Stainer, R. v

Factual and Procedural Background

On 19 May 2020, in the Crown Court at Southwark before HHJ Gregory Perrins and a jury, the Applicant, then aged 74, was convicted of two counts of cheating the Public Revenue contrary to common law and one count of fraud by false representation contrary to section 1 of the Fraud Act 2006. The offences concerned the Applicant's failure to pay income tax and National Insurance contributions due to HMRC under registered PAYE schemes related to two companies owned by the Applicant, namely Company A and Company B. These companies operated the Applicant's hospitality business and managed staff wage payments.

On 7 July 2022, the Applicant was sentenced to three years' imprisonment on each count, to run concurrently, and disqualified from being a company director for three years.

The Applicant renewed an application for an extension of time to seek leave to appeal against conviction and sentence following refusal by a single judge. He sought to introduce fresh evidence including a witness statement from a representative of HMRC and an administrator's report regarding disposal of freehold property. The Applicant contended that HMRC's actions, including bankruptcy petitions, prevented him from settling his tax liabilities, which he maintained were deferred PAYE and National Insurance contributions.

The offences relate to the indictment period from April 2011 to April 2015. During this time, the Applicant and his spouse owned Company B, which operated multiple hospitality venues and employed approximately fifty staff. The Applicant, as employer, was responsible for deducting PAYE tax and National Insurance contributions from employees' wages but failed to account for these deductions to HMRC.

The Applicant and spouse were arrested on 23 July 2015 when HMRC officers seized materials used to calculate tax liabilities. The trial focused on whether the Applicant intended to cheat the Public Revenue and whether he made false representations to staff by issuing wage documentation showing deductions that were not paid to HMRC.

Legal Issues Presented

1. Whether the Applicant intended to cheat the Public Revenue by failing to pay deducted PAYE tax and National Insurance contributions to HMRC.
2. Whether the Applicant made false representations to employees through wage slips indicating deductions had been made to HMRC when they had not.
3. Whether fresh evidence and alleged prosecutorial nondisclosure justify an extension of time and leave to appeal against conviction and sentence.
4. The appropriateness of the sentence imposed, including whether it was manifestly excessive or wrong in principle.

Arguments of the Parties

Applicant's Arguments

• The Applicant denied dishonesty and maintained there was no intention to defraud HMRC, asserting an intention to pay liabilities at a future date supported by independent handwritten records.
• The Applicant contended that HMRC had given him a "breathing space" and an agreement to defer payments, and that he had been open and honest with HMRC.
• He argued that wage slips did not constitute false representations to staff.
• The Applicant alleged HMRC withheld relevant material, including a seized aide memoire, and caused confusion regarding the correct tax position.
• He claimed that HMRC's bankruptcy petitions were an attempt to avoid a false arrest claim and prevented settlement of liabilities.
• The Applicant challenged aspects of the judge’s summing-up and alleged jury misconduct without evidential basis.
• He disputed the sentencing, arguing the judge failed to properly weigh mitigation factors such as his age, health, good character, and that the amount of tax at issue was overstated.
• The Applicant contended that a suspended sentence should have been imposed, though the maximum lawful suspension was two years.

Respondent's Arguments

• The Respondent (HMRC) maintained that the Applicant behaved dishonestly, retaining deducted tax and National Insurance contributions for personal financial gain, thereby exposing employees to loss.
• They argued the aide memoire was disclosed and did not assist the Applicant’s case, and that disclosure issues had been properly ventilated at trial.
• The Respondent denied any misconduct or impropriety in pursuing bankruptcy petitions.
• They supported the judge’s summing-up as fair and comprehensive and denied any jury misconduct.
• The Respondent submitted that the sentencing was appropriate, applying relevant guidelines and properly balancing aggravating and mitigating factors.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court carefully reviewed the Applicant’s grounds of appeal against conviction, including the fresh evidence and allegations of nondisclosure. It found no merit in the Applicant’s assertions that withheld material or prosecutorial misconduct rendered the convictions unsafe. The court noted that the aide memoire was disclosed and did not assist the Applicant’s case, and that disclosure issues should have been addressed at trial.

The court rejected the Applicant’s claim that HMRC’s bankruptcy petitions were improper or affected the safety of the convictions, finding no evidence of misconduct. It also dismissed challenges to the judge’s summing-up and allegations of jury misconduct as unsubstantiated.

Regarding the sentencing appeal, the court observed that the sentencing judge had applied the appropriate guidelines for Revenue fraud and fraud by false representation, categorised the offences at a high level of culpability and harm, and properly balanced aggravating and mitigating factors, including the Applicant’s age and good character. The court found no error in principle or manifest excess in the sentence imposed.

The court further noted that suspension of the sentence was not legally available given the sentence length exceeded the maximum allowable suspension period.

Holding and Implications

The court REFUSED the Applicant’s applications for an extension of time and leave to appeal against both conviction and sentence, concluding these applications would serve no purpose.

The direct effect is that the Applicant’s convictions and sentence stand as adjudicated by the Crown Court. No new legal precedent was established by this decision.

Additionally, the court ordered the Applicant to pay reasonable costs of transcripts amounting to £283.92 within 28 days.