Jersey Unreported Judgments

Application by the Attorney General to appeal a confiscation order and an application by Mr Arthur to appeal against sentence.

[2020]JCA016

Court of Appeal

29 January 2020

Before     :

James W. McNeill, Q.C., President John Martin, Q.C., and Sir Richard Collas, Bailiff of Guernsey.

Richard David Arthur

v

The Attorney General

And

Pamela June Arthur and Maureen Patricia Brunker

And

The Attorney General

-v-

Richard David Arthur

And

Pamela June Arthur and Maureen Patricia Brunker

 

Advocate N. Mière for Richard David Arthur.

Crown Advocate D. J. Hopwood for the Attorney General

Advocate P. G. Nicholls for Pamela June Arthur and Maureen Patricia Brunker.  

And

Crown Advocate D. J. Hopwood for the Attorney General

Advocate N. Mière for Richard David Arthur

Advocate P. G. Nicholls for Pamela June Arthur and Maureen Patricia Brunker.

JUDGMENT

 

collas ja

Introduction

1.        This is the judgment of the Court.

2.        On 12 September 2019 the Royal Court (Samedi Division) (Commissioner J.A. Clyde-Smith OBE and Jurats Blampied, Ramsden, Ronge, Dulake and Averty) made a compensation order and a confiscation order against Richard David Arthur ("Mr Arthur") who, on 2 July, 2018, had been sentenced by the Superior Number of the Royal Court to seven years' imprisonment for three counts of fraud, three counts of fraudulent conversion and four counts of falsification of accounts (AG v Arthur [2018] JRC 129).  That sentence was upheld by this Court on 28 November 2018 (Arthur v AG [2018] JCA 217). 

3.        We are concerned with appeals by both the Attorney General and Mr Arthur against the orders made on 12 September.  Mr Arthur is also appealing an earlier decision of the Royal Court (Samedi Division) dated 18 June 2019 (Commissioner JA Clyde-Smith OBE and Jurats Crill and Hughes) granting a postponement of the Attorney General's application for a confiscation order notwithstanding that more than six months had elapsed since the date of Mr Arthur's sentence. 

4.        Leave to appeal was granted to both parties (in so far as it was required) by Martin JA, sitting as a single judge of this Court, in a judgment dated 18 November 2019.  He also directed that Mr Arthur's mother and mother-in-law, Pamela June Arthur and Maureen Patricia Brunker ("Mrs Arthur Senior", "Mrs Brunker" and together "the Intervenors") be treated as parties to both appeals.  They had both obtained civil judgments against Mr Arthur for recovery of monies loaned to him.

5.        At the hearing of the appeals, Crown Advocate Hopwood appeared for the Attorney General, Advocate Mière for Mr Arthur and Advocate Nicholls for the Intervenors.

6.        In this judgment, after reviewing the factual background, we deal first with the Attorney General's appeal.

Factual Background

7.        There were three victims of the offences committed by Mr Arthur namely Faircliff Property Company Limited ("Faircliff"), Library Place Investments Limited ("Library Place") and a private individual ("Victim 3").  On the face of the indictment, the amounts of which they were defrauded were £1,869,401, £69,000 and £90,000 respectively.  After adjusting those losses for inflation by reference to the Jersey Retail Prices Index, as required by paragraph (5) of Article 2 of the Proceeds of Crime (Jersey) Law, 1999 ("the Proceeds of Crime Law"), the Royal Court declared that Mr Arthur had benefited from his crimes in the sum of £2,967,370.79. 

8.        Faircliff had reached a confidential mediated settlement with Mr Arthur in full and final settlement of past and future claims arising out of the fraud and any other claims against him.  The only information about the agreement was led by the Attorney General who told the Court that Faircliff was not prepared to reveal the terms of the settlement in order not to jeopardise it.  The evidence was that the conveyancing statement for the sale of Mr Arthur's matrimonial home recorded that Faircliff received £1,296,109.35 out of the proceeds, which was less than Faircliff's loss on the face of the indictment.  The Attorney General invited the Royal Court to make a compensation award in favour of Faircliff of its own motion but the Court declined to do so on the ground that Faircliff's loss had been fully restored as we explain below.  

9.        The Attorney General did not seek any compensation for Library Place because its loss had been fully repaid by a co-defendant of Mr Arthur. 

