England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
LEEDS DISTRICT REGISTRY

		The Combined Court Centre Oxford Row Leeds
		04/09/2013

His Honour Judge Gosnell:

1. The principal issue in this case is whether, in the case of confiscation orders, the words "at the time the period of detention was imposed" in section 79(2) of the Magistrates Courts Act ( "MCA 1980") 1980 mean:

(i) The time when the period to be served in default was fixed by the Crown Court Judge (as the Claimant contends), or

(ii) The time when the default term was activated by the Magistrates Court (as the Defendant contends)

The answer impacts upon the number of days that an offender is entitled to have remitted against the default term, in this case under the Drug Trafficking Act ("DTA 1994") 1994.

Factual Background

2. The Claimant (Gene Gibson) was convicted of importing Class A drugs and sentenced to 25 years imprisonment. On 29^th March 2010 he was found to have benefitted from drug trafficking and the recoverable amount was £5,430,671. An order was made fixing a term of imprisonment of 2,190 days (six years) if the sum was not paid or recovered.
3. Enforcement did not take place until 4^th June 2007 when he appeared before the Magistrates Court and by this time the amount outstanding including interest was £8,105,744.72. The Magistrates issued a commitment warrant for 2183 days to be served consecutively to the sentence. The reduction of 7 days was made as a result of a payment of £12,500 having been made on 4^th May 2007. On 19^th October 2007 a further sum of £12,500 was paid into court by the Claimant's receiver. Some further small sums were paid in thereafter but they are not likely to be material to this case. The Defendant calculated the value of each day as follows: £8,105,744.72 / 2183-1 = £3,714.83 per day. On the basis of this calculation this resulted in a sentence reduction of 3 days to 2180 days. The Claimant did not agree with this calculation and made a formal complaint which was rejected.
4. On 14^th November 2011 the court received a further £65,370.23 from the Claimant's Receiver and advised the Claimant that it and the previous payment reduced his sentence by 24 days. This was reviewed and corrected by the Defendant on 2^nd April 2012 when applying the same formula as above the Defendant confirmed a reduction in sentence of 21 days. If the amount originally outstanding at the time of the Crown Court sentence of £5,430,671 had been used the reduction in sentence would have been higher, by my calculation around 32 days. The Defendant was asked to exercise the royal prerogative of mercy in the light of the initial mistake but refused to do so.

The Statutory Framework

5. The provision which governed the imposition of confiscation orders at the time of the Claimant's sentence was the Drug Trafficking Act 1994 which gave the court power to determine whether a defendant had benefitted from drug trafficking and if so the amount to be recovered. Where a confiscation order was made the legislation determined that it should be recovered in the same way as a fine.

"9. Application of procedure for enforcing fines

(1)Where the Crown Court orders the defendant to pay any amount under section 2 of this Act, sections 31(1) to (3C) and 32(1) and (2) of the Powers of Criminal Courts Act (powers of Crown Court in relation to fines and enforcement of Crown Court fines) shall have effect as if that amount were a fine imposed on him by the Crown Court."

6. Section 31and 32 of the Powers of Criminal Courts Act 1973 , which was in force at the time the Claimant was made subject to the order provided so far as material:

"31. Powers, etc., of Crown Court in relation to fines and forfeited recognizances

(1)Subject to the provisions of this section, if the Crown Court imposes a fine on any person or forfeits his recognizance, the court may make an order—

(a) allowing time for the payment of the amount of the fine or the amount due under the recognizance;

(b) directing payment of that amount by instalments of such amounts and on such dates respectively as may be specified in the order ;

(c) in the case of a recognizance, discharging the recognizance or reducing the amount due thereunder.

