Hollier & Anor, R. v

For the second limb of fraudulent trading under Companies Act 1985, section 458, a fraudulent purpose need not involve an intention to deceive, or actual deception of, creditors. Concealing ownership or control to obtain commercial advantage otherwise unavailable may constitute a fraudulent purpose if the jury is sure that the conduct was dishonest.

Dishonesty remains essential, but there must also be a purpose for it. A direction requiring conduct to go beyond what honest and decent people in business would regard as honest was sufficient when read with the summing up as a whole.

Hollier and Booth were convicted after a jury trial of offences including fraudulent trading contrary to section 458 of the Companies Act 1985 and perjury. The prosecution alleged that the purported sale of two insurance companies to a company apparently owned by Booth was a sham intended to conceal Hollier’s continuing ownership and control.

They renewed applications for permission to appeal against conviction. Hollier also sought permission to appeal against sentence. The principal issue was whether Count 3, which alleged second-limb fraudulent trading, was inadequately particularised or wrongly left to the jury through directions which conflated dishonesty with fraudulent purpose.

1. The renewed applications for permission to appeal were refused. The particulars of Count 3 sufficiently identified the alleged fraudulent purpose: disguising Hollier’s role in the ownership and control of the two companies. The absence of further particulars concerning the intended commercial advantage did not divert the jury from its proper task.

2. The second limb of section 458 does not require an intent to deceive, or actual deception of, creditors. A jury may find a fraudulent purpose where ownership is concealed to obtain business advantage that would otherwise be denied, provided that it is sure of dishonest intent. Dishonesty alone is insufficient: there must also be a purpose for the dishonesty.

3. The court held that the judge’s route to verdict and accompanying summing up accurately stated the law. Although the commercial-honesty formulation in the route to verdict derived from R v Grantham [1984] 1 QB 675, it was not confined to first-limb fraudulent trading. Read as a whole, the directions required the jury to determine both whether the conduct had a dishonest fraudulent purpose and whether it exceeded the bounds of honest commercial dealing.

4. There was no unsafe conflation of the perjury counts with fraudulent trading. The perjury allegations were properly joined, and the evidence entitled the jury to find that the asserted consultancy relationship concealed a relationship extending beyond consultancy. Booth’s no-case submission was therefore correctly rejected.

5. Hollier’s two-year sentence for fraudulent trading and seven-year director disqualification were not manifestly excessive. Sentence was not determined by monetary loss alone. The judge was entitled to assess the sustained dishonest business conduct and its effect on employees and clients.

• Court of Appeal (Criminal Division). By [2013] EWCA Crim 2041, the court refused Hollier’s renewed applications for permission to appeal against conviction and sentence, and Booth’s renewed application for permission to appeal against conviction.
• Single judge. Permission had previously been refused. The full court adopted the single judge’s reasoning on Booth’s no-case submission concerning the perjury counts.
• Trial. On 12 April 2012 the applicants were convicted by a jury. Hollier was sentenced on 18 July 2012.