England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM THE CROWN COURT AT IPSWICH
MR RECORDER KHALIL QC)
S20110397

		Royal Courts of Justice Strand, London, WC2A 2LL
		28/04/2015

MR JUSTICE SWEENEY :

Introduction

1. This is an appeal against sentence, by leave of the Single Judge, in relation to a confiscation order in the sum of £83,000 (with two years' imprisonment in default of payment) made under the provisions of the Proceeds of Crime Act 2002 ("POCA") by Mr Recorder Khalil QC in the Crown Court at Ipswich on 2 October 2013, and in relation to an associated costs order in the sum of £8,000.
2. The Appellant, who is in his early 70's and was of previous good character, purchased Botany Farm in Farnham in Suffolk in the early 1990s. A company, ARP Farms Limited, which was controlled by the Appellant, and of which his wife was also a director, was used in the running of the farm, on which the Appellant kept a herd of Red Poll cattle - a specialised local breed. As a cattle farmer, the Appellant was required to comply with a detailed regulatory framework, much of which was concerned with record keeping, which was designed to minimise the potential for introducing BSE into the human food chain. He did comply until the end of 2004, but thereafter failed to do so (in a number of respects) in the broad period between January 2005 and the end of September 2010.
3. An investigation by the Trading Standards Department of Suffolk County Council began on 30 June 2009. Its scope included investigating whether the Appellant had been involved in unlawfully slaughtering cattle and/or in the unlawful sale of meat. At the conclusion of the investigation, in December 2010, the Appellant, his wife and ARP Farms Limited were jointly summonsed in relation to four record keeping offences and one offence of failing to dispose of a cow's carcass. No charges were brought in relation to involvement in unlawful slaughtering and/or in the unlawful sale of meat.
4. On 21 November 2011, in the North East Suffolk Magistrates' Court, the Appellant and ARP Farms Limited pleaded guilty, each with a largely agreed Basis of Plea, to three of the record keeping offences and to the offence of failing to dispose of a cow's carcass. The prosecution agreed to withdraw the other record keeping offence alleged against the Appellant and the company, and to withdraw all charges against the Appellant's wife. It was then, for the first time, that the prosecution indicated that they were seeking the committal of the Appellant to the Crown Court at Ipswich, under the provisions of s.70 of POCA. Once s.70 was invoked, such a committal was, by virtue of s.70(2), compulsory. The Magistrates made clear that, in any event, they would have committed for sentence under s.3(2) of the Powers of Criminal Court (Sentencing) Act 2000. Hence, by virtue of ss.70(5) and 71(2) of POCA, the Crown Court was obliged to inquire into the circumstances of the case and, whether or not a confiscation order was made, to deal with the Appellant in any way in which it could have dealt with him if he had just been convicted on indictment before it.
5. The confiscation hearing eventually took place before Mr Recorder Khalil QC over seven working days from 16-24 September 2013. The prosecution case in relation to confiscation, as ultimately advanced, was confined to the assessment of criminal benefit in the period between 16 July 2007 and 30 May 2009. It was asserted, in short, that the Appellant had a criminal lifestyle because two of the offences to which he had pleaded guilty were each committed over a period of six months, and that the Appellant had benefited (to the extent of £5,000 or more) from the conduct which constituted those offences by obtaining property as a result of or in connection with it, because he was involved in the unlawful slaughter and/or butchery of 209 unaccounted for cattle, and the unlawful sale of their meat, at a benefit of £1,000 per animal – such that a confiscation order in the sum of £209,000 should be made. The Appellant's case was that it was unfair of the prosecution to seek to engage the provisions of POCA by making allegations about the unlawful slaughter of cattle, and the unlawful butchery and sale of meat, when no such charges had been brought; that even if POCA was engaged there was no benefit from the offences that the appellant had admitted; and that, even if there was benefit, the figure per "missing" animal should be much lower, and no benefit should be assigned in relation to certain of the cattle relied upon.
6. The Recorder handed down judgment on 2 October 2013. The perfected version runs to some 218 paragraphs. He accepted that there had been no unlawful slaughter and reduction of cattle on the farm, but was sure that, in the period from 16 July 2007 to 30 May 2009, the unlawful slaughter and butchery of 116 cattle from the farm had taken place off the farm at the Appellant's direction; that there had been packaging /labelling of their meat on the farm by the Appellant to facilitate the unlawful sale for cash of the meat from 61 of the animals to the public via Farmers' Markets, public houses and restaurants at a benefit of £1,000 per animal (making a total of £61,000); and the unlawful sale for cash of meat from the remaining 55 animals direct to abattoirs / butchers at a benefit of £400 per animal (making a total of £22,000).
7. Against that background, the Recorder concluded, applying s.75(2)(c) of POCA, that two of the offences to which the Appellant had pleaded guilty were committed over a period of at least six months, and that thus he had a criminal lifestyle. Having done so, the Recorder declined to apply the statutory assumptions in s.10 of POCA, but nevertheless found under the general criminal conduct provisions of s.76(2) that the Appellant had benefited from his criminal conduct in relation to the 116 cattle and their meat. Applying s.76(4) and (5) of POCA he further concluded that the total benefit obtained was thus £83,000 (i.e. £61,000 plus £22,000). There was no dispute that the Appellant's realisable assets had a value of at least £300,000, and thus the Recorder made the confiscation order to which we have already made reference.
8. The Recorder then went on to pass sentence upon the Appellant in relation to the four charges, each of which carried a maximum sentence of two years' imprisonment. He imposed fines of £2,000, £10,000, £2,000, and £1,000 respectively – making a total fine of £15,000, with six months' imprisonment in default of payment by 31 January 2014. An appropriate Victim Surcharge Order was also made. Recognising that the Appellant was, to all intents and purposes, ARP Farms Limited, the Recorder imposed a conditional discharge on the company upon each of the four charges.
9. Finally, the Recorder ordered the Appellant to pay £10,000 costs in relation to the prosecution of the charges, and £8,000 costs (rather than the £14,500 sought by the Prosecution) in relation to the confiscation proceedings – making a total of £18,000 in costs, which was also ordered to be paid by 31 January 2014.
10. There have been a number of extensions of time, pending the outcome of the appeal, in which to pay the disputed sums.
11. There are two interlinked Grounds of Appeal in relation to the confiscation order, as follows:

