England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM CROYDON CROWN COURT
HH Judge Gower QC
T 2013 0042

		Royal Courts of Justice Strand, London, WC2A 2LL
		10 February 2017

Lord Justice Simon:

1. This is a prosecution application under s.31(2) of the Proceeds of Crime Act 2002 ('POCA') for leave to appeal against a ruling by HH Judge Gower QC, sitting at Croydon Crown Court, made on 12 November 2015, in which he refused to find retrospectively that there were 'exceptional circumstances' within the meaning of s.14(4) of POCA, and dismissed the prosecution application for a confiscation order. The application has been referred to the full court by the Registrar.
2. On 25 February 2013, the respondent (whom we shall refer to as the defendant) pleaded guilty to possession of a controlled class A drug with intent to supply, contrary to section 5(3) of the Misuse of Drugs Act 1971.
3. The police had executed a search warrant at the defendant's home on 13 December 2012. Various items were seized including several packages containing cocaine, mixing agents, a drugs press and approximately £16,000 cash. In interview he accepted that the drugs and other items were his, but said that he mixed the drugs himself, sold them irregularly to about 20 builders at his work place and used the profit to pay for his own drug use. It was on that basis that he entered his plea. This was not accepted by the prosecution, and a trial of the issue was directed.
4. On 19 September 2013, 7 months later, the Court found that the supply was on a commercial basis; and on the same day the defendant was sentenced to a term of 42 months imprisonment, with orders for forfeiture and destruction of the drugs.
5. A timetable for confiscation proceedings was set, which required the provision of information from the defendant (under s.18 of POCA) by 29 November 2013, a s.16 statement of information by the prosecution on 31 January 2014 (9 weeks later), and a defence s.17 response to the statement of information by 30 April 2014 (3 months or so thereafter). Any final answer from the prosecution was to be served by 14 May 2014, and a date for mention was fixed for 28 May 2014.
6. The period of 2 years from the date of conviction was 24 February 2015; and if this timetable had been adhered to, the confiscation application could have been easily dealt with within the 2-year period from the date of conviction as required by s.14(5).
7. However, the provision of information under s.11 was not given by the defence on 29 November 2013, but on the 2 February 2014, over 10 weeks late. Notwithstanding this delay, the prosecution served its s.16 statement of information on 3 March, within 18 days, rather than the 9 weeks allowed under the directions.
8. Following the timetable, the defence response should have been served 3 months later, at the beginning of June 2014. In fact, the defendant changed his solicitors, and on 28 May 2014 the new solicitors proposed a revised timetable with a defence response by 9 July 2014, the prosecution answer on 13 August, any further response from the defence by 27 August, and a mention hearing on 19 December 2014.
9. The mention hearing was brought forward to 12 September 2014, due to a failure by the defence to serve the s.17 response; and on that date a further timetable was set with the s.17 defence response by 7 November, the prosecution answer by 5 December and a mention hearing fixed for 19 December 2014.
10. The mention hearing on 19 December 2014 was concerned with the continuing failure of the defence to serve its response; and a yet further timetable was set with the s.17 defence response by 30 January 2015, the prosecution answer by 27 February and a hearing fixed for 15 May.
11. As we have noted, the 2-year period following conviction expired 25 February 2015, although nobody appears to have picked up the point.
12. No hearing took place on 15 May 2015, because the defence applied to adjourn the hearing. The case was taken out of the list administratively and HHJ Tanzer gave directions setting a new timetable. The defence was to provide evidence of value under the transfer assumption, together with an up-to-date assessment of realisable assets by 12 June 2015. Any further s.16 statement was to be provided by the prosecution by 10 July, and the confiscation hearing was set for 17 August 2015. As we understand it, the Judge indicated that the hearing 'must' go ahead on that date.
13. On Monday 17 August 2015, the confiscation proceedings were listed for hearing before Mr Recorder Bruce.
14. Two committal cases were also listed prior to the confiscation proceedings. Counsel (not Mr Mullins) was instructed for the prosecution in both these cases as well as in the POCA hearing. These took longer than expected; and it was not until shortly before the midday adjournment, at about 12.40, that the parties were called into court.
15. Counsel for the prosecution applied for an adjournment. She had been instructed late, and informed the court that she had not had sufficient time to absorb the content of the bulky confiscation documentation, which filled several lever arch files. It appears that the CPS had failed to send the papers to counsel's chambers. Counsel pointed out that, given the complexity of the matter and that it was intended to hear from four witnesses, the time estimate for the hearing was a full day, which was no longer available. She noted that the matter ought to have gone ahead on 15 May 2015, but that the proceedings had then been adjourned due to a lack of information provided by the defence. She submitted (wrongly, as it is now acknowledged) that the 2-year time limit had not yet expired, since the time ran from the date of the Newton hearing (namely 19 September 2013) and thus the time limit did not expire until 19 September 2015.
16. Defence counsel, then as now, Ms Freeman, opposed the application to adjourn. She submitted that the only reason the prosecution was not in a position to proceed was that the CPS had not properly instructed counsel to attend and represent it. She observed that prosecuting counsel had been instructed in other matters before the court during the morning, and this was the reason why, at 12.40, there was insufficient time remaining for the confiscation proceedings to proceed. She also submitted that, notwithstanding the earlier acceptance that 19 September 2015 was the expiry date, the 2-year time limit had actually expired on 25 February 2015. For these reasons, the hearing should not be further postponed.
