SHERIFFDOM OF
TAYSIDE, CENTRAL AND FIFE AT ALLOA
NOTE BY SHERIFF ALASTAIR BROWN
in causa
HER MAJESTY'S ADVOCATE
against
YAI KAIN CHEUNG
Prisoner in the Prison of Glenochil
Alloa,
18 July 2013
- On
4 July 2013 this case called before me at Alloa Sheriff Court for enquiry
into the failure of the accused to pay £13,391.88, being the balance
outstanding in relation to a confiscation order in the sum of £29,070.76
imposed in the High Court of Justiciary by the Hon Lord Tyre on 21 March
2011. The solicitor who appeared for the accused invited me, on what he
said was "joint motion", to continue the matter for a number of weeks to
allow the accused to make progress with payment. It appeared to me that
what I was being asked to do was procedurally questionable and I asked for
submissions on the matter. Neither the solicitor nor the procurator fiscal
was in a position to make reasoned submissions at that stage and I
therefore fixed a further hearing for 18 July 2013 for that purpose. On
that date, the case called before me again and the motion to continue the
matter was renewed. I asked for submissions, in particular in relation to
the effect of s116 of the Proceeds of Crime Act 2002 ("the 2002 Act"). The
submissions which were made on both sides were directed principally to the
desirability of a continuation rather than to the competency of that
course. I return to those submissions below. It was, however, submitted on
behalf of the accused that the fines enforcement provisions of the
Criminal Procedure (Scotland) Act 1995 ("the 1995 Act") apply and that it
is therefore competent to continue a hearing (specific reference was made
to s216(3) but that subsection does not address this issue). After hearing
submissions, I directed that interest should be applied to the amount
outstanding in terms of s117 of the 2002 Act and, having reached the
conclusion that a further continuation would be incompetent, I imposed a
sentence of 12 months' imprisonment, to be served (in terms of s118(5) of
the 2002 Act) consecutively to the sentence in respect of which the
confiscation order was imposed. This Note explains the reasoning which
led me to do that.
- A
court will make a confiscation order in the circumstances set out in
section 92(1) to (4) of the 2002 Act. In doing so, the court must decide
the recoverable amount (in terms of section 92(6)(a)). That involves the
determination of the accused's benefit from crime and, if it is less than
the benefit, the available amount (2002 Act s93). The court must make a
confiscation order in the recoverable amount (section 92(6)(b)). The
confiscation order does not directly confiscate anything. It is simply an
order to pay a specified sum of money but the way in which that sum is
determined distinguishes a confiscation order very clearly from a fine. A
fine is a penalty, the level of which is arrived at after taking into
consideration the means of the offender (1995 Act s211(7)). Whilst the
amount available for satisfaction of a confiscation order is relevant to
the determination of a confiscation order, the underlying aim of this part
of the 2002 Act is to remove capital from the criminal economy by
depriving enterprise criminals such as this accused of the whole of their
benefit from their crimes, or at least of as much of it as they have left,
and thereby starving the criminal economy of investment.
- In
terms of s116 of the 2002 Act, the confiscation order is, in the first
instance, payable immediately. If, however, the accused shows that he
needs time to pay, the court making the confiscation order may make an
order allowing payment to be made in a specified period which must not
exceed 6 months from the date on which the confiscation order is made. The
law then provides for two intersecting enforcement regimes.
4. First, where a
confiscation order has been made and is not satisfied but is not subject to
appeal, the court may, on the application of the prosecutor, appoint an
administrator with power to take possession of property, to manage or otherwise
deal with it, to realise it in such manner as the court may specify (2002 Act
s128) and to apply the funds on the accused's behalf towards satisfaction of
the confiscation order (s130). The court may order any person who has
possession of realisable property to give possession of it to an administrator
and the court may order a person holding an interest in realisable property to
make to the administrator such payment as the court specifies in respect of the
beneficial interest held by the accused.
- Second,
s118(1) of the 2002 Act applies specified provisions of the fines
enforcement provisions of the 1995 Act to confiscation orders. Those
provisions include s211(4), by which a fine (and hence a confiscation
order) imposed by the High Court falls to be remitted to the sheriff court
for enforcement. For the purposes of this Note, however, it is the omitted
provisions which have to be noticed first and which are of particular
significance. Those omitted provisions include the power under s213 to
remit fines, the parts of s214 which contemplate payment by installments
and the whole of s215, which provides for time to pay. In my opinion, it
follows that those aspects of the fines enforcement provisions of the 1995
Act have no application to confiscation orders and the sheriff has no
power to remit confiscation orders, no power to allow payment by
installments and no power under the 1995 Act to allow further time to
pay.
