and in due course Mr Quadrini became only a non-executive director.
6. An important element of the subsequent trial of Messrs Ward and Howarth was the evidence given for the prosecution by Mr Quadrini. This evidence concerned inter alia telephone conversations between himself and Mr Ward during the bid period; overhearing a conversation between Messrs Ward and Hendry about purchasing shares (called the "kitchen conversation"); and invoices rendered for maintenance carried out on the Tuxedo Princess by a company called Dantice, whose owners were a Mr and Mrs Crawford. Mr Crawford in due course became a co-defendant and was ultimately acquitted of any offence.
7. The prosecution alleged that there was a conspiracy involving Mr Ward, Mr Howarth and others to defraud Midsummer shareholders by arranging for the purchase of EL shares, intending to create a false market in those shares by artificially increasing their value, in order to make the EL bid more attractive. In part, so the prosecution alleged, the purchases were financed by monies stolen from the Company by way of false invoices from a supplier.
8. During March 1990 discussions with Midsummer took place. On 28 March the Board of EL decided to acquire Midsummer and on 2 April 1990 both Companies announced that terms had been agreed whereby EL was to bid for Midsummer, that the bid was to be recommended by Midsummer's Directors to its shareholders, and that they (the Midsummer's Directors) pledged their own shares in support. The offer was that for every 100 Midsummer shares, EL would offer 144 new EL ordinary shares and 50 new European convertible preference shares. There was a partial cash alternative.
9. At the time of the announcement EL shares were valued at 80.5 pence each. The offer thus valued Midsummer shares at 165 pence each, which was some 26% more than the 131 pence price of Midsummer shares as at 26 March. However, on 3 April 1990 Mecca announced disappointing trading results and all leisure industry shares fell. In particular EL shares fell from 80.5 pence to 60 pence in a few days.
10. On 9 April 1990 EL issued its formal offer document. The deadline for acceptance was 3 pm on 30 April. In view of the fall in the EL share price the value of the offer was 133.68p per share representing a premium of only 4% over Midsummer's share price of 129p. The offer document was accompanied by a letter from Mr Page, Chairman of Midsummer, saying that EL's current share price was a major concern and advising shareholders to take no action.
11. On 18 April the Board of Midsummer advised its shareholders to reject the offer and this was followed by a circular from EL dated 21 April in which reference was made to the rise in their share price to 70p whilst the Midsummer price had fallen to 118p. The circular repeated the recommendation that Midsummer shareholders should accept the offer and that the Directors of EL were "convinced of the benefits of combining the two groups".
12. On 10 May 1990 Mr Brownstone, a senior executive of EL, wrote a letter to Mr Ward and the other EL directors. He made allegations concerning the payment of an invoice [the first Dantice invoice] to the effect that he had been told by Mr Howarth that the payment of this invoice was in fact made to friends of Mr Hendry (an EL Director who later pleaded guilty at the trial to another charge) and that the money had been used to purchase EL shares.
13. On 11 May 1990 the Board of EL declared the offer unconditional as to existing acceptances and it was left open. In September 1990 Mr Quadrini approached both the Inland Revenue and the DTI with allegations that money had been improperly taken from the company in order to settle an invoice from a contractor called Dantice and that the company had been involved in a share support scheme in respect of which he had taped telephone conversations between himself and Mr Ward. This led to broadly simultaneous investigations by the Inland Revenue and the DTI, in the latter case under their powers pursuant to S447 of the Companies Act 1985. This latter investigation led them to conclude that the matter should be referred to the SFO.

The Trial

14. As already explained, it was the prosecution case that the claimants (together with their co-defendants) had taken steps illegally to boost the value of EL shares so as to enhance the value of the offer for Midsummer, and that the monies which were the subject of the theft counts had been used for this purpose.
15. The principal features advanced in support of the prosecution case were fourfold:

i) First, evidence of the purchase of shares with money provided by directors of EL: -

a) 30 March 1990 purchase of 40,000 shares in the name of Rebecca Tye with money provided by Mr Ward;

b) 30 March 1990 purchase of 125,000 shares in the name of John Dayle with money provided by Mr Hendry;

c) between 19 and 27 April 1990 the purchase of 130,000 shares in the name of Fininvest with money provided by Mr Ward and Mr Howarth.

ii) Secondly, evidence from Mr Brownstone that Mr Howarth had told him on 8 May that money from EL by way of payment of the first Dantice invoice was, in fact, transmitted to friends of Mr Hendry to purchase shares (see para 12 above);

iii) Thirdly, evidence from Mr Quadrini that he had overheard Mr Ward and Mr Hendry talking in the company's offices and that Mr Ward then told Mr Hendry that they should be buying 100,000 shares;

iv) Fourth, tape-recorded telephone conversations between Mr Ward and Mr Quadrini who was in Amsterdam at the time containing remarks by Mr Ward by way of urging Mr Quadrini to engage in unlawful support operations.

