Leeming, R v

LORD JUSTICE RICHARDS: This is an appeal against a confiscation order made on 14 December 2006 by His Honour Judge Resisus CB at the Reading Crown Court. The confiscation proceedings followed the appellant's conviction on a count of controlling prostitution for gain contrary to section 53 of the Sexual Offences Act 2003. The confiscation order appealed against is in the sum of £1,079,644 with ten years' imprisonment in default of payment. The order was made at a mention hearing in the appellant's absence. The background was that the appellant had failed, despite previous extensions of time, to serve a full response to the prosecutor's statement. At the mention hearing the judge refused a defence application for a further extension sought on the basis that a number of financial institution had not yet responded to requests for documentation. Instead he acceded to an application by the prosecution that, pursuant to section 17(3) of the Proceeds of Crime Act 2002, he should treat the appellant as accepting the allegations in the prosecutor's statement. This led him to make a declaration that the appellant had benefited from the proceeds of crime to the extent set out in the prosecutor's statement and to make a confiscation order in the sum sought by the prosecution.

At the time of the order the prosecutor was the Assets Recovery Agency. Its functions have since been taken over by the Serious Organised Crime Agency ("SOCA"). SOCA has accepted that the judge was wrong to proceed as he did. Several reasons why that are so have been put forward on the appellant's behalf in the grounds of appeal. (1) Under section 17(3) of the 2002 Act a defendant who fails to serve a statement in accordance with an order of the court under subsection (1) may be treated as accepting every allegation in the prosecutor's statement, apart from "(b) any allegation that he has benefited from his general or particular criminal conduct".

In this case the judge appeared to proceed on the basis that he had no discretion in the matter, whereas, under the subsection, he did, and he went beyond the power conferred by the subsection in treating the appellant as accepting not only the prosecution allegations as to the property he held, or had held, but also the allegations that such property amounted to benefit from criminal conduct.

The grounds of appeal also complain _inter alia_ about the making of an order of this kind at a mention hearing without notice to the appellant and in his absence.

It is not necessary to go into the matter in any further detail because SOCA accepts that in the circumstances the appellant did not receive a fair confiscation hearing and/or that the confiscation order was wrongly made and it does not resist the appeal. That stance seems to us to be well founded. Apart from the concern that the judge seems to have gone further than permitted by section 17(3), it seems to us that he was wrong to proceed to make an order of this draconian nature on an application made without notice to the appellant and in the appellant's absence.

There has also been agreement between the parties as to the amount in which the confiscation order should properly be made. The offence of which the appellant was convicted is a criminal lifestyle offence within the meaning of section 75 of the Proceeds of Crime Act 2002. This engages the statutory assumptions under section 10 of the Act, including assumptions that any property held by him at any time during the six years prior to the institution of the proceedings against him was obtained by him as a result of his general criminal conduct. A defendant has the burden of disproving those assumptions. Since the confiscation order was made this appellant has obtained evidence to disprove those assumptions in his case. Several lever arch files of evidence have been served on SOCA which has considered them and accepts that they do disprove the assumptions.

The appellant does, however, concede that he has benefited in substantial amounts from the specific offence of which he was convicted. The benefit has been calculated as follows in accordance with current guidance. The first component was rent received by the appellant from the woman who was running the two premises concerned as brothels. The total rent is £66,730. The second component is payment made by customers of the prostitutes through a credit card facility run by the appellant. This amounts to £124,587. The third component is an adjustment pursuant to section 80(2) of the 2002 Act to take into account inflation since the money already referred to was received. This amounts to £30,014. The total of these three amounts is £221,331. That is the agreed benefit figure. The appellant accepts that he has sufficient assets to pay that amount and that a confiscation order in that amount cannot therefore be resisted.

Accordingly, giving effect to the agreement reached between the parties, in our view rightly, we will quash the judge's confiscation order and substitute a confiscation order in the sum of £221,331. The appellant will have six months to pay that sum with a sentence of two and a half years' imprisonment in default of payment. To that extent the appeal is allowed.