Contents 1. Restraint ............................................................................................................................................................ 1 Proceeds of Crime Act 2002 ........................................................................................................................... 1 Re B. (Restraint Order) [2009] 1 Cr.App.R. 14, CA .......................................................................................... 3 re Windsor and others [2011] 1 W.L.R. 1519 ................................................................................................. 3 2. Initiation (and abuse of process)....................................................................................................................... 3 A. The Duty to Proceed .................................................................................................................................. 4 Proceeds of Crime Act 2002 ........................................................................................................................... 4 B. C. D. Civil Proceedings ........................................................................................................................................ 5 The Directors Guidance ............................................................................................................................ 5 Initiation Authorities ................................................................................................................................. 6 Shabir [2008] EWCA Crim 1809 ...................................................................................................................... 6 Morgan [2009] 1 Cr App R (S) 60 .................................................................................................................... 6 Nelson [2010] QB 678 ..................................................................................................................................... 7 Luigi del Basso [2011] 1 Cr. App. R. (S.) 41 ..................................................................................................... 7 E. Agreement not to Proceed ........................................................................................................................ 7 General principles of Finality .......................................................................................................................... 7 Crudas, Court of Appeal, Civil Division 24 January 1997 ................................................................................ 8 Promise not to proceed Example - R (DWP) v CCC [2011] 1 Cr. App. R. (S.) 1 ................................................ 9 3. The Factual Enquiry ........................................................................................................................................... 9 A. B. Bases of Plea .............................................................................................................................................. 9 Absence of Basis of Plea ............................................................................................................................ 9 Knaggs [2010] 1 W.L.R. 435 ............................................................................................................................ 9 4. Determining Criminal Lifestyle .......................................................................................................................... 9 Proceeds of Crime Act 2002 ......................................................................................................................... 10 A. Particular criminal conduct...................................................................................................................... 11 1
Proceeds of Crime Act 2002 ......................................................................................................................... 11 B. General criminal conduct ........................................................................................................................ 12 Proceeds of Crime Act 2002 ......................................................................................................................... 12 Assumptions under Proceeds of Crime Act 2002 ......................................................................................... 12 C. Other proven conduct ............................................................................................................................. 14 Briggs-Price [2009] 1 A.C. 1026..................................................................................................................... 14 Gale [2011] 1 W.L.R. 2760 ............................................................................................................................ 14 Bagnall [2012] EWCA Crim 677 ..................................................................................................................... 14 5. Benefit ............................................................................................................................................................. 16 A. Defined .................................................................................................................................................... 16 Proceeds of Crime Act 2002 ......................................................................................................................... 16 R v Smith (David) [2002] 1 wlr 54 ................................................................................................................. 16 May [2008] 1 AC 1028 .................................................................................................................................. 16 B. Benefit Minor Players - Employees, Couriers and Custodians................................................................. 18 Sivaramen [2009] 1 Cr App R (S) 80 .............................................................................................................. 18 Allpress [2009] EWCA Crim 8 ........................................................................................................................ 19 Anderson [2010] EWCA Crim. 615 ................................................................................................................ 19 C. Benefit Capacity .................................................................................................................................... 20 Seager and Blatch [2010] 1 W.L.R. 815 ........................................................................................................ 20 D. Benefit proportionality ......................................................................................................................... 21 May [2008] UKHL 28 ..................................................................................................................................... 21 James and Blackburn [2011] EWCA Crim 2991 ............................................................................................. 21 E. Valuing the benefit .................................................................................................................................. 22 Gibbons [2003] 2 Cr App R (S) 169................................................................................................................ 23 Chambers [2008] EWCA Crim 2467 .............................................................................................................. 23 Wall [2003] 1 WLR 731 ................................................................................................................................. 23 Waya [2011] 1 Cr. App. R. (S.) 4 .................................................................................................................... 23 F. Market Value of Drugs ............................................................................................................................. 23 Islam [2009] 1 AC 1076 ................................................................................................................................. 23
G.
In connection with ............................................................................................................................. 24 Waller [2008] ewca crim 2037 ...................................................................................................................... 24 James and Blackburn [2011] EWCA Crim 2991 ............................................................................................. 24 Ahmed (Shakeel) and Ahmed (Syed Mubarak) [2012] EWCA Crim 391; Times, May 29, 2012 .................... 25
6. Recoverable Amount ...................................................................................................................................... 26 Proceeds of Crime Act 2002 ......................................................................................................................... 26 May [2008] UKHL 28 ..................................................................................................................................... 26 A. Hidden Assets .......................................................................................................................................... 26 Telli v Revenue and Customs Prosecution [2008] 2 Cr. App. R. (S.) .............................................................. 27 R v Whittington [2010] 1 Cr. App. R. (S.) 83.................................................................................................. 27 McIntosh [2011] EWCA Crim 1501 ............................................................................................................... 27 7. Available amount ............................................................................................................................................ 27 Proceeds of Crime Act 2002 ......................................................................................................................... 28 Insolvency Act 1986 ...................................................................................................................................... 28 A. Tainted Gifts ............................................................................................................................................ 29 Proceeds of Crime Act 2002 ......................................................................................................................... 29 B. The Family Home ..................................................................................................................................... 30
8. Order ............................................................................................................................................................... 31 A. Period in default ...................................................................................................................................... 31 Powers of Criminal Courts (Sentencing) Act 2000, ss.139 ............................................................................ 31 Szrajber, 15 Cr.App.R.(S.) 821, CA................................................................................................................. 31 Castillo [2011] Ewca Crim 3173; [2012] Crim. L.R. 401 (Ca (Crim Div)) ........................................................ 32 B. Time to pay .............................................................................................................................................. 33 Proceeds of Crime Act 2002 ......................................................................................................................... 33 9. RECONSIDERATION: Available Amount........................................................................................................... 34 Proceeds of Crime Act 2002 ......................................................................................................................... 34 A. Later acquired assets ............................................................................................................................... 35 Tivnan [1999] 1 Cr App R (S) 92 .................................................................................................................... 35 Bates [2007] 1 Cr. App. R. (S.) 2 .................................................................................................................... 36
Re Maye [2008] UKHL 9; [2008] 1 W.L.R. 315 .............................................................................................. 36 In Re Peacock [2012] 1 WLR 550, 22 February 2012 (SC) ............................................................................. 36 Criminal Justice Act 2003 .............................................................................................................................. 37 B. Reasonable time requirement ................................................................................................................. 37 Griffin [2009] Cr App R (S) 587...................................................................................................................... 37 10. RECONSIDERATION: Benefit............................................................................................................................ 37 Proceeds of Crime Act 2002 ......................................................................................................................... 37 11. RECONSIDERATION: Inadequacy of Available Amount (s23) .......................................................................... 38 Proceeds of Crime Act 2002 ......................................................................................................................... 38 Gokal [2001] EWCA Civ 368, ......................................................................................................................... 39 Re ODonoghue [2004] EWCA Civ 1800 ........................................................................................................ 39 Telli v RCPO [2007] EWHC 2233.................................................................................................................... 39 Alan Glaves v Crown Prosecution Service [2011] EWCA Civ 69 .................................................................... 40 R v McIntosh [2011] S.T.I. 1940 .................................................................................................................... 42 12. Enforcement ................................................................................................................................................... 42 A. Committal to prison ................................................................................................................................. 42 Proceeds of Crime Act 2002 ......................................................................................................................... 43 Powers of the Criminal Courts Sentencing act ............................................................................................. 44 Magistrates Court Act 1980 .......................................................................................................................... 45 Harrow Justices [1991] 1 WLR 395 ............................................................................................................... 45 Barnett v Director of Public Prosecutions [2009] EWHC 2004 (Admin) ....................................................... 46 L, Re [2010] EWHC 1531 (Admin); ................................................................................................................ 47 B. Seized Money .......................................................................................................................................... 47 Proceeds of Crime Act 2002 ......................................................................................................................... 47 C. D. Other powers ........................................................................................................................................... 48 Release .................................................................................................................................................... 49 Magistrates Court Act 1980 .......................................................................................................................... 49 Criminal Justice act 2003 .............................................................................................................................. 50 E. Interest .................................................................................................................................................... 50
Proceeds of Crime Act 2002 ......................................................................................................................... 50 Judgment Debts (Rate of Interest) Order 1993/564 ..................................................................................... 50 F. Reasonable Time Requirement ............................................................................................................... 51 Lloyd v Bow Street Magistrates' Court [2003] EWHC 2294 (Admin) ............................................................ 51 Crowther v United Kingdom [2005] ECHR 45: .............................................................................................. 52 Minshall [2010] 1 W.L.R. 590 ........................................................................................................................ 52 Altaf Syed, Tevor Hamilton-Farrell v City of Westminster Magistrates' Court [2010] EWHC 1617 (Admin) 53
1. RESTRAINT
A Restraint order is an order prohibiting any specified person from dealing with any realisable property held by him (section 41). Restraint Order may be made, if: There is reasonable cause to believe that the alleged offender has benefited from his criminal conduct, AND Either o Proceedings for an offence have been started OR o Pre-charge: a criminal investigation has been started (section 40).