16. The trial lasted 6 months. The tape-recorded conversations [Exhibit MQ35] played a significant role. It was accepted that Mr Quadrini had produced the tape by causing the conversations to be recorded covertly and that he had then edited them so as to include only those sections of the conversations considered to be inculpatory of Mr Ward. During the trial there was a voire dire as to the admissibility of the tape given these circumstances. There were also issues as to continuity. Mr Ward did not give evidence in the voire dire.
17. At the conclusion of the hearing of the voire dire, the judge ruled the tape as admissible. It is to be noted in passing that it was not disputed that the speakers recorded on the tape were Mr Quadrini and Mr Ward and that the transcript so far as it went was accurate. The jury were subsequently made aware of the issues of editing and continuity and were given directions in that regard.
18. Neither of the claimants gave evidence at the trial. Following their conviction both claimants appealed. The Court of Appeal handed down its judgment on 20 March 1997 dismissing the appeals. The judgment dealt with a large number of matters including in particular the correctness of the decision to admit MQ35 and the fairness of the trial judge's summing up. Mr Ward thereafter unsuccessfully applied for leave to appeal to the House of Lords.

The Commission's powers

19. The claimants applied to the Commission on the 11 February 2000. Before considering the scope of the work undertaken by the Commission it is desirable to revisit its powers.
20. By virtue of the Criminal Appeal Act 1995, the Commission may only refer a conviction if either there is a real possibility that the conviction would be quashed if it were referred and this real possibility arises from evidence or argument which was not put forward either at the trial or on the appeal or, alternatively, there are exceptional circumstances which justify the making of a reference even there is no such new evidence or argument.
21. As regards any new evidence, it follows that the Commission has to determine whether there is a real possibility that the Court of Appeal would find it necessary or expedient in the interests of justice to receive the evidence. In this context the Commission would have to bear in mind that the court itself would have regard to the following matters:

a) whether the evidence appeared to be capable of belief;

b) whether it would have been admissible at the trial;

c) whether there was a reasonable explanation for failing to adduce the evidence at the trial, and

d) whether the evidence appeared to afford a ground for allowing the appeal.

22. This process was analysed by Lord Bingham CJ in R v CCRC ex parte Pearson [1999] 3 All ER 498, 505-6 [2000] 1 Cr.App. R.141: -

"59. Thus the Commission's power to refer under section 9 is exercisable only if it considers that if the reference were made there would be a real possibility that the conviction would not be upheld by the Court of Appeal. The exercise of the power to refer accordingly depends on the judgment of the Commission, and it cannot be too strongly emphasised that this is a judgment entrusted to the Commission and to no one else. Save in exceptional circumstances, the judgment must be made by the Commission, in a conviction case, on the ground of an argument or evidence which has not been before the court before, whether at trial, on application for leave to appeal or on appeal. In the absence of such exceptional circumstances, the Commission cannot therefore invite the court to review issues or evidence upon which there has already been a ruling. Resort to the Commission must ordinarily follow and not precede resort to the Court of Appeal. [Emphasis added]

60. The 'real possibility' test prescribed in section 13(1)(a) of the 1995 Act as the threshold which the Commission must judge to be crossed before a conviction may be referred to the Court of Appeal is imprecise but plainly denotes a contingency which, in the Commission's judgment, is more than an outside chance or a bare possibility but which may be less than a probability or a likelihood or a racing certainty. The Commission must judge that there is at least a reasonable prospect of a conviction, if referred, not being upheld. …

61. The judgment required of the Commission is a very substantial one, because it inevitably involves a prediction of the view which another body (the Court of Appeal) may take. In a case which is likely to turn on the willingness of the Court of Appeal to receive fresh evidence, the Commission must also make a judgment how, on all the facts of a given case, the Court of Appeal is likely to resolve an application to adduce that evidence under section 23, because there could in such a case be no possibility that the conviction would not be upheld were the reference to be made unless there were also a real possibility that the Court of Appeal would receive the evidence in question. Thus, in a conviction case of this kind, the first task of the Commission is to judge whether there is a real possibility that the Court of Appeal would receive the evidence The Commission has, in effect, to predict how the Court of Appeal is likely to answer the question which arises under section 23, as formulated above. In a conviction case depending on the reception of fresh evidence, the Commission must ask itself a double question: do we consider that if the reference is made there is a real possibility that the Court of Appeal will receive the fresh evidence? If so, do we consider that there is a real possibility that the Court of Appeal will not uphold the conviction? The Commission would not in such a case refer unless it gave an affirmative answer to both questions."

The Investigation

23. The Commission have set out the history of the investigation in its acknowledgment of service: -

"12. The applications from Mr Ward and Mr Howarth were received by the Commission on 11 February 2000 and substantive work on the review of their cases commenced in February 2001. Having regard to the likely complexity of the cases, they were allocated to a Commission Member, Mr Edward Weiss (a chartered accountant with extensive experience of corporate finance matters) to act as caseworker. Mr Weiss retired as a member of the Commission on 31^st July 2003, but has continued to act as a caseworker on the applications.

13. An experienced freelance forensic accountant, Mr Ian Henderson, was engaged by the Commission to assist this investigation. Mr Henderson was assigned primary responsibility for fact finding and in the course of his investigation he reviewed the files of the prosecuting body, the Serious Fraud Office ("SFO"), and also of the Companies Investigation Branch of the Department of Trade and Industry ("DTI"), which carried out an investigation of the affairs of EL prior to the decision to prosecute. Mr Henderson also visited the Complaints Investigation Bureau ("CIB") of the Metropolitan Police (to which Mr Ward had made various complaints) and also investigated (inter alia):

the extant files of the Inland Revenue (which had carried out certain investigations as to the deductibility of sums which were said to have been paid out by EL as part of the share support scheme);

certain files of Her Majesty's Customs and Excise which had previously carried out investigations of the affairs of a company controlled by Mr Quadrini, who was an important prosecution witness at trial; and

matters relating to the disqualifications of one Donald Aitchison, who had been Mr Quadrini's solicitor at material times….

