Greet, R v [2005] EWCA Crim 205

[2005] EWCA Crim 205

Case Nos: 2003/05133/C3 & 2003/06768/C3

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CRIMINAL DIVISION)

Venue ON APPEAL FROM BRISTOL CROWN COURT

HIS HONOUR JUDGE TICEHURST

T19991411

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 3 February 2005

Before

LORD JUSTICE RIX

MR JUSTICE POOLE

MR JUSTICE STANLEY BURNTON

Between

RRespondent

Michael Hugh GreetAppellant/ Defendant

Mr Philip Mott QC and Mr James Dennison (instructed by The Crown Prosecution Service) for Respondent

Mr Geraint Jones QC, Mr Charles Joseph and Mr Robert Lawrie (instructed by Messrs Martyn Prowel) for Appellant/Defendant

Hearing Hearing dates : 2, 3 and 5 November 2004

Judgment

This is the judgment of the court:

[1]There are before the court an application for permission to appeal, and an appeal for which permission has been given. The application for leave to appeal is against conviction, renewed after refusal by Mackay J. There is an ancillary application for fresh evidence to be admitted, indeed the application for leave to appeal against conviction is in essence founded on new evidence. There is also an application for bail. However, for these applications to be made, an extension of time of approximately twenty months would first have to be granted, also refused by the single judge.

[2]The conviction in question was on 12 December 2001 in the Crown Court at Bristol before HH Judge Ticehurst and a jury, when the applicant/appellant, Michael Greet, was convicted on three counts, one of theft (count 1), one of making a false instrument (count 2), and one of a bankrupt failing to keep proper accounting records (count 5). There were also acquittals on the direction of the judge on charges of using a false instrument (count 3) and of concealment of property contrary to section 354 of the Insolvency act 1986 (count 4). Mr Greet was sentenced on 11 January 2002 to a total of six years imprisonment: to six years on count 1 and concurrent sentences of 3 years and 18 months on counts 2 and 5 respectively. There is no appeal against those sentences in themselves.

[3]The substantive appeal is against the making, in whole or in part, of a confiscation order under section 71 of the Criminal Justice Act 1988 (the “1988 Act”) made by the trial judge on 12 November 2003 in the sum of £160,000 with 18 months imprisonment in default of payment. For this appeal leave was granted by Simon J.

[4]At trial Mr Greet was represented by Mr Stuart Lawson-Rogers QC and Mr Tom Watson, instructed by solicitors Messrs Canter Levin & Berg. Following his conviction and sentence, Mr Greet dispensed with the services of his trial team and instructed fresh counsel and solicitors for the purposes of the confiscation order proceedings. His counsel then were Mr Geraint Jones QC and Mr Hills. In these appellate proceedings Mr Jones QC appears for him again, this time leading Mr Charles Joseph. The Crown has been represented throughout, at trial, during the confiscation order proceedings and now, by Mr Philip Mott QC, with Mr Lambert (at trial) and Mr Dennison (now) appearing with him.

An overview of count one

[5]Mr Greet had been a solicitor in practice in Bristol. He was at all relevant times in considerable financial difficulties and careless of keeping proper accounts. On 18 September 1992 Provincial Bank plc obtained judgment against him for £909,583, secured by a second charge against his home at 93 Pembroke Road, Bristol. There was also a first mortgage to the Eagle Star Group for £295,000. In July 1993 he entered into an IVA (an individual voluntary arrangement) with his creditors: there was a deficiency of liabilities over assets of £982,000, and the home, having no equity in it other than for the first charge holders, Eagle Star, was excluded from the arrangement. On 31 March 1995 his accountant, Mr Wormald, finalised accounts for his practice showing losses of over £258,000 for the year ending April 1992, of over £147,000 for the year ending April 1993, and of over £83,000 for the year ending April 1994. The improvement, such as it was, was due to the effect of the IVA. (No further annual accounts were drawn up; Mr Wormald’s last quarterly certificate to the Law Society related to the three months to January 1995.) Mr Wormald told Mr Greet that he was bound to report that his records had not been properly and fully maintained within the three year period; and also that there was a potential VAT danger with the rendering of pro forma invoices (on which VAT did not have to be paid until payment). He thought Mr Greet never had any difficulties in understanding the figures he put forward, but Mr Greet neglected his responsibilities and left things to others, and in particular his bookkeeper, Mrs Judith Ferris. Mr Wormald ceased to act for Mr Greet on 4 September 1996.

[6]Mrs Ferris gave evidence for the prosecution. She had commenced her employment with Mr Greet in about 1993 or 1994. She said that Mr Greet would instruct her to make transfers from the client account to office account in advance of funds being received to permit such transfers, causing a deficiency on client account. Mr Greet would tell her he had plans to make capital injections into client account from dealing in or sales of property, but he never did so. The firm was spending more than it billed. From the end of 1995 properties were being bought in the name of Jane Thompson (who became Mr Greet’s second wife) with monies transferred from client account to office account: and although payments were made into client account for these purposes, the sums transferred were greater. Mrs Ferris was certain that she brought these difficulties regularly to Mr Greet’s attention, and he would say that he would rectify the position, brushing her off or placating her. At about the end of 1996, when the deficiency on client account became excessive and she saw that nothing was being done about it, she stopped writing up the ledger cards for a year. By “deficiency” is meant that more had been taken from the client account than was properly authorised: but at times the client account threatened to move into absolute debit (which must never happen or of course be seen to happen), and special means, involving Mr Greet, had to be found to prevent that occurring. During the year that she stopped writing up the ledger cards, she maintained a form of reconciliation in a private diary. There came a time in November 1997 when she told Mr Greet that the client account deficiency was some £200,000. It was Mr Greet’s case that this was the first he had heard of any difficulty, and that he was shocked to learn of it. During this latter period until Mr Greet’s practice was suspended, Mrs Ferris resumed writing up the ledger cards.

[7]In February 1998 the Office for the Supervision of Solicitors intervened in Mr Greet’s practice and on 11 March 1998 the Law Society suspended it. Mrs Ferris went to see Mr Greet at his home. He suggested that it was not necessary for her to hand over her private diary to anyone else, but she handed it to the police. Mr Michael Calvert, an accountant, was authorised to inspect and report on Mr Greet’s accounting records for a period of almost three years running up to suspension. He was the head of the investigation unit at the Office for the Supervision of Solicitors. He concluded that during this period a sum of at least £631,000 had been improperly transferred from client to office account; and that some £819,000 had been spent from office account on the personal expenditure of Mr Greet and Ms Thompson. The Crown submitted that it was the inevitable inference that the deficiency on client account had gone to fund that expenditure. The figure of £631,000 was the figure inserted in the particulars of count 1 on the indictment as the amount that Mr Greet was charged with stealing from his clients over the period which had been investigated, namely 30 April 1995 to 11 March 1998.

