Crown Prosecution Service v C & Anor

This is an application for the appointment of a Receiver to sell 61, St. Mary’s Way, Hucknall, in part satisfaction of a Confiscation Order in the sum of £173,906 made against the Defendant, ‘C’. On 20 ^th June 2003 the Defendant was sentenced to 66 months for an offence of conspiracy to steal and a Confiscation Order was also made. The Confiscation Order remains largely unsatisfied. This application is not opposed by the Defendant but is by the Interested Party Edward Rooney. Mr. Rooney asserts that he is the legal and beneficial owner of the property.

The property was included in the realisable assets of the Defendant when the Confiscation Order was made at the Crown Court because the Defendant said he owned it. The Confiscation Order was made on the basis of a benefit of over £2m but the realisable assets were agreed in the sum which eventually became the amount of the Confiscation Order. In an affidavit made on the 14 ^th January 2004 and filed in the Confiscation proceedings, the Defendant said that he had purchased the property at 61 St. Mary’s Way for £70,000; he also said that he had carried out renovations on the property and that its value should have increased. The purchase price of that property was included in the calculation of the benefit and the realisable assets. It was known at the time of the Order that the legal title to the property was vested in Edward Rooney, the Interested Party.

The legal ownership of the property as disclosed on the Land Registry file is as follows:

All of these owners were on the evidence part of the Travellers community. Mr. Rooney says that Margaret McColl is one of his wife’s sisters. Margaret McCarthy is the Defendant’s mother and William McCarthy is, according to Margaret McCarthy, her nephew. She says she sold the property to him at a price which was less than she had paid and in any event William McCarthy only paid £2000 or £3000 of the agreed price.

The Prosecutor’s case is that at the time of the Confiscation Order the Defendant was the beneficial owner of the property. Edward Rooney’s case is that he was the beneficial owner, having purchased the property for value from William McCarthy and he therefore is not only the legal owner of the property but also the beneficial owner.

The Prosecutor relies to support his case on the initial affidavit filed by the Defendant in which he asserted that he did own number 61. In a later statement dated 5 ^th June 2008, the Defendant said that he did not own 61 and that part of the affidavit was an error made by the Solicitor’s clerk who prepared the affidavit. He says that he drew the fact of the mistake to the attention of his Solicitor Debra Bell, who agreed to sort out the mistake.

I have also read a statement from Debra Bell in which she says that the Defendant never drew any mistake to her attention. Neither has given evidence. Making up my mind on the statements, it is, in my judgment, much more likely that Debra Bell is correct. The attribution of ownership of number 61 to the Defendant was taken into account not only in assessing the realisable assets but also in assessing the benefit. It is inevitable that the ownership of number 61 would have played a significant part in the discussions between the Defendant and his legal representatives prior to the Confiscation Hearing and any mistake would have been pointed out in the course of negotiations.

Mr Caldwell, on behalf of Mr. Rooney, realistically does not argue that the reason given in the Defendant’s statement for the contents of the affidavit being wrong, namely, that it was all a mistake can be correct. Instead he argues that he deliberately claimed to be the owner of premises that he lived in but did not own so that they could be sold to pay off his Confiscation Order at no cost to himself. Ingenious as that argument is, I am afraid I cannot accept that it is correct. As is well known confiscation proceedings are a 2 stage process. First the Court has to assess the benefit. Included in that is likely to be expenditure made by the Defendant. So in this case the £70,000 that the Defendant says he paid to purchase the property was included in the benefit figure. Then the Court has to assess what are the realisable assets that the Defendant has. In some cases that will be calculated on the basis of the assets declared by the Defendant. In other cases if the Judge concludes that the Defendant is not declaring all his assets then a larger figure than the one that is declared may be made. In this case the realisable asset figure was agreed on the basis of the realisable assets which included number 61.

