Hugh-Jones & Co have four reported cases. Reported cases are cases of public interest which are reported in law journals legal press and references books.
R v SEFER ENVER (2000)
CA (Auld LJ, Wright J, Judge Mellor) 20/1/2000
CRIMINAL LAW - COMPANY LAW - CRIMINAL EVIDENCE - FRAUD - INSOLVENCY
MAKING OR CAUSING TRANSACTIONS IN FRAUD OF CREDITORS : BURDEN OF PROOF : BALANCE OF PROBABILITIES : DISHONESTY : CONFUSED SUMMING UP : MUDDLING OF ISSUES : DIRECTIONS TO JURY
On an offence of making or causing transactions in fraud of creditors, a judge should give a clear direction of the relevance to the burden on the Crown to prove transfer before the jury went on to consider whether dishonesty had been disproved by the defence on a balance of probabilities.
An appeal against conviction after trial at Leicester Crown Court on 14 July 1998 before HH Judge Hammond. The appellant was convicted of two counts contrary to s.207(1)(b) and s.216 Insolvency Act 1986. The charges were: of making or causing transactions in fraud of creditors, for which he was sentenced to a £20,000 fine; and of being a director of a company that used a prohibited company name, for which he was sentenced to a £10,000 fine. The appeal was only in respect of the first charge. The appellant controlled a company ('T') which imported socks from Turkey. One of T's customers was Markshane Ltd ('M') a manufacturer and seller of socks. M began to fail, amassing substantial debts and a large overdraft. T was one of M's substantial creditors, having supplied M with large quantities of socks for which M had not paid. The appellant became involved with M with a view to restore it and recover the money owed to T, and gradually assumed an increasing role and responsibility for M's affairs. He gave personal guarantees to cover M's overdraft with the bank. In May 1994 the appellant owned nearly all of M's share capital, and he became the managing director. Five months later M went into voluntary liquidation owing creditors, including T between £650,000 and £700,000. The Crown's case was that the appellant had stripped M of all its assets so as fraudulently to prefer the bank and T, at the expense of other creditors, and to remove the bank's need to call on his personal guarantee of M's overdraft. Three weeks before the liquidation the liquidator found no assets at M's premises. The appellant's case was that his motive had been to save M and protect all its creditors. He claimed that he had not transferred M's property during the relevant period except after taking legal advice and consulting the bank and the liquidator. It was not disputed that the appellant's involvement in M had cost him in the region of £500,000. The Crown alleged three transfers of M's property to T, plant and machinery, stock, and yarn. To secure conviction it was sufficient for the Crown to make the jury sure of any one of those transfers unless the appellant could show on a balance of probabilities that he had not intended to defraud M's creditors. It was submitted on appeal that the judge had failed to direct the jury clearly on the two principle issues that had to be determined in relation to each of the three categories of property allegedly transferred, namely whether the Crown had proved that the appellant had caused or made the transfer of M's property and, if so, whether the defence had shown on a balance of probabilities that he had not done so with the intent to defraud creditors. It was submitted that the judge had muddled the two issues together resulting in giving the reverse burden of proof on the second issue.
HELD: (1) The judge had failed to direct the jury as a matter of law on the effect of the retention of title clause on the first issue, on which they had to decide before considering, if at all, whether dishonesty had been disproved. Ownership was in part a question of law for the judge, but he had been content to treat it as a matter of fact for the jury. The legal effect of the clause had been a matter of law for the judge to determine after argument from counsel as to the law, not from evidence, supposedly expert or otherwise. On the issue of whether the appellant had honestly believed that the effect of the retention of the title clause was to retain T's ownership of the stock, the judge should have given a clear direction of its relevance to the burden on the Crown to prove transfer before the jury went on to consider whether dishonesty had been disproved. On both of those points the judge had not related the evidence to each of the distinct issues. (2) The case had been presented in the summing up in a complicated and confusing way and there remained a risk that the jury could have taken their starting point, in relation to one or more of the categories of property, that the appellant had to disprove the Crown's case as to transfer. There was a general failure to present the issues and the evidence relating to them clearly and in proper context. The overall evidence against dishonesty was strong, and the conviction on the count of making or causing transactions in fraud of creditors was unsafe.
Appeal allowed.
David Walbank for the appellant. David Iles for the Crown.
| LTL 20/1/2000 (Unreported elsewhere) |
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Document No. AC7800687 |
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TOM GIBSON MONTGOMERY v WANDA MODES LTD (2001)
T COMEDY (UK) LTD v EASY MANAGED TRANSPORT LTD (2007)
IN RE: D (A MINOR)(CHILD:REMOVAL FROM THE JURISDICTION) (1991 |
