Court, R. v (Rev 1)

On 16 January 2020 the full Court (Males LJ, May & Saini JJ) granted the renewed application of Ian Court (“the Appellant”) for leave to appeal against a confiscation order in the sum of £166,232.93 that had been imposed upon him by

Pursuant to Part 36.15 of the Criminal Procedure Rules 2015 (as amended), and by reliance upon the inherent discretion of the Court of Appeal (Criminal Division) to reopen its decisions if it is necessary to do so, in exceptional circumstances, to avoid real injustice (as identified and delineated in cases such as R v Yasain [2016] Q.B. 146, R v Gohil [2018} 1 W.L.R. 3697and R v Cunningham, R v Di Stefano [2020] 1 W.L.R. 1203) the Prosecution apply to re-open the determination of the appeal and for the original confiscation order to be upheld. The Prosecution contend that there is no alternative effective remedy available to them, and that:

On behalf of the Appellant, it is variously argued that the Court acted appropriately in allowing the appeal; that the purported injustice relied upon by the Respondent is not beyond dispute and is certainly not manifest; that the case does not reach the threshold of exceptionality required; that the judgment on appeal was correct; and that the principle of finality applies.

In the summer of 2016, when the Appellant (who is now in his mid-50s) was living with his wife and two children on the small parcel of land to the west of Silt Pit Lane, the police searched an adjacent outbuilding and found a lighting and watering system for growing cannabis (which was powered via a bypass of the mains electricity supply) along with a mother plant, 12 mature plants, 32 seedlings, a frozen 1.5kg block of cannabis in a freezer, and £8245 in cash in a safe.

On 16 November 2016, the Appellant pleaded guilty before Magistrates to the production of cannabis and abstracting electricity, and was committed to the Crown Court at Lincoln for sentence. There, on 27 September 2017, having in the meanwhile been acquitted by a jury of possession of the 1.5kg block of cannabis with intent to supply, the Appellant was sentenced by Mr Recorder King QC to concurrent 12 month Community Orders.

Against the background that, under Schedule 2 of the Proceeds of Crime Act 2002 (“POCA”), production of cannabis is a criminal lifestyle offence, confiscation proceedings were commenced. Neither the five statements of information made by PC

In his first statement of information, which was dated 8 December 2017, PC Roberts variously referred to the following matters:

In his first formal, but undated, response the Appellant variously asserted that:

In his second statement of information, dated 21 February 2018, PC Roberts indicated that:

In his second formal response, served towards the end of March 2018, the Appellant variously asserted that:

In his third statement of information, dated 18 June 2018, PC Roberts stated that:

The Appellant made no reference to the mortgage in his third formal response, which was dated 3 July 2018.

At a hearing on 18 July 2018, a preliminary issue, raised on the Appellant’s behalf, that the confiscation proceedings were disproportionate, was rejected by HHJ Hirst.

In his fourth statement of information, dated 9 October 2018, PC Roberts stated that:

In an undated response, the Appellant said that:

The confiscation hearing before HHJ Easteal began on 12 November 2018. On that date the Appellant produced (for the first time) his application for the Mortgage Works (UK) plc “Buy to Let” mortgage in relation to 64 Norfolk Street. It was in the form of a print from a computer system which recorded answers given by the Appellant to his mortgage broker, Thea Cox – including, amongst other things, that he had asserted that he was in permanent employment, that he had no previous convictions, and that the information that he had provided to his mortgage broker was true.

On 13 November 2018, a witness statement was obtained from Mr Keith Rolfe, Senior

Thereafter, the confiscation hearing was adjourned while a transcript of the Appellant’s evidence at trial (in relation to the allegation of possession with intent to supply) was obtained.

In a further response, dated 21 January 2019, the Appellant contended that:

In his fifth statement of information, dated 18 February 2019, PC Roberts underlined that:

The confiscation hearing resumed before HHJ Easteal on 20 March 2019, and took seven working days to complete. The Appellant gave evidence and called Mr Ruck and a man called Carl Boland.

The Closing Submissions drafted by Ms Earnshaw (on behalf of the Prosecution) and by Mr Jeyes (appearing then as now on behalf of the Appellant) show that:

Against that background, and pulling together the strings of all the materials that are now before us, it is clear that, ultimately, the Prosecution case as to benefit in relation to the land to the west of Silt Pit Lane was that:

Equally, ultimately, the Appellant’s case in relation to these issues was that:

As indicated above, HHJ Easteal gave judgment on 10 May 2019.

