Oyebola, R v

At a trial held in February and March 2011 at Wood Green Crown Court before His Honour Judge Simon Carr and a jury, the Applicant and his wife, Hickmat Hussein, faced an indictment containing 12 counts alleging various offences concerning mortgage frauds and their consequences alleged to have been committed in the period from 1998 to 2004. The trial was a re-trial.

On 16 March 2011 the Applicant was convicted of four counts of furnishing false information in connection with mortgage applications (Counts 2, 4, 5, 7), three counts of transferring criminal property (Counts 8, 9, 10), one count of converting criminal property (Count 11) and one count of possession of a false identity document (Count 12). He was acquitted of Count 1 and the convictions on Counts 7 and 11 were by a majority of 10:2.

The Applicant's wife was charged with him jointly on Counts 8, 9, 10 and 11 and solely on Counts 3 and 6, both being allegations of furnishing false information in connection with a mortgage application. She was convicted on Counts 3, 6 and 10, but acquitted on Count 11 and the jury were discharged from giving verdicts on Counts 8 and 9.

On 20 April 2011 before the same judge the Applicant was sentenced to 4½ years’ imprisonment on each of Counts 2, 4, 5 and 7 to 11 to run concurrently with each other and 12 months’ imprisonmenton Count 12 to run concurrently with the other sentences, with a direction that 143 days should count towards sentence. The sentence imposed on his wife in respect of counts 3, 6 and 10 was one of 12 months' imprisonment on each count concurrent suspended for two years. In the case of count 10 the judge also added a provision that there should be a curfew for a period of three months.

The Applicant and his wife each sought permission to appeal against their convictions, their renewed applications, permission to appeal having been refused by the single judge, coming before this court on 24 February 2012. This court (Jackson LJ and Dobbs J) refused the renewed application, the Applicant's application being supported by arguments advanced by Mr Krolick. The Applicant's wife's application was dealt with as a non-Counsel application. The decision of this court can be found at [2012] EWCA Crim 460. Although the Applicant continues to challenge the correctness and legitimacy of that decision, for present purposes paragraphs 3-9 of the judgment give a concise summary of the allegations which we do not need to repeat. The essential nature of the prosecution case was that the Applicant misrepresented his identity and gave other misleading information about his personal situation in order to obtain mortgages on various properties which were then rented out on a multi-occupancy basis. The allegation in the money laundering counts was that the Applicant was transferring rental income from the properties which had been purchased with fraudulently obtained mortgages into bank accounts in his or his wife's name. Where his wife was concerned, a similar modus operandi to the obtaining of the mortgage was alleged. Count 11 was a joint offence by virtue of which the Applicant and his wife were convicted of converting criminal property by selling and obtaining the proceeds of sale of 7, Hanover Lodge, a property acquired by a fraudulently-obtained mortgage.

All that is by way of background. As we have indicated, what brings the present application for permission to appeal against sentence before the court is the confiscation order made by the judge in due course and the application is confined to that issue. It has been referred by the Registrar to the full court. In view of the concession by the Crown that, in the light of Waya (see below), the benefit figure determined by the judge will need adjustment, we grant permission. The Applicant will henceforth be called 'the Appellant'. It will be understood immediately that the decisions made, particularly by the Crown and by the judge, were made before the decision of the Supreme Court in Waya. It should be noted that the application for permission to appeal was made in time and at one stage the submission had been made on the Appellant's behalf that the confiscation proceedings should be postponed to await the decision in Waya: cf. Jawad (see paragraph 32 below).

The Appellant was initially represented before us by Mr Ivan Krolick who had represented him at the trial and had prepared all the written material in support of the application including, in a revised form, the proposed Grounds of Appeal. Mr Krolick appeared before us at the outset of the hearing, but indicated he was concerned that his client did not want him to represent him in the application. The apparent basis for that concern was the Appellant’s continued desire to challenge his convictions, a matter in respect of which he has engaged in substantial correspondence with the Criminal Appeal Office. Time was allowed for the Appellant to confer with Mr Krolick who then confirmed that the Appellant would represent himself on the appeal.

The order sought to be challenged in the proposed appeal was made on 13 April 2012. The judge in confiscation proceedings under the Proceeds of Crime Act 2002 found that the Appellant had benefited in the sum of just over £1.5 million and had realisable assets of just under £667,000 and the judge made a confiscation order in that latter amount to be paid by the 19 October 2012 with 4 years imprisonment in default consecutive to the substantive sentence. He found the benefit figure for the Appellant's wife as a little in excess of £1.1 million and ordered her to pay just short of £284,000 as an available amount with 3 years imprisonment in default. That order is not before us for consideration. The way in which he arrived at the relevant figures will appear later.

