No: 2003/0701/B4 & 2003/1974/B4 
Neutral Citation Number: [2004] EWCA Crim 2530
IN THE COURT OF APPEAL 
CRIMINAL DIVISION 
Royal Courts of Justice
Strand
London, WC2 

Friday, 9th July 2004
 
B E F O R E:
LORD JUSTICE CLARKE 
MR JUSTICE HENRIQUES 
MR JUSTICE BEATSON
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R E G I N A 

-v- 

ANDREW BAILEY 

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MR R BARRADELL appeared on behalf of the APPELLANT
MISS R HARRISON appeared on behalf of the Crown
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J U D G M E N T
1.	LORD JUSTICE CLARKE:  The appellant is Andrew Bailey, now aged 42.  On 10th January 2003 in the Crown court at Sheffield, before Mr Recorder Hirst and a jury, he was convicted of theft.  On 18th February 2003 he was sentenced to a community punishment order of 200 hours.  He was also ordered to pay compensation of £17,929 to Western Mining Corporation and £1,200 towards the costs of the prosecution.  A recovery of defence costs order was also made against the appellant in the full amount.  The single judge, Gage J, refused leave to appeal against both conviction and sentence.  However both applications were renewed before the full court.  He now appeals against conviction by leave of the full court, Rose LJ, Owen J and Sir Charles Mantell granted on 4th May 2004.  The sole ground of appeal arises out of the way the Recorder directed the jury as to the effect of the appellant's good character.  The full court also referred the appellant's renewed sentence application to the court hearing the appeal against conviction.  
2.	It was the prosecution case that on 17th September 2001 the appellant stole four tonnes of nickel worth £17,929 belonging to the Western Mining Corporation of Australia.  The metal was alleged to have been stolen from a storage and distribution facility in Rotheram owned and managed by AMA Storage and Distribution Limited ("AMA").  In the course of its business AMA stored metals for a number of companies.  The background to the alleged offence was that in November 2000 the appellant made a loan of £40,000 to a man called John Sissons who was the Managing Director of Cobra Ltd, one of the companies that stored metals at AMA.  The loan was secured on the metals owned by Cobra and stored at AMA.  On 5th December 2000, Mr Sissons assigned all the metals stored at AMA to the appellant.  The assignment was formally documented and the metals assigned were based on inventories prepared by AMA at the request of Mr Sissons.  The inventory itemised 84.7 tonnes of various metals.  In September 2001 the appellant went to AMA to remove the metals in question.  He removed 57.8 tonnes of metal and was then informed that he had taken all that was due to him.  There was therefore a shortfall of almost 30 tonnes of metal.  
3.	The appellant responded by taking four tonnes of nickel belonging to the Western Mining Corporation of Australia in lieu of the missing 30 tonnes.  He gave a receipt for the additional four tonnes to AMA and subsequently sent a fax to AMA confirming that it had been taken.  That was followed by a letter to AMA saying that if he was not compensated for the missing 30 tonnes within seven days he would sell the nickel and keep the money as part compensation for his losses.  AMA did not respond but contacted the police.  The police then told the appellant by telephone that the nickel belonged to the Western Mining Corporation of Australia and that he should not sell it.  Despite that advice from the police, the appellant sold the nickel.  
4.	The appellant gave evidence that he was aged 40 and a man of good character.  It was his defence that he believed that he was entitled to take the four tonnes of nickel in lieu of the missing metal, that he had a claim of right under section 2(1)(a) of the Theft Act 1968 and that he was not acting dishonestly.  The central issue for the jury was whether the prosecution had proved that the appellant was acting dishonestly in taking and selling the metal belonging to the Western Mining Corporation.
5.	As we have indicated, the sole ground of appeal arises out of the direction which the Recorder gave to the jury as to the appellant's good character.  As we understand it, the summing-up proceeded over two days.  On the first day the Recorder gave a number of detailed directions as to the law which are not in any way in dispute.  He did not, however, give a good character direction.  As we understand it, the fact that he had not given such a direction was brought to his attention on the morning of the second day of the summing-up.  He thanked counsel and said that he would give such a direction in due course.  
6.	The direction which he gave was given very near the end of his summing-up and was in these terms (page 26): 
"Now I am going back now into my directive mode; this is the mode in which what I say is the law.  Remember, the burden of proof is always on the prosecution to satisfy you, so you can be sure, that the defendant has committed the criminal offence of theft, which means in this case to be sure that he was dishonest, dishonest according to your standards, and also that he realised that what he did was dishonest, and also that he intended to treat that nickel as his own to dispose of.  
He is a man of no previous convictions.  That does not mean to say that you automatically accept everything he says.  But it is something you can take account of as favourable to him, because a person who has lived for 40 years without committing a criminal offence obviously is basically an honest person."
7.	Perhaps unfortunately, counsel did not submit to the Recorder before the jury retired that that direction was inadequate.  We do not blame counsel in this particular case.  We are sure that no deliberate decision was made not to draw the matter to the attention of the Recorder, but we do stress that it is the duty of counsel who hear a direction which appears to be inadequate to consider the matter and, in an appropriate case, to draw the matter to the attention of the Recorder so that any defect can be cured before the jury retire to consider their verdict.  
