Last Updated on June 17, 2019 by LawEuro
FIRST SECTION
DECISION
Application no. 23178/13
Vjacheslav DOSTENKO
against the United Kingdom
The European Court of Human Rights (First Section), sitting on 11 December 2018 as a Committee composed of:
AlešPejchal, President,
Tim Eicke,
Gilberto Felici, judges,
and Renata Degener, Deputy Section Registrar,
Having regard to the above application lodged on 26 March 2013,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,
Having deliberated, decides as follows:
THE FACTS
1. The applicant, Mr VjacheslavDostenko, is a British national, who was born in 1967 and lives in London. He was represented before the Court by Mr M. Newby of QualitySolicitors Jordans, a lawyer practising in Doncaster.
2. The United Kingdom Government (“the Government”) were represented by their Agent, Mr C. Wickremasinghe of the Foreign and Commonwealth Office.
A. The circumstances of the case
3. The facts of the case, as submitted by the parties, may be summarised as follows.
1. The background facts
4. The applicant and another defendant (“K”) ran a business together which the Crown alleged was a vehicle for cheating the public revenue through fraudulent tax repayment claims. During their criminal trial the defence accepted that the amount paid out by the revenue in response to the fraudulent claims for tax rebates was in excess of GBP 1,600,000.
5. On 9 December 2009 the applicant and K were each convicted of one count of cheating the public revenue. The applicant was also convicted of a second count of cheating the public revenue, which related to the continued operation of the fraudulent activity following K’s arrest on 21 August 2008.
6. K was sentenced to eight years’ imprisonment. For procedural reasons the applicant was not sentenced until 15 October 2010, when he received concurrent sentences of seven years and three years on the first and second counts respectively.
7. Following the conviction of the applicant and K, confiscation proceedings were commenced. The applicant appeared before the Crown Court in relation to these proceedings on 10 December 2009, 7 March 2011, 4 July 2011, 2 December 2011, 27-29 February 2012 and 26 March 2012. On each occasion he was represented by a solicitor and counsel of his choosing. Prior to the confiscation hearing, which took place on 27‑29 February 2012, there was advance disclosure of the basis on which the prosecution alleged that the applicant had benefitted from his offending and had realisable assets with which to pay any confiscation order. At the hearing, during which he had the opportunity to both adduce evidence and give oral evidence, he continued to deny any involvement in the cheat.
8. On 26 March 2012 confiscation orders were made against the applicant and K. The prosecution had contended that the applicant’s benefit amounted to GBP 1,665,567.29 and K’s to GBP 1,584,733.20, the difference reflecting the applicant’s additional offending. The applicant did not dispute the benefit figure. K did, arguing, inter alia, that because half of the amount paid out had been in untraceable payable orders, it could not be proven that the defendants in fact received that half of the proceeds. However, the judge rejected that argument and found as a fact that the prosecution’s assessment of the benefit figure was correct.
9. The judge also considered the question of apportionment. After considering the evidence regarding the level of each defendant’s involvement in the fraud, he rejected their contention that the sum should be apportioned:
“these men were both involved at a very high level indeed in the […] fraud. They both worked jointly, they both jointly benefited and they are each jointly liable for the full sum of benefit.”
10. The judge finally considered the question of the recoverable amount. He noted that in respect of each defendant only GBP 28,806.12 in assets had been discovered. However, as there was no cogent evidence as to what had happened to the remaining money, he could not find that it was unavailable to the defendants. He therefore held that in respect of each defendant the available amount was the benefit figure.
11. Consequently, confiscation orders were made in the amounts of GBP 1,665,567.29 for the applicant and GBP 1,584,733.2 for K, with sentences in default of six years.
2. Appeal to the Court of Appeal
12. On 20 February 2012 the applicant had applied for leave to appeal against conviction. He had also applied for an adjournment of the confiscation proceedings pending the outcome of the appeal proceedings but this application was refused.
13. On 25 June 2012 the applicant applied for leave to appeal against sentence. On the same day he also applied for leave to appeal against the confiscation order. He argued only two points: first, that the recoverable amount should have been apportioned between the defendants because they had acted as equal partners, failing which the order amounted to “double recovery” and was therefore disproportionate; and secondly, that the judge had failed properly to consider whether the applicant’s realisable assets were less than the recoverable amount.