As we have indicated, the Appellant chose to represent himself at the hearing of the application. There were two specific issues he asked us to consider to which we will refer later (see paragraph 71 below). However, as we understood him, he wanted us to consider the arguments advanced in writing by Mr Krolick which we propose to do so far as relevant and appropriate. Because Mr Krolick took no further part in the hearing before us it was not possible for the court to test the contentions advanced and there was, therefore, no sustained argument on either side concerning most of the points advanced. We propose, therefore, to confine ourselves to those issues where we feel we have had sufficient assistance to reach a proper conclusion. [We should add that since the draft judgment was handed down on 28 June “subject to editorial correction”, the Appellant has said that he did not ask the court to consider Mr Krolick’s arguments. He apparently wanted us to consider the issues raised in the letter he had sent to the Registrar on 10 July 2012. However, the issues raised in that letter (like those raised in the further document to which we refer in paragraph 74 below) are not issues for us: this court has dealt with the Appellant’s application for permission to appeal against conviction: see paragraph 5 above. So far as the court is concerned, the Appellant did want any legitimate arguments for the alteration of the confiscation order to be considered by the court, including the two issues he raised specifically. On that basis it would have been unfair to him if we had not considered points raised by Mr Krolick that might arguably reduce his liability under the confiscation order. This judgment reflects our conclusions on those issues and the issues raised by the Appellant.]

There was a lengthy, unhappy and tangled history to the making of the confiscation order on 13 April 2012 that began with directions given by the judge in the confiscation proceedings a year previously. Since Mr Krolick, in his written submissions, sought to take issue with the procedure adopted by the judge (which he has characterised as "extraordinary") we need to say something about that history.

As will be well known, the confiscation process may involve a section 18 request by which a defendant is required to provide information to assist the court in carrying out the confiscation exercise; but the essential procedure involves the prosecution serving a section 16 statement which sets out the basis of the prosecution case concerning the alleged criminal benefit and assets of the defendant, whether it is suggested that he has a criminal lifestyle, whether it is said that he has benefited from his general or particular criminal conduct and in general criminal conduct cases setting out material informing the question of the application or non-application of the ‘assumptions’ provided for in section 10 of the Act. Provision exists for a section 17 response by which the defendant must respond to the section 16 statement and indicate the extent to which the allegations in that statement are disputed, giving particulars of any matters proposed to be relied upon.

Mr Krolick suggested that the judge's initial direction was that the Crown should serve their section 16 financial statement first, after which the Appellant should serve his response, but that nothing was served by the Crown. We have not seen an order in those terms and it does not accord with the recollection of Mr Wayne Cranston-Morris who appeared for the Crown before the judge and before us. We do not need to resolve this issue because it has no relevance to the present application. It is common ground that on 20 April 2011 the judge directed the Appellant to serve and lodge a statement as to his financial position under section 18: there is with the papers before the court an order of the judge that the Appellant should provide certain information under section 18 by 3 June. That is perfectly standard procedure.

Mr Krolick says that the Appellant did provide the information requested. There is an unsigned and undated statement from the Appellant with the papers which does appear to address the issues raised in the section 18 order. It appears from a later ruling of the judge, to which we will turn shortly, that the judge was under the impression that the Appellant had not complied with that direction. Mr Cranston-Morris was not able to assist with the precise date upon which that statement was served, but accepted that it had been served by the time the Crown's section 16 statement (referred to in the next paragraph) was served. We will assume (perhaps somewhat generously) in the Appellant's favour that his statement was served broadly in compliance with the judge's order.

The Crown then served their section 16 statement dated 23 June 2011 which they were required to do by 1 July according to the judge's direction given on 20 April. The Applicant was required to serve a section 17 response by 12 August with a view to the confiscation hearing taking place on 26 August.

It is common ground that he did not do this. It is not entirely clear why, but it appears that once the Appellant had lodged his application for permission to appeal against conviction, he applied to have the confiscation proceedings postponed until after that application had been considered, but the judge refused that application. We do not see any basis for criticising that decision.

On 26 August it appears that all concerned considered that a 2-day hearing was required and the judge allocated 22 and 23 December for such a hearing. He directed that the defence evidence should be served by 18 November 2011, the Crown’s skeleton and authorities by 25 November and the defence skeleton and authorities by 9 December. He directed what was in effect a pre-confiscation hearing review on 15 December by which time the defence and Crown should have prepared a template of the cross-examination and examination-in-chief, timing of submissions and judgment, to ensure that the confiscation hearing was heard and completed within the two days allocated.

In the meantime, by a written application dated 14 November Mr Krolick, who was appearing for the appellant in the case of R v Waya(in due course reported at [2012] UKSC 51) that was proceeding before the Supreme Court, applied for the confiscation hearing to be adjourned to await the outcome of what was to be the second round of that case in the Supreme Court. Mr Krolick was justified in saying that it raised a number of issues which potentially bore upon the confiscation proceedings because that case arose from a mortgage fraud conviction where the defendant had misrepresented his personal situation. Whilst we do not think the judge can be criticised in the circumstances for not acceding to that application, it is unfortunate that it was not drawn to his attention until 15 December, something he commented upon in a subsequent ruling. He may have thought that it was just another delaying tactic by the Appellant. That was an understandable view given the history of matters to that date (to which we will return in a moment), but the application was not without some substance. Nonetheless, the Supreme Court hearing would not be until March 2012 and he felt that it was not right to delay matters in the present case further. That was an entirely legitimate view to take.