When dealing with whether cash deposits (totalling £36,431.15) which had been made to the Appellant’s bank accounts (and were said by the Appellant to be the product of various sources of legitimate income - including buying and selling cars, work done for his friend Mr Ruck, and gifts from his mother) were the product of the Appellant’s general criminal conduct (which included consideration of whether the Appellant had

Thus, when dealing with cash deposits, the judge comprehensively rejected the Appellant’s evidence that he had been in permanent employment at the material time (which, as already indicated, included the time of the mortgage application).

The judge turned next (Transcript p.4A-G) to the land to the west of Silt Pit Lane, and concluded that:

“This property was bought from Stacey Ruck by way of a mortgage for

£59,500 taken out in respect of 64 Norfolk Street, which in turn is said by Mr Court to have been gifted to him by his mother Sylvia on the understanding that it would continue to be rented out, and that the rental income would be entirely her own, until her death.

It is further said that there was a mutual understanding between the

Defendant and Mr Ruck that the land would not be sold but retained until Mr Ruck was in a position to buy it back, having had to raise a sum of money in connection with his divorce proceedings.

The application completed by Mr Court gives no indication of any constraints of Mr Court’s rights over the land. It does not disclose the purported ongoing beneficial interest of Sylvia Court in the mortgaged property and confirms that Mr Court has no previous convictions.

The defence argues however that the application should not be treated as fraudulent, and contends that any fault lies with the deficiencies of the application form and the unlawfulness of the question regarding whether the applicant has any previous convictions, relying on the provisions of the Rehabilitation of Offenders Act, and the proposition that the existence of spent convictions would not justify a potential lender from refusing an application.

In my judgment, the failure to disclose the information referred to clearly constitutes a fraud on the lender, who was plainly misled in respect of these highly material issues. With regards to the lawfulness of the question about any previous convictions, the argument fails to legitimise the dishonest answer given by Mr Court. On the basis of that argument, the only permissible honest answers were; yes, or to decline to answer on the basis that the lender was not entitled to ask for such information insofar as it did or may relate to convictions that were now spent. The proposition that the enquiry was wrong at law would not, and did not, give Mr Court licence to enter a plainly dishonest and misleading response. The assumptions must stand therefore, and the benefit in respect of Silt Pitt Lane is £59,500” (sic - later amended to £62,000).

Thus, the judge did not, in giving his reasons in relation to benefit in respect of the land to the west of Silt Pit Lane, address in terms the Prosecution contentions (see [23(3)(a) & (b)] above) that, contrary to what had been asserted in the mortgage application, the mortgage money had been used to buy land that was not let (which was not disputed by the Appellant, but said not to be material), and that the Appellant had not been in permanent employment (on which issue the judge had already found against the Appellant when dealing with cash deposits), but did address the other matters on which the Prosecution had relied (see [23(3)(c)-(e)] above), including the ultimate alternative assertion that if the Appellant’s mother was the beneficial owner of 64 Norfolk Street the mortgage had been fraudulently obtained because that had not been disclosed.

When dealing (Transcript p.7A-8G/H) with whether 64 Norfolk Street and the land to the west of Silt Pit Lane were available assets, the judge said this:

“I turn then to the question of Mr Court’s available assets, starting with the equity at 64 Norfolk Street. Mr Court is the registered legal owner of this property, and used that status to secure a mortgage, the funds of which were used by him to purchase the land at Silt Pit Lane.

The Crown submits that as a result, all the equity that exists in the property belongs to Mr Court.

The legal title in the property was transferred to Mr Court from his mother Sylvia without consideration in 2008. Thereafter, Mrs Court retained all the responsibilities for its upkeep and management as landlord, and received the entirety of the income from the property generated by rental payments.

The defence therefore contends that despite the absence of any paperwork, despite Mr Court appearing to have no real comprehension of what a trust is, and despite the jeopardy to his Mother’s beneficial interest brought about by the property being mortgaged by her son, an inter vivo trust came into effect upon transfer in 2008 for so long as Sylvia Court remained alive.