8.	However, the question in this case is whether the direction was or was not inadequate.  Mr Barradell submits that it was inadequate in the context of this case where a crucial question for the jury to decide was whether the appellant acted dishonestly.  It is common ground that that was indeed a crucial question in the case.  The Recorder made clear to the jury at page 5C that there were two essentials for the jury to decide.  The first was whether the appellant acted dishonestly and the second was whether at the time he took the four tonnes of nickel he intended permanently to deprive the owner of it.  The judge correctly defined the meaning of dishonesty by reference to the two limbs identified in the case of Ghosh [1982] QB 1053.  Thus, he told the jury that they must be sure (1) that the appellant acted dishonestly by the ordinary standards of reasonable and honest people, and (2) that the appellant realised that what he was doing was dishonest.  Here the defence relied upon section 2(1) of the Theft Act 1968 which provides:
"A person's appropriation of property belonging to another is not to be regarded as dishonest- 
 (a) if he appropriates the property in the belief that he has in law the right to deprive the other of it..." 
The Recorder correctly directed the jury that the Crown must satisfy them that the appellant did not believe that he had the right in law to deprive the owner of the nickel of its property.  Thus the state of mind of the appellant was central to the questions the jury had to decide.  In these circumstances, it was, in our judgment, of considerable importance that the Recorder give a sufficient direction as to the appellant's good character.  
9.	The position is clear on the authorities.  The history of the matter is discussed in some detail in Vye (1993) 97 Cr.App.R 134, where Lord Taylor, CJ, giving the judgment of the court identified the correct approach as follows:  
"To summarise, in our judgment the following principles are to be applied:  
 (1) A direction as to the relevance of his good character to a defendant's credibility is to be given where he has testified or made pre-trial answers or statements.  
 (2) A direction as to the relevance of his good character to the likelihood of his having committed the offence charged is to be given, whether or not he has testified, or made pre-trial answers or statements.  
 (3) Where defendant A of good character is jointly tried with defendant B of bad character, (1) and (2) still apply."  
We are not of course here concerned with point (3).  
10.	The problem has been considered in a number of cases, including the case of Lloyd [2002] Cr.App.R 355 where the judgment of this court was given by Pill LJ.  At 358 he quoted this passage from the speech of Lord Steyn in Aziz [1995] 2 Cr.App.R 478, [1996] AC 41, at pages 486 and 51 respectively:
"Fairness requires that the judge should direct the jury about good character because it is evidence of probative significance.  Leaving it entirely to the discretion of trial judges to decide whether to give directions on good character led to inconsistency and to repeated appeals.  Hence there has been a shift from discretion to rules of practice.  And Vye was the culmination of this development.  This is the context in which the Lord Chief Justice enunciated the principles already quoted."  
11.	Although the facts of Lloyd were very different, it was a case like this at any rate to the extent that the issue of credibility was of the greatest importance and relevance.  In Lloyd, Pill LJ expressed the court's conclusions at pages 359 to 360 as follows:  
"In our judgment it was most important that a plain statement be made in the summing-up as to the good character of the appellant and its effect on the proceedings.  It was particularly important in this case that the jury should be told that, when considering whether his evidence was truthful, they must bear in mind that the defendant was a man of good character.  The relevant sentence from the Judicial Studies Board guideline direction reads: 
	'This means it is a factor which you should take into account when deciding whether you believe his evidence.' 
It was vital in this case that such a direction was given.  It was not given.  Merely to ask the question: 'Is it more likely that he is telling the truth because he is a man of clean character?' was far from sufficient.  This, in our judgment, is a fatal defect in this summing-up.  
The appellant was also entitled to a plain direction upon the second limb contemplated in Vye..." 
12.	Mr Barradell submits that the same is true here.  The current April 2003 version of the standard JSB direction is in these terms in the case of a defendant who has given evidence:  
"You have heard that the defendant is a man ... of good character...  Of course, good character cannot by itself prove a defence to a criminal charge, but it is evidence which you should take into account in his favour in the following way/s:  
1.  In the first place, the defendant has given evidence, and as with any man of good character it supports his credibility.  This means it is a factor which you should take into account when deciding whether you believe his evidence.  
2.  In the second place, the fact that he is of good character may mean that he is less likely than otherwise might be the case to commit this crime now.  
I have said that these are matters to which you should have regard in the defendant's favour.  It is for you to decide what weight you should give to them in this case.  In doing this you are entitled to take into account everything you have heard about the defendant, including..."
