R v Ahmad and another

This appeal concerned the approach to be adopted in post-conviction confiscation proceedings under the Proceeds of Crime Act 2002 where property has been obtained by a number of participants in a criminal enterprise. The Court applied the statutory framework (notably sections 6, 7, 9, 76, 79, 80 and 84 of the 2002 Act) and the three-question structure identified in earlier authority: (1) whether the defendant obtained property (benefit), (2) the value of that benefit, and (3) the sum recoverable. The Court confirmed that where conspirators have together obtained property it is permissible, and often necessary, to treat each conspirator as having obtained the whole of that property for the purposes of assessing benefit and value, subject to careful factual inquiry in appropriate cases. The market value rule in section 79 governs valuation. To avoid a breach of Article 1 of Protocol 1 the Court held that confiscation orders should contain a provision preventing enforcement to the extent that the same proceeds have already been recovered by satisfaction of another confiscation order.

Background and procedural posture. These appeals, from the Court of Appeal ([2012] EWCA Crim 391 and [2013] EWCA Crim 2042), raised the correct statutory and practical approach to confiscation orders under the 1988 and 2002 Acts where multiple participants have acquired property as a result of criminal conduct. The appeals were heard together in the Supreme Court, which gave judgment on 18 June 2014.

Facts. In the first appeal the Ahmad defendants had been convicted of a large-scale carousel VAT fraud for which HM Revenue & Customs suffered a loss of about £12.6m; Flaux J found that those before the court had used their company in the fraud, that the company made payments into various accounts and that the defendants were dishonest and unhelpful in proceedings. In the second appeal the Fields defendants were convicted of conspiring to defraud and the judge found that goods and services worth about £1.4m had been obtained jointly by the principal conspirators.

Nature of the application. Both appeals challenged the Court of Appeal’s orders that each defendant should be liable for the whole of the aggregate recoverable amount assessed (approximately £16.1m in the Ahmad case after adjustment for inflation and about £1.6m in the Fields case), rather than being assessed on apportioned individual shares.

Issues framed by the Court.

• Whether, for the purposes of the statute, a defendant had "obtained" the property (the question of benefit).
• How the value of that benefit should be assessed (valuation rules under section 79 and related provisions).
• What sum should be made payable and whether enforcement should be structured so as to avoid double recovery and to respect A1P1.

Court’s reasoning and conclusions. The Court followed the established three-stage approach and the relevant authorities (including May, Jennings, Green, Waya and Mackle). It held that the statutory word "obtain" should be given a broad ordinary meaning: where property has been obtained as a result of a joint criminal enterprise it is often proper to hold that each conspirator obtained the whole of that property, provided the factual evidence supports that inference. Once it is established that a defendant obtained the property, valuation for confiscation purposes is the market value under s.79 and does not require the court to investigate or recognise unlawful inter se claims between accomplices. The Court accepted that treating each conspirator as having obtained the whole could give rise to double recovery; to prevent a breach of Article 1 of Protocol 1 the Court directed that confiscation orders made in respect of a joint obtainment should be expressed so that enforcement is prevented to the extent that the same proceeds have already been recovered by satisfaction of another confiscation order. On that basis the appeals were allowed in part and the confiscation orders were to be amended accordingly.

Appeals allowed in part. The Court held (i) that where conspirators have together obtained property it is often permissible to treat each as having obtained the whole for the purposes of benefit and valuation under the Proceeds of Crime Act 2002 (applying sections 6, 7, 9, 76, 79, 80 and 84 and existing authorities), (ii) that valuation is by reference to market value under section 79 and does not involve recognising unlawful inter se interests between accomplices, and (iii) that confiscation orders must include a provision preventing enforcement to the extent the same proceeds have already been recovered under another confiscation order, to avoid disproportionate double recovery and to comply with Article 1 of Protocol 1.

On appeal from the Court of Appeal: [2012] EWCA Crim 391; [2013] EWCA Crim 2042 to the Supreme Court which delivered judgment in [2014] UKSC 36.