Exercise of the power The power must be exercised with a view to the value for the time being of realisable property being made available (by the propertys realisation) for satisfying any confiscation order that has been or may be made against the defendant (Section 69). There must be a real as opposed to a fanciful risk that, if a restraint order is not made, the assets in respect of which the order is requested are liable to be dissipated. (Re B) Where, the defendant (or potential defendant) has had ample opportunity to dissipate his assets it is incumbent on both the prosecution and the judge to explain how it could be said that there was a real risk that he would dissipate assets. (Re B) Important to consider section 69 Windsor [2011] 1 W.L.R. 1519
(7) The second condition is not satisfied if the court believes that . (a) there has been undue delay in continuing the proceedings, or . (b) the prosecutor does not intend to proceed. . 41 Restraint orders. (1) If any condition set out in section 40 is satisfied the Crown Court may make an order (a restraint order) prohibiting any specified person from dealing with any realisable property held by him. (2) A restraint order may provide that it applies (a) to all realisable property held by the specified person whether or not the property is described in the order; (b) to realisable property transferred to the specified person after the order is made. (3) A restraint order may be made subject to exceptions, and an exception may in particular (a) make provision for reasonable living expenses and reasonable legal expenses; (b) make provision for the purpose of enabling any person to carry on any trade, business, profession or occupation; (c) 69 Powers of court and receiver. (1) This section applies to . (a) the powers conferred on a court by sections 41 to 60 and sections 62 to 67; . (b) the powers of a receiver appointed under section 48, 50 or 52. . (2) The powers . (a) must be exercised with a view to the value for the time being of realisable property being made available (by the propertys realisation) for satisfying any confiscation order that has been or may be made against the defendant; . (b) must be exercised, in a case where a confiscation order has not been made, with a view to securing that there is no diminution in the value of realisable property; . (c) must be exercised without taking account of any obligation of the defendant or a recipient of a tainted gift if the obligation conflicts with be made subject to conditions.
the object of satisfying any confiscation order that has been or may be made against the defendant; . (d) may be exercised in respect of a debt owed by the Crown.
Abuse
The court retains the jurisdiction to stay an application for confiscation, as any other criminal process, where it amounts to an abuse of the courts process. But his jurisdiction must be exercised with considerable caution. It must be confined to cases of true oppression. (Shabir [2008] EWCA Crim 1809). For instance, it might be an abuse where: the prosecution has agreed not to proceed the defendant has fully repaid the victim it would be truly oppressive to proceed
Exceptional jurisdiction The just result of these proceedings is the result produced by the proper application of the statutory provisions as interpreted in the House of Lords and in this court. However to conclude that proceedings properly taken in accordance with statutory provisions constitute an abuse of process is tantamount to asserting a power in the court to dispense with the statute. Nelson [2010] QB 678
(b) if it decides that he has a criminal lifestyle it must decide whether he has benefited from his general criminal conduct; (c) if it decides that he does not have a criminal lifestyle it must decide whether he has benefited from his particular criminal conduct.
B. CIVIL PROCEEDINGS
The court must treat the duty... as a power if it believes that any victim of the conduct has at any time started or intends to start proceedings against the defendant (section 6(6)).
may be perfectly proper for a confiscation order to be massively greater than a defendants benefit from particular offending (R v Shabir, per Hughes LJ, at paragraph 27). Any injustice as perceived by the court can, in any event, be overcome by the court declining to apply the lifestyle presumptions (the relevant provision in the Proceeds of Crime Act 2002 is section 10(6)). As in the cases set out above, every case will have to be considered on its own facts, but a decision one way or the other must be properly reasoned and it is advisable to keep a clear and accurate record of the decision.
"... where a given matter becomes the subject of litigation in, and of adjudication by, a court of competent jurisdiction, the court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time." There is particular importance in holding a prosecutor to an agreement not to proceed further with a particular matter. In Bloomfield [1997] 1 Cr App R 135, giving the judgment of the court, Staughton LJ stated at page 143B: The statement of the prosecution that they would offer no evidence at the next hearing was not merely a statement made to the defendant or to his legal representatives. It was made coram judice, in the presence of the judge. It seems to us that whether or not there was prejudice it would bring the administration of justice into disrepute if the Crown Prosecution Service were able to treat the court as if it were at his its beck and call, free to tell it one day that it was not going to prosecute and another day that it was.
Not without hesitation, I conclude that, in the particular circumstances of this case, the Crown should not be entitled to resile from concessions which they made in the Crown Court, and for that narrow reason I too would dismiss the appeal. The balancing of the public policies that the defendant should not profit from his crime against the fundamental notion of justice and public interest that there by finality in litigation is a central one. I would have thought that it is bound to be resolved in this way. There are many litigants at least as deserving as the crown in proceeds of crime case, but the rules of litigation must apply. If victims in a pharmaceutical class claim settled litigation in a particular way would anyone seriously argue that there should be some special rule that allows them to resile because they are so worthy a litigant?
