R v White and Others
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE HOOPER |
| Judgment Date | 05 May 2010 |
| Neutral Citation | [2010] EWCA Crim 978 |
| Docket Number | Case No: 200801805C3; 200802920C2; 200804281D4 |
| Court | Court of Appeal (Criminal Division) |
| Date | 05 May 2010 |
[2010] EWCA Crim 978
IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CRIMINAL DIVISION)
Before: Lord Justice Hooper
Mrs Justice Swift Dbe
and
Mr Justice Hamblen
Case No: 200801805C3; 200802920C2; 200804281D4
Mr Richard Kovalevsky QC and Mr Conor Quigley QC (EC issues only) (instructed by EBR Attridge) for the appellant Ian Leslie White
Mr Conor Quigley QC (EC issues only) and Mr Peter Corrigan for the appellant James Dennard
Mr John Wainwright Evans instructed by Owen Nash and Co for the appellant Craig Russell Perry
Mr Andrew Jackson instructed by Grove Tompkins Bosworth for the appellant John Thomas Rowbotham
Mr David Anderson QC (EC issues only) and Mr Martin Evans (instructed by the RCPO) for the respondent in the White appeal
Mr David Anderson QC (EC issues only), Mr Andrew Bird and Mr Gideon Cammerman (instructed by the RCPO) for the respondent in the Dennard appeal
Mr James Puzey (instructed by the RCPO) for the respondent in the Perry appeal
Mr Andrew Bird (instructed by the RCPO) for the respondent in the Rowbotham appeal
Hearing dates: 22/10/2009–23/10/2009
Introduction
The four appellants, Ian Leslie White (“White”), James Dennard (“Dennard”), Craig Russell Perry (“Perry”) and John Thomas Rowbotham (“Rowbotham”) appeal confiscation orders made against them. The four cases, not otherwise linked, involve the smuggling of tobacco into this country for resale and have been listed together because they raise similar issues. The resolution of these issues will determine these cases and hopefully will assist in the disposal of a number of other cases.
Before looking at the individual cases it will be helpful, we believe, to summarise a few of the general principles which apply in confiscation proceedings of the kind with which these appeals are concerned.
Under both the Criminal Justice Act 1988 and its successor the Proceeds of Crime Act 2002 if a person obtains a pecuniary advantage as a result of or in connection with an offence (the 1988 Act) or with conduct (the 2002 Act), he is treated, for confiscation purposes, as having received a sum of money equal to the pecuniary advantage (see section 71(5) of the 1988 Act and section 76 (5) of the 2002 Act). Thus his benefit will be deemed to include a sum of money equal to the pecuniary advantage.
However, the evasion by a smuggler of duty or VAT constitutes, for the purposes of confiscation proceedings, the obtaining of a pecuniary advantage only if he personally owes that duty or VAT. This was established by the House of Lords in May [2008] UKHL 28; [2008] 1 AC 1028; [2009] 1 Cr App R (S) 31 and Jennings [2008] UKHL 29; [2008] 1 AC 1046; [2008] 2 Cr App R 29 and applied in Chambers [2008] EWCA 2467 and Mitchell [2009] EWCA Crim 214.
In May the House of Lords said in paragraph 48 that a defendant “ordinarily obtains a pecuniary advantage if (among other things) he evades a liability to which he is personally subject” (underlining added). The House pointed out that more than one person could be personally liable.
In Jennings the House of Lords overruled the Court of Appeal (Laws, Longmore and Lloyd LJJ) [2005] EWCA Civ 746, [2006] 1 WLR 182, [2005] 4 All ER 391 which had held, in an advance fee fraud case, that all that is required is that the defendant's acts should have contributed, to a non-trivial extent, to the getting of the property. Laws LJ had said:
38. What remains to be said about the meaning of the word “obtain” in s.71(4) [of the Criminal Justice Act 1988]? Clearly it does not mean “retain” or “keep”. But no less clearly, in my judgment, it contemplates that the defendant in question should have been instrumental in getting the property out of the crime. His acts must have been a cause of that being done. Not necessarily the only cause: there may, plainly, be other actors playing their parts. All that is required is that the defendant's acts should have contributed, to a non-trivial (that is, not de minimis) extent, to the getting of the property. This is no more than an instance of the common law's conventional approach to questions of causation.
The House disapproved of this approach, saying:
14. … a person benefits from an offence if he obtains property as a result of or in connection with its commission, and his benefit is the value of the property so obtained, which must be read as meaning “obtained by him”.
The relevant Regulations will determine whether a defendant personally owes duty or VAT, subject to the compatibility of those Regulations with the primary domestic legislation and the relevant EC Directive. However before the law was clarified by the House of Lords in May and Jennings, the Regulations were generally unimportant in confiscation hearings since whether the defendant personally owed the duty or VAT did not matter because he would normally have contributed to the evasion of the duty or VAT by another.
In May the House of Lords also said in paragraph 48:
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. … 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.
A person obtains a pecuniary advantage by evading duty or VAT even though the smuggled goods were seized before they could be sold on: see Smith [2001] UKHL 68; [2002] 1 WLR 54; [2002] 1 Cr App R 35. In that case the House of Lords answered the following certified question in the affirmative:
Whether an importer of uncustomed goods, who intends not to enter them for customs purposes and not pay any duty on them, derives a benefit under section 74 of the Criminal Justice Act 1988 through not paying the required duty at the point of importation, where the goods are forfeited by HM Customs following importation, before their value can be realised by the importer?
Smith remains good law (see CPS v N; CPS v P and R v. Paulet [2009] EWCA Crim 1573, paras 46–47) notwithstanding a passage in Jennings in which the House of Lords said:
13. … 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.
It was confirmed by the House of Lords in May that, if several defendants were jointly responsible for a fraud, and the property thus obtained was jointly held by them, each benefited in the amount jointly held and there was no requirement to apportion that amount between them. Thus if two or more defendants have evaded the liability to pay £x in duty, the sum of money which each defendant is treated as having received as benefit is £x. This is subject to a possible exception described in this way by the House of Lords in May:
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.
It may be that only if the Revenue was in a position where they would actually recover more than the sum of which they had been cheated would the issue of possible disproportionality arise. In these appeals there appears to be no realistic prospect of that occurring.
We turn to Chambers. The appellant had pleaded guilty to an offence under section 170(1)(b) of the Customs and Excise Management Act 1979 of being on September 13 2006 knowingly concerned in carrying, harbouring, depositing, keeping, concealing, removing or in any manner dealing with goods, which were chargeable with a duty which had not been paid, with intent to defraud the Crown of the duty chargeable on the goods. He was made the subject of a confiscation order in the sum of £66,120 under the Proceeds of Crime Act 2002, that sum being the value of the duty evaded.
At the confiscation hearing the prosecution relied on the decision IN THE COURT OF APPEAL in Jennings. By the time the appeal came to be heard the House of Lords had allowed the appeal (see para. 6 above) and the respondent accepted that it was necessary to show that Chambers was personally liable to pay the duty. Thus the Regulations became relevant. To show that he was so liable, the respondent relied on the Excise Goods (Holding, Movement, Warehousing and REDS) Regulations 1992, 1992/3135 (“the 1992 Regulations”) not knowing that they had been superseded (so far as tobacco products were concerned) on 1 June 2001 by the Tobacco Products Regulations 2001, 2001/1712 (“the 2001 Regulations”). See Regulation 28 of the 2001 Regulations...
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