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Government of the United States of America (Respondents) v. Barnette and another (Appellants)
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OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT IN THE CAUSE Government of the United States of America (Respondents) v. Barnette and another (Appellants) ON THURSDAY 22 JULY 2004 The Appellate Committee comprised: Lord Steyn Lord Slynn of Hadley Lord Hoffmann Lord Clyde Lord Carswell HOUSE OF LORDSOPINIONS OF THE LORDS OF APPEAL FOR JUDGMENTIN THE CAUSEGovernment of the United States of America (Respondents) v. Barnette and another (Appellants)[2004] UKHL 37LORD STEYN My Lords, 1. I have had the privilege of reading the opinion of my noble and learned friend Lord Carswell. I agree with it. I would also dismiss the appeal. LORD SLYNN OF HADLEY My Lords, 2. I have had the advantage of reading in draft the speech prepared by my noble and learned friend Lord Carswell. For the reasons he gives I agree that the appeal should be dismissed. LORD HOFFMANN My Lords, 3. I have had the advantage of reading in draft the speech of my noble and learned friend Lord Carswell. For the reasons he gives, with which I agree, I would dismiss this appeal. LORD CLYDEMy Lords, 4. I have had the opportunity of reading in draft the speech to be given by my noble and learned friend Lord Carswell and I agree that the appeal should be dismissed for the reasons set out in that speech. I expressly reserve my opinion on the question whether the operation of the fugitive disentitlement doctrine would if it had taken place in a Convention state have constituted a breach of Article 6. LORD CARSWELL My Lords, 5. The appellant's former husband Larry Barnette was charged with defrauding the United States Government of sums of money totalling some $15 million, and was convicted in 1984 on a number of counts of fraud and related offences, including offences under the Racketeer Influenced and Corrupt Organisations Act ("RICO"). He was sentenced to a term of imprisonment and also ordered to pay $7 million to the United States by way of restitution and to forfeit his 900 shares in Old Dominion SA ("ODSA"), a Panamanian company controlled by him through which he had passed proceeds of his fraudulent activity. 6. In August 1983, shortly before he was indicted for fraud, Mr Barnette transferred 800 of his 900 shares in ODSA to the appellant, who was at that time still married to him. The US court ruled that under RICO the US Government's title to the 800 shares antedated the transfer to the appellant, with the consequence that they were forfeited and had to be surrendered, or their value accounted for, notwithstanding the transfer to the appellant. 7. Mr Barnette and the appellant fought a vigorous rearguard action in an attempt to avoid confiscation of the shares or their value, details of which are set out in paragraphs 4 to 11 of the opinion of my noble and learned friend Lord Hoffmann in Government of the United States of America v Montgomery [2001] UKHL 3; [2001] 1 WLR 196, to which I would refer. After lengthy and complex litigation the US district court made an order on 18 August 1995, whereby it held both the appellant and Mr Barnette in contempt and ordered them to pay by way of forfeiture the sum of $4,217,833.01, representing the value of the ODSA shares as at 15 October 1984 (the date of the order for forfeiture of the shares) after setting off the $7 million already paid. Following this order Mr Barnette brought a motion on 24 August 1995 seeking credit for a sum seized from accounts in the name of ODSA in Liechtenstein. The US Government brought a motion on 28 August 1995 to revise the sum ordered to be paid by the addition of substantial interest and a sum for reimbursement of costs and expenses incurred. The order of 18 August 1995 was revised by a further order of 15 November 1995, which gave effect to the credit sought by Mr Barnette and ordered payment of interest at US Treasury rates from January 1985 to June 1995. The final effect of these orders was an increase in the total sum payable by the appellant and Mr Barnette to $11,767,754, plus a further sum for costs and expenses. 8. In August 1983 the appellant left Mr Barnette and subsequently remarried, being now Mrs Montgomery. She renounced her US citizenship in April 1992 and moved to London in May 1992, with the intention of taking up residence there. She became a citizen of St Kitts and Nevis in June 1994 and lost her US nationality in November 1994. On 15 December 1992, when she was out of the jurisdiction, the US court made an order for discovery against her, but she failed to comply with it. When the US Government brought a motion to increase the liability of the appellant and Mr Barnette as assessed on 18 August 1995, the appellant did not file any brief in opposition. The judge in the Administrative Court in the present confiscation proceedings found that the appellant had sufficient notice of the Government motion of 28 August 1995 to be able to oppose it if she chose. She did, however, take part in the proceedings to the extent that she supported an application by Mr Barnette claiming credit for certain sums and a motion by him seeking further time to respond to the US Government's motion. The order of 15 November 1995 was made by the district court after consideration of the documents without an oral hearing. 9. The appellant and Mr Barnette filed appeals to the US Court of Appeals against the order of the district court. The appellant filed a substantial brief and was represented by counsel. At the end of the hearing the court invited further submissions on the issue whether in view of the "fugitive status" of the appellant and Mr Barnette it should not entertain their appeal at all. The appellant submitted a brief on this issue, but the court on 20 November 1997 dismissed both appeals on the basis of the fugitive disentitlement doctrine. Under this doctrine the court had a discretion to refuse to hear or decide the appeal, on the ground that the appellant was a fugitive from justice. 10. The doctrinal basis for the discretion was described by the US Court of Appeals in the following passage from its judgment in para 7:
The court went on to say that the basis for the district court's decision to hold the appellant in contempt:
The court found on the facts that the appellant was not a clearly innocent party in the government's effort to collect the shares of stock owned by her. It stated that she acted in concert with him to hide assets and transfer funds, resulting in inaccessibility to these monies by the government. She admitted in a sworn statement that she moved the assets of ODSA to avoid the criminal forfeiture judgment. She had fought the forfeiture every step of the way and her continuing failure to furnish discovery was regarded by the district court as part of the Barnettes' overall scheme to evade the forfeiture judgment. It went on in para 15 of its judgment:
11. The respondent government seeks in these proceedings to register the confiscation order under section 97 of the Criminal Justice Act 1988, with a view to enforcing it by process against assets of the appellant in the United Kingdom. In aid of the confiscation process it obtained a restraint order in September 1997, whose validity was finally upheld by your Lordships' House in the appeal of Government of the United States of America v Montgomery [2001] 1 WLR 196. Section 97 provides:
It is common case that the United States is a designated country, by virtue of the Criminal Justice Act 1988 (Designated Countries and Territories) Order 1991 (SI 1991/2873), as amended by an amendment order of 1994 (SI 1994/1639), and that the confiscation order made by the US district court is an external confiscation order, which is in force and not subject to appeal. Nor has the judge's ruling been challenged that the appellant had due notice of the proceedings. The issue between the parties is whether it would be contrary to the interests of justice to register the order. 12. The appellant has based her case upon the proposition that if a court in a state which is a signatory to the European Convention for the Protection of Human Rights and Fundamental Freedoms ("the Convention") were to shut her out from pursuing an appeal, as the US Court of Appeals did, it would constitute a breach of article 6 of the Convention, which provides:
It was argued on her behalf that for a court in this jurisdiction to register the confiscation order and so enforce the order of the US Court of Appeals would be to act in a way which was incompatible with a Convention right, which is made unlawful by section 6 of the Human Rights Act 1998. 13. In the Administrative Court [2002] EWHC 1113 (Admin) Stanley Burnton J held that the US proceedings would be classed as criminal if they took place in a country that was a party to the Convention, which made article 6(3)(c) applicable. On the Strasbourg authorities stemming from Ashingdane v United Kingdom (1985) 7 EHRR 528 and Poitrimol v France (1993) 18 EHRR 130 the judge held that if the United States had been a party to the Convention article 6 would have required the Court of Appeal to consider the appellant's appeal on the merits. Neither of these conclusions was the subject of argument before your Lordships, though Lord Woolf CJ in the Court of Appeal reserved his opinion on whether the US proceedings constituted "the determination of a criminal charge" within the meaning of the phrase in article 6(1). For the purposes of this appeal I am content to assume that the operation of the fugitive disentitlement doctrine by the US Court of Appeals would, if it had taken place in a Convention state, have constituted a breach of article 6. 14. In the Court of Appeal the appellant's case relied heavily on the decision of the European Court of Human Rights in Soering v United Kingdom (1989) 11 EHRR 439, to which I shall refer in more detail later. The same argument was founded upon this authority as that which had been advanced before Stanley Burnton J, that to enforce the order of the US court would be acting incompatibly with the appellant's Convention rights under article 6 of the Convention and article 1 of the First Protocol. Lord Woolf CJ, with whose judgment Kennedy and Scott Baker LJJ agreed, did not base his approach to the case on the provisions of the Convention. In para 25 of his judgment, at [2003] 1 WLR 1916, 1924, he set out his reasons for distinguishing the Soering decision:
He pointed out that there are difficulties in seeking to judge the procedures of a court in a jurisdiction to which the Convention does not apply by applying article 6. The standards required by the Convention might be a guide to the court in determining for the purposes of section 97 what was in the interests of justice, but it was preferable not to become too closely engaged with the jurisprudence relating to article 6, which could be somewhat technical. The Court of Appeal held on examination of the facts of the case that it would not be contrary to the interests of justice to register the order. 15. Notwithstanding the views of Lord Woolf CJ which I have quoted, it is in my opinion necessary to consider whether registration of the order would constitute a breach of article 6 of the Convention. In doing so I would observe that in my judgment the case belongs to the category classified by Lord Bingham of Cornhill in R (Ullah) v Special Adjudicator [2004] UKHL 26; [2004] 3 WLR 23 as "foreign cases" rather than "domestic cases". In the latter category, exemplified by Abdulaziz, Cabales and Balkandi v United Kingdom (1985) 7 EHRR 471 and Bensaid v United Kingdom (2001) 33 EHRR 205, the treatment by a state within its jurisdiction of a person resident there is such that that treatment may constitute a breach of one of the articles of the Convention. Conversely, in a "foreign" case, such as those concerning the expulsion of aliens seeking entry, the complaint is that the act or omission of the state may expose the applicant to treatment in another state which, if committed by a Convention state would constitute a breach of one or more of the provisions of the Convention. 