Lord Justice Pitchford :
Introduction
- On 18 June 2013 the court considered three applications for an extension of time within which to apply for leave to appeal against sentence, in the cases of Naim Raza (Sadik), Sajid Bashir and Jean Pierre Bestel. In Mr Raza's case the extension sought was 1 year 5 months; in Mr Bashir's case, 1 year and 5 weeks; and in Mr Bestel's case, 2 months. Each of the applicants seeks to challenge a confiscation order made in the Crown Court following convictions for offences generically described as mortgage fraud. The Crown Court judge had assessed the benefit received for the purposes of section 6 Proceeds of Crime Act 2002 by reference to sums received by the applicant as loans from mortgage lenders secured by a charge over property purchased with a deposit and the mortgage advance.
- In Waya [2012] UKSC 51, [2012] 3 WLR 1188, in which the Supreme Court delivered judgments on 14 November 2012, it was held that, contrary to former practice, the benefit to the defendant from mortgage fraud was not to be assessed as the value of the mortgage advance or the value in the market of the property obtained by means of the mortgage without reference to the underlying mortgage debt. Such an assessment was likely to lead to a disproportionate confiscation order in breach of Article 1, First Protocol ECHR. The Supreme Court found that the defendant did not "obtain" the sum of the loan as "property" for the purposes of section 76(4) Proceeds of Crime Act 2002 but a bundle of contractual or equitable rights whose value for the purpose of section 80 was likely to be nil at the date of purchase of the property with the tainted money. Accordingly, the defendant's benefit was in general to be assessed as the proportion of any increase in the value of the property represented by the original tainted investment. Each of these applicants seeks to have his confiscation order quashed and re-assessed according to the principles described in Waya.
- By section 76(4):
"(4) A person benefits from conduct if he obtains property as a result of or in connection with the conduct"
We were informed by counsel that before the decision in Waya in the Supreme Court, property obtained by means of a mortgage fraud would be identified either as the mortgage advance or the property purchased with it (as in Waya in the Court of Appeal, [2010] EWCA Crim 412). Section 80 applied to valuation. The value of the property obtained was, on this analysis, to be taken as its value at the time of acquisition (the mortgage advance/purchase) adjusted for the value of money or, if the mortgage advance had been converted to other property, to the value of that other property, whichever was the greater. When, however, it came to valuation of the available amount under section 7(2) of the 2002 Act, it was recognised that the defendant's realisable assets represented by the tainted property would be the value of his equitable interest in the net proceeds after redemption of the legal charge over the property. Since the benefit figure was, under the foregoing analysis, artificially high, the defendant's untainted assets, if any, were exposed to confiscation. We shall refer to some of the consequential effects later in this judgment. The Supreme Court has, by declaring that the defendant in a mortgage fraud does not obtain the sum of the mortgage advance or the property purchased but a bundle of rights, removed the unfairness or, in the words of the Supreme Court, the disproportionality of the confiscation order.
- The common issue in these applications is the identification of the principles upon which this court should act in considering whether to grant an extension of time within which to appeal when the effect would be to permit the applicant to take advantage of the change in the law. In Jawad [2013] EWCA Crim 644 (Hughes LJ, Vice-President, Foskett J and HHJ David Radford) the appellant argued that a confiscation order was disproportionate (contrary to paragraphs 10 - 35 of Waya) when both the confiscation order and a compensation order made on the same occasion were founded upon the same 'benefit'. The court made an order which enabled the appellant to pay the compensation ordered by the Crown Court, on which condition the appeal would be allowed and the confiscation order would be reduced by an equivalent sum. Mr Jawad had been granted an extension of time within which to seek leave to appeal by the single judge. However, in his judgment on behalf of the court, the Vice-President, who had been a member of the Supreme Court in Waya, addressed obiter the issue of applications for extensions of time within which to appeal in other cases. Commencing at paragraph 29, he said:
"29. We nevertheless think that we should make clear the general approach of this court, over many years, to change of law cases. An extension of time will not be granted routinely in such a case simply because the law has changed. It will be granted only if substantial injustice would otherwise be done to the defendant, and the mere fact of change of law does not ordinarily create such injustice. Nor is the case where an extension will be refused limited to where, if the law had been correctly understood at the time of the proceedings in the Crown Court, a different charge or different procedure might well have left the defendant in a similar position to that in which he now finds himself. The line of authority setting out this court's approach culminates in R v Cotterall and Fletcher [2007] EWCA Crim 2016, [2008] 1 Cr App R 7, where the judgment was given by Sir Igor Judge P, as he then was. But that line of authority includes similar pronouncements by successive Lords Chief Justice from Lord Lane CJ onwards. An early example is R v Mitchell [1977] 65 Cr App R 185 in which Lane LJ (as he then was) expressly approved the decision of this court in R v Ramsden [1972] Crim LR 547. There, a defendant who had been convicted of dangerous driving before Gosney [1971] 55 Cr App R 502 had held that fault was a necessary ingredient of the offence, was refused leave to appeal out of time after the latter decision had been published. The court observed that alarming consequences would flow from permitting the general re-opening of old cases on the ground that a decision of a court of authority had removed a widely held misconception as to the prior state of the law on which the conviction on which it was sought to appeal had been based. No doubt otherwise everyone convicted of dangerous driving over a period of several years could have advanced the same application. A similar proposition was recently adumbrated by the Supreme Court of Ireland in A v Governor of Arbour Hill Prison [2006] IEFC 45 where the court held that absolute retro-activity would lead to "dysfunctional effects in the administration of justice". A further example from the jurisprudence from the Court of Appeal Criminal Division is R v Ballinger [2005] EWCA Crim 1060, [2005] 2 Cr App R 29.
30. Whilst the point does not arise in the present case, and we do not decide it, we think it important that defendants should not be encouraged to think that the effect of Waya is likely to be that confiscation orders made when no disproportionality point was taken, or was rejected, can now be re-opened. We doubt very much that, if an extension of time had been required in the present case, we should have granted it." [emphasis added]
Had the full court been required to grant an extension of time it would have amounted to "a very few days extension" (Jawad paragraph 28).
- In order better to ascertain the principles upon which the court should act in cases where the issue of an extension of time does arise we heard submissions from counsel for each of the applicants and each of the respondents successively before considering submissions upon the facts of each case. Having heard argument we reserved judgment in all three applications and, with the agreement of counsel, it is convenient for the court to give its decisions and reasons in a single judgment.
Extension of time in the Court of Appeal Criminal Division
- By section 18 Criminal Appeal Act 1968:
"18(1) A person who wishes to appeal under this part of this Act to the Court of Appeal, or to obtain the leave of that court to appeal, shall give notice of appeal or, as the case may be, notice of application for leave to appeal, in such manner as may be directed by rules of court.
(2) Notice of appeal, or of application for leave to appeal, shall be given within 28 days of the date of the conviction, verdict or finding appealed against, or in the case of appeal against sentence, from the date on which sentence was passed or, in the case of an order made or treated as made on conviction, from the date of the making of the order.
(3) The time for giving notice under this section may be extended, either before or after it expires, by the Court of Appeal."
An extension of time may be granted by a single judge acting under section 31 Criminal Appeal Act 1968 (see section 31(2)(b)), although it is probable that any "change of law" application for leave will be referred to the full Court by the Registrar. The Criminal Procedure Rules rule 65.4 requires the applicant to make an application for an extension of time when serving the notice of appeal and to give reasons for the application. There is no statutory identification of the principles upon which the court will act when granting or refusing an extension of time. Those principles have emerged from the practice of the Court over many years.
- Under section 7 Criminal Appeal Act 1907 the time within which to appeal to the Court of Criminal Appeal was 10 days. In Rigby [1923] 17 Cr App R 111 the Court of Criminal Appeal considered an application made to extend time by a period of just over five weeks. A co-accused had brought his appeal within time and his conviction had been quashed. At page 112 Lord Hewart CJ said:
"Though power is given by the same section [section 7] to extend this time, except in the case of sentence of death, it is clear that the Act, the practice and the rules of this court all contemplate that the application for appeal should be made within 10 days. … as was laid down by Lord Alverstone in the case of E. Rhodes 74 J. P. 380: 5 Cr. App. R. 35: 1910, it must not be understood that an extension of time will be granted as a matter of course; the court will require substantial reason to be advanced before they will grant such an extension …
In this case it is clear that the appellant never thought that he had any ground for appealing until he heard that Spinney's conviction had been quashed. In itself the mere fact that a fellow prisoner's conviction has been quashed is no ground for extending the time for appealing of another prisoner.
In the present case it is to be observed that there was a clear distinction between the appellant's case and Spinney's case, and considering the particular part played by this appellant the jury might well have convicted him, at any rate, of false pretences."
- In Marsh [1935] 25 Cr App R 49 (Lord Hewart CJ, Avory and Macnaghten JJ) the court again considered applications from co-accused made after successful appeals by others. Their convictions took place on 10 October 1934 and the applications for an extension of time were dated 14, 20 and 21 December respectively. Avory J, giving the judgment of the court said at page 52, without referring to the earlier decision in Rigby :
"… it being rule and practice of this court not to grant any considerable extension of time unless we are satisfied upon the application that there are such merits that the appeal would probably succeed, we are quite unable to say in this case that there was no evidence upon which these applicants could properly be convicted on some, at least, of the counts of this indictment. We, therefore, do not grant the applications for an extension of time."
- It is the experience of this court that an extension of time will generally be granted by the single judge under section 31 of the 1968 Act when the applicant provides a satisfactory explanation for missing the deadline by a narrow margin and there appears to be merit in the grounds of appeal. This may be because counsel or solicitors were at fault and the applicant personally was not. The court has been more likely in recent times to permit an extension of time where a co-accused's appeal has been allowed on grounds which apply equally to the applicant but the applicant was erroneously advised that no grounds existed. An extension of time is likely to be granted in cases where relevant and cogent fresh evidence admitted under section 23 of the 1968 Act has emerged for the first time well after conviction. Nonetheless, evidence as to the circumstances in which the fresh evidence emerged will be required and prompt action thereafter will be expected (Gogana The Times July 12 1999; James [2000] Crim LR 571). Long periods of delay will require cogent explanation.
