Regina v Montila and others

The House of Lords considered whether subsection (2) of section 49 of the Drug Trafficking Act 1994 and subsection (2) of section 93C of the Criminal Justice Act 1988 require the Crown to prove that the property dealt with was in fact the proceeds of drug trafficking or of criminal conduct. The court held that the statutory wording requires that the relevant property must in fact be proceeds of the kind described and that the Crown must therefore prove origin as part of the actus reus. The decision turned on textual analysis (noting that the word "knowing" presupposes the truth of the matter known), the context of surrounding provisions and headings, and the legislative and international background, including the Vienna and Strasbourg instruments and the 1991 EEC Directive; practical difficulties in proving origin did not justify implying an omission into the statute.

This case arose on a preparatory hearing (under section 29 of the Criminal Procedure and Investigations Act 1996) in which the judge decided that, for counts alleging conversion of another person's proceeds under s 49(2) Drug Trafficking Act 1994 and s 93C(2) Criminal Justice Act 1988, the Crown must prove that the property was in fact the proceeds of drug trafficking or of criminal conduct. The Crown appealed by interlocutory appeal to the Court of Appeal which allowed the appeal ([2003] EWCA Crim 3082, [2004] 1 WLR 624) and certified a point of law of general public importance. The appellants then appealed to the House of Lords.

Nature of the application: an interlocutory appeal concerning the correct construction of statutory offences of money laundering and whether proof of origin of the property is an element of the acts complained of.

Issues framed:

• whether the Crown must prove that the property was in fact the proceeds of drug trafficking (s 49(2)) or of criminal conduct (s 93C(2));
• the proper role of section headings and side notes and of international and later domestic legislation (including the Proceeds of Crime Act 2002) in construing the provisions;
• the significance of mens rea language ("knowing" or "having reasonable grounds to suspect") for the actus reus.

Court's reasoning and decision: the Lords held that the ordinary meaning of the words — particularly the use of "knowing" — and the context (including the grouping of subsections under headings referring to "proceeds") indicate that subsection (2) is directed to property which is in fact proceeds of the relevant kind. Headings and side notes were treated as admissible contextual aids. International instruments and the legislative history pointed the same way. Practical concerns about proof, and subsequent choices of wording in the Proceeds of Crime Act 2002, did not justify importing an extra omission into the earlier statutes. The House of Lords allowed the appeal and answered the certified question in the affirmative.

Appeal allowed. The House of Lords held that subsections s 49(2) of the Drug Trafficking Act 1994 and s 93C(2) of the Criminal Justice Act 1988 require the Crown to prove that the property was in fact the proceeds of drug trafficking or of criminal conduct respectively; this conclusion followed from the statutory wording, context (including headings and side notes) and international and legislative background, and practical difficulties did not justify implying otherwise.

Preparatory hearing before Judge van der Bijl (19 December 2002) resolving a point of law under section 29 Criminal Procedure and Investigations Act 1996; prosecutor's interlocutory appeal to the Court of Appeal allowed ([2003] EWCA Crim 3082, [2004] 1 WLR 624); certification under Criminal Appeal Act 1968 s 33(2); appeal to the House of Lords allowed ([2004] UKHL 50).