England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL
CRIMINAL DIVISION

		Royal Courts of Justice Strand London, WC2A 2LL
		Monday, 7th February 2011

1. SIR DAVID CLARKE: The appellant is aged 29.
2. On 10th June 2010 he was charged with offences of fraud in a case investigated and prosecuted by the Serious Fraud Office. On 14th June, four days later, in the Central Criminal Court, on an application made by the SFO, a restraint order was made against him pursuant to section 41 of the Proceeds of Crime Act 2003. This prohibited him from dealing with, disposing of or diminishing the value of his assets, with certain exceptions for living expenses and the like. It was a detailed order in conventional terms requiring him also to disclose all information about his assets, including specific requirements to disclose all assets worth over £1,000 transferred to others since May 2005 and any vehicles owned by him since then.
3. On 22nd October 2010, on the application of the SFO, the appellant was before the court on an application that he be committed to prison for contempt of court for being in breach of the restraint order in five respects. He admitted the five breaches. Four of them related to positive actions which he had taken and which contravened the restraining provisions. The first, however, constituted his continuing failure to give full disclosure as required.
4. Counsel on his behalf sought more time for him to comply with that provision but the judge, reviewing the full history and applying the relevant law and authorities, to some of which we will return, said that enough was enough. He proceeded to impose an immediate custodial sentence of 18 months' imprisonment for breach No 1, the continuing failure to disclose his asset and 6 months' imprisonment concurrent for each of the other breaches. The appellant appeals to this court as of right.
5. The two grounds of appeal as presented in writing were, firstly, that the judge should have held back from imposing an immediate prison sentence but should have given more time for compliance with the disclosure requirement, and secondly that if immediate imprisonment was to be imposed the 18 month term was too long against a statutory maximum of 2 years.
6. The appellant, apart from the false passport offence to which we will refer shortly, is a man of previous good character.
7. The breaches arose in this way. He failed to provide any information concerning his assets within 21 days. However, within a week after the commencement of the order, correspondence ensued between the parties. Eventually, on 15th September a statement of his assets was provided.
8. There were provisions of the order requiring him to provide the names and addresses of all the persons holding such assets including financial institutions or banks. Another paragraph required him to details of all accounts held by him, or in which he had an interest. It is accepted that he did not comply with those provisions. In the statement he said:

"I believe I have one or two bank accounts in Spain, one of which is with BBBA. I can't recall the details of bank accounts in Spain as the paperwork is still in Spain. I also have an account in Cyprus. I believe that all the information relating to this is in Spain still."

9. As regards the provision about transferred assets, he was required to disclose those matters which we have already recited. In fact on 6th January 2009, a matter not referred to in the statement, he had transferred the property in this country in Braintree in Essex to a former partner for no consideration. She sold the property on 28th May 2010 for £535,000. None of that was mentioned in his statement. He also failed to mention an expensive Ferrari motorcar which he had sold within the last 2 years. No supporting documentation was provided as required by the order.
10. That was the state of affairs when the matter came before the court. On 6th July, and this is the second of the breaches, the appellant opened a bank account - this is a month or so after the making of the restraint order - with a false passport in the name of "Rowley" which bore his photograph. He paid £200 into the account and that represented a disposal of an asset in breach of the order.
11. As regards the possession of false passports, he was arrested subsequently, as we shall relate, and he was sentenced to 6 months' imprisonment for an Identity Cards Act offence. Two days after the opening of that account - and this is now breach No 3 - he converted 4,000 Euros into a sum of sterling and paid that into the Lloyds TSB bank account which he had opened. He signed the transfer form in the name "M Rowley", the name on that passport.
12. On 12th July, a few days later - this is now breach No 4 - he went to the Chelmsford branch of Lloyds TSB where he aroused the suspicion of staff. He had £8,500 in cash in sterling and Euros in his possession and a second passport in another name. It was following his arrest on that occasion that he was charged with the false passport offence committed on 6th July. He was dealt with very promptly through the courts for that, being sentenced to 6 months on the 23rd July 2010.
13. The fifth contempt arose on the day after his arrest of the 12th, when £77.50 was paid to the Peterborough Passport Office to apply for a passport under a false identity "Paul Williams Jones". All those breaches the appellant admitted.
14. The judge heard this case carefully. Before imposing the term of imprisonment, he summarised the history of the appellant's failure to give full disclosure. He summarised the four subsequent breaches which we have just summarised, describing them as arguably less serious, and he then went on to direct himself in accordance with the appropriate authorities.
15. It is appropriate to read into this judgment the parts of his sentencing remarks in which he did so. He cited from the Court of Appeal (Civil Division) in Lightfoot v Lightfoot [1989] FLR 414 as follows (in the judgment of Donaldson MR):

"It would be consistent with the previous practice of the courts and give full effect to the modification required by statute if courts considered imposing a 2-year sentence when the contemptor was in continuing and wilful breach of court orders. Whilst there might be cases in which such a sentence would be disproportionately severe, any wilful defiance of the court and its orders is necessarily a very serious offence and if the contemptor is aggrieved he has a remedy in his own hands - he can seek his immediate release by ceasing his defiance, complying with the order thereby purging his contempt."

The judge said:

"I bear those principles in mind."