10.      The only compensation ordered by the Royal Court was in favour of Victim 3.  The amount by which he had been defrauded was £90,000.  £20,000 had been repaid shortly thereafter leaving a loss of £70,000 which, after adjusting for inflation, was assessed by the Court in the sum of £88,904 and it ordered compensation in that amount. 

11.      In addition to that compensation order, the Royal Court made a confiscation order in respect of the benefit received by Mr Arthur from the fraud committed against Library Place.  The sum defrauded was shared with Mr Arthur's co-defendant.  After adjustment for inflation, Mr Arthur's half share was assessed as £43,816.98 and a confiscation order was made in that amount.  

The Attorney General's appeal

12.      The Attorney General has appealed the judgment of 12 September 2019 (AG v Arthur [2019] JRC 175) ("the 12 September 2019 Judgment") on the ground that "The Royal Court erred by misapplying the principle of proportionality in Article 1 Protocol 1 to the European Convention on Human Rights (as applied in Jersey by the Human Rights (Jersey) law 2000) ("Article 1 Protocol 1")".  The question of law raised by the Attorney General in respect of which Martin JA granted leave to appeal is "Whether Article 1 Protocol 1 operates to reduce a confiscation order to nil where the Defendant has settled civil proceedings brought against him by his victim for a sum of money that is less than the benefit he obtained from his crimes".

13.      Mr Arthur contends that the Attorney General is taking a new point on appeal that was not raised in the Royal Court.  When he granted leave to appeal, Martin JA held that the arguments the Attorney General wishes to make are well within the ambit of his submissions in the court below.  We all agree for the reason that the main focus of the submission relates to the application of Article 1 Protocol 1 ("A1P1") in this case.  A1P1 was raised by Advocate Mière in support of his contention that the imposition of either a compensation order or a confiscation order in respect of the loss suffered by Faircliff would be disproportionate in circumstances where the company had already been compensated for its loss as a result of the confidential mediated settlement.  

14.      The Attorney General's Notice of Appeal did not specify what relief he was seeking but at the oral hearing, Advocate Hopwood stated that he sought a variation to the confiscation order to an amount equal to the value of the available assets of Mr Arthur.  A consequence of such a variation would be that Mr Arthur would have no surplus assets against which the Intervenors could enforce their civil judgments whereas at present they stand to recover the bulk of the monies they are owed.  Advocate Nicholls' submissions on their behalf supported those made by Advocate Mière on behalf of Mr Arthur.

15.      In response to the Attorney General's appeal, Advocate Mière emphasised the extent of the discretion conferred by the Proceeds of Crime Law on the Royal Court which is wider than the comparable jurisdiction vested in English courts as a result of which care must be taken when looking to English decisions for guidance.  He also stressed the need to take care when looking to decisions decided in England before R v Waya [2012] UKSC 36 and before issues as to A1P1 and proportionality were applicable in cases where there had been repayment or part-payment made to the victim of the crime.  He acknowledged that an agreement reached in a prior civil settlement will not automatically reduce a confiscation order to nil but the issue of proportionality must be decided on the particular facts of the case.  He submitted that a full and final mediated settlement as in the present case is different from either a part-payment to the victim or a judgment obtained by the victim which has not yet been satisfied.  He said the Attorney General's position on proportionality has shifted from the position he adopted at first instance, for example the Attorney General now contends that a sum paid by a defendant to the victim should not be required to be confiscated and paid once again to the Crown.  The issue of proportionality should be determined by the Court at the confiscation hearing and any reductions made under A1P1 and/or the Court's discretion conferred by article 4(3) of the Proceeds of Crime Law should be applied both to the "penalty" and to the benefit figure calculated by the Court.  Finally, he contends that the issue of proportionality was properly considered by the Royal Court in the exercise of its unfettered discretion and this Court should not interfere with its conclusion.

16.      We begin by quoting from Articles 3 and 4 of the Jersey Proceeds of Crime Law and sections 6 and 7 of the English Proceeds of Crime Act in order to illustrate the differences between the two pieces of legislation.

17.      "The Proceeds of Crime Law

3         Confiscation orders

(1)       Where a defendant appears before the Court to be sentenced in respect of one or more offences specified in Schedule 1, and the defendant has not previously been sentenced or otherwise dealt with in respect of his or her conviction for the offence or (as the case may be) any of the offences concerned -

(a)        if the Attorney General asks the Court to proceed under this Article; or           

(b)        if the Court considers that, even though the Attorney General has not asked it to do so, it is appropriate for it to proceed under this Article,

the Court may act in accordance with this Article.