As we have indicated, the prosecution statement had been lodged in June. Mr Krolick, in a Skeleton Argument dated 14 November, identified the fact that some of the fraudulent mortgage applications in respect of which the Appellant was convicted were made and acted upon by the mortgagees before 24March 2003, which was the date on which the confiscation provisions of the 2002 Act came into force. The offences reflected in Counts 2 and 4 came within this category. His argument, as articulated in his Skeleton Argument, was that the transitional provisions of the 2002 Act resulted in the proposition that the entirety of the confiscation proceedings should have been brought under the Criminal Justice Act 1988 and that the confiscation proceedings should be stayed since the prosecution would have been well out of time in proceeding under that Act. In the written material advanced in support of the present application Mr Krolick told us that an application was also made for an extension of time for compliance with the directions given in August. We are content to accept that this was so although there is no reference to it elsewhere in the papers we have seen. At all events, Mr Krolick's position is that no response to his Skeleton Argument of 14 November of any kind was received from the court or from the prosecution, but during the period thereafter attempts were made to have the application listed before the court as a matter of urgency but this was not possible. It seems that the application was not considered by the judge until 15 December, but in the meantime neither the Appellant nor his wife had lodged any of the documents directed to be lodged. At some stage prior to (or possibly at) the hearing on 15 December the prosecution accepted the force of some aspects of the submission made in the Skeleton Argument and informed the judge on 15 December of a concession that would be made in respect of any conviction arising from an offence committed before 24 March 2003. We will refer to the nature of the concession later (see paragraphs 42-46). The properties at 7, Hanover Lodge, Ruislip, and Telford Avenue, Brixton, were affected by this concession.

Despite that concession, the judge was plainly not impressed with the lack of activity by the defence prior to the hearing on 15 December. In a ruling given a week later, in circumstances to which we will refer, the judge said this:

"When the matter came in front of me on 15^th December the defence had complied with none of those orders [referring to the orders made on 26 August]. The position being taken was that they had taken it upon themselves not to comply with what was the second series of directions because they had an outstanding application to stay the proceedings as in breach of jurisdiction and therefore of their own volition and in ignorance of the orders that had now been made on two occasions had decided to simply ignore them and await the hearing of that stay application. In fact the stay application came to nothing because the Crown conceded that they would not seek to rely on conduct prior to March 2003 therefore obviating the jurisdictional problems caused when offending spans that particular and in the sense of confiscations critical date."

Mr Krolick did remind him subsequently that the Appellant's section 17 statement was made available on 15 December. The judge accepted that, but reminded Mr Krolick that it had been due by 18 November 2011.

It appears that the judge then gave some further directions to the effect that the Appellant should by Saturday 17 December 2011 serve on counsel for the Crown a document setting out any issues of law and the arguments relating thereto to be relied upon at the hearing scheduled for 22 and 23 December, the Crown should serve a skeleton argument in response by 9.00 am on Tuesday 20 December 2011 and the Appellant should respond by 21 December, thus in time for the first day of the confiscation hearing on 22December 2011.

Mr Krolick sent a document entitled “Issues of Law” by e-mail to Mr Cranston-Morris on 17 December, but apparently this was not received by him and on 22 December 2011 he told the judge that he had not received the "Issues of Law" document and was therefore unaware of the Defendant’s case. There were also problems concerning the Appellant's wife's representation. We have seen a transcript of the obviously somewhat tetchy interchanges that day. There can be little doubt that the judge thought that the procedure was being manipulated to delay the confiscation proceedings. We will turn to that shortly, but it is clear that one of the arguments that Mr Krolick was proposing to advance was that the benefit received by the Appellant was considerably less than the prosecution was proposing to suggest because the rental income upon which the prosecution sought to rely came "either from properties which are not criminal properties at all or from properties [upon] which the Crown have said they [do not] seek to rely". The judge did not agree that that was the effect of the Crown's concession and we will return to it (see paragraphs 42-46). However, the basis of one matter Mr Krolick was proposing to argue was obviously understood by the judge.

Mr Krolick suggested, in the light of the late delivery of certain valuation evidence by the Crown, the lack of preparedness of Ms Hussein's counsel and the fact that the judge had not until that day seen the prosecution's section 16 statement, that the case was not ready. The judge's response was as follows:

" … The position is it will be heard over the next two days. I’ve given directions now since April. Not a single of those directions has ever been complied with in the timescale envisaged. Both parties have had all the opportunity over the last eight months to put before me the evidence they wish to put. This case will be tried on the evidence that I have in front of me eight months after I first gave directions in this case and I will do it to the best of my ability on the information in front of me and therefore I will deal with it on whatever skeleton arguments I eventually receive and whatever evidence is put in front of me. This case will be delayed no more.

