Supreme Court allows constitutional challenge to Finance Act 1997 s.89(b) by criminal defendants facing prosecution.

THE SUPREME COURT

Appeal No. 440/2004

Murray C.J.

Denham J.

Hardiman J.

Geoghegan J.

Kearns J.

BETWEEN/

DERVISA OSMANOVIC

Appellant/Applicant

and

THE DIRECTOR OF PUBLIC PROSECUTIONS, IRELAND AND THE ATTORNEY GENERAL

Respondents

THE SUPREME COURT

Appeal No. 441/2004

BETWEEN/

CELEBIJA OSMANOVIC

Appellant/Applicant

and

THE DIRECTOR OF PUBLIC PROSECUTIONS, IRELAND AND THE ATTORENEY GENERAL

Respondents

THE SUPREME COURT

Appeal No. 300/2004

BETWEEN/

SAMANTHA SWEENEY

Applicant/Appellant

and

IRELAND AND THE ATTORNEY GENERAL

Respondents

and

THE DIRECTOR OF PUBLIC PROSECUTIONS AND JUDGE CATHERINE MURPHY

Notice Parties

JUDGMENT of Mr. Justice Geoghegan delivered the 25th July 2006

1. Each of these three appeals started life as judicial review applications to the High Court with leave seeking a declaration that

section 89(b) of the Finance Act, 1997 is unconstitutional and a consequential order of prohibition/injunction restraining a further

prosecution of the applicant. The cases made in the two Osmanovic cases were identical. A joint reserved judgment was delivered by

Ó Caoimh J. on the 30th July, 2004. In his conclusions, the learned trial judge referred to similarities between these two cases and

the Sweeney case, the subject matter of the third appeal in which he had delivered a judgment on the 27th May, 2004. He also

pointed out that there were some differences but apparently did not regard the differences as relevant and neither do I. I will outline

them in due course.

2. In his conclusion, the learned trial judge said the following:

“In the circumstances I find no basis upon which I should depart from the views expressed by me in the Sweeney case.

Essentially I take the view that the application in the instant case is premature and that a constitutional issue should not be

determined by this court at this stage. I believe that the facts of Curtis v. Ireland can be contrasted with the instant case as

in that case issues of fact relative to the offence charged were not capable of being determined before the court of trial.”

3. The judge went on to deal with another aspect of the case to which I will return, the question of whether the impugned provision

imposed a fixed penalty.

4. Unfortunately, the learned trial judge’s recollection as to how he had decided the Sweeney case was not entirely accurate.

Although he did say in the Sweeney judgment that he accepted the submission made that the application was “somewhat premature”

he went on to deal with the constitutionality of section 89(b). The judge upheld its constitutionality.

5. Any judgment as to the constitutionality or otherwise of section 89(b) of the Finance Act, 1993 must be a single judgment of the

court, as it is a post-1937 statutory provision. This judgment of mine, therefore, is confined to the other issues which arise.

6. In the two Osmanovic cases, the statement of opposition on behalf of all the respondents contained (inter alia) the following

ground of opposition.

“This judicial review is moot in that the applicant has not been tried or convicted of the offences she is charged with and to

which she has pleaded not guilty and thus the question of the constitutionality of what penalty will be imposed, if any, has not

yet arisen.”

7. In the Sweeney case the grounds of opposition included the following:

“2. The issue raised in this judicial review is premature and moot in that the applicant herein has not been returned for trial to

the Dublin Circuit Criminal Court.

3. The issue raised in this judicial review is premature and moot in that the applicant herein has not indicated that a plea of

guilty or not guilty is intended.

4. This judicial review is moot in that the applicant has not been tried or convicted of the offences she is charged with and

thus the question of the constitutionality of what penalty will be imposed, if any, has not yet arisen.”

8. The context of these particular grounds of opposition will become clear when I explain, as I am about to do, the factual

background to these proceedings. In this judgment, I will be confining myself to the “moot” issue. Although, in the judgments of Ó

Caoimh J. an issue of whether in certain circumstances the appellants will be subjected to a fixed penalty has been made marginally

relevant to the moot question, it is primarily a ground of attack on the constitutionality of the statutory provision and, therefore, in

my view, should more appropriately be dealt with in the judgment of the court on that issue.

