England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT

		Royal Courts of Justice Strand London WC2A 2LL
		24th March 2010

1. LORD JUSTICE TOULSON: The Secretary of State for Work and Pensions challenges the legality of a decision made by Her Honour Judge Downing at Croydon Crown Court on 27 May 2009 to stop confiscation proceedings under Section 6 of the Proceeds of Crime Act 2002 as an abuse of process. The principal question is whether the judge was wrong in law to consider that it would have been an abuse for the court to proceed with the confiscation application in circumstances where the court had on an earlier occasion told the offender that the matter would not proceed if she repaid the benefit obtained by her from her criminal conduct before the date fixed for the hearing of the application and she had done so.
2. The facts may be summarised shortly. On 16 June 2008 Miss Wendy Stubbs pleaded guilty at Bromley Magistrates Court to an offence under Section 111A(1)of the Social Security Administration 1992 of dishonestly making a false representation with a view to obtaining benefit and she asked for 109 other offences to be taken into consideration. In all, she dishonestly obtained income support of £25,703.30 over a period of three years two months from November 2003 to January 2007. It was a bad case because she was not in great financial need, but on the contrary was the owner of more than one property, one which she acquired on mortgage during the period over which she was dishonestly obtaining benefit.
3. The Minister seeks a confiscation order in the sum mentioned, that is £25,703.30. She was sent by the Magistrates to the Crown Court where she was sentenced by His Honour Judge Ainley on 16 June 2008 to 50 weeks imprisonment suspended for two years. At the end of the sentencing hearing he gave directions regarding the confiscation application. He set dates for various steps, beginning with service of an affidavit by Miss Stubbs on 14 July, and culminating in a hearing of the application, which he fixed for 29 September 2008. He continued by addressing Miss Stubbs in these words which have lead to the issue now before the court:

"And, if the payment is made, there won't be any need for it at all [meaning the hearing of the confiscation application].

But bear this in mind, if it gets to the stage where you have not made any or any significant payment and a confiscation order is made by the court the court will fix an amount that has to be paid within the given time. If you don't pay it, you go to prison."

4. Counsel for the prosecution said nothing. There was present also in court a financial investigator from the Department, but she was sitting in the public gallery. On 10 July 2008 Miss Stubbs paid the £25,703.30 by cheque. Concluding that the confiscation hearing would not go ahead she did not serve an affidavit as had been ordered, but on 1 August 2008 the prosecution served a statement under Section 16(5) of the Act identifying her benefit from her offending in the sum mentioned and seeking a confiscation order in that amount.
5. When the matter came back before Judge Ainley Miss Stubbs's legal representatives submitted that it would be an abuse of process for the application to continue. Her counsel said that the prosecution had made a representation on a previous occasion that it would not continue if voluntary repayment can be made. Judge Ainley directed a transcript. When the transcript was obtained it showed that the representation had come from the judge himself rather than from the prosecution. In those circumstances he wisely recused himself and so the matter came before Her Honour judge Downing. She held that the judge had given an unequivocal representation that there would be no confiscation proceeding if she repaid the money, that the prosecution had said nothing to correct what the offender had been told, and that it would be an abuse of process if the confiscation application were to be allowed to continue after she had repaid the money. He also considered that it would be oppressive and therefore an abuse of process for the application to continue in any event, relying for this purpose on the decision in Morgan and Bygrave [2008] EWCA Crim 1323.
6. Certain matters are not contested. Mr Murray for the Minister does not dispute that as a matter of simple English what the judge said did amount to an unequivocal representation that the confiscation proceedings would not go ahead if in the meantime the offender repaid the money. He also realistically and wisely does not dispute that she repaid under the inducement of the representation which the court had made, but he submits that that is irrelevant in law. The prosecution's submissions can be summarised in the following propositions: one, Judge Ainley was wrong to say what he did; two, the Act required the court to hold a confiscation hearing when requested by the prosecution to do so; three, the prosecution was not responsible for his ill-considered remark and not bound by it; four, although the court has a power to stay a confiscation application where it would be an abuse for the prosecution to pursue it, the circumstances in which that jurisdiction may be exercised are very narrow; five, in this case there was no conduct by the prosecution which made it an abuse of process for the prosecution to seek to proceed with its confiscation application; six, Judge Downing's alternative ground for ordering a stay was unsustainable.
7. The first two propositions go together and I have no difficulty with them. I would, however, not wish to sound over critical of the judge for his error in a complex area. It is a paradox that although generally speaking it is in the interests of justice and victims that a wrongdoer should make voluntary repayment of the loss caused to a victim, the provisions of the Act are if anything a disincentive to do so. This is because if a wrongdoer does make voluntary repayment, it is not something that can be taken into account on an assessment of the offender's benefit on a subsequent hearing of a confiscation application. This paradox has been commented upon by the courts in a number of judgments. Most recently in Nelson [2009] EWCA Crim 1573; [2010] 1 Cr App R (S) 82, Lord Judge CJ averted to it and also to the guidance for prosecutors on the discretion to instigate confiscation proceedings published by the Crown Prosecution Service on 28 September 2009. Lord Judge observed that what the court perceived to be a gap in the statutory process was recognised in the guidance, which the court endorsed. He recognised that the discretion not to proceed belongs to the prosecution and not to the court. Referring to the guidance, he observed:

"Where the facts demonstrate that the defendant has voluntarily repaid the proceeds of his crime to his victim and has thus deprived himself of any profit from his crimes, we endorse the guidance relating to voluntary repayment of full compensation in a simple benefit case where the proceeds of crime have not been used to the defendant's wider financial advantage, as consistent with the interests of justice within the statutory context."

