Brack & Anor, R. v

A Crown Court must determine a confiscation application under the statutory scheme once the conditions for proceeding are met. It cannot decline to deploy the scheme because it regards confiscation powers as suitable only for particular types of offender. Where a defendant has a criminal lifestyle, the court must address the statutory assumptions and decide, on an evidential basis, whether an assumption is incorrect or would create a serious risk of injustice. The court must give reasons which identify the route by which it reached that conclusion. A bare dismissal without that analysis is flawed and should ordinarily be set aside for a fresh determination under the Proceeds of Crime Act 2002.

The respondents, father and son, pleaded guilty at Liverpool Crown Court to separate offences of concealing criminal property contrary to section 327(1)(a) of the Proceeds of Crime Act 2002. The father admitted concealing legitimate business income to evade tax. The son admitted concealing money received from his father while suspecting that it might derive from tax evasion.

The Crown sought confiscation orders based on alleged benefits substantially exceeding the cash forfeited after the investigation. The judge dismissed the applications after a short hearing, apparently considering that the respondents' assets were attributable to legitimate market trading and that confiscation powers should be reserved for more serious offenders. The Crown appealed. The central issue was whether the judge had performed the statutory task required by the Act.

1. Appeal allowed. The judge's dismissal of the confiscation applications was quashed. The Crown Court was directed to proceed afresh under section 6 of the Proceeds of Crime Act 2002.

2. The respondents had a criminal lifestyle because their money-laundering convictions fell within paragraph 2A of Schedule 2. The judge was therefore required by section 6(4) to decide whether they had benefited from general criminal conduct. In doing so, he had to address the assumptions in section 10, unless an assumption was shown to be incorrect or its application would create a serious risk of injustice.

3. The Crown had an unqualified right to require the court to proceed under section 6(1) once the conditions in section 6(2) and (3) were met. The court had no free-standing discretion to reject the application because it thought the statutory powers draconian or more appropriate for other forms of criminality.

4. A conclusion about the statutory assumptions required consideration of the evidence and reasons showing whether the assumed benefit was incorrect or unjust. Oral evidence was not invariably necessary, but the judge had to identify the evidential basis of the conclusion. The brief exchanges did not show that he had followed the required stages or reached either statutory conclusion. The Court of Appeal had power to determine the matter itself under section 32(2)(a), but considered a fresh Crown Court determination the appropriate course and made that direction under section 32(2)(b).

• Court of Appeal (Criminal Division): The Crown's appeal was allowed. The dismissal of the confiscation applications was quashed and the Crown Court was directed to proceed afresh under section 6 of the Proceeds of Crime Act 2002 ([2007] EWCA Crim 1205).
• Liverpool Crown Court: Following the respondents' convictions, Judge MacMillan dismissed the Crown's confiscation applications on 18 August 2006.