GROUNDS OF APPEAL AND SKELETON ARGUMENT

IN THE COUNTY COURT AT CENTRAL LONDON

Claim No. E40CL216

IN THE MATTER OF THE POLITICAL PARTIES, ELECTIONS AND REFERENDUMS ACT 2000; AND THE POLITICAL PARTIES, ELECTIONS AND REFERENDUMS (CIVIL SANCTIONS) ORDER 2010 BEFORE HHJ DIGHT CBE B E T W E E N: DARREN GRIMES Appellant -and-

THE ELECTORAL COMMISSION Respondent _____________________________ NOTICE OF RESPONSE _____________________________ INTRODUCTION 1.

The Commission is the independent body which oversees elections and regulates political finance in the UK. It is a body corporate established by statute which consists of nine or ten members, known as Electoral Commissioners and appointed by the Queen, who also appoints one of the Commissioners to be the chairman of the Commission: see ss.1(1)-(5) PPERA. Mr Grimes is an individual who registered as a permitted participant in the 2016 EU referendum.

2.

This appeal concerns the decision contained in the Commission’s Statutory Notice dated 16 July 2018 and issued on 17 July 2018 (“the Notice”). In the Notice, the Commission concluded that Mr Grimes had committed offences in connection with four payments made in June 2016 to a Canadian data analytics firm called Aggregate IQ (“AIQ”) for services provided to campaigners in the EU referendum; and had thereby acted in breach of the Political Parties, Elections and Referendums Act 2000 (“PPERA”). The Commission concluded that the offences were serious and imposed civil sanctions accordingly. On the same date, the Commission published a report of its investigation into the Appellant (amongst others) concerning campaign funding and spending for the EU referendum (the “Report”). The Appellant now appeals against the Notice pursuant to §6(6) of Schedule 19C PPERA.

3.

The Commission was satisfied beyond reasonable doubt that Mr Grimes had committed an offence under s.117(3) PPERA by incurring referendum spending, in excess of the statutory £10,000 limit applicable, on behalf of an unincorporated association (“BeLeave”) that was not a permitted participant, in circumstances where Mr Grimes 1

knew or ought reasonably to have known that he was doing this. The Commission found that these expenses came to over £675,000 and were incurred by BeLeave in a common plan with Vote Leave Limited (“Vote Leave”). Vote Leave is a limited company established for the purpose of the EU referendum in June 2016. It was the designated lead campaigner for a “leave” outcome in the referendum.

4.

The Commission found (amongst other things) as follows: 4.1. Mr Grimes had registered as a permitted participant in his individual capacity, even though from May 2016 BeLeave existed as an unincorporated association and could have so registered. Nevertheless, Mr Grimes chose to campaign using BeLeave as the vehicle for accepting donations and for incurring referendum spending in excess of £10,000, to a total of £675,908.32 (Notice §47); 4.2. BeLeave’s overall spending was “substantially above the threshold of £10,000 at which a campaigner must become a permitted participant”. The Commission concluded that “[t]hat is a very significant failure and warrants a significant sanction” (Notice §48).

4.3. The Commission weighed the mitigating factors raised by Mr Grimes against the aggravating factor of the seriousness of the offence. However, it stressed that “an unprecedented sum of money was involved here and the referendum was a highly significant political event (Notice §88).

4.4. Having considered Mr Grimes’ representations, the Commission was nevertheless satisfied beyond reasonable doubt that he had committed the following offences; 

under s.122(4)(b) PPERA that Mr Grimes, as a permitted participant without reasonable excuse delivered a return that did not meet the requirements of section 120(2) or (3) PPERA;



under s.117(3) PPERA that he incurred referendum spending in excess of £10,000 on behalf of a body that was not a permitted participant (Notice §98).

4.5. In the circumstances of the case, the Commission was satisfied that it was appropriate to impose a sanction in respect only the second of these offences and that it was proportionate and in the public interest to impose the sanction of £20,000 in relation to that offence (Notice §99).

5.

Pursuant to §§1 & 7 of the Court’s 2 November 2018 Order, this appeal is being case managed and heard together with a parallel appeal against other financial penalties imposed on Vote Leave arising out of the same investigation.

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THE APPEAL JURISDICTION Statutory framework 6.

The County Court’s appeal jurisdiction is defined by §6(6) of Schedule 19C PPERA: “(6) A person on whom a discretionary requirement is imposed may appeal against the decision to impose the requirement on the ground— (a) that the decision was based on an error of fact, (b) that the decision was wrong in law, (c) in the case of a variable monetary penalty, that the amount of the penalty is unreasonable, (d) in the case of a non-monetary discretionary requirement, that the nature of the requirement is unreasonable, or (e) that the decision is unreasonable for any other reason, or on such other grounds as may be prescribed.” (emphasis added)

7.

Schedule 19C PPERA is supplemented by the Political Parties, Elections and Referendums (Civil Sanctions) Order 2010/2860 (the “2010 Order”). Art. 8 of the 2010 Order relevantly provides as follows: “(2) On an appeal under paragraph […] 6(6) […] of Schedule 19C the county court […] may— (a) withdraw, confirm or vary the requirement or notice; (b) take such steps as the Commission could take in relation to the act or omission giving rise to the requirement or notice; (c) remit the decision whether to confirm the requirement or notice, or any matter relating to that decision, to the Commission.”

8.

Two particular matters are to be noted regarding the appeal jurisdiction: 8.1. First, the Appellant bears the legal burden of establishing one of the grounds of appeal specified in §6(6) of Schedule 19C. Insofar as the Appellant seeks to make a factual challenge, it is incumbent upon him to identify an “error” of fact upon which the Commission’s decision was based: see §6(6)(a) of Schedule 19C. Accordingly, the Court is not tasked with a de novo rehearing of the facts and matters upon which the Commission’s decision is based. As Mr Grimes accepts, the Court’s jurisdiction is to “review ... the factual and legal basis on which [the] decision is made” and this amounts to “jurisdiction only to review a discretionary decision” (Grounds §20, emphasis added).

