Easter
Term
[2018] UKSC 23
On appeal from: [2015] NICA 31
JUDGMENT
R v
McCool (Appellant) (Northern Ireland)
R v
Harkin (Appellant) (Northern Ireland)
before
Lord Mance, Deputy President
Lord Kerr
Lord Reed
Lord Hughes
Lady Black
JUDGMENT GIVEN ON
2 May 2018
Heard on 23 November 2017
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Appellant
(McCool)
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Respondent
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Barry Macdonald QC
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Liam McCollum QC
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Dessie Hutton
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Rosemary Walsh
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(Instructed by Madden
& Finucane)
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(Instructed by Public
Prosecution Service)
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Appellant
(Harkin)
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Fiona Doherty QC
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Catherine Devlin
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(Instructed by
Madden & Finucane)
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LORD KERR:
Introduction
1.
Part 4 of the Proceeds of Crime Act 2002 deals with the circumstances
where benefits obtained by persons in Northern Ireland by their criminal
activity can be confiscated. By virtue of article 2 of and the Schedule to the
Proceeds of Crime Act 2002 (Commencement No 5, Transitional Provisions, Savings
and Amendment) Order 2003, Part 4 of the Act came into force on 24 March 2003.
2.
The first and central provision in Part 4 of the Act is section 156.
That section is declared in the statute to be concerned with the making of
confiscation orders. Subsection (1) of section 156 expressly requires that the
Crown Court must proceed in accordance with the terms of the section, where two
conditions are satisfied. The context for the way in which confiscation orders
are to be applied for and obtained is therefore set. That context, in my view, is
defined by the consideration that it is confined to confiscation orders which
can be made under the Act.
The relevant statutory provisions
3.
Subsections (2) and (3) of section 156 set out the two conditions
foreshadowed in subsection 1. The first of these is that the defendant against
whom a confiscation order is sought must either have been convicted of an
offence or offences before the Crown Court or have been committed to the Crown
Court in respect of an offence under section 218. There is an important rider to,
or explanation of, the latter of these conditions. It is to the effect that the
committal should have been with a view to a confiscation order being
considered. This reinforces the nature of the context in which these provisions
fall to be considered. The purpose of the committal is to deal with
confiscation orders that might be made under the 2002 Act.
4.
The terms of section 218(1) again emphasise this essential aspect.
Subsection (1)(b) makes clear that committal should take place when the
prosecutor asks the court to commit the defendant to the Crown Court with a
view to a confiscation order being considered under section 156. Thus,
under this provision, the court is principally concerned with the making of a
confiscation order under the 2002 Act. The magistrates’ court must commit the
defendant to the Crown Court if requested to do so - section 218(2)(a). But it
may also, under section 218(2)(b), commit him in respect of other offences
falling within subsection (3). Offences falling within the latter subsection
are those of which the defendant has been convicted by the magistrates’ or
other court and where the magistrates’ court has the power to deal with them.
5.
Thus, offences in respect of which it is not proposed to seek a
confiscation order may be referred to the Crown Court. It is not difficult to
deduce the reason for that. It would not be unusual for a defendant to be
charged with a number of offences, only some of which would qualify for
applications for a confiscation order. For administrative convenience, and to
avoid the possibility of over penalisation, it may be considered prudent to
commit the defendant to the Crown Court for a comprehensive sentencing
exercise.
6.
The section 218(2) distinction between the two categories of case which
the magistrates’ court may commit to the Crown Court is significant: those
offences which are committed so that a confiscation order can be considered and
other offences in which the question of a confiscation order does not arise.
The important theme, in relation to this case, is that the first category
relates to offences in respect of which a confiscation order can be made under
the Act. This reflects the general, underlying purpose of the legislation,
so far as concerns confiscation orders. It is that, in the first and principal
instance, the cases which are to be dealt with by the Crown Court are those in
respect of which a confiscation order under the 2002 Act can be made. The
provision that a second type of case (the other offences category) can also be
committed serves to demonstrate that the primary purpose of the Crown Court in
dealing with cases emanating from the magistrates’ court is to make
confiscation orders which can be made under the Act.
7.
Returning to section 156, the second condition which forms part of the
enjoinder to the Crown Court to act is provided for in subsection (3). That
condition is fulfilled where the prosecutor asks the court to proceed under the
section or the court considers it is appropriate to do so. Both these
alternatives are obviously geared to the making of confiscation orders that can
be made under the Act.
8.
The theme of facilitating or requiring the making of confiscation orders
under the 2002 Act is again apparent from subsection (4) of section 156. The
court is required to consider whether the defendant has a criminal lifestyle by
subsection (4)(a) and, if it so decides, it must determine whether he has
benefited from his general criminal conduct under subsection (4)(b). If the
court decides that the defendant does not have a criminal lifestyle, it must
consider whether he has benefited from particular criminal conduct - section
156(4)(c). All of these provisions have as their ultimate aim the ascertainment
of whether a confiscation order under the Act is appropriate.
9.
That basic objective is evident from the succeeding subsections (5) to
(8) of section 156. These do not require to be set out, but subsection (9) is
material for other reasons. It provides:
“References in this Part to the
offence (or offences) concerned are to the offence (or offences) mentioned in
subsection (2).”
10.
Drawing on the language used in this subsection and an allied provision,
section 236(1), it is argued that the phrase, “the offence (or offences)
concerned” is given a fixed and immutable meaning throughout the Act. (Section
236(1) provides that a reference to the offence (or offences) concerned must be
construed in accordance with section 156(9)). Guidance as to that meaning is
provided, it is suggested, by article 4 of the Commencement Order which provides:
“Transitional provisions
relating to confiscation orders - Northern Ireland
4(1) Section 156 of the Act
(making of confiscation order) shall not have effect where the offence, or any
of the offences, mentioned in section 156(2) was committed before 24 March
2003.”
11.
In particular, the use of the words, “any of the offences” in article 4
is said to indicate that, if any of the offences on which a defendant has been
committed pre-date 24 March 2003, none of the offences, even those which were
committed after that date can be treated as candidates for confiscation orders
under the 2002 Act but must be dealt with under legislation which applied on
the date when the first offence occurred.
12.
To say that this would produce a wholly anomalous result is not an exaggeration.
This is particularly so since it is accepted by the appellants that, if the
prosecution elects not to have a defendant committed to the Crown Court on a
charge which might have warranted a confiscation order in respect of an offence
committed before March 2003, and has the defendant committed only on offences
committed after that date, it would be open to the Crown Court to make
confiscation orders under the 2002 Act in respect of those offences. Likewise,
it is accepted that in a case which starts in the Crown Court, if the
prosecution chooses not to proceed on a charge relating to an offence committed
before March 2003, a confiscation order may be made in relation to offences
that occurred after 24 March 2003. In effect, therefore, the appellants accept
that the jurisdiction of the court to make confiscation orders under the 2002
Act could be controlled by tactical decisions by the prosecution.
13.
Ironically, the appellants object to what they portray as the election
of the prosecution to proceed under the 2002 Act and to ignore offences to
which they had pleaded guilty and which occurred before the relevant date, when
pre- and post-24 March offences are proceeded with on the same indictment. They
suggest that, in those circumstances, the prosecution should not be permitted
to choose only the post-March offences on which to seek compensation orders.
The respondent’s riposte to this argument is, of course, that this is not a
matter of election or choice. It submits that only offences which can be dealt with
under the Act qualify for consideration as “confiscation offences”. It is
therefore not a matter of tactical decision by the prosecution but, rather, the
consequence of the correct construction of section 156.
14.
The appellants counter this argument by pointing to, among other
provisions, section 224(3)(b) of the Act. As noted at para 8 above, the court
is required to consider whether the defendant has a criminal lifestyle by
subsection (4)(a) of section 156. If it decides that the defendant does not
have a criminal lifestyle, it must consider whether he has benefited from
particular criminal conduct - section 156(4)(c). Section 224 deals with
criminal conduct and benefit. Subsection (1) provides:
“Criminal conduct is conduct which
-
(a) constitutes an offence
in Northern Ireland, or
(b) would constitute such
an offence if it occurred in Northern Ireland.”
15.
A distinction is made between general criminal conduct and particular
criminal conduct. General criminal conduct is dealt with in subsection (2).
Particular criminal conduct is the species of criminality involved in this case
and it is provided for in subsection (3):
“(3) Particular criminal
conduct of the defendant is all his criminal conduct which falls within the
following paragraphs -
(a) conduct which
constitutes the offence or offences concerned;
(b) conduct which
constitutes offences of which he was convicted in the same proceedings as those
in which he was convicted of the offence or offences concerned;
(c) conduct which
constitutes offences which the court will be taking into consideration in
deciding his sentence for the offence or offences concerned.”
16.
The appellants argue that if the rubric, “the offence or offences
concerned”, is given the interpretation advanced by the respondent, viz offences
in respect of which confiscation orders could be made, it is clear from the
terms of section 224(3)(b) that the court considering the defendant’s
particular criminal conduct must have regard to offences which lie outside that
definition, in other words, offences that were committed before 24 March 2003.
This, say the appellants, makes the respondent’s interpretation unworkable.
17.
Despite its initial attraction, I do not accept the appellants’ argument
on this point. The overarching consideration is that, plainly, it was
Parliament’s intention that offences which were committed before 24 March 2003
should not be included in the section 156 consideration. It was also
Parliament’s intention, in my opinion, that all offences committed after that
date which could generate confiscation orders under the Act should be dealt
with under section 156. It cannot have been intended that a swathe of post-2003
offences should be removed from the Act’s purview simply because the defendant
was convicted of an associated offence before the relevant date. If that was
found to be the effect of the Act, it seems to me to be beyond question that
this was a wholly unintended effect.
18.
In these circumstances, the proper approach to interpretation is to determine
whether it is possible to give effect to Parliament’s intention,
notwithstanding the apparent incongruity of section 224(3)(b). I will explain
why this is the correct way to interpret the 2002 Act in the next section of
this judgment. In the meantime, however, it appears to me that subsection
(3)(b) is explicable on the basis that the criminal conduct which the court may
take into account under this provision is conduct on which a confiscation order
might have been made under the 2002 Act but which has not been put forward by
the prosecution as a potentially qualifying offence.
19.
That view is supported by a consideration of article 8 of the
Commencement Order in its amended form which deals with the approach that the
court should take in relation to the ascertainment of whether a defendant has a
criminal lifestyle. Although the present case does not involve that question,
it is argued that the amendments effected by the Order of 6 March 2003 provide
an insight into the issue whether the 2002 Act can apply to offences committed
after 24 March 2003, where the defendant has also been convicted of offences
committed before that date. First it is necessary to set out the relevant
provisions in section 223 of the Act. So far as material, it provides:
“223 Criminal lifestyle
(1) A defendant has a
criminal lifestyle if (and only if) the following condition is satisfied.
(2) The condition is that
the offence (or any of the offences) concerned satisfies any of these tests -
(a) it is specified in
Schedule 5;
(b) it constitutes conduct
forming part of a course of criminal activity;
(c) it is an offence
committed over a period of at least six months and the defendant has benefited
from the conduct which constitutes the offence.
(3) Conduct forms part of a
course of criminal activity if the defendant has benefited from the conduct and
-
(a) in the proceedings in
which he was convicted he was convicted of three or more other offences, each
of three or more of them constituting conduct from which he has benefited, or
(b) in the period of six
years ending with the day when those proceedings were started (or, if there is
more than one such day, the earliest day) he was convicted on at least two
separate occasions of an offence constituting conduct from which he has benefited.”
20.
In order to set in context the argument in relation to article 8 in its
original and amended form, it is necessary to set out both. In its first
incarnation, article 8 provided:
“Transitional provisions
relating to criminal lifestyle -Northern Ireland
8.(1) This article applies where
the court is determining under section 156(4)(a) of the Act whether the
defendant has a criminal lifestyle.
(2) The tests in section
223(2)(a) and (c) of the Act shall not be satisfied where the offence (or any
of the offences) concerned was committed before 24 March 2003.
(3) In applying the rule in
section 223(5) of the Act on the calculation of relevant benefit for the
purposes of section 223(2)(b) and (4) of the Act, the court must not take into
account benefit from conduct constituting an offence which was committed before
24 March 2003.
(4) Conduct shall not form
part of a course of criminal activity under section 223(3)(a) of the Act where
-
(a) the offence (or any of
the offences) concerned; or
(b) any one of the three or
more offences mentioned in section 223(3)(a), was committed before 24 March
2003.
(5) Conduct shall form part
of a course of criminal activity under section 223(3)(b) of the Act,
notwithstanding that any of the offences of which the defendant was convicted
on at least two separate occasions in the period mentioned in section 223(3)(b)
was committed before 24 March 2003.”
21.
Two weeks after its promulgation on 20 February 2003, the Commencement
Order was amended in order to substitute (so far as concerns Northern Ireland)
a new article 8. It was in the following terms:
“Transitional provisions
relating to criminal lifestyle -Northern Ireland
8.(1) This article applies where
the court is determining under section 156(4)(a) of the Act whether the defendant
has a criminal lifestyle.
(2) Conduct shall not form
part of a course of criminal activity under section 223(3)(a) of the Act where
any of the three or more offences mentioned in section 223(3)(a) was committed
before 24 March 2003.
(3) Where the court is applying
the rule in section 223(5) of the Act on the calculation of relevant benefit
for the purposes of determining whether or not the test in section 223(2)(b) of
the Act is satisfied by virtue of conduct forming part of a course of criminal
activity under section 223(3)(a) of the Act, the court must not take into
account benefit from conduct constituting an offence mentioned in section
223(5)(c) of the Act which was committed before 24 March 2003.
(4) Conduct shall form part
of a course of criminal activity under section 223(3)(b) of the Act,
notwithstanding that any of the offences of which the defendant was convicted
on at least two separate occasions in the period mentioned in section 223(3)(b)
were committed before 24 March 2003.
(5) Where the court is applying
the rule in section 223(5) of the Act on the calculation of relevant benefit
for the purposes of determining whether or not the test in section 223(2)(b) of
the Act is satisfied by virtue of conduct forming part of a course of criminal
activity under section 223(3)(b) of the Act, the court may take into account
benefit from conduct constituting an offence committed before 24 March 2003.
(6) Where the court is
applying the rule in section 223(6) of the Act on the calculation of relevant
benefit for the purposes of determining whether or not the test in section
223(2)(c) of the Act is satisfied, the court must not take into account benefit
from conduct constituting an offence mentioned in section 223(6)(b) of the Act
which was committed before 24 March 2003.”
22.
If the appellants’ argument that any proceedings which involved a
pre-March 2003 offence would have to be brought under a statutory regime
existing before the 2002 Act was correct, the new article 8(2) (and, for that
matter, the original article 8(4)) would not be required. Article 8(3) is also
significant. This requires that a court, which is assessing benefit under section
223(5) for the purposes of determining whether or not the test set out in
section 223(2)(b) of the Act is satisfied, must leave out of account benefit
from an offence committed before 24 March 2003. That stipulation again serves
to illustrate the ending of the application of pre-March 2003 legislation for
those purposes and the currency of the 2002 Act for offences committed after
that date.
The proper approach to interpretation
23.
