England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL
CRIMINAL DIVISION

		Royal Courts of Justice The Strand London WC2
		23rd November 2000

1. LORD JUSTICE KENNEDY: On 6th September 1999 in the Crown Court at Blackfriars these two appellants, who we grant leave to appeal, pleaded guilty to a joint charge of conspiracy to steal, which was count 1 in the indictment, and the male appellant also pleaded guilty to the offence of arson, which was count 2 in the indictment.
2. On 21st January 2000, before the same court, they were sentenced to periods of imprisonment. So far as the male appellant was concerned, a confiscation order was made in the sum of £33,719.80 to be paid by 30th November 2000, with a period of 12 months' imprisonment in default, consecutive, and a precisely similar order was made in respect of the female appellant.
3. Their joint grounds of appeal against sentence relate solely to the imposition of the confiscation order, and what is complained of as the double punishment effect when that order takes effect.
4. The offences charged arose out of the misappropriation of funds from Sodexho Ltd, at that time known as Gardner Merchant Ltd, by the female appellant who was at that time employed by a subsidiary company of Gardner Merchant called Town and Country Catering Company as a personnel manager. That subsidiary had the catering contract for cricket matches played at Lords Cricket Ground at St John's Wood.
5. The female appellant, assisted by her husband, the male appellant, set up a number of ghost employees who then received payment as if they had been employees of the company. Following investigation some nine people were identified who had never in fact worked at Lords at all.
6. In an attempt to conceal evidence relating to this fraud, the male appellant set fire to the Gardner Merchants premises at Lords Cricket Ground hence the charge of arson. That was on the evening of 26th August 1998, and as a result there was damage to property in excess of £60,000.
7. The amount of the joint benefit to the two appellants in respect of the fraud was agreed on their behalf at the sum of £67,439.60. For the purposes of section 71(6) and section 74 of the Criminal Justice Act 1988, it was agreed that the realisable property held by the female appellant was her share in the equity of the matrimonial home, namely £50,000 and that held by the male appellant totalled £60,874.76, being his half share of the equity in the matrimonial home together with uncashed cheques in the sum of £10.874.76.
8. The judge, when dealing with the question of the sentence to be imposed, declined to make a compensation order against either appellant on the ground that to do so would be oppressive. They would have little or no prospect of obtaining monies in the future, following their release from prison and the employers had their remedies in the civil courts.
9. The admitted benefit being £67,439.60, obtained by the appellants through the conspiracy to steal, that represented a corresponding loss to Gardner Merchant in the amount of those funds which had been misappropriated. We understand that Gardner Merchant is uninsured in respect of that loss and at the time the matter was before the learned judge they indicated, although perhaps not in the clearest terms, that they did intend to pursue a civil claim.
10. The effect of the confiscation orders arithmetically has been to reduce the assets available to £44,435.60 and thus deprive Gardner Merchant of the opportunity to recover the losses it has suffered as a result of the conspiracy to steal and the fire. The Crown, on the face of it, has benefited by virtue of confiscation orders at the expense of those who were in fact the victims of these offences. That is a principal reason why this matter is now brought before this Court.
11. It is submitted in the grounds of appeal that it was wrong in principle to impose a confiscation order, that by the making of the confiscation order, the sentence, as a whole was made manifestly excessive, and that in the light of information which has become available since the sentence was imposed, the confiscation order should no longer be allowed to stand.
12. The information which has become available since the sentences imposed amounts to this: that very shortly after the sentence was passed on 21st January 2000, Sodexho Ltd commenced civil proceedings on the 10th February 2000 and in March of this year obtained judgment in default against each defendant. Pursuant to that judgment, charging orders were obtained against each defendant, against the male defendant in the sum of £105,392.07, and against the female defendant, in the sum of £75,350.76. That, of course, is information which necessarily was not available to the sentencing judge.
13. The structure of the Criminal Justice Act 1988, as amended, is such that where, as here, the prosecution gives appropriate notice, pursuant to section 71 to 83 of that Act, the court must proceed with a view to making a confiscation order. The first step to be taken is that the court must determine whether the defendant has benefited from any relevant criminal conduct. That was done in this case and, as we have already indicated, the benefit was identified and accepted as being in the sum of £67,439.60.
14. The next step to be taken is to show that the amount that might be realised is or is not less than the value of the benefit. That is a step to be taken by or on behalf of the defendant. That, again, was a step which was taken in this case, and the figure which was reached again, as we have indicated, was a figure slightly in excess of £100,000, namely £110,874.76.
15. The court was therefore obliged to make a confiscation order for the amount assessed as the value of the offender's benefit, unless the victim was shown to be taking or had already taken civil proceedings against the defendants in which case the court was put in a position where it was entitled to decide for itself whether to make a confiscation order and, if so, in what sum.
16. As to that, the provisions of section 71(1)(c) of the Criminal Justice Act reads as follows:

"If in a case falling within subsection(1) (b) the court is satisfied that a victim of any relevant criminal conduct has instituted or intends to institute civil proceedings against the defendant in respect of loss, injury or damage, sustained in connection with that conduct, the court have a power instead of a duty to make an order under this section."

17. For present purposes one need not read further.
18. The confiscation order did, by reason of the statutory provision, have to be left out of the account in deciding whether or not to make a compensation order but, as it seems to us, it was the clear intention of Parliament that the victim should come first. As to that section 72(7) provides:

"Where a court makes both a confiscation order and the order for the payment of compensation under section 35 of the Powers of Criminal Courts Act against the same person in the same proceedings and it appears to the court that he will have not sufficient means to satisfy both the orders in full it shall direct that so much of the compensation as will not in its opinion be recoverable because of the insufficiency of his means shall be paid out of any sums recovered under the confiscation order."

