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Cite as: [2004] IEHC 161
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HC 295/04
[2003 No. 168 & 169 J.R.]
BETWEEN:-
APPLICANTS
RESPONDENT
JUDGMENT of Mr. Justice Aindrias Ó Caoimh delivered the 30th July, 2004.
By order of this court made 14th March, 2004 (O'Donovan J.) the applicants were given leave to institute these proceedings by way of an application for judicial review for the relief as follows:-
1. A declaration that the provisions of s. 89(b) of the Finance Act, 1997 are inconsistent with the Constitution.
2. An order of prohibition and/or an order of by way of an injunction restraining the first named respondent (hereinafter referred to as 'the Director') from further prosecuting the applicant in each case. The grounds upon which relief is sought in each case are as follows:-
(i) Section 89(b) of the Finance Act, 1997 interferes with the independence of the judiciary contrary to Article 34.1 of the Constitution in that it dictates to a trial judge the penalty to be imposed on a person convicted of an offence and deprives the trial judge of jurisdiction to exercise discretion so that different sentences may be applied as appropriate in different circumstances.
(ii) Section 89(b) of the Finance Act, 1997 is inconsistent with Article 38 of Constitution in that it dictates to a trial judge the penalty to be imposed on a person convicted of an offence and deprives the trial judge of jurisdiction to exercise discretion so that different-sentences may be applied as appropriate in different circumstances.
(iii) Section 89(b) of the Finance Act, 1997 is inconsistent with Article 40.1 and/or 40.3 of the Constitution in that it invidiously discriminates between those who are rich and those who are poor
(iv) Section 89(b) of the Finance Act, 1997 is inconsistent with Article 40.1 and/or 40.3 of the Constitution in that it invidiously discriminates between those charged with such offences and persons charged with other offences of dishonesty.
(v) Section 89(b) of the Finance Act, 1997 taken in conjunction with Section 13 of the Criminal Procedure Act 1967 interferes with the Applicants constitutional rights pursuant to Article 34.1 and/or 38 and/or 40.3 of the Constitution in that it is disproportionate and interferes with the Applicant's constitutional rights to an extent greater than necessary, having regard to the offence and the circumstances of the accused.
Each of these applications is grounded upon an affidavit of the applicants' solicitor Mr. Terrance Lyons and the affidavits are similar. In each case he points that the applicant was proceeded against by the Director by three summons dated 12th June, 2002 in respect of offences alleged to have been committed on 7th August, 2001 contrary to s. 186 of the Customs Consolidation Act, 1876 as amended by s. 34 of the Finance Act, 1963 as amended by s. 177 of the Finance Act, 2001 and s. 89 of the Finance Act, 1997 as amended by s. 240 of the Finance Act, 2001 and as applied by s. 9(1) of the Finance (Excise Duty and Tobacco Products) Act, 1997. The offences in question allege that the applicants on the 7th August, 2001 at Dublin Airport while knowingly concerned any fraudulent evasion of excise duty chargeable on importation on certain goods to wit tobacco products. In the context of the first named applicant Celebija Osmanovic, the charge relates to 14,140 cigarettes and in the case of the second named applicant the charge relates to 12,800 cigarettes. In the case of the value of the goods concerning the first named applicant the estimated value of same is stated to be €3,390.53. In the case of the second applicant the estimated value of the goods concerned being tobacco products being cigarettes is €3,071.75. The second charge in relation to each case is one of being knowingly concerned in carrying goods on which excise duty chargeable on importation had not been paid. The third charge in each case is one of being knowingly concerned in a fraudulent attempt at evasion of excise duty chargeable on importation of tobacco products.