15. In accordance with the Commission's normal processes, a decision-making committee was empanelled consisting of three Commissioners who had had no involvement in the investigation of the applications. It was decided that in view of the complexity of the case, the panel should consist of three legally qualified Commissioners: Laurence Elks – a former partner of Nabarro Nathanson and commercial lawyer with experience of corporate and takeover affairs; Leonard Leigh – a former professor of Criminal Law at the London School of Economics who has written extensively on the law relating to commercial fraud; and Mr John Weeden – former Director of the RAF Legal Branch and an experienced practitioner of criminal law.

16. The Committee first met on 3 March 2003 and met in all on 10 occasions before issuing a provisional Statement of Reasons on 28^th August 2003 in which the Commission set out the reasons for its provisional decision not to refer the convictions of Mr Ward and Mr Howarth to the Court of Appeal. In the course of its deliberations, the members of the Case Committee considered voluminous submissions and supporting correspondence from Mr Ward and Mr Howarth (running to several hundreds of single spaced pages) as well as the very extensive material arising from the investigations of Mr Henderson and Mr Weiss.

17. In accordance with the obligations set out in R v Secretary of State for the Home Department ex parte Hickey & ors (No. 2) 1995 1 All ER 489 the Commission disclosed with its provisional Statement of Reasons those documents which, it was considered, would assist Mr Ward and Mr Howarth to develop their best case that their convictions should be referred.

18. The Commission recognised that Mr Ward and Mr Howarth would require sufficient time to develop their responses to the provisional Statement of Reasons. Mr Ward's main response was received on 4 February 2004, some five months later, with further submissions from both Mr Ward and Mr Howarth and supporting correspondence totalling several hundreds of pages, and the Case Committee met on a further 5 occasions to consider these further submissions. In the course of consideration of the applications, and of further correspondence from both applicants, the Case Committee considered whether all those documents which might assist the applicants to develop their best case, and which were therefore disclosable under Hickey, had been disclosed. As a result the Commission made disclosure of further documents. The Committee recognised that further time should be given to Mr Ward and Mr Howarth to consider and respond to those disclosures and allowed additional time for this purpose. The Commission's final Statement of Reasons was issued on 13 September 2004."

The role of the Court

24. Before turning to the grounds advanced on this application it is desirable to review the role of this court in regard to the decisions of the Commission. As Lord Bingham CJ stated in Pearson the exercise of the power of referral depends upon the judgment of the Commission. It is not for this court to consider substituting its own assessment. In Pearson Lord Bingham concluded the judgment as follows: -

"64. Had the Commission decided to refer this case to the Court of Appeal, that would (if based upon a proper direction and reasoning) have been a reasonable and lawful decision: The decision not to refer was in our view equally reasonable and lawful. The question lay fairly and squarely within the area of judgment entrusted to the Commission. If this court were to hold that a decision one way or the other was objectively right or objectively wrong, it would be exceeding its function. The Divisional Court will ensure that the Commission acts lawfully. That is its only role. To go further would be to usurp the function which Parliament has, quite deliberately, accorded to the judgment of the Commission. We find no grounds for impugning the Commission's decision and accordingly refuse this application."

This approach was reinforced by Lord Woolf CJ in R v CCRC ex parte Hunt [2001] 2 Cr.App. R. 71: -

"65. It seems to me that, particularly on an application to review a decision of the Commission, it is important that this court restricts attempts to raise grounds for challenging the decision of the Commission unless a proper basis is established, justifying the consideration of the allegation by this court. It is to be remembered that the Commission only becomes involved after the exercise by an applicant to the Commission of his rights in the court below and, if he seeks this, on appeal. It is a residual, but a very important jurisdiction which the Commission exercises. It imposes a heavy burden on the Commission. It is a jurisdiction which was previously exercised by the Home Secretary. It is a jurisdiction which requires the Commission carefully to exercise the discretion which it is given by Parliament. In these circumstances it is important that the courts should not in inappropriate cases allow the Commission to be sucked into judicial review proceedings which are bound to distract it from fulfilling its statutory role."

25. In short, an application of the kind made by the claimants cannot be used to challenge the correctness or otherwise of the Commission's decision, let alone as a vehicle for a rehearing of the earlier appeal. The court is only concerned whether there are arguable grounds that the Commission's decision was reached unlawfully.

The grounds

26. As we understand it, the Statement of Claim served by Mr Ward contains the grounds for seeking permission relied upon by both Claimants. This leads to a further preliminary point. The Statement of Claim runs to 67 pages of single space typing. It is accompanied by several volumes of appendices. It would appear that the Commission was likewise deluged with material by the claimants. Two points arise from this. First there is always a danger in an over elaborate and repetitive presentation that potentially arguable points get lost. On the other hand, the court will not be diverted from its task of assessing whether there are genuine grounds for challenge by adopting the soft option that the mere length and detail of the material alone justifies the grant of permission.
27. Whilst on this topic it is worth noting that the claimants' letter before claim as required by the protocol is by any standards open ended: -

"The Commission should be aware that exceptional care was taken in the preparation of the submissions for its benefit and that these were supported by senior counsel and experienced solicitors. The Commission was provided with a considerable volume of material (provoking complaint at one point with regard to their volume) and was afforded extensive opportunity for discussion, including with counsel and solicitors.