PROMISE NOT TO PROCEED EXAMPLE - R (DWP) V CCC [2011] 1 CR. APP. R. (S.) 1
An order staying confiscation proceedings as an abuse of process upheld, where the sentencing judge indicated to the defendant that if she made full repayment there would be no need for the confiscation proceedings to continue, and the defendant made repayment.
Effect
He is convicted of three other offences (from which he benefitted in a sum >5,000) in the same proceedings. He was convicted on two other occasions of offences (from which he benefitted in a sum >5,000) in the six years prior to the commencement of these proceedings. It was carried out over a period of at least six months.
If the defendant has a criminal lifestyle, benefit is calculated from his general criminal conduct (all his criminal conduct). If the defendant does not have a criminal lifestyle, benefit is calculated from his particular criminal conduct (the conduct dealt with in those proceedings.
earliest day) he was convicted on at least two separate occasions of an offence constituting conduct from which he has benefited. . (4) But an offence does not satisfy the test in subsection (2)(b) or (c) unless the defendant obtains relevant benefit of not less than 5000. . (5) Relevant benefit for the purposes of subsection (2)(b) is . (a) benefit from conduct which constitutes the offence; . (b) benefit from any other conduct which forms part of the course of criminal activity and which constitutes an offence of which the defendant has been convicted; . (c) benefit from conduct which constitutes an offence which has been or will be taken into consideration by the court in sentencing the defendant for an offence mentioned in paragraph (a) or (b). .
(6) Relevant benefit for the purposes of subsection (2)(c) is . (a) benefit from conduct which constitutes the offence; . (b) benefit from conduct which constitutes an offence which has been or will be taken into consideration by the court in sentencing the defendant for the offence mentioned in paragraph (a). . (7) The Secretary of State may by order amend Schedule 2. . (8) The Secretary of State may by order vary the amount for the time being specified in subsection (4). .
11
12
(b) at the earliest time he appears to have held it. . (3) The second assumption is that any property held by the defendant at any time after the date of conviction was obtained by him . (a) as a result of his general criminal conduct, and . (b) at the earliest time he appears to have held it. . (4) The third assumption is that any expenditure incurred by the defendant at any time after the relevant day was met from property obtained by him as a result of his general criminal conduct. . (5) The fourth assumption is that, for the purpose of valuing any property obtained (or assumed to have been obtained) by the defendant, he obtained it free of any other interests in it. . (6) But the court must not make a required assumption in relation to particular property or expenditure if . (a) the assumption is shown to be incorrect, or . (b) there would be a serious risk of injustice if the assumption were made. . (7) If the court does not make one or more of the required assumptions it must state its reasons. . (8) The relevant day is the first day of the period of six years ending with . (a) the day when proceedings for the offence concerned were started against the defendant, or . (b) if there are two or more offences and proceedings for them were started on different days, the earliest of those days. . (9) But if a confiscation order mentioned in section 8(3)(c) has been made against the defendant at any time during the period mentioned in subsection (8) . (a) the relevant day is the day when the defendants benefit was calculated for the purposes of the last such confiscation order; . (b) the second assumption does not apply to any property which was held by him on or before the relevant day. . (10) The date of conviction is . (a) the date on which the defendant was convicted of the offence concerned, or . (b) if there are two or more offences and the convictions were on different dates, the date of the latest
13
14
Whilst investigations were carried out in relation to money laundering the investigation team found documents that strongly suggested B had been involved in missing trader (MTIC) fraud. A position statement served by the Crown stated that B would not be prosecuted for MTIC fraud but that allegations of his involvement would be made during the course of confiscation proceedings. At the confiscation proceedings the judge made the assumptions under the Proceeds of Crime Act 2002 s.10 that the property was obtained by B as a result of his general criminal conduct. In relation to S, a confiscation order was made under the Criminal Justice Act 1988 s.72AA. B submitted that the court should not have applied the assumptions under s.10 of the 2002 Act as the reliance on a specific accusation that he was involved in MTIC fraud required that allegation to be proved to the criminal standard in order to safeguard his rights under the European Convention on Human Rights 1950 art.6(2) and art.6(1). S submitted that there was an absence of proportionality between the offences which he was convicted and the offences he was assumed to have committed for the purpose of s.72AA of the 1988 Act. (1) The fact the Crown accused B of specific offences and adduced evidence to support that accusation did not amount to the bringing of a new charge, Phillips v UK (2011) 11 BHCC 280 considered. B was not at risk of any further conviction, there was no finding of guilt and the findings reached by the judge on the assumptions under s.10 of the 2002 Act merely went to the amount of the order the court was obliged to make. The Crown was obliged to include in its statement of information matters relevant with the making of assumptions and was, accordingly, obliged to set out the information it had relevant to the fraudulent MTIC activity. B sought to contend that the assumptions should not apply because the source of the assets was lawful trading. The Crown was entitled to produce evidence in rebuttal and, in doing so, it did not take upon the burden of proving that the source of those assets was criminal conduct. There was no dispute B held the assets; the only question was their source. Since that was the only question, the assumptions applied and the fact that the Crown had material and evidence to rebut B's assertion that they should not apply did not shift a criminal standard of proof onto the prosecution (see paras 18-21 of judgment). (2) Whilst art.6(1) applied to confiscation proceedings the proceedings were not unfair to B. The statutory assumption applied to assess the amount of the confiscation order. B was entitled to rebut the assumption that the source of the assets was criminal on the balance of probabilities. There was nothing unfair in requiring B to demonstrate that two of the companies through which he was trading were carrying out lawful business (para.23). (3) The judge had erred in adding, to the benefit sum, 200,000, which had been loaned to his company to provide working capital, R. v Ahmad (Shakeel) [2012] EWCA Crim 391, Times, May 29, 2012 followed, and R. v Waller (Sebastian) [2009] EWCA Crim 1096, [2010] 1 Cr. App. R. (S.) 33 considered. (4) In relation to S, the assumptions under s.72AA(4) of the 1988 Act applied and property, which it was not disputed had been held by S at the date of conviction, was assumed to have been received by him as a result of or in connection with the commission of offences to which Part VI of the 1988 Act applied. It was not disproportionate to require a defendant to establish that the source of money which he held was from a legitimate and not a criminal source. There was no basis for contending that to impose the burden upon the defendant of showing that the source of his property was legitimate was unfair or contrary to art.6 (paras 34, 40).
15
5. BENEFIT
A person benefits from conduct if he obtains property as a result of or in connection with the conduct.