(2) Subject to the provisions of this section, if the Crown Court imposes a fine on any person or forfeits his recognizance, the court shall make an order fixing a term of imprisonment which that person is to undergo if any sum which he is liable to pay is not duly paid or recovered

…32. Enforcement, etc., of fines imposed and recognizances forfeited by Crown Court

(1) Subject to the provisions of subsection (4) below, a fine imposed or a recognizance forfeited by the Crown Court after 31st December 1967 shall be treated for the purposes of collection, enforcement and remission of the fine or other sum as having been imposed or forfeited—

(a) by a magistrates' court specified in an order made by the Crown Court; or

(b) if no such order is made, by the magistrates' court by which the offender was committed to the Crown Court to be tried or dealt with;

and in the case of a fine as having been so imposed on conviction by the magistrates' court in question.

(2) The term of imprisonment specified in any warrant of commitment issued by a magistrates' court on a default in the payment of a fine imposed, or sum due under a recognizance forfeited, by the Crown Court as the term which the offender is liable to serve shall be the term fixed by the latter court under section 31(2) of this Act or, if that term has been reduced under section 79(2) of the Magistrates Court Act 1980 (part payment) or section 44(10) of the Criminal Justice Act 1967 (remission) that term as so reduced, notwithstanding that that term exceeds the period applicable to the case under Schedule 4 to the Magistrates' Courts Act 1980… (maximum periods of imprisonment in default of payment of fines, etc.)…"

7. The procedure under the Drug Trafficking Act 1994 was therefore that the Crown Court Judge was to fix the term of imprisonment to be imposed in default of payment of the sum to be confiscated and the order would be enforced by the Magistrates Court. The provision which dealt with situations were a defendant made part-payment after sentence was imposed was s79(2) Magistrates Court Act 1980 which provided as follows:

"79(2) Where, after a period of imprisonment or other detention has been imposed on any person in default of payment of any sum adjudged to be paid by the conviction or order of a magistrates' court or for want of sufficient distress to satisfy such a sum, payment is made in accordance with the rules of the court of part of the sum, the period of detention shall be reduced by such number of days as bears to the total number of days in that period less one day the same proportion as the amount so paid bears to so much of the said sum, and the costs and charges of any distress levied to satisfy that sum, as was due at the time the period of detention was imposed"

8. Interest is payable under the Drug Trafficking Act on the amount outstanding under a confiscation order and section 10 of that Act provides as follows:

"10. Interest on Sums unpaid under confiscation orders

(1) If any sum required to be paid by a person under a confiscation order is not paid when it is required to be paid (whether forthwith on the making of the order or at a time specified under section 139(1) of the Powers of Criminal Courts (Sentencing) Act 2000) that person shall be liable to pay interest on that sum for the period for which it remains unpaid; and the amount of the interest shall for the purposes of enforcement be treated as part of the amount to be recovered from him under the confiscation order.

(2) The Crown Court may, on the application of the prosecutor, increase the term of imprisonment or detention fixed in respect of the confiscation order under subsection (2) of section 139 of the 2000 Act (as it has effect by virtue of section 9 of this Act) if the effect of subsection (1) above is to increase the maximum period applicable in relation to the order under subsection (4) of that section…."

