UK Supreme Court: Confiscation orders made against couple who committed benefit fraud are upheld

About this case:

• Judgment:
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It was submitted on behalf of the appellants that confiscation orders made pursuant to the Proceeds of Crime Act 2002 did not apply, as the couple had each pleaded guilty to offences both pre- and post-2003, when the legislation came into force.

Dismissing the appeal by a 3:2 majority, Lord Kerr of Tonaghmore, who gave the leading judgment, said that the appellant’s proposed construction of the legislation could not have been what was intended by parliament and would lead to absurd results.

Background

Donna McCool pleaded guilty to four offences of obtaining benefit by fraud in 1990 representing she was single, and three further false declarations in 2003, 2005, and 2010. Michael Harkin, to whom Ms McCool was married at all material times, pleaded guilty to making a false declaration in 1999 and further offences post-2003. As such, for both appellants, all but one of the offences to which they each pleaded guilty had been committed before the Proceeds of Crime Act 2002 (POCA 2002) came into force in March 2003.

Section 156 provides for confiscation orders, and article 4(1) states that Section 156 “shall not have effect where the offence, or any of the offences, mentioned in section 156(2) was committed before 24 March 2003.”

On behalf of the appellants, it was submitted that “any of the offences” indicates that if any of the offences pre-date 24 March 2003, then none of the offences – even those committed after that date – can result in confiscation orders under POCA 2002, and “must be dealt with under legislation which applied on the date when the first offence occurred”.

The NI Court of Appeal held that confiscation orders could be applied to convictions after POCA 2002, even where they had been convicted for offences before it came into force.

Supreme Court

The certified question before the Supreme Court was:

“Can a confiscation order under section 156 of the Proceeds of Crime Act 2002 be made by a Crown Court in circumstances where a defendant is convicted in proceedings before that Crown Court of an offence or offences which were committed before 24 March 2003, given the stipulations of the commencement, transitional and saving provisions set out in articles 2, 4 and 11 of the Proceeds of Crime Act 2002 (Commencement No 5, Transitional Provisions, Savings and Amendment) Order 2003?”

Delivering the leading judgment of the five-judge Supreme Court, Lord Kerr said that it was not an exaggeration to say that the appellant’s interpretation of the Act “would produce a wholly anomalous result”, and that the jurisdiction of the Court to make confiscation orders under POCA 2002 “could be controlled by tactical decisions by the prosecution”.

Lord Kerr said it was ironic that the appellants objected to the prosecution proceeding under POCA 2002, ignoring offences pre-March 2003 to which the appellants had also pleaded guilty to. The appellants said that the prosecution should not be able to choose only the post-March offences to seek compensation orders. The prosecution riposted that this resulted from a proper construction of s.156, rather than a tactical decision.

Lord Kerr said that it could not have been intended by parliament that “a swathe of post-2003 offences should be removed from the Act’s purview simply because the defendant was convicted of an associated offence before the relevant date”. He said it was evidently objectionable and undesirable that contemporary cases would have to be dealt with according to standards replaced by POCA 2002.

Answering the certified question in the affirmative, Lord Kerr was satisfied that Parliament’s intention in enacting POCA 2002 “was that all offences committed after the date of its coming into force should be subject to its regime, irrespective of whether they were associated with offences committed before the commencement date”. Lord Kerr was satisfied that there was nothing unfair to the appellants in this construction.

Also answering in the affirmative, Lord Hughes agreed with Lord Kerr that it was not necessary to read words into the legislation in order to achieve this result. Lord Hughes said that the context of POCA 2002, considered separately, and also together with its Commencement Order, shows that the construction applied in R v Simpson EWCA Crim 1499, (2004) QB 118, R v Ahmed (Court of Appeal, Criminal Division, unreported 8 February 2000), R v Stapleton (2009) 1 Cr App R (S) 38, and R v Aniakor EWCA Crim 2171 was correct. Lady Black agreed with Lord Hughes.

Lord Reed and Lord Mance Dissenting

Lord Reed and Lord Mance dissented with the opinion of the majority, stating that they would have answered the certified question in the negative and allowed the appeal. Delivering the dissenting opinion, Lord Reed said that a confiscation is sought in respect of the benefit obtained from criminal conduct; and that the construction of section 156 of POCA 2002, “or of its equivalent in the earlier legislation, cannot be predicated on an assumption that whether a conviction of a particular offence will lead to the making of a confiscation order, or will affect the amount specified in the order, can be determined at the time when the confiscation proceedings are initiated.”