APPEAL COURT, HIGH COURT OF JUSTICIARY
Lord Justice Clerk
Appeal No: C434/99
OPINION OF THE COURT
delivered by LORD SUTHERLAND
NOTE OF APPEAL AGAINST SENTENCE (CONFISCATION ORDER)
HER MAJESTY'S ADVOCATE
Appellant: Brady; McCourts
Respondent: Di Rollo, A.D.; Crown Agent
20 October 1999
This is an appeal against the making of a confiscation order in the sum of £89,614 against the appellant. The appellant pled guilty in Dunfermline Sheriff Court to two charges on indictment, being a charge of reset on 21 December 1996 of 72 laptop computers and a charge of reset on 9 December 1996 of one computer, and he was convicted after trial of a charge of obtaining legal aid by fraud between 23 and 31 December 1996. He was sentenced to a period of imprisonment for these offences and the Crown sought a confiscation order under the provisions of section 1 of the Proceeds of Crime (Scotland) Act 1995 ("the 1995 Act"). The relevancy of the statement by the prosecutor was challenged by the appellant but the plea to the relevancy was repelled by the sheriff. Thereafter a hearing was held and the sheriff made the order which is now appealed against.
The opening provisions of the 1995 Act are as follows,
"1(1) Subject to the provisions of this Part, where in respect of any offence to which this Part applies -
(a) the accused is convicted, whether in solemn or summary proceedings; or
(b) in the case of summary proceedings (without proceeding to conviction) an order is made discharging him absolutely,
the court, on the application of the prosecutor, may make an order (a "confiscation order") requiring the accused to pay such sum as the court thinks fit.
(2) This Part applies to any offence which has been prosecuted -
(a) on indictment; or
(b) on summary complaint if the offence is punishable by a fine of an amount greater than the amount corresponding to level 5 on the standard scale or by imprisonment for a period longer than three months or by both such fine and imprisonment,
but it does not apply to an offence under Part III of the 1989 Act (financial assistance for terrorism).
(3) A confiscation order shall not be made unless the court orders some other disposal (including an absolute discharge) in respect of the accused.
(4) Except where the offence is a drug trafficking offence, the court may make a confiscation order against an accused only if it is satisfied that he has benefited from the commission of the offence concerned.
(5) The sum which a confiscation order requires an accused to pay in the case of a drug trafficking offence shall be an amount not exceeding -
(a) subject to paragraph (b) below, what the court assesses to be the value of the proceeds of the person's drug trafficking; or
(b) if the court is satisfied that the amount that might be realised in terms of this Act at the time the confiscation order is made has a value less than that of the proceeds of the person's drug trafficking, what it assesses to be that amount.
(6) A sum which a confiscation order requires an accused to pay in the case of an offence not mentioned in subsection (5) above, must not exceed the lesser of -
(a) the amount of the benefit -
(i) from the commission of the offence; or
(ii) where section 2(4) of this Act applies, from the commission of the offence and any other offence, not being a drug trafficking offence, to which this Part of this Act applies; and
(b) the amount that might be realised at the time the order is made.
2(1) For the purposes of this Part of this Act, an accused shall be held to have benefited from the commission of an offence if in connection with its commission he has obtained, directly or indirectly, any property or other economic advantage.
(2) Subject to subsection (4) below, in determining whether an accused has benefited from the commission of an offence and, if he has, the amount referred to section 1(6)(a)(i) of this Act, the court may make the following assumptions, except in so far as he proves either of them, on the balance of probabilities, to be incorrect -
(a) that any property or other economic advantage which has been obtained by him since the relevant date has been obtained in connection with the commission of the offence; and
(b) that any expenditure by him since the relevant date was met out of property or other economic advantage obtained in connection with the commission of the offence.
(3) In subsection (2) above 'the relevant date' means -
(a) the date of the offence; or
(b) if the offence is found to have been committed over a period of time, the date occurring at the beginning of that period.
(4) Where -
(a) the application for the confiscation order has been made in respect of two or more offences; or
(b) during the relevant period the accused has been convicted of at least one other offence to which this Part of this Act applies,
the court may, in determining the amount referred to in section 1(6)(a)(ii) of this Act, make the assumptions set out in subsection (5) below, except in so far as the accused proves either of those assumptions, on the balance of probabilities, to be incorrect.