As I have said, it is my opinion that Parliament cannot have intended
that a potentially extremely wide range of post-2003 offences would be excluded
from the ambit of the 2002 Act. That would produce a result which would be
plainly at odds with the entire scheme of the legislation. It is, of course,
possible to regard section 156 as an open and simple gateway and that, on a
literal interpretation, every offence of which the defendant is convicted, whether
or not it preceded March 2003, must be considered. But the absurd outcome which
this would produce is a strong indication against treating the section in that
way.
24.
In Bennion on Statutory Interpretation (6th ed) at section 312 of
what the author describes as the Code, the following statements are made:
“(1) The court seeks to avoid a construction that
produces an absurd result, since this is unlikely to have been intended by
Parliament. Here the courts give a very wide meaning to the concept of ‘absurdity’,
using it to include virtually any result which is unworkable or impracticable,
inconvenient, anomalous or illogical, futile or pointless, artificial, or
productive of a disproportionate counter-mischief.
(2) In rare cases, there are
overriding reasons for applying a construction that produces an absurd result,
for example where it appears that Parliament really intended it or the literal
meaning is too strong.”
25.
Bennion suggests that the courts have been prepared to give the concept
of absurdity an expansive reach. In support of that view, he cites Lord Millett
in R (Edison First Power Ltd) v Central Valuation Officer [2003] UKHL 20, [2003] 4 All ER 209 at paras 116 and 117, where he said:
“The courts will presume that
Parliament did not intend a statute to have consequences which are
objectionable or undesirable; or absurd; or unworkable or impracticable; or
merely inconvenient; or anomalous or illogical; or futile or pointless. But the
strength of these presumptions depends on the degree to which a particular
construction produces an unreasonable result. The more unreasonable a result,
the less likely it is that Parliament intended it ...”
See also Lord Scott of Foscote’s approval of this dictum
in Gumbs v Attorney General of Anguilla [2009] UKPC 27, para 44.
26.
The consequence of the 2002 Act being disapplied to a wide array of
offences committed after the operative date of 24 March 2003, and requiring
these to be dealt with under 1996 (or even, in the case of Ms McCool, 1990)
legislation, is self-evidently objectionable and undesirable. It means that
contemporary cases would have to be dealt with according to standards and rules
which have been replaced by the 2002 Act and secondary legislation made on foot
of it. I consider, therefore, that if there is a workable interpretation of the
legislation which allows post-2003 offences to be dealt with under the 2002
Act, even when those are associated with pre-2003 offences, that interpretation
should be adopted. For the reasons given earlier, I think that such an
interpretation is entirely feasible and that the 2002 Act was correctly applied
to the appellants’ cases. I will discuss the facts of the appellants’ offences
and the reasons that I consider that they were properly subject to confiscation
orders under the 2002 Act later in this judgment.
Ahmed, Martin, Simpson, Aslam and Stapleton
27.
The Court of Appeal in this case considered a number of authorities in
which transitional provisions in similar terms to those involved in the present
appeal were examined. The first of these was R v Ahmed (Court of Appeal,
Criminal Division, unreported 8 February 2000). In that case, the appellant had
pleaded guilty to three offences of conspiracy to defraud by inflating invoices
for goods supplied. The first of those offences took place at a time between
January 1995 and October 2006; the second between January 1995 and June 2007;
and the third between January 1997 and 30 November 2007. Section 16(5) of the
Proceeds of Crime Act 1995, which was the statute under which the confiscation
orders were sought, provided:
“Section 1 … shall not apply in
the case of any proceedings against any person where that person is convicted
in those proceedings of an offence which was committed before the commencement
of that section.”
The section came into force on 1 November 1995.
28.
The Court of Appeal in Ahmed accepted that the first two
conspiracy offences occurred partly before and partly after the operative date.
That circumstance had been overlooked by the parties and the trial judge. If it
had been adverted to, it would have been obvious that the judge had a
discretion whether to make the confiscation order in the sum that he had
decided upon. In the event, the Court of Appeal concluded that this would not
have made a difference to his decision. But the appellants in the present case
argue that the court in Ahmed effectively precluded the application of
the 1995 Act because of the earlier offences.
29.
This is not what the court held, however. It was decided that the
circumstance that two of the three offences had occurred before the operative
date meant that the trial judge did indeed have a discretion to make a
confiscation order for a lesser sum than that ordered. But the court was not
required to, and did not address, the question whether the effect of section
16(5) of the 1995 Act was to preclude a confiscation order under that
legislation, if an application had been made solely in relation to the offence
which occurred after its coming into force.
30.
In contrast, the respondent in the present case relies exclusively on
offences occurring after the coming into force of the 2002 Act. As the Court of
Appeal in the present case observed (in para 9 of its judgment), it was common
case that where the prosecution seeks a confiscation order in respect of an
offence committed before the date of coming into force of the relevant statute,
the earlier legislation will apply. The prosecution in the present case does
not seek to rely on offences committed before 24 March 2003. On the contrary,
it bases its claim for a confiscation order on offences committed after that
date. Ahmed is therefore not in point in relation to the appellants’
claim in this appeal.
31.
In R v Martin [2001] EWCA Crim 2761; [2002] 2 Cr App R (S) 74,
the appellant had pleaded guilty to conspiring with others to evade the payment
of duty owed to HMRC. The evasion took place over the period between October
1994 and January 1997. It was held that. since the dates of the conspiracy
straddled the commencement date of the 1995 Act, that legislation could not be
applied to the appellant’s case, notwithstanding that overt acts in the
perpetration of the conspiracy occurred after that date. The Court of Appeal
held that Ahmed was directly in point and that it was bound to follow
the decision in that case.
32.
Again, however, the situation in Martin is different from that
which obtains in the present appeals. In Martin, the prosecution was
relying on offences which had occurred before the commencement date for the
1995 Act, in support of its application for a confiscation order under that
Act. In the present case, the prosecution places no reliance on offences
committed before the coming into force of the 2002 Act. To the contrary, it
says that such offences must be left strictly out of account in deciding
whether confiscation orders should be made. The Court of Appeal in the present
case considered that Martin “did not add a great deal on [the issue
arising] to Ahmed.” In my view, it adds nothing to that issue.
33.
The next authority considered by the Court of Appeal in this case was R
v Simpson [2003] EWCA Crim 1499, (2004) QB 118. In that case the appellant
had pleaded guilty to offences involving VAT fraud. A confiscation order was
made under section 71 of the Criminal Justice Act 1988. The appellant appealed
against the confiscation order on the ground that the judge had no jurisdiction
to make it because the notice served on the court by the prosecution was not in
the form required by section 72(1) of the 1988 Act, and that, by virtue of
section 16(5)(c) of the Proceeds of Crime Act 1995, since one of the offences
to which he had pleaded guilty had been committed before 1 November 1995, the
amendment to section 72, made by section 1 of the 1995 Act, and providing that
service of a notice was no longer necessary, did not apply. He submitted that
the application of section 16(5) was not limited to offences on which the
confiscation order was based. The prosecution had not sought a confiscation
order in respect of the sole charge of an offence that had predated the coming
into force of the 1995 Act.
34.
It was common case that, if the appellant had not been convicted of the
offence which had been committed before the commencement date, the 1995 Act
would apply. But, because he had been convicted of that offence, it was argued
that that single conviction determined that the earlier legislation was the
only enactment under which a confiscation order could be sought. Lord Woolf CJ
described this as “an obviously … absurd result”. Before the Court of Appeal in
the present case, Mr Hutton, and before this court, Mr Macdonald QC, on behalf
of the appellants, challenged this description. It was, they said, in the
nature of transitional provisions that a line had to be drawn somewhere. The
choice of that line might in some cases seem arbitrary. That did not mean that
the result produced was absurd.
35.
While I accept that the imposition of a cut-off point will, in some
instances, produce a result which might appear anomalous and that anomaly
should not be equated with absurdity, for the reasons given earlier (in paras
23-26), I consider that if a significant number of offences committed after 24
March 2003 were excluded from the 2002 Act’s application, solely because of the
happenstance that a defendant had also been convicted of an offence committed
before that date, this would indeed be an absurd outcome.
36.
The Court of Appeal in Simpson considered that section 16(5) of
the 1995 Act should be applied so that, after the word “offence” in that
section, “there appears, the words ‘in respect of which a confiscation order is
or could be sought’” - para 19. It is not clear whether the court proposed that
these words be “read into the section” or merely that they were intended to be
clarificatory of the extent of its application. Reading in words to a statute
is problematic, of course. In Inco Europe v First Choice Distribution (a
firm) (2000) 1 WLR 586, 592, 115, Lord Nicholls of Birkenhead said:
“It has long been established that
the role of the courts in construing legislation is not confined to resolving
ambiguities in statutory language. The court must be able to correct obvious
drafting errors. In suitable cases, in discharging its interpretative function
the court will add words, or omit words or substitute words. Some notable
instances are given in Professor Sir Rupert Cross’ admirable opuscule, Statutory
Interpretation (3rd ed, 1995) pp 93-105. He comments (p 103):
‘In omitting or inserting words
the judge is not really engaged in a hypothetical reconstruction of the
intentions of the drafter or the legislature, but is simply making as much
sense as he can of the text of the statutory provision read in its appropriate
context and within the limits of the judicial role.’
This power is confined to plain
cases of drafting mistakes. The courts are ever mindful that their
constitutional role in this field is interpretative. They must abstain from any
course which might have the appearance of judicial legislation. A statute is
expressed in language approved and enacted by the legislature. So the courts
exercise considerable caution before adding or omitting or substituting words.
Before interpreting a statute in this way the court must be abundantly sure of
three matters: (1) the intended purpose of the statute or provision in
question; (2) that by inadvertence the draftsman and Parliament failed to give
effect to that purpose in the provision in question; and (3) the substance of
the provision Parliament would have made, although not necessarily the precise
words Parliament would have used, had the error in the Bill been noticed. The
third of these conditions is of crucial importance. Otherwise any attempt to
determine the meaning of the enactment would cross the boundary between
construction and legislation (see per Lord Diplock in Jones v Wrotham Park
Settled Estates [1980] AC 74 at 105-106).”
37.
For the reasons that I have given earlier, I consider that Parliament’s
intention in enacting the 2002 Act was that all offences committed after the
date of its coming into force should be subject to its regime, irrespective of
whether they were associated with offences committed before the commencement
date. In light of the experience in this case, it would perhaps have been
preferable that the 2002 Act had made it unmistakably clear that this was the
intention. I am not sure, however, that the failure to do so amounts to
inadvertence on the part of the draftsman. But I am entirely satisfied of “the
substance of the provision Parliament would have made” if, indeed, the
provision qualifies for the description of drafting inadvertence. The substance
of the provision which Parliament intended was, as I have said, that all
offences committed after March 2003, whether or not they were associated with
offences that occurred before that date, should be dealt with under the 2002
Act.
38.
Whatever of that, it appears to me that it is not necessary to read in
words such as those suggested in Simpson. The Act was intended to permit
applications for confiscation orders for offences committed after 24 March 2003
and to exclude from its application offences which had taken place before that
date. So understood, the legislation does not require the “reading in” of
further words. Provided a clear segregation between pre- and post-March 2003
offences can be identified, the application of the Act does not present a
problem.
39.
The next case dealt with by the Court of Appeal was R v Aslam
[2004] EWCA Crim 2801; [2005] 1 Cr App R (S) 116. In that case the appellant
pleaded guilty to a number of offences of dishonesty and asked for a number of
others to be taken into consideration. One of the offences to which he had
pleaded guilty and one of those which he had asked to be taken into
consideration had occurred before the coming into force of the 1995 Act. On
this account, it was argued on his behalf that the court had no jurisdiction to
make a confiscation order under the 1995 legislation. That argument was
rejected. At para 11, Bean J said:
“The legislative purpose of
section16(5), as it seems to us, was to prevent the Crown from dividing
convictions against a defendant in one set of proceedings into pre- and
post-November 1, 1995 matters and then taking confiscation proceedings
(concurrently or consecutively) under both statutes. So, if at the time the
judge is asked to make a confiscation order under the 1995 Act on a number of
counts there remains a pre-commencement count on which the Crown is seeking, or
could still seek, a confiscation order under the 1988 Act as amended in 1993,
there is no jurisdiction to make an order under the 1995 Act. However, if the
pre-commencement count is one which could not be the basis of confiscation
proceedings, there is no obstacle to using the 1995 Act regime. Similarly, if
(as in this case) the Crown has expressly abandoned any reliance on the
pre-commencement count for the purposes of a confiscation order, the fact
that it could have sought such an order in respect of that count seems to us
entirely immaterial. In such a case also, in our judgment, there is no obstacle
to using in the 1995 Act regime in respect of the post-commencement counts. We
do not understand Simpson to require a contrary conclusion.” (Emphasis
supplied)
40.
In Aslam, as in this case, the prosecution did not rely on a
pre-commencement offence in support of its application for a confiscation
order. The court in that case referred to the approach in Simpson of
treating section 16(5) as if it read in the manner described in para 36 above.
It did not suggest (at least, not expressly) that words should be read into the
section. For the reasons that I have given, I do not consider that this is
necessary.
41.
The “drawing of the line” by the commencement provision is readily
explicable for reasons quite different from the rationale suggested by the
appellants in the present case. It is, as Bean J said, to avoid the undesirable
prospect of having two sets of parallel or even consecutive proceedings under
two different items of legislation, with all the undesirable consequences that
would entail. It is also to provide a clear demarcation line between the
effective application of the 2002 Act and preceding legislation. It is entirely
consonant with common sense and good administration that the demarcation should
be applied so that only those offences which were committed after it came into
force were caught by the 2002 Act. It is also plainly sensible that the line
should not be blurred by allowing the Act to apply solely to those cases which
happened not to be associated with a pre-March 2003 offence. It may be possible
to construe the Act in that way but I am satisfied that this is not how it was
intended to apply.
42.
The Court of Appeal in the present case also briefly considered the
decision in R v Stapleton (2009) 1 Cr App R (S) 38. The appellant
pleaded guilty to six offences of furnishing false information, contrary to the
Theft Act 1968. She was committed to the Crown Court for sentence under the
2002 Act, with a view to a confiscation order being considered. She had made
claims for housing benefit in the amount of £15,946 between July 2002 and
August 2006. A confiscation order was made under the 2002 Act. On appeal, an
argument was made on her behalf in broadly similar terms to those presented by
the appellants in this case. Two of the offences had been committed before 24
March 2003.
43.
It was argued that the straightforward reading of the transitional
provisions meant that there was no power to make an order under the 2002 Act.
Reference was made to R v Clarke [2008] UKHL 8; [2008] 1 WLR 338, where
it was said that where the statutory provisions were clear in their terms, the
court was bound to apply them, even if the consequence was that a defendant is
enabled to obtain what might be regarded as an unmerited outcome. In Clarke Lord
Bingham said (at para 17):
“Technicality is always
distasteful when it appears to contradict the merits of a case. But the duty of
the court is to apply the law, which is sometimes technical, and it may be
thought that if the state exercises its coercive power to put a citizen on trial
for serious crime a certain degree of formality is not out of place.”
44.
The Court of Appeal in Stapleton acknowledged the obvious
authority of this statement but nevertheless considered itself bound by Aslam.
