Legal Developments 2009

Legal Developments 2009

 

Developments in the Law: 2009
(Serious Crime)

 

Useful Cases and Materials

  • BZP, GBL and “spice” to be controlled drugs: link
    On the 25th August 2009, the home office announced its intention to add BZP and GBL to the list of Class C drugs, and to add all cannabis substitutes (cannabinoids) which mimic the effects of marijuana, as Class B substances. The changes to Schd.2 to the MDA 1971 (and presumably to the MD Regs 2001) are likely to be made by the end of 2009. And see the Draft Order link
  • Note: The Criminal Justice and Immigration Act 2008 (Commencement No. 11) Order 2009: S.I.2009/2606 – art.2 brings provisions into force from the 1st October 2009; art 3 brings provisions into force from the 31st October 2009: Link

Cases

  • Re v F and S [2009] EWHC 2512 (Admin) The case is a further illustration of the prinicple that, where a certificate of inadequacy is sought pursuant to s.83, CJA 988, it is insufficient for a defendant to say ‘that his assets are inadequate to meet the confiscation order, unless at the same time he condescends to demonstrate what has happened since the making of the order to the realisable property found by the trial Judge to have existed when the order was made’ (citing Gokal v Serious Fraud Office (2001) EWCA Civ 368, at para. 24, Re O’Donoghue [2004] EWCA Civ 1800, and In the Matter of B [2008] EWHC 3217). The Court added that “where…the court is quite satisfied that there has been a total lack of candour on the part of each applicant as to his current assets, and where the hidden asset in each case has been found by the judge to be of a substantial value…it does not lie in the mouth of the applicant to say that the shortfalls in respect of particular identified assets mean that a certificate must follow ‘as a matter of common justice'” [para.29].
  • SOCA v Pelekanos [2009] EWHC 2307 (QB) [transcript].
    The SOCA applied for a civil recovery order under Part 5 of POCA 2002 in respect of several properties. Eight points are noted here: (1) A claim for a recovery order “must be made using the CPR Part 8 procedure” (4.1). The hearing had come on under Part 8 with the consequence that there had been no disclosure by SOCA, but merely the exhibiting of documents, upon which they relied, to their witness statements. “In a case involving disputed allegations of fraud and other criminal conduct this is unsatisfactory” [para.3]. (2) The alleged “unlawful conduct” was drug trafficking and/or money laundering and/or mortgage fraud. Although the burden of proof was on P and the standard of proof is the balance of probabilities, the serious nature of the allegations being made and the serious consequences of such allegations being proved meant that careful and critical consideration has to be given to the evidence for the Court to be satisfied that the allegations had been established [para.19]. (3) The Court regarded it is as “clear” that although it is not necessary to prove the commission of a specific criminal offence, it is necessary to identify the kind(s) of unlawful conduct being alleged and to prove that the property was obtained by or in return for criminal conduct of an identifiable kind [para.22]. — {RF comment: Practitioners might wish to consider the judgment of the Appeal Court, High Court of Justiciary in Ahmed v HM Advocate [2009] HCJAC 60 (noting para.24)}. (4) When property is purchased with tainted and untainted funds one determines the portions of the value of the property derived therefrom at the time of the purchase [para.46, and see R v Roach [2008] EWCA 2649. (5) In relation to the alleged frauds, it was necessary to establish that the fraud “materially influenced” the decision to lend [para.48]. (6) Once it has been shown that a misrepresentation is material in that it would be likely to induce the contract and that the contract has been entered into, then inducement may be inferred without the need for direct evidence: see St Paul and Marine Insurance Co Ltd v McConnell Dowell Constructors Ltd [1996] 1 All ER 96 [para.49]. (7) the allegations of drug trafficking and money laundering were not proved and were rejected. (8)This began as a case about drug trafficking. It has ended up as a case about mortgage fraud. As such, it illustrates the breadth of application of the civil recovery legislation. As the law stands, any person, however otherwise law abiding, may be the subject of a civil recovery order if he makes a deliberately false statement in a mortgage application form. It is important that this be more widely known, and it is desirable that mortgage providers spell out this possible consequence of a misstatement in their application forms.” [para.170]
  • Mejia and Sneath [2009] EWCA Crim 1940 [transcript]. M and S appealed against confiscation orders made against them following their conviction for conspiracy to supply cocaine. The judge made a finding that they had each benefited in the sum of £268,770 (based on an equal split of a total figure of £537,540). The appellants contended that, having regard to Islam [2009] UKHL 30, the cocaine-impregnated doors (containing 17.34 kg of pure cocaine) would have no market value. The Court rejected the suggestion as “absurd” given that the cocaine was brought into this country for the very purpose of extracting the cocaine and selling it on. The Court also rejected the contentions (a) that the relevant value of the benefit was the invoice price of the doors or (b) the cost price of the cocaine in Panama. Contention (b) is of greater interest to practitioners. The Court held that the relevant question is the market value of the property in the UK – not its cost at source. M also submitted that in the light of e.g. CPS v Jennings [2008] UKHL 29, that his limited role in relation to the storage premises, involving neither the purchase nor the importation of the doors, was insufficient to result in a finding that he had “obtain” the property at all. Whatever the actual merits might be about that point, the “insuperable problem” about that and other submissions “is that they were not advanced in the confiscation proceedings in the Crown Court”. The comments made by the Court, in relation to the evidence relevant to the question of whether M obtained the drugs, are arguably best seen in the context of that problem.
