England and Wales Court of Appeal (Criminal Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM CROWN COURT AT AYLESBURY
HIS HONOUR JUDGE CRIPPS

		Royal Courts of Justice Strand, London, WC2A 2LL
		19/06/2008

His Honour Judge Roberts Q.C.:

1. Shaheen Ilyas appeals by leave of the single judge against a confiscation order. The order was made on 4 July 2007 in the Crown Court at Aylesbury in confiscation proceedings arising from the Appellant's conviction, after a trial, for two offences of benefit fraud.
2. Because of the dates of those offences, the confiscation regime applicable to the Appellant's case was that laid down by Part VI of the Criminal Justice Act 1988 as amended by the Criminal Justice Act 1993 and the Proceeds of Crime Act 1995. That regime has of course now been superseded by the new regime under the Proceeds of Crime Act 2002.
3. To determine whether a confiscation order should be made, and if so in what amount, the judge had to go through the following stages. First he had to decide whether the appellant had benefited from relevant criminal conduct. If so, he had next to assess the amount of her benefit. Then he had to assess the amount (if any) that might be realised from her available assets as at the date of the determination. After going through those stages he had to make a confiscation order in whichever of those two amounts was the lesser. If there were no available assets, it would be inappropriate to make any order at all.
4. The judge decided that the Appellant had benefited from relevant criminal conduct: he assessed the benefit figure at £382,712.66 and the amount that might be realised at £225,000. He therefore made a confiscation order in the latter amount. He was required to fix a period of imprisonment to be served in default of payment: he fixed that period at 27 months.
5. Of the total benefit figure as assessed by the judge, £345,000 represented the value of a freehold property in Aylesbury, and the whole of the amount that might be realised represented the value of that property after deducting the amount outstanding on mortgage. It was not suggested that the Appellant had any other assets from which any amount might be realised.
6. The issues arising on this appeal are whether the value of the freehold property should have been included (a) in the benefit figure and (b) in the amount that might be realised.
7. To understand the issues, and the conclusions to which we have come, it is necessary first to set out the history of the matter, insofar as it is relevant, and then to examine the relevant statutory provisions.