In these circumstances I do not believe it is necessary to repeat the grounds for seeking the reference of my conviction and I do not propose so to do. Having received detailed submissions the Commission has either ignored or misunderstood them or treated them as insufficient to ground a referral. The errors in the Commission's provisional and final Statement of Reasons cannot be attributed to the claimant.

I believe that the Commission has reached its decision after an inadequate review, which I believe falls short of its obligations, and that this is exemplified by the errors, inconsistencies, unfairness and unreasonableness demonstrated by the Commission's various responses, statements and reasons. As claimant I now request the Commission to alter its decision and to refer my conviction to the Court of Appeal."

The earlier submissions

28. The reference to the claimant's submissions (again leaving aside the massive exhibits to it) incorporates some 550 pages in the original submission and another 150 pages in response to the provisional statement of reasons covering an enormous amount of ground. The Commission's response in their letter of the 15 November is worth quoting: -

"This was a very complex and lengthy application, and during the course of the review a vast quantity of material was considered by the Commission. The review was conducted throughout by a Commissioner Mr Edward Weiss who is an experienced accountant. Recognising the extent of the investigation required, the Commission engaged the services of an experienced external forensic accountant Mr Ian Henderson to assist in the review. The Commission applied no resource limitation to this aspect of the investigation or to resolving the Claimant's application.

The case committee appointed to decide the claimant's application consisted of three lawyers, two of whom have extensive knowledge of corporate and financial matters. Reflecting the complexity of the issues in the application the case committee met a number of times during the course of the review.

The Commission applied itself to all the detailed aspects of the case, made full and proper use of its statutory powers and applied those powers to investigate background matters (such as Inland Revenue and VAT) not previously known. In the course of its investigation the Commission established certain matters (in particular about the prosecution disclosure process and certain prosecution witnesses) which went beyond what was known either to the defence and the jury. This was done with great care and application.

It is accepted there was a small number of errors in the provisional Statement of Reasons. These errors were properly drawn to the Commission's attention by the claimants following which they were considered and rectified. No specific error has been identified in the final Statement of Reasons by the claimants. ….

In conclusion therefore the Commission asserts that it has fully discharged its obligations in this case. The claimants' letters before action do not identify any unlawfulness, irrationality or unreasonableness that might render the Commission's decision not to refer the claimant's conviction to the Court of Appeal susceptible to challenge."

29. There can be no doubt that the claimants vigorously contend that they are the victims of a gross miscarriage of justice. Indeed, there is scarcely any person or institution that escapes blame from the claimants (and in particular Mr Ward) for the outcome of the trial and the subsequent appeals and investigations. It is contended that the inquiries by the Inland Revenue and the DTI were conducted unfairly and in some respects dishonestly, the SFO and the police acted likewise, at the trial the prosecution witnesses committed perjury and the trial judge was incompetent and prejudiced. At the appeal stage, the judges were said to have been ignorant and unfair.
30. Thereafter the claimants or one of them have protested to the heads of the SFO and the DTI, to the Attorney General, to the Home Secretary and the Prime Minister, to the Lord Chief Justice and the Commissioner of the Metropolitan Police, the Director of Public Prosecutions and various members of parliament. They in turn, it is complained, have all failed to deal with the case either fairly or responsibly.
31. Of course, such an unhappy and deplorable state of affairs could exist albeit the motive for such widespread want of fairness is obscure. But it emphasises a need for an analysis which reveals specific, targeted and coherent complaints. The history of the present proceedings is long on assertion and short on clarity. It further emphasises the need to focus on the specific role of the Commission, putting to one side the activities of the prosecuting authorities and the reasoning of the Court of Appeal.

Bad faith

32. The focus of the claimants' basis for challenging the Commission's decision is an allegation of bad faith. Indeed details of this assertion encompassed 59 pages out of the 76 pages of the Statement of Claim. The point is put in this way: the Commission was complicit in deliberate falsification of facts to sustain their decision not to refer for the purpose of protecting other public bodies. The foundation stones of this allegation appear to be as follows: -

a) During the inquiry, the Commission's staff (including for this purpose Mr Henderson) commented favourably on the merits of the claimants' arguments both as regards particular issues and as regards the prospects of a referral, and the claimants treated those comments as matters which they could rely on the Commission endorsing, and

b) During the inquiry the Commission's staff admitted that there were covert (i.e. non-statutory) restraints on the Commissioners' powers, and

c) Since the refusal to refer was unexpected, the only possible explanation for what had occurred was that the decision was unrelated to its merits.

Indications on the merits

33. The Commission accepts that Mr Henderson was given a broad scope of discretion (under Mr Weiss's supervision) to make such enquiries as seemed appropriate and to identify matters which might justify a reference. He was, in short, the Commission's field worker. It is also common ground that Mr Henderson had numerous conversations with Mr Ward and his advisors during the investigatory process. It is contended that Mr Henderson made comments that led the claimants to be optimistic about the progress and the outcome of the inquiry.
34. Particular reliance was placed by the claimants on a meeting dated 10 July 2001. In their written submissions there is the following comment on that meeting: -

"Several months into the enquiry, on 10 July 2001, the Commission Member responsible for the case, Mr Weiss (accompanied by Mr Henderson) met with the claimant's advisers to discuss the case. Although one of the purposes of the meeting was undoubtedly to enable them to interrogate the claimant's advisers about the case and notwithstanding Mr Weiss made it clear that no decision had yet been taken, in the course of the meeting Mr Weiss offered up opinions of his own about crucial matters in the case… He appeared so supportive of the claimant's forensic arguments on most of the key issues that the advisors telephoned the claimant immediately after the meeting and told him that the Commission fully supported the claimant's principal arguments…"

The Claimant's solicitor Mr Goldsmith kept a very detailed note of the meeting, although it was not shown to the Commission until very much later. Mr Weiss is recorded as having opened the meeting by saying that the position as regards the Commission was that "we are still digesting a mountain of information and we have not yet come to any opinion." The rest of the meeting appears to have been made up of questions put to Mr Ward's counsel and solicitor about the content of the case and the conduct of the trial.