Do not deduct sums retained by co-Ds from the amount jointly obtained Where D is a prime mover in a conspiracy he may obtain the whole amount, notwithstanding that he is nominally only an employee
The narrow principles decided are straightforward, but in the course of their opinions their lordships delivered what amounts to a comprehensive code for determining benefit under the confiscation regime. Paragraph 48 of May: Recognition of the importance and difficulty of this jurisdiction prompts the committee to emphasise the broad principles to be followed by those called upon to exercise it: (1) The legislation is intended to deprive defendants of the benefit they have gained from relevant criminal conduct, whether or not they have retained such benefit, within the limits of their available means. It does not provide for confiscation in the sense understood by schoolchildren and others, but nor does it operate by way of fine. The benefit gained is the total value of the property or advantage obtained, not the defendants net profit after deduction of expenses or any amounts payable to co-conspirators. (2) The court should proceed by asking the three questions posed above: (i) Has the defendant (D) benefited from relevant criminal conduct? (ii) If so, what is the value of the benefit D has so obtained? (iii) What sum is recoverable from D? Where issues of criminal life style arise the questions must be modified. These are separate questions calling for separate answers, and the questions and answers must not be elided. (3) In addressing these questions the court must first establish the facts as best it can on the material available, relying as appropriate on the statutory assumptions. In very many cases the factual findings made will be decisive. (4) In addressing the questions the court should focus very closely on the language of the statutory provision in question in the context of the statute and in the light of any statutory definition. The language used is not arcane or obscure and any judicial gloss or exegesis should be viewed with caution. Guidance should ordinarily be sought in the statutory language rather than in the proliferating case law. (5) In determining, under the 2002 Act, whether D has obtained property or a pecuniary advantage and, if so, the value of any property or advantage so obtained, the court should (subject to any relevant statutory definition) apply ordinary common law principles to the facts as found. The exercise of this jurisdiction involves no departure from familiar rules governing entitlement and ownership. While the answering of the third question calls for inquiry into the financial resources of D at the date of the determination, the answering of the first two questions plainly calls for a historical inquiry into past transactions. (6) D ordinarily obtains property if in law he owns it, whether alone or jointly, which will ordinarily connote a power of disposition or control, as where a person directs a payment or conveyance of property to someone else. He ordinarily obtains a pecuniary advantage if (among other things) he evades a liability to which he is personally subject. Mere couriers or custodians or other very minor contributors to an offence, rewarded by a specific fee and having no interest in the property or the proceeds of sale, are unlikely to be found to have obtained that property. It may be otherwise with money launderers. 17
Jennings v Crown Prosecution Service [2008] AC 1046 , para 13. It was pointed out: There is a real danger in judicial exegesis of an expression with a plain English meaning, since the exegesis may be substituted for the language of the legislation. It is, however, relevant to remember that the object of the legislation is to deprive the defendant of the product of his crime or its equivalent, not to operate by way of fine. The rationale of the confiscation regime is that the defendant is deprived of what he has gained or its equivalent. He cannot, and should not, be deprived of what he has never obtained or its equivalent, because that is a fine. This must ordinarily mean that he has obtained property so as to own it, whether alone or jointly, which will ordinarily connote a power of disposition or control, as where a person directs a payment or conveyance of property to someone else. A persons acts may contribute significantly to property (as defined in the Act) being obtained without his obtaining it. But under section 71(4) a person benefits from an offence if he obtains property as a result of or on connection with its commission, and his benefit is the value of the property so obtained, which must be read as meaning obtained by him. As Lord Bingham held in R v May [2008] 1 AC 1028, at paragraph 35 But it has been recognised that a defendant may lack the means to pay a sum equal to the aggregate of the payments or rewards he has received, or the value of the property or pecuniary advantages he has obtained. It has also been recognised that it would be unjust to imprison a defendant for failure to pay a sum which he cannot pay. Thus provision has been made for assessing the means available to a defendant and, if that yields a figure smaller than that of his aggregate benefit, making a confiscation order in the former, not the latter, sum.
18
payment of duty, his benefit was the amount paid to him by his employer for his participation in the scheme, not the whole amount of the duty evaded. 17 The crucial question in the case of the appellant was: what was his position in relation to his employer with regard to the purchase and sale of the fuel which generated that pecuniary advantage? ... As previously stated, the appellant had admitted receiving eight to ten deliveries, knowing of their illicit nature. But that begs the vital question as to the capacity in which he did so. It would be one thing if he did so as a joint trader...; but another if he was acting as an employee. 20.... Conspirators are criminally liable for the acts of their confederates done within the scope of their employment; but, when considering questions of confiscation the focus of the inquiry is on the benefit gained by the relevant defendant, whether individually or jointly.
19
21. Given the lack of clear evidence here and any appropriate finding by the judge, we consider that the assumed division of the proceeds is an acceptable solution as Gibbons shows. As we have said, the Crown accept that this should be the outcome if the finding of joint ownership is not sustained. We have some uncertainty as to whether it is right to divide the proceeds three ways. But that is agreed between counsel, and the contrary was not argued
C. BENEFIT CAPACITY
Whether the benefit of corporate offending is the turnover of the company or the income to the defendant is a question of fact. May pierce the veil where where the offender had attempted to shelter behind a corporate faade to hide his crime or done acts in the name of a company which constituted a criminal offence or where a transaction was a sham to deceive third parties or the courts
in return for his services as a shadow director during the relevant period, the court would find that that sum was the amount of his benefit and substitute a confiscation order in that sum; but that in the first case, since there were no findings of primary fact or the relevant materials to enable the court to reach any alternative finding of the defendant's benefit, no other confiscation order could be substituted (post, paras 6869, 7476, 7880, 8385, 90, 9296).
D. BENEFIT PROPORTIONALITY
Proportionality The benefit figure for each of joint beneficiaries is the total amount obtained. This means that if each had the assets, the state could multiple-recover. In May: There might be circumstances in which orders for the full amount against several defendants might be disproportionate and contrary to article 1 of the First Protocol, and in such cases an apportionment approach might be adopted, but that was not the situation here and the total of the confiscation orders made by the judge fell well below the sum of which the revenue had been cheated. Also consider fiscal neutrality.
21
45. There might be circumstances in which orders for the full amount against several defendants might be disproportionate and contrary to article 1 of the First Protocol, and in such cases an apportionment approach might be adopted, but that was not the situation here and the total of the confiscation orders made by the judge fell well below the sum of which the Revenue had been cheated. In the event, the court allowed appeals in both case on different grounds. So the matter is left unresolved.
22
(4)The references in subsection (2)(a) and (b) to the value are to the value found in accordance with section 79.
23
G. IN CONNECTION WITH
In connection with A person benefits from conduct if he obtains property as a result of or in connection with the conduct. (section 76(4) What about the cost of smuggled and seized tobacco? What about staff costs? What about rent? What about money to prime the pump of a fraud?
24
It was agreed that there was no evidence that Mr Blackburn financed the purchase of the raw leaf tobacco. The court of appeal held that he was therefore akin to an employee akin to Sivaramen. The confiscation judge found Mr James to have a financial interest, but the sentencing judge did not. The court could not resolve this and so quashed the order.
EXPENSES
The judge, at the request of the prosecutor, added a figure to the unpaid excise duty a figure to represent expenses which it was said the appellants had incurred. Thus, for example, Blackburn had bought scales, saw blades for the machine (50), had paid some rent, had paid money out as wages to those working in the factory and had paid other miscellaneous expenses and that was held to be a benefit, in the total amount of 6960.00, increased to 7411.00 by reason of a change in the value of money. The Court of Appeal held that none of these amounted to benefit. The appellant did not obtain the items in connection with any criminal conduct. His criminal conduct in participating in the conspiracy formed no part of the transactions by which he acquired the various items. Their acquisition was by way of lawful purchase for value. The transactions were entered into for the purpose of criminal conduct, but that is not the state of affairs caught by section 76(4).