  • R v Frost [2009] EWCA Crim 1737. The case provides a graphic illustration of the approach required when calculating “benefit” in accordance with the trilogy of cases decided by the House of Lords in May, Jennings and Green. F pleaded guilty to 9 charges of theft totalling £17,250 and asked for several offences of VAT fraud to be TiC’d. F was employed at a school where he managed the school finances, and submitted invoices to the County Council. The school had its own bank account and it was a net re-claimer of VAT. F submitted false invoices to the County Council who innocently reclaimed VAT from HMRC in amounts that were credited to the school’s bank account. F manipulated the VAT accounts to cover up his theft offences (£17,250). The judge also ruled that the F had obtained a benefit in respect of the overpayments of VAT (£60,551.17) having accepted the Crown’s argument that the VAT offences and the thefts were inextricably linked and that the reclaiming of the VAT was crucial to the operation of F’s dishonest scheme. The Court of Appeal reduced the amount recoverable under the confiscation order by deducting the value of the VAT credited to the school’s bank account. Although F had been in a position “to bring about the transfer of funds obtained as a result of his own dishonesty, this did not give him any interest in the school bank account and therefore did not give him any interest in property” [para.18]. F did not have absolute control over the account. The transfers did not create “a thing in action” in F’s favour against the bank. Of crucial importance is the observation made by the Court that one must not “confuse criminal liability and resulting benefit” [para.18]. He never “got his hands on” the balance of the funds transferred into the school bank account as a result of the VAT fraud.”
  • R v Fazal [2009] EWCA Crim 1697 [transcript].
    F was convicted of seven counts of money laundering pursuant to s.327 POCA2002 (concealing, disguising, converting, etc criminal property) in respect of 7 deposits that were made, over a two month period, into a bank account held by F. Six deposits came from victims who had paid for goods advertised on the Internet which were never delivered and never intended to be delivered. The 7th deposit concerned a stolen forged cheque which was cleared into that account. F submitted that as the deposits and their withdrawals were done by others (either by the victims or, by a friend of F) and that as F had merely allowed his account to be used by another(s), he was not himself guilty of converting criminal property, even assuming the necessary mens rea. In dismissing the appeal against conviction, the Court of Appeal said that there were successive acts of converting criminal property, “not only when these monies were lodged but also when they were credited to the appellant’s account, when they were retained in it, and when they were withdrawn from it, all of which occurred with the full co operation, knowledge, approval and authority of the appellant…” [para.22]. It is submitted that the decision to dismiss the appeal was right. But two points seem not to have been taken (probably for sound reasons that do not appear in the judgment). First, there is the question of whether money that had been transferred by a victim into F’s account, was a “benefit” obtained by B from the moment that it left V’s bank account. Section 340(5) POCA states that a person “benefits from conduct if he obtains property as a result of or in connection with [criminal conduct]”. However, s.340(10)(a) states that “property is obtained by a person if he obtains an interest in it”. It is difficult to see what interest B or F obtained until the monies had been credited to F’s account. Secondly, if the monies deposited by V became a benefit in B’s hands at the moment that they were credited to F’s account, then the question arises whether F at that precise moment (and assuming knowledge of the fraudulent transaction) concealed, or disguised, or converted, “criminal property”? It is submitted that the strict answer is in the negative because the acts forbidden by s.327(1) relate to a time after property has become a person’s benefit from criminal conduct (s.340). Even if that answer is correct, this need not be an obstacle to a conviction under s.327 because, as the Court points out, “When money goes through an account it changes its nature from money likely to be owned by one bank but representing a debt owed to one creditor into money owned by another bank and representing a debt owed to another creditor. Finally, when that money is withdrawn in cash, if it is withdrawn in cash, it becomes transferred into cash into the hands of the withdrawer.” [para.22].
