Nuro v The Home Office

Cash is recoverable property under the Proceeds of Crime Act 2002 only where the criminal conduct has a legally sufficient causal connection with its acquisition. An unlawful entry offence does not, without more, make earnings from lawful self-employed work proceeds of that offence. A material contribution approach used at the seizure stage does not necessarily apply at forfeiture, where the Secretary of State bears the burden of proving the case to the civil standard. Fraud cannot be inferred merely from unlawful entry and subsequent work, particularly where the alleged offence was not put to the individual in evidence.

This was an appeal by way of case stated from the Crown Court at Chelmsford, which had upheld a magistrates’ court order forfeiting £6,500 under section 298 of the Proceeds of Crime Act 2002. The money represented income from the appellant’s self-employed work as a handyman, plasterer and decorator after his unlawful entry into the United Kingdom.

The Crown Court treated the money as recoverable property on two alternative bases: a causal connection between the unlawful entry and the earnings, and an implied fraudulent misrepresentation. The central issue was whether either basis satisfied the statutory requirement that the cash had been obtained by or in return for unlawful conduct.

1. Appeal allowed. The cash was not recoverable property within the meaning of section 304 of the Proceeds of Crime Act 2002.
2. Under sections 298(2), 304, 241 and 242(1) of the Proceeds of Crime Act 2002, the Secretary of State had to prove that the cash was obtained through unlawful conduct, meaning by or in return for that conduct. This required a sufficient causal nexus between the criminal conduct and the acquisition of the property.
3. The appellant’s unlawful entry was a single offence. His subsequent self-employed work was not itself criminal. The causal relationship between the entry offence and the earnings was too remote. The Crown Court was wrong to treat the loss of an opportunity to impose employment restrictions as relevant to the statutory nexus.
4. The court distinguished R Sarwar v Chief Constable of Greater Manchester Police [2008] EWHC 1651 (Admin). That decision concerned detention at the seizure stage, where reasonable grounds for suspicion were sufficient and the money seized from an employer included proceeds of employing illegal workers. It did not establish that a material contribution would suffice at forfeiture. In any event, even that test was not met on these facts.
5. The alternative fraud case also failed. The appellant did not require authorisation to work, and no representation to an employer or client could be inferred merely from unlawful entry followed by self-employed work. The Crown Court had no evidential basis for finding fraud without hearing evidence from the appellant.
6. R v Paulet [2009] EWCA Crim 1573 was distinguishable. There, a jury had found a fraudulent misrepresentation that the appellant was entitled to work, and that criminal activity had a meaningful effect on the employer’s decision to continue the employment.
7. The forfeiture order was quashed. Proceedings below remained without a costs order. Counsel for the appellant was awarded £1,200 for the appeal, with no other order as to costs.

• Chelmsford Magistrates’ Court: ordered forfeiture of £6,500 under section 298 of the Proceeds of Crime Act 2002.
• Chelmsford Crown Court: upheld the forfeiture order on the bases of causal connection and implied fraud.
• High Court (Administrative Court): allowed the appeal by way of case stated and held that the cash was not recoverable property.