Bell & Ors v R

A confiscation assessment cannot treat evaded duty as a defendant’s benefit merely because the defendant was convicted of being knowingly concerned in its fraudulent evasion. Under the Proceeds of Crime Act 2002, the court must identify a pecuniary advantage and determine separately whether the defendant was liable for the duty or had the legally required connection with its non-payment.

The continuing nature of the offence under the Customs and Excise Management Act 1979 means that post-importation involvement may establish guilt without establishing personal liability for duty. A late appeal should be permitted where a common legal error produced an unjust confiscation order, notwithstanding an earlier acceptance of benefit.

Five applicants had been sentenced for offences concerning smuggled cigarettes and were subject to confiscation orders which included alleged evaded tobacco duty. Bell, Leigh, Bevan and Peratikou had agreed the original orders. Middlecote’s contention that he had not benefited from the duty evasion had been rejected.

They sought leave to appeal out of time. The common issue was whether conviction for knowingly being concerned in fraudulent duty evasion established that each defendant had obtained a pecuniary advantage equal to the unpaid duty, and whether the applications depended upon a subsequent change in the law.

1. Leave to appeal out of time was granted to all five applicants. The appeals of Bell, Leigh, Bevan and Peratikou succeeded. Their confiscation orders were quashed and replaced by consent. Middlecote’s order was to be set aside at a further hearing, at which the court would determine the proper order on the evidence available at the original confiscation hearing and permit him to give evidence.
2. Section 76(5) of the Proceeds of Crime Act 2002 deems a person who obtains a pecuniary advantage to have received a sum equal to it. It did not permit the unpaid duty to be included as benefit unless the defendant had actually obtained that advantage. Bell, Leigh, Bevan and Peratikou were neither liable for the duty nor connected with another person’s non-payment in the manner formerly treated as sufficient.
3. The court followed the general analysis in White, Dennard and others [2010] EWCA Crim 978: liability for excise duty on smuggled tobacco depended upon the defendant’s connection with the goods at importation. A conviction under section 170(2)(a) of the Customs and Excise Management Act 1979 did not decide that separate question. The offence was continuing, so a person could become knowingly concerned after importation without becoming liable for the duty.
4. This was not a change-of-law case. Even on the approach of the Civil Division in Jennings [2005] EWCA Civ 746, which the court described as wrong, the four appellants had no necessary causal link with another’s non-payment. Nor did their prior acceptance of benefit prevent relief. All concerned had proceeded under a shared error of law, and refusing leave would have caused grave injustice. That conclusion remained so even if Cottrell and Fletcher [2007] EWCA Crim 2016 applied.
5. The substituted benefit figures were £950 for Bell, £420 for Leigh, £123,428.65 for Bevan, and £42,479 for Peratikou.

• Court of Appeal (Criminal Division): Leave to appeal out of time was granted. The court allowed the appeals of Bell, Leigh, Bevan and Peratikou, quashed their confiscation orders and substituted agreed orders: [2011] EWCA Crim 6.
• Crown Court: Confiscation orders had been made at Ipswich for Bell and Leigh, at Shrewsbury for Bevan, at Bristol for Middlecote, and at Nottingham for Peratikou. The orders for Bell, Leigh, Bevan and Peratikou had been made by consent. In Middlecote’s case, the judge had rejected the argument that he had not benefited from the evasion of duty.