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England and Wales Court of Appeal (Criminal Division) Decisions


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URL: http://www.bailii.org/ew/cases/EWCA/Crim/2002/2954.html
Cite as: [2003] 1 WLR 1655, [2003] WLR 1655, [2003] 2 Cr App Rep (S) 38, [2003] 1 Cr App R 34, [2003] 3 All ER 508, [2002] EWCA Crim 2954, [2003] 2 Cr App R (S) 38, [2003] 1 Cr App Rep 34, [2003] Crim LR 642

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Neutral Citation Number: [2002] EWCA Crim 2954
Case No: (1) 1999/05684/X2
(2) 2000/01015/X2
(3) 2000/01016/X2
(4) 2000/01245/X2
(5) 2001/04807/Y2
(6) 2001/04865/Y2
(7) 2002/00603/W1

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM CROWN COURT AT
NEWCASTLE UPON TYNE (HHJ WOOD)
AND CROWN COURT AT KINGSTON-UPON-THAMES
(HHJ HAWORTH)

Royal Courts of Justice
Strand,
London, WC2A 2LL
Monday 16 December 2002

B e f o r e :

THE LORD CHIEF JUSTICE OF ENGLAND AND WALES,
MR JUSTICE HOLLAND
and
MR JUSTICE KEITH

____________________

Between:
(1) Daljit Singh Sekhon
(2) Shangara Singh
(3) Satnam Singh
(4) Gurdev Singh Dhnoay
(5) Richard Michael Knights
(6) Kevin Maguire
(7) Kevin McFaul






Appellants

- and -


R
Respondent

____________________

Mr Balbir Singh (instructed by Murria Solicitors, Birmingham) for the 1st Appellant
Mr Avtar Bhatoa (instructed by Bassra Solicitors, Bradford) for the 2nd Appellant
Mr Robert Rhodes QC and Mr Simon Taylor (instructed by Pannone and Partners, Manchester) for the 3rd Appellant
Mr Sunit Sandhu (instructed by Harbans Singh Solicitors, Birmingham) for the 4th Appellant
Mr Christopher Campbell-Clyne (instructed by Harkarys Solicitors, London) for the 5th Appellant
Mr Joseph Boothby for the 6th Appellant
Mr Jason Smith for the Applicant (7)
Mr David Perry and Mr John Muir (instructed by The Solicitor for H.M Customs and Excise, London) for the Crown (Appellants 1,2,3,4)
Mr Michael Brompton (instructed by The Solicitor for H.M Customs and Excise, London) for the Crown (Appellants 5,6)

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    The Lord Chief Justice:

    INTRODUCTION

  1. One of the most successful weapons which can be used to discourage offences that are committed in order to enrich the offenders is to ensure that if the offenders are brought to justice, any profit which they have made from their offending is confiscated. It is therefore not surprising that Parliament has repeatedly enacted legislation designed to enable the courts to confiscate the proceeds of crime.
  2. Regrettably a series of cases have come before the courts recently which reveal that the prosecuting authorities, including the advocates appearing for them, have been attaching far too little significance to ensuring that confiscation proceedings are effective. A series of cases have resulted in orders for the confiscation of substantial sums being set aside for the failure to adhere to procedural requirements that are often of a technical nature.
  3. Furthermore, until Mr Perry was instructed to appear in the present cases, on behalf of the prosecution, important arguments as to the effect of non-compliance with procedural requirements were not placed before the courts.
  4. These repeated failures on the part of prosecuting authorities should not be allowed to continue. The sort of mistakes being made are apparent from the cases to which it will be necessary to refer in this judgment which relates to appeals arising out of three prosecutions. The first prosecution is in respect of Daljit Singh Sekhon, Satnam Singh, Shangara Singh and Gurdev Singh Dhnoay. The second prosecution relates to Kevin McFaul and the third prosecution to Richard Michael Knights and Kevin Maguire.
  5. It is convenient before turning to the circumstances of these cases to set out the statutory framework. It is also desirable to consider the large body of case law that has accumulated around that legislation. In relation to both the legislation and the case law we are indebted to Mr Perry for the account that he provided. In the description that we now provide, we rely heavily on his extremely helpful submissions. It is necessary to refer to the successive legislation because even in relation to the same trial different legislation can apply to different defendants because of the dates on which their respective provisions came into force.
  6. The Background to the Legislation

  7. The 1988 Act: An Overview of the Provisions
  8. i) The Hodgson Committee report, 'The Profits of Crime and their Recovery, Howard League for Penal Reform, 1984', made a number of recommendations which form the background to confiscation provisions in the Criminal Justice Act 1988 (" the 1988 Act"). It is the 1988 Act as subsequently amended with which we are concerned in these appeals.
    ii) The report recommended the repeal of the criminal bankruptcy order and its replacement with a sentence of confiscation designed to catch the profits of major crime. Following these recommendations, a confiscation regime was introduced in relation to drug trafficking by the Drug Trafficking Offences Act 1986. As well as including the powers of restraint and confiscation, that Act also contained a statutory assumption to the effect that a drug trafficker's assets were the proceeds of crime and therefore liable to confiscation.
    iii) The 1988 Act introduced a new power to make a confiscation order in the case of certain crimes other than drug trafficking offences. The confiscation provisions in the 1988 Act, as originally enacted, applied mainly to offenders in the Crown Court and only in cases where the defendant had benefited by at least £10,000 from the offence (S.71). In such cases the maximum amount of the confiscation order was the amount of the benefit or the extent of the realisable property, whichever was the lesser.
    iv) The procedure for making a confiscation order involved the prosecution serving a notice (section 72) and, thereafter, was subject to a procedure requiring further statements and counter-statements to establish the extent of the defendant's benefit (section 73).
    v) Section 74 provided rules for calculating the "amount that might be realised" and contains provisions designed to defeat sham transactions.
    vi) Confiscation orders were to be enforced as unpaid fines (section 75) but it was also provided that a receiver might be appointed to realise the defendant's property in order to apply it in satisfaction of the order (sections 80 to 82).
    vii) The pre-trial restraint of property was provided for in sections 76 to 79. Two forms of order were introduced. First, a restraint order, which may be used to prevent dealing with designated property and, secondly, the charging order which may be used to impose a charge on designated property to preserve assets for a future confiscation order.
    viii) The provisions of the 1988 Act most relevant to the issues raised in these appeals are sections 71 and 72 that are in Part VI of the Act. We refer to them initially in their unamended form.

    Section 71

  9. Section 71, so far as material, provides as follows:
  10. (1) "The Crown Court and a magistrates' court shall each have power, in addition to dealing with an offender in any other way, to make an order under this section requiring him to pay such sum as the court thinks fit.

    (2) The Crown Court may make such an order against an offender where:

    (a) he is found guilty of any offence to which this Part of this Act applies; and
    (b) it is satisfied:
    (i) that he has benefited from that offence or from that offence taken together with some other offence of which he is convicted in the same proceedings, or which the court takes into consideration in determining his sentence, and which is not a drug trafficking offence; and
    (ii) that his benefit is at least the minimum amount.

    (3) (…)

    (4) For the purposes of this Part of this Act a person benefits from an offence if he obtains property as a result of or in connection with its commission and his benefit is the value of the property so obtained.

