England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL
CRIMINAL DIVISION

		Royal Courts of Justice Strand London, WC2A 2LL
		12th June 2014

MR JUSTICE SUPPERSTONE:

1. On 30th June 2006, in the Crown Court at Newport, the appellant was convicted of conspiracy to steal. The conspiracy covers six incidents: first, theft of a Land Rover Defender (valued at £7,000) on 21st October 2003; second, theft of a Land Rover Discovery (valued at £28,000) on 20th October 2004; third, an attempted theft and theft of a mini-digger, trailer and other property (valued at £30,000) on or around 31st July 2005; fourth, theft of a quad motorcycle (valued at £4,000) on 13th August 2005; fifth, theft of two trailers and a winch (valued at £6,000) between 7th April 2004 and 9th September 2005; sixth, attempted theft of mini-diggers (valued at £45,000) on or about 4th December 2005. The total value of the property stolen in furtherance of the conspiracy was estimated by the Crown at £71,000.
2. On 21st July 2006 the appellant was sentenced by His Honour Judge Llewellyn-Jones QC to 21 months' imprisonment. On 8th January 2007 the same judge imposed a confiscation order under the Proceeds of Crime Act 2002 (known as "POCA") in the sum of £7,200, with 28 days to pay and six months' additional imprisonment in default consecutive to the sentence imposed. In the course of the confiscation proceedings the judge found that the appellant had benefited from his offending to the extent of £200,000. The amount of the confiscation order was determined by the available realisable assets at the time of the order.
3. On 2nd January 2014 His Honour Judge Bidder QC, sitting in the Crown Court at Cardiff, considered an application by the prosecution for a reconsideration of the amount available for a revised confiscation order pursuant to section 22 of POCA and imposed a confiscation order in the sum of £36,389.44 to be paid, of which £7,200 had been paid. The order was to be satisfied within two months with a sentence of 12 months' imprisonment in default.
4. The appellant appeals against the confiscation order imposed by His Honour Judge Bidder by leave of the single judge.
5. The appellant was born on 21st January 1979. At the time of his offending he was between 24 and 26 years old. He served his sentence and was released from prison in about May 2007.
6. On 13th February 2009 the appellant was a passenger in a Transit van involved in a road traffic collision. As a result of the collision he suffered total loss of the vehicle in which he was being carried. On 16th April 2009 he was paid a sum of £5,400 by Direct Line Insurance Group PLC, the insurers of the second vehicle which struck the vehicle in which he was the passenger, in settlement of any claim arising from this loss. Also as a result of the collision, the appellant suffered moderate tinnitus, hearing loss and a whiplash injury. A sum of £23,000 is being held for him by Direct Line Insurance in settlement of any claim arising from these injuries. The offer of settlement was based on a quantum of damages particularised as follows: £13,000 in respect of general damages and £10,000 in respect of special damages. The special damages consisted of: £810 for an MRI scan, £525 for physiotherapy, £2,340 for tinnitus retraining therapy and £6,400 for hearing aids and batteries for life.
7. On the application for a reconsideration, the prosecution sought a recalculation of the available amount under section 22 from £7,200 to £37,517.66, representing an increase of £30,317.66.
8. The sum of £30,317.66 was made up of four amounts. First, £2,140 (plus accrued interest) consisted of monies seized from the appellant and retained by the police when he was arrested on 12th November 2010 following an investigation into thefts of plant and vehicles. A restraint order was granted on 20th December 2010. No prosecution resulted. Second, £4,049.44 (plus accrued interest) consisted of monies held in a Lloyds TSB account in the name of the appellant. Third, £1,128.22 consisted of monies drawn by the appellant from a Barclays bank account on 12th May 2012. Fourth, the sum of £23,000 held by Direct Line Insurance relating to the settlement to which we have referred.
9. The appellant had conceded in advance of the hearing on 2nd January 2014 that the first and second amounts of £2,140 and £4,049.44 respectively were available for confiscation and raised no objection to them being included in any recalculation. With regard to the third amount of £1,128.22, the appellant gave evidence at the hearing that those monies had been withdrawn for personal travel and living expenses. The judge accepted that there was confusion as to the restraint order that was applicable. He said the bank made the mistake, they should not have paid it out, but they did. The judge accepted that the appellant had used the monies for living expenses and, that being so, there was no available amount to be taken into account. That left the fourth amount, the sum of £23,000 held by Direct Line Insurance in respect of the accident, which, as the judge emphasised, was not the appellant's fault. The judge noted that the real issue on the reconsideration was in relation to that sum. He enunciated the issue in these terms:

"Is it just that someone who gains damages through no fault of his own from the person responsible for a tort on him should keep those damages, or is it more just that someone who is benefit to a very substantial amount of criminal conduct should lose those damages?"

The judge considered it more just that he should lose the damages.

10. Section 22 of POCA provides, so far as material, as follows:

"(1) This section applies if -

(a)a court has made a confiscation order,

(b)the amount required to be paid was the amount found under section 7(2) ...

...

(3) In a case where this section applies the court must make the new calculation, and in doing so it must apply section 9 as if references to the time the confiscation order is made were to the time of the new calculation and as if reference to the date of the confiscation order were to the date of the new calculation.

(4) If the amount found under the new calculation exceeds the relevant amount the court may vary the order by substituting for the amount required to be paid such amount as -

(a) it believes is just, but

(b) does not exceed the amount found as the defendant's benefit from the conduct concerned.

(5) In deciding what is just the court must have regard in particular to [certain specific matters]

...

(8) The relevant amount is -

(a) the amount found as the available amount for the purposes of the confiscation order, if this section has not applied previously;

(b) the amount last found as the available amount in pursuance of this section, if this section has applied previously."

11. Section 9 of POCA states that the available amount is:

"... the aggregate of -

(a) the total of the values (at the time the confiscation order is made) of all the free property then held by the defendant minus the total amount payable in pursuance of obligations which then have priority, and

(b) the total of the values (at that time) of all tainted gifts.

12. Mr Ali Dewji, for the Appellant, accepts that the mere fact that the recalculation under section 22 of POCA takes into account assets legitimately acquired after the order was made does not render the amount unjust. This is clearly so. In In re Peacock (Secretary of State for the Home Department) [2012] UKSC 5, where the Supreme Court was considering a confiscation order made against an appellant under the Drug Trafficking Act 1994, which contains a similar provision to section 22 of POCA, the court held that "after acquired property" could properly be taken into account under the 1994 regime. Lord Brown, delivering the leading judgment of the court, stated at paragraph 29:

"As for the main argument, based on fairness and rehabilitation, naturally I recognise that Parliament could have chosen a different policy with regard to after-acquired assets. But it seems to me perfectly understandable that in fact Parliament decided (as indisputably it did when later enacting POCA) to leave it open to the courts as a matter of discretion to mulct a defendant of his criminal gains on an ongoing basis irrespective of precisely how and when he came by any increased wealth."

13. Subsequent to Peacock, in Gurpreet Singh Padda v Regina [2013] EWCA Crim 2330 this court considered section 22 of POCA, which was directly in issue. At paragraph 49, Irwin J, delivering the judgment of the court concluded that:

"POCA section 22(4)(a) preserves an obligation on the court and a discretion to make an order which is just. The court can take all relevant circumstances into account when deciding this issue. The court must also take into account the legislative policy in favour of maximising the recovery of the proceeds of crime, even from legitimately acquired assets."

14. (As to the legislative purpose of POCA, see also R v Waya [2012] UKSC 51 at paragraphs 1-4 in the majority judgment delivered by Lord Walker and Sir Anthony Hughes).
15. At paragraph 45 of his judgment in Padda, the judge stated:

"... it is entirely appropriate for a court to consider such matters as the amount outstanding, the additional amount which might now be available for a further payment, the length of time since the original confiscation order was made, the impact on the Defendant of any further payment contemplated and indeed any other consideration which might properly be thought to affect the justice of the case."

