In this issue
URGENT NOTICE re: Issue 30 of our Criminal Appeals Bulletin
Financial Crime Appeals
Hong Kong Case Summaries
Appeals Against Sentence; England and Wales
Appeals Against Conviction; England and Wales
Financial Crime Appeals

By Richard Fisher QC

 

R v S

 

[2019] EWCA Crim 569

INTRODUCTION

The Court of Appeal considered an appeal against an order made under s.22(4)(a) of the Proceeds of Crime Act 2002 (‘POCA 2002’) where the Recorder of the Crown Court had varied a confiscation order in S’s case from £8,550 to £108,642.81.

The unusual facts in this case required the Recorder and the appellate judges to consider what was just in the circumstances. 

 

 

THE FACTS

On 3 January 2006 at the Crown Court, the appellant was convicted on three counts charging possessing controlled drugs of class A, B and C with intent to supply. He was sentenced to a term of imprisonment of 4 years and 6 months.

 

Confiscation proceedings were pursued and on 11 January 2007, the judge found the benefit figure to be £189,621.36 and the available amount to be £18,050.

 

On 15 November 2007, the available amount was varied on an application by S under s.23 of POCA 2002 to £8,550, comprising £6,395 in cash seized on his arrest and a further amount of £2,155. The unsatisfied benefit figure was thus £181,071.36 (£189,621.36 less £8,550).

 

Following his release from prison, the appellant began in business and, in June 2014 acquired a property. It was this acquisition that alerted the authorities, in December 2015, to the possibility of an application to the Crown Court under s.22 of POCA 2002 requesting the Court to reconsider the available amount.

 

The CPS obtained a restraint order on the property in April 2016 and began the s.22 proceedings in June 2016. There was a delay between June 2016 and the eventual hearings before the Recorder on 16 February and 29 March 2018. On 2 April 2018 the Recorder set out the reasons for his decision.

 

THE APPEAL

Their Lordships considered three points made on behalf of S. Firstly, that the Recorder should have refused to make any order under s.22 of POCA 2002, on the grounds that it was contrary to public policy to pursue the application against S when he had given considerable assistance to the police since his release from prison. In addition to the matters referred to by the Recorder, he had assisted the police enquiries into a corrupt police officer. Alternatively, S should have given very much more credit than 40% to reflect that assistance. Secondly, it was submitted that the Recorder should have refused to have made any order in the light of the delay, or alternatively should have applied an additional and further discount to take into account delay. Thirdly, it was argued that insufficient weight was given to the principle of rehabilitation when determining the level of discount so as to reflect the lawful life that the appellant had been leading since the original order. It was submitted that taking all of these factors into account the discount should have been in the order of 75-80%.

 

The Recorder had been referred to the relevant authorities: In re Peacock [2012] UKSC 5; Padda [2014] 2 Cr App R (S) 149; Leon John [2014] 2 Cr App R (S) 73 and Mundy [2018] EWCA 105 (Crim). Their Lordships noted that the Recorder had directed himself that a property which was legitimately acquired after the making of a confiscation order was, in principle, within the reach of the POCA process and that in deciding whether to vary the original confiscation order by recalculating the sum which was available and substituting a different sum, the Court should apply the provisions of s.22:

 

(4) If the amount found under the new calculation exceeds the relevant amount the court may vary the order by substituting for the amount required to be paid such amount as-

    1. it believes is just, but
    2. does not exceed the amount found as the defendant’s benefit from the conduct concerned.

 

Their Lordships were not critical of the Recorder in finding that the 11 years that had elapsed since the making of the original confiscation order was of such length as to prevent a just order being made under s.22. There were cases where lengthy periods had elapsed prior to such an application including Padda, 6 years, Peacock, 10 years and Mundy, 9 years.

