Morgan, R v

This appeal by Christopher Lynn Morgan against a confiscation order of HHJ Morris made on 20 April 2012 in the sum of £156,500 raises two issues of importance in the context of offences concerning the unlawful deposit of waste material at an unlicensed landfill site on the appellant’s farm just outside Swansea. The first issue relates to the extent to which proceedings under the Proceeds of Crime Act 2002 (“POCA”) can be challenged on the grounds that they are oppressive in the final order made. The second issue concerns the proper basis on which a judge is to calculate the “benefit” obtained by an offender who has permitted the unlawful deposit of waste on his land and in doing so has not paid any licencing costs or landfill taxes, but has also not obtained any payment for the deposits or other benefit. The third issue in the appeal is more technical. It is whether the judge was correct to conclude that the exercise undertaken on the appellant’s land constituted “disposal” of waste at an unlicensed landfill site or whether, on the facts of this case, it constituted, or was intended to constitute an exercise in “recovery” of the land concerned.

The regulatory regime in respect of the deposit and disposal of various forms of waste is based on the Environmental Protection Act 1990 (“the EPA”) and regulations made under it. These UK statutory provisions are based in various European directives, starting with the Waste Framework Directive 75/442/EEC of 1975, followed by the Waste Framework Directive 2006/12/EC. The European directives were transposed into UK regulations by the Waste Management Licensing Regulation 1994. There have been further regulations since then, in particular the Environmental Permitting (England and Wales) Regulations 2007 (“the Regulations”). For present purposes the relevant provision of the EPA is section 33, which is set out in Appendix 1 to this judgment.

Throughout this case it has been common ground that both the European legislation and the UK legislation based on EU directives draw a distinction between two types of operation on land where waste material is used. One is a waste “disposal” operation, including “deposit into or on to land”. The other is a ‘recovery” operation which includes “land treatment resulting in benefit to agriculture”. There is no need to go into the detail of either the European or the UK legislation. The decision of the European Court of Justice in Abfall Services AG (ASA) v Bundmeister fur Umwelt (2002) C-6/00 establishes that “disposal” and “recovery” are mutually exclusive: see [62]-[63]. The court said, at [69] of the same judgment that:

“The essential characteristic of a waste recovery operation is that its principal objective is that the waste serves a useful purpose in replacing other materials which would have had to be used for that purposes, thereby conserving natural resources”.

It is also common ground that waste material is to be divided into two types: “active” and “inert”. Again, the details of what constitutes each type do not matter because there was substantial agreement by experts before and at the confiscation hearing on the extent to which “active” or “inert” waste was involved in this case.

Land where waste is kept or disposed of is known as a “landfill” site. As a result of European directives, the Finance Act 1996 introduced a “landfill tax”. The relevant sections are 39, 40 and 41, which establish that a disposal of material as waste that is made by way of a landfill will be subject to landfill tax and the “landfill site operator” is liable to pay such tax. Section 66 of the Finance Act 1996 provides that land is a landfill site if at a given time there is in force in relation to the land a site licence which is called a “Waste Management Licence” for which a fee is payable. Sections 39-41 and 64, 65 and 66 of the Finance Act 1996 are also set out in Appendix 1.

The relevant provisions of POCA are sections 6 to 10, 16, 17, 75, 76 and 84. They are set out in Appendix 2. In the course of argument there was reference to Article 1 of Protocol 1 to the European Convention on Human Rights (“A1P1” of the “ECHR”). This is also reproduced at Appendix 2.

The appellant lived on Bryn-yr-Arad Farm, Grovesend, Swansea, from which he operated a scrap vehicle recovery business called Coalbrook Motors. There is a field on the farm called The Waun, which was pasture in 2003. The appellant had the necessary licenses to bring waste on to parts of his land but not to The Waun.

The appellant’s scrap vehicle business was confined to a yard and a nearby area (not The Waun) and the appellant had all the necessary authorisations to carry out works associated with keeping and treating scrap vehicles, which, in the jargon, are known as “end of life vehicles”.

At some stage during the enquiries and exemption registration process in respect of the appellant’s scrap yard, the appellant asked an Environment Agency Officer if he could register an exemption to import waste onto a field for reclamation purposes. His evidence was that he was told that he could not do so. The principal allegation against the appellant was that he thereafter engaged in a commercial operation of unlicensed tipping of some 8,945m³ “active” (as opposed to “inert”) waste material on The Waun from September 2006 to April 2008.

In interview, the appellant said that The Waun was a cattle-feeding area. He accepted that he had no planning permission for any works there. He denied that the waste material brought in for deposit on The Waun was “active”; he said that it was all “clean”. He also said that he did not charge people to tip there.

On 25 January 2010 in the Crown Court at Cardiff the appellant pleaded guilty to two offences. First, that of depositing controlled waste between 1 September 2006 and 5 April 2008 without a licence contrary to section 33(1)(a) and (6) of the Environmental Protection Act (count 1); secondly, that of knowingly permitting the operation of a regulated facility between 6 April 2008 and 13 November 2008, contrary to Regulation 38(1)(a) of the Environmental Permitting (England and Wales) Regulations 2007 (count 3). On 7 June 2010 at the same court, the appellant (having previously entered a not guilty plea) changed his plea to guilty to a third offence (count 10); that of knowingly causing controlled waste to be submitted to a listed operation without an environmental permit, viz the storage of “waste vehicles” contrary to section 33(1)(b) of the Environmental Protection Act 1990. All three offences related to the deposit of waste material at The Waun.

