England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL
CRIMINAL DIVISION

		Royal Courts of Justice Strand London, WC2A 2LL
		11 March 2011

1. MR JUSTICE SPENCER: On 2 September 2010 the appellant, now aged 26, appeared before His Honour Judge Merfyn Hughes QC in the Crown Court at Mold, having been committed for sentence for offences of theft and making off without payment. The offences all involved and arose from the use of his 2006 registration Audi A4 motor car. As part of the sentence the judge made an order under section 143 of the Powers of the Criminal Courts (Sentencing) Act 2000 depriving the appellant of his interest in the vehicle. It is against that order that he appeals with the leave of the single judge.
2. The appellant admitted in total six offences of making off without payment for fuel and two offences of theft of vehicle registration plates. The appellant lives in Abergele. The pattern was that he filled up the car with diesel at various service stations in North Wales, £60 to £75 at a time, and drove off without making any attempt to pay. To avoid detection, he changed the registration plates on the vehicle, stealing front and rear plates from parked cars. The total value of the diesel fuel he obtained fraudulently in this way, together with the value of the unrecovered registration plates he stole, was £450.
3. The offences were committed between 12 September and 19 November 2009. At this time he was subject to a community order imposed in February 2009 for handling stolen goods.
4. In interview, he told the police he was not working but was on sickness benefit. He admitted that ever since he had acquired the Audi he would always fill it up without paying for fuel. A friend, he said, had shown him how he could get away with this by exchanging number plates.
5. The transcript of the proceedings in the Crown Court shows that during the course of the prosecution's opening the judge raised the question of compensation and the possibility of making an order depriving the appellant of his interest in the Audi with a view to compensation being met out of the proceeds of sale of the vehicle.
6. Mr Treadwell, counsel who appeared on behalf of the appellant in the court below, argued against such a course. The appellant in the course of mitigation offered to pay the compensation within 28 days. The judge was made aware that the vehicle was subject to a hire purchase agreement. However, it is clear from submissions made to us this morning that the judge was not aware of the precise terms of the hire purchase agreement, and, in particular, the amount of the finance still outstanding and the extent to which, in effect, there was potentially a negative equity.
7. In passing sentence the judge observed that the appellant had a previous caution for making off without payment for fuel and that these offences represented a premeditated campaign of doing exactly the same thing at a time when he was subject to a community order. Despite this, the judge took the view that a short custodial sentence would serve no public interest and instead he made a further community order with an unpaid work requirement of 200 hours and a curfew requirement. The judge then said this:

"I am satisfied that the property, namely an Audi A4S motor vehicle, registered number RYN 9L, was used by you for the purpose of committing these offences and I therefore, as part of the punishment I impose upon you, make a deprivation order under section 143 of the Powers of Criminal Courts (Sentencing) Act 2000. That vehicle will be taken into the possession of the police and sold. Out of the proceeds of sale, £450 will be paid towards those you stole the petrol from and also the number plates and I shall ask Mr Curtis[ prosecuting counsel] to provide the court with the names and addresses of the different complainants."

Mr Treadwell, defence counsel,then queried whether the deprivation order was intended to be a punishment in itself or simply to facilitate payment of the compensation. The judge said:

"No, he loses the whole of his rights to the vehicle. It is just that the proceeds which go to central funds, £450 to be paid by way of compensation, if there is that money left after the finance company take their share."

On behalf of the appellant it has been submitted that the making of such an order as a punishment was manifestly excessive. Mr Treadwell in his written submissions relied upon several decisions of this court in which such orders have been quashed on the basis that they were oppressive when the totality of the sentence was considered.

8. We have been shown documentation which confirms that as at 9 August 2010 there was outstanding finance on this vehicle under a hire purchase agreement with Black Horse Limited. The outstanding balance on the agreement at that date was £13,004.95. Had the appellant wished to sell the car on that date, the total amount required to settle the hire purchase agreement was £9,113.19. The value of the car at that time was estimated to be £10,000. On this basis there should theoretically have been just enough to meet the sum order as compensation £450. However, as we have explained, in fact the judge would not have been aware of that because he did not know what the figures were. Potentially, however, if the vehicle fetched less on sale, the appellant might have been liable to pay the finance company a substantial sum as well as losing the vehicle.
9. Section 143(1) of the Act provides as follows:

"Where a person is convicted of an offence and the court by or before which he is convicted is satisfied that any property which has been lawfully seized from him, or which was in his possession or under his control at the time when he was apprehended for the offence or when a summons in respect of it was issued—

(a) has been used for the purpose of committing, or facilitating the commission of, any offence, or

(b)was intended by him to be used for that purpose,

the court may (subject to subsection (5) below) make an order under this section in respect of that property."

It is acknowledged on behalf of the appellant that the judge undoubtedly had power to make the order. This vehicle had been used for purpose of committing or facilitating the commission of the offences of making off without paying and was intended by appellant to be used for that purpose.

10. Section 143(5) of the Act provides:

"In considering whether to make an order under this section in respect of any property, a court shall have regard—

(a)to the value of the property; and

(b)to the likely financial and other effects on the offender of the making of the order (taken together with any other order that the court contemplates making)."

