CPS Nottinghamshire v Rose

Factual and Procedural Background

These two cases were heard together as they both concern issues arising under the Proceeds of Crime Act 2002 ("the 2002 Act"). The first case involves an application for leave to appeal against conviction by the Appellant, who was convicted of acquiring criminal property contrary to section 329(1)(a) of the 2002 Act. The second case concerns a prosecution appeal against a confiscation order, raising the question of how criminal property should be valued for determining the defendant's benefit. Both cases also raise concerns about the appropriateness of charging money laundering offences under Part 7 of the 2002 Act in circumstances resembling ordinary burglary or handling stolen goods.

Legal Issues Presented

1. Whether stolen goods acquired by a thief or handler constitute "criminal property" for the purposes of the offence of acquiring criminal property under section 329(1)(a) of the 2002 Act.
2. How criminal property should be valued for the purpose of deciding the amount of a defendant's benefit under the 2002 Act.
3. The appropriateness of charging money laundering offences under section 329 in cases involving conduct akin to burglary, theft, or handling stolen goods.

Arguments of the Parties

Appellant's Arguments (Case One)

• The Appellant contended that the thief who stole the motorcycle did not obtain an "interest" in it within the meaning of section 340(10)(a) of the 2002 Act, as "interest" must mean a lawful interest.
• Consequently, the stolen motorcycle was not "criminal property" under the Act, and the Appellant could not be guilty of acquiring criminal property even if he was the thief or a handler.

Crown's Arguments (Case One)

• The Crown argued that a thief obtains an "interest" in stolen property by virtue of having a right to possession, which constitutes property obtained as a result of criminal conduct and thus criminal property.
• Reliance was placed on the precedent that possession, even if unlawful, confers a possessory title protected by law, referencing Costello v Chief Constable of Derbyshire Constabulary [2001] EWCA Civ 381.
• The Crown submitted that the Appellant was properly convicted as the stolen motorcycle was criminal property under the Act and the jury had properly been directed on the knowledge or suspicion element.

Appellant's Concession (Case One)

• At the hearing, counsel for the Appellant accepted the correctness of the Crown's arguments and did not pursue the appeal against conviction.

Appellant's Wider Concern (Case One)

• The Appellant raised a wider concern about the appropriateness of charging under section 329 in cases resembling burglary or handling stolen goods, where dishonesty would otherwise be an ingredient.
• It was submitted that section 329 was being used as an easier means of securing convictions for conduct that would traditionally attract burglary or handling charges.
• Reference was made to CPS guidance emphasizing that money laundering offences are serious and should be charged with public interest considerations, which may not align with low-level theft cases.

Crown's Response to Wider Concern (Case One)

• The Crown submitted that charging decisions are governed by the Code for Crown Prosecutors, which requires evidential sufficiency and public interest considerations.
• Prosecutors are guided to consider the seriousness of the offending, sentencing powers, and clarity in presenting cases.
• It was noted that money laundering charges are appropriate where there is active concealment or transfer of criminal proceeds, or possession of large or repeated amounts.
• The Crown provided statistics showing many more handling charges than section 329 charges, indicating no widespread misuse of section 329.
• The decision to charge under section 329 in the Appellant's case simplified trial issues given uncertainty whether he was a thief or handler.

Respondent's Arguments (Case Two)

• The Respondent contended that the value of the stolen property for benefit calculation should be the market value of the Respondent's interest in the property.
• Since the Respondent only had a right to possession (a bare possessory title) which has nil market value, the value of the property in relation to the Respondent was nil for those items restored to their true owners.
• The Respondent argued that the judge correctly limited the confiscation order to the value of property not restored to the owners.

Crown's Arguments (Case Two)

