R v Jawad (Mohid)

JurisdictionEngland & Wales
CourtCourt of Appeal (Criminal Division)
JudgeLord Justice Hughes
Judgment Date03 May 2013
Neutral Citation[2013] EWCA Crim 644
Docket NumberCase No: 20113226 D3 AND 201103347 D3
Date03 May 2013

[2013] EWCA Crim 644

IN THE COURT OF APPEAL (CRIMINAL DIVISION)

ON APPEAL FROM BRISTOL CROWN COURT

His Honour Judge Picton

T20097457

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lord Justice Hughes

Mr Justice Foskett

and

His Honour Judge David Radford

Case No: 20113226 D3 AND 201103347 D3

Between:
Mohid Jawad
Appellant
and
The Queen
Respondent

Ivan Krolick (instructed by Central Law Practice) for the Appellant

Andrew Mitchell QC and Will Hays (instructed by Crown Prosecution Service) for the Respondent

Hearing date: 21 March 2013

Approved Judgment

Lord Justice Hughes
1

This appeal against a confiscation order raises a question about the relationship between confiscation orders and compensation orders in the light of the recent decision of the Supreme Court in R v Waya [2012] UKSC 51; [2012] 3 WLR 1188 ('Waya').

2

The defendant and two others were convicted, on pleas of guilty, of a money laundering offence connected with frauds on Lloyds Bank. A count charging conspiracy to steal was left on the file. The details of the frauds do not matter. Very broadly the principal fraud consisted of opening bank accounts in a false name, paying in worthless cheques and then cross-firing the money from account to account so that multiple cash withdrawals could be made before it was spotted that the cheques would not be cleared. That enabled the fraudsters to obtain far more than the face value of the worthless cheques. In addition, gold bars, jewellery and the like, which were the product either of this practice or of the fraudulent use of bank cards obtained on the accounts were found in the possession of this defendant on his arrest. The money laundering offence to which the defendant pleaded guilty charged conversion of the fraudulently acquired bank balances; it did not relate to the credit card use.

3

Because this was a money laundering offence, the lifestyle provisions of the Proceeds of Crime Act 2002 (" POCA") applied. The defendant's benefit was therefore anything obtained from criminal conduct generally and was not limited to the proceeds of the count of which he was convicted. Before the judge the amount of benefit was agreed at £174,827.20. The loss to the bank from the frauds was put at £64,086.76. The larger agreed benefit figure was arrived at by adding together (i) that sum, directly obtained through the frauds and (ii) sums resulting from the statutory assumptions provided for by section 10 of the Act — that is to say where the defendant could not show a legitimate origin for assets passing through his hands during the relevant six year period or held by him after conviction. The defendant's available assets comfortably exceeded the agreed benefit figure and so created no lower ceiling on the confiscation order which could be made.

4

The transcript shows that the first thing which occurred was that the judge made the confiscation order in the sum of the agreed benefit (£174000 odd). There was no submission on behalf of the defendant that he should not do so. He was then asked by the Crown to make a compensation order in favour of the bank for the £64086.76 said to be its loss, and he was told that the bank had asked for that application to be made.

5

As to the latter application, counsel for the defendant invited the judge not to make a compensation order. The judge addressed two possible reasons which were advanced for not doing so. The first was that it involved an element of double counting of the £64000 odd, which was included in both orders sought. The second was that the co-accused had not been made the subject of compensation orders and it was said to be unfair to make one against this defendant, or at least unfair not to limit it to an apportioned share of the total. The judge rejected both arguments. There is no challenge to the rejection of the apportionment argument, nor could there be; after all, each of the fraudulent conspirators was jointly and severally liable to the bank for the whole of its loss.

6

Mr Krolick's challenge does rely on a complaint of double counting. But it is a challenge not to the compensation order, but to the confiscation order. He contends that because the confiscation order was based on a benefit figure which included the same £64000 for which a compensation order was made, there has been (to that extent) double counting. The result is, he submits, that the confiscation order can now be seen to have been disproportionate and thus an infringement of Article 1 of Protocol 1 to the European Convention on Human Rights ("A1P1"). That, he contends, follows from Waya, which decision of course post-dates the making of the orders in this case.