The court also acknowledged that Aslam had been criticised by Professor
Thomas in his commentary on the case which appeared in 2005 Criminal Law Review
154. But, Latham LJ, who delivered the judgment of the court, observed that it
could not be said that Aslam was plainly wrong. It had to be followed.
45.
It is, I believe, possible to address somewhat more forthrightly than
did the court in Stapleton the argument that the technical
interpretation of the relevant provisions of the 2002 Act compel a result that
the decision in Aslam was wrong. The correct interpretation of those
provisions must be informed by the predominant purpose of the legislation. As I
have said, its purpose was to provide a clear dividing line between those
offences which were caught by the Act and those which were not. A sensible, workable
segregation exists between offences committed before 24 March 2003 and those
which occurred after that date. While it is theoretically possible to construe
the Act as placing an embargo on its application to post-March 2003 offences
where they are associated with offences before that date, in no sense is that
the only possible construction. This is not a question of the technical
interpretation of the legislation compelling a particular result. Rather it is
a matter of construing the legislation in a perfectly legitimate way which
keeps faith with its plain and obvious purpose.
46.
Professor Thomas’s disapproval of Aslam, and in a second
commentary in 2008 Criminal Law Review 1, of Stapleton founds on two
principal criticisms. The first was that reading words into the statute was
objectionable. For reasons given earlier, I do not believe that it is at all
clear that the Court of Appeal in Simpson did read words into the
provision but merely clarified how its interpretation should be approached by
the device of instancing words that would have made its meaning clearer. In any
event, if words were read into the statute, that was an unnecessary exercise.
Finally, it is not in the least apparent that the Court of Appeal in Aslam did
read words into the statute.
47.
The second major criticism made by Professor Thomas was that the court
had no discretion to ignore offences of which the defendant has been convicted.
This objection to the approach of the court in Aslam, Simpson and Stapleton
was based on his consideration of section 76(3) of the 2002 Act (the
equivalent of section 224(3) in Part 4). He suggested that a defendant’s
“particular criminal conduct [was] all of the defendant’s criminal
conduct which constitutes the offence or the offences concerned, and conduct which
constitutes offences of which he was convicted in the same proceedings as those
in which he was convicted of the offence or offences concerned”. This is the
same argument as was advanced by the appellants in the present case and which,
as I observed in para 17, I initially found attractive. For the reasons that I
there gave, however, I consider that it is ill-founded.
The facts of the present cases
48.
At all material times the appellants, Ms McCool and Mr Harkin were man
and wife. Ms McCool was charged with and pleaded guilty to four offences of
obtaining benefit by fraud. These were of false accounting on 26 September 1990
for the purpose of obtaining income support as a single person, when in fact
she was married; making a false declaration to similar effect on 28 November
2003; making the same false declaration on 20 October 2005 and again on 10
August 2010. One of the offences therefore preceded the coming into force of
the 2002 Act. The other three did not. It was asserted that she had received an
overpayment of £76,817.72 in the period between 11 November 2003 and 17 May
2011 and it was this sum which formed the basis of the application for the
confiscation order. (It was adjusted to £84,966.30 to take account of the
increase in the value of money between the time that the benefit was paid and
the date of Ms McCool’s plea of guilty.)
49.
The available amount to meet the confiscation order was deemed to be
£38.037, representing half the value of the estimated equity of a property
which she owned jointly with her husband, Mr Harkin, the second appellant. The
Crown Court judge held that Ms McCool had benefited in the amount of £84,996
and made a confiscation order for a sum exceeding £38,000.
50.
In the case of Mr Harkin, he pleaded guilty to making a false declaration
on 16 December 1999 in relation to an application for income support,
representing that he was single when he was in fact married to Ms McCool. He
pleaded guilty to other offences, two of which were similar to the first
offence in December 1999 and the remainder were in relation to housing benefit.
In all of these cases, the offences were committed after the coming into force
of the 2003 Act. The total amount of the benefits received was said to be
£53,937.12, after making adjustment for the changes in the value of money. A
confiscation order was made in his case in the same sum as Ms McCool’s.
51.
On appeal to the Court of Appeal, the appellants argued, as they have
before this court, that the Crown Court did not have jurisdiction to make the
orders which it did. They also argued, however, that the Crown Court should
have applied Regulation 13 of the Social Security (Payments on Account,
Overpayments and Recovery) Regulations (Northern Ireland) to reduce the amount
of recoverable benefit by deducting the amounts to which the appellants would
have been entitled, had they made honest and accurate applications for benefit.
The Court of Appeal acceded to the latter argument and reduced the sums to be
recovered by way of confiscation to £5,531.95 in the case of Ms McCool and
£33,624 in the case of Mr Harkin. That order has not been challenged by the
respondent on this appeal.
52.
An application for leave to appeal to this court was refused by the
Court of Appeal but the court certified the following question as giving rise
to a point of law of public general importance:
“Can a confiscation order under section
156 of the Proceeds of Crime Act 2002 be made by a Crown Court in circumstances
where a defendant is convicted in proceedings before that Crown Court of an offence
or offences which were committed before 24 March 2003, given the stipulations
of the commencement, transitional and saving provisions set out in articles 2,
4 and 11 of the Proceeds of Crime Act 2002 (Commencement No 5, Transitional
Provisions, Savings and Amendment) Order 2003?”
53.
Both appellants were convicted of offences which, in all instances save
one in each case, were committed after the coming into force of the 2002 Act. I
have concluded that the offences committed after 24 March 2003 had to be dealt
with under the 2002 Act by the Crown Court considering whether to make
confiscation orders against the appellants. I have also decided that the court
was obliged to leave out of account offences which occurred before that date. I
would therefore answer the certified question in the affirmative.
Conclusion
54.
I would dismiss the appeal.
Postscript
55.
I agree with what Lord Hughes has had to say about the power of the
Court of Appeal to substitute an order under a different regime - see paras 108
et seq of his judgment.
LORD HUGHES: (with whom
Lady Black agrees)
Overview
56.
Not for the first time, this case concerns a technical issue relating to
the construction of confiscation legislation. The two defendants, who have at
all material times been married to one another, were both convicted of a series
of offences of making dishonest claims for State benefits by pretending that
they were single people when they were not and, in the case of Harkin, by
claiming housing benefit for a house when he was living with Ms McCool at a
different one. There is and was no significant dispute as to the total amounts
which they thereby obtained over a period of some years. There is and was no
serious dispute that confiscation orders were appropriate, nor that substantial
assets were available, from which such orders could be met: the available
amount was accepted to be £38,037 each. The only issue of substance in relation
to the proper sum to be confiscated arose from the contention that the amount of
the order ought to be reduced, in accordance with R v Waya [2012] UKSC 51;
[2013] 1 AC 294 from the gross payments received (the benefit for the purposes
of the legislation) to the amount of overpayment. The Court of Appeal
accepted that contention and reduced the confiscation orders accordingly. The
Crown accepts the reduction, and there thus remains no dispute as to the sums. But
it is said on behalf of both defendants that the orders were made under the
wrong set of confiscation legislation and must for that reason be quashed.
57.
The reason why this is said relates to the commencement dates of the
confiscation legislation and the transitional provisions effecting the change
from one set to another. The question here arises in a Northern Ireland case,
but the legislation is substantially the same in England and Wales, and indeed
very largely in Scotland. For convenience, the equivalent England and Wales
provisions, where identical, are noted in brackets.
58.
By way of very broad summary, confiscation legislation in the UK began
with the Drug Trafficking Offences Act 1986 (“DTOA 1986”). Shortly afterwards,
the Criminal Justice Act 1988 (“CJA 1988”) introduced similar provisions for
non-drug offending. Both statutes responded to international co-operation, and
treaty obligations in both fields arose at about the same time. Initially the
regime affecting drug offending was more severe than that applying to other
offences. The DTOA 1986 was replaced by the Drug Trafficking Act 1994 (“DTA
1994”). Meanwhile by the Criminal Justice Act 1993 (“CJA 1993”) and the
Proceeds of Crime Act 1995 (“POCA 1995”) a number of amendments were made. Three
which affected non-drugs offending may here be relevant: (1) the court’s
discretion as to the amount of the order was removed and replaced by an obligation
(in all but immaterial exceptional situations) to make an order in the sum of
the benefit obtained, capped by the available (or realisable) amount; (2) the
concept of a minimum benefit disappeared, and (3) provision was introduced for
including benefit from past offending where there was a course of criminal
conduct. Those alterations brought the non-drug regime closer into line with
what the drug regime had always been. There was also in the past separate
legislation for confiscation in relation to terrorist offences, which it is not
necessary to consider here. Then, in 2002 the legislation was re-worked and
consolidated in the Proceeds of Crime Act 2002 (“POCA 2002”), which assimilates
drug and other offending. This Act contains separate but similar sections for,
respectively, England and Wales, Scotland and Northern Ireland.
59.
The Northern Ireland legislation relating to confiscation for both kinds
of offence has been:
(i)
The Criminal Justice (Confiscation)(Northern Ireland) Order 1990, 1990
No 2588 (NI 17) (“the 1990 Order”); this dealt with both drugs and other
offences;
(ii)
The Proceeds of Crime (Northern Ireland) Order 1996 (SI 1996/1299) (NI
9) (“the 1996 Order”); this essentially mirrored the changes made in England
and Wales in 1993, 1994 and 1995 and came into force on 25 August 1996; and
(iii)
The Proceeds of Crime Act 2002; the chiefly relevant provisions of this
Act came into force for Northern Ireland (as also for England and Wales) on 24
March 2003.
The issue
60.
Ms McCool’s indictment, to which she pleaded guilty, charged four
counts. The first related to 26 September 1990. The remaining three related to
November 2003, October 2005 and August 2010. Those counts reflected a
continuing course of repeated false representations made between 1990 and 2010.
61.
Harkin’s indictment, to which he also pleaded guilty, contained counts
relating to offences committed in December 1999, October 2005, April 2006, May
2007 and August 2009. Those counts reflected a course of repeated false claims
made between 1997 and 2009 (income support) and between March 2003 and 2011
(housing benefit).
62.
When calculating the benefit for the purpose of the confiscation
proceedings, the prosecution disclaimed reliance, in both cases, on any
offending before the commencement of POCA 2002 in March 2003. In Ms McCool’s
case, her benefit was calculated from the date of her second count (28 November
2003). The gross sums obtained were £76,817.72; adjusted for inflation this
became £84,966.30. The overpayments however, were £5531.95. In Harkin’s
case, his benefit was similarly calculated. As to income support, benefit was
calculated by the prosecution as running from 20 October 2005 to 18 November
2009, and as to housing benefit from 3 April 2006 to 27 March 2011. In each
case the start date for the calculation of benefit was the date of the earliest
count on the indictment which related to a time after the commencement of POCA
2002. The gross payments received, adjusted for inflation, were £53,937.12. The
sum overpaid was (similarly adjusted) £33,624. It follows that these net
benefit figures were significantly smaller than the total overpayments
dishonestly obtained from 1990 onwards in the case of Ms McCool and from 1999 onwards
in the case of Harkin. They were also, but not by nearly so much, somewhat
smaller than the total overpayments obtained after the commencement of POCA
2002.
63.
The confiscation orders were made under POCA 2002. The appellants
contend that there was no power to make orders under that Act. They say that
any order could only be made under the relevant predecessor legislation, thus
the 1990 Order for Ms McCool and the 1996 Order for Harkin. This contention is
founded on the terms of section 156 of POCA 2002 and of the relevant
Commencement Order.
64.
Section 156 [section 6 for England and Wales] is the foundation of the
power to make a confiscation order. So far as relevant, it says:
“156 Making of order
(1) The Crown Court must
proceed under this section if the following two conditions are satisfied.
(2) The first condition is
that a defendant falls within either of the following paragraphs -
(a) he is convicted of an
offence or offences in proceedings before the Crown Court;
(b) he is committed to the
Crown Court in respect of an offence or offences under section 218 below
(committal with a view to a confiscation order being considered).
(3) The second condition is
that -
(a) the prosecutor asks the
court to proceed under this section, or
(b) the court believes it
is appropriate for it to do so.
(4) The court must proceed
as follows -
(a) it must decide whether
the defendant has a criminal lifestyle;
(b) if it decides that he
has a criminal lifestyle it must decide whether he has benefited from his
general criminal conduct;
(c) if it decides that he
does not have a criminal lifestyle it must decide whether he has benefited from
his particular criminal conduct.
(5) If the court decides
under subsection (4)(b) or (c) that the defendant has benefited from the
conduct referred to it must -
(a) decide the recoverable
amount, and
(b) make an order (a
confiscation order) requiring him to pay that amount.
(6) [exception where victim
brings civil proceedings].
(7) The court must decide
any question arising under subsection (4) or (5) on a balance of probabilities.
(8) [provision for
absconding defendant].
(9) References in this Part
to the offence (or offences) concerned are to the offence (or offences)
mentioned in subsection (2).”
65.
The relevant Commencement Order is the Proceeds of Crime Act 2002
(Commencement No 5, Transitional Provisions, Savings and Amendment) Order 2003
(SI 2003/333) (C20) (“the Commencement Order”). So far as material, it says in
article 4(1) [article 3(1) E & W]:
“4.(1) Section 156 of the Act
(making of confiscation order) shall not have effect where the offence, or any
of the offences, mentioned in section 156(2) was committed before 24 March 2003.”
And by article 11, [article 10 E & W] it preserves
the predecessor legislation for cases where article 4 precludes use of POCA
2002:
“11. Where, under article 4 or
6, a provision of the Act does not have effect, the following provisions shall continue
to have effect -
…
(e) Articles 3 to 40 of,
and paragraph 18 of Schedule 3 to, the Proceeds of Crime (Northern Ireland)
Order 1996.”
66.
It follows that the issue in this case relates to which offences are
contemplated by section 156(2) and thus referred to in article 4(1). Is it, in
each case, any offence for which the defendant is before the court, or
is it any such offence which is relied upon by the Crown (or the court) as justifying
confiscation proceedings?
Previous authority
67.
A similar problem arose (in England and Wales) in relation to the
transition from the pre-1995 legislation to POCA 1995. Section 16(5) of that
latter Act contained a provision very similar to the present article 4(1). It
provided:
“Section 1 … shall not apply in
the case of any proceedings against any person where that person is convicted
in those proceedings of an offence which was committed before the commencement
of that section.”
68.
As Lord Kerr explains, the Court of Appeal (Criminal Division)
confronted this question in R v Simpson, R v Aslam and R v
Stapleton. It concluded that the “offence(s)” referred to were ones which were
relied upon for the making of a confiscation order, that is to say those which
the Crown was seeking, or could still seek, to bring into account for
confiscation purposes. It followed that if when it came to confiscation the
Crown disclaimed reliance on a pre-commencement count and brought into account
only post-commencement offences, the new Act applied. I agree with Lord Kerr
that it is not necessary to read words into the new statute to achieve this. Nor,
pace the Court of Appeal (Criminal Division) in R v Simpson, is it
necessary to label the alternative construction absurd. The decisions were that
the new statutes applied where the relevant offences, that is to say
those relied on for confiscation purposes, post-dated the commencement date. There
is no doubt that these decisions have consistently been followed as a matter of
practice since, as is shown by the considered decision of the Crown in the
present case to disclaim reliance on the counts which pre-dated March 2003. The
decisions have also consistently been applied in the Court of Appeal (Criminal
Division); see for example R v Aniakor [2014] EWCA Crim 2171. The
present appellants contend that this established line of authority, and the
practice based upon it, are wrong. Of course, if this construction of the
statutes, despite such general acceptance, is not permissible, then it must
follow that however technical the objection raised, the orders made in the
present case cannot stand.
