Easter Term [2018] UKSC 23 On appeal from: [2015] NICA 31

JUDGMENT
R v McCool (Appellant) (Northern Ireland)
R v Harkin (Appellant) (Northern Ireland)
before
Lord Mance, Deputy President
Lord Kerr
Lord Reed
Lord Hughes
Lady Black
JUDGMENT GIVEN ON
2 May 2018
Heard on 23 November 2017
Appellant (McCool) Respondent
Barry Macdonald QC Liam McCollum QC
Dessie Hutton Rosemary Walsh
(Instructed by Madden &
Finucane
)
(Instructed by Public
Prosecution Service
)
Appellant (Harkin)
Fiona Doherty QC
Catherine Devlin
(Instructed by Madden &
Finucane)
Page 2
LORD KERR:
Introduction
1. Part 4 of the Proceeds of Crime Act 2002 deals with the circumstances where
benefits obtained by persons in Northern Ireland by their criminal activity can be
confiscated. By virtue of article 2 of and the Schedule to the Proceeds of Crime Act
2002 (Commencement No 5, Transitional Provisions, Savings and Amendment)
Order 2003, Part 4 of the Act came into force on 24 March 2003.
2. The first and central provision in Part 4 of the Act is section 156. That section
is declared in the statute to be concerned with the making of confiscation orders.
Subsection (1) of section 156 expressly requires that the Crown Court must proceed
in accordance with the terms of the section, where two conditions are satisfied. The
context for the way in which confiscation orders are to be applied for and obtained
is therefore set. That context, in my view, is defined by the consideration that it is
confined to confiscation orders which can be made under the Act.
The relevant statutory provisions
3. Subsections (2) and (3) of section 156 set out the two conditions
foreshadowed in subsection 1. The first of these is that the defendant against whom
a confiscation order is sought must either have been convicted of an offence or
offences before the Crown Court or have been committed to the Crown Court in
respect of an offence under section 218. There is an important rider to, or
explanation of, the latter of these conditions. It is to the effect that the committal
should have been with a view to a confiscation order being considered. This
reinforces the nature of the context in which these provisions fall to be considered.
The purpose of the committal is to deal with confiscation orders that might be made
under the 2002 Act.
4. The terms of section 218(1) again emphasise this essential aspect. Subsection
(1)(b) makes clear that committal should take place when the prosecutor asks the
court to commit the defendant to the Crown Court with a view to a confiscation
order being considered under section 156. Thus, under this provision, the court is
principally concerned with the making of a confiscation order under the 2002 Act.
The magistrates’ court must commit the defendant to the Crown Court if requested
to do so – section 218(2)(a). But it may also, under section 218(2)(b), commit him
in respect of other offences falling within subsection (3). Offences falling within the
Page 3
latter subsection are those of which the defendant has been convicted by the
magistrates’ or other court and where the magistrates’ court has the power to deal
with them.
5. Thus, offences in respect of which it is not proposed to seek a confiscation
order may be referred to the Crown Court. It is not difficult to deduce the reason for
that. It would not be unusual for a defendant to be charged with a number of
offences, only some of which would qualify for applications for a confiscation order.
For administrative convenience, and to avoid the possibility of over penalisation, it
may be considered prudent to commit the defendant to the Crown Court for a
comprehensive sentencing exercise.
6. The section 218(2) distinction between the two categories of case which the
magistrates’ court may commit to the Crown Court is significant: those offences
which are committed so that a confiscation order can be considered and other
offences in which the question of a confiscation order does not arise. The important
theme, in relation to this case, is that the first category relates to offences in respect
of which a confiscation order can be made under the Act. This reflects the general,
underlying purpose of the legislation, so far as concerns confiscation orders. It is
that, in the first and principal instance, the cases which are to be dealt with by the
Crown Court are those in respect of which a confiscation order under the 2002 Act
can be made. The provision that a second type of case (the other offences category)
can also be committed serves to demonstrate that the primary purpose of the Crown
Court in dealing with cases emanating from the magistrates’ court is to make
confiscation orders which can be made under the Act.
7. Returning to section 156, the second condition which forms part of the
enjoinder to the Crown Court to act is provided for in subsection (3). That condition
is fulfilled where the prosecutor asks the court to proceed under the section or the
court considers it is appropriate to do so. Both these alternatives are obviously
geared to the making of confiscation orders that can be made under the Act.
8. The theme of facilitating or requiring the making of confiscation orders under
the 2002 Act is again apparent from subsection (4) of section 156. The court is
required to consider whether the defendant has a criminal lifestyle by subsection
(4)(a) and, if it so decides, it must determine whether he has benefited from his
general criminal conduct under subsection (4)(b). If the court decides that the
defendant does not have a criminal lifestyle, it must consider whether he has
benefited from particular criminal conduct – section 156(4)(c). All of these
provisions have as their ultimate aim the ascertainment of whether a confiscation
order under the Act is appropriate.
Page 4
9. That basic objective is evident from the succeeding subsections (5) to (8) of
section 156. These do not require to be set out, but subsection (9) is material for
other reasons. It provides:
“References in this Part to the offence (or offences) concerned
are to the offence (or offences) mentioned in subsection (2).”
10. Drawing on the language used in this subsection and an allied provision,
section 236(1), it is argued that the phrase, “the offence (or offences) concerned” is
given a fixed and immutable meaning throughout the Act. (Section 236(1) provides
that a reference to the offence (or offences) concerned must be construed in
accordance with section 156(9)). Guidance as to that meaning is provided, it is
suggested, by article 4 of the Commencement Order which provides:
“Transitional provisions relating to confiscation orders –
Northern Ireland
4(1) Section 156 of the Act (making of confiscation order)
shall not have effect where the offence, or any of the offences,
mentioned in section 156(2) was committed before 24 March
2003.”
11. In particular, the use of the words, “any of the offences” in article 4 is said to
indicate that, if any of the offences on which a defendant has been committed predate 24 March 2003, none of the offences, even those which were committed after
that date can be treated as candidates for confiscation orders under the 2002 Act but
must be dealt with under legislation which applied on the date when the first offence
occurred.
12. To say that this would produce a wholly anomalous result is not an
exaggeration. This is particularly so since it is accepted by the appellants that, if the
prosecution elects not to have a defendant committed to the Crown Court on a charge
which might have warranted a confiscation order in respect of an offence committed
before March 2003, and has the defendant committed only on offences committed
after that date, it would be open to the Crown Court to make confiscation orders
under the 2002 Act in respect of those offences. Likewise, it is accepted that in a
case which starts in the Crown Court, if the prosecution chooses not to proceed on
a charge relating to an offence committed before March 2003, a confiscation order
may be made in relation to offences that occurred after 24 March 2003. In effect,
therefore, the appellants accept that the jurisdiction of the court to make confiscation
Page 5
orders under the 2002 Act could be controlled by tactical decisions by the
prosecution.
13. Ironically, the appellants object to what they portray as the election of the
prosecution to proceed under the 2002 Act and to ignore offences to which they had
pleaded guilty and which occurred before the relevant date, when pre- and post-24
March offences are proceeded with on the same indictment. They suggest that, in
those circumstances, the prosecution should not be permitted to choose only the
post-March offences on which to seek compensation orders. The respondent’s
riposte to this argument is, of course, that this is not a matter of election or choice.
It submits that only offences which can be dealt with under the Act qualify for
consideration as “confiscation offences”. It is therefore not a matter of tactical
decision by the prosecution but, rather, the consequence of the correct construction
of section 156.
14. The appellants counter this argument by pointing to, among other provisions,
section 224(3)(b) of the Act. As noted at para 8 above, the court is required to
consider whether the defendant has a criminal lifestyle by subsection (4)(a) of
section 156. If it decides that the defendant does not have a criminal lifestyle, it must
consider whether he has benefited from particular criminal conduct – section
156(4)(c). Section 224 deals with criminal conduct and benefit. Subsection (1)
provides:
“Criminal conduct is conduct which –
(a) constitutes an offence in Northern Ireland, or
(b) would constitute such an offence if it occurred in
Northern Ireland.”
15. A distinction is made between general criminal conduct and particular
criminal conduct. General criminal conduct is dealt with in subsection (2). Particular
criminal conduct is the species of criminality involved in this case and it is provided
for in subsection (3):
“(3) Particular criminal conduct of the defendant is all his
criminal conduct which falls within the following paragraphs –
(a) conduct which constitutes the offence or offences
concerned;
Page 6
(b) conduct which constitutes offences of which he
was convicted in the same proceedings as those in which
he was convicted of the offence or offences concerned;
(c) conduct which constitutes offences which the
court will be taking into consideration in deciding his
sentence for the offence or offences concerned.”
16. The appellants argue that if the rubric, “the offence or offences concerned”,
is given the interpretation advanced by the respondent, viz offences in respect of
which confiscation orders could be made, it is clear from the terms of section
224(3)(b) that the court considering the defendant’s particular criminal conduct must
have regard to offences which lie outside that definition, in other words, offences
that were committed before 24 March 2003. This, say the appellants, makes the
respondent’s interpretation unworkable.
17. Despite its initial attraction, I do not accept the appellants’ argument on this
point. The overarching consideration is that, plainly, it was Parliament’s intention
that offences which were committed before 24 March 2003 should not be included
in the section 156 consideration. It was also Parliament’s intention, in my opinion,
that all offences committed after that date which could generate confiscation orders
under the Act should be dealt with under section 156. It cannot have been intended
that a swathe of post-2003 offences should be removed from the Act’s purview
simply because the defendant was convicted of an associated offence before the
relevant date. If that was found to be the effect of the Act, it seems to me to be
beyond question that this was a wholly unintended effect.
18. In these circumstances, the proper approach to interpretation is to determine
whether it is possible to give effect to Parliament’s intention, notwithstanding the
apparent incongruity of section 224(3)(b). I will explain why this is the correct way
to interpret the 2002 Act in the next section of this judgment. In the meantime,
however, it appears to me that subsection (3)(b) is explicable on the basis that the
criminal conduct which the court may take into account under this provision is
conduct on which a confiscation order might have been made under the 2002 Act
but which has not been put forward by the prosecution as a potentially qualifying
offence.
19. That view is supported by a consideration of article 8 of the Commencement
Order in its amended form which deals with the approach that the court should take
in relation to the ascertainment of whether a defendant has a criminal lifestyle.
Although the present case does not involve that question, it is argued that the
amendments effected by the Order of 6 March 2003 provide an insight into the issue
Page 7
whether the 2002 Act can apply to offences committed after 24 March 2003, where
the defendant has also been convicted of offences committed before that date. First
it is necessary to set out the relevant provisions in section 223 of the Act. So far as
material, it provides:
“223 Criminal lifestyle
(1) A defendant has a criminal lifestyle if (and only if) the
following condition is satisfied.
(2) The condition is that the offence (or any of the offences)
concerned satisfies any of these tests –
(a) it is specified in Schedule 5;
(b) it constitutes conduct forming part of a course of
criminal activity;
(c) it is an offence committed over a period of at least
six months and the defendant has benefited from the
conduct which constitutes the offence.
(3) Conduct forms part of a course of criminal activity if the
defendant has benefited from the conduct and –
(a) in the proceedings in which he was convicted he
was convicted of three or more other offences, each of
three or more of them constituting conduct from which
he has benefited, or
(b) in the period of six years ending with the day
when those proceedings were started (or, if there is more
than one such day, the earliest day) he was convicted on
at least two separate occasions of an offence constituting
conduct from which he has benefited.”
Page 8
20. In order to set in context the argument in relation to article 8 in its original
and amended form, it is necessary to set out both. In its first incarnation, article 8
provided:
“Transitional provisions relating to criminal lifestyle –
Northern Ireland
8.(1) This article applies where the court is determining under
section 156(4)(a) of the Act whether the defendant has a
criminal lifestyle.
(2) The tests in section 223(2)(a) and (c) of the Act shall not
be satisfied where the offence (or any of the offences)
concerned was committed before 24 March 2003.
(3) In applying the rule in section 223(5) of the Act on the
calculation of relevant benefit for the purposes of section
223(2)(b) and (4) of the Act, the court must not take into
account benefit from conduct constituting an offence which
was committed before 24 March 2003.
(4) Conduct shall not form part of a course of criminal
activity under section 223(3)(a) of the Act where –
(a) the offence (or any of the offences) concerned; or
(b) any one of the three or more offences mentioned
in section 223(3)(a), was committed before 24 March
2003.
(5) Conduct shall form part of a course of criminal activity
under section 223(3)(b) of the Act, notwithstanding that any of
the offences of which the defendant was convicted on at least
two separate occasions in the period mentioned in section
223(3)(b) was committed before 24 March 2003.”
21. Two weeks after its promulgation on 20 February 2003, the Commencement
Order was amended in order to substitute (so far as concerns Northern Ireland) a
new article 8. It was in the following terms:
Page 9
“Transitional provisions relating to criminal lifestyle –
Northern Ireland
8.(1) This article applies where the court is determining under
section 156(4)(a) of the Act whether the defendant has a
criminal lifestyle.
(2) Conduct shall not form part of a course of criminal
activity under section 223(3)(a) of the Act where any of the
three or more offences mentioned in section 223(3)(a) was
committed before 24 March 2003.
(3) Where the court is applying the rule in section 223(5) of
the Act on the calculation of relevant benefit for the purposes
of determining whether or not the test in section 223(2)(b) of
the Act is satisfied by virtue of conduct forming part of a course
of criminal activity under section 223(3)(a) of the Act, the court
must not take into account benefit from conduct constituting an
offence mentioned in section 223(5)(c) of the Act which was
committed before 24 March 2003.
(4) Conduct shall form part of a course of criminal activity
under section 223(3)(b) of the Act, notwithstanding that any of
the offences of which the defendant was convicted on at least
two separate occasions in the period mentioned in section
223(3)(b) were committed before 24 March 2003.
(5) Where the court is applying the rule in section 223(5) of
the Act on the calculation of relevant benefit for the purposes
of determining whether or not the test in section 223(2)(b) of
the Act is satisfied by virtue of conduct forming part of a course
of criminal activity under section 223(3)(b) of the Act, the court
may take into account benefit from conduct constituting an
offence committed before 24 March 2003.
(6) Where the court is applying the rule in section 223(6) of
the Act on the calculation of relevant benefit for the purposes
of determining whether or not the test in section 223(2)(c) of
the Act is satisfied, the court must not take into account benefit
from conduct constituting an offence mentioned in section
Page 10
223(6)(b) of the Act which was committed before 24 March
2003.”
22. If the appellants’ argument that any proceedings which involved a pre-March
2003 offence would have to be brought under a statutory regime existing before the
2002 Act was correct, the new article 8(2) (and, for that matter, the original article
8(4)) would not be required. Article 8(3) is also significant. This requires that a
court, which is assessing benefit under section 223(5) for the purposes of
determining whether or not the test set out in section 223(2)(b) of the Act is satisfied,
must leave out of account benefit from an offence committed before 24 March 2003.
That stipulation again serves to illustrate the ending of the application of pre-March
2003 legislation for those purposes and the currency of the 2002 Act for offences
committed after that date.