(1) The Recorder was wrong to find that the Appellant had benefited from the offences to which he pleaded guilty, and so had no power to make a confiscation order.

(2) In all the circumstances, the confiscation order was disproportionate or unfair.

12. The first Ground requires consideration of the criminal lifestyle provisions in ss.6, 75 & 76 of POCA.
13. It is common ground that the success or otherwise of the appeal in relation to the costs order is parasitic on the outcome of the appeal in relation to the confiscation order.
14. Given the issues, it is necessary first to expand upon some aspects of both the background and the confiscation proceedings.

Background

15. The Appellant was an energetic promoter of Red Poll cattle – forming the Red Poll Development Society in the process, and assisting the Food Standards Agency in a project to develop a DNA database for pure and cross bred Red Poll cattle. The Appellant also sat on the Regional Board for livestock of the National Farmers Union and was well respected in the farming community.
16. At all material times, there was a detailed regulatory framework including, in particular, the Animal By-Products Regulations 2005 (SI 2005 No. 2347), which came into force in September 2005, and the Cattle Identification Regulations 2007 (SI 2007 No. 529), which came into force in April 2007, which were intended to minimise the potential for introducing BSE into the human food chain. The requirements of the Regulations included the following:

(1) Cattle had to be registered within twenty days of birth.

(2) After initial registration cattle had to be marked with two ear tags (one large and one small) containing unique identification numbers relating to the particular farm and to the animal itself – which numbers were also contained in a "passport" issued after registration and required to remain with the animal throughout its lifespan.

(3) A Cattle Movement Register had to be kept at the farm and any movements on or off the farm, and any deaths on the farm, had to be notified to the Cattle Movement Service within three and seven days respectively.

(4) In particular, when cattle were sent to an abattoir for slaughter, they were required to be accompanied by their ear tags and the relevant part of their passport.

(5) There was a requirement, if requested, to produce the Cattle Movement Register to a person acting duly under the Regulations.

(6) Dead cattle had to be collected, transported and identified without undue delay and directly disposed of at an approved incinerator plant or at an approved processing plant.

17. The Rural Payments Agency was the central body that oversaw the regulatory framework. It had powers of inspection, but not of enforcement, which was the responsibility of Trading Standards Authorities.
18. In 1999 and 2004 Suffolk Trading Standards inspected the farm, and found that full and accurate records were being kept in relation to the cattle. However thereafter, and until the end of May 2009, it was said that the Appellant had failed to keep such records.
19. In July 2004 the Appellant was granted planning permission to build a butchery on the farm. In 2006 he obtained a grant of about £30,000 to build the butchery, to which he added about £40-50,000 of his own money. He also purchased a refrigerated van. There was a dispute as to whether construction had ever been completed and, in any event, whether the butchery had ever been operational.
20. In 2008 the Appellant sought assistance from the National Farmers Union in relation to his record keeping. It seems that they contacted the British Cattle Movement Service, which in turn contacted the Rural Payments Agency. In consequence, Ms Jennie Crohill, a Rural Payments Agency Inspector, carried out an inspection of the farm – visiting it on six occasions in the period between 12 March 2009 and 30 May 2009. The Appellant told her that his records were not compliant as his computer had broken down, and that he could not keep written records because he had suffered a whiplash injury. However, he did produce some records thereafter - said by him to be consequent on the repair of his computer.
21. In the result, Ms Crohill found records of 94 cattle, none of which correlated to the animals that she had seen on the farm, and which had thus been moved off, or died on, the farm without the requisite notification to the Secretary of State. Ms Crohill also found some 165 cattle (around 150 inspected and 10-15 not inspected) on the farm, of which 93 had not been registered at all.
22. After the conclusion of her visits Ms Crohill made a report in which she concluded that the Appellant's record keeping breaches were negligent (rather than intentional), and that they were "rectifiable". It is clear that from 30 May 2009 the Appellant's records were, generally speaking, put back in order. The Rural Payments Agency wrote to the Appellant stating that, as a penalty for his non-compliance with the Cattle Identification Regulations, there would be a reduction of 5% in the payment due to him under the Single Payment Scheme.
23. The matter was, nevertheless, reported to the Trading Standards Department of Suffolk County Council. As already indicated, the Department began an investigation on 30 June 2009. On 2 July 2009 Mr Chaplin, a duly authorised inspector, attended the farm and asked the Appellant to produce his Cattle Movement Register or other records showing the movement of his cattle. The Appellant failed to do so. On a subsequent visit on 18 September 2009 the farm was searched and the butchery facility was found (although it was not being operated that day), together with the decaying carcass of a cow in a nearby container. On that date, and when seeking to interview the Appellant in September 2010, Mr Chaplin repeated his request to the Appellant to produce the Cattle Movement Register or other records showing the movement of the Appellant's cattle. Again, the Appellant did not do so.
24. It is clear that the principal focus of the long Trading Standards investigation was whether the Appellant and his wife (who became extremely unwell during the course of the investigation – suffering a heart attack in March 2010 and shortly thereafter a stroke) had been involved in unlawfully slaughtering animals and/or unlawfully selling meat, and hence whether they had committed offences in those regards contrary to the Food Safety Act 1990, the Fraud Act 2006, the General Food Regulations 2004, the Animal By-products Regulations 2005, the Cattle Identification Regulations 2007, and the Transmissible Spongiform Encephalopathies (England) Regulations 2008.
25. In the end, however, as already touched on, no charges were brought in relation to unlawful slaughtering and/or the unlawful sale of meat. Instead in December 2010 (some eighteen months after the investigation had begun) the Appellant and his wife (who was still unwell) were jointly summonsed (along with the Appellant's company) for four record keeping offences and one offence relating to the failure to dispose of a cow's carcass.
26. The four offences to which the Appellant and the company pleaded guilty on 21 November 2011 were, in the order in which they were charged, as follows:

(1) On 30 May 2009 being the keeper of 93 cattle found on Botany Farm which were not registered with the Secretary of State within seven days from the date that they were required to be tagged – namely within twenty days of birth, contrary to Regulation (EC) no. 911/2004 and 1760/2000 by virtue of condition 1, 2 and 3 of Schedule 2 and Regulation 5 of the Cattle Identification Regulations 2007. (This related to the 93 cattle found by Ms Crohill which had not been registered at all – see para.21 above).

(2) Between 1 January 1993 and 30 May 2009 being the registered keeper of 94 cattle at Botany Farm failed to notify the Secretary of State of their movement off, or death on, the farm within seven days of such movement or death – contrary to Regulation (EC) no. 911/2004 and 1760/2000 by virtue of conditions 1 and 2 of Schedule 4 and Regulation 7 of the Cattle Identification Regulations 2007. (Despite the dates in this charge it was said to relate to the period from January 2005 to 30 May 2009 and to the 94 cattle that Ms Crohill found had been moved off, or died on, the farm without notification to the Secretary of State – see again para.21 above).

(3) Between 2 July 2009 and 30 September 2010 being the keeper of approximately 165 cattle found on Botany Farm, and the registered keeper of 94 cattle registered as being on the farm that were no longer there, failed to produce a Cattle Movement Register as required by Schedule 5 of the Cattle Identification Regulations 2007 when required to do so by John Chaplin a person acting under the Regulations, contrary to Article 7(3) of Regulation (EC) no. 1760/2000 and by virtue of Regulation 13(d) of the Cattle Identification Regulations 2007. (This related to the various requests made by Mr Chaplin – see para.23 above).

(4) On 18 September 2009 had in his possession the carcass of a cow which failed to comply with Article 5(2) of the Community Regulations (EC) no. 1774/2000 in that it was not collected, transported and identified without undue delay and directly disposed of at an approved incinerator plant or an approved processing plant, contrary to Regulation 5(1) of the Animal By-Products Regulation 2005. (This related to the carcass found by Mr Chaplin – see again para.23 above).

The confiscation proceedings

27. It is clear that, initially, the prosecution proceeded upon the erroneous basis that one or more of the four offences to which the Appellant had pleaded guilty was specified in Schedule 2 of POCA, and that thus (by virtue of s.75(1) & (2)(a)) the Appellant had a criminal lifestyle.
28. However, in the end, the prosecution case was advanced along the following lines:

(1) The Appellant had been committed to the Crown Court under s.70 and the prosecutor was asking the court to proceed under s.6, therefore the two conditions required by s.6(1)-(3) were satisfied.

(2) Thus, by virtue of s.6(4), the court was required to decide whether the Appellant had a criminal lifestyle.

(3) The Appellant had a criminal lifestyle because his convictions constituted conduct forming part of a course of criminal activity – thus satisfying s.75(1), (2)(b) & (3); and/or because the second and third offences (as set out in para.26 above) were each committed over a period of more than six months – thus satisfying s.75(1) &(2)(c); and, in each case, the appellant had benefited (to the extent of £5,000 or more) from the conduct which constituted the offence(s) by obtaining property as a result of or in connection with it – thus satisfying, as appropriate, s.75(4), (5) & (6) by reference to s.76(4).

(4) He had so benefited because, without the need to resort to the s.10 assumptions, the evidence showed that, in the period from 16 July 2007 (around which time the Appellant had told a veterinary surgeon Mr Franco-Guerrero, who was treating the cattle, that there were 304 cattle present on the farm) and 30 May 2009 (when Ms Crohill completed her counting of the cattle on the farm) there were 131 "missing" cattle (less 6 that had been lawfully slaughtered and 9 that appeared to have lawfully died on the farm) making a total of 116 animals that had been unlawfully slaughtered and/or butchered by the Appellant and the meat sold through Farmers Markets and other outlets at a benefit of £1,000 per animal to the Appellant.

(5) In addition, the 93 cattle that were found by Ms Crohill without documentation each also represented a benefit in that they were available for illegal slaughter and sale – at a benefit of £1,000 per animal to the Appellant.

