In the matter of Peacock

The Supreme Court was concerned with whether section 16(2) of the Drug Trafficking Act 1994 applied to assets acquired by a defendant after the making of an earlier confiscation order and whether section 16 remained in force for offences committed before the commencement of the Proceeds of Crime Act 2002. The court held that the commencement order (SI 2003/333) preserved the 1994 Act for offences committed before 24 March 2003 and that, as a matter of construction, section 16(2) permits the High Court to have regard to after-acquired assets when deciding whether the amount that might be realised is greater than the amount taken into account in making the original confiscation order. The majority relied on the language of section 16 read with the Act's definitions, the logical symmetry between sections 16 and 17, and practical and policy considerations; the minority would have allowed the appeal on the ground that the statutory language was not sufficiently clear to permit confiscation of legitimately acquired after-acquired property.

Background and facts:

• The appellant was convicted of drug trafficking offences in 1997. A confiscation order was made in 1997 for £823 (realised amount) though the assessed proceeds of trafficking were substantially higher. After release the appellant legitimately acquired substantial assets.
• In 2005 the prosecution obtained a certificate under section 16(2) of the Drug Trafficking Act 1994 and applied for an increase in the confiscation order; the Crown Court in 2007 substituted an increased amount (the assessed proceeds) and the order was enforced by appointment of a receiver.

Procedural posture: the Crown Court's increase was upheld by the Court of Appeal; the appellant appealed to the Supreme Court, raising two issues: (i) whether section 16 remained in force for pre-24 March 2003 offending given the Proceeds of Crime Act 2002 commencement order; and (ii) whether section 16(2) lawfully permits regard to after-acquired assets.

Issues framed:

• Was section 16 of the 1994 Act in force for this case notwithstanding the commencement of POCA?
• If so, does section 16(2) extend to assets acquired by the defendant after the original confiscation order was made?

Court’s reasoning and disposition:

• On the commencement issue the court (unanimously) held that article 10 of the Commencement Order saved sections 1 to 36 of the 1994 Act so that section 16 continued to apply where the offending pre-dated 24 March 2003.
• On the substantive issue the majority construed the phrase "the amount that might be realised" in section 16(2) as referring to the amount realisable at the time of the section 16 application. They found the definition and structure of the Act, the symmetry with section 17 (inadequacy of realisable property), practical considerations and the availability of judicial discretion supported taking after-acquired assets into account. The court noted that Parliament later expressed such a position clearly in POCA but inferred that the 1994 Act, properly construed, already allowed it.
• The minority would have allowed the appeal, emphasising the established principle that property rights should not be taken without clear and unambiguous words; they considered the language of section 16 ambiguous and that, unlike POCA s.22(3), section 16 lacks an express direction to recalculate the available amount at the later date.

The court therefore dismissed the appellant’s appeal by majority and upheld the section 16(2) certificate.

Appeal dismissed. The majority held that (1) the Commencement Order saved the 1994 Act so that section 16 was in force for offences committed before 24 March 2003, and (2) section 16(2) properly construed allows the High Court to take after-acquired assets into account when deciding whether the amount that might be realised exceeds the amount taken into account in making the original confiscation order. The minority would have allowed the appeal, finding the statutory language insufficiently clear to permit confiscation of legitimately acquired after-acquired assets.

Conviction and initial confiscation order at Crown Court (1997). Crown Court increased confiscation under section 16(4) (14 November 2007). Appeal to Court of Appeal (Criminal Division) dismissed (20 February 2009). Further appeal to the Court of Appeal (reported as [2010] EWCA Civ 1465) dismissed (20 December 2010; Arden LJ providing a reasoned judgment). Leave to appeal to the Supreme Court granted (11 April 2011). Supreme Court judgment given 22 February 2012 ([2012] UKSC 5).