- An
accused person who wishes to seek further time to pay a confiscation order
must apply to the sheriff under s116(4) to (6) of the 2002 Act for the 6
month period to be extended. That may be done only if the court believes
that there are exceptional circumstances and it may be done only to such
an extent that the total period within which the confiscation order is
paid does not exceed 12 months. By s116(6), although such an application
may be made after the expiry of the initial 6 month period, it must not be
made after the end of the period of 12 months starting with the date on
which the confiscation order is made.
- With
two small exceptions, there is no other means by which the accused can be
granted further time to pay. The first exception is the power conferred in
terms of s118(f)(ii) of the 2002 Act to postpone any decision about
imprisonment in default until a report is obtained from any administrator
who has been appointed. The second exception is the right of the
prosecutor, in limited circumstances, to ask the court to delay imposing
any period of imprisonment for up to 3 months to allow an application to
be made for the appointment of an enforcement administrator (2002 Act
s118(2)(f)(iii)). Otherwise, the period of 12 months from the date
of imposition of the confiscation order is, in my opinion, the absolute
outer limit of the period allowed for payment (an opinion which is strengthened
by the fact that Parliament has thought it necessary to grant a specific
power to delay imprisoning in cases involving administrators - that would
have been unnecessary if a general power had existed).
- If
there was any doubt about the conclusion that the court has no power to
allow time to pay beyond the 12 month limit, it seems to me that it would
be dispelled by para 187 of the Explanatory Notes where it is said that:
"[s]ection
116 indicates how long the court may allow the accused to pay the amount due
under the confiscation order. It provides that a confiscation order is to be
paid immediately, unless the accused can demonstrate to the court that he needs
more time to pay. If the court is satisfied that it is required, the court may
allow up to six months to pay, and up to a further six months on a later
occasion if there are exceptional reasons justifying the extension. In no
case, however, will more than 12 months be granted from the day on which the
confiscation order is made" (emphasis added).
- Once
the time permitted for payment (whether 6 months or up to 12 months) has
expired without the confiscation order being settled, the accused must pay
interest at the rate payable under a decree of the Court of Session (2002
Act s117). Section 216 of the 1995 Act, as applied by s118(2)(c) of the
2002 Act, will also operate so that the accused will be brought before the
sheriff court for enquiry into the reason why the confiscation order has
not been paid. On that occasion, the sheriff has the fines enforcement
powers which are applied to confiscation orders by s118 of the 2002 Act.
On close examination and comparison of s118 of the 2002 Act with the
provisions of the 1995 Act to which it refers, those powers appear to me
to be limited to the imposition of a prison sentence in default of payment
(in terms of s219(1)(b) of the 1995 Act) and an order that the amount is
to be recovered by civil diligence (in terms of s221 of the 1995 Act)
except where an administrator has been appointed (2002 Act s118(2)(h)).
What the sheriff does not have is any power, apart from s116 of the 2002
Act, to allow further time to pay.
- In
my opinion, to continue an enquiry under s216 of the 1995 Act for
negotiation about payment or in order to allow the accused time to pay the
confiscation order is to do no more and no less than to allow him further
time to pay, which is precisely what Parliament sought to exclude by
omitting s215 of the 1995 Act from the provisions which are applied by
s118 of the 2002 Act. A convicted accused who is subject to a confiscation
order may get up to 6 months to pay from the judge who imposes that order
and may (in exceptional circumstances) get that extended to 12 months by the
sheriff; but that is all he can get.