The proper approach to interpretation
23. As I have said, it is my opinion that Parliament cannot have intended that a
potentially extremely wide range of post-2003 offences would be excluded from the
ambit of the 2002 Act. That would produce a result which would be plainly at odds
with the entire scheme of the legislation. It is, of course, possible to regard section
156 as an open and simple gateway and that, on a literal interpretation, every offence
of which the defendant is convicted, whether or not it preceded March 2003, must
be considered. But the absurd outcome which this would produce is a strong
indication against treating the section in that way.
24. In Bennion on Statutory Interpretation (6th ed) at section 312 of what the
author describes as the Code, the following statements are made:
“(1) The court seeks to avoid a construction that produces an
absurd result, since this is unlikely to have been intended by
Parliament. Here the courts give a very wide meaning to the
concept of ‘absurdity’, using it to include virtually any result
which is unworkable or impracticable, inconvenient, anomalous
or illogical, futile or pointless, artificial, or productive of a
disproportionate counter-mischief.
(2) In rare cases, there are overriding reasons for applying a
construction that produces an absurd result, for example where
it appears that Parliament really intended it or the literal
meaning is too strong.”
Page 11
25. Bennion suggests that the courts have been prepared to give the concept of
absurdity an expansive reach. In support of that view, he cites Lord Millett in R
(Edison First Power Ltd) v Central Valuation Officer [2003] UKHL 20, [2003] 4
All ER 209 at paras 116 and 117, where he said:
“The courts will presume that Parliament did not intend a
statute to have consequences which are objectionable or
undesirable; or absurd; or unworkable or impracticable; or
merely inconvenient; or anomalous or illogical; or futile or
pointless. But the strength of these presumptions depends on
the degree to which a particular construction produces an
unreasonable result. The more unreasonable a result, the less
likely it is that Parliament intended it …”
See also Lord Scott of Foscote’s approval of this dictum in Gumbs v Attorney
General of Anguilla [2009] UKPC 27, para 44.
26. The consequence of the 2002 Act being disapplied to a wide array of offences
committed after the operative date of 24 March 2003, and requiring these to be dealt
with under 1996 (or even, in the case of Ms McCool, 1990) legislation, is selfevidently objectionable and undesirable. It means that contemporary cases would
have to be dealt with according to standards and rules which have been replaced by
the 2002 Act and secondary legislation made on foot of it. I consider, therefore, that
if there is a workable interpretation of the legislation which allows post-2003
offences to be dealt with under the 2002 Act, even when those are associated with
pre-2003 offences, that interpretation should be adopted. For the reasons given
earlier, I think that such an interpretation is entirely feasible and that the 2002 Act
was correctly applied to the appellants’ cases. I will discuss the facts of the
appellants’ offences and the reasons that I consider that they were properly subject
to confiscation orders under the 2002 Act later in this judgment.
Ahmed, Martin, Simpson, Aslam and Stapleton
27. The Court of Appeal in this case considered a number of authorities in which
transitional provisions in similar terms to those involved in the present appeal were
examined. The first of these was R v Ahmed (Court of Appeal, Criminal Division,
unreported 8 February 2000). In that case, the appellant had pleaded guilty to three
offences of conspiracy to defraud by inflating invoices for goods supplied. The first
of those offences took place at a time between January 1995 and October 2006; the
second between January 1995 and June 2007; and the third between January 1997
and 30 November 2007. Section 16(5) of the Proceeds of Crime Act 1995, which
was the statute under which the confiscation orders were sought, provided:
Page 12
“Section 1 … shall not apply in the case of any proceedings
against any person where that person is convicted in those
proceedings of an offence which was committed before the
commencement of that section.”
The section came into force on 1 November 1995.
28. The Court of Appeal in Ahmed accepted that the first two conspiracy offences
occurred partly before and partly after the operative date. That circumstance had
been overlooked by the parties and the trial judge. If it had been adverted to, it would
have been obvious that the judge had a discretion whether to make the confiscation
order in the sum that he had decided upon. In the event, the Court of Appeal
concluded that this would not have made a difference to his decision. But the
appellants in the present case argue that the court in Ahmed effectively precluded
the application of the 1995 Act because of the earlier offences.
29. This is not what the court held, however. It was decided that the circumstance
that two of the three offences had occurred before the operative date meant that the
trial judge did indeed have a discretion to make a confiscation order for a lesser sum
than that ordered. But the court was not required to, and did not address, the question
whether the effect of section 16(5) of the 1995 Act was to preclude a confiscation
order under that legislation, if an application had been made solely in relation to the
offence which occurred after its coming into force.
30. In contrast, the respondent in the present case relies exclusively on offences
occurring after the coming into force of the 2002 Act. As the Court of Appeal in the
present case observed (in para 9 of its judgment), it was common case that where
the prosecution seeks a confiscation order in respect of an offence committed before
the date of coming into force of the relevant statute, the earlier legislation will apply.
The prosecution in the present case does not seek to rely on offences committed
before 24 March 2003. On the contrary, it bases its claim for a confiscation order on
offences committed after that date. Ahmed is therefore not in point in relation to the
appellants’ claim in this appeal.
31. In R v Martin [2001] EWCA Crim 2761; [2002] 2 Cr App R (S) 74, the
appellant had pleaded guilty to conspiring with others to evade the payment of duty
owed to HMRC. The evasion took place over the period between October 1994 and
January 1997. It was held that. since the dates of the conspiracy straddled the
commencement date of the 1995 Act, that legislation could not be applied to the
appellant’s case, notwithstanding that overt acts in the perpetration of the conspiracy
occurred after that date. The Court of Appeal held that Ahmed was directly in point
and that it was bound to follow the decision in that case.
Page 13
32. Again, however, the situation in Martin is different from that which obtains
in the present appeals. In Martin, the prosecution was relying on offences which had
occurred before the commencement date for the 1995 Act, in support of its
application for a confiscation order under that Act. In the present case, the
prosecution places no reliance on offences committed before the coming into force
of the 2002 Act. To the contrary, it says that such offences must be left strictly out
of account in deciding whether confiscation orders should be made. The Court of
Appeal in the present case considered that Martin “did not add a great deal on [the
issue arising] to Ahmed.” In my view, it adds nothing to that issue.
33. The next authority considered by the Court of Appeal in this case was R v
Simpson [2003] EWCA Crim 1499, (2004) QB 118. In that case the appellant had
pleaded guilty to offences involving VAT fraud. A confiscation order was made
under section 71 of the Criminal Justice Act 1988. The appellant appealed against
the confiscation order on the ground that the judge had no jurisdiction to make it
because the notice served on the court by the prosecution was not in the form
required by section 72(1) of the 1988 Act, and that, by virtue of section 16(5)(c) of
the Proceeds of Crime Act 1995, since one of the offences to which he had pleaded
guilty had been committed before 1 November 1995, the amendment to section 72,
made by section 1 of the 1995 Act, and providing that service of a notice was no
longer necessary, did not apply. He submitted that the application of section 16(5)
was not limited to offences on which the confiscation order was based. The
prosecution had not sought a confiscation order in respect of the sole charge of an
offence that had predated the coming into force of the 1995 Act.
34. It was common case that, if the appellant had not been convicted of the
offence which had been committed before the commencement date, the 1995 Act
would apply. But, because he had been convicted of that offence, it was argued that
that single conviction determined that the earlier legislation was the only enactment
under which a confiscation order could be sought. Lord Woolf CJ described this as
“an obviously … absurd result”. Before the Court of Appeal in the present case, Mr
Hutton, and before this court, Mr Macdonald QC, on behalf of the appellants,
challenged this description. It was, they said, in the nature of transitional provisions
that a line had to be drawn somewhere. The choice of that line might in some cases
seem arbitrary. That did not mean that the result produced was absurd.
35. While I accept that the imposition of a cut-off point will, in some instances,
produce a result which might appear anomalous and that anomaly should not be
equated with absurdity, for the reasons given earlier (in paras 23-26), I consider that
if a significant number of offences committed after 24 March 2003 were excluded
from the 2002 Act’s application, solely because of the happenstance that a defendant
had also been convicted of an offence committed before that date, this would indeed
be an absurd outcome.
Page 14
36. The Court of Appeal in Simpson considered that section 16(5) of the 1995
Act should be applied so that, after the word “offence” in that section, “there
appears, the words ‘in respect of which a confiscation order is or could be sought’”
– para 19. It is not clear whether the court proposed that these words be “read into
the section” or merely that they were intended to be clarificatory of the extent of its
application. Reading in words to a statute is problematic, of course. In Inco Europe
v First Choice Distribution (a firm) (2000) 1 WLR 586, 592, 115, Lord Nicholls of
Birkenhead said:
“It has long been established that the role of the courts in
construing legislation is not confined to resolving ambiguities
in statutory language. The court must be able to correct obvious
drafting errors. In suitable cases, in discharging its
interpretative function the court will add words, or omit words
or substitute words. Some notable instances are given in
Professor Sir Rupert Cross’ admirable opuscule, Statutory
Interpretation (3rd ed, 1995) pp 93-105. He comments (p 103):
‘In omitting or inserting words the judge is not really
engaged in a hypothetical reconstruction of the
intentions of the drafter or the legislature, but is simply
making as much sense as he can of the text of the
statutory provision read in its appropriate context and
within the limits of the judicial role.’
This power is confined to plain cases of drafting mistakes. The
courts are ever mindful that their constitutional role in this field
is interpretative. They must abstain from any course which
might have the appearance of judicial legislation. A statute is
expressed in language approved and enacted by the legislature.
So the courts exercise considerable caution before adding or
omitting or substituting words. Before interpreting a statute in
this way the court must be abundantly sure of three matters: (1)
the intended purpose of the statute or provision in question; (2)
that by inadvertence the draftsman and Parliament failed to
give effect to that purpose in the provision in question; and (3)
the substance of the provision Parliament would have made,
although not necessarily the precise words Parliament would
have used, had the error in the Bill been noticed. The third of
these conditions is of crucial importance. Otherwise any
attempt to determine the meaning of the enactment would cross
the boundary between construction and legislation (see per
Lord Diplock in Jones v Wrotham Park Settled Estates [1980]
AC 74 at 105-106).”
Page 15
37. For the reasons that I have given earlier, I consider that Parliament’s intention
in enacting the 2002 Act was that all offences committed after the date of its coming
into force should be subject to its regime, irrespective of whether they were
associated with offences committed before the commencement date. In light of the
experience in this case, it would perhaps have been preferable that the 2002 Act had
made it unmistakably clear that this was the intention. I am not sure, however, that
the failure to do so amounts to inadvertence on the part of the draftsman. But I am
entirely satisfied of “the substance of the provision Parliament would have made”
if, indeed, the provision qualifies for the description of drafting inadvertence. The
substance of the provision which Parliament intended was, as I have said, that all
offences committed after March 2003, whether or not they were associated with
offences that occurred before that date, should be dealt with under the 2002 Act.
38. Whatever of that, it appears to me that it is not necessary to read in words
such as those suggested in Simpson. The Act was intended to permit applications for
confiscation orders for offences committed after 24 March 2003 and to exclude from
its application offences which had taken place before that date. So understood, the
legislation does not require the “reading in” of further words. Provided a clear
segregation between pre- and post-March 2003 offences can be identified, the
application of the Act does not present a problem.
39. The next case dealt with by the Court of Appeal was R v Aslam [2004] EWCA
Crim 2801; (2005) 1 Cr App R (S) 116. In that case the appellant pleaded guilty to
a number of offences of dishonesty and asked for a number of others to be taken into
consideration. One of the offences to which he had pleaded guilty and one of those
which he had asked to be taken into consideration had occurred before the coming
into force of the 1995 Act. On this account, it was argued on his behalf that the court
had no jurisdiction to make a confiscation order under the 1995 legislation. That
argument was rejected. At para 11, Bean J said:
“The legislative purpose of section16(5), as it seems to us, was
to prevent the Crown from dividing convictions against a
defendant in one set of proceedings into pre- and postNovember 1, 1995 matters and then taking confiscation
proceedings (concurrently or consecutively) under both
statutes. So, if at the time the judge is asked to make a
confiscation order under the 1995 Act on a number of counts
there remains a pre-commencement count on which the Crown
is seeking, or could still seek, a confiscation order under the
1988 Act as amended in 1993, there is no jurisdiction to make
an order under the 1995 Act. However, if the precommencement count is one which could not be the basis of
confiscation proceedings, there is no obstacle to using the 1995
Act regime. Similarly, if (as in this case) the Crown has
Page 16
expressly abandoned any reliance on the pre-commencement
count for the purposes of a confiscation order, the fact that it
could have sought such an order in respect of that count seems
to us entirely immaterial. In such a case also, in our judgment,
there is no obstacle to using in the 1995 Act regime in respect
of the post-commencement counts. We do not understand
Simpson to require a contrary conclusion.” (Emphasis
supplied)
40. In Aslam, as in this case, the prosecution did not rely on a pre-commencement
offence in support of its application for a confiscation order. The court in that case
referred to the approach in Simpson of treating section 16(5) as if it read in the
manner described in para 36 above. It did not suggest (at least, not expressly) that
words should be read into the section. For the reasons that I have given, I do not
consider that this is necessary.
41. The “drawing of the line” by the commencement provision is readily
explicable for reasons quite different from the rationale suggested by the appellants
in the present case. It is, as Bean J said, to avoid the undesirable prospect of having
two sets of parallel or even consecutive proceedings under two different items of
legislation, with all the undesirable consequences that would entail. It is also to
provide a clear demarcation line between the effective application of the 2002 Act
and preceding legislation. It is entirely consonant with common sense and good
administration that the demarcation should be applied so that only those offences
which were committed after it came into force were caught by the 2002 Act. It is
also plainly sensible that the line should not be blurred by allowing the Act to apply
solely to those cases which happened not to be associated with a pre-March 2003
offence. It may be possible to construe the Act in that way but I am satisfied that
this is not how it was intended to apply.
42. The Court of Appeal in the present case also briefly considered the decision
in R v Stapleton (2009) 1 Cr App R (S) 38. The appellant pleaded guilty to six
offences of furnishing false information, contrary to the Theft Act 1968. She was
committed to the Crown Court for sentence under the 2002 Act, with a view to a
confiscation order being considered. She had made claims for housing benefit in the
amount of £15,946 between July 2002 and August 2006. A confiscation order was
made under the 2002 Act. On appeal, an argument was made on her behalf in broadly
similar terms to those presented by the appellants in this case. Two of the offences
had been committed before 24 March 2003.
43. It was argued that the straightforward reading of the transitional provisions
meant that there was no power to make an order under the 2002 Act. Reference was
made to R v Clarke [2008] UKHL 8; [2008] 1 WLR 338, where it was said that
Page 17
where the statutory provisions were clear in their terms, the court was bound to apply
them, even if the consequence was that a defendant is enabled to obtain what might
be regarded as an unmerited outcome. In Clarke Lord Bingham said (at para 17):
“Technicality is always distasteful when it appears to
contradict the merits of a case. But the duty of the court is to
apply the law, which is sometimes technical, and it may be
thought that if the state exercises its coercive power to put a
citizen on trial for serious crime a certain degree of formality
is not out of place.”