- We are not, however, limited to our own experience. The Court in Hawkins [1997] 1 Cr App R 234 (Lord Bingham CJ, Owen and Connell JJ), at page 239, accepted the description by counsel for the respondent, Mr Perry, of the Court's general practice. Lord Bingham said:
"He submits that while the Court of Appeal has power to extend the 28 day time limit for applying for leave to appeal, the court has traditionally been reluctant to do so save where the extension sought is relevantly short and good reason is shown for the failure to apply in time. In the ordinary run of cases the extension sought is a matter of days and the application is usually made because of some mishap or misunderstanding or administrative delay in the settlement of documents. Such indulgence is not traditionally shown where the defendant, acting on advice has pleaded guilty or where he has taken a conscious decision not to appeal. In our view the submission is well founded and the court should be satisfied that good reason exists for granting leave to appeal out of time in circumstances such as the present."
Change of law cases and the principle of finality
- In Mitchell [1977] 65 Cr App R 185 the appellant was convicted of possessing cannabis with intent to supply. He was granted leave to appeal against sentence. In the meantime, the Court of Appeal held in Goodchild [1977] 64 Cr App R 100 that cannabis, within the meaning of section 37(1) Misuse of Drugs Act 1971, did not comprise merely the leaves and stalk of the cannabis plant. Possession was unlawful only if it was of those parts of the plant from which resin could be extracted. On appeal against sentence it was demonstrated, fortuitously since the prosecution's expert happened to be in court, that the appellant had been in possession of parts of the plant from which no resin could have been extracted. The appellant applied for an extension of time within which to appeal against conviction. Lane LJ, later LCJ, acknowledged the principle of finality applied by the court in Ramsden (unreported, 26 June 1972) in which the court declined to re-open out of time a conviction for dangerous driving following the Court of Appeal's decision in Gosney in 1971 that driving was dangerous only if the driver was at fault. However, the court was informed that the appellant was about to complete a concurrent sentence imposed for handling stolen goods. If no action was taken the appellant would be required to serve a further sentence of imprisonment in respect only of an offence which, under the changed law, he had not committed. In the circumstances the court exercised its discretion to permit an extension of time. Lane LJ said at page 190:
"This seems to us therefore to be the very rare case where the court should exercise its undoubted discretion to allow the extension of time and grant leave to appeal against conviction. We wish to make it clear, however, that this is not to be taken as an invitation to all and sundry who have been convicted of this type of offence to present application to this court for leave to appeal out of time, because they will not be greeted with very much enthusiasm."
- Mr Andrew Mitchell QC, on behalf of the respondent in Mr Bestel's application, submits that Mitchell would be decided differently today. The appellant had been convicted properly under the law as it was understood at the time of his trial. The appeal against sentence was before the court. It is more likely, Mr Mitchell submits, that if Mitchell were to be decided today the court would allow the appeal against sentence, quash the sentence of imprisonment upon the possession count and impose in substitution an absolute or conditional discharge. The court would recognise the need to prevent at least the appearance of injustice. That need could be met by applying the principle of finality but ameliorating the effect of its application. Having regard to our examination of later decisions of both divisions of this Court we are inclined to accept Mr Mitchell's submission.
- In Hawkins the court was considering the consequences upon other previously completed cases of a change in the interpretation of section 15 Theft Act 1968 by the House of Lords in Preddy [1996] 2 Cr App R 524. The applicant was seeking an extension of time of some 7 months in order to take advantage of the change in the law. The court refused the extension of time, concluding that on the facts there had been "no substantial injury to the applicant" because his admitted dishonesty would have permitted other charges under the 1968 Act and the Theft Act 1978. The court accepted the submissions made on behalf of the respondent, described by Lord Bingham at page 239 as follows:
"Counsel goes on to submit that a change in the law since the date of conviction or plea of guilty has not usually been regarded in the past as good reason for granting an extension of time in which to appeal. In support of that submission he has drawn our attention to Lesser [1940] 27 Cr App R 69, Ramsden [1972] Crim L R 547, Re Berkeley [1945] Ch 1 and Mitchell [1977] 65 Cr App R 185."
At page 240 Lord Bingham observed:
"That practice may on its face seem harsh. On the other hand, the consequences of any other rule are equally unattractive. It would mean that a defendant who had roundly and on advice accepted that he had acted dishonestly and fraudulently and pleaded guilty, or who had been found guilty and chosen not to appeal, could after the event seek to re-open the convictions. If such convictions were to be readily opened it would be difficult to know where to draw the line or how far to go back.
Counsel on behalf of the applicant suggests that there is a readily available line of demarcation which would distinguish those serving sentences from those who had completed their sentences. That, however, would not in our judgment be an altogether satisfactory line of demarcation in the case of those who were serving sentences for other offences as well as for offences against (in this case) section 15(1).
It is plain, as we read the authorities, that there is no inflexible rule on this subject, but the general practice is plainly one which sets its face against the re-opening of convictions recorded in such circumstances. Counsel submits, and in our judgment submits correctly – that the practice of the court has in the past, in this and comparable situations, been to eschew undue technicality and ask whether any substantial injustice has been done. In suggesting that that is and has been the practice reference has been made to McHugh [1977] 64 Cr App R 92, R v Ayres [1984] 78 Cr App R 232, [1984] AC 447, Pickford [1995] 1 Cr App R 420 and Molyneux & Farmborough [1981] 72 Cr App R 111."
- Similar considerations arose in the appeal of R [2006] EWCA Crim 1974, [2007] 1 Cr App R 10 (Hughes LJ, Field J and Sir Richard Curtis) in which the applicants sought an extension of time in order to take advantage of a decision of the House of Lords in Saik [2006] UKHL 18, [2006] 2 WLR 993 that to establish guilt of conspiracy to commit an act of money laundering the prosecution was required to prove an agreement, and therefore an intention, to deal with money whose source was illicit, not merely that the source of the money might be illicit. The court held that the applicants would have had no defence to substantive offences (in which proof of suspicion was enough) charged upon the same facts, and extensions of time were refused. Hughes LJ considered several of the authorities upon the issue of extension of time following changes in the law. At paragraph 30 he said:
"30. It is the very well established practice of this court, in a case where the conviction was entirely proper under the law as it stood at the time of trial, to grant leave to appeal against conviction out of time only where substantial injustice would otherwise be done to the defendant. R v Lesser [1939] 27 Cr App R 69 is an early example of emphasis that absent special reasons an application out of time will not be allowed. …" [emphasis added]
At paragraph 35, Hughes LJ noted that in Kansal No 2 [2001] UKHL 62, [2002] 1 Cr App R 36 the House of Lords had recognised the practice of the Court of Appeal:
"...but, the particular construction of the Human Rights Act apart, it is clear from both the speeches that this court's practice to grant leave out of time only where substantial injustice would otherwise be done is recognised, and indeed endorsed."
At paragraph 37 he concluded:
"37. We have no doubt that the practice is very fully established, endorsed by successive Lords Chief Justice, binding upon us and soundly based in justice."
- Hughes LJ's statement was approved by Sir Igor Judge P in Cottrell and Fletcher [2007] EWCA Crim 2016, [2007] 1 WLR 3262. At paragraph 46 the President said:
"In short, the principle is that the defendant seeking leave to appeal out of time is generally expected to point to something more than the mere fact that the criminal law has changed, or been corrected, or developed. If the appeal is effectively based on a change of law, and nothing else, but the conviction was properly returned at the time, after a fair trial, it is unlikely that a substantial injustice occurred".
The tension created by individual and public interests was described by the President commencing at paragraph 42 as follows:
"42. These cases present issues of great sensitivity and latent tension. Those convicted on the basis of the old law assert that their convictions were based on an erroneous understanding of the criminal law and that they have therefore suffered an injustice. At the same time there is a continuing public imperative that so far as possible there should be finality and certainty in the administration of criminal justice. In reality, society can only operate on the basis that the courts administering the criminal justice system apply the law as it is. The law as it may later be declared or perceived to be is irrelevant. Change of law appeals create quite different problems to those which arise in the normal case where an individual is wrongly convicted on the basis of the law which applied at the date of conviction. These tensions are not confined to England and Wales.
43. The issue presented itself to the Supreme Court of Ireland in A v Governor of Arbour Hill Prison [2006] IESC 45. The facts were simple. In June 2004 A pleaded guilty and was convicted of unlawful carnal knowledge contrary to section 141 of the Criminal Law Act 1935. In May 2006, in CC v Ireland & Others the Supreme Court declared that section 1(1) was inconsistent with provisions of the Constitution of Ireland. A appealed against his conviction. The argument was simple. His conviction was null. It depended on a law which, because it was inconsistent with the Constitution, did not exist. The High Court agreed. The prosecution appealed. Murray CJ and the remaining members of the court conducted a comprehensive analysis of both common law and civil justice systems, which demonstrated the effective universality of the problem. He observed:
"85...Absolute retroactivity based solely on the notion of an Act being void ab initio so as to render any previous final judicial decision null would lead the constitution to have dysfunctional effects in the administration of justice … The application of such a principle … in the field of criminal law would render null and of no effect final verdicts or decisions effected by an act which at the time had been presumed or acknowledged to be constitutional and otherwise had been fairly tried. Such unqualified retroactivity would be a denial of justice to the victims of crime and offend against fundamental and justice interests of society".
Addressing the general principle he observed:
"125..In a criminal prosecution where the state relies in good faith on a statute in force at the time and the accused does not seek to impugn the bringing or conduct of the prosecution, on any ground which may in law be open to him or her, including the constitutionality of the statute, before the case reaches finality on appeal or otherwise, then the final decision in the case must be deemed to be and to remain lawful notwithstanding any subsequent ruling that the statute, or a provision, is unconstitutional. That is the general principle.
