Hockey, R v

LORD JUSTICE PILL: On 21st March 2006 in the Bristol Magistrates' Court, Terence John Hockey pleaded guilty to six charges arising out of three mortgage applications: (1) the dishonest obtaining of a money transfer from Bradford & Bingley Building Society in the sum of £180,000 [in fact £171,000] on 26th August 2003; (2) the dishonest obtaining from NatWest Bank of a money transfer in the sum of £142,450 [in fact £127,457] on 6th September 2005, both those offences being under section 15A of the Theft Act 1968; (3) dishonestly attempting to obtain a money transfer from Northern Rock Building Society in the sum of £110,675 on 8th October 2005, charged under section 1 of the Criminal Attempts Act 1981. Charges 4, 5 and 6 were offences relating to the use of false instruments by Hockey in the course of each of the applications, contrary to sections 3 and 6 of the Forgery and Counterfeiting Act 1981.

Hockey was committed to the Crown Court for sentence. On 17th November 2006 he appeared before His Honour Judge Lambert. On the charges relating to the Bradford & Bingley (which pre-dated the Criminal Justice Act 2003) he was sentenced to concurrent terms of nine months' imprisonment suspended for 2 years. On the other charges (which postdated the 2003 Act) the judge imposed a suspended sentence on each charge, nine months' imprisonment suspended for 2 years, to run concurrently with the earlier sentences, and a community requirement of 240 hours' unpaid work.

In confiscation proceedings under section 6 of the Proceeds of Crime Act 2002 ("the 2002 Act") heard on the same day, the prosecution sought a confiscation order against Hockey in the sum of £298,457. The judge declined to make the order, in circumstances to which we will refer.

The prosecutor appeals against that ruling of His Honour Judge Lambert by leave of the single judge, who also granted Hockey a representation order.

On 26th August 2003 Hockey completed an application form to obtain a mortgage from Bradford & Bingley for premises in Derby. In the form he stated that he was employed as a catering and events manager for a company called Bigger Fights and earned £60,000 a year. He produced what purported to be a P60 and wage slips in support of the application. He had never worked for the company and the documentation provided was false. Unaware of that, the building society transferred the sum of £171,000 to Hockey.

In September 2005 Hockey obtained a mortgage from NatWest for a residential property in Derbyshire. He completed an application form stating that it was for residential purposes and not to buy and let. He stated that he was contracts manager for a company called Fairy Deli and earned £40,000 a year. He again produced false documentation in support of the application, and obtained a mortgage in the sum of £127,457.

In October 2005 Hockey prepared a mortgage application in connection with the purchase of Plot 5, Heritage Brewery, Burton on Trent. He applied for £110,675, stating that he was a contracts manager earning £40,000 a year, in support of which representation he provided false documentation.

The premises in Derbyshire were intended to be let. At least one of them has been let. With respect to both of them mortgage payments have been made by Hockey and he is up to date with payments. We are told they are interest-only mortgages. He has paid on one for a period of approaching four years and on the other for a period of well over a year.

Once the frauds came to light, the lending institutions concerned were prepared to continue with the mortgages and have received the appropriate monthly payments.

The questions of the benefit obtained by Hockey as a result of these dishonest transactions, and his realisable assets, were considered at the September hearing before the magistrates. It was agreed by the parties that the benefit obtained within the meaning of the statute amounted to £298,457 and that Hockey's realisable assets were substantially in excess of that, at £471,000. The judge was accordingly invited by the prosecution, on 17th November 2006, to make a confiscation order in the sum of £298,457.

No suggestion was made at the hearing in the Crown Court that the realisable assets had changed significantly following the September hearing and no such representation is made to this court today, though counsel for Hockey, Mr Davidson, has mentioned the possibility that the figure may have changed. He has had an opportunity to take instructions from his client and has not pursued a submission that there has been any change relevant for present purposes.

On behalf of the prosecution, Mr Wilson invites the court to allow the appeal and itself to make a confiscation order in the sum already mentioned.

Section 31(2) of the Proceeds of Crime Act 2002 provides:

Section 32(2) provides:

On behalf of Hockey, Mr Davidson submits that there was not a decision not to make such an order within the meaning of section 31(2). He submits that the judge was merely adjourning proceedings and this court has no jurisdiction under section 32. Subject to that, Mr Davidson does not submit that the provisions of section 6 of the 2002 Act are other than mandatory. His further submission is that if the court, contrary to his submission, assumes jurisdiction under section 32, it should not deal with the matter itself, but direct the Crown Court to proceed afresh under section 6.

In view of the comparatively narrow compass of the issue between the parties, it is not necessary to set out in full the statutory procedure. Section 6 of the 2002 Act provides:

Mr Davidson makes the further submission, on the basis of the wording of the section, that by adjourning the judge was entitled to encourage the prosecution not to proceed under section 6. He states that judges frequently dissuade prosecutors from taking action they propose to take and that is all the judge was doing in this case.

We accept, of course, that there is an abuse of process jurisdiction. The court can intervene if the prosecuting authorities are, in the view of the court, abusing their powers. It is, however, well established and indeed fundamental to the legal system that the question whether to prosecute or not is for the prosecutor. The House of Lords, while recognising the existence of an abuse of process jurisdiction, has stated that proposition in Connelly v Director of Public Prosecutions [1964] AC 1254 and Director of Public Prosecutions v Humphrys [1977] AC 1. The principle has been restated more recently and frequently. We can see no abuse of process in the prosecution's decision to proceed under section 6 upon the facts of this case.

