Director of Revenue & Customs Prosecutions, R (on the application of) v Criminal Cases Review Commission

This is the judgment of the Court, to which both members have contributed.

By section 93C(2) of the Criminal Justice Act 1988, the mens rea for the substantive offence of money laundering is either knowledge or having reasonable grounds to suspect that property is or represents another person’s proceeds of criminal conduct. However, where the charge is not the substantive offence but a statutory conspiracy, pursuant to section 1 of the Criminal Law Act 1997, to commit the substantive offence, the mens rea for the conspiracy requires intention or knowledge. Reasonable grounds for suspicion are not enough. This is because of section 1(2) of the 1977 Act. It was so held by the House of Lords in the case of Saik [2006] UKHL 18, which was decided on 3 May 2006.

The four Interested Parties in the present proceedings - Mumtaz Ahmed, Ussama El-Kurd, Gulbir Rana Singh and Zafar Rizvi - presently stand convicted of offences of conspiracy in relation to which the indictments particularised the respective conspiracies on a basis which included “reasonable grounds to suspect”. The convictions were all incurred before the decision of the House of Lords in Saik. In each case, their appeals or applications for leave to appeal had been dismissed, or the time for appealing had expired long before 3 May 2006.

On 23 May 2006 a case committee of the Criminal Cases Review Commission (“the Commission”) decided to refer the cases of the Interested Parties to the Court of Appeal Criminal Division (CACD) pursuant to the powers of the Commission contained in the Criminal Appeal Act 1995 and formal references followed on 31 May. In these judicial review proceedings, the Director of Revenue and Customs Prosecutions (“the Director”) is challenging the decision of the Commission to refer.

At the heart of this litigation there is a tension between the statutory powers of the Commission and the approach of the CACD to appeals based on the subsequent development of the law by judicial decision. We here use the word “subsequent” in the sense of subsequent to the determination of the original appeals in the index cases. Traditionally, the CACD has been reluctant to extend time and to grant leave to appeal on the basis of a subsequent judicial development of the law. However, if the Commission refers a case in such circumstances, then by section 9(2) of the 1995 Act:

“A referral … shall be treated for all purposes as an appeal by the person under section 1 of the [Criminal Appeal Act 1968] …”

Thus in a referred case the CACD is not concerned with an extension of time or a grant of leave. It has to proceed to hear and determine the appeal as if it had extended time and granted leave. In so doing, it will apply the law as it is at the time of the hearing of the appeal, which, in the present cases, would be the law as expounded in Saik. The approach was described by Lord Bingham CJ in Bentley [2001] 1 Crim App R 307, at p.310:

“Where, between conviction and appeal, there have been significant changes in the common law (as opposed to changes effected by statute) or in standards of fairness, the approach indicated requires the Court to apply legal rules and procedural criteria that were not and could not reasonably have been applied at the time.”

What this means is that an appeal for which the CACD would or might have refused an extension of time and a grant of leave may come before it on a reference by the Commission, whereupon the CACD must determine it in accordance with the developed law.

The tension is obvious. In present circumstances, it is vividly illustrated by what has occurred and is occurring in the case of Ramzan and others [2006] EWCA Crim 1974. The appellants and applicants there were all seeking to take the Saik point. The appeal of Ramzan was by way of reference by the Commission. The CACD “with no enthusiasm whatever” (para 24) proceeded to allow his appeal and ordered a retrial. It felt obliged to take a similar course with another appellant, Vakilipour, who had succeeded in obtaining leave to appeal from a High Court Judge. The CACD doubted whether that judge had had the relevant authorities drawn to his attention. However, in relation to five applicants whose applications for an extension of time and leave to appeal were being considered in the same judgment, the CACD refused their applications in accordance with what Hughes LJ described as:

“… the very well established practice of this Court, in a case where the conviction was entirely proper under the law as it stood at the time of trial, to grant leave to appeal against conviction only where substantial injustice would otherwise be done to the Defendant.” (para 3)

We are told that some or all of the five unsuccessful applicants in Ramzan have now approached the Commission in the hope of obtaining referrals and thereby securing what the CACD has thus far denied them.

