Simpson v R.

This is yet a further appeal involving a confiscation order. The confiscation order was made under the provisions of the Criminal Justice Act 1988 (“CJA 1988”) by His Honour Judge Balston at the Maidstone Crown Court on 1 February 2002.

On 8 January 2001 the appellant, Ian McDonald Simpson, had pleaded guilty on re-arraignment to two counts involving value added tax offences (counts 4 and 6), two counts of producing a false document for the purposes of VAT (counts 5 and 14), one count of cheating the public revenue (count 16) and one count of being knowingly concerned in the fraudulent evasion of VAT (count 18). Following a Newton hearing before the same court, on 1 May 2001 the appellant was sentenced to 30 months imprisonment on count 6 and to concurrent sentences of 12 months imprisonment on each of the other counts.

The confiscation order which is the subject of the appeal was made under section 71 of the CJA 1988. The sum of £209,351.34 was ordered to be confiscated with a sentence of 18 months imprisonment in default of payment. The appellant was also ordered to pay £15,000 towards the costs of the prosecution. There were two other alleged offenders, one was acquitted and the other, Kenneth Anthony Young was prosecuted in Scotland and sentenced to 5 years imprisonment on each count concurrent. In addition, a confiscation order was made in the sum of £26,000.

The frauds involved taking advantage of the special cash accounting scheme which can be used for making VAT returns. The scheme was introduced to give relief to small businesses which would otherwise have to pay VAT charged on a transaction before the business had received payment from its customer. The scheme also took advantage of the fact that a business may legitimately purchase goods and services from a subsidiary, this involving what is known for VAT purposes as “outsourcing”. A number of bogus outsourcing agreements were deployed in carrying out the frauds.

The grounds of appeal fall into two categories. First, there are those in relation to the judge’s jurisdiction to make the confiscation order and secondly, there are those which relate to the amount of the confiscation order. It is the grounds of appeal which relate to jurisdiction which explain the constitution of this court. The Crown’s contention is that the jurisdictional points are of no substance because of the decision of this Court (the Lord Chief Justice, Mr Justice Holland and Mr Justice Keith) in the case of Sekhon and Others [2002] EWCA Crim 2954 which clearly establishes that the points are without substance. However, Mr Raymond Walker QC, who together with Mr Simon Taylor, appears on behalf of the appellant contends that the Sekhon decision wrongly indicates that the decision of this Court in R v Palmer [2002] EWCA Crim 2202 was wrongly decided and that earlier cases applied in Palmer “should be examined with care” (see para 56 of Sekhon). It was the decision in Palmer that caused the appellant to amend his notice of appeal to raise the jurisdiction points. No leave to appeal has yet been granted to the appellant in respect of the jurisdiction points. However, this Court can and does give leave for them to be argued. It should not be thought that we are giving leave because we consider that there is any substance in the jurisdiction points. We only give leave so as to enable the appellant to have a possibility of appealing further by applying to this Court to certify a point of law and then applying to this Court or the House of Lords for leave to appeal to the House of Lords. If there is no further appeal, it is our hope that this decision will put an end to the string of appeals which are continuing to come before this Court. There have already been at least ten decisions in which the Sekhon case has been applied.

The fact that the relevant provisions of the CJA 1988 have been the subject of a number of amendments has contributed to the problem. Powers of confiscation appear in similar terms in the Drug Trafficking Act 1994 and they have also been the subject of amendment and give rise to the same problems. The legislative history is set out in Sekhon (paragraphs 6-18) and it is not necessary to repeat that history. It is sufficient for the purposes of the present appeal to set out the relevant terms of section 71 and 72 of the CJA 1988 as it was originally enacted.

The provisions of section 71 so far as relevant were as follows:

“(1)

The Crown Court and a magistrates’ court shall each have power, in addition to dealing with an offender in any other way, to make an order under this section requiring him to pay such sum as the court thinks fit.

(2)

The Crown Court may make such an order against an offender where:

(a)

he is found guilty of any offence to which this Part of this Act applies; and

(b)

it is satisfied:

(i)

that he has benefited from that offence or from that offence taken together with some other offence of which he is convicted in the same proceedings, or which the court takes into consideration in determining his sentence, and which is not a drug trafficking offence; and

(ii)

that his benefit is at least the minimum amount.

(3)

(4)

For the purposes of this Part of this Act a person benefits from an offence if he obtains property as a result of or in connection with its commission and his benefit is the value of the property so obtained.