THE HISTORY

8. The Appellant is now aged 46. She was born and brought up in Pakistan. She came to this country in 1981, at the age of 19, to marry her cousin Mohammed Ilyas. The marriage had been arranged by their respective families.
9. Prior to their marriage Mohammed Ilyas had lived for many years with other members of his family at the family home, 39 Tring Road, Aylesbury. The property was owned jointly by his father Mohammed Dil and his brother Abdul Majid, who was married to the appellant's sister.
10. After the marriage the Appellant and her husband lived for some years at the family home with the rest of her husband's family. In due course they started a family of their own. They have six children, of whom the first was born in 1983.
11. In or around 1985, by which time they had two children of their own, they applied for and obtained a tenancy of council accommodation. By around 1991 they had moved to other council accommodation at 7 Sussex Close, Aylesbury. The Appellant and her children have lived there ever since then.
12. Her husband lived there too until, unhappily, he left her for another woman in or around 1995. Thereafter he returned to 7 Sussex Close on occasions, staying for a while and then leaving again. While he was not living with her, the appellant applied for and received Income Support from the Department of Work and Pensions, and Housing Benefit and Council Tax Benefit from the Aylesbury Vale District Council.
13. By June 1999 the taxi business run by the Appellant's husband and his brother Abdul Majid had run into financial difficulties. One of the reasons was that there had apparently been an arson attack on their premises and vehicles, and there was difficulty in obtaining the insurance monies.
14. The men in the family decided that a solution to these problems was to transfer 39 Tring Road to the Appellant and to obtain a new mortgage in her name which would pay off the existing mortgage and provide some much needed cash to pay debts and keep the business going. This arrangement also had the advantage of putting the house out of reach, or apparently out of reach, of the creditors of the business.
15. The new mortgage advance of £120,000 was obtained from the Bank of Scotland. The property was valued at £135,000.
16. Regrettably, with the assistance of a dishonest accountant who produced false and misleading accounts, the Bank was led to believe that the Appellant was an arm's length purchaser, and that she carried on business as a market trader with an income sufficient to support the mortgage repayments. Monies were passed through an account to give the false impression that the Appellant had paid a deposit to the vendors. The mortgage advance from the Bank of Scotland was used to pay off the previous mortgage with Lloyds Bank, the balance being paid to the Appellant's husband's family.
17. It is abundantly clear that the Appellant was used by the family to enable this fraudulent scheme to be carried out. An account was opened in her name at the Abbey and the mortgage repayments were paid from that account by direct debit. The money to service these payments was paid into the account by the family.
18. None of these arrangements made any difference whatever to the Appellant's own position in practice. She continued to live with her children in their council accommodation. She did not receive any rent for 39 Tring Road, and had nothing to do with the upkeep of that property or the payment of outgoings.
19. The arrangements were clearly made at the behest of her husband's family and for their benefit. It was the judge's view that for cultural reasons she had no option but to go along with what the men in the family wanted her to do. We will return later to what she knew or did not know about what was happening.
20. The transfer of the property into the Appellant's name was dated 15 December 1999, and from 23 February 2000 she was registered at the Land Registry as its proprietor.
21. The fact that the Appellant was now the legal owner of a freehold property was, as the jury at her trial were in due course to accept, a material change of circumstances which she should have notified to the District Council, but did not. By this time her husband had left her permanently, and she continued to draw the various benefits until 2003 when the District Council became aware of the position. Their investigation began on 2 April 2003, and the Appellant was interviewed under caution on 8 July 2003.
22. It appears that the family then became concerned about the position. On 22 December 2003 a Deed and Declaration of Trust was executed by the Appellant and Abdul Majid which stated that the entirety of the equity in 39 Tring Road belonged to Abdul Majid and that since the legal title had been transferred to the Appellant she had held it as a trustee for him. On the same day the Appellant signed a Statutory Declaration to the same effect, giving a little more detail about the circumstances in which the property had been transferred to her.
23. There appears to be no direct evidence as to how these documents came about, but it seems reasonable to assume that they were instigated by the family, for whose benefit they were created, rather than by the Appellant herself.
24. The same can be said of the next step in the story, which was that on 6 April 2004 the legal title to 39 Tring Road was transferred by the Appellant to Abdul Majid and his wife Nasim Aktar Majid. No payment was made to the Appellant herself in return for this transfer, but as part of the transaction the transferees were to pay off the Bank of Scotland mortgage in the Appellant's name.
25. The property was at that time valued at £200,000. The Majids obtained a new mortgage advance of £120,000 from GMAC-RFC Ltd, out of which the amount outstanding in respect of the Bank of Scotland mortgage (£100,000) was repaid.
26. It follows that, although the Bank of Scotland mortgage had been obtained in the first place by false representations, the Bank in fact suffered no loss as a result of the fraud. On the contrary, it received its capital and interest in full.
27. Further false representations were made by the Majids in their application for the new mortgage from GMAC-RFC Ltd. They falsely stated that they had been living at the property as tenants of the owner (the Appellant) and paying her £386 per month by way of rent. In fact, as everybody now agrees, to describe them as tenants of the Appellant was quite untrue. They had been continuing to occupy the property just as they had done before it was transferred to the Appellant; and, so far from paying £386 per month rent, they had been paying a much larger sum into the Abbey account each month to service the Bank of Scotland mortgage repayments on her behalf.
28. On 5 August 2004 the Appellant was re-interviewed under caution, but it was not until 5 July 2005 that a summons was issued for her to attend the Magistrates Court to answer five charges of benefit fraud brought by the District Council. She was in due course committed to the Crown Court to stand trial.
29. On 18 October 2006 a restraint order was made by Bean J under s 77 of the 1988 Act restraining the Appellant from disposing of any of her assets. In fact by that time she had none of any real value.
30. Her trial took place in February 2007. She was acquitted on three of the five charges on the direction of the judge, and convicted by the jury on the other two, as follows.

On Count 1 she was convicted of dishonestly failing between 22 February 2000 and 8 July 2003 to notify a change of circumstances affecting her entitlement to Housing Benefit and Council Tax Benefit.