There was a basis of plea, which was entered in respect of all three counts and which was accepted (for the most part) by both the prosecution and the court. It was as follows: (i) waste was deposited at Bryn-yr-Arad Farm; (ii) there was no licence or permit permitting such deposits; (iii) to the appellant’s knowledge, the waste was inert construction and demolition waste; (iv) the deposits were to improve the land for agricultural purposes. A further basis, ie. that no monies were received by the appellant for the deposits was not accepted, but was the subject of a ruling in favour of the appellant during the confiscation proceedings.

After the appellant had tendered his guilty pleas, the prosecution requested the court to proceed to deal with confiscation and it did so pursuant to section 6(3)(a) and (b) of POCA.

On 23 November 2012 the prosecution served a statement under section 16 of POCA. This explained that the legal tipping of waste and the running of legal sites for such tipping in Wales was governed by the Environmental Agency of Wales (“the EAW”). The EAW issued licences to waste carriers and owners of land who had planning and exemption certificates to allow such activity. Waste had to be sorted out before it was dumped to ensure that there was no dumping of hazardous waste together with non-hazardous waste. A further licence was required to sort out waste. A person who wished to run a landfill site (in Wales) required a permit from the Environmental Agency of Wales. The land had to be prepared for landfill. The owner or manager of the site had to pay landfill tax due on the site and had to adhere to the relevant regulations concerning the site. The section 16 statement asserted that, in addition to the various costs of licences and landfill tax that the owner or manager of a legitimate landfill site would have to pay, he would have further costs of running the site, in order to comply with the regulations.

The section 16 statement asserted that the appellant had a “criminal life style” within the terms of section 6(4) of POCA, because the three offences had been committed over a period of more than 6 months and the “benefit” obtained by the appellant from those offences was greater than £5000, thus bringing the offences within the terms of section 75(2)(c) and 75(4) of POCA. The section 16 statement invited the court to utilise the assumptions set out in section 10 of POCA in assessing the “benefit” obtained by the appellant in relation to his “criminal life style”.

The section 16 statement calculated the benefit obtained by the appellant as follows: (i) active waste of 8880 tonnes had been deposited, which would have attracted a total landfill tax of £186,480. It was asserted that this tax had been evaded by the appellant. (ii) Inert waste of 6790 tonnes had also been deposited, which would have attracted an additional landfill tax of £13,580, which, it was alleged, had also been evaded by the appellant. (iii) The appellant had avoided the cost of a permit application relating to the running of a legal landfill site at The Waun. The cost of such an application together with yearly additional costs would have totalled £43,408. (iv) The appellant had also avoided the engineering costs of running a legal landfill site, which had put him at an unfair advantage viz-a-viz operators of legal sites. The statement asserted that this was a “benefit” obtained by the appellant, calculated at £26.04 per square metre of the illegal site and so totalling £234,360. Therefore, it was alleged that the total benefit derived from the offences was £477,828.

In his section 17 defence statement the appellant did not accept that he had obtained the “benefits” as alleged by the Crown. He said that he was not aware that any “active” waste had been deposited and he did not accept that he was running an illegal landfill site. He relied upon a report prepared by Dr Malcolm Blandford to support his case that none of the waste deposited was “active”.

On 25 February 2011 the appellant made an application to the Crown Court at Newport to stay the confiscation proceedings on the ground that they were an abuse of process. Mr David Elias did not appear for the appellant on that occasion. Counsel for the appellant argued that the evidential effect of the pleas of guilty to the three offences, made on the basis of plea accepted by the prosecution and the Court, was that this land did not and could not have constituted a “landfill” site within the meaning of the legislation, so that the appellant could not have been liable for landfill tax, the cost of licences or any other costs associated with running a lawful landfill site.

Judge Morris rejected this application on two bases. First, he accepted the prosecution argument that the meaning of the word “landfill” had to follow that given to it by the legislation, rather than that given to it in the Oxford Reference Dictionary. Secondly, Judge Morris accepted the distinction drawn by the prosecution between an “intention” or “purpose” of the person engaging in depositing waste at a site and the “result” of that action. It was, in his judgment, the “result” that mattered for the purposes of the Regulations of 1994. It was therefore necessary to decide whether, for the purposes of those Regulations, the result of the tipping was a “disposal” or constituted a “recovery operation” of the land. As the judge succinctly put it (transcript page 6A): “if the admitted tipping amounts to a “disposal” it attracts tax. If it was a “recovery operation” then it would not”.

On 8 Novenber 2011, after the service of further experts reports on both sides on the nature of the operations undertaken at The Waun, there was a further application before Judge Morris to stay the confiscation proceedings on the ground that they were an abuse of process. This time the argument advanced by Mr Elias on behalf of the appellant was that, given the terms of the basis of plea, no pecuniary advantage was obtained by the appellant as a result of his failure to obtain a licence or permit to allow inert waste at The Waun, within the meaning of section 76(5) of POCA. Mr Elias argued that this was because the intended purpose of the appellant’s offences was essentially lawful and not inherently unlawful: (see transcript of ruling page 3C-G).