14. Although the applicant was represented by counsel, he included some forty pages of his own grounds. Insofar as they related to the confiscation order and raised distinct points to those of counsel, they argued that there was abuse and bias in the judge’s calculation of the benefit figure and in his decision not to adjourn the confiscation proceedings pending a decision on the application for permission to appeal against conviction.
3. The single judge’s rulings
15. On 3 October 2012 each of these applications was refused by a single judge.
16. With regard to the appeals against conviction and sentence, permission was refused because the applications had been made out of time and the judge refused to extend time as no sufficient explanation had been given for the long delay. In any case, he noted that there was no proper basis for allowing an appeal.
17. In relation to the confiscation order, although the application for permission to appeal had been lodged marginally out of time the judge refused permission to appeal because he did not consider that there were any grounds for challenging the order. In particular, he found that the judge had been right not to apportion the sum, having found that the applicant and K were jointly responsible for the fraud.
4. The full Court of Appeal’s ruling
18. The applicant renewed his application at an oral hearing. However, on 20 December 2012 the full Court of Appeal refused his application for permission to appeal. In relation to the appeals against conviction and sentence, the court agreed that there was no good reason to grant an extension of time for the appeal and it could therefore be dismissed on that ground only. However, it noted that the single judge had carefully considered in meticulous detail all the applicant’s many grounds of appeal and it agreed entirely with his conclusion that there was no properly arguable ground of appeal against conviction or sentence and that those applications were wholly without merit.
19. In respect of the appeal against the confiscation order, the court noted that the application was marginally out of time, but indicated that it would primarily rule on the merits.
20. It found first, that it was clearly established by authority that a confiscation order might properly require a defendant to pay the whole of the sum which he has obtained jointly with one or more others (see, for example, R v. May [2008] UKHL 28and R v. Waya[2012] UKSC 51). It further found that the defendant had not discharged the burden of proof necessary to demonstrate that the available amount was less than the benefit figure. It noted, in particular, that
“no attempt was made in the confiscation proceedings by the applicant, nor has any been made since, to give any explanation of what had happened to the money ”
21. The applicant’s separate grounds were dismissed as they were not properly arguable and disclosed no proper basis for an appeal.
5. The sentences in default
22. The applicant did not pay the sum due under the confiscation order and on 12 June 2012 the Magistrate’s Court activated his sentence in default of payment.
23. K, who was not a British national, was deported without paying the sum due under the confiscation order and without serving the sentence in default.
B. Relevant domestic law and practice
1. The Proceeds of Crime Act 2002
24. Confiscation proceedings are governed by the Proceeds of Crime Act 2002 (“the 2002 Act”). Section 6(4) sets out the approach to be followed by the court:
“(a) it must decide whether the defendant has a criminal lifestyle;
(b) if it decides that he has a criminal lifestyle it must decide whether he has benefited from his general criminal conduct;
(c) if it decides that he does not have a criminal lifestyle it must decide whether he has benefited from his particular criminal conduct.”
25. Under section 76(4)-(7), a person benefits from general or particular criminal conduct if he obtains property or pecuniary advantage as a result of or in connection with the conduct, and his benefit is the value of the property or pecuniary advantage obtained. Pursuant to section 10, if a court finds that a defendant has a “criminal lifestyle”, it must apply four rebuttable “assumptions” for the purpose of deciding whether and to what extent he has benefitted from his “general criminal conduct”.
26. Pursuant to section 6(5), where the court decides that the defendant has benefited from the conduct referred to it must calculate the recoverable amount and make a confiscation order requiring him to pay that amount.
27. Section 7 provides guidance on fixing the recoverable amount:
“(1) The recoverable amount for the purposes of section 6 is an amount equal to the defendant’s benefit from the conduct concerned.
(2) But if the defendant shows that the available amount is less than that benefit the recoverable amount is–
(a) the available amount, or
(b) a nominal amount, if the available amount is nil.”
28. Section 6(7) requires any question concerning the benefit or recoverable amount to be decided on a balance of probabilities.
29. Following the making of a confiscation order, section 23 gives the Crown Court power to vary the order to a lesser amount if there are grounds to conclude that the available or realizable assets are insufficient to satisfy it. This may be done on application by the defendant himself or any receiver who is appointed to enforce the order.