8.2. Secondly, the error of fact or law must be material. Thus, as set out in art. 8(2)(a) of the 2010 Order, the powers of the Court on appeal include (amongst other things) to “withdraw, confirm or vary the requirement or notice” (emphasis added). Immaterial matters provide no basis for varying or withdrawing the requirement imposed by the Commission. If the Court is not satisfied as to materiality, the appropriate course is to confirm the requirement. This follows the well-established principle in civil appeals that “(e)rrors of law of which it can be 3

said that they would have made no difference to the outcome do not matter” and an appeal against a finding of fact must identify a “material matter”: see R. (Iran) v Secretary of State for the Home Department [2005] EWCA Civ 982 at §§9-11 per Brooke LJ. 9.

Mr Grimes has pleaded a number of grounds which (even on his own case) would make no difference to the correct outcome. To give one example, he advances a ground of appeal based on the statutory eligibility requirement for an unincorporated association to have its “main office” in the UK. He contends that “(t)he Commission made no finding… that BeLeave did or did not have an office in the [UK]”: Grounds §111-112.

Yet he does not contend that BeLeave had any office outside the UK. Indeed, his pleaded case as to his own whereabouts is that “(h)e was based in and almost exclusively worked from his home in Brighton” and “(h)is activities were carried out wholly in the [UK]”: Grounds at §114(4)-(5). Accordingly, even if there were anything missing from the Commission’s findings on this point (which there is not), this is not a matter which provides any basis for disturbing the Commission’s decision. The statutory scheme does not require the Court to vary or withdraw a decision based on unmeritorious and immaterial grounds such as this.

Article 6 ECHR 10.

Mr Grimes contends that the civil sanction imposed on him involves a “criminal charge” for the purposes of Article 6 ECHR: Grounds §§59-60. The Commission submits that: 10.1. A variable monetary penalty imposed as a discretionary requirement under Schedule 19C PPERA is a civil matter for the purposes of Article 6; 10.2. In any event, even if such a monetary penalty were properly to be characterised as a “criminal charge”, the statutory scheme under Schedule 19C for the imposition of such penalties by the Commission and appeal to the County Court is compatible with Article 6.

11.

The established case-law of the ECtHR sets out three criteria to be considered in the assessment of the applicability of the criminal aspect of Article 6. These criteria are sometimes referred to as the “Engel criteria” following the decision of the ECtHR in Engel and others v The Netherlands (No 1) (1976) 1 E.H.R.R. 647. The Engel criteria, in summary, require the following to taken into account in considering characterisation: (a) the classification of the penalty in domestic law; (b) the nature of the offence; and (c) the nature and degree of severity of the penalty that the person concerned had risked incurring.

12.

Each of these criteria supports a civil characterisation of variable monetary penalties under Schedule 19C PPERA: 12.1. Schedule 19C expressly sets out a regime of “Civil sanctions”. The domestic classification is therefore explicit; 4

12.2. The nature and purpose of these civil sanctions is to promote the proper conduct of elections and in particular (as amended by the European Union Referendum Act 2015 (“EURA”)) the EU referendum. That is not a criminal purpose. So held the ECtHR in Pierre-Bloch v France (1998) 26 E.H.R.R. 202 at §56: “[t]he penalty is […] directly one of the measures designed to ensure the proper conduct of parliamentary elections, so that, by virtue of its purpose, it lies outside the ‘criminal’ sphere”; 12.3. The size of the sanction is statutorily capped at £20,000: see §6(1) of the 2010 Order and §5 of Schedule 1 thereto. This is a significant limitation on the severity of the available sanction. The maximum sanction amounts to less than 3% of the spending limit of a permitted participant (being £700,000 pursuant to §1 of Schedule 14 PPERA) and 3% of the expenses incurred by Mr Grimes on behalf of BeLeave in excess of its spending limit as an unregistered person (being approximately £666,000).

13.

Further and in any event, even if such a variable monetary penalty under Schedule 19C PPERA were to be characterised as a “criminal charge”, the statutory appeal scheme under Schedule 19C of the 2000 Act is compatible with Article 6. Placing the burden on Mr Grimes to establish his grounds of appeal is justified, proportionate and does not go beyond reasonable limits. This is the same conclusion recently reached by the FirstTier Tribunal in British-American Tobacco (Holdings) Ltd v Revenue and Customs Commissioners [2017] UKFTT 167 (TC) (“BAT”) at §§521-538 per Tribunal Judge Brannan in relation to statutory appeals under s.16(5) of the Finance Act 1994.

GROUND 1: ATTRIBUTION OF EXPENDITURE UNDER s.117 PPERA 14.

This is a short point as to the proper interpretation of the “expenses threshold” for nonregistered persons in §22(5)(c) of Schedule 1 to the European Union Referendum Act 2015 (“EURA”). Mr Grimes does not dispute, for the purposes of this ground of appeal, the factual finding by the Commission that BeLeave’s total referendum expenditure was over £675,000. He nonetheless contends that BeLeave was below the “expenses threshold” of £10,000 under §22(5)(c). That is wrong.

15.

The relevant provision, §22, Schedule 1 EURA, first sets out the circumstances in which it applies (§22(1)) and defines “common plan expenses” (§22(2)): “(1) This paragraph applies where— (a) referendum expenses are incurred by or on behalf of an individual or body during the referendum period for the referendum, and (b) those expenses are incurred in pursuance of a plan or other arrangement by which referendum expenses are to be incurred by or on behalf of — (i) that individual or body, and 5

(ii) one or more other individuals or bodies, with a view to, or otherwise in connection with, promoting or procuring a particular outcome in relation to the question asked in the referendum.

