Supreme Court dismisses constitutional challenge to Finance Act 1997 s.89(b) as proportionate and non-discriminatory.

THE SUPREME COURT

Murray C.J.

Denham J.

Hardiman J.

Geoghegan J.

Kearns J.

440/2004

BETWEEN

DERVISA OSMANOVIC

Appellant/Applicant

and

THE DIRECTOR OF PUBLIC PROSECUTIONS, IRELAND AND THE ATTORNEY GENERAL

Respondents

THE SUPREME COURT

441/2004

BETWEEN

CELEBIJA OSMANOVIC

Appellant/Applicant

and

THE DIRECTOR OF PUBLIC PROSECUTIONS, IRELAND AND THE ATTORENEY GENERAL

Respondents

THE SUPREME COURT

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 the Court delivered the 25th day of July 2006 by Murray C.J.

Constitutional Challenge

1. Each of the above-named appellants has challenged the constitutionality of s. 89(b) of the Finance Act, 1997. The said s. 89 reads

as follows:

“In s. 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.

Separation of Powers

2. It is suggested on behalf of the appellants that in so far as a fine may be imposed, that fine is a fixed penalty contrary to the

principles of separation of powers under the Constitution. In making this submission the appellants rely on Deaton v. Attorney General

[1963] I.R. 170. The Deaton case concerned a prosecution under s. 186 of the 1876 Act. That section conferred on the Revenue

Commissioners power to elect which of two penalties there prescribed the court was to impose for a customs offence. This court held

that that was repugnant to the Constitution to the extent that the said power was an integral part of the administration of justice

and as such could not be committed to the hands of the executive. The judgment of the court was delivered by Ó Dálaigh C.J.

Contrary to the submissions made by the appellants, that judgment does not support the particular separation of powers argument

which is being made on behalf of the appellants on these appeals. In the Deaton case, the court was considering a piece of legislation

which had provided for alternative penalties for a revenue offence already declared to be criminal and which went on to confer on an

executive authority the power to choose the penalty in any given case. It will be pointed out later on in this judgment that the

penalty complained of in this case is not in fact a fixed penalty but, even if it was, nothing in the judgment of the court in the Deaton

case would support any constitutional attack on it. At p. 181 of the report Ó Dálaigh C.J. had this to say:

“It is common ground that it is for the Legislature, when it creates an offence, to prescribe what punishment shall attach to

the commission of such offence. It is also common ground that the Legislature may for a particular offence prescribe a single

or fixed penalty, or a maximum penalty or a minimum penalty, or alternative penalties, or a range of penalties.”

3. The court went on to hold that once there was a choice of penalty prescribed by the legislature, the exercise of that choice was

the administration of justice and had to be carried out by a court.

4. In this case, s. 89(b) does not fix a penalty. It is not proposed to enter into any consideration therefore of what would be the

position if it had. On the contrary, s. 89(b) provides for a choice of penalty that is to say, 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” imprisonment for a term not

exceeding five years or to both the fine and the imprisonment.

5. There is clearly a multiple choice here. Even within the power to impose a prison term there is clearly the implied power to suspend

all or part of that term. The prison sentence whether custodial or suspended or partly custodial and partly suspended may be the only

sentence or may be combined with the fine. The selection is entirely to be made by the court. There is no question, therefore, of

either the legislature or the executive fixing the punishment. Only the court exercising its judicial power does that. This court cannot

accept that because there is a legislative prescription in relation to the fine option there is a breach of the principle of separation of

powers. It is quite clear from the judgment of Ó Dálaigh C.J. in the Deaton case that the Oireachtas does have powers to lay down

general parameters within which a sentence is to be imposed. There is no necessity in this judgment and indeed it would be wholly

undesirable to consider what the limits might be (if any) on the power of the Oireachtas to provide for either fixed sentences or

mandatory sentences. One could postulate extreme situations where the sentencing powers of judges were removed altogether and

every offence had a mandatory sentence. The constitutionality of such a law would obviously be questionable. But it has always been

accepted and indeed was accepted in Deaton that, within reason at least, the Oireachtas has power to lay down those parameters.

