Cartwright, R. v

Primary liability for fraudulent trading under section 458 of the Companies Act 1985 is confined to those who exercise a controlling or managerial function in the company’s business. That restriction does not exclude ordinary secondary liability. A person who intentionally assists a principal offender may be guilty even though that person could not personally be a principal offender under the section.

Unjustified prosecutorial delay may mitigate sentence, including where an offender contested the charge. Its weight depends on its actual impact in the particular circumstances.

Following a jury trial at Southwark Crown Court, Cartwright and Bancroft were convicted of fraud-related offences arising from a scheme which caused substantial losses to HBOS. Mills, the dominant participant, and Bancroft were convicted of conspiracy to corrupt, fraudulent trading and concealing criminal property. Cartwright was convicted of fraudulent trading and conspiracy to conceal criminal property.

Cartwright renewed his application for leave to appeal conviction. He contended that section 458 of the Companies Act 1985 did not permit liability as an aider and abettor. Bancroft renewed his application for leave to appeal sentence, and Mills appealed sentence with permission. The central issues were secondary liability for fraudulent trading and whether the sentences were excessive or required further allowance for prosecutorial delay.

1. Disposition. The court granted Cartwright and Bancroft leave to appeal, but dismissed all three appeals. Cartwright’s conviction on fraudulent trading therefore stood, as did his conviction for conspiracy to conceal criminal property.
2. Fraudulent trading. The court accepted that, as explained in R v Miles [1992] Crim LR 657, a principal offender under section 458 of the Companies Act 1985 must exercise a controlling or managerial function in carrying on the company’s business. However, that restriction on principal liability did not expressly or by necessary implication displace common-law secondary liability.
3. The ordinary rule, authoritatively stated in R v Jefferson [1994] 99 Cr App R(S) 13, was that secondary liability is excluded only by express provision or necessary implication. Section 458 contained no such exclusion. Provided that a principal offender existed, whether or not charged, a person could intentionally assist that offender and be liable as a secondary party. The judge’s alternative route to conviction of Cartwright as an aider and abettor was therefore lawful.
4. Sentences. The sentencing judge had taken account of the Crown’s disclosure failures and consequent delay. Although an offender who contests a charge may still receive mitigation for unjustified delay, its practical effect may be reduced by the offender’s circumstances. Mills had continued to enjoy a luxurious lifestyle funded by the offending. His total sentence of 15 years was severe but not manifestly excessive.
5. Bancroft’s lesser role, age, health, totality and the differential between his sentence and Mills’s had been properly considered. The judge was entitled to structure the individual terms so as to reach an overall total of 10 years reflecting Bancroft’s role. No appellate intervention was justified.

• Court of Appeal (Criminal Division): Leave to appeal was granted to Cartwright and Bancroft; Cartwright’s conviction appeal and the sentence appeals of Bancroft and Mills were dismissed: [2020] EWCA Crim 369.
• Southwark Crown Court: Following a jury trial, the defendants were convicted of fraud-related offences and sentenced on 2 February 2017.