The defendant appealed against confiscation orders made under the 2002 Act. He had bought a flat with a substantial deposit from his own resources, and the balance from a lender. That lender was repaid after he took a replacement loan. He was later convicted of having misled the first lender in his application. The judge made a confiscation order in the sum of the increased value of the flat less only the initial deposit.
Held: The appeals succeeded.
Where the same solicitor acts for a borrower and a mortgage lender, and the mortgage advance is paid to the solicitor to be held in the solicitor’s client account, until completion, to the order of the mortgage lender; and on completion the solicitor transfers the advance to the vendor’s solicitor against an executed transfer: ‘In the eyes of the law all these events occurred simultaneously’ (per Lord Walker and Hughes LJ, at para 50). The purchaser never acquired more than an equity of redemption (at para 53) and ‘under the tripartite contractual arrangements between vendor, purchaser and mortgage lender, [the purchaser] obtained property in the form of a thing in action which was an indivisible bundle of rights and liabilities’
The Court dealt with a new argument based on Human Rights law, and adjusted the amount payable. Under A1P1, the result of a confiscation order must be proportionate to the aim of the Act which is to remove the proceeds of crime from criminals, rather than to act as a deterrent, and the Crown Court should only make confiscation orders which would be proportionate in each case. This is not however to be taken as a general discretion to fot each case to the facts and justice of the case before it.
Lord Phillips and Lord Reed would have allowed the appeal in full.
Lord Walker and Sir Anthony Hughes set out the duty of the court in respect of proportionality: ‘The Crown’s power, under s. 6(3)(a) of POCA, to ask the court to make a confiscation order is one with far-reaching consequences and care should be taken to exercise it on sound principles. S. 6 of HRA imposes on prosecutors the duty not to act in a manner incompatible with Convention rights, so that the Crown has an important preliminary function in ensuring that a disproportionate order is not sought. But the safeguard of the defendant’s Convention right under A1P1 not to be the object of a disproportionate order does not, and must not, depend on prosecutorial discretion, nor on the very limited jurisdiction of the High Court to review the exercise of such discretion by way of judicial review. The latter would moreover lead to undesirable satellite litigation. Mr Perry and Lord Pannick were correct to identify the repository of the control in the person of the Crown Court judge, subject to the reviewing jurisdiction of the Court of Appeal, Criminal Division, on appeal by either party.’
Lord Phillips, Lord Walker, Lady Hale, Lord Judge, Lord Kerr, Lord Clarke, Lord Wilson, Lord Reed, Sir Anthony Hughes
[2012] WLR(D) 324, [2012] 3 WLR 1188, [2012] UKSC 51, UKSC 2010/0088, [2013] HRLR 5, [2013] 1 AC 294, [2013] Crim LR 256, [2013] 1 All ER 889, 35 BHRC 293, [2013] 2 Cr App R (S) 20, [2013] Lloyd’s Rep FC 187
Bailii Summary, Bailii, SC Summary, SC, WLRD
Proceeds of Crime Act 2002, Proceeds of Crime Act 1995, Human Rights Act 1998 19
England and Wales
Citing:
Cited – John v Germany ECHR 2006
The court considered the operation of post-reunification German land re-organisation: ‘The Court reiterates that an interference with the peaceful enjoyment of possessions must strike a ‘fair balance’ between the demands of the general interest of . .
Cited – Phillips v United Kingdom ECHR 5-Jul-2001
Having been convicted of drug trafficking, an application was made for a confiscation under the 1994 Act. On the civil balance of proof, and applying the assumptions under the Act, an order was made. The applicant claimed that his article 6 rights . .
Cited – Regina v Rezvi HL 24-Jan-2002
Having been convicted of theft, a confiscation order had been made against which the appellant appealed. The Court of Appeal certified a question of whether confiscation provisions under the 1988 Act were in breach of the defendant’s human rights. . .
Cited – CPS Nottinghamshire v Rose CACD 21-Feb-2008
. .
Cited – May, Regina v HL 14-May-2008
The defendant had been convicted of involvement in a substantial VAT fraud, and made subject to a confiscation order. He was made subject to a confiscation order in respect of the amounts lost to the fraud where he was involved, but argued that the . .
Cited – Perry and Others v Serious Organised Crime Agency SC 25-Jul-2012
The first appellant had been convicted of substantial frauds in Israel. He appealed against world wide asset freezing (PFO) and disclosure (DO) orders made against him. Neither the appellant, nor his offences were connected with the UK. A bank . .