6. Revenue offences have traditionally attracted a somewhat different kind of sentencing culture. Penalties relating to the value of

goods were not uncommon. There is nothing in the structure or content of s. 89(b) which infringes the principles of separation of

powers. The Oireachtas was performing a fairly normal function in relation to a revenue offence and on the other hand in relation to

the choice of sentences, the courts were to perform their normal function. Any argument that s. 89(b) is invalid having regard to the

Constitution by reason of a breach of the separation of powers principle has to be rejected.

Wealth Discrimination

7. The next argument put forward in support of alleged unconstitutionality of s. 89(b) is that there is inherent in that provision a

wealth based discrimination. Crudely put, the argument more or less runs that the rich are fined and the poor are sent to prison.

There are several fallacies in this argument. First of all, there is nothing at all unusual about statutory offences of any kind providing

for a prison sentence and / or fine. In this instance what is provided for is a fine and/or prison sentence. There is that slight

difference of juxtaposition but that would be normal in a revenue offence. In the case of an ordinary offence a judge might well be

dealing with somebody who had no money and would, therefore, form the view that some kind of custodial or suspended sentence

would be more appropriate as otherwise there would be no punishment. If, on the other hand, the person he is sentencing has money

the fine becomes a real option. Normally, there is no element of unconstitutional discrimination in this process.

8. In the Sweeney case there is a refinement of the argument. It is submitted on behalf of Ms. Sweeney that she is a person without

money and that that being so, she may be forced to plead guilty in the District Court against her will so as to avoid the substantial

fine which would be imposed if she was found guilty in a trial upon indictment. This submission is made on foot of s. 13 of the Criminal

Procedure Act, 1967, as amended by s. 10 of the Criminal Justice Act, 1999. The relevant subsections of that section are already set

out in the judgment of Geoghegan J. relating to the aspects of these appeals other than the constitutionality of s. 89(b) of the

Finance Act, 1997. It is appropriate however to set out those provisions again in this judgment. They 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.”

9. In the first instance, it is a matter of choice for the accused whether to plead guilty or not. It must be assumed that normally this

will depend on whether the accused knows that he or she is in fact guilty. Even if the accused does wish to plead guilty the court

has to be satisfied that he or she understands the nature of the offence and the facts alleged and there has to be in place the

consent of the prosecutor, before the District Court judge is entitled to deal with the offence summarily. Undoubtedly, the penalties

are less on summary disposal. In that respect this offence is no different from any number of statutory offences. The procedure

whereby an indictable offence may, in some circumstances, be dealt with summarily with the consent of both the accused and the

prosecutor and attract a lesser penalty is available in numerous instances of statutory offences. It is a perfectly rational and just way

of dealing with offences which of their nature may be serious but where in any particular given instance the offending conduct may

not be particularly serious relative to other offences of the same kind. The court cannot discern anything unconstitutional about that.

Having regard to the various steps which have to be taken and the safeguards which are in the legislation, the court would wholly

reject the argument that there is, as it were, “a gun at the head” of an impecunious accused forcing him or her to plead guilty when

he or she might either know that he or she was innocent or might consider he or she would get a better trial before a jury.

10. A second argument against any suggestion of wealth discrimination is that the option of suspended sentence is open to the judge

in any given instance where in all the circumstances that might appear to him or her to be just.

11. Thirdly, it has to be borne in mind that s. 89(b) is concerned with a conviction for a revenue offence. Money should have been

available to pay the duty and in those circumstances a financial penalty is not unjust. If, however, it is unrealistic or impracticable,

the judge has other options as already pointed out. These kind of sentences involving substantial fines have been traditionally a

feature of revenue offences and in considering what is fair or unfair or discriminatory or non-discriminatory, the court should take this

factor into account. The obiter dicta of Ó Dálaigh C.J. in In re McIlhagga, judgment of the Supreme Court delivered 29th July, 1971

are not really relevant to this case. That was a case where a High Court judge in the Central Criminal Court imposed three years penal

servitude on foot of a plea of guilty to a count of obtaining money by false pretences and took other charges into account but added

a provision that in the event of the accused paying restitution at any time within a period of three years he would be released from

custody upon entering into a bond to keep the peace and be of good behaviour. The defendant brought a habeas corpus application

on the ground that the trial judge’s order was contrary to the maxim that all persons are equal before the law. The court held against

him but Ó Dálaigh C.J. did say this:

“The payment in question is not the imposition of a fine. Nor have we here a case – if such is to be supposed – where a court

is sentencing two persons of equal obloquy, one rich and the other poor, sends the poor man to prison but lets the rich man

go free on payment of a fine well within his means. The payment referred to in Mr. Justice Butler’s order relates to the

restoration by the convicted person of the monies of which he fraudulently deprived the injured party. Neither in the purpose

nor in effect is there discrimination as between rich and poor.”

12. Arising out of that passage there are two observations to be made. The first is that the former Chief Justice took into account

that the restitution order was related to the monies of which the defendant had “fraudulently deprived the injured parties”. In every

revenue offence there is the element that it arises from the accused owing money to the Revenue Commissioners. Secondly, the

former Chief Justice seems to be postulating in his obiter dicta a theoretical case in which the same judge would be sentencing two

people, one rich and one poor. Nothing like that is occurring here.

13. Finally, the judgment of Herbert J. in the High Court in Redmond v. Minister for the Environment [2001] 4 I.R. 64 does not seem

to be in point because even if correctly decided, it cannot be accepted that s. 89(b) is “a law which has the effect, even if totally

unintended of discriminating between human persons on the basis of money”.

Proportionality

14. The third ground of alleged unconstitutionality is that s. 89(b) infringed the constitutional principle of proportionality. In this

connection, passages from different judgments are cited in the written submissions and were referred to also at the oral hearing. It is

appropriate to set out a sample number of them. In WC [1994] 1 ILRM 321 Flood J. said the following:

“In my view the selection of the particular punishment to be imposed on an individual offender is subject to the constitutional

principle of proportionality. By this I mean that the imposition of a particular sentence must strike a balance between the

particular circumstances of the commission of the relevant offence and the relevant personal circumstances of the person

sentenced.”

15. The judge then further stated:

“The sentence to be imposed on the accused person in a particular case is solely a matter for the trial judge in the

independent and impartial exercise of judicial discretion. To suggest otherwise would be to countenance a constitutionally

impermissible invasion of judicial independence.”

16. These two passages from the judgment of Flood J. are impeccable but they do not advance the case being made by the

appellant. As has already been pointed out in relation to the separation of powers issue the parameters laid down by the legislature

are not unreasonable and there are a considerable number of choices available to the sentencing judge.

17. The next quotation comes from D.P.P. v. Kelly, an unreported judgment in the Court of Criminal Appeal of the 5th July, 2004,

delivered by Hardiman J. The learned judge said the following:

“Under our present sentencing regime sentences must be proportionate not only to the crime but to the individual offender.”

18. And he also said:

“The principle in itself is well-established and is derived at least partly from the Constitution. In The State (Healy) v.

O’Donoghue [1976] I.R. 325 Henchy J. said that the Constitution guarantees that a citizen should not be deprived of his liberty

by a trial conducted so as to shut out ‘a sentence appropriate to his degree of guilt and his relevant personal circumstances’.”

19. That passage must be read in context. As has already been pointed out there are reasonable options open to the trial judge in

these cases and in so far as there are limitations (a) they are not unreasonable and (b) they are the kind of limitations which are

normal in revenue offences. The principle that sentences must be proportionate to the personal circumstances of the appellant is

perfectly capable of being applied in these cases. It may well be, as Professor O’Malley suggests in his “Leading Cases of the

Twentieth Century”, that the courts might be entitled to strike down a mandatory sentence if they were convinced that its purpose

or effect was to leave offenders liable to a disproportionately heavy punishment. In the view of the court, that issue not arise in this

case and should not be considered in this case.

20. The court is of the view that s. 89(b) of the Finance Act, 1997 is consistent with the separation of powers doctrine, does not

constitute wealth based discrimination and is consistent with the constitutional principle of proportionality.

21. Accordingly, the court holds that s. 89(b) of the Finance Act, 1997 is not invalid having regard to the Constitution and the

appeals must be dismissed.