Lexi Holdings Plc v Luqman & Ors [2008] EWHC 151 (Ch)

[2008] EWHC 151 (Ch)IN THE HIGH COURT OF JUSTICECHANCERY DIVISIONCase No HC06C0407Venue Royal Courts of JusticeStrandLondonWC2A 2LLDate Tuesday, 15 th January 2008
Before
MR JUSTICE HENDERSON
Between
LEXI HOLDINGS PLCClaimantv
Between
SHAID LUQMAN AND OTHERSDefendant
MR P MARSHALL QC appeared for Claimant.MR IAN MACDONALD QC appeared on behalf of Mr SHAID LUQMAN, the First Defendant.
Transcribed from a tape recording by UbiqusOfficial Court Reporters,Cliffords Inn, Fetter Lane, London EC4A 1LDTelephone 0207 269 0370
JUDGMENT
[1]This is an application by Mr Luqman asking the court to give permission to the governor of any prison in which he serves his sentence for contempt of court for him to be granted release on temporary licence on the same terms as would apply if he were serving a sentence of imprisonment following conviction for a criminal offence.[2]The background to the matter is that Mr Luqman has been sentenced by me to a number of concurrent terms of imprisonment for contempt of court, including three terms of two years, all of which run from 2nd July 2007.[3]The contempt proceedings were brought against him by the administrators of Lexi Holdings Plc in the context of a massive claim of commercial fraud of which Mr Luqman was alleged to be the prime perpetrator.[4]The details are set out in two lengthy judgments, which I delivered in July and October last year and to which reference should be made for a fuller description of the case and the reasons which led me to find that most of the grounds relied upon by the claimant, in support of the contempt application, had been proved to my satisfaction to the criminal standard of proof.[5]I took the view that at least some of the contempts which had been proved were very serious ones, and the three terms of two years’ imprisonment which I imposed were the maximum that the court can impose for contempt of court in civil proceedings: see section 14(1) of the Contempt of Court Act 1981. However, the effect of the early release provisions in section 258 of the Criminal Justice Act 2003 is that a person committed to prison for contempt is to be released unconditionally after serving one half of the term for which he has been committed. Accordingly, Mr Luqman will be released, as matters now stand, on 2nd July 2008, although it is always open to him to make an application to the court before that date for immediate release on the basis that he has purged his contempt or, in exceptional circumstances, even if he has not purged his contempt: see RSC Order 52, Rule 8(1) and the judgment of Neuberger J, as he then was, in Shalson v Russo [2002] EWHC 399 (Ch) at paragraphs 12 to 20.[6]The present application was originally made in early December, on paper and without notice to the claimant, on the footing that the requirements for release on temporary licence are exclusively a matter for the prison authorities. The brief evidence in support of the application contained in Part C of the Application Notice referred to Prison Service Order 6300, paragraph 5.2 of which is headed “Prisoners in contempt of court” and reads as follows:
“Prisoners who are serving a term for contempt of court may not be granted temporary release except with the permission of the clerk of the court concerned”
. The reference to “the clerk of the court concerned” is obviously puzzling, where, as in the present case, the contemnor has been sentenced by the High Court, if only because there is no such officer as “the clerk of the High Court”. At least in the Chancery Division, judges of the High Court do sit with an associate and, without doing too much violence to the language of the paragraph, it might be possible to interpret the reference to “the clerk” as a reference to “the associate”. But, even then, one is left asking which associate and which sitting of the court is referred to.[7]Be that as it may, paragraph 5.2 is, in practice, interpreted by the Prison Service as requiring the consent of the sentencing judge himself, as was made clear in a letter dated 21st November 2007 from the authorities at HMP Kirkham, where Mr Luqman is currently serving his sentence, to his solicitors. If that view were correct, the question would then arise as to the basis upon which the sentencing judge is to grant or to withhold his consent. Would he be required to exercise a judicial discretion in the matter, or would the requirement be one of an essentially administrative nature?