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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Electoral Commission, R (on the application of) v City of Westminster Magistrates Court & Anor [2009] EWCA Civ 1078 (19 October 2009) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2009/1078.html Cite as: [2009] EWCA Civ 1078, [2010] 1 All ER 1167, [2010] 2 WLR 873, [2010] QB 298 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Mr Justice Walker
CO92772007
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE GOLDRING
and
SIR PAUL KENNEDY
____________________
The Queen on the application of The Electoral Commission |
Appellant |
|
- and - |
||
City of Westminster Magistrates Court - and - United Kingdom Independence Party |
Respondent Interested Party |
____________________
The Respondent did not appear and was not represented
Alan Newman QC and Sam Blom-Cooper (instructed by Moreland & Co) for the Interested Party
Hearing dates : 28th and 29th July 2009
____________________
Crown Copyright ©
Sir Paul Kennedy :
Introduction
". . . may, on an application made by the Commission, order the forfeiture by the party of an amount equal to the value of the donation."
In the Magistrates Court
The application for Judicial Review
Additional Facts
The Neill Committee Report
". . . Before deciding whether a discretion has been exercised for good or bad reasons, the court must first construe the enactment by which the discretion is conferred. Some statutory discretions may be so wide that they can, for practical purposes, only be challenged if shown to have been exercised irrationally or in bad faith. But if the purpose which the discretion is intended to serve is clear, the discretion can only be validly exercised for reasons relevant to the achievement of that purpose."
In the present case it is said, and I would accept, that in order to discover the policy and objects of the statute it is helpful to look at its legislative history, beginning with the Neill Committee Report and going on to consider the White Paper and then the statute, but noting the significant changes made on the way.
"24. Political parties should in principle be banned from receiving foreign donations."
but it was difficult to find a foreign donation so –
"25. Political donations should be receivable by political parties only if originating from a permissible source (as defined).
26. The definition of a permissible source should cover:
As to individuals: registered UK voters and those entitled to register as UK voters . . .
28. The responsibility for ensuring that donations are received only from a permissible source should be placed on each political party. . .
31. Criminal sanctions should attach to a deliberate acceptance of a donation from a source falling outside the definition of a permissible source. There should be a power for the court to order a defaulting political party to forfeit a sum of up to ten times the donation wrongfully accepted."
"In essence, what we said in chapter 4 at paragraphs 4.60 and 4.61 should apply here too with necessary modifications. Thus, the Election Commission will have statutory powers to call for information and to institute an investigation into any donation which it suspects has not come from a permissible source. If a party were to be guilty of the deliberate acceptance of a donation from a source outside the definition of a permissible source, criminal sanctions should attach to all responsible, and a sum no less than the donation should be liable to forfeiture from the party's funds; in significant cases of attempted evasion of the rules a penalty of up to ten times the overspend might be levied. A forfeiture power should also apply even if the receipt were innocent or inadvertent, although the courts would clearly take into account the degree of culpability in setting the level of forfeiture."
"The reporting obligations of the political parties should be backed by criminal sanctions. These should be so drafted as to distinguish between inadvertent and a deliberate failure to report a disclosable donation. In the latter case those responsible should be fined or imprisoned. In both cases the courts would have power to order the defaulting party to forfeit a sum not exceeding the unreported donation."
"We wish to emphasise that our recommendations have been conceived as part of an overall integrated scheme for the reform of the funding of political parties. There is a direct linkage between all the recommendations, which should be viewed as a whole."
The White Paper
"The Government agrees that a regulatory scheme of some rigour is needed to enable the restrictions to be enforced . . . The Government's proposals follow the Neill Committee Report in using the concept of an "impermissible source". The principle target is to require political parties to reject donations which are anonymous or which do not appear to be either from a person registered to vote in the United Kingdom or from a company . . ."
"The bedrock functions of the Electoral Commission, as recommended by the Neill Committee, will be those relating to the new regulatory framework for the reporting of donations to political parties, the ban on foreign donations and the controls on campaign expenditure at parliamentary and other elections."
Mr Alan Newman QC for UKIP
pointed to that paragraph as showing that the banning of foreign donations was at the heart of the Government's proposals.
"The Neill Committee recognised that a key difficulty in seeking to ban foreign donations was the problem of defining a foreign source for the purposes of such a ban. Any such definition would inevitably be hedged around with a multitude of exceptions. The Committee concluded that this difficulty could effectively be overcome by defining those sources from which political parties should be entitled to receive donations. They therefore recommended that donations should be receivable by political parties only if they originate from a "permissible source", defined in such a way as to exclude foreign funding. Part IV of the draft Bill adopts this suggested approach."
"4.5 The Neill Committee recommended that political parties should be able to receive donations both from those who are registered voters in the United Kingdom and from those who are entitled to register to vote in the United Kingdom. Clause 50(2)(a) departs from this recommendation by providing that registered political parties may accept donations only from those individuals who appear on the electoral register. Entitlement to register, whether as a resident or overseas elector, will not qualify an individual as a permissible source.
4.6 Checking that a particular donor appears on the electoral register offers a test that is both conclusive and simple to administer. It would be far less straightforward for political parties to verify that a donor not appearing on the register was nevertheless entitled to do so. It is in the interests of the parties to have available a test which offers certainty as to the eligibility of the donor . . ."
"4.13 The Neill Committee proposed that criminal sanctions should attach to the deliberate acceptance of a donation from a source outside the definition of a permissible source . . .
4.14 As the Neill Committee recommended, the Government also proposes that it should be a criminal offence to attempt to evade the restrictions on the source of political parties' funds . .
