Adams, R (on the application of) v Special Investigations Unit [2008] EWHC 947 (Admin)

[2008] EWHC 947 (Admin)Case No CO/7029/2007
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Venue Royal Courts of JusticeDate Thursday 10 April 2008
The Strand
London
WC2A 2LL
B e f o r e:
LORD JUSTICE LATHAM
(Vice-President of the Court of Appeal, Criminal Division)
MR JUSTICE PENRY-DAVEY
and
MR JUSTICE FOSKETT
Between
The Queen on the application ofClaimantTERRANCE ADAMSClaimant- v -
Between
SPECIAL INVESTIGATIONS UNITDefendant
Computer Aided Transcription byWordwave International Ltd (a Merrill Communications Company)190 Fleet Street, London EC4Telephone No: 020 7421 4040(Official Shorthand Writers to the Court)
Mr G Cox and Mr C Benson appeared for ClaimantMr L Weston appeared for Defendant
J U D G M E N T
[1]Yesterday we heard argument in, and indicated our decision in, this application for judicial review which is brought by the claimant in relation to an order as to costs which was made on 9 March 2007 by His Honour Judge Pontius sitting at the Blackfriars Crown Court. We gave leave to apply for judicial review and indicated that we would quash the judge's order, remit the matter to the Blackfriars Crown Court for consideration of the appropriate order to be made, and direct that the hearing should be before a judge of that court other than His Honour Judge Pontius. We now give the reasons for the decision which we announced yesterday.[2]The order was made on 9 March 2007, which was the day upon which the claimant was sentenced in relation to a count alleging conspiracy to launder money which was the proceeds of crime. That was the culmination of lengthy criminal proceedings which had been set in train by the claimant's arrest in 2003. In relation to those criminal proceedings the claimant had obtained a representation order pursuant to the relevant regulations. The order with which this court is concerned was that made pursuant to the Criminal Defence Service (Recovery of Defence Costs Orders) Regulations 2001 (as amended). The costs that were ultimately ordered against the claimant were quantified on 18 May 2007 in the sum of just over £4.7 million.[3]The claimant has sought to quash that order on the ground that he was not given any or any proper opportunity to argue that an order in those terms should not be made.[4]We have been taken to the transcripts of the proceedings both on 9 March 2007 and 18 May 2007. They set out the course of the proceedings, indicate the way in which the order came to be made and give some indication also of the way in which the judge had, it is submitted, misunderstood the nature of the order that he concluded was appropriate.[5]The regulation which he invoked for the purposes of making the order was regulation 13. It may be helpful in the first instance to refer briefly to the regulations in question. Regulation 3(1) both requires and empowers the court to make a Recovery of Defence Costs Order. The general basis upon which that order is to be calculated is by reference firstly to the amount of the costs which have been incurred, and secondly the defendant's means. Regulation 6 imposes an obligation upon a defendant to comply with any demand to supply information by either the appropriate investigations unit of the Legal Services Commission or the court. Regulation 11 provides as follows:
"At the conclusion of the relevant proceedings, the judge shall (a) subject to regulation 4(2) make a Recovery of Defence Costs Order; (b) where a Recovery of Defence Costs Order may be made under regulation 4(2)(d), consider whether it is reasonable in all the circumstances of the case to make such an order."
Regulation 12 provides: 6. "Where the judge considers that it is, or may be, reasonable to make a Recovery of Defence Costs Order, he may: (a) make the order; or (b) if further information is required in order to decide whether to make the[6]In relation to the procedure to be adopted by the court when considering the making of a Recovery of Defence Costs Order the regulations themselves do not make any specific provision, but there are such provisions in the Practice Direction (Costs: Criminal Proceedings) [2004] 2 All ER 1070. The relevant paragraphs are as follows:
"XI.1.9 .... The special investigations unit will produce a report for the judge to consider at the end of the case in the same way that the court will provide the judge with a summary of the defendant's means. This report is made to support the role of the court, and is not an application for costs. XI.1.10 During the proceedings, the judge may refer the matter to the Legal Services Commission/special investigations unit for investigation where further information has come to light which had previously not been disclosed by the defendant to the court. The special investigations unit may investigate the financial resources of the funded defendant and require him to provide further information or evidence as required. XI.1.11 At the end of the case where the judge is considering what order to make, he may make the order or, if further information is required, adjourn the making of the order and order that any further information which is required, should be provided .... This power may be used where further information has come to light during the case about the