House of Lords
|Session 2001- 02
Publications on the Internet|
|Judgments - Regina v Rezvi
HOUSE OF LORDS
Lord Slynn of Hadley Lord Browne-Wilkinson Lord Steyn Lord Hope of Craighead Lord Hutton
OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT
IN THE CAUSE
(ON APPEAL FROM THE COURT OF APPEAL (CRIMINAL DIVISION))
ON 24 JANUARY 2002
 UKHL 1
LORD SLYNN OF HADLEY
1. I have had the advantage of reading in draft the speech of my noble and learned friend Lord Steyn. I agree with him that this appeal should be dismissed on the basis of the decision of your Lordships' House in R v Kansal  3 WLR 1562. I also agree with the views he expresses as to the relationship between Convention rights and the provisions of the Criminal Justice Act 1988.
2. I have had the advantage of reading in draft the speech of my noble and learned friend Lord Steyn. I agree with it and, for the reasons he has given, I too would dismiss this appeal.
3. At present the powers of the court to order the confiscation of the proceeds of crime are contained in three statutes, viz Part VI of the Criminal Justice Act 1988, the Drug Trafficking Act 1994 and Part III of the Terrorism Act 2000. If the Proceeds of Crime Bill (Bill 31 of 2001), which is presently before Parliament, is enacted it will create a uniform and more comprehensive system for confiscation orders in relation to persons who benefit from criminal conduct.
4. In outline the circumstances of the appeal before the House are as follows. On 11 October 1999 in the Crown Court at Snaresbrook the appellant pleaded guilty to two counts of theft on an indictment containing 14 counts of theft. On 10 April 2000 he was sentenced to 15 months' imprisonment on each count. On the same day after a hearing under the 1988 Act a judge made a confiscation order against the appellant in the sum of £214,839. He appealed to the Court of Appeal against the confiscation order. His appeal was heard together with other appeals including the appeal R v Benjafield  3 WLR 75, that case being concerned with a confiscation order under the 1994 Act. The principal point in both cases before the Court of Appeal was whether the making of confiscation orders under the 1988 Act and under the 1994 Act was compatible with the Human Rights Act 1998 which incorporated the European Convention for the Protection of Human Rights and Fundamental Freedoms into our law (Schedule 1). On the basis of the position as to retrospectivity as then understood, the Court of Appeal considered the position as if the 1998 Act was directly applicable to the two appeals. The Court of Appeal held that both the 1988 Act and the 1994 Act were compatible with the Convention. The Court of Appeal dismissed the appeal of the appellant (Rezvi) and adjourned the appeal of Benjafield for further argument. The Court of Appeal certified that a point of law of general public importance is involved, viz:
With the leave of the House both Rezvi and Benjafield appealed to the House. The appeals raise in some respects similar questions but are otherwise unconnected. This opinion is only concerned with the appeal of Rezvi (and the 1988 Act). I will consider the appeal of Benjafield (and the 1994 Act) in a separate opinion. However, some reference to the 1994 Act will be necessary.
5. It is now necessary to return to the assumption that the 1998 Act is applicable to the present appeal. The appellant's plea of guilty, the sentence of the court, and the making of the confiscation order preceded the coming into operation of the 1998 Act on 2 October 2000. After the hearing of the appeals of Rezvi and Benjafield in the House of Lords the decision of the House in R v Kansal  3 WLR 1562, settled the issue of retrospectivity of the 1998 Act in respect of the outcome of criminal trials which were concluded before 2 October 2001: the 1998 Act is not applicable to such cases even if an appeal is heard after the relevant date. It follows that the appellant's Convention rights are not engaged. Nevertheless, given the fact that the Court of Appeal dealt with the Convention issues and bearing in mind the importance of the points, it would be sensible to give consideration to the potential impact of the Convention on the 1988 Act.