2. The Serious Crime Act 2015
30. Paragraph 19 of Schedule 4 to the Serious Crime Act 2015 (“the 2015 Act”) amended the 2002 Act with the effect that a confiscation order could only be made if or to the extent that it would not be disproportionate to require the defendant to pay the recoverable amount.
3. Case-law in respect of confiscation
(a) R. Sharma [2006] EWCA Crim 16
31. In R v. Sharma the Court of Appeal for England and Wales (Criminal Division) found that the 1988 Act (the provisions of which were similar to those contained in the 2002 Act) focused on the individual benefit obtained by each defendant, the total amount of which was not limited by the amount of the victim’s loss (paragraph 19 of its judgment). The court went on to observe (at paragraph 25):
“In our judgment, since the Act is concerned to force a defendant to surrender the benefit he has obtained from his criminal activity, so long as the benefit he obtained is correctly calculated, it cannot be disproportionate for him to be made accountable for what he obtained. The amount of the benefit he obtained is not affected by the amount which might also be obtained by others to whom he transfers any part of the benefit. The amount of money which might be recovered pursuant to a confiscation order is irrelevant. In every case, at the time a confiscation order is made, there can be no certainty that the amount to be paid will be paid and thus, where more than one confiscation order is made in respect of a victim’s loss, the question of double recovery may not arise.”
(b) R v. May [2008] UKHL 28
32. R v. May concerned several defendants who had been jointly responsible for fraud. The trial judge had decided that the property obtained had been held jointly by them, that each had benefited in the amount jointly held, and that there was no requirement to apportion that amount between them. In confirming that approach, the House of Lords observed (at paragraph 45 of the Report from the Appellate Committee):
“There might be circumstances in which orders for the full amount against several defendants might be disproportionate and contrary to Article 1 of the First Protocol, and in such cases an apportionment approach might be adopted, but that was not the situation here and the total of the confiscation orders made by the judge fell well below the sum of which the Revenue had been cheated.”
33. It went on to state at paragraph 46:
“The sum which the appellant, jointly with others, was found to have fraudulently obtained from HM Customs and Excise was, in law, as much his as if he had acted alone. That conclusion leads ineluctably to the further conclusions that he benefited from his offending, and benefited to an extent substantially greater than the confiscation order made against him … The order made was less than his realisable assets. It is entirely consistent with the legitimate objects of the legislation, and it requires that he be ordered to pay such sum, which involves no injustice or lack of proportionality. The legislation is, as Lord Steyn described it in R v Rezvi [2003] 1 AC 1099, para 17, ‘a precise, fair and proportionate response to the important need to protect the public’.”
34. Finally, as part of the endnote to the Report, it was stated (at paragraph 48(1):
“The legislation is intended to deprive defendants of the benefit they have gained from relevant criminal conduct, whether or not they have retained such benefit, within the limits of their available means. It does not provide for confiscation in the sense understood by schoolchildren and others, but nor does it operate by way of fine. The benefit gained is the total value of the property or advantage obtained, not the defendant’s net profit after deduction of expenses or any amounts payable to co‑conspirators.”
(c) R. v. Green [2008] UKHL 30
35. In R. v. Green (heard and delivered at the same time as May) the House of Lords reached the same conclusion in respect of equivalent confiscation provisions in the Drug Trafficking Act 1994. It added that it could not regard it as disproportionate to make an order depriving a defendant of a benefit which he had in fact and in law obtained, within the limits of his realisable assets. It noted that challenges to the proportionality of the confiscation regime (as in Phillips v. the United Kingdom, no. 41087/980 ECHR 2001‑VII and in its own judgment in R v. Rezvi [2002] UKHL 1, [2003] 1 AC 1099) had not succeeded. Finally, counsel for Green had sought to argue that the possibility of “multiple recovery” of the same sum from different offenders was not sanctioned by the relevant international conventions on the matter (including the Council Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime) or by the confiscation regimes of Australia, Canada, New Zealand or the United States. The House of Lords rejected that submission, stating that, in construing a United Kingdom statute, the meaning of which it judged to be clear, it could not be influenced by the legislation of other countries, even if (as might be the case) those countries had chosen to give effect to common international obligations in a different way.