AHMED (SHAKEEL) AND AHMED (SYED MUBARAK) [2012] EWCA CRIM 391; TIMES, MAY 29, 2012
The appellants were convicted in 2007 of conspiracy to cheat the public revenue. The appellants were concerned in a missing trader VAT fraud which took place over a short period in 2002. The appellants were directors and shareholders of a company which acted as a buffer company for the purposes of the fraud. The fraud involved five companies in Ireland purporting to export large quantities of central processing units to a number of companies in the United Kingdom. The goods were zero rated on import to the United Kingdom and the first company, the missing trader sold them on to the first buffer company, which then sold the goods on to the second buffer company, which was the company of which the appellants were directors. The appellants' company then sold the goods on to an exporting company for an amount which included the VAT. The exporting company then exported the goods back to the company in Ireland which had originally sold the goods. No VAT was payable on the export, but the exporter reclaimed the VAT that it had paid to the appellant's company. The amount of the VAT which was fraudulently obtained was approximately 12.6 million. The missing trader company issued a VAT invoice enabling the first buffer company to deduct the amount shown as being input tax from the amount due from the buffer company to the HMRC as output tax in respect of other transactions. In many cases all the transactions took place on the same day. In a carousel fraud the conspirators have to put up a significantly large sum of money to prime the pump. That money then passes through the accounts of the buffer companies. As we have said, to commit an MTIC fraud, it is a necessary part of the deception on HMRC that an amount representing the value of the goods and the VAT thereon should pass through the accounts of the buffer companies. The fact that money has to be put up to prime the pump is part of the cost of committing the fraud. The Court held that Waller was wrongly decided. IMPORTANT Court of Appeal not following its own decision.
25
The money was obtained for the purpose of criminal conduct, but not in connection with criminal conduct. The mere fact that a loss to the Revenue of 12.6 million leads to two confiscation orders in the sum of twice 72 million (before uplift) shows, we believe, that something has gone wrong.
Difficult to reconcile Ahmad with Shabhir where court held that the confiscation order was rightly in the full sum, albeit ought not be made as oppressive and Simons. Is the court right that Waller is wrong, but wrong in its own conclusion?
6. RECOVERABLE AMOUNT
The Recoverable amount is the benefit. The Recoverable amount is the benefit. The Recoverable amount is the benefit. Unless the defendant shows that the available amount is less than that benefit the recoverable amount
A. HIDDEN ASSETS
There is no statutory concept of hidden assets. It is shorthand for a situation where the defendant fails to show that the available amount is less than the benefit, in which case the confiscation
26
order is made in the amount of the benefit irrespective of whether in fact the defendant can pay. It is as if the difference between the apparent assets and the benefit is made up of assets which are hidden. In truth there may be: (a) more or (b) less assets than the benefit figure. Section 7 in effect deems the unknown amount to be the benefit figure.
7. AVAILABLE AMOUNT
A criminal caught in possession of criminally-acquired assets will suffer their seizure by the state.
27
Where a criminal has benefited financially from crime but no longer possesses the specific fruits of his crime, he will be deprived of assets of equivalent value, if he has them. The object is to deprive him, directly or indirectly, of what he has gained. May para 9 Defined The total of the values (at the time the confiscation order is made) of all the free property then held by the defendant The total of the values (at that time) of all tainted gifts Less fines and certain limited preferential debts.
28
(3) Schedule 6 is to be read with [Schedule 4 to the Pension Schemes Act 1993] (occupational pension scheme contributions). Schedule 6 Category 1: Debts due to Inland Revenue [REPEALED] Category 2: Debts due to Customs and Excise [REPEALED] Category 3: Social security contributions [REPEALED] Category 4: Contributions to occupational pension schemes, etc. Category 5: Remuneration, etc., of employees Category 6: Levies on coal and steel production
A. TAINTED GIFTS
A gift is a transfer for a consideration whose value is significantly less than the value of the property (section 78) In the case of a criminal lifestyle: A gift is tainted if it was given with six years before the proceedings started. Or at any time in the case if it was the proceeds of crime. If no criminal lifestyle At any time after the offence was committed.
29
(4) Subsection (5) applies if a court has decided that the defendant does not have a criminal lifestyle. . (5) A gift is tainted if it was made by the defendant at any time after . (a) the date on which the offence concerned was committed, or . (b) if his particular criminal conduct consists of two or more offences and they were committed on different dates, the date of the earliest. . (6) For the purposes of subsection (5) an offence which is a continuing offence is committed on the first occasion when it is committed. . (7) For the purposes of subsection (5) the defendants particular criminal conduct includes any conduct which constitutes offences which the court has taken into consideration in deciding his sentence for the offence or offences concerned. . (8) A gift may be a tainted gift whether it was made before or after the passing of this Act. . (9) The relevant day is the first day of the period of six years ending with . (a) the day when proceedings for the offence concerned were started against the defendant, or . (b) if there are two or more offences and proceedings for them were started on different days, the earliest of those days. 78 Gifts and their recipients. (1) If the defendant transfers property to another person for a consideration whose value is significantly less than the value of the property at the time of the transfer, he is to be treated as making a gift. . (2) If subsection (1) applies the property given is to be treated as such share in the property transferred as is represented by the fraction . (a) whose numerator is the difference between the two values mentioned in subsection (1), and . (b) whose denominator is the value of the property at the time of the transfer. . (3) References to a recipient of a tainted gift are to a person to whom the defendant has made the gift. ..
30
While non-complicity in the crime is a necessary conduction for the wife to succeed in an ancillary relief claim as a matter of discretion where she is in competition with a confiscation order, such non-complicity is not a sufficient condition. Stodgell v Stodgell [2005] 2 FLR 244
8. ORDER A. PERIOD IN DEFAULT POWERS OF CRIMINAL COURTS (SENTENCING) ACT 2000, SS.139
Archbold [5-676] The top of each band is as follows:
Over 1,000,000
Archbold [5-679]
200 500 1,000 2,500 5,000 10,000 20,000 50,000 100,000 250,000 1,000,000 6,000,000
max period
7 14 28 45 3 6 12 18 2 3 5 10
days days days days months months months months years years years years
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Cr.App.R.(S.) 16, CA (reducing the default term from 10 to eight years where the benefit was 27 million and the available amount was 1.5 million).
