Heron v Serious Organised Crime Agency & Anor

The absence of an express finding at confiscation stage that property was a tainted gift does not invariably deprive the enforcement court of jurisdiction to make that finding. Under the Proceeds of Crime Act 2002, jurisdiction may exist where the stage 1 judge found all facts necessary to establish the gift, proceeded on a different but overlapping basis, and included the asset in the available amount. The court must consider whether the recipient suffers prejudice. A recipient who can contest the issue fully at stage 2, and identifies no evidence capable of displacing the tainted-gift case, is not prejudiced. A concession that the asset formed part of the available amount may be material. The better practice is to address the issue expressly at stage 1 where it may matter.

Ms Heron sought judicial review of an enforcement decision concerning property registered in her name. The Crown Court had made a confiscation order against Mr Jones in 2007, treating the acquisition of the property as expenditure constituting a benefit. The Court of Appeal (Criminal Division) dismissed Mr Jones’s appeal in [2009] EWCA Crim 177.

At the 2009 enforcement hearing, the Crown Court treated the property and related transactions as tainted gifts. Collins J refused permission to seek judicial review of that decision. The central issue was whether the enforcement court had jurisdiction to make a tainted-gift finding at stage 2 when the stage 1 judgment had not expressly made that finding, but had found the necessary underlying facts and included the property in the available amount.

Appeal dismissed. The Court of Appeal upheld Collins J’s refusal of permission for judicial review. The issue was whether the Crown Court had jurisdiction at the enforcement stage to treat the property as a tainted gift.

1. The statutory scheme distinguishes the confiscation calculation at stage 1 from enforcement at stage 2. The criminal-lifestyle assumptions included the assumption concerning expenditure under section 10(4) of the Proceeds of Crime Act 2002. Enforcement against property held by a recipient of a tainted gift is limited to the value of the gift.
2. At stage 1, the Crown Court had proceeded on the basis that the bridging loan used to acquire the property was expenditure funded by criminal conduct. The loan was not property held by Mr Jones when the confiscation order was made. Mr Jones had agreed that the property itself formed part of the available amount. It was therefore open to the judge to include the property rather than the loan.
3. In the particular circumstances, the stage 2 jurisdiction was established. The stage 1 judge had found all the facts necessary to establish that the gifts were derived from criminal conduct. An additional tainted-gift finding would have been duplicative of the expenditure analysis. The property’s inclusion in the available amount and the defendant’s concession were also material.
4. Ms Heron suffered no prejudice. Although she was not a party to the confiscation hearing, she could contest realisability and the tainted-gift issue at stage 2. Her evidence was heard and rejected, and no further evidence capable of disproving the tainted-gift finding was identified. The court also rejected reliance on an observation made during exchanges in an earlier appeal, since it was not part of a judgment and was not binding precedent.

The arguments based on R v Buckman [1997] 1 Cr App R (S) 325 and R v Norris [2001] 1 WLR 1388 did not require a different result. The court regarded the procedure as imperfect and indicated that, where necessary, counsel should reserve the tainted-gift issue or invite an express finding at stage 1.

1. Court of Appeal (Civil Division) — In the present appeal, the court dismissed the appeal and upheld the refusal of permission for judicial review.
2. High Court of Justice, Queen’s Bench Division, Administrative Court — Collins J refused permission to seek judicial review of the Crown Court’s 2009 enforcement decision.
3. Crown Court at St Albans — On 17 December 2009, HHJ Baker QC treated the relevant property and related transactions as tainted gifts for enforcement purposes.
4. Court of Appeal (Criminal Division) — In [2009] EWCA Crim 177, the court dismissed Mr Jones’s appeal against the 2007 confiscation order and upheld the inclusion of the property on the expenditure-and-benefit basis.
5. Crown Court at St Albans — In 2007, HHJ Baker QC made a confiscation order against Mr Jones, including the property in the available amount.