Jones, R v

MR JUSTICE DAVIS: On 2nd September 2004, in the Magistrates' Court at Maidstone, the appellant pleaded guilty to four charges of obtaining property by deception and one charge of handing stolen goods. The case was in due course committed to the Crown Court for sentence. On 4th April 2005 at the Crown Court at Maidstone the appellant was sentenced by His Honour Judge Lawson QC to two years' imprisonment on each charge to run concurrently. He was also ordered to pay £5,015 in compensation and £245 towards the prosecution costs. A number of other offences, ten, were also taken into consideration.

Confiscation proceedings were instituted. On 17th June 2004, after a previous oral hearing, the same court then made a confiscation order under the Proceeds of Crime Act 2002 in a sum of £20,007 to be paid within four months or in default the appellant serve 12 months' imprisonment consecutive to the term imposed on the substantive offences. The judge found the appellant's benefit to be £142,018.42. He found the available amount to be £25,257 from which he deducted the amount of compensation order previously made in determining the amount so to be paid.

The appellant now appeals against the sentence in respect of the confiscation order aspect only by leave of the single judge.

As to the amount of the benefit obtained it is the position of Mr Sinclair, counsel appearing on behalf of the appellant before us as he did in the court below, that in terms of the benefit as such the appellant will always be at risk, to the extent that he may in the future have assets available to meet that finding. The argument of Mr Sinclair in the court below, and repeated before us, is that there was no evidence of the appellant benefiting from his general criminal conduct and that the only evidence available went to his benefit from the particular criminal conduct the subject of the proceedings.

That submission should be set in the context of the background facts which can be briefly summarised in this way. The appellant worked as a motor dealer purchasing vehicles principally from salvage yards in Kent, arranging for their repair and then selling them on privately. Between October 2003 and May 2004 the appellant sold nine accident damaged cars which were sold with false service histories and had been clocked. Between April and July 2004 the appellant also knowingly received stolen Subaru vehicle parts, valued in excess of £3,000, which was the subject of count 5, the count of handling stolen goods.

The appellant was notified in January 2005 of the prosecution's intention to instigate confiscation proceedings against him and a detailed statement of information was then served on 11th February 2005. It is important to note that by reference to section 6 of the Proceeds of Crime Act 2002 it was agreed that the appellant fell to be considered as someone with a criminal lifestyle by virtue of the number of offences and the time scale of the offending.

The prosecution's case was that the appellant's total benefit was £142,018.42 made up of £14,866.40 in benefit from the offences charged plus £8,500 benefit from offences taken into consideration, totalling £23,266.40. To that the prosecution then added the sum of £94,321.98 cash deposit in the appellant's National Westminster bank account from the sale of vehicles for the relevant period and, in addition, £24,330-odd, being further cash from sales of vehicles used by the appellant to purchase cars at auctions after May 2003. The prosecution's further submission was that the appellant's available amount was £25,466.90, being £25,257 in respect of vehicles then registered in the name of the appellant, plus the sum of around £209, being the balance of the National Westminster bank account.

The defence's overall submission was that, on the whole, the appellant was a legitimate car dealer and only a small proportion of the cars which he had sold had had their odometers altered or service histories altered.

In approaching this particular matter Mr Sinclair accepts that by virtue of section 10 of the Proceeds of Crime Act 2002 the assumptions are against his client. But he submits that on the evidence the appellant had shown the prosecution case to be incorrect and at all events that there would be a serious risk of injustice if the assumptions were to be made: see section 10(6) of the Act.

Mr Sinclair further says, and he may well be right in this, that overall this statute is capable of operating in such a way as to give rise to a draconian consequence. Mr Sinclair in this regard cited to us two decisions, a decision of a constitution of this court in the case of R [2003] EWCA Crim 690 and also a decision of a constitution of this court in Glatt [2004] EWCA Crim 605.

The appellant gave evidence himself before the judge at the confiscation hearing. His case, as we have indicated, was that this was essentially a legitimate business (albeit one confined to dealing, apparently, solely in cash) and he said that only a few vehicles which had been sold had been clocked. It was further said that the police had investigated sales of other cars sold by the appellant and had brought no charges against him in respect of those. Further, as to the National Westminster bank account it was said that had not been used solely for his living expenses, but also, in effect, was the account which contained his cash working capital which was recycled through that account for the purposes of enabling him to acquire stock.