35. The claimants rely on two observations of Mr Weiss during the course of the meeting as recorded in the note. First: -

"From the facts it appears that there were two Fininvest invoices in respect of work that was done and three invoices in relation to Dantice, but where the invoices were sent (sic) but there was no connection to any shares purchased. So there was no theft."

To which Mr Ward's counsel responded: -

"I agree. Upon that evidence all of the invoices convictions are unsafe. The prosecution did rely upon Pearson as to the purpose of the Fininvest invoices and Armstrong in relation to the allegation that there was no work done on the ship."

There was then a later exchange after Mr Ward's counsel had spent time going through all of the issues in trial at some length when Mr Weiss commented: -

"Yes, but as MQ 35 was not particularly inculpatory of Ward, would this have made any difference? "

To which counsel replied: -

"Not in relation to this because we did not know about it. We had asked for all the information from the DTI and were told that we had received it. There was nothing in Joyce and Martindill's statements that warranted the investigation."

36. Whether or not this transcript is accurate and whether or not it indicated some provisional views of Mr Weiss at a very early stage of the investigation, the fact remains that there was nothing in the course of this meeting that begins to justify the reliance placed on it by the claimants to the effect that the Commission fully supported the claimant's arguments. Indeed on the following day Mr Goldsmith wrote to his client following a conversation with Mr Henderson. Mr Goldsmith appears to have actually asked Mr Henderson, since he and Mr Weiss appeared to think that there was some merit in the defence arguments, how that was going to impact upon the decision to refer. Mr Henderson's answer as recorded in the letter was as follows: -

"In effect Ian concurred with my summary and explained that he was preparing a report at the moment which Mr Weiss would sign off after amending as he saw fit. A report would then be submitted to independent commissioners who would make the final decision whether or not to refer. They would, however, take account of what Mr Weiss said because of his financial experience. He added that they were of the firm view that they were not wasting their time with this investigation but there was still a lot to do and the final report was still some way off. He added that there were really a lot of deficiencies in what had happened. We discussed in particular the non-disclosures and he felt that this did have an impact upon the entirety of the evidence that was before the court at the time. He stressed that that was not to say that they had reached any final conclusion. "

These observations are then transposed in the claimant's Statement of Claim to the effect that "Mr Henderson agreed with the proposition that there had been a miscarriage of justice in the case with numerous defects of a procedural nature on the part of the prosecution."

37. Whilst things at that stage were no doubt encouraging from the Claimant's point of view, nonetheless the extent to which those investigating the case on the Commission's behalf were expressing views favourable to the likely outcome has been exaggerated and distorted.
38. Six months later, on 5 December 2001, Mr Goldsmith again spoke to Mr Henderson to ask about progress and was told that there had been some delay as some further interviews had had to be conducted. When Mr Goldsmith asked him who had been interviewed and whether the interviews had been useful, Mr Henderson had responded to the effect that "he could not tell me but that it was all going in the right direction for Michael." Later, in April 2002, Mr Henderson telephoned Mr Goldsmith to inform him that work on the first trial had very nearly finished and that "he had prepared his Statement of Reasons which had now been reviewed by 2 Commission members but that one section was not as strong as he had hoped".
39. Despite these encouraging noises the Provisional Statement of Reasons, which finally emerged 16 months later in August 2003, reached the provisional view that it was not appropriate to refer the matter to the Court of Appeal. The contemporary reaction of Mr Ward is set out in his letter to Mr Weiss dated 4 September 2003: -

"The CCRC has been twofaced in its dealings with us. Firstly your report is contrived to reach an adverse conclusion fully against the grain of the facts and of the admissions you have made to my advisers and I "off the record". It also serves to whitewash the misconduct and inadequacies of public officials, including the judiciary. These are important matters of principle and we shall now explore them through other means."

40. Particulars of what are now described as the reversal or abandonment of "key forensic conclusions" indicated by Mr Henderson during the course of investigation, whether on or off the record, are set out in pages 58 – 68 of the claimant's analysis of the provisional Statement of Reasons. We are prepared to accept for the purposes of argument that Mr Henderson made the observations there set out under some 46 paragraphs, but without knowing the dates on which the observations were made and their context it is quite impossible to discern the extent to which the claimants might fairly claim to have placed reliance on some of them. But, in any event, it has to be emphasized that, as explained by Mr Henderson, his report was to be reviewed by the three commissioners. It was their role to exercise their own independent judgment as to the appropriate findings to make and, other than the fact that different findings may have been foreshadowed by Mr Henderson, it cannot, in our judgment, be suggested that there was no adequate material on which the Commissioners could act to form the views which they expressed, even if others might have reached a different conclusion.
41. The day after Mr Ward's letter, on 5 September 2003, Mr Goldsmith made an attendance note on a telephone call from Mr Henderson. Mr Henderson is noted to have "expressed his disappointment at the result and referred to the fact that it was not set in stone and that they had certainly changed their mind in the past and much would turn on our response." Mr Goldsmith records himself as having expressed disappointment because "I had been under the impression that they found it very difficult and that it was very finely balanced." There is no suggestion in the record of the telephone conversation that Mr Goldsmith complained to Mr Henderson that he, Mr Henderson, had somehow misled them as to the likely findings that the Commission was going to make, let alone that Mr Henderson's observations were being treated as in some way binding on the Commissioners.
42. The note continues: -

