R v Guraj [2016] UKSC 65

Guraj pleaded guilty to drug supply and money laundering. The judge sentenced him, made forfeiture orders, then postponed confiscation. After prosecution delays and procedural breaches, a confiscation order was made. The Supreme Court held jurisdiction survived absent unfairness to the defendant.

Facts

The respondent, Lodvik Guraj, pleaded guilty on 11 June 2012 to offences involving the supply of heroin and money laundering, having been caught with approximately 1.5kg of heroin, other drugs, processing equipment and cash. The offences were lifestyle offences for the purposes of the Proceeds of Crime Act 2002 (POCA).

On 16 July 2012, he was sentenced to five years and four months’ imprisonment. At the same hearing, the judge made forfeiture orders under section 27 of the Misuse of Drugs Act 1971 and deprivation orders under section 143 of the Powers of Criminal Courts (Sentencing) Act 2000 in respect of various items used for crime. The judge also set a timetable for the confiscation process, with the last directed date being 9 November 2012.

The confiscation timetable then slipped badly. The CPS lost sight of the case for a year, two further hearings in January and March 2014 proved abortive owing to prosecution failures, and wasted costs orders were made. Eventually, on 9 June 2014, the judge made a confiscation order in the agreed sum of £57,458, having rejected a jurisdiction challenge by the defence. The Court of Appeal quashed the order, holding that jurisdiction had been lost.

Issues

The principal issue was whether, in circumstances where the trial judge had inadvertently made forfeiture and deprivation orders in breach of section 15(2) of POCA (so disapplying the protective effect of section 14(11) by virtue of section 14(12)), a further procedural breach—the prosecution’s failure to apply for an extension of postponement before the original postponement period expired (section 14(8))—deprived the court of jurisdiction to make a confiscation order.

Arguments

Respondent (Guraj)

It was accepted that the respondent could point to no injury, unfairness or injustice. He argued that the combination of (i) the section 15(2) breach (which removed the protection of section 14(11) via section 14(12)) and (ii) the section 14(8) breach was fatal to jurisdiction. Mr Farrell QC ultimately submitted that section 14(12) was intended to permit invalidation where there had been both a section 15(2) breach and a flagrant procedural error, the flagrancy being a matter of degree requiring factual enquiry.

Appellant (Crown)

The Crown contended that the Soneji approach governed: the question was whether Parliament intended invalidity to follow from procedural error, having regard to the court’s duty to make a confiscation order. Absent unfairness, the order should stand. An alternative analysis was offered that the original postponement remained valid until two weeks after service of the statements of information.

Judgment

The Supreme Court (Lord Hughes giving the leading judgment, with whom Lord Neuberger, Lord Mance, Lord Reed and Sir Declan Morgan agreed) allowed the Crown’s appeal and restored the confiscation order.

Statutory framework

Lord Hughes analysed sections 13, 14 and 15 of POCA. Section 13 directs the court to take account of any confiscation order before imposing fines or making certain financial/property orders. Section 14 governs postponement. Section 14(11) provides that a confiscation order must not be quashed only on the ground of a procedural defect connected with postponement, but section 14(12) disapplies that protection where the court has, before making the confiscation order, imposed a fine or made one of the orders listed in section 13(3). Section 15(2) prohibits the making of such financial/property orders during a postponement period.

The Soneji approach

The Court reaffirmed the approach in R v Soneji [2005] UKHL 49 and R v Knights [2005] UKHL 50, namely that statutory procedural provisions should no longer be classified as mandatory or directory; rather the question is what Parliament intended to be the consequence of non-compliance, bearing in mind the court’s duty to make a confiscation order. That reasoning is broader than sections 14(11) and (12) and applies to procedural errors generally.

Effect of section 14(12)

The Court of Appeal had treated section 14(12) as effectively restoring the pre-Soneji jurisprudence that procedural error went to jurisdiction. Lord Hughes rejected that reading. Section 14(12) removes the peremptory bar in section 14(11) but does not prescribe that invalidity follows from procedural error. The court’s duty to make a confiscation order remains, and the relevant question is whether procedural error has caused unfairness to the defendant. The Court endorsed the reasoning in R v Donohoe [2006] EWCA Crim 2200 and R v Paivarinta-Taylor [2010] EWCA Crim 28, and clarified obiter observations in R v Neish [2010] EWCA Crim 1011.

Application

The judge had applied the correct test. The breach of section 14(8) did not go to jurisdiction; if it did, even a one-day delay or a defence-consented late application would be fatal, which Parliament could not have intended. Since no unfairness whatever was suggested, there was no obstacle to making the order.

Implications

The decision clarifies that, even where section 14(12) disapplies section 14(11) (because forfeiture, deprivation or similar orders have been made in breach of section 15(2)), procedural breaches—including those concerning postponement under section 14(8)—do not automatically deprive the Crown Court of jurisdiction to make a confiscation order. The court retains jurisdiction; the operative question is whether substantial unfairness to the defendant would result from making the order.

The judgment underlines the priority POCA gives to confiscation as a statutory duty of the court, while emphasising that confiscation proceedings must not be allowed to drift. A very long period of prosecutorial inactivity may itself give rise to unfairness, particularly where the two-year permitted period under section 14(3)-(5) is exceeded without exceptional circumstances. Possible cures for unfairness in other cases might include adjustment of the order for proportionality (R v Waya [2012] UKSC 51), variation of sentence under section 155 of the 2000 Act, or quashing the prematurely made forfeiture order rather than the confiscation order.

The decision matters principally to prosecutors, defence practitioners and Crown Court judges and listing officers handling confiscation. It provides reassurance that technical procedural slips will not defeat meritorious confiscation orders, while reminding all involved that the statutory timetable must be respected. Lord Hughes also noted the Law Commission’s interest in reviewing the legislation, identifying as candidates for reform both the sequencing of sentencing and confiscation and the status of procedural requirements.

Verdict: The Crown’s appeal was allowed and the confiscation order of £57,458 was restored.

Source: R v Guraj [2016] UKSC 65