|Judgments - Regina v. Montila and others (Appellants)
(On Appeal from the Court of Appeal (Criminal Division))
32. Mr Perry for the Crown submitted that it was well settled that a side note in an Act of Parliament does not constitute a legitimate aid to the construction of the section to which it relates. Mr Grenfell QC for the appellants said that he was willing to concede the point. But this is not a concession that can be accepted. It was based on a dictum of Phillimore LJ in In re Woking Urban District Council (Basingstoke Canal) Act 1911  1 Ch 300, 322, where he said:
In R v Hare  1 KB 354, 355-356 Avory J said:
33. These observations were not wholly inaccurate at the time they were made, and they are out of keeping with the modern approach to the interpretation of statutes and statutory instruments. It is not true that headings and side notes are inserted by "irresponsible persons", in the sense indicated by Phillimore LJ. They are drafted by Parliamentary Counsel, who are answerable through the Cabinet Office to the Prime Minister. The clerks, who are subject to the authority of Parliament, are empowered to make what are known as printing corrections. These are corrections of a minor nature which do not alter the general meaning of the Bill. But they may very occasionally, on the advice of the Bill's drafter, alter headings which because of amendments or for some other reason have become inaccurate: Bennion, p 609. Nor is it true that headings are inserted only after the Bill has become law. As has already been said, they are contained in the Bill when it is presented to Parliament. Each clause has a heading (previously a side note) which is there throughout the passage of the Bill through both Houses. When the Bill is passed, the entire Act is entered in the Parliamentary Roll with all its components, including those that are unamendable. As Bennion states at p 638, the format or layout is part of an Act.
34. The question then is whether headings and side notes, although unamendable, can be considered in construing a provision in an Act of Parliament. Account must, of course, be taken of the fact that these components were included in the Bill not for debate but for ease of reference. This indicates that less weight can be attached to them than to the parts of the Act that are open for consideration and debate in Parliament. But it is another matter to be required by a rule of law to disregard them altogether. One cannot ignore the fact that the headings and side notes are included on the face of the Bill throughout its passage through the Legislature. They are there for guidance. They provide the context for an examination of those parts of the Bill that are open for debate. Subject, of course, to the fact that they are unamendable, they ought to be open to consideration as part of the enactment when it reaches the statute book.
35. There is a further point that can be made. In Pickstone v Freemans Plc  AC 66, 127 Lord Oliver of Aylmerton said that the explanatory note attached to a statutory instrument, although it was not of course part of the instrument, could be used to identify the mischief which it was attempting to remedy: see also Westminster City Council v Haywood (No 2)  2 All ER 634, 645, para 19 per Lightman J. In Coventry and Solihull Waste Disposal Co Ltd v Russell  1 WLR 2093, 2103, it was said that an explanatory note may be referred to as an aid to construction where the statutory instrument to which it is attached is ambiguous. In R (Westminster City Council) v National Asylum Support Service  1 WLR 2956, 2959B-C, Lord Steyn said that, in so far as the Explanatory Notes that since 1999 have accompanied a Bill on its introduction and are updated during the Parliamentary process cast light on the objective setting or contextual scene of the statute and the mischief at which it is aimed, such materials are always admissible aids to construction. It has become common practice for their Lordships to ask to be shown the Explanatory Notes when issues are raised about the meaning of words used in an enactment.
36. The headings and side notes are as much part of the contextual scene as these materials, and there is no logical reason why they should be treated differently. That the law has moved in this direction should occasion no surprise. As Lord Steyn said in that case, at p 2958, the starting point is that language in all legal texts conveys meaning according to the circumstances in which it was used.
37. In the present case there are two features about the headings and the side notes that provide guidance. The first is that the subject matter of these sections is "proceeds" - in the one case of drug trafficking, in the other of criminal conduct. The second is that no distinction is made as to subject matter between the various offence-creating subsections within each section. All three, in the case of the 1990 Act, and both, in the case of the 1994 and 1988 Acts, are grouped under the same heading and have the same side note. There is no indication here that the subject matter of the activities that are being criminalised need not, in the case of subsection (2), actually be proceeds of drug trafficking or of criminal conduct. Such indications as can be gathered from the headings and side notes are to the contrary. They indicate that the mischief that Parliament was seeking to address was the concealment, conversion or transfer of actual proceeds for the purpose of avoiding prosecution for the conduct that gave rise to them or the making or enforcement of a confiscation order calculated with reference to the value of those proceeds. In other words, that the fact that the property in question had its origin in drug trafficking or criminal conduct is an essential part of the actus reus of the offence.