(d) R v Waya [2012] UKSC 51
36. In R v Waya the Supreme Court analysed the compatibility of the 2002 Act with the Convention. They clarified that it would be open to a judge to refuse to make a confiscation order on the ground that it would be wholly disproportionate and a breach of Article 1 of Protocol No. 1. However, they stated that:
“26. It is apparent from the decision in May that a legitimate, and proportionate, confiscation order may have one or more of three effects:
(a) it may require the defendant to pay the whole of a sum which he has obtained jointly with others;
(b) similarly it may require several defendants each to pay a sum which has been obtained, successively, by each of them, as where one defendant pays another for criminal property;
(c) it may require a defendant to pay the whole of a sum which he has obtained by crime without enabling him to set off expenses of the crime.
These propositions are not difficult to understand. To embark upon an accounting exercise in which the defendant is entitled to set off the cost of committing his crime would be to treat his criminal enterprise as if it were a legitimate business and confiscation a form of business taxation. To treat (for example) a bribe paid to an official to look the other way, whether at home or abroad, as reducing the proceeds of crime would be offensive, as well as frequently impossible of accurate determination. To attempt to enquire into the financial dealings of criminals as between themselves would usually be equally impracticable and would lay the process of confiscation wide open to simple avoidance. Although these propositions involve the possibility of removing from the defendant by way of confiscation order a sum larger than may in fact represent his net proceeds of crime, they are consistent with the statute’s objective and represent proportionate means of achieving it….”
(e) R v Ahmad and Others; R. v. Fields and Others [2014] UKSC 36
37. In R v Ahmad and Fields the Supreme Court again considered the proper approach for the court to adopt, and the proper orders for the court to make, in confiscation proceedings where a number of criminals (some of whom might not be before the court) had between them acquired property or money as a result of committing an offence for which all or only some of them had been convicted in the trial which led to the proceedings. Although both sets of defendants accepted that they obtained their respective benefits jointly, they contended that the full amount should not be recovered from each of them. Counsel for the Ahmad defendants accepted that it was appropriate for each of the appellants to be liable for the total amount, but contended that their liability should be treated as joint and several in accordance with normal common law principles, so that they should be required to pay that sum between them. If the two appellants were liable for GBP 16.1 million, and one paid GBP 12.6 million, both he and the other appellant would continue to be liable, but only for GBP 3.5 million, and if one or both paid the GBP 3.5 million, there would be no further liability on either of them. Counsel for the Fields defendants raised a more fundamental challenge to the approach adopted by the Court of Appeal, arguing that it was wrong for each of the defendants to be liable for the total amount. Instead, the courts below ought to have apportioned the benefit between the three defendants, and assessed their individual liability accordingly. If this proved impossible the presumption should be of an equal split.
38. Lord Neuberger, Lord Hughes and Lord Toulson (with whom Lord Sumption and Lord Reed agreed) identified three difficulties inherent in the process of recovering the proceeds of crime from those convicted of offences:
“36. First, there are the practical impediments in the way of identifying, locating and recovering assets actually obtained through crime and then held by the criminals. The defendants will often, indeed normally, be as misleading and uninformative as they can, and the sophistications and occasional corruptions in the international financial community are such as to render the task of locating the proceeds of crime very hard, often impossible. Secondly, again owing to the reticence and dishonesty of the defendants, there will often be considerable, or even complete, uncertainty as to (i) the number, identity and role of the conspirators involved in the crime, and (ii) the quantum of the total proceeds of the crime, or how, when, and pursuant to what understanding or arrangement, the proceeds were, or were to be, distributed between the various conspirators. Thirdly, there will be obvious difficulties in applying established legal principles to the allocation of liability under the 2002 Act, as the rules relating to matters such as acquisition, joint and several ownership, and valuation of property and interests in property, and the rights and liabilities of owners, both as against the world and inter se, have been developed by the courts over centuries by reference to assets which were lawfully acquired and owned.”
39. Bearing in mind both the guidance given in previous decisions and the need to ensure, so far as was consistent with the wording of the 2002 Act, that the recovery process did not strip defendants of their Convention rights, in particular their rights under Article 6 and Article 1 of Protocol No. 1, they found that:
“…where property is obtained as a result of a joint criminal enterprise, it will often be appropriate for a court to hold that each of the conspirators “obtained” the whole of that property. That is the view expressed in May, para 48(6), first sentence (although the word “owns” is probably inappropriate), in Green, para 15, and in Allpress, para 31 (as quoted and approved in Mackle, para 65). However, that will by no means be the correct conclusion in every such case.