    (5) Where a person derives a pecuniary advantage as a result of or in connection with the commission of an offence, he is to be treated for the purposes of this Part of this Act as if he had obtained as a result of or in connection with the commission of the offence a sum of money equal to the value of the pecuniary advantage.

    (6) The sum which an order made by a court under this section requires an offender to pay must be at least the minimum amount, but must not exceed:

    (a) the benefit in respect of which it is made; or
    (b) the amount appearing to the court to be the amount that might be realised at the time the order is made,
    whichever is the less.

    (7) For the purposes of this Part of this Act the minimum amount is £10,000 …

    (8) (…)

    (9) (…)"

    Thus, by reason of section 71, before a Court had power to make a confiscation order the Court had to be satisfied that the defendant had benefited by at least £10,000. This followed a recommendation made by the Hodgson Committee which had been in favour of limiting the power to make confiscation orders by reference to a sum of money so as to prevent its operation in impracticable small cases.

    Section 72

  11. Section 72, so far as material, provides:
  12. (1) "A court shall not make a confiscation order unless the prosecutor has given written notice to the court to the effect that it appears to him that, were the court to consider that it ought to make such an order, it would be able to make an order requiring the offender to pay at least the minimum amount.

    (2) If the prosecutor gives the court such a notice, the court shall determine whether it ought to make a confiscation order.

    (3) (…)

    (4) If the court determines that it ought to make such an order, the court shall, before sentencing or otherwise dealing with the offender in respect of the offence or, as the case may be, any of the offences concerned, determine the amount to be recovered in his case by virtue of this section and make a confiscation order for that amount specifying the offence or offences."

    Under section 72(1) and (2) the procedure for making an order was dependent on the prosecution giving notice that there were likely to be sufficient assets to meet it. Where such a notice was given, the Court was bound to consider the making of an order. By section 71(4) the Court was required to determine the amount to be recovered and make a confiscation order before sentencing or otherwise dealing with the offender.

    The Criminal Justice Act 1993

  13. Part III of the Criminal Justice Act 1993 ("the 1993 Act") (sections 27 to 35) made significant changes to Part VI of the 1988 Act. The principal changes that were made to the confiscation regime were twofold:
  14. (i) the standard of proof required to determine any question as to whether a person had benefited, and whether his benefit was at least the minimum amount and the amount to be recovered, was to be that applicable in civil proceedings (section 71(7A) of the 1988 Act as inserted by section 27 of the Criminal Justice Act 1993);

    (ii) the Court was given power to postpone a determination of the amount which might be recovered until after the Court had sentenced the defendant (section 72A of the 1988 Act as inserted by section 28 of the Criminal Justice Act 1993).

  15. The power to order postponement was enacted to give the sentencing Court the flexibility to sentence the offender, so that he might not be left in a state of uncertainty, before proceeding to confiscation. Under the 1988 Act in its original form (and under the Drug Trafficking Offences Act 1986 in its original form) the sentencing Court was prevented from proceeding to sentence until the Court had gone through the procedural steps involved in confiscation. This often meant that sentence was adjourned for a considerable period of time in order to enable the parties to prepare and present evidence and arguments.
  16. Section 72A

  17. Section 72A, (in its unamended form) so far as material, provides as follows:
  18. (1) Where a court is acting under section 71 above but considers that it requires further information before:

    (a) determining whether the defendant has benefited as mentioned in section 71(2)(b)(i) above;
    (b) determining whether his benefit is at least the minimum amount; or
    (c) determining the amount to be recovered in his case by virtue of section 72 above,
    it may, for the purposes of enabling that information to be obtained, postpone making that determination for such period as it may specify.

    (2) More than one postponement may be made under subsection (1) above in relation to the same case.

    (3) 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.

    (4) Where the defendant appeals against his conviction, the court may, on that account:

    (a) postpone making any of the determinations mentioned in subsection (1) above for such period as it may specify; or
    (b) where it has already exercised its powers under this section to postpone, extend the specified period.

    (5) A postponement or extension under subsection (1) or (4) above may be made:

    (a) on application by the defendant or the prosecutor; or
    (b) by the court of its own motion.

    (6) Unless the court is satisfied that there are exceptional circumstances, any postponement or extension under subsection (4) above shall not exceed the period ending three months after the date on which the appeal is determined or otherwise disposed of.

    (7) Where the court exercises its powers under subsection (1) or (4) above, it may nevertheless proceed to sentence, or otherwise deal with, the defendant in respect of the offence or any of the offences concerned.

    (8) Where the court has so proceeded, section 72 above shall have effect as if:

    (a) in subsection (4), the words from "before sentencing" to "offences concerned" were omitted; and
    (b) in subsection (5), after "determining" there were inserted "in relation to any offence in respect of which he has not been sentenced or otherwise dealt with".

    (9) In sentencing, or otherwise dealing with, the defendant in respect of the offence, or any of the offences, concerned at any time during the specified period, the court shall not:

    (a) impose any fine on him; or
    (b) make any such order as is mentioned in section 72(5)(b) or (c) above.

    (10) In this section references to an appeal include references to an application under section 111 of the Magistrates' Courts Act 1980 (statement of case by magistrates' court).

    (11) In this section "the date of conviction" means:

    (a) the date on which the defendant was convicted of the offence concerned, or
    (b) where he was convicted in the same proceedings, but on different dates, of two or more offences which may be taken together for the purposes of subsection (2) or, as the case may be, (3) of section 71 above, the date of the latest of those convictions.

    Section 72A gave the sentencing court the power to postpone the confiscation proceedings. The Court may order one or several postponements providing the total period does not exceed six months from the date of conviction, though even then that time limit can be extended if there are "exceptional circumstances".

    The Proceeds of Crime Act 1995

  19. The 1988 Act was further amended by the Proceeds of Crime Act 1995 ("the 1995 Act"). (It had also been amended by the Criminal Justice and Public Order Act 1994, but the amendments effected by that Act are not directly material to the issues raised in these appeals.)
  20. Section 1 of the 1995 Act made a number of changes to section 71 of the 1988 Act and these changes may be summarised as follows:
  21. (i) a duty was placed upon the Court to exercise its powers to embark upon confiscation proceedings in every case in which written notice had been given by the prosecutor;

    (ii) the Court was given a power to institute confiscation proceedings of its own volition;

    (iii) the minimum figure of £10,000 was abolished.

