Communicated on 6 May 2014
FOURTH SECTION
Applications nos. 60105/10 and 60113/10
Thomas LESLIE against the United Kingdom
and Gerald MOONEY against the United Kingdom
lodged on 12 October 2010 and 12 October 2010 respectively
STATEMENT OF FACTS
A. The circumstances of the case
1. The applicants are Thomas Richard Leslie and Gerald Mooney. They are British nationals, born in 1978 and 1973 respectively, and they live in County Down, Northern Ireland. They are represented before the Court by Ms N. Harte, a lawyer practising in Belfast with Harte Coyle Collins Solicitors.
2. The facts as submitted by the applicants may be summarised as follows.
1. The theft
3. At about 2.00 a.m. on 20 July 2004 eleven quad bikes and two ramps for such bikes were discovered missing from a farm machinery warehouse in County Fermanagh, Northern Ireland. Twenty minutes later, a few miles away, the police stopped a number of vehicles, including two lorries containing the quad bikes and ramps. The drivers of the two lorries were arrested together with the applicants and a third man who were in a nearby car. The quad bikes were returned to the original owner.
4. The five men were charged with theft. They sought indications of what their likely sentences would be if they pleaded guilty. It was agreed between the defence and the prosecution: (i) that although the retail value of the bikes was GBP 32,000, the value if resold would have been closer to GBP 12,000; (ii) that the profit would have been split between the five defendants; and (iii) that the defendants had relatively minor criminal records.
5. All five defendants pleaded guilty and received sentences of two years’ probation and one hundred hours’ community service.
2. The confiscation proceedings
6. The prosecution then asked for confiscation orders to be made under Part 4 of the Proceeds of Crime Act 2002 (see section on relevant domestic law and practice below) in respect of the two applicants only. The prosecution alleged that each applicant had benefited in the amount of GBP 33,000 (later reduced to 32,000) and thus sought that amount from each of them (for a total of GBP 66,000).
7. At the confiscation hearing counsel for the applicants argued that the goods should have been valued at their re-sale value; that since the crime was a joint enterprise between five offenders, their personal benefit should each be twenty per cent of the value of the goods; and that as the goods were recovered almost immediately there had in fact been no benefit from the criminal activity.
8. The judge rejected the first ground on the basis that the value of goods was never the second-hand or black-market value but the value to the victim at the time of the theft.
9. As to the submission that the applicants had obtained no benefit, the judge found it to be reasonably well-established that benefit did not mean the defendant had retained the property; rather, that he had obtained it, as the calculation of benefit was concerned with “what passes through the defendant’s hands not with what sticks to his fingers”. The applicants could not therefore use the promptness of the police action in recovering and returning the goods to avoid the consequences of their actions.
10. Finally, the judge observed that although there were conflicting authorities in relation to joint criminal activity, each case had to be considered on its facts. It had to be recognised that the total amount which was potentially recoverable from all the members of a criminal enterprise could not be capped at the level of loss suffered by the victim (R v. Sharma [2006] EWCA Crim 16: see paragraph 22 below). Similarly, one or two members of the criminal enterprise could not object if they were singled out for confiscation orders when others were left alone. While it was acknowledged that in certain circumstances it might be disproportionate and contrary to Article 1 of Protocol No. 1, the confiscation legislation pursued a legitimate public interest to punish offenders and remove criminal assets from circulation. Moreover, although in some cases an apportionment approach should be adopted (R v. May [2008] UKHL 28: see paragraph 23 below), this was not required in the applicants’ case as the legislation was not concerned with a criminal’s operating profit or his net gain (R. v Wilkes [2004] 1 Cr App R (S) 105). For these reasons, the judge found that the recoverable amount in each case was GBP 32,000 and the confiscation amount was assessed as the same. This sum of GBP 32,000 was to be recovered from each applicant separately. They were given four weeks to pay, failing which they would be subject to twelve months’ imprisonment.