… … …
49. It is clear from May at paragraph 34 that the amount of the benefit which a defendant obtains is not affected by the amount which might be obtained by others to whom he transfers any part of it (any more than it can be affected by his payment out of the expenses of his criminal venture). However, there could be other cases where the court may be satisfied on the evidence that individual defendants obtained (i.e. assumed the rights of an owner over) only a specific part or share of the property which had been acquired as a result of the criminal activity. …
50. There has sometimes been a tendency to equiparate joint involvement in the crime with joint ownership of the fruits of the crime. But the fact that the defendants were jointly responsible for the crime in question does not automatically justify a conclusion that they jointly obtained the resulting property, a point well made by the Court of Appeal in Allpress, para 31.
51. The tendency to conclude that property is jointly obtained by criminals may also be attributable to the fact that it is often difficult to determine how the asset(s) obtained has, or have, been distributed between the defendants. Judges in confiscation proceedings should be ready to investigate and make findings as to whether there were separate obtainings. Sometimes of course this is too difficult or impossible. In many cases the court will not have before it all the conspirators for a variety of reasons. The indictment may well name other conspirators (as well as including the usual phrase “and other persons unknown”). A court should never make a finding that there has been joint obtaining from convenience, or worse from laziness. Where the evidence supports a finding that the asset acquired from a crime was obtained effectively on a several basis, the judge should make it, but there are cases in which a finding of joint obtaining is the proper, indeed the only available finding, especially but not only where an inference or presumption that the defendants before the court were the only joint obtainers would be contrary to the probabilities.”
40. Where a finding of joint obtaining was made, the Supreme Court preferred the approach of Counsel for the Ahmad defendants for assessing the recoverable amount:
“72. In our view [counsel for the Ahmad defendant’s] argument is as compelling as it is simple. To take the same proceeds twice over would not serve the legitimate aim of the legislation and, even if that were not so, it would be disproportionate. The violation of A1P1 would occur at the time when the state sought to enforce an order for the confiscation of proceeds of crime which have already been paid to the state. The appropriate way of avoiding such a violation would be, as [counsel for the Ahmad defendant’s] has submitted, for the confiscation order made against each defendant to be subject to a condition which would prevent that occurrence.
… … …
74. Accordingly, where a finding of joint obtaining is made, whether against a single defendant or more than one, the confiscation order should be made for the whole value of the benefit thus obtained, but should provide that it is not to be enforced to the extent that sum has been recovered by way of satisfaction of another confiscation order made in relation to the same joint benefit.”
41. According to the Supreme Court, the approach for which counsel for the Fields defendants contended:
“would render the prospect of full recovery even more unlikely than it already is. That is because, in many multi-party sophisticated crimes, it is unusual to have all the conspirators before the court, the defendants who are before the court will say that the other conspirators received all the property, and frequently many of those other conspirators will never be apprehended. … [F]or similar reasons, it would render the task of a judge at a confiscation hearing more difficult than it already is, and would make it correspondingly easier for an unscrupulous defendant (and most defendants in these cases appear, unsurprisingly, to be unscrupulous) to seek to avoid, or at least to minimise, his liability.
56. In many cases it is often completely unclear how many people were involved in the crime, what their roles were, and where the money went. As a result, if the court could not proceed on the basis that the conspirators should be treated as having acquired the proceeds of the crime together, so that each of them “obtained” the “property”, it would often be impossible to decide what part of the proceeds had been “obtained” by any or all of the defendants. There is obvious cause for concern about having to inquire into the financial dealings between criminals who have together obtained property, especially given that the ringleaders are often not even before the court. It is one thing for the court to have to decide whether a defendant obtained any property, which the 2002 Act requires. It is another thing for the court to have to adjudicate on the respective shares of benefit jointly obtained, which the Act does not appear to require.”
(f) R. v. Amer Dad [2014] EWCA Crim 2478
42. In R. v. Amer Dad the Court of Appeal considered a case in which no Ahmad proviso had been included by the sentencing court. The court held that the proviso had not been required on the facts of the case because there was no prospect of double recovery. Had the prospect arisen, they considered that the matter could properly be addressed at the enforcement stage, since the law, as now established, was that the Crown could not make more than a single recovery of jointly obtained benefit.
COMPLAINTS
43. The applicant complained that his rights under Article 6 and Article 1 of Protocol No. 1 have been violated because the Crown Court, in making the confiscation order, did not adopt an apportionment approach in calculating either the benefit or the recoverable amount.