19. Where the amount that might be realised is sufficient to enable the court to make both a confiscation order and a compensation order, there is no objection to that course. That is clear from the decision of this Court in the case of R v Brazil, unreported, decided 12th January 1995 and in so far as the decision of this Court in the case of R v Sorrelli, unreported, 25th May 1999, may suggest otherwise, that decision is to be regarded as per incuram.
20. When it is clear that the victim can be properly compensated, and that what remains in the hands of the defendants is a relatively modest sum, the residue of a lifetime's legitimate savings, the court may wish to take that factor into account. But it cannot sensibly be taken into account if the effect of doing so will be to reduce the amount which the victim is entitled to recover by means of civil proceedings. If the compensation order is deflated the victim can sue for the balance. And if and in so far as the judge in the present case thought he would be able to spare the appellants some of their funds, when in reality, at the end of the day, they were going to be liable to those who were the victims of their offences for more than their assets there was simply no route by which he could achieve that perhaps desirable end.
21. Unfortunately, in this case -- and one does have to say this -- the learned judge was not assisted as he might have been by counsel who were representing the appellants before him. We emphasise that they are not counsel who are representing the appellants before us today.
22. They were under the misapprehension that it was to the advantage of their respective clients, if a confiscation order was made against each of them in the sum of £33,719.80, and if no compensation order was made at all. They urged the judge to follow that course and eventually he was persuaded to do so.
23. That, as it seems to us, could not have been to the advantage, at the end of the day, of the appellants or, for that matter, in reality, of anyone else. As Mr Mitchell has pointed out, appearing today on behalf of the Crown in respect of this matter, the purpose of a confiscation order is to remove the benefit of criminal conduct. But the court will always be at pains to ensure that so far as possible the victim is compensated and that, as we have already indicated, ought to be the first priority.
24. If it is possible both to confiscate and to compensate, then that course may indeed be followed. But where, as here, it appears, at the end of the day, and in the light of the judgment which was obtained in the civil proceedings after the confiscation order had been made, that it is not possible to achieve both ends, then the problem does arise as to how the matter should be properly disposed of. Nobody can criticise the learned judge for making a confiscation order in the sum that he did if he was to make a confiscation order. He could have made it in a lesser sum by virtue of the powers to which we have already referred in section 71(1)(c). But by making it in the sum that he did he potentially gave assistance to the victims because, as Mr Mitchell pointed out, if a compensation order was also made, and the compensation order could not be fully satisfied, then the victims could pray in aid the services of the Crown to enforce the confiscation order and by virtue of an order made under section 72(7), that money thus gathered in could be utilised so far as necessary in order to satisfy the remainder of the compensation order which could not otherwise be satisfied.
25. However, in this case, the reality now is that we are considering a situation where the victim is a large public company, which has been able to obtain judgment in civil proceedings, in the sums to which we have referred, with a charging order in respect of the male appellant in the sum of £105,392.07, and in respect of the female appellant in the sum of £75,350.76, together in round figures a total of £180,000, a figure on the face of it well in excess of the actual realisable assets of the two appellants.
26. One course which might be considered appropriate at this stage, would be to make a compensation order against each of the appellants in the sum of £33,719.80 and to leave the confiscation orders undisturbed thus enabling the route to be followed to which we have already referred; that is to say to use the confiscation order if necessary to assist the victims to obtain, so far as possible, full satisfaction of their loss. However Mr Green, appearing on behalf of the victims, does not consider that course to be necessary. So, in the peculiar circumstances of this case, it seems to us that, putting ourselves in the position in which the judge would have been, had he had the benefit of the information which we have and the assistance which we have had from counsel on all sides, he would have exercised his power not to make a confiscation order in respect of either of these appellants and simply to make a compensation order in respect of each of them, in the sum of £33,719.80.
27. The fact that we adopt that course in this case does not mean and is not intended to mean that it is not appropriate, in the normal run of cases, to consider making a confiscation order, even where there are civil proceedings that and we have attempted to make it as clear as possible, there are positive benefits to those who are in the position of being victims, if that course is followed. Accordingly, to the extent that we have indicated these appeals are allowed.
28. LORD JUSTICE KENNEDY: Mr Keith you may have your costs.
29. MR LESLEY: I was in doubt whether to ask for time to pay, I checked. I do, I think I am going to.
30. LORD JUSTICE KENNEDY: Tell us where you are looking.
31. MR LESLEY: At paragraph 6-117, the Powers of the Crown Court to allow time for payment, section 34, page 783. Right at the bottom of the page. Enforcing orders as to costs and compensation.
32. LORD JUSTICE KENNEDY: How much do you need?
33. MR LESLEY: I ask for 180 days, my Lord, the reason being that the house has a charging order and has to be sold presumably etcetera and etcetera.
34. LORD JUSTICE KENNEDY: Very well you may have that.
35. MR KEITH: I raise in relation to the costs, I invite the Court to make an order for detailed assessment in view of the shortness of time. There has not been time to serve detailed schedules, it requires an order for detailed assessment.
36. LORD JUSTICE KENNEDY: I would hope that the costs could be agreed, in reality, but detailed assessment in default of agreement. Thank you all very much for making a difficult part of the law that much more intelligible.