3. The applicants’ appeal
11. The applicants appealed against these findings, relying, inter alia, on Article 6 and Article 1 of Protocol No. 1. The Court of Appeal in Northern Ireland dismissed their appeal on 30 June 2008 but reduced the order for each applicant to GBP 16,000. Having reviewed the applicable authorities of the Court of Appeal and House of Lords (see further the summary of relevant domestic law and practice at paragraphs 21–24 below) the court found:
“18. From the authorities we are driven to the conclusion that the applicants must be held to have benefited from the property criminally obtained from the true owner of the quad bikes. They obtained possession and control of those items as thieves which gave them a possessory title pending their return to the true owner. The subsequent seizure of the items by the police did not negate their obtaining of the items which gave rise to the statutory benefit. Green makes clear that each of the thieves who are joint conspirators in the theft obtained the goods and thereby each of them benefited from them. May makes clear that where assets are held jointly there is nothing wrong in principle in making a confiscation order for the whole of the benefit as against each of the defendants severally. The fact that that may amount to multiple recovery of the benefit does not of itself make it unfair to impose a several liability on each of the co-defendants in respect of the entirety. In the trilogy of cases before the House of Lords the House said nothing to question the compatibility of the Proceeds of Crime Act 2002 with Article 1 of Protocol 1 of the Convention but it did recognise that in appropriate circumstances proportionality may call for an apportionment. At paragraph [45] in May the House of Lords stated:-
‘There might be circumstances in which orders for the full amount against several defendants might be disproportionate and contrary to Article 1 of the First Protocol and in such cases an apportionment approach might be adopted.’
[19] In the exceptional circumstances of this case a number of factors lead to the conclusion that the principle of proportionality favours an apportionment of the liability between the applicants. The total amount of the confiscation order as made by the court is double the value of the goods stolen. This factor combined with the facts that the goods were in the possession of the defendants for a very short time and the victims suffered no loss because the goods were returned to him produce what appears on the face of it to be a disproportionate outcome. Only two of the five defendants were made the subject of confiscation orders. There may well have been reasons relevant to the means of the other defendants which led the Crown not to proceed against the other defendants. Whatever the reason the question of apportionment can only be decided in the context of an apportionment between the two parties before the court. In the circumstances throwing the entire recoverable amount on each of the two applicants throws an exceptionally heavy burden on each in a case where it was accepted that the proceeds of the crime were to be split amongst the five defendants. It is to be noted that at no stage during the Rooney hearing [the hearing in which the applicants and their co-defendants sought indications of what their likely sentences would be if they pleaded guilty] was any reference made to the likelihood of a confiscation order of the magnitude ultimately imposed. Had the court been fully aware of the significance of the potential confiscation orders that fell to be imposed upon the applicants the judge’s approach to the actual sentencing may have been somewhat different.”
12. The applicants sought leave to appeal against this ruling. This was refused by the Court of Appeal on 17 December 2008. The court did, however, certify that a question of general public importance was involved in its decision, namely whether, when stolen goods were recovered and promptly returned, the relevant provisions of the Proceeds of Crime Act (read in the light of Article 6 and Article 1 of Protocol No. 1) were to be interpreted as conferring a power on the court to make confiscation rather than a mandatory duty to do so. On the basis of that certified question, the applicants sought permission to appeal to the Supreme Court, but that was refused by the Supreme Court on 13 April 2010.
B. Relevant domestic law and practice
1. The Proceeds of Crime Act 2002
13. The relevant statutory framework for confiscation proceedings in Northern Ireland is set out in Part 4 of the 2002 Act. These provisions mirror the equivalent provisions for England and Wales that are set out in Part 2 of the Act.
14. Section 156(4) (the equivalent of section 6(4) in Part 2) sets out the approach to be followed by the court:
“(a) it must decide whether the defendant has a criminal lifestyle;
(b) if it decides that he has a criminal lifestyle it must decide whether he has benefited from his general criminal conduct;
(c) if it decides that he does not have a criminal lifestyle it must decide whether he has benefited from his particular criminal conduct.”
15. Section 156(5) (the equivalent of section 6(5)) provides that, where the court decides that the defendant has benefited from the conduct referred to, it must decide the recoverable amount and make a confiscation order requiring him to pay that amount. Section 156(7) (the equivalent of section 6(7)) requires any question arising under subsections (4) or (5) to be decided on a balance of probabilities.