125.. I do not exclude … some extreme feature of an individual case, which might require, for wholly exceptional reasons related to some fundamental unfairness amounting to a denial of justice … "
- The principle derived by the President from the reasoning in A v Governor of Arbour Hill Prison was endorsed by the Supreme Court in the Scottish appeal of Cadder v HM Advocate [2010] UKSC 43, [2010] 1 WLR 2601 at paragraphs 60 – 62 and 99 – 103. The Supreme Court applied to Scottish cases the decision of the ECtHR in Salduz v Turkey [2008] 49 EHRR 421 that denial of access to legal assistance in police custody amounted to a breach of the fair trial requirement under Article 6(1) in conjunction with Article 6(3)(c) ECHR. The Court considered the impact which its decision would have upon 'closed' cases. Lord Rodger cited with approval the statement of principle by Murray CJ in A v Governor of Arbour Hill Prison and continued:
"102. Murray CJ's description of the effect of a decision which alters the law as previously understood can be applied to Scots law. For instance, in Smith v Lees 1997 JC 73 the Court of Five Judges overruled Stobo v HM Advocate 1994 JC 28 and thereby laid down a more restrictive test for corroboration in cases of sexual assault. The new test applied to the appellant's case and to other cases that were still live. But it could never have been suggested that the decision meant that convictions in completed cases, which had been obtained on the basis of the law as laid down in Stobo, were ipso facto undermined or invalidated. Similarly, in Thompson v Crowe 2000 JC 173, the Full Bench overruled Balloch v HM Advocate 1977 JC 23 and re-established the need to use the procedure of a trial within a trial when the admissibility of statements by the accused is in issue. But, again, this had no effect on the countless completed cases where convictions had been obtained on the basis of evidence of such statements by the accused which judges had admitted in evidence without going through that procedure. So, here, the Court's decision as to the implications of article 6(1) and (3)(c) of the Convention for the use of evidence of answers to police questioning has no direct effect on convictions in proceedings that have been completed. To hold otherwise would be to create uncertainty and, as Murray CJ rightly observes, cause widespread injustices. And the Strasbourg court has pointed out that the principle of legal certainty is necessarily inherent in the law of the European Convention: Marckx v Belgium (1979) 2 EHRR 330, 353, para 58. In the Irish case Geoghegan J said, [2006] 4 IR 88, 200, para 286, that he was "satisfied … that it would be wholly against good order if convictions and sentences which were deemed to be lawful at the time they were decided had to be reopened." I emphatically agree. And that policy is, of course, embodied in section 124 of the 1995 Act which makes interlocutors and sentences pronounced by the appeal court "final and conclusive and not subject to review by any court whatsoever", except in proceedings on a reference by the Scottish Criminal Cases Review Commission."
- Mr Mitchell QC drew our attention to the application of the finality principle in the civil appeal of Serious Organised Crime Agency v O'Docherty and Manncherty SL [2013] EWCA Civ 518. A civil recovery order had been made against the respondents under Part 5 of the Proceeds of Crime Act 2002. The order captured property situated out of the jurisdiction. In Serious Organised Crime Agency v Perry (Nos. 1 and 2) [2012] UKSC 35, [2013] 1 AC 182 the Supreme Court subsequently held that the High Court of England and Wales had no jurisdiction to make a freezing order over property held by the respondent out of the jurisdiction. Mr Doherty did not appeal the civil recovery and freezing orders, nor a subsequent finding that he was in contempt. Following the judgments in Perry he applied, successfully, under the 'liberty to apply' paragraph of the order, and under section 267 of the 2002 Act, for a variation of the freezing order so as to exclude the overseas property from its reach. Section 267 provided:
"(1) The court may at any time vary or set aside a property freezing order...
(4) If the court decides that any property to which a property freezing order applies is neither recoverable property nor associated property, it must vary the order so as to exclude the property."
- The Agency appealed to the Court of Appeal. Mr Docherty sought out of time to appeal against the committal order made in consequence of his breach of the civil recovery order. The Court found that the civil recovery order was a final order. Leveson LJ, with whom Richards LJ agreed, and Mummery LJ agreed in part, said, commencing at paragraph 34:
"34. The answer to this aspect of the case is to be found in the observation that the retrospective effect of a judicial decision is excluded from cases already finally determined. There is nothing exceptional about this case: it is no different from that which would obtain in any case where the common law (or the construction of a statute) takes a line which differs from previously decided cases with the result that one or more earlier decisions of the court would be decided differently had the law then been understood in the way that it is now explained. If that fact itself was exceptional, the critically important principle of finality of litigation would be undermined. Once seen in that light and, additionally, it is also recognised that the decision of Kenneth Parker J is a final determination, neither can the re-opening of the decision be said to be necessary to remedy a real injustice: his decision was correctly made in the light of the law as it was then understood to be. In my judgment, the pre-requisites identified in CPR 52.17 for re-opening the decision of the court are not met.
35. This conclusion is reinforced if attention is focused on the subject-matter of the decision that it is sought to reopen, namely the refusal of permission to appeal. The only point raised in the application concerned Kenneth Parker J's refusal of a stay; there was no other challenge to his order. In particular, no issue was raised about the territorial reach of the order, even though Perry was then before the Supreme Court. It cannot be said to be necessary, for the avoidance of injustice, to re-open the refusal of permission by reference to a point of law that could have been but was not taken at the time.
36. On that basis, the civil recovery order remains a binding order of the court. Accepting that to be the case (and it is important to underline that Mr O'Docherty did not initially seek to re-open this appeal but applied only to vary the property freezing order), it is necessary to turn to the other orders which are consequent upon the civil recovery order." [emphasis added]
- Leveson LJ proceeded to find (paragraphs 37 - 44) that since the civil recovery order was a final order, the property freezing order made to enforce it was also a valid order notwithstanding the Supreme Court's subsequent finding that the 2002 Act did not give authority over foreign assets. Nevertheless, the majority dismissed SOCA's appeal against the variation of the freezing order at first instance on another ground: by the operation of section 266(2) the foreign property had vested in the trustee for civil recovery, at which point section 308(2) applied, and the property ceased to be recoverable property; it could not, therefore, be the subject of the freezing order.
- As to the order for committal, Leveson LJ said:
"48. ... At the time the order was made, it was entirely justified in law and nobody suggested the contrary. When the contempt was committed, the order remained entirely valid; again, nobody suggested the contrary. When Kenneth Parker J came to deal with the breach, the order continued to be valid. Mr O'Docherty, who could have sought to set aside the order, or appeared to challenge either the breach or the committal or both, did not choose to take any of these steps. It is only the subsequent change to the law that gives rise to issues of jurisdiction but none of that affects the legitimacy of the order when it was made or the gravamen of the breach.
49. In the circumstances, I would reject Mr Mitchell's application to extend time within which to appeal the order of committal although, for the avoidance of all doubt, I would, in any event, have rejected it on the merits."
- Mummery LJ agreed with the majority that Perry had done nothing to change the lawfulness of the civil recovery order made against Mr O'Docherty. At paragraphs 64 - 65 he said:
"64. Since that order was made nothing has changed, save the interpretation of the 2002 Act. According to Perry the definition of "property" in s. 316(4) of the 2002 Act as "property wherever situated" does not include property wherever situated, but only property situated in the UK. Nothing was said in Perry about final orders already made by the courts on the basis of a different interpretation. The general rule against the retrospective effect of judicial decisions on final court orders is clear. It was held in Cadder v. HM Advocate [2010] 1 WLR 2601, which is cited by Leveson LJ at [20], that, at common law, a judicial decision, such as Perry, has a retrospective effect in relation to matters or cases not yet finally determined: but it is excluded from cases already finally determined, either at first instance and unappealed, or unsuccessfully appealed. Mr Andrew Sutcliffe QC appearing for SOCA described those as "closed cases". He said that Perry was irrelevant in closed cases. While it is true that the Supreme Court interpreted s.316(4) of the 2002 Act differently from the way it was previously interpreted by the High Court and the Court of Appeal in that and other cases, Perry has no direct consequences for the validity or terms of an order made on 16 December 2011. It does not in itself enable, let alone require, a closed case to be re-opened or the order concluding it to be re-drawn.
65. In my judgment, Mr Andrew Mitchell QC for the respondent is not correct in submitting that the decision in Perry dictated the result of the application to vary the PFO; or that the civil recovery order and the PFO were, post-Perry, "unlawful orders" insofar as they purported to apply to the overseas property identified in the order; or that they cannot stand, as being orders founded on a fiction and as tending to undermine the decision in Perry; or that the judge below was bound by Perry and the 2002 Act to conclude that the overseas property was not "recoverable property" for the purposes of the pre-Perry order of Kenneth Parker J."
- Mr Mitchell QC was counsel for the respondent in O'Docherty. He submits that the principle of finality of orders correctly made under the law as then understood, including their enforcement, as explained in O'Docherty, applies with equal force to confiscation orders made under the criminal jurisdiction given by Part 1 of the 2002 Act.
The finality principle in confiscation cases
- The principle of finality was applied in O'Docherty subject to the need to avoid substantial injustice. The Court found on the facts that there would be no substantial injustice in declining to permit the re-opening of a judicial decision on grounds which could have been but were not argued at the time it was made (see paragraph 35 of the judgment of Leveson LJ at paragraph 18 above). It seems to us that recent pronouncements in both divisions of the Court of Appeal and in the Supreme Court as to the importance and primacy of the principle of finality have the effect of requiring the most exceptional circumstances before an applicant may be permitted to argue that the new law should apply to his old case and that, otherwise, a substantial injustice will be caused. It remains for us to determine how those circumstances are to be measured in a criminal confiscation case and whether they exist in the present cases.
