Royal Courts of Justice
The Strand
London
WC2A 2LL
B e f o r e:
LORD JUSTICE ELIAS
MR JUSTICE IRWIN
and
MR JUSTICE SAUNDERS
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R E G I N A
- v -
JASWINDER SINGH JOHAL
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Mr S Sandhu appeared on behalf of the Appellant
Mr B Linneman appeared on behalf of the Crown
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J U D G M E N T
LORD JUSTICE ELIAS: I shall ask Mr Justice Irwin to give the judgment of the court.
MR JUSTICE IRWIN:
The Background
On 12 March 2009 in the Wolverhampton Crown Court before His Honour Judge Challinor the appellant pleaded guilty to one offence of possessing a controlled drug of Class A with intent. On 18 December 2009 he was sentenced to six years' imprisonment.
On 30 September 2011 Mr Recorder Desmond granted an application by the Crown for the confiscation hearing pursuant to the Proceeds of Crime Act 2002 to be heard outside the permitted two year period.
On 16 May 2012 His Honour Judge Hughes made a confiscation order whereby the appellant was ordered to pay £18,778, with six months' imprisonment to be served in default of payment. In fact the amount available to satisfy the confiscation order made by His Honour Judge Hughes was agreed.
The appellant appeals against the confiscation order by leave of the single judge.
The chronology of the case is set out in the clear ruling given by Mr Recorder Desmond. Following the plea of guilty in March 2009 there was a Newton hearing for the purpose of sentence on 20 November 2009. At that hearing a timetable was set for the purposes of the Proceeds of Crime Act proceedings. There was a direction that, by 18 December 2009, the defence should serve a statement pursuant to section 18 of the Act. 18 December was, as we have already observed, the date of sentence.
The defence lodged their section 18 statement on that day and the court made an order that by 15 January 2010 the prosecution were serve a section 16 statement under the Act. The defence were to respond within a fortnight, on 29 January 2010; and there was a direction that the hearing of the Proceeds of Crime Act application would take place in the first two weeks of February 2010. The prosecution served the section 16 statement two weeks late, on 29 January 2010. On 8 February the defence requested further time to respond. On 17 February the court granted an extension to 3 March 2010. On 13 May 2010 the section 17 statement was sent by the defence.
On 21 May, at the request of the Crown, the case was listed for mention. It had been listed for a final hearing on that date, but because of the defence's late delivery of the section 17 statement, and because of the absence of supporting documentation necessary for the testing and assessment of what the defence were saying in their response, both sides agreed that there was insufficient material available for that hearing and it was removed from the list. A fresh timetable was set. The defence was ordered to supply supporting documentation by 11 June 2010. The prosecution were to respond to it by 2 July. The hearing of the substantive proceedings was ordered to take place on the first available date after 2 July 2010.
On 26 May 2010 the prosecution served an amended section 16 statement. On 16 July, at the request of the defence, the matter was listed again for mention instead of for final hearing. At that stage the defence were still seeking conveyancing details relevant to the valuation of property. The substantive hearing was re-fixed for 2 December 2010. On 12 November 2010 the defence supplied the further conveyancing details. On 2 December the substantive hearing was listed. However, adverse weather conditions in the form of heavy snow prevented the appellant (then a serving prisoner following upon his six year sentence) from being taken to court. The hearing was once more adjourned. The court raised questions of law to be addressed and directed the defence to serve a skeleton argument by 16 January 2011. Again a final hearing was ordered to be listed in the week commencing 9 February 2011. All parties were aware of the two year permitted period, which ended on 11 March 2011.
On 6 December 2010 the court fixed the final hearing not for February, but for 11 March 2011 (the two year anniversary of the conviction and the last day within the permitted period under the legislation).
On 9 February the prosecution served a certificate of readiness, or in this case unreadiness: the case was not ready for hearing because no defence skeleton argument had been filed. On 14 February the defence served a certificate of readiness, stating they were ready, albeit that they were still awaiting some bank statements.
However, at some stage prior to 11 March 2011 the court removed the case from the list due to lack of court time and the availability of a judge to deal with the hearing which had been listed on 11 March. On that day, as we have indicated, the permitted two year period expired.