16. The gravamen of the appellant's complaint is that she was treated unfairly by the US Court of Appeals and that registration of the confiscation order, by giving effect to its terms and exposing her to its consequences, engages the responsibility of the English court. Mr Lewis QC argued on behalf of the appellant, first, that article 6 was directly engaged, because it was incumbent on the English court to satisfy itself that the American proceedings satisfied the guarantees enshrined in article 6 and, secondly and in the alternative, that article 6 was indirectly engaged, in that the English court by registering the confiscation order has exposed the appellant to the consequences of the American proceedings which were conducted in breach of the requirements of article 6. 17. In considering these arguments it is necessary to have regard to the territoriality principle, governing the territorial reach of the Convention and its limitations, aptly described in para 86 of the judgment of the European Court in Soering v United Kingdom 11 EHRR 439, 466:
18. Given this territorial limitation, it is difficult to see how registration of the US court's order could constitute a direct breach of its terms, for there can be no suggestion that the hearing afforded to the appellant in the registration proceedings failed to meet any of the requirements of the article. It was argued on behalf of the appellant, however, that the decision of the European Court in Pellegrini v Italy (2002) 35 EHRR 44 was an authority in her favour which was indistinguishable from the present case. 19. Pellegrini's case turns on the relationship between the Italian civil courts and the Ecclesiastical Court of the Rome Vicariat, a church court classed by the European Court as a court of the Vatican (properly the Holy See), a state which is not a party to the Convention. The applicant Ms Pellegrini was married to Mr A Gigliozzi in 1962 in a religious marriage, which had legal effect in Italy. In 1987 she sought a decree of judicial separation from the civil court in Rome and in 1990 she was granted a decree and an order for maintenance was made in her favour. Meanwhile Mr Gigliozzi brought proceedings in the ecclesiastical court for annulment of the marriage on the grounds of consanguinity. By a judgment given in December 1987 the ecclesiastical court annulled the marriage. The applicant forthwith brought an appeal to the Roman Rota, an Italian civil court, complaining that the procedure adopted in the ecclesiastical court had deprived her of her right to a fair hearing under article 6 of the Convention. Under the terms of a Concordat made between Italy and the Vatican a judgment of the ecclesiastical courts annulling a marriage may be made operative in Italy at the request of one of the parties through a judgment of the competent appeal court. The Rota upheld the annulment and its decision was affirmed on appeal to the Florence court of appeal and the Court of Cassation, both of which were of opinion that the procedure adopted by the ecclesiastical court did not amount to a violation of the applicant's rights. 20. The European Court allowed Ms Pellegrini's application, finding that the procedure in the ecclesiastical court was insufficient to satisfy the requirements of article 6. In considering the application of article 6 to the issue the court stated, at pp 51-52, para 40:
21. Mr Lewis placed this decision at the forefront of his argument whereby he submitted that article 6 was directly engaged in the present case. The relationship between the Italian courts and the Vatican courts depends, however, on the terms of the Concordat, a special legal relationship between states. Article 8(2) of the Concordat provides, in an English translation, so far as material:
Article 6 of the Convention, to which Italy is a party, has been "enacted in the Italian legal order", according to Professor Roberto Baratta and Professor Andrea Giardina. Moreover, article 111 of the Italian Constitution provides that jurisdiction is exercised through fair trial ("giusto processo") as regulated by the law. The Italian courts were accordingly specifically obliged to ensure that the procedure was sufficient to satisfy the terms of article 6 of the Convention, as well as article 111 of the Italian Constitution. The decision in Pellegrini is therefore in my opinion dependent on the particular effect of the Concordat, and is not authority for the conclusion which the appellant's counsel sought to draw from it. I therefore do not consider that the appellant's argument based on direct engagement of article 6 is well founded. 22. The Strasbourg jurisprudence has, however, developed an exception to the principle of territoriality, which may conveniently be described as giving indirect effect to provisions of the Convention. The fons et origo of this doctrine is to be found in the decision of the European Court in Soering v United Kingdom (1989) 11 EHRR 439. The applicant sought to resist his extradition to the United States to face trial on a charge of capital murder. The United Kingdom Government contended that the risk of a capital sentence being either imposed or carried out was low, especially in light of the assurances which it had obtained, and that that risk was insufficient to make the applicant's extradition a breach of article 3 of the Convention. The court rejected this contention and also held that the risk of the applicant's having to endure the "death row phenomenon" exposed him to a real risk of treatment going beyond the threshold set by article 3. It emphasised the high degree of importance to be attached to the observance of the obligations of article 3, which it described, at p 467, para 88, as "one of the fundamental values of the democratic societies making up the Council of Europe". In this regard it stated at para 87:
The court concluded accordingly that a risk that the applicant might be subjected to torture, inhuman or degrading treatment or punishment was sufficient to engage the responsibility of a contracting state under article 3 when considering extradition. |
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