On Count 4 she was convicted of dishonestly making a false representation on 12 April 2002, in a claim form to continue her benefits, that she did not own any land or property.

31. She was sentenced to 5 months imprisonment concurrent on each count, suspended for 2 years. There is no appeal against that sentence. The suspended sentences were "old style" ones: before the judge could suspend them, he had to be satisfied that there were exceptional circumstances making it appropriate to do so, and he was so satisfied.
32. It was, as we have said, the Appellant's convictions for those two offences of benefit fraud which led to the confiscation proceedings which were concluded on 4 July 2007.

THE RELEVANT LEGAL PROVISIONS (BENEFIT)

33. Section 71(4) of the Criminal Justice Act 1988 provided that:

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.

34. Section 74(5) provided that "the value of the property so obtained" means "the value of the property to him when he obtained it", subject to adjustments to reflect subsequent changes in the value of money or subsequent changes in the value of the property in question.
35. It is well established by authority that the relevant figure is the full value of the property in question, not merely the profit from it which remained in the hands of the defendant.
36. It was and is common ground that the £13,256.97 Housing Benefit and £1,744.79 Council Tax Benefit received by the Appellant during the period specified in Count 1 were to be included in the benefit figure for the purposes of the confiscation proceedings.
37. Under the 1988 Act as originally enacted, the benefit figure would have been the total of those two amounts, namely £15,001.76. That is because the assessment of a defendant's benefit under the unamended Act was limited to his benefit from the offences of which he had been convicted, or other offences (of which there were none in this case) taken into consideration in determining the sentence for those offences.
38. However, the amendments introduced by the Proceeds of Crime Act 1995 required the court to take into account, in certain circumstances, any benefit obtained by a defendant from other offences, even if neither he nor anyone else had ever been charged with or convicted of those offences. This was achieved by the convoluted and Draconian provisions of the new section 72AA inserted into the 1988 Act.
39. Section 72AA was triggered if the defendant had been convicted of at least two "qualifying offences" (i.e. indictable offences, other than drug trafficking offences, committed after the 1995 Act came into force) in the proceedings in question, or of one such offence in the proceedings in question and at least one other such offence during the "relevant period", i.e. during the 6 years before the proceedings in question were instituted.
40. If those conditions were satisfied (as they were in the Appellant's case by reason of her conviction on two counts) the court was effectively required to conduct an enquiry as to whether the defendant had benefited from any other offences; and for the purpose of that enquiry the court was entitled (but not bound) to make the assumptions set out in section 72AA(4).
41. The first assumption, under section 72AA(4)(a), applied to any property appearing to the court (i) to be held by the defendant at the date of conviction or at any time in the period between that date and the determination in question, or (ii) to have been transferred to him at any time since the beginning of the relevant period (that is, the period of 6 years ending when the proceedings in question were instituted). The assumption was that that property was received by him, at the earliest time when he appears to the court to have held it, as a result of or in connection with the commission of offences to which this Part of this Act applies (i.e. any indictable offences other than drug trafficking offences).
42. The second assumption, under section 72AA(4)(b) is agreed to be immaterial for present purposes.
43. The third assumption, under section 72AA(4)(c) was that, for the purpose of valuing any benefit which he had or which he is assumed to have had, he received the benefit free of any other interests in it.
44. Section 72AA(5) went on to provide as follows (so far as is material for present purposes):

Where the court has determined that the assumptions specified in subsection (4) above are to be made in any case, it shall not in that case make any such assumption in relation to any property … if

(a) that assumption, so far as it relates to that property …, is shown to be incorrect in the defendant's case;

(b) [immaterial for present purposes]; or

(c) The court is satisfied that there would, for any other reason, be a serious risk of injustice in the defendant's case if the assumption were to be made in relation to that property.

45. Finally we come to section 72AA(6) which was in these terms:

Where the assumptions specified in subsection (4) above are made in any case, the offences from which, in accordance with those assumptions, the defendant is assumed to have benefited shall be treated as if they were comprised, for the purposes of this Part of this Act, in the conduct which is to be treated, in that case, as relevant criminal conduct in relation to the defendant.

