FOURTH SECTION

FINAL DECISION

AS TO THE ADMISSIBILITY OF

Application no. 21413/02 by Yash Pal KANSAL against the United Kingdom

The European Court of Human Rights (Fourth Section), sitting on 23 September 2003 as a Chamber composed of:

Mr M. Pellonpää , President , Sir Nicolas Bratza , Mr M. Fischbach , Mr J. Casadevall , Mr S. Pavlovschi , Mr J. Borrego Borrego , Mrs E. Fura-Sandström, judges , and Mr M. O’Boyle , Section Registrar ,

Having regard to the above application lodged on 21 May 2002,

Having regard to the partial decision of 28 January 2003,

Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,

Having deliberated, decides as follows:

THE FACTS

The applicant, Mr Yash Kansal, is a United Kingdom national, who was born in 1947 and lives in Oldham, United Kingdom.

A. The circumstances of the case

The facts of the case, as submitted by the parties, may be summarised as follows.

From 1977, the applicant ran a company which operated 20 chemist shops. Following financial problems, the company went into liquidation in February 1987. On 20 May 1987, a bankruptcy petition was presented against the applicant and on 11 March 1988, a bankruptcy order was made.

On 16 March and 20 May 1988, the applicant was interviewed by an examiner at the office of the official receiver. On 29 July 1988, the applicant was publicly examined by the official receiver. Under section 291 of the Insolvency Act 1986, the applicant was obliged to answer the questions put to him by the official receiver and if he failed to comply without reasonable excuse, he would have been guilty of contempt of court and liable to punishment by a fine or imprisonment.

On 16 March and 23 March 1988, the Halifax Building Society advanced 150,000 pounds sterling (GBP) and GBP 116,250 respectively to the applicant on the security of his house. On 23 March 1988, the applicant’s wife collected part of the advance, GBP 104,000, from the applicant’s solicitor and took it to India in a bin liner.

The applicant was subsequently charged with two offences of obtaining property by deception contrary to section 15(1) of the Theft Act 1968 on the grounds that he had misled the building society into advancing money by false representations regarding his annual income, his debts and the bankruptcy proceedings against him. He was also charged with two offences of removing property required to be delivered to the official receiver and failing to account for the loss of property while bankrupt contrary to section 354(2) and (3) of the Insolvency Act 1986.

At the applicant’s trial in February 1992, the prosecution introduced as evidence the transcript of the examination of the applicant by the official receiver in the bankruptcy proceedings. The applicant submitted that the transcript was inadmissible under section 31 of the Theft Act 1968 which provides that a statement or admission made by a person answering questions in proceedings for the administration of any property or for an account of any property or dealings with property is not admissible in evidence against that person. However, the trial judge ruled the evidence admissible under section 433 of the Insolvency Act 1986 which provides that statements made in pursuance of a requirement imposed by the Act may be used in evidence against the maker of the statement.

The full transcript of the applicant’s examination by the official receiver was placed before the jury and in his summing up, the judge stated that the transcript “could be very important”.

On 18 February 1992, the applicant was convicted of the four offences charged and was sentenced to 15 months’ imprisonment. The applicant appealed against conviction and on 12 May 1992, the Court of Appeal dismissed his appeal deciding, inter alia , that the transcript of the bankruptcy examination was admissible under section 433 of the Insolvency Act 1986 which abrogated the privilege against self-incrimination. Leave to appeal against this decision was refused by the Court of Appeal and by the House of Lords.

On 27 April 1998, the Criminal Cases Review Commission (CCRC) referred the applicant’s case back to the Court of Appeal due to changes in the domestic law on obtaining mortgage advances by false statements. On 20 June 2000, the Commission added the ground that, following the decision of the European Court of Human Rights in Saunders v. the United Kingdom (judgment of 17 December 1996, Reports of Judgments and Decisions 1996-VI) and the introduction of the Human Rights Act 1998, the admission of answers given under compulsion during the bankruptcy examination may have been in breach of Article 6 of the Convention and rendered the applicant’s conviction unsafe.

On 24 May 2001, the Court of Appeal overturned the applicant’s conviction on the grounds that the answers given by the applicant in his examination by the official receiver had been wrongly admitted at trial. The court found that the Human Rights Act 1998 could apply retrospectively in appeals against convictions which took place before the legislation came into force. The court went on to find that the admission of the transcript of the examination of the applicant in bankruptcy proceedings was in breach of section 6(1) of the Human Rights Act 1998 since the admission of this statement in criminal proceedings violated Article 6 of the Convention.

The Court of Appeal certified a point of law to the House of Lords, as to whether the Human Rights Act 1998 could apply retrospectively in appeals arising from a reference to the Court of Appeal by the CCRC.

The Crown appealed to the House of Lords against the decision of the Court of Appeal of 24 May 2001. On 29 November 2001, the House of Lords allowed the appeal, holding that they were bound to follow the earlier decision of the House in R v. Lambert [2001] 3WLR206, which had decided that the Human Rights Act 1998 could not apply retrospectively to allow a defendant whose trial took place before the Act came into force to rely on a breach of the Convention in a later appeal. Three of the five Law Lords believed that R v. Lambert had been decided incorrectly. Lord Lloyd proposed referring the applicant’s case to a panel of seven Law Lords which would have the power to reverse the decision in R v. Lambert but the required majority for such a reference did not exist.

