Legal Developments 2014

Legal Developments 2014

Developments in the Law: 2014
(Serious Crime)

Useful Cases and Materials

CASES

  • R v Sheidu [2014] EWCA Crim 1671. [transcript available on Casetrack] S pleaded guilty to five counts of acquiring criminal property. A confiscation order was made in the sum of £578,632.19. During a search of A’s home, police found a photograph (without a caption) of a man standing on wooden scaffolding in front of a substantial partially built house. S denied that he was the person in the photograph, and said that he did not know the location of the house. The Crown adduced evidence of facial mapping, which the judge accepted, that identified S as the person depicted in the photograph. The judge concluded that the house was the proceeds of the appellant’s criminal conduct. In the Statement of Information (s.16, POCA 2002), it was stated that the property existed “possibly in Nigeria”, but “being unable to locate it, and therefore know the local property market valuations I will attribute a value of £250,000.” The judge assessed S’s benefit as £578,632.19 (in effect, a half share in the overall benefit obtained by S and others from the enterprise), and that since S had failed to discharge the burden of proof upon him to show that his assets were less than the value of his benefit, he made a confiscation order in the latter sum. Held: The appeal succeeded to the extent that the value attributed to the property (£250,000) would be taken out of the benefit determination, which reduced the value of the amount recoverable under the confiscation order to £453,632.19 [(£1,157,264.39 – £250,000) ÷ 2)]. The valuation of the property was an entirely arbitrary figure. The judge accepted that valuation without hearing any evidence, for example from a valuer with at least some knowledge of Nigerian property prices. The Court acknowledged that the judge was in a difficult position, and that any valuation which the Court put upon the property can be criticised on the same grounds. [11]
  • R v Okedare [2014] EWCA Crim 1173. [transcript].
    The appellant (O), having been charged with an offence of conspiracy to defraud, failed to appear at the Crown Court. He was subsequently convicted and sentenced in his absence of that offence, and a confiscation order was made in the sum of £29,050.62, pursuant to s.6(5) of the Proceeds of Crime Act 2002 (“POCA”). The issue on appeal was whether, in those circumstances, O could be made the subject of a confiscation order under the 2002 Act, and if so, whether the route was under s.6 alone, or under s.27 or s.28 of the Act. On appeal, counsel for O submitted that where an accused absconded prior to his conviction, then none of the POCA provisions empowered the court to make a confiscation order. Held: At the time of making the confiscation order against O, the proceedings for the offence against him had not been concluded, and he had absconded. [18] Two years had elapsed since those proceedings had started and the prosecutor had applied to the court to proceed under that section. Had the judge considered that s.28 empowered him to make a confiscation order, he would have considered that it was appropriate to do so. [19]. In those circumstances, and subject to compliance with the matters set out in s.28(5), the judge would have been entitled to proceed to make a confiscation order under s.6 as applied by s.28 of POCA. The wording of the section permitted it and nothing in that or the following sections precluded it. COMMENT: for a commentary to this case, see [2014] Crim L.R.914.