(2)       ...

(3)       Where the Court is proceeding under this Article, it may first determine whether the defendant has benefitted from any relevant criminal conduct.

(4)       If the Court is proceeding under this Article, it may before sentencing or otherwise dealing with the defendant in respect of the offence or (as the case may be) any of the offences concerned -

(a)        determine in accordance with Article 4 the amount to be recovered in the defendant's case by virtue of this Article; and

(b)        make a confiscation order, to the effect that the defendant pay that amount.

(5)       Where the Court makes a confiscation order -

(a)        it shall take account of the order before -

(i)         imposing any fine on the defendant,

(ii)        making any order involving any payment by the defendant, or

(iii)       making any forfeiture order under Article 29 of the Misuse of Drugs (Jersey) Law 1978, Article 27 of the Terrorism (Jersey) Law 2002 or Article 9 of the Proceeds of Crime (Cash Seizure) (Jersey) Law 2008; and

(b)        subject to sub-paragraph (a), it shall leave the order out of account in determining the appropriate sentence or other manner of dealing with the defendant in the proceedings.

(6)       ...

(7)       Where -

(a)        the Court makes both a confiscation order and an order for the payment of compensation under Article 2 of the Criminal Justice (Compensation Orders) (Jersey) Law 1994 against the same person in the same proceedings; and

(b)        it appears to the Court that the person will not have sufficient means to satisfy both the order in full,

It shall direct that so much of the compensation as will not in its opinion be recoverable because of the insufficiency of the person's means shall be paid out of any sums recovered under the confiscation order.

(8)       The standard of proof required to determine any question arising under this Law as to -

(a)        whether a person has benefitted from any offence; or

(b)        the amount to be recovered in the person's case by virtue of this Article,

shall be that applicable in civil proceedings.

(9)       ...

4         Amount to be recovered under confiscation order

(1)       Subject to paragraphs (2) and (3), the amount which a defendant is required by a confiscation order to pay (in this Article, "the penalty") shall be the amount assessed by the Court to be the value of the defendant's benefit from the relevant criminal conduct (in paragraph (2), the "assessed value").

(2)       Where the Court is satisfied that the amount which might be realised at the time when the confiscation order is made is less than the assessed value, the penalty shall be the amount which appears to the Court might be so realised (or, if that amount is nil, a nominal amount).

(3)       Where the Court is satisfied that a victim of the relevant criminal conduct has instituted or intends to institute civil proceedings against the defendant in respect of loss, injury or damage sustain in connection with that conduct, the penalty may be of such lesser amount as the Court thinks fit.

"The Proceeds of Crime Act 2002

6         Making of order

(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 -

(a)        he is convicted of an offence or offences in proceedings before the Crown Court;

(b)        he is committed to the Crown Court for sentence in respect of an offence or offences under section 3, 3A, 3B, 3C, 4, 4A or 6 of the Sentencing Act;

(c)        he is committed to the Crown Court in respect of an offence or offences under section 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, or

(b)        the court believes it is appropriate for it to do so.

(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 benefitted from his general criminal conduct;

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

(5)       If the court decides under subsection (4)(b) or (c) that the defendant has benefitted 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 (b) applies only if, or to the extent that, it would not be disproportionate to require the defendant to pay the recoverable amount.

(6)       But the court must treat the duty in subsection (5) as a power if it believes that any victim of the conduct has at any time started or intends to start proceedings against the defendant in respect of loss, injury or damage sustained in connection with the conduct.

(6A)    The court must also treat the duty in subsection (5) as a power if -

(a)        an order has been made, or it believes an order may be made, against the defendant under section 4 (criminal unlawful profit orders) of the Prevention of Social Housing Fraud Act 2013 in respect of profit made by the defendant in connection with the conduct, or

(b)        it believes that a person has at any time started or intends to start proceedings against the defendant under section 5 (civil unlawful profit orders) of that Act in respect of such profit.

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

(8)       The first condition is not satisfied if the defendant absconds (but section 27 may apply).

(9)       References in this Part to the offence (or offences) concerned are to the offence (or offences) mentioned in subsection (2)."

"7       Recoverable amount

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

(2)       But if the defendant shows that the available amount is less than that benefit the recoverable amount is -

(a)        the available amount, or

(b)        a nominal amount, if the available amount is nil.