(5)

Where a person derives a pecuniary advantage as a result of or in connection with the commission of an offence, he is to be treated for the purposes of this Part of this Act as if he had obtained as a result of or in connection with the commission of the offence a sum of money equal to the value of the pecuniary advantage.

(6)

The sum which an order made by a court under this section requires an offender to pay must be at least the minimum amount, but must not exceed:

(a)

the benefit in respect of which it is made; or

(b)

the amount appearing to the court to be the amount that might be realised at the time the order is made,

whichever is the less.

(7)

For the purposes of this Part of this Act the minimum amount is £10,000 … ”

Section 72, so far as material, provided:

“(1)

A court shall not make a confiscation order unless the prosecutor has given written notice to the court to the effect that it appears to him that, were the court to consider that it ought to make such an order, it would be able to make an order requiring the offender to pay at least the minimum amount.

(2)

If the prosecutor gives the court such a notice, the court shall determine whether it ought to make a confiscation order.

(3)

(4)

If the court determines that it ought to make such an order, the court shall, before sentencing or otherwise dealing with the offender in respect of the offence or, as the case may be, any of the offences concerned, determine the amount to be recovered in his case by virtue of this section and make a confiscation order for that amount specifying the offence or offences.”

Under section 72(1) and (2) the procedure for making an order was dependent on the prosecution giving a notice that there were likely to be sufficient assets to meet it. Where such a notice was given, the Court was bound to consider the making of an order. By section 71(4) the Court was required to determine the amount to be recovered and make a confiscation order before sentencing or otherwise dealing with the offender.

Sections 71 and 72 were amended by the Criminal Justice Act 1993, the Criminal Justice and Public Order Act 1994 and the Proceeds of Crime Act 1995 (the “1995 Act”). It is the amendments which were made by the 1995 Act which are relevant to the argument which is advanced on behalf of the appellant. Section 1 of the 1995 Act amended section 71(1) to (3). It did so in terms described in the Sekhon decision as follows:

“(i)

a duty was placed upon the Court to exercise its powers to embark upon confiscation proceedings in every case in which written notice had been given by the prosecutor;

(ii)

the Court was given a power to institute confiscation proceedings of its own volition;

(iii)

the minimum figure of £10,000 was abolished.

Thus, section 71(1) of the 1988 Act now provides:

(1)

Where an offender is convicted, in any proceedings before the Crown Court or a magistrates’ court, of an offence of a relevant description, it shall be the duty of the court:

(a)

if the prosecutor has given written notice to the court that he considers that it would be appropriate for the court to proceed under this section, or

(b)

if the court considers, even though it has not been given such notice, that it would be appropriate for it so to proceed,

to act as follows before sentencing or otherwise dealing with the offender in respect of that offence or any other relevant criminal conduct.”

The 1995 Act also repeated section 72 (1) to (4). The other amendments made were briefly summarised in the Sekhon case as follows:

“14.

Section 2 of the 1995 Act inserted section 72AA into the 1988 Act to provide for confiscation in relation to a course of criminal conduct.

15.

Section 3 of the 1995 Act amended section 73 of the 1988 Act (effect of provision of statement by prosecutor) and provided for the service on the Court and defendant of statements from the prosecutor.

16.

Section 4 of the 1995 Act inserted section 73A into the 1988 Act so as to empower the Court to order the defendant to provide information to assist it in carrying out its functions under Part VI of the 1988 Act.

17.

Sections 5 to 10 of the 1995 Act amended the 1988 Act in relation to such matters as the review and revision of confiscation orders, the enforcement of confiscation orders and the variation of confiscation orders.”

The commencement of section 1 of the 1995 Act, which amended section 71 of CJA 1988, was provided for in section 16 of that Act. Subsection (5) and (6) of section 16 provide:

“(5)

Section 1 above shall not apply in the case of any proceedings against any person where that person is convicted in those proceedings of an offence which was committed before the commencement of that section.

(6)

Sections 8(1) and 9 above shall not apply where the offence, or any of the offences, in respect of which the confiscation order was made was committed before the commencement of section 1 above.”

Section 72, prior to being amended by the 1995 Act, required in mandatory terms, if a literal construction of the section is adopted, the service of a notice on the court setting out the information stated in section 72(1). However, after the 1995 Act came into force that notice was no longer necessary because the court could act on its own motion. (See section 71(1)(b) as amended.)