    Thus, Section 71(1) of the 1988 Act now provides:

    "(1) Where an offender is convicted, in any proceedings before the Crown Court or a magistrates' court, of an offence of a relevant description, it shall be the duty of the court:
    (a) if the prosecutor has given written notice to the court that he considers that it would be appropriate for the court to proceed under this section, or
    (b) if the court considers, even though it has not been given such notice, that it would be appropriate for it so to proceed,
    to act as follows before sentencing or otherwise dealing with the offender in respect of that offence or any other relevant criminal conduct."
  22. Section 2 of the 1995 Act inserted section 72AA into the 1988 Act to provide for confiscation in relation to a course of criminal conduct.
  23. Section 3 of the 1995 Act amended section 73 of the 1988 Act (effect of provision of statement by prosecutor) and provided for the service on the Court and defendant of statements from the prosecutor.
  24. Section 4 of the 1995 Act inserted section 73A into the 1988 Act so as to empower the Court to order the defendant to provide information to assist it in carrying out its functions under Part VI of the 1988 Act.
  25. Sections 5 to 10 of the 1995 Act amended the 1988 Act in relation to such matters as the review and revision of confiscation orders, the enforcement of confiscation orders and the variation of confiscation orders.
  26. Part IV of the 1988 Act came into force on 3 April 1989. The amendments made by the 1993 Act, which were of a procedural nature, came into force on 3 February 1995 (SI 1995/43); the amendments made by the 1995 Act came into force on 1 November 1995 (SI 1995/2650). The amendments to the 1988 Act made by the 1995 Act apply when the offences of which the accused is convicted were committed on or after 1 November 1995.
  27. The Human Rights Act

  28. In addition to the domestic legislation, in the Sekhon appeal there is reliance on Article 6 of the European Convention. However, because of the conclusions which we have come to it is not necessary to deal with this issue.
  29. The Argument on the Legislation

  30. In all the cases before us the argument turned on whether the confiscation proceedings had taken place in accordance with the procedure set out in the 1988 Act in the amended form appropriate to the particular appellant. It was only when Mr Perry came on the scene that the prosecution case was advanced in what we are satisfied is the appropriate manner by the following issues:
  31. i) Did the confiscation proceedings take place in accordance with the procedures set out in the 1988 Act, and, in particular, did the Sentencing Judge properly postpone the confiscation hearing?
    ii) If the confiscation proceedings did not take place in accordance with the procedures set out in the 1988 Act, were the confiscation orders in each case nevertheless lawfully made?

  32. Before examining the statutory provisions further, let us try to explain why the second issue is all important when considering whether a court has been deprived of jurisdiction to make a confiscation order:
  33. i) The starting point is that the court is seized of a general criminal jurisdiction over the proceedings. The confiscation proceedings are ancillary to the main proceedings.
    ii) The courts have been given by Parliament jurisdiction to make confiscation orders where a defendant has been found guilty and a defendant has benefited from the crime of which he has been found guilty.
    iii) It is in those circumstances obvious that what Parliament intends is that a confiscation order should be made by the court, if a defendant has been found guilty and has benefited from his crime, absent any indication to the contrary.
    iv) Parliament can make provision itself as to the procedure to be followed before a confiscation order is made or it can give the power to another body, such as a Rule Committee, to lay down Rules of Procedure. However, in criminal proceedings those Rules are frequently contained in primary legislation, but they remain nonetheless Rules of Procedure.
    v) The purpose of Rules of Procedure is not usually to give or take away a court's jurisdiction. It is the substantive provisions of the legislation creating the power or duty of the court which have given the jurisdiction, here under sub-paragraphs (1) and (2) of S.71 above. What the procedural provisions are doing is to provide a convenient and just machinery enabling the court to exercise its jurisdiction.
    vi) The procedural provisions can be, but usually are not, conditions that have to be fulfilled to give the court jurisdiction. More usually procedural provisions do no more than; (a) enable the court if they are not complied with to make orders to require something to be done if it has not been done in accordance with the statutory provisions or (b) in the same circumstances to dismiss the proceedings.
    vii) Neither (a) nor (b) above happens automatically in the absence of the proceedings being abandoned. What is required is for the court to come to a decision (usually on the application of the prosecution or defence) to take action (a) or (b) above. What action the court takes will depend on what is just in all the circumstances.
    viii) If there is no application made (see sub-paragraph vii above) but the next steps set out in the procedural provisions take place, the step that is not taken as it should have been can usually be ignored. It is no longer relevant even though Parliament has said it "must" or "should" be taken. This is because its objective of moving the procedure forward is no longer required. We would not regard this outcome to involve a "waiver".
    ix) It is because of the matters set out in sub-paragraph viii that procedural steps usually do not go to jurisdiction. The difficulty arises because Parliament does not often expressly indicate what procedural steps are to result in proceedings becoming, in effect, a nullity if they are not taken. It is left to the courts to infer what Parliament intended to happen if a procedural requirement is not complied with. Deducing what Parliament intended can be difficult. It may be helpful if it is remembered that (a) the use of mandatory terms is far from decisive and (b) substantive provisions giving the court its jurisdiction are not to be automatically defeated in the ordinary way by non-compliance with procedural requirements unless this is necessary to achieve the statutory purpose.
  34. It is unfortunate that the second issue was not previously advanced on behalf of the Crown. Mr Perry submits there are two facets to the second issue, the first being that breaches of apparently absolute statutory requirements do not necessarily deprive the court of jurisdiction and the second is dependent on the doctrine of waiver. That doctrine plays no part in our decisions in these appeals but we recognise that in other cases it could be important.
  35. In relation to the second issue Mr Perry submits that if even the most trivial breach of an apparently absolute requirement had the effect of vitiating the relevant proceedings the consequences would be out of all proportion. Here, he relies upon Bennion 3rd edition (1997), "Statutory Interpretation a Code" and the following statement of principle (at page 31):
  36. "Where a requirement arises under a statute, the court, charged with the task of enforcing the statute, needs to decide what consequence Parliament intended should follow from failure to implement the requirement. This is an area where legislative drafting has been markedly deficient. Drafters find it easy to use the language of command. They say that a thing 'shall' be done. Too often they fail to consider the consequence when it is not done. What is not thought of by the drafter is not expressed in the statute. Yet the courts are forced to reach a decision. It would be draconian to hold that in every case failure to comply with the relevant requirement invalidates the thing done. So the courts' answer has been to devise a distinction between mandatory and directory duties."
  37. He also refers to numerous authorities which deal with the distinction between "mandatory and directory duties" including in relation to the time limit specified in the Crown Court Rules 1982: (R v Urbanowski [1976] 1 WLR 455; R v Governor of Spring Hill Prison, Ex parte Sohi and Dhillon 86 Cr App R 382) and as to the time for preferring a bill of indictment in the Indictment (Procedure) Rules 1971 (R v Sheerin 64 Cr App R 68; R v Soffe 75 Cr App R 133; and R v Farooki 77 Cr App R 257).
  38. There is no doubt that difficulties for courts exist in applying the distinction between mandatory requirements, on the one hand, and directory requirements on the other. Even if the terms 'directory' and 'mandatory' are not used the problem remains of answering the question "what is the effect of non-compliance with procedural requirements?" What is necessary as indicated by Lord Campbell LC in Liverpool Borough Bank v Turner [1861] 30 LJ Chancery 319 at 380, is "to try to get at the real intention of the legislature by carefully attending to the whole scope of the statute to be construed".
  39. In a case in which the Secretary of State had failed to apply for leave to appeal on the form prescribed by statutory instrument, the Court of Appeal Civil Division in the case of R v Secretary of State for the Home Department, ex parte Jeyeanthan [2000] 1 WLR 354 took very much the same view in a judgment of the then Master of the Rolls at page 359. What was stated is as follows:
  40. "Because of what can be the very undesirable consequences of a procedural requirement which is made so fundamental that any departure from the requirement makes everything that happens thereafter irreversibly a nullity it is to be hoped that provisions intended to have this effect will be few and far between. In the majority of cases, whether the requirement is categorised as directory or mandatory, the tribunal before whom the defect is properly raised has the task of determining what are to be the consequences of failing to comply with the requirements in the context of all the facts and circumstances of the case in which the issue arises. In such a situation that tribunal's task will be to seek to do what is just in all the circumstances: see Brayhead (Ascot) Ltd. v Berkshire County Council [1964] 2 Q.B. 303, applied by the House of Lords in London and Clydeside Estates Ltd. v Aberdeen District Council [1980] 1 WLR 182."

