Revenue & Customs Prosecution Service v Kearney [2007] EWHC 640 (Admin)

Case No CO/10098/2006[2007] EWHC 640 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT
Venue Royal Courts of JusticeDate Tuesday, 27th February 2007
Strand
London WC2
B E F O R E:
LADY JUSTICE SMITH DBE
MR JUSTICE GROSS
Between
REVENUE AND CUSTOMS PROSECUTION SERVICEClaimant-v-
Between
KEARNEYDefendant
Computer-Aided Transcript of the Stenograph Notes ofWordWave International LimitedA Merrill Communications Company190 Fleet Street London EC4A 2AGTel No: 020 7404 1400 Fax No: 020 7831 8838(Official Shorthand Writers to the Court)
MR J HALL AND MR D LUXTON (instructed by RCPO) appeared for CLAIMANTMR N POWER (instructed by Cobleys) appeared for DEFENDANT
J U D G M E N T
[1]MR JUSTICE GROSS: This is an appeal by the Revenue and Customs Prosecution Office ("the appellant") by way of case stated from a decision of His Honour Judge Duncan sitting at the Liverpool Crown Court to extend by four months the time limit available to pay a confiscation order made under section 71 of the Criminal Justice Act 1988 ("the 1988 Act") against Mr Kearney ("the respondent"). The sole and narrow question on the appeal is whether the Crown Court had jurisdiction to vary or extend the time to pay outside the 28-day slip rule period. It is common ground that if the Crown Court lacked power to do so, then this court has jurisdiction to quash the order made by His Honour Judge Duncan.[2]The facts may be shortly summarised. On 5th January 2005 the respondent pleaded guilty to one count of being knowingly concerned in the fraudulent evasion of duty chargeable on goods, namely cigarettes, contrary to section 170(2) of the Customs and Excise Management Act 1979. On 2nd September 2005, His Honour Judge Duncan made a confiscation order against the respondent under section 71 of the 1988 Act as amended. The respondent was ordered to pay £143,000 within 12 months. A default sentence of 2 years' imprisonment was set.[3]The court had found the value of the benefit to be £281,980, with a recoverable amount of £143,000; hence the confiscation order in the sum of £143,000. As already indicated, the respondent was given 12 months to pay the order with a 2 year period of imprisonment in default. It followed that the period allowed for payment of the order expired on 2nd September 2006.[4]On 18th September 2006 the matter was listed at Liverpool Crown Court at the respondent's request, and it was on this occasion that His Honour Judge Duncan made the order extending the time to pay. As already foreshadowed, the extension was one of four months. On the argument before His Honour Judge Duncan, the respondent contended that the Crown Court had an inherent jurisdiction to extend the time available to pay; that although there was no provision within the 1988 Act to allow the Crown Court to extend the time to pay a confiscation order, there was nothing in the Act to prevent such an extension; that section 11 of the Proceeds of Crime Act 2002 provided the court with such a power; as that Act was a more draconian Act than the 1988 Act, by inference the court must have had such a power under the 1988 Act.[5]For the appellant, it was then contended that the Crown Court had no inherent jurisdiction to extend the time available to pay a confiscation order made under the 1988 Act; that the court's powers to amend such a confiscation order were confined to those provided by the slip rule; that section 11 of the Proceeds of Crime Act 2002 did not assist at all; and that enforcement of the confiscation order should take place in the Magistrates' Court, the Magistrates having a discretion as to whether to activate the default sentence or not.[6]In the event, the learned judge held that, it would seem by way of inference from the Proceeds of Crime Act 2002, and in the light of a decision of the Court of Appeal Criminal Division that that court had power to extend the time to pay a confiscation order, then so to too the Crown Court had jurisdiction to extend the time available to pay in respect of a confiscation order made under the 1988 Act.[7]On the appeal, the written submissions of Mr Hall and Mr Luxton for the appellant may be shortly summarised as follows:(1) The Crown Court had no power to extend the time to pay under the 1988 Act. The court had the power initially to provide for time to pay (see section 75(1) of the 1988 Act and section 139(1)(a) of the Powers of Criminal Courts (Sentencing) Act 2000). Thereafter, however, the Crown Court had no power to vary the time to pay, save within the time and the ambit of the 28-day slip rule.(2) The order in this case had not been varied or extended within the ambit of the 28-day slip rule.(3) The court had no inherent jurisdiction to vary or extend the time to pay.(4) The fact that the Court of Appeal Criminal Division had power on an appeal to vary the time to pay was irrelevant.