The appellants’ argument
69.
The argument for the appellants rests principally upon the fact that
there are some differences between the POCA 2002 regime and the earlier regimes
which it replaced. The confiscation legislation is, it is rightly said, penal
legislation. Accordingly, it is said that it ought to be construed strictly in
favour of defendants to whom its provisions are applied. It is unjust, it is
said, to permit the Crown by a process essentially of election, to choose which
regime is to apply to a defendant. And it is contended that the wording of
article 4(1) [article 3(1) E & W] of the Commencement Order is clear and
can only sensibly mean that where any offence on the indictment dates
back before the commencement date of POCA 2002, the old regime applies and not
the new.
Differences between the regimes
70.
The appellants helpfully assembled a list of differences. By no means
all of them could even arguably affect them, but their case is that all of them
are relevant to deciding the principle whether POCA 2002 can be applied to
those who are before the Crown Court for offences which include
pre-commencement offences, even if the Crown disclaims reliance on the earlier
offence(s) for the purposes of confiscation. The identified differences are
addressed serially below.
71.
First, the pre-1995 non-drug regimes provided for confiscation to be
available only where the benefit exceeded a minimum amount (set at all material
times at £10,000) and moreover made the same sum the minimum amount for which a
confiscation order could be made: article 4(1) of the 1990 Order [the unamended
section 71(2)(b)(ii) CJA 1988 for E & W]. Allied to this rule, the pre-1995
non-drug regimes required the Crown to serve notice to the effect that an order
in at least the minimum amount would be possible: article 4(6) of the 1990
Order [the unamended section 72(1) CJA 1988 for E & W]. This concept of a
minimum amount never applied to drugs offending, and disappeared from the
legislation after POCA 1995 and the 1996 Order.
72.
Second, the pre-1995 non-drug regimes vested in the court a discretion
as to the amount of a confiscation order. The court was given the power to make
such order as it thought fit, subject to the ceiling of the assets
available/realisable: Article 4(1) of the 1990 Order [the unamended section
71(1) CJA 1988 for E & W]. Since 1995/1996 the court has been required in
all but immaterial cases to make an order in the amount of the benefit which
the defendant has obtained, subject again to the ceiling of
available/realisable assets. There was never any discretion in the drug
regimes.
73.
Third, for the non-drug regimes, there was until the 1995/96 changes no
provision for taking into account benefit obtained from offences other than
those before the court, either as charges or as offences taken into
consideration. Since then, benefit from other offences has been taken into
account in prescribed circumstances. The label attached to the prescribed
circumstances was, until POCA 2002, “a course of criminal conduct”: article 9
of the 1996 Order [new section 72AA(1) CJA 1988 inserted by POCA 1995 for E
& W]. Since POCA 2002 it has been “criminal lifestyle”: POCA 2002 section
156(4) and 223 [sections 6(4) and 75 for E & W]. The conditions for
attracting these extended provisions have not remained identical, but are very
similar. The post 1995/96 conditions were satisfied if the defendant was now,
or had been in the preceding six years, convicted of one other offence: article
9(1) of the 1996 Order [new section 72AA(1) CJA 1988 for E & W]. Under POCA
2002 the defendant falls within the lifestyle provisions if there are either three
additional convictions (four in all) in the present proceedings, or two
previous convictions in the preceding six years: section 223(3) POCA 2002
[section 75(3) for E & W]. Moreover, the course of criminal activity
lifestyle rules of POCA 2002 do not apply unless the total benefit is £5,000 or
more: section 223(4) [section 75(4) E & W]. In these respects the
qualifying conditions are narrower under POCA 2002 than under the previous
1995/96 regime. But under POCA 2002 a defendant is also to be treated as a
lifestyle offender if he is convicted of certain specific offences, or (subject
to the £5,000 minimum) of an offence committed over a period of at least six
months: section 223(2) [section 75(2) for E & W]. The objective seems
sensibly to have been to identify more reliably those whose offending spanned a
period so as to raise the realistic possibility that their lifestyle was to a
significant extent supported by crime.
74.
The effect of the course of conduct and lifestyle conditions being
satisfied is, in each case, to make available to the court assumptions as to
benefit, each applicable unless either the defendant disproves it on the
balance of probabilities, or there would be a serious risk of injustice if it
were made. The assumptions are the same under both regimes, although the first
has been split into two in POCA 2002: compare section 160 POCA 2002 [section 10
E & W] with article 9, 1996 Order [new section 72AA(4) CJA 1988 E & W].
The chief assumptions are that any property held by the defendant over the
preceding six years, and any expenditure made by him over the same period, are
the product of criminal offences, so that they count towards his benefit. Plainly
the objective under both regimes is to cast the onus onto a lifestyle offender
to demonstrate, on the balance of probabilities, that his assets have been
legitimate. There is one difference between the 1995/96 regime and the POCA
2002 regime, in that the assumptions, which were discretionary under the
former, have become mandatory under the latter. In the case of drug offending,
the assumptions were always available, and the confiscation order took into
account all benefit from drug offending whenever it occurred, before or after
the inauguration of the confiscation legislation: see eg DTOA sections 1(3),
2(1)(a) and 2(2).
75.
Fourth, the rules as to postponement of confiscation, which were the
subject of a considerable amount of litigation until the House of Lords held in
R v Soneji [2005] UKHL 49; [2006] 1 AC 340 and R v Knights [2005] UKHL 50; [2006] 1 AC 368 that failure strictly to comply with them did not
usually render an order invalid, have been modified from time to time. Under
the 1990 Order the maximum postponement was six months: article 7. Later that
was revised to six months absent exceptional circumstances: article 11 of the
1996 Order [section 72A(3) CJA 1988 inserted by section 28 CJA 1993 E & W].
Under POCA 2002 postponement can be for up to a maximum of two years, and
beyond in event of exceptional circumstances: section 164 [section 14 E &
W].
76.
Fifth, all the regimes have provided for the calculation of the
“ceiling” amount of the defendant’s available or realisable assets to include
gifts which he has made. Under the pre-POCA 2002 non-drug regimes, gifts which
were thus to be included were those made by the defendant after the commission
of the predicate offence which the court thought it appropriate to take into
account: article 3(10) of the 1990 Order and article 7(1)(a) of the 1996 Order
[section 74(10) unamended CJA 1988 E & W]. Under POCA 2002 the same rule
for what are now termed “tainted gifts” applies by section 225(5) [section
77(5) E & W], but the expression is widened in lifestyle cases, logically
enough, to include gifts either made during the six year period or which were
of property obtained via criminal conduct: section 225(2)(3) [section 77(2)(3) E
& W]. In both cases, if gifts qualify as tainted they are now to be added
into available assets, without a further requirement that the court conclude it
appropriate to do so.
77.
Sixth, from time to time the provisions relating to variation of
confiscation orders have been revisited and revised. It is enough to record
that the 1995/96 regimes somewhat extended the power to vary an order upwards,
when compared with the pre-1995 regime, in the event of fresh evidence becoming
available. POCA 2002 provides for additional specific situations in which there
may be variation on the basis of fresh evidence; they include cases where the
Crown Court made no confiscation order at all, either because it was not invited
to do so, or where at that time the evidence did not show any benefit.
78.
Seventh, there are differences in the means of enforcement of
confiscation orders. It is unnecessary to set them out. Essentially the system
of enforcement has remained the same throughout. Confiscation orders are
enforced by the magistrates as if they were Crown Court fines: see R v Guraj
[2016] UKSC 65. Additional mechanisms have however been added from time to
time, such as widening the range of officials who may exercise powers of
seizure, extending the powers of management receivers appointed under restraint
orders, and enlarging the ability to enforce as if civil debts.
79.
The appellants identify a particular aspect of enforcement. When
making a confiscation order the court has always had power to stipulate the
time within which payment must be made. In Northern Ireland the power derived
until POCA 2002 from the general provisions for fines, found in section 35(1)
of the Criminal Justice Act (NI) 1954, which permitted extension of the period
from time to time. Under POCA 2002, section 161(5) [section 11(5) E & W]
time cannot be extended beyond 12 months. The charging of interest depends on
the time given to pay, because it runs from default. It follows that in this
respect POCA 2002 is, at least theoretically, more severe than the previous
regime, under which it was at any rate legally possible for time to be extended
beyond 12 months.
80.
Eighth, the early legislation placed confiscation jurisdiction in
the court of trial, whether the Crown Court or the Magistrates’ Court. POCA
2002 restricts it to the Crown Court and therefore includes provision for the
defendant who is convicted of a benefit-generating offence before the
magistrates to be committed to the Crown Court for confiscation to be considered:
section 218 [section 70 E & W]. This power of committal is separate from,
and wider than, the ordinary power which magistrates have in England and Wales
to commit a defendant for sentence where he is convicted of an offence triable
either way. It extends to purely summary offences, and is a power of committal
available only where confiscation is a possibility. The terms of the provisions
for committal are relevant context on the construction question and are
considered more fully below.
81.
Ninth, the earlier legislation made no provision for a right of appeal
by the Crown. The defendant’s right of appeal was secured from the outset
because a confiscation order was, although not strictly part of the sentence,
an “order … made when dealing with an offender” and thus appealable as if a
sentence under section 30 Criminal Appeal Act (Northern Ireland) 1980 [section
50 Criminal Appeal Act 1968 E & W]: see R v Johnson [1991] 2 QB 249.
This was later reinforced by inserting specific provision in those statutes
including a confiscation order in the definition of sentence, such as section
30(3)(a) of the Criminal Appeal Act (Northern Ireland) 1980 [section 50(1)(d)
Criminal Appeal Act 1968 E & W]. There is of course no general right of
appeal by the Crown against sentence (although there existed the power to refer
the case under section 36 of the Criminal Justice Act 1988 as unduly lenient). A
general right in the Crown to challenge either a decision not to make a
confiscation order, or the amount of it if made, had to be created separately
and is found in section 181-182 of POCA 2002 [sections 31-32 E & W].
82.
The detail and technicality of the confiscation legislation, sometimes
necessary and sometimes not, is such that changes from time to time of the kind
set out above are to be expected. The question which matters for present
purposes is whether these differences mean that the Simpson/Aslam
construction of POCA 2002 is thereby rendered impermissible. That in turn
involves asking whether that construction would or might result in any
unfairness to defendants. If it would, or might, then the principle that penal
statutes must be construed strictly in favour of those penalised would carry
considerable weight.
83.
There would be unfairness, and a breach of article 7 ECHR, if this
construction had the effect of applying retrospectively to defendants a regime
which was not in force at the time their offences were committed. But there is
no question of this retrospective operation of POCA 2002 if it is applied only
to confiscation proceedings depending on offences committed after its commencement.
If the Crown disclaims reliance, for confiscation purposes, on any
pre-commencement offence, then retrospective operation simply does not arise. The
principal rationale of the impermissibility of retrospective operation of a
penal statute is that a citizen is entitled to know, at the time he decides how
to behave, what the legal consequences of what he does may be. If now these
appellants, or other defendants like them, were to be visited with consequences
by way of confiscation of a kind different from what was available to the Crown
when they committed the offence(s) attracting those consequences, there would
be impermissible retrospective operation of the criminal law. But these
appellants have committed offences since the commencement of POCA 2002. The
consequences which have been visited upon them are precisely the same as would
have been applied to anyone else who committed such offences after that
commencement. It is true that both of them have also committed pre-commencement
offences. But the orders made owe nothing to those offences and are precisely
the same as would have followed if the earlier offences had never occurred. There
is nothing unfair in saying to Ms McCool that she should bear the confiscation
consequences of her post-March 2003 offences, as required by POCA 2002, unless
those consequences differ in some way from what they would have been if she had
not committed her earlier offences. They do not. The same is true of Harkin.
84.
There would also be likely to be a real risk of unfairness if a
defendant faced the prospect of two different confiscation regimes being
applied to him, because so much of the ground covered by each regime is the
same. This was the consideration underlined by the Court of Appeal, Criminal
Division, in Aslam [2005] 1 Cr App R (S) 116. Speaking of the
commencement provisions in POCA 1995, the court’s judgment contains the following
analysis:
“11. The legislative purpose
of section 16(5), as it seems to us, was to prevent the Crown from dividing convictions
against a defendant in one set of proceedings into pre- and post-November 1,
1995 matters and then taking confiscation proceedings (concurrently or
consecutively) under both statutes. So if at the time the judge is asked to
make a confiscation order under the 1995 Act on a number of counts there
remains a pre-commencement count on which the Crown is seeking, or could still seek,
a confiscation order under the 1988 Act as amended in 1993, there is no jurisdiction
to make an order under the 1995 Act. However, if the pre-commencement count is one
which could not be the basis of confiscation proceedings, there is no obstacle
to using the 1995 Act regime. Similarly if (as in this case) the Crown has
expressly abandoned any reliance on the pre-commencement count for the purposes
of a confiscation order, the fact that it could have sought such an order in
respect of that count seems to us entirely immaterial. In such a case also, in
our judgment, there is no obstacle to using in [sic] the 1995 Act regime in
respect of the post- commencement counts.”
However, for the reasons explained in that passage, there
is no question of more than a single confiscation regime being applied to these
appellants or anyone in a similar position. That is because the offences which
are relevant to section 156 [section 6 E & W] are those on which the Crown
and thus the court will found any confiscation order. Where, as here, any
earlier pre-commencement offences are disclaimed by the Crown, and not relied
upon by the court, there can only be the single confiscation regime established
by POCA 2002.
85.
This position is true despite the various differences between the regimes
which are set out above.
86.
Ms McCool, had she been dealt with in the early 1990s for her offending
up to that point, would have been subject to a confiscation regime under which
£10,000 was the minimum sum for which an order could be made - see the 1990
Order and para 71 above. But to say that an order can now be made against her
under POCA 2002, where there is no minimum, is to subject her to no injustice
if the order is made exclusively on the basis of offences committed since March
2003. It is exactly the same as if she had now been prosecuted only for the
post-March 2003 offences. In that event, everyone agrees that POCA 2002 would
be the relevant regime and there would be no minimum sum.
87.
For the same reasons, there is no injustice to Ms McCool in the fact
that the regime applied to her permits of no general discretion as to the
amount of the confiscation order. She is in exactly the same position as she
would have been in if prosecuted only for the post-March 2003 offences. It
might be added that, in any event, no basis is suggested on which any court
considering her case at any time under any regime might have made an order in a
sum smaller than the £5,531.95 actually made.
88.
The lifestyle provisions are of some complexity but the same reasoning
applies. If these appellants had been prosecuted only for the post-March 2003
offences, no one suggests that the POCA 2002 provisions would not correctly have
been applied to them. The slightly different lifestyle provisions of POCA 2002
are deliberately applied to anyone convicted of offences committed after the
commencement of that statute. They were in force when those post-commencement
offences were committed, and no improper retrospectivity is involved in
applying them.
