The Supreme Court of the United Kingdom was asked to determine a point of law of general public importance concerning the making of confiscation orders and the operation of s.160A of the Proceeds of Crime Act 2002. The Court held that there was no automatic right for a person with a property interest to make representation at the first stage of a confiscation process.
Facts of the Case
On the 22nd of September 2015, the Appellant (Hilton) was convicted of three separate offences contrary to s.105 of the Social Security Administration (Northern Ireland) Act 1972. The offences related to serious cases of fraud. Following the conviction, Hilton was committed to the Crown Court for confiscation proceedings. The Judge made a confiscation order in respect of £10,263.50. This was equivalent to half of Hilton’s matrimonial home. Against this order, Hilton filed an appeal before the Supreme Court.
In R v Hilton [2017] NICA 73, the Court of Appeal decided that s.160A of the Proceeds of Crime Act 2002 (POCA 2002) required that, at the time of making a confiscation order, the Crown Court must consider a person, who might hold an interest in the property, the opportunity to make representations on whether a confiscation order should be made, if so, in what amount. The failure to give Hilton’s estranged partner and the building society the chance to make representation was fatal to the decision of the Judge. The confiscation order was thus invalid. The Director of Public Prosecutions (DPP) filed an appeal before the Supreme Court.
Supreme Court’s Decision
The Supreme Court explained the purpose and operation of s.160A of POCA 2002. There are potentially two stages to confiscation proceedings, namely, the making of the order and subsequently its enforcement. It was held that s.160A was intended to combine them into one for simple cases. However, in complex cases, particularly, one which concerns property that is jointly owned, the two-stage process could still occur. In such matters, any potential third-party property interest could arise for consideration at the enforcement stage.
Regarding approaching confiscation proceedings, the Supreme Court noted that the obligation to make an order arose in relatively straightforward and quasi-automatic circumstances. Once it had arisen, the Court was under the duty to decide whether a Defendant had benefited from their criminal conduct, and if so, the potential recoverable amount. The method of calculating was enlisted in the 2002 Act, under s.159(1)(a). Consequently, where the Defendant held an interest in a certain property, the Court had to “determine”, the extent of their interest in that property, under s.160A(1). It was required by s.160A(2) not to exercise that power unless it gave “to anyone who the Court thinks is or maybe a person holding an interest in the property a reasonable opportunity to make representations.”
The critical question before the Court was whether the Judge in the instant case had in fact “determined” the extent of Hilton’s interest under s.160A(1) to preclude any further representation by a person(s) other than Hilton. Making a “determination” as to the extent of a person’s interest which precluded later representations by third parties was dependent on the Court’s decision that it was appropriate to do so. Given the requirement in s.160A(2), the Judge had to be confident that the third party’s interest would not be affected.
The question of whether a confiscation order had been made in response to such a determination had to be addressed with the two-stage process firmly in mind. If third party interests were not considered and disposed of at the stage of making the confiscation order, they had to be dealt with at the enforcement stage. The fundamental point was that, at the enforcement stage, third party rights might continue to be considered, either because the Judge did not make an s.160A determination or because the Judge did so without affording a person with an interest in the property the opportunity to make representations when the determination was made.
Regarding whether the Judge in the Court of Appeal made a s.160A determination in the instant case, the Supreme Court held that he did not. The Judge had been principally concerned with the relevance of the costs of sale of the property. The possible significance of third-party interests had not been referred to and the Judge had probably been unaware of them. S.160A, therefore, had no bearing on the case and the Judge’s order was to be restored.
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