England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL
CRIMINAL DIVISION

		Royal Courts of Justice Strand London, WC2
		17th October 2008

1. LORD JUSTICE TOULSON: This was to be hand down judgment, but events have moved on. Mr Cammerman we have had your further submissions. We accept your personal explanation, how you came to misunderstand what the law was and present the appeal on a false basis.
2. MR CAMMERMAN: I am much obliged.
3. LORD JUSTICE TOULSON: But it is a matter of concern. Was this a CPS or a Customs prosecution?
4. MR CAMMERMAN: This was a Customs prosecution, my Lord.
5. LORD JUSTICE TOULSON: So how did it come about that this mistake was spotted only at very much the 11th hour?
6. MR CAMMERMAN: An assiduous lawyer at the office of the RCPO, Revenue and Customs Prosecutions Office, came into possession of the knowledge.... (Pause)
7. There was a lawyer in Manchester who had noticed that the Regulations, as no doubt did a number of other lawyers in different departments at the Revenue and Customs, that the Regulations had been superseded, or should I say amended. A lawyer for Revenue and Customs, when considering a different case, came upon the consideration of that lawyer yesterday. She was considering a section 16 Proceeds of Crime Act application in respect of another case. When the observations of that lawyer in Manchester came to her attention, she immediately realised the importance of it and left a message on my telephone in chambers yesterday evening.
8. LORD JUSTICE TOULSON: So effectively it was a fortunate accident?
9. MR CAMMERMAN: My Lord, I regret to say it was a fortunate accident.
10. LORD JUSTICE TOULSON: By fortunate accident the draft judgment came to the attention of a lawyer in the RCPO, who was aware that the Regulations had been superseded and very properly took prompt steps to see that the court was alerted.
11. MR CAMMERMAN: Became aware I think yesterday and --
12. LORD JUSTICE TOULSON: Meanwhile, others in the RCPO have in recent years been proceeding on the erroneous basis.
13. MR CAMMERMAN: My Lord, yes, and --
14. LORD JUSTICE TOULSON: Have you any information how many confiscation orders may have been obtained where the court has not been told what the relevant Regulations are? (Pause)
15. MR CAMMERMAN: In the light of what my Lord describes as a fortunate accident, a review is currently underway to answer the question your Lordship understandably asks. So the answer to the question is that there is no - I do not know --
16. LORD JUSTICE TOULSON: It is not the only time it has happened in this court this week. As it so happens we had an earlier appeal this week when counsel for the respondent relied on the 1992 Regulations in a cigarette case. The Regulations were introduced only at a very late stage and he made his submissions on instructions, having spoken to the RCPO. That was I think on Wednesday.
17. MR CAMMERMAN: I have been made aware of that case, although as I understand it that case in fact was not resolved.
18. LORD JUSTICE TOULSON: Very fortunately, we thought that there was something which worried us about the fact that these Regulations were being produced at a very late stage and that all might not be entirely straightforward and that it really was not fair for the appellant to have to deal with them on his feet.
19. MR CAMMERMAN: My Lord, yes.
20. LORD JUSTICE TOULSON: That turns out to have been absolutely right.
21. MR CAMMERMAN: My Lord, yes. I can also say on a personal note that I am in possession of a number of skeleton arguments of cases that I know my Lord himself is due to hear in due course.
22. LORD JUSTICE TOULSON: Am I?
23. MR CAMMERMAN: It may be that you are, my Lord. I am this afternoon going to write to all those individuals whose skeleton arguments I have seen that rely on those provisions, including counsel of greater esteem than I, and alert them to the difficulty that we have encountered here and hopefully avoid any further submissions being made that are wrong.
24. LORD JUSTICE TOULSON: Right.
25. MR CAMMERMAN: Can I in open court echo the apology that I have communicated in writing to the court.
26. LORD JUSTICE TOULSON: Yes. (Pause)
27. I am just trying to find among the recent cascade of emails that we have had, the one which actually explains the source of the misinformation.
28. MR CAMMERMAN: That would be an email from myself, my Lord.
29. LORD JUSTICE TOULSON: Yes, I think it was. Actually it is in your skeleton additional submissions. Yes, it is paragraph 1 of your addendum skeleton argument. Yes, the OPSI web site.
30. MR CAMMERMAN: Yes. My Lord, I checked this morning to see if other sources of information would also mislead and in fact the Lawtel and the Westlaw web sites, which are common sources of statutory instruments, also quote the Regulations in their amended form; that is to say, without the new paragraph 3(4) --
31. LORD JUSTICE TOULSON: Yes, they are private sector web sites, of course.
32. MR CAMMERMAN: My Lord, yes. (Pause)
33. LORD JUSTICE TOULSON: Yes, do you want to say anything further on your addendum submissions?
34. MR CAMMERMAN: There is nothing further on the submissions themselves, save that those instructing me wish me to invite the court to consider giving some time for two things to happen. First of all, consideration of the impact of the change in Regulations on this particular appeal and, secondly, for any submissions to be made in writing that may assist the court.
35. LORD JUSTICE TOULSON: Why should you have time? The position is this. You seek to uphold the order on the basis of a factual assertion that Chambers caused the tobacco products to reach an excise duty point. That is a pure assertion of fact. No such finding was made by the judge, nor was the case presented to him in a way which invited him to make such a finding of fact. If the prosecution had presented the case below on the basis that we have to establish a liability to pay duty arose on the part of this defendant, and that turns on the question of whether he caused the products to reach the excise duty point, both the Recorder and Chambers, and more particularly his lawyers, would have had their eye on the ball. We do not know, and it is not for us to speculate, what advice would have been given to Chambers about whether he should give evidence, or what evidence he might have given, or what the finding of fact the court may have made. Why in these circumstances would it be just to put the case over for further argument?
36. MR CAMMERMAN: I think the recent nature of the realisation of the way in which Customs have put its case, most particularly before your Lordships, was an erroneous one and the implications that has in respect of the stance that Her Majesty's Revenue and Customs would wish to take in respect of this appellant is the reason why those instructing me wish time to draw breath and consider the position.
37. LORD JUSTICE TOULSON: I appreciate that, but the short point is they did not seek the appropriate finding of fact when the matter was before the judge, although the relevant Regulations had been in force for over 5 years.
38. MR CAMMERMAN: My Lord, my attention is being drawn.... (Pause)
39. My Lord has the point that I make. (Laughter) (The Bench conferred)
40. LORD JUSTICE TOULSON: We need not trouble you, Mr Corrigan.
41. William John Chambers and James Dennard pleaded guilty on 11th October 2007 at Maidstone Crown Court before Judge Patience QC to an offence under section 170(1)(b) of the Customs and Excise Management Act 1979 of being knowingly concerned in carrying, harbouring, depositing, keeping, concealing, removing or in any manner dealing with goods, which were chargeable with a duty which had not been paid, with intent to defraud the Crown of the duty chargeable on the goods. The judge set a timetable for sentence and for confiscation proceedings. On 23rd November 2007, before the same court, Chambers received a community sentence.
42. On 8th April 2008 Mr Recorder Wilson made confiscation orders against both defendants for £66,120 under the Proceeds of Crime Act 2002, with a period of imprisonment in each case of 20 months in default of payment.
43. Chambers' application for leave to appeal against his confiscation order was referred by the single judge to the full court. Having heard full argument in the matter from counsel for Chambers and for the prosecution, we formally grant leave.
44. The evidence for the prosecution showed that the goods which were the subject of the charge were bought in Belgium on 12th September 2006 at 17.44. The evidence leading to the prosecution of the appellant and Dennard was summarised by the Recorder in his full and careful judgment as follows:

"7. On 13 September 2006 at 11.30am, officers of HM Customs & Revenue were at commercial premises at Nickolls Yard, Newing Green, Nr Hythe, Kent. In the yard was a Toyota Carina car. Mr Dennard was in the driver's seat, Mr Chambers in the front passenger seat and Mr Dennard's son was in a rear passenger seat. Messrs Dennard and Chambers were promptly arrested and taken to the Customs Custody Centre at Dover. At about 12.15 a customs officer searched the car and discovered a bunch of 5 keys with an alarm fob in the passenger footwell. The keys were tried in various locks on site and it was found that 2 of the keys opened 2 separate padlocks securing a large metal storage container near to the warehouse on the site. A third key fitted the padlock on one of the entry gates to the yard and a fourth key fitted the padlock on a door to the warehouse. ...

8. Inside the storage container there were 24 boxes of Golden Virginia tobacco: 600kg in all. Samples of the tobacco packaging were examined by the manufacturer who confirmed that the tobacco had been manufactured in July 2006 and delivered to the Belgian market. The revenue evaded was calculated at £66,120 ..."

45. The appellant was interviewed on the day of his arrest and declined to comment.
46. His subsequent plea of guilty was entered on the following written basis:

"1. He had never visited or had any contact with the yard prior to the day of his arrest.