89.
In considering the lifestyle provisions it is necessary to distinguish
between the conditions which must be met before they can be applied, and the
consequences if they are. It is certainly true that the conditions for their
application may to a strictly limited extent involve looking at past
convictions. There are two possible routes to a finding that there has been a
course of criminal activity. The first is that the defendant is convicted in
the current proceedings of at least three other offences (ie at least four in
all) from which he has benefited: section 223(2)(b) with section 223(3)(a) [section
75(2)(b) with section 75(3)(a) E & W]. The second is that he has previous
convictions, sustained on two or more different occasions, for
benefit-generating offences: section 223(2)(b) with section 223(3)(b) [section
75(2)(b) with section 75(3)(b) E & W].
90.
As to the first route, one or more of the three other offences might of
course be pre-commencement. But if it is, the Commencement Order requires it to
be left out of consideration: Article 8(2) [article 7(2) E & W], and nor
can its associated benefit count towards the minimum benefit condition of £5,000
required by section 223(4) and (5) [section 75(4) and (5) E & W]: Article
8(3) as amended [article 7(4) E & W]. The exception of pre-commencement
offences for this purpose of counting three others in the present proceedings,
and counting a minimum of £5,000 benefit has clearly been stipulated for in the
Commencement Order to avoid any risk of retrospectivity, for under the 1995/96
regime only one other offence was sufficient and there was no minimum benefit
requirement. It may or may not have been necessary, in order to avoid
infringement of article 7 ECHR, to make these stipulations, given that the new
conditions are tighter, not looser, for the establishment of a course of
criminal activity, but this must have been the aim. Whatever the reason, the
outcome is that no pre-commencement offences, even if the conviction occurs in
the current proceedings, can count towards the establishment of a course of
criminal activity via the three other offences (four in all) rule. It is also
to be noted that the fact that it was thought necessary, in order to achieve
this, to include articles 8(2) and (3) in the Commencement Order is relevant to
the construction of section 156: see below.
91.
As to the second route, the past convictions may clearly have been
pre-commencement, as was the case under the previous regime. These can and do
count, as article 8(5) of the Commencement Order [article 7(5) E & W] makes
clear. There is no reason why they should not. There is no offensive
retrospectivity so long as the past convictions only go to the calculation of
benefit in respect of confiscation based on post-commencement offence(s). It is
similar to taking account of previous criminal history for sentencing purposes.
The rule that such pre-commencement benefit might be taken into account when
fixing the confiscation order was in force and available to the defendant at
the time he committed the post-commencement offence(s) which generate the
order.
92.
POCA also introduced two new routes to the lifestyle provisions, as
additions to the “course of criminal activity” routes. The first is that some
offences specified in Schedule 5 [Schedule 2 E & W] (intended to be the
kind likely to be committed by professional criminals) now automatically bring
the lifestyle provisions into play. The second is that an offence committed
over a period of six months or more also does so, since it is likely to involve
repetition. Both these new routes are more severe on defendants than the
previous regimes. Accordingly, for both of them, the Commencement Order
provides by article 8(2) [article 7(2) E & W] that pre-commencement
offences are to be left out of consideration. There is thus no risk of
objectionable retrospectivity or unfairness.
93.
When it comes to the consequences of the lifestyle provisions applying,
it is necessary to go back in the statute to section 160 [section 10 E &
W]. This sets out the assumptions which must be made. As with the provisions of
the previous regimes, they do involve counting as benefit assets obtained
before the Act was passed, if but only if the defendant cannot displace the
assumptions on the balance of probabilities. But that is the position for
anyone convicted of (say) a course of dishonest conduct perpetrated between
June and December 2003, if he qualifies under the lifestyle provisions. The
counting of past-obtained benefits is not objectionably retrospective, because
it applies a regime which was in force when the offences were committed. Nor,
for the same reasons, is there any unfairness to a defendant if the Crown
disclaims reliance on any pre-commencement offence in the present indictment
and proceeds in relation only to the post-commencement offence(s). A defendant
whose case is treated in this way by the Crown is in exactly the same position
as if he had only been prosecuted for, or indeed had only committed, the
post-commencement offence(s).
94.
Exactly the same applies to the various other differences between the
regimes which are set out at paras 75-81 above. In all cases there is no
unfairness to a defendant such as these appellants if the POCA 2002 regime is
applied, based only on post-commencement offences, because the rules which are
being applied are those which were in force, and publicly known, at the time
the offence(s) generating the confiscation order were committed.
95.
Even if it were to turn out possible for circumstances to occur in which
the result of this, correct, construction of POCA 2002 as applied in the Aslam
series of cases was to create real risk of unfairness to the defendant, the
court retains a simple method of preventing such risk eventuating. On any view,
under both the present POCA 2002 regime and its predecessors, the court is
given the power to embark upon the confiscation process of its own motion, even
if not asked by the Crown to do so: section 156(3)(b) POCA 2002 or article
8(1)(b) of the 1996 Order [section 6(3)(b) POCA 2002 or section 71(1)(b) CJA
1988 for E & W]. On the assumption that the Aslam construction is
correct, the offence(s) in respect of which the confiscation inquiry is
undertaken are therefore those which either the Crown seeks to rely on or
the court determines should be made part of the process. It would therefore be
open to a defendant to apply to the court to determine that one or more
pre-commencement counts ought to be included in the process, on the grounds
that if they are not he would be at demonstrated risk of unfairness. If the
court acceded to that application, the earlier count would be part of the
confiscation inquiry and, as the Commencement Order ordains, the relevant
statutory regime would then be the earlier one.
96.
It is clear from the judgment of Lord Reed that the foregoing
conclusions as to the absence of risk of unfairness is not in issue; his
differing conclusions depend on his construction of the legislation.
The construction of section 156 and the Commencement Order
97.
There is no basis for the appellant’s assertion that it is improper, or
inconsistent with POCA 2002, for there to be an element of election by the
Crown in relation to which offences are relied on for the confiscation process.
Section 156 [section 6 E & W] does not make a confiscation order available
in respect of every person who profits from criminal behaviour. It makes it
available in relation to those who are convicted of one or more offences.
Certainly confiscation depends on benefit from conduct rather than attaching to
particular offences, but the confiscation exercise is, by section 156(2) [section
6(2) E & W] triggered by the offences there referred to. It is axiomatic
that the decision to prosecute for an offence is for the Crown. An element of
choice as to which offence(s) to charge is inherent in the vast majority of
prosecution decisions, and in all where there is serial offending. It is
positively unusual for every offence revealed to be charged. It follows that by
deciding to charge only those of a series of offences which were committed
after the commencement date, the Crown can achieve exactly the same result as
contemplated by Aslam and similar cases, that is to say the application
of the POCA 2002 regime. No one suggests otherwise. There is nothing remotely
improper about it.
98.
A similar telling indication is provided by the second part of section
156(2), viz section 156(2)(b) [section 6(2)(b) E & W]. As explained at para
80 above, the magistrates’ power to make confiscation orders disappeared in
POCA 2002. Accordingly it was replaced by a power to commit a defendant to the
Crown Court for consideration of confiscation. The power is found in section
218 [section 70 E & W]. This provides:
“218 Committal
by magistrates’ court
(1) This section applies if
-
(a) a defendant is
convicted of an offence by a magistrates’ court, and
(b) the prosecutor asks the
court to commit the defendant to the Crown Court with a view to a confiscation
order being considered under section 156.
(2) In such a case the
magistrates’ court -
(a) must commit the
defendant to the Crown Court in respect of the offence, and
(b) may commit him to the
Crown Court in respect of any other offence falling within subsection (3).
(3) An offence falls within
this subsection if -
(a) the defendant has been
convicted of it by the magistrates’ court or any other court, and
(b) the magistrates’ court
has power to deal with him in respect of it.
(4) If a committal is made
under this section in respect of an offence or offences -
(a) section 156 applies
accordingly, and
(b) the committal operates
as a committal of the defendant to be dealt with by the Crown Court in
accordance with section 219.
(5) [provision
for bail].”
99.
This power is explicitly to commit with a view to confiscation. It is
not the same as the ordinary (English) magistrates’ power to commit for
sentence in an either-way offence. This power extends to purely summary
offences, where the magistrates could not commit for sentence, and it exists
only where consideration of confiscation is the purpose. Once invoked, it does
transfer also to the Crown Court the function of sentencing the defendant: see
sections 218(4) and 219 [sections 70(4) & 71 E & W]. But the sentencing
power to be exercised by the Crown Court is not the same as it would be in the
case of committal for sentence in an either-way offence, for it is limited by
section 219 to whatever (more limited) power the magistrates would have had by
way of sentence [section 71(3)(b) E & W, with the variant that the
magistrates may in that jurisdiction indicate under section 70(5) as to an
either-way offence that they would in any event have committed for sentence,
and then the Crown Court has its own sentencing powers under section 71(2)(b).]
In both jurisdictions it is to be noted the magistrates have no power to commit
of their own motion with a view to confiscation. They can do so only where the
Crown asks them to do so: section 218(1)(b) [section 70(1)(b) E & W]. So
the Act recognises explicitly the power of the Crown to make a decision either
way about committal. It provides an election to the Crown. If some of the
offences before the magistrates’ court are pre-commencement and the Crown opts
to request committal with a view to confiscation only those which are later,
post-commencement, offences, then only the POCA 2002 regime will apply. There
is nothing at all improper in the Crown adopting this course. If it can do so
in relation to convictions in the magistrates’ court there is no reason why it
should not also do so, via the Aslam procedure, if the convictions occur
in the Crown Court. It is true that the magistrates can, if asked by the Crown
to commit offences A-D with a view to confiscation, also do the same of its own
motion in relation to offences E-G. But there is no obligation to do so, and
the result is that the Crown’s decision as to which are to be committed is
permitted to stand, and in practice in most cases will be determinative.
100.
Section 224(3) [section 76(3) E & W] deals with the non-lifestyle
offender. Under section 156(4)(c) [section 6(4)(c) E & W] his benefit falls
to be assessed from offences constituting his “particular criminal conduct.” Those,
by section 224(3) [section 76(3) E & W] are (a) “the offence(s) concerned”
and (b) any other offence(s) of which he was convicted in the same proceedings.
(A third element, under subsection (3)(c) is offences taken into consideration,
but this provision does not assist on the present construction question.) An
“offence concerned” is, by section 156(9) [section 6(9) E & W] to be read
as an offence mentioned in section 156(2) [section 6(2) E & W]. But section
224(3(b) demonstrates that there may be offences of which the defendant is
convicted in the current proceedings which are not the offence(s)
mentioned in section 156(2). That is a strong pointer against the appellant’s
argument that section 156(2)(a), and thus article 7 of the Commencement Order,
means all offences of which the defendant is convicted in the current
proceedings. Rather, it supports the Crown’s contention, that “the offence(s)
concerned” are throughout those on which the Crown seeks to rely for the
purposes of the statute, that is to say, to justify confiscation proceedings.
101.
It may just be possible to give section 224(3)(b) [section 76(3)(b) E
& W] content without this construction. That might be possible if it could
be read as intended only to deal with “left behind offences”, that is to say ones
of which the defendant was convicted in the magistrates’ court (and thus in the
present proceedings) but in respect of which he was not committed for
confiscation. But if this is all it is for, it might have been expected to
refer to magistrates’ offences specifically. Next, the suggested eventuality is
unlikely, for if the Crown asks for the defendant to be committed with a view
to confiscation in respect of offences A-D, and there are also
benefit-generating offences E-G, it is highly unlikely that the Crown would not
seek committal in respect of all of them, unless of course the complication
exists that some of the offences are pre-commencement, and it is necessary to
exercise the Aslam procedure. Thirdly, it is very significant that the
Scottish section of POCA 2002 includes wording identical to section 224(b)(3): see
section 143(3)(b). That is because the provisions as to general and particular
criminal conduct are identical for each of the three national jurisdictions. But
in Scotland there is no question of committal by justices of the peace (or
anyone else) for consideration of confiscation. In Scotland, confiscation
follows on conviction either in the High Court or before the Sheriff: section
92, and especially section 92(13). Confiscation in Scotland is dealt with by the
court of conviction, whether the High Court or the Sheriff Court: section
92(1). Since there is no question of committal there is therefore no equivalent
of sections 218 (NI) and 70 (England and Wales). So 224(3)(b) cannot have been
intended to refer to “left behind” or un-committed offences because if it were,
there would be no occasion for the same words in the Scottish section.
102.
I do not think that the operation of the group of provisions found in
sections 163-165 [sections 13-15 E&W] is in any way impaired by the
construction of the statute here explained. As a matter of general sentencing
principle, a court which contemplates fining a defendant for any offence before
it is bound to take into account his means to pay. A confiscation order made,
triggered by whichever offences, will be relevant to those means, in relation
to any offence for which a fine is being considered. Likewise, as a matter of
general sentencing principle a court ought in any event to sentence a defendant
for all the offences before it at the same time, unless there is a reason to do
otherwise.
103.
For the reasons explained above at para 84, I do not think that the
consequence of this construction of POCA is that it is mandatory for the Crown,
in a case where the indictment contains both pre- and post-commencement
offences, to exercise the Aslam election to nominate only the latter for
the purposes of asking the court to proceed to confiscation. There may well be
cases where this is inappropriate, for example where the great majority of offences,
or the most serious, are pre-commencement. But in such a situation, where the
earlier offences are relied on, the court will, according to the Commencement
Order, proceed under the earlier regime.
104.
To the extent that the appellants argued that the effect of section
224(3)(b) is, unless their preferred construction is correct, to defeat the aim
of confining POCA 2002 to post-commencement offences, this is not so because article
9 of the Commencement Order [applicable also to E & W] specifically provides
that conduct which constitutes an offence committed before the commencement
date “is not particular criminal conduct under section 76(3) or 224(3)”. That
provision in the Commencement Order is likewise a good indication of the
assumption that there might be offence(s) of which the defendant is convicted
in the current proceedings which are not the offence(s) within section
156(2) [section 6(2) E & W].
105.
A similar indication is given by article 8(2) [article 7(2) E & W]. This
provides that when considering the two new routes to treating the defendant as
a lifestyle offender (commission of a specified offence or of an offence
committed over a six month period) pre-commencement offences are to be ignored
(see para 90 above). But if, as the appellants contend, every case in which
there is a pre-commencement offence in the present proceedings must for that
reason alone be dealt with under the old 1995/96 regime, this stipulation in
the Commencement Order would simply not be necessary. The same applies to the
stipulation in article 8(3) [article 7(3) E & W] which excludes
pre-commencement offences from the course of criminal conduct (three additional
offences and thus four in all) rule. I agree of course that subordinate
legislation cannot control the meaning of the primary statute, but where, as
here, the primary and subordinate legislation are part of a single scheme to
substitute one statutory regime for another, and are plainly intended to
operate in tandem, it is not irrelevant to take account of indications of
consistency between them.
106.