46. In other words the assessment of the defendant's benefit, for the purposes of confiscation proceedings, had to include not only the value of any property obtained by him as a result of or in connection with the offences of which he had been convicted (or which he had had taken into consideration) but also the value of any other property which, applying the assumptions, he was found to have obtained as a result of or in connection with any other offences.
47. Thus the defendant was in effect required to provide innocent explanations for all the property which had passed through his hands in the six years before the commencement of proceedings for the offences of which he was actually convicted, and to the extent that he failed to do so he was liable to be found to have benefited from other criminal offences (known or unknown) and to have that benefit included in the assessment of his total benefit for the purposes of confiscation proceedings.
48. In the present case the judge found that there were three items of "benefit" which fell to be included under section 72AA.
49. The first was the total of the Income Support received by the Appellant from the Department of Work and Pensions during the period specified in Count 1 (which amounted to £22,644.90). There was no dispute about this item. The appellant had not been prosecuted by the Department of Work and Pensions for any offence in relation to Income Support, but it was common ground that she had received the Income Support payments and that, just as she should have notified the District Council of her change of circumstances, so she should have informed the Department of Work and Pensions of that change.
50. The second was a relatively small sum of £66.00 which was likewise accepted by the appellant's counsel Ms Kate Lumbers as being caught by section 72AA.
51. The third was the value of 39 Tring Road. This was the subject of competing submissions.
52. The Crown contended that the transfer of that property to the Appellant in December 1999 represented a benefit obtained by her as a result of or in connection with the commission of a known offence, namely the mortgage fraud perpetrated on the Bank of Scotland when the mortgage in the Appellant's name was obtained. The transfer of the property to the Appellant occurred within the six years before the institution of proceedings (though not by very much) and so, said the Crown, the assumption in section 72AA(4)(a) applied to it.

The proper construction of section 72AA(4)(a)

53. The argument before the judge on this part of the case focussed to a large extent on the proper construction of the words as a result of or in connection with offences to which this Part of this Act applies as used in section 72AA(4)(a).
54. Ms Lumbers on behalf of the Appellant contended that the subsections contemplated only offences to which the defendant herself was a party, or at least of which she was aware. The Crown contended that they contemplated offences committed by anyone, whether or not the defendant was aware of them.
55. The judge preferred the Crown's contention. He gave as his reason for so doing that, if Parliament had intended to confine the application of the assumption to offences committed by the defendant, it would have been easy for them to do so by express words, and they did not. He might have added that, if Parliament had intended to include offences committed by others but only if the defendant was aware of them, it would have been equally easy for them to do so by express words, and they did not.
56. These are, on the face of them, compelling arguments, as indeed is the additional argument advanced by Mr Nicholas Syfret QC on behalf of the Crown on this appeal that the whole purpose of the new section 72AA was to claw back the proceeds of any criminal conduct.
57. Ms Lumbers' argument to the contrary is essentially based on the proposition that it is inherently highly unlikely that Parliament could have intended that, if property has passed quite innocently through the hands of a defendant as a result of offences committed by others of which he or she was completely unaware, he or she should be made liable, subject to having sufficient available assets, to pay over the value of that property under a confiscation order.
58. We accept that as a proposition: such a result would be demonstrably unfair. However, we also accept the point made in response to it by Mr Syfret, namely that the Crown's contention does not produce the potentially unfair results suggested by Ms Lumbers. That is because Parliament included in section 72AA a "safety valve", as it was referred to in argument, which could always be used to avoid unfair results of that kind.
59. In fact section 72AA contained a double safety valve. First, 72AA(3) gave the court a discretion as to whether to apply the statutory assumptions at all; and second, section 72AA(5)(c) provided that the court is not to make any particular assumption if satisfied that there would be a serious risk of injustice in the defendant's case if that assumption were to be made.
60. We therefore agree with the construction of section 72AA(4)(a) advanced by the Crown and accepted by the judge. We do not think that, to bring the assumption in that subsection into play, the Crown needed to show that the Appellant knew that the transfer of the property to her was part of a fraudulent scheme.
61. However, we think that a defendant's knowledge or lack of knowledge of the criminal origin of property obtained by him or her is a highly material factor when it comes to deciding whether or not to apply the "safety valve". We find it difficult to believe that, save in exceptional circumstances, it would be appropriate to include in the defendant's benefit figure the value of property whose criminal origin he or she had no means of knowing. It might be different if the defendant closed his or her mind to the obvious, or was otherwise reckless as to the origin of the property.
62. That being so, it is necessary to consider two further submissions advanced by Ms Lumbers. The first is that the judge failed to give any or any proper consideration to the question whether he should apply the safety valve in relation to 39 Tring Road. The second is that, if that property was to be included in the assessment of the Appellant's benefit, its value should have been taken to be a nominal amount and not the £345,000 at which the judge valued it.