  • RCPO v May [2009] EWHC 1826 (QB) [transcript]. The High Court held that once assets have been identified as relevant realisable property, they may be recovered, subject to the protection afforded by sections 80(8) and 82(4). They may be recovered from any trust or company irrespective of any legal obstacles or protections for the direct or indirect benefit of the Defendant which would otherwise arise under company or trust law: “If the position were otherwise…a master criminal, before embarking on a serious financial crime would be able to protect his assets, other than those directly obtained from the crime he was about the commit, by placing them all in trust. It cannot have been the intention of Parliament to make that possible leaving the victims with only the potential weapon of the law of insolvency to rely upon.” [para.18]
  • R v Knaggs [2009] EWCA Crim 732 [transcript]. The defendant dismissed his legal team which, by his absence, deprived him of the opportunity of proving his case that he had no assets. The Court of Appeal stated (correctly it is submitted) that this was his own fault, “If a defendant declines to take the opportunity to establish that his realisable assets are less than the amount of the benefit, because he is aggrieved at the judge’s conclusion as to the benefit, he cannot later complain as to the consequences of that decision. He is not entitled to wait and see whether he can successfully impugn the calculation of benefit on appeal.” [para.34].
  • Whittington v The Crown [2009] EWCA Crim 1641 [transcript]. The Court of Appeal emphasised that “it is for the prosecution to prove that the defendant has obtained the property in issue, which will either be known property he still possesses or which he has possessed. This issue as to proof of the existence of property must not be confused with proof of the source of that property.” [para.13]. The existence of property must be proved to the civil standard of proof (Briggs-Price [2009] 2 WLR 1101 explained). Furthermore, the Court stressed that the assumptions “have nothing whatever to do with proof that the defendant obtained property. Apart from the fourth, they are concerned only with proof of the source of property which the prosecution has proved the defendant has obtained or remains in his possession.” [para.18].
  • CPS v Nelson and others [2009] EWCA Crim 1573 [transcript]. The Court of Appeal held that s.6(6) POCA 2002 “does not state expressly, and does not appear to provide, that compensation paid to the victim in advance of civil proceedings or an expressed intention to take them, reduces the duty to make a confiscation order to a power, notwithstanding that a defendant has in reality fulfilled this desirable statutory purpose before being impelled to do so by the threat or fact of civil proceedings. What we perceive to be a gap in the statutory process is recognised in the guidance. Where the facts demonstrate that the defendant has voluntarily repaid the proceeds of his crime to his victim and has thus deprived himself of any profit from his crimes, we endorse the guidance relating to voluntary repayment of full compensation in a simple benefit case where the proceeds of the crime have not been used to the defendant’s wider financial advantage as consistent with the interests of justice within the statutory context. In such a case the statutory purpose that the defendant should not enjoy the fruits of his offence(s) will have been achieved.” [para.45].
  • R v Islam [2009] UKHL 30 [transcript]. The questions of whether illicitly obtained drugs in D’s hands have a value, and what that value is, have been difficult to analyse, as well as to answer, ever since the enactment of the DTOA1986 (see Fortson, Misuse of Drugs and Drug Trafficking Offences, 4th and 5th editions, Sweet & Maxwell). In the most recent decision on the issue, the House held (Lord Walker and Lord Neuberger dissenting) that (1) the expression “market value” for the purpose of determining the value of D’s benefit (see ss.6, 7, 8, 79, 80 POCA 2002), even where the property concerns illegally obtained controlled drugs, is “the market to which he would have been expected to go to sell the drugs, even although this was an illicit one, especially as this was the only market in which he could have derived any significant benefit from them”, but (2) that in relation to the “available amount” (the realisable value of property in D’s hands), the court is “looking for the amount that the defendant can be expected to pay under the confiscation order. The assumption is that he will have to realise his property if it is not already available to him in the form of cash. The only market that can properly be considered for this purpose is one in which it will be lawful for him to engage in. The court cannot expect him to resort to transactions that are illegal to find the money that he will need to satisfy the terms of the confiscation order.” [per Lord Hope, para.17; see ss.7, 9, 79, 82]: Hussain [2008] EWCA Crim 1740 overruled, Byrne v Low [1972] 1 WLR 1282 considered. It is hardly surprising that their Lordships did not find the issues easy to unpick. The following points are made. First, the opinions do not explain that both the DTOA1986 and the DTA1994 speak not of a benefit “obtained” (which is the word used in the CJA1988 and POCA) but of a “payment or other