The Claimant's submissions

9. The Claimant concedes that an objective reading of section 79(2) of the Magistrates Courts Act ("MCA 1980") does favour the Defendant's interpretation more than the Claimants'. However counsel for the Claimant submitted that when the legislation as a whole is examined, the Defendant's interpretation produces either unworkable or capricious results. The Claimant relies very heavily on the fact that s 79(2) MCA 1980 makes no express provision for payments made prior to the imposition of a term of imprisonment in default of payment in that it starts with the words "Where, after a period of imprisonment or other detention has been imposed on any person in default of payment…." . Whilst the Claimant concedes that section 32(2) of the Powers of Criminal Courts Act 1973 ("PCCA 1973") appears to give the magistrates court power to reduce the term of imprisonment imposed in default of payment to reflect any part payment made it does so by reference to section 79(2) MCA 1980 which contains no such power. Understandably the Claimant submits it would be unfair if payments made prior to enforcement were not taken into account or if they were taken into account only against a higher figure than the amount that was owed at the date the payment was made (due to accrued interest up to the date of enforcement). The Claimant contends that this lacuna in the legislation can be avoided if s79 (2) MCA 1980 is interpreted so that the "time the period of detention was imposed" is the date the sentencing Judge fixed the sentence in default. All payments made thereafter would then be taken into account as against a fixed sum (the amount which was certified as the recoverable amount when the sentence in default was fixed).
10. The problem with the Defendant's interpretation is then exacerbated by the fact that the date of enforcement is usually within the control of the Defendant (in this case it took over seven years). The effect of section 79(2) according to the Defendant is that there is a convenient cut-off point for when interest accrues for the purposes of calculating reductions in the default term due to part-payment. The fact that enforcement is often at the behest of the Defendant and can be seriously delayed means that the number of days which each sum of money can buy can be significantly reduced if the delay is long and the figures are high. In this case on the Defendant's figures the amount outstanding had gone up from around £5million to around £8 million during the seven year delay. This meant that the payments made by the Claimant bought him eleven less days than would have occurred had the figure remained fixed. This appears to be artificially increasing the sentence according to the Claimant. Whilst the Claimant accepts that section 10 of Drug Treatment Act 1994 ("DTA 1994") appears to impose interest on the unpaid sum it does not state that interest will cease to run for the purposes of calculating discounts for part payment on the date of enforcement which is how the Defendant contends the system works. The Claimant contends that the purpose of section 10 DTA 1994 is to confirm that interest shall run on the unpaid sum for the purpose of civil enforcement (which continues to apply after the default sentence has been served). The Claimant also makes further submissions by reference to the Proceeds of Crime Act 2002 ("POCA 2002") regime which I will deal with separately.

The Defendant's submissions

11. The Defendant relies strongly on the wording of s 79 (2) MCA 1980 suggesting that the phrase "was due at the time the period of detention was imposed" strongly suggests the imposition of the default term by the Magistrates Court rather than the fixing of the period of imprisonment in default by the sentencing Judge in the Crown Court. Similarly the section as a whole is intended to deal with sentences in default of payment of fines in Magistrates Court which is normally dealt with by a separate fines court rather than by the original sentencing bench. Similarly the terms of s 10(1) DTA 1994 stating that interest "shall for the purposes of enforcement be treated as part of the amount to be recovered" strongly suggests that interest should be taken into account for the purposes of enforcement which would include both for calculating the sum required for a complete discharge of the default term and for a reduction in sentence for part payment.
12. The Defendant disagrees with the Claimant's contention that there is no power to reduce the default term to reflect payments made before the imposition of the sentence by the enforcement court. The Defendant relies on the clear wording of section 32(2) of PCCA 1973 which give the Magistrates Court the authority to pass the sentence fixed by the Crown Court (which would normally be in excess of their sentencing powers) less any reduction for part payment. The reference to s 79(2) MCA 1980 in the section is a reference to what procedure to adopt to calculate the reduction even though the procedure normally applies only after the sentence in default of payment has been imposed.
13. The Defendant contends that if the Claimant's interpretation is correct then the Claimant would be able to secure his release at any time by making the full payment due at the time of the original sentencing hearing without any payment of interest. This does not appear to accord with the intention of Parliament in ordering that interest should run on the amount outstanding. If Parliament had intended interest only to run on the civil debt it would have been easy to make this clear. If interest only runs on the civil debt it is difficult to see how section 10(2) can operate as the debt would never increase. The Defendant contends that there is nothing wrong in principle with interest running on the amount outstanding given the proposition that if a convicted criminal has the assets to make the payment to avoid the sentence in default they should do so without delay.
14. The Defendant also relies on previous authority in the decision of a Divisional Court in Hansford v Southampton Magistrates Court [2008] EWHC 67 (Admin). This case was mainly about the issue of whether fees payable to a receiver could be deducted from the amount to be paid but the court also considered whether the enforcement court had any power to waive interest which had accrued (in that case under the Criminal Justice Act 1988). Lord Justice Dyson gave the leading judgment and the relevant passage is as follows:

"Section 75A provides a yet further reason why the proceeds should be applied towards the satisfaction of the confiscation order as soon as they are received. The defendant is liable to pay interest to the extent that sums are unpaid under a confiscation order. For reasons that I explain later in this judgment, the court has no discretion to vary a defendant's obligation to pay interest or vary the interest rate. Unpaid interest is treated as part of the amount to be recovered under the confiscation order (section 75A (1)(b)). The liability to serve a custodial term in default of payment will increase by the amount of any unpaid interest. That is a further reason why the receiver should not be allowed to delay payment of the proceeds towards the satisfaction of the confiscation order."

The Claimant points out that this issue was conceded by Counsel for the Claimant in that case (wrongly it is contended) and that whilst the dicta appear to support the Defendant's case it was not fully argued.

The Proceeds of Crime Act 2002

15. Whilst this Act does not apply to the Claimant's sentence both parties consider the provisions in the Act relevant to the interpretation of the statutory provisions which do apply to his sentence. This approach is permitted pursuant to Anglesey County Council v Welsh Ministers [2009] EWCA Civ 94 and was impliedly approved by the order of Judge Richardson QC in these proceedings on 13^th February 2013. The relevant equivalent provisions are as follows:

"12 Interest on unpaid sums

(1)If the amount required to be paid by a person under a confiscation order is not paid when it is required to be paid, he must pay interest on the amount for the period for which it remains unpaid.

(2)The rate of interest is the same rate as that for the time being specified in section 17 of the Judgments Act 1838 (interest on civil judgment debts).

(3)For the purposes of this section no amount is required to be paid under a confiscation order if—

(a) an application has been made under section 11(4),

(b) the application has not been determined by the court, and

(c) the period of 12 months starting with the day on which the confiscation order was made has not ended.

(4)In applying this Part the amount of the interest must be treated as part of the amount to be paid under the confiscation order."

16. Sections 35-39 of POCA 2002 deal with enforcement of the confiscation order as a fine but the parties agree that only section 37 is relevant. Where the Director of Assets Recovery is not appointed section 35 applies and both parties agree this effectively applies the current regime including section 79(2) MCA 1980. If the Director of Assets recovery is appointed then section 37 applies which reads as follows:

"37. Director's application for enforcement

(1)If the Director believes that the conditions set out in subsection (2) are satisfied he may make an ex parte application to the Crown Court for the issue of a summons against the defendant.

(2)The conditions are that—

(a) a confiscation order has been made;

(b) the Director has been appointed as the enforcement authority for the order;

(c) because of the defendant's wilful refusal or culpable neglect the order is not satisfied;

(d) the order is not subject to appeal;

(e) the Director has done all that is practicable (apart from this section) to enforce the order.

(3)If it appears to the Crown Court that the conditions are satisfied it may issue a summons ordering the defendant to appear before the court at the time and place specified in the summons.

(4)If the defendant fails to appear before the Crown Court in pursuance of the summons the court may issue a warrant for his arrest.

(5)If—

(a) the defendant appears before the Crown Court in pursuance of the summons or of a warrant issued under subsection (4), and

(b) the court is satisfied that the conditions set out in subsection (2) are satisfied,

it may issue a warrant committing the defendant to prison or detention for default in payment of the amount ordered to be paid by the confiscation order.

(6)Subsection (7) applies if the amount remaining to be paid under the confiscation order when the warrant under subsection (5) is issued is less than the amount ordered to be paid.

(7)In such a case the court must substitute for the term of imprisonment or detention fixed in respect of the order under section 139(2) of the Sentencing Act such term as bears to the original term the same proportion as the amount remaining to be paid bears to the amount ordered to be paid.

