Peacock and another
| Jurisdiction | England & Wales |
| Judge | LORD BROWN,LORD WALKER,LORD WILSON,LORD HOPE,Lady Hale |
| Judgment Date | 22 February 2012 |
| Neutral Citation | [2012] UKSC 5 |
| Date | 22 February 2012 |
| Court | Supreme Court |
[2012] UKSC 5
Lord Hope, Deputy President
Lord Walker
Lady Hale
Lord Brown
Lord Wilson
Appellant
Orlando Pownall QC
Christopher Marsh-Finch
(Instructed by Creed Lane Law Group)
Respondent
David Perry QC
William Hays
(Instructed by CPS Appeals Unit)
Intervener (Secretary of State for the Home Department)
David Perry QC
William Hays
(Instructed by Treasury Solicitors)
Heard on 14 December 2011
Suppose that a convicted drug trafficker is found to have benefited from his trafficking to the extent of £1m but, having at the time realisable property worth only £100,000, a confiscation order is initially made against him just for this lesser sum. Suppose then that the defendant, entirely legitimately, later acquires property to the value of upwards of a further £900,000. Is he at that stage liable to a further court order increasing to the full extent of his criminal gain the amount recoverable under the confiscation order by reference to these after-acquired assets?
It is not in doubt that, assuming his offences were committed after 24 March 2003, and that he were therefore subject to the provisions of the Proceeds of Crime Act 2002 (" POCA"), the answer would be a clear "yes"—see particularly section 22(3) of POCA. But what if, as in the case of this appellant, his offences were committed before that date so that he falls to be dealt with under the Drug Trafficking Act 1994 ("the 1994 Act"), in particular under section 16 of that Act? Section 16, as amended by section 165(1) of, and paragraph 169 of Schedule 9 to, the Powers of Criminal Courts (Sentencing Act 2000, provides:
"(1) This section applies where, by virtue of section 5(3) of this Act, the amount which a person is ordered to pay by a confiscation order is less than the amount assessed to be the value of his proceeds of drug trafficking.
(2) If, on an application made in accordance with subsection (3) below, the High Court is satisfied that the amount that might be realised in the case of the person in question is greater than the amount taken into account in making the confiscation order (whether it was greater than was thought when the order was made or has subsequently increased) the court shall issue a certificate to that effect, giving the court's reasons.
(3) An application under subsection 2 above may be made either by the prosecutor or by a receiver appointed in relation to the realisable property of the person in question under section 26 or 29 of this Act or in pursuance of a charging order.
(4) Where a certificate has been issued under subsection (2) above the prosecutor may apply to the Crown Court for an increase in the amount to be recovered under the confiscation order; and on that application the court may—
(a) substitute for that amount such amount (not exceeding the amount assessed as the value referred to in subsection (1) above) as appears to the court to be appropriate having regard to the amount now shown to be realisable; and
(b) increase the term of imprisonment or detention fixed in respect of the confiscation order under subsection (2) of section 139 of the Powers of Criminal Courts (Sentencing) Act 2000 (as it has effect by virtue of section 9 of this Act) if the effect of the substitution is to increase the maximum period applicable in relation to the order under subsection (4) of that section."
Is the High Court, on an application made under section 16(2), entitled to have regard to after-acquired assets? That is the critical question now for decision by this court, leave to appeal in respect of it having been granted on 11 April 2011. It was a question expressly left open by the House of Lords successively in In re Maye [2008] 1 WLR 315 (see Lord Scott of Foscote's speech at para 24) and R v May [2008] AC 1028 (see Lord Bingham's speech at para 41).
There is, however, a preliminary issue also to be decided: was section 16 in force at the material time?
With that brief introduction let me sketch in, to the limited extent necessary, the particular facts of the present case.
On 7 January 1997 the appellant pleaded guilty before Judge Slinger at the Crown Court sitting at Preston to five offences of conspiracy to supply controlled drugs, two offences relating to Class A drugs, three to Class B drugs, all committed in 1995. On 8 January 1997 he was sentenced to 12 years imprisonment, reduced on appeal to ten years. In confiscation proceedings commenced under the 1994 Act the judge assessed the value of the appellant's proceeds of drug trafficking to be £273,717.50 but the amount then realisable to be only £823. Accordingly, on 10 July 1997, pursuant to section 5 of the 1994 Act, the judge made a confiscation order for £823 payable within 14 days, an order which was duly satisfied.