Both parties were represented by counsel before Judge Lambert on 17th November 2006. The judge in the course of argument expressed the view that a confiscation order would be inappropriate having regard to the legitimate interest of the financial institutions. The judge stated at page 10B:

He stated at page 9E:

The judge rightly heard submissions as to whether, under section 6(6), the lenders had at any time started or intended to start proceedings in respect of the defendant in respect of loss, damage or injury sustained in connection with the conduct). He stated in the course of his ruling that he did not hold that belief.

The judge ruled as follows:

Mr Wilson submits that the judge's ruling amounts to a decision not to make a confiscation order within the meaning of section 31(2). He submits that in whatever language the judge dressed it up, it was a decision not to make an order. The judge sought to achieve the result he desired by reserving the question to himself, and then, to make his position clear, stating that he had no intention of restoring the section 6 application to the list. That that was his intention is confirmed by the statement he made in the course of argument, to which we have referred.

In our judgment that was plainly a decision not to make an order. The prosecution were entitled to treat it as such and to exercise their right to appeal to this court under section 32(2). There is much authority as to the circumstances in which an application for a confiscation order may be adjourned, as to the limitations upon that power, and as to the time limits which apply. The cases on that subject do not bear upon the present question. There was plainly a decision by the judge, and the court has the power to consider whether an order should be made.

It is not disputed that the sum of almost £300,000 did come within the definition of "benefit" under the Act. Recently in R v Nield [2007] EWCA Crim 993 this court explained the effect of section 6:

The court was applying its earlier decision in R v Dimsey and Allen [2000] 1 Cr App R (S) 497 and the House of Lords' decision in R v Smith (David) [2002] 1 WLR 54. The point has been affirmed even more recently in a case cited by Mr Davidson to this court, R v Brack and Brack [2007] EWCA Crim 1205:

The judge's concern appears to have been that the victims of the crime, the lending institutions, would or might be prejudiced if the confiscation order were to be made. Some of the cases cited involve a situation in which there may be hardship, certainly to the defendant. Concern for the interests of the financial institutions did not, however, justify the judge in refusing to make a confiscation order in this case. It was immaterial whether those institutions would or would not suffer loss as a result of the offences committed against them. They apparently are content to allow the mortgages to proceed, notwithstanding their unpromising criminal beginnings, and are continuing to accept payments.

This is a case where the realisable assets are greatly in excess of the sum to be paid under the order. It may be, we know not and it is not necessary to find out, whether the sum ordered can be paid without recourse to the properties the subject of these criminal offences.

The point has been made by at least one of the lending financial institutions that if they have to foreclose to realise their security, first, if there were to be a downturn in the market they would lose money and, secondly, they lose the interest which would have accrued had the mortgage been allowed to continue. That of course is a matter of speculation. They may lose commercially. At a time of rising interest rates, they may, on the other hand, be able to re-lend at an enhanced level. It is a common occurrence for mortgages to last a shorter term than that originally stipulated.

In any event, it is not for this court or any court to speculate upon such matters. We mention it only to show that, in this case at any rate, there is no obvious injustice to the financial institutions concerned, about whose interest the judge expressed great concern in the course of argument and in his ruling. In our judgment, a confiscation order should have been made by the judge in the sum requested. We allow the appeal.

There remains the question whether we should exercise our power under section 32(2) to proceed ourselves to make an order, or whether we should remit the matter to the Crown Court with a direction. In our judgment, it is appropriate in the circumstances of this case to make the order ourselves. The respondent should not be permitted to take advantage of the passage of time which has resulted from the judge's refusal to do what he should have done. There is no suggestion in any event that this is a case where the realisable assets have changed significantly or that there can be any injustice to the respondent in this court proceeding, and proceeding today, and thereby preventing further costs from being incurred.

We take that course. We make the confiscation order in the amount claimed. We direct that the respondent, Hockey, should have six months in which to make the payment. That is the maximum period for which the statute allows (section 11(3)). We are required to impose a sentence of imprisonment in default of payment. We have regard to the relevant table and the sentence we impose in default is one of 3 years' imprisonment.

Before leaving the case, we refer to the issue the judge has raised. The Parliamentary intention is in our judgment clear, and has been stated to be clear in decisions of the House of Lords and this court. In the circumstances which existed it was the duty of the judge to make an order under section 6 of the Act, once he had found that section 6(6) did not apply. There is a borderline between legislative powers and judicial powers, and it is sometimes open to argument where that borderline should run. The intention of this statute is clear. It was not open to the judge to frustrate the intention of Parliament, as expressed in the statute, as he purported to do.

Thus, the appeal is allowed and the confiscation order made in the terms we have already mentioned.

Does anything else arise?

MR TALBOT: No thank you, my Lord.

MR DAVIDSON: No thank you, my Lord.

LORD JUSTICE PILL: I am grateful to you for your submissions. We have a non-counsel application which we will deal with, there is no need for counsel to stay as a matter of courtesy.