(8)Subsections (9) and (10) apply if—

(a)the defendant has been committed to prison or detention in pursuance of a warrant issued under subsection (5), and

(b)a payment is made in respect of some or all of the amount remaining to be paid under the confiscation order.

(9)If the payment is for the whole amount remaining to be paid the defendant must be released unless he is in custody for another reason.

(10)If the payment is for less than that amount, the period of commitment is reduced so that it bears to the term fixed under section 139(2) of the Sentencing Act the same proportion as the amount remaining to be paid bears to the amount ordered to be paid."

17. The Claimant claims that the wording of the POCA 2002 is even more supportive of his contention that interest should not be included when giving credit for sums paid before and after sentence to the default term. Section 37(7) (before) and 37(10) (after) both speak of credit being given in accordance with a proportion calculated by comparing the amount "ordered to be paid" with the amount "remaining to be paid". If the amount "remaining to be paid" includes interest imposed under section 12(4) then the interest will continue to run on the outstanding sum throughout the period of the default sentence until it is fully paid. The Claimant claims that this is unfair and the amount outstanding in cases like the Claimant will continue to rise almost inexorably. The provisions in section 37 also contain no "cut-off" provision such as appears in section 79(2) MCA 1980 where interest stops running for the purposes of calculation of reduction in sentence for part payment at the date of the enforcement hearing (according to the Defendant's interpretation). The provisions of POCA 2002 actually appear to give the Defendant the right to add interest all the way through the sentence for the purposes of apportionment, a position which is not consistent with the Defendant's contention as to the operation of the current law. All this can be avoided say the Claimant if the amount "remaining to be paid" is the amount ordered to be paid by the sentencing Judge less any actual payments by the Defendant. The Claimant will still remain liable for interest as far as civil enforcement is concerned it is submitted.
18. The Defendant relies heavily on the terms of section 12(4) of POCA 2002 which is reproduced above in particular "in applying this Part". This section appears in Part 2 of the Act as does section 37. The Defendant's case is that the current regime works more simply by comparing the amount ordered to be paid with the amount remaining to be paid which, as a consequence of section 12(4) says the Defendant, includes interest. The Defendant says that there is nothing unfair or capricious about interest accruing or the Claimant being disadvantaged if he delays before making payment. Whenever a payment is made appropriate credit will be given, allowing for interest. If the Claimant is right in his interpretation then the Claimant could wait until the last possible moment to make a payment and suffer no disadvantage at all (other than serving the full sentence in default).