Mr Walker argues that in view of the language of section 72 prior to the amendments of the 1995 Act the court did not have jurisdiction to make a confiscation order unless:

On the facts of this case Mr Walker has to advance this submission because he can only rely on count 6 of the indictment for arguing that the 1995 Act was not in force at the relevant time and count 6 was not a count on which the confiscation order was based. While Mr Walker accepts that this is the position, he points to the language of section 16(5) which he contends does not limit the restriction of the application of section 16(5) to offences on which a confiscation order is based.

In support of the appellant’s argument reliance was placed upon the decision of this Court in the case of Ahmed (Lord Justice Kennedy, Mr Justice Goldring and Sir Charles McCullough; unreported 8 February 2000 no. 9905818X4). Sir Charles McCullough in giving judgment in that case said:

“22.

In these proceedings there were three offences in the three counts. Count 3 within a period wholly after 1^st November 1995. The other two, Counts 1 and 2, were in relation to periods partly before and partly after that date. In each of those instances there were overt acts committed in pursuance of the existence of the relevant conspiracy both before and after that date, 1^st November 1995.

23.

Counsel’s submission is that as the conspiracies in Counts 1 and 2 ran from 1^st January 1995, the offences in Counts 1 and 2 were being committed both before and after 1^st November 1995. That being so in these proceedings the appellant was “convicted … of an offence which was committed before [1^st November 1995]”. We agree. It follows that the judge had the discretion to make an order in the full agreed sum of £40,000 or a lesser sum or none at all.” (emphasis added)

However, when those paragraphs are read as a whole, it is clear that Sir Charles was not seeking to say anything different from what we have indicated is the position. Sir Charles made it plain that the court was not “persuaded that these arguments would or might persuade the judge to do other than he did”.

Reliance was also placed upon the case of R v Brown [2001] EWCA Crim 2761. It is said that the approach of Sir Charles was approved in that later case. However, that does not provide any further assistance to the appellant. The only other point, that it is important not to ignore in relation to the Ahmed case, is that unlike here, there was no issue in that case that the conspiracies were ones to which the 1995 Act could not apply. The dates in the counts of the indictment reflected the actual dates.

Mr Walker’s submission, if correct, means that in this case if the appellant had been acquitted on count 6 the confiscation order would be subject to the 1995 Act but because he was convicted of count 6 the confiscation order cannot be made. This is obviously an absurd result and we have no doubt that Mr Jonathan Fisher QC, who appeared on behalf of the Crown, is right in his contention that section 16(5) is not intended to produce this very strange consequence. In our judgment section 16(5) has to be applied so that after the word ‘offence’ there appears, the words “in respect of which a confiscation order is or could be sought” as proposed in the admirable skeleton argument prepared by Mr David Barnard who appeared on behalf of the Crown before Mr Fisher was instructed.

Before coming to Mr Walker’s principal point on behalf of the appellant there is the further problem that he faces. This is that while count 6, in the Particulars of the Offence, refers to 16 October 1995, because that is the date on the invoice which is relied upon by the Crown as the initial act constituting the offence, it is clear from the evidence that the invoice was created on 19 November 1995. So in fact, the offence was committed after 1 November 1995. In any event the argument of the appellant, that the 1995 Act cannot be relied upon fails on the facts.

This is the issue which is of considerable significance and explains why it was thought appropriate to have a decision by a court constituted by the five judges who are hearing this appeal. We will deal with the issue as succinctly as we can but we recognise the broad importance of the issue in relation to both statutory construction and the doctrine of precedent.

Initially, it is necessary to identify the limited nature of the dispute between the parties. The issue in dispute is, (on the assumption that section 1 of the 1995 Act was not in force) does the fact that the notice that was served on the court by the prosecution which was not in the form required by section 72, CJA 1988 mean that the court had no jurisdiction to make a confiscation order? This the appellant contends is the position. This is the argument notwithstanding that the Crown had already informed the court prior to the service of the notice that the figure suggested as being the amount that the appellant benefited from the fraud far exceeded the statutory minimum amount of £10,000. In addition, the issue as to jurisdiction was not raised by the appellant prior to the confiscation order being made.

