Ahmed v Crown Prosecution Service [2018] EWCA Civ 2543

Case No C1/2017/2106[2018] EWCA Civ 2543
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
ADMINISTRATIVE COURT
Mr Justice Jay
CJA 173 and 174 of 2006
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 15/11/2018
Before
LORD JUSTICE PATTENLORD JUSTICE NEWEYLORD JUSTICE COULSON
Between
SYED MUBARAK AHMEDAppellantCROWN PROSECUTION SERVICERespondent
The Appellant appeared in person for in personMr Jonathan Kinnear QC and Mr Michael Newbold (instructed by CPS Proceeds of Crime) for RespondentHearing Hearing date: 7 November 2018
Judgment
[1]This case concerns the impact on pension policies in the name of the appellant, Mr Syed Ahmed, of a receivership order made in confiscation proceedings.[2]Mr Ahmed was convicted on 28 March 2007 of conspiracy to cheat the public revenue. The charges arose out of a “carousel” VAT fraud designed to extract money from HM Revenue and Customs (“HMRC”, then HM Customs and Excise).[3]Confiscation proceedings under Part VI of the Criminal Justice Act 1988 ensued. In 2010, these came before Flaux J, who ordered Mr Ahmed and a co-defendant to pay some £92 million. He arrived at that figure on the basis that it represented the value of the property that each defendant had obtained as a result of or in connection with his offence. Although section 71(6) of the 1988 Act provided for an offender to be ordered to pay a sum equal to “the amount appearing to the court to be the amount that might be realised at the time the order was made” if that was less than “the benefit in respect of which it is made”, the defendants had concealed their assets and so, Flaux J considered, could not show that the “amount that might be realised” was lower than the value of the benefit. In consequence, Flaux J said, “the Court must make a confiscation order for the full value of the benefit and has no discretion to order confiscation of a lesser sum” (see paragraph 383 of the judgment). A little earlier in his judgment, Flaux J had observed that a personal pension scheme of Mr Ahmed was “clearly a realisable asset for the purposes of these proceedings” (paragraph 381).[4]On appeal (see R v Ahmad [2012] EWCA Crim 391, [2012] 1 WLR 2335), the Court of Appeal (Criminal Division) concluded that the value of the benefit that Mr Ahmed and his co-defendant had each obtained was £12,662,822 (uplifted to £16,145,098 to reflect changes in the value of money), on the footing that the benefit should be calculated by reference to the amount of which HMRC were cheated rather than (as Flaux J had thought) the total sums passing through bank accounts of the defendants’ company. The Court therefore quashed the confiscation orders that Flaux J had made and substituted orders requiring each defendant to pay £16,145,098.[5]There were further appeals to the Supreme Court (see R v Ahmad [2014] UKSC 36, [2015] AC 299). When outlining the issues, Lord Neuberger, Lord Hughes and Lord Toulson (with whom Lord Sumption and Lord Reed agreed) explained (at paragraph 24) that counsel acting for Mr Ahmed and his co-defendant “accepted that it was appropriate for each of [them] to be liable for £16.1m, but contended that their liability should be treated as joint and several in accordance with normal common law principles, so that they should be required to pay that sum between them”. The Supreme Court allowed the appeal only to the extent of directing that the confiscation orders should be amended along the lines indicated in the first sentence of paragraph 74, where this was said: “where a finding of joint obtaining is made, whether against a single defendant or more than one, the confiscation order should be made for the whole value of the benefit thus obtained, but should provide that it is not to be enforced to the extent that a sum has been recovered by way of satisfaction of another confiscation order made in relation to the same joint benefit”.[6]On 13 January 2016, the respondent, the Crown Prosecution Service (“the CPS”), applied for a receiver to be appointed to enforce the confiscation orders against Mr Ahmed and his co-defendant. Acceding to the application, Mitting J appointed Mr Richard Long “to act as an Enforcement Receiver to take possession of, or otherwise deal with, all the realisable property of the Defendants, and the realisable property of the recipients of tainted gifts, including, but not limited to, the property listed in the Schedule to this Order”.[7]This appeal relates to an order made by Jay J on 29 June 2017. The order provided, among other things, for the schedule to the receivership order of 13 January 2016 to be amended to include certain pension policies in Mr Ahmed’s name.[8]Mr Ahmed challenges that part of Jay J’s order. His case is that the pension policies have as yet no realisable value and that they will continue to have none for a number of years. That being so, he said, they cannot represent “realisable property”. In contrast, Mr Jonathan Kinnear QC, who appeared for the CPS with Mr Michael Newbold, submitted that the policies are “realisable property” within the meaning of the 1988 Act and, hence, that Jay J was right to include them in the schedule to the receivership order.