R (on the application of Gibson) v Secretary of State for Justice
| Jurisdiction | England & Wales |
| Judge | Lord Reed,Lord Mance,Lord Hughes,Lord Carnwath,Lady Black |
| Judgment Date | 24 January 2018 |
| Neutral Citation | [2018] UKSC 2 |
| Court | Supreme Court |
| Date | 24 January 2018 |
[2018] UKSC 2
Lord Mance, Deputy President
Lord Reed
Lord Carnwath
Lord Hughes
Lady Black
Appellant
Pete Weatherby QC
Matthew Stanbury
(Instructed by Swain & Co Solicitors)
Respondent
David Perry QC
Will Hays
(Instructed by The Government Legal Department)
Heard on 5 December 2017
Lord Reed AND( with whomLord Mance, Lord CarnwathandLady Blackagree)
This case concerns the enforcement of confiscation orders made by the Crown Court upon conviction. As well as various statutory mechanisms for enforcement via the appointment of receivers, successive confiscation statutes have adopted the scheme of making confiscation orders enforceable as if they were fines imposed by the Crown Court. That involves using the powers of the Magistrates' Court, which is the court which can, if payment is not made, issue a warrant committing the non-paying defendant to prison. When making the confiscation order (as when imposing a fine), the Crown Court is required by statute to fix a default term of imprisonment to be served if the defendant does not pay. In a simple case of non-payment, the magistrates will usually issue a warrant committing the defendant to prison for the period which the Crown Court fixed as the default term, and that term has to be served consecutively to any sentence passed for the substantive offences which led to the making of the confiscation order. There are, however, two possible adjustments which may have to be considered. The first is interest. The second is part payment. The present appeal concerns how these two adjustments fall to be made when they coincide.
Because the confiscation order made in this case, and the enforcement action taken in consequence, happened some time ago, this case falls to be decided upon legislation now repealed and replaced. It is not, however, of merely historical interest. Although the drafting of later legislation has not been identical, the issue raised by this appeal arises in much the same way under the current legislation, the Proceeds of Crime Act 2002.
Put shortly, the issue is this. If between the making of the confiscation order by the Crown Court and the issue of a warrant by the magistrates committing the defendant to prison, part payment has been made, but also interest has accrued, what does the statutory scheme say about how credit is to be given for the part payment? Is the term of imprisonment ordered by the magistrates to be reduced, by reason of the part payment, by reference to the total net sum outstanding (including interest), or is reduction for part payment to be calculated by reference only to the principal sum payable under the confiscation order? It is trite, but important, to say at the outset that the question is not what scheme might be thought desirable, but rather what the convoluted statutes actually mean. It is also relevant to note that although the issue makes a difference of 11 days in the present case, in the context of a defendant sentenced originally to a term of 25 years for his substantive offences, it will apply to a large number of prisoners, and may fall for decision not only by courts, but also by prison governors who have to determine release dates.
Mr Gibson was convicted of drug trafficking offences on 21 May 1999 and sentenced to 25 years' imprisonment. On 29 March 2000 at the confiscation hearing, he was ordered to pay a little over £5.4m; that meant that it had been determined by the judge that his benefit was not less than that sum and that he had assets from which that sum might be realised. He was given 12 months to pay, and the judge fixed the term of six years' imprisonment in default of payment. Interest therefore ran from the expiry of the 12 months to pay. He paid nothing until 4 May 2007, when £12,500 was paid, it would appear via a receiver appointed to realise his assets. A month later, he appeared before the magistrates for consideration of a warrant of commitment. The magistrates deducted seven days from the six year term in default, to take account of the recent part payment. As at that time, interest had lifted the net sum outstanding, allowing for the part payment, to £8.1m. Subsequently, later in 2007 and in 2011, two further realisations were achieved by his receiver, which produced payments of £12,500 and £65,370. The prison authorities, and through them the Secretary of State for Justice, calculated the reduction in the six year default term on the basis of the proportion which these payments bore to the £8.1m outstanding at the time of his committal. That produced reductions of three days and 21 days, totalling 24 days. If the arithmetic had been applied instead to an outstanding figure confined to the original £5.4m, something like 11 extra days reduction would have been made. The issue in the present appeal is whether he was entitled to those 11 extra days.
