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You are here: BAILII >> Databases >> United Kingdom Supreme Court >> Varma, R. v [2012] UKSC 42 (10 October 2012) URL: https://www.bailii.org/uk/cases/UKSC/2012/42.html Cite as: [2013] 1 Cr App R 8, [2013] 2 Costs LO 224, [2012] WLR(D) 270, [2012] 3 WLR 776, [2013] Crim LR 166, [2012] UKSC 42, [2013] 1 All ER 129, [2013] Lloyd's Rep FC 89, [2013] 1 AC 463 |
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Michaelmas Term
[2012] UKSC 42
On appeal from: [2010] EWCA Crim 1575
JUDGMENT
R v Varma (Respondent)
before
Lord Phillips
Lord Mance
Lord Clarke
Lord Dyson
Lord Reed
JUDGMENT GIVEN ON
10 October 2012
Heard on 27 June 2012
Appellant David Perry QC William Hays (Instructed by Crown Prosecution Service) |
Respondent Hugh Southey QC Rupert Hallowes (Instructed by Frame Smith Solicitors) |
LORD CLARKE (with whom Lord Dyson and Lord Reed agree)
Introduction
"Does the Crown Court have power to make a confiscation order against a defendant following conviction for an offence if he or she receives an absolute or conditional discharge for that offence?"
This court subsequently granted permission to appeal. The three remaining applications for leave to appeal against sentence were adjourned pending the outcome of this appeal.
The statutory framework
"(1) Where a court by or before which a person is convicted of an offence ... is of the opinion, having regard to the circumstances including the nature of the offence and the character of the offender, that it is inexpedient to inflict punishment, the court may make an order either -
(a) discharging him absolutely; or
(b) if the court thinks fit, discharging him subject to the condition that he commits no offence during such period, not exceeding three years from the date of the order, as may be specified in the order ...
(7) Nothing in this section shall be construed as preventing a court, on discharging an offender absolutely or conditionally in respect of any offence, from making an order for costs against the offender or imposing any disqualification on him or from making in respect of the offence an order under section 130, 143 or 148 below (compensation orders, deprivation orders and restitution orders)".
As is apparent, there is no reference in subsection (7) to confiscation orders.
"No enactment restricting the power of a court dealing with an offender in a particular way from dealing with him also in any other way shall by reason only of the making of an order under this section restrict the Crown Court from dealing with an offender in any way the court considers appropriate in respect of a drug trafficking offence."
Similar provision was made, with necessary alterations to the language, to deal with non-drug trafficking offences, by section 72(6) of the Criminal Justice Act 1988.
"(1) Subject to subsection (2) below, a conviction of an offence for which an order is made under section 12 above discharging the offender absolutely or conditionally shall be deemed not to be a conviction for any purpose other than the purposes of the proceedings in which the order is made and of any subsequent proceedings which may be taken against the offender under section 13 above.
(3) Without prejudice to subsections (1) and (2) above, the conviction of an offender who is discharged absolutely or conditionally under section 12 above shall in any event be disregarded for the purposes of any enactment or instrument which -
(a) imposes any disqualification or disability upon convicted persons; or
(b) authorises or requires the imposition of any such disqualification or disability.
(6) Subsection (1) above has effect subject to section 50(1A) of the Criminal Appeal Act 1968 and section 108(1A) of the Magistrates' Courts Act 1980 (rights of appeal); and this subsection shall not be taken to prejudice any other enactment that excludes the effect of subsection (1) or (3) above for particular purposes."
"(1) The Crown Court must proceed under this section if the following two conditions are satisfied.
(2) The first condition is that a defendant falls within any of the following paragraphs
(a) he is convicted of an offence or offences in proceedings before the Crown Court;
(3) The second condition is that -
(a) the prosecutor asks the court to proceed under this section, or
(b) the court believes it is appropriate for it to do so.