CASTILLO [2011] EWCA CRIM 3173; [2012] CRIM. L.R. 401 (CA (CRIM DIV))
The appellant was convicted of conspiring to cheat the public revenue. The appellant was involved in a carousel or missing trader fraud in which an estimated 250 million of VAT was claimed from HM Revenue and Customs. Sentenced to 10 years' imprisonment, disqualified from acting as the director of the company for 10 years with a confiscation order in the amount of 3 million, with 10 years' imprisonment in default. Held, in confiscation proceedings the benefit figure was agreed at 30,791,277 and 25p. The sentencing judge accepted the Crown's contention that the appellant's minimum profit from the conspiracy was 4 million. The appellant claimed that he had dissipated the funds obtained from the conspiracy in various ways. The sentencing judge found that except for certain mortgage payments, the appellant's account of this expenditure was fanciful. The Crown accepted that in arriving at the figure for realisable assets, the judge should make some reduction from the sum of 4 million which was estimated to represent the appellant's minimum profit from the conspiracy to reflect expenditure which could not be recovered. The sentencing judge was satisfied that the appellant's minimum profit was 4 million and that there were available hidden assets in the sum of 3 million. The sentencing judge referring to the default sentence commented that the appellant's approach had been wholly untruthful and that his purpose was to preserve his remaining criminal assets of at least 3 million so as to enjoy them on his release from custody. Accordingly, the sentencing judge imposed a default sentence of 10 years, consecutive to the term which the appellant was already serving. The sentencing judge added that the appellant would not serve any part of the sentence if he repaid the money which he had obtained by fraud. The principles which emerged from the authorities given by the court are: (1) All the circumstances of the case had to be considered. (2) It was of the first importance to have in mind that the purpose of the default term was to secure payment of the confiscation order. (3) It was not the court's function to find an arithmetical match to the amount of the order and the length of the term, so that for any given band or bracket prescribed in the statute, an order at the bottom of the band should attract a default term likewise at the bottom of the bracket, an order in the middle of the band should attract a term the middle of the bracket or an order at the top should attract a term at the top of the bracket. (4) The court was not to be influenced by the overall totality of the sentence passed for the crime plus the default term. (5) For any given band, the court should have regard to the maxima; the maximum amount of the confiscation order within the band and the maximum default term within the band. (6) Where there was no maximum confiscation order, and only a maximum default term, regard must be had to the requirement of proportionality Those were the principles which emerged from the cases. The court would add that although the court had insisted that the requirement of proportionality had to be respected, that did not imply what in sentencing parlance might be called a tariff. The purpose of the default term was not 32
punishment for the achievement of retributive justice. It was to secure satisfaction of the confiscation order and so deprive the criminal of the fruits of his crime. The demands of proportionality were much weaker than where the court was punishing the offender but still a consideration. The order of 10 years would be quashed and a term of nine years would be substituted.
200,000
400,000
600,000
Extrapolating the graph, it is plain that 1,000,000 does not require a defeault sentence of 10 years, rather it is at the top of the 250,000 to 1,000,000 band which is 3 to 5 years ie. 5 years.
B. TIME TO PAY
The defendant may be given up to six months to pay. Which may be extended to up to one year if there are exceptional circumstances.
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(a) must start with the day on which the confiscation order is made, and (b) must not exceed 12 months.
(2) These applicants fall within this subsection . (a) the prosecutor; . (b) the Director; . (c) a receiver appointed under section 50 or 52. .
(3) In a case where this section applies the court must make the new calculation, and in doing so it must apply section 9 as if references to the time the confiscation order is made were to the time of the new calculation and as if references to the date of the confiscation order were to the date of the new calculation. . (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 . (a) it believes is just, but . (b) does not exceed the amount found as the defendants benefit from the conduct concerned. .
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(5) In deciding what is just the court must have regard in particular to . (a) any fine imposed on the defendant for the offence (or any of the offences) concerned; . (b) any order which falls within section 13(3) and has been made against him in respect of the offence (or any of the offences) concerned and has not already been taken into account by the court in deciding what is the free property held by him for the purposes of section 9; . (c) any order which has been made against him in respect of the offence (or any of the offences) concerned under section 130 of the Sentencing Act (compensation orders). .
(6) But in deciding what is just the court must not have regard to an order falling within subsection (5)(c) if a court has made a direction under section 13(6). (7) In deciding under this section whether one amount exceeds another the court must take account of any change in the value of money. . (8) The relevant amount is . (a) the amount found as the available amount for the purposes of the confiscation order, if this section has not applied previously; . (b) the amount last found as the available amount in pursuance of this section, if this section has applied previously. . (9) The amount found as the defendants benefit from the conduct concerned is . (a) the amount so found when the confiscation order was made, or . (b) if one or more new calculations of the defendants benefit have been made under section 21 the amount found on the occasion of the last such calculation. .
the further certificate and increased confiscation order. Thirdly, the marginal note refers to increase in realisable property. Fourthly, there is in the section no reference to the reason, (whether culpable concealment, subsequent acquisition, or otherwise), why, the amount that might be realised is greater than the amount taken into account in making the confiscation order.
confiscation order was made and matters of exceptional hardship may be relevant to the exercise of the discretion. Such is in my view the area which Parliament has provided for the court to make allowance for the type of factors which, as is clear in para 59, Lord Hope of Craighead DPSC instead prefers to weigh in his approach to the exercise of construction.
(d) the protection of the public, and . (e) the making of reparation by offenders to persons affected by their offences.
(b) there is evidence which was not available to the prosecutor or the Director at the relevant time, . (c) the prosecutor or the Director believes that if the court were to find the amount of the defendants benefit in pursuance of this section it would exceed the relevant amount, .
(d) before the end of the period of six years starting with the date of conviction the prosecutor or the Director applies to the Crown Court to consider the evidence, and . (e) after considering the evidence the court believes it is appropriate for it to proceed under this section. . (2) The court must make a new calculation of the defendants benefit from the conduct concerned, and when it does so subsections (3) to (6) below apply
made, the court must take into account the extent to which realisable property held by that person or that company may be distributed among creditors. . (5) The court may disregard any inadequacy which it believes is attributable (wholly or partly) to anything done by the defendant for the purpose of preserving property held by the recipient of a tainted gift from any risk of realisation under this Part. . (6) In subsection (4) company means any company which may be wound up under the Insolvency Act 1986 (c. 45) or the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)).
recovered the statue of Dionysus as stolen property and that its value to him was therefore nil. It appears from the report that he was silent on his application about the part of the sum previously taken to be the value of his realisable assets which had not been itemised. Collins J dismissed the application and the Court of Appeal upheld his decision. In the Court of Appeal, Moses LJ (with whom the other members of the court agreed) said that, absent identification of all the realisable property held by him, a defendant will normally be unable to satisfy the court that the amount that might be realised at the time the confiscation order is made is less than the amount assessed to be the proceeds of his drug trafficking (para 31). Dealing with the particular case Moses LJ said: 37. once it is appreciated that the property held by the defendant included unidentified assets forming part of the total value of the realisable property at the time of the order, it is impossible for Telli to establish that the realisable property is inadequate now to meet payment of the outstanding amounts. The order was made in 1996. If a defendant fails to identify all the assets he holds, no one will know their true value and by the time of the application, the value of the assets he failed to identify may have increased, particularly after ten years. Absent consideration of current value, no court could be satisfied that the realisable property was inadequate. If the assets remain unidentified no conclusion can be reached as to their current value. 38. In short, the appellant's application fails because he is not able to identify the current value of his realisable assets whilst he chooses not to identify all of those assets.