Mr Walker contends that this Court should not follow the decision in Sekhon in so far as it casts doubt upon the Palmer decision. In support of this submission he advances three separate arguments. First, he submits that the issue as to the correctness of the decision in Palmer was not canvassed during the Sekhon hearing. This submission is the result of his being misinformed as to what happened at the hearing of Sekhon. Mr Walker’s junior, Mr Simon Taylor, was also junior counsel for Mr Satnam Singh in the Sekhon case. Mr Walker, no doubt as a result of what he had been told by Mr Taylor, was under the impression that there had been no argument as to the correctness of the Palmer decision on the appeal in Sekhon. This impression was wrong. It is perhaps to be explained by the fact that at the beginning of the hearing in Sekhon the Court indicated that it was proposing to allow the appeals in the case of Mr Taylor’s client and his co-defendants who were involved in his appeal. Accordingly, the court indicated it was not necessary for the legal advisors of those appellants to attend during the argument relating to the other appellants who were also involved in the appeal. The appeals of the other three appellants then proceeded and it was in relation to those appeals that the effect of the Palmer decision was contested. However, unusually since unless Mr Perry was able to persuade us otherwise, those appeals would have to be allowed as well, by agreement Mr Perry advanced his arguments on behalf of the Crown prior to the appellants advancing their argument. The right approach to the law was, however, fully canvassed. There is therefore no substance in this point.

After the course of events in Sekhon had been discussed, Mr Walker turned to his argument that it had not been open to the Court in Sekhon to conclude that Palmer had been decided irregularly and for that reason should not be followed. As to this, there was a striking division between the views of the parties since Mr Barnard in his skeleton argument on behalf of the Crown contended that Sekhon itself was a binding precedent as to the status of Palmer and this Court should refuse to go behind the Sekhon decision.

Mr Walker, when developing his submissions, relies on Halsbury’s Laws (4^th Ed Vol. 37 para 1242) as to the situations in which it is appropriate for the Court of Appeal to depart from a decision otherwise binding on the Court. The situations are stated to be:

He also refers to two further passages in the same paragraph of Halsbury as to the Court of Appeal, Criminal Division. The first stating that a full Court of Appeal has no greater powers than the usual constitution of the Court of three judges and, except in the cases mentioned above has no power to overrule a previous decision of the Court. The other citation is that:

“In its criminal jurisdiction the Court of Appeal applies the same principles as on the civil side, but recognises that there are exceptions; (a) where the applicant is in prison and in the full court’s opinion wrongly so, (b) where the court thinks the law was misunderstood or misapplied; and (c) where the full court is carrying out its duty to lay down principles and guidelines in relation to sentencing.”

These statements from Halsbury are unexceptional and are soundly based upon the authorities to which they refer. Prominent among them is the decision in Young v The Bristol Aeroplane Company Limited [1944] 1KB 718. However, the paragraphs in Halsbury should not be read as if they are contained in a statute. The rules as to precedent reflect the practice of the courts and have to be applied bearing in mind that their objective is to assist in the administration of justice. They are of considerable importance because of their role in achieving the appropriate degree of certainty as to the law. This is an important requirement of any system of justice. The principles should not, however, be regarded as so rigid that they cannot develop in order to meet contemporary needs.

One of the earliest statements on the rationale underpinning this doctrine was made by Parke J (Mirehouse v Rennell (1833) 1 Cl. & F 527 at 546) when he stated:

“Our common-law system consists in the applying to new combinations of circumstances those rules of law which we derive from legal principles and judicial precedent; and for the sake of attaining uniformity, consistency and certainty, we must apply those rules, where they are not plainly unreasonable and inconvenient, to all cases which arise; and we are not at liberty to reject them, and to abandon all analogy to them, in those to which they have not been judicially applied, because we think that the rules are not as convenient and reasonable as we ourselves could have devised.” (emphasis added)

In Lord Greene MR’s judgment in Young v Bristol Aeroplane Company Limited, Lord Greene (at p729) was careful to provide for a degree of flexibility. He stated:

“We do not think that it would be right to say that there may not be other cases of decisions per incuriam in which this court might properly consider itself entitled not to follow an earlier decision of its own.”

The House of Lords is in a special position because it is, so far as this jurisdiction is concerned, the final court of appeal in both criminal and civil matters, but the reasons for it departing from its previous practice are worth repeating. They appear in the practice note (judicial precedent) [1966] 1WLR 1234 and [1966] 3All E.R. 77.

“ Their lordships regard the use of precedent as an indispensable foundation upon which to decide what is the law and its application to individual cases. It provides at least some degree of certainty upon which individuals can rely in the conduct of their affairs, as well as a basis for orderly development of legal rules.