The "safety valve" argument

63. The judge, as is normal and proper, structured his ruling by dividing it into two parts. In the first part he dealt with benefit. In the second part he dealt with the amount that might be realised.
64. Ms Lumbers points out, correctly, that in the first part of his ruling, when dealing with 39 Tring Road, the judge made no express reference to the safety valve. He did not state that he had considered it and decided not to use it, and he therefore gave no reasons for not using it.
65. Mr Syfret points out that the judge was clearly well aware of the safety valve because he used it in relation to another item which was prima facie caught by the assumption in section 72AA(4)(a), namely the total amount of £34,687.88 paid into the Appellant's Abbey account by her husband's family to service the mortgage repayments on 39 Tring Road.
66. The judge rightly decided that there would be a serious risk of injustice if that amount were to be included in the benefit figure as well as the value of 39 Tring Road itself: it would amount to double counting. He therefore used section 72AA(5)(c) to exclude the £34,687.88.
67. Mr Syfret's point goes some way to meeting Ms Lumbers' argument but does not actually show that the judge applied his mind to the possible application of the safety valve to 39 Tring Road itself or, if he did, that he took all relevant considerations into account.
68. In fairness to the judge we think that he probably did do that, but since he did not expressly say that he had done so, or give any reasons for not using the safety valve so as to exclude the value of the property, we think the appropriate course is for us to consider the matter ourselves and reach our own conclusions as to whether the safety valve should or should not be applied to this item.
69. In that regard we are considerably assisted by a passage in the second part of the judge's ruling. He was there dealing with the Crown's contention that the current value of 39 Tring Road should be included in the "amount that might be realised" because the re-transfer of the property by the Appellant to Mr and Mrs Majid in April 2004 amounted to a gift caught by section 74(10) of the Act (to which we will make further reference in due course).
70. Section 74(10), as we will explain, contains a "safety valve" of its own, namely the provision in section 74(10)(b) that the value of any gift is not caught by the Act if the court does not consider it appropriate in all the circumstances of the case to take it into account.
71. The judge gave full reasons, in the course of which he set out certain findings of fact, for not using the section 74(10)(b) safety valve to exclude from the amount that might be realised the value of what he found to have been a gift of the property by the Appellant. Those reasons are highly relevant to the separate question whether the corresponding safety valve under section 72AA(3) or section 72AA(5)(c) should be used to exclude the property from the assessment of the Appellant's benefit.
72. The judge expressly found that the transfer and re-transfer of the property to and by the Appellant were both part of a fraudulent scheme to which the Appellant lent herself. He was unable to accept her evidence that, although she knew that the property was in her name and that it was purchased with the assistance of a mortgage in her name, she did not know about the fraud.
73. She cannot read or write English (apart from her own signature) but that did not mean that she did not know what was going on. The judge did not doubt that she had been persuaded by the family to go along with the fraud and that, given her cultural background, she had little option but to go along with what was being proposed. He properly took that very much into account when deciding that he could suspend the sentences of imprisonment, but for the purposes of the confiscation proceedings he had to proceed on the basis that this was a fraud in which she was a knowing participant.
74. The judge had the advantage of seeing the Appellant give evidence at the trial and again in the confiscation proceedings, and we cannot go behind his findings of fact. In the light of those findings we are not persuaded that the safety valve should have been applied, or should now be applied, so as to exclude 39 Tring Road from the Appellant's benefit.
75. It follows that, if the judge did consider the safety valve and decided against its use, we think he was right: if he did not consider it, that failure does not affect the validity of his decision to treat the property as a benefit obtained by the Appellant as a result of or in connection with the mortgage fraud.
76. We are conscious that those who are alleged to have been the prime movers in the mortgage fraud have never been charged or prosecuted. But we have to proceed, as the judge did, on the basis of the evidence before the court. That evidence, including the Appellant's own evidence, demonstrates very clearly that, whichever individuals were behind it, there most certainly was a fraud; and that the Appellant benefited from it within the meaning of the Act.

