- The central question of law
arising on the appeal before the House is whether the Court of Appeal
acted on the correct legal principle when it quashed two confiscation
orders made by the Crown Court pursuant to the Criminal Justice Act 1988,
as amended by the Proceeds of Crime Act 1995: R v Soneji and Bullen
[2004] 1 Cr App R(S) 219.
1. The Confiscation Regime.
- Parliament has firmly adopted the
policy that in the fight against serious crime, apart from ordinary
sentences, a high priority must be given by the courts to the making of
confiscation orders against defendants convicted of serious offences. The
purpose of confiscation proceedings is to recover the financial benefit
that the offender obtained from his criminal conduct. In England and Wales
the confiscation regime was introduced by the Drug Trafficking Offences
Act 1986. It was extended by the Criminal Justice Act 1988 to cover other
indictable offences and specified summary offences. Since its introduction
this legislation has been amended from time to time. The approach
reflected in this legislation has been reinforced by the United Kingdom's
ratification on 28 June 1991 of the United Nations Convention Against
Illicit Traffic in Narcotic Drugs And Psychotropic Substances 1988 and
ratification on 28 September 1992 of the Convention on Laundering, Search,
Seizure and Confiscation of the Proceeds from Crime 1990.
- The most recent statute is the
Proceeds of Crime Act 2002, which came into force on 24 March 2003. The
aim of the new statute is to create an effective unified regime of
confiscation law. Given the almost year by year amendment over the last 20
years of sometimes overhasty criminal legislation, and the great
difficulties created for the courts by much of this flood of legislation,
it would be innocent to predict that the 2002 Act has solved the problems
involved in the criminal process of confiscation. On the present appeals
the interpretation of the 2002 Act does not arise for consideration.
Section 14(11) of the 2002 Act, however, is of some historical interest.
It provides:
"A confiscation order must not be quashed only on the ground that
there was a defect or omission in the procedure connected with the
application for or the granting of a postponement."
In the course of moving the Bill in the House of Lords the Lord
Chancellor explained (Hansard, HL Debates, 25 June 2002, col 1241) that
section 14(11) is:
". . . designed to stop confiscation orders from being quashed
merely because some procedural error has taken place in the application
of the postponement procedures. I shall, if I may, provide your
Lordships with a little background on this occasion, as it is directly
relevant to the amendments.
As your Lordships will be aware, the Bill amends the postponement
regime in the existing legislation. . . . It is important to understand,
however, that the basic mechanics of the postponement regime envisaged
by the Bill remain rather similar to those in the existing legislation.
Unfortunately, it is becoming increasingly clear that the courts are
finding this legislation difficult to operate. A string of appeal cases
testifies to the fact that defendants regularly attempt to have the
confiscation order overturned on the ground that the postponement
procedures were not applied properly by the court. Confiscation orders
are being lost as a result. The case of Woodhead, [[2002] 2 Cr
App R (S) 238] decided by the Court of Appeal in January this year, is a
good example. In that case, the postponement procedures had been
followed to the letter. However, the Court of Appeal overturned a
confiscation order of £200,000 on the grounds that the judge had not
shown that he was exercising his discretion when agreeing to the
postponement."
This provides some retrospectant evidence of the difficulties caused in
practice by the postponement procedures under the 1998 Act.
- The appeals before the House are
governed by the 1988 Act, as amended. Under this legislation there is no
provision like section 14(11). In other words, there is no express
provision that a confiscation order must not be quashed only on the ground
that there was a defect or omission in the procedure connected with the
application for or the granting of a postponement.
- For present purposes the relevant
provisions of the 1988 Act are section 71(1) and section 72(A). Section
71(1), as amended, reads as follows:
"Where an offender is convicted, in any proceedings before the Crown
Court or a magistrates' court, of an offence of a relevant description,
it shall be the duty of the court -
(a) if the prosecutor has given written notice to the
court that he considers that it would be appropriate for the court to
proceed under this section, or
(b) if the court considers, even though it has not been
given such notice, that it would be appropriate for it so to proceed,
to act as follows before sentencing or otherwise dealing with the
offender in respect of that offence or any other relevant criminal
conduct."
The succeeding subsections of section 71 then spell out the duties of
the court in detail. About section 71(1) three points must be noted.
First, it places an overarching duty on the court when an offender is
convicted to consider how to act in respect of confiscation. Secondly,
even if the prosecutor does not seek by notice to persuade the court to
consider confiscation, the court must of its own motion consider whether
to embark on confiscation proceedings. Thirdly, the court must act in this
way act before sentencing.
- Section 72(A) of the 1988 Act, as
amended, governs postponed determinations. It provides:
"(1) Where a court is acting under section 71 above but
considers that it requires further information before -
(a) determining whether the defendant has benefited from
any relevant criminal conduct; or
(c) determining the amount to be recovered in his case .
. .,
it may, for the purpose of enabling that information to be
obtained, postpone making that determination for such period as it may
specify.
(2) More than one postponement may be made under subsection (1)
above in relation to the same case.
(3) Unless it is satisfied that there are exceptional
circumstances, the court shall not specify a period under subsection
(1) above which -
(b) where there have been one or more previous postponements under
subsection above (1) or (4) below, when taken together with the
earlier specified period or periods,
exceeds six months beginning with the date of conviction.
(4) Where the defendant appeals against his conviction, the court
may, on that account -
(a) postpone making any of the determinations mentioned in
subsection (1) above for such period as it may specify; or
(b) where it has already exercised its powers under this section
to postpone, extend the specified period.
(5) A postponement or extension under subsection (1) or (4) above
may be made -
(a) on application by the defendant or the prosecutor; or
(b) by the court of its own motion.
(6) Unless the court is satisfied that there are exceptional
circumstances, any postponement or extension under subsection (4)
above shall not exceed the period ending three months after the date
on which the appeal is determined or otherwise disposed of.
(7) Where the court exercises its power under subsection (1) or
(4) above, it may nevertheless proceed to sentence, or otherwise deal
with, the defendant in respect of the offence or any of the offences
concerned.
(8) Where the court has so proceeded -
(a) subsection (1) of section 71 above shall have effect as if the
words from 'before sentencing' onwards were omitted;
(b) that subsection shall further have effect as if references to
an offence that will be taken into consideration in determining any
sentence included references to an offence that has been so taken into
account; and
(c) section 72(5) above shall have effect as if after
'determining' there were inserted 'in relation to any offence in
respect of which he has not been sentenced or otherwise dealt with".
The genesis of section 72A is as follows. The earlier provisions were
premised on the basis that in the normal case the court would deal with
the confiscation order before sentencing the defendant. The power to
postpone confiscation proceedings was provided in effect as an
afterthought by the Criminal Justice Act 1993.
- Section 72(A) has spawned a
substantial case law. A troublesome question has been whether under
subsection (3), absent exceptional circumstances, the court is deprived of
the power to make a confiscation order after the lapse of six months. In
practice lapse of the six month limit has frequently been thought to
compel the result that the convicted offender is freed from the penalty of
confiscation.
- In practice the courts have, as
the Lord Chancellor observed during the passing of the 2002 Act, found the
postponement procedures under section 72(A) difficult to interpret and
apply. Many confiscation orders have been overturned for very technical
failures. An example is R v Palmer, The Times, 5 November
2002, where the Court of Appeal quashed a confiscation order of more than
£30 million because of a defect in a prosecutor's notice. The Court of
Appeal has held that Palmer was wrongly decided: R v Sekhon
[2003] 1 WLR 1655, 1672-1673, para 51-56; subsequently affirmed by a
five-member court in R v Simpson [2004] QB 118. In both cases it
was held that the provisions concerning postponement were directory only.
This was an attempt by the Court of Appeal to ensure that mere procedural
errors would not in future deprive the court of the power to proceed, if
appropriate, to confiscation. Sekhon and Simpson have,
however, not entirely solved the problem of how to deal with errors in the
application of postponement procedures. That will become clear when the
present case and its disposal by the Court of Appeal after the decision in
Sekhon is considered.
