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	England and Wales Court of Appeal (Criminal Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Criminal Division) Decisions >> Aujla, R v [2008] EWCA Crim 637 (25 February 2008) URL: http://www.bailii.org/ew/cases/EWCA/Crim/2008/637.html Cite as: [2008] EWCA Crim 637

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IN THE COURT OF APPEAL
CRIMINAL DIVISION

		Royal Courts of Justice Strand London, WC2A 2LL
		Monday, 25th February 2008

1. Mr Justice Coulson: On 25th July 2006, at Wolverhampton Crown Court, the appellant pleaded guilty to count 7, a charge of conspiracy to contravene section 93C(2) of the Criminal Justice Act 1988, namely to transfer or remove from the jurisdiction money which he suspected in whole or in part, directly or indirectly, represented the proceeds of relevant criminal conduct of another for the purpose of assisting others to avoid prosecution for an offence or the making of a confiscation order. On 23rd September he was sentenced by His Honour Judge Eades to four years' imprisonment on count 7. That sentence, on 1st March 2007, was reduced by this court to three years' imprisonment. No evidence was offered on count 1 and counts 2 to 6, which were ordered to remain on file on the usual terms. On 19th December 2006, again before His Honour Judge Eades, a confiscation order was imposed in the sum of £263,471.55 with a period of four years' imprisonment in default of payment.
2. This appeal, which is brought with the leave of the single judge, is in respect of the amount of that confiscation order, it being the appellant's case that, for reasons which we shall explore in a moment, it should have been limited to the sum of £30,000.
3. There was a written basis of plea in this case which was accepted by the Crown. In accordance with that basis of plea the following was common ground: sub-para (A) The appellant had been a Hawala banker since 1975. As a Hawala banker he was responsible for sending cash abroad. Sub-para (B) HM Customs and Excise had at no time sought to close down his business. Sub-para (C) In the course of his business the appellant had used sub-agents to collect money on his behalf. Sub-para (D) The Crown accepted that none of the money subject to count 7 was the proceeds of drug dealing. Sub-para (E) The appellant admitted count 7 on the basis that he had "relevant grounds to suspect" rather than "knowing". Sub-para (F) The best estimate of the total sum handled was £3 million and that the net profit generated by the appellant was £30,000, i.e 1 per cent of the total sum handled. Sub-para (G) The Crown acknowledged that the appellant's involvement did not go beyond money laundering.
4. In addition, at the first confiscation hearing on 22nd September 2006, the Crown opened the case by reference to the following additional facts: sub-para (A) The total sum of money which had passed through the appellant's hands between 1st January 1998 and 31st December 2002 was £27,127,134. Sub-para (B) The appellant kept a very poor and few paper records of payments, so it was unclear how the £3 million was made up, although it was clear that it was about 1 per cent on the total sum passing through the accounts. Sub-para (C) the appellant operated approximately 19 different bank accounts during the period. Sub-para (D) Although, for a prolonged period the appellant's accounts were subject to a High Court restraining order, some of the accounts were used to continue the appellant's businesses during that period, in contravention of the court order. Sub-para (E) Affidavits sworn by the appellant during the High Court proceedings did not give a true picture of his financial dealings.
5. It is most unfortunate that there is no clear record of this hearing on 22nd September and there is no note of what, if any, arguments arose in respect of the principles to be applied by the learned judge when dealing with the confiscation order.
6. Mr Thomas, who appears before us today, and who was present before the judge on that occasion, tells us that it was conceded by the appellant that the benefit was £3 million and that, although a discretion point was raised, it was also conceded that the point was not applicable to the particular statute (as amended) which applied to this case. There was no ruling by or record of any concessions made to the judge.
7. Instead, it appears that the confiscation application, after argument, was adjourned to 19th December 2006, which hearing was going to be limited to an investigation into the appellant's realisable assets. On that occasion it appears that the sum of £263,471.55 was agreed as being the maximum sum available by way of the appellant's realisable assets.
8. This appeal raises three issues: the meaning of 'benefit'; the question of discretion; and, albeit very faintly, a suggestion arising out of Article 1 of the European Convention on Human Rights. We deal with those points in turn below.
9. The meaning of benefit: Before us Mr Lallie sought to argue as a matter of construction that the relevant benefit was not the whole of the money passing through the appellant's hands, but was limited to the net profit made by the appellant, which is, of course, in a very much smaller sum.
10. In addressing that argument, we must first record that these offences were charged under the Criminal Justice Act 1988 as amended by the Proceeds of Crime Act of 1995. It is important to note that this was not a case under the unamended 1988 Act, nor was it a case under the Proceeds of Crime Act 2002.
11. Section 71 of the Criminal Justice Act 1988, as amended, provided as follows:

"(1A) The court shall first determine whether the offender has benefited from any relevant criminal conduct.

(1B) Subject to subsection (1C) below, if the court determines that the offender has benefited from any relevant criminal conduct, it shall then --

(a) determine in accordance with subsection (6) below the amount to be recovered in his case by virtue of this section, and

(b) make an order under this section ordering the offender to pay that amount.

...

(1D) In this Part of this Act 'relevant criminal conduct', in relation to a person convicted of an offence in any proceedings before a court, means (subject to section 72AA(6) below) that offence taken together with any other offences of a relevant description ..."

12. (4):

"For the purposes of this Part of this Act a person benefits from an offence if he obtains property as a result of or in connection with its commission and his benefit is the value of the property so obtained."

13. Section 72AA of the 1988 Act, again as amended, provided in its relevant subclauses as follows:

"(3) When proceeding under section 71 above in pursuance of the notice mentioned in (1)(a) above, the court may, if it thinks fit, determine that (subject to subsection (5) below) the assumptions specified in subsection (4) below are to be made for the purpose --

(a) of determining whether the defendant has benefited from relevant criminal conduct; and

(b) if he has, of assessing the value of the defendant's benefit from such conduct.

(4) Those assumptions are --

(a) that any property appearing to the court --

(i) to be held by the defendant at the date of conviction or at any time in the period between that date and the determination in question, or

(ii) to have been transferred to him at any time since the beginning of the relevant period.

was received by him, at the earliest time when he appears to the court to have held it ..."

14. Subsection (5) provided as follows:

"Where the court has determined that the assumptions specified in subsection (4) above are to be made in any case it shall not in that case make any such assumption in relation to any particular property or expenditure if --

...

(c) the court is satisfied that there would (for any other reason) be a serious risk of injustice in the defendant's case if the assumption were to be made in relation to that property or expenditure."

15. There has been a good deal of authority on the meaning of the word "benefit", which is an expression common to all of the relevant legislation. Those cases include: sub-para (i) R v Patel [2000] 2 Cr App R(S) 10, in which this court held that where an offender received the whole proceeds of a fraudulent scheme and passed half to his accomplice his benefit was the whole of the proceeds; sub-para (ii) R v Alagobola [2004] EWCA Crim 89, where, although the proceeds were paid into the defendant's bank account without his knowledge, he disposed of them with guilty knowledge to the instructions of the criminal; the benefit was the entirety of the proceeds; sub-para (iii) R v Sharma [2006] 2 Cr App R(S) 63 where this court held that, where a member of the criminal enterprise had fraudulently received money into a bank account, on which he was the sole signatory, his benefit for the purposes of the Act was the whole of that money, notwithstanding that money from the account had been paid after receipt to other members of the enterprise.
16. Furthermore, although in the case R v Glatt [2006] EWCA Crim 605 this court quashed a confiscation order in excess of £3 million, it did so on the proper exercise of the wide discretion arising under the original (unamended) 1988 Act. In that case Mr Glatt had not benefited personally from his participation in the conspiracy. It should be noted that, as to the concept of benefit generally, this court said at paragraph 102:

"In cases involving very large sums of money, the disposal of the proceeds of crime (and civil wrongs) is difficult to achieve without the assistance of professional agents. The fact that they have not themselves profited from the crime to the full value of the loss is a point that arises on the issue of contribution between defendants to civil proceedings. It is not normally a defence to the claim. If the financial risk to which they are exposed in the confiscation proceedings is limited by the amount of the reward they gain, the deterrent will be much less than if the financial risk is limited by the amount of the property they obtain."