16. Mr Dewji, by reference to the facts of the present case, submits there are a number of points that can properly be taken in the appellant's favour on the question of what amount would be just. More than two years after the original confiscation order was made the appellant has received monies as a result of a collision which was not his fault and which resulted in him sustaining permanent physical injuries. The award of £13,000 general damages was, Mr Dewji submits, intended to reflect not only the immediate suffering caused by the collision, but also the immediate and future losses which are likely to continue to be suffered by him. The £10,000 special damages award is intended to reimburse him for the expenses occurred or likely to be incurred as a result of the collision. He requires therapy, hearing equipment and further diagnostic attention. Mr Dewji submits that in effect to include these monies would be to deprive him of the protection of civil law from the negligence of a third party.
17. In our view, the judge asked himself the correct question when considering this issue. He noted that the sum of £23,000 represented both general and special damages in respect of an accident that was no fault of the appellant, and he plainly was aware that the revised compensation order was made seven years after the original confiscation order. We note that in Peacock it was ten years and in Padda it was six years.
18. Mr David Thomas, for the prosecution, makes the point that the judge also knew that the appellant was assessed to have benefited in the sum of £200,000 from his criminal conduct, that only £7,200 had been paid and that there was therefore £192,800 outstanding. Inclusion of the figure of £23,000, together with the other sums the appellant agreed should be included, only amounted to less than 20 per cent of the benefit figure of £200,000. The payment of such a small percentage of the benefit figure is, Mr Thomas suggests, just. It is not suggested that the confiscation order does not conform to the test of proportionality and so violates Article 1 of the First Protocol of the European Convention on Human Rights (see Waya paragraphs 10 to 35, in the judgment of the majority, with which the minority agreed).
19. Mr Thomas submits, and we agree, that it is wrong to suggest that the appellant's rights under civil law have been affected. He has obtained compensation because his rights have been protected by the law. However, by reason of the order of the judge, the appellant's enjoyment of the damages he would have received will be prevented because of his criminal activity and his benefit from it.
20. It is Mr Dewji's alternative submission, if he fails in his primary submission that the entire £23,000 should be taken into account, that a distinction should be made between general and special damages because the latter are based on specific expenses incurred or likely to be incurred as a result of the appellant's injuries, and it would be particularly unjust to deprive the appellant of these amounts.
21. Mr Thomas submits that in the circumstances of this case there can be no difference between special and general damages. It would be artificial, he submits, to suggest that it would be unjust to confiscate one rather than the other.
22. We do not accept Mr Thomas' submission that no distinction can properly be drawn between special and general damages. Whether or not such a distinction could be made does not appear to have been considered by the judge. It is correct, as Mr Thomas contends, that the appellant has an ongoing right to medical care under the National Health Service for no charge. However the MRI scan and some of the other expenses have already been incurred, and therefore the special damages, at least in part, will reimburse the appellant for sums he has already paid. The special damages as a whole relate to specific expenses that have been incurred, or it has been calculated will be incurred, by reason of the injuries caused to the appellant in the collision. We do not consider it to be just for these sums to be included in the available amount under section 22. In reaching this decision we emphasise that the exercise to be conducted in each case is fact specific.
23. However, having regard to the statutory regime and the legislative policy to which we have referred, we do not consider that the general damages element of the settlement can be excluded. As Lord Brown made clear in Peacock at paragraph 29, how a defendant came by any increased wealth is, in principle, immaterial. It matters not whether the source of the new assets is as a result of the defendant having worked hard to set up a legitimate business (as in Padda), or by way of gift inheritance or some other windfall (see observations in the majority in Peacock at paragraph 35). In our view, there is no good reason for treating the part of the settlement in the present case relating to general damages any differently. That part of the judge's order was neither wrong in principle, nor was the sum involved manifestly excessive.
24. We do wish to stress that it is important for judges when determining applications under section 22 of POCA to assess carefully in each case the competing considerations in order to decide what course is truly just. In cases such as the present, not involving a "windfall" gain the consideration should be particularly anxious.
25. In summary, we consider that the judge in this case adopted the correct approach in relation to general damages but erred in relation to special damages. Accordingly, this appeal is allowed to the extent that the order the judge made included the figure of £10,000 for special damages. The confiscation order will be varied and will be in the sum of £26,389.44, of which, as we have noted, £7,200 has been paid. This order is to be satisfied within two months, with 12 months' imprisonment in default.