Uniquely amongst orders for payment of money made by criminal courts, confiscation orders carry interest. They have done so since the early 1990s: see section 15 of the Criminal Justice (International Co-operation) Act 1990 and section 9 of the Proceeds of Crime Act 1995, which introduced the rule respectively in relation to drugs offences and to other forms of crime. Interest has been set, by successive statutes, at the same rate as is prescribed from time to time for civil judgment debts under section 17 of the Judgments Act 1838.
The interest provisions relevant to the present case were contained in section 10 of the Drug Trafficking Act 1994 (“the Drug Trafficking Act”), as in force at the relevant time:
10. Interest on sums unpaid under confiscation orders.
(1) If any sum required to be paid by a person under a confiscation order is not paid when it is required to be paid (whether forthwith on the making of the order or at a time specified under section 139(1) of the Powers of Criminal Courts (Sentencing) Act 2000) that person shall be liable to pay interest on that sum for the period for which it remains unpaid; and the amount of the interest shall for the purposes of enforcement be treated as part of the amount to be recovered from him under the confiscation order.
(2) The Crown Court may, on the application of the prosecutor, increase the term of imprisonment or detention fixed in respect of the confiscation order under subsection (2) of section 139 of the 2000 Act (as it has effect by virtue of section 9 of this Act) if the effect of subsection (1) above is to increase the maximum period applicable in relation to the order under subsection (4) of that section.
(3) The rate of interest under subsection (1) above shall be the same rate as that specified in section 17 of the Judgments Act 1838 (interest on civil judgment debts).
For present purposes, the key provisions are:
(1) the concluding words of section 10(1), by which the interest is to be treated for the purposes of enforcement as part of the amount to be recovered under the confiscation order; and
(2) section 10(2), which enables a Crown Court judge to re-fix, and increase, the default term if the addition of accrued interest takes the sum outstanding into a higher bracket in the relevant schedule of permissible default terms.
If the statutory scheme had stopped at this point, there would no doubt have been a powerful argument for saying that for all enforcement purposes interest is simply added to the original confiscation order. But this apparently fairly simple provision has to be considered in its place in the much more complex statutory scheme under which the magistrates' powers of commitment to prison are made applicable to confiscation orders.
In common with other confiscation statutes, the Drug Trafficking Act referred enforcement by committal to prison to the Magistrates' Court. By the time of the 2007 commitment proceedings in this case, section 9 provided:
9. Application of procedure for enforcing fines.
(1) Where the Crown Court orders the defendant to pay any amount under section 2 of this Act, sections 139(1) to (4) and 140(1) to (3) of the Powers of Criminal Courts (Sentencing) Act 2000 (powers of Crown Court in relation to fines and enforcement of Crown Court fines) shall have effect as if that amount were a fine imposed on him by the Crown Court.
The provisions there referred to in the (essentially consolidating) Powers of Criminal Courts (Sentencing) Act 2000 (“the 2000 Sentencing Act”) were previously contained in sections 31 and 32 of the Powers of Criminal Courts Act 1973, to which section 9 in its original form referred. In the courts below all parties, and thus the courts, proceeded on the basis that the 1973 provisions were the relevant ones. It was common ground before this court that the 2000 Act provisions had become the relevant ones by the time of the commitment proceedings in this case. The difference does not matter, because although the wording is not identical, it is agreed that the effect of the two sets of provisions is the same.
It follows that section 9 of the Drug Trafficking Act referred one on to sections 139 and 140 of the 2000 Sentencing Act, which are about fines. So far as material, they provided as follows:
“139. Powers and duties of Crown Court in relation to fines and forfeited recognizances.
(1) Subject to the provisions of this section, if the Crown Court imposes a fine on any person or forfeits his recognizance, the court may make an order —
(a) allowing time for the payment of the amount of the fine or the amount due under the recognizance;
(b) directing payment of that amount by instalments of such amounts and on such...
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