Benefit from criminal conduct – Confiscation orders – Fraudulent evasion of duty

R v Steven Waller: CA (Crim Div) (Lord Justice Gage, Mr Justice Silber, Judge Radford): 18 July 2008.

The appellant (W), who had pleaded guilty to being knowingly concerned in the fraudulent evasion of the duty payable on the importation of 250kgs of tobacco, appealed against a confiscation order in the sum of £41,505. In the confiscation proceedings, the Crown had served a statement of information contending that W’s benefit had amounted to £41,505, being £14,000 for the value of the tobacco and £27,505 for the evaded duty. The judge accepted the Crown’s case. W argued that the judge had erred, as he should have determined that the correct amount of the benefit was solely the duty evaded.

Held: There were six reasons that individually and cumulatively led to the conclusion that the judge had been right to make a confiscation order not merely for the value of the duty but also for the value of the tobacco. First, the Appellate Committee had held in R v May (Raymond George) [2008] UKHL 28, [2008] 2 WLR 1131 that a defendant ordinarily ‘obtained property‘ if in law he owned it, May applied. In this case, there could be no doubt that W owned the tobacco when he bought it. Second, the House of Lords held in R v Smith (David Cadman) [2001] UKHL 68, [2002] 1 WLR 54, which concerned drug trafficking, that the measure of the defendant’s benefit was the value of the property obtained, Smith applied. The value had to include the purchase price of the goods. Third, there was the width of the statutory provisions. Section 76(4) of the Proceeds of Crime Act 2002 stated that a person benefited from conduct ‘if he obtains property as a result of or in connection with the conduct’. Fourth, the word ‘property‘ had been used in section 76(4). That was significant because the focus was not on the benefit which W obtained as a result of his smuggling, namely the evasion of duty, but what ‘property’ he received, and again that had to be the tobacco. Fifth, W’s submission would mean that the statutory provision would have to be rewritten so that the word ‘profit’ was introduced to define the word ‘property’. That was not permissible. Sixth, the judge in the case of R v McCrarren (Gerald) (unreported) 2 March 2007 Crown Ct (Belfast) had held, in a case involving the unlawful importation of cigarettes, that the cost of the purchase of the cigarettes abroad had be taken into account when calculating the value of the property obtained, McCrarren applied.

Appeal dismissed.

C Bott QC for the appellant; A Mitchell QC, T Allen for the Crown.