CPS (Durham) v N

A Crown Court may not stay properly instituted confiscation proceedings merely because the statutory result appears oppressive. A stay is reserved for a true abuse of process. Under the Proceeds of Crime Act 2002, confiscation concerns the benefit obtained when the offence was committed; later recovery of property or the absence of a net profit does not ordinarily remove that benefit.

The limited power to make a just order under section 7(3) does not create a general discretion to disapply the statutory regime. A continuing false representation that secures employment may make the resulting earnings a benefit of the offending, particularly where there is a wider public interest in enforcing the prohibition circumvented.

Three linked confiscation appeals under the Proceeds of Crime Act 2002 were heard together.

• Nelson pleaded guilty to handling a stolen digger after providing the false identity needed for the theft. The Durham Crown Court stayed confiscation proceedings although it found him an active participant.
• Paulet obtained employment by falsely representing that he was entitled to work in the United Kingdom. The Luton Crown Court made a confiscation order based on his available assets, and he appealed.
• Pathak pleaded guilty to theft from his employer. Although he had repaid the employer following civil proceedings, the Nottingham Crown Court stayed confiscation proceedings as oppressive.

The central issues were the prosecutor’s right to appeal a stay, the proper scope of abuse of process in confiscation proceedings, and whether benefit had been obtained in each case.

1. The prosecutor’s appeals in Nelson and Pathak were allowed, and Paulet’s appeal was dismissed. Section 31(2) of the Proceeds of Crime Act 2002 permits a prosecutor to appeal whenever the Crown Court decides not to make a confiscation order. That includes a decision to stay proceedings for alleged abuse of process.

2. A stay is available where there is a genuine abuse of the confiscation process, but it must be used sparingly. A judge cannot treat the statutory consequences of a properly instituted confiscation claim as oppressive merely because the result is thought harsh. That would, in substance, confer a discretion to dispense with the statutory scheme. The court followed the cautious approach stated in R v Shabir [2009] 1 CAR (S) 497.

3. Confiscation deprives an offender of the benefit obtained through crime. The relevant time is when the offence is committed; later events affecting the property do not ordinarily alter the benefit. An offender who assumes the rights of an owner, including through control or disposition, obtains property. A mere custodian or courier may stand differently. The court applied the principle in R v Smith (David Cadman) [2002] 1 WLR 54 and explained, by reference to Jennings v CPS [2008] 1 AC 1046, that this approach does not impose a fine for property never obtained.

4. Section 6(6) and section 7(3) create only a confined power where a victim has begun, or intends to begin, civil proceedings. The requirement to make the order thought just operates within the statutory purpose of depriving criminals of benefit; it is not a broad discretion to disapply confiscation. Voluntary full repayment in a simple-benefit case may properly affect the prosecutor’s decision to continue, but compensation and confiscation must not be conflated.

5. Nelson was an active participant whose provision of the false identity was integral to the stolen digger enterprise. Police recovery of the digger before its planned removal did not remove his benefit. The stay was wrong and a confiscation order of £14,337.75 was to be made.

6. Paulet’s false representation secured, and continued throughout, his employment. His wages were therefore sufficiently linked to his offences in the circumstances, including the wider public interest in the work prohibition he had deliberately evaded. His confiscation order stood.

7. Pathak’s repayment of his employer’s loss did not necessarily exhaust his benefit. There was substantial evidence requiring determination of the benefit and recoverable amount. The proceedings were neither abusive nor unjustly oppressive, and the issue was to be reconsidered in the Crown Court.

• Court of Appeal (Criminal Division): In the linked appeals, the court allowed the prosecution’s appeals from the Durham and Nottingham Crown Courts and dismissed Paulet’s appeal from the Luton Crown Court: [2009] EWCA Crim 1573.
• Crown Court at Durham: The Recorder stayed confiscation proceedings against Nelson as an abuse of process. That decision was reversed.
• Crown Court at Nottingham: His Honour Judge Teare stayed confiscation proceedings against Pathak as an abuse of process. That decision was reversed and the issue required reconsideration.
• Crown Court at Luton: His Honour Judge Kay QC made a confiscation order against Paulet. The order was upheld.