England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL
CRIMINAL DIVISION

		Sitting at Birmingham Crown Court Queen Elizabeth II Law Courts 1 Newton Street Birmingham, West Midlands B4 7NA
		7 November 2007

1. MR JUSTICE GIBBS: This appeal brought by the appellant Lee Darren Stanley with the leave of the single judge against a confiscation order raises a question about the meaning of the words "he obtains property" under section 76(4) of the Proceeds of Crime Act 2002.
2. On 21st September 2004 in the Crown Court at Wolverhampton the appellant pleaded guilty to a count of handling stolen goods and assisting in the retention of stolen goods. On 31st August 2005 he was sentenced to 15 months' imprisonment. On 11th September 2006 a confiscation order was made by His Honour Judge Challinor for £70,274.10 with 18 months' imprisonment in default - that imprisonment, if it came into effect, to be consecutive with the substantive sentence. The only challenge in this appeal is to the appropriateness of the confiscation order.
3. In the year 2003 a company known as RDS Automotive Interiors Limited supplied components to M G Rover which were manufactured at their premises in Tipton. The plant was closed for a week at the end of October 2003. During that period, at about 2.30 in the afternoon of 29th October, the appellant, driving a Mercedes lorry, dropped a skip off at the site. Later that same afternoon, no doubt by arrangement, two men entered the site. One kept a lookout while the other went into the factory and came out with a large manufacturing tool on a fork-lift truck which was placed in the skip. A similar procedure was used to remove other large manufacturing tools from the factory. They were all placed in the skip. In the early hours of the following morning the appellant came back with his lorry and removed the skip.
4. The reason why we are able to describe these events so clearly is that they were caught on CCTV. The appellant's lorry was traced and he was arrested. At first he told a story about collecting the skip on instructions from a friend called "Dave" and that he had been doing no more than taking wooden pallets. However, the truth soon emerged.
5. The value of the tools to their legitimate owners was just over £250,000. It appears that their value as scrap was limited to some £10,000 and it appears further that the property was being stolen in order to be sold as scrap. The effect on the business of M G Rover was very serious indeed. It lost them three days of production, resulting, it appears, in a consequential loss of more than £10 million.
6. The appellant pleaded guilty upon a written basis of plea as follows:

"(a) He dropped off the relevant skip knowing it was to be used for a criminal purpose;

(b) He did not know that the contents were aluminium tooling; he believed that it was stolen scrap metal."

7. In considering the appropriateness of a confiscation order, the judge received detailed submissions on the issue and delivered a reserved judgment. The relevant statutory provisions may be stated quite briefly. The Proceeds of Crime Act 2002, section 76(4) provides:

"A person benefits from conduct if he obtains property as a result of or in connection with the conduct."

There is further clarification provided about the meaning of the word "obtains" in section 84(2)(b):

"... property is obtained by the person if he obtains an interest in it..."

Section 84(2)(h):

"... references to an interest, in relation to property other than land, include references to a right (including a right to possession)".

8. One of the issues that the judge had to determine and the issue upon which leave to appeal to this court has been given revolves around the meaning of section 76(4). If the appellant obtained property as a result of or in connection with his conduct then he benefited from the conduct and a confiscation order was appropriate. If, however, he did not obtain property within the meaning of that subsection, then he did not benefit from the conduct and a confiscation order would not have been appropriate.
9. In his ruling on the issue of confiscation, the judge recited the fact that the appellant had been paid £100 to drop off the skip in which the tools were placed and then returned to collect and deliver the skip as instructed. The judge noted that there was no assertion by the prosecution that the appellant had a criminal lifestyle and therefore he had to determine whether the appellant had benefited from the particular criminal conduct, namely the handling. The judge went on to consider the statutory provisions which we have just cited. The judge noted that it was asserted that the benefit of the conduct was limited to £100 for the appellant's part in transporting the stolen property and that the scrap value was confined to £10,000. It was submitted, therefore, if any confiscation order was appropriate it should be limited either to the lesser or, at most, to the greater sum. The judge referred to the value of the property to its owners and to the losses caused to M G Rover. He found that the appellant had clearly obtained the property. He had pleaded guilty to assisting in the retention of the machine tools and the fact that he was unaware of their real value was irrelevant. It was the physical obtaining that counted.
10. The judge considered authorities to which he had been referred, including R v Smith (David) [2002] 1 WLR 54 and R v Wilkes [2003] EWCA Crim 848. He concluded that the appellant obtained the property within the meaning of the subsection when it passed through his hands and that the value to be attributed to it was the replacement value rather than the value which the appellant attached to it, namely the scrap value.
11. It is not necessary for us to rehearse a number of further issues which the sentencing judge considered in the course of his judgment. The reason is that the single judge gave leave to appeal on one issue and one issue alone, namely whether the appellant can properly be said to have "obtained the goods".
12. Mr Hutt, on behalf of the appellant, relies upon the following factual aspects of the offence and the circumstances surrounding it. He relies on the fact that others, not the appellant, were responsible for organising and carrying out the theft of valuable tooling from the industrial premises. He points out that as it happens none of those individuals, though seen on CCTV, was ever arrested. He relies on the fact that the appellant's only part in the events was to drop off an empty skip and later transfer it together with its contents. He relies on the basis of the appellant's plea as to what happened thereafter. He says that it was not disputed that the appellant's role was confined to that which has been described to us. He relies on the fact that the appellant received only £100 for his services. He submits under the circumstances that the appellant's knowledge of what he was removing and his degree of control or possession of it, if any, were all minimal. Under those circumstances he contends that the appellant did not "obtain" the metal in the sense required by the relevant subsection. He argues by analogy on section 15 of the Theft Act 1968 as support for his argument since it speaks of obtaining as involving ownership, possession or control. He submits that in the present case ownership does not arise and the degree of possession and control were either absent or minimal. He relies on the fact that the offence to which the appellant pleaded guilty was not receiving the property but assisting with its retention. The particular offence with which the appellant was charged was, said Mr Hutt, further support for the proposition that he never essentially exercised any control over the goods.
13. The respondents say quite simply that the appellant obtained the tools within the meaning of the subsection when he collected the skip and took them away. The prosecution acknowledge that there is no direct authority on the meaning of the expression "obtaining property" within section 76(4) of the Proceeds of Crime Act 2002. But they do rely on several authorities which deal with the predecessor of that subsection, namely the Criminal Justice Act 1988, section 71(4). That section provided:

"For the purposes of this Part of this Act a person benefits from an offence if he obtains property as a result of or in connection with its commission and his benefit is the value of the property so obtained."

There was no definition or clarification of the expression "obtains property" within the 1988 Act. However, there was consideration of its meaning in the case of J v CPS [2005] EWCA Civ 746. This was an appeal to the Court of Appeal against a refusal to set aside a restraint order. At paragraph 38 of his judgment, Laws LJ considered the meaning of the word "obtain" and said as follows:

"Clearly it does not mean 'retain' or 'keep'. But no less clearly, in my judgment, it contemplates that the defendant in question should have been instrumental in getting the property out of the crime. His acts must have been a cause of that being done. Not necessarily the only cause: there may, plainly, be other actors playing their parts. All that is required is that the defendant's acts should have contributed, to a non-trivial (that is, not de minimis) extent, to the getting of the property. This is no more than an instance of the common law's conventional approach to questions of causation.

14. I do not believe that there is a separate requirement that the defendant must be shown to have control over the property, although in reality if he has been instrumental in getting it he will, no doubt, in some sense (and at some stage) have had control over it."

The respondents submit that in the present case the appellant was instrumental in getting the property out of the crime. He provided the skip and took the property away. It is submitted that the length of time that it was in his possession is of no consequence.

14. The respondents place reliance on the case of R v Smith (David Cadnam) [2002] 1 WLR 54, a case in the House of Lords. The respondent says that although that was directly concerned with section 71(5) the Court of Appeal in the case of R v Wilkes [2003] EWCA Crim 848 held that a similar approach could be applied to section 71(4). The essence of those decisions was that the important assessment was of the value of the property in the hands of the offender when he obtained it regardless of what happened to it afterwards. The respondents submit that the approach adopted in those cases is consistent with what they describe as a simple statement of principle by the then Lord Chief Justice in R v Currey (1995) 16 Cr.App.R (S) 421. The Lord Chief Justice said that for the purposes of 71(4) "benefit": "does not mean that the defendant has retained the property, simply that he has obtained it."
15. In our judgment the logic of the respondents' case is persuasive. It cannot, we think, reasonably be argued that a person who participates in criminal conduct by collecting property which he knows to be stolen is otherwise than taking possession of that property. He may not be the principal offender. He may have been asked or instructed to collect the property by others, but in any circumstances falling short of duress, which is not suggested in the present case, he assumes possession of the property. That being so, in our judgment, in any sensible meaning of the word he "obtains" the property. To use Laws LJ's terminology he "gets the property out of the crime." As it seems to us, there is no need to resort to or consider section 84(2)(b). That subsection is designed, in our view, to cater for a situation in which an offender, whilst not necessarily obtaining possession of goods, obtains an interest in them. Here it is clear that the goods themselves were obtained. The fact that the offender may be ignorant of their true value is in our judgment immaterial. On the facts of this case he was aware that he was collecting a substantial amount of property which had been stolen from a nearby factory. It must have been clear to him that they were metal components of some kind. When he collected them, in our judgment, he obtained them. As was recognised in the case of R v Smith (David Cadnam) the effect of legislation of this kind may be draconian, but the purpose is to strip proven criminals of the benefits of their crime which, as was said, may not be out of place in that context.
16. Here many of Mr Hutt's powerful submissions were directed not to the question of whether the appellant obtained the property, but to the general fairness or otherwise of a situation in which he was ordered to pay a sum very many times greater than that which he stood to gain from the criminal enterprise. Indeed, that is the only sense in which the outcome here could be seen as draconian. Viewed from the point of view of the losers in this matter, namely the automotive suppliers and M G Rover, the amount of the confiscation order might be seen as a small fraction of the loss suffered by the victims of the criminal enterprise.
17. We return to the discrete point in issue. We are quite satisfied that the facts here amply justified the conclusion of the judge that the appellant "obtained" goods within the meaning of section 76(4) of the 2002 Act and accordingly the appeal must be dismissed.