Boyle Transport (Northern Ireland) Ltd v R, Court of Appeal - Criminal Division, February 25, 2016, [2016] EWCA Crim 19

Issuing Organization:Criminal Division
Actores:Boyle Transport (Northern Ireland) Ltd v R
Resolution Date:February 25, 2016
 
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Neutral Citation Number: [2016] EWCA Crim 19

Case No: 201501963 B3, 201504636 B3 and 201504633 B3

IN THE COURT OF APPEAL (CRIMINAL DIVISION)

ON APPEAL FROM THE CROWN COURT AT CARLISLE

HHJ HUGHES QC

20150193 B3

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 25/02/2016

Before:

LORD JUSTICE DAVIS

MRS JUSTICE COX DBE

and

HIS HONOUR JUDGE KINCH QC

(SITTING AS A JUDGE OF THE CACD)

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Between:

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Julian Knowles QC (instructed by McNamee McDonnell Solicitors LLP) for the Appellant

Simon Medland QC (instructed by the Crown Prosecution Service) for the Respondent

Andrew Bodnar (instructed by Stephensons Solicitors) for the Applicants

Hearing date: 26TH January 2016

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Lord Justice Davis:

Introduction

  1. By an order of 27 March 2015 made in the Carlisle Crown Court an enforcement receiver was appointed over the realisable assets of Patrick Boyle and Mark Boyle. That order also extended to certain assets held in the name of Boyle Transport (Northern Ireland) Limited, the appellant in this case. This step was taken with a view to achieving recovery of the amounts of confiscation orders previously made in the Crown Court under the provisions of the Proceeds of Crime Act 2002 (``the 2002 Act'') as long ago as 25 March 2013, against Patrick and Mark Boyle.

  2. This appeal involves considering the application of the doctrine of lifting or piercing the corporate veil (using, as a short hand, the ugly metaphorical language which has become established by use). In reaching his decision to extend the appointment of the enforcement receiver over assets of Boyle Transport (Northern Ireland) Limited (``the New Company'') the Judge lifted, or pierced, the corporate veil with regard to a company called Boyle Transport Limited (``the Old Company''), which had itself caused certain of its assets to be transferred on 1 July 2011 to the New Company. The Judge found that transfer not to be genuine. The Judge treated the turnover and assets of the Old Company, and hence the relevant assets ostensibly transferred to the New Company, as property obtained by and belonging to Patrick and Mark Boyle individually. The question on this appeal is whether he was justified in doing so.

  3. In consequence of this appeal of the New Company, brought by leave of the Single Judge, Patrick and Mark Boyle themselves seek leave to appeal against the original confiscation orders made against them on 25 March 2013. They require a very lengthy extension of time if to be permitted to do so. It is made clear on their behalf that their applications are prompted by and dependent on the New Company's appeal. If that fails then it is accepted that their applications necessarily must fail (subject to a point raised in the case of Patrick Boyle as to the length of the default period imposed, by reason of the present state of his health). If it succeeds, then it is said that the confiscation orders originally made against them will have been shown to have been made on an incorrect basis.

  4. The points raised on this appeal among other things require consideration in the context of confiscation proceedings of the decision of the Supreme Court in the case of Prest v Petrodel Resources Limited [2013] 2 AC 415, [2013] UKSC 34 and the subsequent decision of a constitution of this court in Sale [2014] 1 CAR(S) 60, [2014] EWCA Crim 1306.

  5. The appellant New Company was represented before us by Mr Julian Knowles QC. The Crown was represented before us by Mr Simon Medland QC. The applicants, who had not been represented by counsel at the enforcement receiver hearing below, were represented before us by Mr Andrew Bodnar. The case was well argued on all sides.

    Background facts

  6. The background facts giving rise to the issues raised are these.

  7. The Old Company was, as we were told, incorporated in Northern Ireland on 1 August 2003. It was established and operated as, in effect, a family business. At all relevant times, the sole directors were Patrick and Mark Boyle, father and son.

  8. Between them, Patrick and Mark Boyle had a 50.1% shareholding in the Old Company, thus enabling them, if they acted together, to pass or defeat ordinary resolutions of the company. Patrick Boyle had a 30.1% shareholding. Mark Boyle had a 20% shareholding. The remaining shareholders were Mary Boyle, the wife of Patrick Boyle, who (ignoring exact percentages) held 20% of the shares and their other two sons, Neil and John Boyle, who each had, 15% of the shares.