Their lordships nevertheless recognise that too rigid adherence to precedent may lead to injustice in a particular case and also unduly restrict the proper development of the law. They propose therefore to modify their present practice and, while treating former decisions of this House as normally binding, to depart from a previous decision when it appears right to do so.

In this connexion they will bear in mind the danger of disturbing retrospectively the basis on which contracts, settlements of property and fiscal arrangements have been entered into and also the especial need for certainty as to the criminal law.

This announcement is not intended to affect the use of precedent elsewhere than in this House.”

The passage from Halsbury makes a distinction between the position of the Criminal and Civil Divisions of the Court of Appeal but there is no general power in the Court of Appeal Criminal Division equivalent to that contained in the practice direction.

That the position in the criminal jurisdiction of the Court of Appeal should be different from that in the civil is derived from the judgment of Diplock LJ in R v Gould [1968] 2 QB 65. The relevant passage reads as follows:

“ In its criminal jurisdiction, which it has inherited from the Court of Criminal Appeal, the Court of Appeal does not apply the doctrine of stare decisis with the same rigidity as in its civil jurisdiction. If upon due consideration we were to be of opinion that the law had been either misapplied or misunderstood in an earlier decision of this court or its predecessor, the Court of Criminal Appeal, we should be entitled to depart from the view as to the law expressed in the earlier decision notwithstanding that the case could not be brought within any of the exceptions laid down in Young v Bristol Aeroplane Co Ltd as justifying the Court of Appeal in refusing to follow one of its own decisions in a civil case (Rex v Taylor). A fortiori, we are bound to give effect to the law as we think it is if the previous decision to the contrary effect is one of which the ratio decidendi conflicts with that of other decisions of this court or its predecessors of co-ordinate jurisdiction.”

What Lord Diplock said in Gould has to be read in the light of his later comment in R v Merriman [1973] A.C. 584 at p605 f-g. There he stated:

“These decisions it rightly treated as binding, for although the criminal division of the Court of Appeal is not so strictly bound by its own previous decisions as is the civil division, its liberty to depart from precedent which it is convinced was erroneous is restricted to cases where the departure is in favour of the accused. This would not be the case in the instant appeal.”

There is nothing to suggest in Merriman that Lord Diplock was reminded of what he said in Gould. We appreciate that there may be a case for not interpreting the law contrary to a previous authority in a manner that would mean that an offender who otherwise would not have committed an offence would be held to have committed an offence. However, we do not understand why that should apply to a situation where a defendant, as here, wishes to rely upon a wrongly decided case to provide a technical defence. While justice for a defendant is extremely important, justice for the public at large is also important. So is the maintenance of confidence in the criminal justice system. If the result in the Palmer case had to be applied to other cases even though the Court of Appeal had acted in ignorance of the appropriate approach this would indeed, reveal a most unattractive picture of our criminal justice system’s ability to protect the public.

Here we prefer the approach indicated in Bennion on Statutory Interpretation (4^th edition) at p134 which states:

“The basis of the per incuriam doctrine is that a decision given in the absence of relevant information cannot be safely relied on. This applies whenever it is at least probable that if information had been known the decision would have been affected by it.”

It is now convenient to refer to another argument advanced by Mr Walker. He submits that the issue raised in Sekhon was not the same issue as that in Palmer and therefore that the views in Sekhon about Palmer should not be regarded as necessary for the decision in Sekhon. This argument of Mr Walker misses the point. Although Sekhon was dealing with another procedural failure, namely the need to postpone the confiscation proceedings to a specific date, the approach to interpretation required in both cases was the same. If the Palmer case was correctly decided, then the same approach would have also applied to the contested issue in Sekhon. As Lord Evershed MR said in Critchell v Lambeth Borough Council [1957] 2QB 535 at p545:

“I think it would be wrong for this court to introduce into a matter already in all conscience complicated enough, and made complicated by what I cannot help feeling to be the imperfections of the drafting of these acts, refinements and narrow distinctions between cases which might fall under one section rather than another of the same legislation.”

This Court considers that the law was misunderstood and misapplied in Palmer. In Palmer the court did not have the opportunity to consider all the authorities which were considered in Sekhon. There was also before Palmer conflicting decisions, including, another decision of this Court with Rix LJ presiding in R v Copeland [2002] EWCA 736. The combination of these features provided in our judgment ample grounds for this Court to regard the decision in Palmer as being irregular and therefore not binding upon this Court. We do not, however, accept the contention of Mr Barnard that this Court was not entitled to look behind the decision in Sekhon. The normal position is that courts will not do so but they undoubtedly have a residual discretion to do so.