If the judge was saying, as part of that review, that the Appellant's section 18 response was not supplied (or not supplied on time), he may have been mistaken (see paragraph 22 above), but he was entirely right to say that thereafter there had been scant, if any, compliance with his directions. Whilst it was the judge's intention at the time of those observations that there should be no further delay, it became apparent that an effective hearing was not going to be possible and it was put over to 3 February at 2 pm, but the procedure at that hearing was to be essentially "paper-based". The judge directed that any cross-examination of the financial officer was to be limited to 30 minutes per defence counsel and in the event that the Appellant or his wife should give evidence, the Crown would be entitled to cross-examine each for 30 minutes with 15 minutes permitted for the co-defendant. No oral submissions were to be made and all submissions were to be in writing. The total time of two and a half hours from 2.00 pm to 4.30 pm would be utilised in this way. The judge said that he would reserve his judgment. He gave certain other directions concerning the filing of documents.

On 3 February Ms Hussein dispensed with the services of her then Counsel. That resulted in the conclusion that the confiscation hearing concerning her could not be heard. In circumstances revealed by the judge's ruling, an application was made by Mr Krolick on the Appellant's behalf to adjourn the proceedings. After reciting the history up to 22 December 2011 the judge's ruling was as follows:

"At that stage I felt every opportunity had been given repeatedly for the defendants to put their house in order and to be in a position to present the matter in front of me fully and fairly and therefore I set a new timetable but on very strict terms which are to be complied with today.

I gave the defence one final opportunity to file any witness evidence they wished to file, there being two statements at that stage from [the Appellant] and a single page from Miss Hussein, that the prosecution and defence could file any skeleton argument or bundle of authorities they wished to file, that at the hearing, which was then to be for today at 2.00 p.m., the method of evidence was to be the financial officer tendered for cross-examination by the defence, either defendant if they chose to give evidence to give evidence and be cross-examined by the prosecution and then both parties again to be allowed to file such other closing written submissions they wished on which I would give judgment. That seemed to me, given all the false starts in this case and the use of court time, to be an appropriate and judicial way to deal with this case. I have to say that my experience of this case sadly has been that not just through the confiscations but through the trial process [the Appellant] has attempted to delay the process of his trial and confiscation at every turn.

Today I was confronted with the position that Miss … Hussein, I have no doubt at least under the influence, direct or otherwise, of her husband, sacked her legal team as a way of stopping today’s proceedings. That has resulted in me inevitably having to put her hearing off for a week so she can have time to consider the papers to make her own representations as she is now representing herself. There is no reason why [the Appellant's] case should not continue.

Once I made that order and it was clear to [the Appellant] I intended to proceed he asked to speak to counsel at the back of the court and indicated he felt he himself was not ready to proceed as he hadn’t had a transcript of the original trial back in March and April of last year. I have no doubt whatsoever that this is another attempt to attempt to put off the day on which these confiscation proceedings are to be heard and any delay will not now occur and any application for an adjournment is refused."

We have set out the background to the situation confronting the judge and the parties on 3 February. Although Mr Krolick has not criticised the timetable previously set by the judge, he complains about a hearing at which there should be no oral submissions by counsel, something he has described as "unique" in his experience. He had, he said, prepared an additional Skeleton Argumentdated 14 January 2012 and attended the hearing with the limited purpose of cross-examining the financial investigator (with whom there was, or could be, very little factual dispute, the only dispute being as to valuation which the officer conceded was not an "exact science"). The Appellant was cross-examined. At the conclusion of the evidence he was not permitted to address the judge on matters raised in cross-examination or on any of the matters of law which had been referred in his Skeleton Arguments. He says that the judge did not ask him any questions on the matters referred to in his written submissions and, accordingly, did not know whether he had read, or understood, the issues set out in the documents he had prepared.

As we have indicated, the judge gave his decision at a hearing on 13 April 2012, almost exactly a year after the confiscation process commenced. We will say more about the substantive decision after referring to Mr Krolick's first ground of appeal.

Mr Krolick has contended that the judge acted unfairly by proceeding as he did. That is his first ground of appeal.

We do not accept that this ground is made out. The judge plainly felt that attempts were being made to "string out" these confiscation proceedings and that he needed to take some firm action which he did. That is no particular reflection on Mr Krolick; it is a reflection of the judge's assessment of the instructions Mr Krolick was being given and the likely manipulation by the Appellant of the Appellant’s wife. We have seen for ourselves that he is an intelligent and articulate communicator, both orally and in writing, and we have little doubt that he is quite capable of being manipulative. So far as the procedure adopted is concerned, written submissions are a commonplace in current practice and the judge was well-placed to decide whether cross-examination of the financial investigator was going to be of assistance at the confiscation hearing. We can understand why he felt that it would not assist. Provided that essential fairness was not sacrificed in the process and appropriate rigour was shown to the analysis of the issues in due course, there is nothing wrong with a judge taking a robust approach in such circumstances: indeed the Criminal Procedure Rules demand it. If Mr Krolick had felt that the Appellant had been disadvantaged significantly in the circumstances, he could have sent the judge some further written submissions that the judge might well have felt it was inappropriate not to take into account. Indeed the judge anticipated that such a step might be taken. However, it was not taken.