- Following
his conviction of rape and a contravention of s4(3)(b) of the Misuse of
Drugs Act 1971, the accused was sentenced to periods of 7 years' and 3
years' imprisonment respectively. A joint minute agreeing the amount of
the accused's benefit from criminal conduct, his available assets and the
amount of the confiscation order was tendered to the court and the
confiscation order was imposed on 21 March 2011. The court directed that
payment was to be made to the Sheriff Clerk at Alloa within 6 months. Thereafter,
the procedure followed in the present case bears little resemblance to the
procedure described above. On 15 July 2011 a letter was received by the
Sheriff Clerk in which the accused said that he was unable to pay the
order in full. That letter was faxed by the Sheriff Clerk to the Crown
Office but nothing else seems to have been done. In particular, the letter
does not appear to have been treated as an application under s116 of the
2002 Act for an extension of time for payment. In terms of s117, at the
expiry of the 6 month period, interest ought to have begun to be charged
on the outstanding balance. That was not done then and has never been
done. On 2 November 2012 (over 19 months after the imposition of the
order) the Crown Office Proceeds of Crime Unit wrote to the Sheriff Clerk
to say that the order was to have been paid by 21 September 2011, that
there was an outstanding balance of £13,391.88 and to ask that the accused
be cited to a means enquiry court. That happened on 13 December 2012. On
that date, consideration of the case was continued to allow the accused's
solicitor to attend. The same thing happened on 20 December 2012. On 24
January, the case was continued for legal aid to be granted. On 21
February 2013, the accused was represented and the case was continued "for
investigation and negotiation". On 11 April 2013, it was continued "for
resolution". On 4 July, it called before me and, as narrated above, I
refused to perpetuate that process.
- The
effect of all of this is that, whereas the accused was allowed 6 months
for payment and the legislation contemplates an absolute limit of 12
months, almost 28 months has passed and this confiscation order has
neither been paid nor enforced effectively. The process did, however,
metamorphose from the enforcement of a penalty into a quasi-civil recovery
(the minutes even use the language of civil practice when they refer to
"investigation and negotiation" and to "resolution"). In my opinion, that
was an error. The accused is required to explain to the sheriff why he has
not paid and the sheriff is required to decide what to do about that,
within the limits of the legislative scheme. The prosecutor is given a
right to be heard but the idea that the prosecutor can negotiate about how
much the accused will pay, when he will pay, and what consequences might
ensue from failure to pay is not to be found anywhere in the Act.
- The
accused was before me to be dealt with in terms of the provisions applied
by s118 of the 2002 Act. Much was made of the difficulties being
experienced in realising three assets referred to in the joint minute - an
interest in a business (said now to be worthless), the value of an
insurance policy and a cash sum seized by the police. All of that might
have been relevant to an application to extend the period for payment to
12 months from the imposition of an order. Indeed, if I had been empowered
to grant further time to pay apart from s116 of the 2002 Act, it might
have been relevant to the exercise of that discretion. However, the first
and most fundamental question, was whether I had any power to grant
further time to pay. That question was never addressed by the parties. I
concluded that I have no such power.
- The
submissions advanced before me made the assumption that I had power to
grant the continuation sought. They were directed, almost exclusively, to
the proposition that I ought to exercise my (presumed) discretion in such
a way as to grant the continuation. The argument made on behalf of the
accused was that he was now trying to realise the assets listed in the
joint minute, so far as not already done, in order to satisfy the
confiscation order and that he ought to be allowed to do so. The position
adopted on behalf of the Crown was that what the Crown really wanted was
to get the money in and (by implication) that the continuation was most
likely to achieve that. The procurator fiscal expressed concern that if I
imposed a prison sentence in default, that would extinguish the
confiscation order.
- Although
it might very well be that the completion of a term of imprisonment
in default of payment exhausts the confiscation order, I am not persuaded
that the imposition of such a term of imprisonment extinguishes the
order. The law on part payment of fines by those imprisoned for failure to
pay a fine is set out in s220 of the 1995, which is one of the provisions
which is applied to confiscation orders by s118 of the 2002 Act. Such a
person can pay part of the fine (or, it follows, a confiscation order) and
the term of imprisonment to be served is reduced by the operation of that
section in proportion to the payment made. In a confiscation case, the
recovery and payment over of a sum by an administrator has the same effect
(2002 Act s118(2)(g)). Moreover, s128 of the 2002 Act, which provides for
the appointment of administrators, allows that to be done when a
confiscation order is made, is not satisfied and is not subject to an
appeal. It is not provided that the power to appoint an administrator
lapses upon the imposition of a sentence of imprisonment in default of
payment. The imposition of a term of imprisonment in default of payment
should, therefore, operate as an additional incentive to the accused to
make the payment which he has delayed in making and it leaves it open to
the Crown to seek the appointment of an administrator to recover payment
of the order out of identified assets.