In addition, it is not wholly without significance that the present court is constituted by five members of the Court of Appeal Criminal Division. We consider a degree of discretion remains in this Court to decide whether a previous decision should be treated as a binding precedent in future or not when there are grounds for saying that the decision is wrong. In exercising that residual discretion, the constitution of the court is of relevance. We would here refer to the judgment of Widgery LJ in the five judge court in R v Newsome [1970] 2 QB 711. There the court was dealing with the question of a guideline judgment on sentence. In that case, as in Sekhon there was good reason to adopt a flexible approach. In Sekhon the Court made it clear that the discretion to depart from a previous precedent was not to be exercised lightly and we endorse that restrictive and cautious approach.

It is, however, relevant to note in relation to the Court of Appeal Criminal Division that there can be situations when a wrong decision of the Criminal Division can create a greater problem than decisions of the Civil Division with regard to appealing to the House of Lords. There are many situations where in practice there is little prospect of an appeal to the House of Lords because of the requirements, prior to an appeal, of a certificate that there is a point of law of general public importance involved (Criminal Appeal Act 1968 s33) and the absence of a right to appeal after an acquittal. For example, if a judge of first instance is bound by a decision of the Criminal Division and as a result a defendant is acquitted there will be no right to appeal from that acquittal so there can be no confiscation proceedings that will be subject to appeal, as an order can only be made after the defendant has been convicted. In addition, there will be little if any prospect of the Attorney General being entitled to refer the case to the Court of Appeal never mind the House of Lords if a judge refuses to make a confiscation order. So here, if the Palmer case had been allowed to stand notwithstanding that it was indeed wrongly decided, the consequences are that in a future case there could be considerable difficulty in obtaining a decision from the Lords. The only conceivable route would appear to be a reference to the Court of Appeal in the later case by the Attorney General under his powers to refer an unduly lenient sentence. However, it is doubtful that the refusal to make a confiscation order on the grounds of lack of jurisdiction is in fact an unduly lenient sentence. However, we do not finally decide this point.

There is no doubt that if the decision of this Court in Palmer represents the law then it provides very considerable assistance to the appellant, subject to the points made earlier. However, in Sekhon in relation to the case of Palmer it was stated as follows:

“51.

The second is R v Palmer [2002] EWCA Crim 2202. In Palmer a confiscation order in the total sum of £33,243,812.46 had been made on 23 April 2002. In this court Rix LJ presided. The court quashed the confiscation order. Two notices under S.72 had been served by the prosecution. As to the first, Rix LJ indicated that the court had “anxiously considered” the submissions that despite inaccuracies it was valid. He observed that he saw the strength in the Crown’s case “that in substance everyone knew where they were going” and that it was clear to all that the appellant was a wealthy man who had profited enormously from his fraud but he concluded “albeit with reluctance”, that the judge was right to find that the first notice was invalid and that the second notice could not make up for its deficiencies. He was of the opinion that the first notice, not having been valid, a second notice served after the confiscation proceedings had commenced could not cure the absence of an effective notice at the outset. The consequence was that it was not possible for the trial court to postpone the confiscation proceedings and proceed to sentence.

52.

The first notice in Palmer referred to the wrong section. The explanation as the court pointed out was that it was drafted with the 1995 provisions in mind when that Act was not in force at the relevant time. So the notice referred to the amended S.71 (1)(a) when it should have referred to S.72 (1) (the 1995 Act did not apply to the proceedings). In addition, it did not refer to the fact that if an order was made it would at least be for £10,000, which in Palmer’s case was hardly likely to be in issue. The errors were due to the notice being on a standard form developed for use when the 1995 provisions applied. Neither the court nor the defendant, if they had seen the notice, would have been under any doubt that the prosecution thought this was a case where confiscation proceedings should continue. It is difficult to conceive that Parliament intended that technical failures of this sort should affect the jurisdiction of the court to make a confiscation order.

53.

The Court of Appeal was, however, without the benefit of the argument advanced before us by Mr Perry. Furthermore, they were influenced by two decisions given by this court which shared the same disadvantage. Those decisions being R v Martin [2002] 2 Cr App R (S) 34 and R v Miranda [2000] 2 Cr App R (S) 347.

