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THE INDEPENDENT
Friday, June 3, 1988
Mu mastu
Extradition for revenue crimes
Regina ▾ Chief Metropolitan Stipendiary Magistrate, Ex parte Secretary of State for the Home Department.
Queen's Bench Divisional Court (Lord Justice Stuart-Smith and Mr Justice Farquharson). 27 May 1988.
The rule that the English courts would not en- tertain revenue claims by a foreign state did not apply to proceedings for the extradition of someone charged with criminal offences com- mitted in a revenue context.
The Queen's Bench Divisional Court granted an application by the Secretary of State for the Home Department for judicial review of the refusal by the Chief Metropoli- tan Stipendary Magistrate, on 27 January 1988, to commit Tore Kjell Nuland to custody under to section 10 of the Extradition Act 1870.
David Pannick (Treasury Solicitor) for the Secretary of State; Clive Nicholls QC and Rob- ert Rhodes (Treasury Solicitor) for the magis- trate; Nuland did not appear and was not rep-
resented.
LORD JUSTICE STUART-SMITH, giving the judgment of the court, said that Nuland had been convicted in a Norwegian court of 11 criminal offences in respect of which Norway requested his extradition.
The magistrate ordered Nuland's committal on six charges of theft, attempted theft and in- ducing a creditor by deception to wait for pay- ment. But he declined to commit on the other five charges, involving false accounting, forg- ery and theft, because he considered that they were in various ways connected with tax eva- sion, and that he was bound by the Divisional Court decision in R v Governor of Pentonville Prison, Ex parte Khubchandani (1980) 71 Cr App R 241 not to commit.
In that case, the court granted a writ of ha- beas corpus on the ground that the offences alleged against the applicant were in sub- stance breaches of Ghanaian exchange con-
trol, and claims on behalf of a foreign state to recover taxes due under its fiscal laws were un- enforceable in the English courts. It made no difference, the court held, that the breaches involved fraud or deception.
For the Secretary of State, Mr Pannick sub- mitted that Kubchandani had been wrongly decided on this point and the court should not follow it.
The court's reasoning in Kubchandani was inconsistent with that of the House of Lords in In re Nielsen [1984] AC 606, which made it clear that what the magistrate had to do in a conviction case was to consider whether the eign court amounted, as a matter of English conduct and state of mind proved in the for-
law, to one of the extraditable offences.
In Nielsen, Lord Diplock at p624D emphasised that the jurisdiction of the magis trate was derived exclusively from the statute.
Mr Pannick submitted that the magistrate should look only to the statute, and any treaty provisions incorporated under section 5, for any limitation or restriction on his jurisdiction.
Mr Nicholls, on behalf of the magistrate, submitted that Lord Diplock's statement of the law was too narrow and that the magistrate had jurisdiction to consider issues which did not fall expressly within the limitations found in the Act.
Mr Nicholls' main submissions were (1) that as a matter of construction it required clear and express language in a statute to derogate from the common law; (2) that it was a rule of international custom and practice that a state would not directly or indirectly enforce reve- nue or penal laws of another state; (3) that that rule had become part of the common law; and (4) that the 1870 Act did not specifically take away this limitation. But the language of the Act was, to his Lordship's mind, clear: pro- vided the conduct amounted to an extradition crime, then subject to the specific limitations in the Act, the magistrate had to commit
Section 3 of the Act expressly preserve wo limitations which had existed under interna. tional custom and practice and had been adopted as part of the common law, and his Lordship found it hard to accept that such provisions were otiose and could have been left to the common law. Where Parliament had dealt with two of the alleged three com- mon law restrictions expressly in the Act, it was difficult to suppose that the third, relating to revenue offences, was to be left intact and unaffected.
In Kubchandani, the court had relied on Government of India, Ministry of Finance v Tay- lor [1955] AC 491 for the rule that the courts of this country should not entertain claims by a foreign state to recover a tax. But the limited extent of that proposition was stated by the House of Lords in Williams & Humbert v W & H Trade Marks [1986] AC at p 440G. It was one thing to say that the courts of this country would not entertain a suit by a foreign state to recover a tax; it was another to say that crimi- nal offences which stood independently of rev- enue offences, albeit in a revenue connection, were within the rule.
In Kubchandani, the court relied on Schemmer v Property Resources Lid [1973] CH 273 for the proposition that foreign fiscal laws were unenforceable in the English courts even when the breaches concerned were founded upon fraud or deception. But Schemmer's case had been in an entirely different context and was not concerned with extradition.
For these and other reasons, his Lordship concluded that the decision in Kubchandani had been wrong and the present case should be remitted to the magistrate with a direction to commit on the remaining five charges if, as it appeared, he was satisfied that the conduct complained of in those charges amounted to extradition crimes,
Case remitted accordingly.
Paul Magrath, Barrister
The Guardian
Financier quizzed 7
Fraud Squad officers yesterday quizzed financier Michael Dee in a Jersey courtroom over his role in the payment of £5.2 mil- lion by Guinness to its former director, US lawyer Thomas Ward. The hearing was part of attempts to extradite Mr Ward to the UK, where a warrant for. his arrest has been issued. Mr Ward's British lawyers attended the hearing, but would not comment on the outcome.
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