Chahal & Anor, R. v

Where an earlier confiscation order expressly determines benefit from general criminal conduct, a later confiscation court must accept that determination as conclusive for the earlier date. Sections 8(3) and 8(4) of the Proceeds of Crime Act 2002 do not permit a court of co-ordinate jurisdiction to recharacterise the earlier order or reassess its merits, even if it may have been erroneous. The earlier order stands unless lawfully varied or set aside. Section 10(9) correspondingly fixes the relevant day for the statutory assumptions at the date of the previous benefit calculation. This construction prevents double counting and cannot be displaced to produce a result thought more consistent with the merits of an individual case.

The respondents had been made subject to confiscation orders in the Southwark Crown Court on 4 August 2010 following convictions arising from Operation Sunbird. Those orders expressly recorded benefit from general criminal conduct.

Following separate convictions for carousel VAT fraud in the Birmingham Crown Court, the Crown sought further confiscation orders. HHJ Mayo held that sections 8(3) and 8(4) of the Proceeds of Crime Act 2002 required the earlier benefit determinations to be treated as fixing benefit up to 4 August 2010. The Crown appealed that ruling.

A separate appeal by Charanjit Singh Chahal concerned the refusal to vary a restraint order so that the confiscation orders could be paid. The central issue was whether the later confiscation court could look behind the earlier orders and decide that they had, in substance, assessed only particular criminal conduct.

1. The Crown’s appeals were dismissed. HHJ Mayo had correctly held that the prior confiscation orders were determinations of benefit from general criminal conduct. Each order expressly said so, and the statutory scheme had required the Southwark court to make that form of determination because the respondents had criminal lifestyles.

2. Under sections 8(3) and 8(4) of the Proceeds of Crime Act 2002, the later court had to accept and act upon the benefit found by the prior orders at the date they were made. It could not investigate whether the earlier court had, in substance, assessed particular rather than general criminal conduct, or revisit the merits of the earlier assessment. Section 10(9) then made the date of that calculation the relevant day for the statutory assumptions.

3. The earlier orders were res judicata. Even if they were erroneous, agreed by the parties, or unsupported by reasons, they were not nullities. Following Cain [1985] 1 AC 46, they remained effective unless set aside or varied through a lawful route, such as an appeal or, where its conditions were met, reconsideration under section 21. A court of co-ordinate jurisdiction could not reopen them.

4. The statutory language and purpose, including prevention of double counting, were clear. The court declined to distort that meaning to address the serious practical consequence that the respondents might not disgorge the full proceeds of their criminality. The approach in Barnett [2011] EWCA Crim 2936 was consistent with that conclusion.

5. Charanjit Singh Chahal’s separate appeal concerning the restraint order was allowed. The Crown no longer opposed variation to permit payment of the confiscation orders, and an order in agreed terms was to be lodged.

• Court of Appeal (Criminal Division): Dismissed the Crown’s appeals against HHJ Mayo’s construction of the confiscation provisions. Allowed Charanjit Singh Chahal’s separate, unopposed appeal concerning variation of a restraint order.
• Crown Court at Birmingham: On 21 November 2012, HHJ Mayo held that the prior orders delimited benefit from general criminal conduct for the later confiscation proceedings. On 28 January 2013, the court refused to vary the restraint order.
• Crown Court at Southwark: On 4 August 2010, confiscation orders were made which expressly determined each respondent’s benefit from general criminal conduct.