Appellant Pollock: Kerrigan QC; Drummond Miller LLP (for Livingstone Brown, Glasgow)

Appellant Kenmure: McCluskey; Hamilton Burns & Co., Glasgow

Respondent: Divers AD; The Crown Agent

24 February 2009

[1] On 16 December 2005 at Hamilton Sheriff Court the appellants were found guilty of ten charges of reset. The offences dated from 10 and 27 April 2004 and the goods ranged from a Mitsubishi Warrior vehicle to tyres, a trailer, a generator and sundry tools. The vehicle was said to be worth about £17,000, but the other items on each charge were individually worth less than £3,000. Immediately after conviction, the respondent served on each appellant what is minuted as "an application in terms of section 101 of the Proceeds of Crime Act 2002". A "confiscation hearing" was fixed for 24 February 2006 and meantime the appellants were allowed to lodge answers. After sundry procedure, a proof was fixed for 6 February 2008, but that was subsequently changed to a "pre-proof hearing". After several more continued hearings, a debate on certain legal issues was held on 6 June 2008.

[2] Section 92 of the Proceeds of Crime Act 2002 (c 29) provides that the Court must act where a person has been convicted of an offence or offences and the prosecutor asks the Court so to act. The Court must decide whether the "accused" (sic) "has a criminal lifestyle" and, if so, whether he has benefited from his "general criminal conduct". If he does not have such a lifestyle, the Court must decide if nevertheless he has benefited from "his particular criminal conduct" (s 92(5)). If the Court decides against an accused on either aspect then it must make a confiscation order of the "recoverable amount".

[3] Section 142 provides that an accused has a criminal lifestyle if, inter alia:

"(1) ... the offence (or any of the offences) concerned...

(b) constitutes conduct forming part of a course of criminal activity".

Conduct forming part of a course of criminal activity exists if the accused has benefited from it and the accused:

"(2)(a) ... was convicted of three or more other offences, each of three or more of them constituting conduct from which he has benefited".

However:

"(3) ... an offence does not satisfy the test in subsection (1)(b) unless the accused obtains relevant benefit of not less than £5,000.

(4) Relevant benefit for the purposes of subsection (1)(b) is:

(a) benefit from conduct which constitutes the offence;

(b) benefit from any other conduct which forms part of the course of criminal activity and which constitutes an offence of which the accused has been convicted

...".

[4] It was not disputed before the Sheriff that, as a generality, the complainers had been convicted of conduct forming part of a course of criminal activity. What was submitted was that each offence qualifying in terms of the statute required a relevant benefit figure of not less than £5,000. The appellants argued that, since all but one of the offences involved a much lower value, there was no qualifying course of criminal conduct. The respondent submitted that the relevant benefit figure related to the course of conduct as a whole.

[5] The Sheriff's Opinion was that:

"... the crux of the matter is to establish what does 'an offence' in sub-section 3 refer to. I have come to the view that it refers back to the principal offence in sub-section 1.

... the principal offence was a reset to the value of £17,000. ... one looks for three or more offences, each of which constitutes conduct from which he has benefited. It is clear that the principal offence per se does not satisfy the test unless the accused obtains some benefit from three or more other offences. These other offences can be relatively nominal in value as long as he was convicted of them at the same time as the principal offence and that he derived some benefit from them.

Had it referred to the three or more other offences in sub-section 2(a) then one would have expected Parliament to use a plural form or a phrase such as 'each of the offences' as clearly it would have been referring to a minimum of three offences, It did not and thus ... the use of a singular refers back to the singular when used at the beginning of sub-section 142(1). It is for these reasons that I favour the Crown's interpretation which [is] in keeping with the spirit of the Act which is the recovery of [proceeds] of crime arising out of a course of criminal activity rather than scrutinising each offence separately to test whether it meets a threshold of £5,000".

[6] At the hearing of the Bills, the first appellant raised a preliminary point that there had been no request to the Court by the prosecutor to act under section 92; such a request being a condition precedent (ss 92(3)). This was despite the second statement of fact in the Bill being:

"That upon conviction the Respondent made an application for a Confiscation Order under the Proceeds of Crime Act 2002 ..."

The Minute referred only to an application under section 101 of the Act. However, section 101 provides:

"(1) When the court is proceeding under section 92 the prosecutor must... give the court a statement of information".

In this case, that is what the prosecutor did. What was actually served on each appellant was a statement of information. It is an irresistible inference from that service and the terms of the Minute that the respondent had asked the Court to act under section 92. The competency point was therefore repelled.

[7] The appellants then advanced succinct arguments along the lines of those presented to the Sheriff. Properly read, it was submitted, section 142 required the accused to be convicted of three, or possibly four, offences; each of which had a value of £5,000. The Advocate Depute resisted this interpretation in favour of that set out by the Sheriff. The Act could not be clearer. The £5,000 figure referred to the totality of the benefit. Any other interpretation would be absurd. Under reference to the dicta of Lord Steyn in R (Westminster City Council) v National Asylum Service [2002] 1 WLR 2956 (at paras 2, 5 and 6), the Advocate Depute drew attention to the Explanatory Notes attached to the Bill as it went through Parliament. So far as relevant, these are as follows:

"220. The third test is more complicated than the other two. The accused satisfies it if he has (a) been convicted ...of four or more offences of any description from which he has benefited ... In addition, the total benefit from the offences, ... must not be less than £5,000".

[8] Had the content of the Explanatory Notes found its way into the Act, the answer to the appellants' submissions might have been more obvious. Following Lord Steyn's dicta (supra at para 5), the Explanatory Notes can be looked at, but only in so far as they explain the "objective setting or contextual scene of the statute, and the mischief at which it is aimed". As expressions of Governmental desires, they cannot assist as representing reflections of the will or intention of Parliament, at least outwith the situation where the Government is seeking to argue that that intention was different to that which the Government itself previously advanced in terms of the Notes when promoting the relevant Bill (Lord Steyn (supra) para 6).

[9] In the interpretation of any statutory provision, the Court must strive to find the intention of Parliament. It does so primarily by applying ordinary and natural meanings to the words used, albeit having regard to the "objective setting or contextual scene of the statute, and the mischief at which it is aimed" (supra) and looking at the statute as a whole. Of course, absurdities or inconsistencies are to be avoided. But when construing the terms of a penal statute, such as the one under consideration, the benefit of any substantial doubt concerning a real ambiguity may have to be resolved in favour of the person against whom the penalty (ie the confiscation) is aimed.

[10] In the cases presently under consideration, there is no ambiguity requiring resolution. In terms of sub-section 142(3) "an offence does not satisfy the test in subsection (1)(b) unless the accused obtains relevant benefit of not less than £5,000". The value of the benefit is not then related to the particular offence. Rather, it is specifically defined in subsection (4), again for the purposes of sub-section (1)(b), as not only the benefit from the particular or principal offence, but the benefit from "any other conduct which forms part of the course of criminal activity and which constitutes an offence of which the accused has been convicted". This makes it clear that the threshold will be reached, in this type of sub-section (1)(b) case, where the totality of the benefit from the principal and the three or more other offences, of which the person has been convicted, exceeds £5,000. That is the position alleged here. The Court has therefore refused to pass the Bills of Advocation.