reward” that is “received” (see, for example, the discussion in Berry [1999] EWCA Crim 2252). There are cases where D is given a controlled drug as a payment or reward (e.g. for acting as custodian of a drug). Secondly, Islam decides (or it did not hold that a concession made by the Crown was erroneous: see paras.69/70) that the market value to be ascribed to illegal controlled drugs, for the purposes of s.9(1)(a) POCA, is nil. Thirdly, a distinction was made between (1) forfeiture which is “automatic” when HMRC have seized goods [para.34; but the source of such a power was not cited] and (2) goods seized but liable to forfeiture (e.g. s.27 MDA1971). Fourthly, although the definition of “free property” is narrowly defined (s.82 POCA), it is at least arguable that a controlled drug that D is forbidden from possessing without lawful authority (MDA 1971) is not “held” once it has been seized. D can hardly sue for its return. The question is therefore not simply one of value but whether D “holds” the property at the moment that the court is determining D’s “available amount”. D might be in unlawful possession of drugs, which the authorities have not seized (e.g. being unable to find them). As the House points out, D cannot be expected to realise the drugs (which the MDA 1971 forbids) in order to pay a confiscation order, so that either the value is nil or (arguably) D is adjudged not to “hold” the property for the purposes of s.9 POCA. It is accepted that the latter point is fraught with difficulty (some might say that the point is unarguable). Fifthly, some controlled drugs can, in the condition in which they appear when seized, be sold on the legitimate market (consider temazepam and other medicinal products). Sixthly, what is the true purpose of confiscation and the determination of “benefit”? Benefit is not profit but it is, supposedly, proceeds (and no longer, in cases of drug trafficking, property that is received as a “payment or other reward”), and yet a confiscation order can be made in respect of a “benefit” which D “obtained” without actual personal enrichment (e.g. drugs seized at a port).
  • R v Clarke [2009] EWCA Crim 1074 [transcript]. The Court of Appeal held that, having regard to Savage (1983) 5 Cr.App.R.(S) 216, and Young (1991) 12 Cr.App.R.(S) 262, and of the history of s.12(7) of the Powers of Criminal Courts (Sentencing) Act 2000, the Crown Court has no power to make 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. However, the Court added that given that a confiscation order can (at least in theory) be made before passing sentence, it would be prudent “in those very rare cases where an absolute or conditional discharge is a possibility, to decide upon sentence first. We do not think that offends section 13 of the 2002 Act” [see para.78].
  • R v Shahid [2009] EWCA Crim 831 [transcript]. The Court of Appeal held that the fact that a bankrupt’s assets are vested in his trustee in bankruptcy may well affect the enforcement of a confiscation order (calculated by reference to those assets) but it does not necessarily affect the making of the order in the first place (see s.102(8) CJA 1988): see para.13 of the judgment. The Court noted that in CPS v Compton [2002] EWCA 1720 Civ, the Court of Appeal did not doubt that the confiscation order which had been made in that case could have been made despite the refusal of the court previously to make a restraint order simply because the defendant had already been made bankrupt.
  • CPS v Campbell and oths [2009] EWCA Crim 997 [transcript]. The Court of Appeal dealt with three cases in which the defendant in confiscation proceedings had not been able to obtain legal representation for one reason or another (see R v P [2008] EW Misc 2 (EWCC)) [transcript] . The Court reached the conclusion that the fact that in the future an adequately funded advocate may be available was no justification for an adjournment.
  • R v Briggs-Price [2009] UKHL 19 [transcript]. The House of Lords considered whether, for the purposes of the DTA 1994, (a) it is permissible for the prosecution to to establish that D has benefited from drug trafficking by proving that he has committed drug offences and then inviting the court to infer the monies expended or received in relation to those offences, and (b) whether such an approach is incompatible with the requirements of the ECHR. The HL dismissed the appeal concluding (4:1) that the approach did not engage article 6(2). The HL also held (3:2) that the relevant standard of proof was the criminal standard. On the facts of B-P, the trial judge had found cannabis trafficking proved “beyond reasonable doubt” (Asan Rushiti v Austria (2001) 33 EHRR 1331; Geerings v Netherlands (2007) 46 EHRR 1222, considered). It seems not to have been argued that B-P ought to have been charged with cannabis trafficking that conduct was to be relied upon in subsequent confiscation proceedings or, that the cannabis trafficking conduct should not have been taken into account (see para.150). Geerings appears to be authority for the proposition that benefit is not to be calculated by reference to an offence with which the defendant was charged and of which he has been acquitted (see para.90, Briggs-Price). This case might have implications in the context of other civil proceedings where an allegation of criminal conduct is alleged against the defendant.
