In this post, James Warshaw, an associate in the Dispute Resolution team at CMS, previews the decision which is expected to be handed down tomorrow, 1 July 2020, in the matter of R v Hilton (Northern Ireland). 

On 2 December 2019, the Supreme Court heard the case of R v Hilton following certification by the Court of Appeal in Northern Ireland. The Supreme Court’s judgment is expected to be handed down tomorrow, 1 July 2020.

The appeal concerned two questions:

  1. Where property is held by the defendant and another person, in what circumstances is the court making a confiscation order required by section 160A of the Proceeds of Crime Act 2002, in determining the available amount, to give that other person a reasonable opportunity to make representations to it at the time the order is made?
  • If section 160A does so require, does a failure to give that other such an opportunity render the confiscation order invalid?

What follows is a brief summary of the key facts and history of the case so far.

  1. The Crown Court Decision

Ms Hilton pled guilty in 2015 under section 105A of the Social Security Administration (Northern Ireland) Act 1972 to obtaining income support dishonestly by failing to report that she had part-time employment.

As a result, the Crown exercised its right to bring confiscation proceedings against her and this was heard on 20 October 2016; with the judge imposing a confiscation order of £10,263.50 for the recoverable amount. Ms Hilton had 3 months to pay the sum and would face a prison sentence of 6 months in the event of default.

Notably, Ms Hilton was only able to raise this sum by selling her home in Belfast, title to which showed her to be a co-owner alongside her estranged husband. The property had an approximate value of £175,000 and an outstanding mortgage on it. Accordingly, the trial judge subtracted the mortgage from the approximate value of the house and divided it in two in order to come up with a figure likely to be realised from the sale of the home in order to meet the order.

  1. Court of Appeal Judgment – 12 May 2017

Ms Hilton appealed to the Northern Ireland Court of Appeal on the basis that the trial judge’s attention had not been drawn to the provisions of Section 160A of the Proceeds of Crime Act 2002:

“Section 160A – Determination of extent of defendant’s interest in property

(1) Where appears to a court making a confiscation order that –

 (a) there is property held by the defendant that is likely to be realised or otherwise used to satisfy the order; and

 (b) a person other than the defendant holds, or may hold, an interest in the property, the court may, if it thinks it appropriate to do so, determine the extent at the time the confiscation order is made of the defendant’s interest in the property.”

The Court of Appeal concluded that the trial judge had determined that Ms Hilton had a half interest in the property that was likely to be realised to meet the confiscation order. However, his attention had not been drawn to sub-section 2 of section 160A which states:

“The court must not exercise the power conferred by sub-section 1 unless it gives to anyone who the court thinks is, or may be, a person holding an interest in the property a reasonable opportunity to make representations to it.”

The Court of Appeal held that this language suggested a mandatory provision and the court, having exercised its power to make a confiscation order, ought to have given Ms Hilton’s estranged husband the opportunity to make such representations. They stated that such a provision was a sensible one in cases where there had been a development which had not been reflected on the title to the property, and by which another person with an interest, (such as Ms Hilton’s husband), might persuade the court that she did not have a 50% interest in the property, such as to affect the order to be made by the court.

Consequently, the Court of Appeal considered this fatal to the decision made by the trial judge. It quashed the 20 October 2016 confiscation order and concluded that it was appropriate to direct the Crown Court to reconsider the matter in light of these observations.

In addition, the court stated that reference should have been made to the Article 8 rights of the Appellant at the stage that the confiscation order was made. This is because there might be cases where it would be inappropriate to impose such an order (for example if the house had been specially converted for a disabled child living at the property).

  1. Before the Supreme Court

The case was appealed to the Supreme Court by the Public Prosecution Service. They submitted before the Supreme Court that it was not correct to say that the effect of section 160A was to require a court, in every case of jointly held assets likely to be used to meet a confiscation order, to proceed by way of section 160A and make a conclusive determination of a defendant’s share and, therefore, as they conceded is required by the section, give a third party an opportunity to make representations.

Rather, they argued that the intention behind the introduction of the section was to enable the court, in appropriate cases, to conclusively determine the defendant’s share in such property. Moreover, they argued, even if the court was required to make such a determination in every case, a confiscation order would not be voided simply because of a failure to allow third party representations.

Indeed, this case raises interesting issues regarding the interpretation of section 160A. With judgment eagerly awaited, it remains to be seen how the Supreme Court will rule on whether a failure to give a third party an opportunity to make such representations renders an order invalid. We also await to see whether, in the case of jointly held assets, the court is now required to proceed by way of section 160A and make a conclusive determination of the defendant’s share in property such as to require third party representations before the court.