Revenue & Customs Prosecutions Office v Hill & Ors

Jurisdiction to make a restraint order exists where, at the time of the application, an investigation has begun into at least one post-commencement offence capable of giving rise to a confiscation order. The investigation may also concern earlier offences. Earlier criminal conduct may also underlie a post-commencement money-laundering offence without defeating jurisdiction under the Proceeds of Crime Act 2002.

The power under sections 40 and 41 remains discretionary. Once jurisdiction is established, the Crown Court must decide whether a restraint order ought to be made on the facts of the case.

HM Customs and Revenue investigated companies operating a scheme for temporary and contract workers. The investigation concerned suspected tax evasion or cheating the Revenue from 1999 and suspected post-24 March 2003 transfers of money out of the jurisdiction which might constitute money laundering.

On an ex parte application, the Crown Court made restraint orders under the Proceeds of Crime Act 2002. HH Judge Byers later discharged the orders against John Hill and Timothy Hill, holding that the investigation was into offences predating 24 March 2003. The prosecutor appealed. Although civil freezing orders had subsequently been obtained, the Court of Appeal held that the appeal was not moot.

The central issue was whether an investigation into both pre- and post-commencement offending could found jurisdiction for a POCA restraint order.

1. Appeal allowed. The appeal was not moot. The prosecutor was not a party to the civil proceedings and could not control the continuation of the freezing orders. A successful appeal could also affect the position of persons not covered by those proceedings.

2. Section 40(2)(a), read with article 5 of the Commencement Order, asks whether an investigation has begun into an offence committed after 24 March 2003. The relevant time is when the restraint-order application is made, rather than when the wider investigation began. It is sufficient that an offence capable, on conviction, of giving rise to a confiscation order is then under investigation.

3. The existence of investigations into earlier tax offences does not remove that jurisdiction. Nor does it matter that criminal conduct before 24 March 2003 is relied upon as the predicate conduct for a later money-laundering offence. Section 340(4) of the Proceeds of Crime Act 2002 makes the date of that underlying criminal conduct immaterial.

4. At the date of the application, the prosecutor was investigating alleged money-laundering transfers, apart from one, made after 24 March 2003. The Crown Court therefore had jurisdiction to make the orders. The authorities concerning purposive construction of confiscation legislation after technical procedural failures, including R v Soneji and another [2005] 3 WLR 303, were not directly applicable because this case concerned the substantive jurisdictional condition.

5. The power under sections 40 and 41 is discretionary. As the judge had discharged the orders for want of jurisdiction, he had not exercised that discretion. If the prosecutor still sought orders against the respondents, the matter was remitted to the Crown Court for that purpose.

• Court of Appeal (Criminal Division) — In [2005] EWCA Crim 3271, allowed the prosecutor's appeal and held that the Crown Court had jurisdiction. The matter was remitted for the discretionary question.
• Crown Court at Blackfriars — On 22 September 2005, HH Judge Byers discharged restraint orders against John Hill and Timothy Hill, holding that the investigation concerned offences before 24 March 2003.