cross - costs ruling

jonerees

IN THE WOLVERHAMPTON CROWN COURT

Regina

-v-

Paul Ross

RULING re COSTS

INTRODUCTION

1. This is an application under S19(1) Prosecution of

Offences Act 1985 & Regulation 3 of the Costs in

Criminal Cases (General) Regulations 1986 by the

Applicant (Paul Cross) for all or some of the costs he

says he has incurred in a criminal trial at the above

court.

2. The Applicant is a dentist. At the relevant time he had

2 contracts of employment; one with Sandwell PCT

and one with Northamptonshire PCT. In respect of the

former there was disputed evidence that the Applicant

knew that he could only provide dental services under

this contract from the address stipulated in the

contract. The Applicant initially signed a contract with

Sandwell PCT that required him to work from a

particular address in Smethwick (Bearwood Rd). Mr

Cross only signed that contract under protest and


subsequently requested to change the address

stipulated in the Sandwell PCT contract (from

Bearwood Rd) to the Village Practice, 4 St Mary’s Rd,

Smethwick. Sandwell PCT agreed to that change and

although contracts were drawn up and draft contracts

were in circulation, it appears that no final contract

giving the St Mary’s address as the contract address

was ever signed. The Crown asserts that the Applicant

knew he could only bill Sandwell PCT for work carried

out on Smethwick surgery patients at the St Mary’s

surgery address.

3. In respect of the latter (the Northampton contract) the

Applicant rented a room from a dentist, Shama

Moopen, who operated from an address in

Northampton. According to that contract all work

conducted by the Applicant was to be billed under the

Northampton contract. For reasons which need not be

explained, if work was done at the Sandwell surgery

the Applicant was paid more than if he had done the

same work in the Northampton surgery.

4. He was charged with fraudulently receiving payments

between 15 th Jan 07-31 Oct 11 for works done in

accordance with his Sandwell PCT contract. The

allegation was that he dishonestly represented that he

was entitled to payment from that PCT when in fact he

had actually performed the work at the practice in

Northampton, thus being paid at a higher rate. The

Crown alleged that 386 claims were falsified in this

way resulting in a fraud that amounted to £110,527-

21.

5. There is no dispute that the work was done. Further,

it is not denied by the Applicant that he treated

Northampton surgery patients through the Smethwick


surgery and billed accordingly – he claims that there

was no geographical restriction on the location of

patient’s homes at which he could treat patients and

as such was not acting dishonestly. Further, he

asserts that one of the partners of the Northampton

surgery, a Mr Hanji, not only knew that he was doing

this but that he actually paid Mr Hanji £7,000 in order

that he could put claims for Northampton patients

through his Sandwell/Smethwick practice. The real

question was whether the submission of invoices by

the Applicant for payment by the Sandwell PCT was

done dishonestly.

6. The Applicant was arrested on 5 th December 2011

when a search of his house occurred. He was

interviewed under caution twice; on 5 th December

2011 and 22 nd October 2012. He first appeared in the

Crown Court in January 2014. An application to

dismiss was scheduled for 23 rd June 2015 but on that

day the Applicant decided against pursuing the

application. The Applicant was arraigned and pleaded

not guilty. On 1 st September 2014 the CPS informed

the Court and Defence that it was reviewing the

evidence. On 25 th September 2015 the CPS offered no

evidence against the Applicant and a formal S17

Criminal Justice Act 1967 not guilty verdict was

entered.

LAW

7. Initially there was a question about the appropriate

test to apply: that expounded in R v Denning [1991]2

QB 532 in which Nolan LJ said:

“improper (in the context of reg 3)…does not necessarily

connote some grave impropriety. Used as it is in

conjunction with the word ‘unnecessarily’, it is

…intended to cover an act or omission which would not


have occurred if the party concerned had conducted his

case properly”.

Or the test put forward in Ridehalgh v Horsefield

[1994] Ch 205 approved and confirmed in R v

Counsell [2014]WL 978909 that:

“improper…covers any significant breach of a

substantial duty imposed by a relevant code of

professional conduct. But it is not limited to that.

Conduct which would be regarded as improper

according to the consensus of professional opinion….”