17. The Recorder noted that the issue of whether time had already expired had not been flagged up until the hearing. Prosecuting counsel had been faced with bulky additional papers and the information that there were four potential witnesses at a very late stage. This was the first time the prosecution had requested an adjournment, and the defence had been responsible for a considerable amount of delay within the confiscation timeframe. The two committals that had been listed in court earlier in the day had taken considerably longer than anticipated and it was clear that there was insufficient time to complete the confiscation hearing. In these circumstances, he ruled that the proceedings would be adjourned so that all matters could be dealt with at the same time in a proper manner.
18. It was in these circumstances that the confiscation proceedings came before HHJ Gower on 12 November 2015. The Judge found that the relevant period had expired on 25 February 2015, and refused to extend the two-year time limit in which to make a confiscation order. He recorded Mr Mullins's submission that the Court should find that there were exceptional circumstances for extending the two-year time limit under section 14 of POCA. He referred to the chronology and the judgment of this court in Johal [2014] 1WLR 146. In his view, it was clear that the prosecution had laboured for a long time under the mistaken belief that the two-year time limit ran from the date of sentence rather than the date of conviction. Neither on 15 May 2015 nor at the hearing on 17 August 2015 had it been realised that the two-year time period had already expired. It was clear that the hearing could not take place on 17 August 2015 because counsel had not been in a position to conduct the case and no argument had been put forward for a finding of exceptional circumstances such as would have justified an extension under section 14. He noted the defence concession that if the matter had proceeded on 17 August 2015, they would have accepted that exceptional circumstances existed in view of the delays by the defendant, but that by 17 August 2015, the prosecution had had sufficient time to prepare and ensure that counsel was properly instructed with all the relevant papers. The defence submitted that the prosecution failures and the circumstances of what occurred on 17 August could not amount to exceptional circumstances. The Judge also recorded the further defence submission that, although prejudice to the defendant did not become relevant unless exceptional circumstances were found, there would be prejudice to the defendant who was paying privately for his representation and would incur the costs of an additional hearing.
19. We have set out these arguments because they were broadly replicated in the submissions before us.
20. The Judge recognised that a broad approach should be taken as to what constituted 'exceptional circumstances' in s.14 of POCA and that, although adherence to the timetable was an obligation, the approach to failure to comply should reflect the intention of Parliament, which was that confiscation proceedings should go ahead without technical problems of timing and timetabling acting as a bar to recovery. The court should not be deprived of its duty to make an order by a breach which did not prejudice the defendant.
21. In view of what happened in the lead up to the August 2015 hearing, the Judge was wholly unpersuaded that there were any exceptional circumstances that applied to the case, such as would enable him to allow an extension. Although in the light of this finding, it was not necessary for the defence to prove they had been prejudiced, he concluded that the defendant had inevitably been prejudiced by the fact he had to pay for two hearings instead of one. He concluded that he was not entitled, nor would it be right, to extend the time limit, and the confiscation proceedings would therefore be dismissed.
22. On this appeal the prosecution advances a number of criticisms of the ruling. First, it was inconsistent with the finding made by the Recorder at the 17 August hearing that the need for an adjournment was 'nobody's fault' and that, even if the hearing had started at 10.30, it would not have been accommodated within a day.
23. Secondly, the Judge's conclusion that, if the prosecution had properly had the time limits in mind, the court's timetabling would have been structured so as to ensure that the hearing would have taken place within the two-year period did not take into account the numerous breaches by the defence of all five sets of timetabling directions set by the court.
24. Thirdly, the consequence of the Judge's approach would be that a defendant would not have any incentive to comply with timetabling directions since, if the defence could push the timetable beyond the two-year point then any single mistake by the prosecution could bring the confiscation proceedings to an end. This could not have been Parliament's intent. In any event, the defence suffered no real prejudice from the adjournment on 17 August, which could not be met by an adverse order for costs.
25. In answer, Ms Freeman submitted that the prosecution was trying to blame the Court for there being insufficient time to hear the case, and that this was impermissible. The only issue was whether a failure by the prosecution properly to instruct competent counsel in the three months following Judge Tanzer's order on 15 May 2015 established 'exceptional circumstances.' She submitted that it did not. If prejudice were required (which she did not accept) it was clearly demonstrated, since even if a costs order were made (and it had been refused at the conclusion of the 17 August hearing) it would not eliminate the prejudice suffered.
26. We have considered these submissions and the Judge's ruling.
27. Section 6 of POCA provides for the making of a confiscation order; and s.14, headed 'Postponement', provides:

(1) The Court may –

(a) Proceed under section 6 before it sentences the defendant for the offences (or any of the offences) concerned, or

(b) Postpone proceedings under section 6 for a specified period.

(2) A period of postponement may be extended.

(3) A period of postponement (including one as extended) must not end after the permitted period ends.

(4) But subsection (3) does not apply if there are exceptional circumstances

(5) The permitted period is the period of two years starting with the date of conviction.

28. The cases concerning the operation of s.14 recognise the tension between the prompt resolution of confiscation proceedings (within 2 years of conviction) and the practical difficulties that this may cause. They also recognise the imprecision of the statutory phrase, 'exceptional circumstances'.
29. Soneji [2006] 1 AC 340 was a case which was concerned with the previous statutory provision dealing with 'exceptional circumstances': s.72A of the Criminal Justice Act 1988 (as amended). At [24] Lord Steyn highlighted the 'public interest in not allowing a convicted offender to escape confiscation for what were no more than bona fide errors of the judicial process.'
30. In Guraj [2017] 1 WLR 22 (SC), Lord Hughes JSC commented on the possibility of a review of the statutory sequencing of sentencing and confiscation, and the status of the procedural requirements in POCA.

36.              Enough has been said to show that Lord Steyn's prediction in Soneji (see para 1 above) was sadly entirely accurate. The Law Commission has expressed interest in reviewing the confiscation legislation. It may be that amongst the topics which would merit review are (1) the best way of providing realistically for the sequencing of sentencing and confiscation and (2) the status of procedural requirements in the Act.