The judge rejected this argument. He held that the intended purpose of the appellant was irrelevant in deciding whether he had obtained a “pecuniary advantage as a result of or in connection with [his] conduct” within section 76(5). This “conduct” was “criminal conduct” within section 76(1) because the appellant had admitted the three offences, albeit subject to the basis of plea. Moreover, the judge rejected the suggested distinction between these offences and those concerning the unlawful importation of goods such as tobacco, where the very essence of the offence was the intention and fact of avoiding excise duty and tax.

The full confiscation hearing took place before Judge Morris on 19 – 23 March 2012. The two experts, Mr Paul Hesketh for the Crown and Dr Malcolm Blandford for the appellant, had prepared and served extensive reports on issues concerning the nature of the waste deposited for the purposes of the definitions in the UK Regulations and EU Directives. They had also met and produced “Points of Agreement and Disagreement”. As the judge records in his reserved ruling, handed down on 12 April 2012, the experts agreed: (1) that the waste deposited at The Waun was predominantly “inert” although it contained some “active” elements; (2) that there is no specific percentage value as to the extent of the inclusion of active materials within loads of waste, beyond which a particular load will be classified as “hazardous”, although in the past the EAW had used a rule of thumb of a maximum of 1% active waste in a load (the so-called WRAP protocol); (3) that a subjective visual observation was acceptable as a first test; (4) that, for practical purposes a largely “inert” load which contained some “active” elements could still be acceptable as an “inert” load, but the critical consideration was the proportion of “active” material; (5) that a method of calculating that proportion of “active” material in this case using was a trial pit exercise.

The experts disagreed on the results of the practical exercise and the relevant method of calculating the proportion of “active” and “inert” material in the waste deposited. But they agreed a range and, on this basis there was, as the judge put it (page 10D of his ruling) “apparent agreement of a proportion in the region of “active waste” of some 2,500 m³ in a total tonnage (sic) deposited of about 8,900 m³ .”

The experts also reviewed the amount of “benefit” derived by the appellant from operating an unlicensed scheme. The experts considered five possible “Scenarios” or factual circumstances which the judge might find proved, eg. that the operation involved “disposal” but using “inert” waste, but without any licence being obtained and without the payment of any landfill tax or other fees. The table set out a range of the cost of various items in the case of each of the five scenarios, such as the cost of a waste management licence and the landfill tax payable.

Lastly, the two experts agreed, for the purposes of deciding whether the operation undertaken by the appellant was a “disposal” operation or a “recovery” operation, that the court should be guided by the five-step test set out in the protocol or guidance to the European Directives and the UK regulations based on them, which guidance was set out in the Environmental Agency’s own regulatory guidance series, called “Defining Waste Recovery. Permanent Deposit of Waste on Land, issue number EPR 13”. However, the experts did not agree on the outcome of the application of the five-step test. Mr Hesketh maintained that the deposits of waste did not amount to a “recovery operation”; Dr Blandford argued that this was a “low cost operation for the improvement of drainage, which would improve the land and was proportionate in volume, content, purpose and cost”: ruling page 11B.

The judge heard evidence on behalf of the Crown from Ms Hannah Louglin, who had worked for the EAW in 2006, as well as from Mr Hesketh. At the outset of his evidence he stated that the experts further agreed that the waste deposited was not hazardous and that it was proper to regard it as “inert”. In evidence Mr Hesketh maintained his view that if the five-step test was applied then these deposits of waste did not amount to a ‘recovery” operation and so must be regarded as “disposal”. He accepted that he had not visited the site himself. Dr Blandford gave evidence on behalf of the appellant, who did not give evidence himself. Dr Blandford conceded that he was not an expert on issues of agricultural improvement generally or land drainage improvement in particular, so that his view that this was a “low budget land improvement scheme” was given as a layman.

By the time Judge Morris came to make his ruling, the appellant accepted that the offences attracted the “criminal lifestyle” provisions of POCA and so, at least prima facie, the assumptions set out in section 10 of POCA were applicable. Judge Morris made the following findings at pages 16-20 of his ruling: (1) the waste deposited at The Waun was “inert” with no more than minimal (or at the most, acceptable) amounts of “active” waste in it. There was no actual contamination and no risk of leachate contamination. (2) This was not a “recovery” operation. There was not even a marginal improvement of the drainage of The Waun as a result of the operation and there would not be any improved agricultural use of the land as a result of the deposits. This was so whether the “five-step” test was used or not. The judge accepted the evidence and analysis of Mr Hesketh over that of Dr Blandford. For an operation to be a ‘recovery” there had to be a “clear” benefit to the land concerned, not just a minor benefit. The tipping that actually took place with the materials used, even if intended to improve the land or the drainage, could not achieve these ends. (3) The fact that the appellant received no payment for the tipping of the material was a relevant factor and “a useful indication in cases as to whether the landowner was obtaining a benefit” and relevant to the issue of whether this was a “deposit” or a “recovery” case. But the fact that the appellant received no payment was, in this case, “overborne” by the other findings. (4) There were no applicable exemptions in this case and, insofar as the evidence of Ms Loughlin might have suggested the contrary, that was rejected.