[8]The Crown called Mr Calvert to present his findings. It also called a further expert accounting witness, Mr Peter Tegg, of Messrs Pannell Kerr Forster (“PKF”), who was instructed in March 2000 and presented his report in September of that year. He, like Mr Calvert, was also experienced in the auditing of solicitors’ accounts. He had made his own investigations but he also had Mr Calvert’s statement before him and effectively re-performed the work that Mr Calvert had done, using the latter’s schedules as a basis for presentation and format. Like Mr Calvert he had found that the practice books of account were so unreliable as to be useless, and he too went back to source documents. Again like Mr Calvert, he found it impossible to state what the ultimate deficiency on the client account was, and set out rather to find out how much had been transferred from client account to practice account and to compare that with how much could properly have been so transferred. He concluded that the amount transferred exceeded the amount which should have been transferred by some £800,000, a figure in excess of Mr Calvert’s.

[9]The differences between the two experts’ figures and the individual bases of their calculations were the subject-matter of a fair degree of successful cross-examination by Mr Lawson-Rogers on behalf of Mr Greet. However, no expert evidence was called by the defence, although Mr Greet had had available to him, on legal aid and thus subject to constricted availability of funds, the services of a well-known firm of accountants, Messrs Hacker Young. Since Mr Greet has in his grounds of appeal attacked the conduct of his defence, he has waived privilege over his defence papers. We shall have to refer further to the content of the waiver documents below, as well as to the responses from Mr Greet’s former legal team. Suffice it to say for the present that the decision not to submit a report from Hacker Young nor to call the Hacker Young accountants was a deliberate tactical decision on the part of the defence, in which Mr Greet played a full part. Mr Lawson-Rogers’ cross-examination had, however, been prepared with the full aid of the Hacker Young accountants as well as with Mr Greet’s own very considerable knowledge of the material. In a memorandum of observations intended for his legal team and made by Mr Greet on the first day of trial, dated 16 October 2001, he comments that “no one knows the case better than I do” (at para 5) and also states:

“7. We are all agreed that Tony Maber [of Hacker Young] will NOT take the stand, because, (a) We would have to disclose his report to the CPS, and this would, inevitably lead them to insist on an adjournment. (b) In X exam of TM, they could broaden out the scope of the questioning. So, I will, in evidence, produce the relevant schedules and this is what I mean when I say this gives us the element of ambushing the CPS – and getting the same points over to the court that TM could have produced in his report, without the CPS having the chance to seek an adjournment, and thus get time to recover. The great weapon of surprise in wa[r]!!”

[10]The effect of these tactics, as at any rate Mr Greet regarded them, was successful enough to require the Crown to accept that the unauthorised transfers from client account to office account should be reduced to a figure of £487,000. This was still higher than the figure that Mr Greet accepted in his evidence, albeit even he acknowledged that he could not explain an unauthorised deficiency of some £200,000. The cross-examination of the two Crown experts led the judge to include the following passages in his summing-up: “You will wish to assess the reliability of those experts who gave evidence to you, and one of the questions you may wish to consider is whether their evidence is unreliable and flawed or whether it is an indication of the complexity of the situation and the poor state of the accounts available to them when they came to prepare their reports” (at 78G). “Mr Tegg was questioned at length and in great detail by Mr Lawson-Rogers and it is right to say that there were a significant number of errors, omissions and problems picked up in the course of the extensive cross-examination…He did not think of looking at the legal aid payments, he said. He accepted that it was a glaring omission on his part and would require the figures to be adjusted” (at 84H/85D). “You will recall that Mr Mott re-examined Mr Tegg in great detail. The net effect of this, you may think, members of the jury, is that the figures as originally set out in Mr Tegg’s report have been shown to be less than accurate. There are discrepancies between Mr Tegg’s figures and those of Mr Calvert even though they were working with precisely the same information. Mr Tegg relied on the accuracy of Mrs Ferris’s annotations. What the prosecution say, however, is that, making all the appropriate allowances for errors and inconsistencies in the expert evidence from Mr Tegg and Mr Calvert, you can still safely reach the conclusion that substantial amounts were transferred out of the client account in breach of solicitors accounts rules and in a way that enables you to say that Mr Greet was dishonestly appropriating clients’ monies for his own use. And that, in essence, is what this case is all about” (at 87E/88A). “You will recall that Mr Lawson-Rogers, in his concluding speech, poured a lot of scorn on the workings and reliability of Mr Calvert and Mr Tegg so far as their investigations and conclusions were concerned. You will have to assess their evidence and, as I say, the extent to which you feel that you can rely on it. What you need to be certain of when reaching your conclusion is that you are satisfied so that you are sure that Michael Greet dishonestly took substantial funds belonging to his clients and to which he was not properly entitled (at 90B/C). “You will recall that in his closing speech Mr Mott accepted that, in the light of the evidence of Mr Calvert and Mr Tegg, adjustments should be made. From the starting point of £804,294 as the figure representing transfers in contravention of solicitors accounts rules…Mr Mott said this reduced the overall total from £804,294 to £487,508. Have Mr Calvert’s and Mr Tegg’s figures been shown to be so unreliable that you can have no confidence in them whatsoever? Or do the discrepancies simply highlight the scale of the problem and the difficulties that faced them?” (at 91A/F).

[11]Mrs Ferris was also strongly cross-examined, on the basis that she was not only incompetent but also dishonest. It was suggested to her that she had given Mr Greet no warnings until as late as November 1997 and that he had never promised to deal with the situation. Her own personal financial difficulties (she too had made an IVA) and her involvement in a number of failed businesses, in particular a taxicab business (Peter Taxis), were questioned. It was put to her (“hinted” is the word the judge used in summing up) that she had falsified the books for her own advantage and had stolen money from the practice. She accepted only that she had maintained books which were contrary to the solicitors accounts rules, and had done so for the sake of the practice. She denied taking any money. She had continued to be paid in full even during the year when she had withdrawn from writing up the ledgers.