II. The Confiscation Proceedings.
- This prosecution concerned a
money-laundering scheme. Between September 1997 and July 1999 more than
£15 million in used sterling bank notes were laundered through a small
bureau de change close to Victoria Station, London. There were cash
deposits on 189 different dates in sums of up to £350,000 at a time. In
each instance the cash was exchanged either for high-denomination foreign
currency notes (with a view to it being physically carried out of the
jurisdiction) or for bankers drafts or for electronic transfers. The
scheme was masterminded by a man called Raju Soneji. Accused No 1, Kamlesh
Soneji, is his brother. Accused No 1 acted as the runner of Raju Soneji
and was responsible for physically delivering to the bureau most of the
sterling cash deposits. Accused No 2, David Bullen, acted as a link-man
between the Soneji brothers and one of the criminal groups making use of
their laundering services. On 24 March 2000 in the Crown Court at
Southwark Accused No 1 pleaded guilty to an offence of conspiracy to
convert property and to remove it from the jurisdiction knowing or
suspecting that it represented the proceeds of criminal conduct, contrary
to section 1 of the Criminal Law Act 1977. On 3 April 2000 Accused No 2
pleaded guilty to the same offence.
- On 21 June 2000 the prosecutor
served notice under section 71(1)(a) of the 1988 Act that he considered
that it would be appropriate for the court to proceed under that section.
On 18 August 2000 the judge sentenced Accused No 1 to 4½ years
imprisonment (varied on appeal to 3½ years imprisonment) and Accused No 2
to six years imprisonment (varied on appeal to five years imprisonment).
In January 2002, the judge made a confiscation order against the Accused
No 1 in the amount of £75,350. Subsequently, the order was varied to
£30,284. The judge made a confiscation order against Accused No 2 in the
sum of £375,000. Before these orders were made counsel for the two
defendants unsuccessfully submitted to the judge that because of the lapse
of the six months period under section 72(A)(3) the judge no longer had
jurisdiction to make the confiscation orders.
III. The Court of Appeal Decision.
- The Court of Appeal (Criminal
Division) quashed the confiscation orders on the basis that they had been
made more than six months beyond the date of conviction. The Court of
Appeal accepted that there is a power to postpone the making of a
confiscation order under the 1988 Act and a power to adjourn such
proceedings at common law, but held these powers may only be exercised
where the sentencing court finds that there are established exceptional
circumstances which justify the postponement or adjournment. The Court of
Appeal held that a failure to consider or make a finding of exceptional
circumstances deprived the sentencing court of jurisdiction to make a
confiscation order. The Court of Appeal quashed the confiscation orders
for want of jurisdiction under the 1988 Act: R v Soneji and
Bullen, supra.
IV. The Certified Questions.
- The Court of Appeal certified
that the following points of law of general public importance were
involved in the decision to allow the appeals against the confiscation
orders:
"(i) Is the court's common law jurisdiction to adjourn
confiscation proceedings subject to a mandatory time limit of six months
from the date of conviction save where 'exceptional circumstances' are
present?
(ii) Once the court has assumed jurisdiction under
section 71 of the Criminal Justice Act 1988, is its jurisdiction
thereafter extinguished by failure to comply either with the provisions
of section 72A of the Act or any common law requirements relating to the
postponement/adjournment of the proceedings?"
While the Appellate Committee always pays close attention to the
formulation of questions certified by the Court of Appeal, it is not bound
by the terms of the certification: Attorney General for Northern
Ireland v Gallagher [1963] AC 349, 365, per Lord Reid. In this case I
would prefer, in the first place, to consider what are the legal
consequences of failures under the confiscation regime under section
72(A), and in particular the time limit under section 72(A)(3).
V. The Assumption.
- There is an initial difficulty.
Before one can consider the legal consequences of failures under section
72(A) it is necessary to identify those failures. An examination of the
tortuous history of the confiscation procedures in the present case left
me in some doubt whether there were indeed material failures in the
process. On balance I am prepared to assume (without deciding) that the
findings of fact of the Court of Appeal were correct. The Court of Appeal
took into account what it conceived to be the effect of the Sekhon
decision. Giving the judgment of the Court of Appeal Pill LJ observed
[2004] 1 Cr App R (S) 219, 232-233, paras 26-28:
"When the judge gave his ruling on 3 November 2000, that is after
the six months had elapsed, he acknowledged, with admirable candour if
we may say so, that on 18 August, when the earlier decision was
confirmed, no enquiry was made of the defendants as to the postponement
and that there had been no analysis of the factors which might amount to
exceptional circumstances. In his later rulings, the judge also candidly
acknowledged, more than once, that there were not exceptional
circumstances and to go behind that judicial finding would create a
sense of injustice. Even if the judge's finding may be construed as
making a general point that listing difficulties are not an exceptional
event, so that it might be said that the use of the expression was not
itself fatal, the absence of any judicial enquiry and finding upon the
circumstances meant that the requirement was not satisfied.
Failure to address the question whether the circumstances could
properly be described as exceptional and to make a finding to that
effect is in our judgment fatal to the upholding of these confiscation
orders. We would respectfully seek to sustain the principle that
confiscation orders should not be quashed for mere defects in procedure.
To give effect to the requirement that there must be exceptional
circumstances, and if the expression is not to be a mere incantation,
however, enquiry into the circumstances and the possibility and
feasibility of a timely hearing, is required . . . To overlook these
failures would be to nullify the statutory intention upheld in the
cases. . . .
Even if, contrary to the views expressed, the existence of
exceptional circumstances is not invariably a pre-requisite of the
exercise of the power to postpone or adjourn beyond six months of
conviction, any exercise of the power must recognise, in the light of
the authorities, the importance of promptness and the consequent need
for a judicial appraisal of the circumstances, including those which it
is suggested justify delay. A threshold of difficultness must be
crossed. In this case, the lack of enquiry into listing difficulties
following conviction and on 29 June, when the date of 30 October was
pencilled in, and the lack of analysis of the situation then or, as
acknowledged by the judge, on 18 August, make it unfair to uphold orders
eventually made in early 2002."
This is the basis on which I propose to consider what are the legal
consequences of the failures identified by the Court of Appeal. But the
issues have a wider significance.
VI. The Core Problem.
- A recurrent theme in the
drafting of statutes is that Parliament casts its commands in imperative
form without expressly spelling out the consequences of a failure to
comply. It has been the source of a great deal of litigation. In the
course of the last 130 years a distinction evolved between mandatory and
directory requirements. The view was taken that where the requirement is
mandatory, a failure to comply with it invalidates the act in question.
Where it is merely directory, a failure to comply does not invalidate what
follows. There were refinements. For example, a distinction was made
between two types of directory requirements, namely (1) requirements of a
purely regulatory character where a failure to comply would never
invalidate the act, and (2) requirements where a failure to comply would
not invalidate an act provided that there was substantial compliance. A
brief review of the earlier case law is to be found in Wang v
Commissioner of Inland Revenue [1994] 1 WLR 1286, 1294D-1295H.