There has been produced to this court, as an appendix to the defence skeleton argument, a copy of a manuscript attendance note which appears to have been made on 10 March 2011. We understand that it originates from the appellant's solicitors. It indicates that on that day (10 March) there had been discussion between the Crown Court listing officer and a representative of the appellant's solicitors. It indicates that the matter was taken out of the list because of a lack of court time. Mr Sandhu for the appellant tells us that there was a discussion initiated by his instructing solicitors in which the court's attention was specifically drawn to the fact that the two year period expired on the following day, 11 March. It does not appear that that document was produced to the Recorder when he made the decision as to jurisdiction.
The date of 11 March 2011 is significant. It was at that point that the timetable went beyond the permitted period. As we shall see, the legislation requires that "exceptional circumstances" should exist to justify such an extension of postponement.
The sequence of events, as outlined by the Recorder, continued as follows. On 18 March 2011 the defence produced to the Recorder a letter which indicated that on that date there had been served a skeleton argument. The prosecution position was that they had not received such a skeleton argument at that stage; nor was such found at court. The prosecution received in on 22 July, as did the court.
On 22 July 2011 there was a further hearing for mention and further directions were made, including a direction that there should be a hearing on the preliminary legal issue as to whether, given the history, there was continuing jurisdiction on the part of the court to deal with the matter. That was the hearing wherein the Recorder made his ruling.
Was there an application?
One interesting feature of the position was that the Recorder framed the matter as an application by the Crown to extend the proceedings beyond the permitted period. At the outset of his ruling he said this:
"In this application the prosecution apply for the Proceeds of Crime Act hearing in this case to be heard outside of the permitted period. Although not stated as such, the application must be pursuant to section 14(8) of the Proceeds of Crime Act 2002."
In fact it does not appear to have been a prosecution application as such. The prosecution sought to rely on the decision of the court just prior to 11 March 2011. As the ruling makes clear, no reliance was placed by the Crown in their submissions, or by the Recorder in his ruling, on anything which arose later than 11 March 2011. As was observed by the single judge when giving leave, it is also to be noted that, when extending the period in early March, the court did not do so "for a specified period" as stipulated in section 14(1)(b). This was not a point raised before the Recorder, or addressed by him.
The Recorder's Ruling
The Recorder proceeded to hear argument and to rule on the question whether "exceptional circumstances" existed, and as to how that phrase should be interpreted and applied. He was referred to authority and in particular to R v Soneji and another [2005] UKHL 49 and R v T [2010] EWCA Crim 2703. From the speech of Lord Steyn in Soneji at [28] the Recorder concluded that it was not appropriate to adopt a very strict approach to the meaning of "exceptional circumstances"; and from the speech of Lord Rodger at [33] that "some listing difficulties could amount to 'exceptional circumstances'".
The Recorder then turned to the facts to consider whether they might properly be regarded as amounting to "exceptional circumstances". He emphasised that the final hearing, which had been due on 21 May 2010, had to be adjourned, because the defence statement was late and more documents were needed; that the final hearing on 16 July was vacated following a defence request for more time to obtain information on conveyancing matters; and that it took the defence four months to obtain that information. The Recorder drew attention to the fact that the hearing on 2 December 2010 did not take place because of the unusual circumstances that heavy snow prevented the appellant from attending. He emphasised the failure of the defence to comply with the directions of 2 December to serve a skeleton argument by 16 January and the surrounding facts which he had outlined. There was no record that the court had received the skeleton argument by the key date in March 2011.
It was at the end of that sequence of events, as the Recorder observed, that the court had to remove the case from the list on 10/11 March due to a lack of court time. On that basis the Recorder found that there were indeed "exceptional circumstances" which justified the extension of the permitted period. As we have noted, he did not consider the point as to whether there was a failure to specify a period; he was not asked to do so.
The Law
Section 14 of the Proceeds of Crime Act 2002 represents a code for procedural matters in confiscation proceedings, and in particular for the postponement of such proceedings. The essential provisions of the section, as it applies to the circumstances of this case, are as follows. By section 14(1)(b) the court may postpone proceedings "for a specified period". Section 14(2) specifies that a period of postponement may be extended. By subsection (5) the section provides that the "permitted period" is the period of two years starting with the date of conviction (in this instance beginning 12 March 2009). Section 14(7) specifies that postponement or extension may be on application by either party or "by the court of its own motion". But subsection (3) provides:
"A period of postponement (including one as extended) must not end after the permitted period ends."