  • R v Agombar [2009] EWCA Crim 903 [transcript]. The Court of Appeal held that since the trial judge concluded, in confiscation proceedings under POCA 2002, that property had been acquired by and thus represented the proceeds of crime, any money raised by way of mortgage must itself be the proceeds of crime. It is not clear if cases such as Walls [2002] EWCA Crim 2456 and Nottinghamshire CPS v Rose [2008] EWCA Crim 239, were considered.
  • R v Peacock and Gillett [2009] EWCA Crim 654 [transcript]. A case that illustrates the operation of s.16 DTA 1994 (application by the prosecution for an increase in the amount to be recovered under a confiscation order).
  • R v McMillan-Smith [2009] EWCA Crim 732 [transcript]. The Court of Appeal, having heard evidence on the appeal, was satisfied that M had no hidden assets by reason of his extravagant lifestyle. Indeed the fact that he had an extravagant lifestyle was part of the prosecution case against him at trial.
  • Sinclair v Glatt [2009] EWCA Civ 176 [transcript]. The Court of Appeal (Civil Division) has held that there can be circumstances in which a receiver, who is appointed pursuant to s. 77 of the Criminal Justice Act 1988, will be entitled to recover his/her costs from innocent third parties whose assets are tied to the defendant’s notwithstanding that those third-party assets cannot be used to satisfy the confiscation order itself. It is unclear in what circumstances Article 1 of the First Protocol of the European Convention on Human Rights might be applied to limit the costs and expenses recoverable from an innocent third party (see paras.25 and 42, and consider Hughes v Customs & Excise Commissioners [2003] 1 WLR 177). In a useful summary of the position, the Court said that a receiver, like a receiver at common law, is entitled to recover his remuneration, costs and expenses from the assets which he has been appointed to receive (“the receivership assets”). That is so whether or not he ought to have been appointed in the first place or the order appointing him has been discharged (Mellor v Mellor [1992] 1 WLR 517). Even if the defendant, whose assets have been caught by the order appointing the receiver, is subsequently acquitted or has his conviction quashed, the receivership assets must bear the costs of the receivership; this is also the position if a confiscation order is made but subsequently quashed (Hughes v Customs and Excise Commissioners [2003] 1 WLR 177). Even if the receiver carries on his receivership unnecessarily and should have agreed that his receivership should have been discharged at a time before a court application is made to terminate his receivership, the receivership assets bear those costs reasonably incurred up to the date he is actually discharged (Capewell v Revenue and Customs Commissioners [2007] 1 WLR 386): per Longmore LJ, para.2.
  • R v Mitchell [2009] EWCA Crim 214 [transcript]. Recent decisions of the House of Lords, and the Court of Appeal, are to be welcomed in so far as they have endeavoured to keep the value of a defendant’s benefit from his criminal conduct within limits that are proportionate to the extent of his/her offending. For several years the principles that had been applied to determine a defendant’s ‘benefit’ from crime sometimes resulted in unrealistic, and absurdly high, valuations. That said, there are enough points in Mitchell to occupy many pages of commentary. It is submitted that one needs to bear in mind the distinction that exists in CEMA1979, between dutiable goods and prohibited goods. In Mitchell, M pleaded guilty to being knowingly concerned in the fraudulent evasion of duty payable on the importation of tobacco contrary to s 170(2) of the Customs and Excise Management Act 1979. In confiscation proceedings (POCA 2002) the prosecution did not assert that M had a criminal lifestyle but it did allege (a) that he obtained the tobacco within the meaning of s 76(4) of POCA, and (b) that he obtained a pecuniary advantage within s 76(5) by evading payment of the excise duty payable on the tobacco. The Recorder made a confiscation order in the sum of £100 after accepting M’s contention that his only benefit from the offence was in that sum, which had been paid to him in cash for helping to load the tobacco. In dismissing the Crown’s appeal, the court proceeded on the basis that M was not an importer or co-imported. The question arose whether M, as a loader, was personally liable for payment of the excise duty (and see Chambers [2008] EWCA Crim 2467). The answer to that question turned on the proper construction of the Tobacco Products Regulations 2001 (SI 2001 No 1712), made under the Tobacco Products Duty Act 1979 (particularly s. 2), and which implement EC Council Directive 92/12/EEC (0J L76, 23/3/1992). The Court observed that “chargeability arises in the case of imported tobacco upon importation; and the excise duty point, subject to immaterial exceptions, is that point in time, i.e the moment of importation” [para.20]. The Court did not reach a formal decision regarding the precise definition of the phrase “any person who caused the tobacco products to reach an excise duty point” as it appears in regulation 13(3)(e) but “it appears to us that it is directed at that person or body who had real and immediate responsibility for causing the product to reach that point, which will typically and ordinarily be the consignor” [para.32]. With that in mind, three points are flagged up here. First, should the value of a commodity that D was lawfully entitled to buy and to import (e.g. tobacco: dutiable), be included in the benefit figure? The value of the duty evaded is a different matter altogether. Prohibited goods would not normally have a value that forms part of the ‘benefit’ calculation: Dore. Secondly, is an “importer” the person who owns the goods (jointly or solely) or the person who “brings about” the importation of the goods? The weight of authority – at least in connection with prohibited goods – is surely the latter. Thirdly, when does an ‘evasion’ begin’? In Mitchell, the Court said that “chargeability arises in the case of imported tobacco upon importation; and the excise duty point, subject to immaterial exceptions, is that point in time…” However, the Court added [emphasis supplied] that “the point at which an evasion occurs will not be until the importer ought to declare.” Is that at the ‘excise duty point’ or later? In the context of prohibited goods, the Court in Green (1976) 62 Cr.App.R.74, said that “Once imported, the evasion of the prohibition continues until the goods ceased to be prohibited goods or, possibly, are re-exported.”