- It has been the consistent practice of this Court for many years, when presented with applications for an extension of time to appeal against conviction in change of law cases, to examine the underlying justice of the conviction. So, for example, in Hawkins the applicant pleaded guilty to offences of dishonesty. It was at least arguable that alternative charges on the same facts would have resulted in conviction. In Cottrell the applicant would have been convicted of sexual assault founded purely upon acts committed before the act of unlawful sexual intercourse on which the charge had been laid. In R the jury would have convicted the applicants of substantive offences of money laundering. In Ballinger the application was refused because the applicant received a fair trial notwithstanding that the Judge Advocate was a serving officer and not, therefore, institutionally independent of the prosecution. In Mitchell the court granted an extension of time where there was no alternative offence of which the applicant could have been found guilty. As a matter of fact and law the appellant had committed no offence because he did not possess that which it was unlawful to possess. This Court does not, in other words, apply the finality principle in isolation from the justice of the case. While we recognise and respect the force of the Vice-President's words in Jawad (paragraph 4 above), "Nor is the case where an extension will be refused limited to where, if the law had been correctly understood at the time of the proceedings in the Crown Court, a different charge or different procedure might well have left the defendant in a similar position to that in which he now finds himself.", we find that the practice of this Court, almost without exception, has been to examine the underlying justice of a conviction for a criminal offence.
- Counsel for the applicants challenge the respondent's assertion that the proceedings in their cases were finalised at the time the confiscation orders were made. The confiscation orders, while made on the basis of the law as it then existed, have continuing effects that survive the change of the law made by Waya. Each of the orders made required the applicant to make payment under the confiscation order within a limited period of time in default of which he would be required to serve a sentence of imprisonment. In the case of Mr Bestel the default period is one of 10 years imprisonment. Each applicant would, it is submitted, suffer a substantial injustice if faced with the prospect of having to serve a period of imprisonment in default solely by reason of the fact that the court made an assessment of benefit subsequently found to be erroneous in law and in fact. Furthermore, the injustice is magnified by the liability of the applicant, notwithstanding that he has served a sentence of imprisonment in default, to remain liable to surrender any untainted assets which remain in his possession or come into his possession because the original assessment of benefit was made on a legally and factually incorrect basis. Thus expressed, the applicants' submissions fail to recognise the principle of finality. At the time the orders were made in their cases, they were properly made under the law as then consistently applied to the level of the Court of Appeal.
- The applicants' submissions fail also to recognise the judgments of the Civil Division in O'Docherty. Enforcement of an order properly made is lawful (see also the reference by Lord Rodger in Cadder, at paragraph 16 above, to the lawfulness of sentences passed pursuant to a conviction under the law as it was then understood). We observe, however, that it was the view of the Court in O'Doherty that the order for committal for contempt was, in any event, justified on the merits. It is a long established principle that an order of the court is to be obeyed unless and until it is subsequently rescinded or invalidated (see McGrath v Chief Constable of The Royal Ulster Constabulary [2001] UKHL 39, per Lord Clyde at paragraphs 15 - 17). On the other hand, we recognise that when enforcement proceedings are taken in respect of breaches of obligations arising after a change in the law the enforcing authority may well need to judge the justice of the case against the changed circumstances and to ameliorate the penalty which would otherwise be imposed. It seems to us that Mr Mitchell QC's submission that if Mitchell were decided today the appellants' sentence would be reduced significantly is a recognition of the need to do justice, notwithstanding the sentence imposed was lawful and appropriate under the law as it was understood at the time of its imposition.
- Mr Mitchell QC says in response that the applicants are not without remedy and for that reason substantial injustice can be avoided. Section 23 Proceeds of Crime Act 2002 provides:
"23 (1) This section applies if –
(a) A court has made a confiscation order, and
(b) The defendant, or a receiver appointed under section 50 applies to the Crown court to vary the order under this section.
(2) In such a case the court must calculate the available amount, and in doing so it must apply section 9 as if references to the time the confiscation order is made were to the time of the calculation and as if references to the date of the confiscation order were to the date of the calculation.
(3) If the court finds that the available amount (as so calculated) is inadequate for the paying of any amount remaining to be paid under the confiscation order it may vary the order by substituting for the amount required to be paid such smaller amount as the court believes is just.
(4) If a person has been adjudged bankrupt or his estate has been sequestrated, or if an order for the winding up of a company has been made, the court must take into the account the extent to which realisable property held by that person or that company may be distributed among creditors.
(5) The court may disregard any inadequacy which it believes is attributable (wholly or partly) to anything done by the defendant for the purpose of preserving property held by the recipient of a tainted gift from any risk of realisation under this part.
…"
Section 9 which concerns the assessment of the recoverable amount provides:
"9 (1) For the purposes of deciding the recoverable amount, the available amount is the aggregate of –
(a) the total of the values (at the time that the confiscation order is made) of all the free property then held by the defendant minus the total amount payable in pursuance of obligations which then have priority, and
(b) the total of the values (at that time) of all tainted gifts.
(2) An obligation has priority if it is an obligation of the defendant –
(a) to pay an amount due in respect of a fine or other order of a court which was imposed or made on conviction of an offence and at any time before the confiscation order is made, or
(b) to pay a sum which would be included among the preferential debts if the defendant's bankruptcy had commenced on the date of the confiscation order or his winding up had been ordered on that date.
(3) "Preferential debts" has the meaning given by section 386 of the Insolvency Act 1986."
- Mr Mitchell QC submits that it is open to all three of the present applicants to make an application to the Crown Court for a reassessment of the available amount. That, however, it seems to us, is not a complete answer to the applicants' argument. The confiscation order is payable out of all the applicants' assets whether tainted or not. A defendant who had already made payments in discharge of the confiscation order in excess of his actual benefit from criminal conduct (as re-assessed) will have been deprived of his untainted assets without the means of recovery. The only avenue to the recovery of overpayment is an appeal to this Court resulting in a reduction of the benefit figure. The question for us is whether the principle of finality must take precedence over the sense of grievance felt by a defendant who was worse off under the previous regime.
- In Gokal v Serious Fraud Office [2001] EWCA Civ 368 the Court of Appeal was considering an appeal against a refusal by the High Court to consider the issue of a certificate of inadequacy (at a time when the application was to the High Court rather than to the Crown Court). The Crown Court judge had found that the appellant had hidden assets and that the value of his realisable property was some £2.94 million. He could not go to the High Court seeking a certificate of inadequacy unless:
"24. … he condescends to demonstrate what has happened since the making of the order to the realisable property found by the trial judge to have existed when the order was made: see R v C unreported, 18 November 1997 and R v W unreported, 29 January 1998. Any other approach would amount to an attempt to go behind the finding embodied in the confiscation order and such an attempt would be an abuse of process. In the present case the appellant does not seek to demonstrate where the realisable property of over £2 million was in May 1997 nor to show how it has decreased in value or otherwise diminished since then."
Gokal was followed in Re: McKinsley [2006] 1 WLR 3420 (CA). The court found that where a defendant applied for a certificate of inadequacy on the ground that he did not have, and had not had when the confiscation order was made, the hidden assets identified by the Crown Court judge it was not open to the defendant to seek to challenge the Crown Court judge's findings as to his realisable assets. Scott Baker LJ, giving the leading judgment, found that the rule was "hard edged". It is not open to a party to re-litigate an issue that has already been decided against him in the Crown Court. In Younis [2008] EWCA Crim 2950, the criminal division of the Court of Appeal affirmed that the nature of the regime under section 23 Proceeds of Crime Act 2002 was identical. It was not open to the applicant to make an application under section 23 in order to challenge a finding as to hidden assets made against him at the confiscation hearing.
- The effect of these decisions is that it is the reduction in value of assets identified by the Crown Court during a confiscation hearing which is capable of founding an application under section 23. The defendant cannot argue that he did not have the asset when the order was made. Mr Mitchell QC, supported by Mr Little, asserted that it remains open to the Crown Court upon an application under section 23 to re-consider a valuation of his real property made by the Crown Court during the confiscation hearing without any or any adequate reference to the mortgage to which it was subject. A revaluation of the property, they contend, is bound to recognise the priority charge over the property in favour of the lender.
Conclusion
- The principle of finality that decisions made under the law as it was then understood should not be disturbed unless substantial injustice would follow is well recognised and we must apply it. The relevant date is the date of the confiscation order and not of the enforcement proceedings. It seems to us that this must follow from O'Docherty. On the other hand, within the criminal jurisdiction, the enforcement proceedings and their consequences are a relevant factor in a consideration whether a substantial injustice might follow should an extension of time be refused; so also, on the other, is the availability of an application to the Crown Court under section 23. In particular, where the "available amount" is represented by the value of the very property which the tainted loans enabled the applicant to acquire, it must follow, it seems to us, that when at the enforcement stage it is known that the property is subject to a charge in favour of the lender, that charge must be brought into account so as to reduce the available amount if it has not already been considered. Equally, if the market value of the property has decreased since the making of a confiscation order based on the market value of the property, section 23 would enable the Crown Court to reflect that fact. Where, however, as a result of an erroneous assessment of benefit, a defendant has been required to meet a confiscation order from assets which can be clearly demonstrated to be untainted, the availability of the section 23 application may not, in our view, act to ameliorate the stringency of the principle.