In turn, it is submitted that Mr Court holds no beneficial interest in the property and the equity that exists belongs entirely to Sylvia Court. Although Sylvia Court has not given evidence, it seems clear that she was to all intents and purposes the landlord of 64 Norfolk Street. That being said, the self-evident implausibility of Mr Court’s case in this respect is made greater still by two further limbs of evidence, both of which were given and accepted by Mr Court.

Firstly, Mr Court transferred ownership of Silt Pit Lane back to Mr Ruck without any form of payment or retained equitable interest in that land being made in return, effectively surrendering the value of the mortgage he had taken out, without any reference to or measures to protect Sylvia Court’s purported beneficial interest in 64 Norfolk Street.

And Mr Court also gave evidence that much of his Mother’s money was kept in the safe referred to above and that he was allowed to help himself to it without consulting her nor with any expectation of, or arrangement for, its repayment. This evidence plainly goes some way to undermine the defendant’s own claim that his Mother’s purported retained beneficial interest is evidenced in part by the fact that rental payments accrued exclusively to her.

Accordingly, in my judgment, such equity as there is or may be in 64 Norfolk Street is wholly to be treated as an available asset.

Silt Pit Lane, the defence contends that the value of this land belongs to Stacey Ruck, and has done so all along. It is said that the property was bought by Mr Court only as a temporary measure in order that his friend Mr Ruck could proceed with his divorce by reducing his personal levels of borrowing. It is also claimed that there were several understandings in place which effectively amounted to trusts, these being firstly, Mr Court would not and could not sell Silt Pit Lane, but would instead retain it until such time as Mr Ruck could buy it back from him.

Second, at such time as Mr Ruck repurchased Silt Pit Lane, Mr Court would pay off the mortgage taken out against 64 Norfolk Street with the funds paid to him, as the beneficial interest in that property rested with his mother Sylvia and not with Mr Court. And until such time as Silt Pit Lane was bought back my Mr Ruck, Sylvia Court’s beneficial interest in 65 Norfolk Street was effectively charged against the value of Silt Pit Lane.

The ownership of Silt Pit Lane was transferred back to Mr Ruck after Mr Court’s arrest. No payment whatsoever was or has been made in consideration of that transfer. The prosecution contends that the transfer constitutes a tainted gift, and that the value of the land should be treated as an available asset. Once again there is no documentation which exists, or ever did exist, to in any way formalise or even corroborate the existence of any trusts or such other arrangements as would lend any veracity to the scenario upon which the defence bases its arguments.

Moreover, Mr Court, having transferred ownership of the land back to Mr Ruck continues to make the mortgage repayments himself, with absolutely no contribution by Mr Ruck and no consultation with Sylvia Court. The patent unfairness of this, were the defence narrative to be believed, appeared to come as a complete surprise to Mr Ruck when his attention was drawn to it during the course of his evidence to the court.

Having acknowledged there was no reason why this burden should be borne by his close friend Mr Court, Mr Ruck also acknowledged that he thought he owed monies to Mr Court which he had not yet repaid, and which neither man had taken into account at any stage whilst these arrangements were made and actioned.

The defence case in relation to Silt Pit Lane is in my judgment utterly implausible. The transfer of ownership was, as the Crown argue, a tainted gift intended to evade the inclusion of the land in the calculation of Mr Court’s available assets, and accordingly must be included in that calculation.”

Thus, the judge concluded that the Appellant was the sole owner of the equity in 64 Norfolk Street, and of the equity in the land to the west of Silt Pit Lane, and that the “repurchase” by Mr Ruck of the land to the west of Silt Pit Lane was a tainted gift, and that therefore the full equity in both properties were available assets. The total value of the available assets was £270,895 - hence the judge made a confiscation order in the total sum of the Appellant’s benefit, namely £166,232.93.

In a 32-page document, dated 5 June 2019, Mr Jeyes set out some 11 Grounds of Appeal on the Appellant’s behalf (variously relating to proportionality, hearsay evidence from Mrs Court, and the judge’s findings in relation to the benefit amounts and the available assets) and a summary of his arguments in support of them.

In Ground (iv)(c) it was asserted that:

“In respect of the benefit amount, the learned Judge:

In Grounds (v)(a) & (b) it was asserted that the judge had wrongly decided that Sylvia Court had no beneficial interest in 64 Norfolk Street and that the judge had wrongly rejected the submission that there was a trust in favour of Sylvia Court in respect of the land at Silt Pit Lane.