9. The background to the moot issue is as follows. All three appellants have been prosecuted in respect of alleged excise offences

contrary to section 186 of the Customs Consolidation Act, 1876, as amended by section 34 of the Finance Act, 1963, as further

amended by section 72 of the Finance Act, 1983 and as yet further amended by ss. 89 and 90 of the Finance Act, 1997, and as

applied by section 9(1) of the Finance (Excise Duty on Tobacco Products) Act, 1977.

10. Section 89 of the Finance Act, 1997 reads as follows:

“In section 186 of the Customs Consolidation Act, 1876, there shall be substituted, in lieu of the penalty for each such offence

specified therein (being forfeiture of either treble the value of goods including the duty payable thereon, or one hundred

pounds, whichever is the greater) –

(a) on summary conviction, a fine of £1,000, or at the discretion of the court, to imprisonment for a term not exceeding

12 months or to both the fine and the imprisonment,

(b) on conviction on indictment, a fine of treble the value of the goods, including the duty payable thereon, or £10,000

whichever is the greater, or at the discretion of the court, to imprisonment for a term not exceeding 5 years or to both

the fine and the imprisonment.”

11. Section 34 of the Finance Act, 1963 as amended provides in respect of prosecutions under section 186 of the 1876 Act as

follows:

“1. If the estimated value of the goods is not challenged ‘in case treble the estimated value exceeds one thousand pounds

(€1,269.74) the offence shall be tried on indictment’.

2. If the estimated value of the goods is challenged ‘where treble the value so determined exceeds one thousand pounds

(€1,269.74) the offence shall be tried on indictment’.”

12. In the Osmanovic cases the value of the goods was €3,071.75 (Dervisa) and €3,309.53 (Celebija). In the Sweeney case the value

of the goods was £1,230.60. The effect of these valuations was that under the statutory scheme the offences would have to be

dealt with on indictment unless a particular appellant indicated a willingness to plead guilty in circumstances where the Director of

Public Prosecutions consented to summary disposal. This arises under section 34(6)(c) of the Finance Act, 1963, as inserted by

section 90 of the Finance Act, 1997 which provides as follows:

“Nothing in the foregoing subsections of this section shall prevent …

(c) the application of section 13 of the Criminal Procedure Act, 1967, to offences under section 186 of the Customs

Consolidation Act, 1876, section 3 of the Customs Act, 1956, or any other provision of the Customs Acts or section 106

of the Finance Act, 1992.”

13. To understand the options open to the appellants, it is necessary now to move to section 13 of the Criminal Procedure Act, 1967

as amended by section 10 of the Criminal Justice Act, 1999 which amendment came into force on the 1st October, 2001. In their

amended form the subsections relevant to this case read as follows:

“(2) If at any time the District Court ascertains that a person charged with an offence to which this section applies wishes to

plead guilty and the court is satisfied that he understands the nature of the offence and the facts alleged the court may –

(a) with the consent of the prosecutor, deal with the offence summarily, in which case the accused shall be liable to the

penalties provided for by subsection (3) or

(b) if the accused signs a plea of guilty, may, subject to subsection 2(a) send him forward for sentence with that plea

to a court to which, if he had pleaded not guilty he could lawfully have been sent forward for trial.

(2A) The accused shall not be sent forward for sentence under this section without the consent of the prosecutor.

(3)(a) On conviction by the District Court for an offence dealt with summarily under subsection (2)(a), the accused shall be

liable to a fine not exceeding £1,000 (€1,269.74) or, at the discretion of the court, to imprisonment for a term not exceeding

12 months, or to both such fine and imprisonment.”

14. The Osmanovic cases are at a different stage from the Sweeney case but for reasons which I will be explaining, I do not think

that anything turns on this. However, I will outline the factual position. In the Osmanovic cases both appellants have pleaded not

guilty and have been returned for trial. They have not yet been tried.

15. In the Sweeney case, all that has happened is that the appellant has appeared before the District Court but no further step has

been taken.

16. The basis on which the Osmanovics challenge the constitutionality of section 89(b) of the Finance Act, 1997 as contained in their

respective statements of grounds may be summarised as follows:

“1. The provision dictates to a trial judge the penalty to be imposed on a convicted person and deprives the judge of

jurisdiction to exercise any discretion in relation to sentence.