We see nothing in the procedural points taken by Mr Krolick and do not consider there was anything unfair (or indeed "extraordinary" as Mr Krolick has suggested) in the process the judge adopted.

The next ground of appeal is to the effect that, given the acceptance by the Appellant that he had a criminal lifestyle within the meaning of section 75 of the 2002 Act, the judge was wrong to include in his assessment of benefit the benefit from particular criminal conduct. We do not, for this purpose, need to refer to the way the judge expressed himself: he plainly approached matters in this way and indeed was invited to do so by the Crown.

Mr Krolick's argument is based upon an interpretation of section 6(4) of the Act which we do not accept. In our judgment, where criminal lifestyle is established or accepted, general criminal conduct includes the particular conduct in the count or counts of which the defendant has been convicted. Another division of this court (presided over by Hughes LJ, as he then was, and of which Foskett J was a member) has reached that conclusion in respect of the same argument advanced by Mr Krolick in that case: Jawad v R [2013] EWCA Crim 644. This court would, in any event, be bound by that decision, but we add that we agree with it entirely.

The third ground of appeal is expressed in these terms: the judge erred in law in holding that properties which were purchased with the use of fraudulently obtained mortgage advances, and rents received by the Appellant from such properties, were themselves criminal benefit. (The Appellant did not dispute that the money going through the various bank accounts in his name related primarily - "almost entirely" was the expression he used in his section 17 statement - to rental income from the properties he acquired, though he also suggested that there may have been some money sent from his family, but he was unable to identify which of the various payments into the accounts were from his family and which from rental income.)

As we understand the argument, it is based on the effect of the decision of the majority in Waya and is advanced as follows: where someone using deceit has applied successfully for a mortgage advance which is then utilised to purchase property, that person has, within the meaning of the 2002 Act, obtained neither the property nor the advance but a chose in action reflecting the contractual right to require the mortgage advance to be utilised in the acquisition of the relevant property. If the property increased in value, the value of the benefit increased in the proportion of the increase representing the proportion that the mortgage advance bore to the purchase price (see paragraph 70 of Waya), but allowing for any repayment of capital by the Defendant from his own untainted resources (see paragraphs 76-77 of Waya).

On that basis it is argued that the beneficiary of any fraudulently obtained mortgage advance used to purchase a property that is then rented out obtains no criminal benefit from the rental income.Alternatively, only that part of the rental income which represented the proportionate value of the mortgage advance should be seen as constituting the benefit to the fraudulent mortgage-applicant. If that latter view is held, since no attempt has been made to compute this valuation in this case and there have been no findings by the judge which would allow this court to make a calculation, it is submitted that the case should be remitted to the Crown Court for re-determination.

Mr Cranston-Morris submits that R v Pattison [2007] EWCA Crim 1536, which is a non-criminal lifestyle case, is authority for the proposition that where property received by a defendant through his criminal activity generates an income without his interest in the property itself being diminished, such proceeds should be regarded as property obtained as a result of or in connection with the criminal conduct. He submits that this supports the contention that rental income from a property acquired at least in part by criminally-obtained funding is to be treated as a criminal benefit. Toulson LJ said this at paragraph 24:

"Where property received by a defendant through his criminal activity generates an income without his interest in the property itself being diminished, for example, by money which represents the proceeds of crime being put on deposit and gaining interest, the scenario is different. Section 80 does not address that situation. We see the force of the argument that such proceeds should be regarded as property obtained as a result of the criminal conduct. That would apply in this case to the rental income, as to which it was conceded before the judge that an order should properly be made."

Mr Cranston-Morris' contention is that this decision, and the principle underlying the conclusion to which we have referred, survives Waya.

We are bound to say that Mr Krolick's submission, if valid, would have the startling result that a criminally-obtained property to the beneficial ownership of any part of which the fraudster was not entitled could be used as a means of generating for the fraudster a significant "legitimate" rental income which could not be the subject of confiscation proceedings: he would thus benefit from his crime. This would have the effect of emasculating the Act (cf. [68] of Waya), particularly if the property did not increase in value between its acquisition and sale such that there was no "benefit" in the terms described in Waya which could be made the subject of a confiscation order.

Waya did not involve consideration of the extent to which rental income from a criminally-obtained property constituted a "benefit" from the crime. However, in our judgment, there is nothing in the principle established in Waya that undermines what would seem, with respect, to be the common-sense of the conclusion in Pattison. Our conclusion is that rental income from such a property does constitute a "benefit" in the hands of recipient. We do not consider that there is anything in the case of Sumal & Sons (Properties) Limited v The Crown (London Borough of Newham) [2012] EWCA Crim 1840, to which Mr Krolick referred us, which deals with a specific statutory code under the Housing Act 2004, that undermines that conclusion.