The offences in question charged against the applicants are indictable offences. By virtue of s. 13 of the Criminal Procedure Act, 1967 if the applicant pleads guilty in the District Court in respect of any such offence she would have been fined a sum not exceeding €1,270 or at the option of the District Court Judge may have been imprisoned for a term of up twelve months or both. In each case the applicant has pleaded not guilty in the District Court and has been sent forward for trial to the Dublin Circuit Criminal Court. It is stated that in each case, if convicted by virtue of the provisions of s. 89(b) of the Finance Act, 1997 the applicant must be fined a sum of €12,700 namely that sum being greater than three times the stated value of the goods concerned or at the discretion of the trial judge be imprisoned for a term of imprisonment of up to five years or both such fine and imprisonment. Each of the applicants has pleaded not guilty to the charges preferred against them. With regard to the applicants Mr. Lyons deposes that the first applicant is a woman aged 34 born on 8th March, 1969 in Bosnia but who has been resident in Ireland for the past six years and has Irish citizenship. The second applicant is described as a young woman aged 20 years born on 18th February, 1983. She was also born in Bosnia and has been residing in Ireland for the past six years. It is stated that her asylum application is pending. Mr. Lyons describes each applicant to be of very modest means. He states that due to their circumstances the applicants are unable to engage in any gainful employment and have no private means and lives in very modest circumstances. No elaboration of this assertion is given by Mr. Lyons and no affidavit is sworn by either of the applicants indicating their particular circumstances.
Mr. Lyons deposes that if the applicant in each case is tried and a conviction entered that they are unlikely to be fined as the sum of €12,700 is beyond their means and thus will be imprisoned for a period which he believes to be probably substantial although not to exceed five years. A statement of opposition has been filed in each case which raise similar issues. In each case it is pleaded that the applicant has not been tried or convicted of the offences with which they are charged and to which they have pleaded not guilty and thus the question of the constitutionality of what penalty will be imposed if any has not yet arisen. It is further pleaded that the arguments in relation to s. 13 of the Criminal Produce Act of 1967 are mute in that the applicants did not indicate a wish to plead guilty in the District Court. In other respects the statement of opposition amounts to a traverse of the grounds relied upon by the applicants in each case.
SUBMISSIONS
Counsel for the applicant Mr. Feichin McDonagh, S.C. refers to s. 89(b) of the Finance Act, 1997 which provides that where three times the stated value of the goods concerned is less than €12,700 (£10,000), upon conviction the trial judge must impose a mandatory minimum fine in the sum of €12,700 or at the discretion of the trial judge a term of imprisonment of up to five years or both the fine and imprisonment. On this basis it is submitted that if convicted the applicants must be fined the sum of €12,700 that sum being greater than three times the stated value of the goods concerned in each case or at the discretion of the trial judge be imprisoned for a term of imprisonment of up to five years and being fined €12,700 and imprisoned for a term of imprisonment of up to five years.
Counsel refers to Deaton v. Attorney General and Revenue Commissioners [1963] I.R. 170 in which the Supreme Court held that while a choice of penalty may be prescribed by the legislature the choice of penalty to be imposed in a particular case cannot be committed to any person or body not being a judge or court. In that case Ó Dálaigh C.J. indicated a p. 183 of the report that the selection of punishment is an integral part of the administration of justice. In the same case however, Ó Dálaigh C.J. indicated:-
"The legislature may for a particular offence prescribe a single or fixed penalty, or a maximum penalty, or a minimum penalty, or alternatively penalties or a range of penalties."
It is submitted by counsel that there is an inconsistency between these two statements.
Counsel refers to Sweeney v. Ireland and The Attorney General (Unreported, High Court, Ó Caoimh J., 27th May, 2004) raising similar issues to the instant case in which this court held that the application in question was premature in circumstances where the applicant had not entered any plea in the District Court and no decision in relation to venue had been determined. In that case I expressed the view, submitted by counsel to be obiter, that the applicant had not satisfied me that the imposition of a fixed penalty is such as to render such provision as imposes same to be invalid having regard to the provisions of the Constitution. I indicated in that case my view that it was within the power of the legislature to determine what if any penalties may be imposed by the courts in the imposition of penalty in any given case. I indicated my view that the applicant had failed to satisfy me that the imposition of a fixed penalty is ipso facto in valid having regard to the provisions of the Constitution.
Counsel submits that the facts in that case are readily distinguishable from the instant cases in circumstances where the applicant in the Sweeney case was still in the District Court at an early stage in the criminal proceedings. In that case the claim was that the statutory regime would pressurise the applicant to plead guilty even though she had a good defence because if she was tried in the Circuit Court and her defence failed she would be fined a sum beyond her means and would probably be imprisoned for a period substantial though not exceeding five years.