 

It was of note in this case that S had acquired assets though payments for operating as a Covert Human Intelligence Source between 2007 and 2011. S had used those assets to establish his business through which he prospered and, as a result, he was then able to acquire the property at the end of 2014. It was S’s interest in that property that founded the prosecutor’s application to increase the available amount.

 

The Recorder was of the view that it would be just to make an order in S’s case because the legislative policy of POCA 2002 to maximise the proceeds of crime outweighed the value of rehabilitating offenders through legitimately acquiring assets.  The Recorder found that S had “sailed very close to the wind” in his business dealings but decided that the length of time that had elapsed did not prevent an order from being made. In addition, the assistance S gave as a Covert Human Intelligence Source did not preclude an order being made under s.22 but did merit a discount being made in S’s case as such an approach would be just in the context of s.22(4)(a) of POCA 2002. The Recorder assessed this discount at 40%.

Their Lordships were of the view that the Recorder’s approach to this case could not be faulted and they dismissed the appeal.

 

COMMENT

The facts of the case are unusual and it is difficult to assess the likelihood of such a set of circumstances arising in the future in the context of an application under s.22 of POCA 2002. However, their Lordships must have thought that there will be other cases because they made six observations which will undoubtedly be followed in other such cases (see below).

 

Some will view the application of s.22 in this case as going too far, it is more than simply arguable that no order should have been made in S’s case due to the length of time that had elapsed and/or because of the source of the legitimately acquired assets in the years after the confiscation order had been made and/or because of the importance of encouraging offenders to rehabilitate, after all what is the point of working legitimately and rehabilitating if all of that will be taken away under s.22 of POCA 2002? However, it is perhaps not that surprising that their Lordships disagreed and dismissed the appeal.

 

The six observations at paragraphs 28 to 34 of the judgment should be considered in any s.22 case despite the fact that several of them are really fact specific. The first of those observations could provide some comfort to those having to respond to a s.22 application because it refers to the Crown Court having a “broad discretion” and that the provisions of subsection (4) use the word “may” and the phrase “believes to be just.” However, those references go both ways of course and may provide encouragement to prosecutors that whatever the circumstances of the post acquired assets are, it is just to pursue an application under s.22 of POCA 2002 if the offender has more now than they had before.

 

The observations concluded with the following [at paragraph 35], a reminder that the Court of Appeal will rarely interfere with the decision of the Crown Court on a s.22 application:

 

The weight to be attached to such matters as delay in bringing an application and assistance to the prosecution is for the Crown Court; and this Court will not interfere with such findings unless a decision either involves an error of law or principle; or falls outside the judge’s discretion, in that no Court properly directing itself in accordance with the law could have come to such a conclusion; or is fundamentally lacking in any underlying reasoning.

 

It is difficult to know what the likelihood is of similar cases presenting the opportunity for the Crown to pursue an application under s.22, but if there are other cases, their Lordships’ observations will undoubtedly be applied. One only has to look at the other cases referred to in the judgement (and above) to appreciate that any number of scenarios may present themselves where an offender acquires assets after a confiscation order is made and finds s.22 looming over them. There are of course many who would say that that in itself is entirely just.

 

 

 

By Farrhat Arshad

 

Sentencing Council’s Definitive Guideline on Fraud, Bribery and Money Laundering – section 327 offences – “Harm B” and its effect on categorization

 

R v Evans, Jackson and Johnson

 

[2019] EWCA Crim 606

 

The three appellants had been sentenced to immediate sentences of imprisonment for offences of transferring cash arising from the sale of drugs in a conspiracy.  It had been argued on appeal that consideration of “Harm B”, that is the level of harm associated with the underlying offence, should have meant a sideways move into another category of culpability but the Court held that it was inevitable that the level of harm associated with the underlying offence warranted an upward adjustment of the starting point to the next category range and thus the judge was amply entitled to take the view that immediate custodial sentences were warranted.

 

 

To discuss these cases further with Richard Fisher QC or Farrhat Arshad please email here for Richard or here for Farrhat.