The effect of that is qualified by subsection (4) which provides:
"But subsection (3) does not apply if there are exceptional circumstances."
It is by that route that the "exceptional circumstances" test arises. Finally, section 14(11) provides:
"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."
Some things are clear. First, this case was taken out of the list of the court's own motion and not in response to an application by either side. Second, the court did not postpone the matter for a "specified period" within section 14(1)(b). Third, there is no indication that, when it removed the matter from the list, the court had considered whether there were exceptional circumstances before it took the decision to remove the matter from the list. Fourth, when considering whether there were "exceptional circumstances", the Recorder took into account the whole history of the matter, not merely the immediate situation, before the court removed the case from the list.
A number of questions arise for answer. First, what is the proper approach to the application of the requirement for "exceptional circumstances" in the application of this section? Second, was the Recorder's conclusion open to him on these facts? Was it reasonable: Associated Provincial Picture Houses Limited v Wednesbury Corporation [1948] 1 KB 223? Third, what is the effect, if any, of the failure to postpone for a "specified period"?
The first question: What is the proper approach to the application of the requirement for "exceptional circumstances"?
The Authorities
In Soneji the following passages from the headnote encapsulate the decision. After a recital of the facts the headnote states:
"On the defendants' appeal against those orders, the Court of Appeal (Criminal Division) held that although there was a power to postpone the making of a confiscation order under section 72A of the 1988 Act, and a power to adjourn such proceedings at common law, the provision of section 72A(3) that the period of postponement was not to exceed more than six months from the date of conviction save where the court was satisfied that exceptional circumstances existed, and the failure of the judge to consider or make any such finding, had deprived him of jurisdiction to make a confiscation order. The Court of Appeal accordingly quashed the confiscation orders.
....
Held, allowing the appeal, that the correct approach to an alleged failure to comply with a provision prescribing the doing of some act before a power was exercised was to ask whether it was a purpose of the legislature that an act done in breach of that provision should be invalid; that since section 71(1) of the 1988 Act as amended imposed a duty on the court when an offender had been convicted to consider confiscation proceedings, with the purpose of the sequence of such proceedings as required by section 71(1) and the postponement power under section 72A, which precluded any common law power of adjournment, being to make the sentencing process rather than the confiscation procedure as effective as possible; that the judge's failure to adhere to the requirements of section 72A(3) had caused no prejudice to the defendants in respect of their sentences and any other prejudice to them caused by the delay was outweighed by the public interest in not allowing convicted offenders to escape confiscation for bona fide errors in the judicial process; and that, accordingly, that failure would not have been intended by Parliament to invalidate the confiscation proceedings, and the confiscation orders made by the judge would stand."
It will be clear from that extract from the headnote that Soneji addresses precursor legislation to the 2002 Act, but legislation which, apart from the length of the specified period, is mirrored closely in the relevant provisions in the 2002 Act.
Lord Steyn in his speech noted the existence of section 14 in the 2002 Act. At [3] he recited some of the terms of the section and proceeded to recite a passage from the speech of the Lord Chancellor, Lord Falconer in debate when the 2002 Act came before the House of Lords. That passage is of interest in considering the purpose of section 14(11), which was said to be:
"designed to stop confiscation orders from being quashed merely because some procedural error has taken place in the application of the postponement procedures. I shall, if I may, provide your Lordships with a little background on this occasion, as it is directly relevant to the amendments.
As your Lordships will be aware, the Bill amends the postponement regime in the existing legislation .... It is important to understand, however, that the basic mechanics of the postponement regime envisaged by the Bill remain rather similar to those in the existing legislation.
Unfortunately, it is becoming increasingly clear that the courts are finding this legislation difficult to operate. A string of appeal cases testifies to the fact that defendants regularly attempt to have the confiscation order overturned on the grounds that the postponement procedures were not applied properly by the court. Confiscation orders are being lost as a result."
As identified by Lord Steyn, the legislative purpose of the additional provisions within section 14 of the 2002 Act was explicitly to avoid technical points being taken so as to defeat confiscation proceedings.