In the present proceedings, the first submission on behalf of the Director, as set out in the Claim Form in each of the four cases, was that, when considering whether or not to refer what we shall call change of law cases, the Commission is “bound to apply an identical filter to that applied by the Court of Appeal when deciding whether or not to grant leave to appeal out of time”. This developed into a submission that it is incumbent upon the Commission to have regard to what Hughes LJ described as “the very well established practice” of the CACD. The implication is that, if the Commission approaches applications in this way, this should ensure that only” substantial injustice” cases are referred and the tension between the two bodies would be alleviated. In effect, they would both be applying the same filter. The primary case for the Commission is that it is not bound to have regard to the practice of the CACD in relation to the granting of extensions of time and/or leave to appeal because the sift mechanisms applicable in the CACD are conspicuously absent from the statutory provisions governing the Commission. It is an independent body operating within its own statutory framework and that independence is underwritten by section 9(2) of the 1995 Act. It is right to record that the Director, through Mr Perry, expressly paid tribute to the high standing of the Commission and the Commissioners who comprise it.

The Commission was established by Part II of the 1995 Act. This followed the Royal Commission on Criminal Justice, which reported in July 1993, having been established on the same day that the Court of Appeal quashed the convictions of the six men who had been convicted of the Birmingham bombings in 1974. The Royal Commission recommended the establishment of a statutory body and the 1995 Act gave effect (with some variations) to the recommendations.

Section 9 of the 1995 Act provides:

“(1)

Where a person has been convicted of an offence on indictment in England and Wales, the Commission –

(a)

may at any time refer the conviction to the Court of Appeal …”

We have already referred to the material part of section 9(2) which requires that the reference of a conviction be treated “for all purposes as an appeal” under section 1 of the Criminal Appeal Act 1968.

The discretion to refer under section 9 is conditioned by section 13, which provides:

“(1)

A reference of a conviction … shall not be made under … section 9 … unless –

(a)

the Commission consider that there is a real possibility that the conviction … would not be upheld were the reference to be made,

(b)

the Commission so consider –

(i)… because of an argument, or evidence, not raised in the proceedings which led to it or on any appeal or application for leave to appeal against it … and

(c)

an appeal against the conviction … has been determined or leave to appeal against it has been refused.

(2)

Nothing in subsection (1)(b)(i) or (c) shall prevent the making of a reference if it appears to the Commission that there are exceptional circumstances which justify making it.”

The material parts of section 14 are in these terms:

“(2)

In considering whether to make a reference of a conviction … under … section 9 the Commission shall have regard to –

(a)

any application or representations made to the Commission by or on behalf of the person to whom it relates,

(b)

any other representations made to the Commission in relation to it, and

(c)

any other matters which appear to the Commission to be relevant.

(3)

In considering whether to make a reference under section 9 … the Commission may at any time refer any point on which they desire the assistance of the Court of Appeal to that Court for the Court’s opinion on it; and on a reference under this subsection the Court of Appeal shall consider the point referred and furnish the Commission with the Court’s opinion on the point.”

In applying the “real possibility” test under section 13(1), the Commission is concerned to predict what the CACD would do in the event of a reference being made. Section 2(1) of the 1995 Act amended the Criminal Appeal Act 1968 so that section 1 of the 1968 Act now provides:

“Subject to the provisions of this Act, the Court of Appeal –

(a)shall allow an appeal against conviction if they think that the conviction is unsafe; and

(b)shall dismiss such an appeal in any other case.”

This replaced the previous wording (in s.2(1) of the 1968 Act) of “unsafe or unsatisfactory” and the alternative bases of “wrong decision of any question of law” and “material irregularity” with the single criterion – “unsafe”. It also deleted the power to dismiss an appeal on the ground that no miscarriage of justice had occurred (“the proviso”).

It is common ground that a decision of the Commission, either to refer or not to refer, is in principle susceptible to challenge by an application for judicial review. The approach of the Divisional Court when considering such a challenge was described in authoritative terms by Lord Bingham CJ in Regina v Criminal Cases Review Commission, ex parte Pearson [2001] 1 Crim App R 141 in the following passages:

“The exercise of the power to refer accordingly depends on the judgment of the Commission, and it cannot be too strongly emphasised that this is a judgment entrusted to the Commission and to no one else.” (at p.149d)

“We are not sitting as a court of appeal, but as a court of review, and it is no part of our duty to decide whether the Commission’s conclusion was right or wrong, but only whether it was lawful or unlawful.” (at p.169e)”

“Had the Commission decided to refer this case to the Court of Appeal, that would (if based upon a proper direction and reasoning) have been a reasonable and lawful decision. The decision not to refer was in our view equally reasonable and lawful. The question lay fairly and squarely within the area of judgment entrusted to the Commission. If that Court were to hold that a decision one way or the other was objectively right or objectively wrong, it would be exceeding its function. The Divisional Court will ensure that the Commission acts lawfully. That is its only role. To go further would be to usurp the function which Parliament has, quite deliberately, accorded to the judgment of the Commission.” (at p.171g-h)

These passages have informed every single challenge to the Commission in recent years.