VII. A New Perspective.
- In London & Clydeside
Estates Ltd v Aberdeen District Council [1980] 1 WLR 182, 189E-190C
Lord Hailsham put forward a different legal analysis:
"When Parliament lays down a statutory requirement for the exercise
of legal authority it expects its authority to be obeyed down to the
minutest detail. But what the courts have to decide in a particular case
is the legal consequence of non-compliance on the rights of the subject
viewed in the light of a concrete state of facts and a continuing chain
of events. It may be that what the courts are faced with is not so much
a stark choice of alternatives but a spectrum of possibilities in which
one compartment or description fades gradually into another. At one end
of this spectrum there may be cases in which a fundamental obligation
may have been so outrageously and flagrantly ignored or defied that the
subject may safely ignore what has been done and treat it as having no
legal consequences upon himself. In such a case if the defaulting
authority seeks to rely on its action it may be that the subject is
entitled to use the defect in procedure simply as a shield or defence
without having taken any positive action of his own. At the other end of
the spectrum the defect in procedure may be so nugatory or trivial that
the authority can safely proceed without remedial action, confident
that, if the subject is so misguided as to rely on the fault, the courts
will decline to listen to his complaint. But in a very great number of
cases, it may be in a majority of them, it may be necessary for a
subject, in order to safeguard himself, to go to the court for
declaration of his rights, the grant of which may well be discretionary,
and by the like token it may be wise for an authority (as it certainly
would have been here) to do everything in its power to remedy the fault
in its procedure so as not to deprive the subject of his due or
themselves of their power to act. In such cases, though language like
'mandatory,' 'directory,' 'void,' 'voidable,' 'nullity,' and so forth
may be helpful in argument, it may be misleading in effect if relied on
to show that the courts, in deciding the consequences of a defect in the
exercise of power, are necessarily bound to fit the facts of a
particular case and a developing chain of events into rigid legal
categories or to stretch or cramp them on a bed of Procrustes invented
by lawyers for the purposes of convenient exposition. As I have said,
the case does not really arise here, since we are in the presence of
total non-compliance with a requirement which I have held to be
mandatory. Nevertheless I do not wish to be understood in the field of
administrative law and in the domain where the courts apply a
supervisory jurisdiction over the acts of subordinate authority
purporting to exercise statutory powers, to encourage the use of rigid
legal classifications. The jurisdiction is inherently discretionary and
the court is frequently in the presence of differences of degree which
merge almost imperceptibly into differences of kind."
This was an important and influential dictum. It led to the adoption of
a more flexible approach of focusing intensely on the consequences of
non-compliance, and posing the question, taking into account those
consequences, whether Parliament intended the outcome to be total
invalidity. In framing the question in this way it is necessary to have
regard to the fact that Parliament ex hypothesi did not consider the point
of the ultimate outcome. Inevitably one must be considering objectively
what intention should be imputed to Parliament.
- In Wang v Commissioner of
Inland Revenue [1994] 1 WLR 1286, in an appeal from Hong Kong, the
Privy Council followed and applied the dictum of Lord Hailsham in
London & Clydeside Estates. At first instance the judge found
that the deputy commissioner lacked jurisdiction to make two
determinations since he had not done so within a reasonable time required
by the imperative language of the statute. The Court of Appeal reversed
the decision. On appeal the Privy Council dismissed the appeal on two
grounds. First, the Privy Council found on the facts that the
determinations were made within a reasonable time. Secondly, on the
assumption that there had been a breach of the time limit, the Privy
Council held that the deputy commissioner had not been deprived of his
jurisdiction. After reviewing earlier case law Lord Slynn of Hadley,
giving the judgment of the Privy Council, observed [at 1296D]:
". . . their Lordships consider that when a question like the
present one arises - an alleged failure to comply with a time provision
- it is simpler and better to avoid these two words 'mandatory' and
'directory' and to ask two questions. The first is whether the
legislature intended the person making the determination to comply with
the time provision, whether a fixed time or a reasonable time. Secondly,
if so, did the legislature intend that a failure to comply with such a
time provision would deprive the decision maker of jurisdiction and
render any decision which he purported to make null and void?
In the present case the legislature did intend that the commissioner
should make his determination within a reasonable time. . . . If the
commissioner failed to act within a reasonable time he could be
compelled to act by an order of mandamus. It does not follow that his
jurisdiction to make a determination disappears the moment a reasonable
time has elapsed. If the court establishes the time by which a
reasonable time is to be taken as having expired, which will depend on
all the circumstances, including factors affecting not only the taxpayer
but also the Inland Revenue, it would be surprising if the result was
that the commissioner had jurisdiction to make the determination just
before but not just after that time. Their Lordships do not consider
that that is the effect of a failure to comply with the obligation to
act within a reasonable time in the present legislation. Such a result
would not only deprive the government of revenue, it would also be
unfair to other taxpayers who need to shoulder the burden of government
expenditure; the alternative result (that the commissioner continues to
have jurisdiction) does not necessarily involve any real prejudice for
the taxpayer in question by reason of the delay."
It will be noted that Lord Slynn spoke of jurisdiction not being lost.
He was using that notion in the traditional sense of conveying that the
authority or power of the court had not been lost: Halsbury's Laws of
England, 4th ed, (Re-issue), para 314.
- Charles v Judicial Legal
Service Commission [2003] 1 LRC 422 involved an appeal from
Trinidad and Tobago. It is a decision of some importance. The case
concerned the effect of failures to observe time limits laid down by
regulations dealing with discipline and misconduct in the public service.
Giving the judgment of the Privy Council Tipping J (of the New Zealand
Court of Appeal) observed, at pp 428-429, para 12:
"At the outset their Lordships observe that it seems highly unlikely
that the Commission can have intended that breaches of time limits at
the investigation stage would inevitably prevent it from discharging its
public function and duty of inquiring into and, if appropriate,
prosecuting relevant indiscipline or misconduct. A self-imposed fetter
of such a kind on the discharge of an important public function would
seem inimical to the whole purpose of the investigation and disciplinary
regime."
He added at p 430, para 17:
". . . If a complaint is made about the non-fulfilment of a time
limit the giving of relief will usually be discretionary. This
discretionary element to which Lord Hailsham referred [in the London
& Clydeside Estates case] underlines the fact that problems
arising from breach of time limits and other like procedural flaws are
not generally susceptible of rigid classification or black and white a
priori rules. With this in mind their Lordships note that in the present
case the delays were in good faith, they were not lengthy and they were
entirely understandable. The appellant suffered no material prejudice;
no fair trial considerations were or could have been raised, and no
fundamental human rights are in issue."
The reasoning in Charles is along the same lines as Lord
Hailsham's observations and the Wang case.
- There is also subsequent House
of Lords authority to similar effect: Attorney General's Reference (No
3 of 1999) [2001] 2 AC 91. In imperative language Parliament had
provided that if a defendant is cleared of an offence fingerprints or
samples taken from him in the investigation of the offence must be
destroyed. There was a breach of the duty. A DNA profile obtained from
swabs taken from a rape victim was found to match that of the defendant.
He was charged and convicted. The Court of Appeal quashed the conviction.
The House of Lords reversed the decision of the Court of Appeal. The House
declined to apply the mandatory/directory distinction. Instead the House
adopted the reasoning of Lord Hailsham, concentrated on the consequence of
non-compliance, and addressed the question what in the light of the
consequences must Parliament be taken to have been intended. The House
held that the Parliamentary intent would have been inimical to holding
that that the prosecution was invalid: see my judgment, at pp 117-118;
Lord Cooke of Thorndon, at pp 120-121; and Lord Clyde, at p 121. Lord
Hobhouse of Woodborough agreed, at pp 125-126. Lord Hutton concurred in
the result. This decision involved a rejection of the mandatory/directory
distinction in the face of explicit imperative language. It is a strong
decision.
- Apart from these three cases
which applied Lord Hailsham's dictum, it is to be noted that the Court of
Appeal has adopted the same approach on a number of occasions: R v
Kensington and Chelsea Royal London Borough Council Ex p Hammell
[1989] QB 518; Crédit Suisse v Allerdale Borough Council [1997] QB
306; R v Secretary of State for the Home Department, Ex p
Jeyeanthan [2000] 1 WLR 354.
- Moreover, in the courts of New
Zealand, Australia and Canada parallel developments took place. In New
Zealand Institute of Agriculture Science Inc v Ellesmere County [1976]
1 NZLR 630. Cooke J (subsequently Lord Cooke of Thorndon) speaking for the
court said, at p 636:
"Whether non-compliance with a procedural requirement is fatal turns
less on attaching a perhaps indefinite label to that requirement than on
considering its place in the scheme of the Act or regulations and the
degree and seriousness of the non-compliance."
This observation was subsequently cited in the
Charles case in the Privy Council to which I have referred.