The judge therefore determined that, on these facts, Scenario 3 of the experts’ five possible Scenarios would apply. This was that the operation was a “disposal” involving “inert” waste, in which no waste management licence had been obtained and no landfill tax paid. The experts agreed that the relevant range of sums saved the appellant in that situation was between £156,500 and £207,000. The judge determined that the lowest figure was the “benefit” obtained by the appellant’s criminal conduct, so that the “recoverable amount” for the purposes of section 6(5)(a) of POCA was £156,500, that being the benefit the appellant had obtained from the criminal conduct concerned: see section 7(1) of POCA. As the “available amount” ie. the value of the appellant’s property available to meet a confiscation order, was in excess of the “recoverable amount”, the judge made the confiscation order in the sum of £156,500.

The present appeal is made with the leave of the single judge. Both counsel supplied us with very helpful written submissions and agreed very well organised bundles for the appeal. We heard argument on 19 April 2013 and reserved our judgment.

The three grounds of appeal are: (1) the judge was wrong to refuse the second application (in November 2011) to stay the confiscation proceedings as an abuse of process. (2) In his ruling of 20 April 2012 the judge erred in finding that the appellant had benefitted from his criminal conduct within the terms of section 74(4) and (5) of POCA. (3) The Judge erred in finding that the criminal conduct (ie the offences to which the appellant had pleaded guilty) constituted a “disposal” operation rather than a “recovery” operation.

On the first argument, Mr David Elias for the appellant relied on the basis of plea, the findings that the appellant received no payment for the deposit of the waste and also the fact that the intention of the appellant was to improve the land at The Waun (even if that was not achieved) and also that, contrary to the original allegations of the Crown, the material deposited was, effectively, all “inert”. Insofar as the confiscation proceedings have been conducted on the basis that this appellant has a “criminal lifestyle” for the purposes of section 6 of POCA, so that the assumptions set out in section 10 would normally have to apply, there would, in the circumstances of this case be a “serious risk of injustice”, if those assumptions were to be employed. In that regard, Mr Elias relied on the decisions of this court in R v Shabir [2009] 1 Cr App R (S) 84 and R v Nelson [2010] QB 678.

On the second ground Mr Elias submitted that the circumstances of this case could be distinguished from the standard case where a defendant had smuggled in cigarettes or other goods with the intention of evading excise duty or tax. In such cases the offences themselves necessarily involved the evasion of duty or tax and so the defendant thereby obtained a benefit in attempting to do so. In this case the appellant did not intend to operate a landfill site and took no money for the deposit of the waste. Therefore there was no question of being liable to tax or licence fees in the way that an importer of cigarettes is always liable to pay excise duty and VAT on the goods imported. Overall it could not be demonstrated that he had obtained any pecuniary advantage at all from his activities. The only “benefit” was the improvement in the land itself, which was very small.

On the third ground Mr Elias submitted that the judge’s findings on the nature of the exercise (ie. whether it “disposal” or “recovery”) were fundamentally flawed. He relied on the following: (a) the experts agreed that the material used was capable of increasing drainage and so improving the land; (b) the experts agreed that the depositing of material at The Waun had not resulted in any contamination of the surrounding environment; (c) the process had been interrupted by the intervention of the Environmental Agency, so that the eventual benefit remained unknown; thus it was unfair and artificial to distinguish between the intended result and the actual, interrupted result.

Lastly, Mr Elias relied on the recent decision of the Supreme Court in R v Waya [2013] 1 AC 294 for the proposition that a confiscation order made under POCA must not be so disproportionate as to constitute a violation of the defendant’s rights under Article 1 of the First Protocol to the European Convention on Human Rights. He submitted that, on the facts of this case, the confiscation order of £156,500 was so disproportionate as to constitute such a violation.

For the Crown, Mr Christian Jowett submitted, on ground one, that, in the light of the Supreme Court’s decision in Waya, there could be no “abuse of process” in this case. The only possible argument would be that the confiscation order was so disproportionate as to amount to a breach of the appellant’s A1P1 rights. But that submission, (not made below) was hopeless on the facts.

On ground two, the starting point was that the appellant had accepted before the judge that this was a “criminal lifestyle” case, so that the assumptions set out in section 10 of POCA would be applicable unless found to be incorrect or their use would result in a serious risk of injustice. The judge found, as fact, that the operation carried out by the appellant constituted a “disposal” rather than a “recovery” operation. Such an operation would attract landfill tax, licence fees and engineering costs to comply with the regulations. The appellant had evaded these taxes, fees and costs by engaging in an unlawful operation. The evaded taxes and expenses were statutorily assumed to constitute “benefit” from the appellant’s general criminal conduct, he had failed to rebut that assumption and, further, there was no risk of a serious injustice if that assumption were made.

As for ground 3, Mr Jowett submitted that the judge did not err in concluding that the operations at The Waun constituted “disposal” ie. landfill, as opposed to “recovery” and there is no basis on which to attack the factual finding. Moreover, as the judge found that the waste was “inert”, the amount of benefit was confined to the pecuniary advantages obtained from depositing only “inert” waste.