  • R v Yusuf and oths [2014] EWCA Crim 1586. [transcript]. In relation to a co-appellant (McLean), who appealed against his sentence in respect of an offence of conspiracy to rob, the point in issue was whether and in what circumstances it was open to the sentencer, to sentence M on the basis that he knew that a loaded firearm had been carried notwithstanding that M had not be convicted of a separate Firearms Act offence. For a commentary to this case, see [2014] Crim L.R.840
  • R v Ahmad, Ahmed, and Fields [2014] UKSC 36. [transcript]. Two joined appeals were heard to determine the correct approach that a court should adopt when making confiscation orders in cases where several confederates in the commission of an offence (some of whom may not have been convicted before the court) have, by their combined roles, acquired property as a result of or in connection with the commission of that offence. In the cases of Ahmad and Ahmed, their benefit was assessed (in each case) as the loss suffered by HMRC, namely £12.6m (£16.1m when adjusted for inflation). In Fields, the benefit obtained in the case of each of the relevant defendants was £1.6m for goods and services supplied. Held: As for the definition of “benefit”, the word “obtain” should be given a broad, normal meaning, and the non-statutory word “joint”, referred to by Lord Bingham in May, paras 17 and 27-34, should be understood in the same nontechnical way [45]. Accordingly, where property is obtained as a result of a joint criminal enterprise, it will often be appropriate for a court to hold that each of the conspirators “obtained” the whole of that property [46]. In some cases, one or more of the conspirators may be able to show that he was only involved to a limited extent, so that he did not in any way obtain the property which was obtained as a result of the crime.[48] There could be other cases where the court may be satisfied on the evidence that individual defendants obtained (ie assumed the rights of an owner over) only a specific part or share of the property which had been acquired as a result of the criminal activity.[49] As for the value of benefit, the current effect of the authorities is that the interests of accomplices are not to be taken into account for the purposes of s.79(3) POCA 2002. Accordingly, the “interests” of a defendant’s co-conspirators are not to be taken into account when
    valuing the property for the purpose of assessing the value of the property which the defendant “obtained”.[62] In respect of each of appeal, the courts had been right to hold that the benefit to be valued in respect of each defendant was the whole amount of the property obtained.[70] However, to take the same proceeds twice over would not serve the legitimate aim of
    the legislation and, even if that were not so, it would be disproportionate. The violation of A1P1 would occur at the time when the state sought to enforce an order for the confiscation of proceeds of crime which have already been paid to the state.[72] Accordingly, where a finding of joint obtaining is made, whether against a single defendant or more than one, the confiscation order should be made for the whole value of the benefit thus obtained, but should provide that it is not to be enforced to the extent that a sum has been recovered by way of satisfaction of another confiscation order made in relation to the same joint benefit.[74]
    COMMENT: THe UKSC was clearly anxious not to disturb (still less to depart from) the guidance given in cases such as May, Jennings, and Green “unless it was shown that they were plainly wrong or unless it was established that they had led to problems for courts making confiscation orders. Adherence to previous guidance from this court is mandated by the need to ensure that the law is clear and predictable as well as by the doctrine of precedent.[40] The Court was right to say that the word “obtain” should be given its normal meaning, and this appears to be saying (in effect) that the word should be given a sensible construction. However, this will still leave courts wrestling with a rather nebulous concept. As this commentator has remarked elsewhere, the application of A1P1 appears to operate at the stage when the court is determining the amount to be recovered from a defendant under a confiscation order (the “available amount”, s.7, POCA) rather than in respect of the value of a defendant’s “benefit”. Counsel for the Ahmad defendants submitted that “liability should be treated as joint and several in accordance with normal common law principles”. [24] It is respectfully submitted that the use of the expression “joint and several” is unfortunate. Although this may appear to be the practical effect of the decision of the UKSC in this case, it is not evident that the UKSC or HL has overruled Porter [1990] 1 WLR 1260, insofar as the CACD held that the making of “joint and several” confiscation orders was “unsound”. What the UKSC has held in the instant case is that A1P1 applies with regards to the enforcement of confiscation orders in a ‘joint benefit case’ in order to avoid multiple recovery of a benefit jointly obtained. One imagines that in some cases this approach may lead to some intense discussions and quarrels, between defendants, as to how much each should pay and why.

  • R v O’Brien [2014] UKSC 23. [transcript]. The Court observed that a restraint order made under s. 41 of POCA 2002 is an interim remedy. That Act does not provide that it is an offence to disobey or obstruct a restraint order or a receivership order, but the Crown Court has an inherent power to treat such behaviour as contempt of court, for which it may impose punishment under s.45 of the Senior Courts Act 1981. Rule 59.6 of the Criminal Procedure Rules 2013 (SI 2013/1554) provides that an applicant who wants the Crown Court to exercise that power must comply with the rules set out in part 62 (Contempt of Court) [36].
    The Court said that “It is fallacious to argue that because the order was made by a criminal court, rather than a civil court, disobedience to the order amounts to a crime, whereas it would not have been a crime to disobey a similar order imposed by a civil court. The question whether a contempt is a criminal contempt does not depend on the nature of the court to which the contempt was displayed; it depends on nature of the conduct. To burst into a court room and disrupt a civil trial would be a criminal contempt just as much as if the court had been conducting a criminal trial. Conversely, disobedience to a procedural order of a court is not in itself a crime, just because the order was made in the course of criminal proceedings. To hold that a breach of a procedural order made in a criminal court is itself a crime would be to introduce an unjustified and anomalous extension of the criminal law. “Civil contempt” is not confined to contempt of a civil court. It simply denotes a contempt which is not itself a crime” (per Lord Toulson [42] with whom Lord Mance, Lord Wilson, Lord Carnwath and
    Lord Hughes agreed).