[12]She was also questioned about another employee of the practice, Paul Avery, who did conveyancing work. He was not a witness at trial. We shall have more to say about him below, for new evidence that he was a substantial gambler during his time with the practice is now relied on by Mr Greet as one of his two main grounds of appeal. There was no evidence at trial that he was a gambler, but the jury did know both that he had had a previous conviction for stealing from a solicitors’ practice for which he had received a 4 year sentence of imprisonment in 1980, and also that he had been convicted again of stealing some £21,000 from the successor firm, Thorpe & Thorpe, which had bought Mr Greet’s practice for £1: for this Mr Avery received a prison sentence of 18 months. The period in question at Thorpe & Thorpe was just under a year, from March 1998 to February 1999.

[13]Mrs Ferris, when asked about Mr Avery, said that he was sometimes slow in producing small amounts of cash, from £85 to £150, which he had received as search fees and such like, and sometimes had to be reminded about them: but that he always produced the money.

[14]In his own evidence, Mr Greet denied any wrongdoing on his own account, other than carelessness or honest lack of observance of the rules. Essentially, he had relied on Mrs Ferris to do the bookkeeping and on Mr Avery to do the conveyancing. He was not told of any deficiency on the client account until November 1997, when the news of a deficiency of some £200,000 came as a shock. He agreed, however, that hundreds of thousands of pounds had been lost from his firm’s account and that there was a large deficiency in six figures. He accepted that he was the only signatory on the bank account and the person ultimately responsible, but he denied giving any instructions for improper transfers. He had no explanation for the deficiency; he did not involve the police after the November 1997 bombshell; but his suggestions were that Mr Avery as well as Mrs Ferris may have been syphoning off the firm’s funds.

[15]In his summing up the judge described the effect of this defence and of the corresponding part of the cross-examination of Mrs Ferris in the following passages:

“What it comes down to is this, members of the jury: on the one hand, Mrs Ferris has taken you through in some considerable detail as to how she prepared the accounts and the difficulties under which she was labouring. Mr Greet has, on the other hand, accused her of considerable dereliction of duty and has suggested, or hinted through the line of questioning he has instructed counsel to pursue, that she is dishonest. That suggestion was emphasised in Mr Lawson-Roger’s closing speech. It is your assessment of the witnesses, what you make of them, all of them, that is important” (at 61E/G). “…[Mr Greet] described [Mr Avery] as excellent. He said, “I was happy to rely on him to look after the conveyancing, unwisely.”

No doubt, the reason for that remark were the frequent suggestions that Paul Avery as well as Judith Ferris may have been syphoning off the firm’s funds” (at 108A). “Between November 1997 and March 1998, he said he was suspicious that money was going missing but he had no proof” (at 131C).

[16]There was one other area of prosecution evidence which was of importance. Statements were read from a number of clients about money which should have been safe in the firm’s client account, but was not. The statements were read because they were not in dispute. The sums in question, excluding interest, amounted to £398,000. The case of Mr Biracowz was of particular interest. In November 1997 he bought a house with the aid of a bridging loan of £100,000 pending a longer-term mortgage from a bank. On 22 February 1998 Mr Greet told him that the mortgage from the bank had been received and had been used to pay off the bridging loan. Over the next few weeks Mr Greet assured Mr Biracowz two or three times that everything was in order. However, it turned out that it was not, and that the bridging loan had not been paid off and that Mr Biracowz had to claim compensation from the Law Society Compensation Fund for the £100,000. That evidence was not disputed. It would appear to demonstrate dishonest misrepresentations by Mr Greet to Mr Biracowz. At the hearing of the renewed application Mr Jones was at a loss to explain this evidence. He ultimately stated on instructions from Mr Greet that the latter had made those representations on the assurances of Mr Avery, who was handling the conveyancing file. But there is nothing in the summing up to support those instructions.

[17]There were also a small number of clients who gave oral evidence at trial. Again we draw attention to one transaction of particular interest for present purposes. On 2 June 1995 Mr Greet telephoned a client, Mr John Miles, with whom he was on friendly terms, to propose the loan of £27,000 needed urgently by another of his clients, a Mr Richard Hill: £30,000 would be repaid in 3 months, with security on the borrower’s farm. The very same day, a lady came from Mr Greet’s office, with unsigned copies of all the ancillary paper-work, to collect the cheque for £27,000. He was assured that Mr Greet had the signed originals. In the result, the loan was not repaid until September 1997, and then without the £3,000 interest, which Mr Greet said had not been paid but hopefully would be received shortly. Mr Miles was not concerned as he trusted Mr Greet who had assured him that his security was all in order. Then shortly before the failure of Mr Greet’s practice Mr Greet asked Mr Miles to lend him £100,000 with no clear explanation of the loan’s purpose, but Mr Miles understood it had something to so with Mr Greet’s practice. He declined.

[18]Mr Richard Hill also gave evidence. Mr Greet had been doing legal work for him on a business dispute. Mr Hill was looking for finance of some £30,000 and Mr Greet mentioned someone, a Mr Miles or Mills, who could provide it. However, Mr Hill declined because the terms were unacceptably high, involving a £3,000 fee. He never received any money by way of loan. He never signed any documents. Later there was a dispute between Mr Hill and Mr Greet over the latter’s fees in 1996/97, and Mr Greet sued for them.

[19]So a loan was made by Mr Miles to Mr Hill, but not obtained by Mr Hill. There were also in evidence Mr Greet’s firm’s internal ledger cards relating to this transaction. Although the loan was not proposed to or made by Mr Miles until 2 June 1995, the internal documentation shows the receipt of it (by the firm) dated to 24 May 1995, the same date as a payment on account of costs charged to Mr Hill was transferred out of Mr Hill’s client account into Mr Greet’s office account. The effect of the £27,000 loan was to place Mr Hill’s client account in a credit balance of some £20,000, and the effect of the overall transaction including the transfer on account of costs was to leave Mr Hill’s client account with a debit balance of some £25,000.

[20]Mr Greet’s evidence about this transaction was that Mr Hill had borrowed money from Mr Miles to cover legal fees owed to his firm. When Mr Hill disputed the bill, he, Mr Greet had repaid the sum of £27,000 from “client account”. This explanation was in conflict with the internal paper-work, which showed that the client account had already been debited at the time of the loan, and long before any dispute about fees, for which Mr Greet ultimately sued.