In our view it is these two grounds that need to be considered together rather than grounds two and three. The essence of Mr Elias’ argument on ground one is that the confiscation order in the sum of £156,500 was oppressive and, as such, constituted an abuse of the court’s process. But, as the Supreme Court has now made clear in R v Waya, (Footnote: ¹) particularly at [15] to [18], although previous cases such as Morgan [2008] 4 All ER 890 and Shabir [2009] 2 Cr App R (S) 497 had invoked the court’s jurisdiction to prevent an abuse of process as the means of dealing with otherwise oppressive confiscation orders, that is not now the preferred analysis. The “better analysis” is that where a confiscation order would be wholly disproportionate so as to amount to a breach of the defendant’s rights under A1PI, then a confiscation order will not be made under section 6(5)(b) of POCA. This is because paragraph (b) of section 6(5) must be read subject to a qualification. The effect of this is that if a court decides under section 6(4)(b) or (c) that the defendant has benefited from his criminal conduct then, having decided the “recoverable amount”, it will make a confiscation order requiring him to pay that amount “except insofar as such an order would be disproportionate and thus a breach of Article 1, Protocol 1”.

In Waya, the Supreme Court also advanced some further general propositions in the light of their conclusion that section 6(5)(b) must be read so as to comply with A1P1. Two are particularly relevant to the present case. First, a confiscation order must bear a proportionate relationship to the purpose of POCA; and the purpose or “essence” of POCA was and is “to remove from criminals the proceeds of their crime”: see [20]-[21]. Secondly, in a criminal lifestyle case, the safeguards to the use of the statutory assumptions built into section 10(6)(a) and (b) should, except in very unusual circumstances, avoid the danger of a disproportionate confiscation order being made, because the assumptions will only be applied if correct and if they can be made without risk of serious injustice: see [25].

It seems to us, therefore, that in order to test whether the confiscation order in this case is, or is not, disproportionate in terms of A1P1 , it is necessary to examine whether the judge’s conclusion on the ‘benefit” obtained by the appellant produced a “disproportionate” result in terms of the order that was made under section 6(5)(b) of POCA. That in turn requires consideration of two matters in particular in this case. First, the use of the statutory assumptions under section 10, because this is, as the appellant conceded below, a criminal lifestyle case. Secondly, the basis of the judge’s conclusion on the “benefit” obtained from the appellant’s criminal conduct.

Dealing with the first matter, we note that before the judge the appellant did not demonstrate that any of the four statutory assumptions in section 10 were “incorrect”. Nor, so far as the four statutory assumptions were concerned, did he show that the use of them would produce a serious risk of injustice. In truth the kernel of the appellant’s case, both before the judge and before us, is that the judge’s analysis and conclusion on the “benefit” obtained from his general criminal conduct was wrong.

Moving on to the second matter, viz. the basis of the judge’s conclusion on benefit, we think that there are two aspects to consider; one is legal and one is factual. On the first aspect Mr Elias made two broad attacks. He argued, first of all, that there had been no pecuniary advantage to the appellant from “evading” taxes or fees in the way that a smuggler of cigarettes evades excise duty and VAT and thereby obtains a pecuniary advantage within the terms of section 76(5) of POCA. Secondly, there was “no benefit” in this case because the appellant did not receive any payment for the deposit of the waste by others. Therefore, in law, there could be no “benefit” obtained.

We do not accept these arguments. On the assumption that the waste deposits constituted “disposals” as opposed to a “recovery” operation (which we consider in relation to ground three), the whole activity of the appellant was unlawful because the whole operation was conducted without the necessary licences and permits required under the EPA and regulations for the deposit of waste on a landfill site. The fact that the appellant intended the exercise to be a “recovery” operation, rather than a “deposit” one, cannot turn what was undoubtedly an unlawful operation into a lawful one. By engaging in this unlawful activity the appellant has, in the words of Lord Bingham of Cornhill in R v May [2008] 1 AC 1028 at [48], evaded a liability to which he was personally subject, viz. the payment of landfill taxes and licence fees. Such evasion, as Lord Bingham also pointed out, will ordinarily constitute obtaining a pecuniary advantage. In our judgment that analysis applies to this case just as much as it applies to the smuggler of cigarettes who thereby evades excise duty and VAT on the imported goods.

In our view, on the assumption that the operation was a “disposal” rather than a “recovery”, it is also clear that the appellant would obtain a pecuniary advantage by not having to pay for the surveys and necessary engineering works that would have accompanied a lawful “disposal” operation. The pecuniary advantage would consist of the fact that this appellant did not have to pay out those sums whereas a lawful operator would have to do so.

In R v Allingham, R v McKenna [2012] NICA 29, the Court of Appeal in Northern Ireland came to a similar conclusion on broadly similar facts, although in those cases the defendants did accept money for the deposit of the waste material.

This means we must consider the factual position and the judge’s findings on “benefit”. As already noted, prior to the confiscation hearing before the judge the experts, Mr Hesketh and Dr Blandford, drew up an agreed table of the costs involved in various different circumstances, one of which (called “Scenario 3”) was where the appellant conducted a lawful landfill “disposal” which was properly licensed. The experts agreed that the total sum this would cost (for the necessary licence, planning permission, site surveys etc, design fees, plant and equipment, staff, landfill tax and other items) would be between £156,500 and £207,000.

