England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL
CRIMINAL DIVISION

		Royal Courts of Justice Strand London, WC2A 2LL
		13th December 2012

1. MR JUSTICE GLOBE: On 9th March 2012, at Liverpool Crown Court before His Honour Judge Boulton, the appellant, having previously been sentenced to a total of 12 months' imprisonment for offences of theft and attempting to pervert the course of justice, was made subject to a confiscation order in the sum of £22,010 and a compensation order in the sum of £7,718 in favour of Royal Sun Alliance Motability. The appellant appeals the financial orders with the leave of the single judge.
2. On 30th July 2010 the appellant reported a burglary at his home in which he claimed that a Motability Land Rover Discovery vehicle, leased to his mother, had been stolen. Royal Sun Alliance had concerns about the legitimacy of the claim. Their investigations established that the appellant had taken the vehicle to Ibiza, where it was found in and recovered from an underground garage near to the appellant's flat.
3. At the confiscation hearing the appellant argued that the owners had recovered the vehicle and it would be double recovery if a confiscation order was made.
4. The respondent argued that recovery of the stolen property was not to be taken into account, the appellant's benefit was the value of the stolen vehicle, which at the material time was £22,010, and the appellant had sufficient realisable assets to pay that sum.
5. The judge agreed with the respondent. In doing so, he stated that he was applying the principles derived from the cases of Wilkes [2003] EWCA Crim 848 and Rose [2008] EWCA Crim 239. He specifically referred to paragraph 88 in Rose, which he summarised as stating "the fact that the stolen property has been restored to its true owner is irrelevant". The judge was satisfied that the appellant had sufficient realisable assets to pay the benefit figure of £22,010 and he therefore made a confiscation order in that sum. The judge checked with the respondent that what were referred to as "the repatriation costs" were £7,718. He received confirmation that that was the figure that was being claimed at that time. He ruled that the appellant's assets were sufficiently large to pay a compensation order in that sum. In addition to the confiscation order, he made a separate compensation order for the £7,718.
6. The grounds of appeal, dated 4th April 2012, and the respondent's response, dated 26th June 2012, both pre-date the Supreme Court's recent judgment in the case of Waya [2012] UKSC 51 dated 14th November 2012. In a document headed "Respondent's consolidated submissions", dated 11th December 2012, the respondent now concedes that the original confiscation order should be quashed, but invites the court to increase the compensation order. In consolidated submissions by the appellant, in a document dated 9th December 2012, Mr Whitehurst concludes that, subject to the matters that need clarifying, the compensation of £7,718 should stand alone, and he too confirmed that as a result of the case of Waya, the confiscation order should be quashed.
7. The case of Waya relates to the impact of the Human Rights Act 1988 on the making of post-conviction confiscation orders under the Proceeds of Crime Act 2002. Principles to be derived from the judgment relevant to this case are as follows.
8. There are three stages to the making of a confiscation order. The first is the identification of the benefit obtained by a defendant - the relevant sections are section 6(4) and sections 8 and 76. The second is the valuation of the benefit - the relevant sections are sections 79 and 80. The third is the valuation as at the confiscation day of all the defendant's realisable assets - the relevant section is section 9. That value sets a cap on the recoverable amount of the confiscation order to be made under section 7.
9. The effect of Article 1 of the First Protocol to the European Convention is that there must be a reasonable relationship of proportionality between the means employed by the state and the deprivation of property as a form of penalty and the legitimate aim which is sought to be realised by the deprivation. The legitimate aim and real essence of the Proceeds of Crime Act is to remove from criminals the pecuniary proceeds of their crime. That is confirmed in the explanatory notes to the Act, which states:

"The purpose of confiscation proceedings is to recover the financial benefit that the offender has obtained from his criminal conduct."

A confiscation order must therefore bear a proportionate relationship to this purpose.

10. Section 6(5) sets out the final stage of the process of assessment of a confiscation order. It states:

"If the court decides under subsection (4)(b) or (c) that the defendant has benefited from the conduct referred to it must —

(a) decide the recoverable amount, and

(b) make an order (a confiscation order) requiring him to pay that amount."

Paragraph 16 of the judgment in Waya goes on to state:

"It is plainly possible to read paragraph (b) as subject to the qualification:

'except insofar as such an order would be disproportionate and thus a breach of Article 1, Protocol 1.'"

11. The appellant's case was not a criminal lifestyle case. The judge was therefore not concerned with general criminal conduct and the application of assumptions. He was solely concerned with the applicant's particular conduct arising from the commission of his offences. By section 6(4) and section 76, the appellant's benefit was the vehicle he acquired. By sections 79 and 80, the value of that benefit was £22,010. By section 9, the applicant's realisable assets were substantially in excess of that figure. By section 7, the recoverable amount was £22,010. At that stage of the process, and applying the principles explained in Waya, the issue that next arose was whether, in accordance with section 6(5), the making of a confiscation order in the sum of £22,010 would be disproportionate and be in breach of Article 1 Protocol 1 in circumstances where the Royal Sun Alliance had recovered the vehicle.
12. A like situation was considered in paragraph 29 of the Waya judgment, where it was stated that where the item has been wholly restored to the loser, a confiscation order that requires a defendant to pay the same sum again does not achieve the object of the legislation of removing from the defendant his proceeds of crime, it simply amounts to a further pecuniary benefit and would be disproportionate.
13. The two cases referred to by Judge Bolton are also referred to in Waya. Little need be said about the case of Wilkes because the confiscation order was arrived at after considering that defendant's general criminal conduct and not his particular criminal conduct. There is no need in this judgment to deal with the different considerations that apply to general criminal conduct cases.
14. In relation to Rose, the following was said at paragraph 30:

"To the extent that Rose held at para 88 that the recovery and restoration intact of the stolen property was always irrelevant to the making of a confiscation order, that part of the decision should not be followed."

15. In the circumstances of this case the making of a confiscation order of £22,010 was disproportionate. The respondent is right to make that concession.
16. Insofar as the respondent seeks in the consolidated submissions of 11th December, and orally before us in submissions this morning, to submit that an increase in the compensation order to a sum of £17,096 is appropriate, that application must fail. There are a number of possible reasons. First, it is based on material that was not before the judge. We stress that that is not the fault of the respondent, still less Miss McCracken, who has appeared below and before us today. Numerous requests were made prior to the confiscation hearing for details of the losses without any adequate response being received in time for the hearing. It is now too late to produce new figures this late in the day. In any event, the new figures are not the easiest to understand, and have only recently been supplied to Mr Whitehurst. In the course of his consolidated submissions, he raises a number of queries which might have needed close scrutiny in the context of a fact-finding investigation such as one that would have occurred before Judge Boulton. Secondly, the compensation order was not one that was to be paid out of the confiscation order. It was a stand-alone compensation order with its own enforcement processes. Increasing the amount of the order would require us to increase a completely separate part of the sentence, which would arguably amount to the appellant being more severely dealt with than below, which would be a contravention of section 11 of the Criminal Appeal Act. Thirdly, our understanding is that the real substance of this appeal and the matter which was complained of was the confiscation order, rather than the compensation order in itself, and there is an argument that we are not actually seised of the compensation aspect of the order.
17. For all of those reasons, whether individually or cumulatively looked at, we refuse the application to increase the compensation order. The appeal succeeds in relation to the confiscation order, which order will be quashed, together with the default term attached to it.