(2) In this paragraph references to “common plan expenses” of an individual or body are to referendum expenses which are incurred by or on behalf of that individual or body— (a) as mentioned in sub-paragraph (1)(a), and (b) in pursuance of a plan or other arrangement mentioned in subparagraph (1)(b).”

16.

§§22(3)-(4) then set out the general rule that (in summary) common plan expenses are to be treated as incurred by each and every person who is part of the common plan: “(3) The common plan expenses of the individual or body which is mentioned in sub-paragraph (1)(a) are to be treated for the purposes of— (a) section 117 of the 2000 Act, and (b) section 118 of and Schedule 14 to that Act, as having also been incurred during the referendum period by or on behalf of the other individual or body (or, as the case may be, each of the other individuals or bodies) mentioned in sub-paragraph (1)(b)(ii); but this is subject to sub-paragraph (5).

(4) This paragraph applies whether or not any of the individuals or bodies in question is a permitted participant.” (emphasis added)

17.

§22(5) sets out an exception to the general rule (upon which Mr Grimes seeks to rely) whereby common plan expenses are attributed only to the designated organisation: “(5) But if any of the individuals or bodies in question (“the persons involved”) is or becomes a designated organisation, the following referendum expenses are to be treated for the purposes of sections 117 and 118 of and Schedule 14 to the 2000 Act as having been incurred during the referendum period by or on behalf of the designated organisation only— (a) any referendum expenses incurred during the referendum period by or on behalf of the designated organisation; (b) where any of the other persons involved is a permitted participant, any common plan expenses of that permitted participant; (c) where any of the other persons involved is an individual or body which is not a permitted participant but is below the expenses threshold, any common plan expenses of that individual or body.

(6) For the purposes of this paragraph an individual or body is “below the expenses threshold” if the total of the referendum expenses incurred during the referendum period by or on behalf of the individual or body does not exceed £10,000.[…]”

18.

As noted above, for the purposes of this ground of appeal, Mr Grimes accepts the Commission’s factual finding that BeLeave’s total referendum expenditure was over £675,000. Accordingly, he clearly cannot fall within §22(6) above. But he contends that 6

these expenses must be disregarded for the purposes of the expenses threshold because (on the Commission’s findings) these expenses were incurred in pursuance of a common plan with a designated organisation (Vote Leave). However: 18.1. The expenses threshold is part of the test for whether common plan expenses should be attributed only to the designated organisation. Unless and until that test is satisfied, the general rule in §22(3) applies, and so the expenses are treated as incurred by each and every person who is part of the common plan.

18.2. Accordingly, for the purposes of applying the “expenses threshold” itself, all expenses must be taken into account. This is plain from the definition of the threshold in §22(5)(c) set out in §22(6), which requires that “the total of the referendum expenses incurred during the referendum period by or on behalf of the individual or body does not exceed £10,000” (emphasis added).

18.3. Mr Grimes’ contention wrongly assumes what it seeks to prove. He takes as a premise that the expenditure is solely attributable to Vote Leave and concludes on that basis—and that basis only—that the test for sole attribution is met. That is a circular argument.

19.

Further, his proposed interpretation would create a considerable enforcement gap, as is well illustrated by the facts of this appeal: 19.1. Section 117(1) PPERA provides that “(t)he total referendum expenses incurred by or on behalf of any individual or body during the referendum period in the case of a particular referendum to which this Part applies must not exceed £10,000 unless the individual or body is a permitted participant” (emphasis added). There are important reasons of public policy, fundamental to PPERA, which underlie this spending restriction to ensure the fair conduct of elections and referendums; 19.2. The effect of Mr Grimes’ interpretation would be to allow an unregistered person to exceed the £10,000 statutory limit (and indeed to incur unlimited expenditure) without any consequence for them, provided their expenditure is “common plan expenditure” with the designated organisation. That would allow, in the present case, for BeLeave to exceed the statutory limit on expenditure by non-registered persons by over £665,000 without consequence. That would amount to a significant statutory loophole. The purpose of the “expenses threshold” in §22 of Schedule 1 EURA is precisely to avoid that gap and to ensure that only de minimis common plan expenses incurred by non-permitted participants are attributed solely to the designated participant; 19.3. Mr Grimes’ assumption appears to be that there is no good reason for a person to register (and duly fulfil all of the obligations of a permitted participant, including reporting, thereafter) if the only substantial expenditure they will incur is common plan expenditure. But that is contradicted by the statutory scheme, 7

which expressly requires permitted participants to report expenditure even if it is deemed only to have been incurred by another: see ss.120(4A) and 120(4D)(a) PPERA. GROUND 2: MISINTERPRETATION OF s.122 PPERA Jurisdiction (Grounds: §§69-71) 20.

The Commission found that Mr Grimes had committed an offence under s.122(4)(b) PPERA but decided not to impose any sanction in respect of this offence: see Notice §§98-99. Accordingly, the only sanction imposed by the Notice was in respect of the s.117 offence. The question therefore arises whether the County Court has jurisdiction to consider the s.122 offence on appeal. The Commission agrees that the Court has such jurisdiction, although not for the reasons given by Mr Grimes, and the Commission will address the nature and scope of the Court’s jurisdiction in due course as necessary.

21.

The correct position, it is submitted, is this: 21.1. The County Court does have jurisdiction to consider the s.122 offence on appeal because there are findings in the Notice regarding this offence.

21.2. This ground of appeal is distinct from those relating to the s.117 offence and provides no basis for varying or withdrawing the sanction imposed in respect of that offence. That is because the findings in respect of the s.122 offence did not increase the size of the sanction imposed for the s.117 offence.

21.3. Accordingly, even if this ground of appeal were well-founded (which it is not), the appropriate course (in the Commission’s respectful submission) would simply be for the County Court to confirm the sanction imposed in respect of the s.117 offence.