[8]In view of these uncertainties, I was not prepared to deal with the application on paper unless notice was given to the administrators and they consented. In the event, they requested an oral hearing and, on 11th December, I gave a direction for service of sequential skeleton arguments, first by Mr Luqman, in support of the appointment, and then by the claimant in response.[9]Skeleton arguments were duly served by leading counsel on both sides, Mr Ian MacDonald QC for Mr Luqman and Mr Philip Marshall QC for the claimant. I had originally hoped that it would be possible to arrange a hearing date before Christmas, but, unfortunately, that could not be done. Accordingly, I am now hearing the application on the earliest convenient date this term. I would express my gratitude to both counsel for their very helpful written arguments and their clear and concise oral submissions to me this morning.[10]It is necessary to begin by setting paragraph 5.2 of PSO 6300 in its statutory context. Once a civil contemnor has been sentenced to a term of imprisonment, he or she enters the prison system and is subjected to prison discipline, prison rules and prison law. Having imposed the sentence, the court has no further jurisdiction over the type of prison the contemnor goes to - for example whether open or closed - or over the terms upon which the sentence is served. These are exclusively matters for the prison authorities who are, ultimately, answerable to the Secretary of State.[11]Provision for temporary release of prisoners is made by Rule 9 of the Prison Rules 1999, themselves made in exercise of the enabling power conferred by section 47 of the Prison Act 1952. Rule 9 is headed “Temporary Release” and I need to read some of its provisions. “(1) The Secretary of State may, in accordance with the other provisions of this rule, release temporarily a prisoner to whom this rule applies. “(2) A prisoner may be released under this rule for any period or periods and subject to any conditions. “(3) A prisoner may only be released under this rule:(a) on compassionate grounds or for the purpose of receiving medical treatment;(b) to engage in employment or voluntary work;(c) to receive instruction or training which cannot reasonably be provided in the prison;(d) to enable him to participate in any proceedings before any court, tribunal or inquiry;(e) to enable him to consult with his legal adviser in circumstances where it is not reasonably practicable for the consultation to take place in the prison;(f) to assist any police officer in any enquiries;(g) to facilitate the prisoner’s transfer between prisons;(h) to assist him in maintaining family ties or in his transition from prison life to freedom. “(4) A prisoner shall not be released under this rule unless the Secretary of State is satisfied that there would not be an unacceptable risk of his committing offences whilst released or otherwise failing to comply with any condition upon which he is released. “(5) The Secretary of State shall not release under this rule a prisoner serving a sentence of imprisonment if, having regard to (a) the period or proportion of his sentence which the prisoner has served ... and (b) the frequency with which the prisoner has been granted temporary release under this rule, the Secretary of State is of the opinion that the release of the prisoner would be likely to undermine public confidence in the administration of justice”. (a) the period or proportion of his sentence which the prisoner has served ... and (b) the frequency with which the prisoner has been granted temporary release under this rule,[12]I can then pass over paragraphs (6) and (7) of Rule 9, but I shall, finally, quote paragraphs (8) and (9), which provide as follows:
“(8) A prisoner released under this rule may be recalled to prison at any time, whether the conditions of his release have been broken or not. “(9) This rule applies to prisoners other than persons committed in custody for trial or to be sentenced or otherwise dealt with before or by any Crown Court or remanded in custody by any court.”