(6) Therefore the appellant had benefited from his offences in relation to 209 cattle and thus in the total sum of £209,000, and an order should be made in that sum as there was no dispute that the Appellant's realisable assets exceeded it.

29. The Appellant gave evidence. His case was to the following broad effect:

(1) It was unfair of the prosecution to seek to engage the provisions of POCA.

(2) Even if POCA was engaged there was no benefit from the offences which he had admitted, and thus no order could be made.

(3) Even if there was benefit, the value of benefit per "missing" animal should be much lower, and there was no benefit in relation to the 94 cattle in relation to which only records were found, or in relation to the 93 cattle that were found but for which there was no corresponding documentation.

30. As indicated above, the Recorder handed down judgment on 2 October 2013. In further detail:-

(1) Having set out the background to the proceedings and summarised the respective positions of the parties, he reminded himself of the three stage approach enunciated by the House of Lords in R v May [2008] 1 AC 1028 and, in accordance with the judgment of the Supreme Court in R v Waya [2013] 1 AC 294, of the need for any resultant order to be compliant with the provisions of Article 1 of Protocol 1 to the ECHR.

(2) He then analysed the evidence in detail – including finding that the Appellant's evidence was unreliable or untruthful in a number of respects.

(3) In the result, he was sure that there were 304 cattle on the farm in July 2007 and that only some 165 cattle were there in May 2009 (of which 93 did not have documentation) – and that hence there were 139 fewer cattle in May 2009. Of those, 23 were lawfully accounted for, meaning that 116 were unaccounted for (and documents for 94 such cattle had been found).

(4) He accepted that there had been no unlawful slaughter and reduction of cattle on the farm – either by the Appellant himself or by a third party.

(5) However, he was sure (bearing in mind his findings in relation to missing cattle) that during the period from 17 July 2007 to 30 May 2009 (which amounted to 98 weeks) the unlawful slaughter and butchery of cattle from the farm had taken place, at the Appellant's direction, off the farm; that there had been packaging / labelling of the meat on the farm by the Appellant to facilitate its sale to the public; and that the Appellant had unlawfully sold illegally slaughtered and butchered Botany Farm meat to the public, for full value, via Farmers' Markets, public houses and restaurants (with payments made in cash that the Appellant did not account for); and that other such meat had been sold direct to abattoirs / butchers (again with payments made in cash that the Appellant did not account for).

(6) Given admissions made by the Appellant during the course of his evidence, he concluded that the minimum benefit per animal in relation to the meat sold to the public was £1,000, and that the realistic benefit from animals sold direct to abattoirs / butchers was £400.

(7) Given the Appellant's evidence that he sold an average of half a carcass per week at Farmers' Markets, he concluded that the Appellant had sold 49 animals at Farmers' Markets for full value during the period from July 2007 to May 2009, and that it was realistic to conclude that Appellant had also sold a total of 12 animals to other public outlets in the same period – thus making a total number of 61 animals unlawfully sold to the public and a benefit to the Appellant of £61,000.

(8) That left a total of 55 animals (of the missing 116) which, he concluded, had been unlawfully sold to abattoirs / butchers – with a total benefit to the Appellant of £22,000.

(9) Given the risk of double counting in relation to the 94 cattle whose documents had been found, and the lack of clear evidence as to value in relation to the 93 cattle that were found without documentation, he declined to make any findings in relation to any other cattle.

(10) As to the determination under s.6(4) of POCA of whether the Appellant had a criminal lifestyle, he concluded that s.75(2)(a) did not apply (as had, by then, been agreed), and that (agreeing with submissions made on behalf of the Appellant) nor did s.75(2)(b) because the carcass offence was not one from which the Appellant had benefited and thus there were not the required three offences in addition to the first one that he would have to consider.

(10) However, he concluded, applying s.75(2)(c) of POCA, that two of the offences (the second and third set out in para.26 above) were committed over a period of at least six months, and that the Appellant's conduct in failing to comply with the Cattle Identification Regulations 2007 had been intended to conceal what he had been doing with the 116 animals. He made no specific finding that the Appellant's benefit from the conduct that constituted the second and third offences was not less than £5,000.

(11) Having, nevertheless, concluded that the Appellant had a criminal lifestyle, the Recorder declined to apply the statutory assumptions under s.10 of POCA, but went on to find under the general criminal conduct provisions of s.76(2) that the Appellant had benefited from criminal conduct in relation to the unlawful slaughter of, and sale of the meat from, a total of the 116 cattle in the period between 17 July 2007 and 30 May 2009. Applying s.76(4) and (5) of POCA he further concluded that the total benefit obtained was £83,000 (i.e. £61,000 plus £22,000).

(12) The Recorder rejected the contention that the proceedings were improper or unfair.

31. For the purposes of this appeal, the critical passages in the judgment were as follows:

"190. Plainly the…[relevant]…charges are drawn over a period wide enough to cover the time scale required and it has not been suggested there is a difficulty with the 6-month qualifying period. I have already set out my factual findings, namely that the 'missing animals' were illegally slaughtered and butchered off site, but were then sold illegally for cash by Mr Moss. In these circumstances I am sure that the conduct of the defendant in failing to abide by the CIR [Cattle Identification Regulations 2007] was designed to conceal that which he was doing with his animals.

