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On appeal from: [2011] NICA 31

This appeal concerned the validity of confiscation orders made with the appellants’ consent. Three brothers pleaded guilty to having been knowingly concerned in the fraudulent evasion of duty on cigarettes contrary to the Customs & Excise Management Act 1979, s 170(2)(a). In a separate trial the fourth appellant pleaded guilty to a similar offence. Confiscation orders were made against the appellants, the amount of which was equal to the amount of duty and VAT said to have been evaded. These orders were later appealed against on the grounds they were made on the wrong legal basis – although they might have been liable to pay the duties they were concerned in avoiding under the previous regime, they did not fall under any of the categories of persons liable under the current regime, the Tobacco Products Regulations 2001.

The Supreme Court unanimously allowed all four appeals. The appellants’ liability to pay duty could not be established, and so the prosecution’s case that the benefit obtained by the appellants took the form of a pecuniary advantage derived from evasion of the duty on the cigarettes was not a correct legal basis for calculating the benefit. In considering whether the appellants may nonetheless be bound by the orders since they were made with their consent, the Court of Appeal had not referred to authorities which established that an appeal ought to be available to defendants who had made a plea on a mistaken legal basis. It would be manifestly unfair to require the appellants in this case to be bound by their consent to the confiscation orders when the only possible explanation for the consent was that it was given under a mistake of law.

The appeal also concerned a second question of whether knowingly handling dutiable goods that duty has been evaded on confers a benefit to the defendant for the purposes of the Proceeds of Crime Act 2002, s 158. It was held that this would not necessarily be the case; it must be established by evidence or reasonable inferences drawn therefrom that such a person has actually obtained a benefit.

For judgment, please download:[2014] UKSC 5
For Court’s Press Summary, please download: Court’s Press Summary
For a non-PDF version of the judgment, please visit: BAILII