England and Wales Court of Appeal (Criminal Division) Decisions

COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM SNARESBROOK CROWN COURT
HIS HONOUR JUDGE KENNEDY
T 20078210

		Royal Courts of Justice Strand, London, WC2A 2LL
		04/02/2010

Lord Justice Hughes :

1. These two applicants were two of a total of eight men who pleaded guilty to conspiracies to produce large quantities of counterfeit banknotes, both sterling and euro. As in the case of some of the other defendants, the Judge was asked to, and did, make Serious Crime Prevention Orders ("SCPO"s) under the Serious Crime Act 2007. Each of these defendants contends that in his case he was wrong in principle to make such orders.

Serious Crime Prevention Orders.

2. These orders are preventive orders, designed, according to the statute, "to prevent, restrict or disrupt" defendants in the commission of serious crime. An application for such an order can be made to the High Court without the need for prior conviction (see section 1), but the statutory power with which we are concerned is one which is conferred on the Crown Court following conviction, and not otherwise. It is to be found in section 19. The necessary pre-conditions for making such an order are three.

i) The defendant must have been convicted of a serious offence committed in England and Wales. For this purpose, a serious offence will generally be one of those listed in Schedule 1 Part 1. Broadly, those offences are ones aimed at substantial gain. They include drugs, arms and people trafficking, armed robbery, money laundering, fraud, various revenue offences, corruption and bribery, counterfeiting, blackmail and certain intellectual property offences. They also include certain prostitution and sexual offences involving organisation. There is a residual power to treat a particular case involving an unscheduled offence as serious if the court considers that it ought to be so treated: section 2(2)(b). Counterfeiting, it will be observed, is a scheduled offence.

ii) The application must be made by the DPP, the Director of the RCPO, or the Director of the SFO: sections 19(6) and 8(a). For this purpose the general delegation in section 1(6) & (7) Prosecution of Offences Act 1985 under which all Crown Prosecutors may exercise any powers conferred on the DPP does not apply; instead there is a specific power in Schedule 2 paragraph 2(1) enabling particular delegation to individual Crown Prosecutors. There are similar provisions relating to delegation by the Directors of the RCPO and SFO. The Attorney General gave an assurance in Parliament (4 & 25 March 2007, Hansard col 674) that only express delegation would be permitted and then only to those with suitable training and expertise. Currently under CPS guidance, the delegation in relation to Crown Court applications is limited to Chief Crown Prosecutors and Heads of HQ divisions.

iii) the court must have reasonable grounds to believe that an order would protect the public by preventing, restricting or disrupting involvement by the defendant in serious crime (as defined in section 2 and Schedule 1) in England and Wales: s 19(2).

3. By virtue of s 19(6) and ss 6-15, certain restrictions apply to such orders.

i) the defendant must be at least 18: s 6;

ii) the order may require the defendant to give written information, but not oral: s 11;

iii) it may not require him to give privileged information nor to divulge material which would be 'excluded material' within s 11 Police and Criminal Evidence Act 1984 nor to reveal matter of which disclosure is prohibited by another statute: ss 12-14;

iv) a statement made by a defendant under the compulsion of such an order cannot be used against him in criminal proceedings except for breach of the Order, or by way of cross-examination upon an inconsistent statement made in evidence: s 15;

v) the order must specify when it begins (which may be upon release) and must be for a defined period; the maximum length is 5 years: s 16.

