COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM MAIDSTONE CROWN COURT
London, WC2A 2LL
B e f o r e :
LORD JUSTICE KENNEDY
MR JUSTICE MITCHELL
MRS JUSTICE HALLETT
MR JUSTICE PITCHERS
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Jonathan Fisher QC & John Law (instructed by The Solicitor for HM Customs and Excise) for the Respondent
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The Lord Chief Justice:
The Jurisdictional Issue
"(1) The Crown Court and a magistrates' court shall each have power, in addition to dealing with an offender in any other way, to make an order under this section requiring him to pay such sum as the court thinks fit.
(2) The Crown Court may make such an order against an offender where:
(a) he is found guilty of any offence to which this Part of this Act applies; and
(b) it is satisfied:
(i) that he has benefited from that offence or from that offence taken together with some other offence of which he is convicted in the same proceedings, or which the court takes into consideration in determining his sentence, and which is not a drug trafficking offence; and
(ii) that his benefit is at least the minimum amount.
(4) For the purposes of this Part of this Act a person benefits from an offence if he obtains property as a result of or in connection with its commission and his benefit is the value of the property so obtained.
(5) Where a person derives a pecuniary advantage as a result of or in connection with the commission of an offence, he is to be treated for the purposes of this Part of this Act as if he had obtained as a result of or in connection with the commission of the offence a sum of money equal to the value of the pecuniary advantage.
(6) The sum which an order made by a court under this section requires an offender to pay must be at least the minimum amount, but must not exceed:
(a) the benefit in respect of which it is made; or
(b) the amount appearing to the court to be the amount that might be realised at the time the order is made,
whichever is the less.
(7) For the purposes of this Part of this Act the minimum amount is £10,000 … "
"(1) A court shall not make a confiscation order unless the prosecutor has given written notice to the court to the effect that it appears to him that, were the court to consider that it ought to make such an order, it would be able to make an order requiring the offender to pay at least the minimum amount.
(2) If the prosecutor gives the court such a notice, the court shall determine whether it ought to make a confiscation order.
(4) If the court determines that it ought to make such an order, the court shall, before sentencing or otherwise dealing with the offender in respect of the offence or, as the case may be, any of the offences concerned, determine the amount to be recovered in his case by virtue of this section and make a confiscation order for that amount specifying the offence or offences."
"(i) a duty was placed upon the Court to exercise its powers to embark upon confiscation proceedings in every case in which written notice had been given by the prosecutor;
(ii) the Court was given a power to institute confiscation proceedings of its own volition;
(iii) the minimum figure of £10,000 was abolished.
Thus, section 71(1) of the 1988 Act now provides:
(1) Where an offender is convicted, in any proceedings before the Crown Court or a magistrates' court, of an offence of a relevant description, it shall be the duty of the court:
(a) if the prosecutor has given written notice to the court that he considers that it would be appropriate for the court to proceed under this section, or
(b) if the court considers, even though it has not been given such notice, that it would be appropriate for it so to proceed,
to act as follows before sentencing or otherwise dealing with the offender in respect of that offence or any other relevant criminal conduct."
"14. Section 2 of the 1995 Act inserted section 72AA into the 1988 Act to provide for confiscation in relation to a course of criminal conduct.
15. Section 3 of the 1995 Act amended section 73 of the 1988 Act (effect of provision of statement by prosecutor) and provided for the service on the Court and defendant of statements from the prosecutor.
16. Section 4 of the 1995 Act inserted section 73A into the 1988 Act so as to empower the Court to order the defendant to provide information to assist it in carrying out its functions under Part VI of the 1988 Act.
17. Sections 5 to 10 of the 1995 Act amended the 1988 Act in relation to such matters as the review and revision of confiscation orders, the enforcement of confiscation orders and the variation of confiscation orders."
"(5) 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.
(6) Sections 8(1) and 9 above shall not apply where the offence, or any of the offences, in respect of which the confiscation order was made was committed before the commencement of section 1 above."
i) a notice which complies with section 72(1) was served and
ii) none of the offences on which the appellant is indicted and convicted were committed before 1 November 1995.
"22. In these proceedings there were three offences in the three counts. Count 3 within a period wholly after 1st November 1995. The other two, Counts 1 and 2, were in relation to periods partly before and partly after that date. In each of those instances there were overt acts committed in pursuance of the existence of the relevant conspiracy both before and after that date, 1st November 1995.