37.              The Act must, however, be obeyed as it stands. Confiscation proceedings are particularly susceptible to drift. They must not be allowed to suffer it. They need not always be complicated, and efforts should be made by the Crown, as well as the courts, to simplify them. It will often be in the interests of defendants to delay. In overstretched police and CPS offices it may often be tempting to give priority to something other than confiscation. Courts have got to be alive to these realities. It may help to echo the useful practical guidance offered by Irwin J, giving the judgment of the Court of Appeal (Criminal Division) in Johal:

48. ... We re-emphasise the message given at para 13 by this court in R v T [2010] EWCA Crim 2703. The fact that the courts will not wish to see the intention of Parliament defeated by technical points taken to stave off meritorious confiscation orders, does not mean that the obligations under the Act can be taken lightly. It is essential that listing officers, acting as they do on behalf of judges and discharging a judicial function delegated to them for day-to-day administration, pay close regard to the procedural steps laid down in section 14. Listing officers should be aware of the necessity to adhere to the two-year limit. They should be alive to the risk that the parties may not alert them to such a problem. They should be aware of the requirement to consider whether there are exceptional circumstances before a postponement beyond two years is granted. They should be aware of the obligation not to postpone generally but to specify a date when there is to be a postponement. It would be wise for listing officers to consult the resident judge when any such problem is likely to arise. It would also be wise to keep a record of what was taken into consideration at the time, and in particular whether any exceptional circumstances arose which justified postponement.

31. The passage in Johal highlights that the hearing of POCA applications will engage a duty on the prosecution, the defence, and Court listing officers (who act on behalf of Judges in listing applications) to pay close regard to the procedural requirements of s.14. We would add that those duties reflect the duties set out in the overriding objective in CPR Part 1.
32. In Johal the Court posed three questions. The first of these questions was: what is the proper approach to the application of the requirement in s.14(4) of exceptional circumstances? Having reviewed a number of authorities, the Court said this:

39. Standing back from all the authorities, it is clear in our judgment that the intention of Parliament was that a broad approach should be taken to what constitutes 'exceptional circumstances'. Indeed, in the approach to section 14 generally, Parliament's intention must be taken to be to ensure that confiscation proceedings go ahead and are effective without technical problems of timing and timetabling acting as a bar to recovery. Adherence to the timetable is an obligation, as we shall re-emphasise later in this judgment, but the approach to strict failures to comply should reflect that intention of Parliament.

33. This passage indicates that Courts should adopt an approach which keeps in balance the importance of the prompt resolution of the confiscation proceedings (within 2 years of conviction) and the practical difficulties of timing and timetabling that this may involve.
34. It is also clear from Johal, at [38], that where the court adjourns a case before the expiry of the permitted time, without a consideration of whether there were exceptional circumstances, it is permissible for the court subsequently to conclude that there had been exceptional circumstances at the time of the adjournment, see also R v. T [2010] EWCA Crim 2703.
35. We doubt that it is either possible or desirable to provide an all-embracing definition of what may amount 'exceptional circumstances', but a consideration of the circumstances will plainly involve looking at the entire history of the proceedings to see whether circumstances exist which may exceptionally justify a postponement.
36. It is clear in the present case that there were circumstances which justified postponing the proceedings on 19 December 2014 and 15 May 2015; and it follows, as Ms Freeman accepted, that if the hearing had proceeded on 17 August 2015 exceptional circumstances could have been relied on retrospectively to postpone the period from February to August 2015.
37. If it were otherwise, a defendant would be able to contrive delays beyond the two-year period which could result in the confiscation proceedings being dismissed thereafter.
38. To see why the hearing did not proceed on 17 August it is necessary to consider another passage in the ruling of Mr Recorder Bruce:

On the 9 July this year, the Crown Prosecution Service wrote to say that the addendum to the section 17 response, which had been ordered on the 15 May and which was due by the 12 June, had not then been served. That left, they said, the prosecution with insufficient time for the investigator to produce his report by the 10 July. That response was submitted on the last working day of last week, Friday, the 14 of August, and I have considered that response.

It is self-evident that the parties are very substantially apart as to the benefit enjoyed. The defendant has produced a mass of paper including, on my preliminary perusal, some limited detail in respect of rental income. The Crown criticise the disclosure, suggesting that figures are unsupported by evidence and at variance with other documents.