In each of the present cases, the Commission explained the decision to refer in these words:

“Following the decision of the House of Lords in Saik there is a real possibility that the Court of Appeal will conclude that [the] conviction is wrong in law.”

In each of the acknowledgements of service in which it set out its grounds for resisting the application for judicial review, the Commission set out the background to its decision and stated:

“Against that background, the decision-making committee did not deem it necessary to consider the practice of the Court of Appeal on the exercise of its discretion not to refer.”

It is common ground that it has a discretion not to refer, even when the “real possibility” test is satisfied: Regina (Hunt) v Criminal Cases Review Commission [2001] QB 1108, per Lord Woolf CJ at para 3.

It seems to us that the question of legal error is best approached in two stages. First, as a matter of principle, is the Commission generally bound to have regard to a practice of the CACD in relation to the extension of time and the granting of leave? Secondly, if it is so bound, did the obligation arise in the present cases? This second stage necessitates consideration of two sub-issues, namely (a) the actual practice of the CACD in relation to change of law cases, and (b) the state of affairs that existed when the present decisions to refer were made.

The point of principle

The submission on behalf of the Director is that the tension to which we referred in paragraph 4 of this judgment cannot have been intended by Parliament; that it undermines public confidence in the criminal justice system when cases are treated differentially in the way illustrated by Ramzan; and that this Court should strive to achieve symmetry of approach between the Commission and the CACD, which can only be done by common application of the substantial injustice test. Mr Perry seeks to support this submission by referring to the recommendations of the Royal Commission which led to the establishment of the Commission. Chapter 11 of the Report of the Royal Commission was entitled Correction of Miscarriages of Justice and the recommendation was of “a new independent body to consider allegations of miscarriage of justice, to arrange for their investigation where appropriate, and where that investigation reveals matters that ought to be considered further by the courts, to refer the cases concerned to the Court of Appeal”.

Although the Report of the Royal Commission led to the establishment of the Commission, it cannot be said that the 1995 Act simply enacted the recommendations of the Royal Commission or reflected all its views. Importantly, it did not adopt the language of miscarriage of justice. Indeed, it amended the 1968 Act by, amongst other things, removing the proviso which had been tied to the concept of miscarriage of justice. Also, the 1995 Act did not adopt the recommendation that judicial review of the Commission’s decisions should be excluded.

In considering the scope of the Commission’s statutory powers, it is essential to focus on the terms in which they are expressed. In our judgment, the significant features are as follows: (i) unlike the CACD, the Commission does not act within statutory time limits. Section 9(1)(a) expressly enables it to refer a case “at any time”. (ii) The power to refer is not linked to consideration of whether there is a real possibility that the CACD would extend time or grant leave. Indeed, by section 9(2), once a reference is made, the need for the leave of the CACD is removed. (iii) The central test is in the form of a prediction of a real possibility that a conviction would not be upheld by the CACD, not of whether the continued existence of the conviction would be held to be a miscarriage of justice. (iv) The 1995 Act provided for a truly independent Commission and clothed it with discretionary powers of the utmost width, as has been confirmed in all the cases since Pearson. Although it is empowered by section 14(3) to seek the opinion of the CACD (and, we are told, has done so on two occasions, each raising highly specific issues of jurisdiction), it is not bound to do so. Its obligation is to decide whether, on a substantive appeal, there would be a real possibility of the quashing of a conviction. (v) In addressing that question, the Commission must have regard to the way in which the CACD approaches the “unsafe” test. Following the repeal of the proviso, Lord Bingham CJ explained that approach in Graham [1997] 1 Crim App R 302, 308-309:

“… if, for whatever reason, the Court concludes that the appellant was wrongly convicted of the offence charged, or is left in doubt whether the appellant was rightly convicted of that offence or not, then it must of necessity consider the conviction unsafe. The Court is then subject to a binding duty to allow the appeal. It can make no difference that the appellant might, if duly indicted, have been rightly convicted of some other offence. Where the condition in section 2(1)(a) as it now stands is satisfied, the Court has no discretion to exercise .... Our sole obligation is to consider whether a conviction is unsafe. We would deprecate resort to undue technicality. A conviction will not be regarded as unsafe because it is possible to point to some drafting or clerical error, or omission, or discrepancy, or departure from good or prescribed practice … But if it is clear as a matter of law that the particulars of offence specified in the indictment cannot, even if established, support a conviction of the offence of which the defendant is accused, a conviction of such offence must in our opinion be considered unsafe.”

That is no doubt why the appeals (as opposed to the applications) in Ramzan were successful.

All this leads us to the clear conclusion that the independent Commission was under no obligation to have regard to, still less to implement, a practice of the CACD which operates at a stage with which the Commission is not concerned. We resolve the point of principle in favour of the Commission. We shall return to the practicalities later.

The circumstances of the present references

The practice of the CACD

As we have related, in Ramzan Hughes LJ referred to “the very well established practice” of the CACD. In so doing, he was echoing the words of Rose LJ in Kansal (No.2) [2001] EWCA Crim 1260, at para 21, where he referred to:

“… this court’s established practice for over 20 years not to grant an extension of time or leave to appeal because of a change in the law since trial.”

In the following paragraph, Rose LJ expressed

“… the very firm hope that, in exercising the discretion under section 9 and the judgment conferred by section 13(1)(a), the [Commission] may think it right to take into account this court’s practice in refusing leave because of a change in the law …”

The context in Kansal (No.2) concerned the change in the law brought about by statute, the Human Rights Act 1998, and its possible retrospective effect, an alarming prospect which was removed on the subsequent appeal to the House of Lords [2001] UKHL 62.

We do not doubt the existence of the practice referred to by Hughes LJ and Rose LJ. The point made on behalf of the Commission is that the CACD has not been consistent in observing it. Prior to Kansal (No.2), the most cogent acknowledgement of such a practice and the substantial injustice exception was to be found in Hawkins [1997] 1 Crim App R 234. It is not necessary for us to refer to all the cases which preceded or post-dated Hawkins, as Miss Lang and Miss Dixon have done in their careful skeleton argument. However, it is worthy of note that, for example, in Ramsden [1972] Crim App R 547, the approach of the CACD seems to have been more in the form of a general interests of justice test than one requiring substantial injustice. Those words were also absent from the judgment of Geoffrey Lane LJ in Mitchell (1977) 65 Crim App R 185 where, having considered Ramsden, he referred to the case before the Court as a very rare one in which “the Court should exercise its undoubted discretion to allow the extension of time and grant leave to appeal against conviction” (at p.190).

Nor can it be said that the CACD has consistently applied the “substantial injustice” test since Hawkins. In King [2000] 2 Crim App R 391 an extension of time in excess of 12 years was granted to permit an appeal. Interestingly, Lord Bingham CJ took into account that, if the extension were refused, “it would be open to the applicant as a matter of statutory entitlement to approach the [Commission] and that, if the case were referred, it would fall to be treated by the CACD as a permitted appeal” (at p.403). Although King was not strictly a change of law case, the reasoning comes close to that appropriate to one – for example, the question whether the appellant “may have lacked protection which it was later thought right that he should enjoy” (at p.402). The governing consideration was “whether an injustice may have been done” (at p.403).

In addition to a degree of inconsistency in the adoption of the substantial injustice test, there has also been a discernible unpredictability in its application. This is hardly surprising. There is room for different views on questions of “substantial injustice” as between, for example, cases in which the appellant is still serving his sentence, cases where there may or may not be suitable alternative convictions at the disposal of the CACD pursuant to section 3 of the 1968 Act, or cases in which the appellant has served his sentence but still has an interest to protect in relation to, say, his previous good character or the consequences of a confiscation order. One does not have to go as far as the written submission on behalf of Liberty in this case – “it is arguable (to say the least) that any person found guilty in a case that the Court of Appeal would subsequently find to be unsafe has, in fact, suffered substantial injustice” – to acknowledge that the boundaries of substantial injustice are not always easy to predict. This is no doubt what resulted in the Chairman of the Commission, Professor Graham Zellick, saying in his witness statement in the present case:

“… we have not been able to discern from the authorities what is meant by ‘substantial injustice’: we regard it as too vague for our purposes and in one or two instances would have to question the outcome.”