44. The Court of Appeal in Stapleton acknowledged the obvious authority of this
statement but nevertheless considered itself bound by Aslam. The court also
acknowledged that Aslam had been criticised by Professor Thomas in his
commentary on the case which appeared in 2005 Criminal Law Review 154. But,
Latham LJ, who delivered the judgment of the court, observed that it could not be
said that Aslam was plainly wrong. It had to be followed.
45. It is, I believe, possible to address somewhat more forthrightly than did the
court in Stapleton the argument that the technical interpretation of the relevant
provisions of the 2002 Act compel a result that the decision in Aslam was wrong.
The correct interpretation of those provisions must be informed by the predominant
purpose of the legislation. As I have said, its purpose was to provide a clear dividing
line between those offences which were caught by the Act and those which were
not. A sensible, workable segregation exists between offences committed before 24
March 2003 and those which occurred after that date. While it is theoretically
possible to construe the Act as placing an embargo on its application to post-March
2003 offences where they are associated with offences before that date, in no sense
is that the only possible construction. This is not a question of the technical
interpretation of the legislation compelling a particular result. Rather it is a matter
of construing the legislation in a perfectly legitimate way which keeps faith with its
plain and obvious purpose.
46. Professor Thomas’s disapproval of Aslam, and in a second commentary in
2008 Criminal Law Review 1, of Stapleton founds on two principal criticisms. The
first was that reading words into the statute was objectionable. For reasons given
earlier, I do not believe that it is at all clear that the Court of Appeal in Simpson did
read words into the provision but merely clarified how its interpretation should be
approached by the device of instancing words that would have made its meaning
clearer. In any event, if words were read into the statute, that was an unnecessary
exercise. Finally, it is not in the least apparent that the Court of Appeal in Aslam did
read words into the statute.
Page 18
47. The second major criticism made by Professor Thomas was that the court had
no discretion to ignore offences of which the defendant has been convicted. This
objection to the approach of the court in Aslam, Simpson and Stapleton was based
on his consideration of section 76(3) of the 2002 Act (the equivalent of section
224(3) in Part 4). He suggested that a defendant’s “particular criminal conduct [was]
all of the defendant’s criminal conduct which constitutes the offence or the offences
concerned, and conduct which constitutes offences of which he was convicted in the
same proceedings as those in which he was convicted of the offence or offences
concerned”. This is the same argument as was advanced by the appellants in the
present case and which, as I observed in para 17, I initially found attractive. For the
reasons that I there gave, however, I consider that it is ill-founded.
The facts of the present cases
48. At all material times the appellants, Ms McCool and Mr Harkin were man
and wife. Ms McCool was charged with and pleaded guilty to four offences of
obtaining benefit by fraud. These were of false accounting on 26 September 1990
for the purpose of obtaining income support as a single person, when in fact she was
married; making a false declaration to similar effect on 28 November 2003; making
the same false declaration on 20 October 2005 and again on 10 August 2010. One
of the offences therefore preceded the coming into force of the 2002 Act. The other
three did not. It was asserted that she had received an overpayment of £76,817.72 in
the period between 11 November 2003 and 17 May 2011 and it was this sum which
formed the basis of the application for the confiscation order. (It was adjusted to
£84,966.30 to take account of the increase in the value of money between the time
that the benefit was paid and the date of Ms McCool’s plea of guilty.)
49. The available amount to meet the confiscation order was deemed to be
£38.037, representing half the value of the estimated equity of a property which she
owned jointly with her husband, Mr Harkin, the second appellant. The Crown Court
judge held that Ms McCool had benefited in the amount of £84,996 and made a
confiscation order for a sum exceeding £38,000.
50. In the case of Mr Harkin, he pleaded guilty to making a false declaration on
16 December 1999 in relation to an application for income support, representing that
he was single when he was in fact married to Ms McCool. He pleaded guilty to other
offences, two of which were similar to the first offence in December 1999 and the
remainder were in relation to housing benefit. In all of these cases, the offences were
committed after the coming into force of the 2003 Act. The total amount of the
benefits received was said to be £53,937.12, after making adjustment for the changes
in the value of money. A confiscation order was made in his case in the same sum
as Ms McCool’s.
Page 19
51. On appeal to the Court of Appeal, the appellants argued, as they have before
this court, that the Crown Court did not have jurisdiction to make the orders which
it did. They also argued, however, that the Crown Court should have applied
Regulation 13 of the Social Security (Payments on Account, Overpayments and
Recovery) Regulations (Northern Ireland) to reduce the amount of recoverable
benefit by deducting the amounts to which the appellants would have been entitled,
had they made honest and accurate applications for benefit. The Court of Appeal
acceded to the latter argument and reduced the sums to be recovered by way of
confiscation to £5,531.95 in the case of Ms McCool and £33,624 in the case of Mr
Harkin. That order has not been challenged by the respondent on this appeal.
52. An application for leave to appeal to this court was refused by the Court of
Appeal but the court certified the following question as giving rise to a point of law
of public general importance:
“Can a confiscation order under section 156 of the Proceeds of
Crime Act 2002 be made by a Crown Court in circumstances
where a defendant is convicted in proceedings before that
Crown Court of an offence or offences which were committed
before 24 March 2003, given the stipulations of the
commencement, transitional and saving provisions set out in
articles 2, 4 and 11 of the Proceeds of Crime Act 2002
(Commencement No 5, Transitional Provisions, Savings and
Amendment) Order 2003?”
53. Both appellants were convicted of offences which, in all instances save one
in each case, were committed after the coming into force of the 2002 Act. I have
concluded that the offences committed after 24 March 2003 had to be dealt with
under the 2002 Act by the Crown Court considering whether to make confiscation
orders against the appellants. I have also decided that the court was obliged to leave
out of account offences which occurred before that date. I would therefore answer
the certified question in the affirmative.
Conclusion
54. I would dismiss the appeal.
Page 20
Postscript
55. I agree with what Lord Hughes has had to say about the power of the Court
of Appeal to substitute an order under a different regime – see paras 108 et seq of
his judgment.
LORD HUGHES: (with whom Lady Black agrees)
Overview
56. Not for the first time, this case concerns a technical issue relating to the
construction of confiscation legislation. The two defendants, who have at all
material times been married to one another, were both convicted of a series of
offences of making dishonest claims for State benefits by pretending that they were
single people when they were not and, in the case of Harkin, by claiming housing
benefit for a house when he was living with Ms McCool at a different one. There is
and was no significant dispute as to the total amounts which they thereby obtained
over a period of some years. There is and was no serious dispute that confiscation
orders were appropriate, nor that substantial assets were available, from which such
orders could be met: the available amount was accepted to be £38,037 each. The
only issue of substance in relation to the proper sum to be confiscated arose from
the contention that the amount of the order ought to be reduced, in accordance with
R v Waya [2012] UKSC 51; [2013] 1 AC 294 from the gross payments received (the
benefit for the purposes of the legislation) to the amount of overpayment. The Court
of Appeal accepted that contention and reduced the confiscation orders accordingly.
The Crown accepts the reduction, and there thus remains no dispute as to the sums.
But it is said on behalf of both defendants that the orders were made under the wrong
set of confiscation legislation and must for that reason be quashed.
57. The reason why this is said relates to the commencement dates of the
confiscation legislation and the transitional provisions effecting the change from one
set to another. The question here arises in a Northern Ireland case, but the legislation
is substantially the same in England and Wales, and indeed very largely in Scotland.
For convenience, the equivalent England and Wales provisions, where identical, are
noted in brackets.
58. By way of very broad summary, confiscation legislation in the UK began
with the Drug Trafficking Offences Act 1986 (“DTOA 1986”). Shortly afterwards,
the Criminal Justice Act 1988 (“CJA 1988”) introduced similar provisions for nondrug offending. Both statutes responded to international co-operation, and treaty
obligations in both fields arose at about the same time. Initially the regime affecting
Page 21
drug offending was more severe than that applying to other offences. The DTOA
1986 was replaced by the Drug Trafficking Act 1994 (“DTA 1994”). Meanwhile by
the Criminal Justice Act 1993 (“CJA 1993”) and the Proceeds of Crime Act 1995
(“POCA 1995”) a number of amendments were made. Three which affected nondrugs offending may here be relevant: (1) the court’s discretion as to the amount of
the order was removed and replaced by an obligation (in all but immaterial
exceptional situations) to make an order in the sum of the benefit obtained, capped
by the available (or realisable) amount; (2) the concept of a minimum benefit
disappeared, and (3) provision was introduced for including benefit from past
offending where there was a course of criminal conduct. Those alterations brought
the non-drug regime closer into line with what the drug regime had always been.
There was also in the past separate legislation for confiscation in relation to terrorist
offences, which it is not necessary to consider here. Then, in 2002 the legislation
was re-worked and consolidated in the Proceeds of Crime Act 2002 (“POCA 2002”),
which assimilates drug and other offending. This Act contains separate but similar
sections for, respectively, England and Wales, Scotland and Northern Ireland.
59. The Northern Ireland legislation relating to confiscation for both kinds of
offence has been:
(i) The Criminal Justice (Confiscation)(Northern Ireland) Order 1990,
1990 No 2588 (NI 17) (“the 1990 Order”); this dealt with both drugs and
other offences;
(ii) The Proceeds of Crime (Northern Ireland) Order 1996 (SI 1996/1299)
(NI 9) (“the 1996 Order”); this essentially mirrored the changes made in
England and Wales in 1993, 1994 and 1995 and came into force on 25 August
1996; and
(iii) The Proceeds of Crime Act 2002; the chiefly relevant provisions of
this Act came into force for Northern Ireland (as also for England and Wales)
on 24 March 2003.
The issue
60. Ms McCool’s indictment, to which she pleaded guilty, charged four counts.
The first related to 26 September 1990. The remaining three related to November
2003, October 2005 and August 2010. Those counts reflected a continuing course
of repeated false representations made between 1990 and 2010.
Page 22
61. Harkin’s indictment, to which he also pleaded guilty, contained counts
relating to offences committed in December 1999, October 2005, April 2006, May
2007 and August 2009. Those counts reflected a course of repeated false claims
made between 1997 and 2009 (income support) and between March 2003 and 2011
(housing benefit).
62. When calculating the benefit for the purpose of the confiscation proceedings,
the prosecution disclaimed reliance, in both cases, on any offending before the
commencement of POCA 2002 in March 2003. In Ms McCool’s case, her benefit
was calculated from the date of her second count (28 November 2003). The gross
sums obtained were £76,817.72; adjusted for inflation this became £84,966.30. The
overpayments however, were £5531.95. In Harkin’s case, his benefit was similarly
calculated. As to income support, benefit was calculated by the prosecution as
running from 20 October 2005 to 18 November 2009, and as to housing benefit from
3 April 2006 to 27 March 2011. In each case the start date for the calculation of
benefit was the date of the earliest count on the indictment which related to a time
after the commencement of POCA 2002. The gross payments received, adjusted for
inflation, were £53,937.12. The sum overpaid was (similarly adjusted) £33,624. It
follows that these net benefit figures were significantly smaller than the total
overpayments dishonestly obtained from 1990 onwards in the case of Ms McCool
and from 1999 onwards in the case of Harkin. They were also, but not by nearly so
much, somewhat smaller than the total overpayments obtained after the
commencement of POCA 2002.
63. The confiscation orders were made under POCA 2002. The appellants
contend that there was no power to make orders under that Act. They say that any
order could only be made under the relevant predecessor legislation, thus the 1990
Order for Ms McCool and the 1996 Order for Harkin. This contention is founded on
the terms of section 156 of POCA 2002 and of the relevant Commencement Order.
64. Section 156 [section 6 for England and Wales] is the foundation of the power
to make a confiscation order. So far as relevant, it says:
“156 Making of order
(1) The Crown Court must proceed under this
section if the following two conditions are satisfied.
(2) The first condition is that a defendant falls within
either of the following paragraphs –
Page 23
(a) he is convicted of an offence or offences
in proceedings before the Crown Court;
(b) he is committed to the Crown Court in
respect of an offence or offences under section
218 below (committal with a view to a
confiscation order being considered).
(3) The second condition is that –
(a) the prosecutor asks the court to proceed
under this section, or
(b) the court believes it is appropriate for it to
do so.
(4) The court must proceed as follows –
(a) it must decide whether the defendant has
a criminal lifestyle;
(b) if it decides that he has a criminal lifestyle
it must decide whether he has benefited from his
general criminal conduct;
(c) if it decides that he does not have a
criminal lifestyle it must decide whether he has
benefited from his particular criminal conduct.
(5) If the court decides under subsection (4)(b) or (c)
that the defendant has benefited from the conduct
referred to it must –
(a) decide the recoverable amount, and
(b) make an order (a confiscation order)
requiring him to pay that amount.
Page 24
(6) [exception where victim brings civil
proceedings].
(7) The court must decide any question arising under
subsection (4) or (5) on a balance of probabilities.
(8) [provision for absconding defendant].
(9) References in this Part to the offence (or
offences) concerned are to the offence (or offences)
mentioned in subsection (2).”
65. The relevant Commencement Order is the Proceeds of Crime Act 2002
(Commencement No 5, Transitional Provisions, Savings and Amendment) Order
2003 (SI 2003/333) (C20) (“the Commencement Order”). So far as material, it says
in article 4(1) [article 3(1) E & W]:
“4.(1) Section 156 of the Act (making of confiscation order)
shall not have effect where the offence, or any of the offences,
mentioned in section 156(2) was committed before 24 March
2003.”
And by article 11, [article 10 E & W] it preserves the predecessor legislation for
cases where article 4 precludes use of POCA 2002:
“11. Where, under article 4 or 6, a provision of the Act does
not have effect, the following provisions shall continue to have
effect –

(e) Articles 3 to 40 of, and paragraph 18 of Schedule
3 to, the Proceeds of Crime (Northern Ireland) Order
1996.”
66. It follows that the issue in this case relates to which offences are contemplated
by section 156(2) and thus referred to in article 4(1). Is it, in each case, any offence
Page 25
for which the defendant is before the court, or is it any such offence which is relied
upon by the Crown (or the court) as justifying confiscation proceedings?
Previous authority
67. A similar problem arose (in England and Wales) in relation to the transition
from the pre-1995 legislation to POCA 1995. Section 16(5) of that latter Act
contained a provision very similar to the present article 4(1). It provided:
“Section 1 … shall not apply in the case of any proceedings
against any person where that person is convicted in those
proceedings of an offence which was committed before the
commencement of that section.”
68. As Lord Kerr explains, the Court of Appeal (Criminal Division) confronted
this question in R v Simpson, R v Aslam and R v Stapleton. It concluded that the
“offence(s)” referred to were ones which were relied upon for the making of a
confiscation order, that is to say those which the Crown was seeking, or could still
seek, to bring into account for confiscation purposes. It followed that if when it came
to confiscation the Crown disclaimed reliance on a pre-commencement count and
brought into account only post-commencement offences, the new Act applied. I
agree with Lord Kerr that it is not necessary to read words into the new statute to
achieve this. Nor, pace the Court of Appeal (Criminal Division) in R v Simpson, is
it necessary to label the alternative construction absurd. The decisions were that the
new statutes applied where the relevant offences, that is to say those relied on for
confiscation purposes, post-dated the commencement date. There is no doubt that
these decisions have consistently been followed as a matter of practice since, as is
shown by the considered decision of the Crown in the present case to disclaim
reliance on the counts which pre-dated March 2003. The decisions have also
consistently been applied in the Court of Appeal (Criminal Division); see for
example R v Aniakor [2014] EWCA Crim 2171. The present appellants contend that
this established line of authority, and the practice based upon it, are wrong. Of
course, if this construction of the statutes, despite such general acceptance, is not
permissible, then it must follow that however technical the objection raised, the
orders made in the present case cannot stand.
