Hogan v The Director of Public Prosecutions

Under section 329(2)(c) of the Proceeds of Crime Act 2002, adequate consideration is an objective question of fact. The court may consider all relevant circumstances, but the inquiry is distinct from the defendant’s knowledge or suspicion that property represents criminal benefit.

Once the issue is raised, the prosecution bears the legal burden of proving, to the criminal standard, both that consideration was given and that it was inadequate. The provision is an element or limitation of the offence, rather than a conventional defence. The court may therefore find no offence under the provision even where the defendant knew or suspected that the property was stolen.

The claimant was convicted at Lincoln Magistrates’ Court of acquiring and possessing criminal property, namely scaffolding, contrary to sections 329(1)(c) and 334 of the Proceeds of Crime Act 2002. The district judge held that evidence of payment did not provide an absolute defence and that the whole circumstances of the transaction had to be considered in deciding whether the consideration was adequate.

The claimant appealed by case stated. The central issues were whether adequate consideration was a discrete question from the defendant’s state of mind, and whether the burden of proving inadequacy lay on the prosecution or the defendant.

1. Appeal allowed. The convictions were quashed and the matter was remitted to the district judge.
2. Under section 329(2)(c) of the Proceeds of Crime Act 2002, a person does not commit the relevant offence if criminal property was acquired for adequate consideration. This applies even if the defendant knew that the property was stolen. Other offences might arise, but not an offence under this part of the Act.
3. “Adequate consideration” is an objective question of fact. The court must consider all relevant circumstances shown by the evidence. The inquiry is separate from whether the defendant knew, believed or suspected that the property represented a benefit from criminal conduct under section 340. The same evidence may be relevant to both questions, but the inquiries must remain distinct.
4. The wording of section 329(2)(c) makes adequate consideration an element or limitation of the offence, rather than an exception or conventional defence. The Proceeds of Crime Act 2002 was not merely consolidating legislation, and its formulation differed materially from section 93B of the Criminal Justice Act 1988. Any ambiguity in the penal provision should in any event be resolved so as to narrow criminal liability.
5. There may initially be an evidential burden on the defendant to raise the issue. Once it is raised, however, the Crown must prove, to the normal criminal standard, both the fact of the consideration and its inadequacy. The approach was consistent with the common-law rule reflected in section 101 of the Magistrates’ Courts Act 1980, while the different wording of section 329(2)(c) led to the conclusion reached here.
6. Mr Justice David Clarke agreed. His Lordship noted that the Convention issue had not required full argument and was unnecessary to dispose of the appeal. The court certified the question where the burden of proof lies under section 329(2)(c), but did not grant leave.

• High Court (Administrative Court): On an appeal by case stated, the court allowed the appeal, quashed the convictions and remitted the matter to the district judge.
• Lincoln Magistrates’ Court: The claimant was convicted of acquiring and possessing criminal property under the Proceeds of Crime Act 2002.