Counsel submits in the instant case that the fixing of a mandatory fine by the legislature means that different offenders of equal obloqi have been left liable to disproportionately heavy punishments. It is submitted that regardless of the personal circumstances of a person convicted pursuant to s. 186 of the Customs Consolidation Act, 1876 (as amended) and (2) the particular nature of the offence, no courts even where it believes that a fine is the appropriate sentence, can fix a fine below €12,700. It is further submitted that the court cannot take into account the ability of the person to pay in fixing the fine. It is submitted that the court is limited in tailoring the fine to the particular crime or the particular individual convicted. It is submitted that the setting by the legislature of a high economic sanction for what is in effect an "economic offence" – loss of revenue to the Central Fund – as harsh consequences for the indigent. Counsel submits that if the value of the goods is €400 the court must still impose a €12,700 being the same fine as if the value of the goods were €4,000. On this basis it is submitted that the provision in question of fairness, the principle of proportionality insofar as it is recognised at Irish law and under the Constitution. Counsel before me submits by reference to a number of cases cited before this Court in the Sweeney case that the statutory regime in question offends the principle upon which sentences are imposed in this jurisdiction. In this regard counsel refers to The People (Director of Public Prosecutions) v. W.C. [1994] 1 I.L.R.M. 321 in which reliance was placed upon the earlier decisions in Deaton v. Attorney General [1963] I.R. 170 and The State (O) v. O'Brien [1973] I.R. 50. In the case W.C. Flood J. indicated that the principle of proportionality required that the imposition of a particular sentence must strike a balance between the particular circumstances of the commission of the relevant offence and the relevant personal circumstances of the person sentenced. Counsel further relies upon portion of the judgment of Flood J. in that case where he indicated that the sentence to be imposed on the accused person in a particular case is solely a matter for the trial judge in the independent and impartial exercise of judicial discretion. Counsel further refers to the decision of the Court of Criminal Appeal in The People (Director of Public Prosecutions) v. Stephen Kelly (Unreported, Court of Criminal Appeal, 5th July, 2004) in which the Court of Criminal Appeal stressed that under our present sentencing regime sentences must be proportionate not only to the crime but to the individual offender. Counsel further refers to the decision in Cox v. Ireland [1992] 2 I.R. 503 relating to the fact that the penalty to be imposed must be fair and must not be unfair or capricious in nature. Counsel refers to the fact that in The State (Healy) v. Donoghue [1976] I.R. 325 Henchy J. indicated that the Constitution guarantees that a citizen should not be deprived of his liberty by a trial conducted so as to shut out "a sentence appropriate to his degree of guilty and his relevant personal circumstances." Counsel further refers to The People (Attorney General) v. O'Driscoll (1972) 1 Frewen 351 in the Court of Criminal Appeal indicated as follows:-
"The objects of passing sentences are not merely to deter the particular criminal from committing a crime again but to induce him insofar as possible to turn from a criminal to an honest life and indeed the public interest would best be served if the criminal could be induced to take the later course. It is therefore the duty of the courts to pass what are the appropriate sentences in each case having regard to the particular circumstances of that case – not only in regard to the particular crime but in regard to the particular criminal."
Counsel further advances the argument that the penalty in question in the instant case is one which involves a wealth-based discrimination. Counsel submits that Article 40.1 and 40.3 of the Constitution outlaws invidious discrimination between rich and poor and in this regard relies upon In Re Robert McIlhagga (Unreported, Supreme Court, 29th July, 1971). In that case the Supreme Court heard an appeal from a decision of the Judge of the Central Criminal Court in which he had sentenced the applicant to three years penal servitude on foot of a plea of guilty to a count of obtaining money by false pretences but provided that in the event of the appellant paying restitution at any time within three years, he would be released from custody upon entering into a bond to keep the peace and be of good behaviour. The Supreme Court per Ó Dálaigh C.J. stated at p. 5 of the judgment inter alia as follows:-
"It is not possible, on any view, to construe the terms of Mr. Justice
Butler's Order as offending against the constitutional assertion that all citizens shall, as human persons, be held equal before the law or as favouring the well off as against the poorer citizens".