B. Relevant domestic law

1. Compulsion to answer questions during bankruptcy proceedings

Section 291(4) of the Insolvency Act 1986 provides as follows:

“The bankrupt shall give the official receiver such inventory of his estate and such other information, and shall attend on the official receiver at such times, as the official receiver may for any of the purposes of this Chapter require; ...”

Section 291(6) goes on to stipulate that:

“If a bankrupt without reasonable excuse fails to comply with any obligation imposed by this section, he is guilty of a contempt of court and liable to be punished accordingly (in addition to any other punishment to which he may be subject).”

The Divisional Court would deal with such a contempt of court and the sentence could be a fine or imprisonment for a maximum of two years (section 14 of the Supreme Court Act 1981).

Section 290(1) of the Insolvency Act 1986 provides that the official receiver may apply to the court for the public examination of the bankrupt. Cases such as Re Paget (1927) 2 Ch. 85 and R v. Harris (1970) 1 WLR1252 establish that the bankrupt is not entitled to refuse to answer questions during the public examination on the grounds that he may incriminate himself.

2. The admission of statements made in bankruptcy proceedings as evidence in criminal trials

At the time of the applicant’s trial, section 433 of the Insolvency Act 1986 provided that:

“In any proceedings (whether or not under this Act) -

(a) a statement of affairs prepared for the purposes of any provision of this Act which is derived from the Insolvency Act 1985 and

(b) any other statement made in pursuance of a requirement imposed by or under any such provision or by or under rules made under this Act,

may be used in evidence against any person making or concurring in making the statement.”

In contrast, section 31(1) of the Theft Act 1968 stipulates that a statement or admission made by a person answering questions in proceedings for the administration of any property is not admissible in evidence in criminal proceedings relating to an offence under the Act:

“A person shall not be excused, by reason that to do so may incriminate that person or the wife or husband of that person of an offence under this Act -

(a) from answering any question put to that person in proceedings for the recovery or administration of any property, for the execution of any trust or for an account of any property or dealings with property; or

(b) from complying with any order made in any such proceedings

but no statement or admission made by a person in answering a question put or complying with an order made as aforesaid shall, in proceedings for an offence under this Act, be admissible  in evidence against that person ... ”

In R v. Kansal (1993) 95 Cr.App.R. 348 (the decision on the first appeal of this applicant), the Court of Appeal held that the Insolvency Rules 1986 (S.I. 1986 No. 1925) made it clear that the privilege against self-incrimination was abrogated in any public examination of the bankrupt and that, thereafter, section 433 of the Insolvency Act 1986 rendered the evidence admissible in a criminal trial notwithstanding section 31 of the Theft Act 1968.

Following the decision of this Court in Saunders v. United Kingdom and the planned introduction of the Human Rights Act 1998, section 59 and Schedule 3 of the Youth Justice and Criminal Evidence Act 1999 amended section 433 of the Insolvency Act 1986. A second sub-paragraph (section 433(2)) was inserted which reads:

“(2) However, in criminal proceedings in which any such person is charged with an offence to which this subsection applies–

(a) no evidence relating to the statement may be adduced, and

(b) no question relating to it may be asked,

by or on behalf of the prosecution, unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person.”

This provision was not in force at the time of the applicant’s trial.

It is possible for a court to refuse to admit evidence on the grounds of fairness. Section 78(1) of the Police and Criminal Evidence Act (PACE) 1984 provides that:

“In any proceedings the court may refuse to allow evidence on which the prosecution proposes to rely to be given if it appears to the court that, having regard to all the circumstances, including the circumstances in which the evidence was obtained, the admission of the evidence would have such an adverse effect on the fairness of the proceedings that the court ought not to admit it.”

COMPLAINTS

The applicant complains under Article 6 of the Convention that the statements obtained under compulsion in bankruptcy proceedings should not have been admitted in criminal proceedings against him.

The applicant’s representative in the observations submitted on 15 July 2003 refers to Article 13 of the Convention. This aspect of the application, concerning the applicant’s complaints about the refusal of the House of Lords to overrule a previous decision, was however rejected in the Court’s partial decision on admissibility of  28 January 2003 and it is no longer within the scope of the Court’s examination.

THE LAW

The applicant complains about the use at his trial of statements made under compulsion in bankruptcy proceedings, invoking Article 6 § 1 of the Convention which provides as relevant:

“In the determination of ... any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.”

A. The parties’ submissions

The Government accept that significant use was made by the prosecution at the applicant’s trial of the statements made by him under compulsion in bankruptcy proceedings. As such, the case is not distinguishable from Saunders v. the United Kingdom (judgment of 17 December 1996, Reports of Judgments and Decisions 1996-VI) and they concede that the result of the case should be the same.

The applicant submits that the statements which he was compelled to make to the official receiver were a significant part of the prosecution case against him, used in the prosecuting counsel’s opening and closing address to the jury and in cross-examining the applicant to demonstrate the inconsistency of his testimony. This rendered his trial unfair contrary to Article 6 § 1 of the Convention.

B. The Court’s assessment

Having regard to the applicant’s complaint and the parties’ submissions, the Court finds that serious questions of fact and law arise, the determination of which should depend on an examination of the merits. The application cannot be regarded as manifestly ill-founded within the meaning of Article 35 § 3 of the Convention. No other grounds for declaring it inadmissible have been established.

For these reasons, the Court unanimously

Declares the remainder of the application admissible, without prejudging the merits of the case.

Michael O’Boyle Matti Pellonpää Registrar President