(5) Section 11 of the Proceeds of Crime Act 2002 ("POCA"), which does provide such a power as part of the new and different regime covering confiscation orders, was not applicable; in any event, the application for an extension would have been out of time under that Act as section 11 of POCA does not allow for an extension after the end of the period of 12 months, starting with the day on which the confiscation order was made. The reason why POCA did provide for a power to vary or extend the time to pay and why the pre-POCA regime did not do so was straightforward. POCA provided a comprehensive regime, placing civil and criminal enforcement in the hands of the Crown Court. By contrast, in the regime governing the 1988 Act, the enforcement of confiscation orders was shared between three courts: the Crown Court, which made the order, gave time to pay if it did, and set a period of imprisonment in default; the High Court which could make restraint, receivership and charging orders; the Magistrates' Court which, if appropriate, would impose the default sentence or otherwise deal with such questions.(6) If here the respondent needed an extension of time to pay, the proper course, leaving aside any appeal to the Court of Appeal Criminal Division, was to apply to the Magistrates who have both the requisite powers of enforcement and dispensing powers to do so justice in the individual case (see sections 76 and 77 of the Magistrates' Courts Act).(7) The order made by His Honour Judge Duncan was made without jurisdiction and should be quashed.[8]These were powerful and persuasive arguments and, in the event, the court did not find it necessary to call upon Mr Hall orally.[9]In response to those submissions, Mr Power for the respondent argued before this court as follows. Realistically he did not pursue the arguments which had been canvassed before the judge as to inherent jurisdiction, or as to any inference to be drawn from the powers of the Court of Appeal Criminal Division, or section 11 of POCA. Helpfully, Mr Power explained that there had been a number of these orders made, certainly in Liverpool, varying or extending time to pay by consent. But as I say, realistically he did not pursue the same arguments as those canvassed before His Honour Judge Duncan.[10]For his part today, Mr Power relied on the recent decision of Gordon [2007] EWCA Crim 165. Seeking to build on that authority, Mr Power submitted that the learned judge was doing no more than dealing with the final implementation of his order. It was open to the judge to adjust a technical or merely procedural aspect of his order, as this was, after the expiry of the 28-day period. Technicality, said Mr Power, should not be allowed to frustrate and invalidate the way in which the judge wished his order to be implemented.[11]By way of support for that submission, Mr Power also drew the court's attention to the administrative form headed "Confiscation Order" and used in this case. Mr Power said that the order was comprised in that section which directed the respondent to pay the sum of £143,000 and set the period of default imprisonment at 2 years. The time to pay, namely within 12 months, was contained not in the section dealing with the order but instead in a further section of the form headed "Information for the Defendant". Therefore, said Mr Power, that was simply part of the implementation of the order and the slip rule did not stand as a bar to the Crown Court varying or extending time to pay after the expiry of 28 days.[12]With respect to Mr Power's arguments, valiantly and charmingly advanced, I am in no doubt that the appellant's arguments are to be preferred. More weight is sought to be put by Mr Power on the authority of Gordon than that case will bear in this context. Gordon was a decision primarily concerned with a requirement of section 240 Criminal Justice Act 2003 that a specific order must be made for time spent in custody on remand to be deducted from the sentence imposed. The decision, with respect, carefully balanced the need for finality in sentencing against the undesirability of some administrative error in calculating the days on remand resulting in the need for an appeal to the Court of Appeal Criminal Division solely because the 28-day period for the operation of the slip rule had expired. The court recognised (see paragraph 49 and elsewhere in the judgment) that in the light of Menocal [1980] AC 598 and other authority, "save in very limited circumstances an extension to the 28-day period is impermissible". The solution devised by the court in Gordon was that provided the judge had indicated that credit should be given for time spent in custody on remand then, even if more than 28 days had expired, the Crown Court would still be in a position to deal with "what is no more than the final implementation of its order".