If the appellants’ contention were correct, and the earlier confiscation
regime has to be applied wherever there is a single pre-commencement offence on
the indictment (or before the magistrates) even if it is not relied on for confiscation,
it would follow that that rule would have to apply even if the pre-commencement
offence could never, even arguably, have generated a benefit, and thus could
never, even arguably, have had the slightest relevance to the issue of
confiscation. Of course, in order to appear on the same indictment, in the
Crown Court in Northern Ireland or in England and Wales at least, the offences
have to satisfy the rules of joinder to be found in rule 21 of the Crown Court
Rules (Northern Ireland) 1979 [Criminal Procedure Rules 2014, rule 14.2(3) for
E & W]. But it is not difficult to imagine circumstances in which the
earlier and the later offences would be a “series of offences of the same or
similar character” for the purpose of these rules. There simply has to be a
sufficient nexus between the counts, which do not at all have to be for the
same form of criminal charge; see for the proper approach see R v Kray (1969)
53 Cr App R 569 and Ludlow v Metropolitan Police Comr [1971 AC 29. Sometimes
acquisitive offences are part of a series of offences of abuse - for example by
carers. Count 1 may well charge an assault on the elderly person in January
2003, whilst counts 2-5 charge thefts from her bank account starting in April
of the same year. A fire raiser may have committed a series of arsons prior to
March 2003, which are all offences from which there is no arguable benefit, but
the last in the series might be setting fire to his own house, followed by an
insurance claim. But in these and similar cases, if the appellants are right,
the offences referred to in section 156 or E & W 6 will include the earlier
non-benefit ones, and the confiscation proceedings in relation to the only
benefit-generating offences, all committed after March 2003, would have to be
conducted under the earlier regimes. Even more oddly, the same would be true of
a serial fraudster whose first offence was an unsuccessful attempt, committed
before March 2003, followed by a succession of similar frauds which succeeded, all
committed after that date. There is no rhyme or reason for this and such an
outcome might well be termed absurd.
Conclusion
107.
For these reasons, I agree with Lord Kerr that the appellants’ arguments
fail. The offences referred to in sections 156 and E & W 6 are those on
which the Crown relies as relevant to the possibility of confiscation. The
context of POCA 2002, considered separately, and also together with its
Commencement Order, shows that the construction applied in Simpson, Aslam,
Stapleton and Aniakor is correct. The important rule that penal
statutes must be construed strictly so as to avoid any possible unfairness to
those potentially penalised provides no reason to the contrary. The consequence
is that these appeals must be dismissed.
Postscript: The powers of the Court of Appeal to
substitute
108.
Although the question does not, in consequence, arise, this case ought
not to be concluded without some reference to it. The argument put to this
court by the appellants was that if they were correct, and the order in the
present cases was made under the wrong legislation, the Court of Appeal had no
power to put the error right by substituting an order, if satisfied that it was
in the correct sum, under the correct statutory regime.
109.
In the present case the Crown had conceded in the court below
that substitution was not available, and having taken that stand did not ask
this court to permit it to withdraw the concession. Since the point was in
consequence not argued, it is better not to express a concluded view about it.
Equally, however, it ought not to be assumed that the concession made, and the
appellants’ supportive argument, were correct.
110.
The appellants’ right of appeal is given by section 8 of the Criminal
Appeal Act (Northern Ireland) 1980:
“8. A person convicted on
indictment may appeal to the Court of Appeal against the sentence passed on his
conviction, unless the sentence is one fixed by law.”
The equivalent provision in England and Wales is section
9 of the Criminal Appeal Act 1968, and in that jurisdiction section 10 makes
clear that the same right of appeal exists when a defendant is dealt with by
the Crown Court after committal for sentence to that court by the magistrates. Section
30(3)(a) [section 50(1)(d) Criminal Appeal Act 1968 for E & W] expressly
includes a confiscation order in the expression “sentence” for this purpose,
confirming the earlier decision in R v Johnson.
111.
On an appeal against sentence, the powers of the Court of Appeal include
the power, if quashing the sentence, to impose such alternative sentence as is
available in law. Section 10(3) of the Criminal Appeal Act Northern Ireland
1980 provides:
“(3) On an appeal to the Court
against sentence under section 8 or 9 of this Act the Court shall, if it thinks
that a different sentence should have been passed, quash the sentence passed by
the Crown Court and pass such other sentence authorised by law (whether more or
less severe) in substitution therefor as it thinks ought to have been passed; but
in no case shall any sentence be increased by reason or in consideration of any
evidence that was not given at the Crown Court.”
The equivalent provision in England and Wales is section
11(3) Criminal Appeal Act 1968 which is in the same terms except that they are
subject to the proviso that the defendant shall not, taking the case as a
whole, be dealt with more severely than he was below.
112.
In the particular case of confiscation orders, the Criminal Appeal Acts
have been amended to enable the Court of Appeal, instead of substituting its
own order, to remit the case to the Crown Court. Section 10(3A) [section 11(3A)
in E & W] provides:
“(3A) Where the Court of Appeal
exercises its power under subsection (3) to quash a confiscation order, the
Court may, instead of passing a sentence in substitution for that order, direct
the Crown Court to proceed afresh under the relevant enactment.”
This power is very useful when there may be a need for
the Crown Court to take fresh evidence to deal with the import of the judgment
of the Court of Appeal.
113.
Where a case is thus remitted to the Crown Court, the Criminal Appeal
Acts have consequential provisions. They include section 10(3C) [section 11(3D)
E & W]. This provides, inter alia, that:
“‘relevant enactment’ in relation
to a confiscation order quashed under subsection (3), means the enactment under
which the order was made.”
The effect of
this last provision, whether intended or not, is that when remitting a
confiscation case the Court of Appeal is bound to direct the Crown Court to
apply the same statutory regime that it did before.
114.
Section 10(3C) is the foundation of the argument of the appellants in
the present case, to the effect that if their confiscation orders had had to be
quashed on the grounds that they were made under the wrong statute, it would
not be possible for the Court of Appeal to substitute an order under the right
legislation. This, however, by no means necessarily follows. On its face,
section 10(3C) only applies when the Court of Appeal is remitting the case
under the new power to do so. Its longstanding and pre-existing power simply to
quash and substitute under section 10(3) is arguably quite unaffected. When
dealing with a confiscation order which is found to contain some error
justifying its quashing, it is not bound to remit the case to the Crown Court; it
simply has power to do so if it wishes. If it chooses not to do so, section
10(3C) is arguably irrelevant.
115.
At least where the Court of Appeal can apply the findings of fact and
the decisions on the evidence made by the Crown Court, there may be no reason
at all why it should not, in a proper case, quash an order if made under the
wrong legislation and substitute an order under the right statutory scheme, and
it is relevant to note that this is the practice of the Court of Appeal,
Criminal Division, in England and Wales - see for example R v Lazarus
[2004] EWCA Crim 2297; [2005] 1 Cr App R (S) 96 and R v Bukhari [2008] EWCA Crim 2915; [2009] 2 Cr App R (S) 18.
LORD REED: (dissenting)
(with whom Lord Mance agrees)
116.
The first appellant, Ms McCool, pleaded guilty at Derry Crown Court to
four counts on an indictment. The first count was of false accounting contrary
to section 17(1)(a) of the Theft Act (Northern Ireland) 1969, committed on 26
September 1990. The remaining counts were of making false declarations with a
view to obtaining benefits contrary to section 105A(1) of the Social Security
Administration (Northern Ireland) Act 1992, committed on dates between 28
November 2003 and 10 August 2010. The second appellant, Mr Harkin, appeared on
the same indictment, and pleaded guilty to seven counts of offences under section
105A(1) of the 1992 Act, committed on 16 December 1999 (count 5) and on six
other dates between 20 October 2005 and 3 August 2009.
117.
At sentencing, the court was asked by the prosecutor to proceed with
confiscation proceedings pursuant to section 156(3) of the Proceeds of Crime
Act 2002 (“POCA”). Prosecutor’s statements were subsequently served on the
appellants. In an effort to avoid the problem which has given rise to these
appeals, the statement served on the first appellant stated, in relation to the
calculation of the benefit obtained:
“I have decided not to include the
first charge on the bill of indictment (this is the first charge in relation to
the defendant) for confiscation purposes and as such I have amended the Income
Support overpayment period to commence from 28 November 2003.”
The statement served on the second appellant contained a
similar statement in respect of count 5. The overpayment period was therefore
calculated as if it had commenced on 20 October 2005.
118.
The explanation for this apparent generosity on the part of the
prosecutor lies in the transitional provisions governing POCA’s entry into
force in Northern Ireland. It was thought that, by leaving out of account the
offences committed before POCA came into force, the remaining offences could
then be brought within POCA’s ambit. The principal issue in the appeal is
whether that manoeuvre has succeeded in achieving its purpose, or whether the
presence of the earlier offences on the indictment means that all the offences
properly fall within the scope of earlier confiscation legislation.
The relevant provisions of POCA
119.
POCA contains broadly similar sets of provisions dealing with
confiscation in England and Wales (Part 2: sections 6 to 91), Scotland (Part 3:
sections 92 to 155) and Northern Ireland (Part 4: sections 156 to 239). Section
156 is the introductory section of Part 4, dealing with Northern Ireland:
“156 Making of order
(1) The Crown Court must
proceed under this section if the following two conditions are satisfied.
(2) The first condition is
that a defendant falls within either of the following paragraphs -
(a) he is convicted of an
offence or offences in proceedings before the Crown Court;
(b) he is committed to the
Crown Court in respect of an offence or offences under section 218 below
(committal with a view to a confiscation order being considered).
(3) The second condition is
that -
(a) the prosecutor asks the
court to proceed under this section, or
(b) the court believes it
is appropriate for it to do so.
(4) The court must proceed
as follows -
(a) it must decide whether
the defendant has a criminal lifestyle;
(b) if it decides that he
has a criminal lifestyle it must decide whether he has benefited from his
general criminal conduct;
(c) if it decides that he
does not have a criminal lifestyle it must decide whether he has benefited from
his particular criminal conduct.
(5) If the court decides
under subsection (4)(b) or (c) that the defendant has benefited from the
conduct referred to it must -
(a) decide the recoverable
amount, and
(b) make an order (a
confiscation order) requiring him to pay that amount.
(6) But the court must treat
the duty in subsection (5) as a power if it believes that any victim of the
conduct has at any time started or intends to start proceedings against the
defendant in respect of loss, injury or damage sustained in connection with the
conduct.
(7) The court must decide
any question arising under subsection (4) or (5) on a balance of probabilities.
(8) The first condition is
not satisfied if the defendant absconds (but section 177 may apply).
(9) References in this Part
to the offence (or offences) concerned are to the offence (or offences)
mentioned in subsection (2).”
120.
For reasons which will appear, section 156(9) is of particular
importance to the issue in this appeal. It provides a definition of the phrase
“the offence (or offences) concerned”, where it appears in Part 4: a definition
which is repeated in section 236(1). The phrase is defined as referring to the
offence or offences mentioned in section 156(2). Section 156(2) applies to a
defendant who (a) is convicted of an offence or offences in proceedings before
the Crown Court, or (b) is committed to the Crown Court in respect of an
offence or offences under section 218. Where the defendant has been convicted
of an offence or offences in proceedings before the Crown Court, “the offence
(or offences) concerned” is or are therefore the offence or offences of which
he has been convicted in those proceedings. Where the defendant has been committed
to the Crown Court in respect of an offence or offences under section 218, “the
offence or offences concerned” is or are the offence or offences in respect of
which he has been committed. There is nothing in section 156(2) or (9) which
indicates that the meaning of the words “the offence (or offences) concerned”
is limited in any other way.
121.
Section 156 sets out the steps which the Crown Court must follow where a
defendant falls within either section 156(2)(a), because he has been convicted
of an offence or offences in proceedings before that court, or section
156(2)(b), because he has been committed to that court in respect of an offence
or offences under section 218, and, in accordance with section 156(3), either
the prosecutor asks the court to proceed under section 156, or the court itself
considers it appropriate to do so. Under section 156(4), the court has first to
decide whether the defendant has a criminal lifestyle, because the answer to
that question affects the subsequent steps to be taken. If he has a criminal
lifestyle, it must then decide whether he has benefited from what is termed his
“general criminal conduct”. If he does not have a criminal lifestyle, it must
decide whether he has benefited from what is termed his “particular criminal conduct”.
If the defendant has benefited either from his general criminal conduct or from
his particular criminal conduct, as the case may be, the court is then required
by section 156(5) to decide what is termed “the recoverable amount” and to make
a confiscation order requiring him to pay that amount. It is to be noted that
the object of the statutory scheme is to deprive the defendant of the benefit
obtained from “conduct”: not to deprive him of the benefit obtained from any
particular offence or offences of which he has been convicted.
122.
The remaining provisions of Part 4 flesh out that general scheme. In
particular, section 157(1) defines the recoverable amount, subject to
exceptions, as an amount equal to the defendant’s benefit from the conduct
concerned. Section 157(2) however limits the recoverable amount to “the
available amount” (defined by section 159), where that is less than the
defendant’s benefit from the conduct concerned.
123.
Section 158 is concerned with the defendant’s benefit from the conduct
concerned. The court is required to take account of “conduct” occurring up to
the time it makes its decision, and of property obtained up to that time.
124.
Section 160 applies where the court decides that the defendant has a
criminal lifestyle. It requires the court to make a number of assumptions for
the purpose of deciding whether he has benefited from his general criminal
conduct, and deciding the amount of his benefit from the conduct. These include
an assumption that any property transferred to him at any time after “the
relevant day” was obtained by him as a result of his general criminal conduct:
the transfer need not be related to any offence of which he has been convicted.
The relevant day is the date six years before proceedings for “the offence
concerned” were started against the defendant, or if there are two or more
offences and proceedings for them were started on different days, the earliest
of those days. In this context, the relevance of “the offence (or offences)
concerned”, as defined in section 156(2) and (9), is therefore to fix how far
back POCA can bite on property obtained by a defendant with a criminal
lifestyle. It can go back six years from the date on which proceedings were
started for the earliest of those offences.
125.
Section 163 explains the effect of a confiscation order on the court’s
other powers. Under section 163(1), if the court makes a confiscation order it
must proceed as mentioned in subsections (2) and (4) in respect of “the offence
or offences concerned”. In terms of section 163(2), the court must take account
of the confiscation order before it imposes a fine on the defendant, or makes
any other order involving payment or forfeiture by the defendant, apart from a
compensation order. Subject to that provision, the court is required by section
163(4) to leave the confiscation order out of account in deciding the
appropriate sentence for the defendant. If the court makes both a confiscation
order and a compensation order against the same person in the same proceedings,
and it believes that he will not have sufficient means to satisfy both orders
in full, section 163(5) provides for the potential shortfall in payment of the
compensation order to be paid out of sums recovered under the confiscation
order. The intended recipient of the compensation is thus protected against the
risk of a shortfall, and the defendant is also protected against the risk of
penal consequences of a failure to satisfy the confiscation order. In this
context, the relevance of “the offence or offences concerned” is to define the
scope of those protections.
126.
It is to be noted that these provisions make sense on the footing that
“the offences concerned” encompass all the offences of which the defendant has
been convicted in the proceedings in the Crown Court, or all the offences in
respect of which he has been committed to that court. It makes sense to
regulate the relationship between the confiscation order and any other
financial orders made by the Crown Court in the same proceedings, since the
confiscation order can affect the defendant’s ability to meet any other
financial order, and vice versa. That is so, whether all of the offences
concerned were offences involving financial gain or not.
127.