    This statement has since had the benefit of the endorsement of Lord Steyn in the House of Lords in Attorney General's Reference No.3 of 1999 [2001] 2 WLR 56 at page 62C.

  41. In relation to the procedural requirements which Parliament has imposed it is possible fairly readily to come to certain conclusions. These are as follows:
  42. i) Since the 1988 Act was passed, Parliament has been attaching increasing importance to courts being in a position to make confiscation orders. For that reason it has relaxed the requirements of the order having to be made as part of the original sentencing process. In the 1988 Act in its unamended form, the court was unable to proceed to sentence until the court had gone through the procedural steps and dealt with confiscation. The subsequent amendments gave the court power to adjourn sentencing but care was taken to specify the limits on the power to postpone its decision to order confiscation. (See S.28 of the 1993 Act and the terms of S.2A of the 1988 Act inserted by S.28.) This process was continued by the 1995 Act which extended the court's powers.
    ii) Parliament was intent on ensuring that wherever practicable the process of making a confiscation order and sentencing should be linked. It can be readily understood why Parliament should have adopted this course. After all, it is important that the defendant should know as soon as practicable what are the consequences to him of his conviction. Parliament, therefore, when it did relax the requirements did require the court to be satisfied that if it was to grant a postponement or extension there were "exceptional circumstances" to justify this. (see S.72A(6))
  43. On the other hand we suggest that it would not have been the intention of Parliament to exclude the jurisdiction of the court in relation to the making of confiscation orders because of procedural defects of a technical nature that caused no injustice to the defendant. In this context it is interesting to note that certainly this is not Parliament's intention now. The most recent legislation in this area is the Proceeds of Crime Act 2002 ("the 2002 Act"). S.14(11) of that Act provides:
  44. "A confiscation order must not be quashed only on the ground that there was a defect or omission in the procedure connected with the application for or the granting of a postponement".
  45. We would expect a procedural failure only to result in a lack of jurisdiction if this was necessary to ensure that the criminal justice system served the interests of justice and thus the public or where there was at least a real possibility of the defendant suffering prejudice as a consequence of the procedural failure.
  46. Having set out this general approach, it is convenient to return to the procedural requirements themselves. Here it is important to note that S.71 is dealing with the jurisdiction of the court. It does contain provisions which undoubtedly have to be complied with to give the court jurisdiction to make an order. The defendant must have been found guilty of the required offence. In addition, the court must be satisfied that the offender has benefited from the offence to the required extent. Section 72, on the other hand, is dealing with procedure and procedural requirements do not usually go to jurisdiction.
  47. Notwithstanding the actual language of S.72(1) which read literally is mandatory in its terms, we would not regard it as likely that Parliament would, for example, be concerned to deprive the court of jurisdiction because of defects in the contents of the written notice which is required by S.72(1). The notice, which does not have to be given to the defendant, starts the procedure and avoids the court being involved in confiscation proceedings if the prosecutor thinks that the court would not be able to order the defendant to pay more than £10,000. Furthermore, once the 1995 Act was in force, this is the almost inevitable conclusion because not only was the court required to exercise its powers when a notice had been given it had power to exercise its powers of its own volition.
  48. It seems to us that the non-jurisdictional nature of the requirements of S.72 is supported by the decision of the Court of Appeal in R v Urbanowski [1976] 1 WLR 455. That was a case in which the court was considering S.7(4) of the Courts Act 1971 which provides:
  49. "The trial of a person committed by magistrates court… (b) shall, unless the Crown Court has otherwise ordered, begin not later than the expiration of the prescribed period beginning with the date of his committal."
  50. Rule 19 of the Crown Court Rules 1971 prescribed a period of 56 days. Scarman LJ in giving judgment said of the subsection:
  51. "It seems to us plain that this subsection is primarily addressed to the Crown Court, and obliges the court to take steps to ensure that cases are begun within the prescribed period. Accordingly in our view this provision, being addressed to the court and its officials, is directory and not mandatory; it follows from that view of the subsection that it is open to the Crown Court to grant an extension of time if it thinks fit after the expiration of the prescribed period."

    The Case Law

  52. Having made these general observations it is next important to look at the relevant case law. The general effect of the decisions on postponement of the confiscation proceedings can be summarised as follows:
  53. (i) the postponement of confiscation proceedings must be ordered by a judicial decision (R v Steele and Shevki [2001] 2 Cr App R (S) 178; R v Ross [2001] EWCA Crim 560);
    (ii) whilst no particular form of words is required, the decision to postpone must be made manifest (R v Steele and Shevki, supra, and R v Ross, supra);
  54. Turning to individual cases, the case which it is convenient to take first because it contains a statement in the judgment of the court given by Judge LJ with which we would respectfully agree is R v Cole (unreported) 97/3929/X4 of 22 April 1998. It was a case where the trial judge had become ill after a difficult and complex trial. The issue was whether this constituted exceptional circumstances in parallel legislation dealing with drug trafficking. Judge LJ stated:
  55. "… section 3 therefore creates a convenient code which permits the court to pass an appropriate sentence before having determined whether to make a confiscation order under section 2, and simultaneously maintains the necessary control over the process which could otherwise become protracted and ultimately unfair … The court should normally deal with a confiscation order within six months of the conviction. In exceptional circumstances this period may be exceeded. The judgment whether circumstances are exceptional or not must be made by the court considering whether to make a confiscation order, and the decision must be made before the six month period has elapsed … here the judge was in hospital on the date when he had indicated that he would determine the confiscation issue. Of course it might have been the defendant who was ill and unfit to attend court. For that matter it might equally have been counsel who the defendant wished to appear for him. Having studied the statutory code we do not consider that it was intended or drafted so as to preclude the listing officer making sensible arrangements for the conduct of Crown Court business, normally after discussion with the trial judge or the resident judge …"
  56. This subject was again addressed by Judge LJ in R v Steele and Shevki [2001] 2 Cr App R (S) 178 to which we have already referred. This is a case also decided under the Drug Trafficking Act 1994 rather than under the 1988 Act. However, Judge LJ again sets out what should be the general approach which is relevant to the similar statutory provisions we are considering. He said:
  57. "Confiscation orders should normally form part of the ordinary sentencing process. For lack of appropriate information, this will often be impractical. If the conditions set out in section 3(1) or section 3(4) are satisfied, and within six months of conviction, the court may decide that the determination should be postponed. Unless the circumstances are exceptional this should not extend beyond six months after conviction. These decisions involve the court's discretion, judicially exercised when the statutory conditions are present, taking full account of the preferred statutory sequence as well as the express directions in the statute that save in exceptional circumstances confiscation determinations should not be postponed for more than six months after conviction. So far as practicable, adjournments which would have the effect of postponing the determination beyond that period, or in exceptional cases, beyond the period envisaged when the decision to postpone was made, should be avoided. Nevertheless when the circumstances in an individual case compel an adjournment which would have this effect, then whether or not the information gathering process has been completed, it may be ordered, for example, to take account of illness on one side or the other, or the unavailability of the judge, without depriving a subsequent order for confiscation of its validity."
  58. We refer to both of the judgments of Judge LJ. As it appears to us, they make it clear that the consideration of whether there should be a postponement of the confiscation proceedings and whether there are exceptional circumstances involve just the type of issue that courts regularly are required to determine when engaged in case management. The strict compliance with procedural requirements relating to issues of this nature would not normally be expected to go to jurisdiction. The provisions tell the judge the order in which he must deal with matters and the considerations he must have in mind. Any default by the judge can be satisfactorily dealt with on appeal when it is to be expected that the court would examine the circumstances and not focus on technicalities. The issue would be what did justice require having regard to the Parliamentary code. The court would take into account, as Mr Campbell Clyne on behalf of Knights urges, "the draconian" nature of the proceedings so far as the defendant is concerned.
  59. We turn next to R v Ross [2001] EWCA Crim 560, in which the Court of Appeal (Potter LJ, Burnton J and the Recorder of Manchester) considered the situation of a Judge who had passed sentence and then postponed the confiscation proceedings under the Drug Trafficking Act 1994. The confiscation order was quashed. Potter LJ stated (at paragraph 18):
  60. "In our judgment section 2 and section 3 of the Act lay down a clear and mandatory sequence to be followed in a case such as the present when a defendant appears before the Crown Court to be sentenced in respect of one or more drug trafficking offences, and either the prosecution makes a request within section 2(i)(a), or the court considers it is appropriate to proceed under section 2. We say mandatory because of the first five words of section 2(2) ['The court shall first determine …']."