13.	The notes to the JSB direction of course make it clear that the precise direction to be given will depend upon the circumstances of the particular case, but they say that generally the direction should not be watered down.  They also stress the desirability of the proposed direction being discussed with counsel before their closing speeches, which did not occur here.  
14.	Mr Barradell submits that the direction given in the present case was inadequate because it fails to distinguish between the two limbs of the good character direction.  He submits that the Recorder neither used the word "credibility" nor otherwise made it clear that the jury should take the appellant's good character into account in deciding whether they believed his evidence.  Nor did the Recorder make it clear that they should consider whether the fact of his good character might mean that he was less likely to have committed the offence.  
15.	Miss Harrison recognises that the central issue in the case was the state of mind of the appellant and in particular his honesty or dishonesty and that the Recorder did not use the standard direction, but she submits that he dealt with both its limbs in commonsense terms.  She stresses that the jury were told to take the fact that the appellant had no previous convictions into account in his favour.  She further submits that the conviction was not in any event unsafe.  It is fair to say that it was broadly on that basis that the single judge initially refused leave to appeal on paper.  
16.	We recognise that there have been cases in which appeals have been dismissed notwithstanding a failure on the part of the judge to give an entirely appropriate direction.  As ever, each case turns on its own facts.  However, in the instant case we are persuaded that Mr Barradell's submissions are well-founded.  The direction was of particular importance in this case and in our judgment it did not go far enough.  It did not identify the two distinct ways in which good character is relevant, namely as to credibility and as to propensity.  Although it might be said that both were wrapped up in what the Recorder said, they were not spelled out clearly.  The direction was somewhat delphic.  Moreover, the authorities, especially Lloyd, spell out the importance of a plain direction being given that the jury should take into account the defendant's good character (our emphasis).  In the present case the Recorder merely said that they could take it into account, which in our view is to water down the direction.  The direction should not have been watered down.  In all these circumstances we have reached the conclusion that the direction was inadequate.  
17.	Was the conviction nevertheless safe?  We cannot say that it was because the honesty or dishonesty of the appellant and what he believed were central to the case the jury had to consider.  It follows that this appeal must be allowed.  
18.	We only add by way of postscript that the case highlights again the importance of giving a clear direction along the lines of the JSB guidelines and indeed the desirability of discussing the proposed direction with counsel in advance.  
19.	For the reasons we have given, the conviction is quashed.  We will now hear submissions on whether to order a retrial. 
20.	MISS HARRISON:  My Lord, the Crown do not seek a retrial in this case.  By the time the trial was heard the offence was already of some age.  Bearing in mind the fact that Mr Bailey is still of good character, now your Lordships have overturned the conviction, he has already served the sentence in terms of the community punishment order which he has completed and the compensation which he was ordered to pay has been dealt with by way of insurance settlement in any event, he would have been paying the insurance company rather than the Australia Mining Corporation direct.  In those circumstances the Crown Prosecution Service consider that it is not in the public interest to seek a retrial.
21.	LORD JUSTICE CLARKE:  Very well.  In that case we do not order a retrial.  So far as we can see, without hearing any argument on the point, it is very difficult to see how the applicant would have any defence to the claim for £17,000 at the instance of Western Mining, perhaps by way of a subrogated claim by its insurers, but that is not a matter we are considering today.  The result of this appeal is that it is allowed and the conviction is quashed.  
22.	MR BARRADELL:  My Lord, there is one final matter.  The appellant had the benefit of a representation order throughout proceedings at the lower court.  That extended to advice on appeal to the single judge.  Once the single judge refused the grounds for permission to appeal he then paid privately to renew the application.  I invite your Lordships to consider awarding a Defendants Costs Order out of central funds for the out of pocket expenses of Mr Bailey. 
23.	LORD JUSTICE CLARKE:  He has a representation order for the purposes of the appeal?  
24.	MR BARRADELL:  He has for the purposes of the appeal. 
25.	LORD JUSTICE CLARKE:  But not the application for leave?  
26.	MR BARRADELL:  My Lord, what happened was that when I appeared before the full court and the full court gave permission to appeal, they then granted a representation order for my attendance on that day.  But Mr Bailey by then had first of all paid for his solicitors to attend here at the renewed application and I had accepted that brief on a privately paid basis. 
27.	LORD JUSTICE CLARKE:  You are asking for a Defence Costs Order, if that is the right expression, out of central funds in relation to the costs relating to the application for permission. 
28.	MR BARRADELL:  Yes, and also his out of pocket expenses to bring himself here on two occasions and effectively at the outcome of -- 
29.	LORD JUSTICE CLARKE:  We will make a Defence Costs Order in relation to the application for permission.  What such an order covers is really a matter for whoever determines these questions.  Thank you for your assistance.