In [6] to [8] Lord Steyn notes the problems thrown up by a technical approach to postponement procedures. He touches on earlier attempts by the Court of Appeal to address the problem. In [14] he identifies that one of the problems is the presence within the Act of "imperative drafting by Parliament". In [15] to [16] Lord Steyn sets out extracts from the well-known case of London & Clydeside Estates v Aberdeen District Council [1980] 1 WLR 182, where Lord Hailsham (then Lord Chancellor) advanced a legal analysis of the approach to requirements in statutes, beyond the traditional distinction between directory and mandatory provisions. He said this:
"When Parliament lays down a statutory requirement for the exercise of legal authority it expects its authority to be obeyed down to the minutest detail. But what the courts have to decide in a particular case is the legal consequence of non-compliance on the rights of the subject viewed in the light of a concrete state of facts and a continuing chain of events. It may be that what the courts are faced with is not so much a stark choice of alternatives but a spectrum of possibilities in which one compartment or description fades gradually into another. At one end of this spectrum there may be cases in which a fundamental obligation may have been so outrageously and flagrantly ignored or defied that the subject may safely ignore what has been done and treat it as having no legal consequences upon himself. .... At the other end of the spectrum the defect in procedure may be so nugatory or trivial that the authority can safely proceed without remedial action, confident that, if the subject is so misguided as to rely on the fault, the courts will decline to listen to his complaint. But in a very great number of cases, it may be in a majority of them, it may be necessary for a subject, in order to safeguard himself, to go to the court for a declaration of his rights."
Having recited that quotation, Lord Steyn went on to say:
"This was an important and influential dictum. It led to the adoption of a more flexible approach of focusing intensely on the consequences of non-compliance, and posing the question, taking into account those consequences, whether Parliament intended the outcome to be total invalidity."
Following a further review of authority, at [23] Lord Steyn said:
"Having reviewed the issue in some detail I am in respectful agreement with the Australian High Court [a reference to authority he had just digested] that the rigid mandatory and directory distinction, and its many artificial refinements, have outlived their usefulness. Instead, as held in Attorney General's Reference (No 3 of 1999), the emphasis ought to be on the consequences of non-compliance, and posing the question whether Parliament can fairly be taken to have intended total invalidity. That is how I would approach what is ultimately a question of statutory construction. In my view it follows that the approach of the Court of Appeal was incorrect."
In [24] he set out a similar approach to the 1988 statute which was under consideration in Soneji, and in [25] and [26] reached the conclusion that he would allow the appeal from the Crown.
A like approach was taken by the other members of the House of Lords. In [30] Lord Rodger emphasised the duty placed upon the court, where appropriate, to make a confiscation order, and emphasised the importance of the court's being permitted to do so without the intervention of technical problems. In [32] with similar emphasis he analysed the legislation before the court in Soneji. He said:
"When section 71(1) is engaged, it imposes a duty on the court to act as required by subsections (1A) and (1B) and, where appropriate, to make a confiscation order 'before sentencing or otherwise dealing with the offender in respect of that offence or any other relevant criminal conduct'. This duty is to be contrasted with the mere power, which the court has under subsection (1C), to make such an order if it is satisfied that a victim of crime intends to take civil proceedings against the defendant."
In [33] Lord Rodger went on to say:
"I also agree, however, that 'exceptional circumstances' in section 72A(3) should not be interpreted too narrowly. The court must comply with the six-month requirement wherever reasonably possible, even if this means that its timetable has to be adjusted accordingly. Nevertheless, I would certainly not rule out the possibility that some listing difficulties could amount to 'exceptional circumstances'. But the judge must look into the position and see what can and cannot be done."
He, too, concluded that the delay in Soneji should not preclude the jurisdiction. He concluded in [42] that, subject to the question of abuse of process, even considerable delay need not affect the validity of orders made outside the timetable.
In his speech Lord Cullen of Whitekirk at [45] emphasised the duty placed upon the court to make confiscation orders. At [52] he concluded as follows:
"Since the statute does not spell out the legal consequences for the offenders of non-compliance with subsection (3) it is necessary to work out those consequences, applying the authorities to which the noble and learned Lord Steyn has referred. The failure to comply .... has to be seen in the light of the purposes of the statutory provisions as a whole, in order to determine whether or not the failure was of such significance as to make the ensuing confiscation orders of no effect."