16. Section 160 (section 10 in Part 2) provides for the making of four assumptions for the purpose of deciding whether a defendant has benefited from his general criminal conduct and deciding his benefit from that conduct. Where relevant, it provides:
“(1) If the court decides under section 6 that the defendant has a criminal lifestyle it must make the following four assumptions for the purpose of —
(a) deciding whether he has benefited from his general criminal conduct, and
(b) deciding his benefit from the conduct.
(2) The first assumption is that any property transferred to the defendant at any time after the relevant day was obtained by him —
(a) as a result of his general criminal conduct, and
(b) at the earliest time he appears to have held it.
(3) The second assumption is that any property held by the defendant at any time after the date of conviction was obtained by him —
(a) as a result of his general criminal conduct, and
(b) at the earliest time he appears to have held it.
(4) The third assumption is that any expenditure incurred by the defendant at any time after the relevant day was met from property obtained by him as a result of his general criminal conduct.
(5) The fourth assumption is that, for the purpose of valuing any property obtained (or assumed to have been obtained) by the defendant, he obtained it free of any other interests in it.
(6) But the court must not make a required assumption in relation to particular property or expenditure if —
(a) the assumption is shown to be incorrect, or
(b) there would be a serious risk of injustice if the assumption were made.
17. The “relevant day” referred to in subsections (2) and (4) is normally the day six years before proceedings were started against the defendant (section 160(8)). Thus, in respect of the first assumption any property transferred to the defendant at any time in the six years before his conviction will be assumed to have been obtained by him as a result of his general criminal conduct.
18. Under section 224(4) (the equivalent of section 76(4)), a person benefits from conduct if he obtains property as a result of or in connection with the conduct. Section 224(7) (the equivalent of section 76(7)) provides that if a person benefits from conduct, his benefit is the value of the property obtained.
19. Sections 227 and 228 (the equivalents of sections 79 and 80) provide guidance as to the assessment of the value of property. The relevant extracts provide as follows:
“227 Value: the basic rule
(1) This section applies for the purpose of deciding the value at any time of property then held by a person.
(2) Its value is the market value of the property at that time.
...
80 Value of property obtained from conduct
(1) This section applies for the purpose of deciding the value of property obtained by a person as a result of or in connection with his criminal conduct; and the material time is the time the court makes its decision.
(2) The value of the property at the material time is the greater of the following—
(a) the value of the property (at the time the person obtained it) adjusted to take account of later changes in the value of money;
...
(4) The references in subsection (2)(a) and (b) to the value are to the value found in accordance with section 227.”
20. Section 157 (the equivalent of section 7) provides guidance on fixing the recoverable amount:
“(1) The recoverable amount for the purposes of section 156 is an amount equal to the defendant’s benefit from the conduct concerned.
(2) But if the defendant shows that the available amount is less than that benefit the recoverable amount is–
(a) the available amount, or
(b) a nominal amount, if the available amount is nil.”
2. Relevant case-law on confiscation
21. In R. v Wilkes [2003] EWCA Crim 848, the defendant appealed against a confiscation order made under the Criminal Justice Act 1988 (the provisions of which were similar to those contained in the 2002 Act). Together with a number of others, he had taken goods up to the value of GBP 7,000 from a shop when they were interrupted by police officers. All of the goods were recovered. Goods from a second linked offence also appear to have been recovered separately. He maintained that he had not benefited from the offences because the police had recovered the goods. Dismissing the appeal, the court observed that the question of whether the offences had resulted in a successful outcome for the defendant was irrelevant. When the appellant had completed the commission of the offences he had obtained property and the fact that he had been unable to realise that property because of the intervention of the police was immaterial.
22. In R v. Sharma [2006] EWCA Crim 16 the Court of Appeal for England and Wales (Criminal Division) found that the 1988 Act focused on the individual benefit obtained by each defendant, the total amount of which was not limited by the amount of the victim’s loss (paragraph 19 of its judgment). The court went on to observe (at paragraph 25):
“In our judgment, since the Act is concerned to force a defendant to surrender the benefit he has obtained from his criminal activity, so long as the benefit he obtained is correctly calculated, it cannot be disproportionate for him to be made accountable for what he obtained. The amount of the benefit he obtained is not affected by the amount which might also be obtained by others to whom he transfers any part of the benefit. The amount of money which might be recovered pursuant to a confiscation order is irrelevant. In every case, at the time a confiscation order is made, there can be no certainty that the amount to be paid will be paid and thus, where more than one confiscation order is made in respect of a victim’s loss, the question of double recovery may not arise.”