- A question arose in the course of argument whether and to what extent it was relevant that the applicant had, upon legal advice or otherwise, conceded the benefit figure at the confiscation hearing. It was submitted on behalf of the respondent in the cases of Mr Raza and Mr Bashir that the applicant may have had reasons of his own for agreeing rather than disputing the figure for benefit proposed by the prosecutor in his section 16 statement, quite apart from the issue of proportionality subsequently raised in Waya. It was known to legal practitioners in this field for a considerable period before the Supreme Court gave its judgments in Waya that these arguments were being raised since, following the decision in the Court of Appeal, the Supreme Court adjourned the first hearing in 2011 specifically for the purpose of considering Mr Waya's arguments upon disproportionality and Article 1, First Protocol ECHR. In Hirani [2008] EWCA Crim 1463 the prosecution and defence prepared a memorandum of agreement that the defendant's benefit from criminal conduct was £161,023.57 and that his realisable assets were £110,000. A confiscation order was made to reflect that agreement. No payment was made during the 2 year period within which the defendant was required to discharge the order. Enforcement proceedings were commenced. The appellant was granted bail pending appeal to the Court of Appeal Criminal Division. The appellant complained that his instructions to his legal advisors had at all material times been that he had no assets from which to make confiscation payments. The court noted that it was not open to the appellant to seek a certificate of inadequacy when, to do so, he was required to go behind specific findings made in the Crown Court. The court examined the circumstances in which the memorandum of agreement came to be made and rejected the appellant's assertion that there were grounds upon which the court could go behind his agreement. The appellant had reached a compromise knowing that his present assets may not amount to £110,000. The court did not accept that he had been misled and the appeal was dismissed.
- It is submitted on behalf of the respondent that the burden is upon the applicant in an application for an extension of time to demonstrate that a substantial injustice may have resulted to the applicant by reason of his acceptance of counsel's advice based upon the law as it was understood at the date of the confiscation order. Neither Mr Raza nor Mr Bashir, it is submitted, have presented evidence to the court which would justify an extension of time on the ground that agreement as to his benefit was reached solely upon an understanding of the law at the material time rather than for reasons personal to the applicant. We shall consider the effect of these submissions when dealing with the facts of the relevant applications.
Jean Pierre Bestel
The conviction and confiscation proceedings
- This is an application for an extension of time of 2 months within which to apply for leave to appeal against a confiscation order made at Maidstone Crown Court on 13 July 2012.
- On 14 October 2009 the applicant appeared at Maidstone Crown Court for a plea and case management hearing ("PCMH"), charged in an indictment containing 11 counts. Counts 1 – 7 charged the applicant with fraud contrary to section 1 of the Fraud Act 2006. It was alleged that to each of the seven separate financial institutions named in the indictment the applicant falsely represented that he was employed by Ernst & Young LLP as an accountant earning sums in excess of £275,000-£290,000 p.a., dishonestly, and with the intention of making a gain for himself or to expose the lender to the risk of loss. He was in fact a former employee of Ernst & Young. In Counts 8 – 11 the applicant was charged with four offences of making articles for use in fraud, contrary to section 7(1) of the Fraud Act 2006. The articles made or adapted were alleged to be documents created for the purpose of supporting the dishonest applications for mortgage loans by representing that he was employed by Ernest & Young with a salary and benefits of more than £275,000. By this means the applicant had obtained funds for the purchase of many buy-to-let properties.
- Raised at the PCMH was an issue whether the applicant was fit to plead. It was asserted that the applicant was suffering from bipolar disorder. The court adjourned arraignment to 16 November 2009 and ordered the defence to serve any expert evidence in support of the claim that he was unfit to plead. At the adjourned hearing on 16 November no expert report had been served. It was conceded that the applicant was fit to plead. He pleaded not guilty and the trial date was set for 4 October 2010. In the meantime, on 11 August 2010, the applicant had been charged with doing acts tending to pervert the course of justice. It was the prosecution contention that while representing to the court that he might not be fit to stand trial the applicant was, amongst other things, engaged in complex financial deals for which he was receiving a daily fee of some £1,500. On 1 September 2010 the case was relisted for mention. The applicant pleaded guilty to counts 1 - 6 inclusive and count 8 of the indictment. The prosecution accepted the applicant's pleas and did not proceed with the remaining counts in the indictment or upon the indictment alleging the offence of perverting the course of justice. On 18 March 2011 the applicant was sentenced by His Honour Judge ("HHJ") Gold QC to concurrent terms of 3 years imprisonment.
- On 28 September 2010 the court issued a restraining order in respect of properties purchased with the aid of dishonest loans and the applicant's other assets. A confiscation timetable was set. Under section 18 Proceeds of Crime Act 2002 the applicant was ordered to serve, by 28 May 2011, a witness statement giving all relevant information as to his assets, bank and other accounts, and details of any transfer by way of gift or sale during the period of 6 years before the commencement of the prosecution.
- The matter was re-listed on 26 September 2011. The applicant had failed to serve the witness statement ordered. The court set a new timetable. The applicant was to serve his statement by 10 October. No further progress had been made on 21 October 2011 or 18 November 2011, on both of which dates the case had been listed for mention. On 23 November 2011 the prosecution elected to serve its own section 16 statement notwithstanding the continuing absence of the applicant's section 18 witness statement. The prosecutor's statement set out the basis on which the confiscation order would be sought. It was contended that by reason of his pleas of guilty and the duration of his offending the applicant had a criminal lifestyle. It was contended that each of the offences committed formed part of a course of criminal activity. It was argued that since this was a criminal lifestyle case the section 10 assumptions applied. Section 10(2) required the court to assume that any property transferred to the defendant was obtained by him as a result of his general and particular criminal conduct. The total of the loans obtained in consequence of the offences to which the applicant pleaded guilty was (after apportionment between joint borrowers in some cases): £5,215,729.35. The total of non-indicted loans obtained, apportioned as before, was: £4,211,394.00. The prosecution therefore contended that the applicant's benefit was £9,427,123.35.
- On 19 January 2012, after complaints from the applicant, his legal representation order was transferred from Mary Manson Solicitors to Wells Burcombe LLP. The case was listed for mention on 6 February 2012 and again on 2 March 2012. On the latter occasion the applicant appeared in person with his new solicitors and counsel. The court set a further timetable culminating in the confiscation hearing listed on 13 July 2012. On 12 March 2012 the prosecution wrote to the applicant in prison to remind him of the timetable, including the date of the hearing. On 17 April 2012 the applicant's own solicitors wrote to the applicant enclosing a draft section 18 statement. That letter also specified the date of the confiscation hearing. On 26 April the applicant personally sent his section 18 statement to the prosecution. It comprised the draft sent to him by his solicitors on 17 April with his own handwritten notes endorsed. It was signed and dated. Also enclosed was a handwritten letter apparently addressed to "Massimo" and dated 15 April. In that letter he claimed to have assets all over the world whose value he estimated to total over £400 million.
The confiscation hearing
- At the hearing on 13 July 2012 before His Honour Judge ("HHJ") Charles Macdonald QC, solicitors and counsel for the applicant appeared. The applicant himself did not. We have been provided with a transcript of the proceedings that day. The applicant was represented by Ms Amanda Bostock who made an application for an adjournment. She informed the judge that her solicitors, Wells Burcombe LLP, had attempted to make contact with the applicant by email and telephone unsuccessfully. They had received no response to their emails and had failed to make contact by telephone. A conference had been held with the applicant three weeks earlier. She was instructed that information provided in the applicant's section 18 statement was inaccurate. A written request for an adjournment had been made on 8 June but it seemed that the application had been refused by the Crown Court. Her solicitors were making enquiries of the various Law of Property Act ("LPA") receivers appointed by the lenders to receive the rent due for the properties in repayment of the mortgages. The solicitors wished to discover the balance in respect of each property and, in particular, whether there was an equitable benefit remaining for the defendant. Ms Bostock did not spell out whether that information was required to mount an argument as to benefit or only to address the issue of what was the available amount.
- The judge intervened to ask why it was necessary to consult the receivers. The account balance could be obtained from the lenders and the properties could be valued by estate agents. Ms Bostock did not give a direct answer to the question but responded that she understood that many of the properties were in negative equity. The information was needed before the confiscation hearing could take place. The solicitors were having difficulties obtaining instructions and had not obtained evidence of the valuations required. An adjournment of two months was sought.
- In response, Mr Little for the prosecution, drew the judge's attention to the repeated failures of the applicant to comply with the court's directions. He had still not lodged a section 17 response to the prosecutor's section 16 statement. Mr Little submitted that although the numbers were large this was a simple and straightforward confiscation case. He confirmed that the prosecutor's statement was founded on the section 10(2) assumption. In his section 18 statement the applicant was not denying he had assets with which to meet the confiscation order sought. On the contrary, he was asserting that he was worth more than £400 million. In reply Ms Bostock reminded the judge of the applicant's psychiatric condition. It is apparent that the judge did not have the psychiatric reports with which he was subsequently provided but there was evidence that the applicant had been suffering from a bipolar disorder since about January 2009. One of the features of the disorder was a tendency to grandiose expressions of omnipotence of which, Ms Bostock submitted, his section 18 statement was an example.
- The judge rejected the application for an adjournment and gave a judgment as to his reasons for doing so. He noted the history in which there appeared to be a wholesale lack of co-operation by the applicant towards the confiscation proceedings. In the judge's view, contrary to the argument put to him by Ms Bostock, the case was not complicated. The section 10 assumptions applied. Secondly, the judge concluded that the solicitors' inability to obtain instructions from the applicant appeared to be a consequence of the applicant's deliberate fault. The appellant was already on his second firm of lawyers. Thirdly, it may well be that the section 18 statement was inaccurate but he would make a decision in the confiscation hearing which ignored what the applicant said about his current assets. The judge was unimpressed by the solicitors' attempts to obtain information from the LPA receivers since there was no need to do so. In any event, there had been ample time for the relevant information to be gathered. The judge concluded at page 28G of the transcript of his ruling:
"My conclusion is that he has had massively ample time to prepare for these proceedings, it is in principle a simple case, there is no answer to the benefit claim, subject to my studying the detailed evidence in respect of the income assumption items, realisable assets could have been demonstrated with some ease. It is highly likely, or at the lowest perfectly possible, the defendant is abusing the process by non-co-operation, but the clean-sure reason is that there is absolutely no reason to think that we will be in any different position in two months' time or any time in the future that I might choose to adjourn these proceedings for. There is no reason to think he will start to co-operate, whether his inability to do so is due to illness or whether in truth he is refusing to do so as a tactic."