22.

This position follows from the statutory framework in Schedule 19C PPERA and the 2010 Order: 22.1. The right of appeal is against the “the decision to impose the requirement”: see §6(6) of Schedule 19C (emphasis added).

22.2. That “decision” must be set out in a notice. In particular, “(w)here the Commission decide to impose a discretionary requirement on a person, they shall serve on the person a notice specifying what the requirement is”: see §6(5) of Schedule 19C; 22.3. The notice must set out (amongst other things) the “grounds for imposing the discretionary requirement”: see §7(3) of Schedule 19C; 22.4. The “decision” subject to appeal under §6(6) is circumscribed by the “notice” setting out the decision that is required by §§6(5) and 7(3); and

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22.5. The statutory scheme does not however contemplate that sanctions will be overturned based on immaterial findings. Thus, the powers of the Court on appeal expressly include the power to “confirm” the sanction imposed: see §8(2)(a) of the 2010 Order.

Substance (Grounds §§98-104) 23.

Section 122(4)(b) PPERA defines the offence: “(4) The responsible person commits an offence if, without reasonable excuse, he— […] (b) delivers a return which does not comply with the requirements of section 120(2) or (3); […]”

24.

The relevant statutory requirement is set out in s.120(2)(a) PPERA (emphasis added): “(2) A return under this section must specify the referendum to which the expenditure relates and must contain— (a) a statement of all payments made in respect of referendum expenses incurred by or on behalf of the permitted participant during the referendum period in question; […]”

25.

As the Commission found (and Mr Grimes accepts for the purposes of this ground): (1) Mr Grimes registered himself personally as a participant; and (2) he reported approximately £675,000 of spending that was in fact incurred by or on behalf of the unregistered campaigner BeLeave. It is submitted that he therefore failed to make a statement of “all payments made in respect of referendum expenses incurred by or on behalf of the permitted participant” as required by section 120(2)(a) PPERA (the “permitted participant” being the Appellant himself). Instead, he provided a statement including other payments, being those expenses incurred by BeLeave.

26.

He appears to contend that extraneous matters that do not fit the statutory definition of the payments to be included in a return can be included without consequence. The Commission submits that s.120 PPERA requires a return to include all reportable payments. The evident purpose of s.120 and the wider PPERA referendum spending regime is for there to be clarity, transparency and public confidence in the regime governing election expenditure.

GROUND 3: ALLEGED ABUSE OF PROCESS (Grounds §§105-108) 27.

Mr Grimes’ allegations under this heading contain no particulars of the facts relied upon and no explanation as to how they are said to amount to an abuse of process. This is therefore not a properly formulated ground of appeal.

28.

In any event, and for the avoidance of doubt, the Commission’s position is that: 9

28.1. It conducted a fair investigation and followed a fair process.

28.2. It considered and answered the procedural objections raised by the Appellant in the course of the investigation in the Notice at §§66-73.

GROUND 4: ALLEGED ERRORS OF FACT AND LAW (Grounds, §§109-155) Office in United Kingdom (Grounds §§110-112)

A.

29.

The list of permissible donors in s.54(2)(h) PPERA includes unincorporated associations whose “main office” is in the UK: “(2) For the purposes of this Part the following are permissible donors— […] (h) any unincorporated association of two or more persons which does not fall within any of the preceding paragraphs but which carries on business or other activities wholly or mainly in the United Kingdom and whose main office is there.”

30.

Mr Grimes accepts that “by at least May 2018, BeLeave was an unincorporated association”: Grounds §137; and does not dispute that BeLeave carried on its activities wholly or mainly in the UK. However, he contends that “(t)he Commission failed to direct itself to this test” because “(t)he Commission made no finding, in the Final Notice or in the Report that BeLeave did or did not have an office in the United Kingdom”: Grounds §111-112. This contention is not accompanied by any suggestion that BeLeave in fact had an office in any other jurisdiction. Nor did he make any such contention in his evidence and representations in the course of the Commission’s investigation..

31.

In its Report, the Commission found as follows: 31.1. At §4.2: “‘BeLeave’ was initially a name used by Mr Grimes in his activities in support of the UK leaving the EU. From early 2016, Vote Leave gave Mr Grimes infrastructure and resource support to carry out his BeLeave activity. In May 2016, when Vote Leave was engaged in an unsuccessful attempt to get funding for Mr Grimes’s BeLeave activity, Vote Leave drafted a constitution for BeLeave.

When the individuals who became the BeLeave Board agreed this constitution, they effectively created an unincorporated association that could have been registered as a referendum campaigner. All of BeLeave’s funding came directly from Vote Leave, or was arranged by Vote Leave. Vote Leave had significant influence over how that money was spent by BeLeave, to the extent that Vote Leave made a commitment to a different BeLeave donor to about how his money would be used.”

31.2. At §4.11 (emphasis added): “In order to meet the legal definition of an unincorporated association, BeLeave had to be an association “of two or more persons… which carries on business or 10

other activities wholly or mainly in the UK and whose main office is there” (section 45(2)(h) PPERA). By the act of drafting a constitution, Vote Leave facilitated the creation of BeLeave as an unincorporated association. By agreeing to that constitution, BeLeave’s Board members created an unincorporated association. That association, BeLeave, came into existence on or around 18 May 2016.”

31.3. At p.35 of the Report, the Commission also included s.54 as a relevant part of the Legal and Statutory Framework set out at Annex A to the Report.

32.

Accordingly, the Commission expressly directed itself to the correct legal test and made a full and sufficient factual finding in this regard.

33.