23. Counsel's submission is that as the conspiracies in Counts 1 and 2 ran from 1st January 1995, the offences in Counts 1 and 2 were being committed both before and after 1st November 1995. That being so in these proceedings the appellant was "convicted … of an offence which was committed before [1st November 1995]". We agree. It follows that the judge had the discretion to make an order in the full agreed sum of £40,000 or a lesser sum or none at all." (emphasis added)
The Irregularity (per incuriam) Issue
i) where the Court has acted in ignorance of a previous decision of its own court or a court of coordinate jurisdiction which covered the case before it. If this is the case the Court must decide which case to follow,
ii) where the Court has acted in ignorance of a decision of the House of Lords,
iii) where the Court has given its decision in ignorance of the terms of a statute or a rule having statutory force, or
iv) where in exceptional and rare cases, the Court is satisfied that there has been a manifest slip or error and there is no prospect of an appeal to the House of Lords.
"In its criminal jurisdiction the Court of Appeal applies the same principles as on the civil side, but recognises that there are exceptions; (a) where the applicant is in prison and in the full court's opinion wrongly so, (b) where the court thinks the law was misunderstood or misapplied; and (c) where the full court is carrying out its duty to lay down principles and guidelines in relation to sentencing."
"Our common-law system consists in the applying to new combinations of circumstances those rules of law which we derive from legal principles and judicial precedent; and for the sake of attaining uniformity, consistency and certainty, we must apply those rules, where they are not plainly unreasonable and inconvenient, to all cases which arise; and we are not at liberty to reject them, and to abandon all analogy to them, in those to which they have not been judicially applied, because we think that the rules are not as convenient and reasonable as we ourselves could have devised." (emphasis added)
"We do not think that it would be right to say that there may not be other cases of decisions per incuriam in which this court might properly consider itself entitled not to follow an earlier decision of its own."
" Their lordships regard the use of precedent as an indispensable foundation upon which to decide what is the law and its application to individual cases. It provides at least some degree of certainty upon which individuals can rely in the conduct of their affairs, as well as a basis for orderly development of legal rules.
Their lordships nevertheless recognise that too rigid adherence to precedent may lead to injustice in a particular case and also unduly restrict the proper development of the law. They propose therefore to modify their present practice and, while treating former decisions of this House as normally binding, to depart from a previous decision when it appears right to do so.
In this connexion they will bear in mind the danger of disturbing retrospectively the basis on which contracts, settlements of property and fiscal arrangements have been entered into and also the especial need for certainty as to the criminal law.
This announcement is not intended to affect the use of precedent elsewhere than in this House."
" In its criminal jurisdiction, which it has inherited from the Court of Criminal Appeal, the Court of Appeal does not apply the doctrine of stare decisis with the same rigidity as in its civil jurisdiction. If upon due consideration we were to be of opinion that the law had been either misapplied or misunderstood in an earlier decision of this court or its predecessor, the Court of Criminal Appeal, we should be entitled to depart from the view as to the law expressed in the earlier decision notwithstanding that the case could not be brought within any of the exceptions laid down in Young v Bristol Aeroplane Co Ltd as justifying the Court of Appeal in refusing to follow one of its own decisions in a civil case (Rex v Taylor). A fortiori, we are bound to give effect to the law as we think it is if the previous decision to the contrary effect is one of which the ratio decidendi conflicts with that of other decisions of this court or its predecessors of co-ordinate jurisdiction."
"These decisions it rightly treated as binding, for although the criminal division of the Court of Appeal is not so strictly bound by its own previous decisions as is the civil division, its liberty to depart from precedent which it is convinced was erroneous is restricted to cases where the departure is in favour of the accused. This would not be the case in the instant appeal."
"The basis of the per incuriam doctrine is that a decision given in the absence of relevant information cannot be safely relied on. This applies whenever it is at least probable that if information had been known the decision would have been affected by it."
"I think it would be wrong for this court to introduce into a matter already in all conscience complicated enough, and made complicated by what I cannot help feeling to be the imperfections of the drafting of these acts, refinements and narrow distinctions between cases which might fall under one section rather than another of the same legislation."