The appellants’ argument
69. The argument for the appellants rests principally upon the fact that there are
some differences between the POCA 2002 regime and the earlier regimes which it
replaced. The confiscation legislation is, it is rightly said, penal legislation.
Page 26
Accordingly, it is said that it ought to be construed strictly in favour of defendants
to whom its provisions are applied. It is unjust, it is said, to permit the Crown by a
process essentially of election, to choose which regime is to apply to a defendant.
And it is contended that the wording of article 4(1) [article 3(1) E & W] of the
Commencement Order is clear and can only sensibly mean that where any offence
on the indictment dates back before the commencement date of POCA 2002, the old
regime applies and not the new.
Differences between the regimes
70. The appellants helpfully assembled a list of differences. By no means all of
them could even arguably affect them, but their case is that all of them are relevant
to deciding the principle whether POCA 2002 can be applied to those who are before
the Crown Court for offences which include pre-commencement offences, even if
the Crown disclaims reliance on the earlier offence(s) for the purposes of
confiscation. The identified differences are addressed serially below.
71. First, the pre-1995 non-drug regimes provided for confiscation to be available
only where the benefit exceeded a minimum amount (set at all material times at
£10,000) and moreover made the same sum the minimum amount for which a
confiscation order could be made: article 4(1) of the 1990 Order [the unamended
section 71(2)(b)(ii) CJA 1988 for E & W]. Allied to this rule, the pre-1995 non-drug
regimes required the Crown to serve notice to the effect that an order in at least the
minimum amount would be possible: article 4(6) of the 1990 Order [the unamended
section 72(1) CJA 1988 for E & W]. This concept of a minimum amount never
applied to drugs offending, and disappeared from the legislation after POCA 1995
and the 1996 Order.
72. Second, the pre-1995 non-drug regimes vested in the court a discretion as to
the amount of a confiscation order. The court was given the power to make such
order as it thought fit, subject to the ceiling of the assets available/realisable: Article
4(1) of the 1990 Order [the unamended section 71(1) CJA 1988 for E & W]. Since
1995/1996 the court has been required in all but immaterial cases to make an order
in the amount of the benefit which the defendant has obtained, subject again to the
ceiling of available/realisable assets. There was never any discretion in the drug
regimes.
73. Third, for the non-drug regimes, there was until the 1995/96 changes no
provision for taking into account benefit obtained from offences other than those
before the court, either as charges or as offences taken into consideration. Since then,
benefit from other offences has been taken into account in prescribed circumstances.
The label attached to the prescribed circumstances was, until POCA 2002, “a course
Page 27
of criminal conduct”: article 9 of the 1996 Order [new section 72AA(1) CJA 1988
inserted by POCA 1995 for E & W]. Since POCA 2002 it has been “criminal
lifestyle”: POCA 2002 section 156(4) and 223 [sections 6(4) and 75 for E & W].
The conditions for attracting these extended provisions have not remained identical,
but are very similar. The post 1995/96 conditions were satisfied if the defendant was
now, or had been in the preceding six years, convicted of one other offence: article
9(1) of the 1996 Order [new section 72AA(1) CJA 1988 for E & W]. Under POCA
2002 the defendant falls within the lifestyle provisions if there are either three
additional convictions (four in all) in the present proceedings, or two previous
convictions in the preceding six years: section 223(3) POCA 2002 [section 75(3) for
E & W]. Moreover, the course of criminal activity lifestyle rules of POCA 2002 do
not apply unless the total benefit is £5,000 or more: section 223(4) [section 75(4) E
& W]. In these respects the qualifying conditions are narrower under POCA 2002
than under the previous 1995/96 regime. But under POCA 2002 a defendant is also
to be treated as a lifestyle offender if he is convicted of certain specific offences, or
(subject to the £5,000 minimum) of an offence committed over a period of at least
six months: section 223(2) [section 75(2) for E & W]. The objective seems sensibly
to have been to identify more reliably those whose offending spanned a period so as
to raise the realistic possibility that their lifestyle was to a significant extent
supported by crime.
74. The effect of the course of conduct and lifestyle conditions being satisfied is,
in each case, to make available to the court assumptions as to benefit, each
applicable unless either the defendant disproves it on the balance of probabilities, or
there would be a serious risk of injustice if it were made. The assumptions are the
same under both regimes, although the first has been split into two in POCA 2002:
compare section 160 POCA 2002 [section 10 E & W] with article 9, 1996 Order
[new section 72AA(4) CJA 1988 E & W]. The chief assumptions are that any
property held by the defendant over the preceding six years, and any expenditure
made by him over the same period, are the product of criminal offences, so that they
count towards his benefit. Plainly the objective under both regimes is to cast the
onus onto a lifestyle offender to demonstrate, on the balance of probabilities, that
his assets have been legitimate. There is one difference between the 1995/96 regime
and the POCA 2002 regime, in that the assumptions, which were discretionary under
the former, have become mandatory under the latter. In the case of drug offending,
the assumptions were always available, and the confiscation order took into account
all benefit from drug offending whenever it occurred, before or after the
inauguration of the confiscation legislation: see eg DTOA sections 1(3), 2(1)(a) and
2(2).
75. Fourth, the rules as to postponement of confiscation, which were the subject
of a considerable amount of litigation until the House of Lords held in R v Soneji
[2005] UKHL 49; [2006] 1 AC 340 and R v Knights [2005] UKHL 50; [2006] 1 AC
368 that failure strictly to comply with them did not usually render an order invalid,
Page 28
have been modified from time to time. Under the 1990 Order the maximum
postponement was six months: article 7. Later that was revised to six months absent
exceptional circumstances: article 11 of the 1996 Order [section 72A(3) CJA 1988
inserted by section 28 CJA 1993 E & W]. Under POCA 2002 postponement can be
for up to a maximum of two years, and beyond in event of exceptional
circumstances: section 164 [section 14 E & W].
76. Fifth, all the regimes have provided for the calculation of the “ceiling”
amount of the defendant’s available or realisable assets to include gifts which he has
made. Under the pre-POCA 2002 non-drug regimes, gifts which were thus to be
included were those made by the defendant after the commission of the predicate
offence which the court thought it appropriate to take into account: article 3(10) of
the 1990 Order and article 7(1)(a) of the 1996 Order [section 74(10) unamended
CJA 1988 E & W]. Under POCA 2002 the same rule for what are now termed
“tainted gifts” applies by section 225(5) [section 77(5) E & W], but the expression
is widened in lifestyle cases, logically enough, to include gifts either made during
the six year period or which were of property obtained via criminal conduct: section
225(2)(3) [section 77(2)(3) E & W]. In both cases, if gifts qualify as tainted they are
now to be added into available assets, without a further requirement that the court
conclude it appropriate to do so.
77. Sixth, from time to time the provisions relating to variation of confiscation
orders have been revisited and revised. It is enough to record that the 1995/96
regimes somewhat extended the power to vary an order upwards, when compared
with the pre-1995 regime, in the event of fresh evidence becoming available. POCA
2002 provides for additional specific situations in which there may be variation on
the basis of fresh evidence; they include cases where the Crown Court made no
confiscation order at all, either because it was not invited to do so, or where at that
time the evidence did not show any benefit.
78. Seventh, there are differences in the means of enforcement of confiscation
orders. It is unnecessary to set them out. Essentially the system of enforcement has
remained the same throughout. Confiscation orders are enforced by the magistrates
as if they were Crown Court fines: see R v Guraj [2016] UKSC 65. Additional
mechanisms have however been added from time to time, such as widening the
range of officials who may exercise powers of seizure, extending the powers of
management receivers appointed under restraint orders, and enlarging the ability to
enforce as if civil debts.
79. The appellants identify a particular aspect of enforcement. When making a
confiscation order the court has always had power to stipulate the time within which
payment must be made. In Northern Ireland the power derived until POCA 2002
from the general provisions for fines, found in section 35(1) of the Criminal Justice
Page 29
Act (NI) 1954, which permitted extension of the period from time to time. Under
POCA 2002, section 161(5) [section 11(5) E & W] time cannot be extended beyond
12 months. The charging of interest depends on the time given to pay, because it
runs from default. It follows that in this respect POCA 2002 is, at least theoretically,
more severe than the previous regime, under which it was at any rate legally possible
for time to be extended beyond 12 months.
80. Eighth, the early legislation placed confiscation jurisdiction in the court of
trial, whether the Crown Court or the Magistrates’ Court. POCA 2002 restricts it to
the Crown Court and therefore includes provision for the defendant who is convicted
of a benefit-generating offence before the magistrates to be committed to the Crown
Court for confiscation to be considered: section 218 [section 70 E & W]. This power
of committal is separate from, and wider than, the ordinary power which magistrates
have in England and Wales to commit a defendant for sentence where he is
convicted of an offence triable either way. It extends to purely summary offences,
and is a power of committal available only where confiscation is a possibility. The
terms of the provisions for committal are relevant context on the construction
question and are considered more fully below.
81. Ninth, the earlier legislation made no provision for a right of appeal by the
Crown. The defendant’s right of appeal was secured from the outset because a
confiscation order was, although not strictly part of the sentence, an “order … made
when dealing with an offender” and thus appealable as if a sentence under section
30 Criminal Appeal Act (Northern Ireland) 1980 [section 50 Criminal Appeal Act
1968 E & W]: see R v Johnson [1991] 2 QB 249. This was later reinforced by
inserting specific provision in those statutes including a confiscation order in the
definition of sentence, such as section 30(3)(a) of the Criminal Appeal Act (Northern
Ireland) 1980 [section 50(1)(d) Criminal Appeal Act 1968 E & W]. There is of
course no general right of appeal by the Crown against sentence (although there
existed the power to refer the case under section 36 of the Criminal Justice Act 1988
as unduly lenient). A general right in the Crown to challenge either a decision not to
make a confiscation order, or the amount of it if made, had to be created separately
and is found in section 181-182 of POCA 2002 [sections 31-32 E & W].
82. The detail and technicality of the confiscation legislation, sometimes
necessary and sometimes not, is such that changes from time to time of the kind set
out above are to be expected. The question which matters for present purposes is
whether these differences mean that the Simpson/Aslam construction of POCA 2002
is thereby rendered impermissible. That in turn involves asking whether that
construction would or might result in any unfairness to defendants. If it would, or
might, then the principle that penal statutes must be construed strictly in favour of
those penalised would carry considerable weight.
Page 30
83. There would be unfairness, and a breach of article 7 ECHR, if this
construction had the effect of applying retrospectively to defendants a regime which
was not in force at the time their offences were committed. But there is no question
of this retrospective operation of POCA 2002 if it is applied only to confiscation
proceedings depending on offences committed after its commencement. If the
Crown disclaims reliance, for confiscation purposes, on any pre-commencement
offence, then retrospective operation simply does not arise. The principal rationale
of the impermissibility of retrospective operation of a penal statute is that a citizen
is entitled to know, at the time he decides how to behave, what the legal
consequences of what he does may be. If now these appellants, or other defendants
like them, were to be visited with consequences by way of confiscation of a kind
different from what was available to the Crown when they committed the offence(s)
attracting those consequences, there would be impermissible retrospective operation
of the criminal law. But these appellants have committed offences since the
commencement of POCA 2002. The consequences which have been visited upon
them are precisely the same as would have been applied to anyone else who
committed such offences after that commencement. It is true that both of them have
also committed pre-commencement offences. But the orders made owe nothing to
those offences and are precisely the same as would have followed if the earlier
offences had never occurred. There is nothing unfair in saying to Ms McCool that
she should bear the confiscation consequences of her post-March 2003 offences, as
required by POCA 2002, unless those consequences differ in some way from what
they would have been if she had not committed her earlier offences. They do not.
The same is true of Harkin.
84. There would also be likely to be a real risk of unfairness if a defendant faced
the prospect of two different confiscation regimes being applied to him, because so
much of the ground covered by each regime is the same. This was the consideration
underlined by the Court of Appeal, Criminal Division, in Aslam [2005] 1 Cr App R
(S) 116. Speaking of the commencement provisions in POCA 1995, the court’s
judgment contains the following analysis:
“11. The legislative purpose of section 16(5), as it seems to
us, was to prevent the Crown from dividing convictions against
a defendant in one set of proceedings into pre- and postNovember 1, 1995 matters and then taking confiscation
proceedings (concurrently or consecutively) under both
statutes. So if at the time the judge is asked to make a
confiscation order under the 1995 Act on a number of counts
there remains a pre-commencement count on which the Crown
is seeking, or could still seek, a confiscation order under the
1988 Act as amended in 1993, there is no jurisdiction to make
an order under the 1995 Act. However, if the precommencement count is one which could not be the basis of
Page 31
confiscation proceedings, there is no obstacle to using the 1995
Act regime. Similarly if (as in this case) the Crown has
expressly abandoned any reliance on the pre-commencement
count for the purposes of a confiscation order, the fact that it
could have sought such an order in respect of that count seems
to us entirely immaterial. In such a case also, in our judgment,
there is no obstacle to using in [sic] the 1995 Act regime in
respect of the post- commencement counts.”
However, for the reasons explained in that passage, there is no question of more than
a single confiscation regime being applied to these appellants or anyone in a similar
position. That is because the offences which are relevant to section 156 [section 6 E
& W] are those on which the Crown and thus the court will found any confiscation
order. Where, as here, any earlier pre-commencement offences are disclaimed by
the Crown, and not relied upon by the court, there can only be the single confiscation
regime established by POCA 2002.
85. This position is true despite the various differences between the regimes
which are set out above.
86. Ms McCool, had she been dealt with in the early 1990s for her offending up
to that point, would have been subject to a confiscation regime under which £10,000
was the minimum sum for which an order could be made – see the 1990 Order and
para 71 above. But to say that an order can now be made against her under POCA
2002, where there is no minimum, is to subject her to no injustice if the order is
made exclusively on the basis of offences committed since March 2003. It is exactly
the same as if she had now been prosecuted only for the post-March 2003 offences.
In that event, everyone agrees that POCA 2002 would be the relevant regime and
there would be no minimum sum.
87. For the same reasons, there is no injustice to Ms McCool in the fact that the
regime applied to her permits of no general discretion as to the amount of the
confiscation order. She is in exactly the same position as she would have been in if
prosecuted only for the post-March 2003 offences. It might be added that, in any
event, no basis is suggested on which any court considering her case at any time
under any regime might have made an order in a sum smaller than the £5,531.95
actually made.
88. The lifestyle provisions are of some complexity but the same reasoning
applies. If these appellants had been prosecuted only for the post-March 2003
offences, no one suggests that the POCA 2002 provisions would not correctly have
been applied to them. The slightly different lifestyle provisions of POCA 2002 are
Page 32
deliberately applied to anyone convicted of offences committed after the
commencement of that statute. They were in force when those post-commencement
offences were committed, and no improper retrospectivity is involved in applying
them.