He went on:

"On his behalf, Mr Lennon submits that Mr Baird should be given credit for his frank admission that he has failed to comply with the order. It is difficult to see how he could argue otherwise. Submission is made that matters should be adjourned to a date after 5 November this year to enable all matters to be considered overall..."

We pause to remark that was the date of next court hearing in the fraud case.

"Mr Baird to give instructions to his solicitors and a further statement to be forthcoming.

This court takes the view that enough is enough. Mr Baird had had since June to comply with the order and instead of complying with the order, it being said on his behalf he wanted to go to Spain to get details of his bank accounts, rather than using more conventional methods to obtain documentation there is, in my judgment, a wilful defiance of the order and continuing willful defiance of the order and a continuing willful breach by Mr Baird.

It is submitted that he has already been sentenced in respect of a passport offence and has served 6 months in respect of that matter, it being imposed on 23 July of this year. It was upon his release from that sentence that Mr Baird was arrested at the gate of the prison and was held in custody.

I take the view that credit should be given to him for his admission of his failings in respect of breach but I do regard this as a very serious contempt of a restraint order. I do not accept the mitigation that this was difficulty over taking instructions, that it was misunderstanding by Mr Baird or that he was not yet in a position to supply the information. I am afraid those submissions do not hold water.

I therefore look at the circumstances here, I take the view that a 2 year sentence is excessive but I do take the view that it is inappropriate to show the Court's displeasure at a continuing and wilful breach."

He then sentenced the appellant to 18 months for contempt No 1 and currently 6 months each for the others.

16. Mr Lennon, in excellent written submissions, supplemented orally before us today, says that the judge's approach was unduly harsh. In writing he submitted that this court should hold that the judge should have given more time. In this court he emphasises the submission that 18 months was excessive. He relies on the fact that the appellant did not turn a blind eye to the order but through his solicitors engaged in correspondence with the SFO and obtained a number of agreed variations. He made some disclosure in September but it is accepted that it was far from complete.
17. Mr Lennon has drawn attention to the dual purposes of imprisonment for contempt of court. It is not only punitive, within which we would include deterrent in many cases, but it is also (and in many cases primarily) coercive, to secure compliance with an order properly made in the public interest. The court should not be thinking primarily in terms of punishment in cases where the primary aim is to secure a full disclosure and thus compliance with the restraint order.
18. We are referred to the dictum of Neuberger J (as he then was) in Shalson v Russo & Ors [2001], who, whilst referring to the factors went on:

"... I suspect in the great majority of the cases where the contempt has not been purged, the most important element in the sentencing exercise is coercion."

He refers to Taylor Made Golf Co v Rata [1996] FSR 528. Laddie J, there held back from imposing a prison sentence after a flagrant breach, subsequently partly purged, and remarked:

"... that the penny was beginning to drop so far as these defendants were concerned."

19. We have considered these arguments. We are not able to accept them in this case. The judge was entitled and, in our judgment, right to say that enough was enough. The argument that there was here engagement with and co-operation with the SFO is, in our view, fatally undermined by the deceptions which the appellant was perpetrating in false names.
20. As to the length of the sentence, the judge was conscious in the light of Lightfoot, that he might have been justified in imposing a maximum of 2 years but he held back on the ground that this was excessively severe.
21. Our attention is drawn to recent decisions of this court, in which the length of sentence for contempt of court for breaching Proceeds of Crime Restraint Orders was reduced. In R v Adewunmi [2008] 2 Cr App R(S) 52, the appellant was sentenced to 18 months for contempt of court, consecutive to a 4-year term for fraudulent trading, in which he had stolen very large sums from a government department in which he had obtained employment by false pretences. He was ordered to repatriate funds which he had transferred overseas and he was in breach of that order. He committed a breach of that order by transferring funds from the USA to Cyprus. That was a very serious case. By the time of the appeal some of the funds had been repatriated. Furthermore there was an addition coercive sanction upon him by then, because after conviction a confiscation order had been put in place with a substantial term in default. In those circumstances we are not persuaded the reduction of the 18-month sentence to 12 months in that case, by this court, is of any assistance to the appellant.
22. In R v Roddy [2010] 2 Cr App R(S) 107, in which the judgment of this court was given by my Lord, Nicol J, a sentence of 20 months consecutive to 7 years for serious drugs offences was imposed for a flagrant breach of a restraint order, committed very soon after the order was made, selling his house, cashing the proceeds and removing them from the jurisdiction. This was a punitive and indeed perhaps also deterrent sentence rather than a coercive one. This court held it was too high, being too close to the maximum term, despite the plea of guilty to this offence. The sentencing judge had been influenced by the adverse view he had formed of the appellant during a trial. But as this court pointed out, that element was already reflected in the 7-year term imposed for the principal offence.
23. We have considered whether that decision is of any assistance to the present appellant. In our judgment, it is not, in a case where the primary purpose of the sentencing exercise was coercive and where the appellant can return to court to purge his contempt. In light of what we have heard it seems that steps are well on the way for such a hearing to take place before long, one attempt to purge having already been made.
24. We have come to the conclusion that the judge in the present case cannot be faulted, either in his decision to proceed or in the length of term which he imposed. It was not disproportionate. It was not manifestly excessive. This appeal is therefore dismissed.