West Law Report

R v MAY

Posted in confiscation order, House of Lords (case), Westlaw Reports by mrkooenglish on May 23, 2008

(see also Times law report: Guidance on making confiscation orders )

Last Updated: 11:27AM 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)

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Apportionment – Benefit from criminal conduct – Confiscation orders – Principles to be followed by judges – s. 1(1) Criminal Law Act 1977

FACTS

The appellant (M) appealed against a decision ([2005] EWCA Crim 97, [2005] 1 WLR 2902) upholding a confiscation order made against him in the sum of £3,264,277. M had pleaded guilty to conspiracy to cheat contrary to the Criminal Law Act 1977 s. 1(1) after taking part in a “missing trader” or “carousel” fraud involving the sale of high-value computer processing units. The VAT unaccounted for during the period of M’s involvement totalled £4,439,533. In determining the extent of M’s benefit, however, the judge subtracted from that figure sums amounting to £1,175,256 in respect of money recovered from the missing traders’ bank accounts and the proceeds of sale of a number of computer processing units, leaving a net figure of £3,264,277. It was now common ground that the judge had erred in reducing the benefit figure in that way: he had confused benefit with realisable assets. The judge valued M’s realisable assets at £3,887,198, an amount exceeding the benefit figure. He accordingly made the confiscation order in the full sum of £3,264,277. M argued that Parliament had intended to establish a confiscation regime which was effective but fair. It intended to strip wrongdoers of their ill-gotten gains but not to deprive them of that which they had never had, to permit recovery of the same sum against different defendants or to permit recovery of a sum exceeding what the victim had lost. Such results were oppressive and disproportionate. Sixteen conspirators had been named in the indictment. Had each been found to have shared jointly in the proceeds of the fraud and made liable (assuming they had realisable assets of the required value) for the full sum ordered against M, the same sum would have been recovered 16 times over and the state would have gained more than HM Customs and Excise had lost. The solution in such a case was to apportion the overall loss among those held to be jointly liable.

ISSUE

Whether the confiscation order made was entirely consistent with the legitimate objects of the legislation.

HELD (appeal dismissed)

The sum which M, jointly with others, was found to have fraudulently obtained from HM Customs and Excise was, in law, as much his as if he had acted alone. That conclusion led ineluctably to the further conclusions that he benefited from his offending, and benefited to an extent substantially greater than the confiscation order made against him (because of the deduction wrongly made by the judge). The order made was less than his realisable assets. It was entirely consistent with the legitimate objects of the legislation, and it required that he be ordered to pay such sum, which involved no injustice or lack of proportionality. The legislation was, as Lord Steyn described it in R v Rezvi (Syed) [2002] UKHL 1, [2003] 1 AC 1099, “a precise, fair and proportionate response to the important need to protect the public”. R v Porter (Jeremy) [1990] 1 WLR 1260 CA (Crim Div) was not authority for the proposition that the court had the power to apportion liability between parties jointly liable, a procedure which would be contrary to principle and unauthorised by statute. The Appellate Committee reviewed the legislation and authorities relating to confiscation orders and emphasised the broad principles to be followed by those called upon to exercise the jurisdiction to make such orders.

Andrew Campbell-Tiech QC and Gavin Irwin (instructed by Pattichi Hill & Croques, Ilford) for the appellant. Oliver Sells QC and Ivan Pearce (instructed by in-house solicitor) for the Crown.

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