[13]I would comment on the basis of these citations that it seems clear that temporary release is exclusively a matter for the Secretary of State, who will, in practice, act through the relevant prison governor. Rule 9(3) sets out an exhaustive list of the grounds upon which a prisoner may qualify for temporary release. The necessary degree of protection for the public is provided by paragraphs (4) and (5), together with the ability to recall a prisoner on licence at any time as provided for in paragraph (8).[14]I now turn to PSO 6300. Unlike the Prison Rules, this document does not have statutory force, but is a policy and guidance document issued by the Prison Service to assist in the implementation of Prison Rule 9.[15]The Statement of Purpose set out at the beginning of the document says that its purpose is to set out policies and required actions for the Prison Service, consolidating and modernising several existing guidance instructions which date back to 1995, and also to incorporate the provisions of the Criminal Justice Act 2003. It goes on to say that the procedures and policy applying to release on temporary licence are designed to ensure that suitable prisoners are released only for precisely defined and specific activities, which cannot be provided in penal establishments, and that the decision to grant a period of release on licence is for the Secretary of State to take, although, in practice, it will normally be taken on his behalf by the governor of the prison concerned.[16]It then states that PSO 6300 is intended to provide a more user-friendly guidance document than its predecessors.[17]I can now turn to chapter 5 of the document, which is headed “Classes of Prisoners Needing Special Consideration”. I have already quoted paragraph 5.2. Before that comes 5.1, which states that civil prisoners and fine defaulters may be considered for release on temporary licence, provided that they have been committed to custody for a sufficiently long period to qualify within the terms of the Order. I should say that there is no dispute that Mr Luqman has been sentenced for a sufficiently long period to qualify for consideration.[18]Against this background, the submissions of Mr MacDonald QC for Mr Luqman were short and simple. First, he submits that Rule 9 confers a discretion which is to be exercised by the Secretary of State or, in practice, the relevant prison governor on his behalf, and by nobody else. Accordingly, if paragraph 5.2 were to be read literally as requiring the permission of anybody else to be obtained, that would be an unlawful delegation of discretion. The paragraph must, therefore, be read, he submits, as requiring no more than a process of consultation with the sentencing court. Such consultation might properly take place, for example, to ensure that the proposed period of temporary release does not clash with a date when the attendance of the contemnor in court is required, or in order to draw the attention of the governor to matters which the court took into account when sentencing the contemnor and which might be relevant to the governor’s exercise of discretion under Rule 9.[19]Secondly, and following on from his first submission, Mr MacDonald said that, if the governor felt that consultation with the sentencing court would be useful, the request should come from him. It should not be left to the prisoner to make the application, nor should the application be a preliminary step that has to be taken before the application for temporary release can be considered by the governor.[20]Thirdly, Mr MacDonald submitted that I should not, myself, express any view on the merits or otherwise of the application for temporary release on compassionate grounds over a period of five days in early February, which he told me that Mr Luqman now wishes to make. That is a matter exclusively for the prison governor. Mr MacDonald did, however, submit that it would be helpful, both in the present case and generally, if I were to clarify the ambit and effect of paragraph 5.2 and explain what role, if any, the sentencing court has to play in the exercise.[21]On behalf of the claimant, Mr Marshall agreed with Mr MacDonald that the grant of permission for release on temporary licence is the responsibility of the Secretary of State alone and that Rule 9 of the Prison Rules sets out the parameters for the grant or refusal of such permission. There is, therefore, no scope for the sentencing court to be involved in the exercise. The remedy for any improper exercise of discretion by the Secretary of State or the prison governor on his behalf would be an application for judicial review.[22]By contrast, submitted Mr Marshall, the sentencing court does have jurisdiction to entertain an application by the contemnor to purge his contempt or to be released from prison on exceptional grounds. Statutory authority for applications of this nature is provided by Rules of Court currently, RSC Order 52, Rule 8(1), as incorporated into the CPR. The predecessor of this Rule was introduced in response to the decision of the Divisional Court in Attorney General v James [1962] 2 QB 637, where it was held that in a case of criminal contempt the period of imprisonment was for a fixed term and the court had no jurisdiction to interfere with the sentence after it had been imposed. The position with regard to civil contempt was similar, but, if anything, even more stringent, because it seems that the Royal Prerogative to pardon a contemnor was not available in cases of civil contempt, although it was available and was used in suitable cases in relation to criminal contempt (see Arlidge, Eady and Smith on Contempt, 3rd Edition, paragraphs 3-185 and 14-39).