In any event, any alleged insufficiency in the Commission’s findings would provide no basis for varying or withdrawing the sanction imposed. If (as Mr Grimes accepts) BeLeave was an unincorporated association, the only finding reasonably open to the Commission was and remains that its main office was in the UK. As set out above, no factual case to the contrary is advanced. Indeed, his pleaded case on appeal is that “(h)e was based in and almost exclusively worked from his home in Brighton” and “(h)is activities were carried out wholly in the [UK]”: Grounds §§114(4)-(5).

B.

Status of BeLeave as an unincorporated association (Grounds §§113-118) (1) Point in time at which BeLeave became an ‘unincorporated association’

34.

The Commission found that BeLeave came into existence as an unincorporated association in May 2016: Notice §25 and Report §4.11. Mr Grimes contends that “there are insufficient grounds for finding that BeLeave, if eligible for registration, was eligible in May 2016 but was not eligible on 15.3.2016”: Grounds §§113-114. In particular, he contends that “there is no evidential basis (and no basis is stated at all)” for the Commission’s finding and that the Commission “took no account (alternatively insufficient account) of the substantial evidence with which it had been supplied by the Appellant and [Vote Leave] that the association of the Appellant and other individuals began before March 2016” (Grounds §116).

35.

It is submitted that the Commission explained the basis for its finding and correctly concluded in the Notice as follows (at §§25, 29-32 & 79): “25. Prior to May 2016, any campaigning using the name BeLeave was carried out by you personally. There was no unincorporated association called BeLeave until May 2016. […]

29. Prior to the agreement of the BeLeave constitution in May 2016, there was no evidence of a private arrangement with a contractual basis between you and Mr Sanni. BeLeave’s constitution was drafted on 18 May 2016 by a lawyer from Vote Leave, the designated organisation for the leave result at the EU Referendum. The Commission accepted that at that point the position changed. You and others agreed to the constitution and the roles given to you within it. That constitution was the first evidence of any kind of agreement between you as to a specified 11

common purpose, or any rules or agreement on your roles or duties to achieve that common purpose.

30. The constitution gave five Board members and there was evidence that you were conducting activities with others in the name of BeLeave from May 2016 onwards. For example, you and another Board member signed an application for a bank account in late May 2016.

31. After May 2016 there was evidence of BeLeave Board members emailing about possible media activity, without Vote Leave members on the email chains.

BeLeave had its own Facebook page, and ran advertisements in the name, and with the visual identity, of BeLeave.

32. The Commission was therefore satisfied that up to or around 18 May 2016 there was no unincorporated association called BeLeave. There were individuals producing online content with the branding of BeLeave, and evidence of steps being taken by those individuals to secure funding for this activity. Some of those individuals were working on behalf of Vote Leave when doing this. However, at that time no unincorporated association called BeLeave was in existence. […]

79. The Commission remains satisfied that at the point at which you registered as a permitted participant, BeLeave cannot be said in law to have been an unincorporated association. The Commission does not consider that the evidence reasonably suggests that there was a sufficient formalisation of the relationship between you and the others campaigning using the BeLeave name/brand prior to this point. […]”

36.

So too the Commission found as follows in its Report (at §§4.8, 4.10-4.11 & 4.53): “4.8. Prior to May 2016, Mr Grimes was using the name BeLeave to campaign online for the UK to exit the EU. From March 2016, Mr Sanni also did some work in the name of BeLeave, such as helping develop proposals for a prospective donor. There is no evidence that a distinct entity or body called BeLeave existed at that time. For example, it had no constitution that defined its purpose, nothing saying who was involved or what they did, and nothing saying how it worked. It is not clear how much referendum campaigning Mr Grimes did in the name of BeLeave at this point. He reported campaign spending totalling £21.51 between 9 February and 13 June 2016. […]

4.10 In May 2016 Vote Leave’s Legal Director drew up a constitution for BeLeave. According to Mr Grimes, this was because he asked Vote Leave’s Head of Outreach about opening a bank account for BeLeave so that it could receive funds from prospective donors. She advised him to get a constitution, and according to Mr Grimes Vote Leave gave him a blank template he could use. Vote Leave also gave us this explanation. These accounts are not consistent with the email chain between Mr Grimes and Vote Leave, however. This shows Vote Leave providing him with a complete draft, and advising on the purpose and dissolution clauses to allow BeLeave to continue its activities after the referendum. It is clear from the evidence that the catalyst for the creation of the constitution was the fact that Vote Leave had found a potential donor for BeLeave. Discussions with the donor took place, but in the event no donation was made.

4.11. In order to meet the legal definition of an unincorporated association, BeLeave had to be an association “of two or more persons… which carries on 12

business or other activities wholly or mainly in the UK and whose main office is there” (section 45(2)(h) PPERA). By the act of drafting a constitution, Vote Leave facilitated the creation of BeLeave as an unincorporated association. By agreeing to that constitution, BeLeave’s Board members created an unincorporated association. That association, BeLeave, came into existence on or around 18 May 2016. [...]

4.53 […] BeLeave did not become eligible to register until on or around 18 May 2016. On or around 18 May 2016 a group of five people, including Mr Grimes and Mr Sanni, agreed a constitution for an unincorporated association called BeLeave. Those five people were listed as Board members in the constitution.

They carried out campaign activit[y] within the framework of this constitution.

From around 18 May 2016, therefore, BeLeave was eligible to register as a campaigner. No attempt was made to register it.”

(2) The BeLeave constitution 37.

Mr Grimes makes two further specific points regarding the BeLeave constitution. He contends that the Commission: 37.1. “misdirected itself in fact, the draft constitution for BeLeave having been drafted but not finalised by May 2016” (Grounds, §116(a)); and 37.2. “misdirected itself in law, a written constitution being unnecessary for there to be an ‘association’ of two or more individuals” (Grounds, §116(b)).

38.