An overview of count two

[21]The grounds of Mr Greet’s application for leave to appeal against conviction are really concerned with count one, but it is necessary to say something also about count two, both because it is relevant to the overall case of criminality charged against him, and also because its background is relevant to his separate appeal against the confiscation order.

[22]The essence of count 2 was that Mr Greet was charged with forging a trust deed purportedly dated 12 October 1992 under which he and his first wife, Mrs Jean Greet, (the “nominees”) declared that they held 93 Pembroke Road in trust for Ms Thompson (the “beneficiary”) and would transfer it to her at her direction. It was in fact transferred by a transfer dated 24 July 1997. The trust deed was signed by all three and was expressed to be in consideration of the payment of £4,500 by Ms Thompson to the other two signatories. It was conclusively proved by scientific evidence relating to the paper on which the trust deed was drawn up that the deed could not have been made in 1992. The paper had not been manufactured until May 1994, nor supplied to Mr Greet’s office until January 1996. Mr Greet was forced to accept this, but his defence was that the trust deed was drawn up to reflect an earlier oral agreement, made in October 1992, to the same effect.

[23]The importance of the trust deed is that, if it had been made in 1992, at the time it purported to have been made, then the disposition predated Mr Greet’s July 1993 IVA and the property would fall outside it, as the supervisor of the IVA, a Mr Byrne, accepted it should do. If on the other hand the deed was made only at about the time a copy of it first surfaced, that is to say when faxed to Mr Byrne on 20 May 1997, then it is unlikely that Mr Byrne would have accepted that the home, or at any rate Mr Greet’s 50% interest in it, should not be included in the IVA. The forgery of which Mr Greet was convicted was therefore a fraud on his creditors. When on 30 October 1997 Pembroke Road was sold for £365,000 and the Eagle Star mortgage was redeemed, Ms Thompson had an equity in the home of some £117,000 less expenses, or, as the judge found, some £110,000. It was in 1997 that Mr Greet divorced his first wife: although they had separated in 1991 and she had gone to live in a second home in Wales.

[24]Of course, if the second charge to Provincial Bank had remained in place, there would never have been any equity in the home at all. However, in March 1996 Provincial Bank had agreed to accept a discharge of their second charge in consideration of payment of £5,000: on the basis that there was nothing left for them after the first charge to Eagle Star. This was a successful negotiation on Mr Greet’s part, commenced in October 1995: for the home’s owners, whoever they were, were able to benefit from the rise in the value of property which was about to take place.

[25]When he was interviewed by the police, Mr Greet had said that he had prepared the deed and had done so at about its date, in October 1992, and had signed it then. When first confronted with the scientific evidence, he had nothing further to say. It was only at a subsequent interview that he said that the deed should have contained recitals reflecting an earlier oral agreement. That remained his evidence at trial: he said that 12 October 1992 was the date of the oral agreement and that there was no intent to deceive.

[26]Mrs Jean Greet gave evidence. She could not remember whether the date was on the trust deed when she signed it, nor could she remember when she signed it. She could not say positively that she signed it in 1992, but she might have done. (On the scientific evidence, of course, she could not.) However, Mr Greet had wanted her to swear an affidavit to say that she remembered the trust deed had been signed in October 1992, but she declined to do so.

[27]The jury’s verdict on count 2 was in our judgment all but inevitable. The trust deed first surfaced in May 1997, a few months before the transfer of July 1997 itself. Its first appearance was in the form of a fax to Mr Byrne, which emphasises its function, namely to keep the property, or at any rate Mr Greet’s half-share interest in it, out of the hands of his IVA. In any event, there would appear to be little point to any dealing with the property until Provincial Bank had agreed to discharge their security, which they did in March 1996. Mr Greet’s first response to being interviewed on the subject was to affirm that the date of the deed was indeed the date of its making. When he was challenged with the scientific evidence, he produced no explanation. It was only some months later, in a subsequent interview, that he sought to say that the deed had been back-dated to the date of an earlier agreement in 1992. But he had no support for that in any other evidence.

[28]Mr Jones sought to submit that leave to appeal on count 1, where the new evidence relied on was concentrated, should be extended into counts 2 and 5: on the basis that if it was arguable that Mr Greet’s conviction on count 1 was unsafe, then it was also arguable that the jury had carried over into the other counts their disbelief in Mr Greet’s basic honesty. There was otherwise no ground of appeal specifically related to these other counts. In our judgment, however, the alternative is the more likely: that Mr Greet’s dishonesty in relation to the trust deed would have done nothing to assist him on any other count.

Count 5

[29]Little need be said about count 5. Mr Greet in effect accepted that he had not kept proper books of account in the two years preceding his bankruptcy in April 1998, but he said that he had a reasonable and honest excuse in that he relied on the incompetent, inefficient and dishonest Mrs Ferris. We would again regard the prospect of an appeal as hopeless. Mr Greet’s notice of appeal does not even seek leave to appeal in respect of count 5: only the skeleton argument prepared for the hearing of the renewed application seeks leave to amend the notice in this respect.

The confiscation proceedings

[30]It is necessary to say something about the confiscation proceedings before turning to the new evidence and grounds of appeal relied on for the purpose of Mr Greet’s renewed application for leave to appeal against conviction.

[31]A confiscation notice was served on the day of conviction and confiscation proceedings were adjourned, as they were again on 11 January 2002, the day on which Mr Greet was sentenced. In sentencing Mr Greet on count 1, the judge stated the amount of the theft of clients’ money to be “some £487,000”, the reduced figure on which the Crown had relied in its closing speech to the jury. There has been no appeal from the sentence of six years based on that figure.

[32]The prosecutor’s statement was served on 28 March 2003. In it the Crown assessed the “benefit” (for the purposes of section 73 of the 1988 Act) which Mr Greet had obtained from his offence under count 1 at that same figure of £487, 000. It put “the amount which might be realised” from Mr Greet (for the purposes of section 74 of the 1988 Act) at £214,408, its then estimate of the equity in a property at 8 Chantry Road, Bristol. (It subsequently conceded that there was no other realisable asset.) This was the new matrimonial home of Mr Greet and his second wife, Ms Thompson (as we will continue to refer to her). Although Chantry Road was in the name of Ms Thompson and had been bought by her (with the aid of a mortgage) with proceeds from the sale by her of Pembroke Road, it was the Crown’s case that the transfer to Ms Thompson of the Pembroke Road property constituted a gift of it from Mr Greet and therefore fell within the meaning of “realisable property” for the purposes of section 74(1)(b). We shall have to give further details of these transactions below when we come to deal with the confiscation order appeal.