191. Mr Taylor [Counsel then appearing for the Appellant] contends that the failure to notify the movement of the cattle is not to be equated with the fact of illegal movement, slaughter, butchery and sale, since other more serious charges could have been brought to reflect these matters; Mr Taylor thus asserts that the defendant has not 'benefited' from the offences because they are essentially documentary regulatory offences rather than essentially acquisitive offences. In these circumstances it is argued that that the illegal activity that I have decided was carried out with the animals is not 'conduct which constitutes the offence' charged.

192. These are propositions that do not sit easily with the defence contention at the outset of the Hearing that I would be unable to determine the case without hearing the evidence and of the importance of my determination of the 'intention' of the defendant; if the present arguments were correct, then the hearing of evidence would have been wholly immaterial to my decision on this point.

193. I accept the submissions of the Prosecution that in this case the offences are not properly to be characterised as mere documentary irregularity, for underpinning them is the important matter of the intention of the defendant in committing the offences and the manner in which he committed them; if he was merely incompetent in his record keeping and there was no underlying / accompanying illegality in respect of his dealings with the cattle that necessitated the false 'record keeping' (I use that as a shorthand for the allegation in question), then my actual findings would have reflected this and there would be no question of me determining that he had 'benefited' from the admitted conduct.

194. Mr Taylor makes the separate submission that the Prosecution has chosen not to prosecute his client for the more serious offences that could have been made, thus depriving the Defendant of the advantage of the more significant burden of proof that would have rested on the Crown. Oral submissions were made on this point.

195. If proceedings are properly brought, then there can be little room for complaint that a defendant has not been prosecuted for a more serious offence – the reverse submission is usually made. In these circumstances I am not satisfied that that the submission as it pertains to these proceedings is a valid one.

196. In any event, I have made it plain in my factual findings that I have come to conclusions based upon the application of the criminal standard, and where there was doubt I have given the defendant the benefit thereof. I make it plain that I have not done this in order to circumvent the statutory provisions, but because the evidence has caused me to reach the conclusions accordingly.

197. In these circumstances, I cannot see any impropriety or unfairness arising in the case. I anticipate that the Prosecution's decision to restrict the nature of the charges will be of significance in Mr Taylor's submissions when I have to consider the appropriate sentence in this case.

………..

201. Under s.76(2) I am to consider 'all his criminal conduct' – in this case I restrict myself to the matters set out in my factual findings above.

Benefit

202 Under s.76(4) the defendant 'benefits' from his offending if he 'obtains property as a result of or in connection with' it. Under s.76(5) if the defendant obtains a pecuniary advantage as a result of or in connection with his conduct he is taken to have obtained a sum of money equal to the pecuniary advantage.

203. Further to my factual findings, in this case Mr Moss has sold illegally no fewer than 116 animals – he has covered up this criminality by failing to supply the proper information to BCMS [British Cattle Movement Service]. In these circumstances I have concluded that the cash that he received from the sales is property obtained as a result or in connection with his offending. This is plainly a benefit. I have placed the total value of these sales as £61,000 + £22,000 = £83,000."

The legislation

32. For the purposes of this appeal, the relevant provisions of POCA are as follows:-

"6(1) The Crown Court must proceed under this section if the following two conditions are satisfied.

(2) The first condition is that a defendant falls within any of the following paragraphs - …….

(c) he is committed to the Crown Court in respect of an offence or offences under s.70 below (committal with a view to a confiscation order being considered).

(3) The second condition is that –

(a) The prosecutor asks the court to proceed under this section…

(4) The court must proceed as follows –

(a) it must decide whether the defendant has a criminal lifestyle;

(b) if it decides that he has a criminal lifestyle it must decide whether he has benefited from his general criminal conduct;

(c) if it decides that he does not have a criminal lifestyle it must decide whether he has benefited from his particular criminal conduct.

(5) 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…….

(7) The court must decide any question arising under subsection (4) or (5) on a balance of probabilities……..

7(1) The recoverable amount for the purposes of section 6 is an amount equal to the defendant's benefit from the conduct concerned……

75(1) A defendant has a criminal lifestyle if (and only if) the following condition is satisfied.

(2) The condition is that the offence (or any of the offences) concerned satisfies any of these tests –

(a) it is specified in Schedule 2;

(b) it constitutes conduct forming part of a course of criminal activity;

(c) it is an offence committed over a period of at least six months and the defendant has benefited from the conduct which constitutes the offence.

(3) Conduct forms part of a course of criminal activity if the defendant has benefited from the course of conduct and –

(a) in the proceedings in which he was convicted he was convicted of three or more other offences, each of three or more of them constituting conduct from which he has benefited, or……….

(4) But an offence does not satisfy the test in subsection 2(b) or (c) unless the defendant obtains relevant benefit of not less then £5,000…….

(6) Relevant benefit for the purposes of subsection 2(c) is –

(a) benefit from conduct which constitutes the offence;…..

76(1) Criminal conduct is conduct which –

(a) constitutes an offence in England and Wales……

(2) General criminal conduct of the defendant is all his criminal conduct……

(3) Particular criminal conduct of the defendant is all his criminal conduct which falls within the following paragraphs –

(a) conduct which constitutes the offence or offences concerned;….

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

(5) If a person obtains a pecuniary advantage as a result of or in connection with conduct, he is to be taken to obtain as a result of or in connection with the conduct a sum of money equal to the pecuniary advantage.