The President of the Queens Bench Division put the matter as follows:

"(45) . . . But once the court has decided that credit should be given it should say so, and it would then be entitled to adjourn for appropriate information to be provided about the relevant number of days. In short, if for whatever reason that calculation has not been made, or the court is uncertain about the 'time served', but considers that in principle the time spent in custody should be treated as time served, the court may properly direct that the period will be deducted after the appropriate calculation has been made, and adjourn this part of the process. (46) Thereafter the calculation should be made promptly. Plainly if there is any dispute about it, the arguments should be reduced to writing and put before the sentencing judge for his consideration. If necessary he may order a short further oral hearing . . . We emphasise that the adjournment should be for a limited period only, and the final decision should, save in exceptional circumstances, be concluded within 28 days. But even if delayed beyond that period, it would be permissible for the Crown Court to deal with what is no more than the final implementation of its order. This would not be a variation or rescission of sentence. It would merely represent the conclusion of an adjourned part of the sentencing process . . . (47) . . . We see no reason why the judge cannot use language making clear that he is directing that the defendant should receive credit for the full period of time spent in custody on remand (or any particular part of that period), that on the basis of the information currently before him the relevant period is X days, but if this period proved to be based on an administrative error, on being informed, the court would order an amendment of the record for the correct period to be recorded. Approaching the problem in this way, the number of days to be credited may properly be regarded as a temporary rather than a final order, and therefore open to correction if and when any error emerges. If of course there were any continuing issue about the number of days, the case would have to be re-listed for a judicial decision in open court. Again, the corrected order should be listed and pronounced in open court. Arrangements like these would not fall foul of the 28-day rule."
[14]The situation here is very different. There was nothing temporary, provisional or uncertain in the time period imposed by His Honour Judge Duncan when he made the confiscation order. There was no administrative error whatever. On a proper analysis, Gordon, as it seems to me, provides no assistance to the respondent. To the contrary, Gordon underlines the limits on the Crown Court's ability to vary its own orders after the expiry of the 28-day period.[15]For completeness, and with respect to Mr Power's submission to the contrary, nothing turns on the administrative form. The reality of the confiscation order is that it is to pay a given amount within a given period or face a sentence of imprisonment in default. The given period of time to pay is an integral part of the order. For my part, I am satisfied that the introduction of any power such as that purportedly exercised by the judge here into the pre-POCA regime would, as submitted by Mr Hall, give rise to some difficulty. But that in a sense is by the by. There is no such power contained in the relevant legislation. There is no inherent power. There is no power which is capable of being inferred from the provisions of POCA, a different regime which in any event would not have assisted the respondent as he was out of time. The right answer was for the respondent to seek to persuade the Magistrates in the exercise of their discretion, not then to activate the default sentence so that any injustice, if such there was, could have been addressed. Here that course was not followed. The learned judge had, with respect, no jurisdiction to make the order which he did.[16]The answer to the question posed by the case is "No". The order of the learned judge must be quashed and the appeal allowed.

LADY JUSTICE SMITH: I agree. The appeal is therefore allowed. The judge's order is quashed. Costs?

[18]MR HALL: I am not seeking costs.

MR JUSTICE GROSS: You are not asking for costs?

[20]MR HALL: No.

Cited in 2 later judgments