Middlecote, R. v

For confiscation of evaded excise duty, a defendant convicted of conspiracy must nevertheless be proved personally liable for the duty. Liability depends on holding tobacco products at the Excise Duty Point, or causing them to reach that point while retaining a connection with them. The breadth of the conspiracy offence does not answer that narrower question of benefit. Under section 71(5) of the Criminal Justice Act 1988, a pecuniary advantage is treated as money received for confiscation only where it has been derived by the defendant.

The appellant had pleaded guilty at Bristol Crown Court to conspiracy to fraudulently evade excise duty on imported tobacco products. In confiscation proceedings, the Crown Court found benefit of £568,477.59 and made an order for £78,184.90.

The Court of Appeal granted an extension of time and leave to appeal, giving reasons in [2011] EWCA Crim 6. It quashed the original order and re-determined benefit on the material before the Crown Court.

The appellant had agreed to provide premises to receive four containers and helped unload three delivered containers. He accepted benefit from cover loads and rewards, but denied liability for the evaded duty. The central issue was whether he had personally incurred liability for duty under the Tobacco Products Regulations 2001.

1. The appeal was allowed. The original confiscation order was quashed. The court made a replacement order for £31,070.75, representing the agreed value of cover loads and rewards. A period of seven days in default was specified, although the sum had already been paid.

2. Section 71(5) of the Criminal Justice Act 1988 treats a pecuniary advantage derived from an offence as money received. Evaded duty is capable of being such an advantage. However, guilt of conspiracy to evade duty does not itself establish that each conspirator obtained that advantage. Proof of benefit requires proof of the defendant’s own liability for the duty.

3. Applying the approach in White, Dennard & Ors [2010] EWCA Crim 978, the relevant liability could arise if the appellant held the tobacco products at the Excise Duty Point, or caused them to reach that point and retained a connection with them there. The respondent had proved neither route. The importer and consignee was Seconique; delivery instructions to the appellant’s premises were given only after the products had passed the Excise Duty Point; and the accepted Basis of Plea showed that the appellant neither ordered nor paid for the goods and knew nothing of the wider conspiracy.

4. The respondent’s proposed benefit for reimbursement of rent and van-hire costs was speculative. No amount was therefore added for it or for evaded excise duty.

• Court of Appeal (Criminal Division): In [2011] EWCA Crim 548, the court allowed the appeal, quashed the confiscation order and made a new order for £31,070.75. It had granted an extension of time and leave to appeal, with reasons given in [2011] EWCA Crim 6.
• Bristol Crown Court: On 24 November 2005, Judge Hagen found benefit of £568,477.59 and realisable assets of £78,184.90, and made a confiscation order for £78,184.90 under the Criminal Justice Act 1988.