"51. The second is R v Palmer  EWCA Crim 2202. In Palmer a confiscation order in the total sum of £33,243,812.46 had been made on 23 April 2002. In this court Rix LJ presided. The court quashed the confiscation order. Two notices under S.72 had been served by the prosecution. As to the first, Rix LJ indicated that the court had "anxiously considered" the submissions that despite inaccuracies it was valid. He observed that he saw the strength in the Crown's case "that in substance everyone knew where they were going" and that it was clear to all that the appellant was a wealthy man who had profited enormously from his fraud but he concluded "albeit with reluctance", that the judge was right to find that the first notice was invalid and that the second notice could not make up for its deficiencies. He was of the opinion that the first notice, not having been valid, a second notice served after the confiscation proceedings had commenced could not cure the absence of an effective notice at the outset. The consequence was that it was not possible for the trial court to postpone the confiscation proceedings and proceed to sentence.
52. The first notice in Palmer referred to the wrong section. The explanation as the court pointed out was that it was drafted with the 1995 provisions in mind when that Act was not in force at the relevant time. So the notice referred to the amended S.71 (1)(a) when it should have referred to S.72 (1) (the 1995 Act did not apply to the proceedings). In addition, it did not refer to the fact that if an order was made it would at least be for £10,000, which in Palmer's case was hardly likely to be in issue. The errors were due to the notice being on a standard form developed for use when the 1995 provisions applied. Neither the court nor the defendant, if they had seen the notice, would have been under any doubt that the prosecution thought this was a case where confiscation proceedings should continue. It is difficult to conceive that Parliament intended that technical failures of this sort should affect the jurisdiction of the court to make a confiscation order.
53. The Court of Appeal was, however, without the benefit of the argument advanced before us by Mr Perry. Furthermore, they were influenced by two decisions given by this court which shared the same disadvantage. Those decisions being R v Martin  2 Cr App R (S) 34 and R v Miranda  2 Cr App R (S) 347.
. . .
55. The question that remains is what is the status of the Palmer case and the other authorities on which it was based. What has happened is that as part of the normal common law process, decision has followed decision extending the principle that there is no jurisdiction if there is a procedural failure from one aspect to another of the confiscation process. Palmer is only significant because it dealt with the use of a notice designed for use under a later Act being used as a notice under an earlier Act. Even though the wrong notice was used it could still achieve and did achieve its primary objective of initiating confiscation proceedings. Yet a defendant who had been otherwise properly subjected to a confiscation order in excess of £30m had that order quashed. This is a result that Parliament could not have intended.
56. For one constitution of this court to hold that a series of cases have been decided per incuriam, is not a course to be lightly taken. There is now new legislation which contains the section to which we have referred above which is designed to prevent repetition of the problem. There are, however, no doubt other cases in the pipeline which could be affected by the earlier authorities which did not consider Mr Perry's argument. In these circumstances we feel it right to indicate that in our view the Palmer case is wrongly decided and should not be followed and each of the earlier cases to which we have referred should be examined with care to see whether in fact it can be said they should be regarded as doing any more than deciding that there should be a decision to postpone confiscation proceedings, however generally expressed, prior to the completion of sentencing an offender, if confiscation proceedings are to take place after sentencing."
The Amount of the Confiscation Order
"………the scheme of the Act requires the court to perform two distinct and discrete tasks. First, to determine the benefit. Secondly, to determine the amount that might be realised at the time the order is made, which may be very different. Further, the amount that may be realised may be quite unrelated to the identifiable proceeds of the offence, eg a lottery win, inheritance, or other lawfully acquired property. In the end, the task of the court at the second stage is to determine the amount "appearing to the court" to be the amount that might be realised. But once the benefit has been proved, it is permissible and ought normally to be the approach of the court, to conclude that the benefit remains available until the defendant proves otherwise; subject to the issue of changes in the value of the money…….."
"Turning to the question of what assets are realisable for the purpose of making a confiscation order, the accepted approach of the court is to conclude that the benefit remains available until the defendant proves otherwise. This places on him the burden of proving that the realisable assets available to him are less than the benefit he has been found to have received. He must prove it on the civil standard of proof."
"There was an agreement between the defendant and his wife that for the future they would so arrange their affairs that their assets would be unassailable by the defendant's creditors."
"There is no evidence that has been placed before me that confirms that the debt to the bank has not been paid. There is no evidence to tell me how the debt was originally incurred. It could, for example, have arisen from a guarantee by Mrs Simpson of a debt owed by the defendant to the bank. There is no evidence as to the amount now due under the charging order, if indeed the money has not been paid. The onus is upon the defendant to satisfy me about these matters. He has not done so."