  • R v Smith [2009] EWCA Crim 344 [transcript]. This is another case in a line of recent cases regarding fixing the term of imprisonment in default of payment of a confiscation order: see Szrajber (1994) 15 Cr App R (S) 821, French (1996) 16 Cr App R (S) 841, Qema [2006] EWCA Crim 2806, Howard [2007] EWCA Crim 1489, and Liscott [2007] EWCA Crim 1706. The Court of Appeal said, “In fixing the precise length of the sentence…The court must have particular regard to the purpose of the imposition of a period of imprisonment in default, that is to say to secure payment of the amount that the court has ordered to be paid. This is because the overriding purpose of the legislation is to ensure that those who benefit from such crimes do not retain those benefits. The power to imprison in default is given to ensuring or obtaining as far as possible the co-operation of the defendant in complying with the order. It is to be make clear to him that he has nothing to gain by non-compliance. It is particularly important to have regard to the judgment of Hobhouse LJ in French to that effect at page 844 of the report. Although a court must take into account intransigence, it seems to us the court must also take into account, in a case where the order is not for the maximum, what that maximum is”. The Court added that it was wrong in principle to take into account, in fixing the default term, the substantive sentence. Presumably Cukovic [1996] 1 Cr.App.R.(S.) 131, and Walpole (19th June 1997; 97/2302/Y2) no longer represent current policy on this point (but neither case is referred to in the judgment).
  • R v Berr [2009] EWCA Crim 194 [transcript]. The Court of Appeal rejected an argument that, on the facts in B’s case, confiscation proceedings were an abuse of process. The Court said that “contrary to the fears of some (as for example set out in [2008] Crim LR 991 at 995) that it will not be difficult to know when the jurisdiction to stay is applicable. The cases in which it is likely to be applicable are very rare. Indeed, if the principles set out in Morgan and Byegrave are observed by prosecutors, it may never arise. It is not, for example, an abuse of process to seek to recover more than a defendant has profited from his crime nor where he has made restitution outside the very narrow circumstances identified in Morgan and Byegrave. If it were otherwise the case and the jurisdiction exercised more widely, the court would be defeating the clear decision of Parliament, by enacting the legislation in the terms in which it did, not only to impose a draconian policy but also to remove the discretion of the court to avoid those consequences, save in a case where abuse was established”. The Court also said, “Too many authorities are cited to courts. Advocates should bear the observations in May at paragraph 48 (4) clearly in mind before any authority is cited to the judge hearing the proceedings or in this court. We were provided with a large bundle of authorities which were unnecessary.”
  • CPS (Swansea) v Gilleeney and Gilleeney [2009] EWCA Crim 193 [transcript]. The Court of Appeal held that there is no requirement to complete confiscation proceedings under s.6 POCA2002 within a particular period, or before sentence, or that a direction under s.14(1)(a) requires directions beyond that to provide statements of information. The Court added “We do however stress the importance of judges stating plainly whether they are acting under section 14(1)(a) or section 14(1)(b) to avoid situations such as the present arising. Statements of information should of course be prepared promptly whichever route is taken.”