[23]Mr Marshall went on to submit that the present application was not and did not purport to be made under Order 52, Rule 8(1), which provided the only basis upon which the court could properly entertain an application by Mr Luqman. The court, therefore, had no jurisdiction to grant permission for his temporary release and the application should be dismissed.[24]With the assistance of these submissions, I shall now state my conclusions.[25]First, in agreement with counsel on both sides, I consider it to be clear that the decision whether or not to grant an application by a contemnor for temporary release from prison is a decision entrusted by Rule 9 of the Prison Rules to the Secretary of State alone. The decision will, in practice, normally be made on behalf of the Secretary of State by the prison governor. The considerations that are to be taken into account are set out in Rule 9. Guidance as to the application of Rule 9 may properly be given in a document, such as PSO 6300, but such guidance may not contradict Rule 9 or purport to authorise any delegation of the discretion conferred by Rule 9 to anybody other than the Secretary of State or his representative.[26]Secondly, it follows from the principle that I have stated that paragraph 5.2 of PSO 6300 is unlawful in so far as it purports to require, or is interpreted by the Prison Service as requiring, the permission of the sentencing judge to be obtained before a contempt prisoner may be granted temporary release. The permission which has to be obtained is that of the Secretary of State or his representative acting in accordance with Rule 9. The sentencing judge has performed his function once the sentence for contempt has been imposed. Entitlement to be considered for release on temporary licence is then a matter for the prison authorities and does not concern the sentencing judge in his judicial capacity. In my view, it would be entirely wrong for the sentencing judge to express any view as to how the discretion under Rule 9 should be exercised in any particular case.[27]Thirdly, I agree with Mr MacDonald that there is no objection, in principle, to the prison governor seeking confirmation from the administrative officers of the sentencing court that the proposed period of release does not clash with a date on which the attendance of the prisoner in court is required; for example, on an application under RSC Order 52, Rule 8 or on the hearing of an adjourned or further committal application. I also agree that the governor may properly ask to be provided with copies of any relevant judgment or sentencing remarks made by the judge to assist him in the exercise of his discretion under Rule 9. Whether consultation with the trial judge may in any circumstances go further than that is not a question on which I am prepared to express a view in the abstract. The important point is that there should be no delegation of the governor’s discretion and that the trial judge should not seek to interfere in any way with the exercise of that discretion.[28]Fourthly, paragraph 5.2, in its current form, is, in my judgment, not only difficult to understand but positively misleading in so far as it suggests that the permission of the court is a prerequisite to the grant of a temporary release to a contempt prisoner or that the court may have a judicial role of some sort to play in the process. In my view, the sooner the paragraph is consigned to the dustbin and redrafted the better.[29]Finally, I wish to express my concern that, perhaps because of the way in which paragraph 5.2 is drafted, contempt prisoners may, at present, be treated rather less favourably than other prisoners in relation to release on temporary licence. It appears from inquiries made of the Prison Service on behalf of the claimant that Rule 5.2 is interpreted and applied as meaning that contempt prisoners are, generally, not to be granted temporary release, but may obtain a temporary release licence if the court that committed them permits it. As I have attempted to explain, such an interpretation is, in my judgment, profoundly mistaken. There is no presumption against the grant of temporary release for contempt prisoners and they are entitled to have their applications for temporary release considered by the governor on the same basis and subject to the same criteria as applications by other convicted prisoners.[30]The wording of the Application Notice was settled before Mr MacDonald was instructed and it is common ground, I think, that it does not now accurately reflect the submissions which have been made to me on Mr Luqman’s behalf. In the circumstances, I propose to make no order on the present application, but I will direct that a copy of this judgment should be provided as soon as possible to the governor of HMP Kirkham. MR MARSHALL: We would wish to apply to your lordship in relation to costs in this matter. The Application Notice, as your lordship has observed in the judgment, is in a rather different form from the relief that was actually pursued today. The Application Notice asked for an order of the court to give permission to the governor of the prison. As your lordship has indicated, that is really a misconceived application, because the court has no function in that regard. In my learned friend’s skeleton of the 13th December, paragraph 16, I