2. The provision ‘invidiously’ and unconstitutionally discriminates between those who are rich and those who are poor.

3. There is invidious discrimination between those charged with these offences and persons charged with other offences of

dishonesty.

4. The fettering of the judge’s discretion is disproportionate to the extent that it interferes with the appellant’s constitutional

rights.

16. The grounds for alleged unconstitutionality put forward on behalf of Samantha Sweeney in her statement of grounds are worded

differently but are broadly the same. It is worth quoting however the second ground from her statement of grounds as it sets out the

rich/poor issue with admirable clarity.

“The effect of the said section 89(b) taken in conjunction with section 13 of the Criminal Procedure Art, 1967 in the case of an

impecunious accused is to pressurise such an accused to plead guilty despite having a good defence to such charges as have

been laid against the applicant because of fear that if she is tried and her defence fails she will be fined in a sum beyond her

means or in prison for a period probably substantial though not to exceed five years. To that extent it interferes with the

constitutional right of the applicant of free access to the court and the exercise of what should be an unrestricted right to

present a defence to the charges without fear of being in effect punished for doing so.”

17. Is each of these appellants acting prematurely in seeking to challenge the constitutionality of section 89(b)? The learned trial

judge thought so but I do not agree. In the case of the Osmanovics, the judge took the view that these applicants might well be

acquitted on the merits and that they should wait until they were convicted before mounting any challenge to the constitutionality of

the provision. In relation to the Sweeney case the respondents lay emphasis on the very early stage of that case and that it is not

known yet what options are open to that appellant at the District Court stage. In other words, the Criminal Procedure Act, 1967 has

not really yet come into play. The trial judge seems to have been of the same view. I do not accept that locus standi is such a

narrow concept or that the views of the learned trial judge conformed with the principles of this court set out in Cahill v. Sutton

[1980] I.R. 269. I appreciate that prematurity and locus standi are not quite the same thing. In each of these three cases, however,

I am of the opinion that if the appellants’ complaints based on the Constitution could be arguably justified, they are perfectly entitled

to air them at this stage. In each case, prosecutions have at least been instituted.

18. Counsel for the Osmanovics have argued that there is plenty of authority for the proposition that a person facing criminal charges

has sufficient standing to challenge the constitutionality of the substantive provisions at issue. In the written submissions and at the

oral hearing Norris v. The Attorney General [1984] I.R. 36, Desmond v. Glackin (No. 2) [1993] 3 I.R. 67 and Curtis v. Attorney

General [1985] I.R. 458 have all been relied on and reliance has also been placed to some extent on the recent judgments of this

court in PG v. Ireland and CC v. Ireland delivered on the 12th July, 2005. In expressing the views which I have done, I would prefer to

rely on general principle supported by the case which seems to me to be most relevant that of Curtis v. The Attorney General, a

decision of Carroll J. in the High Court. The PG and CC cases are distinguishable in that there was a very special reason which is set

out in the judgments as to why this court was prepared to consider the validity of a proposed defence ahead of a trial. Some support

can be gained from the Norris and Desmond cases but the Norris case in particular would seem to me to have different features. I

believe that the case most in point is the Curtis case. In that case, there was a prosecution under section 186 of the Customs

Consolidation Act, 1876 as amended and by reason of the provision for the determination of value of the goods the plaintiff wanted to

challenge the constitutionality of the relevant provision ahead of the trial. Carroll J. took the view that the plaintiff had locus standi

to challenge the constitutionality of the provisions in question “as he was in imminent danger of a determination affecting his rights,

and this need not necessarily be a decision which would adversely affect his rights.” In my opinion, Carroll J. applied the law

correctly. Applying the same principles to this case, I consider that none of the proceedings, the subject matter of this appeal, are

premature.

19. As I have already pointed out in the Sweeney case the learned trial judge decided the constitutionality issue against the

applicant. Technically, he made no decision on the constitutionality issue in the Osmanovic cases. I could, in theory, take the view

that in those circumstances the Osmanovic cases would have to go back to the High Court for a decision by the High Court on the

constitutionality issue. As these cases, however, have been dealt with at the appeal stage contemporaneously with the Sweeney

case and as there is already a decision on the constitutionality issue in that case by the same trial judge as tried the Osmanovic

cases it would seem to me that this court should decide the constitutionality issue in all three cases by way of single judgment.