40
appreciated in value in a way that equals any diminution in value there may have been in the respondent's identified assets (if, that is, the defendant is telling the truth about those matters); (iii) therefore his application is bound to fail, whatever depletion in value there may have been in his identified assets. Collins J, however, decided, as a preliminary issue, that an application for a certificate of inadequacy was not bound to fail. Collins J reasoned: 1. 2. 3. 4. 5. 6. 7. The question is what his realisable assets now are; Glaves cannot go behind...the finding of the Crown Court against him on the existence, so far as the order was concerned, of hidden assets; Glaves can, and should be able to, establish that he has made nothing out of those hidden assets; That is so even if his assertion is that they never actually existed; The proviso is that Glaves produces sufficient evidence before the court; The test is that the court is satisfied that he has been honest in showing that he did not actually make anything out of those presumed hidden assets. It will be a very difficult task for any defendant in his position to persuade the court, if he has not cooperated in the pastthat that is indeed the position.
Without such an opportunity, Collins J observed, it would be entirely unfair, and would lead to this being a punishment as opposed to an asset stripping exercise if he were liable to be sent to prison on the basis that he had made a profit, which in this case is over 50% of the assets which were found against him, simply because he has not accepted and has never accepted that those assets existed. The Court of Appeal (Toulson LJ, Wilson LK, Arden LJ) agreed. Toulson LJ concluded: (i) the inflexibility of the rule for which [the Prosecution] contends has the potential to cause injustice; (ii) although the courts are routinely reminded that a defendant must produce clear and cogent evidence and that generalised assertions will rarely be sufficient to discharge the burden upon him, the truth is that there is a balance of judgment to be struck; (iii) the courts are right to treat with some scepticism generalised assertions by someone whose credibility may be deeply suspect by reason of the facts of the offence; and (iv) the absence of independent credible evidence to corroborate a defendant's account is not fatal as a proposition of law, but it may well be fatal as a matter of fact. Toulson LJ then held (at para. 54): At the stage of an application for a certificate of inadequacy, the burden of proof is again on the defendant. He is unlikely to succeed unless the court is satisfied that he is being candid, and an application for a certificate of inadequacy is not intended to be a means of the defendant having a second bite at the same cherry. Those principles are clearly established. However, a rule of law which said that the court could not be persuaded that the defendant was unable to pay the outstanding amount by reason of a worsening of his financial circumstances unless he gave full disclosure of what had happened in the meantime to all his assets, including previously unidentified assets, would trammel the width of s83 by imposing a restriction which is not in the statute. It would also be capable of causing not merely hardship but hardship amounting to injustice. And at para. 55, Toulson LJ made the following observations:
41
In the case of previously unidentified assets, it is possible that a defendant may genuinely have no idea or only a dim recollection what had originally happened to them. He should be allowed to try to persuade the court, if this be the case, that his identified assets have shrunk in value and that as a result he is not able to pay the amount outstanding. The rationale was explained by Toulson LJ as follows: If the defendant is not permitted the opportunity of trying to establish this, there is a real risk that even though he can demonstrate a change in his circumstances, possibly very great, he may serve an additional period of imprisonment through failure to do that which is impossible by reason of his change of circumstances. The Courts response to such a submission will depend on the nature of the case before it (supra.): What the court makes of that evidence will be a matter for its judgment. Much will no doubt depend on the nature of the case. Cases involving unidentified assets can vary greatly. The case of an international drug dealer with evidence of a lavish lifestyle, ready access to large sums of cash and connections with a web of offshore companies and bank accounts [e.g. the Telli-type case], may merit different treatment from the case of a defendant whose apparent circumstances and amount of unaccounted for assets are much more modest. It is for the court to consider the totality of the evidence before concluding whether it accepts that the defendant has suffered a change of fortune such that he is probably not able to pay the balance of the outstanding money.
42
Where default is made in paying a sum adjudged to be paid by a conviction or order of a magistrates' court, the court may issue a warrant committing the defaulter to prison MCA1980, s76.
(ii) of detention in a young offender institution; or (iii) of detention under section 108 above. (4) The periods set out in the second column of the following Table shall be the maximum periods of imprisonment or detention under subsection (2) above applicable respectively to the amounts set out opposite them. (9) This section shall not apply to a fine imposed by the Crown Court on appeal against a decision of a magistrates' court, but subsections (2) to (4) above shall apply in relation to a fine imposed or recognizance forfeited by the criminal division of the Court of Appeal, or by the Supreme Court on appeal from that division, as they apply in relation to a fine imposed or recognizance forfeited by the Crown Court, and the references to the Crown Court in subsections (2) and (3) above shall be construed accordingly. 140. Enforcement of fines imposed and recognizances forfeited by Crown Court. (1) Subject to subsection (5) below, a fine imposed or a recognizance forfeited by the Crown Court shall be treated for the purposes of 44
collection, enforcement and remission of the fine or other sum as having been imposed or forfeited (a) by a magistrates' court specified in an order made by the Crown Court, or (b) if no such order is made, by the magistrates' court by which the offender was committed to the Crown Court to be tried or dealt with or by which he was sent to the Crown Court for trial under [section 51 or 51A of the Crime and Disorder Act 1998], and, in the case of a fine, as having been so imposed on conviction by the magistrates' court in question. (2) Subsection (3) below applies where a magistrates' court issues a warrant of commitment on a default in the payment of (a) a fine imposed by the Crown Court; or (b) a sum due under a recognizance forfeited by the Crown Court. (3) In such a case, the term of imprisonment or detention under section 108 above specified in the warrant of commitment as the term which the offender is liable to serve shall be (a) the term fixed by the Crown Court under section 139(2) above, or (b) if that term has been reduced under section 79(2) of the Magistrates' Courts Act 1980 (part payment) or section 85(2) of that Act (remission), that term as so reduced, notwithstanding that that term exceeds the period applicable to the case under section 149(1) of the Customs and Excise Management Act 1979 (maximum periods of imprisonment in default of payment of certain fines).
to respond. What we can do is to remind justices that they have a discretion whether or not to issue a warrant of commitment and that the discretion is one which must be exercised judicially. For such discretion to be properly exercised, it is well that the following points should be kept in mind. (1) The object of a confiscation order is to divest the defaulter of money or other realisable assets. Consequently, (2) it is not a matter of choice for the defaulter to buy his way out of such an order by serving the term of imprisonment imposed in default of responding to the order of confiscation: see Reg. v. Clacton Justices, Ex parte Customs and Excise (1987) 152 J.P. 129. (3) The mere fact of a confiscation order is evidence that at the date it was made there were realisable assets available to meet the requirements of the order. (4) Even if at the date when justices have to consider the question of enforcement the value of realisable assets are less than they were at the date of the confiscation order, it is open to the defaulter to apply for a certificate of inadequacy under section 14 of the Drug Trafficking Offences Act 1986 which will lead to a reduction in the amount of the original order. (5) Given the inter partes nature of the procedure leading to the making of a confiscation order, it will be in the nature of things that the prosecution will in all probability have information available which would be relevant for the justices' consideration. More compellingly, the prosecution has a legitimate interest in being heard before the justices come to any decision. (6) Given the purposes of the Drug Trafficking Offences Act 1986, it is incumbent on justices to consider all methods of enforcement short of issuing a warrant of commitment in a Drug Trafficking Offences Act case before doing so. Note: this case was decided at a time when the committal would extinguish the confiscation order (Drugs offences charged prior to 3 February 1994 and CJA offences committed before 1 November 1995. This has never been the case under POCA (see s38(5))). So it was the prosecution challenging the magistrates decision to commit.