Since this case is a "criminal lifestyle" case, there is no room for considering whether any rental income received from the criminally-obtained property ought to be apportioned by reference to the contribution to the acquisition cost of the property of "untainted money" compared with the fraudulently obtained loan. We would prefer to express no view on whether, in principle, such an apportionment is appropriate when such a situation exists (as it did in Waya) because we have heard no sustained argument on the issue.

The fourth ground of appeal is that, given what is said to have been "the Crown's abandonment" on any reliance on convictions relating to offences which occurred before 24 March 2003 for the purpose of relying on the criminal lifestyle provisions of the 2002 Act, it was wrong to include in assessing the benefit the proceeds of sale and rental incomes which were, it is argued, "parasitic on such convictions".

Mr Cranston-Morris says that the Crown merely abandoned its reliance on the convictions on Counts 2 and 4 (and the properties thus obtained) for the purposes of assessing the Appellant's benefit from those particular offences. As a result they were removed as sources of a specific benefit in the addendum section 16 statement that was advanced after having considered Mr Krolick's Skeleton Argument of 14 November 2011 (see paragraph 17 above). That addendum statement reads as follows at paragraph 3.1;

"It has been agreed between the Crown and [the Appellant] that benefit from the particular criminal conduct will not include the convictions that pre-date the Proceeds of Crime Act 2002."

Indeed the addendum section 16 statement indicates in the next paragraph that the amount of the loans used to acquire 7, Hanover Lodge and Flat 4, 25 Telford Road, Brixton, were removed from the benefit calculation and indeed a schedule requested by the court from the Crown to show its current position has confirmed this to be so.

However, he asserts that the Crown's position never changed in relation the payments of the rent from these properties, that position being that those payments remained to be considered as benefit from "general criminal conduct" as this was a "criminal lifestyle case" and section 76(2) of the Act permits the inclusion of benefit from all his criminal conduct, whether the conduct occurred or the benefit was received before or after the passing of the Act.

Whilst we have not seen a transcript of what Mr Cranston-Morris told the judge on 15 December 2011, this appears to be consistent with the addendum section 16 statement to which we have referred above and consistent with the judge's understanding of the position when he contradicted Mr Krolick's assertion to which we referred at paragraph 21 above.

In our judgment, the Crown was entitled to take the position referred to in paragraph 42 above and, accordingly, the rental income received from the properties subject to offences committed before 24 March 2003 was in principle properly regarded as part of the benefit the Appellant obtained from his general criminal conduct. We say "in principle" because the question of whether some apportionment to reflect the involvement of "untainted money" in the acquisition of the property might itself in principle need to be considered. However, as we have indicated, in our view this issue does not arise in the present case and we express no view on the principle (see paragraph 39 above).

Mr Krolick's next argument is foreshadowed in the point mentioned in paragraph 44 above. It is that having held that the entirety of the sums paid into the Appellant's bank accounts were derived from rental income, the judge erred by failing to apportion such rents between legitimate and illegitimate sources. What the judge said on this issue was as follows:

"As to the monies passing through the various accounts it is said that only a proportion of this should be seen as a benefit for the purposes of the proceedings as some of the rental income came from properties that were fraudulently obtained prior to 24^th March 2003. Again with respect such an argument seems misconceived. Where the rental income is obtained after 24^th March 2003 from properties where the original mortgage had been obtained by fraud the lifestyle provisions would have the effect of including such receipts. It is worthy of note that none of this rental income was ever declared for tax purposes. Further, [the Appellant] failed to identify as regards any of the monies which he said came from any particular property in the form of rent."

We have been told that the Crown did exclude from the benefit calculation unexplained credits paid into one of the Appellant's accounts before 24 March 2003. That may have been more generous than the provisions of section 76(2) demand (see paragraph 42 above), but it shows that at least part of the Appellant's concern in this regard has been met.

Nonetheless, Mr Cranston-Morris' argument is that the Appellant was running a self-financing rental enterprise sustained from fraudulently-obtained mortgage advances and that he had no records of the tenancies or proper accounting records, most of the payments received being in cash and unaccounted for. Any issue as to apportionment was totally reliant on the credibility of the Appellant and his ability to rebut the section 10 assumptions or to show that any such assumption was "wrong" or would cause a "serious risk of injustice". The judge's view of the Appellant's lack of credibility is plain.

In our judgment, the judge's approach was correct and that this ground cannot be sustained.

