R v. Saik (Appellant) (On Appeal from the Court of Appeal (Criminal Division))

For statutory conspiracy, the parties must intend to pursue an agreed course of conduct which will necessarily involve an offence. Their states of mind must satisfy the substantive offence. In addition, section 1(2) of the Criminal Law Act 1977 requires them to intend or know that each material fact or circumstance forming part of the actus reus will exist.

Suspicion, recklessness and strict liability cannot satisfy that requirement. Accordingly, a person who agrees to launder identified property which he merely suspects to be criminal proceeds is not guilty of conspiracy to launder it. Knowledge means a true belief that the property is criminal proceeds. For unidentified future property, the prosecution may instead prove an intention that the property will have that provenance.

The appellant operated a bureau de change and was charged with conspiracy to convert banknotes which were the proceeds of drug trafficking or other criminal conduct. He pleaded guilty on the agreed basis that he suspected, but did not know, that the money was the proceeds of crime. The Crown Court sentenced him to seven years’ imprisonment.

The Court of Appeal dismissed his appeal against conviction but reduced the sentence to five and a half years: [2004] EWCA Crim 2936. It held that suspicion could suffice for conspiracy to contravene section 93C(2) of the Criminal Justice Act 1988.

The principal issue before the House was whether section 1(2) of the Criminal Law Act 1977 nevertheless required the appellant to intend or know that the property would be criminal proceeds. A second issue concerned whether the substantive laundering offence required actual suspicion as well as reasonable grounds for suspicion.

1. By a majority of four to one, the appeal was allowed and the conviction set aside. Lord Nicholls delivered the leading speech. Lord Steyn agreed with him. Lord Hope and Lord Brown reached the same result by substantially similar reasoning. Baroness Hale dissented on the first certified question.

2. Per Lord Nicholls, section 1(1) of the Criminal Law Act 1977 makes the agreement the essence of conspiracy. The parties must intend to pursue a course of conduct which, if carried out according to their intentions, will necessarily involve an offence. They must intend the prohibited act and possess any specific intent or recklessness required by the substantive offence. An ordinary conditional intention remains an intention for this purpose.

3. Section 1(2) supplies an additional and more exacting requirement. For every fact or circumstance forming part of the actus reus of the substantive offence, the conspirator and at least one other party must intend or know that it will exist when the agreed conduct occurs. The subsection applies to all substantive offences. It excludes strict liability, recklessness and suspicion concerning such a fact or circumstance.

4. Under section 93C(2) of the Criminal Justice Act 1988, the property’s criminal provenance was a fact necessary for the offence. For unidentified future property, the prosecution could prove an intention that the property would be criminal proceeds. For property already identified when the agreement was made, it had to prove that the conspirator knew it was criminal proceeds. In this context knowledge meant true belief and could not be reduced to belief or suspicion.

5. Per Lord Hope and Lord Brown, the requirement of reasonable grounds to suspect in section 93C(2) included a subjective requirement that the defendant actually suspected the property’s criminal origin and an objective requirement that the suspicion had reasonable grounds. That state of mind could support the purpose required by the substantive offence, but it could not satisfy section 1(2) on a conspiracy charge.

6. The appellant’s accepted plea admitted suspicion only. The court could not infer knowledge or intention contrary to that express qualification. A willingness to deal with money despite suspecting its criminal origin was not a conscious decision that the money should be criminal proceeds.

7. Baroness Hale considered that conditional intention could satisfy section 1(2) if the conspirator intended to proceed even if told that the property was criminal proceeds. The majority rejected that approach because it would convert suspicion or risk-taking into the intention or knowledge expressly required by Parliament.

1. House of Lords: By a majority of four to one, allowed the appeal and set aside the conviction: [2006] UKHL 18.

2. Court of Appeal (Criminal Division): Dismissed the appeal against conviction but allowed the sentence appeal, substituting five and a half years’ imprisonment for seven years: [2004] EWCA Crim 2936.

3. Crown Court at Kingston-upon-Thames: Accepted the appellant’s qualified guilty plea to conspiracy and sentenced him to seven years’ imprisonment.