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
		Thursday, 3rd October 2013

1. LORD JUSTICE FULFORD:
2. background
3. On 20th September 2004, at the Snaresbrook Crown Court, the appellant pleaded guilty to a single count of conspiracy to defraud the Department of Work and Pensions ("DWP") contrary to common law. He was sentenced to two-and-a-half years' imprisonment and the associated confiscation proceedings were adjourned. The appellant, together with his wife, had run a post office in London and by his plea he admitted processing fake Giro cheques. This was undoubtedly a serious fraud that involved a significant breach of trust.
4. The confiscation hearing took place before His Honour Judge Wilkinson on 22nd March 2005, 7th April 2005 and 13th April 2005. The learned judge found that the benefit figure was £292,398.96 and he made a confiscation order in the sum of £194,756.67, reflecting the appellant's realisable assets, to be paid in full within 9 months, with a term of 2 years' imprisonment in default.
5. We note that from the end of the period afforded to the appellant to pay the entire sum interest has been claimed at a rate of about £39 a day (8%) and as of that date only £13,416.90 had been paid. A High Court restraining order had frozen the appellant's assets prior to the confiscation order.
6. During 2005 and 2006 the appellant, through new legal representatives, MR Solicitors, contacted the DWP on numerous occasions with a view to lifting the restraint order, so that certain assets could be sold and to obtain agreement to a variation of the confiscation order to reflect inter alia the decrease in the value of some of the relevant property. MR Solicitors wrote to the DWP on 22nd November 2005, expressing particular concerns over the value of some of the relevant assets and again on 8th December 2005 seeking agreement to the sale of 89 Palmerston Road, the former post office.
7. When the DWP failed to respond the applicant wrote to Snaresbrook Crown Court on 29th December 2005, explaining that he was attempting to lift the restraint order, in order to fulfil his obligations and requesting an extension of the time for him to satisfy the order, given the lack of co-operation on the part of the Department (along with other reasons). There was no response to this letter. On 9th January 2006 MR Solicitors re-sent it to the court. There is no record of a reply to this second attempted communication with the Crown Court. We have seen attendance notes for January 2006 of the efforts thereafter by MR Solicitors to secure the co-operation of the DWP in the process of enabling the appellant to discharge his obligations under the confiscation order.
8. In January 2006 the office of the solicitor for the DWP wrote to MR Solicitors indicating probable but not definite agreement to an extension of time for satisfying the confiscation order but stating that more consideration needed to be given to the proposed downward variation in the value of the property (by £23,000). It was implicit in this response that a full reply would be sent in due course. On 10th October 2006 MR Solicitors wrote to the DWP pointing out that no response had been received. The following day the DWP wrote to MR Solicitors and stated as follows:

i. "Thank you for your letter dated 10th October 2006 in respect of the above matter. This was dealt with by London North Area Lawyer Office which closed down last year. We have requested the file to be retrieved from our department records office and will revert to you in due course."

9. There was then silence for 4 years and 4 months. The prosecution authorities comprehensively failed to respond substantively to any of these attempts by the appellant to communicate with the prosecution to enable him properly to address his liability under the confiscation order. Indeed, nothing more was heard until 24th February 2011 when the appellant received a letter from HMCS London Regional Confiscation Unit reminding him of his obligation to pay the confiscation order. Before this court the prosecution has candidly accepted that it can provide no real explanation for its wholesale failure to take active enforcement steps during that period.
10. Thereafter, on 3rd April 2012 the appellant successfully obtained a certificate of inadequacy in the High Court regarding the devaluation of two motor vehicles. On 17th July 2012 the matter was listed for an enforcement hearing in the Westminster Magistrates' Court which was adjourned to 6th September 2012 for legal argument. The applicant contended that there had been "undue inexcusable and culpable delay in the instigation of the enforcement proceedings", and that they should be stayed as an abuse of the process. The prosecution accepted that it would not be appropriate to seek the committal of the appellant to prison but it was suggested the delay should not otherwise act as a bar to recovery of the outstanding monies. The confiscation order was varied and reduced on 18th September 2012 at the Snaresbrook Crown Court in line with the certificate of inadequacy.
11. On 2nd November 2012 District Judge Purdy delivered his first ruling in relation to an application to stay the proceedings in which he decided that "civil enforcement must follow". The learned judge reminded himself of what he described as the intentionally draconian nature of the confiscation regime (and in that observation he was undoubtedly correct). Having reviewed the case law to which his attention was directed he decided that whilst at a full term of imprisonment was unconscionable, it was otherwise appropriate not to impose a stay on the enforcement process. However, he was troubled by the accruing interest charges and he provided an opportunity for the parties to address him in relation to whether the Magistrates' Court has the power to stay the interest payments in these circumstances. We note that in his judgment the judge acknowledged attempts by the appellant and his solicitors to communicate with the prosecution and he stated that:

i. "This is not a case of a defendant prevaricating or worse being untraceable for long periods thus causing or certainly contributing to an inability to enforce the confiscation order."

12. On 22nd January 2013 legal submissions which were advanced on the issue of the interest payments and the judge's ruling was handed down on the 19th March 2013. He decided that he had "no discretion to modify the total outstanding" of the "confiscation monies" including the interest that had accrued. As of that date £13,416.90 had been paid leaving £181,339.77 pence outstanding plus £102,000 in interest, to which we have observed about £39 was being added each day. Following this process in the Magistrates' Court there was a means inquiry that has resulted in the appellant paying monthly instalments of £40 which began on the 29th March 2013.
13. the Questions
14. On 8th April 2013 District Judge Purdy provided two questions for consideration by the High Court by way of Case Stated:

(i) Is 6 years and 5 months delay, despite full co-operation with the authorities such a period that all forms of enforcement including civil should be stayed as an abuse of process of the court per Article 6 ECHR?

(ii) If enforcement of the default term of imprisonment (2 years) is stayed (being accepted as unenforceable per Article 6 ECHR), is there jurisdiction available to the Magistrates' Court to stay interest payments even if enforcement of the original order remained to prevent unjust enrichment given inexcusable delay from seeking enforcement?

15. submissions
16. The appellant stresses that he should not be held liable for the delay in the enforcement of the confiscation proceedings throughout any part of the relevant period of 6 years and 5 months following his conviction. Given the confiscation order was imposed in April 2005, eight-and-a-half years ago, it is suggested it would be wholly unfair for the available current assets, such as they are, to be used in order to enforce the order. This is due, in particular, to the fact that in 2007 and 2008 the matrimonial home, 30 Northcott Road, was adapted with the help of a grant from the local authority (£25,000) to enable the applicant's severely disabled 19-year-old daughter to remain living there. The former post office 89 Palmerston Road is, we are told, owned by the appellant's wife, who is not now prepared voluntarily to sell it in order to satisfy the confiscation order, thereby resulting in the likely appointment of a receiver.
17. Finally, criminal proceedings, we are reminded, were instituted a decade ago and it is argued the appellant is entitled to finality, bearing in mind his property is still the subject of the High Court restraint order. In all the circumstances it is suggested that the judge reached an unsustainable decision in that continuation of the enforcement proceeding is oppressive, unfair and disproportionate.
18. The respondent argues the court should be slow to impose a stay of enforcement given the public interest in separating the proceeds of crime from convicted criminals. It is suggested the purpose of a stay is to prevent unfairness or oppression to a defendant. In this case we are reminded the respondent did not seek committal of the appellant to prison because it was recognised this particular course would be oppressive and unfair.
19. It is highlighted that permitting the enforcement proceedings to continue is not to be equated with permission to pursue each and every method of civil enforcement that is available. Therefore, any applications made by the respondent to enforce the existing order will be assessed by the relevant court against the background of the delay. Thus, if an application is made for the appointment of an enforcement receiver, the court would be entitled to take into account the extent and the circumstances of the delay when considering whether to exercise its discretion to appoint a receiver.
20. It is submitted this consideration is particularly important in relation to assets such as the appellant's home, which he has modified to assist his daughter. If an application were made to appoint a receiver over that asset, the respondent accepts the court would have to take into account the delay and any unfairness caused to the appellant and his family when deciding whether to attempt to force a sale. Indeed, in his oral submissions Mr Newbold, acting for the respondent, candidly accepted that there are likely to be formidable problems in the way of the prosecution, if it were in fact to attempt to enforce a sale of the family home.
21. In all the circumstances it is contended that the appellant will not suffer from oppression or prejudice, and there is nothing to prevent a fair assessment of the appellant's means being carried out. Against that background it is suggested that there are no sustainable reasons for interfering with the decision of the judge in the court below.
22. discussion
23. The extent of the protection to be provided to a defendant when there are delays in enforcing confiscation orders has been considered on a number of occasions by the Divisional Court. Notably, this issue was raised in R (on the application of Lloyd) v Bow Street Magistrates' Court [2004] 1 Cr App R 11, [2004] EWHC 2294 (Admin), a case in which over 5 years had elapsed following the imposition of a confiscation order before enforcement proceedings commenced. This court decided that a defendant in criminal proceedings is entitled to the full protection of the "reasonable time" guarantee afforded by Article 6(1) of the ECHR as regards all aspects of confiscation proceedings, and including the enforcement process in the Magistrates' Court by means of a summons for the issue of a warrant to commit.
24. In the course of giving the judgment of the court Dyson LJ observed:

i. "25... Convicted criminals who are the subject of confiscation orders do not attract sympathy, and are not entitled to favoured treatment. But there is nothing surprising about a requirement that, if the prosecuting authorities/magistrates court seek to enforce a confiscation order, they should do so within a reasonable time. It is potentially very unfair on a defendant that he should be liable to be committed to prison for non-payment of sums due under a confiscation order many years after the time for payment has expired, and long after he has been released from custody and resumed work and family life."

25. The court stressed that it had not heard argument on the various civil methods of enforcement and that the judgment only addressed the enforcement of a confiscation order by way of commitment to prison.
26. This approach to the risk of committal to prison was adopted in Altaf Syed and Trevor Hamilton-Farrell [2010] EWHC 1617 (Admin), a case in which the appellants challenged the periods of imprisonment that were imposed on them on 2nd March 2010, following their failure to pay sums due under confiscation orders made on 17th April 2002 at Middlesex Crown Court.
27. The period of delay complained about in that case prior to the confiscation proceedings was of the order of five-and-a-half years. This court quashed the sentences of imprisonment on the basis that the proceedings to enforce the confiscation orders by activating the sentence should have been stayed on the basis of unreasonable delay on the part of the prosecution.
28. In R (on the application of) Derek Joyce v Dover Magistrates' Court [2008] EWHC 1448 (Admin), this court upheld a refusal to stay enforcement proceeding in a case in which the Crown conceded imprisonment was inappropriate, when the delay for which the prosecution was (entirely) responsible was 2 years and, otherwise, the delay was properly explained or it was as a result of the claimant being unlawfully at large.
29. However, the court observed that there may be cases in which the delay is so extensive and culpable and/or unexplained that a stay would be appropriate. The court dealt with the case on the basis that the common law power to stay a case on the grounds of abuse of process was no less protective than Article 6 of the ECHR and in those circumstances the absence of a warrant of commitment was immaterial.
30. Maurice Kay LJ addressing the particular circumstances of that case observed:

i. "24. It seems to me that, before the District Judge, what the claimant had to establish in order to obtain a stay of these proceedings was that the delay for which the respondent was responsible was such that it would now be unfair for there to be an enquiry into his means and/or unfair for any established means to be resorted to for the purpose of enforcing the confiscation order."

31. This issue came before the Divisional Court again in 2008, in Flaherty v City of Westminster Magistrates' Court [2008] EWHC 2589 (Admin), in which it was reiterated that the common law empowers a court to impose a stay on enforcement proceedings that have not been brought within a reasonable period of time even if all that is sought is civil enforcement (as opposed to committal to prison). Moses LJ's observed in that case as follows:

i. "19... There is no dispute but that there is jurisdiction in the District Judge to stay the enforcement of an order where to continue to seek to enforce it would be oppressive....

ii. 21. ... Since part of the purpose of the proceedings is, ... to maintain the integrity of the system for collection of confiscation orders made by the Crown Court, and thus vindicate part of the system of criminal punishment and penalties imposed by the Crown Court, all the more important it is that the Enforcement Agency should pursue that purpose with vigour and within a reasonable period. In the instant case, in my judgment, the period which elapsed between 2004 and 2006 [we interpolate note, these dates related to the period between the appellant's release from prison for failure to pay the confiscation order, through to the first letter to the first letter asking for his proposals following his release] was inexcusable and runs counter to the whole purpose for which such an order was sought. It reveals an insouciant attitude by the Enforcement Agency to that which they were required to pursue, for which no proper explanation has ever been given."