- In Project Blue Sky Inc v
Australian Broadcasting Authority (1998) 194 CLR 355 the Australian
High Court addressed the same problem. In the joint judgment of McHugh,
Gummow, Kirby and Hayne JJ the court concluded, at para 93:
"In our opinion, the Court of Appeal of New South Wales was correct
in Tasker v Fullwood in criticising the continued use of the
'elusive distinction between directory and mandatory requirements' and
the division of directory acts into those which have substantially
complied with a statutory command and those which have not They are
classifications that have outlived their usefulness because they deflect
attention from the real issue which is whether an act done in breach of
the legislative provision is invalid. The classification of a statutory
provision as mandatory or directory records a result which has been
reached on other grounds. The classification is the end of the inquiry,
not the beginning. That being so, a court, determining the validity of
an act done in breach of a statutory provision, may easily focus on the
wrong factors if it asks itself whether compliance with the provision is
mandatory or directory and, if directory, whether there has been
substantial compliance with the provision. A better test for determining
the issue of validity is to ask whether it was a purpose of the
legislation that an act done in breach of the provision should be
invalid. This has been the preferred approach of courts in this country
in recent years, particularly in New South Wales. In determining the
question of purpose, regard must be had to 'the language of the relevant
provision and the scope and object of the whole statute.'"
This reasoning contains an improved analytical framework for examining
such questions. In the evolution of this corner of the law in the common
law world the decision in Project Blue Sky is most valuable.
- In Canada there have been
developments along similar lines. The starting point is British
Columbia (Attorney General) v Canada (Attorney General); An Act respecting
the Vancouver Island Railway (Re) [1994] 2 SCR 41. The
mandatory/directory distinction was strongly criticized. For the majority
Iacobucci J observed: "courts tend to ask, simply: would it be seriously
inconvenient to regard the performance of some statutory direction as an
imperative?" My understanding is that, seven of the Supreme Court Justices
were agreed on this point, with Lamer CJ and McLachlin J dissenting. In
Society Promoting Environmental Conservation v Canada
(Attorney-General) (2003) 228 DLR (4th) 693 this development was taken
a stage further by the Federal Court of Appeal. Relying on Lord Hailsham's
dictum, Evans JA gave the main judgment for the court with Strayer JA
concurring in the result and reasoning on this point, at p 710, para
35:
"(iv) . . . the more serious the public inconvenience and injustice
likely to be caused by invalidating the resulting administrative action,
including the frustration of the purposes of the legislation, public
expense and hardship to third parties, the less likely it is that a
court will conclude that legislative intent is best implemented by a
declaration of invalidity."
I regard the developments in Canada as very similar to those in New
Zealand and Australia.
- Having reviewed the issue in
some detail I am in respectful agreement with the Australian High Court
that the rigid mandatory and directory distinction, and its many
artificial refinements, have outlived their usefulness. Instead, as held
in Attorney General's Reference (No 3 of 1999), the emphasis ought
to be on the consequences of non-compliance, and posing the question
whether Parliament can fairly be taken to have intended total invalidity.
That is how I would approach what is ultimately a question of statutory
construction. In my view it follows that the approach of the Court of
Appeal was incorrect.
VIII. Application of the Test Enunciated in Attorney General's
Reference (No 3 of 1999).
- It remains to address the point
of statutory interpretation in accordance with the test as I have outlined
it. On behalf of the two accused counsel submitted that, given the
criminal law context, a strict approach to construction of section 72A of
the 1988 statute should be adopted. Bearing in mind that one is not
dealing with the definition of crimes, but with the process of making
confiscation orders, I would reject this approach. The context requires a
purposive interpretation: Sir Rupert Cross, Statutory
Interpretation, 3rd ed (1995), 172-175. Secondly, counsel argued that
such an interpretation would render wholly ineffective the Parliamentary
intent of providing for a specific time limit. I would not accept that
this is correct. At the very least the courts can, where necessary,
vindicate the scheme adopted by Parliament by the abuse of process
jurisdiction and perhaps in other ways. Thirdly, counsel for the accused
relied on an alleged injustice caused to the accused by the delay of the
confiscation procedures. In my view this argument was overstated. The
prejudice to the two accused was not significant. It is also decisively
outweighed by the countervailing public interest in not allowing a
convicted offender to escape confiscation for what were no more than
bona fide errors in the judicial process.
- In my view an objective
appraisal of the intent, which must be imputed to Parliament, points
against total invalidity of the confiscation orders.
- For these reasons I would allow
the appeal of the Crown.
IX. Two Remaining Issues.
- For the sake of completeness I
deal briefly with two remaining issues which were debated at the oral
hearing. First, lower courts have accepted that, in parallel to the
statutory confiscation postponement proceedings, there exists a common law
jurisdiction to adjourn confiscation proceedings. In my view section
72(A)(3) rules out such co-existing powers. I would rule that there is no
such common law jurisdiction.
- Secondly, there were competing
arguments about whether the requirement of "exceptional circumstances" in
section 72(A)(3) should be strictly construed. In lower courts a very
strict approach has sometimes prevailed. An expression such as
"exceptional circumstances" must take its colour from the setting in which
it appears. Bearing in mind the context I would not adopt a very strict
approach to the meaning of exceptional circumstances.
X. Disposal.
- For these reasons, as well as
the reasons given by my noble and learned friends Lord Rodger of
Earlsferry and Lord Brown of Eaton-under-Heywood, I would allow the appeal
of the Crown.
LORD RODGER OF EARLSFERRY
My Lords,
- If your young daughter wants to
go out with friends for the evening and you agree, but tell her that she
must be home by eleven o'clock, she is under a duty to return by then. But
this does not mean that her duty is to return by then or not at all.
Rather, even if she fails to meet your deadline, she still remains under a
duty to return home. On the other hand, if you contract with a conjuror to
perform at your daughter's birthday party, you want the conjuror and his
tricks only for the party. His duty is accordingly limited to performing
at the party held on your daughter's birthday and, if he fails to turn up,
he cannot discharge the duty later. In the present cases Parliament has
placed the court under a duty, where appropriate, to make a confiscation
order before it sentences an offender. If the court fails to do so and
proceeds to sentence the offender first, does Parliament intend that -
like your daughter - the court should remain under a duty to make the
order? Or does Parliament intend that the duty should be limited so that -
like the conjuror - the court can perform it only before sentencing?
- I put the issue in terms of the
duty of the court, rather than - as counsel presented their arguments - in
terms of its power or jurisdiction, since the House is interpreting a
statute and it seems best to stick closely to the language which
Parliament has used. So far as material, section 71(1) of the Criminal
Justice Act 1988, as amended, provides:
"(1) Where an offender is convicted, in any proceedings
before the Crown Court or a magistrates' court, of an offence of a
relevant description, it shall be the duty of the court -
(a) if the prosecutor has given written notice to the
court that he considers that it would be appropriate for the court to
proceed under this section, or
(b) if the court considers, even though it has not been
given such notice, that it would be appropriate for it so to proceed,
to act as follows before sentencing or otherwise dealing with the
offender in respect of that offence or any other relevant criminal
conduct.
(1A) The court shall first determine whether the offender
has benefited from any relevant criminal conduct.
(1B) Subject to subsection (1C) below, if the court
determines that the offender has benefited from any relevant criminal
conduct, it shall then -
(a) determine in accordance with subsection (6) below the
amount to be recovered in his case by virtue of this section, and
(b) make an order under this section ordering the
offender to pay that amount."