89. In considering the lifestyle provisions it is necessary to distinguish between
the conditions which must be met before they can be applied, and the consequences
if they are. It is certainly true that the conditions for their application may to a strictly
limited extent involve looking at past convictions. There are two possible routes to
a finding that there has been a course of criminal activity. The first is that the
defendant is convicted in the current proceedings of at least three other offences (ie
at least four in all) from which he has benefited: section 223(2)(b) with section
223(3)(a) [section 75(2)(b) with section 75(3)(a) E & W]. The second is that he has
previous convictions, sustained on two or more different occasions, for benefitgenerating offences: section 223(2)(b) with section 223(3)(b) [section 75(2)(b) with
section 75(3)(b) E & W].
90. As to the first route, one or more of the three other offences might of course
be pre-commencement. But if it is, the Commencement Order requires it to be left
out of consideration: Article 8(2) [article 7(2) E & W], and nor can its associated
benefit count towards the minimum benefit condition of £5,000 required by section
223(4) and (5) [section 75(4) and (5) E & W]: Article 8(3) as amended [article 7(4)
E & W]. The exception of pre-commencement offences for this purpose of counting
three others in the present proceedings, and counting a minimum of £5,000 benefit
has clearly been stipulated for in the Commencement Order to avoid any risk of
retrospectivity, for under the 1995/96 regime only one other offence was sufficient
and there was no minimum benefit requirement. It may or may not have been
necessary, in order to avoid infringement of article 7 ECHR, to make these
stipulations, given that the new conditions are tighter, not looser, for the
establishment of a course of criminal activity, but this must have been the aim.
Whatever the reason, the outcome is that no pre-commencement offences, even if
the conviction occurs in the current proceedings, can count towards the
establishment of a course of criminal activity via the three other offences (four in
all) rule. It is also to be noted that the fact that it was thought necessary, in order to
achieve this, to include articles 8(2) and (3) in the Commencement Order is relevant
to the construction of section 156: see below.
91. As to the second route, the past convictions may clearly have been precommencement, as was the case under the previous regime. These can and do count,
as article 8(5) of the Commencement Order [article 7(5) E & W] makes clear. There
is no reason why they should not. There is no offensive retrospectivity so long as
the past convictions only go to the calculation of benefit in respect of confiscation
based on post-commencement offence(s). It is similar to taking account of previous
criminal history for sentencing purposes. The rule that such pre-commencement
Page 33
benefit might be taken into account when fixing the confiscation order was in force
and available to the defendant at the time he committed the post-commencement
offence(s) which generate the order.
92. POCA also introduced two new routes to the lifestyle provisions, as additions
to the “course of criminal activity” routes. The first is that some offences specified
in Schedule 5 [Schedule 2 E & W] (intended to be the kind likely to be committed
by professional criminals) now automatically bring the lifestyle provisions into play.
The second is that an offence committed over a period of six months or more also
does so, since it is likely to involve repetition. Both these new routes are more severe
on defendants than the previous regimes. Accordingly, for both of them, the
Commencement Order provides by article 8(2) [article 7(2) E & W] that precommencement offences are to be left out of consideration. There is thus no risk of
objectionable retrospectivity or unfairness.
93. When it comes to the consequences of the lifestyle provisions applying, it is
necessary to go back in the statute to section 160 [section 10 E & W]. This sets out
the assumptions which must be made. As with the provisions of the previous
regimes, they do involve counting as benefit assets obtained before the Act was
passed, if but only if the defendant cannot displace the assumptions on the balance
of probabilities. But that is the position for anyone convicted of (say) a course of
dishonest conduct perpetrated between June and December 2003, if he qualifies
under the lifestyle provisions. The counting of past-obtained benefits is not
objectionably retrospective, because it applies a regime which was in force when the
offences were committed. Nor, for the same reasons, is there any unfairness to a
defendant if the Crown disclaims reliance on any pre-commencement offence in the
present indictment and proceeds in relation only to the post-commencement
offence(s). A defendant whose case is treated in this way by the Crown is in exactly
the same position as if he had only been prosecuted for, or indeed had only
committed, the post-commencement offence(s).
94. Exactly the same applies to the various other differences between the regimes
which are set out at paras 75-81 above. In all cases there is no unfairness to a
defendant such as these appellants if the POCA 2002 regime is applied, based only
on post-commencement offences, because the rules which are being applied are
those which were in force, and publicly known, at the time the offence(s) generating
the confiscation order were committed.
95. Even if it were to turn out possible for circumstances to occur in which the
result of this, correct, construction of POCA 2002 as applied in the Aslam series of
cases was to create real risk of unfairness to the defendant, the court retains a simple
method of preventing such risk eventuating. On any view, under both the present
POCA 2002 regime and its predecessors, the court is given the power to embark
Page 34
upon the confiscation process of its own motion, even if not asked by the Crown to
do so: section 156(3)(b) POCA 2002 or article 8(1)(b) of the 1996 Order [section
6(3)(b) POCA 2002 or section 71(1)(b) CJA 1988 for E & W]. On the assumption
that the Aslam construction is correct, the offence(s) in respect of which the
confiscation inquiry is undertaken are therefore those which either the Crown seeks
to rely on or the court determines should be made part of the process. It would
therefore be open to a defendant to apply to the court to determine that one or more
pre-commencement counts ought to be included in the process, on the grounds that
if they are not he would be at demonstrated risk of unfairness. If the court acceded
to that application, the earlier count would be part of the confiscation inquiry and,
as the Commencement Order ordains, the relevant statutory regime would then be
the earlier one.
96. It is clear from the judgment of Lord Reed that the foregoing conclusions as
to the absence of risk of unfairness is not in issue; his differing conclusions depend
on his construction of the legislation.
The construction of section 156 and the Commencement Order
97. There is no basis for the appellant’s assertion that it is improper, or
inconsistent with POCA 2002, for there to be an element of election by the Crown
in relation to which offences are relied on for the confiscation process. Section 156
[section 6 E & W] does not make a confiscation order available in respect of every
person who profits from criminal behaviour. It makes it available in relation to those
who are convicted of one or more offences. Certainly confiscation depends on
benefit from conduct rather than attaching to particular offences, but the confiscation
exercise is, by section 156(2) [section 6(2) E & W] triggered by the offences there
referred to. It is axiomatic that the decision to prosecute for an offence is for the
Crown. An element of choice as to which offence(s) to charge is inherent in the vast
majority of prosecution decisions, and in all where there is serial offending. It is
positively unusual for every offence revealed to be charged. It follows that by
deciding to charge only those of a series of offences which were committed after the
commencement date, the Crown can achieve exactly the same result as contemplated
by Aslam and similar cases, that is to say the application of the POCA 2002 regime.
No one suggests otherwise. There is nothing remotely improper about it.
98. A similar telling indication is provided by the second part of section 156(2),
viz section 156(2)(b) [section 6(2)(b) E & W]. As explained at para 80 above, the
magistrates’ power to make confiscation orders disappeared in POCA 2002.
Accordingly it was replaced by a power to commit a defendant to the Crown Court
for consideration of confiscation. The power is found in section 218 [section 70 E
& W]. This provides:
Page 35
“218 Committal by magistrates’ court
(1) This section applies if –
(a) a defendant is convicted of an offence by
a magistrates’ court, and
(b) the prosecutor asks the court to commit
the defendant to the Crown Court with a view to
a confiscation order being considered under
section 156.
(2) In such a case the magistrates’ court –
(a) must commit the defendant to the Crown
Court in respect of the offence, and
(b) may commit him to the Crown Court in
respect of any other offence falling within
subsection (3).
(3) An offence falls within this subsection if –
(a) the defendant has been convicted of it by
the magistrates’ court or any other court, and
(b) the magistrates’ court has power to deal
with him in respect of it.
(4) If a committal is made under this section in
respect of an offence or offences –
(a) section 156 applies accordingly, and
(b) the committal operates as a committal of
the defendant to be dealt with by the Crown
Court in accordance with section 219.
Page 36
(5) [provision for bail].”
99. This power is explicitly to commit with a view to confiscation. It is not the
same as the ordinary (English) magistrates’ power to commit for sentence in an
either-way offence. This power extends to purely summary offences, where the
magistrates could not commit for sentence, and it exists only where consideration of
confiscation is the purpose. Once invoked, it does transfer also to the Crown Court
the function of sentencing the defendant: see sections 218(4) and 219 [sections 70(4)
& 71 E & W]. But the sentencing power to be exercised by the Crown Court is not
the same as it would be in the case of committal for sentence in an either-way
offence, for it is limited by section 219 to whatever (more limited) power the
magistrates would have had by way of sentence [section 71(3)(b) E & W, with the
variant that the magistrates may in that jurisdiction indicate under section 70(5) as
to an either-way offence that they would in any event have committed for sentence,
and then the Crown Court has its own sentencing powers under section 71(2)(b).] In
both jurisdictions it is to be noted the magistrates have no power to commit of their
own motion with a view to confiscation. They can do so only where the Crown asks
them to do so: section 218(1)(b) [section 70(1)(b) E & W]. So the Act recognises
explicitly the power of the Crown to make a decision either way about committal. It
provides an election to the Crown. If some of the offences before the magistrates’
court are pre-commencement and the Crown opts to request committal with a view
to confiscation only those which are later, post-commencement, offences, then only
the POCA 2002 regime will apply. There is nothing at all improper in the Crown
adopting this course. If it can do so in relation to convictions in the magistrates’
court there is no reason why it should not also do so, via the Aslam procedure, if the
convictions occur in the Crown Court. It is true that the magistrates can, if asked by
the Crown to commit offences A-D with a view to confiscation, also do the same of
its own motion in relation to offences E-G. But there is no obligation to do so, and
the result is that the Crown’s decision as to which are to be committed is permitted
to stand, and in practice in most cases will be determinative.
100. Section 224(3) [section 76(3) E & W] deals with the non-lifestyle offender.
Under section 156(4)(c) [section 6(4)(c) E & W] his benefit falls to be assessed from
offences constituting his “particular criminal conduct.” Those, by section 224(3)
[section 76(3) E & W] are (a) “the offence(s) concerned” and (b) any other
offence(s) of which he was convicted in the same proceedings. (A third element,
under subsection (3)(c) is offences taken into consideration, but this provision does
not assist on the present construction question.) An “offence concerned” is, by
section 156(9) [section 6(9) E & W] to be read as an offence mentioned in section
156(2) [section 6(2) E & W]. But section 224(3(b) demonstrates that there may be
offences of which the defendant is convicted in the current proceedings which are
not the offence(s) mentioned in section 156(2). That is a strong pointer against the
appellant’s argument that section 156(2)(a), and thus article 7 of the Commencement
Order, means all offences of which the defendant is convicted in the current
Page 37
proceedings. Rather, it supports the Crown’s contention, that “the offence(s)
concerned” are throughout those on which the Crown seeks to rely for the purposes
of the statute, that is to say, to justify confiscation proceedings.
101. It may just be possible to give section 224(3)(b) [section 76(3)(b) E & W]
content without this construction. That might be possible if it could be read as
intended only to deal with “left behind offences”, that is to say ones of which the
defendant was convicted in the magistrates’ court (and thus in the present
proceedings) but in respect of which he was not committed for confiscation. But if
this is all it is for, it might have been expected to refer to magistrates’ offences
specifically. Next, the suggested eventuality is unlikely, for if the Crown asks for
the defendant to be committed with a view to confiscation in respect of offences AD, and there are also benefit-generating offences E-G, it is highly unlikely that the
Crown would not seek committal in respect of all of them, unless of course the
complication exists that some of the offences are pre-commencement, and it is
necessary to exercise the Aslam procedure. Thirdly, it is very significant that the
Scottish section of POCA 2002 includes wording identical to section 224(b)(3): see
section 143(3)(b). That is because the provisions as to general and particular
criminal conduct are identical for each of the three national jurisdictions. But in
Scotland there is no question of committal by justices of the peace (or anyone else)
for consideration of confiscation. In Scotland, confiscation follows on conviction
either in the High Court or before the Sheriff: section 92, and especially section
92(13). Confiscation in Scotland is dealt with by the court of conviction, whether
the High Court or the Sheriff Court: section 92(1). Since there is no question of
committal there is therefore no equivalent of sections 218 (NI) and 70 (England and
Wales). So 224(3)(b) cannot have been intended to refer to “left behind” or uncommitted offences because if it were, there would be no occasion for the same
words in the Scottish section.
102. I do not think that the operation of the group of provisions found in sections
163-165 [sections 13-15 E&W] is in any way impaired by the construction of the
statute here explained. As a matter of general sentencing principle, a court which
contemplates fining a defendant for any offence before it is bound to take into
account his means to pay. A confiscation order made, triggered by whichever
offences, will be relevant to those means, in relation to any offence for which a fine
is being considered. Likewise, as a matter of general sentencing principle a court
ought in any event to sentence a defendant for all the offences before it at the same
time, unless there is a reason to do otherwise.
103. For the reasons explained above at para 84, I do not think that the
consequence of this construction of POCA is that it is mandatory for the Crown, in
a case where the indictment contains both pre- and post-commencement offences,
to exercise the Aslam election to nominate only the latter for the purposes of asking
the court to proceed to confiscation. There may well be cases where this is
Page 38
inappropriate, for example where the great majority of offences, or the most serious,
are pre-commencement. But in such a situation, where the earlier offences are relied
on, the court will, according to the Commencement Order, proceed under the earlier
regime.
104. To the extent that the appellants argued that the effect of section 224(3)(b) is,
unless their preferred construction is correct, to defeat the aim of confining POCA
2002 to post-commencement offences, this is not so because article 9 of the
Commencement Order [applicable also to E & W] specifically provides that conduct
which constitutes an offence committed before the commencement date “is not
particular criminal conduct under section 76(3) or 224(3)”. That provision in the
Commencement Order is likewise a good indication of the assumption that there
might be offence(s) of which the defendant is convicted in the current proceedings
which are not the offence(s) within section 156(2) [section 6(2) E & W].
105. A similar indication is given by article 8(2) [article 7(2) E & W]. This
provides that when considering the two new routes to treating the defendant as a
lifestyle offender (commission of a specified offence or of an offence committed
over a six month period) pre-commencement offences are to be ignored (see para 90
above). But if, as the appellants contend, every case in which there is a precommencement offence in the present proceedings must for that reason alone be
dealt with under the old 1995/96 regime, this stipulation in the Commencement
Order would simply not be necessary. The same applies to the stipulation in article
8(3) [article 7(3) E & W] which excludes pre-commencement offences from the
course of criminal conduct (three additional offences and thus four in all) rule. I
agree of course that subordinate legislation cannot control the meaning of the
primary statute, but where, as here, the primary and subordinate legislation are part
of a single scheme to substitute one statutory regime for another, and are plainly
intended to operate in tandem, it is not irrelevant to take account of indications of
consistency between them.