There is no doubt that the appellant did not pay any of the fees, taxes or costs identified and agreed by the experts. In our judgment the judge was correct to conclude that the appellant therefore evaded liabilities for which, if he had acted lawfully, he would have been personally responsible. Thus, basing ourselves on Lord Bingham’s statement in May, the appellant thereby obtained “a pecuniary advantage”. By section 76(5) of POCA if a person obtains a pecuniary advantage “as a result of or in connection with” conduct, he is to be taken to obtain “as a result of or in connection with” the conduct a sum of money equal to the value of the pecuniary advantage. By section 84(1)(a) of POCA, “property” is defined as including money. By section 76 (4) of POCA a person “benefits” from conduct if he obtains “…property as a result of or in connection with the conduct”. As this is a criminal lifestyle case, by virtue of section 10(3) of POCA the court has to make the assumption that “any property held by the defendant at any time after the relevant day was obtained by him (a) as a result of his criminal conduct…”. At the confiscation hearing that presumption was not rebutted by the appellant as being “incorrect” within section 10(6)(a).

Mr Elias submitted that the use of the assumption in section 10(3) would produce a serious risk of injustice so that it should not be made, in accordance with section 10(6)(b) of POCA. In this regard he pressed on us the case of R v Shabir [2009] 1 Cr App R (S) 84, where this court concluded that, although the appellant pharmacist had claimed a total of £179,731 from the relevant body for prescriptions dispensed, that was not the “benefit” obtained by him, because the total amount obtained improperly was only £464. Accordingly, this court set aside the confiscation order for a total of £212,464 (Footnote: ²) as being oppressive and an abuse of process and substituted one for £464. The facts of that case were very different from the present one. In Shabir it was clear that the use of the assumptions in section 10 resulted in a serious risk of injustice because the actual benefit from the pharmacist’s criminal lifestyle was very small indeed. That is not so in this case as the agreed table of the experts demonstrates.

As for Mr Elias’ reliance on the decision of this court in R v Nelson, R v Pathak and R v Paulet [2010] QB 678 this case now has to be read subject to the Supreme Court’s decision in Waya. Nelson does not appear to have been cited in argument to the Supreme Court in Waya but, in our view, the analysis and approach in Nelson remains consistent with that in Waya. It is noteworthy that in the case of Nelson itself, the Court allowed an appeal from the decision of the judge to stay the confiscation proceedings as an abuse of process. The judge had held that on the ground that as the appellant had not received any payment in relation to the stolen JCB digger and it had been restored to its owner undamaged, to impose a confiscation order would amount to a further sentence in the form of a fine. This court ruled that the confiscation proceedings were properly brought, that the appellant had benefited from his crime and that a confiscation order in the amount of the value of the digger was appropriate: see [46] – [48].

Accordingly, applying the assumption in section 10(3) of POCA, the “property” held by the appellant, which represents the money value of the pecuniary advantage he has obtained by operating what we assume for present purposes (subject to ground three) was an unlawful “disposal” operation and not a “recovery”, is the result of his general criminal conduct. It must follow that this “property” constitutes the “benefit” that the appellant has obtained as a result of his general criminal conduct.

We are now in a position to summarise our conclusions on grounds one and two. (1) The concept of “abuse of process” is not appropriate to the argument being advanced, which is that the judge’s finding of the benefit obtained by the appellant from his criminal conduct and so the confiscation order made was “oppressive”. Rather, the key question is whether the confiscation order made was “disproportionate” so as to amount to a breach of the appellant’s rights under A1P1. (2) In order to see whether the confiscation order made was “disproportionate” it is necessary to examine the basis on which the judge arrived at the figure of a “benefit” of £156,500. (3) On the assumption that the judge was correct to conclude that the appellant had engaged in a “disposal” operation, he was also correct to conclude that he had, by engaging in unlawful unlicensed activity, thereby obtained a pecuniary advantage in the sum of £156,500. This is because the appellant had evaded landfill tax and licence fees and had avoided paying for other costs that he would have had to pay if the operation had been conducted lawfully. (4) On the basis of the definition of “property” in section 84(1)(a) of POCA and the application of the assumption in section 10(3), this pecuniary advantage constitutes “property” obtained by the appellant as a result of his general criminal conduct and thus the “benefit” obtained from such conduct for the purposes of section 6(4). (5) There is no basis on which it can be alleged that the use of the assumption in section 10(3) is incorrect. Nor, given the experts’ agreement (set out in the agreed table) on the figures of sums not paid by the appellant as a result of carrying on an unlawful “disposal” exercise, can it be argued that the use of the presumption in section 10(3) would produce a serious risk of injustice within section 10(6)(b). (6) Given the proper use of the assumptions in this case and given the findings of fact of the judge, based in particular on the experts’ agreed table, there can be no “very unusual circumstances” in the present case “to court the danger” of the confiscation order being disproportionate: see Waya at [25].

Subject to ground three we therefore reject grounds one and two.

Essentially, by this ground of appeal the appellant is attempting to challenge the judge’s second abuse of process ruling (in November 2011) and his findings of fact made in his ruling in April 2012 as to the actual nature of the operation carried out at The Waun. Mr Elias submitted, first, that it was necessary to see what the appellant intended by the operation at The Waun, rather than the outcome of it; and secondly, if that is wrong, that the judge should have concluded that the actual operation was a “recovery”.