4. Proceedings relating to a SCPO (in whichever court) are, by section 36 civil proceedings. The court is not limited to evidence which would have been admissible in the criminal prosecution. The Crown Court may, if it appears right to do so, adjourn this part of the proceedings for consideration after sentence has been passed. That section also provides that the standard of proof is the civil standard. We have heard no argument upon, and say nothing about, whether the House of Lords decision in R (McCann) v Crown Court at Manchester [2002] UKHL 39, [2003] 1 AC 787 applies to require, on pragmatic grounds, the application of what is effectively the criminal standard. The CPS guidance assumes that it will. In the context of Crown Court applications this question is not likely to be crucial, since the conviction for a serious crime offence will be a fact incapable of dispute and the remaining issue, whether there are reasonable grounds for believing that an order would protect the public by preventing, restricting or disrupting involvement in serious crime, is a matter not of disputed fact but of judgment and assessment of future risk.
5. There is no power in the Crown Court subsequently to vary the order, unless the defendant is brought back for breach or is convicted of a further serious offence (as defined), and then only at the instance of the applicant prosecutor, not the defendant: ss 20 and 21. The High Court has a more general power to vary any order made. Either the Crown or the defendant may apply for High Court variation, but the defendant has to show a change of circumstance before his application may be entertained: s 22(2) and 17(3) & (4).
6. There are provisions in section 9, which do not concern us in this case, for third parties who consider that they may be affected adversely by an order, to be heard by whichever court has an application before it.
7. If the order is made, breach of it is a criminal offence carrying imprisonment up to five years: s 25.
8. A Crown Court order may be appealed to this court, with leave of this court or, if exceptionally the case is appropriate for it, with the certificate of the trial judge: section 24. By the Serious Crime Act 2007 (Appeals under s 24) Order 2008, 2008 No 1863, article 4, the jurisdiction on appeal is limited to review; this court does not substitute its own view for that of the judge. It will quash or vary the order if satisfied that it is wrong or is unjust because made after serious procedural or other irregularity.
9. The vital provision is section 19(2). The order may be made if but only if the court has reasonable grounds to believe that an order would protect the public by preventing, restricting or disrupting involvement by the defendant in serious crime (as defined in section 2 and Schedule 1) in England and Wales. It follows that the court, when considering making such an order, is concerned with future risk. There must be a real, or significant, risk (not a bare possibility) that the defendant will commit further serious offences (as defined in s 2 and Schedule 1) in England and Wales.
10. If an order is made, it may contain such provisions as the court considers appropriate for the purpose of protecting the public by preventing, restricting or disrupting involvement by the defendant in serious crime (as defined) in England and Wales. Unlike some statutory provisions for the making of preventive orders (for example anti-social behaviour orders under s 1C Crime and Disorder Act 1998 or sexual offences prevention orders under s 104 Sexual Offences Act 2003), this one is not expressly couched in terms of necessity. But we doubt that the different form of words makes a significant difference in practice. It was common ground before us that the principles set out by this court in R v Mee [2004] 2 Cr App R (S) 81 at 434, in the context of the similarly worded power to make travel restriction orders under s 33 Criminal Justice and Police Act 2001, apply equally to SCPOs. Such orders can be made only for the purpose for which the power was given by statute. And they must be proportionate. The necessity for orders to be proportionate also follows from the fact that they will almost inevitably engage Article 8 of the European Convention on Human Rights. They will satisfy the requirement in Article 8(2) for the order to be made according to law, because they are made within a statutory structure, but, as that Article is now understood, it requires further that they must be proportionate: see the authoritative expression in EB (Kosovo) v SSHD [2008] UKHL 41, [2009] 1 AC 1159, per Lord Bingham at paragraph 7, of the questions which arise under Article 8:

"(1) will the proposed [order] be an interference by a public authority with the exercise of the applicant's right to respect for his private...life ? (2) if so, will such interference have consequences of such gravity as potentially to engage the operation of article 8 ? (3) if so, is such interference in accordance with the law ? (4) if so, is such interference necessary in a democratic society in the interests of….the prevention of disorder or crime….. ? (5) if so, is such interference proportionate to the legitimate public end sought to be achieved ?"

That means that it is not enough that the order may have some public benefit in preventing, restricting or disrupting involvement by the defendant in serious crime; the interference which it will create with the defendant's freedom of action must be justified by the benefit; the provisions of the order must be commensurate with the risk.