(4) The court must proceed as follows
(a) it must decide whether the defendant has a criminal lifestyle;
(b) if it decides that he has a criminal lifestyle it must decide whether he has benefited from his general criminal conduct;
(c) if it decides that he does not have a criminal lifestyle it must decide whether he has benefited from his particular criminal conduct.
(5) If the court decides under subsection (4)(b) or (c) that the defendant has benefited from the conduct referred to it must
(a) decide the recoverable amount, and
(b) make an order (a confiscation order) requiring him to pay that amount.
(6) But the court must treat the duty in subsection (5) as a power if it believes that any victim of the conduct has at any time started or intends to start proceedings against the defendant in respect of loss, injury or damage sustained in connection with the conduct.
(7) The court must decide any question arising under subsection (4) or (5) on a balance of probabilities. ..."
Section 13 of the 2002 Act provides:
"(1) If the court makes a confiscation order it must proceed as
mentioned in subsections (2) and (4) in respect of the offence
or offences concerned.
(2) The court must take account of the confiscation order
before
(a) it imposes a fine on the defendant, or
(b) it makes an order falling within subsection (3).
(3) These orders fall within this subsection -
(a) (compensation orders);
(b) (forfeiture orders);
(c) (deprivation orders);
(d) (forfeiture orders).
(4) Subject to subsection (2), the court must leave the confiscation order out of account in deciding the appropriate sentence for the defendant ..."
Section 14 of the 2002 Act provides:
"(1) The court may -
(a) proceed under section 6 before it sentences the defendant for the offence ... or
(b) postpone proceedings under section 6 for a specified period.
(11) 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.
(12) But subsection (11) does not apply if before it made the confiscation order the court
(a) imposed a fine on the defendant;
(b) made an order falling within section 13(3);
(c) made an order under section 130 of the Sentencing Act
(compensation orders)."
Section 15 of the 2002 Act provides:
"(1) If the court postpones proceedings under section 6 it may proceed to sentence the defendant for the offence (or any of the offences) concerned.
(2) In sentencing the defendant for the offence (or any of the offences) concerned in the postponement period the court must not -
(a) impose a fine on him,
(b) make an order falling within section 13(3), or
(c) make an order for the payment of compensation under section 130 of the Sentencing Act.
(3) If the court sentences the defendant for the offence (or any of the offences) concerned in the postponement period, after that period ends it may vary the sentence by -
(a) imposing a fine on him,
(b) making an order falling within section 13(3), or
(c) making an order for the payment of compensation under section 130 of the Sentencing Act.
(4) But the court may proceed under subsection (3) only within the period of 28 days which starts with the last day of the postponement period.
(7) The postponement period is the period for which proceedings under section 6 are postponed."
Statutory construction
The decision in Clarke
"However, in the light of R v Savage (1983) 5 Cr App R (S) 216 and R v Young (1990) 12 Cr App R (S) 262, section 12(7) [of the 2000 Act] and the history of section 12(7), we have reached the conclusion that the Crown Court has no power to make a confiscation order against a defendant following conviction of an offence if he or she receives an absolute or conditional discharge for that offence. If Parliament had wanted to include confiscation orders within the 1973 predecessor to section 12 (see para 37 above) or in the 2000 Act, it could easily have done so. We are mindful of the fact that the orders which had been made in R v Savage and R v Young were made under legislation which gave the power to make the order but did not require the making of an order, but we do not think that this affects the conclusion which we have reached."
"Notwithstanding anything in section 14(3) of the Powers of Criminal Courts (Sentencing) Act 2000 a court in England and Wales which on convicting a person of an offence involving obligatory or discretionary disqualification makes . . . an order discharging him absolutely or conditionally"
may or must disqualify or endorse. It was noted in Clarke that the reference to section 14(3) must have been included because of Taylor v Saycell. In Clarke the court said at para 52 that it followed from the reference to section 14(3) in section 46 of the RTOA 1988 that the draftsman was "accepting" Lord Goddard's interpretation of what is now section 14(3), namely that it prevented the imposition of any disqualification or disability in the proceedings for the offence for which the conditional discharge had been granted, subject to any contrary enactment.