. . .

55.

The question that remains is what is the status of the Palmer case and the other authorities on which it was based. What has happened is that as part of the normal common law process, decision has followed decision extending the principle that there is no jurisdiction if there is a procedural failure from one aspect to another of the confiscation process. Palmer is only significant because it dealt with the use of a notice designed for use under a later Act being used as a notice under an earlier Act. Even though the wrong notice was used it could still achieve and did achieve its primary objective of initiating confiscation proceedings. Yet a defendant who had been otherwise properly subjected to a confiscation order in excess of £30m had that order quashed. This is a result that Parliament could not have intended.

56.

For one constitution of this court to hold that a series of cases have been decided per incuriam, is not a course to be lightly taken. There is now new legislation which contains the section to which we have referred above which is designed to prevent repetition of the problem. There are, however, no doubt other cases in the pipeline which could be affected by the earlier authorities which did not consider Mr Perry’s argument. In these circumstances we feel it right to indicate that in our view the Palmer case is wrongly decided and should not be followed and each of the earlier cases to which we have referred should be examined with care to see whether in fact it can be said they should be regarded as doing any more than deciding that there should be a decision to postpone confiscation proceedings, however generally expressed, prior to the completion of sentencing an offender, if confiscation proceedings are to take place after sentencing.”

We have no doubt we should apply these paragraphs of the judgment in Sekhon. They are fatal to the arguments of the appellant on the jurisdiction issue. Any defects in the notice did not deprive the trial judge of jurisdiction.

Next and finally we turn to the complaints concerning the judge’s approach to two aspects of the merits of making a confiscation order. First, it is said that he erred in including the sum of £115,000 in the benefit figure and second, it is said that the judge erred in his approach to the assessment of the appellant’s realisable assets. The judge made a confiscation order for the full amount of the benefit – namely, £209,351.34.

The benefit of £115,000 is said to have arisen in this way. In the autumn of 1996 the appellant and Young embarked upon a joint enterprise to cheat the public revenue by means of the ‘outsourcing companies’ fraud. Arising out of his fraudulent transactions Young paid the appellant a total of £38,779.70 by way of commissions. That is not disputed nor is it disputed that that money fell to be included as a ‘benefit’ to the appellants.

After HMCE had searched Young’s premises in March 1997 and effectively brought an end to the fraud, Young transferred £115,000 to the appellant who in turn transferred it to a Swiss account. It is not disputed that the money represented the profit from the fraud. It is said on behalf of the appellant that the purpose of the transfer was to enable the appellant to invest the money on behalf of Young. The appellant subsequently in June and August 1997 repaid a total of £35,000 to Young but retained the balance of £80,000. When the appellant applied for an individual voluntary arrangement, Young was shown as a creditor. Did the transfer of £115,000 constitute a benefit for the appellant arising from the offence alleged in count 16? The answer to that question depends upon whether, under section 71(4) of the CJA 1988 (as amended), that money was a benefit obtained by the appellant “as a result of or in connection with” the commission of an offence. On behalf of the appellant it is said first that the £115,000 was outside the scope of the joint fraudulent enterprise involving the appellant and Young and second that the circumstances in which the appellant had obtained control of this money were such that it cannot be described as a benefit obtained “as a result of or in connection with” the offence.

We have unhesitatingly concluded that the appellant did ‘obtain’ this money “as a result of or in connection with” the offence charged in count 16 and that accordingly to that extent he had benefited from the offence. There was the clearest evidence before the judge that this money was obtained as a result of or in connection with the offence of cheating the public revenue because it represented a part of the proceeds of the fraud upon which together the appellant and Young had embarked. The fact that by virtue of some private arrangement part of the proceeds passed from Young’s hands into the appellant’s is neither here nor there. When that occurred he ‘obtained’ the property and the value of the property determined the extent of his benefit.

As to the judge’s assessment of the appellant’s realisable assets, it is settled law (see Barwick [2001] 1 Cr App R (S) 445) that the onus of proving the ‘benefit’ obtained is upon the prosecution. If a defendant wishes to contend that the amount which can be realised falls short of the benefit figure the burden is upon him to establish that to the civil standard. At p453 the court said:

“………the scheme of the Act requires the court to perform two distinct and discrete tasks. First, to determine the benefit. Secondly, to determine the amount that might be realised at the time the order is made, which may be very different. Further, the amount that may be realised may be quite unrelated to the identifiable proceeds of the offence, eg a lottery win, inheritance, or other lawfully acquired property. In the end, the task of the court at the second stage is to determine the amount “appearing to the court” to be the amount that might be realised. But once the benefit has been proved, it is permissible and ought normally to be the approach of the court, to conclude that the benefit remains available until the defendant proves otherwise; subject to the issue of changes in the value of the money……..”

