Crown Prosecution Service v City of London Magistrates' Court

LORD JUSTICE SEDLEY: Keith Hartley is a convicted drug trafficker. In January 1994 he was convicted of possessing class B drugs with intent to supply. Two months later he was sentenced to eight years' imprisonment and the Crown Court made a confiscation order requiring him to pay £200,000 forthwith or to serve three years' imprisonment in default.

Nothing having been paid, a receiver was appointed in March 1997. She was discharged in October 2001, Hartley having failed to co-operate with her and gone missing. She had, however, succeeded in recovering £120,608 (I shall omit pence in the figures I am giving). This left a balance of £79,392 owing, plus interest which by law had been accruing since March 1994.

In April 2006 Mr Hartley was arrested in relation to another matter. Under threat of further enforcement proceedings he co-operated with the court, making over his entire retirement fund in further part discharge of the confiscation debt. He claimed to have no more assets but did not apply for a certificate of inadequacy. The CPS, believing that he had more assets, had the case relisted before the City of London Magistrates' Court for enforcement.

The court on 21st September 2006 activated 85 days of the default sentence. This was a term which bore the same proportion to the full default period of three years as the remaining shortfall of £15,577 capital bore to the £200,000 ordered to be confiscated. It took no account, however, of the interest which had by now accrued due: a total of £82,329. If that had been taken into account, the activated term would have been 536 days.

It is submitted by the Crown Prosecution Service and accepted by those representing Mr Hartley as an interested party that this was an error of law. Section 15(1) of the Criminal Justice (International Co-operation) Act 1990 provides:

No criticism can fairly be levelled at the justices for their oversight: the prosecutor asked for interest to be included but failed to produce the statutory authority for it. In response to these proceedings, however, the chair of the bench, Ms Julie Ann Mills, has suggested that the default period is irrevocably set, so far as the Magistrates' Court is concerned, by the Crown Court, and by definition relates only to a capital sum. The right course, she submits, is for the prosecution to apply to the Crown Court under section 15(2) to increase the default term for non-payment of interest.

Although this makes perfectly good sense, it cannot stand in the face of the terms of section 15(1). The CPS accepts that no amount of interest can take the default term above that set by the Crown Court but within it the amount due includes accrued interest. What the enforcing justices have to work with, therefore, is something like a measuring jug. It has a fixed capacity which cannot be exceeded, but within it the amount of the debt may both fall as the capital sum is paid off and rise as interest accrues on the balance. When they come to activate a default term, the justices must activate the same proportion of it as the amount in the jug -- that is principal and interest together -- bears to its capacity.

It follows that the Crown Prosecution Service is right in its submission that the justices should have activated 536 days, that is about 18 months, of the default term. Mr Forster for Mr Hartley accepts this; but he points out that these are judicial review proceedings for which Silber J, on 14th February 2007, in giving permission, gave Mr Hartley specific liberty to raise the issues of delay and prejudice. Mr Foster has accordingly developed before this court that the court in the exercise of its discretion should withhold the substantive relief sought by the CPS, namely an order quashing the sentence of 85 days and remitting the matter with a direction to impose a term of 536 days. He does not mind it being declared that interest is to be included in the calculation of a default sentence under a confiscation order.

The justices, in addition to defending their decision, have said that even if they had jurisdiction to reopen it they would not do so because the matter is stale and the request for reopening did not come until five weeks after their decision. This is adopted by Mr Forster as part of a larger submission that the court should not in effect send his client back to prison.

First, Mr Forster submits that this application for judicial review was not made promptly as required by CPR 54.5. 54.5 provides:

Section 31(6) of the Supreme Court Act 1981 provides:

Mr Forster cannot say that the full relief sought would prejudice his client's rights since his client is in the wrong in all material respects but he can and does say that it will cause him substantial hardship in the form of another substantial spell of imprisonment after being twice released, and that it would be detrimental to good administration by rewarding, or at least condoning, unconscionable delay by a public authority in a matter affecting individual liberty.

