R v Smith (David)
| Jurisdiction | UK Non-devolved |
| Judge | LORD BINGHAM OF CORNHILL,LORD NOLAN,LORD HOFFMANN,LORD HUTTON,LORD RODGER OF EARLSFERRY |
| Judgment Date | 13 December 2001 |
| Neutral Citation | [2001] UKHL 68 |
| Date | 13 December 2001 |
| Court | House of Lords |
[2001] UKHL 68
Lord Bingham of Cornhill
Lord Nolan
Lord Hoffmann
Lord Hutton
Lord Rodger of Earlsferry
HOUSE OF LORDS
My Lords,
For reasons given by my noble and learned friend Lord Rodger of Earlsferry, which I have had the opportunity to read in draft and with which I am in complete agreement, I would allow this appeal and restore the order of the Crown Court.
My Lords,
I have had the opportunity of reading in draft the speech of my noble and learned friend, Lord Rodger of Earlsferry. For the reasons which he has given, I would allow this appeal and restore the order of the Crown Court.
My Lords,
I have had the opportunity of reading in draft the speech of my noble and learned friend, Lord Rodger of Earlsferry. For the reasons which he has given, I would allow this appeal and restore the order of the Crown Court.
My Lords,
I have had the advantage of reading in draft the speech of my noble and learned friend Lord Rodger of Earlsferry and for the reasons which he gives, with which I am in full agreement, I would allow this appeal and restore the order of the Crown Court.
My Lords,
On 2 October 1998 at Sheffield Crown Court David Cadman Smith ("the respondent") pled guilty to count 3 of an indictment alleging fraudulent evasion of excise duty contrary to section 170(2) of the Customs and Excise Management Act 1979. His co-accused, John Anthony Marriott, pled guilty to the same charge. The respondent was sentenced to 21 months' imprisonment and a confiscation order was made in the sum of £46,250. The respondent appealed against the confiscation order. On 16 June 2000 the Court of Appeal (Criminal Division) (Mance LJ, Newman and Burton JJ) allowed the appeal and quashed the order.
By letter dated 26 June 2000 the administrator of the chambers of counsel for Her Majesty's Customs and Excise served on the registrar of the Court of Appeal an application for leave to appeal to this House. The terms of the letter indicated that counsel would be content for the Court of Appeal to deal with the application without an oral hearing. The papers were passed to the members of the Court of Appeal who considered the matter and, on 28 July 2000, certified that the appeal involved a point of general public importance but refused leave to appeal. This decision was incorporated into an order dated 31 July 2000 but the order was not despatched or notified to the legal representative of either party until it was sent by second class post on 9 August 2000. The notice was not received by Customs and Excise. On 21 August their solicitors telephoned the Court of Appeal office to ask about the position in regard to their application. The office sent a copy of the order. On the basis that the Court of Appeal had reached their decision on 28 July, the 14-day period for applying to this House for leave expired on 10 August, the day after the second class letter was posted. Because they had not received the order by 10 August, the Crown were unable to exercise their right to apply to this House for leave to appeal.
The matter was re-listed before the Court of Appeal on 27 November. Despite the opposition of junior counsel for the respondent, on 20 December the Court of Appeal decided that they had power in the interests of justice to issue a fresh certificate so that the Crown could ask the House for leave to appeal. The Court of Appeal accordingly certified that the case raised the same point of law of public importance as they had previously certified and again refused the Crown leave to appeal against their decision of 16 June. In due course, on report from an oral appeal committee, the House gave leave to appeal.
In his written case the respondent argued that the appeal raised the question whether the Court of Appeal had had jurisdiction to hear a "renewed" application for leave to appeal in these circumstances. At the start of the hearing, however, Mr Emmerson, who appeared for the respondent, explained that he did not propose to argue that matter. He pointed out that the Court of Appeal had not certified the question as one of public importance. Moreover, in their opinion of 20 December, delivered by Mance LJ, the Court of Appeal had indicated that the court intended to adopt a different procedure which was designed to prevent a similar difficulty occurring in future. In these circumstances, understandably, counsel felt unable to argue that this procedural point was of general importance and therefore one that the House should consider. He was accordingly content for us simply to deal with the question certified by the Court of Appeal. On behalf of the Crown Mr Mitchell adopted a similar position. In these circumstances, your Lordships decided that it would indeed be appropriate to proceed simply on the basis that, in their order of 20 December 2000, the Court of Appeal had certified a point of public importance on which the House had then granted leave to appeal.