The history of the 2002 Act
"(4) If the court determines that he has so benefited, the court shall, before sentencing or otherwise dealing with him in respect of the offence or, as the case may be, any of the offences concerned, determine in accordance with section 4 of this Act the amount to be recovered in his case by virtue of this section.
(5) The court shall then, in respect of the offence or offences concerned -
(a) order him to pay that amount,
(b) take account of the order before -
(i) imposing any fine on him, or
(ii) making any order involving any payment by him, or
(iii) making any (forfeiture orders), or (deprivation orders), and
(c) subject to paragraph (b) above, leave the order out of account in determining the appropriate sentence or other manner of dealing with the defendant.
(6) No enactment restricting the power of a court dealing with an offender in a particular way from dealing with him also in any other way shall by reason only of the making of an order under this section restrict the Crown Court from dealing with an offender in any way the court considers appropriate in respect of a drug trafficking offence."
Conclusions
Punishment
"There can be no doubt that confiscation orders constitute punishment. The regime under what is now the 2002 Act is aptly described as 'Draconian'. The use of the offender's realisable assets to recover any benefit (not merely profit), including benefits from criminal activity unassociated with the index offence with a maximum of ten years' imprisonment in default must constitute punishment. Thus, applying these cases, the making of a confiscation order is inconsistent with a finding that it is inexpedient to inflict punishment."
Scotland
"(1) The court must act under this section where the following three conditions are satisfied.
(2) The first condition is that an accused falls within either of the following paragraphs
(a) he is convicted of an offence or offences, whether in solemn or summary proceedings,
or
(b) in the case of summary proceedings in respect of an offence (without proceeding to conviction) an order is made discharging him absolutely.
(3) The second condition is that the prosecutor asks the court to act under this section.
(4) The third condition is that the court decides to order some disposal in respect of the accused; and an absolute discharge is a disposal for the purpose of this subsection."
The remaining provisions are identical or almost identical to those in Part 2 relating to England and Wales which are quoted above. The significant provisions for present purposes are subsections (2)(b) and (4). Subsection (2)(b) provides that the first condition is satisfied in the case of summary proceedings if, without proceeding to a conviction, an order is made discharging the defendant absolutely and subsection (4) provides that the third condition is satisfied if the court decides to order a disposal, an absolute discharge being a disposal for that purpose.
Postscript
Disposition
"Does the Crown Court have power to make a confiscation order against a defendant following conviction for an offence if he or she receives an absolute or conditional discharge for that offence?"
For the reasons I have given, I would answer that question in the affirmative but I would go further. I would hold that, where the criteria in section 6 of the 2002 Act are satisfied, subject to subsection (6), the Crown Court has a duty to make a confiscation order against a defendant following conviction for an offence, whether or not he or she receives an absolute or conditional discharge for that offence. Where subsection (6) applies, that duty must be treated as a power. In all the circumstances I would allow the appeal and restore the confiscation order in the sum of £1,500.
LORD PHILLIPS
"if any person is, in relation to any goods, in any way knowingly concerned in any fraudulent evasion or attempt at evasion - (a) of any duty payable on the goods " (my emphasis).
I consider it questionable whether, in confiscation proceedings, it is legitimate to treat a defendant in the position of Mr Varma as having evaded duty when the only reason that he has done so is that the Customs have chosen not to exact it. If I am correct, then it is doubtful whether there was any basis for bringing confiscation proceedings in this case. I am aware that I am questioning the assumption that underlay the decision of the House of Lords in R v David Smith [2002] 1 WLR 54, but that aspect of that decision (at least) calls out for review. It has not, however, been challenged in this case so the confiscation order made must stand.
LORD MANCE