It was submitted in writing on behalf of the appellant that here the judge fell into error because the effect of depriving the appellant of his interest in the car was disproportionate, particularly when he was in receipt of disability allowance and incapacity benefit. He suffers from a serious form of diabetes.

11. The effect of a deprivation order is set out in section 143(3) of the Act:

"An order under this section shall operate to deprive the offender of his rights, if any, in the property to which it relates, and the property shall (if not already in their possession) be taken into the possession of the police."

In other words, the order only affects the rights of the offender and cannot affect the rights of others in the property such as a finance company.

12. Section 144 provides that if deprivation order is made, the Police (Property) Act 1897 applies and that any application by a person claiming the property must be made within six months. In law the vehicle was owned by the finance company. The appellant was only a bailee so the finance company would have been bound to succeed in recovering the vehicle on application to the magistrates' court under the Police (Property) Act had the vehicle been taken into the possession of the police pursuant to the deprivation order. The vehicle would, therefore, not have been sold and no proceeds would have become available to meet the compensation orders.
13. At the time the judge made the order on 2 September 2010 the vehicle was not in the possession of the police; it was still in the possession of the appellant. Because a notice of appeal was lodged almost immediately the Crown Prosecution Service very properly advised the police that they should not seize the vehicle so as not to prejudice the appeal. Unfortunately, however, it seems that the finance company were not informed of the forfeiture order that had been made.
14. The result has been, for reasons we will explain in a moment, that whether or not the order was properly made in the first place its purpose has, in any event, now been frustrated because the vehicle has since been sold. Enquiries made by the Crown Prosecution Service and by the police at the request of the registrar have confirmed the following. On or about 28 December 2010 the appellant sold this vehicle to a garage, Rixs Motors, in part exchange for a Range Rover Sport which he purchased for £21,300. The part exchange allowance for the Audi was £7,422. The appellant paid a deposit of £1,150 and entered into a finance agreement with Santander for the balance. The sum outstanding to Black Horse Limited under the hire purchase agreement was paid off on 28 December, namely £8,992.32. The new owner of the Audi has not been traced but the details on the police national computer are those of someone residing in army barracks in Norfolk. Whether the appellant committed a further offence in not disclosing to the garage the existence of the deprivation order when he traded in the Audi (and, if so, what action may be taken about that) remains to be seen. But what is clear is that it is now no longer feasible, nor would it be lawful, for the police to take the vehicle into their possession and attempt to dispose of it pursuant to the order in accordance with the provisions of the Act and the regulations made under the Act.
15. In these circumstances it is unnecessary to investigate in detail whether the deprivation order should have been made. We entirely understand why the judge thought it appropriate to make such an order. Here was a man driving around in an expensive motor car, on state benefits, committing offences with that car for the very purpose of being able to keep the car on the road. It should be remembered, however, as Mr Killeen has reminded us, that as a general principle deprivation orders should not be made except in cases which are simple and uncomplicated: see R v Troth (1979) 1 Cr App R(S) 341. In that case a deprivation order had been made in respect of a tipper lorry in which the defendant held an interest but which was in fact partnership property. The court said:

"We in no way criticise the action [the recorder] took; but we think that if he and others were to bear in mind the following principle they would avoid the difficulties that have arisen in the case today. Just as in cases where compensation orders are made this court has repeatedly said that orders ought not to be made unless they are simple orders and there are no complicating factors, we consider that forfeiture orders ought not to be made except in simple, uncomplicated cases. If a person has an interest in an object which is not free from encumbrances then difficulties are likely to arise. Difficulties have arisen in this case."

Those observations are equally apposite in the present case.

16. It was submitted by Mr Treadwell in his written argument that the order should not have been made because of the seriousness of the financial and other effects on the appellant. The importance of this consideration was emphasised by the Divisional Court in R v Highbury Corner Stipendiary Magistrates' Court ex parte Di Matteo (1991) 92 Cr App R 63. Had this vehicle been the appellant's vehicle unencumbered, and only of modest value, we should have rejected such an argument and held that the judge was entitled to make the order he did. In principle it was a fitting punishment. However, as events have proved, the better course would have been to decline to make such an order because of the complications of the finance company's interest, the uncertainty as to the value of the appellant's interest and the uncertainty, therefore, of the practicality of realising that interest. For all these reasons we allow the appeal and quash the deprivation order.
17. It is clear from the court record that the judge did intend to make compensation orders in favour of the various complainants in the various sums indicated in respect of each named complainant, amounting in total to £450. Lest there be any doubt as to whether the judge actually made compensation orders, we exercise our power by way of resentencing to make fresh compensation orders in exactly the same terms in favour of those same complainants in the same sums. If the appellant could find £1,150 to put down as a deposit for the purchase of his latest expensive vehicle, there is no reason why he should not pay the compensation order.
18. Subject to any contrary submissions from Mr Killeen, we are minded to say that those sums of compensation should be paid within three months of today. Of course, if there are genuine difficulties in payment thereafter it will be open to the appellant to apply to the magistrates' court for more time.

MR KILLEEN: My Lord, I have no submissions. That would have been my submission, not to say 28 days because of the uncertainty of his present financial circumstances. Thank you very much.