106. If the appellants’ contention were correct, and the earlier confiscation regime
has to be applied wherever there is a single pre-commencement offence on the
indictment (or before the magistrates) even if it is not relied on for confiscation, it
would follow that that rule would have to apply even if the pre-commencement
offence could never, even arguably, have generated a benefit, and thus could never,
even arguably, have had the slightest relevance to the issue of confiscation. Of
course, in order to appear on the same indictment, in the Crown Court in Northern
Ireland or in England and Wales at least, the offences have to satisfy the rules of
joinder to be found in rule 21 of the Crown Court Rules (Northern Ireland) 1979
[Criminal Procedure Rules 2014, rule 14.2(3) for E & W]. But it is not difficult to
imagine circumstances in which the earlier and the later offences would be a “series
of offences of the same or similar character” for the purpose of these rules. There
simply has to be a sufficient nexus between the counts, which do not at all have to
Page 39
be for the same form of criminal charge; see for the proper approach see R v Kray
(1969) 53 Cr App R 569 and Ludlow v Metropolitan Police Comr [1971 AC 29.
Sometimes acquisitive offences are part of a series of offences of abuse – for
example by carers. Count 1 may well charge an assault on the elderly person in
January 2003, whilst counts 2-5 charge thefts from her bank account starting in April
of the same year. A fire raiser may have committed a series of arsons prior to March
2003, which are all offences from which there is no arguable benefit, but the last in
the series might be setting fire to his own house, followed by an insurance claim.
But in these and similar cases, if the appellants are right, the offences referred to in
section 156 or E & W 6 will include the earlier non-benefit ones, and the confiscation
proceedings in relation to the only benefit-generating offences, all committed after
March 2003, would have to be conducted under the earlier regimes. Even more
oddly, the same would be true of a serial fraudster whose first offence was an
unsuccessful attempt, committed before March 2003, followed by a succession of
similar frauds which succeeded, all committed after that date. There is no rhyme or
reason for this and such an outcome might well be termed absurd.
Conclusion
107. For these reasons, I agree with Lord Kerr that the appellants’ arguments fail.
The offences referred to in sections 156 and E & W 6 are those on which the Crown
relies as relevant to the possibility of confiscation. The context of POCA 2002,
considered separately, and also together with its Commencement Order, shows that
the construction applied in Simpson, Aslam, Stapleton and Aniakor is correct. The
important rule that penal statutes must be construed strictly so as to avoid any
possible unfairness to those potentially penalised provides no reason to the contrary.
The consequence is that these appeals must be dismissed.
Postscript: The powers of the Court of Appeal to substitute
108. Although the question does not, in consequence, arise, this case ought not to
be concluded without some reference to it. The argument put to this court by the
appellants was that if they were correct, and the order in the present cases was made
under the wrong legislation, the Court of Appeal had no power to put the error right
by substituting an order, if satisfied that it was in the correct sum, under the correct
statutory regime.
109. In the present case the Crown had conceded in the court below that
substitution was not available, and having taken that stand did not ask this court to
permit it to withdraw the concession. Since the point was in consequence not argued,
it is better not to express a concluded view about it. Equally, however, it ought not
Page 40
to be assumed that the concession made, and the appellants’ supportive argument,
were correct.
110. The appellants’ right of appeal is given by section 8 of the Criminal Appeal
Act (Northern Ireland) 1980:
“8. A person convicted on indictment may appeal to the
Court of Appeal against the sentence passed on his conviction,
unless the sentence is one fixed by law.”
The equivalent provision in England and Wales is section 9 of the Criminal Appeal
Act 1968, and in that jurisdiction section 10 makes clear that the same right of appeal
exists when a defendant is dealt with by the Crown Court after committal for
sentence to that court by the magistrates. Section 30(3)(a) [section 50(1)(d) Criminal
Appeal Act 1968 for E & W] expressly includes a confiscation order in the
expression “sentence” for this purpose, confirming the earlier decision in R v
Johnson.
111. On an appeal against sentence, the powers of the Court of Appeal include the
power, if quashing the sentence, to impose such alternative sentence as is available
in law. Section 10(3) of the Criminal Appeal Act Northern Ireland 1980 provides:
“(3) On an appeal to the Court against sentence under section
8 or 9 of this Act the Court shall, if it thinks that a different
sentence should have been passed, quash the sentence passed
by the Crown Court and pass such other sentence authorised by
law (whether more or less severe) in substitution therefor as it
thinks ought to have been passed; but in no case shall any
sentence be increased by reason or in consideration of any
evidence that was not given at the Crown Court.”
The equivalent provision in England and Wales is section 11(3) Criminal Appeal
Act 1968 which is in the same terms except that they are subject to the proviso that
the defendant shall not, taking the case as a whole, be dealt with more severely than
he was below.
112. In the particular case of confiscation orders, the Criminal Appeal Acts have
been amended to enable the Court of Appeal, instead of substituting its own order,
to remit the case to the Crown Court. Section 10(3A) [section 11(3A) in E & W]
provides:
Page 41
“(3A) Where the Court of Appeal exercises its power under
subsection (3) to quash a confiscation order, the Court may,
instead of passing a sentence in substitution for that order,
direct the Crown Court to proceed afresh under the relevant
enactment.”
This power is very useful when there may be a need for the Crown Court to take
fresh evidence to deal with the import of the judgment of the Court of Appeal.
113. Where a case is thus remitted to the Crown Court, the Criminal Appeal Acts
have consequential provisions. They include section 10(3C) [section 11(3D) E &
W]. This provides, inter alia, that:
“‘relevant enactment’ in relation to a confiscation order
quashed under subsection (3), means the enactment under
which the order was made.”
The effect of this last provision, whether intended or not, is that when remitting a
confiscation case the Court of Appeal is bound to direct the Crown Court to apply
the same statutory regime that it did before.
114. Section 10(3C) is the foundation of the argument of the appellants in the
present case, to the effect that if their confiscation orders had had to be quashed on
the grounds that they were made under the wrong statute, it would not be possible
for the Court of Appeal to substitute an order under the right legislation. This,
however, by no means necessarily follows. On its face, section 10(3C) only applies
when the Court of Appeal is remitting the case under the new power to do so. Its
longstanding and pre-existing power simply to quash and substitute under section
10(3) is arguably quite unaffected. When dealing with a confiscation order which is
found to contain some error justifying its quashing, it is not bound to remit the case
to the Crown Court; it simply has power to do so if it wishes. If it chooses not to do
so, section 10(3C) is arguably irrelevant.
115. At least where the Court of Appeal can apply the findings of fact and the
decisions on the evidence made by the Crown Court, there may be no reason at all
why it should not, in a proper case, quash an order if made under the wrong
legislation and substitute an order under the right statutory scheme, and it is relevant
to note that this is the practice of the Court of Appeal, Criminal Division, in England
and Wales – see for example R v Lazarus [2004] EWCA Crim 2297; [2005] 1 Cr
App R (S) 96 and R v Bukhari [2008] EWCA Crim 2915; [2009] 2 Cr App R (S) 18.
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LORD REED: (dissenting) (with whom Lord Mance agrees)
116. The first appellant, Ms McCool, pleaded guilty at Derry Crown Court to four
counts on an indictment. The first count was of false accounting contrary to section
17(1)(a) of the Theft Act (Northern Ireland) 1969, committed on 26 September
1990. The remaining counts were of making false declarations with a view to
obtaining benefits contrary to section 105A(1) of the Social Security Administration
(Northern Ireland) Act 1992, committed on dates between 28 November 2003 and
10 August 2010. The second appellant, Mr Harkin, appeared on the same indictment,
and pleaded guilty to seven counts of offences under section 105A(1) of the 1992
Act, committed on 16 December 1999 (count 5) and on six other dates between 20
October 2005 and 3 August 2009.
117. At sentencing, the court was asked by the prosecutor to proceed with
confiscation proceedings pursuant to section 156(3) of the Proceeds of Crime Act
2002 (“POCA”). Prosecutor’s statements were subsequently served on the
appellants. In an effort to avoid the problem which has given rise to these appeals,
the statement served on the first appellant stated, in relation to the calculation of the
benefit obtained:
“I have decided not to include the first charge on the bill of
indictment (this is the first charge in relation to the defendant)
for confiscation purposes and as such I have amended the
Income Support overpayment period to commence from 28
November 2003.”
The statement served on the second appellant contained a similar statement in
respect of count 5. The overpayment period was therefore calculated as if it had
commenced on 20 October 2005.
118. The explanation for this apparent generosity on the part of the prosecutor lies
in the transitional provisions governing POCA’s entry into force in Northern Ireland.
It was thought that, by leaving out of account the offences committed before POCA
came into force, the remaining offences could then be brought within POCA’s
ambit. The principal issue in the appeal is whether that manoeuvre has succeeded in
achieving its purpose, or whether the presence of the earlier offences on the
indictment means that all the offences properly fall within the scope of earlier
confiscation legislation.
Page 43
The relevant provisions of POCA
119. POCA contains broadly similar sets of provisions dealing with confiscation
in England and Wales (Part 2: sections 6 to 91), Scotland (Part 3: sections 92 to 155)
and Northern Ireland (Part 4: sections 156 to 239). Section 156 is the introductory
section of Part 4, dealing with Northern Ireland:
“156 Making of order
(1) The Crown Court must proceed under this section if the
following two conditions are satisfied.
(2) The first condition is that a defendant falls within either
of the following paragraphs –
(a) he is convicted of an offence or offences in
proceedings before the Crown Court;
(b) he is committed to the Crown Court in respect of
an offence or offences under section 218 below
(committal with a view to a confiscation order being
considered).
(3) The second condition is that –
(a) the prosecutor asks the court to proceed under
this section, or
(b) the court believes it is appropriate for it to do so.
(4) The court must proceed as follows –
(a) it must decide whether the defendant has a
criminal lifestyle;
Page 44
(b) if it decides that he has a criminal lifestyle it must
decide whether he has benefited from his general
criminal conduct;
(c) if it decides that he does not have a criminal
lifestyle it must decide whether he has benefited from
his particular criminal conduct.
(5) If the court decides under subsection (4)(b) or (c) that
the defendant has benefited from the conduct referred to it must

(a) decide the recoverable amount, and
(b) make an order (a confiscation order) requiring
him to pay that amount.
(6) But the court must treat the duty in subsection (5) as a
power if it believes that any victim of the conduct has at any
time started or intends to start proceedings against the
defendant in respect of loss, injury or damage sustained in
connection with the conduct.
(7) The court must decide any question arising under
subsection (4) or (5) on a balance of probabilities.
(8) The first condition is not satisfied if the defendant
absconds (but section 177 may apply).
(9) References in this Part to the offence (or offences)
concerned are to the offence (or offences) mentioned in
subsection (2).”
120. For reasons which will appear, section 156(9) is of particular importance to
the issue in this appeal. It provides a definition of the phrase “the offence (or
offences) concerned”, where it appears in Part 4: a definition which is repeated in
section 236(1). The phrase is defined as referring to the offence or offences
mentioned in section 156(2). Section 156(2) applies to a defendant who (a) is
convicted of an offence or offences in proceedings before the Crown Court, or (b)
Page 45
is committed to the Crown Court in respect of an offence or offences under section
218. Where the defendant has been convicted of an offence or offences in
proceedings before the Crown Court, “the offence (or offences) concerned” is or are
therefore the offence or offences of which he has been convicted in those
proceedings. Where the defendant has been committed to the Crown Court in respect
of an offence or offences under section 218, “the offence or offences concerned” is
or are the offence or offences in respect of which he has been committed. There is
nothing in section 156(2) or (9) which indicates that the meaning of the words “the
offence (or offences) concerned” is limited in any other way.
121. Section 156 sets out the steps which the Crown Court must follow where a
defendant falls within either section 156(2)(a), because he has been convicted of an
offence or offences in proceedings before that court, or section 156(2)(b), because
he has been committed to that court in respect of an offence or offences under section
218, and, in accordance with section 156(3), either the prosecutor asks the court to
proceed under section 156, or the court itself considers it appropriate to do so. Under
section 156(4), the court has first to decide whether the defendant has a criminal
lifestyle, because the answer to that question affects the subsequent steps to be taken.
If he has a criminal lifestyle, it must then decide whether he has benefited from what
is termed his “general criminal conduct”. If he does not have a criminal lifestyle, it
must decide whether he has benefited from what is termed his “particular criminal
conduct”. If the defendant has benefited either from his general criminal conduct or
from his particular criminal conduct, as the case may be, the court is then required
by section 156(5) to decide what is termed “the recoverable amount” and to make a
confiscation order requiring him to pay that amount. It is to be noted that the object
of the statutory scheme is to deprive the defendant of the benefit obtained from
“conduct”: not to deprive him of the benefit obtained from any particular offence or
offences of which he has been convicted.
122. The remaining provisions of Part 4 flesh out that general scheme. In
particular, section 157(1) defines the recoverable amount, subject to exceptions, as
an amount equal to the defendant’s benefit from the conduct concerned. Section
157(2) however limits the recoverable amount to “the available amount” (defined
by section 159), where that is less than the defendant’s benefit from the conduct
concerned.
123. Section 158 is concerned with the defendant’s benefit from the conduct
concerned. The court is required to take account of “conduct” occurring up to the
time it makes its decision, and of property obtained up to that time.
124. Section 160 applies where the court decides that the defendant has a criminal
lifestyle. It requires the court to make a number of assumptions for the purpose of
deciding whether he has benefited from his general criminal conduct, and deciding
Page 46
the amount of his benefit from the conduct. These include an assumption that any
property transferred to him at any time after “the relevant day” was obtained by him
as a result of his general criminal conduct: the transfer need not be related to any
offence of which he has been convicted. The relevant day is the date six years before
proceedings for “the offence concerned” were started against the defendant, or if
there are two or more offences and proceedings for them were started on different
days, the earliest of those days. In this context, the relevance of “the offence (or
offences) concerned”, as defined in section 156(2) and (9), is therefore to fix how
far back POCA can bite on property obtained by a defendant with a criminal
lifestyle. It can go back six years from the date on which proceedings were started
for the earliest of those offences.
125. Section 163 explains the effect of a confiscation order on the court’s other
powers. Under section 163(1), if the court makes a confiscation order it must
proceed as mentioned in subsections (2) and (4) in respect of “the offence or
offences concerned”. In terms of section 163(2), the court must take account of the
confiscation order before it imposes a fine on the defendant, or makes any other
order involving payment or forfeiture by the defendant, apart from a compensation
order. Subject to that provision, the court is required by section 163(4) to leave the
confiscation order out of account in deciding the appropriate sentence for the
defendant. If the court makes both a confiscation order and a compensation order
against the same person in the same proceedings, and it believes that he will not
have sufficient means to satisfy both orders in full, section 163(5) provides for the
potential shortfall in payment of the compensation order to be paid out of sums
recovered under the confiscation order. The intended recipient of the compensation
is thus protected against the risk of a shortfall, and the defendant is also protected
against the risk of penal consequences of a failure to satisfy the confiscation order.
In this context, the relevance of “the offence or offences concerned” is to define the
scope of those protections.
126. It is to be noted that these provisions make sense on the footing that “the
offences concerned” encompass all the offences of which the defendant has been
convicted in the proceedings in the Crown Court, or all the offences in respect of
which he has been committed to that court. It makes sense to regulate the
relationship between the confiscation order and any other financial orders made by
the Crown Court in the same proceedings, since the confiscation order can affect the
defendant’s ability to meet any other financial order, and vice versa. That is so,
whether all of the offences concerned were offences involving financial gain or not.
