Grew & Anor, R v

Factual and Procedural Background

There are two separate sets of appeals arising from convictions for fraudulent evasion of duty contrary to section 170(2) of the Customs and Excise Management Act 1979. The appellants in each case played varying roles in two unrelated cigarette smuggling operations. Both sets of appellants pleaded guilty to offences related to the smuggling and evasion of duty on approximately five million cigarettes seized in County Armagh. In each case, the trial judges imposed confiscation orders with the consent of the appellants. The appeals challenge whether the trial judges erred in making those confiscation orders.

In the first case, two appellants pleaded guilty to involvement in the fraudulent evasion of duty and possession of criminal property, with one appellant present at the recovery of the contraband and the other linked to the premises where the contraband was found. Sentences were suspended custodial terms. Confiscation orders were made based on agreed benefit amounts.

In the second case, three appellants initially pleaded not guilty but later pleaded guilty following a Rooney hearing. Their roles were described as labourers unloading the cigarettes and the owner of the premises where the cigarettes were found. The trial judge found limited organisational involvement for one appellant but not a leadership role. Suspended sentences were imposed, and confiscation orders consented to by the parties were made based on agreed benefit figures.

Legal Issues Presented

1. Whether the trial judges erred in imposing confiscation orders without properly recognising the effect of the Tobacco Regulations 2001.
2. Whether the appellants personally benefited from the evasion of duty under the correct application of the 2001 Regulations.
3. Whether consent to confiscation orders made on an incorrect legal basis can be set aside.
4. The appropriate interpretation of "benefit" and "liability" in confiscation proceedings relating to cigarette smuggling offences.

Arguments of the Parties

Appellants' Arguments

• The confiscation orders were wrongly made because the courts failed to apply the Tobacco Regulations 2001 correctly, which replaced the 1992 Regulations.
• Under Regulation 13 of the 2001 Regulations, only persons personally liable for the duty at the excise point could be considered to have obtained a benefit for confiscation purposes.
• The appellants were not personally liable for the duty as they did not hold the tobacco products at the excise point, which was at the port of entry.
• Authorities such as R v. Chambers and R v. Khan support that only persons liable for the duty can be said to have obtained a pecuniary advantage from its evasion.
• Consent to confiscation orders made under a mistaken legal understanding is irrelevant and should not sustain the orders.

Crown's Arguments

• The prosecution must prove fraudulent evasion of duty and knowing participation in the evasion, which includes obtaining the benefit of the duty evasion.
• Persons knowingly concerned in the importation and subsequent handling of smuggled cigarettes benefit from the evasion regardless of personal civil liability for the duty.
• The appellants consented to confiscation orders, recognizing they obtained property or pecuniary advantage, making further judicial inquiry unnecessary.
• The 1992 Regulations are irrelevant as they pertained to intra-EU imports; the appellants accepted the benefit amounts by plea agreement.
• Legal authorities cited by the appellants are wrongly decided if they suggest personal civil liability is the test for criminal benefit.
• The confiscation orders, being consent orders, have contractual status and are binding absent exceptional unfairness.

Table of Precedents Cited

Court's Reasoning and Analysis

The court first examined the factual background and the roles played by the appellants in the two cigarette smuggling operations. It acknowledged the appellants’ pleas of guilty and the consent to confiscation orders based on agreed benefit amounts.

The court then addressed the appellants’ argument that the 2001 Tobacco Regulations limited confiscation orders to those personally liable for excise duty at the point of importation. It considered the authority of R v. Chambers and related cases, which established that only those personally liable for duty can be said to have obtained a pecuniary advantage by evading that duty.

However, the court distinguished the offences pleaded under section 170(2) of the 1979 Act, which criminalise knowing involvement in the evasion of duty, not limited to those personally liable for the duty. It explained that participants in a joint criminal enterprise who knowingly handle smuggled goods after importation can derive a pecuniary advantage from the evasion, even if not personally liable for the duty.

The court emphasized that benefit for confiscation purposes depends on whether the defendant obtained property or a pecuniary advantage as a result of the criminal conduct, not solely on civil liability for duty. It illustrated this with a hypothetical where a person receiving smuggled goods gains economic advantage from their duty-free status.

The court further held that the appellants’ consent to confiscation orders, based on legal advice and admissions of benefit, binds them to those orders. It cited authorities establishing the contractual status of consent orders and the limited grounds for setting them aside, requiring exceptional unfairness which was not shown here.

Regarding sentencing, the court noted the trial judges erred in considering the existence of confiscation orders as a reason for suspending sentences, as the 2002 Act precludes this. Despite the leniency, the court declined to increase sentences on appeal, emphasizing the importance of access to justice and the exceptional nature of such intervention.

Finally, the court stressed the seriousness of cigarette smuggling offences, the scale of duty evaded, and the need for substantial custodial sentences as a deterrent in such cases.

Holding and Implications

The court DISMISSED THE APPEALS, upholding the confiscation orders made against the appellants.

The direct effect is that the confiscation orders consented to by the appellants remain binding and enforceable. The court confirmed the principle that consent orders have contractual effect and are not lightly set aside, even if based on erroneous legal advice. The decision clarifies the application of the 2001 Tobacco Regulations and the legal test for benefit in confiscation proceedings under section 170(2) offences, emphasizing the distinction between personal civil liability for duty and criminal benefit derived from participation in a joint enterprise involving smuggled goods.

No new precedent was established beyond affirming existing principles and applying them to the factual context of the appeals.