"I think he sympathised with this but certainly did not accept responsibility for the way in which the report had been prepared. I said to him that in the circumstances I believe Michael was uncertain whether or not there was any point in putting in a response. He said that not to put in a response would be a mistake. He said that the Committee had found it difficult and indeed there views had been very finely balanced. There were undoubtedly huge errors and mistakes about the prosecution though there were opportunities missed by the defence such as Michael not giving evidence. He felt it needed a very robust response and it would be a mistake not to put one in."

43. Again, the significant thing here is that there was no indication whatsoever in this internal note that the claimant or his advisors had been led to believe that Mr Henderson's views were anything other than optimistic expectation on a finely balanced issue. There was no suggestion that the claimant relied upon him as being able to commit the Commission to any view, or even that some expectation (legitimate or otherwise) had been aroused.
44. As the Commission say in their acknowledgement of service, and we agree with them, Mr Ward and his advisors, as sophisticated business and professional people, would have been aware that Mr Henderson had no powers to commit the Commission. Nor in our judgment had Mr Henderson at any time purported to commit the Commission to any view upon the outcome of his investigations, albeit he may have made it clear, for what it was worth, that in his judgment the outcome of his investigations would be a close run thing.

Lies about the meeting

45. The topic of 10 July meeting is resurrected in another allegation to the effect that Mr Weiss lied about what he had said at that meeting. The starting point here is Mr Goldsmith's letter of 6 October 2003 to Mr Weiss. In that letter Mr Goldsmith expresses dismay at Mr Weiss's disagreement with his clients' interpretation of the meeting and in particular at the fact that Mr Weiss had no recollection of endorsing Mr Ward's arguments at that meeting. The letter asserts "I can assure you that I took very detailed notes not only of that meeting but also of all conversations that I have had with Ian Henderson". As we have already explained, the notes of the meeting do not evidence the endorsement of Mr Ward's views as alleged by Mr Goldsmith, let alone in the context of the material that had been unearthed by the investigation process over the following two years.
46. It may be that it was for this reason that Mr Goldsmith did not forward a copy of his detailed notes at that stage. That did not occur until they accompanied Mr Ward's detailed and long analysis of the Provisional Statement of Reasons in February 2004. Mr Weiss's and Mr Henderson's recollections of the meeting are, in fact, confirmed not only by the content of Mr Goldsmith's note but also by a draft note of the conference that had been made by Mr Henderson and was in due course produced to the claimants. In the Statement of Claim Mr Ward asserts, "Mr Weiss has lied and obfuscated about the views he expressed to the meeting because he is complicit in the cover up of an unfair and error strewn decision made by the Commission on the case." In our judgment this is a wholly unfounded allegation, and the following lengthy citation of the correspondence on the topic within the Statement of Claim takes the matter nowhere.
47. Paragraph 3.9.8 of the final Statement of Reasons neatly summarises the position:

"Mr Ward alleges that the PSR contradicts many of the points made to him and to his advisors during the course of the review. The Commission accepts that in a review as lengthy as this one and with the frequent contact, often by telephone, between the Commission and Mr Ward in particular, views sympathetic to the applicants may well have been expressed. However, the applicants have been under no misapprehension that any views expressed during the review were precisely that, namely views, and that the decision would be made later by others not involved in the investigation and at the time of the conversations had not been nominated to the decision making committee."

Police interview

48. Another alleged example of bad faith is said to be revealed by the denial that Mr Henderson had asked the CIB to interview a former police officer, DC Martindill. The background to this issue is a telephone conversation as long ago as 28 August 2001 between Mr Goldsmith and Mr Henderson. Mr Henderson reported that he was visiting the CIB the following morning and he told Mr Goldsmith that he was "going to say to them that he thought they should now interview Martindill under PACE because there were so many inconsistencies re the provenance issue and 'they all went one way' ". All this arose because of allegations by Mr Ward that DC Martindill was corrupt and, in particular, that DC Martindill was part of a conspiracy which involved substituting tapes which he had received from the DTI by more incriminating items which he had been given later by Mr Quadrini.
49. The following day there was a further telephone conversation in which Mr Henderson is reported to have said that he had asked the CIB "whether they would interview M under caution." He went on to say he did not know that they would, but he hoped they would. The Commission produced its provisional report in August 2003. The relevant paragraphs read as follows: -

"8.14.4 The Commission has found no evidence to support these allegations. DC Martindill was a junior police officer working in a highly supervised environment where he was subject to tasking by more senior officers and also the SFO case controller. Mistakes were made: there was evidence of a degree of over familiarity with some witnesses and certainly with Mr Quadrini: the audio tapes which DC Martindill was responsible for were described by junior prosecuting counsel as being in "appalling confusion"…. This comment however was probably directed at tapes other than MQ35…

8.14.6 Whilst this over familiarity was undoubtedly regrettable the situation which the Commission in its investigation discloses has produced none of the evidence that is necessary to support the very serious allegations made by Mr Ward. The Metropolitan Police internal investigation division notes DC Martindill's unblemished record and has quite independently reached a similar conclusion."