23. R v. May [2008] UKHL 28 concerned several defendants who had been jointly responsible for fraud. The trial judge had decided that the property obtained had been held jointly by them, that each had benefited in the amount jointly held, and that there was no requirement to apportion that amount between them. In confirming that approach, the House of Lords observed (at paragraph 45 of the Report from the Appellate Committee):
“There might be circumstances in which orders for the full amount against several defendants might be disproportionate and contrary to Article 1 of the First Protocol, and in such cases an apportionment approach might be adopted, but that was not the situation here and the total of the confiscation orders made by the judge fell well below the sum of which the Revenue had been cheated.”
It went on to state at paragraph 46:
“The sum which the appellant, jointly with others, was found to have fraudulently obtained from HM Customs and Excise was, in law, as much his as if he had acted alone. That conclusion leads ineluctably to the further conclusions that he benefited from his offending, and benefited to an extent substantially greater than the confiscation order made against him ... The order made was less than his realisable assets. It is entirely consistent with the legitimate objects of the legislation, and it requires, that he be ordered to pay such sum, which involves no injustice or lack of proportionality. The legislation is, as Lord Steyn described it in R v Rezvi [2003] 1 AC 1099, para 17, ‘a precise, fair and proportionate response to the important need to protect the public’.”
Finally, as part of the endnote to the Report, it was stated (at paragraph 48(1) :
“The legislation is intended to deprive defendants of the benefit they have gained from relevant criminal conduct, whether or not they have retained such benefit, within the limits of their available means. It does not provide for confiscation in the sense understood by schoolchildren and others, but nor does it operate by way of fine. The benefit gained is the total value of the property or advantage obtained, not the defendant’s net profit after deduction of expenses or any amounts payable to co-conspirators.”
24. In R. v. Green [2008] UKHL 30 (heard and delivered at the same time as May) the House of Lords reached the same conclusion in respect of equivalent confiscation provisions in the Drug Trafficking Act 1994. It added that it could not regard it as disproportionate to make an order depriving a defendant of a benefit which he had in fact and in law obtained, within the limits of his realisable assets. It noted that challenges to the proportionality of the confiscation regime (as in Phillips v. the United Kingdom, no. 41087/980 ECHR 2001‑VII and in its own judgment in R v. Rezvi [2002] UKHL 1, [2003] 1 AC 1099) had not succeeded. Finally, counsel for Green had sought to argue that the possibility of “multiple recovery” of the same sum from different offenders was not sanctioned by the relevant international conventions on the matter (including the Council Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime) or by the confiscation regimes of Australia, Canada, New Zealand or the United States. The House of Lords rejected that submission, stating that, in construing a United Kingdom statute, the meaning of which it judged to be clear, it could not be influenced by the legislation of other countries, even if (as might be the case) those countries had chosen to give effect to common international obligations in a different way.
COMPLAINTS
25. First, the applicants complain under Article 6 of the Convention that the confiscation proceedings against them were unfair.
26. Secondly, they complain under Article 1 of Protocol No. 1 that the confiscation orders made against them amounted to disproportionate interferences with their rights under that Article.
27. Thirdly, relying on Article 13 of the Convention, they complain that they had no effective remedy in respect of these complaints.
QUESTIONS TO THE PARTIES
1. Has there been a violation of Article 6 § 1 of the Convention?
2. Was the forfeiture of the applicants’ assets a lawful and proportionate interference with the peaceful enjoyment of their possessions within the meaning of Article 1 of Protocol No. 1 to the Convention?
3. In addressing questions 1 and 2, the parties are requested to comment in particular on the relevance, if any, of:
(i) the prompt recovery and return of the stolen property to its owner;
(ii) the reason why confiscation proceedings were brought against the applicants but not their co-defendants;
(iii) whether any other signatories to the Council Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime or any other common law countries allow for confiscation:
(a) when the proceeds of the crime have already been recovered and returned to their owner; and
(b) of an overall sum greater than the value of the proceeds of the crime (so called “multiple recovery” from several convicted defendants)?
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