  9. It is to be noted that in the proceedings below it was not suggested, and no evidence was put in to the effect, that Mary Boyle, Neil Boyle and John Boyle held their shares as nominees or bare trustees for Patrick and/or Mark Boyle. However, the Judge was to find as a fact that with regard to the actual operations of the Old Company Patrick and Mark Boyle were the ``operating minds'' of the Old Company.

  10. We were not shown any of the accounts of either the Old Company or the New Company. However, we were supplied with copies of two section 16 statements put in on behalf of the Crown Prosecution Service in the course of the confiscation proceedings. From those it appears that the Old Company was set up to take over a pre-existing road haulage business established and run by the Boyle family. Its turnover was substantial. It operated a fleet of Heavy Goods Vehicles undertaking commercial journeys both in the United Kingdom and in Europe. In each year after incorporation (save one) up to 31 July 2009 the turnover of the Old Company, according to its accounts, very significantly exceeded £3 million. Gross profits significantly exceeded £1 million in each year.

  11. The business of the Old Company was based in Newry, County Down. It operated from premises adjoining the home belonging to Patrick and Mary Boyle.

  12. The nature of the business was such as to require the Old Company to comply with the relevant Regulations relating to the use of tachographs and drivers' hours. In 2006 and 2008 the Old Company had in fact been fined for failure to keep proper records. The indications are that fines were also sometimes incurred by drivers of such vehicles whilst travelling on the Continent.

  13. In October 2008 a number of the Old Company's lorries were stopped by police on the motorway near Penrith, Cumbria. Investigations showed that the tachographs had been cunningly tampered with and false records also kept. A subsequent attempt by Patrick Boyle to get rid of incriminating evidence failed. The truth emerged. Charges were in due course laid against Patrick and Mark Boyle for conspiring to make false instruments. Some of the drivers were also charged, as was Neil Boyle who himself worked for the Old Company. The period of the conspiracy was particularised as between 30 November 2007 and 30 November 2008. In addition, there were charges of doing acts tending and intended to pervert the course of justice brought against Patrick and Mark Boyle: as well as various charges of forgery brought against them and Neil Boyle and individual lorry drivers. In due course, a number of the drivers were to make statements incriminating Patrick and Mark Boyle.

  14. Each of Patrick and Mark Boyle eventually pleaded guilty on 18 February 2011 to the count of conspiracy. (In the meantime a Restraint Order had been made against them on 30 September 2010.) Shortly thereafter each of Patrick and Mark Boyle resigned as a director of the Old Company. Neil Boyle was appointed its sole director. In the light of the pleas the Crown had elected, it is said on pragmatic grounds, not to proceed further against Neil Boyle and not guilty verdicts had been directed in his case.

  15. They were sentenced in the Carlisle Crown Court by Judge Peter Hughes QC on 28 April 2011. Patrick Boyle was sentenced to a term of 2 years imprisonment. Mark Boyle was sentenced to a term of 18 months imprisonment. Both were disqualified from acting as company directors for a term of five years.

  16. In his sentencing remarks of 28 April 2011 the Judge clearly and concisely summarised the position in this way:

    ``In my judgment you flagrantly and persistently circumvented the driver hour regulations for your own commercial purposes. Together you operated a system of deception. You equipped your vehicles and provided your employees with the means to alter what the tachograph recorded. You imposed unreasonable expectations upon your drivers, expecting them to undertake journeys that would be simply impossible without breaking the regulations, and you required them to undertake alone journeys, for example to Frankfurt and Paris, which should have been operated by two drivers working in turns. You placed them under pressure to do your bidding by paying them not by the hour but by the trip and dealt with any objection by the blunt reminder that you can always find someone else willing to do the work. Quite simply your recruited them to your dishonest practices and made them instruments of it. This was not done for their benefit, save that it provided them with employment. It was, though, done for yours in that by illegal means you were enabled to run a profitable business and make monies for yourselves and your families.

    In 2008 one driver had had enough. In simple but eloquent terms he summed up what was so wrong about your way of business. He used these words, ``I am not a hero, and I am not prepared to risk my life, other people's lives or jail sentence for you to make profit and still pay poor wages for the amount of hours you expect people to work.'' That driver said that after he had been required by you to drive for nearly 37 hours without a daily rest to make his ferry crossing and deliver a load to Heysham.''

    The Judge went on to record that there had also been a policy of not keeping records. He noted the attempts of Patrick Boyle to destroy incriminating evidence. He found that the drivers had painted ``a graphic and consistent...

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