50. Following receipt of that report Mr Ward wrote to Mr Weiss on 26 April 2004 making amongst other things this comment: "You asked the CIB to interview Martindill. You ought now to record in the PSR what Martindill's explanations were." The response from Mr Weiss on 29 April was as follows:

"Regarding Martindill we did not in fact request the CIB to interview him and we are unable to disclose any action which the CIB may have taken in regard to Martindill other than to say we have discovered nothing which would be of assistance to you."

51. The absence of a request for an interview was vigorously challenged in Mr Ward's letter of 3 May 2004. In response Mr Weiss sought Mr Henderson's assistance in checking the answer that he had given. And in a memorandum dated 6 May 2004 Ian Henderson commented: -

"Para 2.

I discussed the question of the CIB interviewing Martindill with officers from the CIB and was informed that Martindill had refused to be interviewed by them – as he was entitled to do. ….

Para 3

My first contact with CIB was some months after Martindill had refused to be interviewed by them. There was therefore no point in asking them to interview Martindill and I did not do so."

52. On 16 June 2004, the relevant officer at the CIB explained that Mr Martindill had formally declined an interview by a letter dated 29 November 2000, nine months before Mr Henderson raised the matter with them again. All the relevant correspondence is set out at length in the Statement of Claim. The suggestion that Mr Henderson told lies has not remotely been made out. At most there is the potential for misunderstanding. The dispute is in any event no more than a storm in a teacup. The matter is referred to in the Statement of Claim as follows: -

"Undoubtedly, therefore, Mr Henderson did say these things and did attend a meeting with the CIB and did suggest or ask them to interview Mr Martindill under caution. Mr Henderson, and perhaps Mr Weiss, has lied.

Why has Mr Henderson lied?

Has pressure come upon him from above to support an unsupportable case? Has it become necessary to lie about the evidence against Mr Martindill in order to avoid referring a case that would gravely embarrass the Commission as well as the SFO and other public agencies?

Exacerbating these worries is the inference that Mr Weiss and Mr Henderson would wish for the claimant to believe that his advisers have, once again, lied to him and have prepared false notes of imaginary conversations.

No reasonable person can be expected to have confidence in an organisation whose members persistently lie and, when challenged, fail to make proper enquiries."

53. This is no more than fanciful speculation arising from a wholly inconsequential matter. The issue is dealt with so far as material in Paragraph 3.6 of the final Statement of Reasons which concludes: "The Commission is thus unable to identify any further line of investigation regarding Mr Martindill and therefore concludes that there are no issues surrounding Mr Martindill which could ground a referral". There is no basis for alleging that that conclusion is unlawful.

Covert Restrictions

54. There is no material whatsoever in support the proposition that there are secret constraints on the Commission's powers other than the practical constraints set by the statutory framework. Of course the claimants have spread their allegations of improper performance and dishonesty far and wide to encompass the SFO, the DTI, Customs and Excise, the Police, the trial judge and so on, all of whom have been variously irresponsible, negligent or dishonest. It would be surprising if the Commission and its staff did not comment in these circumstances on some of the practical limitations on the Commission's role. So far as the Commission is concerned the claimants make the assertion that the Commission has "an unhealthy obsession with how it is viewed by the Court of Appeal". The Statement of Claim goes on to recite at tedious length correspondence between the claimants and the Commission. It takes the matter nowhere. Continuous attacks on the bona fides of Mr Weiss and Mr Henderson do nothing to establish the legitimacy of the complaints.

Response to the decision

55. Whether or not the claimants were astounded or even surprised by the Commission's decision, such cannot conceivably give rise to any inference, as it is put, that it had been made "for reasons unrelated to its merits".

Quadrini

56. In the claimants' submission the credibility of Mr Quadrini has been fatally undermined by matters which have emerged since the trial. So far as the issue of the admissibility of the tape MQ35 is concerned this was dealt with at length in the decision of the Court of Appeal. The character of Mr Quadrini was of marginal significance vis a vis the tape, whose authenticity (albeit edited) was not an issue, except to the extent that he may have been partial in the selections he made. As the Court of Appeal noted neither Mr Ward nor the expert retained by him were called on the voire dire at the trial. An attempt to call another expert at the hearing in the Court of Appeal failed. The Court of Appeal concluded their discussion on the topic by saying "we consider that the judge went through the proper exercise and was entitled to admit the transcript in evidence while leaving to the jury the question of how much weight they should attach to it in the light of the defence's criticisms of its provenance".
57. In the Provisional Statement of Reasons the Commission has considered in detail the material unearthed during the investigation relating to Mr Quadrini which touched on questions of VAT investigations, blackmailing of Customs and Excise personnel, Inland Revenue PAYE investigations and matters of like kind. Their analysis is set out in great detail in Section 8.8 of the Provisional Statement of Reasons. In paras 8.8.11 to 8.8.14, they recite the harsh things that were said about Mr Quadrini at the trial. Their eventual conclusion reads:

"8.8.23 The conclusion of the Commission on this matter is that having regard both to the extent of information that was detrimental to Mr Quadrini's credibility which was before the jury; added to the weight of the trial evidence which remains wholly unaffected by new information about Mr Quadrini – there is no real possibility that the Court would conclude that the undisclosed information about the VAT and PAYE investigations would lead the Court of Appeal to the view that the convictions were unsafe."

