R (Electoral Commission) v Westminster Magistrates' Court
| Jurisdiction | England & Wales |
| Judge | LORD WALKER,LORD PHILLIPS,Lord Clarke,LORD RODGER,LORD KERR,LORD BROWN,LORD MANCE |
| Judgment Date | 29 July 2010 |
| Neutral Citation | [2010] UKSC 40 |
| Date | 29 July 2010 |
| Court | Supreme Court |
[2010] UKSC 40
Lord Phillips, President
Lord Rodger
Lord Walker
Lord Brown
Lord Mance
Lord Kerr
Lord Clarke
Appellant
Patrick Lawrence QC
Can Yeginsu
(Instructed by Moreland & Co Solicitors)
Respondent
Michael Beloff QC
Jasbir Dhillon
(Instructed by the Treasury Solicitor)
LORD PHILLIPS (with whom Lord Clarke agrees)
Introduction
The Political Parties, Elections and Referendums Act 2000 ("the Act") introduced, for the first time in this country, restrictions on the donations that can be made to registered political parties. All statutory references in this judgment are to the Act.
Part IV of the Act specifies those from whom it is permissible for political parties to accept donations. Donations from an individual may only be accepted if the donor is on an electoral register. The Act confers on a magistrates' court the power, at the instigation of the Electoral Commission ("the Commission"), to forfeit from party funds a sum equal to a donation that has been accepted from an impermissible source. This appeal raises the question of the criteria that should properly be applied by a magistrates' court when exercising this power.
This question is of particular interest to the United Kingdom Independence Party ("UKIP"), a small registered political party which has yet to succeed in returning a member to Westminster. UKIP has relied for the majority of its funding on a single supporter, Mr Alan Bown. Since 2003 Mr Bown has made donations to the party, in one form or another, amounting to over £1 million. By inadvertence, between 1 December 2004 and 2 February 2006, he ceased to be on any electoral register. During this period his donations to UKIP amounted to £349,216. On 16 March 2007 the Commission made an application to the Senior District Judge in the City of Westminster Magistrates' Court for an order forfeiting the whole of this sum. The Senior District Judge ordered the forfeiture of only a small proportion of this sum. The Act gives a political party a right to appeal to the Crown Court against a forfeiture order but no right of appeal is given to the Commission. UKIP did not appeal against the order of the Senior District Judge, but the Commission challenged his decision by an application for judicial review.
In a judgment delivered on 22 January 2009 [2009] EWHC 78 (Admin) Walker J identified a wide range of matters to which the Senior District Judge should have had regard when considering the forfeiture application. He held that the Senior District Judge had failed to give adequate reasons for his decision and ordered that the case should be remitted to the Magistrates' court for further consideration.
The Commission appealed to the Court of Appeal, and was successful [2009] EWCA Civ 1078. On 19 October 2009, giving the only reasoned judgment, Sir Paul Kennedy held that, on a true construction of the relevant provisions of the Act, the discretion of the Senior District Judge was very tightly circumscribed. There was a strong presumption in favour of forfeiture. Where a donation was received by a political party from an impermissible source a forfeiture order should follow as a matter of course in the absence of exceptional circumstances. The Magistrates' court should, on remission, reconsider the matter in accordance with this approach.
Before this Court Mr Patrick Lawrence QC for UKIP has sought to uphold the approach of Walker J, whereas Mr Michael Beloff QC for the Commission has urged that the analysis of the Court of Appeal was correct. The difference between the two has been described as "the presumption issue".
The relevant provisions of the Act
Part I of the Act establishes the Commission which is given a wide range of regulatory powers and duties in relation to elections and political parties, including keeping under review "the registration of political parties and the regulation of their income and expenditure" (section 6(1)(e)).