(3)       But if section 6(6) or (6A) applies the recoverable amount is such amount as-

(a)        the court believes is just, but

(b)        does not exceed the amount found under subsection (1) or (2) (as the case may be).

(4)       In calculating the defendant's benefit from the conduct concerned for the purposes of subsection (1), the following must be ignored-

(a)        any property in respect of which a recovery order is in force under section 266,

(b)        any property which has been forfeited in pursuance of a forfeiture notice under section 297A or an account forfeiture notice under section 303Z9."

18.      Articles 3(1), 3(3) and 3(4) of the Jersey Law state that the Court may act when deciding whether to consider confiscation, whether to calculate the defendant's benefit and whether to consider the amount to be recovered under Article 4.  Whereas the English Act states that the Court must consider confiscation where conditions are satisfied, it must consider whether the defendant has a criminal lifestyle or has benefited from criminal conduct, and it must decide the recoverable amount.  The English Court must then make a confiscation order in that amount unless someone has started or intends to institute civil proceedings to recover their loss or an order has been made or is likely to be made under the Prevention of Social Housing Fraud Act 2013, where the Court's duty becomes a power.  It is to be noted that Section 6(5) states that the English Court must not make a confiscation order in an amount that would be disproportionate. 

19.      Although a Jersey court has a wide discretion to decide whether to proceed, it has no discretion as to how it calculates the defendant's benefit which must be the amount assessed by the Court to be the value of the defendant's benefit from the relevant criminal conduct (Article 4(1)).  That is wholly consistent with the frequently described purpose of the legislation which, in England as well as in Jersey, is to remove from criminals the pecuniary proceeds of their crime (R v Waya at paragraph 21 of the judgment of the majority of the Supreme Court).  A compensation order has a different purpose, it is designed as a limited and summary method of ordering the defendant to repay the loser and is available to short-circuit a civil action against the defendant in a straightforward case (per the English Court of Appeal in R v Jawad [2013] 1W.L.R. 3861).

20.      R v Waya was a case of mortgage fraud where the defendant had obtained a mortgage after making false statements about his employment record and his earnings.  The mortgage had been fully secured over the defendant's property and it was repaid in full when the defendant remortgaged the property with a different lender so there were no grounds for making a compensation order.  The Supreme Court held that a confiscation order in the sum that the defendant had restored to the victim would be disproportionate to the purpose of the Act to remove from criminals the pecuniary proceeds of their crimes.  The distinction in the present case is that the mediated settlement was in a sum less than the amount that Mr Arthur had obtained from Faircliff. 

21.      R v Jawad is also distinguishable on its facts.  It was a case of a money laundering offence arising out of frauds on a bank where the defendant was treated by the Court as having a criminal lifestyle.  The Court made a confiscation order representing the amount the Court assessed as the benefit of the defendant's criminal behaviour and, on the application of the Crown acting on a request from the bank, made a compensation order in favour of the bank in the amount representing the loss to the bank, an amount that had been included in the benefit figure assessed by the Court.  The Court of Appeal held that it involved double counting and would be disproportionate.  It held that "ordinarily the concern of the judge will be less with an order for compensation than with whether actual restoration to the loser is assured" (para 15).  A compensation order is not the same as a civil judgment, the methods of enforcement are different, magistrates do not have the power to extract from the defendant the amount to be paid; a defendant may, for example, prefer to serve time in prison in default of payment. 

22.      R v Jawad illustrates the need to consider each case on its own facts in order to decide whether a confiscation order is in fact disproportionate, looking in particular at whether the defendant has made actual restoration in full so that he does not pay for a second time money which he has fully restored to the loser.  The Court of Appeal said at paragraph 21: 

"R v Waya requires the court to consider whether a POCA confiscation order is disproportionate. We are satisfied that it generally will be disproportionate if it will require the defendant to pay for a second time money which he has fully restored to the loser. If there is no additional benefit beyond that sum, any POCA confiscation order is likely to be disproportionate.  If there is additional benefit, an order which double counts the sum which has been repaid is likely, to that extent, to be disproportionate, and an order for the lesser sum which excludes the double counting ought generally to be the right order. But, for the reasons explained above, we do not agree that the mere fact that a compensation order is made for an outstanding sum due to the loser, and thus that that money may be restored, is enough to render disproportionate a POCA confiscation order which includes that sum. What will bring disproportion is the certainty of double payment.  If it remains uncertain whether the loser will be repaid, a POCA confiscation order which includes the sum in question will not ordinarily be disproportionate."