"It is further contended by the defence that the surrender value of the life policies is not an asset available to the defendant. I disagree. He has supplied no details of these policies other than the surrender values. The inference that I draw from their existence is that they are additional security for the payment of the mortgages and that when the mortgages are redeemed or the policies mature, the proceeds will go towards extinguishing the mortgage debt."
"I have also concluded that he has an equitable interest in the house and land at Hamelsham Manor, not only because of his interest in the proceeds of sale of 13 Howlett Drive but also because he has failed to satisfy me as to the origin of the monies he says were found by Mrs Simpson. Additionally, his statement that he was paying rent for the use of the property by his business is again unsupported by any evidence and if it is true, is a contribution to the mortgage repayments in disguise."
"One witness who might greatly have helped the court is Mrs Simpson. I am told there are matrimonial problems between her and the defendant, but one might have expected her to have been called to give evidence as, if what the defendant tells me about her part in this affair is true, her evidence could have been expected to be of assistance to the defendant."
THE LORD CHIEF JUSTICE: For the reasons given in the judgment handed down, this appeal is dismissed. Mr Walker, you want to certify some points?
MR WALKER: My Lord, that is right.
THE LORD CHIEF JUSTICE: We regard point 6 as being a question of fact as to whether something is per incuriam or not. We do not say that it is a practice of law, it is a procedure. It involves issues of a legal nature. What we would be prepared to do, subject to hearing Mr Fisher, is to certify in relation to question 4, but to add "or was correctly decided". We are not sure about question 5, but we are minded to say that that could be a question of law. But whether it is one that meets the requirements of importance, bearing in mind the changes in the law which have a taken place, we are not sure.
MR WALKER: My Lord, I appreciate that. Might I address the court in relation to that point and in relation to our suggested question 6? We respectfully suggest that in fact both of them are questions of law. We accept that in relation to count 6 there is undoubtedly a factual element in it. But, my Lord, the factual element is dependent upon whether as a matter of law sections 72(1) and 72(3), when considered in combination, which is the way that that count was charged in the indictment, it is right as a matter of statutory construction that these offences only commence on the date upon which a document which is false in a material particular is created, because, apart from anything, my Lords, one of the potential difficulties that we would face recognises that by themselves question 5 and question 6 would certainly not -- well I say certainly not, would almost certainly not -- rate as sufficient importance for the House of Lords. My Lords, in a way we respectfully suggest that they should be taken in combination with question 4, which your Lordships felt might be questions that could be certified for the House of Lords, with tagging on the addition. The point is, my Lords, that effectively to give us status to argue the Palmer point, we really should be in a position to say: we are on all fours with Palmer and so it is necessary for us to see that the House of Lords comes to the conclusion that in fact Palmer was correctly decided. That is the reason why my Lords, we would respectfully ask the court to accede to questions 5 and 6, recognising in themselves that they are certainly not matters of sufficient importance that will ordinarily attract the House of Lords, but in a way for our purposes in order to be able to strengthen our case before their Lordships in relation to Palmer that we should at any rate have the opportunity of arguing those two points which we suggest do have elements of law in both of them.
THE LORD CHIEF JUSTICE: Thank you very much.
MR WALKER: My Lords, my learned junior reminds me that the new Proceeds of Crime Act comes into force on 24 February and 28 March -- I knew it was something like that. But, my Lords, the point is that it only comes into effect in respect of offences committed after those dates.
THE LORD CHIEF JUSTICE: Yes, it is the same point.
MR WALKER: That is right. It may be that that point is in the pipeline in relation to a number of other cases.
THE LORD CHIEF JUSTICE: Mr Fisher, how do you see this?
MR FISHER: May it please my Lords, perhaps I may begin by making the clear distinction between an application for leave and an application to certify points.
THE LORD CHIEF JUSTICE: I think we will get the certification out of the way first.
MR FISHER: Exactly. Much of what my learned friend has just advanced on questions 5 and 6 we would say go to the question of leave rather than certification. My Lords, dealing with this in order, we can say nothing about the merits of the Palmer/Sekhon issue. It is right to say, as we understand it, that that issue has already been certified in the case of Clayton. I am not quite sure of the position -- the court may know -- but we believe that in Sekhon itself there was --
THE LORD CHIEF JUSTICE: Sekhon could not go to their Lordships' House because, I believe, the Commissioners of Customs and Excise had blown hot and cold.
MR FISHER: My Lord, yes.
THE LORD CHIEF JUSTICE: So I think that it was thought -- I think the Commissioners need an extension of time and they did not get it.