He proceeded as follows:-
"The payment in question is not the imposition of a fine. Nor have we here a case – if such is to be supposed – where a court is sentencing two persons of equal obliqui, one rich and the other poor, sends the poor man to prison but lets the rich man go free in payment of a fine well within his means.
The payment referred to in Mr. Justice Butler's Order relates to the restoration by the convicted person of the monies of which he fortunately deprived the injured party. Neither in purpose nor in effect is there discrimination as between rich and poor."
Counsel construed these observations of the Chief Justice to the effect that if the appellant had been fined rather than ordered to pay restitution the effect would have been discrimination as between rich and poor. It is submitted that s.89(b) of the Finance Act, 1997 creates the situation where by a court faced with sentencing pieces on different occasions, both of equal obliqui, one rich and the other poor, can let the rich man go free on payment of a fine well within his means. It is submitted that poor person will suffer a default imprisonment because of his or her inability to pay what is a large sum of €12,700, a sum which it is submitted is beyond the means of the poor man. Counsel submits that the effect of imprisonment in default is that the poor man would be sent to jail.
Counsel refers to the a number of US Authorities dealing with discrimination of this nature including Edwards v. California 314 U.S. 160 (1941) Griffin v. Illinois 351 U.S. 12 (1954) and Williams v. Illinois 399 U.S. 235. In the first of these cases Californian law made it a misdemeanour knowingly to bring a non-resident indigent into the State. It was held that the statute in question represented an unconstitutional discrimination against indigents. In Griffin v. Illinois poor criminal appellants were obliged to pay for their own transcript of trial proceedings and in the circumstances of an indigent it appeared that they were precluded from appealing by failure to obtain a transcript in circumstances where a full appellate review could not be prepared without such a transcript. In Williams v. Illinois, the Supreme Court held that a convicted criminal could not be imprisoned for an aggregate period exceeding the statutory maximum term of imprisonment due to an involuntary non-payment of a fine and court costs when non-payment was an involuntary act because of property.
Counsel summaries his submissions as follows s. 89(b) of the Finance Act, 1997 (a) interferes with the independence of the judiciary contrary to Article 34.1 of the Constitution and Article 38 of the Constitution in that it dictates to a trial judge the penalty to be imposed on a person convicted of an offence and deprives the trial judge of jurisdiction to exercise discretion so that different sentences may be applied as appropriate in different circumstances. (b) It interferes with the applicant's constitutional rights pursuant to Article 34.1 and/or 38 and/or 40.3 of the Constitution in that it is disproportionate and interferes with the applicant's Constitution rights to an extent greater than necessary, having regard to the offence and the circumstances of the accused; and (c) is inconsistent with Article 40.1 and/or 40.3 of the Constitution in that (a) invidiously discriminates between those who are rich and those who are poor and (b) invidiously discriminates between those who are charged excise duty offences and persons charged with other offences of dishonesty.
On behalf of the respondents it is submitted by Ms. Nuala Butler S.C., that in the first place the application to this Court in premature. Counsel stresses the fact that while the applicants seek to challenge the penalty provisions in question no trial, no conviction and no penalty has been imposed. Counsel refers to the fact that each of the applicants enjoys the presumption of innocence. In this regard counsel refers to the decision of this Court in Sweeney v. Ireland in which the Court held that a similar application was premature in nature. In that particular case it was asserted that the unfair element related to the choice as to whether to plead guilty or not guilty. In that case no plea had been entered and again there had been no trial conviction or sentence. Counsel submits that similar considerations apply to the instant case. In these circumstances counsel submits that the question of the constitutionality of what penalty may be imposed upon any of the applicants has not yet arisen. It is submitted that it is not opened to a person who has not had a particular sentence imposed to challenge the constitutionality of that sentence. Counsel stresses that the invariable approach of the courts is not to try constitutional issue unless that is proven to be necessary.
In reference to the circumstances of the applicant it is submitted that the circumstances deposed to by their solicitor is wholly insufficient in the detail given. In reference to same the expression 'modest means' is not explained in the context of the assertion that they can not pay a fine. It is submitted that the case is advanced on behalf of each of the applicants is in contradiction of the presumption of innocence which they enjoy and the not guilty pleas entered before the court.