defendant's means. Where the defendant has failed to co-operate either with the court or the special investigations unit, the judge may order that the further information should be provided. XI.1.12 The defendant is obliged to provide details of his means or evidence as is required by the court or the Legal Services Commission .... Arrangements are in place to ensure that a summary of the means information is available for the judge at the first hearing, or details as to whether or not the defendant has provided any information. Where the funded defendant does not provide this information, the judge may order him to do so. XI.1.13 Where information required under the regulations is not provided the judge must make a Recovery of Defence Costs Order for the full cost of the representation incurred under the representation order ...."
[7]In the present case the background to the making of the order was that the special investigations unit of the Legal Services Commission had indeed made requests for information on a number of occasions prior to the hearings in 2007. In particular there had been a request on 18 November 2005 for (amongst other things) the National Insurance numbers of the claimant and a co-defendant (his wife), valuation of the property which he owned and details relating to bank accounts. It was said on behalf of the Legal Services Commission both to the judge and to us that that information had never been properly provided in accordance with the request.[8]Be that as it may, the problem that we have to face in this court is that when reading the transcripts it is difficult to discern any point during the hearing on 9 March when the claimant or his counsel were given any clear indication that the judge intended to make an order under regulation 13. It may have been implicit in that the correspondence, of which counsel was aware was before the judge, asserted that the Legal Services Commission considered that the information had not been provided, but no formal application was made under regulation 13 but that there is an obligation on the Legal Services Commission to make such an application and the order emerged in a way which in our judgment was unfortunate.[9]The facts having been opened by counsel for the prosecution in open court, the judge was then asked by counsel then acting on behalf of the claimant to go into chambers. There is no doubt that that was in order to deal with the issues of costs; but it is also clear that counsel's intention was to seek the judge's views in relation to certain aspects of the way in which costs had been incurred. The stimulus for that was that during the course of the opening prosecuting counsel had suggested that the claimant was responsible for manoeuvring and delaying tactics during the course of the proceedings; and defence counsel sought to persuade the judge (amongst other things) that those were not to be laid at the door of the claimant but were, in fact, tactics determined by counsel. It was in that context that the judge started to comment about the question of costs. The first passage in which the judge indicated his views as to costs is at page 93 of the transcript, where he said:
"I am sorry, Mr Salmon [counsel for the claimant], you mentioned one aspect to me at a relatively early stage .... one aspect of the matter ...., but apart from anything else, I am in something of a difficulty .... in making any specific order as to the lack of information provided in response to the requests made more than once by the Special Investigations Unit of the Legal Services Commission, and that, to some extent .... so far as any order is concerned." 12. "
I do not intend to embark upon any sort of enquiry, (a) because I do not think it would be appropriate; (b) because I think it would be fruitless. I am not equipped, and I do not think anyone is equipped, fully to explore the matter at this stage, unless and until the Special Investigations Unit completes the inquiry .... As things stand, of course, they have no knowledge of course of the extent of Mr Adams' assets and so it would be pointless if I (inaudible) to embark upon some sort of investigation as to the number of hours, the amount of work done by anybody at all in a vain attempt to see if the work done has been done and charged as being wholly justified." At page 95, again in response to a submission of counsel, the judge said: 13. "Thank you. I may simply say something as I have done already once we are in open court and at an appropriate time to highlight the fact that the defendant has not responded to requests properly made for the supply of information to the Special Investigations Unit of the Commission."[10]The parties then went into open court and the claimant's counsel mitigated on his behalf. He did not deal at any stage at that point with the question of costs. That is not surprising because it appears from the transcript that at that stage he considered that the judge (albeit commenting that full information had not been provided) intended to turn the matter over to the Special Investigations Unit of the Legal Services Commission. That procedure would have been entirely in accordance with paragraph XI.1.11 of the Practice Direction.[11]However, in the course of his sentencing remarks, having dealt with the costs of the prosecution,