[33]On 16 April 2002 Mr Greet’s trial solicitors withdrew and Mr Greet was acting in person until he obtained his new representation later in the year. As stated above, that representation has continued down to the present day, in particular in the person of Mr Jones QC. Following the service of the defence response, and of supplementary responses from both parties, there was a final directions hearing on 3 February 2003. This split off the issue of section 73 “benefit” for a second stage: the first stage would be to determine “all issues of law and principle and all evidence, facts and matters relevant to the exercise of discretion under section 74(10) of the Criminal Justice Act 1988”. The issues of the amount which might be realised were therefore to be established first. This was because the establishment of this comparatively lower figure would be likely to set the parameters for any need to investigate the amount of benefit.

[34]Following a two day hearing on the section 74 issues the judge gave his judgment on this first stage of the confiscation proceedings on 10 July 2003. He found that the July 1997 transfer of Pembroke Road to Ms Thompson was a gift for the purposes of the 1988 Act, and that this gift embraced both Mr Greet’s half-share interest in the property and the half-share interest of Mrs Jean Greet “which she gave up or surrendered to him at his request and instigation”. He therefore found that because the whole of the net equity in Chantry Road derived from the net proceeds in Pembroke Road, therefore the section 74 gift could be traced into Chantry Road. He held that it was “appropriate in all the circumstances to take the gift into account” for the purposes of section 74(10)(b). He found the net proceeds derived from the sale of Pembroke Road to have been £110,895.39, but he adjourned the question of the current value of that gift (bound up in the equity in Chantry Road).

[35]The judge then gave consequential directions for the second stage of the proceedings, that concerned with the amount of “benefit” and ultimately the realisable value of the equity in Chantry Road. We do not have a transcript of the discussion leading to those directions or of the judge’s order, but Mr Jones tells us that, on his application on behalf of Mr Greet for the extension of legal aid for the preparation of a report from an expert accountant on the issue of benefit, so that there could be a detailed analysis of the accounting records and materials, the judge indicated that the grant of legal aid would be conditional upon Mr Greet adducing some sort of report from an accountant or experienced bookkeeper to indicate that there were serious issues relevant to that issue. Mr Jones submitted that the judge thereby “implied” that he would be likely to grant legal aid if credible material were placed before him that serious issues arose concerning the amount of benefit which Mr Greet had derived from his offence under count 1.

[36]Mr Greet was due to serve his evidence on the outstanding issues by 5 September 2003, but he chose to serve none. Apparently there was at least one further directions hearing in September 2003 at which the stage two hearing was adjourned to 12 November 2003 and Mr Greet made a renewed, but unsuccessful, application for legal aid to obtain a forensic accountant’s report into the issue of benefit derived.

The Nightingill report

[37]At some point, however, as Mr Jones’ skeleton argument tells us – for on these matters there is no evidence from Mr Greet or even from his solicitors for the purpose of these appellate proceedings – Mr Greet began to address the question of the amount of benefit derived. The skeleton reads:

“Whilst in prison, Greet undertook a great deal of work checking the accountancy evidence against source documents. He found that the evidence given by the Crown’s accountancy witnesses was far more flawed than described by the [judge] in his summing up. Notwithstanding his impecuniosity, Greet then found sufficient funds to commission Mr Nightingill, a very experienced solicitor’s cashier/bookkeeper (qualified by experience over 30 years) to undertake a review of the accountancy premises relied upon by the Crown.”

[38]Mr Gary Nightingill’s undated report was served on the judge’s court on 5 November 2003. It was sent by that court to the Crown on the same day. The defence skeleton on the outstanding issues dated 4 November 2003 refers to that report as “a preliminary report of the kind mentioned and/or envisaged by the judge on 10 July 2003”. It also made a renewed application for legal aid for a forensic accountant’s report prefaced by the following remarks:

“As the Defendant has been denied legal aid and has been unable to obtain a forensic accountant’s report upon this issue and has thus been denied the opportunity to advance his case supported by forensic evidence, the Defendant can take no further part in advancing his case on this issue unless his renewed application is granted. The only issue upon which the Defendant then makes a case, relates to equitable accounting.”

The skeleton asked for legal aid and an adjournment.

[39]The prosecution skeleton in response was dated 10 November 2003. It dealt inter alia with the Nightingill report. It pointed out that even Mr Nightingill’s figure for the balance of transfers from client to office account which could not be lawfully accounted for was some £109,000. It addressed in detail the bases of Mr Nightingill’s figures and argued that, when proper adjustments to Mr Nightingill’s workings had been made, the defence’s “best case” was some £313,000. It concluded:

“The Crown still adheres to its figure of £487,508.14. However, taking into account the above matters, the Defendant’s best case still far exceeds the sum that might be realised, so that the further disputes are no more than academic.”

[40]On 12 November 2003 the final hearing of the confiscation proceedings took place. The judge made a number of separate “rulings” that day: we are concerned with the first three of them. By this time the then current value of the equity in Chantry Road was clear, some £161,500. In the end the judge adopted a figure of £160,000 as the amount that might be realised for the purpose of his order. There were a number of arguments as to why that amount might be less than the full value of the equity, but it was clear that it would not be greater. In these circumstances the judge was not persuaded that he should adjourn for a more detailed forensic examination. The judge accepted that there were undoubtedly issues raised by Mr Nightingill, but the question he posed was:

“are they of such substance and significance that injustice would be done to the defendant were I to refuse his renewed application for legal aid to enable a full report by a forensic accountant to be prepared?”

[41]The judge reminded himself that the burden of establishing the benefit is on the Crown, but he answered his own question in the negative. He was satisfied that the Crown had established beyond argument that the benefit was greater than the sum that might be realised. For these purposes he adverted to certain matters contained in his summing up at trial. For instance, he referred to the unchallenged evidence from Mr Biracowz (see at para 16 above). He cited the unchallenged evidence read to the jury of clients’ money which had disappeared or was unaccounted for, excluding interest in the sum of £398,000. He concluded that he was not persuaded that, notwithstanding the efforts of Mr Nightingill, the interests of justice demanded a further investigation “into precisely how much and how the money was taken by Mr Greet”. He therefore declined the renewed application for legal aid. That was his first ruling. In his second ruling, he decided that the issue of equitable accounting, not having been raised at the first stage, was not open at the second stage. In his third ruling, he repeated his conclusions that the Crown had established a benefit of £398,000 on the basis of undisputed and unchallenged evidence before the jury; and that the matters raised by Mr Nightingill’s report did not cast sufficient doubt upon that conclusion to warrant the success of Mr Greet’s application for legal aid and an adjournment. Finally, he ruled that the amount that might be realised was £160,000.