In our judgment the first of these arguments must fail as a matter of law. The appellant engaged in criminal activity to which he pleaded guilty. This was a “criminal lifestyle” case, so that in the confiscation proceedings the court had to decide whether the defendant “has benefitted” from his general criminal conduct: section 6(4)(b) of POCA. The question of whether there has been a “benefit” cannot depend on what the defendant intended would be the outcome of his criminal conduct. It must depend on what, in fact, actually happened. Thus when section 76(4) of POCA states that a person “benefits from conduct if he obtains property as a result of or in connection with the conduct” it is concerned with actual, not intended, conduct.

Furthermore, the connection between the conduct and whether a person “benefits” from it is put in broad terms. Thus, by section 76(4) if a person obtains “property” (which, as already explained, includes money and so, by virtue of section 76(5) is also a pecuniary advantage) “as a result of or in connection with” conduct, then that person obtains a benefit by conduct. The link between the conduct and obtaining the “property” is a loose one. In terms of the facts of the present case, it is enough that the appellant obtained property (ie the pecuniary advantages discussed above) “in connection with” the conduct of actually carrying out a “disposal” operation.

In our view the second argument, although advanced with skill and elegance by Mr Elias, is hopeless. The judge dealt with the question of whether the operation conducted by the appellant was a “disposal” on two alternative bases; first using the five-stage test set out in EPR 13 and then without that test. The appellant and his advisors had been prepared to accept the five-stage test until well into the hearing before the judge. There is, in our view, no basis on which it can be argued that the judge’s conclusion of fact was unreasonable, or based on a misunderstanding of the evidence or perverse.

Accordingly, we reject ground three.

For all the above reasons, we reject each of the three grounds of appeal. The appeal overall is therefore dismissed.

Prohibition on unauthorised or harmful deposit, treatment or disposal etc. of waste.

Subject to and, in relation to Scotland, to section 54 below, a person shall not—

A person who contravenes subsection (1) above . . . commits an offence.

Subject to subsection (9) below a person who commits an offence under this section is liable—

A tax, to be known as landfill tax, shall be charged in accordance with this Part.

The tax shall be under the care and management of the Commissioners of Customs and Excise.

Tax shall be charged on a taxable disposal.

A disposal is a taxable disposal if—

For this purpose a disposal is made at a landfill site if the land on or under which it is made constitutes or falls within land which is a landfill site at the time of the disposal.

The person liable to pay tax charged on a taxable disposal is the landfill site operator.

The reference here to the landfill site operator is to the person who is at the time of the disposal the operator of the landfill site which constitutes or contains the land on or under which the disposal is made.

A disposal of material is a disposal of it as waste if the person making the disposal does so with the intention of discarding the material.

The fact that the person making the disposal or any other person could benefit from or make use of the material is irrelevant.

Where a person makes a disposal on behalf of another person, for the purposes of subsections (1) and (2) above the person on whose behalf the disposal is made shall be treated as making the disposal.

The reference in subsection (3) above to a disposal on behalf of another person includes references to a disposal—

There is a disposal of material by way of landfill if—

Subsection (1) above applies whether or not the material is placed in a container before it is deposited.

Subsection (1)(b) above applies whether the material—

If material is deposited on the surface of land (or on a structure set into the surface) with a view to it being covered with earth the disposal must be treated as made when the material is deposited and not when it is covered.

An order may provide that the meaning of the disposal of material by way of landfill (as it applies for the time being) shall be varied.

An order under subsection (5) above may make provision in such way as the Treasury think fit, whether by amending any of subsections (1) to (4) above or otherwise.

In this section “land” includes land covered by water where the land is above the low water mark of ordinary spring tides.

In this section “earth” includes similar matter (such as sand or rocks).

a licence which is a site licence for the purposes of Part II of the Environmental Protection Act 1990 (waste on land) is in force in relation to the land and authorises disposals in or on the land,

a resolution under section 54 of that Act (land occupied by waste disposal authorities in Scotland) is in force in relation to the land and authorises deposits or disposals in or on the land,

a disposal licence issued under Part II of the M5Pollution Control and Local Government (Northern Ireland) Order 1978 (waste on land) is in force in relation to the land and authorises deposits on the land,

a resolution passed under Article 13 of that Order (land occupied by district councils in Northern Ireland) is in force in relation to the land and relates to deposits on the land, or

a licence under any provision for the time being having effect in Northern Ireland and corresponding to section 35 of the Environmental Protection Act 1990 (waste management licences) is in force in relation to the land and authorises disposals in or on the land.

The Crown Court must proceed under this section if the following two conditions are satisfied.

The first condition is that a defendant falls within any of the following paragraphs—

The second condition is that—

The court must proceed as follows—

If the court decides under subsection (4)(b) or (c) that the defendant has benefited from the conduct referred to it must—

But the court must treat the duty in subsection (5) as a power if it believes that any victim of the conduct has at any time started or intends to start proceedings against the defendant in respect of loss, injury or damage sustained in connection with the conduct.

The court must decide any question arising under subsection (4) or (5) on a balance of probabilities.

The first condition is not satisfied if the defendant absconds (but section 27 may apply).

References in this Part to the offence (or offences) concerned are to the offence (or offences) mentioned in subsection (2).