(5) Those assumptions are -
(a) that any property or economic advantage which has been obtained by the accused during the relevant period has been obtained in connection with the commission of an offence to which this Part of this Act applies; and
(b) that any expenditure by him during the relevant period was met out of property or other economic advantage obtained in connection with the commission of such an offence.
(6) In subsections (4) and (5) above, "the relevant period" means the period of six years ending with the date on which proceedings were instituted against the accused for the offence in respect of which the application for the confiscation order has been made."
The 1995 Act is a consolidating statute incorporating the provisions of Part I of the Criminal Justice (Scotland) Act 1987 and Part II of the Criminal Justice (Scotland) Act 1995. The former Act dealt with drug trafficking offences and the latter with offences other than drug offences. The provisions of the latter Act stem for the most part from the report of the Scottish Law Commission on Confiscation and Forfeiture (SLC No. 147). That report recommended (recommendation 1(1)) that,
"Subject to the following recommendations, where in a case other than one related to drug trafficking or terrorism a Scottish criminal court is satisfied that an offender has benefited from an offence of which he has been convicted, the court should have a discretionary power to make a confiscation order requiring him to pay such sum as the court thinks fit with the object of depriving him of that benefit."
Recommendation 5 was,
"The sum which a confiscation order requires an offender to pay should not exceed the lesser of
(a) the amount of the benefit which he has derived from the offence or
offences of which he has been convicted;
(b) the amount that might be realised, as defined in recommendation 12
below, at the time the order is made."
In paragraph 3.9 of the report the Commission considered the problem of cases where it is difficult to calculate the benefit from an illegal activity and where the benefit derived from the offence charged is disproportionately small in comparison with the profit which had probably been made from a continuing illegal enterprise. They said,
"It would be possible to deal with such cases by adopting the approach taken in the drug trafficking legislation of enacting provisions with retrospective effect and introducing statutory assumptions the effect of which would be to entitle the court to assume that certain of the offenders' assets represented the proceeds of crime unless he was able to establish the contrary. We doubted however, whether such a draconian approach to confiscation would be justifiable or acceptable in relation to the generality of offences. We therefore sought views on the proposition that any procedure to deprive an offender of the proceeds of crime should extend only to those proceeds derived from the crime or crimes of which he has been convicted. A few consultees expressed the view that that proposition was too weak and did not go far enough, but the weight of opinion among our consultees supported it."
It is therefore apparent that the Commission's recommendation was to legislate to deprive a convicted person of any benefit which he might have received from the commission of the offence or offences of which he had been convicted. This is borne out by the draft Bill attached to the report in which clause 2 contained provisions virtually identical to subsections (1), (2), (3) and (7) of section 2 of the 1995 Act, but no provisions corresponding to subsections (4) and (5). When introducing the Criminal Justice (Scotland) Act 1995 to the House of Commons the Secretary of State said,
"Part II contains comprehensive provisions to deprive offenders of the proceeds and the instruments of crime. These are simple objectives which will, I hope, draw support from both sides of the House. The provisions in Part II are derived from the report on confiscation and forfeiture which was presented to Parliament last September by the Scottish Law Commission. That report recommended the extension of confiscation arrangements to general crime where the offences are prosecuted on indictment or the maximum sentence in summary proceedings exceeds the normal penalties. It also recommended the reform of forfeiture provisions to improve the effectiveness of court forfeiture of the instruments of crime and to clarify the rights of the third parties. The Government moved quickly to present those provisions to Parliament by including them in this Bill. While we accept the main recommendations, minor amendments to the Scottish Law Commission report have been necessary. Some further minor changes may be required." - (Hansard, House of Commons 27 February 1995, col. 715).
The sheriff after the hearing found in fact and in law that,
"(1) There is no evidence of any benefit to the accused from the commission of an offence.
(2) There is no evidence that the accused has committed any other offences in the six years prior to 21 December 1996.
(3) Section 2(4)(a) of the Proceeds of Crime (Scotland) Act 1995 permits the court to make the assumption that any property or economic advantage obtained by the accused during the relevant period has been obtained in connection with the commission of an offence to which this Part of the Act applies and that any expenditure by him during the relevant period was met out of property or other economic advantage obtained in connection with the commission of such an offence.
(4) In this case having regard to the large amount of cash in the accused's possession in respect of which he has been unable to provide an explanation which, on a balance of probabilities, would satisfy the court as to its honest acquisition, it is reasonable to assume that he has acquired this sum dishonestly.