THE LAW
A. Article 1 of Protocol No. 1 to the Convention
44. The applicant complained that the confiscation order was not proportionate within the meaning of Article 1 of Protocol No. 1, which provides as follows:
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
1. The parties’ submissions
(a) The Government
45. The Government submitted that the applicant’s complaint under Article 1 of Protocol No. 1 was manifestly ill-founded and should be rejected pursuant to Article 35 § 3(a) of the Convention.
46. Relying on Phillips v. the United Kingdom, no. 41087/98, ECHR 2001‑VII, the Government argued that, given the importance of the aims pursued by confiscation legislation, a confiscation order was a control on property that the national authorities were entitled to enforce consistently with Article 1 of Protocol No. 1. Moreover, in Gogitidze and Others v. Georgia, no. 36862/05, 12 May 2015 the Court had stated that the national authorities were to be accorded a wide margin of appreciation in deciding on the appropriate means of controlling the use of property through confiscation.
47. According to the Government, the rule by which a person may in an appropriate case be jointly liable for the entirety of criminally obtained benefit in the case of joint offenders was well within the broad discretion conferred on the national authorities under Article 1 of Protocol No. 1. For example, in Minhas v. the United Kingdom (dec.), no. 7618/07, 10 November 2009 the Court had accepted that it was not in principle inconsistent with the requirements of Article 6 for a defendant to be made individually responsible for the entirety of the criminal benefit obtained as a result of an offence committed by multiple offenders. Furthermore, the domestic courts had repeatedly concluded, at the highest appellate level, that there were sound practical reasons for this rule, both in terms of calculating an offender’s benefit and in terms of enforcement.
48. Finally, the Government submitted that the fact it fell to the applicant to show that his realisable assets were less than his benefit was not inconsistent with Article 1 of Protocol No. 1; and that the judge’s conclusion on the evidence that he had failed to discharge that burden was not open to question.
(b) The applicant
49. The applicant submitted that, even making due allowance for the importance of recovering the proceeds of crime, and the facts found by the judge, the order made against him was disproportionate in breach of the requirements of Article 1 of Protocol No. 1. The confiscation order had been made before the Supreme Court gave its judgment in R v. Waya and the judge had therefore not been required to consider proportionality in determining either the benefit or the recoverable amount.
50. In particular, the applicant argued that in calculating the benefit, a fifty-fifty split between him and K would have neither reduced the prospect of recovery nor made the judge’s task more difficult. Alternatively, having found them jointly liable, in calculating the recoverable amount he was obliged, consonant with Article 1 of Protocol No. 1, to consider whether it was proportionate to conclude that the entirety of the benefit figure was available to the applicant. On any view, the applicant was not the sole beneficiary and it was disproportionate to order him to pay the full amount, especially where another high-level beneficiary had been identified.
51. In this regard, the applicant contended that his case could be distinguished from those where the other offenders were not before the domestic courts, as in these cases it would be more difficult to ascertain whether and to what extent there might be some apportionment.
52. Finally, the applicant submitted that the impact of the confiscation order, as well as imposing a substantial debt, was to move the applicant’s case into a higher bracket for the purposes of fixing the default term.
2. The Court’s assessment
(a) General principles
53. The Court has repeatedly stated that a confiscation order constitutes a “penalty” within the meaning of the Convention. It therefore falls within the scope of the second paragraph of Article 1 of Protocol No. 1, which, inter alia, allows the Contracting States to control the use of property to secure the payment of penalties. However, this provision must be construed in the light of the general principle set out in the first sentence of the first paragraph and there must, therefore, exist a reasonable relationship of proportionality between the means employed and the aim sought to be realised (see, among many examples, G.I.E.M. S.R.L. and Others v. Italy (merits) [GC],nos. 1828/06 and 2 others, § 293, 28 June 2018 and Phillips, cited above, § 51). Consequently, the Court must determine whether a fair balance has been struck between the demands of the general interest in this respect and the interest of the individual concerned. In so determining, the Court has recognised that the State enjoys a wide margin of appreciation with regard to the means to be employed and to the question of whether the consequences are justified in the general interest for the purpose of achieving the objective pursued (see G.I.E.M. S.R.L. and Others, cited above, § 293; see also Gogitidze, cited above, § 108).