- It
is, further, at least arguable that an accused person who, after serving a
sentence in default of payment, retains or deals with property which can
be proved to be or to represent, in whole or in part, directly or
indirectly, benefit from crime commits a money laundering offence under
Part 7 of the 2002 Act. It also seems to me that it is arguable that such
property may be the subject of civil recovery proceedings under part 5 of
the 2002 Act. The starting point for such an argument, in either case,
would be the proposition that a confiscation order is an order to pay an
amount of money, not an order which confiscates particular property. Nor
does it operate to "launder" the property which is identified as available
in the course of determining the recoverable amount for the purposes of
s92 of the 2002 Act. If that property is or represents a person's benefit
from crime, there is nothing in the 2002 Act so far as I can see which
changes its character in any way.
- Much
of what was said, on both sides, was focused on the assets listed as
available assets in the joint minute tendered to the sentencing judge.
Three remained unrealised. They were the accused's interest in a business
known as Lily's Cuisine, valued at £5,000; the value of a policy with
Zurich Financial Services; and £3,141 seized from the accused by the
police and still held by them. It was said on behalf of the accused that
the interest in the business now had no value and that, while difficulties
were being experienced in securing payment from Zurich Financial Services,
it was hoped that this could be done soon. The money held by the police
would be recovered and the Crown would then apply to the Court to vary the
available amount to nil (presumably in terms of s108 of the 2002 Act).
- It
is probably important to recognise that that what is stated in the joint
minute is simply the evidential basis upon which the sentencing judge discharges
his duty under section 92(6)(a) to decide the recoverable amount and,
hence, the amount of the confiscation order. It is with the enforcement of
the order to pay that amount that the enforcing court is concerned, not
with the realisation of particular assets. The means by which the amount
is calculated is of no interest to the enforcing court. That court must
proceed on the basis of the order made by the sentencing judge. The
enforcing court has no power to vary or remit the amount ordered to be
paid and, in particular, a Sheriff has no power to vary or look behind the
amount determined by a judge of the High Court. If either the prosecutor
or the accused wishes to have the amount of the order varied, application
can be made to the sentencing court in terms of sections 104 to 109 of the
2002 Act. In particular, if the accused maintains that the available
amount has become inadequate, he can apply to the sentencing court in
terms of s108. The focus, for the enforcing court, must, in my opinion, be
on the amount of the order made by the sentencing court and on the resources
which the accused has to satisfy it at the time he is brought before the
enforcing court in terms of s216 of the 1995 Act. Those resources are
likely to be the same as those which he had at the time of the making of
the order; but not necessarily so, especially where there has been such
delay in enforcing the order.
- It
was not explained to me why, if the interest in the business had truly
become of no value, no application had been made to the sentencing court
in terms of s108. It was not explained to me why steps had not been taken
long ago to realise the value of the insurance policy. The procurator
fiscal seemed to express a general disinclination to seek the appointment
of administrators, on cost grounds, but the realisation of an interest in
a business and of the value of an insurance policy seem to be exactly the
sort of things with which an administrator could assist. No doubt the
administrator's fees would have to be paid out of the property realised
but the legislative objective of deprivation of the accused would still be
realised. The legislative policy is not, as I understand it, to maximize the
income stream to the authorities. It was not explained to me why
difficulty is being experienced, so long after the making of the order, in
getting the police to deliver up cash which has been seized.
- My
duty, in terms of s216 of the 1995 Act, was to enquire into the reason why
the confiscation order had not been paid (by implication, within the time
allowed). The answer appeared to be that the accused, apart from writing
to the sheriff clerk to say that he could not pay, had made no effort
until very recently to do so. In the interim, it appeared likely that his
interest in the business had lost (or been allowed to lose) its whole
value. It appeared, too, that the accused and those who came to represent
him had adopted a somewhat passive role, except in relation to the
insurance policy, leaving it to the Crown to ingather and realise property
and even failing to take advantage of the remedy available under s108 of
the 2002 Act. It appeared that the Crown had largely acquiesced in that
approach.
- Even
if I had been persuaded that I had a discretion to allow further time to
pay, directly or by continuing the hearing without making any order in
respect of the default, I would not have exercised it in the way the
parties desired. Far too much time had passed since the imposition of the
order without any significant steps being taken to progress payment.
- My
duty was, next, to decide what to do about the failure to pay. The options
available to me in terms of the provisions of the 1995 Act applied by the
2002 Act were limited to imprisonment or civil diligence. Having regard to
the amount outstanding and the serious nature of the matter, I decided to
impose imprisonment. I selected 12 months on the basis that the amount
outstanding, including interest, was between £10,000 and £20,000 and that
s219 of the 1995 Act indicates that period.
Sheriff
Alastair N Brown