    He went on to state (at paragraph 25):

    "… section 3(1) confers a discretion on the court to postpone making a determination. It is only if that discretion is exercised, by making an order for the postponement of a determination, that section 3(7) and (8) permit sentence to be passed before the determination is made …the exercise of that discretion requires a judicial decision. No particular form of words is required, but the decision to postpone must be made manifest and, in particular, it must specify the period of the postponement, which cannot go beyond 6 months from the date of conviction unless the circumstances are exceptional.
  61. This case is in part inconsistent with what we have said earlier. However, the court dealt with the question of whether the language was mandatory but did not ask itself what was the effect of non-compliance with the language. That court did not have the benefit of Mr Perry's argument. Even this authority requires no more than that there should be a decision made to postpone the confiscation hearing. The nature of the decision and its form are not treated as critical. We understand Potter LJ as indicating that as long as there is a decision to postpone that is all that matters. In other words the decision gives the court jurisdiction. Other matters go to the nature of that decision and could appropriately be dealt with on appeal. R v Phillips [2001] EWCA 2790 can be explained in the same way.
  62. The next case to which we should refer is R v Davis [2001] EWCA 2902. In that case it was decided that when ordering a postponement under section 3 of the Drug Trafficking Act 1994 it is necessary to specify the period of the postponement. In giving the judgment of the Court, Pitchford J, explaining the statutory scheme under the 1994 Act, stated (at paragraphs 26-30):
  63. "Before sentence is passed the court must, if asked by the prosecution, or of its own motion if it considers it appropriate, act under section 2 to determine whether the defendant has benefited from drug trafficking and, if so, determine the amount to be recovered from the defendant …
    Where the court is acting under section 2 but considers it requires further information before making either determination, it may postpone the determination for such period as it may specify …
    The second use of the word 'may' in section 3(1) means, in this context, 'must' … In our view the mandatory nature of the requirement is established by reading section 3(1) together with section 3(3) …
    The plain purpose of the section is to place time limits on the determination proceedings. Had Parliament intended merely to set a period within which, subject to exceptional circumstances, the determination must be made, it could, and in our view would, have explicitly so provided. The whole section, particularly subsection (3), is structured upon the assumption that the setting of a period or periods for postponement will take or has taken place. Without the setting of a period under subsection (1), the limitation imposed by subsection (3) does not bite. It follows that either Parliament intended that there should be no limitation when the court chooses not to specify the period, or it intended that the court should specify a period in every case. In our view the latter construction is inevitable.
    In expressing its decision under section 3(1), no particular form or words is required provided that the decision of the court is made before sentence and that the decision of the court is manifest.
  64. This reasoning of Pitchford J is impeccable but it does not follow that, if this reasoning is correct, Parliament intended that the setting of the period of postponement was a condition precedent to the court's jurisdiction. We would respectfully doubt the correctness of this decision if it means the court inevitably is without jurisdiction because of a failure to specify a date to which there is to be a postponement even if the application in fact is heard within the required period.
  65. We question whether if the argument advanced before us by Mr Perry had been advanced the decision would have been the same. The trial court, or failing the trial court, the appeal court could have fully protected the interests of the defendant. If the confiscation order was made within the period permitted by the Act we would suggest it is unnecessary by implication to read in a requirement into the statutory code which that statutory code does not specify.
  66. In this connection we would prefer the approach of Rix LJ in R v Copeland [2002] EWCA 736. In that case it was held by the Court of Appeal (Rix LJ, Leveson J and Sir Richard Tucker) that a failure to specify a period of postponement did not deprive the Crown Court of jurisdiction to make a confiscation order. The Court of Appeal referred to the decision in Ross and stated (at paragraph 17):
  67. "We are troubled by the reference in Ross to the fact that the court must specify the period in light of the fact that the statute makes no such requirement and that it did not, as we would observe, provide that the court shall specify such a period. The decision in Ross was of course based on facts very different to the facts of the present case. In that case before sentence the Crown originally said there would be no inquiry. It subsequently said that there might be a request for an inquiry and the whole matter was left in the air whether there would be any inquiry at all. That is quite different from the facts of the present case."
  68. However, in R v Pisciotto [2002] EWCA Crim 1592, (Keene LJ, Davis J and the Recorder of Cardiff) it was decided that a failure to specify the period of the postponement was fatal to the making of a confiscation order and the reasoning in Davis was to be preferred to the reasoning in Copeland. We respectfully disagree and would prefer the reasoning in Copeland.
  69. There are two authorities which suggest that the Crown Court retains a general power to postpone or adjourn confiscation proceedings, for a period that is limited only by its own discretion as to whether or not there are exceptional circumstances and whether or not the offender is sentenced for the offence prior to the confiscation proceedings. The two decisions are R v Tuegel [2000] 2 Cr App R 361 and R v Lingham [2001] 1 Cr App R (S) 158.
  70. In R v Tuegel, (Rose LJ, Tucker and Elias JJ) it was held that a Judge "has inherent power at common law to adjourn the whole or part of the sentencing exercise" and that the power was "not subject to any specific common law time limit." In that case a confiscation order made under the 1988 Act, outside the six month time limit was upheld on the basis that the sentencing Court and counsel had proceeded on the basis that there were exceptional circumstances which justified a confiscation order being made outside the six-month period. (See pages 387B and 388A-G.)
  71. In R v Lingham, the Court of Appeal held that a Court may postpone making a confiscation order for a period of more than six months from the date of conviction if the postponement is for a purpose other than that of obtaining information. Speaking for the Court of Appeal, Jowitt J stated:
  72. "Leaving aside section 3 of the Drug Trafficking Act 1994, a court is entitled to make its own decision about when an application relating to a case of which it is seized should be heard and whether it should be adjourned. It must act judicially. Subsections (1) and (3) of section 3 are all to be considered against this background. For the legitimacy of this approach see Tuegel & Others [2000] 2 Cr App R (S) 361 at 388."
  73. The authorities, to which we have referred so far, do not deal with the question of waiver and in view of our conclusions, it is not necessary for us to give detailed consideration to waiver. However, even without waiver, in our opinion all that is strictly required in order to give the court jurisdiction where a postponement is necessary is that there should be a decision to postpone. This requires no particular form of words. We are not persuaded that the statement of a period of postponement is critical for establishing jurisdiction. It is not a condition precedent for there to be jurisdiction. If there is a failure to specify then this could be a matter of complaint by appeal to the Court of Appeal after a confiscation order has been made. Then the Court of Appeal could, if justice so required, quash the confiscation order. If, however, no injustice was involved, the confiscation order would stand.
  74. Before leaving the authorities we should refer to two more cases. The first of those cases is R v Kelly [2000] 2 Cr App R (S) 129. In that case the judgment of the court was given by Laws LJ. In the course of his judgment which related to a confiscation order made under the Drug Trafficking Act 1994 Laws LJ, after having been referred to Tuegel said (at p137):
  75. "Nothing is plainer than that a postponement under S.3(1) is constituted, and only constituted, by a judicial decision unless there is something wholly exceptional that must be taken and done in open court and reasons there given for it."
  76. In Kelly nothing was said about exceptional circumstances. No period was specified under S.3(1). In our judgment nothing capable of being called a judicial decision was arrived at under S.3(1) on that day. In those circumstances it was decided that the confiscation order was made without jurisdiction. There being no decision at all in that case, we would not question the correctness of the decision.
  77. The second is R v Palmer [2002] EWCA Crim 2202. In Palmer a confiscation order in the total sum of £33,243,812.46 had been made on 23 April 2002. In this court Rix LJ presided. The court quashed the confiscation order. Two notices under S.72 had been served by the prosecution. As to the first, Rix LJ indicated that the court had "anxiously considered" the submissions that despite inaccuracies it was valid. He observed that he saw the strength in the Crown's case "that in substance everyone knew where they were going" and that it was clear to all that the appellant was a wealthy man who had profited enormously from his fraud but he concluded "albeit with reluctance", that the judge was right to find that the first notice was invalid and that the second notice could not make up for its deficiencies. He was of the opinion that the first notice, not having been valid, a second notice served after the confiscation proceedings had commenced could not cure the absence of an effective notice at the outset. The consequence was that it was not possible for the trial court to postpone the confiscation proceedings and proceed to sentence.
  78. The first notice in Palmer referred to the wrong section. The explanation as the court pointed out was that it was drafted with the 1995 provisions in mind when that Act was not in force at the relevant time. So the notice referred to the amended S.71(1)(a) when it should have referred to S.72(1) (the 1995 Act did not apply to the proceedings). In addition, it did not refer to the fact that if an order was made it would at least be for £10,000, which in Palmer's case was hardly likely to be in issue. The errors were due to the notice being on a standard form developed for use when the 1995 provisions applied. Neither the court nor the defendant, if they had seen the notice, would have been under any doubt that the prosecution thought this was a case where confiscation proceedings should continue. It is difficult to conceive that Parliament intended that technical failures of this sort should affect the jurisdiction of the court to make a confiscation order.
  79. The Court of Appeal was, however, without the benefit of the argument advanced before us by Mr Perry. Furthermore, they were influenced by two decisions given by this court which shared the same disadvantage. Those decisions being R v Martin [2002] 2 Cr App R (S) 34 and R v Miranda [2000] 2 Cr App R (S) 347.
  80. After the decision in Palmer, counsel appearing for the Crown abandoned the Crown's right to appeal. In those circumstances when Mr Perry, on behalf of the Crown¸ sought leave to appeal, the court took the view that there was no power to grant leave to appeal.
  81. The question that remains is what is the status of the Palmer case and the other authorities on which it was based. What has happened is that as part of the normal common law process, decision has followed decision extending the principle that there is no jurisdiction if there is a procedural failure from one aspect to another of the confiscation process. Palmer is only significant because it dealt with the use of a notice designed for use under a later Act being used as a notice under an earlier Act. Even though the wrong notice was used it could still achieve and did achieve its primary objective of initiating confiscation proceedings. Yet a defendant who had been otherwise properly subjected to a confiscation order in excess of £30m had that order quashed. This is a result that Parliament could not have intended.
  82. For one constitution of this court to hold that a series of cases have been decided per incuriam, is not a course to be lightly taken. There is now new legislation which contains the section to which we have referred above which is designed to prevent repetition of the problem. There are, however, no doubt other cases in the pipeline which could be affected by the earlier authorities which did not consider Mr Perry's argument. In these circumstances we feel it right to indicate that in our view the Palmer case is wrongly decided and should not be followed and each of the earlier cases to which we have referred should be examined with care to see whether in fact it can be said they should be regarded as doing any more than deciding that there should be a decision to postpone confiscation proceedings, however generally expressed, prior to the completion of sentencing an offender, if confiscation proceedings are to take place after sentencing.
  83. The Appeals of Daljit Singh Sekhon, Satnam Singh, Shangara Singh and Gurdev Singh Dhnoay