In those circumstances it is difficult to see where the advantage lies to the Defendant to declare an asset which is not in fact his. Further it is difficult to believe that the Defendant would have thought that he would have had any chance of getting away with a scheme like that.

However, drawing any firm conclusion from what the Defendant has said is fraught with danger. In his affidavit he said he owned the property while in a later statement he said he did not. While his reason for the difference is wholly unconvincing it remains the fact that he has said 2 different things on 2 different occasions. He also was, at the time, a career criminal who may well have been prepared to get involved in a dishonest scheme to obtain a financial benefit. I was not able to see him give evidence as he has not opposed this application, nor did either side think it was to their advantage to call him. I draw no inference from either side’s failure to call him.

However taking the view that I do, that, on its own, the Defendant’s statement in the affidavit is more likely to be the true account, it requires me to look behind the documentation which shows that Mr. Rooney was the legal owner, to see whether the transfer of legal ownership was in effect a sham to enable the Defendant to keep at least some of the value of one of his assets after his arrest.

Prior to his arrest the Defendant lived at number 61 with his wife and family. According to the Land Registry documents, the owner of the premises at that time was Margaret McCarthy, who purchased the premises from Margaret McColl for £60,000. Margaret McColl is a sister of Mr. Rooney’s wife. I have a statement from Margaret McCarthy. She did not give evidence but I did have a statement which she had made. As with other statements that I had, the truth of Margaret McCarthy’s statement was not admitted, and I have to decide how much weight to attach to it in all the circumstances. It is fair to say that her statement relating to the purchase is somewhat vague but she could be an elderly lady who has difficulty remembering details. Her account as to the sale of the premises does, however, give real cause for concern.

The Defendant was arrested on 19 ^th September 2002 and remained in custody until he had completed his sentence. While he was remanded in custody it seems Margaret McCarthy decided to sell the premises despite, presumably, the occupation of the premises by the Defendant’s wife and children. She attended a firm of Solicitors’ offices on 21 ^st October 2002 to arrange the transfer of the premises to William McCarthy, who is described in the conveyancing file as a grandson, and the transaction is described as a gift. In her statement Margaret McCarthy says that she sold the premises to William McCarthy who she describes as a nephew. She goes on to say that she sold the premises for less than she paid for them but she can’t remember for how much and in any event he only gave her £2000 or £3000. There was some difficulty in registering the transfer because there was no witness to her signature but it was eventually registered and the property was said to have a value of less than £100,000. There is no indication from the file that the Solicitor ever received any proceeds of sale on behalf of the vendor.

The Prosecutor, despite attempts to do so, has never located William McCarthy. He is an important figure in the history because he is the person who is said to have sold number 61 to Mr. Rooney. Mr. Rooney asserts that he exists. He told me in evidence that William McCarthy, like Mr. Rooney, is a member of the Travelling community and, because that community is quite close knit, he believed he could find him. He has however never tried. The reason he gave for that was that it was the police’s job to find him. I find that to be surprising, bearing in mind that the police say that they have tried but failed to locate a William McCarthy and Mr. Rooney must believe, if his case is correct, that William McCarthy could give important supporting evidence.

Mr. Rooney gave evidence before me relating to his purchase of number 61. His case is that he bought it from William McCarthy for £120,000 which he paid in cash and that it was an arms length transaction. It was clear from his evidence that he, as a Traveller does pay in cash and there is nothing wrong in that, although it may be relatively unusual nowadays. He also may have a somewhat cavalier approach to the need to account to the Revenue. He is not much interested in documentation either. None of that affects his credibility. He is a man who uses a number of aliases. He does that to deceive people as to his true identity. He also has a number of convictions for criminal offences; the only one that I treat as being even marginally relevant is the use of a false insurance document. These last matters do affect his credibility but only to a very limited extent.