  • R v Kousar [2009] EWCA Crim 139 [transcript]. The Court of Appeal held that for the purposes of s.92(1)(c) of the Trade Marks Act 1994, proving the element of “possession, custody or control” required more than merely showing that D had the “ability to control” or the right to control goods, the existence of which D had knowledge. Thus, where goods were in a house occupied by D it was not enough “to say that it was her house, she lived there, she knew the goods were there; thus she had the right to demand that they should be removed, she acquiesced in their presence in the house and that was sufficient to render her in possession of them”. The cases of McNamara [1998] Crim LR 278, R v Bland [1988] Crim LR 41, R v Searle [1971] Cr.App.R 592 and R v Conway and Burkes [1994] Crim LR 826, were considered. The court remarked, “Control, in the sense of ability to demand that the property be removed or ability to remove it oneself, is in fact no more than knowledge and acquiescence. That is not enough” [para.17]. It is submitted that the decision is plainly right.
  • MacAngus and Kane v HM Advocate [2009] HCJAC 8 [transcript]. The Appeal Court, High Court of Justiciary, held that for the purpose of the offence of culpable homicide “[the] adult status and the deliberate conduct of a person to whom a controlled drug is recklessly supplied by another will be important, in some cases crucial, factors in determining whether that other’s act was or was not, for the purposes of criminal responsibility, a cause of any death which follows upon ingestion of the drug. But a deliberate decision by the victim of the reckless conduct to ingest the drug will not necessarily break the chain of causation.” The decision is consistent with other decisions of the Scottish Courts in connection with causation Khaliq v HM Advocate 1984 J.C. 23, Ulhaq v HM Advocate 1991 S.L.T. 614, and Lord Advocate’s Reference (No.1 of 1994) 1995 SLT 248, but the decision is markedly different from the criminal law of England and Wales that “D is not to be treated as causing V to act in a certain way if V makes a voluntary and informed decision to act in that way rather than another”, per Lord Bingham of Cornhill (R v Kennedy (No.2) [2008] 1 A.C. 269). Thus, in chapter XII of Causation and the Law, 2nd ed. (1985), page 326, Hart & Honoré wrote: “The free, deliberate and informed intervention of a second person, who intends to exploit the situation created by the first, but is not acting in concert with him, is normally held to relieve the first actor of criminal responsibility.”
    In MacAngus, the HCJAC noted that Professor Timothy H Jones offers a critique of Hart and Honoré’s analysis of the law of causation: Causation, Homicide and the Supply of Drugs (2006) 26 Leg. Studies 139. For a strong ‘defence’ of the position in England and Wales see D. Ormerod and R. Fortson ‘Drugs suppliers as manslaughterers (again)’ [2005] Crim LR 819. The Scottish approach appears to have its roots in Kaliq (glue-sniffing kits). That case, and later Scottish cases, have restricted the application of the ‘novus actus interveniens’ principle in order to deal with cases of substance use/misuse and, they move away from the notion of the autonomy of the drug/substance user. But, where are the lines that limit liability under Scottish law, to be drawn? In Ulhaq, the Court said, “The essence of the charge…was that the appellant knew that the purpose of the acquisition of the solvents was their abuse and that the supply of them to their recipients was a cause of that abuse. That is sufficient for the conduct to be criminal…” It added, “neither the age of the purchaser nor the supply of kits to assist inhalation [is] essential…they do not provide the measure of the offence. They are simply factors, whose weight will vary with the circumstances.” It is respectfully submitted that this is an unsatisfactory, uncertain, basis for fixing criminal liablility (whether culpable homicide [Lord Advocate’s Reference (No.1 of 1994)]; or supplying to another a substance in full knowledge that a person will use it to the danger of his health and life [Khaliq; Ulhaq]). The English cases have tended to deal with Class A drugs that resulted in death. The Scottish cases include the supply of solvents (not controlled) and Ketamine (a Class C drug).
  • Bullen and Soneji v. the United Kingdom decided 8th January 2009 [transcript]. The ECrtHR held that there had been a violation of Art.6.1 in connection with a delay of approximately five years and six months (including appeals to the Court of Appeal (Criminal Division) and the House of Lords) in the final determination of confiscation proceedings. On 24 March 2000 and 3 April 2000, the second and first applicants (respectively) were each convicted and became liable to have confiscation orders made against them. The periods ended in October 2005 when the Court of Appeal re imposed the confiscation orders and sentences of imprisonment in default, following the House of Lords’ order of 21 July 2005. However, he Court found no evidence to substantiate the applicants’ complaint that the imposition of the confiscation orders against them outside the statutory time-limit rendered the proceedings unfair within the meaning of Article 6 § 1 of the Convention.