The value of the benefit

77. That leads to the next question: what was the value of the benefit to the Appellant? Section 74(5), as we have already recited, provided that the value of the property obtained is, essentially, the value of the property to the defendant when he obtained it, subject to adjustments to reflect subsequent changes in the value of money or subsequent changes in the value of the property in question.
78. Ms Lumbers submits that in the particular circumstances of this case the value of 39 Tring Road to the Appellant was nil (or at the most a nominal amount). She submits that all the Appellant received was the bare legal title to the property and that that was of no real value to her. What was of real value, says Ms Lumbers, was the beneficial interest in the property which remained vested in her husband's family throughout: she held the legal title as a mere nominee or trustee for them.
79. Mr Syfret submits that the law of trusts and beneficial interests in real property has no application to a situation in which a property is being held by one person on behalf of others as part of a fraudulent scheme.
80. We think that it is undesirable and usually unnecessary for criminal courts dealing with confiscation proceedings to have to wrestle with complex questions of civil law. Mr Syfret may well be right in his submission, but the view which we take is that, whether or not the Appellant is properly described as a trustee and members of her husband's family as beneficial owners of the property, the Appellant is to be treated for the purposes of the Act as having obtained a benefit equal to the full value of the property.
81. It is pertinent in that connection to refer to the way in which the courts have approached the question of benefit (and its value) under the 1988 Act and under the similar but separate scheme which, prior to the Proceeds of Crime Act 2002, applied to drug trafficking offences.
82. The history of the relevant legislation is summarised, and the authorities conveniently collected and reviewed, in a decision of the House of Lords [R v May [2008] UKHL 28 ] which has come to our attention since the hearing of this appeal, and indeed since we initially drafted this judgment. That decision has fortified us in the conclusions to which we had already come.
83. What emerges very clearly from the authorities, as reviewed and approved (in some cases with qualifications or modifications) in R v May, is that the same item of property may be regarded, for the purposes of confiscation proceedings, as having been obtained by more than one person, so that its full value may be treated as a benefit received by each of those persons.
84. Persons may obtain the same property concurrently (as where the proceeds of a criminal joint venture come into the joint ownership or control of more than one of the participants) or successively (as where property is passed from one person to another and maybe further down a chain). In either event, the full value of the property may be included in the benefit figure for each of those persons in confiscation proceedings.
85. In some cases problems have arisen where a defendant asserts that, although an item of property may have passed through his hands, he was a mere custodian of it for someone else and did not have a sufficient degree of control of it to be said to have obtained it himself. Each case will have to be decided on its own facts, as they are found by the judge, and as so often there will be difficult questions of fact and degree. The degree of control which the defendant had over the property is likely to be a key factor.
86. In our judgment, where the legal title to real property has been transferred as a result of or in connection with a fraudulent scheme, it will generally be appropriate to regard the transferee as having obtained that property within the meaning of the Act, especially where the transferee was himself or herself a party to the fraud.
87. Whoever holds the legal title to property is generally speaking in control of it, at least where (as in this case) no other interests were formally registered when the property was put into that person's name. The point may be tested by asking what would have happened if the Appellant had suddenly decided to re-mortgage and sell the property and to keep the net proceeds for herself. What could her husband's family have done about it? To establish an equitable interest or claim to the property they would have had to rely on the very facts which made this scheme a fraudulent one; and civil courts will not generally allow a claim based on illegality, even if the defendant was a party to the same illegality as the claimant.
88. We conclude that in this case the full value of 39 Tring Road was properly regarded by the judge as having been obtained by the Appellant, whether or not any other persons acquired or retained interests of one kind or another in it. The full value (allowing for adjustments to reflect the increase in market value) was agreed at £345,000, and Ms Lumbers accepts that that is the appropriate figure if her various arguments to which we have referred fail, as we are afraid they do.
89. In the light of the conclusion which we have reached it is unnecessary to say much about section 72AA(4)(c) which, as we have recited, created the rebuttable assumption that for the purposes of valuing any benefit which the defendant had or is assumed to have had at any time, he received the benefit free of any other interests in it.
90. There may of course be many situations in which the value of the defendant's benefit from a particular item of property may be affected by the fact, if it be the fact, that he received that property subject to some interest held by some other person, in which case it will be necessary to consider whether the section 72AA(4)(c) assumption has been rebutted. But in this case, as we have concluded, it is immaterial whether the Appellant received 39 Tring Road subject to some beneficial interest held by members of her husband's family. Even if she did, the value of the property to her was still its full market value.