- When section 71(1) is engaged,
it imposes a duty on the court to act as required by subsections (1A) and
(1B) and, where appropriate, to make a confiscation order "before
sentencing or otherwise dealing with the offender in respect of that
offence or any other relevant criminal conduct." This duty is to be
contrasted with the mere power, which the court has under subsection (1C),
to make such an order if it is satisfied that a victim of the crime
intends to take civil proceedings against the defendant. Section 71(1)
requires the court to take these steps before proceeding to sentence. But,
in practice, the Crown may not have the necessary financial information
readily to hand immediately after the defendant is convicted, or else the
defendant may challenge some of it and there may need to be an inquiry
into the facts. All of this takes time and so, if the confiscation order
has to be made before any sentence can be imposed, the defendant may be
left in an uncomfortable limbo. From every point of view, there will often
be much to be said for the court proceeding to sentence before deciding
about the confiscation order. The defendant can then get on with serving
his sentence. Parliament recognised this and so, to allow the court to
sentence first, by section 28 of the Criminal Justice Act 1993 it inserted
section 72A into the 1988 Act. As further amended and so far as material,
section 72A provides:
"(1) Where a court is acting under section 71 above but
considers that it requires further information before -
(a) determining whether the defendant has benefited from
any relevant criminal conduct; or
(b) determining the amount to be recovered in his case …,
it may, for the purpose of enabling that information to be obtained,
postpone making that determination for such period as it may specify.
(2) More than one postponement may be made under
subsection (1) above in relation to the same case.
(3) Unless it is satisfied that there are exceptional
circumstances, the court shall not specify a period under subsection (1)
above which -
(b) where there have been one or more previous
postponements under subsection (1) above or (4) below, when taken
together with the earlier specified period or periods,
exceeds six months beginning with the date of conviction.
(5) A postponement or extension under subsection (1) ...
above may be made—
(a) on application by the defendant or the prosecutor; or
(b) by the court of its own motion.
(7) Where the court exercises its power under subsection
(1) ... above, it may nevertheless proceed to sentence, or otherwise
deal with, the defendant in respect of the offence or any of the
offences concerned.
(8) Where the court has so proceeded -
(a) subsection (1) of section 71 above shall have effect
as if the words from 'before sentencing' onwards were omitted....
(9) In sentencing, or otherwise dealing with, the
defendant in respect of the offence, or any of the offences, concerned
at any time during the specified period, the court shall not -
(a) impose any fine on him; or
(b) make any such order as is mentioned in section
72(5)(b) or (c) above.
(9A) Where the court has sentenced the defendant under
subsection (7) above during the specified period it may, after the end
of that period, vary the sentence by imposing a fine or making any such
order as is mentioned in section 72(5)(b) or (c) above so long as it
does so within a period corresponding to that allowed by section 155(1)
or (2) of the Powers of Criminal Courts (Sentencing) Act 2000 (time
allowed for varying a sentence) but beginning with the end of the
specified period."
Where the court considers that it requires further information before
making a determination, under subsection (1) it may, for the purpose of
enabling that information to be obtained, postpone making the
determination. But, unless in exceptional circumstances, the period of
postponement must not exceed six months from the date of the defendant's
conviction. If the court exercises this power and postpones the
determination, under subsection (7) the court may nevertheless proceed to
sentence the defendant and, where it does so, under subsection (8) section
71(1) has effect as if the words requiring the court to act before
sentencing were omitted. Put shortly, if the court postpones the
determination of a matter relating to the confiscation order, it can still
sentence the defendant and, if it does so, the words in section 71(1)
which require the confiscation order to be made first are deemed to be
omitted.
- As my noble and learned friend,
Lord Steyn, has explained, in the present case it is said that, in good
faith, the court postponed a relevant determination beyond six months from
the date of Mr Soneji and Mr Bullen's convictions, even though there were
no exceptional circumstances to justify this. I respectfully agree with
him that the court had no common law power to postpone the determination
to obtain information. I also agree, however, that "exceptional
circumstances" in section 72A(3) should not be interpreted too narrowly.
The court must comply with the six-month requirement wherever reasonably
possible, even if this means that its timetable has to be adjusted
accordingly. Nevertheless, I would certainly not rule out the possibility
that some listing difficulties could amount to "exceptional
circumstances". But the judge must look into the position and see what can
and cannot be done. Here the Court of Appeal held that he had failed to do
so and that, accordingly, the court had not been entitled to postpone the
determinations beyond six months after the defendants' convictions. The
Court of Appeal further held that the resulting confiscation orders should
be quashed. Therefore, the principal issue raised by the Crown's appeal in
these cases is whether, assuming that the judge had not been entitled to
postpone the determinations beyond the six-month limit, the confiscation
orders were invalid.
- My Lords, in approaching this
issue, I begin by noticing that, faced with the situation where
undesirable delays in sentencing were occurring because of the need to
complete the confiscation procedure, Parliament introduced section 72A. In
itself, this indicates that, in Parliament's view, the duty to make a
confiscation order should not be limited to cases where the order can be
made before sentence is passed. Of course, Parliament envisages that the
court will make the order first unless it has exercised its power under
section 72A(1) to postpone the relevant determination. But it is of some
significance that, on a broad view, Parliament sees it as more important
that a confiscation order should be made than that it should be made
before the defendant is sentenced.
- Undoubtedly, section 71(1) is
the key provision of this Part of the statute. It lays down the primary
rule that the court should make any confiscation order before sentencing
the defendant. But one must ask why. Why, in Parliament's view, should the
sequence be confiscation order followed by sentence? The answer is that in
the legislative scheme confiscation orders are to have primacy over fines
and other financial disposals, which must be tailored accordingly. This is
laid down in section 72(5). It provides that, where a court makes a
confiscation order, it shall be its duty to take account of the order
before imposing any fine or making any other financial order against the
defendant. Therefore in cases where the judge may be considering whether
to impose a fine, either as the entire disposal or as one element in the
sentence, he will not be able to decide on the appropriate sentence unless
he knows whether the defendant is subject to a confiscation order and, if
so, for what amount. So the confiscation order is to be considered
first.
- It follows that the purpose
behind the sequence in section 71(1) is to make the sentencing process as
effective as possible in a system in which confiscation orders have
primacy. To help achieve that purpose, the confiscation order procedure
should come first. Or, to put it the other way round, what matters is that
sentencing should take place after the court decides on any confiscation
order. Of course, as Parliament recognised by enacting section 72A, the
idea can be pushed too far since it makes little sense to insist on this
rigid sequence where there is no prospect of the court imposing a
financial penalty. Hence the power for the court to invert the sequence
and to sentence the defendant first. But the court can exercise that power
even where it contemplates including a fine or other financial order in
the sentence. In that kind of case section 72A(9) prohibits the court from
imposing the fine or making the order during the period of postponement.
After that, however, when it is known whether the defendant is subject to
a confiscation order and, if so, for how much, under subsection (9A) the
court can vary the sentence by imposing the fine or making the order. In
this way Parliament is careful to maintain the appropriate sequence and to
ensure that the court can take account of any confiscation order when
deciding on the amount of the penalty - as section 72(5) requires. Thus
the purpose behind the sequence laid down in section 71(1) runs,
unmistakably, through the scheme of sections 71 and 72A.
- In the present cases, both Mr
Soneji and Mr Bullen, very understandably, wanted to be sentenced on 18
August 2000 rather than wait until the confiscation order matters could be
sorted out. In that way they knew as soon as possible what period of
imprisonment they were to serve and they could start their sentence. Each
of them appealed successfully against the length of the prison sentence
imposed on him. But they do not suggest that those sentences pronounced by
the court on 18 August 2000, long before the confiscation orders were made
on 7 February 2002, were invalid. Nor do they suggest that the reduced
sentences which the Court of Appeal substituted on 24 October 2001 -
again, months before the confiscation orders were made - are invalid.
- The position of the respondents
therefore appears to be that, since there was no valid postponement under
section 72A(1), the confiscation orders are invalid because they were made
after the prison sentences were imposed, but the prison sentences are
valid even though they were pronounced before the confiscation orders were
made. Prima facie, at least, that is an incoherent position: either both
should be invalid, because the provisions of section 71(1) have not been
observed, or else both should be valid despite the failure to observe
those provisions. In my view both are valid.