  • R v Golfrate Property Management [2014] EWHC 840 (Admin). [transcript]. Search and seizure warrants in relation to properties owned or occupied by G and Dr A, were set aside. The applications for the warrants were made under s.352 (1) and (6)(b) of the POCA 2002 by the Metropolitan Police Service on the basis of an Information prepared by the MPS as a result of a money laundering investigation carried out by them. The decision largely turns on the facts of the case. However, paras 129-131 of the judgment, are important when applications are made under s.352 POCA: “Ordinarily ss.15 and 16 of PACE provide safeguards in relation to any search warrant issued under any enactment. For example s.15(2)(c) requires the applicant for a warrant to identify so far as is practicable the articles to be sought. However [130], s.355(1)-(3) of POCA provided power to modify the provisions of s.15 and s.16 of PACE by Order made by the Secretary of State. By The Proceeds of Crime Act 2002 (Application of the Police and Criminal Evidence Act 1984 and Police and Criminal Evidence (Northern Ireland) Order 1989) Order 2003 SI 2003 No. 174, made on 29 January 2003, s.15 and s.16 of PACE were significantly modified. Unfortunately [131], the leading criminal law textbooks in common use, as distinct from the specialist publications, had not picked up this modification nor had counsel. Thus, although in the grounds s.15(2)(c) and 15(6)(b) were relied on, the modifications made by the 2003 Order removed the application of s.15(2)(c) and modified s.15(6)(b)” (per Lord Thomas of Cwmgiedd, CJ).
    As to best practice when dealing with complex cases, the Court said [26], “We reiterate, hopefully for the last time, that HMCTS must make the necessary resources available so that the Resident Judge at the Crown Court can discharge his responsibility for ensuring that arrangements are in place for these difficult and important applications to be dealt with properly. Judges must therefore be provided with the papers promptly, be accorded the time required to read the papers, to hear the application and to provide written reasons; as this court has observed in other contexts, it is far, far better that time is afforded for an initial application to be subject to rigorous scrutiny in a complex case such as this; the consequences of failing to accord the judge time is that much more time-consuming and expensive proceedings have to be undertaken by way of a review” (per Lord Thomas of Cwmgiedd, CJ).