11. Much of what this court said in Boness [2005] EWCA Crim 2395, [2006] 1 Cr App R (S) 120 at 690 on the topic of another form of preventive order, the Anti-Social Behaviour Order, will apply equally to SCPOs. In particular, that decision examines the application of the test of proportionality, and emphasises the importance of the order being practicable and enforceable and satisfying the test of precision and certainty. Preventive orders of this kind in effect create for the defendant upon whom they are imposed a new criminal offence punishable with imprisonment for up to five years. They must be expressed in terms from which he, and any policeman contemplating arrest or other means of enforcement, can readily know what he may and may not do.
12. Like other forms of preventive order, a SCPO is not an additional or alternative form of sentence. It is not designed to punish. It is not to be imposed because it is thought that the defendant deserves it. It may be imposed if but only if the test set by s 19(2) is met.

The defendants' offences

13. It is not necessary to describe in great detail the counterfeiting operation of which these defendants were part. It was carried out on a commercial scale. It began in Scotland and was subsequently moved to London, apparently to speed up production. It involved the investment of several thousand pounds in equipment, especially in connection with applying foil security features to the notes. Purchases of materials were made in false names constructed, with addresses, for the purpose. At one time the conspirators made use of commercial printing premises; in addition to what was known, there must have been an original printing source which remained an undisclosed secret, as did some sources of machinery or printing dies. However, some parts of the operation could be, and were, accomplished using generally available domestic/business computer and copying apparatus. The team used a process not previously detected for the making of the sterling notes. The period of the conspiracies was said to be from October 2006 to July 2007. Arrests in Scotland of others concerned with that end of the operation had not deterred its continuation in England. Both sterling £20 and euro €50 notes were manufactured. It could not be known how much counterfeit currency had been put into circulation during this roughly 9 month period, but an indication of the scale of the operation was that there were recovered, either still in stock and awaiting distribution or detected in circulation, notes with a face value of just under £2m.
14. Hancox was born in August 1925. He was 81-82 when engaged in the counterfeiting operation and is 84 now. He has some 15 previous convictions for dishonesty, the last in 1992; some led to imprisonment. His London flat was used for the crucial foiling process. In the last month before arrest he moved this part of the operation to a lock up garage. He was heard suggesting that a colourable agreement for renting out the garage should be created, plainly to make association and detection more difficult. On arrest he denied that he had any such garage and, when it was found, advanced a series of patently untruthful accounts of his involvement; such accounts continued in interview by the police and, following a late plea of guilty after an (unsolicited) indication of likely sentence, to the probation officer. In addition to his involvement in this operation, searches of his flat disclosed clear evidence of a separate activity of his manufacturing counterfeit DVDs of copyrighted films and proposing to develop a 'franchising operation' in relation to them. On grounds of his age and his fragile health, the Judge imposed a nine month suspended sentence.
15. Duffy was 57 at the material time and had no previous convitions. He had been in business on his own account in several fields throughout his working life. In the counterfeiting operation he had a co-ordinating production management role. He kept detailed lists of production. He had recruited Hancox and also another of the defendants. He took a personal part in the distribution of finished notes via others and also in laser printing and foiling. On pleas of guilty, he was sentenced to 3 years 9 months in prison.

The Orders made

16. Some parts of the orders made were common to both these defendants. Those were (in summary only):

i) a prohibition on buying, owning or possessing a printer, photocopier or scanner, other than a bubble-jet printer, and a requirement to notify the SOCA of the make and model of any such acquired;

ii) a prohibition on buying, owning, possessing, using or controlling any foiling materials;

iii) a requirement to notify the SOCA of any premises owned, occupied, rented, leased or otherwise used for storage;

iv) a requirement to notify the SOCA of any vehicle to which he has regular access or controls;

v) a requirement to notify the SOCA of any change of name or address or of any application to appeal, vary or discharge the order.

17. In the case of Hancox, the order additionally prohibited him from buying, owning, possessing or using any form of device capable of making a copy of a DVD or CD, other than a computer.
18. In the case of Duffy, the order additionally prohibited him from owning, possessing or controlling more than one mobile communication device (specifically defined), from subscribing to more than two internet service providers (one by landline and one by mobile) and required him to notify the details of any mobile device or ISP contract used by him.