23.      In the present case the evidence before the Court, led by the Attorney General, was that Mr Arthur had paid £1,296,109.35 to Faircliff out of the proceeds of sale of his matrimonial home towards the loss suffered by the company of £1,869,401.00.  The Royal Court's reasoning for declining to make both a compensation order and a confiscation order is at paragraphs 35-38 of the 12 September 2019 ( [2019] JRC 175) Judgment:

"35. Faircliff may regard itself as out of pocket in a non-legal sense, but applying basic principles of contract law, once it has entered into a full and final settlement with the defendant of all claims past and future arising out of these frauds, then these claims are extinguished, and are replaced by the terms of the settlement itself. There is no allegation that the defendant had reneged on his obligations under the settlement.

36. The upshot, therefore, is that Faircliff now has no claims against the defendant, and has no loss to be compensated for; hence, no claim for compensation being made by it. In the Court's view such a claim could not be sustained. The Court would not be compensating Faircliff, but in effect, donating monies to it.

37. Following Waya, for the Court to make either a confiscation order or a compensation order when the defendant has fully settled Faircliff's claims would be disproportionate. To make such orders would require the defendant to pay for a second time money which has been fully restored to Faircliff. It would amount to an additional financial penalty, and not serve the purpose of removing from the defendant the pecuniary proceeds of his crimes.

38. In our view, this submission must succeed, and we decline, therefore, to make a confiscation order or a compensation order in respect of the amounts by which Faircliff was defrauded."

24.      We agree that in arriving at a full and final settlement of all claims past and future Faircliff has fully settled its claims against the defendant and could not pursue a further civil claim and it follows that no compensation order could be made in its favour.  There can be many reasons why a fraudster and his victim may wish to reach an early settlement of any claim for repayment and may achieve settlement in a figure less than the actual loss suffered.  Public policy demands that they are not to be discouraged from doing so and where there is a full and final settlement of all claims it would be wrong for the Court to seek to reopen it by making a compensation order in favour of the victim.  However, it does not automatically follow that the Court should not make a confiscation order to disgorge from the criminal a pecuniary sum equal to the difference between the benefit obtained by the criminal and the monetary sum he has restored to the loser.  A failure to do so would leave the criminal with part of his criminal gains, contrary to the purpose of the legislation.  

25.      In the passage cited above from R v Jawad, the Court of Appeal stated that where the benefit to the criminal is greater than the sum he has restored to his victim, it would be disproportionate to make a confiscation order that includes the amount restored but the right order would generally be the lesser sum which excludes the double counting.  It is the double counting that renders disproportionate a confiscation order.  

26.      Applying the same approach to the present case, the Court was entitled to calculate the benefit Mr Arthur obtained from Faircliff and to deduct from that amount the sum he paid to Faircliff under the terms of the mediated settlement agreement before looking at the issue of proportionality.  It would not have been disproportionate for the Royal Court to have made a confiscation order in an amount calculated as the difference between the benefit Mr Arthur was assessed to have obtained from Faircliff ( adjusted for inflation) and the amount restored to the company (as adjusted for inflation).  It does not matter that Mr Arthur refused to disclose the actual amount he had paid because the Crown produced the evidence from the completion statement following the sale of his former matrimonial home.   

27.      The statement by the Court in the second sentence of paragraph 37 of the judgment quoted above is not correct in respect of a confiscation order.  The Court misdirected itself as to the concept of full settlement altfairhough the Court was correct in holding that it should not make a compensation order in Faircliff's favour for the reasons we have stated.  Advocate Mière's contention on behalf of Mr Arthur, supported by Advocate Nicholls on behalf of the Intervenors, is that the Royal Court had a discretion under Article 4(3) of the Proceeds of Crime Law whether or not to make a confiscation order which it has exercised and it is not for this Court to interfere with the decision of the lower Court.  The Royal Court was right as a matter of law and general principle to reduce the confiscation order to nil where there has been a civil settlement in full and final settlement of Faircliff's loss and was entitled on the facts of the case to make the confiscation order excluding the amount of Faircliff's loss. 