54. An interference with Article 1 of Protocol No. 1 will be disproportionate where the property-owner concerned has had to bear “an individual and excessive burden”, such that “the fair balance which should be struck between the protection of the right of property and the requirements of the general interest” is upset (see Sporrong and Lönnroth v. Sweden, 23 September 1982, § 73, Series A no. 52 and Paulet v. the United Kingdom, no. 6219/08, § 65, 13 May 2014). The striking of a fair balance depends on many factors (see AGOSI v. the United Kingdom, 24 October 1986, § 54, Series A no. 108).
55. Although the second paragraph of Article 1 of Protocol No. 1 contains no explicit procedural requirements, the Court must consider whether the proceedings as a whole afforded the applicant a reasonable opportunity for putting his case to the competent authorities with a view to enabling them to establish a fair balance between the conflicting interests at stake (see Paulet, cited above, § 65; AGOSI, cited above, § 55; and Jokela v. Finland, no. 28856/95, § 55, ECHR 2002‑IV).
(b) Application of the general principles to the present case
56. The Court notes at the outset that the confiscation order was made by a judge following a number of hearings at which the applicant was represented by a solicitor and barrister of his choosing (see paragraph 7 above). He received advance disclosure of the material relied on by the prosecution and he was permitted to adduce his own evidence in response (see paragraph 7 above). Although the burden of proof passed to him to demonstrate, on a balance of probabilities, that his benefit was less than the full value of the proceeds of the crime, the Court has repeatedly found that the shifting of the burden of proof to the applicant in the calculation of the benefit is compatible with Article 6 § 1 of the Convention (see Phillips, cited above, § 44, Grayson and Barnham v. the United Kingdom, nos. 19955/05 and 15085/06, § 41, 23 September 2008, and Minhas, cited above).
57. The confiscation order was, however, made before the Supreme Court confirmed, in R v. Waya, that a judge could refuse to make a confiscation order on the ground that it would be wholly disproportionate and a breach of Article 1 of Protocol No. 1 (see paragraph 36 above). In Paulet, the domestic proceedings had predated R v. Waya. Theapplicant had therefore initially framed his challenge to the confiscation order on the basis that it would be “oppressive” or an “abuse of process”. When he later sought to rely on Article 1 of Protocol No. 1, this analysis was not adopted by the Court of Appeal. Consequently, the Court held that “the scope of the review carried out by the domestic courts was too narrow to satisfy the requirement of seeking the “fair balance” inherent in the second paragraph of Article 1 of Protocol No. 1” (Paulet, cited above, § 68).
58. Nevertheless, the present case is distinguishable from Paulet as the Court of Appeal would appear to have considered the proportionality of the confiscation order in refusing permission to appeal. First of all, although the making of the confiscation order pre-dated the judgment of the Supreme Court in R v. Waya by some eight months, the Court of Appeal decision post-dated it by one month. In his application for permission to appeal the applicant, while not specifically invoking Article 1 of Protocol No. 1, had argued that the failure to apportion rendered the confiscation order disproportionate. Although the reasons given by the Court of Appeal for refusing permission to appeal were brief, it did refer to R v. Waya. Secondly, unlike Mr Paulet, who complained more generally about the proportionality of his confiscation order, the complaint before the Court in the present case relates exclusively to the proportionality of the failure to apportion either the benefit or the recoverable amount. In considering the question of apportionment, the domestic courts, even before R v. Waya, had framed their analysis in terms of proportionality within the meaning of Article 1 of Protocol No. 1 (see R v. Sharma, at paragraph 31; R v. May, at paragraphs 32-34 above; and R v. Green, at paragraph 35 above). Therefore, insofar as the Court of Appeal found it to be “clearly established that a confiscation order may properly require a defendant to pay the whole of a sum which he has obtained jointly with one or more others” (see paragraph 20 above), it was clearly referring to the fact that such a confiscation order could be made without being disproportionate and in breach of Article 1 of Protocol No. 1.
59. Consequently, the Court considers that the confiscation proceedings, taken as a whole, afforded the applicant a reasonable opportunity for putting his case to the competent authorities with a view to enabling them to establish a fair balance between the conflicting interests at stake.