8. I have been referred to Evans v The Serious Fraud

Office [2015] EWHC 263 in which Hickinbotton J

reviewed both lines of authority. The learned judge in

that case concluded that the test in R v Denning, not

Ridehalgh or Counsell, was to be applied. That said

Hickinbottom J reviewed the current state of the law

and further stated:

“…each case will necessary be fact dependent…it is

important that s19 applications are not used to attack

decisions to prosecute by way of collateral challenge;

and the courts must be ever vigilant to avoid any

temptation to impose too high a burden or standard on

a public prosecuting authority in respect of

prosecutorial decisions…to form the basis of an

application under s19 the conduct of the prosecution

must be starkly improper such that no great

investigation into the facts or decision-making process

is necessary to establish it….cases in which it will be

appropriate to make (let alone grant) a S19 application

against a public prosecutor will be rare and restricted

to those exceptional cases where the prosecution has

made a clear and stark error as a result of which a

defendant has incurred costs for which it is appropriate

to compensate him…i.e. the decision was one which no

reasonable prosecutor could have made…”


9. The comments in Evans were reviewed and approved

by Coulson J in R v Dr Errol Cornish, Maidstone &

Tunbridge Wells NHS Trust [2016] EWHC 779. It is

clear that even under the Denning line of authority the

test is one of impropriety; further that it is a high

burden that needs to be established by any applicant

under S19 because the granting of such an order will

be rare; it is this test that I apply to the current case.

10. In addition I bear in mind the Practice direction (costs

in criminal proceedings) 7 th October 2013 and its

guidance; the Code for Crown Prosecutors, in

particular paragraphs 3.3 & 4.2-4.3 (the decision

whether to prosecute & the full code test) and the

DPP’s guidance on Charging 5 th edition 2013, in

particular paragraphs 3, 6 & 26 (duty to investigate,

assessment of evidence & charging decisions)

FACTUAL BASIS OF APPLICATION

11. The Applicant relies on 3 heads of inaction/failure by

the prosecuting authority that it is claimed satisfies

the test identified in Denning and Evans. They are:

(i) a failure to investigate whether there was a

written contract between the Applicant and

Sandwell PCT re the village practice, 4 St

Mary’s Rd, Smethwick.

(ii) a failure to interrogate the computer system at

the Northampton surgery re the allegation

that the Applicant was falsifying documents to

make it appear that he was performing work

at the Smethwick surgery which was in fact

being performed at the Northampton surgery

(iii) a failure to make enquiries with the

Northampton surgery to ascertain if Mr Cross

had been removing the physical files of

registered patients.


Mr Rees, on behalf of the Applicant, submitted that the

above should have been done before the decision was

taken to charge Mr Cross.

12. In respect of 9(i) above Mr Rees submitted that since

this was a case of dishonest breach of a contract, there

should have been further enquiries to ascertain

whether a written contract of employment existed.

Further, that if those enquiries had been conducted

earlier than they were the prosecuting authorities

would have discovered that there was no signed,

written contract and the prosecution may have

stopped there and then.

13. I do not agree. First, it was not until his Defence Case

Statement, dated 23 rd June 2014, that the Applicant

first mentioned there was no signed contract re the

village practice, 4 St Mary’s Rd, Smethwick. It is of

note that in neither interview (the second was ‘no

comment’ and a prepared statement was supplied) did

the Applicant inform the police that there was no

written signed contract. He must have known

whether there was such a contract and he could easily

have informed the police. It does not sit well with the

Applicant to complain that the prosecuting authority

did not discover that there was no written signed

contract until after he had been charged when he

could have informed them of that very fact at any time

following his arrest on 5 th December 2011. It is true

that Mr Cross was not specifically asked if a signed

copy of the contract exited in either interview,

however he and his legal representative fully knew

what the allegation was i.e. that he was in breach of his

contract with Sandwell PCT re the village practice, 4 St

Mary’s Rd, Smethwick, by falsely claiming he had

performed work there that he had in fact performed at

the Northampton surgery.


14. Second, there was no requirement that the contract be

signed. An oral contract or even a contract established

by conduct/practice would suffice. There was clearly

evidence that Mr Cross was operating from the village

practice, 4 St Mary’s Rd, Smethwick and that there was

a contract of employment between him and Sandwell

PCT premised on that address. It is clear therefore

that the absence of a signed contract of employment

would not have caused the prosecuting authority to

necessarily have halted it’s prosecution of Mr Cross.

The question the CPS were interested in was whether

the Applicant had dishonestly claimed for work under

his NHS contract, not whether he had a written or oral

contract with the NHS.

15. In respect of 9(ii) above the allegation was that the

Applicant would cover up his dishonesty by

manipulating the computer system at the

Northampton surgery. He would do this, claimed the

Prosecution, by marking patients files ‘I/A’ (inactive).

