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Confiscation Hearings : Requirement for Rulings Reinforced

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I reported in my blog dated 7 March 2008 following an interim hearing in our case of R v Shabir that the Court of Appeal had stressed the importance of courts giving detailed judgments at first instance as to findings of facts in confiscation hearings, to enable appellate courts to deal with appeals appropriately.

That requirement has been reinforced in the recent case of BERR v Lowe [2009] EWCA Crim 194, which, similarly to Shabir, was another appeal arguing abuse of process. In a postscript to the judgment, Lord Justice Thomas (who interestingly handed down the judgment in Shabir regarding the need for detailed rulings) stated that it was "essential" that the court hearing the proceedings finds and sets out all the relevant facts in its ruling (or judgment), including the facts that are agreed before it.  His Lordship went on to comment that many confiscation hearings are not prepared in advance as they should be and that defence statements are often inadequate, before going on to stress the importance of identifying issues between the parties at an early stage, not leaving matters to the last minute, and the importance of having a properly paginated bundle, so as to ease the burden on the Judge hearing the proceedings.  All parties in confiscation proceedings have been warned.

The case itself concerned an appeal based, inter alia, on a perceived abuse of process concerning property that had been fraudulently transferred out of an insolvent company to the benefit of the appellant and the detriment of the creditors.  That property has been recovered by the administrators using their powers under the Insolvency Act. The argument by the appellant was that as the property had been recovered it would amount to a double penalty to confiscate the value of the benefit again, and therefore be oppressive and an abuse of process. 

The Court decided however that there was no such abuse of process. The Court referred to the authorities of Morgan & Bygrave and Shabir which analysed in detail the jurisdiction relating to abuse in confiscation proceedings. The court referred specifically to the limited circumstances in which an abuse of process could be founded as set out in Morgan & Bygrave and found that no abuse was present in this case. There had been no offer by the appellant to restore the property, rather it was restored by operation of the Insolvency Act and co-defendant; the criminal conduct was not limited to one or more identifiable losers, as the fraudulent transfer stripped an asset from the company to the detriment of every creditor; and there was no arguable oppression and the decision to seek confiscation simply carried out the decision of Parliament, and it mattered not that other government agencies might take a different view to BERR in similar circumstances, eg HMCR.

The outcome of the case is therefore that Shabir (in which this firm represented the defendant in his appeal) remains the first, and believed only, reported successfully argued case of a confiscation order being set aside as an abuse of process, but that the circumstances in which such an argument can succeed remain limited, and, as the Court stressed in Shabir, such jurisdiction "must be exercised with extreme caution, indeed sparingly".  However, if the facts fit, there is scope for argument and it is certainly something worth carefully considering in the Crown Court.

Next week I will review recent developments in confiscation cases, in particular developments post May, Jennings & Green and consider how the law is continuing to develop and where it may go in the next year.

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