- Since Parliament's purpose in
prescribing the sequence in section 71(1) was to ensure that the
sentencing process was effective, it is the fact that the respondents were
sentenced before the confiscation orders were made that constitutes the
real breach of the intendment of the section. And, indeed, there would
have been a breach of the section if the sentences had been imposed first,
even if, on due consideration, the court had decided, in terms of section
71(1B), that the defendants had not benefited from their criminal conduct
and so no confiscation order should be made. Of course, the judge did
actually make confiscation orders in these cases. But the respondents do
not suggest that the fact that they were sentenced before the confiscation
orders were made had any bearing on the judge's decision to impose the
periods of imprisonment that he did - or, for that matter, on the Court of
Appeal's decision to impose the lesser periods of imprisonment. In fact,
they do not suggest that the breach of the section interfered in any way
with the sentencing procedure. Nor is there any reason why it should have
done since both courts imposed custodial rather than financial penalties.
This was therefore exactly the kind of case where it made sense for
sentencing to take place, as it did, ahead of the confiscation order. In
that situation, where the breach of the requirements of section 71(1)
caused no prejudice of any kind to the respondents in respect of their
sentences, I am satisfied that Parliament would not have intended that the
sentences passed by the judge should be invalid.
- A fortiori, Parliament would not
have intended that the confiscation orders made by the judge should be
invalid merely because the sequence required by section 71(1) was not
followed. The purpose of that sequence is to ensure the effectiveness of
the sentencing procedure, not the effectiveness of the procedure for
making a confiscation order. Failure to observe it might therefore,
conceivably, have been a reason why Parliament would have intended a
sentence to be invalid. But, given the purpose of the sequence, there is
no good reason to suppose that Parliament would have intended that the
court's duty to consider making a confiscation order under section 71(1)
should be limited so that the court could no longer discharge it if, with
his consent, the defendant had been sentenced first. Similarly, it is hard
to suppose that Parliament would have intended that a confiscation order
should be invalid merely because it was made in those circumstances.
- In the present case the reason
why the postponement under section 72A(1) is said to have been invalid is
because the period specified took the determination beyond the six-month
period in circumstances which were not exceptional. Strictly, the
six-month period in section 72A(3) relates to the postponement of a
determination in terms of section 71(1A) or (1B)(a), rather than to the
postponement of the making of an order under section 71(1B)(b). But, in
practice, a court will make an order once it has determined the amount to
be recovered. So, at least in the case of a postponement under section
72A(1)(c), the six-month limit means that, unless there are exceptional
circumstances, any confiscation order should be made, at the latest, about
six months after conviction. That is a protection which Parliament has
built into the legislation. But it is a protection for the public interest
represented by the prosecution, as well as for the defendant's interest,
since the time-limit applies where the court considers it requires further
information, irrespective of whether the information is designed to
clarify a matter that is favourable to the Crown or to the defence.
Presumably, Parliament was concerned that, in the absence of a time-limit,
matters might tend to drift once the sentencing was over.
- In the present cases, the
confiscation orders were made not much less than two years after the
respondents' convictions. It may be that, if actings or failures on the
part of the prosecution or the court authorities were to lead to a delay
of more than six months, this might, depending on the circumstances,
amount to an abuse of process which would make it unfair and inconsistent
with the spirit of the Act for the court to make a confiscation order.
But, here, about six months of the delay were due to the need for the
court to resolve points, raised by the respondents, about its jurisdiction
to make the orders. Nor is there any suggestion that the prosecution or
court authorities were deliberately dragging their feet or otherwise
acting in bad faith. In these circumstances I am satisfied that the delay
in making the orders does not affect their validity.
- For these reasons, which are
substantially the same as those of the other members of the committee, I
consider that the confiscation orders made by the judge were valid and
that the Court of Appeal were wrong to quash them. I would accordingly
allow the appeal.
LORD CULLEN OF WHITEKIRK
My Lords,
- This appeal involves an
examination of the significance of, and the relationship between, section
71 and section 72A of the Criminal Justice Act 1988, as amended, prior to
the coming into force of the Proceeds of Crime Act 2002.
- The fact that section 71(1)
imposes a duty, rather than confers a power, on the court to consider
making determinations leading to a confiscation order plainly reflects the
importance attached by Parliament to the need to prevent offenders from
benefiting by their crimes. For this duty to become operative it is
sufficient that the prosecutor or the court considers that it would be
appropriate for the court to proceed under that section.
- According to the terms of
section 71(1), the court is to "act as follows before sentencing or
otherwise dealing with the offender in respect of that offence or any
other relevant criminal conduct". The requirement that consideration of
confiscation should precede that of sentence is evidently intended to
ensure that account can be taken of any confiscation order in the
sentencing of the offender. Section 72(5) explicitly provides for this
when the court is proceeding to impose a fine or make an order such as for
the compensation of the victim.
- Section 72A by subsections (1)
and (2) gives the court power to postpone the making of such
determinations, and hence a confiscation order, for such period or periods
as it may specify, where it "considers that it requires further
information" before making them. This is the sole statutory provision for
such postponement. It pre-supposes that the court has already come under
the duty in section 71(1). The reason for the reversal of the order
provided for in section 71(1) is not hard to find. It could take some time
for the information in regard to confiscation to be collected and
presented to the court. In the result the effect of requiring the
determination of confiscation to precede sentencing - as was the case
before this section was introduced by the amendment of the 1988 Act - was
that it could delay the whole outcome, thus leaving the offender in
additional uncertainty.
- Subsection (3) of section 72A
provides that the court "shall not specify a period" which goes beyond a
certain time limit "unless it is satisfied that there are exceptional
circumstances". Although the terms of the subsection are not entirely
straightforward, it is reasonably plain that the intention is that
postponement is not to go beyond the date that is six months after the
conviction unless there are exceptional circumstances. That subsection
appears to be aimed at avoiding undesirable delay in the process which may
lead to the making of a confiscation order.
- Subsections (7) and (8) of
section 72A are of some importance in showing the relationship between
that section and section 71. The first of these subsections means that in
proceeding to sentence the offender the court is not to be hampered by the
fact that it has exercised its power of postponement of a determination,
subject to the proviso in subsection (9) that during the specified period
it is not to impose a fine or make one of the orders to which section
72(5) refers. Paragraph (a) of subsection (8) goes further: when the court
exercises its power of postponement and proceeds to sentence the offender,
it is no longer required to deal with confiscation first.
- I do not consider that there is
a common law power to postpone determinations which coexists with the
power provided for in section 72A. There is no need to regard the terms of
section 72A as so limited in scope as to indicate that such a common law
power must exist. The court's requirement for "further information" in
subsection (1) may arise from the fact that the information which it
requires has not yet been collected. But it may also arise from the fact
that it has not yet been presented. "Exceptional circumstances" in
subsection (3) does not have to be given a strict interpretation. If there
were such a common law power, this would call in question the need for
section 72A, and would not sit well with the express terms of that
section.
- As regards the second certified
question, I have had more difficulty. It is contended that where the court
fails to comply with section 72A it would lose its "jurisdiction" to make
the determinations referred to in section 71(1A) and (1B), and hence to
make a confiscation order. In the present cases the Court of Appeal held
that the failure of the court to address the question whether the
circumstances were exceptional when postponing the making of
determinations beyond the expiration of the six months was fatal to the
confiscation orders.
- Since the statute does not spell
out the legal consequences for the offenders of non-compliance with
subsection (3) it is necessary to work out those consequences, applying
the authorities to which the noble and learned Lord Steyn has referred.
The failure to comply with subsection (3) has to be seen in the light of
the purposes of the statutory provisions as a whole, in order to determine
whether or not the failure was of such significance as to make the ensuing
confiscation orders of no effect.
- Subsection (3) of section 72A
expressly states that the court is not to postpone beyond the end of the
six months unless it is satisfied that there are exceptional
circumstances. There is a similar prohibition where there is an appeal
against conviction. There is force in the view that the section shows that
the court cannot proceed except where it is so satisfied. However, it is
necessary to scrutinise these provisions in the whole context. Substance
may be more important than form. A number of considerations seem to me to
be material.