28.      The parties are agreed that the test for a successful appeal against the exercise of a discretion by a judge and Jurats is a strict one as set out by this Court in Flynn v Reid ([2012] (2) JLR 226) at paragraph 15: 

"The exercise of a discretion such as that in awarding costs is immune from review by the Court of Appeal unless vitiated by matters almost too well known to repeat (United Capital Corp. Ltd v Bender) i.e. that the Court of Appeal should only interfere if it is satisfied that one or more of the following has occurred: (i) The judge misdirected himself with regard to the principles in accordance with which his discretion should be exercised.  (ii) The judge, in exercising his discretion, has taken into account matters of which he ought not to have taken account or not taken into account matters he should.  (iii) The decision is plainly wrong, in the sense that no reasonable judge properly directed could reasonably have reached the same decision.  (iv) There has been a change of circumstances since the lower court's decision, which would have justified a different decision."

29.      The first comment we make is that at paragraph 37 of the judgment, the Royal Court was not exercising a discretion under Article 4(3).  Elsewhere in the judgment, the Court said when it was exercising that discretion but did not say so in paragraph 37.  The judgment makes it clear that although the Court had both proportionality and Article 4(3) in its mind, it dealt with them separately when it needed to do so.  It would have been wrong for the Court to exercise the Article 4(3) discretion at that stage.  The similar discretion in section 7(3) of the English legislation is to be exercised for the benefit of the victim to ensure the victim receives his compensation, as Lord Judge held in R v Nelson [2010] QB 678.  Article 4(3) has to be interpreted in the same way.  In summary, the Court was not exercising its Article 4(3) discretion but even if it were, it was misdirecting itself and therefore this Court should set it aside under the first of the four principles set out above.

30.      At this point we must say more about the Intervenors.  They are both elderly, Mr Arthur's mother is now aged 86 years and his mother-in-law is 84.  They were both primary school teachers before their retirement and have modest means.  Under the terms of the Royal Court's order they would be free to enforce their judgments against the balance of the monies held by the Viscount under the saisie judiciare after the confiscation order has been paid when they would recover a substantial proportion of their respective claims, as the Court calculated in the 12 September 2019 ([2019] JRC 175) Judgment.  If the Attorney General's appeal is successful, they will recover nothing and they can ill afford such a loss.  Advocate Nicholls submitted that they had the misfortune to lend money to Mr Arthur before his frauds were discovered.  Mrs Arthur senior and her late husband made loans to him during the period 2009 to 2016 and Mrs Brunker leant money to him between dates in 2011 and 2015.  It is wrong to say that the frauds had not been discovered at that time because he had been suspended from his employment at BDO in 2009.  If the Intervenors are saying that he had not told them about the frauds then it may be that he borrowed money from them under false pretences but there has been no criminal prosecution, perhaps because they declined to go to the Police, not wanting to make a complaint against a close family member.  If they were the victims of criminal fraud and there had been successful prosecutions, the Court could have made a compensation order in their favour. 

31.      Mrs Brunker's loans were secured over Mr Arthur's property but she claims that security was erroneously cancelled by Advocate Lawrence of Viberts leaving her as an unsecured creditor.  She does not say whether she has a separate claim for her loss against Viberts.  On 22 June 2018, Mrs Arthur Senior obtained judgment against Mr Arthur in the sum of £146,150.86 and Mrs Brunker obtained judgment against him in the sum of £472,495.80. 

32.      In their submission the Intervenors rely, as did Mr Arthur, on the discretion conferred on the Royal Court under Articles 3(3), 3(4) and 4(3) of the Proceeds of Crime Law, in particular, Article 4(3) which, they contend, confers an unfettered discretion on the Court to reduce the penalty to such lesser amount as the Court thinks fit in cases where the Court is satisfied that a victim of the relevant criminal conduct has instituted or intends to institute civil proceedings against the defendant in respect of his loss.  They all concede that the Intervenors' position as judgment creditors does not entitle them to avail themselves of any statutory provision to intervene in the calculation of the amount of the confiscation order.

33.      The Court must have regard to A1P1 and cannot make a confiscation order that would be disproportionate for the reasons we have stated.  It does not have a wholly unfettered discretion and must act in a manner that is consistent with the statutory purpose which is to deprive a criminal of the benefit of his crime.  The effect of the Royal Court's order is to allow Mr Arthur to use part of the proceeds of the fraud he perpetrated on Faircliff to repay a substantial part of the civil judgments the Intervenors have obtained against him which would be to his benefit in that they would not be able to enforce their judgments against any other assets he might have now or in the future. 