2. He had been asked to attend the yard on the day of the arrest by his co-defendant and another.

3. He was to be paid £50 for his work that day.

4. He became aware that the work would involve handling dutiable items but nevertheless agreed.

5. He did not travel to Belgium on 12th September 2006."

47. The Recorder noted in his judgment in the confiscation proceedings:

"According to the Court Log, the Crown asserted at the time that it was not bound by the basis of Mr Chambers' plea. A Newton hearing was neither requested nor ordered."

48. Mr Corrigan argued on behalf of the appellant that because his client was sentenced by Judge Patience without a Newton hearing, the Recorder was bound in the confiscation proceedings to accept that the appellant's role was limited to that set out in his written basis of plea. We reject that submission.
49. The Recorder said in his judgment:

"May is ... authority for the proposition that where the Crown agrees a basis of plea, that basis is binding on both the Crown and the Court considering confiscation. If the basis is not agreed, the judge will be required to hear evidence and reach his own conclusion as to the part played by the defendant. No such evidence was called before me in this case."

50. That was a proper approach. The general principles regarding a basis of plea were set out in Underwood [2005] 1 Cr App R (S) 90, [2004] EWCA Crim 2256. The Recorder's reference to May was to the judgment of the Court of Appeal in that case at [2005] 2 Cr App R (S) 67, [2005] EWCA Crim 97, paragraph 88. In this case the fact that the sentencing judge did not find it necessary to conduct a Newton hearing before sentencing the appellant was neither here nor there when it came to the confiscation proceedings. The facts found by the Recorder in paragraphs 7 and 8 of his judgment were undisputed. If the appellant wished to call evidence to explain his role in the matter, it was for him to do so. There would have been no excuse for any misunderstanding by the appellant, not only because the principles were clear but also because the prosecution's position was spelled out at the time of the appellant's guilty plea. Its position was that it did not seek a Newton hearing before sentence or consider such to be necessary, but it regarded the confiscation proceedings as a different matter and it did not agree to the appellant's basis of plea. On the hearing of the appeal Mr Corrigan accepted that Mr Cammerman had made these points clear.
51. In his judgment the Recorder neither expressly accepted nor rejected the assertions in the appellant's basis of plea. He concluded that on the prosecution's evidence and the appellant's admissions he had obtained a pecuniary advantage equal to the value of the unpaid duty. He reached this conclusion on the ground that by becoming concerned in the removal and continuing concealment of the goods he "provided an important link in the chain between the importation and ultimate sale, up to which point no profit could actually be realised." The Recorder referred to regulation 5 of the Exercise Goods (Holding, Movement, Warehousing and REDS) Regulations 1992 but he relied rather more strongly on a number of Court of Appeal authorities in reaching the conclusion that the appellant had evaded duty and thereby obtained a pecuniary advantage. At the time of his judgment the cases of May, Jennings and Green were awaiting the decisions of the House of Lords, but the Recorder was asked by both parties not to defer his decision on that account.
52. The Recorder is not to be criticised for deciding the case as he did, but the decisions of the House of Lords in those cases have now clarified the law¹. On the hearing of the appeal Mr Cammerman accepted, in our judgment correctly, that the appellant would only have obtained a benefit by way of a pecuniary advantage in the form of the evasion of excise duty if he was himself under a liability for the payment of that duty which he dishonestly evaded. To help somebody else to evade the payment of duty payable by that other person, within intent to defraud, is no less criminal, but in confiscation proceedings the focus is on the benefit obtained by the relevant offender. An offender may derive other benefits from helping a person who is under a liability for the payment of duty to avoid that liability, e.g. by way of payment for the accessory's services, but that is another matter. In order to decide whether the offender has obtained a benefit in the form of the evasion of a liability, it is necessary to determine whether the offender had a liability which he avoided. In the present case that turns on whether the appellant was liable for the payment of excise duty on the relevant goods under the relevant Regulations.
53. The Regulations relied on by the prosecution at the hearing of the appeal were the Excise Goods Regulations 1992. We heard arguments from both sides about their proper construction.
54. Fortunately, as matters have turned out, we reserved our judgment. Two days ago we released to the parties our draft judgment, in which we were going to conclude that on the proper construction of those Regulations there was a liability to duty on the part of the appellant and that the appeal should therefore be dismissed.
55. Yesterday, by a fortunate accident, our draft judgment came across the desk of a lawyer in the Asset Forfeiture Division of the Revenue and Customs Prosecutions Office, who was aware that the 1992 Regulations no longer applied to tobacco products. She immediately took proper steps to ensure that this court was alerted.
56. It transpires that the Excise Goods Regulations 1992 were superseded in relation to tobacco products by the Tobacco Product Regulations 2001, which came into force on 1st June 2001, i.e. over 5 years before the events giving rise to the present prosecution.