38. There are a number of other indications. Common to all three international instruments was the proposal that those third parties whose actions were to be criminalised were people who knew that the property which they were dealing with was the proceeds of drug trafficking or criminal conduct. Reasonable suspicion is not mentioned in any of them. It was of course open to the Legislature to find its own solutions to the problem in the domestic system. There is no doubt that the effectiveness of the measures that were being introduced was assisted by enabling prosecutions to be brought where there was no evidence of actual knowledge but reasonable grounds to suspect could be established. But to broaden the scope of the third party offences still further so as to bring cases within their reach where the Crown could not prove that the property that was being dealt with was the proceeds of drug trafficking or criminal conduct would have been a significant departure from what had been asked for by the international instruments. One would have expected some indication of this to be given to Parliament, and there was none.
39. Two other points were mentioned in argument, but they carry little weight. First, there is the concession in R v El-Kurd  Crim L R 234, in which the Crown accepted that it had to establish that the money had come from drug trafficking or other criminal conduct. That was a case where the defendants had been charged with four conspiracies, each of which was indicted as a conspiracy to commit offences under the 1994 Act on the one hand and under the 1988 Act on the other. As Latham LJ pointed out in para 26, the wording of each alternative depended upon whether the property was the proceeds of drug trafficking or criminal conduct. Secondly, there is the way the 2002 Act has dealt with the problem of money laundering.
40. All that need be said on the first point is that the concession, if that was what it was, could not have been held against the Crown if the interpretation for which it is now contending was the right one. There is some authority for the view that official statements by a government department which is responsible for administering an Act may be taken into account as persuasive authority as to what the Act means: Bennion, p 597. But the concession that was made in that case fell well short of being an official statement of that kind.
41. As for the second, Parliament is of course free to restructure the offences that it creates in any way it likes. The language that it has chosen to use in the 2002 Act is different from that in the enactments which are in issue in this case. There is no room for any ambiguity. The property that is being dealt with in each case must be shown to have been criminal property. But it would be surprising if the intention was to reduce the scope of these offences. The problem of money laundering has not gone away. The fact that these offences have been designed on the assumption that proof that the property being dealt with was in fact criminal property fits into the pattern which was set by the international instruments and which the wording of the subsections themselves, when properly construed in their context, indicates.
The effect in practice
42. Mr Perry submitted that, if the Crown has to prove the origin of the property, counts alleging that the money was the proceeds of drug trafficking on the one hand and that it was the proceeds of criminal conduct on the other would be mutually destructive if applied to the same property. As Scott Baker LJ put in the Court of Appeal, the Crown would have to prove in every case a coincidence between the defendant's view of origin and the origin itself  1 WLR 624, 632, para 34. So the jury would have to be told that they could not convict under section 49(2) of the 1994 Act if the defendant thought that the money which was said to be the proceeds of drug trafficking might be the proceeds of criminal conduct, and that they could not convict under section 93C(2) of the 1988 Act if he thought that the money which was said to be the proceeds of criminal conduct might be the proceeds of drug trafficking.
43. The problem which Mr Perry has identified is plain enough in theory. But it is not a sufficient reason for thinking, despite all the indications to the contrary, that Parliament intended that it should be solved by relieving the Crown of the burden of proving the coincidence. Proof that the origin of the property was of the kind which the subsection describes is, after all, a necessary element of the offence in subsection (1). The coincidence does not need to be proved, because the allegation in a count under subsection (1) is that the defendant is dealing with his own property. But the origin must be proved, and the evidence which goes to prove knowledge or reasonable grounds to suspect for the purposes of subsection (2) will often be sufficient to justify the inference that the origin of the property was coincident with that state of mind.
44. There are other answers to the problem, as Mr Grenfell pointed out. Where (as in this case) the counts are in pairs, the facts proved may be sufficient for a conviction pursuant to subsections (3) and (4) of section 6 of the Criminal Law Act 1967 of attempting to commit whichever of the two offences coincided with what the defendant suspected the origin of the property to be; for Scotland, see the Criminal Procedure (Scotland) Act 1995, section 294 and Schedule 3, para 10(1). Mr Grenfell conceded that the effect of section 1(2) of the Criminal Attempts Act 1981 was that an accused who dealt with such property in these circumstances would be guilty of an attempt: R v Shivpuri  AC 1. Or it might have been open to the Crown, if there was a problem about proving origin, to charge the defendants with a conspiracy to launder money which had been obtained illicitly whether by way of drug trafficking or other criminal activity, as Latham LJ said in R v El-Kurd  Crim L R 234, para 47. The suggestion that the appellants' construction will put the Crown in an impossible position is not convincing. The problem appears to have been solved for the future by the approach which is taken in the 2002 Act to the definition of criminal property.
45. For these reasons their Lordships are satisfied that the judge's decision was right and ought not to have been reversed by the Court of Appeal. The appeal will be allowed and the certified question will be answered in the affirmative.
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