- Ms Bostock immediately made an application to withdraw as she was without sufficient instructions. The judge responded that this was a matter for counsel and her instructing solicitors. Ms Bostock and her solicitors then withdrew from further attendance. We are unaware of the precise reasons why counsel took the view she did but it seems to us that, on the face of it, this was an unfortunate decision for the judge. Ms Bostock's submissions on matters of law may have been of some assistance to the judge for reasons to which we shall come in a moment.
- The judge then retired to read the prosecutor's statement with its supporting documents. He returned to court to discuss briefly with Mr Little the question whether all of the loans had been drawn down by the applicant. His judgment in the confiscation hearing was then as follows:
"I find on the evidence that the defendant has benefited from his particular and general criminal conduct in the sum of £9,427,123 sterling. The defendant has not shown that his realisable assets are less than that sum so I make a confiscation order in that sum. I allow 6 months to pay and set the default term at 10 years. I record that no compensation is sought. Costs are adjourned with permission to apply."
Discussion
- The applicant's absence from the Crown Court on 13 July 2012 raised an issue before the judge which was never resolved before the conclusion of the confiscation hearing; that is, whether the defendant had "absconded" within the meaning of section 27 Proceeds of Crime Act 2002. Section 27 provides so far as is relevant for present purposes:
"27(1) This section applies if the following two conditions are satisfied.
(2) The first condition is that a defendant absconds after –
(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 of an offence offences under section 3, 4 or 6 of the Sentencing Act, or
(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 –
(a) the prosecutor applies to the Crown Court to proceed under this section, and
(b) the court believes it is appropriate for it to do so.
(4) If this section applies the court must proceed under section 6 in the same way as it must proceed if the two conditions there mentioned are satisfied; but this is subject to sub-section (5).
(5) If the court proceeds under section 6 as applied by this section, this part has effect with these modifications.
(a) …
(b) …
(c) …
(d) sections 10, 16(4), 17 and 18 must be ignored;
(e) …
(6) Once the defendant ceases to be an absconder section 19 has effect as if sub-section (1) (a) read –
(a) at a time when the first condition under section 27 was satisfied the court did not proceed under section 6.
(7) If the court does not believe it is appropriate for it to proceed under this section, once the defendant ceases to be an absconder section 19 has effect as if sub-section 1(b) read –
(b) there is evidence which is not available to the prosecutor on the relevant date."
Section 19 provides for a re-consideration in cases where either the first condition in section 6 is satisfied but no court has proceeded under the section, and there is fresh evidence, or where (as a result of section 27(6) and (7)), the defendant ceases to be an absconder.
- The judge made an express finding that it was "highly likely or at the lowest perfectly possible" that the defendant was absent in an attempt to frustrate the confiscation proceedings. An important issue therefore arose as to whether the applicant had 'absconded'. If he had the court was not permitted, if it proceeded in his absence, to make the assumptions provided by section 10 (see section 10(5)(d) at paragraph 46 above). If the applicant was properly to be treated as an absconder then the judge's stated reason for continuing with the hearing (i.e. the section 10 assumptions rendered this a simple assessment of benefit) was undermined. It seems to us that the judge was required in the circumstances to reach a decision whether the applicant was an absconder or not. He made no such finding.
- It is submitted on behalf of the respondent that the applicant clearly did not "abscond" from the confiscation hearing. Mr Mitchell made the powerful point that if mere absence from the confiscation hearing is enough to constitute 'absconds' for the purpose of section 27, a defendant could avoid the application of the assumptions by the simple expedient of staying at home. That would deprive the statutory assumptions of their intended effect. There is no statutory definition of the word 'abscond'. The respondent points to the use of the words "an accused unlawfully at large" in the equivalent section 111 of the Act which applies to Scotland. Mr Bestel was not unlawfully at large. In ordinary usage a person who absconds flees, runs away or escapes. In our judgment, in the context of the administration of criminal justice, the phrase "a defendant absconds" implies that, at least, the defendant has sought to place himself beyond the reach of the court for the purpose of escaping judgment. Mr Bestel did not abscond in this sense. We note that in Jones [2002] UKHL 5 [2003] 1 AC 1 the House of Lords considered the Article 6 requirements of a criminal trial which took place in the absence of defendants who had "absconded" by not surrendering to bail. They had not been found by the time trial was due to take place and the judge decided to continue in their absence. The House of Lords was agreed that, whether or not the defendants could be held to have waived their right to attend trial (about which there was a difference of opinion), the court should satisfy itself that a defendant would receive the basic elements of a fair trial notwithstanding his absence. Absence which constituted the waiver of a right to attend would count strongly in favour of continuing with the trial. This, in our view, was the effect of the finding made by the judge in the present case: Mr Bestel had deliberately failed to attend hoping that the confiscation hearing would be postponed but knowing of the risk that the court would proceed in his absence; but he remained at his known address, had been communicating with his solicitors and with the prosecution; and he had not attempted to escape the reach of the court. In our judgment he did not abscond within the meaning of section 27.
- This court was required to consider the consequences of the absence of defendants from confiscation hearings in Gavin and Tasie [2010] EWCA Crim 2727, [2011] 1 Cr App R (S) 126 (Elias LJ, Maddison J and HHJ Morris QC). In the case of Mr Gavin the appellant, when represented by solicitors, submitted a signed statement pursuant to section 17. Within a month he made a request to immigration officials to return to Jamaica under the facilitated return scheme. Within two months he had sold a property which he intended to represent was not a realisable asset. The proceeds of sale were transferred to an account in Jamaica. A deportation order was issued and served on the appellant one month before the confiscation hearing was to take place. He was removed from the jurisdiction two weeks before the confiscation hearing. The hearing was adjourned for a short time and then restored. The judge concluded that the confiscation hearing should proceed in the appellant's absence. The appellant had unambiguously chosen to place himself out of the jurisdiction. It was common ground between the parties, accepted by this Court, that the appellant had not absconded within the meaning of section 27 notwithstanding that it was his intention to manipulate a situation in which his deportation would occur. The prosecutor was content to concede that by analogy the section 10 assumptions should not be made at the confiscation hearing in the appellant's absence. The judge agreed. This Court held that the judge had been entitled to proceed as he did.
- Subject to ensuring the fundamental fairness of the process it seems to us that the judge was entitled to proceed in Mr Bestel's absence even without any offer from the prosecutor to eschew reliance on section 10 of the 2002 Act.
- By section 7 of the 2002 Act the judge was required to assess the "recoverable amount for the purposes of section 6". Section 7(2) provides:
"(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. …"
While there is no assumption created by section 7 the burden is placed upon the defendant to show that his available assets should be valued at less than the benefit figure. We would observe that the imposition of this burden of proof does not enable the court to ignore the available evidence just because the defendant fails to take part or to submit evidence. At the confiscation hearing the prosecution relied on a section 16 statement made by Police Sergeant Debra Noonan dated 8 July 2011. In section 11 of her statement titled "Available Amount" she said:
"11.4 At paragraph 6 of the restraint order of 28 September 2010, appendix xviii, the defendant is prohibited from dealing with 36 properties in which he holds an interest and shares held in several limited companies. Appended to the witness statement dated 16 September 2010 made in support of the application for the said restraint order is a table detailing all properties in which the defendant holds an interest.
11.5 The spread sheet shows the 36 properties particularised at paragraph 6 of the restraint order and a further 59 properties. These 59 properties were not included in the restraint order as at the time the order was made the properties were in the hands of receivers of rent appointed under the Provisions of the Law of Property Act 1925 on the instructions of the various mortgage lenders due to arrears.
11.6 It is acknowledged that the defendant does not have control of the properties whilst the receivers remain appointed, however he is entitled to receive any equity generated from property sales. The situation from the properties at the moment is very fluid. Several properties have been re-possessed and sold by the lenders since the table was prepared. I am also informed that as a result of the receivers of rent being appointed several of the mortgage accounts are now in an advanced [sic] position. As stated above the onus remains with the defendant to provide the court with full details of all his free property, including valuations, at the time of the confiscation hearing."
The schedule to which Sergeant Noonan referred contained a list of properties, their dates of purchase, their purchase prices, and identification of the mortgage lender and of the existence of a charge, but it did not contain any information as to the value of the properties at the date of the statement or the state of the mortgage accounts. Ignoring the section 18 statement, as the judge said he would, there was no evidence of significance before the court as to the source of the available amount other than the remaining equity in the properties purchased by means of the tainted loans.
- However, there was placed before the judge as Appendices (i)-(xvi) to Sergeant Noonan's report the source documents for the mortgages of "Other Properties". By "other properties" Sergeant Noonan meant those properties acquired by mortgage advances which did not form part of the indictment. They were assumed under section 10 to be property obtained in consequence of the applicant's criminal conduct. It is quite clear from those documents, which we have examined, that the loans obtained by the applicant represented the substantial part of the purchase price in each case. A careful reading of the documents together with section 11 of Sergeant Noonan's statement should have revealed that the applicant's available assets would represent a fraction of any benefit figure represented by the sum of the mortgage advances made by the lenders. The equivalent documents for the mortgages charged in the indictment were not exhibited to Sergeant Noonan's statement but in section 3.7 of her statement she referred the reader to the exhibits identified in the trial bundle. We have not been provided with those exhibits but it is conceded that purchase of the properties was funded by substantial loans secured by charges over the properties. As the law stood at the time of the confiscation hearing the sum of the mortgage advances could be treated as the applicant's benefit by section 80(2) of the Act. As we have said, the value of the property was to be treated as the value of property at the time the person obtained it or the value of the property into which it was converted, whichever was the greater. Most of the purchases were made at the top of the market in the years 2006 and 2007 and there had been in the meantime, as everyone knows, a substantial adjustment downwards in the property market.