Counsel addresses the issue as to whether the penalty in question can be considered to be a mandatory fixed penalty or otherwise. Counsel submits that it not mandatory insofar as the trial judge has a choice between the imposition of a fine and a term of imprisonment. At the same time counsel agrees that the method of calculation of the fine and the minimum level thereof are fixed by the statute in question. Counsel submits by reference to the statute that there is no requirement that a fine must be imposed. Counsel refers to the fact that a criminal court having power to impose a term of imprisonment has power to suspend same and may choose to impose community service under the terms of the Criminal Justice (Community Service) Act, 1983.
Counsel addressed the fact that it was conceded by counsel for the applicant that certain fixed penalties are not necessarily unconstitutional per se. In this regard reference is made to the offence of murder and certain driving offences.
Counsel refers to the judgment of Ó Dálaigh C.J. in Deaton v. Attorney General [1963] I.R. 170 and 181 where he stated, inter alia, as follows:-
"It is common ground that it is for the legislature, when it creates an offence, to prescribe what punishment shall attach to the commission of such offence. It is also common ground that the legislature may for a particular offence prescribe a single or fixed penalty, or a maximum penalty, or minimum penalty, or alternative penalties or a range of penalties. Where a choice of penalty is prescribed by the legislature, either by reference to alternatives or a range of penalties, the choice of the penalty to be imposed in a particular case cannot, be the appellant says, be committed to any person or body not being a judge or court. The selection of penalty, where the legislature affords a choice, is, he submits, part of the administration of justice. The respondent's contention, on the contrary, is that the selection of penalty is not a judicial function or part of the administration of justice, but that it falls into the domain of administrative or executive action and, accordingly in the present case, that the power of the Revenue Commissioners to elect for a higher penalty is constitutional".
Later at p. 182 of the report Ó Dálaigh C.J. stated having rejected the submission of counsel for the Attorney General and the Revenue Commissioners as follows:-
"There is a clear distinction between the prescription of a fixed penalty and the selection of a penalty for a particular case. The prescription of a fixed penalty is the statement of a general rule, which is one of the characteristics of legislation; that is wholly different from the selection of a penalty to be imposed in a particular case. It is here that the logic of the respondents' argument breaks down. The legislature does not prescribe the penalty to be imposed in an individual citizen's case; it states the general rule, and the application of that rule is for the courts. If the general rule is enunciated in the form of a fixed penalty then all citizens convicted of the offence must bear the same punishment. But if the rule is stated by reference to a range of penalties to be chosen from according to the circumstances of the particular case, then the choice or selection of penalty falls to be made. At that point the matter has passed from the legislative domain."
Counsel submits that the statute in question enjoys the presumption of constitutionality and the onus rests on the applicants to establish their case. It is submitted that nothing has been raised in the argument advanced on behalf of the applicants to show that in principle objection is to be taken to fixed penalties.
Counsel addresses the issue of proportionality raised on behalf of the applicants. Counsel submits that the applicants must show that a fixed penalty is not proportionate in any event.
Counsel submits that the principles enunciated in Director of Public Prosecutions v. Stephen Kelly (Unreported, Court of Criminal Appeal, 5th July, 2004) are not of direct relevance to the instant case. It is submitted that they do not establish that a fixed penalty is inconsistent with sentencing policy.
Counsel stresses that the applicants' case is essential hypothetical in nature.
Counsel refers to the level of penalty in an offence as such as that charged against the applicants and refers to the decision of the Director of Public Prosecutions v. Gray [1987] I.L.R.M. 4.
That case related to s. 78 of the Excise Management Act, 1827 as amended. At p. 11 of the report Henchy J. inter alia as follows:-
"Section 25(1) of the Finance Act, 1926 empowered the Revenue Commissioners to make regulations for securing the payment of the duty on bets. Section 25(2) (as amended by s. 69(1)(b) of the Finance Act, 1982) provided that every person who contravenes or fails to comply with such a regulation shall be guilty of an offence and shall be liable on summary conviction to an excise penalty of £800. It was to such offences that the defendant pleaded guilty.