127. Section 164 allows the court either to proceed with confiscation proceedings
before it sentences the defendant for “the offence (or any of the offences)
concerned”, or to postpone confiscation proceedings for up to two years starting
with “the date of conviction”, or potentially longer where there is an appeal or if
there are exceptional circumstances. The date of conviction is defined as the date on
Page 47
which the defendant was convicted of the offence concerned, or if there are two or
more offences and the convictions were on different dates, the date of the latest. In
practice, confiscation proceedings are usually postponed, often for a substantial
period. This provision again makes sense on the footing that “the offences
concerned” encompass all the offences of which the defendant has been convicted
in the proceedings in the Crown Court, or all the offences in respect of which he has
been committed to that court. Like section 163, it reflects the potential relationship
between the court’s function of sentencing the defendant for the offences of which
he has been convicted, or in respect of which he has been committed, and the
confiscation order which it may also make.
128. Section 165 explains the effect of postponement, and contains analogous
provisions to section 163 in respect of the relationship between the confiscation
proceedings and any sentence imposed during the postponement period for “the
offence (or any of the offences) concerned”.
129. This group of provisions (which is replicated elsewhere in Part 4 of POCA in
a variety of contexts, and is also replicated in the corresponding provisions for the
other parts of the United Kingdom) seems to me to be particularly difficult to
reconcile with an interpretation of “the offence (or offences) concerned” which
would restrict that phrase to only some of the offences before the court. The
language of these provisions is prescriptive. I have difficulty seeing how they might
be interpreted as excluding offences which the prosecution had elected to leave out
of account for the purpose of assessing the benefit obtained by the defendant. If,
however, all the offences before the court fall within the scope of the phrase in this
context, then how can it be given a more restricted meaning in the context of section
156(2) and (9), given the definitional status of those provisions?
130. Under section 166, in a case where the court is proceeding under section 156
at the request of the prosecutor, he must give it a statement of information within
the period the court orders. Similarly, in a case where the court is proceeding under
section 156 of its own motion, it can order the prosecutor to give it a statement of
information within the period ordered. The statement must include the matters which
are relevant to the making of a confiscation order, including whether the defendant
has a criminal lifestyle, whether he has benefited from his general or particular
criminal conduct as the case may be, and his benefit from the conduct. The defendant
can then respond to the prosecutor’s statement in accordance with section 167.
131. Section 218 is concerned with committal by the magistrates’ court. It applies
if a defendant is convicted of an offence by a magistrates’ court, and the prosecutor
asks the court to commit the defendant to the Crown Court with a view to a
confiscation order being considered under section 156. In such a case, the
magistrates’ court must commit the defendant to the Crown Court in respect of the
Page 48
offence, and may commit him to the Crown Court in respect of any other offence of
which he has been convicted, and in respect of which the magistrates’ court has
power to deal with him. The latter provision enables the Crown Court to deal with
the defendant in relation to the same offences in respect of which he could be dealt
with in the magistrates’ court, and thus enables the relationship between sentencing
and confiscation proceedings to be regulated in accordance with sections 163 to 165.
Section 219 confirms the power of the Crown Court to sentence the defendant for
all the offences in respect of which he has been committed.
132. Finally, in relation to the provisions of POCA, it is necessary to note a
number of provisions concerned with interpretation. Section 223 defines the term
“criminal lifestyle”. Under section 223(2), a defendant has a criminal lifestyle if “the
offence (or any of the offences) concerned” satisfies any of the following tests:
“(a) it is specified in Schedule 5;
(b) it constitutes conduct forming part of a course of
criminal activity;
(c) it is an offence committed over a period of at least six
months and the defendant has benefited from the conduct
which constitutes the offence.”
These tests are alternatives.
133. In relation to test (a), it is sufficient that any of the offences concerned is
specified in Schedule 5. That schedule specifies a number of offences, including the
unlawful supply of controlled drugs, and possession of a controlled drug with intent
to supply. It is irrelevant to test (a) whether the defendant has made any financial
gain from an offence falling within Schedule 5, or whether he has made such a gain
from any of the other offences of which he has been convicted in the proceedings in
the Crown Court, or in respect of which he has been committed to that court.
134. In relation to test (b), section 223(3) provides that conduct forms part of a
course of criminal activity if the defendant has benefited from the conduct and:
“(a) in the proceedings in which he was convicted he was
convicted of three or more other offences, each of three or more
of them constituting conduct from which he has benefited, or
Page 49
(b) in the period of six years ending with the day when those
proceedings were started (or, if there is more than one such day,
the earliest day) he was convicted on at least two separate
occasions of an offence constituting conduct from which he has
benefited.”
In a case where the defendant was convicted of an offence or offences in proceedings
in the Crown Court, test (b) is therefore satisfied by virtue of section 223(3)(a) if the
defendant benefited from conduct constituting any of those offences, and was also
the convicted in those proceedings of three or more other offences constituting
conduct from which he benefited. The effect of section 223(3)(b) is that he will also
have a criminal lifestyle if he benefited from conduct constituting any of the offences
of which he was convicted in the proceedings in the Crown Court, and in addition
he was convicted on at least two separate occasions, during the six years before those
proceedings were started, of another offence constituting conduct from which he
benefited. Section 223(3) operates in a similar way where the defendant has been
committed to the Crown Court by the magistrates’ court in respect of an offence or
offences, and benefited from conduct constituting any of those offences. It is
therefore unnecessary for the defendant to have made a financial gain from any of
the other offences of which he has been convicted in the proceedings in the Crown
Court, or in respect of which he has been committed to that court.
135. The same is also true in relation to test (c). It is sufficient that any of the
offences concerned was committed over a period of at least six months and the
defendant benefited from the conduct which constituted that offence.
136. In relation to both test (b) and test (c), section 223(4) provides that an offence
does not satisfy the test unless the defendant obtains “relevant benefit” of not less
than £5,000. The expression “relevant benefit” is defined for the purposes of test (b)
by section 223(5). It means:
“(a) benefit from conduct which constitutes the offence;
(b) benefit from any other conduct which forms part of the
course of criminal activity and which constitutes an offence of
which the defendant has been convicted;
(c) benefit from conduct which constitutes an offence
which has been or will be taken into consideration by the court
in sentencing the defendant for an offence mentioned in
paragraph (a) or (b).”
Page 50
A broadly similar definition (subject to the omission of paragraph (b)) applies for
the purposes of test (c). Accordingly, even if the defendant has benefited from any
of the offences concerned, and test (b) or (c) is potentially satisfied, it remains
necessary to investigate the amount of the benefit and to ascertain whether it is at
least £5,000.
137. Section 224 defines “criminal conduct”, “general criminal conduct”,
“particular criminal conduct” and “benefit”. Criminal conduct is conduct which
constitutes an offence in Northern Ireland, or would constitute such an offence if it
occurred there. General criminal conduct is all the defendant’s criminal conduct. It
is immaterial whether it occurred before or after the passing of POCA, and whether
property constituting a benefit from conduct was obtained before or after the passing
of POCA (section 224(2)). Particular criminal conduct is all the defendant’s criminal
conduct which falls within the following paragraphs of section 224(3):
“(a) conduct which constitutes the offence or offences
concerned;
(b) conduct which constitutes offences of which he was
convicted in the same proceedings as those in which he was
convicted of the offence or offences concerned;
(c) conduct which constitutes offences which the court will
be taking into consideration in deciding his sentence for the
offence or offences concerned.”
138. So far as paragraph (a) is concerned, it follows from section 156(2) and (9)
that the offences concerned are the offences of which the defendant was convicted
in the proceedings in the Crown Court, or in respect of which he was committed to
the Crown Court for confiscation proceedings. Paragraph (b) envisages a situation
where the defendant has been convicted in the same proceedings of offences other
than the offence or offences concerned. It must therefore be concerned with offences
of which he was convicted in the magistrates’ court but in respect of which he was
not committed to the Crown Court. Under section 224(4), a person benefits from
conduct if he obtains property as a result of or in connection with the conduct.
139. Returning to section 156, it follows from the later provisions that, at the time
when the Crown Court is required to proceed under that section, it will not know the
answers to all, or possibly any, of the questions which that section requires it to
decide. In particular, it may not be in a position to know whether the defendant’s
conviction in the Crown Court of “the offences concerned”, or his committal by the
Page 51
magistrates’ court in respect of those offences, will or may result in the making of a
confiscation order, or how the order may relate to any of those offences. Section 156
simply provides for a process to be put in train, which may or may not lead to the
making of such an order.
The transitional provisions
140. The relevant transitional provision is article 4 of the Proceeds of Crime Act
2002 (Commencement No 5, Transitional Provisions, Savings and Amendment)
Order 2003 (SI 2003/333) (“the Order”). So far as relevant, article 4 provides:
“4(1) Section 156 of the Act (making of confiscation order)
shall not have effect where the offence, or any of the offences,
mentioned in section 156(2) was committed before 24 March
2003.”
141. The effect of article 4 is clear. Where the offence, or any of the offences,
mentioned in section 156(2) was committed before 24 March 2003 (which was the
commencement date of the relevant provisions), section 156 does not have effect,
and POCA therefore does not apply. Instead, the position is regulated by article 11
of the Order, which provides for earlier legislation to continue to have effect.
142. The offence or offences mentioned in section 156(2), as earlier explained, are
the offence or offences of which the defendant has been convicted in the proceedings
before the Crown Court, if the case falls within section 156(2)(a), or the offence or
offences in respect of which he has been committed to the Crown Court, if the case
is one in which the defendant has been committed under section 218. It follows that
section 156 does not have effect, and POCA is therefore inapplicable, where that
offence, of any of those offences, was committed before 24 March 2003. Instead,
the previous law continues to apply.
143. It follows that section 156 has no application to the case of either of the
appellants. Article 4 cannot be obviated by the prosecutor’s ignoring those of “the
offences concerned” which were committed before POCA came into force. The fact
remains that the appellants were convicted of those offences in the proceedings
before the Crown Court, and they are therefore among “the offences concerned”. It
follows that the confiscation proceedings against the appellants should have
proceeded under the legislation which was in force when the earliest of the offences
concerned was committed. The confiscation orders made should therefore be
quashed. Since the Crown conceded in the court below that the substitution of orders
under the correct legislation was not possible, and it has not sought to withdraw that
Page 52
concession, it follows that the appeals should be allowed. Like Lord Hughes, I would
wish to reserve my opinion as to whether the concession was rightly made.
The reasoning of the majority
144. The only matter which remains to be discussed is the reasoning by which a
majority of this court have reached the opposite conclusion. Their judgments must
speak for themselves, but so far as I understand them, they contain a number of
different strands of reasoning. Their approach appears to be based first on a
purposive interpretation of the words of the statute. As I shall explain, I respectfully
disagree that the statute has the purpose which they attribute to it, and I do not in
any event accept that such a strained interpretation of the statutory language can be
justified by a purposive approach. Secondly, they support their interpretation of the
statute by reference to the transitional provisions in the Order. That appears to me,
with respect, to be an impermissible use of subordinate legislation, made under
powers conferred by Parliament in POCA, to interpret the meaning of the provisions
enacted by Parliament in POCA itself. Thirdly, the reasoning of the majority is also
based in part on previous authorities, which appear to me to be distinguishable
because they were concerned with the interpretation of a transitional provision
contained in the primary legislation itself. The reasoning of the earlier authorities
appears to me to be unsatisfactory in any event, and it has been subjected to cogent
criticism (Thomas, (2005) Crim LR 145 and (2008) Crim LR 813).
Purposive interpretation of the statute
145. As I understand their reasoning, the majority of the court consider that it
would be absurd if offences committed after the commencement of POCA were
subject to an earlier confiscation regime. In their view, Parliament must have
intended that all offences committed after the commencement of POCA which could
generate confiscation orders should be dealt with under section 156. Having decided
that that must have been Parliament’s intention, the majority then construe the
provisions of POCA so as to fulfil that intention.
146. I see no absurdity. Given their natural meaning, and read with article 4 of the
Order, section 156(2) and (9) of POCA achieve a rational purpose, which reflects
two considerations identified by Lord Hughes. In the first place, POCA cannot apply
to pre-commencement offences, if retrospectivity, and a consequent breach of article
7 of the ECHR, is to be avoided. Otherwise, in Lord Hughes’ words, “there would
be impermissible retrospective operation of the criminal law” (para 83).
Page 53
147. In the second place, practical difficulties are liable to arise if a court is
required to apply different confiscation regimes in the same proceedings, where
some counts relate to offences committed before the commencement date of POCA
and some to offences committed after that date. In Lord Hughes’ words, “there
would also be likely to be a real risk of unfairness if a defendant faced the prospect
of two different confiscation regimes being applied to him” (para 84).
148. It follows that pre-commencement offences have to be dealt with under the
previous confiscation regime in force at the time when they were committed, and
that it is sensible that the same regime should also be applied to post-commencement
offences dealt with in the same proceedings. The natural way of achieving those
objectives is to provide that in any case in which the defendant has been convicted
in Crown Court proceedings of an offence committed before the commencement
date, all the offences of which he has been convicted in those proceedings are to be
governed by the confiscation regime in force at the time when the earliest offence
was committed. Similarly, mutatis mutandis, in any case in which the defendant has
been committed under section 218 in respect of an offence committed before the
commencement date, and also of later offences. That is the effect of section 156(2)
and (9) of POCA, read with article 4 of the Order.
149. The interpretations of section 156 to which the majority are driven by their
desire to avoid the supposed absurdity appear to me, with respect, not only to be
strained beyond breaking point, but also to create anomalies of their own. As I
understand Lord Kerr’s judgment, he considers that, as a matter of construction of
the statute, section 156(2) cannot apply to any offence committed before the date
fixed for the entry into force of the provisions of Part 4 (which, in the event, was 24
March 2003). With respect, I cannot understand how that construction can be
derived from the statutory wording. In my view, it requires the insertion of words
which are not there, as the Court of Appeal acknowledged when it arrived at the
same construction of the predecessor of section 156, as explained below.
150. Furthermore, the logic of Lord Kerr’s interpretation appears to be that one
and the same court could undertake two or more different confiscation exercises in
the same criminal proceedings: one, in respect of offences committed on or after 24
March 2003, under POCA, and others, in respect of earlier offences, under
whichever confiscation regime was in force at the relevant time. That situation, it
appears to me, might justifiably be described as anomalous.
151. As I understand Lord Hughes’ judgment, he takes a different approach. He
appears to interpret the phrase “the offence (or offences) concerned” – defined by
section 156(9) to mean “the offence (or offences) mentioned in subsection (2)” – as
if the definition referred to “any offence (or offences) mentioned in subsection (2)
in relation to which the condition mentioned in subsection (3)(a) is also satisfied”
Page 54
(that condition being “that the prosecutor asks the court to proceed under this
section”). Bearing in mind the clarity of section 156(9), and the level of detail and
technicality which characterises the drafting of POCA, I find this hard to accept.
152. Furthermore, the logic of Lord Hughes’ interpretation appears to be that, if
pre-commencement and post-commencement offences are before one and the same
court, the Crown must in effect forego any confiscation proceedings in respect of
the pre-commencement offences, and proceed only in respect of postcommencement offences for whatever benefit they may yield. That is indeed what
happened in the present case. It seems to me to be much more likely that the drafter
of the transitional provisions intended to bring all the offences in any set of
proceedings into one statutory confiscation scheme or the other. Then, at least, no
offences would fall outside all confiscation regimes.