Part IV deals with "Control of Donations to Registered Parties and their Members etc". Chapter II imposes restrictions on the receipt of donations. Section 54(1) provides that a donation must not be accepted if the person seeking to make it is not, at the time of its receipt, a permissible donor, or if his identity cannot be ascertained. Section 54(2) identifies those who are permissible donors. These include an individual registered in an electoral register and a company registered under the Companies Act 2006, incorporated within the United Kingdom or another member state, and carrying on business in the United Kingdom. Section 54(3) provides that a donation made in the form of a bequest will have been made by a permissible donor provided that he was registered in an electoral register at any time within the five year period that terminated with his death.
Section 56 imposes duties in relation to the acceptance or return of donations and imposes criminal sanctions for breach of those duties. Where section 54 prohibits acceptance of a donation it must be returned within 30 days of receipt. If it is not, both the party and the treasurer of the party are guilty of an offence, albeit that it is a defence to prove that all reasonable steps were taken to verify or ascertain whether the donor was a permissible donor and that, as a result, the treasurer believed that he was a permissible donor. The effect of section 56(5) is that a donation will be deemed to have been accepted, even if it is returned within 30 days, unless a record can be produced of its receipt and its return.
Section 58 contains the provision that has given rise to this appeal. It deals with forfeiture of donations that have been made by impermissible or unidentifiable donors. Where these have been accepted, notwithstanding that their acceptance was prohibited, section 58(2) provides:
"The court may, on an application made by the Commission, order the forfeiture by the party of an amount equal to the value of the donation."
Section 58(4) makes it plain that such an order may be made whether or not proceedings are brought against any person for an offence connected with the donation. Section 58(5) provides that in England and Wales the "court" is a Magistrates' court.
Section 60 provides that proceedings under section 58 shall be brought against the party in its own name and not in the name of any of its members and that any amount forfeited is to be paid out of the funds of the party.
It is notable that section 58 does not provide for the automatic forfeiture of any donation that is accepted from an impermissible source. The provision that the court may order its forfeiture confers a discretion on the court. Furthermore it has been common ground, rightly in my view, that the Commission also enjoys a discretion whether or not to make an application for forfeiture to the court. The Act itself gives no indication of the criteria that should govern the exercise of either discretion. It is the former discretion that is critical, but it would be strange if the court's discretion was narrower than that of the Commission.
The second issue of interpretation
The primary issue is the presumption issue. Does section 58(2) confer a broad discretion on the court whether or not to make a forfeiture order, or is there a strong presumption in favour of forfeiture? But section 58(2) raises a secondary issue of interpretation. It confers on the court a power to order forfeiture of "an amount equal to the value of the donation". Where the court exercises this power, does it have to order forfeiture of an amount equal to the total value of the donation, or is it implicit that the court has a discretion to order forfeiture of a lesser sum if it considers this appropriate? This has been described as the "all or nothing" issue.
There is a potential interrelationship between the presumption issue and the all or nothing issue. The Commission argues that Parliament has deliberately chosen a stringent regime in order to ensure that political donations come from acceptable sources. There is no half-way house. Similar policy considerations support both a strong presumption in favour of forfeiture and a requirement that forfeiture should be total. Conversely a wide discretion whether to forfeit or not sits better with a power to order partial forfeiture, so that the court has the flexibility to tailor its order to the particular facts.
The approach to interpretation
The answer to the all or nothing issue will not, however, determine the presumption issue. This is demonstrated by the fact that both Walker J and the Court of Appeal held that the power conferred on the Magistrates' court by section 58(2) was an "all or nothing" power. In these circumstances I have not found it helpful to try to answer the all or nothing issue first. The more helpful approach is to consider the interpretation of section 58(2) having regard to the mischief at which it is aimed. The parties are agreed that the discretion conferred by section 58(2) should be used to promote the policy and objects of the statute. This proposition is supported by high authority – see Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997 at 1030 per Lord Reid. This principle led Lord Bridge to observe in R v Tower Hamlets London Borough Council, Ex p Chetnik Developments Ltd [1988] AC 858, at p 873:
"Thus, before deciding whether a discretion has been exercised for good or bad reasons, the court must first construe the enactment by which the discretion is conferred. Some statutory discretions may be so wide that they can, for practical purposes, only be challenged if shown to have been exercised...
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