Beazley, R. v

Trade mark offences designated by Parliament as lifestyle offences attract the confiscation regime even where the offending was conducted through an otherwise organised business and the defendants did not act dishonestly. Confiscation concerns the proceeds of offending, not the offender’s degree of blame or net profit.

A stay for abuse of process cannot be granted because a judge considers the statutory consequences unfair. The proper safeguard is that a confiscation order must be proportionate under Article 1 of Protocol 1. An order removing the gross proceeds of a business founded wholly on criminal trade mark infringement is not disproportionate merely because it exceeds the profit made.

The Crown appealed under section 31(2) of the Proceeds of Crime Act 2002 against the Recorder’s stay of confiscation proceedings as an abuse of process.

The defendants, husband and wife, had been convicted of offences under section 92 of the Trade Marks Act 1994 after selling non-genuine wheel trims bearing vehicle manufacturers’ trade marks. The Recorder considered confiscation beyond an estimated profit of about £25,000 oppressive, relying on the strict-liability character of the offences, the absence of prosecutions of others, and the defendants’ otherwise orderly business practices.

The central issue was whether those matters could justify a stay, or a reduction on proportionality grounds, of the statutory confiscation process.

1. Appeal allowed. None of the Recorder’s reasons could justify staying the confiscation proceedings. Trade mark offences are expressly designated as lifestyle offences. A criminal lifestyle is not confined to offences such as drug trafficking or armed robbery. It includes a business founded entirely on criminal offending, as this business was.

2. The purpose of confiscation is to remove the proceeds of crime. The measure is not the offender’s culpability or net profit. The defendants’ good character, their presentation of the goods as non-genuine, their record-keeping and tax compliance, and the failure to prosecute the Italian manufacturer or other traders did not make confiscation oppressive. Nor did the possible removal of their available assets, subject to their ability to rebut the statutory assumptions.

3. The restricted abuse-of-process jurisdiction explained in R v Shabir [2009] 1 Cr.App.R (S) 84 could not be invoked because a judge was unhappy with a regime enacted by Parliament. Crown Prosecution Service v Paulet and others [2009] EWCA Crim. 1573 confirmed that position.

4. Following R v Waya [2012] UKSC 51, a stay for abuse of process was neither appropriate nor required to address alleged oppression. The question was instead whether the order was proportionate so as to avoid infringement of Article 1 of Protocol 1 to the European Convention. Removing the gross takings of this wholly unlawful business was not disproportionate. The distinction between gross proceeds, which measure benefit, and profit remained applicable.

5. The confiscation proceedings were remitted to the Crown Court, preferably before the Recorder, for determination and sentencing.

• Court of Appeal (Criminal Division) Allowed the Crown’s appeal under section 31(2) of the Proceeds of Crime Act 2002, set aside the stay, and remitted the confiscation proceedings to the Crown Court.

• Crown Court (Recorder) Stayed confiscation proceedings as an abuse of process because an order exceeding the defendants’ estimated profit was considered oppressive.