The use of subordinate legislation in the construction of primary legislation
153. The majority of the court also rely on their construction of a number of
provisions in the Order, and more particularly the fact that they were substituted by
different provisions shortly after the Order was made, as supporting their
interpretation of section 156(2) and (9). With respect, this appears to me to be an
example of using subordinate legislation to interpret the primary legislation under
which it was made: an impermissible, and indeed illogical, method of statutory
interpretation. The tail is wagging the dog. Even if I agreed with the majority’s
construction of the Order, and the intention attributed to it, it follows that I would
nevertheless reject this aspect of their reasoning. The Order cannot affect the
meaning of section 156(2) and (9). But I am not in any event persuaded by their
construction of the Order.
154. The majority rely in particular on articles 8 and 9. In its original form, article
8 provided:
“8.(1) This article applies where the court is determining under
section 156(4)(a) of the Act whether the defendant has a
criminal lifestyle.
(2) The tests in section 223(2)(a) and (c) of the Act shall not
be satisfied where the offence (or any of the offences)
concerned was committed before 24 March 2003.
(3) In applying the rule in section 223(5) of the Act on the
calculation of relevant benefit for the purposes of section
Page 55
223(2)(b) and (4) of the Act, the court must not take into
account benefit from conduct constituting an offence which
was committed before 24 March 2003.
(4) Conduct shall not form part of a course of criminal
activity under section 223(3)(a) of the Act where –
(a) the offence (or any of the offences) concerned; or
(b) any one of the three or more offences mentioned
in section 223(3)(a),
was committed before 24 March 2003.
(5) Conduct shall form part of a course of criminal activity
under section 223(3)(b) of the Act, notwithstanding that any of
the offences of which the defendant was convicted on at least
two separate occasions in the period mentioned in section
223(3)(b) was committed before 24 March 2003.”
155. A different version of article 8 was substituted by the Proceeds of Crime Act
2002 (Commencement No 5) (Amendment of Transitional Provisions) Order 2003
(SI 2003/531) (“the Amendment Order”). The substituted provisions provide:
“8.(1) This article applies where the court is determining under
section 156(4)(a) of the Act whether the defendant has a
criminal lifestyle.
(2) Conduct shall not form part of a course of criminal
activity under section 223(3)(a) of the Act where any of the
three or more offences mentioned in section 223(3)(a) was
committed before 24 March 2003.
(3) Where the court is applying the rule in section 223(5) of
the Act on the calculation of relevant benefit for the purposes
of determining whether or not the test in section 223(2)(b) of
the Act is satisfied by virtue of conduct forming part of a course
of criminal activity under section 223(3)(a) of the Act, the court
must not take into account benefit from conduct constituting an
Page 56
offence mentioned in section 223(5)(c) of the Act which was
committed before 24 March 2003.
(4) Conduct shall form part of a course of criminal activity
under section 223(3)(b) of the Act, notwithstanding that any of
the offences of which the defendant was convicted on at least
two separate occasions in the period mentioned in section
223(3)(b) were committed before 24 March 2003.
(5) Where the court is applying the rule in section 223(5) of
the Act on the calculation of relevant benefit for the purposes
of determining whether or not the test in section 223(2)(b) of
the Act is satisfied by virtue of conduct forming part of a course
of criminal activity under section 223(3)(b) of the Act, the court
may take into account benefit from conduct constituting an
offence committed before 24 March 2003.
(6) Where the court is applying the rule in section 223(6) of
the Act on the calculation of relevant benefit for the purposes
of determining whether or not the test in section 223(2)(c) of
the Act is satisfied, the court must not take into account benefit
from conduct constituting an offence mentioned in section
223(6)(b) of the Act which was committed before 24 March
2003.”
156. The majority argue that the changes made to article 8 are consistent with their
interpretation of section 156. As I have explained, I do not accept the logic of the
argument. But I am not in any event persuaded that the inferences which the majority
draw from the changes are justified. As it appears to me, the problem with article
8(2) of the Order in its original form was that POCA does not apply, by virtue of
article 4(1), where the offence (or any of the offences) concerned was committed
before 24 March 2003. There is therefore no question of section 223 of POCA
applying in those circumstances, and article 8(2) was therefore otiose. Article 8(4)(a)
of the Order was also otiose, for the same reason. Article 8(4)(b), on the other hand,
could have applied in cases where the defendant was committed by the magistrates’
court.
157. That view is consistent with the changes made. The provisions contained in
articles 8(2) and 8(4)(a) of the Order did not appear in the Amendment Order. On
the other hand, the terms of article 8(4)(b) of the Order reappeared as article 8(2) of
the Amendment Order.
Page 57
158. I find it much more difficult to be certain of the thinking behind the
replacement of articles 8(3) and (5) of the Order by articles 8(3) to (6) of the
Amendment Order. Section 223(2)(b), (3), (4) and (5) of POCA form a complex
group of provisions. The same is true of article 8(3) and (5) of the Order, and a
fortiori of article 8(3) to (6) of the Amendment Order. An in-depth analysis of these
provisions would take this court into a minefield of difficulties. It would also take it
beyond the scope of the parties’ submissions. In the circumstances, I do not express
any view.
159. So far as article 9 of the Order is concerned, it provides:
“Conduct which constitutes an offence which was committed
before 24 March 2003 is not particular criminal conduct under
section 76(3) or 224(3) of the Act.”
The majority suggest that that provision also supports their interpretation of section
156(2) and (9). I am not persuaded. The explanation of article 9, as it appears to me,
is that “particular criminal conduct” is defined by sections 76(3) and 224(3) of
POCA as including not only “(a) conduct which constitutes the offence or offences
concerned”, but also “(b) conduct which constitutes offences of which he was
convicted in the same proceedings as those in which he was convicted of the offence
or offences concerned”, and “(c) conduct which constitutes offences which the court
will be taking into consideration in deciding his sentence for the offence or offences
concerned”. Since (b), interpreted as explained in para 138 above, and more plainly
(c), could otherwise apply in respect of offences committed prior to the
commencement of POCA, article 9 is necessary in order to exclude that possibility,
consistently with the objectives explained in paras 146-148 above.
160. Lord Hughes also relies on section 143(3)(b) of POCA, a provision
applicable in Scotland which is in similar terms to section 224(3)(b). I have to
acknowledge that, although section 224(3)(b) can be interpreted consistently with
the approach which I have adopted to section 156(2) and (9), it is at least not obvious
that section 143(3)(b) can also be interpreted consistently with that approach. This
point has not, however, been the subject of argument, and I am reluctant to express
a concluded view. I would not exclude the possibility that, in such a complex and
technical piece of legislation, it is possible that the provisions applicable in England
and Wales may have been replicated for Scotland, as for Northern Ireland, without
noticing a material distinction. I am not, in the absence of fuller argument, inclined
to accept that an apparent infelicity in the drafting of one of the Scottish provisions
is a sufficient reason for departing from the natural meaning of section 156(2) and
(9) and their equivalents for the other parts of the United Kingdom.
Page 58
Previous authority
161. The majority place some reliance on three decisions of the Court of Appeal
of England and Wales concerned with section 16(5) of the Proceeds of Crime Act
1995 (“the 1995 Act”), a transitional provision broadly analogous to article 4 of the
Order. The 1995 Act operated by amending the Criminal Justice Act 1988 (“the
1988 Act”). Section 1 of the 1995 Act was analogous to section 156 of POCA.
Section 16(5) provided:
“Section 1 above shall not apply in the case of any proceedings
against any person where that person is convicted in those
proceedings of an offence which was committed before the
commencement of that section.”
162. The intended meaning and effect of section 16(5) could hardly have been
made clearer. Where a person was convicted in any proceedings of an offence which
was committed before the commencement of section 1, that section did not apply,
with the result that it was the unamended version of the 1988 Act which generally
applied. Where, on the other hand, all the offences of which the person was
convicted were committed after the commencement of section 1, it was the 1995
Act (strictly speaking, the 1988 Act as amended by the 1995 Act) which applied.
163. That straightforward interpretation of section 16(5) was however rejected by
the Court of Appeal in a series of cases, on the ground that it led to absurd results:
as to which, see paras 146-148 above. The first of these cases was R v Simpson
[2003] EWCA Crim 1499; [2004] QB 118; [2003] 3 All ER 531; [2004] 1 Cr App
R (S) 24, where a confiscation order made under the 1995 Act was challenged on
the basis that one of the offences of which the appellant had been convicted in the
relevant proceedings was committed before the commencement of section 1. The
Court of Appeal considered it “obviously an absurd result” that an order could be
made under the 1995 Act if a defendant were acquitted of an offence committed
prior to the commencement date, but not if he were convicted of that offence. I see
no absurdity: transitional provisions limiting the operation of penal provisions to
offences committed after their entry into force are necessary in order to protect those
who are convicted of earlier offences, not those who are acquitted of them. However,
in order to avoid the supposed absurdity, the Court of Appeal read words into section
16(5):
“In our judgment section 16(5) has to be applied so that after
the word ‘offence’ there appears, the words ‘in respect of which
a confiscation order is or could be sought’.” (para 19)
Page 59
164. On the facts of the case, a confiscation order was not sought in respect of the
offence in question; but there was no obvious reason why such an order could not
be sought. The nature of the offence – a VAT fraud – did not in itself present any
problem. More importantly, the Court of Appeal’s discussion of the issue was in any
event obiter dictum, since it decided that the offence had actually been committed
after the commencement of the 1995 Act:
“So in fact, the offence was committed after 1 November 1995.
In any event the argument for the appellant, that the 1995 Act
cannot be relied upon, fails on the facts.” (para 20)
165. The issue was considered again in R v Mohammed Aslam [2004] EWCA
Crim 2801; [2005] 1 Cr App R (S) 116. In that case, the appellant had been convicted
of numerous offences of dishonesty. At the confiscation hearing, it was pointed out
that one of the offences had been committed before the 1995 Act came into force.
The prosecution then disclaimed reliance on any benefit obtained as a result of that
offence. The question was whether that cured the defect. Relying on Simpson, the
Court of Appeal held that it did. The court noted that, in Simpson, a confiscation
order could have been sought in respect of the offence in question. It concluded that
the fact that the appellant had been convicted in the instant proceedings of a precommencement count did not prevent the court from making a confiscation order
under the 1995 Act where the pre-commencement count was one which could not
be the basis of confiscation proceedings, or if the prosecution had expressly
abandoned any reliance on the pre-commencement count for the purposes of a
confiscation order.
166. The Court of Appeal followed Aslam in R v Stapleton [2008] EWCA Crim
1308; (2009) 1 Cr App R (S) 38, stating that it could not properly say that the earlier
decision was “plainly wrong” (para 7).
167. The Court of Appeal’s approach in these cases raises a number of difficulties.
First, and most importantly, it is inconsistent with the plain meaning of section 16(5)
of the 1995 Act: a fact which the Court of Appeal acknowledged by effecting a
judicial amendment of the provision. As amended by the Court of Appeal, section
16(5) permits the Crown to bring proceedings under the 1995 Act in circumstances
where Parliament has directed that the proceedings are to be brought under the
preceding legislation. That is not permissible under any canon of statutory
construction. Secondly, the Court of Appeal was mistaken, as it respectfully appears
to me, in thinking that the result of applying what Parliament had enacted was
absurd, as explained earlier. Thirdly, the Court of Appeal was also mistaken, in my
view, in thinking that the amount of a confiscation order under the 1995 Act could
be restricted by the prosecution. Under the 1988 Act as amended by the 1995 Act,
the court had to determine “whether the defendant has benefited from any relevant
Page 60
criminal conduct” (section 71(1A); emphasis supplied), and “relevant criminal
conduct” was defined as meaning the offence of which the defendant had been
convicted “taken together with any other offences of a relevant description which
are either (a) offences of which he is convicted in the same proceedings, or (b)
offences which the court will be taking into consideration in determining his
sentence for the offence in question” (section 71(1D)). The prosecution could not,
therefore, remove an offence of which the defendant had been convicted in the
proceedings from the calculation by choosing not to rely on it: the court was under
a statutory duty to assess the benefit arising from that offence in any event.
168. There are at least three other difficulties with the approach of the Court of
Appeal. First, it did not address the issues which arose, on its approach, from the
role which the court itself has in bringing confiscation proceedings. By virtue of
section 71(1)(b) of the 1988 Act, as substituted by section 1 of the 1995 Act, the
court can initiate confiscation proceedings in respect of all the offences of which the
defendant has been convicted in the proceedings if it considers that it is appropriate
for it to do so. POCA contains an equivalent provision in section 156(3)(b). One
might ask, in the first place, how that power bears on the assumption, implicit in the
Court of Appeal’s reasoning, that the court should defer to the prosecutor’s decision
not to proceed in respect of pre-commencement offences. The whole point of the
substitution of section 71(1)(b) was to enable the court to act independently of the
prosecution. Further, and in any event, if in any case the court decides to exercise
its power to initiate confiscation proceedings, can it too ignore certain offences so
as to secure the application of the most draconian confiscation regime available?
Under what power would it do so? If it cannot, does it not follow that the supposedly
absurd outcome must indeed have been intended? These issues appear to me to be
equally relevant to the approach adopted by the majority in the present case.
169. Secondly, the Court of Appeal did not address the issue discussed in para 129
above, which also arose in relation to the corresponding provisions of the 1988 Act
both as enacted and as amended. This issue is equally relevant to the approach
adopted by the majority in the present case.
170. Thirdly, in so far as the Court of Appeal’s approach, and that of the majority
in the present case, is premised on the assumption that it is always possible to
identify particular offences as being offences in respect of which a confiscation
order can or cannot be sought (“offences … which would qualify for applications
for a confiscation order”, “offences which can be dealt with under the Act”,
“offences in respect of which confiscation orders could be made” or “offences …
which could generate confiscation orders”, as Lord Kerr describes them in paras 5,
13, 16 and 17), before any inquiry has been made into whether the defendant has in
fact obtained property as a result of, or in connection with, the offence, that does not
appear to me to be a valid assumption.
Page 61
171. As explained earlier, a confiscation order is not sought in respect of offences,
but in respect of the benefit obtained from criminal conduct, which may or may not
have constituted an offence or offences of which the defendant has been convicted
in the proceedings in question. Whether a given offence of which the defendant has
been convicted may turn out to be one which is relevant to the confiscation order
may not be readily apparent at the time when the confiscation proceedings are
initiated. For example, a defendant does not usually obtain property as a result of or
in connection with an assault; but sometimes he does. A defendant usually obtains
property as a result of, or in connection with, the possession of a controlled drug
with intent to supply; but not always. In short, the construction of section 156 of
POCA, or of its equivalent in the earlier legislation, cannot be predicated on an
assumption that whether a conviction of a particular offence will lead to the making
of a confiscation order, or will affect the amount specified in the order, can be
determined at the time when the confiscation proceedings are initiated. The proof of
the pudding is in the eating.
Conclusion
172. For all these reasons, I would have answered the certified question in the
negative, and allowed the appeal.