  • Gabric v. Croatia (decided 5th February 2009) [transcript]. G succeeded before the ECrtHR in her complaint that that the decision of the domestic authorities (pursuant to s.74a(1), Foreign Currency Act, and s.9(2), Prevention of Money Laundering Act) to both fine G and to confiscate Deutsche Marks 20,000 from her, for having failed to declare that sum at the customs in 2002, had been excessive and violated Art.1 of Protocol No.1 ECHR. The Court reiterated that a confiscation measure, even though it does involve a deprivation of possessions, nevertheless constitutes control of the use of property within the meaning of para.2 of Art.1 of Protocol No.1, citing Riela and Others v. Italy; Arcuri and Others v Italy; C.M. v France; Air Canada v the UK (1995); A and AGOSI v the UK (1986). It was common ground that the interference pursued a legitimate aim in the prevention of money laundering. The only issue was whether there was a reasonable relationship of proportionality between the means employed by the authorities to achieve that aim and the protection of the applicant’s right to the peaceful enjoyment of her possessions. NOTE: unlike the ‘cash forfeiture’ provisions under Part 5 of POCA 2002, it was not a requirement of the aforementioned legislation for the state to prove that the cash was obtained through unlawful conduct or intended by any person for use in unlawful conduct.
  • R v Allpress and others [2009] EWCA Crim 8 [transcript]. A five-judge Court of Appeal considered five conjoined appeals in relation to confiscation proceedings against defendants who had varying degrees of involvement in the safeguarding or transfer of funds which represented proceeds of crime. It seems clear that the decision in R v Simpson (David) [1998] 2 Cr App R (S) no longer represents the law. In Allpress, the Court pointed out that Sivaraman [2008] EWCA Crim 1736, addressed two misconceptions. The first misconception is that in assessing benefit in a conspiracy case, each conspirator is to be taken as having jointly obtained the whole benefit obtained by “the conspiracy”. In confiscation proceedings the court is concerned not with the aggregate benefit obtained by all parties to the conspiracy but with the benefit obtained, whether singly or jointly, by the individual conspirator before the court. The secondly misconception is that anybody who has taken part in a conspiracy in more than a minor way is to be taken as having a joint share in all benefits obtained from the conspiracy: there is a distinction between criminal liability and resulting benefit. In confiscation proceedings “the focus of the inquiry is on the benefit gained by the relevant defendant” [Allpress, para.31]. The Court rejected the argument that the language of DTA 1994 s2(3) and CJA 1988, s71(4) compels a different approach to sums of cash than to other forms of property [para.59] or that the judicial committee’s observations in May and Jennings were incorrect or inapplicable in relation to POCA 2002, either in cases involving other forms of property or in cases involving money [para.79]. Accordingly, “if D’s only role in relation to property connected with his criminal conduct, whether in the form of cash or otherwise, was to act as a courier on behalf of another, such property does not amount to property obtained by him within the meaning of POCA 2002 s80(1) or CJA 1988 s71(4) or to ‘payment or other reward’ within in the meaning of DTA 1994 s2(3).” [para.80]. The Court reached the same conclusion in relation to a mere custodian of cash for another [para.82]. Where money is laundered through the banking system, the Court observed that “The starting point (as in R v Sharma [2006] EWCA Crim 16, [2006] 2 Crim App R (S) 416), is that this was therefore his property. In Sharma the defendant caused the proceeds of a fraud in which he was engaged to be paid into a company account of which he was the sole signatory. It was held that the money in the account was money held for his benefit as the sole signatory on the account, and that decision was approved by the House of Lords in May (para 34).” The Court added that it did not “exclude the possibility of a case where money is paid into a bank account in the name of D, but which is in reality operated entirely by P for the benefit of P, and where it would be wrong, unusually, to conclude that D obtained monies paid into the account. This is more likely to arise in a domestic than a commercial context” [para.86]. Readers of this author’s work, Misuse of Drugs Offences, Confiscation and Money Laundering, will know that the result is one that answers the author’s concerns touched upon in the 5th edition, but expressed more forcefully in earlier editions (see 4th ed., p.13-200 to 13-206).
  • Al-Khawaja and Tahery v. the UK (decided 20th January 2009) [transcript]. A decision of the ECrtHR of considerable importance concerning the admissibilty in criminal proceedings of untested statements that are read to the court as evidence in the case. The question whether there has been compliance with Art.6 §§ 1 and 3(d) arose in two contexts: (1) “anonymous witnesses”, in which the identity of a witness is concealed, e.g., to protect him or her from intimidation or threats of reprisals or to preserve the anonymity of an undercover agent or informer, and (2) “absent witnesses”, where the identity of a witness may be disclosed but where use is made in evidence of the statement of the witness who does not appear before the court to give evidence in person because he or she has died, cannot be traced or refuses to appear out of fear or for some other reason. On the facts, there had been a violation of Art.6 §1 read in conjunction with Art.6 § 3(d)