His account to me of the purchase was this. He was approached by William McCarthy to see whether he was interested in buying number 61 and a piece of land opposite which had static caravans on it. He agreed to buy it for £170,000 but of that sum £20,000 was to be withheld until the static caravans were removed. He said that he paid initially in 2 payments: £62,000 and £90,000 and then further payments to make up the total when the static caravans had been removed. All the payments were made in cash and there were no receipts. The first 2 payments were made from money that he received from the sale of a caravan site in Plessley which he owned. He said he sold that to a Peter Daley for £152,000; £90,000 of which was paid in cash and he also gave Mr. Rooney a new Belgian registered Mercedes which Mr Rooney sold on for £62,000. That is why he said he made payments for 61 in 2 tranches.

The Land Registry documents in relation to the transfer of the caravan site are in the bundle. They record the transfer as taking place on 24 ^th May 2002 and that the consideration paid by Mr. Daley was £55,000. Mr. Rooney says that he had no knowledge of that and says that it must be down to Mr. Daley and the Solicitors. It should be recorded that there are doubts as to the probity of this Solicitor. However the fact that it happened in March 2002 does make it difficult to understand why the initial payments for number 61 were made in 2 tranches corresponding to the £90,000 paid in cash and the sale value of the car.

Mr. Rooney says that he bought the premises to live in with his wife and 2 sons. Both of his sons who are grown up suffer from cerebral palsy and have special needs in relation to accommodation. Mr. Rooney needed to do some work on the premises to make it suitable for them and there is evidence to support the fact that he did pay local tradesman to do work, although that evidence is not very satisfactory as to the date when it was done. In the event, despite the work having been done, the Rooney family did not move into the premises because the sons didn’t want to move. Mr. Rooney approached the Halifax in May 2003 with a view to selling the property. There was an initial valuation of £280,000 and it was certainly being marketed in July 2003 for £275,000. Mr Rooney attributes the increase of value from £120,000 to the improvements that he made and because he had bought at a good price. The original price of £170,000 had included the piece of land that was bought for £50,000 and was not included in the sale through Halifax.

Mr. Rooney says that he doesn’t really know the Defendant except by sight and denies having contact with him. There is evidence of calls between a mobile used by the Defendant and Mr. Rooney’s mobile. Mr. Rooney says that they didn’t involve him but may be calls to his wife because she has a sister who is married to the Defendant’s brother and who lives close to number 61 and the calls could have related to them. There is no evidence of any contact between the Defendant and Mr. Rooney after he was remanded in custody but I don’t think that that greatly supports Mr. Rooney’s case. There are plenty of means of communicating from prison without the authorities being aware of it.

I have to decide on the balance of probabilities whether Mr. Rooney is the equitable owner of these premises as well as the legal owner. I could find that he owns 100% of the equity which is his case or that he owns none of the equity which is the Prosecutor’s case. Alternatively I could find that he bought at an undervalue from the Defendant; in which case he would be entitled to the percentage of the equity which is the percentage of the true value that he paid.

In deciding this I have to take into account all the evidence. On the one hand I have the evidence of Mr. Rooney; on the other I have numerous inconsistencies and facts which tend to show that what was going on here was an attempt by a career criminal to divest himself of his assets before the police could get their hands on them.

In the end, I am driven to the conclusion, on the balance of probabilities, that the Defendant was and remains the true owner of 100% of the equity in number 61. Some of the matters that have driven me to this conclusion are these:

The unsatisfactory nature of the evidence that Margaret McCarthy bought and sold these premises. I think it is much more likely that the Defendant was the true owner and decided it was advantageous to register his mother as the owner.

The extremely unsatisfactory evidence of the ‘sale’ to William McCarthy; the lack of evidence of his existence and the failure of Mr. Rooney to even try and locate him when he knew the police had failed to trace him.

The unsatisfactory evidence given by Mr Rooney as to the purchase of number 61 and where the money was obtained from and who it was given to.

The evidence of an attempt to re-sell by Mr. Rooney so soon after acquiring number 61. That on its own is not incredible but it is significant in the context of all the other evidence.