Because the penalty laid down for those offences is an excise penalty, s. 78 of the Excise Management Act, 1827 became applicable. That section (as amended and adapted) is to the effect that when a District Justice is dealing with prosecutions of this kind for revenue or excise offences, he is given a discretion to mitigate the penalty to an amount which is not less than half of that laid down by the relevant statute for the offence. The section is designed for the purpose of allowing, as a matter of judicial discretion in appropriate cases, a substantial degree of mitigation of the severe monetary penalties prescribed as revenue or excise penalties. Those penalties are fixed at such high punitive levels for a variety of reasons, but particularly to ensure that not alone will the wrongdoers be prevented from keeping the unpaid duty but that they will have to pay a heavy penal sum to the State. The range of penalties prescribed is in reality a form of penal taxation of the wrongdoer for the benefit of the Exchequer. While s. 78 of the 1827 Act is intended to grant relief in appropriate cases, the continuation up to date, and the modernisation, of this scheme of statutory penalties show that the imposition and collection of those penalties must be treated as an integral part of the means for raising the revenue of the State. It is not to be expected that Parliament would allow the imposition and collection of those penalties to be avoided save by a clear statutory provision to the effect that s. 8 of the Criminal Justice Act, 1951 is clearly not such a provision."
Counsel stresses the fact that the penalty imposed in the instant case relates to the fact that it is an economic offence in nature. Counsel stresses that the instant case cannot be considered as similar to the features of the Cox v. Ireland case in which a number of features not pertaining to the offence in question give rise to the penalty imposed on the applicant.
Counsel submits that in the circumstances of the instant case the applicants had not established that the fine in any way is disproportionate. Counsel stressed the fact that the provisions of s. 4 of the Finance Act of 1983 are such that only if three times the value of the goods as loss challenged or as determined exceeds the sum of €1,270 (£1,000) that the offence is required to be tried on indictment. Counsel stresses the fact that the offences as charged against the applicants relate to relatively substantial amounts in the value of the goods in question. In the circumstances Counsel stresses that the argument of disproportionately does not arise in a case of these applicants.
In reply Mr. Seamus Clarke Counsel for the applicants submits that the application is not premature if the applicants are in imminent danger of being penalised. On this basis, counsel refers to the decision of Carroll J. in the case of Curtis v. Attorney General [1985 I.R. 458 where at p. 462 Carroll J. states inter alia
"It is not necessary that a determination adversely effecting rights must first be made before a constitutional challenge can be started. It is sufficient if there is a reasonable apprehension of such determination."
Counsel submits that because the applicants are in the Circuit Court facing a criminal trial that the issue is not premature.
Counsel refers to the fact that the penalty should be considered the mandatory or fixed penalty because the discretion of the court is fettered by the manner in which the fine is fixed by law. It is submitted that the fine is fixed in circumstances where it may be unconstitutional.
CONCLUSIONS
Where there are certain distinctive features between the instant case and the case of Sweeney v. Attorney General (Unreported High Court Ó Caoimh J. 27th May, 2004) it is clear that the essential features of this case are the same as those that arose in the Sweeney case. While in the Sweeney case the applicant had not yet pleaded in the District Court and while the applicant in the instant case had pleaded not guilty and had been returned for trial I believe that the essential features of each case is the same. In all cases they have asserted their innocence and have not been tried or sentenced. Furthermore their circumstances have not been clearly indicated. In the circumstances I find no basis upon which I should depart from the views expressed by me in the Sweeney case. Essentially I take the view that the application in the instant case is premature and that a constitutional issue should not be determined by this court at this stage. I believe that the facts of Curtis v. Ireland can be contrasted with the instant case as in that case issues of fact relative to the offence charged were not capable of being determined before the court of trial. The High Court stressed the fact that it was the role of the jury alone to determine disputed issues of fact. It is clear that in the instant case the penalty in question is not a fixed penalty in the sense that only one penalty may be imposed but there is a range of penalties and that the only fixed element is that the fine should such be imposed by the court of trial. In all the circumstances of the case I believe that I should refuse to the applicants the relief which they seek.