POCA UPDATE AUTUMN 2014
10. Procedure
The power to exclude hearsay evidence in civil recovery proceedings
National Crime Agency v Azam and others [2014] EWHC 2722 (QB)
6 May 2014
This appeal concerned an application by the National Crime Agency (NCA) to have hearsay
evidence relied upon by the Respondents excluded. The NCA had initiated civil recovery
proceedings against the Respondents, the first of whom (A) wished to rely on a hearsay
statement from a witness (W). W was overseas and a hearsay notice was served to indicate
A’s intended reliance on the statement.
The NCA argued that if A wished to rely on the evidence of W, an order should be made
under CPR R.33.4 to compel A to produce W as a witness and make them available for
cross-examination. The NCA further argued that the hearsay evidence should be excluded
under CPR R.32.1 on the grounds that this was an exceptional case in which the evidence
should be excluded if W did not attend. The NCA submitted that the application should be
granted because W’s evidence concerned alleged criminal conduct, was contradicted by
other evidence and as such needed to be tested.
The Queen’s Bench Division of the High Court rejected both grounds relied upon by the NCA
and made clear that the NCA’s application was founded on a misunderstanding of the
meaning of the Civil Procedure Rules. Rule 33.4 provided for a party producing a witness
and calling them to the witness box to be cross-examined. The application made by the NCA
furthered the notion that the party wishing to rely on the hearsay evidence must assist in
producing the witness. There was no indication that A would be able to assist in producing
W, nor was there authority that under R.33.4 an order could be made of this nature where
there was no evidence to support a finding that a party, such as A, could assist.
Further, the Court found that a ruling under R.32.1 should only be made in exceptional
circumstances and such circumstances were not made out in the present case. A particularly
important factor in such considerations included the issues to which the hearsay evidence
spoke. The issues in this case were so narrow as to make an exclusionary order
disproportionate: the trial could readily assess the evidence and decide how much weight to
attach to the hearsay evidence.
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Powers to make a confiscation order where the defendant absconds
prior to conviction
R v Charles Okedare [2014] EWCA Crim 1173
15 May 2014
This is an interesting case concerning whether the Crown Court has the power to make a
confiscation order where a defendant has absconded prior to trial and has been convicted in
his absence. In this case the defendant was charged with one count of conspiracy to
defraud. He absconded prior to his trial and a warrant for his arrest could not be executed.
He was subsequently convicted with others in his absence. The fraud concerned benefit
monies and totalled a sum of £620,000 of which the defendant was said to be primarily
responsible for approximately £29,000. A confiscation order was made in the defendant’s
absence under section 6(5) of the 2002 Act and he appealed the decision.
The question arose as to which section the Court should proceed under. Sections 27 and 28
under the main heading “Defendant absconds” were of relevance. Section 27 concerns itself
with the scenario in which the defendant absconds after conviction in the Crown Court or
after having been committed for sentence. Section 28 deals with circumstances in which the
defendant was neither convicted nor acquitted. In those circumstances, if a defendant has
absconded and it is over two years since the start of the proceedings the Court may make a
confiscation order on the application of the prosecution. In both sections important
safeguards are included, namely that the prosecution must take reasonable steps to contact
the defendant and further that any person that might be affected by the confiscation order
has the right to make representations.
At first instance the respondent initially argued that the court should not proceed under
section 6 but under section 28. However, after certain observations by the Crown Court
judge it changed its position and argued that an order could be made under section 6. The
appellant argued that neither section 6, 27 nor 28 covered the circumstances of the case.
The Crown Court judge decided that neither section 27 or 28 applied but that he could make
an order under section 6 on the basis that the defendant had been convicted of an offence
and the prosecution had applied for a confiscation order.
It was argued by the appellant that this was plainly the wrong approach to take as
Parliament had explicitly made powers for circumstances in which the defendant absconds.
