Nawaz & Anor, R v

For an allegation of acquiring criminal property under section 329 of the Proceeds of Crime Act 2002, the adequate-consideration exception is assessed using the ordinary contractual meaning of consideration. Once the issue arises, the Crown must prove that adequate consideration was not given.

A borrower who receives mortgage funds while the lender receives a charge over the property and a personal promise of repayment should not be charged with acquiring criminal property on that transaction. Nor can an attempted offence be upheld where its successful completion would not have constituted an offence under section 329.

The appellants were convicted at Stafford Crown Court after obtaining, or attempting to obtain, mortgage advances through an intermediary using false particulars in mortgage applications. Nawaz was convicted of attempting to acquire criminal property and, following a guilty plea, of a further attempted offence. Noreen was convicted of acquiring criminal property under section 329(1)(a) of the Proceeds of Crime Act 2002.

They applied out of time for leave to appeal against conviction. A co-defendant's appeal, R v Kausar [2009] EWCA Crim 2242, had held that the mortgage transaction supplied adequate contractual consideration. The central issue was whether there was any material distinction from that decision, including in Nawaz's attempted-offence count.

1. Appeals allowed. The court extended time, granted leave to appeal, and quashed Nawaz's two convictions and Noreen's conviction.

2. The court accepted and followed R v Kausar [2009] EWCA Crim 2242. Under section 329 of the Proceeds of Crime Act 2002, consideration bears its ordinary contractual meaning. Once adequate consideration is in issue, the Crown must establish its absence.

3. On the mortgage transaction, the borrower acquired the loan funds, but the lender received a charge over the property and the borrower's personal promise to repay. Those contractual obligations meant that the borrowers should not have been charged with acquiring criminal property. The Crown properly accepted that there was no material distinction between Kausar's case and Nawaz's completed transaction or Noreen's transaction.

4. Nawaz's guilty plea to attempted acquisition did not preserve that conviction. Although no consideration had passed because the transaction was incomplete, it would be wrong to uphold an attempt where successful completion would not have constituted an offence under section 329.

5. The court did not determine whether property can become criminal property under section 329 only after a separate predicate offence, or whether the predicate offence and acquisition can occur simultaneously. That question was unnecessary to the appeals.

6. The court also granted defendants' costs orders under section 16 of the Prosecution of Offences Act 1985.

• Court of Appeal (Criminal Division): Extended time for appeal, granted leave, and quashed all three convictions.

• Stafford Crown Court: The applicants were convicted and, on 18 July 2008, each received a 26-week sentence suspended for 18 months, with additional requirements.