(5) The final value of the proceeds of crime calculated after the deduction of the Crown concession in respect of items 9 and 11 in the impact statement amounting to £3,467 is £89,614."
Counsel for the appellant argued that the sheriff was in error in making findings 3 and 4. He contended that findings 1 and 2 were fatal to the Crown contention as section 1(4) made it clear that in non-drug offences there had to be a benefit to the accused before any confiscation order could be made and, as the sheriff had found that there was no benefit to the appellant, no confiscation order could be made. But for subsections 2(4) and (5), this would be beyond doubt. He submitted that these subsections had to be construed in the light of section 1(4). If they were not, it would mean that a first offender who was convicted on indictment of, say, driving with excess alcohol and dangerous driving could be required to prove that his whole assets acquired during the preceding six years had been honestly acquired. No doubt in such circumstances the Crown might not move for confiscation, or the court in the exercise of its discretion might not grant such a motion if it were made. However, it cannot be thought that this was the intention of Parliament, particularly having regard to the terms of Scottish Law Commission report and the Secretary of State's reference to "minor amendments". He further submitted that section 2(4) related only to the amount of any benefit received and not, as with section 2(2), to the determination of whether any benefit had been received.
The Advocate Depute submitted that section 1(4) only applied where there was a conviction for a single offence. Section 2(2) and (3) applied to such a single offence. The reference in section 1(4) to the "offence concerned" and in section 2(2) to "an offence" made this clear, both being in the singular. Section 2(4) dealt with a different scenario where either two offences were committed or there was previous conviction. The absence in section 2(4) of a reference to "determining whether an accused has benefited from the commission of an offence", unlike section 2(2), was significant as showing that determination of whether any benefit was received is irrelevant in the two-offence situation. The Scottish Law Commission report accepted that it was desirable that English and Scottish legislation on this topic should achieve a similar result, while accepting that because of differences in procedure the latter should not just be a copy of the former. It was clear that the relevant English provisions in the Proceeds of Crime Act 1995, while substantially different in detail, were intended to deal with what is described, in the heading to section 72AA of the Criminal Justice Act 1988 which it inserted, as "confiscation relating to a course of criminal conduct". The same approach should be applied to the Scottish legislation. In any event, even if benefit had to be established, the sheriff erred in holding that the appellant had received no benefit from these offences. He did so apparently on the basis that all the resetted property was recovered. This, however, was not the test. He obtained the stolen property as a result of the commission of the offences at least during the period between its acquisition and its recovery. On any view he obtained the economic advantage of free legal representation as a result of the legal aid fraud. Accordingly benefit was established and therefore section 2(4) and (5) applied.
The construction of this legislation is by no means easy. Little assistance is to be gained from the Scottish Law Commission report as it is clear that section 2(4) and (5), with which this case is concerned, were added despite, rather than because of, the Commission's recommendations. No assistance can be gained from the Parliamentary proceedings. Counsel for the appellant founded on what was said by the Secretary of State in introducing the Bill to the House of Commons. Unfortunately however counsel omitted to observe that at that stage the Bill, which had been introduced in the House of Lords, did not contain what are now subsections 2(4) and (5). These provisions first saw the light of day as amendments introduced by the Government at the Committee stage in the House of Commons and attracted no comment during that stage. When the Bill returned to the House of Lords for consideration of Commons amendments, again they were approved without any comment. There is therefore nothing in the Parliamentary proceedings which gives any assistance as to what was the intention of Parliament.
While there is a superficial attraction in trying to equiparate the intention of the legislation with that of the English legislation, closer examination of the English Act renders this more dubious. Section 72AA of the Criminal Justice Act 1988, as inserted by section 2 of the Proceeds of Crime Act 1995, allows assumptions to be made if an offender is convicted of a qualifying offence and is either convicted of two qualifying offences or has a previous conviction for a qualifying offence. A qualifying offence is one which is "an offence to which this Part of this Act applies" and one from which the defendant has benefited. Section 71(9)(c) defines an offence "to which this Part of this Act applies" as an indictable offence other than a drug offence, or one of certain lesser offences specified in Schedule 4. Under section 72AA(3) the court may make assumptions for the purpose of determining whether the defendant has benefited from "relevant criminal conduct". That expression means, according to section 71(1D), the offence of which he is convicted, together with any other offence of which he is convicted in the same proceedings or which the court will take into consideration in determining sentence. This is subject to provision in section 72AA(6) that, if the assumptions are made,
"the offences from which ... the defendant is assumed to have benefited will be treated as if they were comprised ... in the conduct which is to be treated, in that case, as relevant criminal conduct in relation to the defendant".