(6) References to property or a pecuniary advantage obtained in connection with conduct include references to property or a pecuniary advantage obtained both in that connection and some other.

(7) If a person benefits from conduct his benefit is the value of the property obtained."

The arguments

33. As to the first Ground, namely that the Recorder was wrong to find that the Appellant had benefited from the offences to which he had pleaded guilty and so had no power to make a confiscation order, Mr Talbot (who did not appear below) submitted on the Appellant's behalf that:

(1) The first issue in the confiscation proceedings was whether it was proved that the Appellant had a criminal lifestyle – see s.6(4)(a) of POCA.

(2) Unless a criminal lifestyle was proved, the court could not go on to consider the Appellant's "general criminal conduct" as defined in s.76(2) of POCA - see ss.6(4)(b) & 7(1). In the event of a failure to meet the requirements in s.75 in relation to "general criminal conduct", confiscation would be limited to the consideration of "particular criminal conduct", namely the actual offences to which the Appellant had pleaded guilty – see.ss.6(4)(c), 76(3) & 7(1).

(3) Whilst s.75(2) of POCA provides three potential routes to a finding of a criminal lifestyle, the only one that applied in this case was whether it was proved that the Appellant had committed an offence over a period of six months or more and had benefited "from the conduct which constitutes the offence" by at least £5,000 – see ss.75(2)(c) & 75(4).

(4) By virtue of s.76(4) a person benefits from conduct if he obtains property as a result of or in connection with that conduct. In that context, obtaining in connection with the conduct includes property obtained in that connection and some other, and a person's benefit is the value of the property obtained – see s.76(6) & (7).

(5) S.76(4) requires a causal connection between the offence and the obtaining of the property, and:

(i) The causal link must be construed with some strictness – see Waya (above) at [2] & [8], and Ali [2014] EWCA Crim 1658 at [47], [52-57], [60] & [61].

(ii) For example, the existence of a mere factual connection between the offence and the obtaining of property is not sufficient for the property to be caught by s.76(4). It must be benefit from the offence – see James [2012] 1 WLR 2641 at [40-42], [44] & [47], and Ahmad [2012] 1 WLR 253 at [53], [54] & [59].

(iii) Similarly, a failure to submit a tax return on income does not turn the income into benefit. Rather, the benefit is the value of the tax evaded – see Moran [2002] 1 WLR 253 at [7] & [8].

(iv) Hence, in this case, the admitted failures to make declarations about past movements or deaths did not turn the cash payments consequent on illegal slaughter and sale of meat into property obtained as a result of or in connection with those failures. Rather, it was the illegal slaughter and sale which created the obligation, after the event, to notify.

(6) The Recorder found that the Appellant had a criminal lifestyle because of his commission of the second and third offences set out in para.26 above. However, those offences involved failures by the Appellant to notify the authorities about past events. The sum of £83,000 was the sale price of cattle / meat sold by the Appellant which the Recorder found was sold in breach of provisions of the criminal law that were not charged, but that as the Appellant had committed the two offences in order to conceal those other offences, the sale price of the cattle / meat should be regarded as benefit from the second and third offences.

(7) The Recorder made clear, at paras.190 & 193 of his judgment (above), that his finding as to the purpose of the Appellant was dispositive, and held that if the purpose of the Appellant had not been the concealment of other crime, he would have concluded that the Appellant had not benefited.

(8) That approach was wrong in principle given that:

(i) It was contrary to the statutory intention underpinning the criminal lifestyle provisions – which engaged a draconian regime whereby a confiscation order can be made by reference to offences of which a defendant is not convicted or, as here, not even charged. A court can only apply the criminal lifestyle provisions if a defendant has benefited, by at least £5,000, from proven offences. To permit a court to decide whether a defendant has a criminal lifestyle by reference to the determination of guilt of offences not charged was to put the cart before the horse.

(ii) Where a defendant is paid a sum of money for a transaction, a failure to declare the transaction does not mean that the payment was the benefit from the failure to make the declaration. The benefit was obtained from the transaction, not from the failure to declare it – see Moran (above).

(iii) The purpose of a defendant in committing the crime does not affect whether he has benefited from it, which is an objective issue - see e.g. Threapleton [2002] 2 Cr.App.R. (S.) 46 at [26] & [30].