32. In those circumstances, and bearing in mind a very long period of relevant delay, the court quashed the order of the District Judge in which he refused to stay the enforcement proceedings and it declared their continuation was an abuse of the court.
33. In CPS v Derby and South Derbyshire Magistrates' Court [2010] EWHC 370 (Admin), this court was faced with an unusual case concerning enforcement proceedings, in which it had taken the prosecution 6 years to re-institute the proceedings against the defendant, who was paying small sums (reduced from £200 to £60 a month) in order to discharge an outstanding confiscation order of £200,000. The enforcement proceedings were reopened because it was suggested that his compliance with the order was, or rather had become, minimal. The District Judge decided that the enforcement proceedings as a whole, in those circumstances were an abuse of the process. This court disagreed, for the reasons rehearsed by Elias LJ:

i. "23. This was […] a case of an elderly man where the conviction was well spent, the sentence had been served, and he is now living his life as a pensioner. Accordingly I accept that whilst he could not […] rely on any legitimate expectation that if he honoured the terms imposed by the court, no further enforcement proceedings would be taken, nevertheless the judge was entitled to say it was a breach of Article 6 after so many years suddenly to subject Mr Barrett to the risk of imprisonment.

ii. 24. ... the fact that there is unreasonable delay sufficient to render that step inappropriate does not […] necessarily mean it is appropriate and proportionate to bar all methods of enforcement. The question in each case […] is what is the appropriate sanction for the breach. The Joyce case demonstrates that it may be disproportionate to use the sanction of imprisonment, but nonetheless permissible for the prosecution to seek to enforce proceedings by civil sanctions.

iii. 25. In my judgment whilst the judge was entitled to preclude the use of criminal sanctions I do not accept that in the circumstances of this case it was reasonable to bar the prosecution from using any method of enforcement, even by civil means. It is not clear from the judgment of the court that the judge recognised that it may be open to him to draw this distinction. It must be remembered that the defendant was still making payments to satisfy the order, albeit only in a modest way, and was providing some remedy for the victims. It was not suggested that even the small sums being paid ought to cease on the grounds he would not have any assets, and in any event as I have said, the proper remedy if he did not have assets would be to apply for a certificate of inadequacy. The defendant's case seems to be that he was repaying as much as could properly be expected of him given his means.

iv. 26. It is difficult in those circumstances to see why the prosecution should be debarred from taking steps to secure at least as much compensation as they properly could, having regard of course to Mr Barratt's means. The original confiscation and compensation orders were designed to achieve compensation for the victims as one of the primary objectives. The failure of the prosecution to seek enforcement proceedings between 2002 and 2008 does not indicate any indifference to their desire to achieve that objective. It is a rather curious outcome of these proceedings that all repayments should immediately cease. In my judgment that was not a proportional response to the delay in the prosecution seeking to enforce by way of criminal sanction."

34. Elias LJ concluded his judgment as follows:

i. "27. Accordingly in my judgment this application for judicial review should succeed in part. I will uphold the order in so far as it imposes a stay on any future enforcement of compensation and confiscation orders by way of issuing a warrant for commitment, but remove from the order the stay relating to any other method of enforcement which the prosecution seeks to use. Using the language of Maurice Kay LJ in the Joyce case, I find that the delay was sufficiently extensive to render an abuse of process any attempt to imprison this defendant after such a period of time, but it was not so culpable or unexplained as to make a stay of all enforcement proceedings appropriate."