At the direction of the Registrar, the Prosecution lodged a Respondent’s Notice - in the form of a 16-page document entitled “Prosecution Response to Grounds of Appeal” which was dated 12 August 2019. As recorded in [2(1)] above, the Response began with a recital in the following terms:

“This document contains a summary of the Prosecution submissions in response to the lengthy and numerous Grounds. If not every single point taken by the Appellant is dealt with, no concession is thereby intended. In the event that leave is granted, the Prosecution will respond in detail…”.

At its conclusion, the Response asserted that none of the Grounds, individually or cumulatively, demonstrated that the approach taken by the Judge was wrong in law. As to the Judge’s findings of fact it was asserted that it was not the task of this Court to substitute its own view of the evidence, and that having heard evidence over a prolonged period the Judge was in the best position to determine matters.

In relation to Ground iv(c) (referred to in the Response as Ground 5) the Prosecution set out the Judge’s ruling (Transcript p.4A-G – see [28] above), and the undisputed chronology in relation Silt Pit Lane. The Prosecution then underlined the fact that consideration of benefit in relation to the land at Salt Pit Lane fell to be determined under the property held assumption, and asserted that since the land had been acquired by a fraudulently obtained mortgage, the judge had been wholly justified in treating it as benefit.

The Prosecution also argued, in relation to Grounds (v)(a) & (b), that the Judge’s findings that 64 Norfolk Street and the land to the west of Silt Pit Lane were available assets were both right.

The Single Judge refused leave on 30 September 2019.

As indicated above, the Prosecution were not informed of the hearing of the

The Court retired to consider the submissions made by Mr Jeyes. Thereafter, Males LJ gave the judgment of the Court, which concluded as follows:

“15. The principal point relied on by Mr Jeyes relates to the Judge’s finding on benefit, relating to the land adjacent Silt Pit Lane, where the benefit found was £62,000. This was land purchased with a mortgage on Norfolk Street, as to which the Judge’s conclusion was that the mortgage application was fraudulent in two respects. First, he found that the application failed to disclose that the beneficial interest in the property being mortgaged was the applicant’s mother, rather than the applicant himself. That was indeed the applicant’s case – namely, that his mother had the relevant beneficial interest – although, in fact, the judge did not accept that case. If that is so, there is perhaps an element of inconsistency in saying that the mortgage application was fraudulent for failure to declare a beneficial interest which, in the event, the judge was not persuaded did exist. The judge also found that the application was fraudulent because the applicant failed to answer truthfully a question on the application form about any previous criminal convictions. He answered that he did not have such convictions, when in fact he did, although they were spent. The judge said that the only permissible, honest answer would either have been ‘Yes’, or else to decline to answer, on the basis that the lender was not entitled to ask for such information insofar as it might relate to convictions that were now spent. We accept that the judge was wrong in that respect. The applicant was entitled to answer ‘No’ to that question, because his convictions were, in fact, spent.

16.

Although the Judge’s reasoning therefore, in relation to this aspect of the benefit is, in our judgment, open to those criticisms, we are not persuaded that the consequence is that the assumptions were rebutted. On the facts found by the judge, the mortgage funds were raised through a mortgage on the Norfolk Street property, in relation to which the judge also found that the assumptions were not rebutted, and therefore the Norfolk Street property had to be treated as part of the relevant property. A mortgage raised on that property, which is then used to buy adjacent property, would still be subject to the same considerations, meaning that the assumptions were not rebutted. Plainly, overall, the judge was not persuaded by the applicant’s evidence in relation to the properties in which he claimed that his mother had beneficial interests, and that affected the whole approach to these properties and the judge’s conclusion that the relevant assumptions were not rebutted.

17.

That was identified by Mr Jeyes as his strongest point, and we have rejected it. It is sufficient to say in relation to the other points (this being an application for leave and not a full appeal), that we have considered carefully what is said on each side and we find that the arguments in the Respondent’s Notice persuasive in relation to the benefit figures.

……….