58. In their final set of reasons the Commission has dealt with what they have described as Mr Ward's trenchant comments on that section in Section 3.4 which we have read carefully. In the light of Mr Ward's and Mr Howarth's additional submissions we are not persuaded that there are any part of these reasons that are unreasonable, illogical or unfair.

Inland Revenue/Dantice

59. As already recorded, the sums paid under the three Dantice invoices constituted part of the case against the claimants on the theft charges. The claimants say that the fact, which has emerged since the trial, that there had been an investigation by the Inland Revenue into these invoices is potentially relevant: -

i) because it makes it clear that there was no payment to the Revenue by EL but simply a settlement.

ii) because the Revenue considered the Dantice invoices and did not conclude that they were bogus.

60. All these matters are dealt with in detail in the Final Statement of Reasons in Section 3.3. The matter is summarised by the Commission in their Acknowledgment of Service in paragraph 43-46, which we set out and with which we entirely agree.

"43. The Commission's conclusion on these issues are set out in its Statement of Reasons, and the Commission does not seek to re-rehearse the basis of its conclusions in this Acknowledgment of Service.

44. Expressed briefly, sums paid by EL under three invoices issued by a company called Dantice Limited constituted part of the case against Mr Ward and Mr Howarth on the theft charges. The Commission, in exercise of its powers, obtained the extant Inland Revenue files relating to a Revenue investigation into various payments by European Leisure. The Inland Revenue files disclosed that:

an (inadmissible) statement of opinion had been made on the part of an Inland Revenue official doubting the existence of a share support operation but adding in the same document that he felt that "something went on in European Leisure which the directors are not anxious to see examined in detail";

the first Dantice invoice was subject to adjustment and was not to be treated as a revenue deduction (the applicants later stating that it was to be treated as capital).

No comment was made by the Revenue on the other two invoices. "

The Commission has considered at length in the provisional Statement of Reasons and the final Statement of Reasons whether the matters disclosed by its investigation of the Inland Revenue files give rise to the real possibility that the Court of Appeal would find the applicants' convictions unsafe. The Commission avers that it has properly considered the issues raised by this material and has correctly applied the statutory test to them.

45. The Commission accepts that it made some errors in its provisional Statement of Reasons – particularly in regarding the adjustment of EL's tax accounts as a "payment" rather than a "settlement". These errors were drawn to the Commission's attention in representations received following issuance of the provisional Statement of Reasons. In consequence of those submissions the Commission corrected its errors in the final Statement of Reasons and reconsidered the significance of the Inland Revenue matters in the light of its revised understanding. The Commission avers that its final conclusions on the Dantice/Inland Revenue matters were properly arrived at in the light of its corrected understanding of the evidence.

46. The Commission avers that one purpose of the provisional Statement of Reasons is to enable the Commission to consider any errors or omissions in its understanding of the relevant facts following further representations. The fact that the Commission has acknowledged errors contained in the provisional Statement of Reasons and reconsidered its conclusions evidences that the Commission has correctly carried out its remit. The Commission does not accept that there are uncorrected errors in its final Statement of Reasons or that its final conclusions are based on "specious arguments and errors of fact"."

Whether or not "settlement" was the appropriate word to use, we do not consider that the further points made by Mr Ward in the Statement of Case take matters any further.

Summary

61. A whole range of other matters are raised by the claimants such as the theft of documents by the Mail on Sunday, issues of non-disclosure, and the question whether Mr Ward should have given evidence. All these matters are dealt with either by the Court of Appeal or within the Provisional Statement of Reasons or within the Final Statement of Reasons and we have seen nothing which justifies the conclusion that the Commission has acted unlawfully.
62. The claimant's Statement of Case puts these matters generally as follows:

"What also came across loud and clear in the PSR was that the Commission had acted in bad faith. The case had been re-engineered against the grain of the true facts. Statements had been made about the evidence in the case that were strongly asserted as they were inaccurate, unreasonable, and illogical. The tone of the report was highly negative, mocking the claimant and his adviser's assertions and arguments. It was as if the claimant's complaint had been without any merit at all, as if it had been contrived. It was clear that the Commission approached the case with a determination to find against the claimant at all costs.

Also crying out from the report was the Commission's hypocrisy. Throughout its enquiry, Commission officials had spoke of the incompetence and even the plain dishonesty of officials and judges who had been involved in the case. Yet the PSR whitewashed all of this incompetence and misconduct, and it did so in terms that verged on the obsequious. It was obvious that the Commission had feared criticising any public agency that had dealt with the case, despite having spoken in diametrically opposite terms to the claimant and his advisers"

In our judgment all these complaints are unfounded.

63. All in all, we cannot begin to categorise the Commission's analysis of the detailed circumstances of this case, when the Provisional and Final Statement of Reasons are read together, as unreasonable or illogical in any of the respects alleged. To the contrary, in our judgment the Commission through the offices of three distinguished panellists prepared an exhaustive, thorough and fair-minded analysis of the impact of all the new evidence and arguments. It is sad that unfounded allegations of bad faith were ever made against them. Despite the vast amount of written comments and correspondence emanating from the claimants, there is nothing of substance in the present application and it is therefore dismissed.