• The Crown argued that the market value for benefit calculation refers to the value at the time the property was obtained, understood as the value in the hands of the person from whom it was obtained.
• Section 79(3) applies only to the calculation of the realisable amount, not to benefit calculation.
• The Crown contended that property restored to the true owner should still be included in the benefit calculation.
• The Crown submitted that the benefit is the economic value of the property to the victim or the cost to obtain it lawfully, not the market value of the defendant's limited interest.
• Reliance was placed on earlier case law and legislative history supporting a purposive interpretation to maintain the effectiveness of confiscation orders against thieves and handlers.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Costello v Chief Constable of Derbyshire Constabulary [2001] EWCA Civ 381	Possession, even if unlawful, confers a possessory title protected by law, including in cases of theft.	Supported the conclusion that a thief obtains an "interest" in stolen property by virtue of possession.
R (Wilkinson) v Director of Public Prosecutions [2006] EWHC 3012 (Admin)	Considered appropriateness of charging under section 329 versus handling offences.	Recognized prosecutorial discretion but expressed judicial concern about overuse of section 329 in minor cases.
R v Dore [1997] 2 Cr App S 152	Illegal drugs have no market value for confiscation purposes.	Confirmed that market value means lawful market value, relevant to valuation under the 2002 Act.
R v Hussain [2006] EWCA Crim 621	Illegal drugs are to be valued at nil market value under the 2002 Act.	Applied the market value test consistent with earlier case law.
R v Johnson (1990) 91 Cr App R 332	Displacement of statutory assumptions where property is purchased with lawful third-party funds.	Confirmed that value of benefit excludes property interests funded lawfully; relevant to valuation principles.
In re K, The Times, 1 October 1990	Benefit calculation focuses on property obtained, not equity or lesser interests.	Approved in later cases; guided interpretation of value of benefit under confiscation laws.
R v Layode (unreported, 12 March 1993)	Confirmed In re K; benefit includes full purchase price, not just equity.	Supported full valuation of property obtained for benefit calculation.
R v Smith (David Cadman) [2002] 1 WLR 54	Benefit is value of property to offender when obtained; subsequent loss or forfeiture irrelevant.	Emphasized simplicity and penal purpose of confiscation; guided valuation under 1988 Act.
R v Wilkes [2003] EWCA Crim 848	Value of property obtained is assessed without regard to inability to realise it due to police intervention.	Applied principles consistent with Smith (David Cadman) to stolen property cases.
R v Ascroft [2003] EWCA Crim 2365	Value of property to offender is the incoming value at time obtained, not resale value.	Clarified valuation method focusing on wholesale or retail value depending on circumstances.
R v Glatt [2006] EWCA Crim 605	Value of property for confiscation includes beneficial interest; rejects nil value arguments for couriers/agents.	Supported broad application of confiscation regime to all who obtain property from criminal conduct.
R v Walls [2002] EWCA Crim 2456	Displacement of statutory assumptions where property purchased with lawful mortgage funds.	Confirmed application of valuation principles consistent with earlier case law and valuation of interests.
R v Scragg [2006] EWCA Crim 2916	Application of valuation rules under the 2002 Act for property obtained by fraudulent trading.	Confirmed the use of section 80 valuation provisions for calculating benefit.

Court's Reasoning and Analysis

The court first addressed the issue of whether stolen goods acquired by a thief or handler constitute "criminal property" under the 2002 Act. It accepted the Crown's argument that possession, even if unlawful, confers a possessory title or interest in property. This interpretation aligns with established case law and statutory definitions, particularly section 340(10) of the Act, which includes a right to possession as an interest in property. The court thus concluded that the stolen motorcycle was criminal property, and the jury was correctly directed on the knowledge or suspicion element of the offence. The Appellant's application for leave to appeal was refused following his concession to these points.

Regarding the appropriateness of charging section 329 offences in cases resembling burglary or handling, the court acknowledged the concerns raised but emphasized prosecutorial discretion guided by the Code for Crown Prosecutors and relevant CPS guidance. The court noted that the statistics did not support a widespread misuse of section 329 and that the decision to prosecute under this section in the Appellant's case simplified trial issues given evidential uncertainties.

In the second case concerning the valuation of criminal property for confiscation, the court examined the statutory framework under the 2002 Act and its predecessors, including the 1986, 1988, and 1994 Acts. It analyzed the legislative history, statutory provisions, and relevant case law to determine the proper method for calculating the defendant's benefit from criminal conduct involving stolen property.

The court rejected the Respondent's argument that valuation should be based solely on the market value of the defendant's interest (a bare possessory right with nil market value) in the stolen property. Instead, it held that the benefit is to be calculated as the market value of the property at the time it was obtained, understood as the economic value to the victim or the cost to obtain the property lawfully. This approach aligns with the purposive interpretation of the legislation, ensuring the confiscation regime remains effective against thieves and handlers.

The court further concluded that the fact that stolen property had been restored to its true owner is irrelevant to the calculation of benefit. It found that the judge below erred in limiting the confiscation order to the value of property not restored and allowed the Crown's appeal to increase the confiscation order to the full agreed value of all stolen property found in the Respondent's possession.

Holding and Implications

First Case (Appellant): The application for leave to appeal against conviction for acquiring criminal property was REFUSED. The court affirmed that stolen goods acquired by a thief or handler constitute criminal property under the 2002 Act, and the jury was properly directed on the knowledge or suspicion element. The court expressed concern about the use of money laundering charges in cases resembling burglary or handling but recognized prosecutorial discretion and found no widespread misuse.

Second Case (Respondent): The Crown's appeal against the confiscation order was ALLOWED. The court held that the benefit from criminal conduct involving stolen property is the full market value of the property at the time it was obtained, irrespective of whether the property has been restored to its true owner. The confiscation order was varied to reflect the full agreed value of the stolen property.

The decisions clarify the interpretation of "criminal property" and the valuation of benefit under the 2002 Act, reinforcing the effectiveness of the confiscation regime against thieves and handlers of stolen goods. No new precedent was established regarding prosecutorial discretion in charging decisions, but the court acknowledged concerns warranting attention by the Crown Prosecution Service.