noticed that he also, in his concluding paragraph, again asked the court to give permission, through its clerk, to the prison. My lord, in those circumstances, I would respectfully suggest that our opposition to the application, as it was then framed, in our skeleton argument, our costs which were incurred as a result of the way in which this application was being pursued should be paid by Mr Luqman. If he had framed his application correctly, then it might well have been that this could have been dealt with in a less contentious manner and without, indeed, any need for us to have attended an oral hearing. But, because of the way in which it was framed, opposition and a more contentious hearing were inevitable. For those reasons, I would ask for our costs of the application. MR JUSTICE HENDERSON: Mr MacDonald, what do you say to that? MR MACDONALD: I would submit that this is not a case where any costs should be ordered either way. Paragraph 5.2 has quite clearly posed a difficult problem for the Prison Service and has required the kind of judgment which your lordship has just given in order to clarify matters. The assistance which has been given to the court, as your lordship expressed in the judgment, has really come to some extent equally from both sides in this matter. MR JUSTICE HENDERSON: Yes. MR MACDONALD: Therefore, it is not really a case where we have completely asked for the wrong thing or asked for the right thing and not got it. Our submission would simply be that it was a case in which it was necessary to seek clarification and that your lordship has given that clarification. Obviously, at the end of my skeleton, and indeed when the Notice was framed, if your lordship had held that what paragraph 5.2 meant was that it was necessary to get this court’s permission in the form of the court exercising some kind of discretion, then that would have been an appropriate request. Having considered the matter, I put my submissions the way I did this morning, because I thought that 5.2 was, as your Lordship has just said, a paragraph which should have been consigned to the dustbin. In that sense, perhaps, we have achieved as much as we had hoped for or could have hoped for from your lordship’s judgment. I think that it is one of those slightly rare cases where what your lordship’s judgment has done is to serve the public interest in an important way on this particular matter and I do not think that either side should have to pay costs. MR JUSTICE HENDERSON: Thank you. MR MARSHALL: My lord, can I just respond to that very briefly? MR JUSTICE HENDERSON: Yes. MR MARSHALL: My lord, the way that the application was framed was for a form of order that has simply not been granted. My learned friend says that it has been a process of seeking clarification. The correct and most appropriate way to have sought that clarification would probably have been for a declaration. That might have been one way in which to do it. If it had been a case of applying for a declaration, that the court has no jurisdiction in the matter and is not required to give its consent for the Secretary of State to exercise his powers under the Prison Rules, then we would not have been here, because there would not have been anything to argue about, from our point of view, anyway. The only reason we are here is because it was unclear what the nature of the application was and it would appear to have been an application for the court to give permission for the release of Mr Luqman, which was a misconceived application, which could only properly be pursued, if there was to be an application to the court, under Order 52, Rule 8, which, of course, was a contentious application, which we were entitled to oppose, particularly given the absence of any evidence in support of it. MR JUSTICE HENDERSON: Thank you. O R D E R[1]I now need to deal with the costs of the application, a question which I find not entirely easy. Mr Marshall submits with considerable force that the application as framed in the Application Notice of 3rd December has failed, because it asked for an order in a form which I have held to be inappropriate. He also points out that, even in Mr MacDonald’s skeleton argument, the court is still asked to grant permission, although in his oral submissions this morning Mr MacDonald resiled from that position and adopted the more moderate position which I have, effectively, accepted in my judgment.[2]So Mr Marshall says, on the basis of that application, framed in that particular way, that the claimant was fully entitled to object, to require an oral hearing and to turn up today in order to provide the court with reasons for not granting the relief sought.[3]On the other hand, Mr MacDonald submits that this is a case where I should make no order for costs. He points out that paragraph 5.2 poses a difficult problem for the Prison Service and that it was necessary to clarify it, not only in the public interest generally but also in the circumstances of this particular case. He says that, in practice, it is only because of the submissions that I have heard from both sides today that I have been able to undertake that function. He further submits that, in practice, Mr Luqman has obtained everything which he sought and, in particular, has established the negative proposition that the sentencing court has no role to play in his application for temporary release, although the prison authorities had taken the view, as expressed in the correspondence, that the consent of the sentencing court was a prerequisite. He says, in short, that clarification was needed, it has now been given and, effectively, the main beneficiary of the exercise is the public interest, but, in the circumstances of this case, he says that I should make no order as to costs.