L & Ors, R. v

A preparatory hearing under Criminal Procedure and Investigations Act 1996, section 29 is available only where the statutory requirements of complexity or likely length, and substantial resulting benefits, are met. A desire to obtain an interlocutory ruling from the Court of Appeal does not satisfy those requirements. If there is no relevant material supporting the section 29 threshold, neither the Crown Court nor the Court of Appeal has jurisdiction to proceed on the preparatory-hearing route.

In advisory observations, the court stated that an offence of transferring criminal property under Proceeds of Crime Act 2002, section 327 requires the property to be criminal property when it is transferred. Lawfully obtained money does not become criminal property merely because it is transferred for a criminal purpose.

The appellants were charged with transferring £87,010 in cash as criminal property, contrary to Proceeds of Crime Act 2002, section 327(1)(d). The Crown relied principally on surveillance and mobile telephone evidence to invite an inference that the cash already represented the proceeds of criminal conduct. It also advanced a second case: that the cash became criminal property through the charged transfer because it was transferred for a criminal purpose.

At the Crown Court, Judge Holt treated the dispute as a preparatory hearing under Criminal Procedure and Investigations Act 1996, section 29. On 17 May 2005, he held that the Crown could prove that the money became criminal property when transferred. The defendants brought an interlocutory appeal with leave. The central issues were whether the preparatory-hearing procedure gave the Court of Appeal jurisdiction, and whether the charged transfer itself could make otherwise legitimate cash criminal property.

1. The court held that it had no jurisdiction to entertain the interlocutory appeal. The case was not shown to be sufficiently complex, or likely to be sufficiently long, for substantial benefits to accrue from a preparatory hearing under Criminal Procedure and Investigations Act 1996, section 29. The estimated three-week trial, involving substantially the same surveillance evidence whatever the legal ruling, did not meet that threshold. The utility of obtaining an early appellate decision, even with both parties’ agreement, could not itself create jurisdiction.

2. The court followed the jurisdictional approach in R v Mark Singh [2005] EWCA Crim 90 and Attorney-General's Reference No 1 of 2004 [2004] EWCA Crim 1025. Where there is no relevant material capable of satisfying section 29, the judge lacks power to order a preparatory hearing and the Court of Appeal lacks jurisdiction over the resulting purported interlocutory appeal.

3. Although those conclusions disposed of the appeal, the court considered it appropriate to give observations for the assistance of the trial court. It stated that, had jurisdiction existed, it would have allowed the appeals.

4. On the substantive point, the court stated that the natural meaning of Proceeds of Crime Act 2002, section 327(1) is that the property must be criminal property at the time it is concealed, disguised, converted or transferred. The criminal conduct from which the property is a benefit cannot be the very transfer charged under section 327; that analysis would be circular.

5. Accordingly, on the Crown’s alternative case, the recipient did not obtain a benefit from the alleged conspiracy until after the single charged transfer. The cash was therefore not criminal property when transferred. A lawful sum does not become criminal property merely because a person intends to use it for criminal purposes. The separate cash-seizure and forfeiture provisions in sections 294 and 298 address intended use in unlawful conduct.

6. The court indicated that the Crown Court ruling should instead be treated as a pre-trial ruling under section 40. It was for the trial judge to consider whether to vary it in the interests of justice under section 40(4).

• Court of Appeal (Criminal Division): In [2005] EWCA Crim 1579, the court held that the purported preparatory hearing did not satisfy section 29 of the Criminal Procedure and Investigations Act 1996. It therefore lacked jurisdiction to determine the interlocutory appeal, but gave advisory observations that the appeals would have been allowed.
• Crown Court: Judge Holt ordered a preparatory hearing on 3 May 2005 and, on 17 May 2005, ruled that the Crown could prove that the cash became criminal property when transferred for a criminal purpose.