The judge in his ruling on confiscation set out the background in some detail. He summarised the defence case, which was that the business, was apart from the matters to which he had pleaded guilty, an honest business. He then further summarised the defence case with regard to the bank account.

At page 4 of the ruling the judge said this:

The judge then went on to deal with the point raised about the National Westminster account. The judge stated:

A little further on the judge made this finding:

Thereafter, after making certain further findings, the judge concluded on this particular aspect of the case:

Mr Sinclair concedes, by reference to the decision in R, that the judge was entitled to take the total value of the cars in question, albeit, as he said, the applicant's own benefit to himself would potentially have been the profit he actually made on those cars. Mr Sinclair indicated that he was hoping that this court might take the opportunity to refine or to modify what was said in the case of R. That is an opportunity which this court declines to take up. This court sees no reason to refine or modify what was said in the case of R.

Nevertheless, for the purpose of displacing the assumptions, Mr Sinclair presses the point that the reality is that the benefit as such to this appellant is significantly less than the gross profits of sale or the total value of the cars.

The difficulty of this aspect of Mr Sinclair's argument is rather highlighted by the fact that, when asked by May LJ in the course of argument to try to identify what profit the appellant had made, he was not in any position to do so: hardly a promising start in seeking to argue that the assumption was in some way displaced, at all events on the first ground set out in section 10(6).

Mr Sinclair, however, goes on to criticise the judge in finding that this business was entirely dishonest and in particular for the emphasis that the judge placed on the lack of records and so on. Mr Sinclair makes the point that it is perfectly possible for a business as a whole to be a legitimate business, even though, illegitimately, tax on any profits and any VAT due is not paid. But the fact remains that if persons such as this appellant in this particular business choose to operate their business dealings in such a way as to deal only in cash and to keep no records of any kind whatsoever they have to take the consequences that may arise: not least for the purposes of the potential application of the Proceeds of Crime Act 2002. These considerations were clearly, in our judgment, relevant to the judge's conclusion on this particular point and simply went to show that in documentary terms the appellant was in no position to discharge the burden on him for the purposes of section 10(6). It was also relevant to the question of whether or not there was a serious risk of injustice if the statutory assumptions were made.

As to the overall finding on this aspect of the matter, we consider that the judge, having received the evidence and having formed his view of the appellant, was entitled to conclude as he did, just as he is entitled to conclude as he did with regard to the alleged recycling of the working capital in the National Westminster bank account. Accordingly, in our judgment, there is no basis for challenge to the judge's overall finding that the recoverable amount was £142,000-odd in the light of the evidence heard by the judge.

We turn, then, to the question of the available amount. In the initial prosecution case 13 vehicles were identified as being registered in the appellant's name as at 7th February 2005; that is to say, of course, some considerable period of time after the investigation had started and indeed after the criminal proceedings had started and ended up in the courts.

By the time of the confiscation hearing in May 2005 seven of those vehicles had ceased to be registered in the name of the appellant. The Crown's case at the hearing was that, nevertheless, all 13 vehicles, having a value totalling £25,257, were assets available for confiscation and that the transfers were simply paper or sham exercises designed to defeat the confiscation proceedings.

The appellant's case was that those seven vehicles had been properly sold and that the delay in re-registration in the name of the new keeper was due either to there being slowness on the part of the new owner in causing the details to be lodged with the DVLA, or, perhaps, delay at the DVLA itself.

As to that, the judge made these findings:

Pausing there, Mr Sinclair makes complaint about that last particular point. In our view, there is no substance in that complaint at all. The judge was simply recording that which was the reality.

The judge then went on:

It is also a point of note that, even with regard to these seven alleged sales, the appellant had seen fit not to keep any written record, notwithstanding that by now he had been the subject of investigation and criminal proceedings. It is further a point of note that the appellant did not call any one of the purported new seven owners to confirm the validity, if there was validity, in the underlying sale which had taken place.

In such circumstances no point of principle at all arises in this particular case. The reality is that the appellant is really seeking to reargue all the points which were unsuccessfully raised in the court below. Those points failed in the court below by reason of the judge's assessment of the evidence and by reason of his findings of fact. For precisely those reasons, those points also fail in this court and the appeal is dismissed.