6. Before I turn to the principal issues it is necessary to explain the circumstance of the case in some more detail. On 24 February 1999 the police arrested the appellant on suspicion of theft from his employer. He had held the position of assistant financial controller at the St Giles Hotel, Bedford Avenue, London WC1 for more than three years and had worked at the hotel for approximately nine years. His salary was £23,000 per annum. The appellant admitted two counts of theft of £5,000 on 2 and 14 February 1999. The hotel asked security consultants to investigate the possibility of other thefts. They discovered that between April 1997 and February 1999, the hotel suffered losses totalling approximately £283,000. On 19 May 1999 the police interviewed the appellant in relation to these other losses. He denied that he was involved. He said others had been responsible for other thefts. He was charged with 14 specimen counts of theft and deception covering a period from April 1997 to February 1999. On 11 October 1999, in accordance with the admissions he made in interview, the appellant pleaded guilty to counts 13 and 14 which covered a period of 10 days only. Counsel for the Crown indicated that the pleas were not acceptable and that a trial was necessary. Witnesses from Malaysia were required and so the court ordered a delayed fixture. On 21 January 2000, the Crown served a prosecutor's statement in accordance with section 71(1)(a) of the 1988 Act. The statement stated that it was appropriate to proceed with confiscation proceedings under section 72AA. The prosecutor's statement explained that though he was entitled under the 1988 Act to examine the appellant's assets for a six- year period, he had chosen the period January 1997 to the commencement of proceedings (May 1999) as this is the period during which the appellant's financial lifestyle appears to change significantly. He had made large and regular deposits of cash into the various accounts which he controlled. And during a period when he was in receipt of a moderate income he had expended large amounts of cash. Applying the statutory assumptions, the prosecutor assessed the appellant's total benefit from his criminal activities at £622,375.64 and his realisable assets as £353,742.17. On 24 January 2000 counsel for the Crown told the judge that the appellant's plea brought him within section 72AA of the 1988 Act, that the relevant notices had been served, and that the Crown had decided not to proceed on the main counts on this indictment. He mentioned questions of expense as being one of the factors the Crown had taken into account. He applied for counts 1 to 12 to lie on the file and for sentence (including issues of confiscation) to be adjourned until April. Counsel for the appellant did not oppose the application. He said it was to his client's advantage that the prosecution were not proceeding on counts 1 to 12. Although the Crown offered to explain why it had chosen not to proceed with all counts in the indictment, the court did not require an explanation. The judge acceded to the Crown's application and counts 1 to 12 were ordered to lie on the file on the usual terms. On 28 March 2000 the appellant served a defence statement under section 73(2) of the 1988 Act in response to the prosecutor's statement. He relied on the fact that on 24 January the Crown had elected not to proceed on counts 1 to 12 of the indictment and asserted that there was no evidence to substantiate the Crown's claim as to wider losses. Counsel submitted that the court should not exercise its discretion under section 72AA(3) of the 1988 Act, and should not make the assumptions specified in section 72AA(4). The Crown responded to the defence statement on 4 April 2000 and rejected the argument that the court should not exercise its discretion to proceed under the assumptions provisions because counts 1 to 12 had not been proceeded with. On 10 April 2000, the judge heard evidence from the prosecution and defence as well as argument. He made a confiscation order. After considering the appellant's explanations for his ownership of various assets and moneys over the relevant period the judge concluded that he was unable to accept the appellant's version where it was unsupported. He said that the appellant's evidence was noteworthy for the lack of support where it could have easily been forthcoming. Applying the assumptions he concluded that the total benefit should be fixed at £539,734.60 and the realisable assets should be fixed at £214,839. He made a confiscation order in that sum.
7. The principal issues to which I will now turn are:
There are also additional points which I will briefly mention.
8. The confiscation provisions contained in Part VI of the 1988 Act enable the Crown Court or a magistrates' court to confiscate the proceeds of crime following conviction of offences to which the Act applies. It is unnecessary to set out the legislation in extenso. Subject to complying with the qualifying conditions and safeguards of the regime it empowers a judge to proceed to make a confiscation order. Section 71 spells out steps in the confiscation regime. And section 71(7A) provides that the standard of proof required to determine any question arising under Part VI as to whether a person has benefited from an offence, and the amount to be recovered, is the balance of probabilities. Section 72AA deals with confiscation relating to a course of criminal conduct. At the heart of the matter are the statutory assumptions in aid of the making of a confiscation order which are to be found in section 72AA of the 1988 Act. Section 72AA(3) provides for the making of assumptions. So far as material the section then provides:
These provisions must now be examined in the light of the 1998 Act and the European Convention. The 1998 Act provides:
Article 6 of the Convention provides:
The criminal charge issue
9. Counsel for the appellant submitted that the "assumptions" amount in effect to a clear breach of the guarantee under article 6(2) that everyone "charged with a criminal offence" shall be presumed innocent until proved guilty according to law and that accordingly the relevant provisions of the 1988 Act are incompatible with the 1998 Act. Article 6(2) is triggered whenever a person is "charged with a criminal offence". The issue is whether confiscation proceedings are a discrete process which involved the appellant being "charged with a criminal offence."
10. This point was recently considered by the Privy Council in relation to confiscation proceedings in drugs legislation in Scotland: McIntosh v Lord Advocate  3 WLR 107. The Privy Council unanimously held that an application for a confiscation order under the Proceeds of Crime (Scotland) Act 1995 is not a charge under domestic Scottish law or within the meaning of article 6(2): see in particular the judgments of Lord Bingham of Cornhill, at pp 113-119 (paras 13-28), and Lord Hope of Craighead, at pp 122-123 (paras 41-43). The issue was considered in depth in the context of the law of Scotland and European jurisprudence. In these circumstances it is unnecessary to cover all the same ground again. The Privy Council categorised the confiscation order as "a financial penalty (with a custodial penalty in default of payment) but it is a penalty imposed for the offence of which he has been convicted and involves no accusation of any other offence": para 25, p 118. This is an accurate description of the confiscation procedure under the 1988 Act. Lord Bingham observed in conclusion on this aspect (para 28, p 119):
These observations apply mutatis mutandis to confiscation under the 1988 Act.