46
(4) This section applies if the following conditions are satisfied (a) a restraint order has effect in relation to money to which this section applies; (b) a confiscation order is made against the person by whom the money is held; ... (d) a receiver has not been appointed under section 50 in relation to the money; (e) any period allowed under section 11 for payment of the amount ordered to be paid under the confiscation order has ended. (5) In such a case a magistrates' court may order the bank or building society to pay the money to the designated officer for the court on account of the amount payable under the confiscation order. (6) If a bank or building society fails to comply with an order under subsection (5) (a) the magistrates' court may order it to pay an amount not exceeding 5,000, and (b) for the purposes of the Magistrates' Courts Act 1980 (c. 43) the sum is to be treated as adjudged to be paid by a conviction of the court. (7) In order to take account of changes in the value of money the Secretary of State may by order substitute another sum for the sum for the time being specified in subsection (6)(a). (8) For the purposes of this section (a) a bank is a deposit-taking business within the meaning of the Banking Act 1987 (c. 22); (b) building societyhas the same meaning as in the Building Societies Act 1986 (c. 53).
C. OTHER POWERS
Apart from the powers that may be exercised upon the appointment of a receiver, the magistrates have enforcement powers of the own. The standard powers of magistrates' courts in relation to a defaulter, except imprisonment and detention are listed in Stones Justices Manual as: (a) Remission: a fine (but only a fine) may be remitted in whole or in part if the court thinks it is just to do so having regard to a change in circumstances which has occurred since the conviction MCA1980 s85. This is not available in confiscation. (b) Money payment supervision order (Magistrates' Courts Act 1980, s 88).
48
(c) Distress warrant: a distress warrant may be issued for the purposes of distraining on the defaulter's money and goods; the issue of the warrant may be postponed on conditions Magistrates' Courts Act 1980, ss 7678. (d) Attendance centre order: such an order may be made only where a centre is available and the defaulter is aged under Powers of Criminal Courts (Sentencing) Act 2000, s 60. (e) Curfew and community service orders: where the court has power to issue a warrant of commitment, it may instead make a community service or curfew order provided it has been notified by the secretary of state that arrangements for implementing the order are available in the relevant area Crime (Sentences) Act 1997, s 35. The utility of these provisions in relation to confiscation has not been explored. Their applicability is therefore uncertain. However given the closed list of provisions disapplied by section 35(3) of PoCA it would appear that those which are not disapplied do apply. Worth exploring.
49
F. REASONABLE TIME REQUIREMENT LLOYD V BOW STREET MAGISTRATES' COURT [2003] EWHC 2294 (ADMIN)
Culpable delay in enforcing a confiscation order can constitute a breach of a defendant's right under Article 6(1) of the Convention to a fair trial within a reasonable time. Per Dyson LJ: 22 even if the prosecuting authorities and the magistrates court have no obligation to enforce confiscation orders, it does not follow that, if they decide to seek enforcement by commitment to prison, they are not required to ensure that the enforcement proceedings are determined within a reasonable time. The point can be illustrated by a consideration of the analogous case of an application to stay ordinary substantive criminal proceedings as an abuse on the grounds of delay. It is no answer to such an application for the prosecuting authorities to say that they are under no obligation to prosecute a particular person for an alleged crime and that there is no statutory limitation period within which such a prosecution may be brought. The point is that, even though there is no statutory time limit for prosecutions and no obligation to prosecute individual alleged criminals, the law will protect defendants from facing prosecutions after undue delay has occurred. 23 we do not see how the fact that the defendant is in breach of his continuing duty to satisfy the confiscation order can be relevant. In our view, the conduct of the defendant can have no bearing on the question whether he has a right to have proceedings against him in respect of that conduct instituted and determined within a reasonable time. It is common ground that a defendant is entitled to have a substantive criminal charge against him determined within a reasonable time. That right is predicated on the basis that the defendant is alleged to have broken the law by committing a crime. The fact that a defendant is alleged to have committed a crime is plainly not a reason for denying him the right to have the criminal charge determined within a reasonable time. Indeed, the existence of the criminal charge is the very reason why he has the right. Similarly, in our view the fact that a defendant is alleged to be in breach of a confiscation order is no reason to deny him the right to have proceedings brought to enforce the order by commitment to prison determined within a reasonable time. 25 Convicted criminals who are the subject of confiscation orders do not attract sympathy, and not entitled to favoured treatment. But there is nothing surprising about a requirement that, if the prosecuting authorities/magistrates court seek to enforce a confiscation order, they should do so within a reasonable time. It is potentially very unfair on a defendant that he should be liable to be committed to prison for non-payment of sums due under a confiscation order many years after the time for payment has expired, and long after he has been released from custody and resumed work and family life. 27 in deciding what is a reasonable time, regard should be had to the efforts made to extract the money by other methods, for example (as in the present case) by the appointment of a receiver. If a receiver has been appointed within a reasonable time and has proceeded with reasonable expedition, then the fact that all of this may have taken some time will not prevent the court from concluding that there has been no violation of the 51
defendant's Article 6.1 rights if the unsuccessful attempts to recover the money have led to delay in the institution of proceedings to commit. Likewise, if the defendant has been evasive and has avoided diligent attempts to extract the money from him, he will be unable to rely on the resultant delay in support of an argument that his right to a determination within a reasonable time has been violated. If the delay is found to have infringed Article 6.1 , the appropriate remedy is for the enforcing court to stay the proceedings to the extent that the prosecuting authority is seeking an order requiring the defendant to serve the sentence of imprisonment imposed in default of payment: 34 (i) The term of imprisonment in default is not intended to be an additional punishment for the original offence. It is simply one weapon in the armoury of those seeking to enforce the confiscation order. (ii) Over five years have elapsed since the claimant was released from prison on licence after serving one half of the original sentence. Since release from prison he has rebuilt his home life and obtained employment. At this remove in time, it would be inhuman to subject the claimant to a further term of imprisonment arising out of the original offence. (iii) The only proportionate response to the breaches of Article 6.1 which have occurred is to say that this weapon in the armoury (viz imprisonment in default) is no longer available.
breach what would be the appropriate remedy. That remedy might be refusal to enforce by the ultimate sanction of imprisonment but permission to enforce by other means. In that case the court held that the delay had been largely occasioned by the decision to pursue various appeals and was not unreasonable. The ECtHR later found that the delay between permission to appeal and appeal (waiting for Soneji) was unreasonable.
ALTAF SYED, TEVOR HAMILTON-FARRELL V CITY MAGISTRATES' COURT [2010] EWHC 1617 (ADMIN)
OF
WESTMINSTER
On 2nd March 2010 at the City of Westminster Magistrates' Court, District Judge Roscoe ordered the two claimants, Altaf Syed and Trevor HamiltonFarrell (who is known as Trevor Farrell), to serve terms of imprisonment for failing to pay the sums due under confiscation orders made against them by Judge Blacksell at Middlesex Crown Court on 17th April 2002. Held to be a breach of the reasonable time.
53