Mr Hellman for the CPS puts it rather differently. He writes in his skeleton argument:

Mr Forster in answer relies upon the more recent and more authoritative judgment of Keene LJ in the case of Hardy v Pembrokeshire County Council [2006] EWCA Civ 240. At paragraph 10, Keene LJ said, in relation to another case which he cited:

It seems to me that there is a plain want of promptness here. Mr Hellman has elected not to explain it beyond the -- if I may say so -- somewhat bland assertion that if, which he denies, any explanation was called for, it is the pressure of work. It is, he writes, "otiose to go into any more detail." I have to say that I do not find this acceptable. The CPS is dealing in many instances, including this one, with individual liberty. Its obligation is to act with proper promptness and, so far as it can, to arrange its work accordingly. I am not prepared to assume that that is what it has done. Its conduct of this matter is, I have to say, more suggestive of a series of last minute rushes to get things straightened out. This court is well aware of the difficulties under which the CPS labours but there is a limit to which these can give it special protection from the ordinary principles of justice on which the court acts.

Next Mr Hellman submits that there is a compelling public interest in the enforcement of confiscation orders, the purpose of which is to stop crime paying and to recoup some of its proceeds. For my part, I have no difficulty with this and Mr Forster for his part has not attempted to quarrel with it. Lastly, Mr Hellman submits that a fair hearing is still perfectly possible. That, I hope, is true with regard to what happens in this court but the whole point of his application, if it succeeds in full, is that there will be no further hearing of any significance. The matter will go back to the justices, whose hands will be tied, and Mr Hartley will go back to prison.

As to the other remedies available to the CPS, it is now apparent that even the swift section 142 application which there should have been would have produced a nil return from the Magistrates' Court. A case stated was, in Mr Hellman's submission, not possible because the decision was not final, since interest was still continuing to accrue. Mr Hellman relies here on authorities such as Streames v Copping [1985] QB 920, which concerned preliminary or interlocutory decisions of justices and so do not directly assist. He also cites Practice Direction 52PD2A.2 from the White Book, which reads.

I therefore find some difficulty with Mr Hellman's final proposition, that the judicial review was "the appropriate way to proceed". Judicial review is axiomatically a remedy of last resort and it seems to me that that is in literal terms exactly how the CPS used it here -- with the difference that whereas ordinarily it lies because no other remedy exists, here it was sought because other remedies had been foregone. I do accept, however, that the issue itself, as one of pure law, is no less apt for judicial review than for a case stated.

Mr Hellman is also entitled to say, as he does, that the accusation of delay on the part of the CPS comes from a man who has now evaded full payment of the amount of the confiscation order, including interest, for 13 years. In response, Mr Forster can make the point that Mr Hartley has now paid practically all of the amount ordered to be confiscated and has served the full period imposed in default for the unpaid balance of the capital. The further debt, however, is the interest which represents his undoubted delay. But Mr Hartley has not applied to the High Court for a certificate of inadequacy and the debt is therefore lawful and real. The issue for us is delay in payment against delay in enforcement.

Mr Hellman's final shot is that, once he has his declaration, the CPS can at any time ask the Magistrates' Court to activate the balance of the default term. I express no view about this save to say that, if it were designed to put pressure on this court to do something it would not otherwise do, it would not be an acceptable submission and Mr Hellman properly disavows any such intention. Our task is therefore to decide whether in the circumstances I have now discussed in some detail the discretion of the court should be exercised for or against the grant of an order which will send Mr Hartley to prison for another 451 days.

As I have indicated, what I said in Hay was not a proposition of law. The law is what is set out in CPR 54.5, which I have quoted earlier in this judgment. My comment was intended as no more than an account of the court's rule of thumb, that is to use the three-month time limit as its primary test but to listen to any argument or, if necessary, to take the point itself, that a lack of promptness renders it unfair or wrong to let an application proceed or succeed, albeit brought within the three months. What Keene LJ said in Hardy is very much in point in such a situation.