11. Since McIntosh v Lord Advocate was decided a chamber of the European Court of Human Rights (fourth Section) has dealt with a similar point in relation to confiscation proceedings under the 1994 Act: Phillips v United Kingdom (Application No 41087/98) 5 July 2001;  CrimLR 817. By a majority the court came to the following conclusion, in paragraphs 35-36:
The majority added, in paragraph 40:
Overall, the majority held, the application to the applicant of the relevant provisions of the 1994 Act "was confined within reasonable limits given the importance of what was at stake and that the rights of the defence were fully respected": paragraph 47.
12. There is a powerful partly dissenting opinion of Judge Bratza joined by Judge Vajic to the effect that the majority took too narrow a view of article 6(2). If this view had prevailed it would in my respectful view have caused difficulties in English law and in other national legal systems. After all, a "criminal charge" gives rise to a "minimum right" under article 6(3)(a) "to be informed promptly . . . of the nature and cause of the accusation against him." This provision fits in uneasily with confiscation proceedings with its elaborate step-by-step machinery designed to obtain information to enable the court eventually to decide whether a confiscation order should be made and, if so, in what sum. At the very least, if article 6(2) is held to be directly applicable, it will tend to undermine the effectiveness of confiscation procedures generally. Finally, it is to be noted that on the issue of proportionality the minority share the views of the majority.
13. It follows that in my view confiscation proceedings are part of the sentencing process following a conviction and do not involve a fresh criminal charge.
The proportionality issue
14. It is a notorious fact that professional and habitual criminals frequently take steps to conceal their profits from crime. Effective but fair powers of confiscating the proceeds of crime are therefore essential. The provisions of the 1988 Act are aimed at depriving such offenders of the proceeds of their criminal conduct. Its purposes are to punish convicted offenders, to deter the commission of further offences and to reduce the profits available to fund further criminal enterprises. These objectives reflect not only national but also international policy. The United Kingdom has undertaken, by signing and ratifying treaties agreed under the auspices of the United Nations and the Council of Europe, to take measures necessary to ensure that the profits of those engaged in drug trafficking or other crimes are confiscated: see the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (19 December 1988); Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime, Strasbourg, 8 November 1990. These Conventions are in operation and have been ratified by the United Kingdom.
15. It is clear that the 1988 Act was passed in furtherance of a legitimate aim and that the measures are rationally connected with that aim: see de Freitas v Permanent Secretary of Ministry of Agriculture, Fisheries, Lands and Housing  1 AC 69, 80 for the three-stage test. The only question is whether the statutory means adopted are wider than is necessary to accomplish the objective. Counsel for the appellant submitted that the means adopted are disproportionate to the objective inasmuch as a persuasive burden is placed on the defendant. The Court of Appeal  3 WLR 75, 103 carefully considered this argument and ruled:
For my part I think that this reasoning is correct, notably in explaining the role of the court in standing back and deciding whether there is or might be a risk of serious or real injustice and, if there is, or might be, in emphasising that a confiscation order ought not be made. The Crown accepted that this is how the court, seized with a question of confiscation, should approach its task. In my view this concession was rightly made.
16. In agreement with the unanimous views of the Court of Human Rights in Phillips v United Kingdom (Application No 41087/98) 5 July 2001 I would hold that Part VI of the 1988 Act is a proportionate response to the problem which it addresses.
Issue on article 1 of the First Protocol
17. Article 1 of the First Protocol to the Convention provides:
Counsel argued that article 1 of the First Protocol requires a different conclusion on proportionality. That cannot be right. The legislation is a precise, fair and proportionate response to the important need to protect the public. In agreement with the European Court of Human Rights in Phillips v United Kingdom I would hold that the interference with article 1 of the First Protocol is justified.
Conclusion on compatibility
18. Even if Convention rights were directly engaged I would hold that there is no incompatibility when the provisions of the 1988 Act are measured against the rights under the Convention and the First Protocol.
The principle of legality
19. Counsel for the appellant also sought to rely on the domestic principle of legality. The principle is that ambiguous or general words in a statute cannot override fundamental rights. Many illustrations of the application of this principle are to be found in the speech of Lord Browne-Wilkinson, and in my speech, in R v Secretary of State for the Home Department, Ex p Pierson  AC 539. It was endorsed by the House in R v Secretary of State for the Home Department, Ex p Simms  2 AC 115. Lord Hoffmann, at p 131F-G, explained the rationale of the principle. There is, however, no scope for the application of this principle in the present case. The legislation is explicit in its terms and represents a fair balance between the interests of the individual and those of the community.
Abuse of process