35. As it seems to me the two principal questions that fall to be answered on the facts of the present case are:
36. Whether the reinstatement of the enforcement proceedings after such a long period of time was oppressive (see Flaherty [19]). One of the central issues in this regard is whether it would be unfair for there to be an inquiry into the appellant's means or unfair for any of the established means to be resorted to for the purpose of enforcing the confiscation order, given the delay caused by the prosecuting authorities (see Derek Joyce [24])
37. Whether the delay for which the prosecution is responsible is so extensive and so culpable or unexplained that a stay is appropriate (see Derek Joyce [26]) In reaching a decision as to whether to impose a stay the court must ensure that the order it makes is not disproportionate (see Derby Magistrates' Court [26]).
38. In this case, I have no hesitation in concluding that the learned judge was wrong to decide that the civil enforcement proceedings should continue. Although the threshold for finding a breach of the reasonable time requirement is a high one (see Lloyd [26]) the delay here was not only extensive (six-and-a-half years) but it is also culpable and it is essentially unexplained. The change of office by employees of the DWP and the movement of staff within the department (as suggested by the respondent) fail to provide an adequate explanation or a justification for this high degree of inertia. Moreover, of real additional significance is the fact that the appellant and his solicitors repeatedly sought the co-operation of the prosecution to enable him to discharge his obligations responsibly, when they invited the respondent to consider reasonable adjustments to the valuations of some of the properties and by supporting an application to lift the restraint order.
39. The prosecution simply failed to provide a substantive response at any stage to his repeated request either by telephone or in writing. As a result, inter alia, interest has continued to be claimed, resulting today in a very considerable additional figure. Although no doubt not deliberate, this history reveals, in my judgment, oppressive behaviour on the part of the prosecution. Mr Newbold has candidly accepted that if the prosecution authorities had co-operated in 2005 and 2006, there is a real prospect that the confiscation order would have been paid in full at that stage, 7 or 8 years ago.
40. We are told that counsel eventually advised the appellant to abandon his attempts to obtain the co-operation of the prosecuting authorities. For my part, I would not criticise that advice in the exceptional circumstances of this case, given the repeated failure by the DWP to engage with the proper enquiries that he was making of that department.
41. Furthermore, as the judge acknowledged, the relevant circumstances have now very significantly changed: I have already described how the local authority in 2007 or 2008 adapted one of the relevant properties at considerable cost to enable the appellant's severely disabled daughter to continue living at home. There is now a real issue as to the availability of the former post office (89 Palmerston Road) for these purposes. 30 Northcott Road is arguably the principal asset that could be used to meet the confiscation order. Although the present situation could be evaluated by a court as part of renewed enforcement proceedings, in reality, the process would have to begin afresh, with the interests of a number of people - in addition to the appellant - needing to be analysed once again in some considerable detail. The complications of this particular case are such, and the situation is now so altered, that in my judgment it would be unfair to use the enforcement mechanism to satisfy this order.
42. Given these exceptional circumstances, and notwithstanding that this decision will prevent any further payments being made hereafter, this, in my view, is a proportionate - indeed a necessary response - to the history that I have outlined. There is, in my judgment, no other reasonable conclusion.
43. In answer to the first question therefore, in my view all forms of enforcement are to be stayed as an abuse of the process of the court. I would reverse the decision of the District Judge at 2nd November 2012 and impose a stay on the entirety of the enforcement proceedings. However, I would highlight that any monies paid by the appellant to date are unaffected by this decision. In those circumstances it is unnecessary to answer the second question posed by the District Judge, which on Mr Patel's submissions now does not arise.
44. MR JUSTICE OPENSHAW: I agree.
45. For the reasons given by my Lord, in this case there are in particular unusual circumstances, being an inordinate and inexcusable delay on the part of the prosecution in attempting to enforce this order, despite repeated and indeed persistent attempts by the offender to comply. Furthermore, having failed to galvanise the prosecution into any action, the offender made an entirely reasonable decision to spend grant money on the family home for the benefit of his severely disabled daughter which is likely to be lost if the house is to be sold.
46. So, as a result of the delay, he has acted to his and I might add also to his daughter's detriment. In these circumstances it would, in my judgment, also be unfair, unjust and an abuse of the process of the courts to enforce this order. The sooner it is appreciated that it is in the public interest the prosecution proceed in these cases with some reasonable degree of expedition, the better for justice.
47. MR PATEL: The appellant is publicly funded. May I asks for dispensation?
48. LORD JUSTICE FULFORD: Yes, and of course you get it.
49. Gentlemen, thank you for your assistance. Mr Newbold, some briefs are easier to hold than others but you held this one very competently and notwithstanding the difficulties that have been outlined. Thank you.
50. MR NEWBOLD: Thank you.