- First, it is plain that the
underlying purpose of the general rule that consideration of a
confiscation order is to precede the sentencing of the offender is mainly,
if not entirely, directed to cases in which the court is likely to proceed
to impose a fine or an order of the type referred to in section 72(5).
- Secondly, it is important to
bear in mind the relatively narrow point in respect of which there was
non-compliance. The basis for the contention that the court lost its
"jurisdiction" is not that it made a postponement, nor that it postponed
beyond the end of the six month period, but that it made that postponement
without consideration of whether the circumstances were exceptional. It is
not in doubt that the court made the postponement in good faith and with
the assent of the parties. It appears to be the case that if the court had
complied with the letter of subsection (3) it could have made further
postponements thereafter without being subject to the express terms of
subsection (3).
- Thirdly, the terms of subsection
(8)(a) of section 72A are of some importance. If the court has made a
postponement for a period which does not extend beyond the end of the six
month period the requirement of section 71(1) that consideration of a
confiscation order should take precedence is to be treated as disapplied.
If thereafter the court makes a further postponement which does extend
beyond the end of the six-month period but without considering whether
there are exceptional circumstances, it is very difficult to see how that
could re-apply the requirement of section 71(1) and hence support to the
argument that it was too late for a confiscation order to be made, let
alone that the sentence was incompetent. The present case is, of course,
different, in respect that the first postponement was for a period which
extended beyond the end of the six-month period. However, the point
remains that it cannot be said that there is a universal problem created
by the failure to comply with subsection (3) of section 72A.
- Lastly, and most fundamentally,
section 71 creates a duty on the court to consider the making of a
confiscation order. The repeated use of the expression "jurisdiction"
tends to distract attention from the fact that what is an issue is not the
loss of a power to consider the making of such an order but the
dissolution of a duty to do so. It is a duty which Parliament plainly
envisaged as capable of subsisting after the offender had been sentenced
and after more than six months since his conviction. The power of
postponement under section 72A is expressly for the purpose of enabling
the court to do its duty, whether information is awaited from the
prosecutor or the offender. That is not to say that the six month period
can simply be ignored: the court must do the best that it reasonably can
to comply with subsection (3). If there were a question of unfairness to
the offender, the court would have to consider the offender's rights under
article 6 of the European Convention on Human Rights. Any abuse of process
could be corrected on appeal.
- These considerations lead me to
the conclusion that Parliament cannot have intended that non-compliance
with the terms of subsection(3) of section 72A would deprive the court of
its duty to consider the making of a confiscation order.
- For these reasons I consider
that the confiscation orders were valid and should not have been quashed.
I would accordingly allow the appeal.
LORD CARSWELL
My Lords,
- I have had the advantage of
reading in draft the opinion prepared by my noble and learned friend Lord
Steyn. I am in full agreement with his reasons and conclusions, and wish
only to add a few observations of my own.
- The distinction between
mandatory and directory provisions, which was much discussed in judicial
decisions over many years, has gone out of fashion and been replaced, as
Lord Steyn has said, by a different analysis, directed to ascertaining
what the legislature intended should happen if the provision in question
were not fully observed. I do not seek to question the correctness of the
altered approach to this, but I do feel that the principles inherent in
the rejected dichotomy may in some cases offer assistance in the task of
statutory construction.
- It has long been appreciated
that the essence of the search is the ascertainment of the intention of
the legislature about the consequences of failure to observe the
requirement contained in the provision in question. That is spelled out
clearly in the decisions given in more recent years which have been cited
by Lord Steyn. Failure to appreciate this properly and excessive focus on
the distinction between mandatory and directory provisions did, as Lord
Slynn of Hadley observed in Wang v Commissioner of Inland Revenue
[1994] 1 WLR 1286, 1294, lead to much litigation and on occasion to
somewhat refined distinctions. The germ of the approach now accepted as
correct may, however, be discerned as far back as 1877 in a judgment of
Lord Penzance in the Court of Arches in Howard v Bodington (1877) 2 PD 203, 210-211:
"Now the distinction between matters that are directory and matters
that are imperative is well known to us all in the common language of
the courts at Westminster. I am not sure that it is the most fortunate
language that could have been adopted to express the idea that it is
intended to convey; but still that is the recognised language, and I
propose to adhere to it. The real question in all these cases is this: A
thing has been ordered by the legislature to be done. What is the
consequence if it is not done? In the case of statutes that are said to
be imperative, the courts have decided that if it is not done the whole
thing fails, and the proceedings that follow upon it are all void. On
the other hand, when the courts hold a provision to be mandatory or
directory, they say that, although such provision may not have been
complied with, the subsequent proceedings do not fail. Still, whatever
the language, the idea is a perfectly distinct one. There may be many
provisions in Acts of Parliament which, although they are not strictly
obeyed, yet do not appear to the court to be of that material importance
to the subject-matter to which they refer, as that the legislature could
have intended that the non-observance of them should be followed by a
total failure of the whole proceedings. On the other hand, there are
some provisions in respect of which the court would take an opposite
view, and would feel that they are matters which must be strictly
obeyed, otherwise the whole proceedings that subsequently follow must
come to an end."
- The traditional dichotomy
between mandatory and directory provisions has been used as a convenient
shorthand for a very long time, and, as in the case of many shorthand
labels for concepts, those concerned with statutory interpretation may
have tended to forget the object summarised by the useful labels. A
salutary reminder of the correct approach is contained in the modern
case-law cited by Lord Steyn. There is, however, some value still in the
principles enshrined in the dichotomy, particularly that which relates to
substantial performance.
- I agree with your Lordships that
Parliament did not intend confiscation proceedings to fail in all cases
where the timetable contained in section 72A of the Criminal Justice Act
1988 was not observed. One may approach cases of such failure to observe
the timetable via either of two avenues. First, one can give the phrase
"exceptional circumstances" a broad and purposive construction, as Lord
Steyn has proposed in paragraph 28 of his opinion. Secondly, one can adopt
the view that the failure to keep to the time limit of six months laid
down in section 72A(3) does not invalidate the order for confiscation. I
think that it is necessary to consider both avenues, since there may be
cases which cannot be dealt with by a broad interpretation of the phrase
"exceptional circumstances".
- The traditional consequence of
finding that a provision was merely directory was that substantial
performance would constitute a sufficient compliance with the statutory
requirement. This concept can be more readily applied where a statute
prescribes an exact method or sequence of carrying out specified acts or a
time within which they are to be performed. A minor and insubstantial
deviation from the requirements will not make the resulting proceedings
invalid. A convenient example is to be found in Foyle, Carlingford and
Irish Lights Commission v McGillion [2002] NI 86, in which it was held
that an appellant's failure to serve a copy of a case stated upon the
opposite party within the prescribed time was directory and that
accordingly late service did not bar his appeal. It is less easy to apply
the approach to the determination of what constitutes exceptional
circumstances, but I think that the correct method is to ask whether the
circumstances can be broadly regarded as exceptional.
- The present case may be
approached via this broad construction of "exceptional circumstances". The
trial judge, who was best placed to decide the issue of confiscation, was
not available to hear that issue within the six-month period laid down by
section 72A(3). The reason was that he was committed to other cases
because of the heavy lists in his court. Other cases may arise where the
judge is prevented by illness or some other pressing reason from dealing
with confiscation within the prescribed period. The judge himself said, in
a somewhat resigned fashion, that listing problems are not exceptional,
being an unhappily common occurrence in these times. He would nevertheless
have heard the case within time if he had been free to do so, and I
consider that one can properly regard the circumstances as exceptional for
the purposes of section 72A(3).
- The other avenue is by means of
holding that if the time limit is not strictly observed the confiscation
is nevertheless not invalidated. It is here that the doctrine of
substantial performance may offer some assistance. I would not regard it
as justified to extend the time limit indefinitely, for I do not think
that Parliament would have so intended. Nor would it be sufficient to ask
merely if it would be fair and reasonable to accept the validity of an act
done out of time. I would suggest that one should ask if there has been
substantial observance of the time limit. What will constitute substantial
performance will depend on the facts of each case, and it will always be
necessary to consider whether any prejudice has been caused or injustice
done by regarding the act done out of time as valid.