On the other hand, what the Commission had clearly been able to discern in the years since Kansal (No.2) was a total lack of criticism from the CACD when dealing with references from the Commission in change of law cases. In their skeleton argument, Miss Lang and Miss Dixon refer to seven such cases, in some of which the eventual appeals were allowed and in others they were dismissed: see Clark [2001] EWCA Crim 884, in which Rose LJ referred to “an entirely appropriate exercise of the Commission’s decision” (at para 3); Hayes [2002] EWCA Crim 1945; Sheehan [2005] EWCA Crim 3134; Mair [2002] EWCA Crim 2858; Hayes [2002] EWCA Crim 1945; Kennedy [2005] EWCA Crim 685; and Caley-Knowles and Jones [2006] EWCA Crim 1611. We limit ourselves to comment on the last two cases. In Kennedy, although the appeal was dismissed, Lord Woolf CJ not only refrained from criticising the reference and from mentioning the practice of the CACD: he specifically commended the Commission’s reasoning as “very helpful” and “of considerable assistance” (at p.7). In Caley-Knowles and Jones one appellant had been convicted in 1972, the other in 1994, in both cases as a result of the trial judge directing guilty verdicts, a practice now finally given its quietus by the House of Lords in Wang [2005] UKHL9. Although the appellants could only have been acquitted by perverse jury verdicts, their appeals were allowed without any criticism of the Commission for referring the cases or any mention of the practice of the CACD.

Although Mr Perry, with his customary skill, attempts a taxonomy of the authorities in an attempt to advance the practice of the CACD as being of particular relevance in the present cases, in our judgment it simply cannot be said that, when the Commission was considering possible references in May 2006, the practice of the CACD was of such consistent application, or was being referred to by the CACD on recent references in such a way that, in considering whether to refer, the Commission was obliged to take that practice into account. This point becomes even clearer when one places the present cases in the chronological sequence post-Saik.

The road to Ramzan

The ratio of Saik did not come out of a clear blue sky. It had been anticipated by the decision of the CACD in another case, Ali [2005] EWCA Crim 87, on 7 June 2005. As a result of Ali, Ramzan applied to the Commission for consideration of a reference. On 18 August 2005, the Commission decided to refer Ramzan’s case to the CACD. Ramzan was first listed in the CACD on 22 September 2005, together with applications on behalf of three co-defendants for an extension of time and leave to appeal. It came to the notice of the Court that Ali had been decided by a constitution of the CACD which had not been told of the earlier decision of another constitution of the CACD in Saik, in which judgment had been given, dismissing the appeal, on 26 May 2005 [2005] EWCA Crim 1345. In Ali, the prosecution did not institute a petition for leave to appeal to the House of Lords. However, the appellant in Saik did and was ultimately successful in May 2006. In the face of the uncertainty prevailing at the time, it is hardly surprising that, on 22 September 2005, the CACD adjourned the appeal and applications in Ramzan. Giving the judgment of the Court, Rix LJ said (at para 10):

“Before finding out about the certification and petition in Saik, the Crown had indicated, by their skeleton in the cases before us, dated … 15 September 2005, that, subject to the view of this Court, the Crown felt obliged not to oppose Ramzan’s appeal and the other applicants’ applications or the quashing of their convictions. The discovery, however, that the Ali point, through Saik, may be subject to the views of their Lordships … has … led them to rethink their position … ”

And (at para 13):

“At present, it seems to us that if the Saik petition is refused, then the first thoughts of the Crown, which were that the appeal and the applications will have to be granted and convictions quashed, may well be the ultimate result.”

It goes without saying that, on this reasoning, if the petition in Saik were to be successful and his conviction quashed (as turned out to be the case), the first thoughts of the Crown would be even more likely to be the ultimate result.