MR FISHER: My Lord, it matters not. My learned friend in fact tells me that Predie, who was a co-defendant, has got a point certified. But it matters not because a point was certified in Clayton and I can say nothing on behalf of the Crown about that. My Lords, the only observations we would make on this side of the court are as follows. If the court is going to certify, might the court consider following the language of the question in Clayton and actually confronting the issue of the merits advanced --
THE LORD CHIEF JUSTICE: What was the point in Clayton? Have you got it in writing?
MR FISHER: Yes. My Lord, I can read it to my Lords and see if it attracts. It is as follows:
"Whether for the purposes of the Criminal Justice Act 1988, as amended by the Criminal Justice Act 1993, the Crown Court is deprived of jurisdiction to make a confiscation order in circumstances where a notice served on the Crown Court misdescribes the statutory provisions applicable or is otherwise deficient."
My Lords, the advantage, we would say, of that formulation, as well as consistency, is that it takes out of the arena any issue in this case relating to the practice of the court in terms of precedent because to a large extent my learned friend has elided the two issues in his formulation.
THE LORD CHIEF JUSTICE: If you deal with it in that way, the question of postponement is not actually covered, is it?
MR FISHER: My Lord, yes.
THE LORD CHIEF JUSTICE: I am sympathetic to the approach that you are adopting, but I would rather see going to their Lordships' House:
"Whether for the purposes of the Criminal Justice Act 1998, as amended by the 1993 Act, the Crown Court is deprived of making a confiscation order if the requirements of section 72 of the Criminal Justice Act 1988 --"
Do we want to have the words "as amended by the 1993 Act" in? It is better without them, is it not?
MR FISHER: It Is better without.
THE LORD CHIEF JUSTICE: Without the words "as amended by the 1993 Act are not complied with". That enables the House of Lords so far as they think is appropriate to deal with all the variations of non- compliance, which have been considered in the various cases.
MR FISHER: Can I read that back to make sure I have got it down correctly:
"Whether for the purposes of the Criminal Justice Act 1988 the Crown Court is deprived of jurisdiction to make a confiscation order if the requirements of section 72 of that Act are not complied with."
THE LORD CHIEF JUSTICE: I am sorry, it was in Sekhon that the postponement point arose.
MR FISHER: Yes.
THE LORD CHIEF JUSTICE: There is certain sympathy for that approach among my brothers and sister. What do you say?
MR FISHER: My Lord, we certainly could not stand in the way of the court and seek to advance a contrary position.
THE LORD CHIEF JUSTICE: Yes. We do not need any further help, Mr Fisher.
MR FISHER: My Lord, I am obliged.
THE LORD CHIEF JUSTICE: Mr Walker, I would have thought that that does help. What do you think?
MR WALKER: Yes, my Lord. We envisaged that that was what your Lordships had in mind when the suggestion was made adding the words "or was Sekhon correctly decided" to question 4, as we have it.
THE LORD CHIEF JUSTICE: Yes.
MR WALKER: We are concerned slightly, my Lord, on the basis that, whilst we accept my learned friend's suggestion that our questions 5 and 6 go to the question of leave, we could envisage that if this court was not to consider that those are points which are taken in conjunction with as it were the revised -- what was our question 4 -- the revised certified question for the House of Lords, that we would find it extremely difficult to justify taking the matter further because we would be met with: "Well, look at the judgment; it is a question of pure fact. So if you cannot bring yourself four square within Palmer, why are you applying to us (the House of Lords) for leave" -- that is on the assumption of course that your Lordships are not going to give leave. So we are slightly concerned about that position because we do believe that we have a justifiable argument, as I have said before, that whilst by themselves these two extra matters certainly do not justify going to the House of Lords, they are pertinent to our particular case and we would simply seek to have them, if anything, tagged on.
THE LORD CHIEF JUSTICE: Thank you very much.
(The court conferred)
THE LORD CHIEF JUSTICE: I am afraid we will only give you the certificate in respect of the one question. We do not think it would be right to give certificates in order to help you in order to get leave.
MR WALKER: My Lords, we formally ask for leave. We anticipate what your Lordships' answer will be. I am not sure, but there may even be a Practice Direction.
THE LORD CHIEF JUSTICE: It would be very exceptional for us to give leave.
MR WALKER: We recognise that.
THE LORD CHIEF JUSTICE: I think you have read our minds correctly. So be it, leave refused, but a question certified in those terms. There is nothing else required?
MR WALKER: My Lord, no.