  84. We turn to the individual appeals and set out the sequence of events in the appeals of Daljit Singh Sekhon, Satnam Singh, Shangara Singh and Gurdev Singh Dhnoay:
  85. (i) Daljit Singh Sekhon, Satnam Singh and Dhnoay pleaded guilty to an offence of conspiracy to cheat the public revenue. The offence occurred between 1 August 1994 and 30 November 1995. The relevant statutory scheme in this case is the 1988 Act as amended by the 1993 Act.

    (ii) Satnam Singh pleaded guilty to an offence of conspiracy to cheat the public revenue on indictment T971094. The offence occurred between 1 August 1994 and 30 November 1995. The relevant statutory scheme in his case is the 1988 Act as amended by the 1993 Act.

    (iii) Shangara Singh pleaded guilty to an offence of conspiracy to cheat the public revenue on indictment T980773. The offence occurred between 1 November 1996 and 30 June 1997. The relevant statutory scheme in his case is the 1988 Act as amended by the 1993 Act and the 1995 Act.

  86. In the case of the appellant Shangara Singh the statutory scheme is that which applied after 1 November 1995, including the 1995 Act, whereas the cases of the other appellants were governed by the 1988 Act as amended by the 1993 Act only. However, this makes no material difference to the issues that we have to consider.
  87. Unlike the other appellants we are now considering Dhnoay does not have leave to appeal and he is seeking leave to appeal out of time. We extend time and grant him leave to appeal. The facts of the offences are unimportant, as the appellants all pleaded guilty at the Crown Court at Newcastle in September 1998. Briefly the case arose from the appellants' different roles in the importation or diversion on a large scale of alcoholic goods on which no duty had been paid. The total revenue evaded was calculated to be about £5,555,600.00.
  88. The chronology of events can again be conveniently taken from Mr Perry's submissions:
  89. (i) The sentencing hearing was adjourned and took place on 17 and 18 December 1998.
    (ii) In advance of the sentencing hearing, by a letter dated 8 October 1998, the Judge and the appellants Daljit Singh Sekhon, Satnam Singh and Shangara Singh were notified by the prosecution that this was a suitable case in which to proceed under Part VI of the 1988 Act.
  90. The sequence of events thereafter was as follows:
  91. (i) on 17 December 1998, counsel for the prosecution opened the facts against Daljit Singh Sekhon, Satnam Singh and Gurdev Singh Dhnoay (Transcript 17 December 1998);

    (ii) on 18 December 1998, counsel for the prosecution opened the facts against Shangara Singh (Transcript 18 December 1998 (Volume 1));

    (iii) the Learned Judge passed sentence (Transcript 18 December 1998 (Volumes 2 and 3));

    (iv) counsel for the prosecution then raised the question of confiscation in open court (Transcript 18 December 1998 (Volume 3 page 5A-D));

    (v) the confiscation hearing was adjourned to February 1999 (Transcript 18 December 1998 (Volume 3 page 5D-7A));

    (vi) the confiscation hearing was listed for hearing on 19 February 1999 and on that date, in the cases of Daljit Sekhon, Satnam Singh and Gurdev Singh Dhnoay, having found exceptional circumstances, the Learned Judge postponed the hearing for four months (Ruling 19 February 1999);

    (vii) the case of Shangara Singh was listed on 2 March 1999 and the Judge postponed the matter on the basis of his ruling on 19 February 1999 (Transcript 2 March 1999 page 6C-D);

    (viii) the confiscation hearing took place on 7, 8 and 9 June 1999 and the Judge made confiscation orders against all of the appellants;

    (ix) further hearings took place on 12 and 13 August 1999, at which hearings the Judge reconsidered the confiscation order made against Gurdev Singh Dhnoay and made a confiscation order in the case of Daljit Singh Sekhon

  92. It appears that the appellants were notified of the prosecution's intention to proceed with confiscation proceedings. A restraining order was made prohibiting the appellants from dealing with certain assets on the 16 December 1998. On 17 and 18 December 1998 they appeared at the Crown Court for sentence and (with the possible exception of Shangara) they were sentenced on 18 December 1998. No mention was made of the postponement of the confiscation proceedings before sentence. After sentence, as appears from the transcript (volume 3 page 5) counsel for the prosecution raised the issue of confiscation proceedings and the procedure to be adopted and clearly had S.72A in mind since he referred to a period of six months. No question was raised as to the need for exceptional circumstances to exist if the adjournment was to be for more than six months. The trial judge, His Honour Judge Wood indicated that the matter should be heard initially in February though the parties considered that it might have subsequently be adjourned to a later date.
  93. Clearly what happened did not comply with the procedure set out in S.72A because that section contemplates the decision to postpone being made prior to the passing of sentence. On the evidence which is before us that did not happen. Thus there was a clear contravention of S.72(4) of the 1988 Act.
  94. It has to be accepted that subject to there being a decision to postpone, it was intended that the confiscation order should be made before sentence. Whereas other procedural requirements may not be critical, that there should be a postponement of the making of the confiscation order when there is power to do so, is fundamental to the exercise of the jurisdiction to make a confiscation order. In these cases, therefore, in accord with the earlier decisions, we accept that the effect of non-compliance was intended by Parliament to go to jurisdiction subject to any possible argument as to waiver. In the result, therefore, there having been no postponement or even purported decision to postpone until after the confiscation orders were made without jurisdiction, the orders have therefore to be quashed. To this extent the appeals will be allowed.
  95. The Application of Kevin McFaul

  96. McFaul was a party to the conspiracy which involved Keith Ross which was the subject of the decision in R v Keith Ross [2001] EWCA Crim 560. The facts of his case are indistinguishable from those in Ross but he made no application to appeal until the decision in Ross was brought to his attention. As in the case we have just been considering, in McFaul's case as well there had not been any decision to postpone until after he was sentenced on 9 November 1999. In his case, the relevant legislation was S.2 and 3 of the Drug Trafficking Act 1994. However, there is no material difference between the legislation in that Act and S.72A of the 1988 Act.
  97. Although there was considerable delay in the application for leave to appeal we do not consider it would be right bearing in mind what has happened to his co-accused to allow the confiscation order which was made in the case of McFaul to stand. Accordingly, we grant him leave to appeal and allow his appeal against the confiscation order which was made and quash that confiscation order.
  98. In both the first case and McFaul we have not dealt with any question of waiver since in our judgment it would be wrong to do so when it was raised at a later date.
  99. The appeals of Richard Michael Knights and Kevin Maguire

  100. On 10 July 2000, at the Crown Court at Kingston upon Thames, Knights pleaded guilty to being knowingly concerned in dealing with goods which were chargeable with duty which had not been paid with intent to defraud contrary to 170(1) (B) of Customs and Excise Management Act 1979. On 12 October 2000 Maguire was convicted of the same offence. On 17 October both were sentenced.
  101. On 30 July 2001 before the same court a confiscation order was made against Knights in the sum of £139,260.00 and in the case of Maguire, in the sum of £114,930.00.
  102. One of the grounds of appeal relied upon by Maguire, but not originally by Knights, was that a confiscation order was made in the course of proceedings which were invalid by reason of the circumstances of their initiation and postponement under S.72 of the 1988 Act. This point was subsequently adopted by Knights, so in both cases it is necessary to see whether the points taken as to the jurisdiction to make the order have any validity. However, in the case of Knights and Maguire there had been a hearing on the day prior to the appellants being sentenced and the trial judge, His Honour Judge Howarth, set a timetable for sentencing and confiscation. The Judge ordered the prosecution to serve its statement in the confiscation proceedings by 11 December 2000 with a mention hearing on 4 January 2001. On the latter date the Judge set a date of the 23 January 2001 for the confiscation hearing, having decided that his unavailability until that date amounted to exceptional circumstances.
  103. We have before us the transcripts dealing with the different proceedings before the trial judge. It is clear from those transcripts that on 16 October 2000 there was discussion with regard to a timetable for confiscation proceedings before sentencing. The Judge was wrongly told on 16 October by counsel that the six months ran from sentence rather than conviction but this does not matter as it did not affect the order which the Judge made. Clearly he considered that the proceedings should be postponed starting from the date of conviction. The need for postponement would be greater from the later date of sentence. Furthermore, it is apparent that he did postpone the proceedings. Much argument took place before us as to whether there was postponement to a specific date because the date which was being selected was a date for, in effect, further directions. However, in our judgment as long as the parties are clearly envisaging that the process was to take place within the timescale provided for by S.72A, that is sufficient.
  104. On 4 January 2001 it was common ground that the parties were not in a position to deal with matters then and sensibly and appropriately the judge adjourned the matter to the last date on which he would be sitting in January, namely the 23rd.
  105. Where, as here, there have been complex proceedings, it would be wholly inappropriate for any judge but the trial judge to deal with the confiscation proceedings unless that was unavoidable. In our judgment the Judge was entitled to postpone the confiscation proceedings in the way that he did bearing in mind his availability.
  106. Accordingly in our judgment there is nothing in the procedural points which have been raised by these appellants and we can now turn to the final issues raised in these appeals, namely the extent to which they had benefited from the crime which they committed. We turn first to the law.
  107. The Law