This concerns a property known as 3 Ashbourne Avenue, NW11. It was not a property the subject of one of the mortgage frauds and is registered in the name Abigail Spencer, someone who the Crown has not been able to trace. It was identified by the Appellant as a property in which he had an interest arising from the fact, he said, that he "took over the management of the property since 1993 and in consideration for which [he will] receive the proceeds of any sale or rental income." He said that there was about £2000 outstanding on a mortgage (in fact £1600) and that his estimate was that the property was worth about £300,000. Mr Krolick contends that the judge erred in law in taking into consideration the value of the property 3 Ashbourne Avenue, "notwithstanding that the Appellant had neither a legal or beneficial interest in the property, and could not dispose of the property on the open market". The Appellant had said in his section 17 statement that he had, as we have indicated, "taken over" this property from the original owner (although there were no documents relating to the transfer) and that he had been using the rents to pay the mortgage and that he had repaid the capital element to the extent of "about £90,000" and that he was thus entitled to a equitable interest in the property as a result. He suggested that his interest was acquired solely through the use of untainted funds. The judge addressed this issue in this way:

"Ashbourne Grove presents a different dilemma. This is a property in the name of the third party. In evidence at trial it was [the Appellant] who asserted beneficial ownership. This evidence came out when he was being asked in cross-examination as to why it appeared he was dealing with yet another property including collecting rental income which … was registered in the name of another. He said in evidence that just as with the other properties with which the court was concerned … this house had been purchased by a third party who had subsequently got into financial difficulty. He had stepped in and either bought out their interest or taken over their debts on the understanding that a third party held the property for [the Appellant] and he had an absolute right to the equity in the sale.

The defence accept that this was his evidence and that in effect the only financial basis on which he could have done this was as a result of the monies generated from the other properties he held and which had been obtained fraudulently.

It is now argued that there is no firm basis for advancing his interest in this property. I disagree. It was [the Appellant's] own evidence that brought this property within the calculations."

The judge included a figure of £298,000 as the value of the benefit he received from utilising what had to be taken to be tainted money (because of the Appellant's criminal lifestyle) and treated property as being one of his "realisable assets" with a value in the same figure, his position being "protected by his right to return to the court for a variation were [it] to be the case on any eventual sale" that the value was less.

The Crown’s case was that the equity in the property constituted benefit from general criminal conduct. On the evidence the Judge heard, he was obviously entitled to assume that the property was acquired as a result of the Appellant's criminal lifestyle and equally was available to him as an asset - which indeed was the Appellant's case on the evidence he gave. So far as the value of the "benefit" is concerned, this property does not appear to be covered directly by the Waya approach in the sense that it was not (or at least there is no evidence that it was) acquired with the assistance of a fraudulently-obtained mortgage and, accordingly, the way the value of the benefit is assessed in that situation is not directly applicable. We do not understand Mr Krolick's argument to suggest that assessing the value of the benefit at £298,000 was itself wrong; it is taking the property as something acquired through criminal conduct that was wrong. We do not accept that latter proposition for the reasons given by the judge and we can see no basis for suggesting that treating the value of the benefit at the figure we have mentioned is wrong. Obviously, if the Crown becomes possessed of information to suggest that it is wrong, or should be reviewed, the matter can be taken back to the Crown Court, as can any issues concerning the disposal of the property should that arise. Indeed Mr Cranston-Morris has indicated that, if the Appellant does not satisfy the requirements of the confiscation order voluntarily, the Crown will seek the appointment of an Enforcement Receiver pursuant to section 50 of the Proceeds of Crime Act 2002 and the powers available under section 51 would enable the receiver to pursue the realization of the property under the supervision of the court.

Strictly speaking, the figure that ought to be included as the value of the benefit and of the realisable asset is £298,400 (see paragraph 51 above), but in order to avoid increasing the sum for benefit ascribed by the judge, we will leave in place the figures taken by him.

In our view, the judge arrived at the correct conclusion on the evidence before him and there is no substance in this ground.

This ground relates to two properties, 81 Albert Square and 43 Eighth Avenue. Mr Krolick's argument is that the judge should have found the value of any benefit obtained as a result of, or in connection with, his offending in relation to those properties was nil. On the basis of the way the Crown presented the case to him, he attributed the sums of £178,000 and £199,500, being the amounts of the advances fraudulently obtained, as the benefits received.

In the light of Waya the Crown now accepts that no benefit should have been attributed to in respect of these two properties and that the revised table of benefit in the most recent section 16 statement (of 3 April 2013) omits any benefit from those properties and equally, in respect of 81 Albert Square, omits the sum of £70,000 previously said to be the value of the property as a realisable asset.

It follows that the confiscation order will require appropriate revision.

This concerns the property 7 Hanover Lodge which was purchased for £140,000 in 1998 with an Abbey National mortgage of £130,000 and sold in 2007 for £268,000 of which £171,000 was used to redeem the mortgage and to discharge the costs of sale, including estate agents’ fees, the net proceeds thus being £97,000. It was the loan obtained that gave rise to the conviction on Count 2 and the subsequent sale that gave rise to the Appellant's conviction on Count 11. The judge concluded as follows in relation to this property:

"As regards the monies raised from the sale of 7 Hanover Lodge the defence argue that this should be excluded as that property was purchased prior to March 2003 and therefore outside the ambit of the present regime. However the sale was after March 2003 and therefore it seems to me falls within the regime that applies in this case.

Further, they argue that only the net profit rather than sale price should be included. Again I am of the view that this is a misconceived argument as when it comes to assessing benefit as opposed to realisable assets it is the entire sum that should be included."