Appeal from – Waya, Regina v CACD 25-Mar-2010
The defendant appealed against a confiscation order after his conviction for obtaining a mortgage advance by fraud. Though he had obtained 450k, the house he had purchased had increased considerably in value. The original loan had been repaid in . .
Cited – Pressos Compania Naviera S A And Others v Belgium ECHR 20-Nov-1995
When determining whether a claimant has possessions or property within the meaning of Article I the court may have regard to national law and will generally do so unless the national law is incompatible with the object and purpose of Article 1. Any . .
Cited – Regina v Smith (David Cadnam) HL 13-Dec-2001
Smith had bought a motor vessel, The Vertine, with andpound;55,000 provided by his co-defendant, John Marriott. In the words of the judge when imposing sentence, the respondent allowed himself to be used as Marriott’s ship owner and captain. The . .
Cited – Sheldrake v Director of Public Prosecutions; Attorney General’s Reference No 4 of 2002 HL 14-Oct-2004
Appeals were brought complaining as to the apparent reversal of the burden of proof in road traffic cases and in cases under the Terrorism Acts. Was a legal or an evidential burden placed on a defendant?
Held: Lord Bingham of Cornhill said: . .
Cited – Morgan v Regina; Bygrave v Regina CACD 20-Jun-2008
The court considered the circumstances under which it might exercise its jurisdiction to prevent an abuse of process in confiscation proceedings. The circumstances where a confiscation might be oppressive are: ‘where demonstrably (i) the defendant’s . .
Cited – Shabir v Regina CACD 31-Jul-2008
The appellant, a pharmacist had been convicted of inflating his claims for monthly payments by a small amount. He sought a stay of confiscation proceedings, saying that they amounted to an abuse.
Held: The jurisdiction to order stay for abuse . .
Cited – Grayson and Barnham v The United Kingdom ECHR 23-Sep-2008
Each applicant had been subject to confiscation in criminal proceedings relating to drugs offences. They complained that the legislation had reversed the burden of proof.
Held: ‘it was not incompatible with the notion of a fair hearing in . .
Cited by:
Cited – Padda v Regina CACD 12-Dec-2013
The defendant had been convicted of supplying drugs, had had a confiscation made and had paid out under it. The prosecution sought a restraint order pending re-assessment. A further confiscation order was made. The defendant appealed, saying that . .
Cited – Virgin Media Ltd, Regina (on The Application of) v Zinga CACD 24-Jan-2014
Zinga had been convicted of conspiracy to defraud in a private prosecution brought by Virgin Media. After dismissal of the appeal against conviction, Virgin pursued confiscation proceedings. Zinga appealed against refusal of its argument that it was . .
Cited – White v Regina CACD 15-Apr-2014
The defendant sought an extension of time for leave to appeal against his conviction for fraud. After his conviction there had been academic debate as to its basis, and the present application was not opposed. He had originally been charged under . .
Cited – Ahmad, Regina v SC 18-Jun-2014
The court considered the proper approach for the court to adopt, and the proper orders for the court to make, in confiscation proceedings where a number of criminals (some of whom may not be before the court) had between them acquired property or . .
Cited – Scott v Southern Pacific Mortgages Ltd and Others SC 22-Oct-2014
The appellant challenged a sale and rent back transaction. He said that the proposed purchaser had misrepresented the transaction to them. The Court was asked s whether the home owners had interests whose priority was protected by virtue of section . .
Cited – Harvey, Regina v SC 16-Dec-2015
Police had discovered quantities of stolen goods at the appellant’s business premises. He was convicted of receiving stolen goods, and confiscation order made. He now appealed from the inclusion in that order of sums of VAT which had already been . .
Cited – Guraj, Regina v SC 14-Dec-2016
The defendant had pleaded to charges of possession of drugs with intent to supply. He was sentenced, but then the prosecutor was 14 months’ late serving its notice with regard to the confiscation order under section 16. The crown now appealed . .
Cited – McCool, Regina v SC 2-May-2018
The appellants complained that the recovery order made against them in part under the transitional provisions were unlawful. They had claimed benefits as single people but were married to each other and for a house not occupied. The difficulty was . .
Lists of cited by and citing cases may be incomplete.
Criminal Sentencing, Human Rights
Leading Case
Updated: 01 November 2021; Ref: scu.465791