That approach was clearly adopted by Judge Balston:

“Turning to the question of what assets are realisable for the purpose of making a confiscation order, the accepted approach of the court is to conclude that the benefit remains available until the defendant proves otherwise. This places on him the burden of proving that the realisable assets available to him are less than the benefit he has been found to have received. He must prove it on the civil standard of proof.”

Over the following 15 pages of transcript the judge proceeded to give clear and unassailable reasons for concluding that the appellant had failed to make a full disclosure of his assets. Furthermore the judge was “satisfied that he has other assets which may well exceed the deductions he is claiming” by way of living and business expenses.

In the result it is not surprising that the judge was unable to conclude that the appellant had satisfied him on a balance of probability that the value of his benefit exceeded the value of his realisable assets. In this case, unlike in many, the judge was not confronted with an acceptance on the part of the prosecution that the value of the realisable assets (whatever it might be) fell far short of the benefit figure. It was the prosecution’s case here that the assets did exceed the benefit figure and that one significant component of his realisable assets was his equitable interest in the matrimonial home at 80 London Road, Hailsham. The appellant claimed that his wife arranged the mortgage and purchased the property herself in the late 1980s. He maintained he had no interest in it. It is true that the property was registered in the name of his wife. The learned judge, however, investigated the background to this transaction in some detail. He concluded that some years earlier (in the early 1980s):

“There was an agreement between the defendant and his wife that for the future they would so arrange their affairs that their assets would be unassailable by the defendant’s creditors.”

Although not accepted by the defence the prosecution’s valuation of the property was £402,500. There were two endowment policies charged to the Building Society with a surrender value of about £61,799. It was calculated that following repayment of the mortgages and the costs of the sale there should be an equity of £205,746. Contrary to the appellant’s contention the prosecution claimed he had a 50% interest in the equity. The assets thus available from this source alone amounted to £102,873.

Quite apart from not accepting either the figures or the fact of his interest in the property the appellant further claimed that Barclays Bank had a charge on the property. As to that the learned judge while accepting that a caution was registered against the title, declined to allow any reduction, attributable to the charge, from the value of this realisable asset. He said:

“There is no evidence that has been placed before me that confirms that the debt to the bank has not been paid. There is no evidence to tell me how the debt was originally incurred. It could, for example, have arisen from a guarantee by Mrs Simpson of a debt owed by the defendant to the bank. There is no evidence as to the amount now due under the charging order, if indeed the money has not been paid. The onus is upon the defendant to satisfy me about these matters. He has not done so.”

Further, as to the policies the judge said:

“It is further contended by the defence that the surrender value of the life policies is not an asset available to the defendant. I disagree. He has supplied no details of these policies other than the surrender values. The inference that I draw from their existence is that they are additional security for the payment of the mortgages and that when the mortgages are redeemed or the policies mature, the proceeds will go towards extinguishing the mortgage debt.”

Finally as to whether or not the appellant did have an equitable interest in the property the judge said:

“I have also concluded that he has an equitable interest in the house and land at Hamelsham Manor, not only because of his interest in the proceeds of sale of 13 Howlett Drive but also because he has failed to satisfy me as to the origin of the monies he says were found by Mrs Simpson. Additionally, his statement that he was paying rent for the use of the property by his business is again unsupported by any evidence and if it is true, is a contribution to the mortgage repayments in disguise.”

The appellant’s wife did not give evidence. Of her absence from the witness box the judge said this:

“One witness who might greatly have helped the court is Mrs Simpson. I am told there are matrimonial problems between her and the defendant, but one might have expected her to have been called to give evidence as, if what the defendant tells me about her part in this affair is true, her evidence could have been expected to be of assistance to the defendant.”

We find it is impossible to fault the judge’s approach to this particular issue. His reasons for rejecting the appellant’s claim as to the extent of his assets seem to us to be unanswerable and in our judgment the conclusion that the appellant had failed to satisfy the judge that the confiscation order should be other than in the sum of the benefit figure was inevitable.

Accordingly, the appeal is dismissed.