Analysis

19. The case in front of me was skilfully argued by both counsel. They were each adept at showing that if their opponent's interpretation of the statutory provisions was correct then some anomaly arose which was not otherwise explainable. This is not a case where there is a simple explanation which can make sense of all the provisions.
20. Standing back from the situation my starting point must be to read s 79(2) MCA 1980 and give the provision its ordinary meaning. It speaks of a period of imprisonment being imposed in default of payment adjudged to be paid by the Magistrates Court. This was not a new provision in 1980 when the MCA 1980 was drafted. It was the successor of a previous provision in section 67(2) of the Magistrates Courts Act 1952 and I suspect there may well have been an earlier provision. Section 79(1) MCA 1980 provided for release from custody on payment of the sum due and section 79(2) provided for reduction in sentence for part payment. The sections were not designed with the recovery of proceeds of crime in mind. They were designed to deal with non-payment of fines and other summary costs and penalties. The practice in the Magistrates Court is for fines to be imposed and non-payment to be dealt with by a fines court which is essentially a bench of Magistrates who will be listed to deal with defendants who have failed to pay their fines. They can give them time to pay, remit the fine, or eventually impose a sentence of imprisonment in default. When they impose a sentence in default they do so taking into account any payments which have been made since the original sentencing hearing. This is why section 79(2) is expressed only "after a period of imprisonment has been imposed in default of payment". There was no need to have a provision which took into account payments made after the original sentence and before the default sentence because the Magistrates would be aware of the amount outstanding and would set the default term to reflect that.
21. This explanation makes it far more likely that when section 79(2) MCA 1980 was drafted it was referring to the term of imprisonment being imposed not by the original bench who fined the defendant before them, but by the fines court that sentenced the defendant to a term of imprisonment in default of payment of the fine. When the draftsmen of the legislation which preceded the DTA 1994 decided to order that sentences of imprisonment in default of payment of the sum confiscated should be enforced as fines they unwittingly brought the fine enforcement system in its then current form into the equation. The answer to the question when the sentence is "imposed" under this system is a straightforward one. The original sentencing court fixes the term of imprisonment to apply in default but the sentence is only imposed when the Magistrates Court issue the commitment warrant which cannot be for a longer term than the sentencing judge determined but can (according to the Defendant) be for a shorter term where payment has been made.
22. This in my view is the effect of sections 32(1) and (2) of PCCA. Section 32(2) makes it clear that the term of imprisonment to be imposed in default of payment by the Magistrates Court is the term determined by the Crown Court pursuant to section 31 less any reduction pursuant to section 79(2) MCA 1980. If the Claimant is right that the term of imprisonment is imposed by the Crown Court Judge who pronounces sentence then this provision is completely otiose because there would be no need to reduce the sentence under section 79(2). If the Defendant is right the Claimant says that if this was the intention of Parliament then it failed to achieve what was desired as in fact there is no power to reduce a sentence to take account of payments made before the default sentence is imposed.
23. I am therefore left with two alternatives. If the Claimant is right then section 79(2) can operate fairly to take into account all payments but the parliamentary draftsman has included a provision in section 31(2) PCCA 1973 which is completely otiose. If the Defendant is right there is a lacuna in the relevant provisions in that the draftsman has not appreciated that by including the procedure laid down in section 79(2) MCA 1980 he was unwittingly excluding payments which were made between the Crown Court sentencing hearing and the imposition of the default sentence. It does seem to me that an accidental lacuna is more likely than the intentional drafting of a completely otiose provision.
24. The historical origins of section 79(2) MCA 1980 also explain why there is a cut-off point in the accrual of interest for the purposes of calculation of reduction in sentence for part payment at the date of the imposition of the sentence in default. Fines do not carry interest and accordingly there was no need to make allowances for future interest accrual in the section as drafted. The "sum due at the time the period of detention was imposed" was the amount of the fine as ordered by the sentencing court or the balance remaining by the time the sentence in default was ordered by the fines court.
25. The accrual of interest does not stem from section 79(2) MCA 1980 but stems from section 10(1) DTA 1994. The phrase "and the amount of the interest shall for the purposes of enforcement be treated as part of the amount to be recovered from him under the confiscation order" seems to clearly indicate that interest runs on the amount found due to be confiscated until payment. I cannot accept that this is only intended to apply to civil enforcement. If it was to only apply to civil enforcement then it would have been very easy to make that clear. The Claimant contends that it does not say that interest only accrues up to the date of the imposition of the default sentence either, which it could have done if that was what was intended. The cut-off provision arises however not as a result of this section but as a result of the operation of section 79(2) which was intended to deal with fines not carrying interest. This section imposes interest on the confiscated sum which continues to run until payment. If however the defendant in the criminal proceedings pays the sum either in whole or in part interest only accrues until the imposition of the default sentence for the purposes of calculation of the amount owing and the proportionate reduction in sentence. The provisions are not therefore inconsistent.
26. If interest does not run on the confiscated sum after the sentencing hearing then what is the purpose of section 10(2) DTA 1994? This provided that the Crown Court may, on the application of the prosecutor, increase the term of imprisonment if the effect of section 10(1) is to increase the maximum period applicable by taking the person to be sentenced into the next threshold set out in section 31(3A) of PCCA. In other words whilst a recoverable benefit of between £250,000 and £1million might produce a sentence in default of up to five years if the interest accrued brought the figure above £1million this would then place the defendant to be sentenced in default into the five to ten year bracket. Just leaving aside the fairness of this provision it would make it completely otiose if the Claimant's interpretation of section 79(2) MCA 1980 is right.
27. I can see the Claimant's point as to the inherent unfairness of the scheme as interpreted by the Defendant. Interest is imposed on the recoverable benefit and continues to accrue until the Defendant chooses to enforce the order which can be many years hence. With interest running at 8% per annum in many cases modest payments will not even keep pace with the interest accruing. I have to accept that Parliament decided that interest should accrue on the sums ordered after confiscation hearings. No doubt the justification was that the defendants had benefitted from the proceeds of crime and should make immediate recompense from their current assets. The unfairness may well stem partly from the adoption of the Judgment Rate under the Judgments Act 1838 which has no relationship at present with bank base rates and from the fact that long delays in enforcement were perhaps not anticipated when the legislation was drafted. The remedy of judicial review where there has been delay is not a complete answer. I have to accept however that Parliament intended interest to run and section 10(2) DTA 1994 is an indication of how robust it was intended that this process should be.
28. I am not convinced that an analysis of the current regime under POCA 2002 makes much difference to the analysis of previous legislation. It is clear that the regime is different for example there is no equivalent of the draconian section 10(2) DTA 1994, and under section 37 POCA 2002 the procedure under section 79(2) is excluded. The terms of section 12(4) of POCA 2002 in my view are very clear:

"(4)In applying this Part the amount of the interest must be treated as part of the amount to be paid under the confiscation order."

Section 12(4) is in Part 2 of the Act as are sections 35-39 which deal with enforcement of confiscation orders as fines. It seems to me that when section 37(10) which is the equivalent of section 79(2) of MCA 1980 speaks of "the amount remaining to be paid" it is referring to the amount originally ordered to be paid plus interest, less any previous payments made. To read the section in any other way would mean that it was intended only to apply to civil recovery and not to enforcement by a default term of imprisonment. The wording of section 12(4) suggests it was intended to apply to other provisions in the same part of the Act.

29. I accept that a consequence of this finding would be that POCA 2002 is even more draconian or unfair (as the Claimant would submit) than its predecessor. If the Director of Asset Recovery is instructed and section 37 of POCA 2002 applies then it would appear that interest continues to run throughout the term of both the original and default term of imprisonment and there is no cut-off so far as interest is concerned at the point of imposition of the default term. This, on my analysis is as a consequence of the exclusion of section 79(2) MCA 1980 from the process. I accept that counsel for the Defendant did not say that the Defendant interpreted the current legislation in this way as it would appear the Defendant may still be allowing a cut-off of the accrual of interest up to the imposition of the default sentence. It is however a logical reading of the provisions once it is accepted that interest runs under section 12(4). The Claimant contends that Parliament cannot have intended section 37 to be more unfair than its predecessor without publicising such an intention but that is to assume that all adverse consequences of legislation are intended. Often unintended consequences arise which do not become evident until the issue is raised because someone is prejudiced. Parliament can then decide whether the consequence is acceptable or whether it needs to be changed. This may be such a situation.
30. The final reason that I prefer the Defendant's interpretation of this legislation is that it accords with previous authority namely the Divisional Court decision in Hansford v Southampton Magistrates Court . Whilst it is correct that the point was not fully argued before the court I accept the proposition that Lord Justice Dyson was unlikely to opine as he did in paragraph 27 of the Judgement that "the liability to serve a custodial term in default of payment will increase by the amount of any unpaid interest" if he did not genuinely believe that to be the case.
31. It follows from my analysis of the relevant legislation that the Claimant's substantive claim for relief is dismissed.