In response: 38.1. The true and legally relevant state of affairs (as correctly found by the Commission) is that the constitution was agreed in May 2016 and acted upon thereafter: see e.g. Report §4.53 (quoted above); 38.2. As against this, it is unclear what Mr Grimes means to convey by his use of the term “finalised”. His own (and correct) case is that a “finalised” written constitution is not legally necessary for the formation of an unincorporated association: see Grounds §116(b).

(3) Application of established common law concept of ‘unincorporated association’

39.

Mr Grimes contends that the Commission erred in law by applying the well-established common law concept of an unincorporated association for the purposes of s.54(2)(h) PPERA: Grounds §§116(b) & 117.

40.

It is submitted that the Commission made no error in this regard: 40.1. The Commission correctly stated the law in the Notice at §24: “Unincorporated associations are private arrangements with a contractual basis. The contract between the members may be by way of a constitution, rules or an implicit but sufficiently clear understanding between two or more people”; 13

40.2. The relevant principle of statutory interpretation, rightly applied in this case, is that “(w)here an Act uses a concept that has an established legal meaning it will generally be interpreted to have that meaning” and “(i)f legislation uses a technical legal term or expression that is not given a statutory definition, Parliament is taken to have intended its meaning to correspond to its general legal meaning unless the contrary intention appears”: see Bennion on Statutory Interpretation (7th ed, 2017) at §§25.2(2) & 25.5 and authorities cited therein; Lowe and Potter, Understanding Legislation (2018, Hart Publishing) at §3.15; 40.3. Mr Grimes identifies no reason why s.52(2)(h) PPERA would rely upon a different meaning to that established at common law, and indeed does not explain what that other meaning would be beyond reference to the term “association” (Grounds, §117).

41.

The Commission was entitled to, and correct to, conclude that evidence of a private arrangement with a contractual basis was required in order for an unincorporated association, within the meaning of the legislation, to be established. Such evidence was only present in the period following May 2016.

42.

Mr Grimes further contends that the Commission: 42.1. “made no finding of fact as to whether such an [unincorporated] association existed in a contractual form before 15.3.2016” (Grounds §117); 42.2. “failed to consider whether such a contractual arrangement may have existed through one or more oral agreements” (Grounds §117); 42.3. “failed to consider whether the draft constitution set out in writing the contractual basis on which two or more individuals already engaged in an association they knew as ‘BeLeave’”: Grounds §118. As to this:

43.

However, Mr Grimes passes over the express finding by the Commission that “(p)rior to the agreement of the BeLeave constitution in May 2016, there was no evidence of a private arrangement with a contractual basis between you and Mr Sanni”: see Notice §29. This is a complete answer to these objections.

44.

In any event, Mr Grimes advances no positive case that there was any contractual arrangement prior to 15 March 2016. Accordingly, on his own case, the alleged failure to consider the existence of a contractual arrangement prior to 15 March 2016 is immaterial and provides no basis for withdrawing or varying the sanction.

(4) Application for a bank account

45.

The Commission found that “[Mr Grimes] and another Board member signed an application for a bank account in late May 2016”: Notice §30. Mr Grimes alleges that: (a) the Commission found that BeLeave had a bank account; and (b) this was an error because the bank account was “never opened” (Grounds §118).

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46.

This allegation is based on an incorrect characterisation of the Commission’s finding (quoted above). The Commission correctly found (and Mr Grimes does not dispute) that he and another BeLeave board member signed an application for a bank account. It formed no part of the Notice, nor did it need to, that any such account was ultimately opened.

Mr Grimes’ registration and return (Grounds §§119-139)

C.

47.

Mr Grimes alleges that: 47.1. “the Commission has not turned its mind to the question of whether acts done by the Appellant were sufficient to register the organisation” (Grounds §135(ii)); 47.2. “(t)here is clearly insufficient evidence to allow the Commission to be satisfied, beyond reasonable doubt, that the Appellant did not register as BeLeave, rather than individually” (Grounds §130); and 47.3. “there is sufficient evidence to establish that [the] return made by the Appellant was for whichever PP was registered in March 2016; alternatively, there is insufficient evidence to establish beyond reasonable doubt that it was not” (Grounds §139).

48.

Again, he passes over the Commission’s express findings on this point (which are correct and disclose no error). See the Notice at §§19-24 & 46: “19. On 15 March 2016 you submitted an application to register a permitted participant for the EU referendum. You indicated that the name of the campaigner was BeLeave, and named yourself as the responsible person.

However, you also indicated, by ticking the relevant box that you were registering as an individual. The registration checks were conducted on the basis that you were registering as an individual. […]

21. You met the criterion as an individual resident in the UK or registered in an electoral register and you were registered as an individual campaigner.

22. On 22 March 2016 the Commission wrote to you confirming the registration.

The letter said that “you” had been registered. It was addressed to you with no mention of BeLeave. It included a print out of the registration details giving yours as the “Primary name”. The letter asked you to notify us if there were any errors in the registration details. You did not at any point notify us that there was any error in the registration details.”

23. You delivered a campaign spending return after the referendum, dated 30 June 2016. This was in the name of ‘Darren Grimes/BeLeave’, disclosing spending of £676,015.87, and you obtained an audit report in the name of BeLeave, listing yourself as the responsible person.

24. After we contacted you in August 2016, you stated that you registered as an individual in error, and intended to register BeLeave, as an unincorporated association. […]

46. The Commission noted that the only spending return you delivered was set out as being for ‘Darren Grimes/BeLeave’. It was and is unclear what this was 15

intended to reflect—your response to the Commission’s query in August 2016 was that you had intended to register BeLeave as a permitted participant. However, the Commission was satisfied as a matter of fact that, whatever your intention, only one campaigner was registered as a permitted participant, you as an individual. That was, or should have been very clear to you from the Commission’s correspondence on the matter and you were given the opportunity to correct any inaccuracies. You did not raise any concerns at that time.”

49.