That had the effect of preventing any payment claim

being generated by the Northampton surgery and also,

by a quirk of the software, concealed the fact they

remained unbilled. In effect they were wiped from the

Northampton surgery’s computer. The Crown’s case

was that the Applicant would then obtain the

Northampton patient’s signature on a paper form (an

FP17) that he would later stamp with the Smethwick

surgery stamp – hence it appeared as if the dental

work had occurred at the village practice, 4 St Mary’s

Rd, Smethwick.

16. The computer from the Northampton surgery was

‘imaged’ by a computer expert at the outset of the

investigation at the beginning of 2012. It was

subsequently found that the ‘image’ was corrupted


and unworkable. A duplicate copy of the computer

was not obtained until the summer of 2014. When the

working copy of the imaged computer was examined it

revealed that not every course of treatment which the

Applicant processed through his Smethwick contract

was rendered inactive on the Northampton computer

system. Further, that most of those that had been

marked inactive had also been marked with the

indicator ‘VP’ (village practice – i.e. the Smethwick

surgery) consistent with an intention to process the

treatments through the Smethwick surgery. The effect

of that was the Crown no longer had an unassailable

case that the Applicant had dishonestly covered his

tracks using the Northampton computer. It is of note

that the Applicant was charged in September 2013 i.e.

9-10 months before the Crown obtained a working

copy of the Northampton computer.

17. In respect of 9(iii) above a search of the Applicant’s

hone following his arrest revealed copies of patients

records from the Northampton surgery. The Crown’s

case was that here was evidence that the Applicant

was physically removing the hard copy record of the

patients from the Northampton surgery thus

expunging all record of them from that practice. In his

interview and Defence Case Statement the Applicant

explained the presence of the dozen or so patient

records found at his home as simply documents he

had accidently gathered up and not yet returned.

18. In fact when enquiries were made with the

Northampton practice it was found that there were in

fact hundreds of relevant practice record forms

retained there re patients that the Crown alleged had

been dishonestly treated at the Smethwick surgery.

Once again therefore, the suggestion that the


Applicant had covered his tracks (thereby indicating

dishonesty) fell by the wayside.

19. Mr Rees submitted that, in respect of 9(ii) & 9 (iii)

above, if an interrogation of the Northampton

computer and enquiries of the surgery had been done

earlier, the prosecuting authority would have seen

that they could not establish dishonesty by virtue of

the Applicant either manipulating the Northampton

computer and, or removing the hard copy of patient’s

records from the Northampton surgery.

Consequently, it would have stopped it’s prosecution

of the Applicant much earlier than it did. In my view it

is not possible to argue against that proposition.

20. Was there any other evidence that was capable of

maintaining the prosecution of Mr Cross? The

prosecuting authority was in possession of material

from the Northampton surgery that suggested that the

Applicant’s activities had had a deleterious effect on

the Northampton surgery. It was subsequently

discovered that this assertion by one of the partners,

Mr Moopen, was based on inaccurate data provided by

the practice manager. That the prosecuting relied on

inaccurate material was not the Respondent’s fault.

However, the data on its own did not show dishonesty

by the Applicant.

21. Finally, in interview the Applicant had stated that he

had agreed his actions of treating some of the

Northampton patients at the Smethwick practice in

advance of doing so with one of the partners at the

Northampton surgery – a Mr Hanji. The Crown was in

possession of a statement (unused material) from Mr

Hanji confirming that assertion. The Crown took the

view that Mr Hanji was a dishonest witness. In my

opinion, given that Mr Hanji was interviewed under


caution and maintained his right to silence, the CPS

were perfectly entitled to take that view of him.

FINDING

22. Therefore it seems to me the real issue is whether the

prosecuting authority acted improperly by charging

Mr Cross before it had properly analysed the

Northampton computer system and before it had

made proper enquiries whether hard copies of patient

records who were the subject of the alleged fraud had

been removed from the same practice.

23. There is no doubt in my mind that the prosecuting

authority was entitled to have suspicions in respect of

the Applicant’s behavior. On one view he was clearly

treating patients at the Northampton surgery but

recording them as Smethwick surgery patients. Given

that the Applicant received greater remuneration for

identical dental work carried out at the Smethwick

surgery rather than the Northampton surgery, that in

itself raised the very real suspicion of fraud. As such

the prosecuting authority was entitled, indeed obliged,

to investigate. That investigation clearly began in

earnest on 5 th December 2011 when the Applicant was

arrested. There is however a world of difference

between suspicion of dishonesty and admissible

evidence of dishonesty.