[4]As I have already indicated, I see some force in both ways of looking at the matter, but I think that, on the whole, Mr Marshall’s analysis is the more convincing, because the application as framed was not, I found, in appropriate terms and I think that the administrators were entitled to oppose it. And it is really only this morning that it has become finally clear how Mr Luqman’s case was being put in detail, if not in outline.[5]Nevertheless, I have undoubtedly benefited from the submissions from both sides and I think to a certain extent I should reflect that in the order for costs which I make. What I propose to do is to order the applicant to pay three quarters of the claimant’s costs, which I imagine will be the subject of detailed assessment if not agreed, unless you have a schedule with you. MR MARSHALL: I am not sure that I have a schedule. At the moment, it is probably a slightly academic exercise, because Mr Luqman is already, of course, subject to several cost orders. MR JUSTICE HENDERSON: He owes you quite a lot already.36. Your lordship has on previous occasions required disclosure of who has funded his applications or litigation. Your lordship may recall that an order of that type made at the end, I think, of the hearing ... MR JUSTICE HENDERSON: In October. MR MARSHALL: If not earlier, but certainly the one in October. Having obtained an order in our favour, we would ask your lordship to make a similar requirement now that we should be informed by Mr Luqman of who has actually funded this application, so we can at least consider whether or not any further application is to be made. I have got the Singh and The Observer case, if we need to look at it again. MR JUSTICE HENDERSON: I was obviously satisfied about the principle. In fact, it may not have been controversial. I suspect that Mr Elleray did not oppose it. MR MARSHALL: Indeed. If my learned friend wishes me to take your lordship through it, I will. MR MACDONALD: I wonder if the order of costs could stand with some kind of liberty to apply to the court if other difficulties should arise. MR MARSHALL: I am not sure what that means, really. MR JUSTICE HENDERSON: I think that it simply means that, if you wish to pursue that application, you would need to come back to me rather than making it as you do here and now. MR MARSHALL: My lord, I am very concerned not to waste money. We are in a situation here where we are before your lordship. On another occasion, we will incur further costs in relation to a point which has already been decided. MR JUSTICE HENDERSON: And it is not as though you are actually due back in front of me on anything else in the immediate future that I am aware of, although Mr Justice Briggs, no doubt, has plenty to keep him occupied. MR MARSHALL: Yes. All we want to know from Mr Luqman are the names and details of the person who has funded his application. MR JUSTICE HENDERSON: It seems to me, in principle, that that is a reasonable request, I think, Mr MacDonald, unless you have any objection in principle. MR MACDONALD: Yes, we will supply that. MR JUSTICE HENDERSON: In that case, I will make an order that Mr Luqman do supply details of the funding arrangements that have been made in relation to the costs of this application. MR MARSHALL: Perhaps, that could be done within 14 days in the form of a witness statement. MR JUSTICE HENDERSON: Yes, in the form of a witness statement within 14 days. MR MACDONALD: I am told that the 14 days may not be sufficient, only for one reason. Those instructing me have to be able to arrange a legal visit to the prison and that can sometimes take - I know from experience in dealing with other jurisdictions - over a week simply to get the visit sorted out. MR JUSTICE HENDERSON: Is there any problem about sending him a letter? As I understood it, under his current terms ... MR MACDONALD: No, he can have a letter and there can certainly be phone calls. MR JUSTICE HENDERSON: Or, indeed, a phone call, yes. MR MARSHALL: I do not mind if it is made by Mr Luqman or on his behalf by his solicitors. They must know where they are getting paid from, presumably. MR JUSTICE HENDERSON: I think that, on the whole, I will leave 14 days. Obviously, there is liberty to apply for an extension should that prove to be necessary. On the whole, I would have thought a telephone call could be made, probably, later today and I cannot at the moment see why the results of that should not be placed in a witness statement pretty quickly. MR MACDONALD: I can see the strength of that.37. Is there any direction you wish me to give in relation to getting a transcript of this? MR MARSHALL: I think that that is probably my learned friend’s responsibility rather than mine. It is his application. MR MACDONALD: Will there be a problem about that? MR JUSTICE HENDERSON: I presume not. I just wondered, if it would be helpful, I could indicate that it should be done with expedition. MR MACDONALD: That would be very helpful. MR JUSTICE HENDERSON: I am certainly prepared to indicate that a transcript should be provided on Mr Luqman’s request as a matter of urgency. MR MACDONALD: We would be very grateful for that order, thank you. JUDGE HENDERSON: Thank you again both very much.

Cited in 1 later judgment