West Law Report

CPS v JENNINGS

(See also Times law report: Making confiscation orders)

Last Updated: 11:26AM BST 22/05/2008
House of Lords

Lord Bingham of Cornhill, Lord Phillips of Worth Matravers, Baroness Hale of Richmond, Lord Carswell, Lord Brown of Eaton-under-Heywood

May 14, 2008 (Filed: May 22, 2008)

Benefit from criminal conduct – Conspiracy to defraud – Control – Restraint orders – Statutory interpretation – Meaning of “obtain” in s. 71(4) Criminal Justice Act 1988

FACTS

The appellant (J) appealed against the dismissal ([2005] EWCA Civ 746, [2006] 1 WLR 182) of his appeal against a refusal to discharge a restraint order made against him without notice under the Criminal Justice Act 1988 s. 77(1). The restraint order had been made while J was awaiting trial with three others on a charge of conspiracy to defraud. It prohibited him from removing any of his assets from England and Wales and disposing of or diminishing the value of any of his assets. The particulars of conspiracy related to a company that had received administration fees from potential borrowers for loans which had never been made. The prosecution case was that J had been at the centre of the conspiracy, although he appeared to be no more than an employee, and that he had benefited by more than £584,000 for the purposes of s. 71(4) of the Act, since that was the amount of money obtained by the conspiracy. J’s appeal against the restraint order had been argued while the criminal trial was in progress, and the judgment of the Court of Appeal had been handed down after J had been convicted and sentenced. The Court of Appeal had concluded that the word “obtain” in s. 71(4) of the Act did not mean “retain” or “keep”, but contemplated that the defendant in question should have been instrumental in getting the property out of the crime and that his acts must have been a cause of that being done. It had found that there was no separate requirement that the defendant must be shown to have “control” over the property. J submitted that he had “obtained” his salary and a few minor payments, the total of which amounted to a maximum of £50,000. He maintained that the application for a restraint order had illegitimately sought to pierce the corporate veil of the company through which J and his co-accused had operated. The CPS contended that J had “obtained” property amounting to over £584,000 before adjustment for inflation.

ISSUE

Whether on the facts, there was sufficient material to support the making of the restraint order.

HELD (appeal dismissed)

(1) The meaning of s. 71(4) was, in substance, the same as the equivalent provisions of the drug trafficking legislation. It was to be remembered that the object of the legislation was to deprive a defendant of the product of his crime or equivalent, not to operate by way of fine. The rationale of the confiscation regime was that a defendant was deprived of what he had gained. If he was deprived of what he had never obtained, that was a fine. That must ordinarily mean that in order to be so deprived, a defendant would have to have obtained property so as to own it, whether alone or jointly, which would ordinarily connote a power of disposition or control. The finding of the court below was not entirely accurate because a person’s acts might contribute significantly to property being obtained without his obtaining it. The words “a person benefits from an offence if he obtains property as a result of or in connection with its commission” was to be read as meaning “obtained by him”. The broad thrust of J’s criticism of the Court of Appeal’s construction of s. 71(4) was accepted, but nevertheless, there was clearly sufficient material to support the making of the restraint order.

(2) Ordinarily, acts done in the name of and on behalf of a limited company were treated in law as acts of the company and not of the individuals who performed them. In the instant case, where the acts done by J and his associate had led to the conviction of one and a guilty plea by the other, the veil of incorporation had been not so much pierced as rudely torn away. As the crux of J’s case was that he was not the prime mover in the company, it was a case that could only be explored by examining the internal management of the company.

Anthony Elleray QC and Scott Redpath (instructed by David Hanman Associates, Greater Manchester) for the appellants. Andrew Mitchell QC and Stephen Hellman (instructed by in-house solicitor) for the respondent.

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