Section 164 allows the court either to proceed with confiscation
proceedings before it sentences the defendant for “the offence (or any of the
offences) concerned”, or to postpone confiscation proceedings for up to two
years starting with “the date of conviction”, or potentially longer where there
is an appeal or if there are exceptional circumstances. The date of conviction
is defined as the date on which the defendant was convicted of the offence
concerned, or if there are two or more offences and the convictions were on
different dates, the date of the latest. In practice, confiscation proceedings
are usually postponed, often for a substantial period. This provision again
makes sense on the footing that “the offences concerned” encompass all the
offences of which the defendant has been convicted in the proceedings in the
Crown Court, or all the offences in respect of which he has been committed to
that court. Like section 163, it reflects the potential relationship between
the court’s function of sentencing the defendant for the offences of which he
has been convicted, or in respect of which he has been committed, and the
confiscation order which it may also make.
128.
Section 165 explains the effect of postponement, and contains analogous
provisions to section 163 in respect of the relationship between the
confiscation proceedings and any sentence imposed during the postponement
period for “the offence (or any of the offences) concerned”.
129.
This group of provisions (which is replicated elsewhere in Part 4 of
POCA in a variety of contexts, and is also replicated in the corresponding
provisions for the other parts of the United Kingdom) seems to me to be
particularly difficult to reconcile with an interpretation of “the offence (or
offences) concerned” which would restrict that phrase to only some of the
offences before the court. The language of these provisions is prescriptive. I
have difficulty seeing how they might be interpreted as excluding offences
which the prosecution had elected to leave out of account for the purpose of
assessing the benefit obtained by the defendant. If, however, all the offences
before the court fall within the scope of the phrase in this context, then how
can it be given a more restricted meaning in the context of section 156(2) and
(9), given the definitional status of those provisions?
130.
Under section 166, in a case where the court is proceeding under section
156 at the request of the prosecutor, he must give it a statement of
information within the period the court orders. Similarly, in a case where the
court is proceeding under section 156 of its own motion, it can order the
prosecutor to give it a statement of information within the period ordered. The
statement must include the matters which are relevant to the making of a
confiscation order, including whether the defendant has a criminal lifestyle,
whether he has benefited from his general or particular criminal conduct as the
case may be, and his benefit from the conduct. The defendant can then respond
to the prosecutor’s statement in accordance with section 167.
131.
Section 218 is concerned with committal by the magistrates’ court. It
applies if a defendant is convicted of an offence by a magistrates’ court, and
the prosecutor asks the court to commit the defendant to the Crown Court with a
view to a confiscation order being considered under section 156. In such a
case, the magistrates’ court must commit the defendant to the Crown Court in
respect of the offence, and may commit him to the Crown Court in respect of any
other offence of which he has been convicted, and in respect of which the
magistrates’ court has power to deal with him. The latter provision enables the
Crown Court to deal with the defendant in relation to the same offences in
respect of which he could be dealt with in the magistrates’ court, and thus
enables the relationship between sentencing and confiscation proceedings to be
regulated in accordance with sections 163 to 165. Section 219 confirms the power
of the Crown Court to sentence the defendant for all the offences in respect of
which he has been committed.
132.
Finally, in relation to the provisions of POCA, it is necessary to note
a number of provisions concerned with interpretation. Section 223 defines the
term “criminal lifestyle”. Under section 223(2), a defendant has a criminal
lifestyle if “the offence (or any of the offences) concerned” satisfies any of
the following tests:
“(a) it is specified in
Schedule 5;
(b) it constitutes conduct
forming part of a course of criminal activity;
(c) it is an offence
committed over a period of at least six months and the defendant has benefited
from the conduct which constitutes the offence.”
These tests are alternatives.
133.
In relation to test (a), it is sufficient that any of the offences
concerned is specified in Schedule 5. That schedule specifies a number of
offences, including the unlawful supply of controlled drugs, and possession of
a controlled drug with intent to supply. It is irrelevant to test (a) whether
the defendant has made any financial gain from an offence falling within
Schedule 5, or whether he has made such a gain from any of the other offences
of which he has been convicted in the proceedings in the Crown Court, or in
respect of which he has been committed to that court.
134.
In relation to test (b), section 223(3) provides that conduct forms part
of a course of criminal activity if the defendant has benefited from the
conduct and:
“(a) in the proceedings in
which he was convicted he was convicted of three or more other offences, each
of three or more of them constituting conduct from which he has benefited, or
(b) in the period of six
years ending with the day when those proceedings were started (or, if there is
more than one such day, the earliest day) he was convicted on at least two
separate occasions of an offence constituting conduct from which he has
benefited.”
In a case where the defendant was convicted of an offence
or offences in proceedings in the Crown Court, test (b) is therefore satisfied by
virtue of section 223(3)(a) if the defendant benefited from conduct
constituting any of those offences, and was also the convicted in those
proceedings of three or more other offences constituting conduct from which he
benefited. The effect of section 223(3)(b) is that he will also have a criminal
lifestyle if he benefited from conduct constituting any of the offences of
which he was convicted in the proceedings in the Crown Court, and in addition
he was convicted on at least two separate occasions, during the six years
before those proceedings were started, of another offence constituting conduct
from which he benefited. Section 223(3) operates in a similar way where the
defendant has been committed to the Crown Court by the magistrates’ court in
respect of an offence or offences, and benefited from conduct constituting any
of those offences. It is therefore unnecessary for the defendant to have made a
financial gain from any of the other offences of which he has been convicted in
the proceedings in the Crown Court, or in respect of which he has been
committed to that court.
135.
The same is also true in relation to test (c). It is sufficient that any
of the offences concerned was committed over a period of at least six months
and the defendant benefited from the conduct which constituted that offence.
136.
In relation to both test (b) and test (c), section 223(4) provides that
an offence does not satisfy the test unless the defendant obtains “relevant
benefit” of not less than £5,000. The expression “relevant benefit” is defined
for the purposes of test (b) by section 223(5). It means:
“(a) benefit from conduct
which constitutes the offence;
(b) benefit from any other
conduct which forms part of the course of criminal activity and which
constitutes an offence of which the defendant has been convicted;
(c) benefit from conduct
which constitutes an offence which has been or will be taken into consideration
by the court in sentencing the defendant for an offence mentioned in paragraph
(a) or (b).”
A broadly similar definition (subject to the omission of
paragraph (b)) applies for the purposes of test (c). Accordingly, even if the
defendant has benefited from any of the offences concerned, and test (b) or (c)
is potentially satisfied, it remains necessary to investigate the amount of the
benefit and to ascertain whether it is at least £5,000.
137.
Section 224 defines “criminal conduct”, “general criminal conduct”,
“particular criminal conduct” and “benefit”. Criminal conduct is conduct which
constitutes an offence in Northern Ireland, or would constitute such an offence
if it occurred there. General criminal conduct is all the defendant’s criminal
conduct. It is immaterial whether it occurred before or after the passing of
POCA, and whether property constituting a benefit from conduct was obtained
before or after the passing of POCA (section 224(2)). Particular criminal
conduct is all the defendant’s criminal conduct which falls within the
following paragraphs of section 224(3):
“(a) conduct which constitutes
the offence or offences concerned;
(b) conduct which
constitutes offences of which he was convicted in the same proceedings as those
in which he was convicted of the offence or offences concerned;
(c) conduct which
constitutes offences which the court will be taking into consideration in
deciding his sentence for the offence or offences concerned.”
138.
So far as paragraph (a) is concerned, it follows from section 156(2) and
(9) that the offences concerned are the offences of which the defendant was
convicted in the proceedings in the Crown Court, or in respect of which he was
committed to the Crown Court for confiscation proceedings. Paragraph (b)
envisages a situation where the defendant has been convicted in the same
proceedings of offences other than the offence or offences concerned. It must
therefore be concerned with offences of which he was convicted in the
magistrates’ court but in respect of which he was not committed to the Crown
Court. Under section 224(4), a person benefits from conduct if he obtains
property as a result of or in connection with the conduct.
139.
Returning to section 156, it follows from the later provisions that, at
the time when the Crown Court is required to proceed under that section, it
will not know the answers to all, or possibly any, of the questions which that
section requires it to decide. In particular, it may not be in a position to
know whether the defendant’s conviction in the Crown Court of “the offences
concerned”, or his committal by the magistrates’ court in respect of those
offences, will or may result in the making of a confiscation order, or how the
order may relate to any of those offences. Section 156 simply provides for a
process to be put in train, which may or may not lead to the making of such an
order.
The transitional provisions
140.
The relevant transitional provision is article 4 of the Proceeds of
Crime Act 2002 (Commencement No 5, Transitional Provisions, Savings and
Amendment) Order 2003 (SI 2003/333) (“the Order”). So far as relevant, article
4 provides:
“4(1) Section 156 of the Act
(making of confiscation order) shall not have effect where the offence, or any
of the offences, mentioned in section 156(2) was committed before 24 March
2003.”
141.
The effect of article 4 is clear. Where the offence, or any of the
offences, mentioned in section 156(2) was committed before 24 March 2003 (which
was the commencement date of the relevant provisions), section 156 does not
have effect, and POCA therefore does not apply. Instead, the position is
regulated by article 11 of the Order, which provides for earlier legislation to
continue to have effect.
142.
The offence or offences mentioned in section 156(2), as earlier
explained, are the offence or offences of which the defendant has been
convicted in the proceedings before the Crown Court, if the case falls within
section 156(2)(a), or the offence or offences in respect of which he has been
committed to the Crown Court, if the case is one in which the defendant has
been committed under section 218. It follows that section 156 does not have
effect, and POCA is therefore inapplicable, where that offence, of any of those
offences, was committed before 24 March 2003. Instead, the previous law
continues to apply.
143.
It follows that section 156 has no application to the case of either of
the appellants. Article 4 cannot be obviated by the prosecutor’s ignoring those
of “the offences concerned” which were committed before POCA came into force.
The fact remains that the appellants were convicted of those offences in the
proceedings before the Crown Court, and they are therefore among “the offences
concerned”. It follows that the confiscation proceedings against the appellants
should have proceeded under the legislation which was in force when the
earliest of the offences concerned was committed. The confiscation orders made
should therefore be quashed. Since the Crown conceded in the court below that
the substitution of orders under the correct legislation was not possible, and
it has not sought to withdraw that concession, it follows that the appeals
should be allowed. Like Lord Hughes, I would wish to reserve my opinion as to
whether the concession was rightly made.
The reasoning of the majority
144.
The only matter which remains to be discussed is the reasoning by which
a majority of this court have reached the opposite conclusion. Their judgments
must speak for themselves, but so far as I understand them, they contain a
number of different strands of reasoning. Their approach appears to be based
first on a purposive interpretation of the words of the statute. As I shall
explain, I respectfully disagree that the statute has the purpose which they
attribute to it, and I do not in any event accept that such a strained
interpretation of the statutory language can be justified by a purposive
approach. Secondly, they support their interpretation of the statute by
reference to the transitional provisions in the Order. That appears to me, with
respect, to be an impermissible use of subordinate legislation, made under
powers conferred by Parliament in POCA, to interpret the meaning of the
provisions enacted by Parliament in POCA itself. Thirdly, the reasoning of the
majority is also based in part on previous authorities, which appear to me to
be distinguishable because they were concerned with the interpretation of a
transitional provision contained in the primary legislation itself. The
reasoning of the earlier authorities appears to me to be unsatisfactory in any
event, and it has been subjected to cogent criticism (Thomas, [2005] Crim LR
145 and [2008] Crim LR 813).
Purposive interpretation of the statute
145.
As I understand their reasoning, the majority of the court consider that
it would be absurd if offences committed after the commencement of POCA were
subject to an earlier confiscation regime. In their view, Parliament must have
intended that all offences committed after the commencement of POCA which could generate confiscation orders
should be dealt with under section 156. Having decided that that must
have been Parliament’s intention, the majority then construe the provisions of
POCA so as to fulfil that intention.
146.
I see no absurdity. Given their natural meaning, and read with article 4
of the Order, section 156(2) and (9) of POCA achieve a rational purpose, which
reflects two considerations identified by Lord Hughes. In the first place, POCA
cannot apply to pre-commencement offences, if retrospectivity, and a consequent
breach of article 7 of the ECHR, is to be avoided. Otherwise, in Lord Hughes’
words, “there would be impermissible retrospective operation of the criminal law”
(para 83).
147.
In the second place, practical difficulties are liable to arise if a
court is required to apply different confiscation regimes in the same
proceedings, where some counts relate to offences committed before the
commencement date of POCA and some to offences committed after that date. In
Lord Hughes’ words, “there would also be likely to be a real risk of unfairness
if a defendant faced the prospect of two different confiscation regimes being
applied to him” (para 84).
148.
It follows that pre-commencement offences have to be dealt with under
the previous confiscation regime in force at the time when they were committed,
and that it is sensible that the same regime should also be applied to
post-commencement offences dealt with in the same proceedings. The natural way
of achieving those objectives is to provide that in any case in which the
defendant has been convicted in Crown Court proceedings of an offence committed
before the commencement date, all the offences of which he has been convicted
in those proceedings are to be governed by the confiscation regime in force at
the time when the earliest offence was committed. Similarly, mutatis mutandis,
in any case in which the defendant has been committed under section 218 in
respect of an offence committed before the commencement date, and also of later
offences. That is the effect of section 156(2) and (9) of POCA, read with
article 4 of the Order.
149.
The interpretations of section 156 to which the majority are driven by
their desire to avoid the supposed absurdity appear to me, with respect, not
only to be strained beyond breaking point, but also to create anomalies of
their own. As I understand Lord Kerr’s judgment, he considers that, as a matter
of construction of the statute, section 156(2) cannot apply to any offence
committed before the date fixed for the entry into force of the provisions of
Part 4 (which, in the event, was 24 March 2003). With respect, I cannot
understand how that construction can be derived from the statutory wording. In
my view, it requires the insertion of words which are not there, as the Court
of Appeal acknowledged when it arrived at the same construction of the
predecessor of section 156, as explained below.
150.
Furthermore, the logic of Lord Kerr’s interpretation appears to be that one
and the same court could undertake two or more different confiscation exercises
in the same criminal proceedings: one, in respect of offences committed on or
after 24 March 2003, under POCA, and others, in respect of earlier offences,
under whichever confiscation regime was in force at the relevant time. That
situation, it appears to me, might justifiably be described as anomalous.
151.
As I understand Lord Hughes’ judgment, he takes a different approach. He
appears to interpret the phrase “the offence (or offences) concerned” - defined
by section 156(9) to mean “the offence (or offences) mentioned in subsection
(2)” - as if the definition referred to “any offence (or offences) mentioned in
subsection (2) in relation to which the condition mentioned in subsection (3)(a)
is also satisfied” (that condition being “that the prosecutor asks the court to
proceed under this section”). Bearing in mind the clarity of section 156(9),
and the level of detail and technicality which characterises the drafting of
POCA, I find this hard to accept.
152.
Furthermore, the logic of Lord Hughes’ interpretation appears to be
that, if pre-commencement and post-commencement offences are before one and the
same court, the Crown must in effect forego any confiscation proceedings in
respect of the pre-commencement offences, and proceed only in respect of post-commencement
offences for whatever benefit they may yield. That is indeed what happened in
the present case. It seems to me to be much more likely that the drafter of the
transitional provisions intended to bring all the offences in any set of
proceedings into one statutory confiscation scheme or the other. Then, at least,
no offences would fall outside all confiscation regimes.
