Confiscation: what is obtained “as a result of or in connection with” a crime?

The courts in England and Wales in confiscation proceedings are wrestling with the question of the ‘benefit’ of particular criminal conduct.  This ought to be simple – but it’s not.  Recently the Court of Appeal has issued conflicting decisions and indeed the question will shortly be raised again in the Supreme Court.

This ought to be simple – but it’s not

The legislation sounds straightforward.  The Proceeds of Crime Act 2002 sets out: “A person benefits from conduct if he obtains property as a result of or in connection with the conduct”, s76(4).  “If a person benefits from conduct his benefit is the value of the property obtained”, s76(7).  It is accepted, following the House of Lords decision in CPS v Jennings [2008] UKHL 29, that this means “the property obtained by him“.

Where a person obtains a ‘pecuniary advantage’ he is deemed to obtain a sum of money equal to the value of the pecuniary advantage, s76(5).  References to property or a pecuniary advantage obtained in connection with conduct include references to property or a pecuniary advantage obtained both in that connection and some other, s76(6).  The term “property” is widely defined to include physical property, money and intangible property, s84.

But the statute does not describe in further detail what is meant by “as a result of or in connection with” conduct, such as criminal conduct.

 

What do we mean by that in everyday English?

Suppose I decide to take a holiday abroad.  On holiday I see and purchase a valuable painting by Salvador Dali.  After returning home with it I show it to an art dealer who informs me that it is an obvious fake.  I have been defrauded.  But was I defrauded “as a result of” taking the holiday?  I don’t think so – although it would be true to say that if I had not taken the holiday I would not have been defrauded.

So do we mean that X is “a result of Y” if Y is a necessary and sufficient condition which causes X, so that once Y has occurred X inevitably follows?  Or does that put it too strongly?

Suppose Y occurs and that will cause X unless something intervenes

Suppose Y occurs and that will cause X unless something intervenes?  In the event nothing does intervene and X occurs.  Can we say that X occurred “as a result of Y”?  I would say that we can.  But I am suggesting that Y must be a cause of X (although not necessarily the only cause) – but not merely an action or event which is necessary to enable X to occur.

The expression “in connection with” is even more tricky to explain – and there may be a danger of misinterpretation when we consider the phrase “in connection with” in isolation.

Suppose my friend John says he has a cheque to bank and asks if I would drive him to his bank as his car is being repaired.  I drive John to the bank and when he gets inside he pulls a gun and robs the bank.  Did I drive him to the bank “in connection with” the robbery?  Certainly the two events are connected and my action has facilitated the robbery.

What about Peter who illegally supplied John with the gun but had no knowledge of what John planned to do with it?  Did Peter supply the gun to John “in connection with” the bank robbery?

 

Let’s look at some examples which do relate to confiscation

Those examples of course have nothing to do with confiscation in the criminal courts.  Let’s look at some examples which do relate to confiscation in relation to the defendant’s benefit from the crime of which he has been convicted (on the basis that the statutory criminal lifestyle assumptions are not applicable or are not to be invoked).

although these items were purchased for the purpose of the criminal conduct they were not obtained in connection with the criminal conduct

In the case of James & Blackburn v R [2011] EWCA Crim 2991 Mr Blackburn purchased some weighing scales and cardboard boxes from a legitimate seller.  Mr Blackburn intended to use (and did use) these items in the course of a criminal conspiracy to evade the duty on hand rolling tobacco.  He was caught and convicted and confiscation proceedings followed.  The prosecution asserted that Mr Blackburn had obtained the scales and boxes “in connection with” the criminal conduct.  The Court of Appeal held that, although these items were purchased for the purpose of the criminal conduct they were not obtained in connection with the criminal conduct. His criminal conduct in participating in the conspiracy formed no part of the transactions by which he acquired the various items.  As a consequence the value of these items was not part of Mr Blackburn’s benefit for confiscation purposes.