It seems to me that the CPS's response to the justices' error had been dogged by unexcused delays. Mr Hartley has now served two terms in jail arising out of his 1994 conviction, and it goes against the grain, unless it is inevitable to gaol him again for a third time. Mr Hellman accepts that the CPS could have applied instantly to the justices to revise the terms imposed and, if rebuffed, have come straight to this court for judicial review, which would have been conceded, as we now know, on the point of law on which it was based. None of that happened.

We do not know how remission would be calculated on two default terms as against one but it is conceivable that Mr Hartley might gain somewhat less remission than if he had been given the single term he should have received. What, much more importantly, can be said is that, while he is a convicted drug dealer and a chronic defaulter on his confiscation order, these may have less to do with the exercise of discretion than with the basic facts without which the present issue, including the exercise of discretion, could not have arisen at all. What has to count against Mr Hartley on any view is his prolonged default in payment reflected in the outstanding interest and the corresponding unactivated element of the default term. These cannot be lost sight of.

While Mr Forster cannot put the manifest hardship to his client beyond the simple factor of release and re-imprisonment, I accept -- as the Criminal Division of the Court of Appeal in other contexts also accepts -- that such hardship can be real. It might well ordinarily not be enough to halt the stronger outcome sought by the CPS in the present case, but here, crucially in my judgment, the CPS has been unacceptably dilatory in correcting the justices' error. The many months that have now elapsed since Mr Hartley was released for the second time make it in my view unfair to require the justices to re-imprison him. The right course for the CPS would have been to make a prompt application to the justices to revise their decision and, if this failed, as it looks as if it would have done, to come straight away -- I am speaking of days, not weeks -- to this court, explaining that Mr Hartley was now serving 85 days' imprisonment -- it might be less with remission -- and that it was essential in the interests of justice that, if this term was to be corrected by extending it, it should if at all possible be done before he was released from the term he was now serving. This court is able to move very fast in circumstances which require it. There is certainly no reason why it should not have been asked to move with the requisite speed in the present case. The failure to do so seems to me critical to the exercise of our discretion today. For my part, while granting the declaration sought I would refuse the two further mandatory orders which are sought with a view to requiring the justices to impose a larger term than they have done.

The declaration is a declaration that interest should be included when calculating the period of the default sentence under section 15 of the Criminal Justice (International Co-operation) Act 1990. The orders refused are an order quashing the sentence of 85 days imposed by the City of London Magistrates' Court and an order remitting the case to the City of London Magistrates' Court with a direction that the correct default sentence of 536 days be imposed.

MR JUSTICE NELSON: I agree with the conclusions which my lord has reached and for the same reasons that he has expressed. On the facts of this particular case, I do not consider it appropriate to order that the interested party should be sent back to prison for a third time. There has been in my judgment clear delay by the CPS in this case in correcting the justices' error in law. If proper steps to remedy the situation in the Magistrates' Court had been promptly taken, the matter could have gone back to the Magistrates' Court, and if necessary to this court, whilst the interested party was still serving the sentence of 85 days in default. By reason of the CPS delay that did not happen and the interested party would have to serve effectively two terms of imprisonment in relation to the default mechanism if the mandatory order were made.

I do not consider that delay by a public authority should have that consequence. There is prejudice in reaching the end of what the interested party had every reason to believe was the end of his sentence, to be released and then to be required to serve a further term of imprisonment as a consequence of delay by a public authority.

For these reasons, I agree with the conclusions expressed by my Lord.

LORD JUSTICE SEDLEY: Any consequential applications?

MR FORSTER: Not on my part, my Lord.

MR HELLMAN: I have no applications, my Lord.

LORD JUSTICE SEDLEY: Thank you both very much indeed.

MR JUSTICE NELSON: Mr Forster, thank you for your White Book.