- In our opinion, the evidence presented to the judge demonstrated the injustice of a finding that the applicant had failed to discharge the burden of proving that the available amount was less than the benefit figure. The judge had already indicated in his ruling upon the application to adjourn the confiscation hearing that he would ignore the applicant's section 18 statement in view of the possibility that it was a product of his grandiose imaginings. That being the case, the court was dependent upon such information as was provided by the prosecutor to reach the section 7 conclusion. Where, as here, there was before the judge material which demonstrated the clear probability that the available amount would be a figure substantially lower than that of the benefit, it was, in our view, necessary for the court to make further enquiries of the prosecutor. Sergeant Noonan's submission to the court, made in her witness statement, was that the burden was on the defendant to establish his equitable interest in the properties. We accept that that was the starting position, but where the prosecutor's own evidence demonstrated the inadequacy of the available amount we do not conclude that it could properly have been the final position. If he had been present, the applicant could not have provided the information required, as Ms Bostock had told the judge during the course of her application. He could only have pointed out to the judge that which was clear from the face of the section 16 statement that his equitable interest was substantially less than the benefit figure. The judge should in our view have made further enquiry of the prosecution with a view to reaching his answer to the section 7 question. That may have required a short adjournment so that the figures could be calculated. Instead, the judge proceeded to find, without giving reasons, that the benefit figure was at least matched by the available amount. In our judgment, despite his own lamentable performance of his obligations in the proceedings, this finding provided the applicant with proper grounds to appeal against the confiscation order.
The application to rescind
- Section 155 Powers of Criminal Courts (Sentencing) Act 2000 provides that a sentence or other order made by the Crown Court may be varied or rescinded within a period of 56 days beginning with the day on which the sentence or other order was imposed. Immediately after the confiscation hearing the applicant's new solicitors requested that the matter be listed for mention upon an application to rescind the order made. That hearing took place on 16 August 2012, when the applicant was represented by Mr Hillman, junior counsel in this application, and the prosecution was represented by Ms Pounder. In his skeleton argument in support of the application Mr Hillman put forward an argument that the applicant wished to establish that the benefit figure was wrongly assessed since the loans were made not upon the representation particularised in the counts in the indictment but upon a commercial buy-to-let assessment of the ability of the rental income to meet the mortgage repayments. He did not seek to put forward the disproportionality argument subsequently successful in Waya.
- However, under the title "Available amount" he said:
"21. It is understood that on 13 July 2012 the court made an order that the amount available to Mr Bestel was the same as the benefit figure, namely £9,427,123.35.
22. The figure of £9,427,123.35 is the cumulative figure of the mortgage advances made by all of the lending institutions during the relevant period.
23. It is submitted that the making of an order that Mr Bestel has an amount available to him of £9,427,123.35 must be wrong.
24. As the court will be aware when a lending institution advances monies in return for placing a charge (as security) over a property, on sale of the property, the lending institution is guaranteed to receive an amount equal to the outstanding amount on the mortgage account, subject to the property being sold for a figure to cover this sum.
25. In the present case it is understood that the mortgage advances by the lending institutions accounted for a significant (c.90%) amount of the purchase price of the property. On the paperwork available the Crown has failed to value the properties and provide a realistic figure of the equity available to Mr Bestel from the sale of these properties (after the lending institutions advance has been repaid together with their contractual interest payments, charges etc). This is something the Crown could have ascertained without information provided by Mr Bestel. If the available amount was based solely on the value of the properties (as appears to have been the case) the correct sum to have been ordered for the purpose of the available amount should have been equity available to Mr Bestel after the lending institutions have had their loans (and relevant costs) repaid following the sale of the property. An appropriate amount for sale costs/CGT etc should also be subtracted from this figure.
26. It is clear that this sum would be vastly smaller than the figure of £9,427,123.35 which was ordered to be the amount available to Mr Bestel."
- At the outset of the hearing on 16 August the judge made it clear that he proposed to apply by analogy rule 39.3 of the Civil Procedure Rules. It is not contended that that was otherwise than an appropriate course. Understandably, the judge took the lead in requiring from counsel an explanation for the applicant's non-attendance at the confiscation hearing. Mr Hillman put forward his instructions that the applicant had been unaware of the date. The judge then requested Mr Hillman to deal with the merits. As to the benefit figure, Mr Hillman pointed to the evidence from which he would wish to advance an argument that the applicant could escape a finding as to benefit because the loans were made without regard to the representations made about his employment and income. As to the available amount, the judge pointed out to Mr Hillman that it would have been a simple matter for the applicant to have obtained the information necessary to establish the state of his indebtedness to the lenders before the confiscation hearing on 13 July. The application was adjourned part heard to 21 August 2012, on which date the applicant gave evidence in support of his assertion that he was unaware of the date of the confiscation hearing. He also sought to make a response to the suggestion that he was deliberately avoiding the confiscation process by pointing to the inadequacy of those acting on his behalf. In his ruling, commencing at page 55 of the transcript for 21 August 2012, the learned judge referred to the decision in Gavin and Tasie which, he said, established that in an appropriate case it was permissible for the confiscation hearing to continue in the applicant's absence notwithstanding he had not "absconded" within the meaning of section 27. The judge held that the applicant had not been an absconder since he had participated in the confiscation proceedings and had simply absented himself from the confiscation hearing. He proceeded to find that the applicant did not have a better than fanciful prospect of avoiding a benefit figure based on the sum of the mortgage advances by demonstrating only that the loans may have been made in any event. As to the current asset position the judge concluded that it was wholly unclear. He said:
"There is simply no material on which I can find today that he has any real prospect of showing that his assets are below the amount of the benefit whatever it is."
Finally, as to the reason for non-attendance, the judge rejected the applicant's evidence and found that he had been voluntarily absent. The judge took the view that there was absolutely no reason to think that if he allowed the matter to be re-opened the applicant would demonstrate the necessary level of co-operation.
- As to the judge's rejection of Mr Hillman's putative argument that the lenders may not have relied on the applicant's representations of his employment and income, we would draw attention to paragraph 42 of the majority judgment in Waya in which Lord Walker and Sir Anthony Hughes said:
"42. In economic terms, the benefit that Mr Waya obtained from the offence of which he was convicted was credit obtained on better terms than those he could expect to get if he told the truth. …"
In other words, the overwhelming probability was that further investigation would have revealed only that the loans would have been made but on less advantageous terms to the borrower. We disagree, however, that it was reasonably open to the judge to decline to re-open the assessment of the available amount having regard to the agreement between the prosecutor and the applicant as to the extremely limited equitable interest retained by the applicant in the properties purchased with the tainted loans. As Mr Hillman reminded the judge, the mortgage advance was, on average, about 90% of the purchase price. The judge had found that the grandiose claims made by the applicant could not form the basis of an assessment of the available amount and the prosecutor was unable to identify significant assets beyond those obtained by the tainted loans. We cannot identify, and the judge did not identify, the evidential basis upon which he could have found that the applicant had no real prospect of showing that his assets were "below the level of the benefit". In our judgment, the opposite was the case and the appropriate course would have been to rescind the confiscation order made and to put the parties on terms as to agreement or proof of the available amount. If necessary, the rescission could have been made conditional upon the applicant providing the information required within a stated period of time.
Grounds of appeal
- In his original grounds of appeal the applicant sought to criticise the judge's refusal to permit an adjournment for the purpose of enabling enquiries to be made of the LPA receivers when there was a reasonable possibility that the applicant was not present by reason of his medical condition. It was argued that the judge should not have proceeded to make the section 10 assumptions with regard to the non-indicted loans, nor to make a confiscation order in the sums he did in the absence of any evidence as to the applicant's equitable interest in the property which formed his available assets. There were other grounds to which it is unnecessary to refer. The notice of appeal together with its application for an extension of time was served on 23 October 2012.
- Following publication of the judgment in Waya the applicant, in his perfected grounds, added a ground which depended upon the Waya principle, namely that since there had been no increase in the value of the properties after their acquisition with the tainted mortgage advances, the judge had erred in his assessment of the applicant's benefit. Had the Waya argument been the only basis upon which this court would have been prepared to consider granting an extension of time, it would have been necessary for the court to confront the impact of the finality principle. As it is, we are satisfied that the applicant raised before the Crown Court on 16 and 21 August 2012 the very arguments upon which this court would have given permission to appeal had the application been made in time: that the judge should not have made the confiscation ruling he did and should have permitted the applicant to re-open the confiscation order, made as it was under a misunderstanding of the effect of the prosecutor's evidence. We take the view that the applicant acted reasonably in seeking to obtain from the judge an order of rescission and a re-hearing at least upon the issue of the available amount. What the applicant should have done was to issue, contemporaneously, a notice of appeal against the judge's order at the confiscation hearing on 13 July, although a power to rescind the order would not have been available to the Crown Court if, in the meantime, an application for leave to appeal had been determined (section 155(1A)). It seems to us that the applicant's failure to lodge his notice of appeal in time was largely the result of administrative naivety rather than deliberation or neglect. We acknowledge that the grounds are somewhat discursive and insufficiently focused. We granted leave to the applicant to submit further grounds of appeal in which ground 5, based upon the assessment of the available amount, was properly developed. They are:
5A. In determining the available amount on the 13th July 2012 (and in thus making the confiscation order in the sum of the benefit) the learned judge failed to consider that the equity available to the appellant from the properties must have been significantly less than the benefit figure found by him as a result of the mortgages secured on them (as per paragraphs 21 to 31 of the Skeleton Argument submitted on behalf of the appellant (for the purposes of the slip rule hearing) dated 15th August 2012).
5B. The learned judge erred in finding that Mr Bestel had no real prospects of showing that his assets were below the amount of the benefit and therefore should have rescinded his order of 13th July 2013 (ground of appeal number 9).
