Taylor v R.

For the purposes of section 206(1)(c) of the Insolvency Act 1986, the composite expression book or paper is to be given a practical meaning which reflects current usage. Although a computer record is not itself paper, electronic records affecting or relating to a company’s property or affairs fall within that expression.

A company officer’s physical custody of company vehicles is the company’s possession where the officer has no independent right to possess them. A statement of affairs must therefore disclose vehicles held under hire purchase, together with the relevant agreements and guarantees, even if the vehicles are subject to finance companies’ claims or have no equity.

The appellant was convicted at the Crown Court at Chichester of company insolvency offences. He had diverted a payment due to a company in compulsory liquidation into an account of a newly formed company. He had also omitted from a Preliminary Information Questionnaire the company’s hire-purchase vehicles, the relevant finance agreements and his guarantees.

He appealed against convictions under sections 206 and 210 of the Insolvency Act 1986, and against sentence. The central issues were whether electronic data held by an NHS Trust could be a book or paper under section 206(1)(c), and whether there was evidence that he had materially omitted the vehicles from statements relating to the company’s affairs.

1. Appeal dismissed. The court upheld all challenged convictions and the total sentence of 16 months’ imprisonment.

2. Section 206(1)(c) of the Insolvency Act 1986 had to be construed as enacted, without reference to later legislation. Its application was nevertheless to current facts and circumstances. A computer record was not itself a paper, but company records kept on computer could fall within the composite expression book or paper affecting or relating to the company’s property or affairs. The jury were therefore entitled to convict for falsifying the NHS Trust’s electronic banking records: paras [21]-[25].

3. The judge misdirected the jury by saying that the questionnaire related back to the winding-up order. Its questions were generally in the present tense and naturally referred to the position when answered. The misdirection was immaterial because the appellant still possessed the vehicles when he signed it: paras [34]-[35].

4. The appellant’s possession of the vehicles was possession on behalf of the company. He had no independent right to possess them as against the company. His answers concealed the vehicles, hire-purchase agreements and guarantees. The questionnaire expressly required disclosure of assets subject to hire-purchase claims, and the evidence amply supported the unanimous verdicts under section 210: paras [36]-[38]. Whether the vehicles were assets of the company was not essential to those verdicts.

5. The lack of a pre-sentence report was irrelevant because no potentially material information that it might have supplied was identified. The offending was serious and the sentences were fully justified: paras [39]-[41].

• Court of Appeal (Criminal Division) Dismissed the appeals against conviction and sentence: [2011] EWCA Crim 728.
• Crown Court at Chichester The appellant pleaded guilty to two offences on 14 September 2010, was convicted by a unanimous jury of further insolvency offences on 22 September 2010, and was sentenced on 1 October 2010.