The Supreme Court restored a confiscation order of £57,458 against Lodvik Guraj after the Court of Appeal had quashed it for procedural error. The sentencing judge had made forfeiture and deprivation orders too soon, and the Crown had then lost track of the confiscation proceedings for about a year. Those mistakes did not remove the court’s power to confiscate, because Guraj suffered no unfairness.
What went wrong in the Crown Court
On 11 June 2012 Lodvik Guraj pleaded guilty to supplying heroin and to money laundering. About 1.5 kg of heroin, some amphetamine and cocaine, processing equipment and substantial cash were found at his home. The offences were lifestyle offences under the Proceeds of Crime Act 2002. On 16 July 2012 he was sentenced to terms of imprisonment totalling five years and four months. The judge forfeited the drugs and deprived him of a car, a laptop, five mobile telephones, some scales, the press and a money-counting machine, because they had been used for crime. She directed that confiscation statements be served by 9 November 2012, with a hearing about two weeks later.
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Guraj provided the required information in September rather than August. The Crown Prosecution Service then lost sight of the case for a year and did not serve its statement. Hearings on 7 January and 31 March 2014 were abortive: the Crown served its statement only after the January hearing and failed to attend in March. Wasted costs orders were made against it. Guraj argued that the court no longer had jurisdiction. Whilst lamenting the Crown’s repeated errors, the judge rejected that argument and, on 9 June 2014, made a confiscation order for £57,458, a sum agreed subject to the jurisdiction point. The Court of Appeal quashed the order.
The statutory sequence
Confiscation is separate from the sentence of imprisonment. The court must make an order if the Crown seeks one and, even if it does not, where the court decides that there should be one. Before a fine, a drug forfeiture order or a deprivation order, confiscation must be taken into account, because it may affect the defendant’s means. Section 14 allows the court to pass sentence first and postpone confiscation for a specified period. That period may be extended, but not normally beyond two years from conviction.
Section 14(11) says that a confiscation order must not be quashed only because of a defect or omission in the procedure connected with applying for or granting a postponement. Section 14(12) removes that protection if, before the confiscation order, the court has imposed a fine or made an order which section 15(2) forbids during the postponement. It was agreed that section 14(12) applied, because the judge had made the forfeiture and deprivation orders before confiscation was considered. Lord Hughes described section 15(2) as a trap. Forfeiting Guraj’s drugs was inevitable, and there were practical reasons to do it at once, but the early orders removed the protection in section 14(11).
Jurisdiction and unfairness
Guraj relied on a further breach. Section 14(8) contemplates that a party’s application to extend a postponement will be made before the current period expires. On the basis accepted in the courts below, the postponement expired at the end of November 2012 and no such application was made. He argued that, with section 14(11) unavailable, this failure destroyed jurisdiction. He accepted that he could point to no injury, unfairness or injustice.
The judge followed R v Soneji and R v Knights. Those cases asked what Parliament intended to follow from a failure to comply, rather than classifying a procedural requirement as mandatory or directory. Postponement is meant to keep sentencing prompt and effective. A procedural failure does not bar an order where it causes no injustice. The judge asked whether Guraj had sustained any injustice, held that even an application two days late could not have been intended to invalidate the proceedings, and made the order.
The Court of Appeal held that, once the postponement had expired, the Crown needed the protection of section 14(11), and that section 14(12) had removed it. Relying on an observation by Lord Judge CJ in R v Neish, it treated section 14(12) as a mandatory prohibition and held that the delays and breaches deprived the court of power to make a confiscation order.
Lord Hughes, with whom Lord Neuberger, Lord Mance, Lord Reed and Sir Declan Morgan agreed, held that section 14(12) only disapplies section 14(11). It does not mean that procedural error then goes to jurisdiction, and it does not curtail Soneji and Knights. Those decisions were given after the subsections were enacted, and their reasoning still governs procedural error generally. The duty to make an order remains, and the postponement rules exist to make sentencing effective. A breach of section 14(8) is not fundamental to jurisdiction: otherwise an application a day late would be fatal even with an acceptable excuse, and perhaps even if the defendant made or consented to it. The court may also extend time of its own motion. The remarks in Neish were obiter, because that case involved no procedural error. Disapplying section 14(11) begins the inquiry; it does not end it.
The question is therefore fairness, not loss of power. A procedural defect leaves jurisdiction in place, but raises a real possibility that an order would be unfair. Unless the court is satisfied that no substantial unfairness will follow, it ought not to make the order. Where section 14(11) applies, a postponement defect alone cannot justify quashing, and unfairness cannot be inferred merely from the breach. Where it does not apply, a procedural defect makes an order wrong if it would cause unfairness which cannot be cured. If there is none, the duty requires the order. Very long inactivity may itself be unfair, if the defendant or others have arranged their affairs on the basis that confiscation had gone away. No unfairness was or could be suggested here, so the judge had applied the correct test. It was unnecessary to decide whether the original postponement had in fact expired.
Verdict: The Court unanimously allowed the Crown’s appeal and restored the £57,458 confiscation order. The procedural errors had caused no unfairness and did not deprive the Crown Court of jurisdiction in this case.
Source: R v Guraj [2016] UKSC 65