THE RELEVANT LEGAL PROVISIONS (REALISABLE ASSETS)

91. The Crown contended that, although the Appellant no longer had any interest in 39 Tring Road by the time of the confiscation proceedings, the property fell within those provisions of the 1988 Act which were designed to catch gifts made by a defendant. The relevant provisions were as follows.
92. Section 74(3) provided that the amount that might be realised includes, as well as the total of the values of all the realisable property held by the defendant at the time of the confiscation order, the total of the values at that time of all gifts caught by this Part of this Act.
93. Section 74(10) provided that:

A gift ... is caught by this Part of this Act if

(a) it was made by the defendant at any time after the commission of the offence or, if more than one, the earliest of the offences to which the proceedings for the time being relate and

(b) the court considers it appropriate in all the circumstances to take the gift into account.

94. As to the value of the gift for the purposes of the Act, section 74(7) provided that that is, essentially, the value of the gift to the recipient when he received it, subject to adjustments to reflect subsequent changes in the value of money or subsequent changes in the value of the property in question.
95. However, there was a special provision in the rather convoluted section 74(12), to which our attention was very properly drawn by Mr Syfret. That provision was designed to cover the situation where the defendant, instead of giving the item in question to someone else for nothing, received some consideration for it (though less than its full value).
96. Section 74(12) was in these terms:

For the purposes of this Part of this Act –

(a) the circumstances in which the defendant is to be treated as making a gift include those where he transfers property to another person directly or indirectly for a consideration the value of which is significantly less than the value of the consideration provided by the defendant; and

(b) in those circumstances, the preceding provisions of this section shall apply as if the defendant had made a gift of such share in the property as bears to the whole property the same proportion as the difference between the values referred to in paragraph (a) above bears to the value of the consideration provided by the defendant.