From this passage of his ruling it appeared, therefore, that he may have included, or intended to include, the sale price as the benefit figure. However, Mr Cranston-Morris has confirmed that the confiscation order included the sum of £97,000 as a benefit (and also that the mortgage advance was not included as a benefit.)

The position in relation to this property and the various sums in issue has been extremely confusing. As appears below (see paragraph 72(i)), it is clear now that the sum of £97,000 has been double-counted as a benefit and we have directed that, to the extent that it was counted as a benefit in the circumstances set out in paragraph 71(i) below, the confiscation order should be amended accordingly.

That does not, of course, prevent the sum being counted once if it is truly a benefit. It plainly is a benefit derived from the sale of 7, Hanover Lodge, and thus from the Appellant’s criminal conduct. The sum may properly be included as a benefit for this reason, but once only, of course.

This concerns a Barclays Bank account in the sole name of the Appellant's wife through which a little over £205,000 passed between September 2007 and September 2008. Count 10 charged them jointly with transferring criminally derived money through this account. They were convicted of this allegation.

The Crown included this as against the Appellant as a benefit derived from his criminal conduct and the judge implicitly accepted the proposition by including, as benefit, the sums paid into this account even though it was in his wife's sole name. He did not mention it expressly in his ruling and Mr Krolick seeks to criticise the conclusion.

It seems to us that the criticism is baseless. Mr Cranston-Morris says that account was acknowledged at the trial to have been used by the Appellant to pay in the proceeds of the sale of 7 Hanover Lodge. At trial the Appellant said that he put the proceeds of sale into his wife's account because his account had a restriction on withdrawal and he wanted full access to themoney which, of course, through his wife he did. Both made it clear in their evidence that all the money passing through this account was earned, owned and controlled by the Appellant and he accepted in evidence that the cash sums were payments from properties obtained by fraudulent mortgage applications. His wife needed permission from the Appellant to take money out of the account. Against that background it is clear that the Crown and the judge were right to include the relevant sum as a benefit.

There is a specific issue with this account to which we will refer later (see paragraph 71(i) below).

This ground was withdrawn.

This appears to relate to the transactions reflected in a Nationwide Account in the Appellant's name. It was said in the Crown's initial section 16 statement (and it was not altered subsequently) that there were unexplained credits totalling £13,064 between 1 January 2002 and 31 July 2007. These sums were included by the investigating officer in his assumptions of property transferred during the relevant period and the whole of that sum was included in the total benefit received.

Mr Krolick has argued throughout that the "relevant day" in this case for the purposes of section 10 of the Act was 22 October 2002 and that all, or substantially all, of the credits into this account were before that date. We do not understand Mr Cranston-Morris to dispute that 22 October 2002 was the "relevant day" in this case. He has merely argued that the current balance on the account (£60) has been correctly included as part of the "available amount". Mr Krolick does not disagree with that, but says that the substance of his argument relating to the timing of the credits has not been addressed.

Given the overall history, Mr Krolick's argument is not very attractive because it is highly likely that most if not all of the credits were of sums obtained unlawfully. However, it also seems clear that any made prior to 22 October 2002 should not be treated as a benefit under the "assumptions" permitted by section 10. Accordingly, we direct that such sums as were credited before that date should be excluded from the benefit figure and invite the Crown to re-cast the confiscation order appropriately. [Having seen the draft judgment “subject to editorial correction” Mr Cranston-Morris has said that this sum was not included as an assumed benefit. We regret to say that, as with several matters in this case, the issues have presented themselves to us in a very confusing manner. At all events, the position should now be clear: the sum is not to be included.]

In his oral representations to us the Appellant suggested two instances of double-counting in the assessment of the benefit he obtained:

So far as (i) is concerned, the microfiche of the account for December 2007 does indicate a credit for £97,000 on 3 December 2007 and following the hearing before us the Respondent has confirmed that that there has indeed been double-counting in respect of this sum in that it was also included in the sum of £205,000 odd. Accordingly, we give permission for the matter to be raised, allow the appeal in respect of it and direct that the confiscation order that this court will make in substitution for that made by the judge is adjusted accordingly.

So far as (ii) is concerned, as we have indicated that the periods covered by Count 8 itself and by the statutory assumption are different although the account in question was the same. Mr Cranston-Morris, in material made available to the court following the hearing, has demonstrated that the cash credits relied for the purposes of Count 8 were different from those relied upon for the purposes of the section 10 assumption. Accordingly, there has been no double-counting in respect of the sum of £46,000 odd. We decline to grant permission to appeal in respect of this matter.

We should add that the written submissions that have been made since the hearing before the court on 30 April have included the Appellant who submitted on 24 May his response to certain submissions made by the Crown. Much of that response was directed to his continued complaints about his conviction, the manner in which his conviction was obtained and the decision of this court to which we referred in paragraph 5 above. As will be apparent, those are not issues for us.

In the light of our conclusions and the concessions already made by the Crown, the confiscation order made by the judge will require some adjustment and the appeal will be allowed accordingly.

We invite the Crown to submit a draft revised confiscation order for our consideration within 7 days of the hand down of this final form of the judgment.