17. There are many other authorities which stress both the penial and deterrent nature of the Proceeds of Crime legislation.
18. It seems to us, therefore, on the basis of all of those authorities, that it is clear beyond argument that in the present case the benefit was the £3 million laundered by the appellant. For the reasons summarised in those authorities the purposes of the legislation would be destroyed if a defendant could ask the court to embark on a detailed exercise to determine how much, if any, individual profit had been made out of or from the proceeds of crime, or, in this case, the money being laundered. Under the Proceeds of Crime legislation 'profit' is manifestly not the same as 'benefit'. That ground of appeal therefore fails.
19. The exercise of the court's discretion: The next question is the discretion under section 72AA(5) noted above. The question in the present case is whether that discretion is relevant or applicable. On behalf of the Crown Mr Thomas submitted, just as he had submitted to the learned judge, that the discretion is confined to the application of the assumptions in relation to specific property or specific expenditure and does not allow for the sort of considerations that arose in Glatt. That is because, under the unamended 1988 Act, which was the legislation relevant in Glatt, the court's power to make any order was entirely discretionary. That, of course, must be contrasted with the position under the amended Act, where the power to make the order is mandatory unless there is a serious risk of injustice in respect of specific property or expenditure.
20. On behalf of the appellant, Mr Lallie submits that this is a case where the court should exercise its discretion in favour of the appellant to reduce the amount of the confiscation order to the sum £30,000 because that was his net profit.
21. There are three reasons why we conclude, as was apparently conceded before the judge, there was no relevant discretion in this case. First, there are the changes made to the 1988 Act by the Proceeds of Crime Act 1995. Those changes plainly and deliberately took away the general discretion of the type which formed the basis of the decision in Glatt. They left a very limited discretion under section 72AA(5)(6). To that extent, therefore, we conclude that Mr Thomas' submissions as to the construction of the Act are correct.
22. Secondly, no specific property or expenditure has in argument been identified by the appellant on which the discretion under section 72AA(5) could bite. The discretion under the amended Act is specifically limited to identifiable property or expenditure. Since none has been identified, no discretion can be exercised.
23. Thirdly, on the facts of this case, we have concluded that the exercise of a discretion could not arise because of the agreed terms of the basis of plea and, in particular, paragraph 12 thereof, which made plain that the amount that passed through the account was £3 million. Given the authorities as to the meaning of benefit, it must be the case that the basis of plea has to be taken as conceding that the £3 million was indeed the benefit for the purposes of the statute.
24. For all the those reasons, therefore, we do not consider that any question of discretion arises in this case.
25. The Article 1 point: The final point taken by Mr Lallie was by reference to Article 1 of the European Convention on Human Rights. The point was made that it would be disproportionate to deprive the appellant of a sum in excess of the net profit he may have made.
26. As we have already noted, this argument was raised very faintly before us today and we consider that we can only deal with it in general terms. On that basis it seems to us that the principal difficulty with the argument is that an argument in very similar terms was raised and rejected by this court in R v Sharma. Still further, if (as we believe it was) the benefit under the Act was properly calculated by the judge, we do not consider that the Article 1 point arises. In essence, it seems to us that this submission amounted to a further attempt to argue that, in some way, the wider exercise of the court's discretion in Glatt should apply, no matter how limited that discretion might be expressed in the particular statute under review. For the reasons that we have given, we do not accept that argument.
27. So for all of those reasons we consider that this appeal against the confiscation order must fail.
28. We should add this. This is one of a number of confiscation cases recently before this court where the original ruling was given in a very informal manner without any clear reasons or conclusions. We consider that the provision of a reasoned judgment in an application for a confiscation order is not only good practice but a necessary element of this legislation. Any court making a confiscation order should set out clearly whether or not the statutory assumptions are being accepted or rejected and how and why the relevant findings and conclusions have been reached.

We are aware that this imposes yet further burdens on the judges themselves. But in our view the complex nature of this legislation, the large sums that are often involved, and the potentially devastating consequences of an order for a defendant, make such a requirement imperative.