[42]Mr Nightingill’s report is relied on for two purposes in the proceedings before this court. In relation to the application for permission to appeal, it is relied on as one of two principal grounds of appeal, on the basis that it is new evidence which meets the relevant tests of section 23 of the Criminal Appeal Act 1968 and throws into doubt the conviction on count 1. In relation to the appeal against the confiscation order, it is relied on for the purpose of challenging the judge’s decision to refuse the application for legal aid for a forensic accountant’s report and for an adjournment.

[43]It is an irony or oddity of the chronology relevant to these appellate proceedings that the grounds of appeal against conviction, relying on Mr Nightingill’s report, were only filed on 20 November 2003, after completion of the confiscation proceedings. One might have thought that if new material in the nature of Mr Nightingill’s report was to be submitted at all with respect to conviction on count 1, it would have been important to do so as soon as possible after that conviction. Indeed, it might well have been relevant to sentence as well. Such considerations make it even stranger that such new material has not been accompanied by any evidence from Mr Greet or his solicitors offering an explanation for its late production. Indeed, its deployment seems directly related to the confiscation proceedings rather than to conviction; and it has been relied on for the purpose of conviction only after the failure to deploy it successfully in the confiscation proceedings.

The grounds of appeal against conviction

[44]Two main grounds are relied on, and were the exclusive focus of Mr Jones’ oral submissions. The first relates to Mr Avery, who did the conveyancing in Mr Greet’s firm. The second relates to Mr Nightingill’s report and the Crown’s experts. Mr Jones sought to deploy these two grounds together, but the attempt ran into difficulties, as will appear. A third ground related to the summing up concerning Mrs Ferris and her credibility, concerning which Mr Jones added nothing to his written skeleton.

[45]Mr Avery. New evidence is presented in the form of witness statements dated March through August 2002 concerning Mr Avery’s gambling activities. There are also two statements dated July 2003 by Mr Michael Wike, a mutual friend of Mr Avery and Mr Greet, concerning admissions by Mr Avery to Mr Wike concerning Mr Avery’s thefts from Mr Greet’s practice. Those admissions were made to Mr Wike at some undefined time after August 2000 and passed on to Mr Greet by Mr Wike at some equally undefined time thereafter. Mr Greet asked Mr Wike to try to get Mr Avery’s admissions on tape. Mr Wike managed to do this at a meeting with Mr Avery at a restaurant in February 2003.

[46]Further details of this and other new material are as follows. Mr Avery was also known as Paul di Mambro. The earliest statement is from a regular visitor to Ladbroke’s betting shop at Ashton Drive, Bristol, around the corner from Mr Greet’s offices. He described di Mambro as “the talk of the shop” because of the large amounts he would regularly place on “virtually every race”: this between 1996 and 1999. Next, a statement by Ladbroke’s shop manager said that di Mambro used to visit, starting in 1994, at which point he used his own cheques: after a six months absence in 1995, he started betting only in cash, averaging about £800-£1000 a day. One week he won in excess of £18,000. On one occasion he said that he was placing bets on behalf of someone else as well as himself. He was so well-known that he was what was known as a “monitored customer”, ie a big spender and loser and a good client. In 1999 it all came to an end. A third statement, by the acting managing of the same shop was to similar effect, speaking of betting, mainly in cash, of between £1000/£1500 per day; and of the impression that di Mambro was betting for someone else, as he would appear to divide his winnings in half. A fourth statement came from the manager of a Coral’s betting shop in Bristol, where di Mambro was betting £200/£300 a day, until one day he just stopped coming in. The information contained in these statements would have been new to the jury at trial.

[47]As for Mr Wike’s statement: he said that he met Mr Avery, whom he also knew as di Mambro, in a prison where both were serving sentences. Later, after his own release, when visiting a friend in that prison, he was approached by Mr Greet and asked about Mr Avery, whereupon Mr Wike told him that Mr Avery had mentioned many times that he had been stealing from Mr Greet’s practice. Mr Wike agreed to help Mr Greet by being a witness and by taping Mr Avery’s admissions. He exhibited a transcript of the recording, much of which is not at all easy to follow. In it Mr Avery appears, however, to accept that he stole cash from Mr Greet’s practice, in sums of about £100 at a time in the form of search fees – “you forget how much it all builds up”. The idea that he stole £200,000, however, which Mr Greet seemed to be putting about, was exaggeration, “talking through his hat”. Moreover, Mr Greet was taking money as well, every month, mentioning a monthly figure of £1700. “He said to me before he got done, ‘Well you must have had some’. I said well not up against what you’ve had, Michael.” He, Mr Avery, only took cash, never a cheque or transfer. Deposits were also paid in cash; but he did not take thousands, for that would have stood out. But with fifteen to twenty conveyances a week “at a hundred pounds [it] soon mounts up”. He did it all the time. When asked if “Judy”, ie Mrs Ferris, had taken any money, however, he said, “Nothing at all I can tell you absolutely not a penny”.

[48]Other new material relied on by Mr Greet, such as the 30 June 1999 report of the Office of the Supervision of Solicitors, not only dated from a time prior to trial, but in speaking to Mr Avery’s theft from the successor practice of Thorpe & Thorpe merely gave further detail about a subject-matter already known at trial. Not all of that detail was helpful to Mr Greet: such as the information that Mr Greet had employed Mr Avery, who had been struck off as a solicitor in 1979 for the earlier thefts for which he had gone to prison in 1980, without the knowledge of the Law Society: itself a breach of Law Society rules. The report spoke of a minimum cash shortage of some £24,000 but also of at least 29 improper book entries totalling £148,000 made at the instigation of Mr Avery; which was not, however, the same thing as saying that that sum had been lost. It appears that at Thorpe & Thorpe, unlike the position at Mr Greet’s firm where Mrs Ferris was the bookkeeper, Mr Avery was able to make bookkeeping entries himself.