I have also looked, very briefly, at the short addendum, indicating that the total pages now run to no fewer than 268 pages. In addition, in the judge's file, I find 104 pages of spreadsheet analysis.

My consideration of the papers has been limited in time, but I have to say candidly that I am presently at a loss to understand how this quantity of complex paperwork in what has been described - and I think rightly described - as an intricate and complicated investigation could ever be dealt with within the timescale originally provided.

39. The evidence that the confiscation could not have been heard on 17 August is clear. Even if the prosecution had been properly prepared for the hearing, there was insufficient time to conclude the hearing as a result of the listing of prior cases and a time estimate of 1 day which was plainly an underestimate.
40. There were a number of reasons why Judge Gower did not regard the circumstances as exceptional. (1) The prosecution should know when the relevant period starts and when it will expire, so that the court can be kept informed. (2) As at 17 August 2015, there had been considerable delay: 'the blame being fairly and squarely' due to the defence. Nevertheless, (3) this did not absolve the prosecution from ensuring that they had their own case in order. (4) The longer the delay, the more imperative it is that the prosecution is in a position to go ahead. (5) The Prosecution should have been in a position to go ahead on 17 August and they were not. (6) It followed that there were no exceptional circumstances which could justify postponing the hearing. (7) It was not necessary to show prejudice to a defendant, but if it were, the fact that the defence was privately funded inevitably gave rise to prejudice.
41. As to these points, we agree with points (1)-(3) and (5). So far as (4) is concerned, if the Judge had said that delays should be minimised and that it is the task of the court and the parties to ensure that this is so, then we would agree, although we see no proper basis for placing an additional burden on the prosecution to make up for delays caused by the defence.
42. It is with points (6) and (7) that we disagree. In our view the Judge paid insufficient regard to the delays caused by the defence before 17 August 2015. On the basis of what was said in Johal, it was necessary for the Judge to have regard to all the circumstances; and these included the fact that if the court's timetabling directions had been complied with by the defence the confiscation hearing could have been heard within the two-year period.
43. The Judge was rightly critical of the prosecution for instructing inexperienced counsel who would have found herself in difficulties if the application had gone ahead; and we would emphasise that those who are instructed in confiscation hearings are competent to do so. Nevertheless, at least some difficulties had been caused by the late lodging of defence papers (as Mr Recorder Bruce had recognised); and he had concluded that the hearing should not begin in view of the late start and the necessary adjournment at the end of the day, with all the listing difficulties of re-fixing before a part-time judge that this might involve. The parties recognised on 17 August that the hearing would last two days, and it was fixed on that basis.
44. We would add, that there was no unfairness to the defence in adjourning the application. Seven months of the 24-month period (from February to September 2013) had been spent in dealing with the defendant's dishonest explanation for his possession of the drugs; and every breach of court orders during the period of 19 months (from November 2013 to May 2015) was caused by the defence. In short, the prosecution was not at fault during any period up to the expiry of the 2-year time limit. Furthermore, any prejudice to the defence from the adjournment could have been met with a costs order or an abatement of any sums which were ultimately found to be payable in the confiscation proceedings, if that were justified.
45. Without repeating what was said in Johal at [39], we would again emphasise that confiscation hearings are an important part of the Crown Court's function; and should be given the proper focus and priority that are called for in the light of the statutory time limits. We would add that it is good practice for courts to schedule readiness hearings a week or so before the date fixed so as to ensure that the parties are ready to go ahead, and, if necessary, direct that skeleton arguments be exchanged in good time so as to identify the matters in issue at the hearing.
46. Section 32 of POCA sets out the Court's power on appeal. In relation to an application under s.31(2) of POCA, as this is, s.32(2)(b) provides that the Court may direct that the Crown Court should proceed afresh under s.6 if it considers that the decision of the Crown Court was wrong.
47. For the reasons we have given we consider that the ruling made on 12 November 2015 was wrong and we direct that the Crown Court proceeds afresh.