Further, as set out above, the Commission correctly found that BeLeave only came into existence as an unincorporated association in May 2016. Accordingly, it was incapable of being registered when Mr Grimes submitted his registration on 15 March 2016 (see Notice, §79).

50.

Mr Grimes appears to consider that the registration form is unclear (see Grounds §§119-130). That is not so: 50.1. The Explanatory Notes to the registration form (entitled ‘EUR 1’), which were available online to all potential registrants, spelled out the point as follows: “You should tell us if you are registering as:  an individual registered on a UK or Gibraltar electoral register  a political party registered with the Electoral Commission  a different type of organisation.”

50.2. These three options are then clearly reflected on a single page on the registration form (section 3 of EUR 1).

50.3. Accordingly, there is nothing in the design of the EUR1 form to detract from the conclusion that Mr Grimes registered himself personally. Indeed, he recognises that one of the ten specific alternatives which he could have selected as a “permitted bod[y]” was an “Unincorporated Association” (Grounds, §124).

Expenditure made by Mr Grimes personally (Grounds §§140-142)

D.

51.

Mr Grimes alleges that “(t)he Commission failed to turn its mind to whether the expenditure was incurred by the Appellant personally” (Grounds §141).

52.

However, he again passes over the express findings correctly made by the Commission on this point in the Notice (at §§36-37 & 80): “36. You reported £675,000 spending with Aggregate IQ (‘AIQ’), but the evidence available to the Commission demonstrated that this was incurred by or on behalf of the unregistered campaigner BeLeave and not by or on behalf of you as a permitted participant.

37. You, and AIQ, confirmed that you incurred this spending with AIQ for referendum activity by BeLeave. This was supported by the relevant invoices.

You confirmed that this was a result of donations offered by Vote Leave, and you have stated that you asked Vote Leave to pay the donations direct to AIQ

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because you did not yet have an operational bank account for BeLeave. You have given the same account of the donation from Mr Clake. […]

80. […] those donating to BeLeave saw it as such and actively donated to BeLeave, as opposed to you as an individual. The evidence suggests that others whom the Commission consider were part of the unincorporated association were involved in incurring the relevant expenses, such that as a matter of law the expenses can properly be characterised as having been incurred on behalf of the group BeLeave rather than by you as individual campaigner. […]”

53.

In any event, he does not appear to advance any positive case that the spending was incurred by him personally. Accordingly, on his own case, the alleged failure to consider this question is immaterial and provides no basis for withdrawing or varying the sanction.

Common plan expenses (Grounds §§143-151)

E.

54.

The key “common plan” provision, §22 of Schedule 1 EURA, is set out above. Mr Grimes contends that the Commission erred in law in its approach to the concept of a “common plan”.

(1) Alleged error of law: including expenses incurred on behalf of one and not two persons

55.

Mr Grimes contends that expenses can only be common plan expenses if they are incurred “by or on behalf of two PPs” (Grounds §143(a)).

56.

It is submitted that his proposed restriction on the definition of common plan expenses is contradicted by the statutory text. §22(2) of Schedule 1 EURA expressly defines the “common plan expenses of an individual or body” as a subset of the “referendum expenses which are incurred by or on behalf of that individual or body.”

57.

Mr Grimes invites the Court to “have regard to” the case law on the common law principle of joint tortfeasorship: Grounds §144. It appears that the only proposition he seeks to derive from this case law is the same false proposition addressed immediately above (i.e. that expenses can only be common plan expenses if they are incurred by or on behalf of two persons): Grounds §146(2). As set out above, that proposition is contradicted by the express statutory language. The case law on joint tortfeasorship provides no basis for departing from the statutory language.

(2) Appeal against factual findings

58.

Mr Grimes contends that “the facts as alleged by the Commission cannot, at their highest, justify a finding that the Appellant incurred common plan expenditure; alternatively there is no reliable evidential basis for such a finding” (Grounds §143(b)(c)). He makes five specific points in his appeal against the Commission’s factual findings:

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58.1. First, it is said that “(t)he Commission has neither disclosed nor even summarised any evidence that [Vote Leave] had any control or gave any direction over the expenditure incurred by the Appellant or BeLeave” (Grounds §147, emphasis in original). That is wrong. The Commission has set out its findings by reference to its Initial Notice dated 5 June 2018 and the evidence relied upon in this regard in the Notice (§§58, 61, 75-76; and as to the information on which the Commission relied, p.4). See also, its Report at §§4.1-4.24.

58.2. Secondly, it is said that the evidence of Mr Sanni “contains no evidence that any [Vote Leave] official had any influence—let alone direction—over the AIQ expenditure of BeLeave” and that Mr Sanni is “an unreliable and incredible witness for the reasons set out extensively in [Vote Leave’s] submissions” (Grounds §148). As to this, the Commission’s findings in the Notice attach appropriate weight to the evidence of Mr Sanni. As set out in the Notice at §73: “[t]he Commission conducts its investigations thoroughly and in line with its enforcement policy. During each investigation all evidence is carefully considered with appropriate and proportionate weight placed on evidence.”

58.3. Thirdly, it is said that “the only supposed evidential basis for a finding of common plan expenditure is an inference that the short period between a donation and the commissioning of advertisements by the Appellant, whether on his own behalf or on behalf of BeLeave meant that [Vote Leave] must have had control over the content of such advertisements” (Grounds §149). This is wrong. Neither the Notice nor Report contains any such inference. The Appellant does not identify any specific finding by the Commission which he means to impugn in this regard.

58.4. Fourthly, it is said that “(t)he influence of another campaigner does not equate to that other campaigner ‘incurring’ expenditure with the Appellant’” (Grounds §150). As to this, the Commission was correct to take into account the influence of Vote Leave as one relevant factor supporting the finding of a common plan. As stated in the Commission’s published guidance entitled Working together for EU referendum campaigners in section 6: “In our view, you are highly likely to be working together if, for example […] another campaigner can approve or has significant influence over your spending including leaflets, websites, telephone scripts or other campaign materials” (emphasis added).