[49]There is also material relating to Mr Greet’s attempts to use this information to have Mr Avery prosecuted for stealing from his practice. The police investigated and a report was sent to the CPS, who accepted, in writing, that there was a prima facie case but declined to prosecute. However, District Judge Workman at the Bow Street Magistrates Court, issued a summons to Mr Avery on 12 February 2004 to answer an information laid against him by Mr Greet that he had stolen £416,000 from Mr Greet between 1 April 1994 and 13 March 1998. Nothing further is known about this.

[50]The Nightingill report. We refer to what we have said above about the circumstances in which this came forward in early November 2003. What Mr Nightingill did was to work on Mr Tegg’s report and the various schedules which he had appended to it and check his figures against the original documentation. It will be recalled that Mr Tegg’s original figure for the balance of transfers not accounted for was some £804,000, but that by the end of the trial the Crown had reduced this figure to some £487,000. Many of Mr Nightingill’s corrections covered this same ground. They also covered ground which had been debated at trial and in many cases resolved by unchallenged evidence or admissions in the Crown’s favour: effective or actual agreement which was now reversed. A good example of this is in relation to legal aid receipts: it was admitted that the correct figure should be allowed without VAT or disbursements; but Mr Nightingill restored the VAT and disbursements and thereby overstated the amount properly accounted for by some £95,000. Despite this traversing of old ground, Mr Nightingill’s bottom line still remained an unaccounted for deficiency of £201,269.66 (or more or less what Mr Greet at trial had accepted as the deficiency) (Schedule 8 of the Nightingill report) less a further list of credits (Nightingill Schedule 2 amounting to £91,817.60 of which half had already been relied on at trial), giving a final bottom line deficiency of £109,452.06. If the £95,000 credit taken by Mr Nightingill in respect of VAT and disbursements is again reversed, the outstanding balance reverts again to over £200,000. Other calculations of this kind could be made. The skeleton argument deployed by the Crown at the final hearing of the confiscation proceedings sought to demonstrate in detail that, making the fullest allowances for all the points made by the new report, the defence best case remained at a deficiency which could not be accounted for of £313,503.19.

[51]Mr Jones sought to use the evidence about Mr Avery and the Nightingill report in tandem, as follows. Mr Nightingill’s final deficiency was £109,000 – or even £65,000 in a subsequent edition of the Nightingill report which no one had seen except for Mr Greet’s legal team! But this deficiency could be entirely explained by Mr Avery’s thefts: even a conservative assumption of thefts of £24,000 per annum (£500 per week per 48 week year) for the (almost) three years under review on count 1 could entirely eliminate the remaining deficiency. It was also submitted that the evidence about Mr Avery threw doubt on Mrs Ferris, in as much as there was some suggestion that Mr Avery had an accomplice in his betting exploits.

[52]The difficulty of this cumulative approach, explored and exposed during Mr Jones’ oral submissions, was that the Tegg/Nightingill exercise was a paper accounting exercise in which cash played no part. In effect, the Crown sought to prove the defalcations at Mr Greet’s practice in two ways. One way was to illustrate the ultimate losses on the client account (an answer to the question: How much was missing?) by means of a selection of clients’ losses: hence the unchallenged evidence, including that of Mr Biracowz, of the losses of Mr Greet’s clients. The other way, which arose out of the initial work of Mr Calvert, and was also followed by Mr Tegg, was to seek to show how much of the transfers from client to office account could be justified or remained unjustified and unaccounted for (an answer to the question: How much of what was missing could be put down to unjustified extractions from the client account?). The significance of the latter method was that, in circumstances where only Mr Greet was a signatory to the bank accounts and only he could authorise the transfers from client to office account, it was a cogent explanation of the client account’s ultimate losses. Ultimately, Mr Jones accepted that he could not amalgamate the Nightingill report and Mr Avery’s thefts.

The waiver documents

[53]Mr Greet’s original grounds of appeal, composed by himself and submitted in September 2003 – grounds which were in due course overtaken by the fresh grounds composed by Mr Jones and filed in November 2003 – only relied on new evidence relating to Mr Avery. However, both sets of grounds had attacked the conduct of Mr Greet’s trial counsel and solicitors. Mr Greet’s original grounds had complained that his legal representatives – “were unwilling to pursue any line of enquiry concerning P. Avery. It is only in light of matters arising during trial that fresh lines of enquiry relating to P. Avery have opened up. The Appellant had at all times expressed to his legal advisers that it was P. Avery who was responsible, either in his own light or in collusion with J.A. Ferris for the losses’ to the clients’ account…”

[54]The replacement grounds did not in terms repeat these complaints, which we suppose are not formally any longer relied upon, but instead they adopted a new criticism to embrace the pre-trial (Hacker Young) accountants’ report prepared on his behalf:

“It did not adequately deal with the issues that Nightingill has now dealt with despite requests from the Defendant that such exercises should be undertaken.”

[55]In the light of these complaints Mr Greet executed a waiver of privilege on 12 February 2004. In the light of disclosure of pre-trial defence material Mr Jones has submitted that contemporaneous and justified hindsight criticisms of the inadequacies of the Hacker Young preparation have been shown to have been established. We would observe that there is a significant lack of any evidence before us from Mr Greet in support of those criticisms – at most there is a “Response and Comments” document dated 3 April 2004, a purely forensic document apparently composed by Mr Greet in answer to responses by his trial legal representatives to his own complaints about them. Mr Jones pursued no criticism of Mr Greet’s legal representatives in relation to Mr Avery. In his skeleton argument, however, Mr Jones put the essence of his criticisms in relation to Hacker Young in this way:

“The waiver of privilege has been made to demonstrate the extent to which both Greet’s solicitors and Hacker Young failed to act upon their client’s instructions and/or to get to grips with and/or to undertake a proper analysis of [various named categories of accounting materials]. It is plain from a perusal of Hacker Young’s reports (all in draft) that they failed to undertake any of these analyses or do any substantial or detailed work to check the accuracy or otherwise of the PKF [Mr Tegg’s] report and the figures given in it…Thus Greet went into his trial with no worthwhile accountancy evidence not because the basis for worthwhile evidence to set against the Crown’s case could not sensibly be prepared, but because Hacker Young had failed to undertake the necessary analyses (some of which they had identified as necessary as early as 31 October 2000). Greet had identified and was concerned about the accountant’s lack of direction and detailed work. Note the following [identified letters from Mr Greet to his trial solicitors].”