34. In response to questions from the Court, Mr Talbot accepted that if the prosecution case had been put upon the basis that the commission of the second offence had enabled the defendant to be concerned in the ongoing illegal slaughter of cattle and sale of their meat for a sufficient part of the relevant period, that would have been a legally permissible basis upon which the prosecution could have suggested that the Appellant had obtained the resultant cash as a result of or in connection with the second offence and, if the evidence had supported it, a legally permissible basis upon which the Recorder could have made findings as to Appellant's benefit as a result of or in connection with the second offence. Mr Talbot emphasised, however, that that was not the way that the case had been advanced, and nor was it the basis upon which the Recorder had reached his conclusions in relation to benefit.
35. As to the second Ground, namely that the confiscation order was disproportionate and unfair, Mr Talbot accepted that, in the light of cases such as Bagnall [2013] 1 WLR 204, a confiscation order may properly be calculated from offences of which the defendant was not convicted – whether or not there is evidence of other specific crime.
36. Nevertheless, Mr Talbot submitted, in this case the Appellant had been investigated for a considerable period of time in relation to offences in connection with the unlawful slaughter of cattle and the unlawful sale of their meat, but had not been prosecuted for any such offences. Equally, and without explanation, there had been no notification of the intention to rely upon s.70 of POCA until after the Appellant's pleas had been entered, and the prosecution had then resurrected the allegations to buttress its confiscation order application, and the Recorder found the issue to be determinative, feeling constrained, in the process, to apply the criminal standard of proof - whereas the case had not been conducted in that way. Hence the confiscation order offended Article 1 of Protocol 1 to the ECHR, or was an abuse of process.
37. On behalf of the Respondent, Ms Lambert underlined (as the Recorder did at [192] of his judgment) that, at the outset of the confiscation hearing, counsel then appearing on behalf of the Appellant had contended that it was imperative that evidence was heard in order to establish the intention of the Appellant when the admitted offences were committed.
38. Ms Lambert further submitted that the Recorder had carefully examined in turn each of the questions in the three stage approach identified in R v May (above) – namely as to the identification of the benefit; the valuation of the benefit; and the value of the available assets. In the result, she submitted, the Recorder had been entitled to conclude that the second and third charges fell within s.75(2)(c) of POCA, and that the Appellant had benefited overall to the extent of £83,000.
39. Ms Lambert emphasised that the words "in connection with" in s.76(4) necessarily widened the test to be applied. She placed reliance, in particular, upon Ali (above) in which a finding of benefit as a result of or in connection with an offence of breach of an Enforcement Notice, contrary to s.179(2) of the Town and Country Planning Act 1990, was upheld; and upon Del Basso & Goodwin [2010] EWCA Crim 1119 in which, similarly, a finding that the proceeds of a business carried on in breach of another Enforcement Notice under the same Act were benefit was also upheld.
40. By analogy, and albeit that the relevant admitted offences reflected failures to notify after the event, Ms Lambert submitted that the Recorder was entitled to conclude, having found that the Appellant's purpose in committing those offences was to conceal the activities from which he derived a financial reward, that the financial reward was benefit – as set out in the relevant parts of his judgment cited in para.31 above. It was the failure to alert the authorities to the movements that had enabled the Appellant to carry on his wider offending undetected. However Ms Lambert was not able, in our view, to point to any reference to the case being advanced or decided upon the basis postulated by the Court – see para.33 above.
41. As to the second Ground, Ms Lambert submitted that the confiscation order was both proportionate and fair. The Recorder, she submitted, had paid particular attention to potential unfairness, had followed the principles identified in R v May (above) to the letter, and had also had regard to the principles in R v Waya (above). He had applied the criminal standard of proof, and the benefit that he had found was very significantly below the figure sought by the prosecution.

The merits

42. In our view, this case provides another salutary reminder of the need, emphasised in cases such as Whittington [2010] 1 CrAppR (S) 83, for a rigorous, step-by-step approach to the process of identifying and determining the necessary issues in confiscation proceedings.
43. Albeit that it would have been better if there had been transparency as to their intention from an earlier stage, the prosecution were entitled, following the pleas of guilty on 21 November 2011, to invoke s.70 of POCA.
44. The first and vital question in the consequent confiscation proceedings in the Crown Court was whether it was proved that the Appellant had a criminal lifestyle. Although the prosecution relied, at points, upon all three possible routes in s.75(2), the only realistic route to such proof was via s.75(2)(c), (4) & (6)(a) which required that at least one of the offences to which the Appellant had pleaded guilty had been committed over a period of at least six months and that the Appellant had benefited from the conduct that constituted the offence to the extent of not less than £5,000.
45. The prosecution relied upon both the second and third offences, as set out in para.26 above, as being such offences. In pleading guilty to the second offence the appellant had admitted that, between January 2005 and 30 May 2009, he had failed, within the requisite period, to notify the Secretary of State of the movement off the farm, or death on the farm, of 94 cattle. In pleading guilty to the third offence the Appellant had admitted that, in the period from 2 July 2009 to 30 September 2010, he had failed to produce a Cattle Movement Register when required to do so.
46. Taken in isolation, neither of those offences involved the obtaining of any property or pecuniary advantage. In order to prove that the Appellant had benefited from the conduct that constituted the relevant offence to the extent of not less than £5,000, the prosecution sought in each instance to prove that the Appellant had obtained property or a pecuniary advantage as a result of or in connection with it, via proof that, in the period from 16 July 2007 to 30 May 2009, he had also been concerned in offences relating to the illegal slaughter of cattle and the sale of their meat in consequence of which he must have obtained cash / a pecuniary advantage in excess of £5,000. Indeed, as touched on above, it was the prosecution case that he had obtained a total sum of £209,000.
47. Notwithstanding the earlier decision not to prosecute for offences relating to the illegal slaughter of cattle and the sale of their meat, that course was open to the prosecution and did not, in itself, amount to an abuse of process – see e.g. Bagnall (above).
48. However, the taking of that course meant that, in the particular circumstances of this case it was, at the least of it, arguable (even taking into account the decision of the Supreme Court in Gale v SOCA [2011] UKSC 49) that the rare exception identified by the House of Lords in Briggs-Price (Robert William) [2009] 1 AC 1026 in relation to the analogous provisions of the Drug Trafficking Act 1994 was engaged, as explained in cases such as Whittington (above) and Sakhizada [2012] EWCA Crim 1036. That was because the prosecution could not prove by independent evidence that the Appellant possessed cash or other property for which there was no innocent explanation, but asserted instead that his obtaining of cash was to be inferred from his commission of crimes in relation to the unlawful slaughter of cattle and the unlawful sale of their meat. If that argument was right then, from the outset, proof of the alleged illegal slaughter and sale offences was required to be to the criminal standard.
49. As this issue was not raised before us, we express no concluded view about it. But there can be no doubt that it required careful consideration in the confiscation proceedings, and it is troubling that it did not receive it. Everyone appears to have proceeded upon the basis that, legally, proof on the balance of probabilities was sufficient. If the exception did apply, the fact that, at a late stage, after all the evidence had been heard, the Recorder raised (in the context of abuse of process) the criminal standard and that he later made the relevant findings of fact to the criminal standard (albeit still proceeding upon the basis that proof to the civil standard was legally sufficient) that would not have detracted from the reality that, at a fundamental level, the confiscation proceedings were flawed from the start.
50. In addition there were, it seems to us, undoubted flaws in the way in which the criminal lifestyle issue under s.75(2)(c) was dealt with by both sides and (absent appropriate assistance from them) in the way in which the Recorder dealt with it too.
51. It is clear that the matters that caused the Recorder to conclude that it was proved that the Appellant had a criminal lifestyle were:

(1) No question had been raised as to the six month qualifying period.

(2) The two charges were drawn over a period that was wide enough to cover the time scale required.

(3) The Appellant had also been concerned in the illegal slaughter and sale for cash of the meat from his "missing" animals.

(4) The Appellant's conduct in committing the second and third offences was designed to conceal what he was doing with his animals.

52. Dealing with the third offence first, it was incumbent on the Recorder not just to take the charge at face value but to consider both the charge and the evidence in relation to it, and then to decide whether it amounted to an offence committed by the Appellant over a period of at least six months – see e.g. Bajwa & others [2012] EWCA Crim 1093 at [47] – [56]. It was at least arguable that the third offence, although charged over the period between 2 July 2009 and 30 September 2010, related only to the three days during that period on each of which Mr Chaplin had required the production of the relevant records (see para.23 above), rather than being a continuous offence over the whole period. Yet this was not raised or considered, and it needed to be if appropriate findings were to be made in the confiscation proceedings.
53. Equally, the Recorder found that the unlawful slaughter and sale offences were committed during the period from 17 July 2007 and 30 May 2009 and that the cash which they generated was obtained by the Appellant during that same period. It is very difficult to see how the obtaining of the cash during that period could have been as a result of or in connection with the subsequent failure to produce records on occasion in the period between July 2009 and September 2010, yet that issue was neither raised nor considered either - save to the extent that the Recorder relied on the Appellant's intention (as to which see below). This issue also needed to be considered if appropriate findings were to be made in the confiscation proceedings.
54. The second offence related to failures to notify in relation to the movements of 94 cattle in the period between January 2005 and 30 May 2009. As already indicated, the period when cash was alleged to have been obtained from offences in relation to the illegal slaughter of cattle and the sale of their meat was confined to the period between 17 July 2007 and 30 May 2009. Given the wording of s.75(2)(c) careful analysis was therefore required as to whether, during that latter time, the third offence was committed over a period of at least six months and whether the Appellant had benefited from the conduct which constituted that offence. That should have been carefully considered but, against the background that no question had been raised about the six month period, was not.
55. Equally, as already touched on, it is clear that the Recorder reached his conclusion that the Appellant had benefited from the conduct which constituted both the second and third offences by reference to the Appellant's intention. As rightly asserted by Mr Talbot, and as cases such as Threapleton (above) make clear, the ultimate question as to whether a person has obtained property as a result of or in connection with an offence is an objective one.
56. As the Court pointed out during argument (see para.33 above), there was an appropriate way in which the prosecution case could potentially have been put in order to establish that the Appellant had benefited to the requisite extent from the second offence. However, it is clear to us that that was not the way in which the case was put, and nor was it the basis upon which the Recorder decided the issue.
57. Finally, in relation to both offences, the Recorder made no finding at all that the Appellant had benefited to the extent of not less than £5,000 from the conduct that constituted the relevant offence(s). Instead, he deferred consideration of benefit until his analysis of the different issue of the benefit that the Appellant had obtained from his general criminal conduct. Without such a finding there was no proper basis upon which to conclude that a criminal lifestyle was proved.
58. It is not possible for us to say what the result would have been if the various undoubted flaws had been avoided. We therefore conclude that the first Ground of Appeal in relation to the confiscation order succeeds and that the appeal must be allowed. The confiscation order is quashed, along with the costs order in the sum of £8,000. In all the circumstances it is not, in our view, appropriate to direct the Crown Court to proceed afresh.

Defendant's Costs Order

59. Mr Talbot submitted that, in the event of the appeal succeeding, the Court should exercise its power under s.16 of the Prosecution of Offences Act 1985 (as amended) to make a Defendant's Costs Order. He accepted that, given that the proceedings in this Court were commenced after 1 October 2012, the power to make such an order is confined to the proceedings in relation to confiscation in the Magistrates' Court and the Crown Court.
60. Mr Talbot reminded us of the Court's power to direct the amount to be determined by a costs officer. Before reaching any conclusion in relation to the granting of such an order we must be provided, as required by Rule 76.4 of the Criminal Procedure Rules, with a sufficiently detailed outline of the type of costs and the amount claimed. Once that has been received, we will deal with the matter without the need for a further hearing.

Conclusion

61. For the reasons set out above, this appeal is allowed.