[9]Mitting J was empowered to appoint a receiver by section 80 of the 1988 Act. That provided for a receiver to be appointed “in respect of realisable property” (section 80(2)) and to be granted power “to realise any realisable property in such manner as the court may direct” (section 80(5)). The term “realisable property” was defined in section 74 of the Act to include “any property held by the defendant”, and section 102 explained that “Property is held by any person if he holds any interest in it” (section 102(7)) and that “‘interest’, in relation to property, includes right” (section 102(1)).[10]Mr Ahmed does not dispute that he has an interest in each of the pension policies that Jay J decided should be added to the schedule to the receivership order. It inevitably follows, having regard to the provisions of the 1988 Act quoted in the previous paragraph, that the policies are “realisable property” within the meaning of the Act. Equally, they must form part of the “realisable property of the Defendants” of which Mr Long was appointed receiver. That being so, there can, as I see it, be no valid objection to the policies being included in the schedule to the receivership order.[11]Mr Ahmed referred us to the decisions of the Court of Appeal (Criminal Division) in R v Cornfield [2006] EWCA Crim 2909, [2007] 1 Cr App R (S) 124, R v Ford [2008] EWCA Crim 966, [2009] 1 Cr App R (S) 13 and, especially, R v Chen [2009] EWCA Crim 2669, [2010] 2 Cr App R (S) 34. In the last of these cases, Chen, it was held that no value was to be attributed to two pension policies held by the subject of a confiscation order. Elias LJ, giving the judgment, observed (at [27]):
“In our judgment, it is wrong to say that the market value of this policy was the current value of the underlying fund. There is simply no way in which it would have been possible to realise that or, in reality, any other money of property of any value under this policy. There was simply no market. The prosecution say that the appellant did not give evidence to the court to that effect. That is true, but all parties plainly and realistically accepted that he could obtain no money at all on the back of this policy.”
[12]It seems to me, however, that none of these cases is of any assistance to Mr Ahmed. They all concerned the amounts for which confiscation orders should be made. In Cornfield and Ford, such orders had been made pursuant to the 1988 Act, under which, as I have already mentioned, “the amount that might be realised at the time the order is made” could provide an upper limit to the sum ordered to be paid. Since that amount was stated to be “the total of the values at that time of all the realisable property held by the defendant”, the value of pension policies at the date of the confiscation orders affected the orders’ size. What was at issue was essentially the policies’ worth rather than whether they were “realisable property” at all. Thus, it can be seen from Cornfield that the defendant’s counsel accepted that the pension fund was “property held by the defendant” but argued that its realisable value at the date of the order was nil (see paragraph 23 of the judgment). In Ford, it was contended by the defendant that the “so-called fund value was not an immediately realisable asset and therefore should not be included in the relevant calculation” (see paragraph 9 of the judgment), but the Court held that the pension policies in question had been correctly valued at some £80,000. The Court evidently took the policies to be “realisable property”.[13]In Chen, the confiscation order had been madepursuant to the Proceeds of Crime Act 2002, which had replaced the 1988 Act for material purposes. Very similar issues arose, however. Under the 2002 Act, the amount of a confiscation order could depend on “the total of the values (at the time the confiscation order is made) of all the free property then held by the defendant”, and “free property” extended to “all property wherever situate”, including property in which the defendant had an interest, unless an order was in force under certain statutory provisions. As I have said, the Court concluded that the relevant pension policies had no value at the time of the confiscation order, but that does not mean that it regarded them as anything other than “free property”. To the contrary, there would have been no need to assess the policies’ value if they had not been “free property”.[14]The point emerges from, for example, this passage from the judgment:
“19 In our judgment, these policies constitute free property. The appellant does not dispute that. It is property because the defendant has an interest in it; it is free because there is no order in force with respect to it within the meaning of s.82. 20 But what is its value?”
[15]The present appeal is different. No issue arises as to either the value of Mr Ahmed’s pension policies or the size of the confiscation order to which he is subject. All that matters is whether the policies are “realisable property” and, given the terms of the 1988 Act, it is plain that they are. That conclusion, of course, accords with the view Flaux J expressed in paragraph 381 of his 2010 judgment (see paragraph 3 above).[16]I would dismiss the appeal.[17]I agree.[18]I also agree.