The recoverable amount for the purposes of section 6 is an amount equal to the defendant’s benefit from the conduct concerned.

But if the defendant shows that the available amount is less than that benefit the recoverable amount is—

But if section 6(6) applies the recoverable amount is such amount as—

In calculating the defendant’s benefit from the conduct concerned for the purposes of subsection (1), any property in respect of which—

If the court decides the available amount, it must include in the confiscation order a statement of its findings as to the matters relevant for deciding that amount.

If the court is proceeding under section 6 this section applies for the purpose of—

The court must—

Subsection (4) applies if—

His benefit found at the time the last confiscation order mentioned in subsection (3)(c) was made against him must be taken for the purposes of this section to be his benefit from his general criminal conduct at that time.

If the conduct concerned is general criminal conduct the court must deduct the aggregate of the following amounts—

But subsection (5) does not apply to an amount which has been taken into account for the purposes of a deduction under that subsection on any earlier occasion.

These are the provisions—

The reference to general criminal conduct in the case of a confiscation order made under any of the provisions listed in subsection (7) is a reference to conduct in respect of which a court is required or entitled to make one or more assumptions for the purpose of assessing a person’s benefit from the conduct.

For the purposes of deciding the recoverable amount, the available amount is the aggregate of—

An obligation has priority if it is an obligation of the defendant—

“Preferential debts” has the meaning given by section 386 of the Insolvency Act 1986 (c. 45).

If the court decides under section 6 that the defendant has a criminal lifestyle it must make the following four assumptions for the purpose of—

The first assumption is that any property transferred to the defendant at any time after the relevant day was obtained by him—

The second assumption is that any property held by the defendant at any time after the date of conviction was obtained by him—

The third assumption is that any expenditure incurred by the defendant at any time after the relevant day was met from property obtained by him as a result of his general criminal conduct.

The fourth assumption is that, for the purpose of valuing any property obtained (or assumed to have been obtained) by the defendant, he obtained it free of any other interests in it.

But the court must not make a required assumption in relation to particular property or expenditure if—

If the court does not make one or more of the required assumptions it must state its reasons.

The relevant day is the first day of the period of six years ending with—

But if a confiscation order mentioned in section 8(3)(c) has been made against the defendant at any time during the period mentioned in subsection (8)—

The date of conviction is—

If the court is proceeding under section 6 in a case where section 6(3)(a) applies, the prosecutor or the Director (as the case may be) must give the court a statement of information within the period the court orders.

If the court is proceeding under section 6 in a case where section 6(3)(b) applies and it orders the prosecutor to give it a statement of information, the prosecutor must give it such a statement within the period the court orders.

If the prosecutor or the Director (as the case may be) believes the defendant has a criminal lifestyle the statement of information is a statement of matters the prosecutor or the Director believes are relevant in connection with deciding these issues—

A statement under subsection (3) must include information the prosecutor or Director believes is relevant—

If the prosecutor or the Director (as the case may be) does not believe the defendant has a criminal lifestyle the statement of information is a statement of matters the prosecutor or the Director believes are relevant in connection with deciding these issues—

If the prosecutor or the Director gives the court a statement of information—

If the court makes an order under this section it may at any time vary it by making another one.

If the prosecutor or the Director gives the court a statement of information and a copy is served on the defendant, the court may order the defendant—

If the defendant accepts to any extent an allegation in a statement of information the court may treat his acceptance as conclusive of the matters to which it relates for the purpose of deciding the issues referred to in section 16(3) or (5) (as the case may be).

If the defendant fails in any respect to comply with an order under subsection (1) he may be treated for the purposes of subsection (2) as accepting every allegation in the statement of information apart from—

For the purposes of this section an allegation may be accepted or particulars may be given in a manner ordered by the court.

If the court makes an order under this section it may at any time vary it by making another one.

No acceptance under this section that the defendant has benefited from conduct is admissible in evidence in proceedings for an offence.

A defendant has a criminal lifestyle if (and only if) the following condition is satisfied.

The condition is that the offence (or any of the offences) concerned satisfies any of these tests—

Conduct forms part of a course of criminal activity if the defendant has benefited from the conduct and—

But an offence does not satisfy the test in subsection (2)(b) or (c) unless the defendant obtains relevant benefit of not less than £5000.

Relevant benefit for the purposes of subsection (2)(b) is—

Relevant benefit for the purposes of subsection (2)(c) is—

The Secretary of State may by order amend Schedule 2.

The Secretary of State may by order vary the amount for the time being specified in subsection (4).

Criminal conduct is conduct which—

General criminal conduct of the defendant is all his criminal conduct, and it is immaterial—

Particular criminal conduct of the defendant is all his criminal conduct which falls within the following paragraphs—

A person benefits from conduct if he obtains property as a result of or in connection with the conduct.

If a person obtains a pecuniary advantage as a result of or in connection with conduct, he is to be taken to obtain as a result of or in connection with the conduct a sum of money equal to the value of the pecuniary advantage.

References to property or a pecuniary advantage obtained in connection with conduct include references to property or a pecuniary advantage obtained both in that connection and some other.

If a person benefits from conduct his benefit is the value of the property obtained.

Property is all property wherever situated and includes—

The following rules apply in relation to property—