It seems fairly clear therefore, that under section 72AA, if a person is convicted of two indictable offences from which he has benefited, the court is entitled to assume that all property transferred to him during the preceding six years has been received as a result of commission of offences "to which this Part of this Act applies", i.e. any indictable offence or one of those mentioned in the Schedule. The two major distinctions between the English legislation and the Scottish legislation are the reference to "relevant criminal conduct" and the definition of what constitutes "an offence to which this Part of this Act applies". There is no reference in the Scottish legislation to relevant criminal conduct, which can readily be understood as referring to criminal conduct other than the specific offences for which the accused has been convicted. The English definition of "an offence to which this Part of the Act applies" is, in effect, in terms of a type of offence, whereas the definition in section 1(2) of the 1995 Act is "any offence which has been prosecuted...". If this definition is carried forward to section 1(6)(a)(ii), that would read "the amount of the benefit...from the commission of the offence and any other offence...which has been prosecuted...". If carried forward to section 2(5)(a), that would read "that any property or economic advantage which has been obtained by the accused during the relevant period has been obtained in connection with the commission of an offence which has been prosecuted...".
The question therefore becomes whether the words "an offence to which this Part of this Act applies" can have a different meaning in different subsections. On the Crown argument, in section 1(2) they are used to mean that only conviction of certain specified types of offence can trigger the operation of section 1(1), whereas in section 1(6)(a)(ii) and section 2 they refer to offences which, without having been prosecuted, would be indictable or attract a high level of penalty on summary complaint. It is difficult to see why the same phrase should have two different meanings, particularly as section 1(2) goes to the trouble of defining the phrase without confining that definition to any specific section or subsection. A further difficulty with the Crown construction of section 2(4) and (5) arises out of the absence in section 2(4) of the words "in determining whether the accused has benefited from the commission of the offence", which words appear in section 2(2). The Crown contention that benefit is irrelevant in considering section 2(4) and (5) cannot be accepted in the light of section 1(6)(a) which refers to "the amount of the benefit" in relation to both (i) and (ii). Accordingly the Crown must prove that the accused has received benefit, which is of course in accordance with section 1(4). For the purposes of section 2(2) certain assumptions may be made to assist in determining whether the accused has received benefit, but for the purposes of section 2(4) there is no provision for such assumptions to be made. Accordingly it would appear that the Crown must prove some benefit to the accused without the assistance of assumptions. This literal construction of the Act, however, poses the question as to what content, if any, can be given to section 2(4)(a) and (5). In the case of a first offender who was convicted on indictment of two offences it is most improbable that he would have received any benefit from these specific offences prior to their commission. That being so, if it is only offences which have been prosecuted that are relevant, whatever assets he may have acquired during the preceding six years cannot have any bearing. This means that section 2(4)(a) and section 2(5) would be devoid of content.
The construction of any legislation which leads to it or part of it being without content is, as far as possible, to be avoided. The appellant's construction of this Act, as we have pointed out, would appear to leave section 2(4)(a) without content, although it may be that there is some situation - which was not identified in argument - in which that would not be so. Where the construction of legislation is in doubt, it is legitimate as an aid to construction to consider what was the clear intention of Parliament. In the present case, however, it is not even clear what the intention of Parliament was. It is not in our view at all clear that Parliament intended that the sort of regime which applies in drug trafficking cases should also be applied in non-drug trafficking cases. Furthermore, if Parliament intends to introduce what would be fairly draconian legislation then it must do so in terms which make it clear what the legislation means. This being a criminal statute, in so far as there is ambiguity in its terms it must be construed in favour of an accused person.
Having taken all these factors into account, we have come to be of the view that because of the definition of "an offence to which this Part of this Act applies" the inescapable conclusion is that wherever this phrase appears it must have reference to an offence which has been prosecuted and not merely to an offence which is one which would be indictable or attract substantial penalties on summary complaint.
As the sheriff proceeded on the basis that he was entitled to have regard to all of the appellant's income during the preceding six years in order to arrive at a figure which he considered constituted the proceeds of dishonest conduct on his part, we are satisfied that his approach was in error. The only activities which were relevant for the purpose of a confiscation order were offences which had been prosecuted. It follows that the sheriff's approach was erroneous and accordingly this appeal must be allowed.