Conclusion
- Mr Mitchell QC submitted that if we were to grant leave and quash the order it should be only upon the grounds which do not depend upon the Waya change of law. The benefit figure should be allowed to remain since it was accurately assessed according to the law which applied at the date of the hearing. The applicant should be left to his remedy of making an application to the Crown Court under section 23 for a reduction in the available amount. We take the view that the appropriate course is to grant the necessary extension of time, to grant leave upon grounds 1, 5A and 5B, to allow the appeal and to remit the matter to the Crown Court for a rehearing. We shall not direct that the re-assessment should be confined to the available amount because we have granted leave, the proceedings remain extant and the benefit figure should be re-assessed upon the law as it is and not the law as it was at the time the original order was made. In our judgment, what is required is a re-hearing in the Crown Court which we direct under section 11(3A) Criminal Appeal Act 1968. The re-hearing shall take place under sections 6 and 7 of the Proceeds of Crime Act 2002. The re-hearing should take place before a different judge and the evaluation of the applicant's benefit may be made according to the Waya principle of proportionality. The applicant is aware that the prosecution will seek to demonstrate that the value of his benefit includes the sum of rent received during the relevant period. That is an inevitable consequence of the order for a re-hearing. We therefore remit the matter to the Crown Court for a re-hearing with a direction that a new timetable should be set within the next period of 28 days.
Mr Justice Mitting:
Naim Raza (Sadiq)
- On 6 September 2010 this applicant pleaded guilty to two offences:
Count 1: Obtaining a money transfer in 2005 – a mortgage advance of £25,005 – by deception, namely, that his income was £30,000, that the property, 5 Belgrave Road, Keighley, was not bought to let but would be occupied as his main residence, and that he had not owned any other property in the last three years.
Count 2: In 2005/06, conspiracy to defraud a mortgage company of £212,500 by supplying false information about his earnings for the previous three years (said to be between £60,000 and £65,000) per year) in order to obtain a mortgage advance in that sum for the purchase of 419 Toller Lane, Bradford.
- The applicant provided a deposit for the purpose of the Keighley and Bradford properties of £10,000 and £41,000 respectively, from untainted sources.
- He was sentenced to 15 months imprisonment concurrent on each count.
- On 12 July 2011 a confiscation order in the sum of £203,069.91 was made by His Honour Judge Potter, with a term of 2½ years imprisonment in default. Counsel who then appeared for the applicant conceded the figure sought by the Crown as his benefit from criminal conduct in the sum of £237,505 – the sum of the two mortgage advances. There was a dispute as to the available amount, which the judge determined, after a hearing spread over four days, in a careful written judgment dated 12 July 2011. The judgment, and the information provided to the Crown Court are silent as to the value of the equity in 5 Belgrave Road, Keighley. The judge determined that the value of the equity in 419 Toller Lane, Bradford was £99,257.91 – a figure derived from an undisputed valuation of £230,000, less two secured loans totalling £130,742.09. The judge declined to make a further deduction in respect of loans said to have been made by the applicant's father and brother totalling £124,000, which he held to be unsecured debts, giving rise to no beneficial interest in the property or to any status as preferential debts. The applicant's remaining asset was his share in the stock of a used car sales business, which the judge valued at £103,812. The total available amount at which he arrived, £203,069.91, was the sum of the value of the applicant's interest in the stock and in the Bradford property.
- There was no appeal within time against the confiscation order. The applicant requires an extension of time of 17 months and 7 days in which to bring his appeal.
- There is now no dispute between the Crown and the applicant about the amount which he should be ordered to pay if the confiscation order were to be made now on the basis of the law as declared by the majority in R v. Waya [2012] UKSC 51. The Bradford property is worth less than the price paid (£180,000 as opposed to £250,000), as it was when Judge Potter made his order (when the difference was only £20,000). The package of rights and obligations constituted by the mortgage is, as it was when the mortgage advance was made, worth only a nominal sum. We now know that the Keighley property was sold on 3 February 2006 for £50,000. After repayment of the mortgage and the costs of sale, the applicant received £20,041.17. Applying the Waya formula, it is agreed that the benefit derived from the criminal conduct described in count 1 is 71.4% of the difference between the purchase and sale price (£15,000): £10,710. Because this was and is not a criminal lifestyle case, that represents the true amount of the applicant's benefit from his criminal conduct.
- Mr. Wright QC submits that, on the facts, substantial injustice is established. The applicant has been ordered to pay nearly twenty times more than the sum which the law would have required him to pay had it been correctly appreciated at the time. He has in fact paid £48,580 and claims that he can pay no more. Enforcement proceedings are pending, which might well result in him having to serve the 2½ year sentence imposed in default of payment. If it is necessary to do so, he submits that the fact that those proceedings are still pending, with that possible consequence, means that substantial injustice would otherwise be done to the applicant.
- Mr. Tehrani, who appeared for the Crown below and here, submits, correctly, that no explanation has been given by those who represented the applicant at the confiscation hearing for their agreement to the figure. He submits that the applicant may have had good grounds for not wishing to challenge the benefit figure: for example, it may have caused the Crown to undertake further enquiries which might have produced an even higher figure. He also submits that it is not known whether counsel for the applicant was aware of the possibility, which was known to those who practise in this field, of raising the argument which ultimately succeeded in Waya and chose not to do so, or was unaware of the issue. If the former, the applicant should not now be permitted to resile from his acceptance of the advice which he must have been given. Because legal professional privilege has not been waived, a satisfactory explanation for the applicant's decision has not been given.
- In reply, Mr. Wright submits that, because there was and is no suggestion that further enquiries might produce information adverse to the interests of the applicant and because, subject to the pending appeal to the Supreme Court in Waya, the law was settled, it can safely be assumed that the appellant was advised in accordance with its terms and accepted that advice. In short, because there is now no dispute as to the facts, it has been securely established that a significant injustice has been done to the applicant.
- We do not accept Mr. Wright's secondary submission: that because the applicant faces a term of imprisonment in default of full payment, time should be extended. If the available assets identified by the judge, when realised, were worth substantially less than the value which he put on them, an appropriate adjustment can be made under section 23. Where, as here, there is no finding of hidden assets, section 23 provides, in principle and in practice, adequate protection to a defendant in a case in which the value of his assets has been overestimated.
- Thus we have to consider the first and more substantial of the applicant's submissions. We accept Mr Tehrani's submission that, the burden being upon the applicant to satisfy the court that time should be extended, the court will expect the applicant to establish the circumstances in which he came to agree or concede the benefit he obtained from his criminal conduct. As Mr Tehrani rightly demonstrates the applicant may have had his own reasons for making the concession. No such attempt has been made here. However, we shall assume, for the purposes of the present application, that (i) Mr Raza was tendered competent advice as to previous decisions at first instance and in this Court and that counsel informed him of the likely outcome of a fully fought benefit issue, and (ii) the dominant cause of the concession was counsel's advice.
- Upon this assumption Mr Raza's case is brought into sharp focus. His benefit, correctly conceded upon the principles and practice which were then applied by the courts, was deemed to include the value of the two properties which he had purchased with the fruits of his admitted offending. Mr Raza did not, as he could have done, challenge the assessment on the grounds of disproportion and Article 1 of the First Protocol, and he did not appeal the order. Had the same assessment been made just over a year later his assessed benefit would have been £10,710 and not £237,505. On the other hand, it is open to Mr Raza to make an application to the Crown Court under section 23. At the confiscation hearing the judge assessed the available sum as the value of the applicant's equitable interest in the two properties and the value of his business. He made no finding that assets were hidden. The clear probability is that the Crown Court will reduce the available amount to reflect the current value of his equitable interest in the properties and his car sales business and not the values as they were estimated to be at the time of the order. If Mr Raza takes that course he will not be required to serve a period of imprisonment in default because it is upon re-assessment of the value of those properties that the adjustment in the available amount will depend.
- In our judgment the principle of finality must apply to Mr Raza's application. It is not without more a substantial injustice for a defendant's benefit to be accurately and properly assessed under the law as it was when the assessment was made, even if a person in the same position would be assessed very differently today. For this reason the application for an extension of time must be refused.
Sajid Bashir
- On 25 July 2011 this applicant pleaded guilty to two offences:
Count 1: Fraud, by making false representations to a mortgage lender in June 2007 about his income and employment to obtain a mortgage advance of £106,250 to enable him to buy 41 Kingston Close, Halifax.
Count 2: Converting that sum to an interest in the same property on 17 August 2007.
A suspended sentence was imposed with an unpaid work requirement.
- On 19 December 2011, a confiscation order in the sum of £53,752 was made by His Honour Judge Hunt. Both the benefit and available assets figures were agreed at £106,250 and £53,752 respectively. In default of payment he was to serve a sentence of 18 months imprisonment.
- An application for permission to appeal that order was made on 3 February 2013. An extension of time of one year and five weeks is required. Enforcement proceedings are pending.
- In this case, the agreed benefit figure represented a compromise between the Crown and the applicant. He originally faced an indictment containing five counts. He pleaded guilty to the first two. He pleaded not guilty to the remaining three, which were ordered to lie on the file. They alleged that he had acquired, used or possessed criminal property – substantial payments into deposit accounts in his name at HBOS and Santander, totalling £27,640 and £37,650 respectively. There were nine deposits of four figure sums, ranging from £1,700 to £8,200 and one of £11,000, plus numerous smaller deposits. To make the purchase facilitated by the fraudulently obtained mortgage, the applicant had paid a deposit of £19,000.
- Further, in the four years before the confiscation order was made, the applicant had made substantial repayments of the mortgage debt. They were said to amount to £78,900 on 22 August 2011. If so, £27,350 had been repaid out of unexplained resources. The applicant was also receiving rent from tenants.
- We have already stated our opinion that the principle of finality must be respected, for the reason given at paragraph 71. There is in Mr Bashir's case an additional reason for refusing the application. Mr. Grattage, who appeared for the applicant below and before us, was careful not to waive legal professional privilege. We are entitled to infer from the circumstances that the applicant had good reason for agreeing to a benefit figure of £106,250 apart from any understanding of the law which he and his representatives may have had at the time. In our judgment, no substantial injustice would be done to him by holding him to his agreement. We therefore refuse his application for an extension of time.
