When this case was heard in the Court of Appeal, it was listed before five judges. That is unusual, and is often a sign that the Court of Appeal is considering overruling one of its own earlier decisions. In the end it did not do so. But after finding for the appellants the Lord Chief Justice indicated to the CPS that it should appeal to the Supreme Court which is not, of course, bound by an earlier decision of the Court of Appeal in the way that the Court of Appeal is. The appeal will be heard in the Supreme Court before five justices today.
The issue is a simple one: does the Crown Court have the power to make a confiscation order against a defendant, following conviction for an offence, if he or she receives an absolute or conditional discharge for that offence? There are four joined cases. In all of them Crown Court judges had decided that the most appropriate sentence was to discharge the defendant. But sentencing judges also imposed confiscation orders on the defendants, pursuant to the Proceeds of Crime Act 2002. In Mr Varma’s case, for example, he had evaded duty on tobacco on a number of occasions. The sentencing judge decided that, in light of his medical condition, he should receive a conditional discharge. Nevertheless, Mr Varma was ordered to pay a confiscation sum of £5307.86.
However, in June 2009, two months after Mr Varma’s confiscation order had been imposed, the Court of Appeal decided in the case of R v Joseph Clarke  EWCA Crim 1074, that such an order was impermissible. That is why, when these appeals came before the Court of Appeal, the appellants might well have been optimisitic – the argument had already been won. In very brief summary, the Court of Appeal’s reasoning in R v Clarke was as follows:
- Under section 12 of the Powers of Criminal Courts (Sentencing) Act 2000, a conditional or absolute discharge may be imposed when a Crown Court ‘is of the opinion, having regard to the circumstances including the nature of the offence and the character of the offender, that it is inexpedient to inflict punishment.
- Section 14 of the 2000 Act indicates that where an order for a discharge is made, the conviction shall not to be a conviction for any purpose other than the purposes of the proceedings in which the order is made.
- But the provisions of the Proceeds of Crime Act 2002 (‘POCA’), relating to the imposition of a confiscation order and its enforcements (including punishment for non-payment) relate to a person who has been convicted of an offence.
- After reviewing the history of the various provisions, Lord Justice Hooper, accepted the that a discharge was not a conviction and could not trigger the confiscation provisions under the 2002 Act. Accordingly, a confiscation order (in that case £1500) should not have been made.
However, when Mr Varma’s case reached the Court of Appeal a differently constituted court took a very different view as illustrated by the judgment of Lord Judge LCJ. In summary:
- It was well established prior to the 2000 Act that a confiscation order could be made, even though it was “inexpedient” to impose punishment for the offence and a discharge was appropriate.
- This also fitted with the legislation: the purpose of a confiscation order is to deprive the offender of the benefit of his crimes and the alternative would be to leave him to enjoy the fruits of the offence of which he was convicted.
- It is right that a confiscation order cannot be made unless or until there has been a conviction, but following conviction, and subject to certain conditions the Crown Court is obliged to proceed to address the question whether to make a confiscation order if, as here, the prosecution asked the court to do so.
- Section 13 of POCA appears to include absolute or conditional discharge, when indicating that a court considering a confiscation order should leave out of consideration the sentence it has imposed.
- Accordingly, the position was clearly against the interpretation put forward by the appellants. If it were not for the decision in R v Clarke, the Court of Appeal would not even have granted the appellants leave to appeal.
The CPS asked the Court of Appeal to depart from R v Clarke at that stage and refuse the appeals. But, partly in tribute to the integrity of our appellate system, the Lord Chief Justice indicated that it would not do so. The Court of Appeal is usually bound by its own decisions. It may have been tempting to find ways to try to depart from R v Clarke, for example by finding that it had been decided per incuriam – but that was not the case. Alternatively, the Court of Appeal could have exercised its power – in exceptional circumstances – to depart from its earlier rulings (see R v Simpson  QB 118). However, such circumstances did not apply in this case. Instead, in deference to principle, it followed R v Clarke and allowed all the joined appeals, while advising the CPS to appeal to the Supreme Court so that R v Clarke could be overturned if the Supreme Court agreed that it should be.
There is one additional point that may be of interest when the submissions begin later this week. In R v Clarke the appellant had successfully relied on the interpretation of Lord Mance’s speech in R v Longworth  UKHL 1 as to what may constitute a ‘conviction’. Whether that interpretation was correct may become clear quite quickly in the forthcoming hearing: the five justices hearing this case will be Lord Phillips of Worth Matravers, Lord Clarke of Stone-cum-Ebony, Lord Dyson, Lord Reed . . . and Lord Mance of Frognal.