  • R v Wright [2014] EWCA Crim 382. [transcript available on CaseTrack] The Court of Appeal held (distinguishing James and Blackburn [2011] EWCA (Crim) 2291) that £2,258, which was paid to solicitors acting for W as their costs for processing a false ‘cash-for-crash’ type insurance claim, constituted a benefit to W from his “criminal conduct” pursuant to POCA 2002, s.76(5). W, as a direct result of this fraud, avoided what would otherwise have been his liability to the solicitors for their costs in relation to the work done and expenses which they incurred, in connection with innocently advancing his false claim [23]. The Court observed that it is established that within the phrase “as a result of or in connection with the conduct”, which appears in both s.76(4) and s.76(5) of POCA 2002, the words “in connection with” have a wider connotation than the words “as a result of”. On the facts of the instant case, there was probably no meaningful distinction between the two phrases because what occurred arose both “as a result of”, and “in connection with”, the false claim.
  • R v Onuigbo [2014] EWCA Crim 65. [transcript]. O was convicted on 3 counts of money laundering (counts 2, 3, and 4, charged under ss.328, 327, and 328, of the POCA 2002, respectively). In respect of counts 2 and 3, each offence was charged as having been committed between 23/3/2003 and 30/5/2007. The dates in count 4 were given as 1/5/03 and 31/12/05. O was acquitted on count 1, which charged an offence (money laundering) between 1/6/1999 and 24/3/03, contrary to s.93A of the CJA1988. The trial judge found that O’s benefit from “general criminal conduct” was £21,148,914.22, and a confiscation order was made in the sum of £2,649,959.45. O appealed on various grounds including that the judge erred in ruling that POCA 2002 applied rather than Part 6 of the CJA 1988 (as amended). An issue also arose as to whether O’s previous solicitors could exercise a lien over case papers in respect of the non-payment of fees. It was held, that on a common-sense interpretation of the jury’s verdict on count 1, O was not found to have committed any offence before 24/3/03. Accordingly, notwithstanding the bracket of dates pleaded in counts 2 and 3, the Court was satisfied that O was not found to have committed any offence before the commencement date and that s.6 of the POCA therefore applied to the confiscation proceedings [34]. Evwierhowa [2011] 2 Cr.App.R(S) 77, considered. As for the issue of the solicitor’s lien, it seemed to the Court that the interests of justice test as it affects criminal proceedings pointed heavily in favour of an order for production [48, and 50].
  • R v Boughton-Fox [2014] EWCA Crim 227. [transcript]. This is another instance where the wrong confiscation regime had been applied (citing Evwierhowa [2011] 2 Cr.App.R(S) 77), and see R v Onuigbo, above.
  • R v Okedare [2014] EWCA Crim 228. [transcript]. CO was charged with an offence of conspiring to defraud but failed to appear at a PCMH. CO was tried, convicted and sentenced in his absence. The prosecution considered that they were entitled to proceed with confiscation proceedings against the defendants who had absconded under s.28 of POCA. CO (and others who had absconded) submitted that ss.27 and 28 did not apply with the consequence that legislation did not provide for the commencement of confiscation proceedings against a defendant who had absconded before trial and was subsequently convicted in his absence. The judge determined that neither ss.27 nor 28 applied, but that s.6 did, and a confiscation order was made against CO. The CACD has given CO leave to appeal to the full court on this issue. COMMENT: it is submitted that one possible approach is to regard the word “abscond” and concomitant expressions in ss.27 and 28, as synonymous with “unlawfully at large”, as those words appear in Part 3, ss.111 and 112 (Scot).
  • R v Tatham [2014] EWCA Crim 226. [transcript]. This is a further case that has been decided in the light of R v Chambers [2008] EWCA Crim 2467, in circumstances where a confiscation order had been premised on liability under the Excise Goods Regulations 1992 rather than the Tobacco Products Regulations 2001. The Court usefully summarised the relevant principles [23] but concluded, on the facts of the instant case, that T had made some investment in the enterprise and was financially interested in the purchase and importation of tobacco with the intent to evade excise duty. He therefore ’caused’ the goods to reach the point of excise duty and maintained a connection with them by virtue of his UK distribution role thereafter. On the facts, therefore, he was jointly liable for the excise duty, and on that basis a confiscation order may be made [36].
  • R v Elsayed [2014] EWCA Crim 333. [transcript available on CaseTrack]. E pleaded guilty to counts of possession of class A drugs with intent to supply and possessing criminal property. E’s work locker was searched and found to contain 169 grams of cocaine (80% purity) and a small wrap containing just under 3 grams of cocaine (5% purity), as well as £56,510 cash. It was contended that, for the purposes of valuing the drug as a “benefit” (POCA 2002), the relevant value was the wholesale value and not street value. The appeal was dismissed. On the facts, E was neither a custodian nor a wholesaler: he was going to sell them as a street level dealer. Those facts necessarily bear on the market value of the property obtained by a defendant, as specified in s.79(2). Although the drugs had come to the appellant from a wholesale source that did not mean that this prescribed the value of the drugs as obtained by E as a retailer. The notion of “market value” of property may vary, depending (for example) on the time at which it is obtained or the capacity or role of the person obtaining it [20]. See Mejia and Sneath [2009] EWCA Crim 1940, and Islam [2009] UKHL 30 (both decisions were considered in Elsayed).
  • R v Shepherd [2014] EWCA Crim 179 333. [transcript available on CaseTrack]. The CACD declined the invitation of S’s counsel to provide a definitive ruling as to the competing claims between the “RPI” and “CPI” as indices when valuing property under Part 2 of POCA 2002. No material was placed before the Court to reconsider the established practice in the Crown Court in confiscation proceedings of reliance upon the RPI.
  • R v Mackle and oths [2014] UKSC 5
    . [transcript]. This was an appeal from the Court of Appeal for Northern Ireland ([2011] NICA 31). Confiscation orders were made against the appellants (by consent) in connection with the evasion of duty on the importation of cigarettes. The Court of Appeal (NI) held that, in light of the decision in Chambers [2008] EWCA Crim 2467, if the appellants were not participants in the actual importation of the cigarettes, they would not be liable for the duty on them and thus could not be said to have obtained a pecuniary advantage for the purposes of the Tobacco Products Regulations 2001 (para 26). However, the Court went on to hold that (para 27), “Where, a defendant is knowingly involved in the evasion of duty on smuggled cigarettes after importation and comes into possession of the smuggled cigarettes with knowledge of the evasion and as part of a joint enterprise to take advantage of the economic advantages flowing from the evasion of the duty at the point of importation he
    may gain a financial advantage flowing from his participation in the ongoing enterprise.” The UKSC held that (1) a defendant is not precluded from appealing against a confiscation order made by consent on the ground that the consent was based on a mistake of law, as a result of wrong legal advice, and (2) that it is not to be assumed that because someone has handled
    contraband, even if that is in the course of a joint criminal enterprise, he has, on that account alone, benefited from that possession [61, 66]. The focus must be on what benefit the
    defendant has actually gained. Simply because someone has embarked on a joint criminal enterprise, it does not follow that they have obtained an actual benefit [64]. COMMENT: It is respectfully submitted that although this case provides a useful set of object lessons in relation to the making of confiscation orders (notably under POCA 2002), the principles are (subject to the pending decision of the UKSC in Ahmad and Ahmed) well established. As to orders made by consent, see R v Emmett [1998] AC 773 and the Court of Appeal in R v Bell [2011] EWCA Crim 6 [48]. In relation to the meaning of “benefit”, see Allpress [2009] EWCA Crim 8, Sivaraman [2008] EWCA Crim 1736, and the House of Lords trilogy of cases of May, Jennings, and Green.