19. For these reasons, the order made by the judge must stand, and the renewed application for leave to appeal against the confiscation order is refused”

In immediate response, Mr Jeyes said this:

“I am grateful, my Lord. I rise with some diffidence and with more than a little trepidation. I hope that my Lords and my Lady will understand it my professional duty to say something…. The determination of the court appears to be that the mortgage was not fraudulent for the reasons set out by the learned judge in his judgment. In my submission, if the mortgage was not fraudulent for those

reasons, then the assumption as to the source of those funds would have been rebutted. The learned judge did not rehearse any other reason for those funds, which clearly emanated from the bank, being considered to be fraudulent and therefore the source or the product of criminal conduct”.

Mr Jeyes then developed that submission by arguing that:

The Court retired to further confer, after which Males LJ continued:

“Mr Jeyes, you have a point. When I gave judgment earlier, that was on the basis, I think, of a misunderstanding as to what comprised the benefit figures. It is, in fact, apparent that the Norfolk Street property is not part of the judge’s findings on benefit. That was owned by the mother, and the consequence is that what I said in the judgment earlier was on a mistaken basis, and that once the judges reasoning as to the two reasons which he gave is found to be incorrect, as we did find, then the benefit ought to be reduced by the £62,000.

So, we are grateful to you for pointing that out. You were right to stand and raise it, even with trepidation, and the consequence is that I will correct the judgment when it comes for approval. I hope that this is being recorded, so that I can see what the reasoning was. The consequence, therefore, will be that we give leave, limited to this particular point, and allow the appeal by reducing the benefit figure and thus the confiscation figure by £62000, so that the figure will now be £104,232.93.

MR JEYES; I am very grateful.

LORD JUSTICE MALES; Alright.

MR JEYES; So, my Lord has determined the appeal itself?

LORD JUSTICE MALES; Yes, we have determined the appeal itself, which is the normal practice, and on that basis, you should have a representation order.”

In the formal Order on the Application it was recorded that the Court had:

“1. Granted leave to appeal against sentence on Ground 5 only and, without adjournment, treated the hearing of the application as the hearing of the appeal;

2. Allowed the appeal and varied the amount of the confiscation order imposed in the Court below, having determined that the Applicant does not have any beneficial interest in the property at 64 Norfolk

Street.

…………………..”

We observe that it had not been suggested in the confiscation hearing that 64 Norfolk Street was part of the Appellant’s benefit; that the Appellant’s mother was the previous owner of 64 Norfolk Street, and that HHJ Easteal had found that the Appellant was the sole owner of the house at the material time; that (in the part of his ruling relating to benefit and the land to the west of Silt Pit Lane) the judge had ruled there were three relevant deficiencies (not two) in the mortgage application in relation to 64 Norfolk Street; that, in any event, when dealing with cash deposits, the judge had ruled in favour of the Prosecution on one of the other alleged deficiencies in relation to the mortgage application; that there was another alleged deficiency in relation to the land not being let (which was not disputed but said not to be material); that (as asserted by the Prosecution – see below) it is not the normal practice in confiscation cases to determine appeals without giving the Prosecution an opportunity to be heard (rather, the reverse is the well-established practice); and that the Court had not determined that the Appellant did not have any beneficial interest in 64 Norfolk Street.

In the subsequent Approved Judgment, paragraph 15 remained the same as in the ex tempore judgment, but the remainder was amended, as follows:

“16. The Judge’s reasoning in relation to this aspect of the benefit, that is to say the land adjacent to Silt Pit Lane, is in our judgment flawed for those reasons.

17. This was identified by Mr Jeyes as his strongest point, and we agree with it.

…..

The overriding objective, and the application of it by the Court, are set out in Parts 1.1 & 1.3 of the Criminal Procedure Rules, as follows:

“R1.1 The overriding objective

1.1	(1) The overriding objective of this procedural code is the criminal
	cases be dealt with justly.
	(2) Dealing with a criminal case justly includes–
		(a) acquitting the innocent and convicting the guilty;
		(b) dealing with the prosecution and the defence fairly;
		(c) recognising the rights of a defendant, particularly those
		under Article 6 of the European Convention on Human
		Rights;
		(d) respecting the interests of witnesses, victims and jurors and
		keeping them informed of the progress of the case;
		(e) dealing with the case efficiently and expeditiously
		(f) ensuring that appropriate information is available to the
		court when bail and sentence are considered; and
		(g) dealing with the case in ways that take into account–
		(i) the gravity of the offence alleged,
		(ii) the complexity of what is in issue,
		(iii) the severity of the consequences for the defendant and others affected, and
		(iv) the needs of other cases.