At this stage it is necessary to refer to the witness statement of Anthony Pryce Foster, who was a member of the case committee which had referred Ramzan. It was also he and the same two colleagues who later referred the present cases. Mr Foster states that, following the first hearing in Ramzan on 22 September 2005, he and his colleagues considered the position to be that, if the House of Lords in Saik were to come to the same conclusion as the CACD had in Ali, the Director would not oppose the appeal or the applications in Ramzan but would confine himself to seeking retrials. Mr Foster further notes that Rix LJ had appeared to endorse this approach and that no criticism had been made of the reference, nor mention made of the practice of refusing extensions of time in change of law cases absent substantial injustice. The Commission then received a number of applications in similar cases. They included the four with which we are concerned. In November and December 2005 the Commission was in correspondence with the Registrar of Criminal Appeals. It discovered that no appeals or applications raising the Ali/Saik issue would be listed until the House of Lords delivered its decision in Saik. That took place on 3 May 2006. The case committee met and made the decision to refer on 23 May and the actual references followed eight days later. Mr Foster states:

“At the time we made our decision, we had well in mind the stance taken by the [Director] and the Court of Appeal in Ramzan the previous year … The Court of Appeal had not referred to any practice of refusing extensions of time in change of law cases. The Court of Appeal had not queried or criticised our decision to refer Mr Ramzan’s case. We assumed that the [Director] and the Court of Appeal would take the same view in other Saik appeals. The Commission had been in contact with the Criminal Appeals Office on a number of occasions, discussing the timing of appeals, and the position of co-defendants, and had not been given any indication that the position had changed since the hearing of Ramzan in September 2005 … It was only after these cases had been referred that the Commission was made aware of the change of stance on the part of the [Director] and the Court of Appeal towards the Saik appeals.”

Indeed, that awareness was only complete when Hughes LJ gave the judgment of the differently constituted Court of Appeal on 21 July 2006, the essence of which we have described in paragraph 7, above.

What is the consequence of all this? In our judgment, even accepting (as we do) that there is a practice in the CACD of refusing extensions of time and leave to appeal in change of law cases, that practice is not always applied with consistency and, to the extent that it requires consideration of substantial injustice, which is not always referred to, it can be unpredictable. Moreover, in recent years the CACD has often received and processed references from the Commission in change of law cases without criticism and without reference to the aforesaid practice. Most significantly, the attitude of the Director and the CACD on the first hearing in Ramzan was not such as to suggest that, by referring Ramzan, the Commission had acted otherwise than appropriately.

If (contrary to our first conclusion), the Commission may sometimes be bound to have regard to the practice of the CACD in relation to applications for an extension of time and leave to appeal, we are wholly unpersuaded that such an obligation arose in the circumstances of this case. In our judgment, and in the light of the matters to which we have referred, it was entirely reasonable and lawful for the Commission to proceed as it did in May 2005. We fail to see how the Commission can be said to have failed to have regard to a material consideration or to have acted irrationally in these circumstances. It was entirely permissible for the case committee to see the situation in the manner described by Mr Foster.

In the course of his submissions on substantial injustice Mr Perry contended that the four Interested Parties would suffer no injustice whatsoever if their substantive appeals were unconsidered by the CACD. His argument is that, if the trials had taken place at a time when it was appreciated that the law is as expounded by the House of Lords in Saik, the Interested Parties would have faced trial on substantive rather than conspiracy counts and, in view of the findings of the respective juries, it is inevitable that they would have been convicted and sentenced in the same way, in view of the available mens rea of reasonable suspicion in respect of the substantive offences.

Although we have heard submissions from both sides on the merits of the appeals - this was unavoidable in the context of the substantial injustice issue – we take the view that, having decided not to quash the references, it would be inappropriate for us to express a concluded view on the merits of the appeals. However, we make this observation. Quite apart from being overtaken by Saik in relation to the conspiracy charges, there has also been a significant development in the law which affects the indicting of the substantive offences. In the case of the Interested Party El-Kurd, his first appeal to the CACD was dismissed [2001] Crim App R 234 and the Court approved the practice of indicting a single conspiracy on the basis that the money in question was the product of either drug trafficking or other criminal conduct, even though the two respective substantive offences were mutually exclusive because “criminal conduct” was defined in the amended Criminal Justice Act 1988 in a way which excluded drug trafficking offences. The latter were the exclusive preserve of the Drug Trafficking Act 1994. However, since the cases of the four Interested Parties were considered by the CACD – the last one being Ahmed, whose appeal was dismissed on 15 October 2004 – the House of Lords has held in Montila [2004] UKHL 50 that, in relation to the substantive offences, the prosecution must prove that the money came from drug trafficking or that it came from other criminal conduct. A specific finding is necessary. A conviction cannot be based on proof that the money came from some type of crime but there is no certainty as to whether it was or was not drug trafficking.

