Morgan v R.

Where confiscation legislation makes an order mandatory after a prosecutor invokes the procedure, a court cannot treat voluntary repayment to the victim as if it were an intended civil claim. The statutory civil-claim exception cannot be extended by judicial construction.

However, in the confined class of cases where the offending and benefit are limited to an identifiable victim’s loss, no civil claim is intended, and full restitution has been made or can be tendered immediately, an application producing double payment may be stayed as an abuse of process if it is oppressive. The question is fact-sensitive. Confiscation is not a fine and the prospect of payment exceeding net profit is insufficient by itself to establish oppression.

Two applications concerning confiscation orders were heard together because they raised the effect of voluntary restitution to an identifiable victim.

Morgan, a police officer, had dishonestly obtained money from an elderly woman. He repaid most of it, but could not immediately repay the balance. At Chelmsford Crown Court, Judge Mitchell made a confiscation order under the Criminal Justice Act 1988 and directed that the outstanding loss be paid from the confiscated sum.

Bygrave had stolen from her employers and attended sentence able to repay the full loss. At Bournemouth Crown Court, Judge Jarvis made a confiscation order but declined compensation because of concern that she would otherwise pay twice. After the confiscated money went to the State, the employers indicated that they would bring a civil claim.

The central questions were whether repayment made confiscation discretionary and when an application for confiscation could amount to an abuse of process.

1. Morgan’s appeal was dismissed. The court granted leave but held that Criminal Justice Act 1988, section 71(1C), could not be read as extending the exception for actual or intended civil proceedings to voluntary repayment. The same construction applied to section 6(6) of the Proceeds of Crime Act 2002. If the prosecutor invoked the statutory process and the civil-proceedings exception did not apply, the order and its arithmetically determined amount were mandatory.

2. The statutory consequence did not preclude a stay for abuse of process. In the limited voluntary-repayment category identified by the court, a confiscation application could be oppressive where it would require payment up to twice the restitution already made, or immediately and securely tendered, and would thereby deter restitution. The Crown could not justify such an application solely as a means of imposing an additional financial penalty. Confiscation did not operate as a fine: see R v May [2008] UKHL 28.

3. The mere fact that a confiscation order exceeded a defendant’s net profit did not establish oppression. The inquiry was individual to the facts. It would ordinarily be difficult to establish abuse where the defendant had obtained benefit beyond the victim’s loss, statutory assumptions might establish further benefit, or full repayment was uncertain. A confiscation order coupled with a direction that compensation be paid from its proceeds could protect a victim where payment was not immediately guaranteed.

4. The correct challenge was an application to the trial judge for a stay for abuse of process, normally made below. Judicial review was inappropriate because the Crown Court procedure provided an adequate remedy. On Morgan’s facts, no stay had been sought and his ability immediately to pay the remaining loss was not established. The court could not conclude that the application had been oppressive. Time to comply with his order was extended to 1 December 2008.

5. Bygrave’s appeal was allowed to a limited extent. Her benefit did not exceed the employers’ loss and she lacked means to satisfy separate confiscation and compensation orders. The proper course under sections 13(5) and 13(6) of the Proceeds of Crime Act 2002 was to direct that compensation be paid out of the confiscated sum. The order was varied accordingly, so that the whole sum was payable to the employers’ insolvency representatives.

• Court of Appeal (Criminal Division). Morgan was granted leave to appeal but his appeal against the confiscation order was dismissed. Bygrave was granted an extension of time and leave to appeal; her confiscation order was varied to direct payment to the losing employers from the confiscated sum.
• Chelmsford Crown Court. Judge Mitchell made a confiscation order against Morgan and directed under section 72(7) of the Criminal Justice Act 1988 that the outstanding loss be paid from recovered confiscated money.
• Bournemouth Crown Court. Judge Jarvis made a confiscation order against Bygrave but declined to make a compensation order.