Lord Cullen also concluded, on the facts of the case before the House, that he could not rule out jurisdiction there.
Similar conclusions were reached by Lord Carswell and by Lord Brown of Eaton-under-Heywood.
Soneji was considered in RCPO v Iqbal [2010] EWCA Crim 376 (a decision under the 2002 Act). In that case the defendant faced confiscation proceedings following his conviction on 10 January 2006. The hearing was listed on 21 May 2006. However, it was postponed by the Recorder without a date being set, in order to await a decision of the House of Lords in a case which it was thought might affect the outcome. Between May 2006 and 9 January 2008 no order was made by the court to postpone the confiscation proceedings. No application was made for such an order by either party. The next hearing appears to have been on 1 July 2009, when a judge concluded that there was no jurisdiction to make an order, because of a failure to comply with the procedure in section 14 of the 2002 Act. In its judgment the court said this at [10]:
"The issue is a narrow one. Absent a court order before 10 January 2008 postponing the hearing of the application for a confiscation order, and absent any application made before that date to postpone the hearing, is there jurisdiction to entertain the application for a confiscation order?"
The court then analysed the section. The Crown had cited Soneji in support of its claim that there was a continuing jurisdiction, even when no order had been made at the time when the "permitted period" had expired. In its conclusions in Iqbal the Court of Appeal said:
Mr Farrell QC submits that the intention of Parliament was that the application for a confiscation order should be heard within two years of conviction in the absence of exceptional circumstances and that the intention of Parliament is clear: 'If there has been no application to extend the permitted period of two years before that period expired then the confiscation proceedings cannot continue'.
In our view the wording of section 14 (and in particular of subparagraphs (3) and (8)) makes it quite clear that Parliament intended to give prosecutors a longer period than the six months under the earlier legislation, but at the same time intended to make it clear that any application to extend a period of postponement had to be made before the permitted period expired.
For these reasons we dismiss the appeal."
It is possible that there is some tension between the approach taken in Iqbal and the approach of their Lordships in Soneji. However, the position in Iqbal was clearly distinguishable from the case before us. In that case there had been no application and no order to extend the period; it had lapsed in silence. There was no reliance upon "exceptional circumstances" to justify an extension of the "permitted period". Whether at the time of an extension or at a postponement retrospectively, no step had been taken.
This area of the law was revisited in R v T [2010] EWCA Crim 2703. In that case the convicted defendant had fled the country after arrest and charge. On 19 December 2007 he was convicted, in his absence, of money laundering and sentenced to three and a half years' imprisonment. On the same day the Crown gave notice of their intention to pursue confiscation proceedings. In April 2009 the defendant was extradited from the United States. After his extradition he failed to adhere to various directions made in the confiscation proceedings.
The "permitted period" under section 14(5) of the 2002 Act expired on 18 December 2009. The confiscation proceedings had been adjourned on 2 October 2009, and were adjourned again on 21 December 2009. On neither occasion was the question of exceptional circumstances considered. The matter came back before the court on 5 March 2010 when His Honour Judge Ambrose concluded that he had no power to hear the confiscation proceedings because the question of exceptional circumstances had not been considered. He relied on the dictum from Iqbal at [26] (earlier quoted in this judgment) to the effect that any application to extend postponement had to be made before the "permitted period" expired.
In T the Court of Appeal considered the remarks by His Honour Judge Ambrose that in his view the defendant Iqbal had manipulated the system, and that there were in fact ample exceptional circumstances which could have been considered, subject to the question of jurisdiction. The court agreed on those facts, and went on to find that Judge Ambrose should not have been "inhibited .... by Hooper LJ's observation in Iqbal" so as to conclude that there was no jurisdiction. There were exceptional circumstances in the case which should and did justify an extension of the period. For that reason the court quashed the decision of Judge Ambrose and remitted the matter so that a substantive hearing could proceed.
Standing back from all the authorities, it is clear in our judgment that the intention of Parliament was that a broad approach should be taken to what constitutes "exceptional circumstances". Indeed, in the approach to section 14 generally, Parliament's intention must be taken to be to ensure that confiscation proceedings go ahead and are effective without technical problems of timing and timetabling acting as a bar to recovery. Adherence to the timetable is an obligation, as we shall re-emphasise later in this judgment, but the approach to strict failures to comply should reflect that intention of Parliament.