It seems to us that this undermines Mr Perry’s submission of “no injustice whatsoever”. It has never been suggested that the Interested Parties have been involved in crimes such as drug trafficking, fraud or robbery. The allegation is that, as persons involved in money-changing businesses they processed vast sums of money and had at least a suspicion that it was the proceeds of drug trafficking or other criminal conduct. Whilst it can certainly be said that, in vernacular terms, the Interested Parties have all been proved to be involved with dirty money which they at least suspected was tainted, if they had been tried for the substantive offences under the 1988 Act or the 1994 Act, the prosecution would have faced the considerable and possibly insuperable difficulty of proving that the money fell under one rather than the other statutory regime. Thus, whilst Mr Perry can fairly say that it has been shown that each Interested Party has been involved in nefarious conduct, we do not consider it to be self-evident that the prosecution could have secured sustainable convictions for substantive offences under either Act. Strong submissions to this effect were made by counsel on behalf of the Interested Parties. In reply, Mr Perry was not able to produce a convincing response to them.

Needless to say, the consequences of this analysis cause us no pleasure and we are relieved to understand that the circumstances of these four cases would not be susceptible to that analysis if the alleged offences had occurred after the coming into force of the Proceeds of Crime Act 2002. However, so far as these cases are concerned, we are driven to the conclusion that if, contrary to our judgment, it had been incumbent upon the Commission to take account of the substantial injustice test, the argument that the Interested Parties (to put it at its lowest) were not self-evidently guilty of either of the substantive offences would have made it virtually certain that the decision to refer would have been the same. It is also pertinent to observe that, in each case, there had been an attempt to take the Saik point or the Montila point or both on appeal but the Interested Parties failed where the appellants in Saik and Montila were soon to succeed.

It follows from all that we have said that this application for judicial review must fail. One only has to read the judgment of Hughes LJ in Ramzan and the witness statement of Professor Zellick in this case to appreciate that, whatever had been the outcome of this case, there is a tension between the practice of the CACD and the Commission in cases such as this. It may be a creative tension and, of course, it is accompanied by civility in both institutions. It seems to us that its source is not simply the statutory framework within which the Commission works but is more the result of the way in which the CACD applies the recently developed law to old cases as propounded in Bentley (para 5, above). It is not the job of this Court to express any view on that approach. However, it seems to us that for as long as it coexists with the practice of the CACD in relation to extensions of time and the statutory power of the Commission as they are currently framed, some potential for tension and even conflict will remain. As we have demonstrated, we believe that the Commission would lawfully have referred these cases even if they had taken the substantial injustice test into account, but that will not always be so.

To an extent, the tension is being addressed because the Commission has recently adopted a new policy document on its discretion not to refer a case despite a finding of real possibility in the context of a change of law. Of particular relevance is paragraph 10 which provides that where an applicant to the Commission has not previously appealed or applied for leave to appeal to the CACD, the Commission will advise him of his right to apply for an extension of time and for leave to appeal. If that application is unsuccessful and he returns to the Commission, he will have to advance a new argument or evidence not previously considered by the CACD or point to exceptional circumstances. Also, where an applicant has previously appealed to the CACD, the Commission, even if it is satisfied as to the real possibility test, will also consider whether the CACD could substitute a verdict or a plea of guilty of another offence under section 3 or 3A of the Criminal Appeal Act 1968. If it could, that “normally will militate against referral”, unless the anticipated sentence would be lower than that originally passed, in which case the Commission will consider “any benefit that might accrue to the applicant from a referral, and the public interest” (paragraphs 11 – 12).

For our part we welcome these developments but it cannot be said that they resolve all the problems. In our view it would now be timely for the legislature to reconsider the approach to changes in the common law expounded in the passage from Bentley cited at paragraph 7 above (as Lord Justice Auld invited it to do when recommending its abolition in his Review of the Criminal Courts) and hence the relationship between the Commission and the CACD in change of law cases. Professor Zellick has expressed surprise that Bentley is not mentioned in the recent consultation paper on Quashing Convictions. We share his surprise. We do not regard it as beyond dispute that, as a matter of policy, the declaratory theory of the common law should be a trump card in this area of criminal law.