60. As it is not for the Court to substitute its own assessment of the evidence for that of the national courts, the confiscation order made in the present case would only breach Article 1 of Protocol No. 1 to the Convention if a failure to apportion was inherently incompatible with that Article. While the Court has not, to date, considered the question of apportionment in relation to Article 1 of Protocol No.1, in Minhas it considered a similar issue in relation to a complaint under Article 6 § 1 of the Convention. In that case, the applicant had been convicted of robbery. Although witnesses indicated that three men had been involved, the applicant refused to provide details of his accomplices. Nevertheless, in the confiscation proceedings he argued that the proceeds should be apportioned. The court declined to apportion the benefit since the applicant, despite being legally represented, had declined to provide any information about what had happened to the proceeds, and had provided no evidence to support his contention that the benefit should be apportioned.
61. After the Court of Appeal refused permission to appeal, Mr Minhas complained to this Court under Article 6 § 1 of the Convention. However, the Court considered that it was not inappropriate for the burden to pass to the applicant to demonstrate, on a balance of probabilities, that the proceeds of the robbery had been apportioned and that his benefit was therefore less than the full value of the proceeds. Such information fell within the applicant’s particular knowledge and the burden on him would not have been difficult to meet. Similarly, the Court was satisfied that it was not unduly burdensome to the applicant to demonstrate, once the amount of the benefit had been assessed, that his assets were insufficient to meet a compensation order made out for that sum.
62. Having regard to the wide margin of appreciation afforded to Member States in determining the means to be employed and whether the consequences are justified in the general interest for the purpose of achieving the objective pursued (see G.I.E.M. S.R.L. and Others, cited above, § 293 and Gogitidze, cited above, § 108), the Court considers that the approach of the national courts in respect of apportionment cannot be impugned. In R v Ahmad and Fields the Supreme Court identified a number of difficulties inherent in determining the benefit figure and, in particular, in determining how and to what extent any benefit was apportioned between co-conspirators (see paragraphs 38 and 41 above). Most significantly, it noted that it is often completely unclear how many people were involved in a crime, what their roles were, and where the money went, with the consequence that it would often be impossible for the court to decide what part of the proceeds had been “obtained” by any or all of the defendants. On the other hand, as the Court noted in Minhas, this information falls within the defendant’s particular knowledge and the burden on him would not be difficult to meet.
63. Like the applicant in Minhas, the applicant in the present case was given a full opportunity to demonstrate how the proceeds of the crime had been apportioned, but instead elected to deny all involvement (see paragraph 7 above). While the case differs from Minhas to the extent that the applicant was tried and convicted together with an accomplice, the Court does not consider this fact to be material to its Article 1 of Protocol No. 1 analysis, since it remained the case that the domestic court could not be sure if there were other as yet unidentified persons involved, and in any event without the assistance of the convicted defendants it was not in a position to determine what part of the proceeds had been obtained by whom.
64. Consequently, the Court considers that a failure to apportion the proceeds of a crime is not inherently incompatible with Article 1 of Protocol No. 1 to the Convention. It would agree with the Supreme Court that it would not serve the legitimate aim of the legislation for the State to take the same proceeds twice over, and if it were to do so, the measure would likely be disproportionate (see paragraph 40 above). However, that was not the case here, since neither the applicant nor K has paid the sums due under their respective confiscation orders (see paragraphs 22-23 above). Furthermore it is now clear that, following R v Ahmad and Fields, the State could not enforce the confiscation order against the applicant to the extent that any sum had been recovered by way of satisfaction of the confiscation order made against K (see paragraphs 40 and 42 above).
65. In light of the foregoing, the Court considers the applicant’s complaint under Article 1 of Protocol No. 1 to the Convention to be manifestly ill-founded. It must therefore be rejected pursuant to Article 35 § 3(a) of the Convention.
B. Article 6 of the Convention
66. The applicant’s complaints under Article 6 of the Convention mirror those made in respect of Article 1 of Protocol No. 1. In view both of the Court’s conclusions in Minhas, and its finding, at paragraph 59 above, that the confiscation proceedings, taken as a whole, afforded the applicant a reasonable opportunity for putting his case to the competent authorities with a view to enabling them to establish a fair balance between the conflicting interests at stake, it considers that this complaint must also be rejected as manifestly ill-founded within the meaning of to Article 35 § 3(a) of the Convention.
For these reasons, the Court, unanimously,
Declares the application inadmissible.
Done in English and notified in writing on 10 January 2019.
Renata Degener AlešPejchal
Deputy Registrar President
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