34.      The Court has every sympathy for two elderly ladies who have lost or are in danger of losing a substantial proportion of the modest savings they had hoped to enjoy during their retirement whatever might or might not have been said to induce them to make the loans or what advice, if any, they may have taken or why they are unsecured other than that Mrs Brunker's security was mistakenly cancelled or any of the other circumstances in which their loans were made.  Our sympathy for the predicament in which they now find themselves is not a relevant factor the Court could take into account. 

35.      The question of law in respect of which leave to appeal was given was "Whether Article 1 Protocol 1 operates to reduce a confiscation order to nil where the Defendant has settled civil proceedings brought against him by his victim for a sum of money that is less than the benefit he obtained from his crimes".   The answer is that it would not generally do so, for the reasons given in R v Jawad quoted above. A1P1 normally operates to render disproportionate the amount of any double counting but does not normally prevent a confiscation order in the lesser sum. 

36.      In conclusion on the Attorney General's appeal, we allow the appeal.  In exercise of the powers conferred on this Court under section 45 of the Court of Appeal (Jersey) Law we substitute for the order of the Royal Court a confiscation order in an amount equal to the realisable value of Mr Arthur's assets, being an amount less than the benefit retained by him from Faircliff after giving credit for the sum repaid to Faircliff under the terms of the settlement agreement and after adjusting for inflation.  We direct Advocate Hopwood to calculate the figure for inclusion in the Court's Order.

Mr Arthur's Appeal

37.      Mr Arthur's first and second grounds of appeal concern the judgment of 18 June 2019 (AG v Arthur [2019] JRC 113) which, he contends, could not have been appealed until the confiscation matter had been concluded at the final stage of the sentencing process.  The Attorney General takes no issue with that contention.  

38.      The Proceeds of Crime Law requires the Court to make a confiscation order before sentencing a defendant but it can postpone doing so under the provisions of Article 6 provided that no such postponement can exceed six months from the date of conviction unless there are exceptional circumstances (Article 6(3)).  Mr Arthur had pleaded guilty to the offences on 25 April 2018 and the matter of a postponement was raised at the sentencing hearing on 2 July 2018 when the Crown invited the Court to postpone a decision in relation to confiscation to a date approximately three months from that date.  The Court did not fix a date and the Attorney General had not applied for a further postponement before the Intervenors issued a representation seeking to lift or vary the saisie judiciare over Mr Arthur's realisable property which the Court had imposed on 20 May 2015, the date he was charged with the offences. 

39.      As we have said, Mr Arthur was suspended from his position with BDO in 2009 and during the subsequent six years when he was under investigation the Intervenors lent money to him.  Three years after the saisie, on 22 June 2018, the Intervenors obtained judgments against Mr Arthur in the amounts stated above.  On 13 March 2019 they applied to have the saisie judiciare lifted or varied.  It was only after they had made their application that, on 20 May 2019, the Attorney General applied for a postponement of the confiscation hearing. 

40.      The issues addressed in the judgment of 18 June 2019 ([2019] JRC 113) were whether to lift the saisie judiciare or whether there were exceptional circumstances to justify the grant of a postponement under Article 6(3).  At paragraph 22 of the judgment, the Court listed seven reasons which Advocate Hopwood had submitted justified a postponement, but at paragraph 29 the Court accepted there were only two matters which required more time.  In doing so the Royal Court followed the House of Lords decision in R v Soneji [2005] UKHL 49 (which had been applied in AG v De Silva [2008] JRC 033) in holding that the interpretation of "exceptional circumstances" did not require a very strict approach.    The first matter was the need for the Attorney General to resolve issues over a Mr Carlston which had had little direct relevance to the issues at trial but had required the collation of evidence, analysis of payments and negotiation with Mr Carlston post-conviction.  The second exceptional circumstance was the need for the Attorney General to have more time to assess the position of Faircliff as a potential recipient of a compensation order.  The Court held that the prejudice to the Intervenors in being unable to enforce their judgments was outweighed by the countervailing public interest in not allowing Mr Arthur to retain the benefit of his crimes.  The Court also held that it would not be equitable to allow the Intervenors to obtain priority over the interests of the victims of Mr Arthur's frauds.  The Court granted a further short postponement of the confiscation hearing until 10 July 2019. 