the judge went on as follows:

"In addition, in the light of your complete failure to respond to repeated requests for detailed information about your means, properly required of you by the Special Investigations Unit of the Legal Services Commission and acknowledged by you in a signed declaration dated 29 September 2005, I will make an order under the terms of Regulations 3(1) and 13 of the Criminal Defence Service (Recovery of Defence Costs) Regulations 2001, for the full costs of your representation by all various solicitors and counsel who have had conduct of your defence throughout these proceedings. Irrespective of the fact that the extent of your realisable assets, as presently known, it must be emphasised, for the specific purposes of the confiscation order has been limited to £750,000, I am wholly without sufficient reliable information upon which I would be able to determine your means overall, at home and abroad; thus I cannot specify the extent to which you are in a position to contribute to the costs of your defence, and contribute your plainly must. Hence my order, which requires the Special Investigations Unit to pursue the matter with the intention that all your assets are identified and a contribution up to, but not exceeding, the full costs of the defence is made in due course once the investigation is complete."
[12]That passage contains two inconsistencies. On the one hand it appears to make an order under regulation 13, which, as it will be appreciated, is an order for the whole of the costs and nothing but the costs; it required no investigation of the means of the defendant. The threat of the making of that order is intended to ensure that information is provided. But then the judge goes on to suggest that his intention is that the ultimate order would be one which would take into account the claimant's means -- in other words, that the matter was to be put over for an investigation of his means by the Special Investigations Unit which would result in the making of a final order dependent upon that inquiry. It would appear from the material we have that that was indeed defence counsel's understanding; and there is some indication that it may be that the Special Investigations Unit were under that misapprehension too.[13]The matter came back before the judge in May. At that stage part of the question which the judge had to consider was what the Special Investigations Unit concluded its task had been.[14]On 18 May 2007 counsel for the claimant indicated that he was uncertain as to the status of the order. The judge stated that, having looked at the transcript himself, he believed that he had made an order under regulation 13. He stated that that was on the basis of the defendant's failure to respond to the requests of the Special Investigations Unit. At page 6 of the transcript the judge said that he was bound to make an order because of that failure. At page 9 he put it in the following terms:
"I was not asking for a figure and I was not waiting for a figure. The terms of Regulation 13 are mandatory and, as I made it plain, it was my considered opinion that there had been a complete failure to respond to repeated requests for detailed information about the defendant's means and that was reflected in the letters of request which I saw, and indeed Mr Adams himself acknowledged those requests in a signed declaration on 29 September 2005." 19. "
As I said earlier, in saying that the defendant had the right to make representations as to any limit, I was referring to any rights he had to pursue the matter in the civil courts, in precisely the same way as a defendant who is subject to a confiscation order can apply to the High Court for a Certificate of [Inadequacy]." Counsel said that that meant he had been under the misapprehension. The judge said: 20. "Very well. If there was a misunderstanding, for which I was responsible, I am sorry about that, but it can be totally disregarded in the light of the clearest terms in which I made the Regulation 13 order, a mandatory order which I was obliged to make because of the circumstances that had arisen, namely due to the defendant failing entirely to respond to the proper requests, as mentioned, made of him by the Special Investigations Unit."[15]It is in those circumstances that the claimant asserts to this court that he was given no proper opportunity to argue as to whether or not an order under regulation 13 should indeed be made.[16]From the way in which matters have proceeded, it seems to me that there is irresistible force in that submission. The judge was not bound on 9 March to make an order under regulation 13. As the Practice Direction makes plain, he clearly had a discretion to adjourn the matter for further investigation. Leaving aside any question of the extent to which counsel on that occasion might have wished to argue the issue of whether or not the claimant had indeed complied with any requests made, nonetheless he should have been given an opportunity to argue as to whether or not an order under regulation 13 should have been made then or whether, pursuant to the Practice Direction, the matter should have been adjourned for the investigation which indeed was ordered by the judge.[17]Mr Weston, on behalf of the Legal Services Commission, valiantly sought to argue that the fact is that the claimant had not complied with his obligations under the regulations and that the judge was accordingly bound to make the order in question and that that order was accordingly inevitable. But for the reasons that I have given that was not the case. Had he concluded that the information had not been given by 9 March, the judge had the power to make an order pursuant to regulation 13 on that basis. But he had the discretion to deal with the matter at a later stage under regulation 12 and to make an order which was dependent upon the means of the claimant. Indeed certain passages in what was said by the judge in chambers on 9 March suggest that that is what he originally intended to do and that it was only when confronted by the order that was made during the hearing on 18 May that he appreciated the true and full consequence of the order that had been made. However, he was still clearly under the misapprehension that the order could be mitigated in the same way as a confiscation order can be by a Certificate of Inadequacy at a later stage. But that misunderstands the nature of the consequences of an order under regulation 13. That produces a civil debt in the full sum. There would be no question of it being mitigated other than by the intervention of bankruptcy or some other form of compounding with creditors.[18]In all those circumstances I do not see any alternative but to quash the order, as we have done, and to remit the matter for obvious reasons to a another judge of the Crown Court who will have full jurisdiction to consider what order should in fact be made in the light of all the circumstances of the case. It may or may not be that he or she will come to the conclusion that regulation 13 has been triggered, but that is not for us today. That is a matter which can properly be argued by the claimant's counsel and counsel for the Legal Services Commission. But for the reasons that I have sought to indicate, we came to the conclusion yesterday that the order must be quashed in the terms I have indicated. MR JUSTICE PENRY-DAVEY: I agree. MR JUSTICE FOSKETT: I also agree. MR COX: Did your Lordships deal with the costs of the application? LORD JUSTICE LATHAM: We granted them yesterday. I will add it to my judgment at an appropriate spot. MR WESTON: I agree, subject to taxation. May I raise one matter? LORD JUSTICE LATHAM: Of course. MR WESTON: Authority on these regulations is pretty scarce and any judgment will receive close attention. There is one matter that causes me concern. Your Lordship has indicated that there was no application for the order in the Blackfriars Crown Court. It is not the practice -- LORD JUSTICE LATHAM: When I said that I suddenly realised that I should have said "not that a formal application is necessary". MR WESTON: Thank you. LORD JUSTICE LATHAM: I shall simply say that. MR WESTON: I would not want it to be thought that the Legal Services Commission would send someone along on every occasion. LORD JUSTICE LATHAM: Absolutely. Mr Weston, as I said it, I realised I would have to come back to it at some point. I will tidy that up. MR WESTON: Thank you. 25. ______________________

order

(i) adjourn the making of the order; and(ii) order that any further information which is required should be provided." Regulation 13 provides: 7. "Where information is required under regulation 6, 7(2) or 12(b)(ii) and such information fails to be provided, a Recovery of Defence Costs Order shall .... be made for the full cost of the representation incurred under the representation order." Accordingly it follows that the order in the present case was one made by the judge imposing a liability in relation to the full costs of the representation incurred.