R (the Director of the Assets Recovery Agency) v Green

JurisdictionEngland & Wales
CourtQueen's Bench Division (Administrative Court)
JudgeMR JUSTICE SULLIVAN
Judgment Date16 Dec 2005
Neutral Citation[2005] EWHC 3168 (Admin)
Docket NumberCO/2530/03

[2005] EWHC 3168 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

THE ADMINISTRATIVE COURT

Royal Courts of Justice

Strand

London WC2

Before:

MR JUSTICE SULLIVAN

CO/2530/03

The Queen On The Application Of The Director Of Assets Recovery Agency And Others
(CLAIMANT)
and
Jeffrey David Green And Others
(DEFENDANTS)

MR J CROW, MR N COX AND MR R COLBY (instructed by the Treasury Solicitor) appeared on behalf of the Claimant.

MR J KITSON appeared on behalf of the 10th Defendant

MR J KROLICK appeared on behalf of the 6th Defendant.

MR D LEWIS appeared on behalf of the 13th Defendant.

MR B DOUGLAS-JONES appeared on behalf of the 18th Defendant.

MR JUSTICE SULLIVAN
1

This is the determination of a preliminary issue in proceedings for civil recovery brought by the Director of the Assets Recovery Agency ("the Director") under Part 5 of the Proceeds of Crime Act 2002 ("the Act") against the respondents. The preliminary issue was ordered to be tried by McCombe J and its terms are set out in his order dated 20th July 2005 as follows:

"Whether a claim for civil recovery can be determined on the basis of conduct in relation to property without the identification of any particular unlawful conduct, this first question to include whether the claimant can sustain a case for civil recovery in circumstances where a respondent has no identifiable lawful income to warrant the lifestyle and purchases of that respondent."

The Director submits that the answer to both limbs of the question posed in the preliminary issue is in the affirmative. She does not have to identify or prove any specific acts of unlawful conduct, and may simply invite the court to infer that the property in question was obtained through some unidentified unlawful conduct in the absence of a satisfactory explanation from the respondent as to how the property was obtained. The parties are agreed that the issue is one of statutory construction and that there is no need to consider the complex facts of the Director's case against the respondents.

The legislative context

2

It is common ground that the relevant enactments must be considered in the context of the Act as a whole and that the Act as a whole must be considered in its historical context. In R (Quintaville) v Secretary of State for Health [2003] 2 AC 687 (2003) UKHL 13, a case concerned with the interpretation of the Human Fertilisation and Embryology Act 1990, Lord Bingham said:

"8. The basic task of the court is to ascertain and give effect to the true meaning of what Parliament has said in the enactment to be construed. But that is not to say that attention should be confined and a literal interpretation given to the particular provisions which give rise to difficulty. Such an approach not only encourages immense prolixity in drafting, since the draftsman will feel obliged to provide expressly for every contingency which may possibly arise. It may also (under the banner of loyalty to the will of Parliament) lead to the frustration of that will, because undue concentration on the minutiae of the enactment may lead the court to neglect the purpose which Parliament intended to achieve when it enacted the statute. Every statute other than a pure consolidating statute is, after all, enacted to make some change, or address some problem, or remove some blemish, or effect some improvement in the national life. The court's task, within the permissible bounds of interpretation, is to give effect to Parliament's purpose. So the controversial provisions should be read in the context of the statute as a whole, and the statute as a whole should be read in the historical context of the situation which led to its enactment."

In paragraph 21 of his speech Lord Steyn said:

"21. The adoption of a purposive approach to construction of statutes generally, and the 1990 Act in particular, is amply justified on wider grounds. In Cabell v Markham (1945) 148 F 2d 737,739 learned Hand J explained the merits of a purposive interpretation:

'Of course it is true that the words used, even in their literal sense, are the primary, and ordinarily the most reliable, source of interpreting the meaning of any writing: be it a statute, a contract, or anything else. But it is one of the surest indexes of a mature and developed jurisprudence not to make a fortress out of the dictionary; but to remember that statutes always have some purpose or object to accomplish, whose sympathetic and imaginative discovery is the surest guide to their meaning.'