41.      Mr Arthur's first contention on appeal is that the facts did not amount to exceptional circumstances.  The underlying work required in relation to confiscation was not significantly different from what had been required for the trial and for the sentencing hearing when the Crown had anticipated that a further three months would be sufficient.  Advocate Mière's oral submissions placed great emphasis on the fact that the Court had not been reminded that the Attorney General had said in July 2018 that he would only need a further three months and the Court was therefore not in possession of the full facts and had proceeded on the wrong factual basis, thereby rendering its decision plainly wrong.  Consequently, the Court's decision to grant the Attorney General a further postponement should be over turned on grounds (ii) and (iii) of the principles cited above from Flynn v Reid: the Court had taken account of matter it should not have done and had reached a decision which was plainly wrong.  He also ventured to suggest that ground (i) was engaged as the matters relied upon should have been truly exceptional and they were not.

42.      In our judgment, the Royal Court adopted the correct approach in following R v Soneji in its liberal approach to the interpretation of "exceptional circumstances".  It also followed the Supreme Court in R v Guraj [2017] 1 WLR 22 in assessing whether there was unfairness.  In all the circumstances, there are no grounds on which this Court should interfere with the Royal Court's finding that there were exceptional circumstances justifying a short further postponement.

43.      In coming to that conclusion, we are not baling out the Crown as was suggested by counsel for Mr Arthur and the Intervenors that we would be doing if we rejected their submission.  However, we do consider that it would have been preferable for the Crown to have taken steps to apply for a postponement prior to the expiry of the six month period or soon thereafter and it should not have had to be prompted into action by the Intervenors applying to lift the saisie.  

44.      Mr Arthur's third ground of appeal raises a concern that either the Attorney General or the Viscount may in the future apply under Article 19 of the Proceeds of Crime Law for an increase in the amount to be recovered under the confiscation order.  The alleged risk arises from the fact that the Court's assessment of the value of the benefit received by Mr Arthur greatly exceeds the amount of the confiscation order made by the Royal Court.  If we had not allowed the Attorney General's appeal, the confiscation order would have been fully satisfied from the assets held under the saisie judiciaire.  The sentence should have achieved a position of certainty but the concern is that Mr Arthur cannot be certain that there will not be a future application for an increased order. 

45.      Following our decision on the Attorney General's appeal, this ground of appeal is otiose but in our judgment Mr Arthur has misunderstood the purpose of an application under Article 19 which is to deal with those cases where the amount of a confiscation order has been reduced to a figure that can be satisfied out of the realisable property of the defendant and would have been higher if the value of the property were greater.  In Mr Arthur's case the Royal Court assessed the amount of the confiscation order at a value that could be fully satisfied.  There would be no reason for the Attorney General or the Viscount to seek to increase it, even in the event of Mr Arthur being found to possess more property than was identified at the time of sentencing.  If they were to do so, the same arguments and defences would be available to Mr Arthur to resist the order as existed at the original hearing.  In any event, the Court of Appeal could not make an order which would have the effect of disbarring the Crown from making an application which is its statutory right.

46.      Mr Arthur's fourth ground of appeal pleads that the confiscation order of £43,816.98 is disproportionate in circumstances where the victim, Library Place, has been fully repaid even though not by Mr Arthur.  The repayment was made by Mr Arthur's co-accused who might bring a future claim against Mr Arthur to reimburse him the monies he paid or at least a portion thereof.  The ground is misconceived, based on mere speculation as to what the co-accused might do in the future and assumes that there would be a basis on which the co-accused could bring a successful claim against Mr Arthur.  In any event, the purpose of the Proceeds of Crime Law is to deprive him of the benefit he has received from his criminal activity and it was right for the Royal Court to make a confiscation order in the amount claimed.  

47.      In conclusion, we dismiss all of Mr Arthur's grounds of appeal for the reasons we have given.

Decision

48.      We allow the Attorney General's appeal and we dismiss Mr Arthur's appeal. 

49.      We make a confiscation order in respect of Faircliff in a sum to be calculated by Advocate Hopwood to represent the present value of Mr Arthur's available assets.

Authorities

AG v Arthur [2018] JRC 129. 

Arthur v AG [2018] JCA 217.

Proceeds of Crime (Jersey) Law, 1999

AG v Arthur [2019] JRC 175

R v Waya [2012] UKSC 36.   

R v Jawad [2013] 1W.L.R. 3861

AG v Arthur [2019] JRC 113

R v Soneji [2005] UKHL 49

AG v De Silva [2008] JRC 033

Flynn v Reid [2012] (2) JLR 226

R v Nelson [2010] QB 678

R v Guraj [2017] 1 WLR 22