7

Mr Krolick advanced two further alternative arguments. They were these.

i) Because the bank had asked the Crown to make application for a compensation order, it had "started proceedings" against the defendant in respect of its loss. Accordingly section 6(6) of POCA applied to convert the statutory duty to make a confiscation order into a mere power. The court was thus, independently of the principle in Waya, free to reduce the confiscation order by the £64000, and should have done so.

ii) The confiscation order was in any event based on the wrong benefit figure (£174000 odd). That is because this was a lifestyle case. In a lifestyle case, says Mr Krolick, the relevant benefit is, by section 6(4)(b) the benefit from general criminal conduct, rather than from particular criminal conduct which is the measure under section 6(4)(c) in a non-lifestyle case. The £64000 was benefit from particular criminal conduct and therefore, he submits, should not have been included in the benefit figure in a lifestyle case.

R v Waya: A1P1

8

We accept the argument that it follows from Waya that the Crown Court has a duty to avoid making a confiscation order which is an infringement of A1P1 because it is disproportionate: see paragraphs [16] and [19] of the majority judgment in Waya. The important section of this majority judgment, viz paragraphs [10] to [35], was an integral part of the ruling in that case and it followed detailed submissions on the topic; indeed the hearing had been adjourned in part for further development of such submissions. Moreover, the Supreme Court was unanimous on this section: see paragraphs [82] – [83] of the minority judgment of Lord Phillips and Lord Reed, although paragraph [84], in which the minority derived as an extension of the principle the proposition that there exists a governing concept of "real benefit", was not agreed by the majority: see [26]. True it is that the majority concluded that the appeal in Waya fell to be resolved without the need to modify on grounds of disproportion the confiscation order calculated in accordance with POCA. That does not, as it seems to us, make obiter the important section comprising paragraphs [10] to [35], since the majority regarded it as necessary to ask itself the question whether the order was disproportionate. Even, however, if the strictly correct legal analysis of paragraphs [10] to [35] is that they are obiter, we have no doubt that that section of the judgment must be followed as the considered view of the whole court, arrived at after argument directed specifically to the point. Differently constituted, this court has proceeded on this basis since we heard argument in the present case: see R v Hursthouse [2012] EWCA Crim 610.

9

In future application of Waya it is important that this section of the judgment, [10] to [35], be read as a whole and that no single part of it is taken out of context. It does not attempt the impossible task of defining exhaustively every possible example of disproportionate orders, but it does emphasise (inter alia):

i) at [24] that the jurisdiction to modify a confiscation order for demonstrated disproportion does not invest the judge with a general discretion to make only such order as he thinks fair;

ii) at [25] that in most lifestyle cases there will be little occasion for a separate test of disproportion to be applied to calculations of benefit resulting from the statutory assumptions in section 10, because those assumptions are in any event not to be made if there is a risk of serious injustice arising from them;

iii) at [26] that an order is not to be regarded as disproportionate simply because it removes from the defendant more than may in fact represent his net profits from crime; this is one reason why there is no governing concept of "real benefit"; examples are given, and compare R v May [2008] UKHL 28; [2008] AC 1028; and

iv) at [28]-[29] that one example of an order which may be disproportionate is the case where proceeds of crime which have been restored intact to the loser are nevertheless counted as part of the benefit; it is by consideration of disproportion that this kind of case now falls to be decided rather than by resort to the jurisdiction to stay for abuse of the process of the court.

10

It is largely on the last of these parts of the decision in Waya that Mr Krolick founds his argument.

Confiscation and Compensation

11

The inconvenient similarity of these two words leads us here to use the expression " POCA confiscation order" for confiscation.

12

A compensation order and a POCA confiscation order are two very different things. They derive from quite separate statutes and they serve different purposes. The power to make a compensation order is now derived from section 130 Powers of Criminal Courts (Sentencing) Act 2000. Historically the power existed long before any proceeds of crime legislation and has not been modified as a result of it. A POCA confiscation order is...

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