The Supreme Court held that credit for part payment of a confiscation order, against the term of imprisonment fixed in default, must be calculated by reference to the sum due when the Crown Court made the order and not by reference to the larger sum outstanding once interest is added. Mr Gibson was therefore entitled to a greater reduction in his default term than the authorities had allowed. His appeal was allowed.
The facts
The Crown Court made a confiscation order for just over £5.4 million and fixed a six-year term of imprisonment in default of payment. By the time part payments were realised, interest had substantially increased the outstanding debt. Using the higher figure meant each payment bought a smaller reduction in the default term. Mr Gibson challenged that calculation.
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The enforcement scheme
Unlike other money orders made by the criminal courts, confiscation orders carry interest. Section 10 of the Drug Trafficking Act 1994 made the payer liable for interest on any unpaid sum and provided that, for enforcement purposes, the interest was to be treated as part of the amount to be recovered. The Crown Court could increase the default term if the addition of interest took the sum into a higher band. The order was enforced as if it were a fine imposed by the Crown Court, which in turn engaged the magistrates’ power to commit for non-payment. The only statutory provision dealing with part payment was section 79(2) of the Magistrates’ Courts Act 1980. It reduces the days to be served in the same proportion as the amount paid bears to so much of the sum as was due at the time the period of detention was imposed.
Because the enforcement provisions were designed for magistrates’ fines, they did not fit Crown Court orders neatly. Magistrates ordinarily fix a default term only after default, when any part payment is already known. The Crown Court must fix the term when it makes the order. The courts below treated section 79(2) as referring to the magistrates’ warrant and the Court of Appeal read additional words into it so that part payments made before that warrant could be credited. The Supreme Court held that, for a Crown Court order, the period of imprisonment in default is imposed when the Crown Court fixes the anticipatory term. That follows from the definition of imposing imprisonment in the Magistrates’ Courts Act 1980, from section 140(3) of the Powers of Criminal Courts (Sentencing) Act 2000, which assumes that the Crown Court term may already have been reduced under section 79(2), and from rules permitting payment under section 79 before a warrant of commitment is issued.
Whether interest forms part of the starting sum
The remaining question was whether the sum due when the Crown Court imposed the default term, for the purposes of the proportionate calculation, included interest which had accrued by the time of the magistrates’ proceedings. The Secretary of State argued that it must. The purpose of the interest provisions is that interest forms part of the amount to be recovered, and civil enforcement of interest against a defendant already in default is unlikely to be effective. A confiscation order is premised on the defendant having the means to pay, and the confiscation statutes provide for a certificate of inadequacy and a consequent reduction if circumstances change.
Lord Reed and Lord Hughes, with whom the other members of the court agreed, held that those considerations could not justify straining the words of section 79(2). The subsection requires the part payment to be compared with so much of the sum as was due at the time the period of detention was imposed. At the time the Crown Court fixed the six-year term, no interest had accrued. The construction contended for would increase the period of imprisonment. Penal legislation is construed strictly, particularly where the penalty involves deprivation of liberty. The words suggest that the starting point is the sum outstanding at the time of the Crown Court order. The express inclusion of the costs of distress does not permit interest to be read in from a different Act; that reference is explained by the ordinary sequence in which magistrates may issue a distress warrant before fixing a default term.
A scheme which calculated the default term on the whole sum including interest might have been what the framers of the confiscation legislation would have wished, but the method of statutory cross-reference to provisions drafted for a different purpose had not achieved it. Express legislation would be required. The proposed construction would also be difficult to apply in practice, since interest accrues daily and would steadily reduce the credit given for part payments, while offering no equivalent consequence for a defendant who paid nothing at all.
Verdict: The Court unanimously allowed Mr Gibson’s appeal. The reduction in his default term had to be calculated against the sum due when the Crown Court fixed that term. Interest accruing afterwards did not reduce the credit he received for each part payment.
Source: R (Gibson) v Secretary of State for Justice [2018] UKSC 2