The second question: Was the Recorder's conclusion open to him on the facts?
Mr Sandhu submits that the accumulation of failures in the instant case which culminated in the confiscation hearing three years and two months after conviction should mean that, despite the approach in Soneji (which is not carte blanche to parties or the court), the confiscation order should be struck out.
Mr Linneman accepts that the prosecution were not blameless in the conduct of this case, but submits that much of the delay came from the defence. He derives his submissions from the timetable which the Recorder outlined in his ruling and we have summarised. Mr Linneman submits that the Recorder's conclusion that these amounted to exceptional circumstances was reasonable and, importantly, that there is no basis for saying that the appellant was prejudiced by the Recorder's decision. Fairness was achievable in the circumstances of this case, as evidenced by the fact that the contested confiscation proceedings were resolved by agreement as to the amount to be paid. There was no abuse of process.
Here, adopting the approach in Soneji, we are clear that there was a sufficient basis for the Recorder's conclusions that, reviewing events as a whole, exceptional circumstances did apply. Consideration should have been given to the question before the court postponed the proceedings beyond the permitted period; but had that consideration taken place at the right point, the conclusion would have been the same. In our judgment, taking together the sequence of delays, many of them at the hands of the appellant, and the unusual circumstances which prevented the appellant from attending the hearing, the Recorder's conclusion was well within the range of reasonable conclusions he could have reached. It is not capable of challenge.
The third question: What is the effect, if any, of the failure to postpone for a "specified period"?
There are two possible answer to this question, or rather two routes by which the same answer will emerge. It is strongly arguable, in our judgment, that the failure to specify a period of postponement in the order itself is not merely a procedural error "connected with .... the granting of a postponement" within the meaning of section 14(11) but is a substantive (although technical) omission in the order to postpone, which taints the order itself. If that is right, the defect cannot be remedied by reliance on section 14(11).
Another point which arises is derived from the wording of the subsection which for present purposes it is worth repeating:
"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."
It may be right that the use of the phrase "application for or the granting of a post postponement" means by necessary implication that the subsection applies only where there has, in truth, been an application for a postponement leading to a grant by the court, and that the situation which arose in this case, where the court postpones the period of its own motion, is not covered by the saving provision in section 14(11).
However, setting aside section 14(11), when viewed in the context of the confiscation order itself, the omission of a specified period plainly is a procedural error. Adopting the approach laid down in Soneji, we have no doubt that the defect would not render the confiscation order itself invalid. Applying Soneji, Parliament could not have intended that the court should be deprived of its duty to make such an order for a breach which typically will not, and did not in this case, prejudice the appellant in any way. If substantial prejudice were to arise as a result of such a decision, then the remedy is in the shape of a submission that such a decision represents an abuse of process. This is not a matter where there is no remedy at the hands of someone who has suffered prejudice as a consequence of such an order.
If, contrary to the remarks we have just made, the better view is that such a failure is indeed procedural and does therefore fall within the ambit of section 14(11), then Parliament has stipulated that such a failure must not be the basis for quashing an otherwise valid confiscation order.
For all these reasons this appeal fails.
It is appropriate for us to add a rider. We re-emphasise the message given at [13] by this court in R v T. The fact that the courts will not wish to see the intention of Parliament defeated by technical points taken to stave off meritorious confiscation orders, does not mean that the obligations under the Act can be taken lightly. It is essential that listing officers, acting as they do on behalf of judges and discharging a judicial function delegated to them for day-to-day administration, pay close regard to the procedural steps laid down in section 14. Listing officers should be aware of the necessity to adhere to the two year limit. They should be alive to the risk that the parties may not alert them to such a problem. They should be aware of the requirement to consider whether there are exceptional circumstances before a postponement beyond two years is granted. They should be aware of the obligation not to postpone generally but to specify a date when there is to be a postponement. It would be wise for listing officers to consult the Resident Judge when any such problem is likely to arise. It would also be wise to keep a record of what was taken into consideration at the time, and in particular whether any exceptional circumstances arose which justified postponement.
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