It further argued that by proceeding under section 6 the statutory safeguards were not
implemented, thereby causing potential prejudice to the appellant and, in the circumstances
of this case, his wife, who remained in the matrimonial home that was subject to the
proceedings. The respondent reverted to its original position that the judge should have
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proceeded under section 28 given that none of the section 10 assumptions had been made,
two years had passed since the proceedings started, attempts had been made to contact the
defendant through solicitors and his wife could have made representations at the hearing.
In considering its judgment the Court of Appeal took into account the previous provisions
under the Drug Trafficking Act 1994. The powers concerning confiscation in the 1994 Act
were a precursor to the 2002 Act. Under Section 19 of the 1994 Act the courts were able to
make confiscation orders against defendants who had absconded both before and after
conviction. Section 19(2) of that Act did not create any distinction in the powers of the court
depending on when the defendant absconded. It was considered that Parliament had not
meant to dent these powers and that allowing a defendant to abscond prior to conviction and
therefore evade confiscation proceedings would be a bizarre construction of the legislation.
There was no argument that when the confiscation order was made it was more than two
years since the proceedings were started. Section 27 clearly did not apply to the
circumstances of the case but the Court found that the proceedings should have taken place
under section 28. This was on the basis that the wording of the section allowed an
interpretation covering these circumstances. The Court also found that it was possible that
the time at which an accused is “neither convicted nor acquitted” could refer to the date at
which the defendant absconds rather than the date at which the confiscation order was
made. Finally, given that the wording of the legislation made clear that a defendant who
absconds should be afforded certain protections, it was improper to proceed under section 6,
thereby ignoring those safeguards.
Having made this decision, their Lordships turned to the question of whether the confiscation
order should be quashed and the matter remitted back to the Crown Court. Having heard
arguments from both sides it was decided that this course of action should be taken in order
to ensure that protective measures within the legislation could be applied to this case.
Although a rehearing of the confiscation proceedings could have resulted in an increased
confiscation order, that was an unnecessary consideration for the purposes of the appeal.
It is surely right that this decision was the most sensible outcome possible in the
circumstances. The Court could not leave a lacuna in the legislation by which a defendant
could abscond prior to conviction and avoid subsequent confiscation proceedings; this
interpretation of section 28 is the most efficient means of dealing with this scenario.
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Whether the judge was right to proceed, and to apply the assumptions,
in the defendant’s absence, and further whether a confiscation order
could include rent/housing benefit received for property for which no
enforcement notice had been issued
R v Ali [2014] EWCA Crim 1658
31 July 2014
The appellant had converted a house into twelve flats without planning permission. An
enforcement order was issued to prevent him using the premises as more than one dwelling.
He did not cease to do so. A confiscation order of just under £1.5 million was made. The
judge applied the assumptions, and found that money obtained from three other properties
that had been converted into flats without permission was also obtained through criminal
conduct, and this income was included in the final figure.
The appellant was suffering from mental health problems and was in hospital and so absent
from court at the time of the confiscation hearing. The judge concluded that because there
was an element of malingering, the appellant was not involuntarily absent, and so proceeded
without the appellant present.
The Court of Appeal found that the judge had not erred in concluding that the appellant
could have a fair hearing in his absence. The question of whether it was fair to proceed
depended not only on the reasons for a defendant’s absence but on all relevant factors. The
judge had taken into account what evidence had been placed before him on behalf of the
appellant, as well as the reasons for the appellant’s absence, and the fact that defence
witnesses could have been called. There was no principle of law preventing the making of a
confiscation order, or the applying of the presumptions, in a defendant’s absence: the
question was one of fairness.
However, the judge had erred by including within the confiscation order income received
from the three additional properties. Breaching planning control was not itself a criminal act only a failure to comply with an enforcement order rendered such behaviour criminal.
Therefore, in respect of the properties for which no enforcement order had been issued, the
appellant had not been involved in general or particular criminal conduct and so the Court of
Appeal set aside that element of the confiscation order. In respect of properties for which an
enforcement order did exist, the income received was only criminal property from the date on
which the order was issued.
Barnaby Hone, Jacob Edwards, Simon Walters, Alice Carver and Edward Cole
Chambers of Karim Khail Q.C.
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