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R v Guraj – Back to the Future or Part of Something Bigger?bodnar_a_bw_indmem

The decision in R v Guraj [2016] UKSC 65 is on one view another example of the complexities of the Proceeds of Crime Act 2002 (POCA) and the traps which it sets for the unwary. However, look beneath the surface and, to this author’s mind at least, it is the latest in a line of Supreme Court decisions considering POCA from which a clear principle of constructing that Act is emerging.

Factual Background

The facts of R v Guraj were unremarkable; so unremarkable in fact that the amount of the confiscation order actually made against Mr Guraj is not to be found in either the judgment of the Court of Appeal ([2015] EWCA Crim 305) or that of the Supreme Court. Mr Guraj was arrested in possession of some 1.5kg of heroin, a quantity of amphetamine, and “some cocaine”. There was also some drug dealing paraphernalia in his home and “various substantial quantities of cash”. In due course he pleaded guilty to possession with intent to supply class A and class B drugs, and to possessing criminal property, and was sentenced to a total of five years and four months’ imprisonment. An order was made for the forfeiture of various items used by Mr Guraj in the course of his drug dealing activity, and of course an order was made for the forfeiture and destruction of the drugs found in his possession. A confiscation order was made in an amount which was agreed between prosecution and defence. How does such an apparently run-of-the-mill case lead to a decision of the Supreme Court running to 37 paragraphs and occupying a little over 20 pages of single-spaced text?

Legal Background

The difficulty arose because the plea of guilty was entered in July 2012 but the confiscation proceedings were not concluded until June 2014, nearly two years after the Crown Court had made the forfeiture orders, and not until a chronology had passed which took the Court of Appeal nine paragraphs to summarise and which included the making of two wasted costs orders against the Crown Prosecution Service. Along the way, the need to apply to postpone the confiscation proceedings for a specified period before the existing period of postponement expires was also overlooked. In April 2014 the defence contended that, because of the delays and the fact that forfeiture orders had been made, the Crown Court had been deprived of its jurisdiction to make a confiscation order. This was rejected by the Judge in the Crown Court, but the Court of Appeal quashed the confiscation order on the basis that where a forfeiture order (or a fine) is imposed before a confiscation order is made and there is a procedural failure to properly postpone the proceedings, the effect of section 14 of the Proceeds of Crime Act 2002 (POCA) is that confiscation proceedings were precluded. It was accepted that there was no actual prejudice to the defendant in the making of a confiscation order; the issue was one of statutory construction and its consequences for the jurisdiction of the Crown Court.

Students of the law of criminal confiscation will be aware that in the late 1990s and over the turn of the Millennium the issue of postponing confiscation proceedings generated substantial litigation, leading to apparently contradictory judgments, culminating in the decisions of the House of Lords in R v Soneji ([2005] UKHL 49) and R v Knights ([2005] UKHL 50). In POCA, s 14(11) Parliament provided that a confiscation order may not be quashed purely because of a technical defect in the postponement procedure; a provision enacted specifically to put an end to the issue. In Soneji Lord Steyn expressed his fear that it would “innocent to predict” that POCA had succeeded in solving the procedural difficulties caused by confiscation proceedings and, as if to confirm Lord Steyn’s prophetic abilities, the Court of Appeal in Guraj referred to four post-Soneji authorities on POCA considering the very question which POCA, s 14(11) had been enacted to resolve. The issue which crystalised again in Guraj is as follows:

  • By POCA, s 15 the Crown Court must not fine the defendant, make a forfeiture order, or impose one of a few other types of penalty before it has completed the confiscation process.
  • By POCA, s 14(8) any decision postponing confiscation proceedings must be sought before an existing period of postponement comes to an end, even if the decision is made afterwards.
  • By POCA, s 14(11) a confiscation order must not be quashed solely because of a technical failure to comply with the procedure for postponing confiscation proceedings.
  • However, if the Crown Court has already either fined the defendant or made one of the orders which, by virtue of s 15 of the Act, it must not make until after it has completed the confiscation process, “…subsection (11) does not apply…”

Supreme Court decision

After a close analysis of the evolution of this issue, and in particular of the decisions in Soneji and Knights, Lord Hughes (with whom the other Justices agreed) concluded that it is wrong to read POCA, s 14(12) as operating so as to deprive the Crown Court of jurisdiction to make a confiscation order if s 14(8) is not complied with. Instead, he concluded, it operates only to lift the statutory prohibition on quashing a confiscation order purely on the basis of such a procedural failure. Thereafter, the principles set out in Soneji and Knights are once again engaged; indeed s 14(11) only bites in the narrow context of a procedural error in the postponement process but is silent as regards a failure to abide by one or more the many other procedural requirements of the confiscation process. Lord Hughes set out the principles to be applied as follows:

“The correct analysis is not that a procedural defect deprives the court of jurisdiction, which would indeed mean that every defect had the same consequence. Rather, it is that a failure to honour the procedure set down by the statute raises the very real possibility that it will be unfair to make an order, although the jurisdiction to do so remains, and that unless the court is satisfied that no substantial unfairness will ensue, an order ought not to be made. This is not to deprive section 14(12) of effect; it remains effective to remove the peremptory bar of section 14(11) upon quashing confiscation orders on grounds only of procedural defect connected with postponement. Where section 14(11) applies, no such defect can alone justify quashing. Resulting unfairness, on the other hand, may, but such unfairness cannot be inferred merely from the procedural breach. Where section 14(11) does not apply, a procedural defect, not limited to postponement, will have the effect of making it wrong to make a confiscation order if unfairness to the defendant would thereby ensue. If, however, the defect gives rise to no unfairness, or to none that cannot be cured, there can be no obstacle to the making of the order, and this is what the duty of the court under POCA requires.”

Please see Part Two here.