57. The provisions of the Tobacco Product Regulations 2001 are materially different from the Excise Goods Regulations 1992. In written submissions prepared for today, Mr Cammerman submitted that although the circumstances under which liability to duty may arise under the Tobacco Product Regulations 2001 are narrower than under the preceding relevant Regulations, they still cover the position of the appellant. This would depend on whether liability arose under paragraph 13(3)(e) of the Regulations, which would impose liability on him if he was a person who "caused the tobacco products to reach an excise duty point." In his oral submissions Mr Cammerman invited the court to adjourn the hearing of the appeal in order that fuller submissions could be made by both parties on that issue.
58. In our judgment, it would be wrong to do so. The issue now sought to be raised involves a question of fact upon which the judge made no finding because he was not asked to address it. We have no idea, and it would be wrong to speculate, whether if the case below had been presented on the basis that the prosecution asserted that this appellant had caused the tobacco to reach an excise duty point, the appellant would have chosen to give evidence. It would be wrong for this court, which is primarily a court of review, to make a finding of fact of that kind in these circumstances. It is for the prosecution in a case of this kind to place before the court at first instance the relevant statutory provisions and to invite the court to make such findings of fact as it seeks.
59. Accordingly, this appeal must be allowed and the confiscation order quashed.
60. It is a matter of considerable concern to us that the Recorder was not taken to the relevant Regulations and nor were we until the 11th hour, when we were on the point of reaching a wrong decision. Mr Cammerman has explained that he based his understanding of the relevant law on the Office of Public Sector Information web site, which shows the Excise Goods Regulations 1992 in their unamended form. We accept his personal explanation and apology, but that does not alleviate our concern.
61. What happened in this case is not an isolated lapse. Earlier this week we heard another appeal from a confiscation order relating to the evasion of duty on cigarettes. In that case too the prosecution relied on the Excise Goods Regulations 1992. We were unhappy in that case that the prosecution produced those Regulations - which as we now know were the wrong Regulations - only during the course of the appeal, because we did not think that it gave the appellant a fair opportunity of dealing with a potentially difficult point. So we allowed the appeal, with the result that no injustice was in fact done in that case by our being referred to the wrong Regulations.
62. However, our concern remains that the court should have been misled in this way. It is clear that the problem is a systemic one in that the information on the Office of Public Sector Information web site is defective and has presumably been so for some considerable time. Mr Cammerman has told us that in the present case the prosecution was brought by the Revenue and Customs Prosecutions Office and therefore it is apparent that within that Office there is, or has been until now, considerable ignorance about what were the relevant Regulations in force. That is also a matter of self-evident concern.
63. In the circumstances, we expect that the Revenue and Customs Prosecutions Office will now conduct an urgent inquiry whether there have been mistakes in other cases in which confiscation orders have been made, no doubt with sentences of imprisonment in default. If that turns out to be so, the defendants in those cases should be given notice in order that they can make late applications for leave to appeal or such other application as may be appropriate if, for example, they have served a default term of imprisonment as a result of a court imposing a confiscation order on an erroneous understanding of the law. We were told by Mr Cammerman this morning that such a review is already underway.
64. This case also provides an example of a wider problem. It is a maxim that ignorance of the law is no excuse, but it is profoundly unsatisfactory if the law itself is not practically accessible. To a worryingly large extent, statutory law is not practically accessible today, even to the courts whose constitutional duty it is to interpret and enforce it. There are four principal reasons.
65. First, the majority of legislation is secondary legislation.
66. Secondly, the volume of legislation has increased very greatly over the last 40 years. The Law Commission's Report on Post-Legislative Scrutiny, (2006) Law Com 302, BAILII: [2006] EWLC 302, gave some figures in Appendix C. In 2005 there were 2868 pages of new Public General Acts and approximately 13,000 pages of new Statutory Instruments, making a total well in excess of 15,000 pages (which is equivalent to over 300 pages a week) excluding European Directives and European Regulations, which were responsible for over 5,000 additional pages of legislation.
67. Thirdly, on many subjects the legislation cannot be found in a single place, but in a patchwork of primary and secondary legislation.
68. Fourthly, there is no comprehensive statute law database with hyperlinks which would enable an intelligent person, by using a search engine, to find out all the legislation on a particular topic. This means that the courts are in many cases unable to discover what the law is, or was at the date with which the court is concerned, and are entirely dependent on the parties for being able to inform them what were the relevant statutory provisions which the court has to apply. This lamentable state of affairs has been raised by responsible bodies on many occasions, including the House of Lords Committee on the Merits of Secondary Legislation. In its Report on Post-Legislative Scrutiny, under the heading "Access to legislation and consolidation", the Law Commission stated:

"4.11. One theme related to delegated legislation, on which a number of consultees commented, was access to legislation. The joint response of the Children's Legal Centre and National Children's Bureau addressed the problem that despite their familiarity with the broader legal framework, they still found access to be a real problem:

'The lack of access to statutes with appropriate links to the regulations and guidance which are currently in force must be a cause of serious inconvenience to anyone who does not have access to specialist services. We are concerned when information so fundamental to a democracy is difficult to identify, obtain and understand, and is frequently out of date. It is frequently the case that secondary legislation and guidance are overlooked in the process of scrutiny, although their impact on the day-to-day operation of the law is as significant as the primary statute.'

4.12. The joint response stated that experience of practice in childcare suggests that many injustices are the result not of failure to comply with the statute, but of failure to know about, understand or access secondary legislation."

69. The problem is not confined to secondary legislation relating to childcare. It affects many other areas of law of great impact on the ordinary citizen, such as social security benefits.
70. The Law Commission concluded this section of its report as follows:

"4.15. It is also important that all related statutory provisions, whether primary or secondary, should be capable of being readily accessed together. We are aware of the work being undertaken on the Statute Law Database and recognise that public access to that resource is a step in the right direction. We recommend that steps should be taken to ensure that the related provisions of primary and secondary legislation should be capable of being accessed in a coherent fashion by a straightforward and freely available electronic search."

71. The Government's response to that recommendation was presented to Parliament in March 2008, CM 7320. It stated as follows:

"35. Her Majesty's Stationery Office (HMSO) and the Statutory Publications Office (SPO), which produces the Statute Law Database, are to work together to create a single, powerful and free to access online legislation service. The launch of the SLD has been a milestone in government's online legislation publishing.

36. Over the last two years HMSO, via the OPSI website (www.opsi.gov.uk) has embarked on wide ranging improvements to how legislation is published online, taking account of key usability features for layout and navigation. This work is being undertaken as part of 'The Transforming Legislation Publishing Programme'. The aim has been to present legislation in the most accessible and usable way, whilst maintaining the traditional strengths of immediacy and accuracy. One of the benefits is that it affords the opportunity to provide links to related information. Initially these links will be to the Explanatory Note for Acts or the Explanatory Memorandum for Statutory Instruments. Alongside this is also published an ATOM feed for the piece of legislation. This provides visitors with an easy way to keep up to date with subsequent additions to the website, like the addition of Explanatory Notes for an Act, and also the enacting or making of other related legislation such as Commencement Orders or, longer term, amending legislation. In future HMSO will be adding explicit links to Commencement Orders, and where legislation implements an EU Directive, a link also to that Directive.

37. HMSO/OPSI and SPO will continue to work together and with government's online legislation visitors, to improve the service and ensure that UK legislation is available in a high quality and straight forward terms, with a freely available and powerful search."

72. The aim is laudable, indeed imperative, but there is a long way to go and meanwhile the volume of legislation advances apace. It is a serious state of affairs when the relevant legislation is not accessible, the Government's own public information website (OPSI) is incomplete and the prosecution in an excise case unintentionally misleads the court as to the relevant Regulations in force. Although the problem has in this case arisen in an excise context, it is part of a wider problem of substantial constitutional importance.
73. Mr Cammerman, there is the case of Dennard, who abandoned his application for leave to appeal.
74. MR CAMMERMAN: My Lord, yes.
75. LORD JUSTICE TOULSON: In our view this judgment ought to be made available to his advisers in order that they may consider what course, if any, they may wish to take.
76. MR CAMMERMAN: I myself will ensure that Mr Dennard's counsel receives a copy of the judgment when I do.
77. LORD JUSTICE TOULSON: Yes, thank you very much indeed.
78. Are there any other matters? Mr Cammerman, thank you.
79. ______________________________