……………

The application by the court of the overriding objective

1.3

The court must further the overriding objective in particular when– (a)exercising any power given to it by legislation (including these Rules);

(b)

applying any practice direction;

(c)

or interpreting any rule or practice direction”.

As to Respondent’s Notices, Part 39.6 of the Criminal Procedure Rules provides that:

As to parties being given notice of hearings and decisions, Part 36.7(1) of the Criminal Procedure Rules provides that:

the parties;

In R v Daniel [1977] QB 364, a renewed application was listed, heard and dismissed without notice to the applicant’s lawyers, although the error was not such as to render the proceedings a nullity. Lawton LJ (giving the judgment) considered whether this Court had jurisdiction in a case where the applicant had been deprived of his right to be represented by counsel. He concluded:

In Yasain (above), the Court identified three sets of circumstances in which the Court of Appeal (Criminal Division) may re-open its decisions, namely where:

In R v Cunningham,R v Di Stefano (above) the Court (presided over by Lord Burnett CJ) quoted, with approval, from the judgment of Gross LJ in Gohil (also above), as follows:

the CACD has jurisdiction to re-open concluded proceedings in two situations. First, in cases of nullity, strictly so-called and distinguished from “mere” irregularities. Secondly, where the principles of Taylor v Lawrence, as adopted in Yasain are applicable, thus where the necessary conditions are satisfied. For ease of reference, though not to be interpreted as a statute, the necessary conditions are: the necessity to avoid real injustice; exceptional circumstances which make it appropriate to re-open the appeal; and the absence of any alternative effective remedy. It is to be emphasised to be almost invariably cumulative requirements – though not necessarily sufficient for the exercise of the jurisdiction, in that the court retains a residual discretion to decline to re-open concluded proceedings even where the necessary conditions are satisfied;

though the principles in Taylor v Lawrence apply in both the Court of Appeal (Civil Division) and the CACD, as underlined in Yasain the jurisdiction need not necessarily be exercised in the same way, bearing in mind both the triangulation of interests in criminal proceedings (the state, the defendant and the complainant/victim) and the general availability of the CCRC to remedy the injustice of wrongful convictions;

in exercising the jurisdiction to re-open concluded proceedings, the test applied by the CACD will be the same, regardless of whether the application is made by the Crown or on behalf of the defendant;

we respectfully agree with the observation of the court in Yasain that the jurisdiction of the CACD to re-open concluded proceedings is probably best confined to “procedural errors”. Indeed, at least generally, we see the Yasain jurisdiction as directed towards exceptional circumstances involving (as submitted by the Amicus) the correction of clear and undisputed procedural errors “where it is simpler and more expedient for the court itself to re-open the appeal and correct a manifest injustice without the need for further litigation”. Such an approach is healthy as it does not altogether exclude room for pragmatism in practice, while confining its scope to appropriately very limited circumstances, where, even if recourse to the CCRC was otherwise available, it would be a wholly unnecessary exercise. As it seems to us, fashioning the jurisdiction in this manner accords with authority, principle, practicality and policy – not least the great importance of finality in criminal proceedings;

[…]

[…]’

32. We entirely agree with the approach of this court in Yasain and

this jurisdiction is to be confined to correcting “procedural errors” that are clear and undisputed, and when there is no alternative effective remedy (albeit we do not wish to close the door entirely on exceptional circumstances, when the lack of an alternative effective remedy or some other reason, may lead the court to re-open a decision in order to avoid a manifest injustice). As Gross LJ observed in Gohil, although the jurisdiction to re-open concluded proceedings has not been removed by the availability of recourse to the CCRC, that will almost invariably be the proper route ([128]).”

(3) The application must-

why it is necessary for the court to reopen that decision in order to avoid real injustice,

how the circumstances are exceptional and make it appropriate to reopen the decision notwithstanding the

why there is no alternative effective remedy among

(4) The Registrar

(a) may invite a party’s representations on- (i) an application to reopen a decision, or

A party invited to make representations must serve them on the Registrar within such period as the Registrar directs.

The court must not reopen a decision to which this rule applies unless each other party has had the opportunity to make representations.

[Note. The Court of Appeal has power only in exceptional circumstances to reopen a decision to which this rule applies.]”