The pendulum has swung towards purposive methods of construction. This change was not initiated by the teleological approach of European Community jurisprudence, and the influence of European legal culture generally, but it has been accelerated by European ideas: see, however, a classic early statement of the purposive approach by Lord Blackburn in River Wear Comrs v Adamson (1877) 2 App Cas 743, 763. In any event, nowadays the shift towards purposive interpretation is not in doubt. The qualification is that the degree of liberality permitted is influenced by the context, eg social welfare legislation and tax statutes may have to be approached somewhat differently."

3

The Act forms part of a government initiative to tackle increasing crime across the United Kingdom. In his submissions on behalf of the Director, Mr Crow relied upon the following publications in order to identify the particular legislative purposes of the Act and the mischief to which Part 5 of the Act is addressed. (1) The Working Group on Confiscation, Third Report: Criminal Assets published by the Home Office Organised and International Crime Directorate with a foreword by the Home Secretary in November 1998. (2) Recovering the Proceeds of Crime —a policy and innovation unit (PIU) report published in June 2000 with a foreword by the Prime Minister. (3) Criminal Justice: The Way Ahead Cmnd 5074 presented to Parliament by the Home Secretary in February 2001. (4) Proceeds of Crime Bill —Draft Clauses, Cmnd 506, published with a foreword by the Home Secretary in March 2001.

4

Mr Crow submitted that four relevant points emerge from this pre-statutory material. (1) The previous regime for confiscation and forfeiture was proving to be inadequate because successful and sophisticated criminals were extremely difficult to convict and extremely good at distancing themselves from the coal face of crime and in disguising the proceeds of crime. Hence the need for civil recovery proceedings to make it easier for the state to ensure that crime did not, and was seen not to, pay.

(2) The existing powers of confiscation and forfeiture were tied to limited kinds of offences (for example drug trafficking), whereas in reality professional criminals were likely to be engaged in a range of different kinds of criminal activity which might vary over time. It was therefore likely that it would be difficult to establish what property had been derived from which crime or crimes. Accordingly, there was a need for civil recovery to embrace all crimes without discrimination.

(3) The purpose of civil recovery proceedings is to recover property which represents the proceeds of crime, not to prove particular criminal guilt in relation to particular acts against particular individuals.

(4) In order to ensure that a civil recovery scheme was proportionate it would be necessary to incorporate a number of safeguards, thus, for example, the onus of establishing unlawful conduct to the civil standard of proof should rest upon the Director. The respondents should be entitled to public funding and to compensation in certain circumstances if the court eventually decides that the property sought by the Director is not recoverable. In addition, civil recovery should not be seen as the soft option in place of criminal proceedings.

5

It is unnecessary to cite lengthy passages from these four documents because there is no real dispute as to the legislative purpose of the Act, the mischief to which Part 5 was directed, or the context in which it was enacted. Although the terminology varies, all four documents recognise that "a careful balance has to be struck between the civil rights of the individual and the need to ensure that the State has the tools to protect society by tackling crime effectively": see for example paragraph 5.3 of the PIU report.

6

This preliminary issue is concerned with the detailed manner in which Parliament struck that balance. Mr Crow fairly acknowledged that there was no direct support in the pre-legislative material for his submission that the Director could simply allege that property had been obtained through "unlawful conduct" and was under no obligation to establish any particular kind or kinds of unlawful conduct. I would also sound a note of caution in respect of the three documents which precede the draft clauses. I do not suggest that they are inadmissible for the purpose of establishing the historical context, but the earliest document predates the enactment of the Act on 24th July 2002 by some years, and it is plain that the details of the legislation were continuously evolving: see for example the final sentence of the Home Secretary's foreword to the draft clauses, which states that account will be taken of comments received before finalising the Bill for introduction to Parliament, and paragraph 5.32, which stated that "the clauses reproduced here are still under development and therefore subject to a continuing process of refinement." The remainder of paragraph 5.32 and paragraph 5.33 of the clauses identified a number of matters which were still under consideration at that late stage. See also the final sentence of paragraph 5.25 for a...

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