Togher v HM Revenue and Customs Prosecution Office

JurisdictionEngland & Wales
CourtQueen's Bench Division (Administrative Court)
JudgeMR JUSTICE COLLINS
Judgment Date03 April 2006
Neutral Citation[2006] EWHC 1212 (Admin)
Docket NumberDTA/33/1995

[2006] EWHC 1212 (Admin)

IN THE HIGH COURT OF JUSTICE

THE ADMINISTRATIVE COURT

QUEEN'S BENCH DIVISION

Before:

Mr Justice Collins

DTA/33/1995

The Queen on the Application of T
(Claimant)
and
Revenue and Customs Prosecutions Office
(Defendant)

MR M SUTHERLAND-WILLIAMS (instructed by RCPO) appeared on behalf of the DEFENDANT

MR A BODNAR (instructed by Hughmans) appeared on behalf of the CLAIMANT

Monday, 3rd April 2006

MR JUSTICE COLLINS
1

In form this is an application by Mr T to discharge a restraint order which was imposed some 11 years ago. Mr T was convicted by a jury of drug smuggling offences which were allegedly committed in the early 1990s. He was sentenced to 25 years' imprisonment. In addition he pleaded guilty to involvement in drug smuggling activities in relation to £3.6 million worth of cocaine. That was known as the Madrid indictment. For that Mr T received a sentence, in due course, of 9 years' imprisonment. There were, in addition, imposed confiscation orders under the Drug Trafficking Act 1994 which by then was in force. At the time of the commission of the offences the 1986 Act was the relevant Act. That will become material in relation to submissions that have been made based upon Article 7 of the European Convention on Human Rights.

2

Mr T appealed to the Court of Appeal against his conviction. That appeal was allowed. There were misdirections by the trial judge. He also appealed against the confiscation order. In the Court of Appeal the decision was that the confiscation order should be quashed but that an amount of £800,000 should be substituted. That was attached to the Madrid indictment to which he had pleaded guilty.

3

The trial judge, His Honour Judge Foley, had heard evidence in relation to confiscation and had decided that there were hidden assets. That is what justified the order in the sum of £2.4 million. There were some actual assets which were identified, notably a boat, which was worth something over £200,000, and some property in Scotland, which was of relatively small value as it turned out.

4

Apart from those assets, the total of which was something in the order of £250,000 or so, the order was based upon, as I say, hidden assets. The Court of Appeal, when dealing with the order, fixed the sum of £800,000 on the basis that there were indeed such hidden assets. The restraint order was directed to the known property but also, as one would expect, to all assets which the defendant then had.

5

The defendant has not helped himself since because he took no steps to cooperate with the Revenue in dealing with the payment of the confiscation order. Interest has been accruing and it is now not much less than it was originally, having regard to the payment that has been made of the amount which was realised by the sale of the boat and the sale of the property in Scotland, something approaching a quarter of a million pounds.

6

The defendant is now serving the default sentence of 4 years. That has been reduced pro rata, as the law provides, by the amount that has been paid off the £800,000. Broadly speaking, he has saved himself, by those payments, some 12 months of the default sentence. I am speaking in round figures, those are not in any way precise.

7

Strictly speaking, the Article 7 argument may well not be entirely material to the claim upon which this application is based, that the restraint order should be discharged. On the other hand, it is an argument which has been deployed by Mr Bodnar as a means of adding to the attack he makes now upon the continued existence of the restraint order on the basis that, broadly, it is unfair and an abuse of the process after so long a time to keep it in being. If the reality is that the service of the default sentence ought to expunge the liability, then there really is no point in maintaining the restraint order because it will have nothing upon which it will bite when the defendant ends his default sentence.

8

The question, therefore, is material to that extent and the argument is a short and perhaps obvious one, namely that it is said that what he is now suffering is a penalty which is heavier than that which could have been imposed at the time that he committed the offences, because at that time the law was that a default sentence expunged the liability under the confiscation order and that applied to the whole of the order if the whole of the default sentence was served, and pro rata having regard to however much of the sentence was served.

9

There was also an argument raised based upon interest, it being submitted that under the 1986 Act no interest accrued on confiscations sum outstanding, whereas under the 1994 Act that was changed.

10

Unfortunately it seems that Mr Bodnar overlooked the existence of the Criminal Justice (International Cooperation) Act 1990 which by section 15(1) provided:

"If any sum required to be paid by a person under a confiscation order is not paid when it is required to be paid… 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."

That was in force in 1991 which, of course, was before the offences were committed. That being so, the interesting argument as to whether the accrual of interest made the penalty heavier simply does not arise.

11

Article 7 reads:

"No one shall be held guilty of any criminal offence on account of any act or omission which did not constitute a criminal offence under national or international law at the time when it was committed. Nor shall a heavier penalty be imposed than the one that was applicable at the time the criminal offence was committed."

12

The case most directly in point in which the effect of Article 7 was considered in this context by the European Court of Human Rights is Welch v United Kingdom [1996] 20 EHRR 247. That related to confiscation under the Drug Trafficking Offences Act. The point in that case was that the Drug Trafficking Offences Act introduced a power of confiscation which related to assets held by a defendant which could be regarded as the proceeds of his criminal conduct. Before that there was no power to impose any confiscation order which affected such assets. Accordingly this was a new power which was introduced by the Act.

13

The court cited the words of the Secretary of State in introducing the Bill into the House of Commons, saying:

"By attacking the profits made from drug trafficking, we intend to make it much less attractive to enter the trade. We intend to help guard against the possibility that the profits from one trafficking operation will be used to finance others, and, not least, to remove the sense of injury which ordinary people are bound to feel at the idea of traffickers, who may have ruined the lives of children, having the benefit of the profits that they have made from doing so."

He went on to indicate that the legislation was needed because the forfeiture powers in the existing law had proved inadequate.

14

It was on the basis of that background that the court was asked to decide whether Article 7 applied. The court decided that the confiscation order was a penalty. That is not a finding which Mr Sutherland-Williams has sought to attack in any way, nor could he. It clearly is a penalty imposed upon a conviction for an offence. The court decided, in relation to this aspect of it, thus:

"34. Finally, looking behind appearances at the realities of the situation, whatever the characterisation of the measure of confiscation, the fact remains that the applicant faced more far-reaching detriment as a result of the order than that to which he was exposed at the time of the commission of the offences for which he was convicted…

"35. Taking into consideration the combination of punitive elements outlined above, the confiscation order amounted, in the circumstances of the present case, to a penalty. Accordingly, there has been a breach of Article 7."

15

Then the court concluded with these words:

"36. The Court would stress, however, that this conclusion concerns only the retrospective application of the relevant legislation and does not call into question in any respect the powers of confiscation conferred on the courts as...

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