- If one approaches the present
case by the second avenue, I think that the answer will be the same. There
was a small departure from the prescribed time and no prejudice was
created or injustice done by regarding the confiscation order as valid. I
am satisfied that this approach is not only consistent with the intention
of Parliament but is the proper way to ensure that its intention is
carried into effect.
- I would therefore allow the
appeal and restore the confiscation orders.
LORD BROWN OF EATON-UNDER-HEYWOOD
My Lords,
- I have had the advantage of
reading in draft the opinions of my noble and learned friends Lord Steyn
and Lord Rodger of Earlsferry. I agree with all that they say and there is
very little that I wish to add.
- Lord Rodger must surely be right
in his analysis of Parliament's thinking at the various stages of this
legislation. When first enacted, the 1988 Act required that any
confiscation proceedings be concluded and the order made before the court
proceeded to sentence. In that way the fullest information would be
available to the court and all sentencing options open. Because, however,
such an approach necessarily delayed the passing of sentence which on
occasion could with advantage be passed earlier—most obviously when
custodial sentences are imposed which cannot conceivably be affected by
the outcome of any confiscation proceedings—Parliament in 1993 introduced
into the 1988 Act section 72A which allows the court to postpone
confiscation proceedings until after sentence. Provided that the court "is
acting under section 71" and "requires further information" before it can
finally determine whether to make a confiscation order and, if so, in what
sum, the power of postponement arises and, if exercised, allows the court
thereupon to proceed to sentence.
- All that is required for the
court to be "acting under section 71" is that, following the offender's
conviction, the court recognises its duty to embark upon confiscation
proceedings (either because the prosecutor has given notice or because the
court itself considers such proceedings appropriate). Until, moreover, all
investigations have been completed and any necessary hearing concluded,
the case will necessarily be one where the court "requires further
information".
- So far so good. In the vast
majority of cases, one assumes, the court will conclude any confiscation
proceedings, either as part and parcel of the sentencing hearing itself or
on a later date, within a comparatively short time after conviction. This
appeal, however, concerns one of those cases where this was not
achieved—where, indeed, the confiscation orders were not finally made
until some two years following conviction. In this case, therefore,
attention has been focused principally upon section 72A(3) of the Act,
Parliament's stipulation that:
"Unless it is satisfied that there are exceptional circumstances,
the court shall not specify a period under subsection (1) above which-
(b) where there have been one or more previous
postponements under subsection (1) above or (4) below, when taken
together with the earlier specified period or periods,
exceeds six months beginning with the date of conviction."
- What is contended by these
appellants is that that requirement was not satisfied in the circumstances
of this case; that the court was therefore disabled from postponing the
confiscation proceedings beyond the six month period, that it had
accordingly not "exercise[d] its power under subsection (1)"; that the
court had thus not been entitled to "proceed to sentence" pursuant to
section 72A (7); and that, having done so, it was thereby precluded from
continuing further with the confiscation proceedings which, under section
71(1), were only open to the court (absent an effective postponement under
section 72A) "before sentencing".
- In addressing that argument, and
in particular in divining the intention of Parliament with regard to the
consequences of non-compliance with the strict requirements of section
72A, one obvious question to be asked is why Parliament provided that,
except in "exceptional circumstances", confiscation proceedings must be
completed within six months of conviction (this being the essential effect
of section 72A(3)).
- The appellants seek to argue
that the six months stipulation is essentially for the benefit of the
defendant, to ensure that this further part of his sentence is not too
long delayed after the imposition of his initial sentence. And certainly
there are dicta in the many Court of Appeal judgments shown to your
Lordships tending to support such a view. Take these passages from the
court's judgment in R v David Ruddick [2004] 1 Cr App R (S) 52,
58-60, para 30:
"It seems to us that the structure and purpose of the statutory
provisions is essentially to ensure that the defendant is not exposed to
double jeopardy; that is, he should not be sentenced and then find that
he is being punished yet again with a … confiscation order. … Two
sentencing processes for one offence is unfair; but two or more orders
made during one sentencing process is not unfair, even where the orders
are not made during just one court appearance. The second and important
requirement, as a matter of fairness, is that the one sentencing process
should not be protracted over an unduly long period." (para 30(2)).
"Will a failure to hold a [confiscation] hearing within six months
make any [confiscation] order a nullity? If without exceptional
circumstances the defendant had not had a [confiscation] order made
against him within six months of the date of postponement, then in our
view no such order could lawfully be made. The time limit is there to
protect the defendant from unfairness through justice being unduly
delayed. Like other limitation periods, Parliament has intended a
cut-off date which, subject only to exceptional circumstances, entitles
a defendant to be free from the risk of further punishment. The fact
that the court is given a limited discretion to extend the time beyond
that date ["exceptional circumstances"] supports this view." (para 30
(4)(c)).
But I have difficulty with those observations.
Section 72A(3) can hardly have been designed to maintain a close temporal
connection between the initial sentence and any subsequent confiscation
order. Assume that an offender, A, pleads guilty and is remanded for
sentence until the conclusion of co-offender B's trial. If B's trial takes
six months and A's confiscation order is thus delayed for more than six
months there will necessarily have been a non-compliance with section
72A(3) (unless of course a postponement order was specifically made on
grounds of exceptional circumstances). And this will be so even if the
confiscation order is made before the appellant is sentenced.
- The same point can be made by
reference to section 72A(6): the three months limit imposed by this
provision relates to the date of determination or other disposal of the
offender's appeal against conviction. What Parliament is clearly concerned
to achieve is not that any confiscation order is made within a given time
after sentence but rather that it is not too long delayed after conviction
(or, indeed, after a failed appeal against conviction). Far from these
time limits being imposed in favour of the offender they seem to me
designed rather to ensure that not too long passes before the offender is
stripped of his ill-gotten gains instead of being left in a position to
enjoy and all too probably dissipate them.
- Postulate, then, a non-compliant
postponement of the confiscation proceedings—a postponement beyond the six
month period without there being exceptional circumstances to justify such
a delay. What should be the consequences of that? Posing the "ultimate
question" formulated by Lord Steyn (para 23), can Parliament in these
circumstances "fairly be taken to have intended total invalidity"?
- The answer to that question
seems to me perfectly plain. As Lord Rodger points out (para 38), if the
consequence of a non-compliant postponement was that it remained unlawful
to pass sentence before the conclusion of the confiscation proceedings,
then logically the premature sentence would be no less invalid than the
impermissibly postponed confiscation order. And, indeed, that would be so
even had the final outcome of the confiscation proceedings been no order
at all—the court, say, having eventually determined that the offender had
not after all benefited from his criminality or had no realisable assets
left. Section 71(1), (1A) and (1B), be it noted, requires that (subject
only to postponement under section 72A) each of these questions be
addressed "before sentencing or otherwise dealing with the offender".
- Given these considerations;
given that section 71(1) now imposes upon the court a positive duty
to proceed with confiscation proceedings (in place of what was originally
a mere power to do so—and, indeed, under section 72(1) of the unamended
legislation, an explicit embargo upon the making of a confiscation order
"unless the prosecutor has given written notice to the court"); given that
the time limits under section 72A, linked as they are to the date of
conviction rather than sentence, appear to be imposed rather with a view
to the early disgorgement of the offender's gains than for his benefit,
Parliament cannot in my judgment have been intending to disable the court
from making a confiscation order after sentence merely because the time
limits were not strictly adhered to. Provided always that the court, as
here, was acting in good faith in the purported exercise of its section
72A power to postpone the confiscation proceedings, its subsequent
determinations will not be invalidated despite its having proceeded first
to sentence and only later to the making of a confiscation order.
- I too would allow the
appeal.