4.15 In addition to theses criminal sanctions the Government also accepts the Committee's proposal that where a party is found to have accepted a donation from other than a permissible source it should be liable to forfeit that sum. Clause 51 provides a power for a Magistrates' Court . . . to order the forfeiture of a sum equal to the value of a donation received from other than a permissible source. This will apply whether such a donation was accepted knowingly or not. Under Clause 51(2) it will be for the Electoral Commission to make an application to the court for a civil forfeiture order."
PPERA
"(1) a donation received by a registered party must not be accepted by the party if -
(a) the person by whom the donation would be made is not, at the time of its receipt by the party, a permissible donor; or
(b) the party is (whether because the donation is given anonymously or by reason of any deception or concealment or otherwise) unable to ascertain the identity of that person.
(2) For the purposes of this Part the following are permissible donors –
a) an individual registered in an electoral register;"
"(1) Where –
(a) a donation is received by a registered party and
(b) it is not immediately decided that the party should (for whatever reason) refuse the donation,
all reasonable steps must be taken forthwith by or on behalf of the party to verify (or, so far as any of the following is not apparent, ascertain) the identity of the donor, whether he is a permissible donor, and (if that appears to be the case) all such details in respect of him as are required by virtue of paragraph 2 of Schedule 6 to be given in respect of the donor of a recordable donation."
"(2) If a registered party receives a donation which it is prohibited from accepting by virtue of s.54(1), or which it is decided that the party should for any other reason refuse, then –
(a) unless the donation falls within s.54(1)(b) (which deals with unidentified donors) the donation, or a payment of an equivalent amount, must be sent back to the person who made the donation or any person appearing to be acing on his behalf.
(b) . . .
within the period of 30 days beginning with the date when the donation is received by the party.
(3) Where -
(a) subsection (2)(a) applies in relation to a donation, and
(b) the donation is not dealt with in accordance with that provision, the party and the treasurer of the party are each guilty of an offence.
(4) . . .
(5) For the purposes of this Part, a donation received by a registered party shall be taken to have been accepted by the party unless –
(a) the steps mentioned in paragraph (a) or (b) of subsection (2) are taken in relation to the donation within the period of 30 days mentioned in that subsection; and
(b) a record can be produced of the receipt of the donation and –
(i) of the return of the donation, or the equivalent amount, as mentioned in subsection (2)(a) . . ."
"(1) This section applies to any donation received by a registered party –
(a) which by virtue of s.54(1)(a) or (b) the party are prohibited from accepting, but
(b) which has been accepted by the party.
(2) The court may, on an application made by the Commission, order the forfeiture by the party of an amount equal to the value of the donation.
(3) The standard of proof in proceedings for an application under this section shall be that applicable to civil proceedings.
(4) An order may be made under this section whether or not proceedings are brought against any person for an offence connected with the donation.
(5) In this section "the court" means –
(a) in relation to England and Wales, a Magistrates' Court;"
"Where the court is satisfied, on an application made by the Commission, that any failure to comply with any such requirements in relation to any donation to a registered party was attributable to an intention on the part of any person to conceal the existence or true amount of the donation, the court may order the forfeiture by the party of an amount equal to the value of the donation."
The provision is different from that in s.58(2) in that, as Mr Beloff QC for the EC points out, it expressly requires proof of intent to conceal.
Comment on the legislative history
In the Administrative Court
(1) One of the aims of PPERA as a whole is to enhance and maintain the integrity and propriety of and public confidence in the political process.
(2) A motive for many of the provisions found in part IV, including sections 54-60 is the undesirability of foreign donations.
(3) Practical considerations led Parliament to reject a recommendation (in the Neill Report) that mere entitlement to be on an electoral register should qualify an individual to be a permissible donor. Instead, as regards individuals, Parliament adopted a policy that there should be a ban on donations by those not on an electoral register.
(4) The purpose of s.54 is to give effect to that policy by (1) prohibiting parties from accepting donations from those who are not, at the time of receipt by the party, permissible donors and (2) defining an individual as a permissible donor only if that individual is registered on an electoral register. The main purpose of the forfeiture power in s.58(2) is to provide a method of enforcing s.54. It also seeks to deter future breaches of s.54, whether by the party in question or by others.
(5) Where a Magistrates Court finds that a donation has been accepted from someone who is not a permissible donor it must consider whether to make a forfeiture order, bearing in mind that its task is to advance and not to frustrate the policy and objects of PPERA and, in relation to donations by individuals, the specific purpose of s.54.
More controversially the judge continued –
(6) There is no presumption in favour of forfeiture;
(7) In construing s.58(2) regard must be had to the common law principle that a statute should not be construed so as to interfere with property rights unless it is clearly intended to do so.
(8) In relation to any one donation the power under s.58(2) is all or nothing.
That conclusion has not been the subject of challenge in this court.
(9) Potentially relevant factors include –
(a) the type and degree of harm caused by the breach of s54.(1). Has the party got a benefit it should never have had? Is the donor foreign?
(b) the extent to which the party's action or inaction deserves blame. Did the party know at the time that the donation was impermissible? If not, should it have known? Have there been previous or related transgressions? If so, what happened?
(c) concerns as to what may happen in the future. Is it desirable as a deterrent to order forfeiture even after return of a donation by the party?
(d) the stance and current position of the party. Did the party promptly admit its error and take remedial steps? That could militate against forfeiture, but every registered party of whatever size ought to ensure that its resources are deployed so as to fulfil its obligations under PPERA.
(10) Although defective, the decision of the SDJ was not shown to be irrational.
(11) The Magistrates' Court should give reasons, and, as is now accepted, the reasons given by the SDJ were inadequate.
Submissions and Conclusions
Lord Justice Goldring :
Lord Justice Waller :