Judgments - Regina v. Soneji and another (Respondents) (On Appeal from the Court of Appeal (Criminal Division))

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    43.  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,

    44.  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.

    45.  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.

    46.  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.

    47.  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.

    48.  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.

    49.  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.

    50.  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.

    51.  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.

    52.  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.

    53.  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.

    54.  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).

    55.  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).

    56.  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.

    57.  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.

    58.  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.

    59.  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,

    60.  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.

    61.  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.

    62.  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."

    63.  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.

    64.  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".

    65.  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.

    66.  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).

    67.  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.

    68.  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.

    69.  I would therefore allow the appeal and restore the confiscation orders.

LORD BROWN OF EATON-UNDER-HEYWOOD

My Lords,

    70.  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.

    71.  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.

    72.  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".

    73.  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-

    (a)  by itself; or

    (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."

    74.  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".

    75.  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)).

    76.  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.

    77.  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.

    78.  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"?

    79.  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".

    80.  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.

    81.  I too would allow the appeal.

 
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