The use of subordinate legislation in the construction of
primary legislation
153.
The majority of the court also rely on their construction of a number of
provisions in the Order, and more particularly the fact that they were
substituted by different provisions shortly after the Order was made, as
supporting their interpretation of section 156(2) and (9). With respect, this
appears to me to be an example of using subordinate legislation to interpret
the primary legislation under which it was made: an impermissible, and indeed
illogical, method of statutory interpretation. The tail is wagging the dog.
Even if I agreed with the majority’s construction of the Order, and the
intention attributed to it, it follows that I would nevertheless reject this
aspect of their reasoning. The Order cannot affect the meaning of section 156(2)
and (9). But I am not in any event persuaded by their construction of the
Order.
154.
The majority rely in particular on articles 8 and 9. In its original
form, article 8 provided:
“8.(1) This article applies where
the court is determining under section 156(4)(a) of the Act whether the
defendant has a criminal lifestyle.
(2) The tests in section
223(2)(a) and (c) of the Act shall not be satisfied where the offence (or any
of the offences) concerned was committed before 24 March 2003.
(3) In applying the rule in
section 223(5) of the Act on the calculation of relevant benefit for the purposes
of section 223(2)(b) and (4) of the Act, the court must not take into account
benefit from conduct constituting an offence which was committed before 24
March 2003.
(4) Conduct shall not form
part of a course of criminal activity under section 223(3)(a) of the Act where
-
(a) the offence (or any of
the offences) concerned; or
(b) any one of the three or
more offences mentioned in section 223(3)(a),
was committed before 24 March
2003.
(5) Conduct shall form part
of a course of criminal activity under section 223(3)(b) of the Act, notwithstanding
that any of the offences of which the defendant was convicted on at least two separate
occasions in the period mentioned in section 223(3)(b) was committed before 24
March 2003.”
155.
A different version of article 8 was substituted by the Proceeds of
Crime Act 2002 (Commencement No 5) (Amendment of Transitional Provisions) Order
2003 (SI 2003/531) (“the Amendment Order”). The substituted provisions provide:
“8.(1) This article applies where
the court is determining under section 156(4)(a) of the Act whether the
defendant has a criminal lifestyle.
(2) Conduct shall not form
part of a course of criminal activity under section 223(3)(a) of the Act where
any of the three or more offences mentioned in section 223(3)(a) was committed
before 24 March 2003.
(3) Where the court is
applying the rule in section 223(5) of the Act on the calculation of relevant
benefit for the purposes of determining whether or not the test in section
223(2)(b) of the Act is satisfied by virtue of conduct forming part of a course
of criminal activity under section 223(3)(a) of the Act, the court must not
take into account benefit from conduct constituting an offence mentioned in
section 223(5)(c) of the Act which was committed before 24 March 2003.
(4) Conduct shall form part
of a course of criminal activity under section 223(3)(b) of the Act,
notwithstanding that any of the offences of which the defendant was convicted
on at least two separate occasions in the period mentioned in section 223(3)(b)
were committed before 24 March 2003.
(5) Where the court is
applying the rule in section 223(5) of the Act on the calculation of relevant
benefit for the purposes of determining whether or not the test in section
223(2)(b) of the Act is satisfied by virtue of conduct forming part of a course
of criminal activity under section 223(3)(b) of the Act, the court may take
into account benefit from conduct constituting an offence committed before 24
March 2003.
(6) Where the court is
applying the rule in section 223(6) of the Act on the calculation of relevant
benefit for the purposes of determining whether or not the test in section
223(2)(c) of the Act is satisfied, the court must not take into account benefit
from conduct constituting an offence mentioned in section 223(6)(b) of the Act
which was committed before 24 March 2003.”
156.
The majority argue that the changes made to article 8 are consistent
with their interpretation of section 156. As I have explained, I do not accept
the logic of the argument. But I am not in any event persuaded that the
inferences which the majority draw from the changes are justified. As it
appears to me, the problem with article 8(2) of the Order in its original form
was that POCA does not apply, by virtue of article 4(1), where the offence (or
any of the offences) concerned was committed before 24 March 2003. There is
therefore no question of section 223 of POCA applying in those circumstances,
and article 8(2) was therefore otiose. Article 8(4)(a) of the Order was also
otiose, for the same reason. Article 8(4)(b), on the other hand, could have
applied in cases where the defendant was committed by the magistrates’ court.
157.
That view is consistent with the changes made. The provisions contained
in articles 8(2) and 8(4)(a) of the Order did not appear in the Amendment
Order. On the other hand, the terms of article 8(4)(b) of the Order reappeared
as article 8(2) of the Amendment Order.
158.
I find it much more difficult to be certain of the thinking behind the
replacement of articles 8(3) and (5) of the Order by articles 8(3) to (6) of
the Amendment Order. Section 223(2)(b), (3), (4) and (5) of POCA form a complex
group of provisions. The same is true of article 8(3) and (5) of the Order, and
a fortiori of article 8(3) to (6) of the Amendment Order. An in-depth analysis
of these provisions would take this court into a minefield of difficulties. It
would also take it beyond the scope of the parties’ submissions. In the
circumstances, I do not express any view.
159.
So far as article 9 of the Order is concerned, it provides:
“Conduct which constitutes an
offence which was committed before 24 March 2003 is not particular criminal
conduct under section 76(3) or 224(3) of the Act.”
The majority suggest that that provision also supports
their interpretation of section 156(2) and (9). I am not persuaded. The
explanation of article 9, as it appears to me, is that “particular criminal
conduct” is defined by sections 76(3) and 224(3) of POCA as including not only
“(a) conduct which constitutes the offence or offences concerned”, but also
“(b) conduct which constitutes offences of which he was convicted in the same
proceedings as those in which he was convicted of the offence or offences
concerned”, and “(c) conduct which constitutes offences which the court will be
taking into consideration in deciding his sentence for the offence or offences
concerned”. Since (b), interpreted as explained in para 138 above, and more
plainly (c), could otherwise apply in respect of offences committed prior to
the commencement of POCA, article 9 is necessary in order to exclude that
possibility, consistently with the objectives explained in paras 146-148 above.
160.
Lord Hughes also relies on section 143(3)(b) of POCA, a provision
applicable in Scotland which is in similar terms to section 224(3)(b). I have
to acknowledge that, although section 224(3)(b) can be interpreted consistently
with the approach which I have adopted to section 156(2) and (9), it is at
least not obvious that section 143(3)(b) can also be interpreted consistently
with that approach. This point has not, however, been the subject of argument,
and I am reluctant to express a concluded view. I would not exclude the
possibility that, in such a complex and technical piece of legislation, it is
possible that the provisions applicable in England and Wales may have been replicated
for Scotland, as for Northern Ireland, without noticing a material distinction.
I am not, in the absence of fuller argument, inclined to accept that an
apparent infelicity in the drafting of one of the Scottish provisions is a
sufficient reason for departing from the natural meaning of section 156(2) and
(9) and their equivalents for the other parts of the United Kingdom.
Previous authority
161.
The majority place some reliance on three decisions of the Court of
Appeal of England and Wales concerned with section 16(5) of the Proceeds of
Crime Act 1995 (“the 1995 Act”), a transitional provision broadly analogous to
article 4 of the Order. The 1995 Act operated by amending the Criminal Justice
Act 1988 (“the 1988 Act”). Section 1 of the 1995 Act was analogous to section
156 of POCA. Section 16(5) provided:
“Section 1 above shall not apply
in the case of any proceedings against any person where that person is
convicted in those proceedings of an offence which was committed before the
commencement of that section.”
162.
The intended meaning and effect of section 16(5) could hardly have been
made clearer. Where a person was convicted in any proceedings of an offence
which was committed before the commencement of section 1, that section did not
apply, with the result that it was the unamended version of the 1988 Act which
generally applied. Where, on the other hand, all the offences of which the
person was convicted were committed after the commencement of section 1, it was
the 1995 Act (strictly speaking, the 1988 Act as amended by the 1995 Act) which
applied.
163.
That straightforward interpretation of section 16(5) was however
rejected by the Court of Appeal in a series of cases, on the ground that it led
to absurd results: as to which, see paras 146-148 above. The first of these
cases was R v Simpson [2003] EWCA Crim 1499; [2004] QB 118; [2003] 3 All ER 531; [2004] 1 Cr App R (S) 24, where a confiscation order made under the
1995 Act was challenged on the basis that one of the offences of which the
appellant had been convicted in the relevant proceedings was committed before
the commencement of section 1. The Court of Appeal considered it “obviously an
absurd result” that an order could be made under the 1995 Act if a defendant
were acquitted of an offence committed prior to the commencement date, but not
if he were convicted of that offence. I see no absurdity: transitional
provisions limiting the operation of penal provisions to offences committed
after their entry into force are necessary in order to protect those who are
convicted of earlier offences, not those who are acquitted of them. However, in
order to avoid the supposed absurdity, the Court of Appeal read words into
section 16(5):
“In our judgment section 16(5) has
to be applied so that after the word ‘offence’ there appears, the words ‘in
respect of which a confiscation order is or could be sought’.” (para 19)
164.
On the facts of the case, a confiscation order was not sought in
respect of the offence in question; but there was no obvious reason why such an
order could not be sought. The nature of the offence - a VAT fraud - did
not in itself present any problem. More importantly, the Court of Appeal’s
discussion of the issue was in any event obiter dictum, since it decided that
the offence had actually been committed after the commencement of the 1995 Act:
“So in fact, the offence was
committed after 1 November 1995. In any event the argument for the appellant,
that the 1995 Act cannot be relied upon, fails on the facts.” (para 20)
165.
The issue was considered again in R v Mohammed Aslam [2004] EWCA Crim 2801; [2005] 1 Cr App R (S) 116. In that case, the appellant had been
convicted of numerous offences of dishonesty. At the confiscation hearing, it
was pointed out that one of the offences had been committed before the 1995 Act
came into force. The prosecution then disclaimed reliance on any benefit
obtained as a result of that offence. The question was whether that cured the
defect. Relying on Simpson, the Court of Appeal held that it did. The
court noted that, in Simpson, a confiscation order could have
been sought in respect of the offence in question. It concluded that the fact
that the appellant had been convicted in the instant proceedings of a
pre-commencement count did not prevent the court from making a confiscation
order under the 1995 Act where the pre-commencement count was one which could
not be the basis of confiscation proceedings, or if the prosecution had
expressly abandoned any reliance on the pre-commencement count for the purposes
of a confiscation order.
166.
The Court of Appeal followed Aslam in R v Stapleton [2008] EWCA Crim 1308; (2009) 1 Cr App R (S) 38, stating that it could not properly
say that the earlier decision was “plainly wrong” (para 7).
167.
The Court of Appeal’s approach in these cases raises a number of
difficulties. First, and most importantly, it is inconsistent with the plain
meaning of section 16(5) of the 1995 Act: a fact which the Court of Appeal
acknowledged by effecting a judicial amendment of the provision. As amended by
the Court of Appeal, section 16(5) permits the Crown to bring proceedings under
the 1995 Act in circumstances where Parliament has directed that the
proceedings are to be brought under the preceding legislation. That is not
permissible under any canon of statutory construction. Secondly, the Court of
Appeal was mistaken, as it respectfully appears to me, in thinking that the
result of applying what Parliament had enacted was absurd, as explained
earlier. Thirdly, the Court of Appeal was also mistaken, in my view, in
thinking that the amount of a confiscation order under the 1995 Act could be
restricted by the prosecution. Under the 1988 Act as amended by the 1995 Act,
the court had to determine “whether the defendant has benefited from any
relevant criminal conduct” (section 71(1A); emphasis supplied), and “relevant
criminal conduct” was defined as meaning the offence of which the defendant had
been convicted “taken together with any other offences of a relevant description
which are either (a) offences of which he is convicted in the same proceedings,
or (b) offences which the court will be taking into consideration in
determining his sentence for the offence in question” (section 71(1D)). The
prosecution could not, therefore, remove an offence of which the defendant had
been convicted in the proceedings from the calculation by choosing not to rely
on it: the court was under a statutory duty to assess the benefit arising from
that offence in any event.
168.
There are at least three other difficulties with the approach of the
Court of Appeal. First, it did not address the issues which arose, on its
approach, from the role which the court itself has in bringing confiscation
proceedings. By virtue of section 71(1)(b) of the 1988 Act, as substituted by
section 1 of the 1995 Act, the court can initiate confiscation proceedings in
respect of all the offences of which the defendant has been convicted in the
proceedings if it considers that it is appropriate for it to do so. POCA contains
an equivalent provision in section 156(3)(b). One might ask, in the first
place, how that power bears on the assumption, implicit in the Court of
Appeal’s reasoning, that the court should defer to the prosecutor’s decision
not to proceed in respect of pre-commencement offences. The whole point of the
substitution of section 71(1)(b) was to enable the court to act independently
of the prosecution. Further, and in any event, if in any case the court decides
to exercise its power to initiate confiscation proceedings, can it too ignore
certain offences so as to secure the application of the most draconian
confiscation regime available? Under what power would it do so? If it cannot,
does it not follow that the supposedly absurd outcome must indeed have been intended?
These issues appear to me to be equally relevant to the approach adopted by the
majority in the present case.
169.
Secondly, the Court of Appeal did not address the issue discussed in para
129 above, which also arose in relation to the corresponding provisions of the
1988 Act both as enacted and as amended. This issue is equally relevant to the
approach adopted by the majority in the present case.
170.
Thirdly, in so far as the Court of Appeal’s approach, and that of the
majority in the present case, is premised on the assumption that it is always
possible to identify particular offences as being offences in respect of which
a confiscation order can or cannot be sought (“offences … which would qualify
for applications for a confiscation order”, “offences which can be dealt with
under the Act”, “offences in respect of which confiscation orders could be
made” or “offences … which could generate confiscation orders”, as Lord Kerr
describes them in paras 5, 13, 16 and 17), before any inquiry has been made
into whether the defendant has in fact obtained property as a result of, or in
connection with, the offence, that does not appear to me to be a valid
assumption.
171.
As explained earlier, a confiscation order is not sought in
respect of offences, but in respect of the benefit obtained from criminal
conduct, which may or may not have constituted an offence or offences of which
the defendant has been convicted in the proceedings in question. Whether a
given offence of which the defendant has been convicted may turn out to be one
which is relevant to the confiscation order may not be readily apparent at the
time when the confiscation proceedings are initiated. For example, a defendant
does not usually obtain property as a result of or in connection with an
assault; but sometimes he does. A defendant usually obtains property as a
result of, or in connection with, the
possession of a controlled drug with intent to supply; but not always. In
short, the construction of section 156 of POCA, or of its equivalent in the
earlier legislation, cannot be predicated on an assumption that whether a
conviction of a particular offence will lead to the making of a confiscation
order, or will affect the amount specified in the order, can be determined at
the time when the confiscation proceedings are initiated. The proof of the
pudding is in the eating.
Conclusion
172.
For all these reasons, I would have answered the certified question in
the negative, and allowed the appeal.