Mr Murray submitted that that would not be an apt summary of this case, where the offender had invested the proceeds of her offending in the purchase of a property on mortgage, and I see the force of that submission. That, however, is to my mind a digression from the core issue that we have to decide in this case, which arises from what the judge said at the conclusion of the sentencing hearing.

8. Proposition three is that the prosecution was not responsible for the judge's ill-considered remark and is not bound by it. It is plainly true that the prosecution is not responsible for what the judge said. However the prosecution said nothing to correct it, either then or prior to receiving payment by the offender, which the offender had been led to suppose would be the end of the matter. Why did the prosecution say nothing? Mr Murray is not able to give the court on instructions the answer to that question. There are theoretically three possibilities. One possibility suggested by Mr Murray is that counsel for the prosecution did not hear what the judge said. Absent some positive indication from counsel that she had not heard the judge's remarks, I would discount that suggestion. The two remaining possibilities are that it did not occur to her that the judge had said more than he should or that she did realise that the judge had said more than he should, but for some reason or another decided to remain silent. The last would be unworthy, and Mr Murray rightly suggests we should not draw any such inference. Therefore I approach the matter on the most likely basis, namely that it did not occur to counsel for the prosecution, or for that matter to the department's representative at court (who I recognise was not legally qualified) that the judge had said anything inappropriate.
9. Mr Murray submitted that the principal blame for what happened must lie with the judge, although some blame, he submits, can be attached to both prosecution and defence counsel. For my part while I recognise that defence counsel owes an obligation to correct errors by the judge, I think it would be going too far to say that the defence ought to have challenged what the judge said on this issue when the prosecution were happy on the face of it to let it run. After all the prosecution does have a discretion whether to pursue a confiscation application or not. Be that as it may it seems to me more important to examine the effect on the offender rather than to try to determine the matter by ascribing degrees of blame to the parties concerned. However, it seems me that the probability is that both the judge and prosecuting counsel were operating on an intuitive assumption which was understandable, but erroneous in point of law.
10. Proposition four is that the court's jurisdiction to stop a confiscation hearing which on its face falls within the terms of the Act, on grounds that it would be an abuse of process, is to be exercised very sparingly if the will of Parliament is not to be usurped. That proposition is right, as has been emphasised in a number of cases, and it is therefore necessary to examine with great care whether this is a case where it really would be an abuse of process for the confiscation application to continue.
11. That leads me to proposition five, which is the critical proposition. Mr Murray submitted that it is unfortunate, but immaterial that the judge misled the offender and that she acted on the faith of what she was told by the court. He submits that there was no conduct on the part of the prosecution which made it an abuse of process for the prosecution to wish to proceed. That seems to me to be an unduly narrow approach for two reasons, one of which is more fundamental than the other. As to the first point, I do think that the prosecution have a measure of responsibility for the situation which developed because they did not seek to correct what the judge said. If they had, either then or after the judgment or indeed at any time before payment was made, made plain to the offender's representatives that the judge had overstepped the mark, she would not have been under the misapprehension that she was. However, there is a more important issue, to my mind. What we are concerned about in this case is the integrity of the administration of justice. I recognise that the substantive law in this field is statutory. The court cannot refuse to apply it merely because it is of the opinion that it would be harsh to do so. As I have already said, that would be to usurp the role of the legislature. However, the court does have a responsibility and an inherent power to prevent its own administration of justice from being conducted in a way which would undermine public confidence in its own integrity, and so bring the process of the administration of justice into disrepute. If authority is wanted for that proposition I would refer to the judgments of Lord Diplock in Hunter v the Chief Constable of the West Midlands [1982] AC 529 and Chadwick LJ in Re: Barings PLC [1999] 1 All ER 311, 335-336.
12. In this country great trust is reposed in the courts, and rightly so. It is of great importance that parties and the public should be able to trust what the court says. In this case, after the judge told the offender (without contradiction) that the confiscation hearing would not proceed if she repaid the money and she did so it would, in my judgment, be damaging to the integrity of the process of criminal justice for the court now to proceed with it. It would involve the court itself in giving the offender an inducement and then reneging on its words after she had acted upon the inducement. Quite simply this would not be a fair process. I do not wish to consider what might be the proper resolution of such a problem on other facts; we are concerned only with the facts of this case. Mr Murray submitted that the answer to the problem was a simple one: the words of the statute trump anything the judge may have said. In my judgment that is not right. In this case I believe that in order to prevent the court's own process from becoming an instrument of unfairness it was right for Judge Downey to order that these proceedings be stayed. For those reasons I would dismiss this application.
13. MR JUSTICE GRIFFITH WILLIAMS: I agree. I too, for the reasons given by my Lord, would dismiss this application.
14. MR MURRAY: My Lord, I believe this to be a hearing in which the Administrative Justice Act applies so any appeal would lie to the Supreme Court rather than the Court of Appeal Civil Division.
15. LORD JUSTICE TOULSON: I believe that to be right.
16. MR MURRAY: Accordingly, I think I need to ask for a certificate of a point of general public importance. I could ask to do that now, but I wonder whether I might have three weeks to formulate my submissions on the point?
17. LORD JUSTICE TOULSON: No objection to that, I imagine?
18. MR WYATT: My Lords, no.
19. LORD JUSTICE TOULSON: Yes.
20. MR MURRAY: I am very grateful.