58.5. Fifth, it is said that “the Commission’s finding of fact is unsupportable, even on the material on which it purports to base its findings, none of which has been served on the Appellant” (Grounds §151, emphasis added). This is wrong. The documents relied upon by the Commission are clearly identified on page 4 of the Notice and, as stated there, the Appellant has been sent all of these documents.

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F.

59.

Reasonable excuse? (Grounds §§153-155) Mr Grimes contends that he had an excuse in the form of “confusion caused by a registration form that appeared to allow him to register only as an individual if he was not a political party” (Grounds §155). However: 59.1. As set out in §50 above, the EUR1 registration form and explanatory notes are clear.

59.2. In any event, the Commission correctly concluded in the Notice as follows (at §41): “(t)he Commission was satisfied that you had no reasonable excuse for the failure. Oversight or failure to understand the requirements is not a reasonable excuse”.

GROUND 5: SANCTION (Grounds §§156-173) 60.

Mr Grimes contends that the sanction imposed by the Commission is “unreasonable” within the meaning of §6(6) of Schedule 19C PPERA. It is common ground (and in any event clear) that this ground of appeal does not require the Court to engage in a de novo exercise in penalty-setting. It is incumbent on Mr Grimes to show that the Commission’s decision on sanction is unreasonable. For the reasons set out below, there is no basis for impugning the reasonableness of the sanction.

Inadvertence 61.

Mr Grimes alleges a failure on the part of the Commission to “credit the Appellant with having acted in good faith and/or in innocent ignorance of the law” (Grounds §166).

62.

However, the Commission took this matter into account and set the sanction on the basis that the breach was neither deliberate nor dishonest. See Notice at §83: “[T]he representations [made on behalf of the Appellant] note that your failure was not deliberate. The representations also refer to there being no suggestion of dishonesty on your part. The Commission has already acknowledged that this may have been the case and has not based the determination of the level of sanction on deliberateness or dishonesty.”

Means 63.

Mr Grimes contends that “the Commission cannot have acted reasonably by imposing a financial penalty without making any enquiry as to the Appellant’s means or ability to pay it” (Grounds §169).

64.

However, Mr Grimes was provided with a full opportunity to make representations on the appropriate penalty and his ability to pay. He did not provide any information as to his means. Nor did he make any representation to the Commission that he was unable to pay the penalty. Nor indeed does he assert any inability to pay now, in his grounds of appeal. The Commission reasonably proceeded to set the penalty accordingly.

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Common plan 65.

Mr Grimes contends that “if the Court finds that there was no common plan expenditure” then the sanction set by the Commission was flawed and/or should be reduced (Grounds §170). As to this: 65.1. The Commission’s finding of common plan expenditure is correct for the reasons set out above.

65.2. In any event, due to the scale of the unauthorised expenditure by BeLeave, the seriousness of the Appellant’s offence remains whether or not this expenditure was incurred pursuant to a common plan.

Mr Grimes’ further points on sanction 66.

Mr Grimes’ further contentions repeat in significant part the matters raised in his other grounds of appeal (Grounds §172). The Commission responds as follows: 66.1. §172(1) repeats Ground 2 and is wrong for the reasons set out above.

66.2. §172(2) repeats his case on reasonable excuse and is wrong for the reasons set out above.

66.3. §172(3) repeats Ground 4(b) and is wrong for the reasons set out above.

66.4. As to §172(4), there have been no “investigations in which [the Commission] cleared the Appellant of wrongdoing”. The investigation culminating in the present sanction is the first investigation opened by the Commission into the matter. The procedural history is set out in the Report at §§2.1-2.7.

66.5. As to §172(5), the Commission reasonably took into account its assessment of the harm caused by his offence as set out in the Notice at §52.

66.6. As to §172(6), it is wrong to assert that his offence caused “minimal damage to transparency”. The Commission refers to its findings on harm in the Notice at §52. None of the further matters identified §172(6) are grounds for mitigation.

66.7. As to §172(7), the Commission correctly found that Mr Grimes “co-operated with the investigation to some extent, but did not provide a full explanation for all of the matters the Commission raised with [him]” (Notice §53). The Commission reasonably concluded (in all the circumstances identified in the Notice at §§4362) that this did not warrant any reduction of the sanction below £20,000.

66.8. §172(8) repeats Ground 2 and is wrong for the reasons set out above.

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66.9. As to §172(9), the Commission reasonably took into account the matters in the Notice at §56. The fact that no separate sanction was imposed on BeLeave is no ground for mitigation.

66.10. As to §172(10), the “significant influence” of Vote Leave provides no ground for mitigation.

66.11. As to §172(11), the Commission reasonably concluded that the offences by Vote Leave and Mr Grimes both warranted the maximum sanction of £20,000. The fact that no separate sanction was imposed on the responsible officer of Vote Leave is no ground for reducing Mr Grimes’ sanction.

66.12. As to §172(12), the Commission took into account when setting the sanction that Mr Grimes was “very young and inexperienced in the responsibilities attached to political campaigning” (Notice §59). However, the Commission reasonably concluded as follows (Notice §60): “[M]any referendum campaigners were new to political campaigning or inexperienced. For that reason the Commission published and promoted its guidance before and during the campaign, and provided and advice service.

In those circumstances the Commission did not consider that inexperience was a particularly significant mitigating factor.”

66.13. §172(13) repeats §169 and is wrong for the reasons set out above.

CONCLUSION 67.

For the reasons set out above, the Court is invited to dismiss the appeal and confirm the Notice.

30 November 2018 JAMES EADIE QC RAVI MEHTA AJAY RATAN

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