The point of public importance which the Court of Appeal certified is in these terms:
"Whether an importer of uncustomed goods, who intends not to enter them for customs purposes and not pay any duty on them, derives a benefit under section 74 of the Criminal Justice Act 1988 through not paying the required duty at the point of importation, where the goods are forfeited by HM Customs following importation, before their value can be realised by the importer."
The relevant facts which give rise to that issue can be stated fairly briefly.
Between June and November 1997 John Marriott made a number of trips abroad on his own boat to smuggle cigarettes and, on one occasion, spirits into the United Kingdom. In November 1997 he was arrested and made a full admission. His boat was confiscated but he was granted bail. While on bail, he approached the respondent and, it appears, put up £55,000 with which the respondent bought a motor vessel, The Vertine. In the words of the judge when imposing sentence, the respondent allowed himself to be used as Marriott's ship owner and captain. The Crown did not argue that the respondent himself had put up any of the money to buy the boat. The boat was used in April 1998 on a run to Heligoland to buy cigarettes and to smuggle them into this country without paying duty. On 8 May 1998 the respondent, Marriott and another man, David Russell, set sail once more for Heligoland. Two days later, on 10 May, they sailed The Vertine, laden with cigarettes, into the Humber estuary, past the customs houses at Immingham and Hull and so on for some 50 miles up the River Ouse until she reached Ocean Lock at the entrance to Goole. There is no customs house at this point. When the boat arrived at Goole, customs officers stopped and searched her. They found 1.25 million cigarettes on board. The excise duty payable on that quantity of cigarettes would have been £130,666.40.
Part VI of the Criminal Justice Act 1988 ("the 1988 Act"), as amended by the Criminal Justice Act 1993 and the Proceeds of Crime Act 1995, contains the statutory provisions dealing with the confiscation of the proceeds of an offence. When the possibility of making a confiscation order arises, the court must first determine "whether the offender has benefited from any relevant criminal conduct" (section 71(1A)). Subsections (4) and (5) of section 71 provide:
"(4) For the purposes of this Part of this Act a person benefits from an offence if he obtains property as a result of or in connection with its commission and his benefit is the value of the property so obtained.
(5) Where a person derives a pecuniary advantage as a result of or in connection with the commission of an offence, he is to be treated for the purposes of this Part of this Act as if he had obtained as a result of or in connection with the commission of the offence a sum of money equal to the value of the pecuniary advantage."
In terms of section 102(1) "property" includes "money".
When making the confiscation order against the respondent, the sentencing judge proceeded on the basis that, by evading the duty payable on the cigarettes, the respondent had derived a pecuniary advantage. In terms of subsection (5) he was therefore to be treated as if he had obtained, as a result of the commission of the offence, a sum of money equal to the duty evaded, viz. £130,666.40. In addition, the judge held that, in terms of subsection (4), the respondent had obtained The Vertine, worth £55,000, in connection with the commission of the offence. The judge therefore calculated that, for the purposes of Part VI of the Act, the respondent had benefited to the extent of £185,666.40. The respondent's "realisable property" (section 74(1)) was limited, however, to an apparent equity in his matrimonial home and the value of another boat which he owned, amounting in total to £46, 250. Applying section 71(6) the judge therefore made a confiscation order for the sum of £46,250.
In the Court of Appeal counsel for the respondent argued that the judge had erred in holding that the appellant had actually evaded payment of the excise duty. Counsel contended that, since the respondent had smuggled the cigarettes and had not made entry of them, duty had not been payable on them in terms of section 43 of the Customs and Excise Management Act 1979. The Court of Appeal rightly rejected this argument by observing that under regulation 4(1) and (5) of the Excise Goods (Holding Movement, Warehousing and REDS) Regulations 1992, the excise duty point was the time when the cigarettes were charged with duty at importation and the duty became payable at that point in terms of regulation 6(1). The respondent did not...
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