24. It is clear from the case summary, dated 21 st May

2014, that the evidence the Crown premised their

prosecution on was falsification by the Applicant of

the Northampton computer system by marking files

‘I/A’; the physical removal of the hard copies of

patients records from the Northampton surgery by the

Applicant; and Shams Moopen’s assertion that he

knew nothing of the Applicant’s actions in processing

some of the patients he treated at Mr Moopen’s


(Northampton) surgery through his Smethwick

surgery.

25. However, as can be seen from above, an interrogation

of the Northampton computer system did not support

the assertion that by marking the files ‘I/A’ the

Applicant was dishonestly ‘hiding’ them; an enquiry at

the Northampton surgery revealed that the Applicant

was not physically removing hard copies of patients

reports in order to dishonestly dispose of them from

the Northampton surgery; and whilst Mr Moopen may

not have known of the Applicant’s practice of treating

some of the Northampton surgery patients through

the Smethwick surgery – Mr Hanji (Mr Moopen’s

partner in the Northampton dental practice) did.

26. The Code for Prosecutors at paragraph 4.2 states:

“In most cases, prosecutors should only decide whether

to prosecute after the investigation has been completed

and after all the evidence has been reviewed.”

At paragraph 4.4 the Code continues:

“Prosecutors must be satisfied that there is sufficient

evidence to provide a realistic prospect of conviction…A

case which does not pass the evidential stage must not

proceed, no matter how serious or sensitive it may be”

And at paragraph 4.4 the Code states:

“The finding that there is a realistic prospect of

conviction is based on the prosecutor’s objective

assessment of the evidence…it means an objective,

impartial and reasonable jury …hearing a case, properly

directed and acting in accordance with the law, is more

likely than not to convict the defendant of the charge

alleged.”

Finally at paragraph 4.6 the Code states


“When deciding whether there is sufficient evidence to

prosecute, prosecutors should ask themselves the

following: can the evidence be used in court?...”

27. In my opinion it would have been obvious to any

prosecutor who applied paragraph 4 of the Code to the

material before them in the instant case that there was

insufficient admissible evidence to make it more likely

than not that a jury would convict the Applicant. It

follows that in my view the Applicant should not have

been charged in September 2013; there was simply

insufficient evidence. In other words, whatever

suspicions the prosecuting authority had re the

Applicant’s behavior, they had no admissible evidence

that he had behaved dishonestly - certainly no

sufficient admissible evidence to justify charging the

Applicant. The answer to the paucity of admissible

evidence was to carry on investigating; not to charge

the Applicant with a serious offence. The fact that the

prosecuting authority’s case against the Applicant fell

away was due to it finally investigating the matter

properly; when it did it showed that what he had been

saying was correct and there was no admissible

evidence of dishonesty.

28. Does that amount to improper conduct by the

prosecuting authority? In my view it does amount to

‘a clear and stark error’ (see Evans Ibid). In his

interviews and his Defence Case Statement the

Applicant made it clear that he hadn’t dishonestly

falsified the Northampton computer system or

dishonestly removed hard copies of patients records

en masse. He made it clear that the prosecuting

authority should make further investigations in

respect of the computer and the Northampton surgery.

Despite that, the prosecuting authority, instead of

carrying out those further checks, chose to charge the


Applicant. To charge a person of good character with

a serious criminal offence when there is no or no

sufficient evidence to offer a realistic prospect of

conviction, especially when that person is demanding

the prosecuting authority investigate further because

it is proceeding on a false basis, amounts to ‘starkly

improper behavior’ (see Evans Ibid). Consequently I

find that the decision to charge the Applicant was

improper conduct by the prosecuting authority. As

such as a matter of principle, the Applicant should be

entitled to recover the reasonable costs he incurred as

a direct result of that impropriety.

29. I therefore direct that an enquiry into the appropriate

figure re the Applicant’s costs should be determined

by those expert in such matters, pursuant to rule

45:10 (sub-rule 7.8) of the Criminal Procedure Rules.

Once I have been supplied with the appropriate figure

I shall make the necessary order.

30. I make it clear that I find that the prosecuting

authority’s conduct only became improper when the

Applicant was charged, not before that date. In other

words, the Applicant is entitled to the costs (as

appropriately determined pursuant to paragraph 29

above) he incurred from the date of charge; not before

that date.

CONCLUSION

31. Finally I thank the advocates for their skeleton

arguments and oral advocacy that has greatly assisted

me in coming to my decision.

HHJ Tregilgas-Davey

2 nd September 2016

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