But in the case of R v Waller [2008] EWCA Crim 2037, Mr Waller had arranged with some friends that he would go overseas (taking his own money and theirs) and purchase a large quantity (250 kilograms) of tobacco which he would smuggle back into the UK without paying the duty.  Again he was caught, convicted of being knowingly concerned in the evasion of duty and subject to confiscation.  In his case it was held that the tobacco had been purchased by Mr Waller both as a result of and in connection with the criminal conduct.  He had purchased the tobacco for himself and his friends with the intention of evading the duty on it.  On that basis the cost of the tobacco (as well as the duty evaded) was an element in Mr Waller’s benefit for confiscation purposes.

 

Was Waller wrongly decided?

Very recently the Court of Appeal has delivered its judgment in Ahmad & Ahmed v R [2012] EWCA Crim 391.  Here the Court stated, quite bluntly, that the earlier decision in Waller “was clearly wrong”.  In Ahmad the court highlighted from Jennings the words, “The rationale of the confiscation regime is that the defendant is deprived of what he has gained or its equivalent”.  Mr Waller had not gained anything from the purchase of the tobacco – his gain was limited to the duty evaded.

In Ahmad the Court of Appeal has provided a lengthy analysis of the decision in Waller although it would appear that Waller was “not referred to during the course of argument before us”.  One wonders whether the court might have benefited from counsels’ fully argued contributions on this topic in oral submissions.

I have to say I am not comfortable with the Ahmad decision in this respect

I have to say I am not comfortable with the Ahmad decision in this respect.  It seems to me that here the court (having an understandable desire to ameliorate the harshness of the confiscation regime) may have focussed too much upon the precise wording of the House of Lords’ judgment in Jennings and not enough on the wording of the underlying statute – with its repeated emphasis on what has been obtained (rather than what has been gained).

In Waller it was accepted, on the evidence, that, “for the purposes of the confiscation proceedings, the operative time for calculating the intention is when he purchased the tobacco”.  It follows, in my view, that the purchase was made (at least) “in connection with” the criminal conduct – the tobacco purchase was at the heart of the intended evasion of duty – and so the tobacco was property obtained by Mr Waller falling within s76(7).

Arguably what should have been further investigated in Waller was the value of the defendant’s own interest in that tobacco (which he had purchased in part with monies which his friends had entrusted to him for that purpose) bearing in mind s79(3).  But it seems that aspect of the matter may not have been raised.

There are other debatable aspects of the decision in Ahmad to which I intend to return in a future blog article.  [EDIT: That blog article has since been written and can be found HERE.]

David

UPDATE:

The Supreme Court handed down its decision in the confiscation case of R v Waya [2012] UKSC 51 on 14 November 2012.  In the light of that it may be that it would have been appropriate for the decision in Waller to be considered in terms of whether the Appeal Court judgment resulted in a confiscation order which was disproportionate and hence an infringement of the defendant’s human rights under Article 1 of the First Protocol of the European Convention on Human Rights.  The Supreme Court decision in Waya is considered in a blog article R v Waya – the UK Supreme Court judgment.

9 thoughts on “Confiscation: what is obtained “as a result of or in connection with” a crime?”

  1. Practitioners should also note para 36 of the judgment and in particular this comment:

    “We note in passing in Waya, UKSC 2010/0088, which will be re-argued before the Supreme Court in March, the parties have been sent a note which, amongst other things, asks the question: “Did Parliament intend that confiscation proceedings should be brought in respect of property that has been restored by or recovered from the defendant.” The note also states that “it may be that the Court should reconsider” whether Smith was correctly decided.”

    This presents another opportunity for the courts to revisit the POCA regime, although it should be noted that little changed after Jennings, May and Green.

    1. Although the language of the legislation appears to be mandatory & directive (the court “must” do this or that) the reality is that it is often necessary to makes estimates, assumptions & judgments in arriving at the figures for benefit, available amount and the amount the defendant is ordered to pay. In all of those areas the judge can influence the outcome.

      When setting the time to pay & the length of the default sentence there is again scope for the judge to use his discretion to some extent.

      David

Leave a Reply

Your e-mail address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.