Following his release from prison in November 2000, the appellant went into the property business with his father and acquired very substantial further assets. In the light of this change of circumstances, the prosecution sought and obtained from the High Court, initially a restraint order under section 26 (made by Richards J on 18 March 2005) and thereafter a certificate under section 16(2) (issued by Mitting J on 18 May 2005) certifying that the amount that might now be realised was greater than the £823 taken into account when the confiscation order was first made. Armed with that certificate the prosecution then applied to the Crown Court under section 16(4) for an increase in the amount to be recovered under the confiscation order. On 26 October 2007, following a seven-day hearing, Judge Slinger found that the appellant now held realisable assets to the value of £348,315.54 and on 14 November 2007 he exercised his discretion to substitute for the £823 originally recoverable the sum of £273,717.50 (the full value of the appellant's proceeds from crime) to be paid within six months, with three years' imprisonment in default.
On 20 February 2009 (for reasons given on 2 April 2009) the Court of Appeal (Criminal Division) dismissed the appellant's appeal, brought on the basis that Judge Slinger had over-estimated the value of his realisable assets and had failed to take properly into account in the exercise of his discretion the length of time which had elapsed since the appellant's release from prison. The appellant no longer contends that, in making the order under section 16(4), Judge Slinger exercised his discretion incorrectly.
Subsequently the prosecution obtained from Pitchford J on 18 December 2009 an order under section 31 of the 1994 Act appointing a receiver with a view to enforcing the revised confiscation order. However, in the light of the appellant's argument (citing the reservations of the House of Lords in In re Maye and R v May) that Mitting J's section 16(2) certificate, made by reference to after-acquired assets, had been issued without jurisdiction, the judge suspended the receiver's powers pending a proposed appeal. The appellant's appeal, brought by leave of Black LJ granted on 30 June 2010, was heard by the Court of Appeal (Arden, Thomas and Etherton LJJ) on 10 November 2010 and dismissed on 20 December 2010. Arden LJ gave the only reasoned judgment. She regarded the court as bound by an earlier decision of the Court of Appeal (Criminal Division) (judgment given by Rose VP) in R v Tivnan [1999] 1 Cr App R(S) 92 in the prosecution's favour. She in any event agreed with it. As for the appellant's submission that section 16 no longer had effect after POCA came into force on 24 March 2003, Arden LJ regarded it as clearly wrong having regard to the terms of The Proceeds of Crime Act 2002 (Commencement No 5, Transitional Provisions, Savings and Amendment) Order 2003 ( SI 2003/333) ("the Commencement Order").
It is convenient, and in any event appropriate, to deal first with the appellant's argument that, by the time of Mitting J's section 16(2) certificate, section 16 was no longer in force.
Unless saved by the transitional provisions of the Commencement Order, it is clear that POCA repealed the relevant sections of the 1994 Act with effect from 24 March 2003. One turns, therefore, to article 3 of the Commencement Order headed "Transitional Provisions relating to confiscation orders—England and Wales" and in particular to article 3(1): "Section 6 of the Act (making a confiscation order) shall not have effect where the offence, or any of the offences, mentioned in section 6(2) was committed before 24 March 2003."
Section 6 of POCA (to broadly similar effect as section 2 of the 1994 Act) is the opening section of Part 2 of POCA dealing generally with confiscation orders in England and Wales and it comes into play when two conditions are satisfied, the first (specified by section 6(2)) being that a defendant has been convicted or is being committed to the Crown Court in respect of certain offences. The second condition is for present purposes immaterial.
What, then, is the position where, as here, the relevant offences were committed before 24 March 2003 so that, by virtue of article 3 of the Commencement Order, section 6 of POCA does not have effect? The answer to this is to be found in article 10 of the Commencement Order under the heading "Savings for England and Wales":
"(1) Where, under article 3 … a provision of the Act does not have effect, the following provisions shall continue to have effect … (e) sections 1 to 36 and 41 of the Drug Trafficking Act 1994;"
The appellant's contention is that article 3 (and, in turn, article 10) only come into play when not only was the relevant offending before 24 March 2003 but also no confiscation order had by then been made. Section 6 of POCA, he submits, is concerned only with the making of a...
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