97. There is no doubt that the transfer of the legal title to 39 Tring Road by the Appellant to Abdul Majid and his wife fell within section 74(10)(a). We have already referred to the fact that the judge expressly stated that he considered it appropriate to take it into account under section 74(10)(b).
98. The next question was the value which should be attributed to the gift. Ms Lumbers' submission (the corollary of her submission as to the value of the property for the purposes of assessing the Appellant's benefit) was and is that that value was nil, or at the most a nominal amount.
99. Ms Lumbers' submission is based on the proposition, which we have already indicated we are unable to accept, that the legal title to the property had no real value to the Appellant: Ms Lumbers submits that the re-transfer of the property to Mr and Mrs Majid simply returned to them what had been theirs all along.
100. For the reasons which we have already given, we think that the value of the legal title in the Appellant's hands should be taken to be the full market value of the property, and that (subject to a point very fairly raised by Mr Syfret which we will come to in a moment) that was the value of the gift to Mr and Mrs Majid as at the date of the re-transfer .
101. It was, as we have already said, agreed in the confiscation proceedings that the property had increased in value to £345,000 by the date of the determination. Since there was £120,000 outstanding on mortgage as at that date, the judge (in accordance with the approach agreed by counsel) assessed the value of the gift at £225,000. Since it was agreed that the Appellant had no other realisable assets, the judge assessed the amount that might be realised at £225,000, and (that being less than the total benefit figure) made a confiscation order in that amount.
102. Mr Syfret suggests that counsel, in agreeing that approach, may have overlooked the possible effect of section 74(12). He points out that the Appellant did not give the property (then worth £200,000) to Mr and Mrs Majid for nothing: it was a term of the arrangement that they would pay off the outstanding balance of the Bank of Scotland mortgage loan (£100,000) for which she was responsible, and that is what they did.
103. Mr Syfret therefore suggests that under section 74(12) the Appellant should be treated as having given to the Majids a one half share in the property, and that (taking into account the increase in value of the property) the value of the gift should be assessed under section 74(7) at one half of the current market value. On this approach the amount of the confiscation order should be reduced from £225,000 to £172,500. Unsurprisingly Ms Lumbers makes no submission to the contrary.
104. Ms Lumbers does however make one final submission. She submits that the making of any confiscation order was unfair in that it exposed the Appellant to a real risk of having to serve a prison sentence for not doing something which she cannot do; and that the section 78(10)(b) "safety valve" should therefore have been used so as to avoid an potentially unjust result.
105. Mr Syfret began his submissions by saying that there is no question of the Assets Recovery Agency ever seeking to have the Appellant sent to prison by virtue of the confiscation order. Whilst that was a very fair and proper stance for them to take, it would not be right for an order to be made by a court which depended on the generosity or otherwise of the prosecuting authorities for its effect and which, if the prosecuting authorities took an uncharitable view, might result in a defendant being unjustly imprisoned.
106. We have therefore given careful consideration to the question where the order in this case did create a real risk of such a result. We have come to the conclusion that, when regard is had to the provisions of sections 75-83 of the Act, there was no such risk.
107. Where (as in this case) the amount that might be realised consists of or includes property which the defendant no longer has because it was the subject of a gift caught by the Act, procedures are available to enable the Crown to enforce the order against the current holder of that property.
108. The prosecuting authorities may apply to the High Court to exercise its powers under section 78 to make a charging order on the property in question, and under section 80 to appoint a receiver, to order the person in possession of the property to give possession of it to the receiver, and to empower the receiver to realise the property in such manner as the court directs. Any person holding an interest in the property must, under section 80(8), be given a reasonable opportunity to make representations to the High Court before any order is made under section 80.
109. That is the route which the Assets Recovery Agency propose to take in this case. To the extent that they are unable to recover in that way the whole amount due under the confiscation order, the Appellant can apply to the High Court under section 83 for a "Certificate of Inadequacy", and then (assuming that such a certificate is granted) to the Crown Court to reduce the amount of the confiscation order accordingly. Mr Syfret has indicated that the Assets Recovery Agency would not oppose such applications; and indeed there is no proper basis on which they could do so.
110. We are satisfied that in this way the interests of the Appellant are protected and that there is no real risk of her being imprisoned as a result of the confiscation order. We do not think, therefore, that Ms Lumbers' final point affords a ground for applying the safety valve.

Conclusion

111. For the reasons which we have indicated, we are satisfied that, subject to the one point brought to our attention by Mr Syfret, this order was properly made in accordance with the relevant statutory provisions, and the judge's reasoning and conclusions cannot be faulted.
112. In the light of Mr Syfret's point we will allow the appeal to the extent of reducing the amount that might be realised, and therefore the amount of the confiscation order, from £225,000 to £172,500. Otherwise the judge's order must stand.
113. We would add only this. Though it is not a matter for us, we think that the Majids and the Assets Recovery Agency would be well advised to attempt to come to a compromise agreement which would enable the Majids to retain their home on payment of a proportion of the amount of the confiscation order, and which would avoid the expense of High Court proceedings and the services of a receiver. We are concerned that if the full statutory procedure is followed through, the Majids may lose their home and there may be little if anything left for the Crown. That would not be in anybody's interests.