  108. This involves provisions of the 1988 Act as amended by the 1993 Act and the 1995 Act:
  109. "S. 71(4) For the purpose of this Part of this Act a person benefits from an offence if he obtains property as a result of or in connection with its commission and his benefit is the value of the property so obtained.
    (6) … the sum which an order made by a court under this section requires an offender to pay shall be equal to –
    (a) the benefit in respect of which it is made; or
    (b) the amount appearing to the Court to be the amount that might be realised at the time the order is made,
    whichever is the less
    (7A) The standard of proof required to determine any question arising under this Part of this Act as to:
    a. whether a person has benefited from any offence, or
    c. the amount to be recovered in his case shall be that applicable in civil proceedings."
  110. These provisions were helpfully discussed in R v Barwick [2001] 1 Cr App R(S) 445 at 453:
  111. "We stress that the scheme of the Act requires the court to perform two distinct and discrete tasks. First, to determine the benefit. Secondly, to determine the amount that might be realised at the time the order is made, which may be very different. Further, the amount that might be realised may be quite unrelated to the identifiable proceeds of the offence, e.g. a lottery win, inheritance, or lawfully acquired property. In the end, the task of the court at the second stage is to determine the amount "appearing to the court" to be the amount that might be realised. But once the benefit has been proved, it is permissible and ought normally to be the approach of the court, to conclude that the benefit remains available until the defendant proves otherwise; subject to the issue of changes in the value of money to which we now turn."

    The Hearing

  112. It fell to Judge Haworth to make rulings pursuant to these provisions on the 30 July 2001 having heard evidence during several preceding days, the witnesses being both appellants, Mrs Knights (the wife of the first appellant) and Mr Rodger, a co-defendant. The first rulings were as to the respective benefits that accrued to the appellants by reason of their criminal activities. As to this, he ruled that the benefit obtained by Mr Knights amounted to £139,260 and that obtained by Mr Maguire amounted to £114,930.
  113. These rulings are not the subject of current appeal. It is conceded that evidence had been put before the Judge from which he could fairly infer benefits in such sums. That said, two features of the relevant judgment merit mention. First, the rulings necessarily involved total rejection of the respective appellants as witnesses of truth. Knights had contended that the benefit obtained through active participation in a fraud involving the evasion of £3.6 million duty on the importation of some 36 tonnes of cigarettes was no more than £5,000. Maguire's statement in response to the Prosecutor's statement failed to acknowledge any benefit at all as accruing from his similarly active participation save, possibly, for cash amounting to £19,800 found at his home following arrest. In the course of submissions we gathered that when under cross-examination he seemingly conceded that £4,000 utilised to pay off an overdraft was an obtained benefit.
  114. Secondly, at the time of this ruling and referring to the respective benefits as found, the Judge added "There is no evidence that either of these defendants used any of this money to make purchases or fund an extravagant lifestyle. I have no doubt whatsoever that each has his nest egg salted away."
  115. Having made these rulings the Judge heard further submissions from, respectively, counsel for each appellant and for the Crown and then made additional rulings as to the amounts now due for payment as provided for by S. 71(6). The totality of the rulings merits citation:
  116. "Well dealing with each case, as far as Mr Knights is concerned he has the following realisable assets. His share of the equity of the house, £35 thousand; and the Abbey account £57.41; and his benefit from this enterprise, £139,260, which makes a total realisable asset of £178,699
    I don't think it is likely that Mr Knights has spent any of the benefit figure at all. As I have said I am satisfied it is salted away, therefore in his case, I make a Confiscation Order of the lesser of the two sums, that is the benefit figure, £139,260 with a three year term imprisonment in default.
    In Mr Maguire's case I find his realisable assets to be the equity in Chichester Terrace, £46,250, the Abbey account, £25; the benefit from this enterprise, £114,930 less the £4 thousand that was paid into the bank on the 22 November 1997. Therefore his total realisable assets are £157,05. I make the Confiscation Order in the sum of £114,930 with three years imprisonment in default"
  117. Following this ruling the Judge was prevailed upon to clarify his ruling with respect to Mr Maguire, doing so as follows:
  118. "I wanted to make it clear if I did not do so already that I make the same finding in respect of Maguire that I did in respect of Knights namely that I do not think it likely that he has spent any of the benefits and am satisfied that he has salted them away."

    These appeals

  119. Mr Boothby, Counsel for Mr Maguire, made the principal submission, effectively on behalf of both appellants. He invited us to hold that in these latter rulings the Judge's exercise of discretion was outwith the parameters set by S. 71 and in any event wholly unreasonable so that we could and should set it aside. By reference to S. 71(6), if the Judge was holding that each man was currently retaining his respective benefit as identified in the first rulings then references to other realisable assets were otiose, thus betraying muddled thinking. If in each case the other realisable assets were material to his deliberation then perhaps it was his findings as to benefits being 'salted away' that were open to challenge. In any event there was no attempt made by way of these rulings to address the appellants' individual circumstances nor indeed to address the submissions earlier made to him by counsel. Given evidence that Mr Knights lived frugally whereas Mr Maguire spent money liberally, the Judge should have explained his decision that their present financial positions were comparable – absent such explanation there had to be a doubt as to a finding that each had 'salted away' their respective benefit.
  120. This Court is critical of the content of the rulings under appeal. They are so short as to be labelled cursory. They do not in terms address the issues then raised in submissions and the content owes nothing to S. 71(6) and (7A). It is not surprising that they have spawned these Appeals and this, Mr Boothby's principal submission, has commanded our careful attention. However, in the event we cannot accept it. We remind ourselves that Judge Haworth had had every opportunity to form views as to the appellants and as to their respective disposal of such benefits as accrued from their fraudulent conduct. Thus he had had several recent days of evidence in turn preceded by the evidence given at the trial. It was on the basis of such views that he rejected each man's evidence and asserted in the course of his first rulings that each had in fact 'salted away' his accrued benefit. Given these findings of fact, effectively beyond challenge before this appellate Court, the second rulings became inevitable. It is a pity that the Judge did not say as much, and it is a pity that he qualified the simplicity of his approach by identifying realisable assets other than the respective accrued benefits, that is, assets that lay outwith S. 71(6). That said, we have his findings of fact, such amply founded by his receipt of evidence and they serve to sustain the rulings under appeal.
  121. Other subsidiary points were taken. Should the Judge have asserted in his first rulings that the respective benefits had been 'salted away'? And should not there have been a forensic pause following the first rulings so as to allow the appellants to, as it were, focus upon the scope for realising the now identified benefits? Neither point carries any weight. The finding made in the course of the first rulings might strictly have been better made by way of the second rulings but both sets of rulings reflect the same receipt of evidence and evidential overlap between the issue as to amount of benefit and the issue as to realisable assets must be on occasions inevitable. As to the second point there should be no need for honest and candid defendants to delay preparation and presentation of a case as to realisable assets until there is a ruling as to accrued benefit.
  122. The respective appeals against the rulings as to realisable assets are rejected and the appeals of both these appellants are dismissed.


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URL: http://www.bailii.org/ew/cases/EWCA/Crim/2002/2954.html