Argument

19. For Hancox the principal contention of Miss Nott was that the making of any order was wrong in principle because his age and ill health were such that there existed no risk that he might commit any further serious offence. She contended in addition that the Judge had wrongly departed from an assurance given by him at the time of making a Goodyear indication as to sentence that, in the absence of investigation at trial, he would accept the medical evidence proffered. Thirdly, she contended that the judge was wrong to depart from the assessment of the probation officer of low risk of reconviction.
20. It is certainly true that Hancox has a number of potentially very serious health conditions. He has a longstanding heart condition, a chronic lymphocytic condition, osteoarthritis especially in one knee, and prostate cancer in remission. There was also a diagnosis of a moderate depressive episode in the pre-trial period. His mobility is certainly significantly limited, although whether to quite the extent that his self-reporting indicates is perhaps less clear. The lymphocytic condition was reported as one which might or might not require treatment. The heart condition brings breathlessness with it and was said to carry a roughly 10% risk of an acute attack. We accept that none of his principal conditions is likely to improve and that it may well be that some are worsening. Sadly, it may be true that in due course one or more of these conditions may prove terminal. In the meantime, however, neither age nor any of these conditions had prevented him from taking an active part in two different forms of counterfeiting, nor was he prevented from travelling. The Judge did not disregard the medical reports, which were directed to the question of how the defendant would stand up to the process of trial. His passing observation that reports sometimes suggested that people would be unable to do what history demonstrated they had done came nowhere near Miss Nott's suggested interpretation that he found that the highly qualified medical consultant authors in this case were 'charlatans'. The probation officer's assessment of the risk of reconviction was no doubt based upon the model provided to her, but it appears to have contained no weighting for the desire to make money and it had to be considered by the judge alongside the other evidence, some of it in the form of video recording of observations, of what the defendant had done. The ultimate assessment of risk in these cases is for the judge and not for the probation service. We agree that the defendant's medical condition was relevant. We do not agree that in this case it demonstrated that the risk that he would commit further serious offences, particularly of counterfeiting, was negligible. The judge was entitled to come to the conclusion that he did.
21. We have also considered carefully whether the specific restrictions placed upon the defendant were proportionate. They were tailored to what he had done and might do again. They were clearly designed, in the terms of the statute, to disrupt any future commission of a serious offence. To make it clear to a defendant that he is being monitored in his relevant activities is a legitimate aim of a SCPO. Miss Nott's principal contention, if her primary argument as to risk did not succeed, was that the prohibition on possession of a scanner would be disproportionate because it would prevent the defendant from scanning into his computer his various letters of medical appointments and he was unable to keep handwritten records because of arthritis. Like the judge, we are unable to see why the alternative of typing the details of appointments into his computer is not perfectly satisfactory.
22. In the case of Duffy, we reach the same conclusion that the probation officer's assessment of risk of reconviction as low did not bind the judge, and for similar reasons. We do not think that the judge can be criticised for deciding that a five year order beginning with release from prison was appropriate, and we do not accept the proposition that because the defendant will achieve pensionable age within this period that is a significant reason not to make the order.
23. We have given some thought to the terms relating to the notification of mobile telephones and ISPs. The reason for them, we are told, was that Duffy had had a communications role in these offences, particularly using mobile telephones. We are acutely conscious of the potential for interference in private life which any restriction on private communications may entail, and we would not wish it to be thought that provisions such as these will always be proportionate, still less that they should become standard clauses in a SCPO. However, any further investigation of the defendant's communications would necessarily entail separate authorisation by the processes provided for by the Regulation of Investigatory Powers Act 2000 ("RIPA"), whether by way of examination of 'billing' or 'cell-site' material (ss 21 & 22 with Regulation of Investigatory Powers (Communications Data) Order 2003, SI 2003/3172) or, if a genuine case for it were shown, interception (RIPA 2000 Part I Chapter 1). We are in the end satisfied that in Duffy's case an order requiring him to notify his means of communication by mobile telephone or internet was proportionate to his demonstrated role in these offences and risk of future offending, and was properly designed to serve the end of disrupting or preventing his involvement in any further serious crime.

Conclusions

24. For those reasons, as we announced at the end of the hearing, the appeals of both defendants will be dismissed.