Ranjitkumar, R v

MR JUSTICE BEATSON: On 26th April at the Crown Court at Chelmsford the appellant pleaded guilty and on 13th August was sentenced by His Honour Judge Ball to fifteen months' imprisonment on count 1, conspiracy to defraud, and fifteen months' imprisonment concurrent on count 3, false accounting. A confiscation order in the sum of £14,600 was made, to be paid within six months, with nine months' imprisonment consecutive in default. A compensation order in the sum of £73,853.81 was made, to be paid within twelve months. No order was made in default of payment, but the magistrates' courts' powers in default of payment were enlarged to a maximum of two years' imprisonment. The appellant was ordered to pay £450 towards prosecution costs. He appeals against sentence by leave of the single judge. The appeal is confined to the compensation order. The appellant has now served his sentence of imprisonment.

The facts of the case are that the appellant was a cashier at the Halifax Building Society in Epping. Between 1st April 2003 and 9th July 2003 he obtained credit and debit card details from customers by passing their cards through a card reader device. That data was passed to an unidentified third party and used to clone cards. Forty-five accounts were cloned. The cards were then used to obtain goods fraudulently. The total of the goods obtained was £73,853.81. This was count 1.

There was no evidence that the appellant personally benefited from the transactions. It was HBOS Plc which bore the loss.

On 3rd June 2003 the appellant processed a fraudulent transaction, in which he issued a cheque in the sum of £14,500 from an account of an elderly customer. That cheque was paid into his aunt's account and subsequently 28 withdrawals of £500 each were made from that account. That formed the subject of count 3. On his arrest the card reader was discovered at his home. His aunt's bank card was found on him.

For the purposes of this appeal it is sufficient to record the information relevant to the compensation order. His benefit was agreed at £14,600. The realisable property was property at 85 Portia Way, Bow, with available equity of £13,143 - the appellant is or was the sole owner of that property; a Halifax ISA valued at £3,083.78; a Citreon Saxa valued at £2,220; cash found in the appellant's room of £500; and cash from his aunt's account of £637.28. The statement also included the property at 12 Chase Lane, Barkingside, in which the appellant and members of his family - his father, his stepmother and a number of other family members - lived. The available equity, after taking account of the mortgagee's interest, was £84,000. The appellant is the joint proprietor of this property with his stepmother.

The sentencing judge stated that, although on the face of it there was every reason why, having regard to personal mitigation, the court would want to avoid sending people like the defendant to prison, breach of trust cases called for special consideration because people in special positions of trust were expected to comply with the higher standards of honesty. The financial loss in the case was significant. It was a matter of conjecture how much money had found its way to the appellant. It was not accepted that he benefited but by a few hundred pounds. The bank had suffered a significant loss, and the court was not attracted by the thought that an insurance company would stump up rather than the bank bearing the loss. The sentencing judge stated that he proposed to take steps to ensure so far as possible that the losers did not suffer a penny of loss from the appellant's actions. Account was taken of the fact that significant financial orders would put members of his family who were occupying the Chase Lane premises at risk of homelessness. The judge stated:

Miss Johnson submits that the compensation order was punitive, unjust and wholly inappropriate. First, she submitted that the judge erred, in that he made an order that would necessitate the sale of the family home and make the family homeless contrary to the decisions in a number of cases of this court: Jorge [1999] 2 Cr App R (S) 1; Hackett (1988) 10 Cr App R (S) 388; Butt (1986) 8 Cr App R (S) 216; and Blackmore (1984) 6 Cr App R (S) 284. In these cases this court has stated that a compensation order is not a punishment but is a convenient summary means of putting right all or some of the damage done by a criminal offence and avoiding the necessity for civil proceedings which might be expensive and time consuming. It is not appropriate for such an order to be made when the effect would be to leave the family homeless.

The exceptional situation in which such an order might be made was considered by this court in McGuire (1992) 13 Cr App R (S), where a compensation order did necessitate the sale of the matrimonial home but left sufficient equity for the appellant in that case to purchase a new home.

Secondly, Miss Johnson submitted that in any event the compensation order in the sum of £73,853.81 did not take account of the appellant's stepmother's interest in the property. At the most his equity in it was £42,000. She submitted that it is likely to be significantly less because his father, who lives there and meets the bills and pays the mortgage, also has a beneficial interest in the property.

Thirdly, she submits that the passage which we have quoted shows that the motivation - at least in part - of this compensation order was punitive rather than compensatory and that that was an improper purpose.

We have concluded that the compensation order must be set aside. We accept that, on the basis of the authorities cited, it was wrong to make an order which could only be satisfied by selling the family home. The cases cited all concerned a matrimonial home, but we consider that there is no difference in principle from a shared family home. In any event, this house now appears also to be the matrimonial home. We also consider that the relations between this appellant and other members of his family were wholly irrelevant to this sentencing exercise. Accordingly, we allow this appeal and set the compensation order aside.