[56]We have carefully considered the material relied on by Mr Jones as justifying his criticisms of Hacker Young’s preparation. It is unfortunate that Hacker Young were not asked to respond to those criticisms. Nevertheless, we conclude that the criticisms are wholly unjustified. We would for ourselves derive the following facts and conclusions from the waiver material we have studied:

[57](1) Much of the background work to Hacker Young’s draft report was provided by Mr Greet himself. This was not because of any failings of analysis by Hacker Young but because Mr Greet not only concerned himself with the relevant material but also himself claimed to have the deepest acquaintance with it. See his comment (cited at para 9 above) made on the first day of trial, 16 October 2001, that “no one knows the case better than I do”.

[58](2) It was agreed at a relatively early stage, and that agreement persevered to the end, that Hacker Young’s report should not be disclosed and that Hacker Young’s experts should not take the stand. That is why the report always remained one in draft: it was only intended for the defence team. Hacker Young also separately developed a list of cross-examination questions for counsel. We have already cited in his own words Mr Greet’s approval of this strategy and the reasons for it from his 16 October 2001 comments (see para 9 above). There is also this passage a year earlier from a partner of Hacker Young in his letter dated 27 October 2000 to Mr Greet’s then solicitors:

“10) Tactically, with regard to my going in the witness box, I agree absolutely with Counsel’s concern and his advice that I would better serve the case by producing the “bullets” (or even anti-tank missiles) for him to fire at Tegg/Calvert. Our major contribution, we feel, is to try to devalue and even discredit their case rather than trying to promote positive defence.”

Mr Greet agreed with those tactics completely.

[59](3) One of the difficulties for Mr Greet and his accountancy experts was that between them they could not show an unjustified deficiency lower than around £214,000: a figure which Mr Greet accepted both privately to his defence team (see his letter to his solicitors dated 30 September 2001) and which he was himself, at any rate approximately, to concede at trial.

[60](4) But there were also other difficulties involved in Hacker Young producing a report for disclosure before trial and subjecting themselves ultimately to cross-examination at trial: the defence team were concerned both about the substantial evidence that Mr Greet had been using his client account to finance his own expenditure and a series of other speculative property adventures conducted in Ms Thompson’s name; and also about the non-inclusion of legal aid payments in the practice ledgers which might have given rise to a conclusion of possible deliberate concealment of VAT amounts and failure to account for VAT paid on such receipts. Such concerns lay behind Mr Greet’s own comment of 16 October 2001 (cited at para 9 above) that one of the reasons why Mr Maber of Hacker Young would not give evidence was that “In X exam of TM, they could broaden out the scope of the questioning”. Trial counsel have confirmed that it was because of these risks that it was decided that Mr Greet would produce the various schedules, initially worked up by the accountants in support of his case, as his schedules during his evidence; and that to this end, he worked through the schedules to produce them in finalised form to which he could properly speak, given his knowledge and involvement with the practice.

[61](5) As for Mr Avery: we have already said that the jury knew that he had been convicted of thefts both from a solicitor’s firm in 1980 and from Mr Greet’s successors, Thorpe & Thorpe, in the immediate aftermath to the period with which the trial was concerned. They knew that Mr Greet suspected him of theft, although it would seem from the summing up that the finger was pointed more strongly against Mrs Ferris. All that was put before the jury as part of the defence strategy. What the jury did not have evidence of was that Mr Avery had been true to his metier during his time with Mr Greet as well, although they may well have contemplated it as a reasonable possibility. Nor did they know that he was a heavy gambler and had been gambling when he was with Mr Greet. But there were other things that Mr Greet knew about Mr Avery which he was not willing to let the jury know: such as the fact that when he was employing Mr Avery, he, Mr Greet, knew about his dishonest and criminal past and failed, in breach of Law Society rules, to clear his employment with the Law Society. That, it was agreed with the defence team, would have been a dangerous matter to allow to come out. Moreover, Mr Greet knew enough about Mr Avery’s gambling to have been able to bring to bear as much evidence as he wanted, had he really so desired to. Thus in a letter dated 15 August 2001 to his solicitors, Mr Greet wrote:

“Also, most important, to make investigation of Ladbrokes at Ashton, to ascertain the precise extent of P.A.’s gambling.”

The disclosure material in the bundle prepared for trial does not reveal anything further about this, but we have been told by Mr Jones that it was at least known that Mr Avery had been reported to have been placing large bets on at any rate one occasion at Ladbroke’s Ashton branch. The statements from the manager and acting manager of that branch now relied on show that any investigation must have revealed the full extent of the 2002 material now presented to the court. There is no evidence before the court from Mr Greet or his current solicitors to explain how it was that those 2002 statements could not have been available to Mr Greet at trial; or how it was that they began to become available in April 2002. Moreover, the old newspaper reports of Mr Avery’s first prosecution state that his thefts had been used for gambling.

[62](6) There is no evidence in the disclosed material, at any rate until the first day of trial, that Mr Greet made the complaints now broached against either his legal representatives or Hacker Young. He was undoubtedly a proactive and demanding client (from his letter to his solicitors dated 15 August 2001):

“Of particular concern is the HY work. Please instruct them, as I have so often asked in the past, to go through and deal with every part of the PKF report, and check and vouch everything”

. But that strategy was indeed put into effect at trial with considerable success, and the following is also typical of his response (from his letter to Hacker Young dated 22 September 2001):

“Please accept my apologies for increasing the pace, and bringing up these points at this stage – but suddenly, capricious memory has started to work overtime. I know that you will continue to be my ally in this now short run up to trial and it is appreciated deeply.”

Also (from his letter to his solicitors dated 6 October 2001):

“The cumulative effect of the work done by you and me renders the PKF report, and Calvert totally worthless. We must ensure that Stuart Lawson-Rogers QC is fully briefed, so that Calvert, Tegg and Ferris are totally discredited – as they should be.”

[63](7) The disclosed material was presented to the court in the form of a carefully prepared bundle. It went down to 6 October 2001, some ten days before the start of trial. Mr Greet’s memorandum of observations dated 16 October 2001 from which we have quoted above was not in that bundle. It was, however, passed to the court by Mr Jones during the hearing, apparently at Mr Greet’s request as demonstrating his complaints, but without any further submission upon it by Mr Jones. We have noted that it was referred to in Mr Greet’s response dated 3 April 2004 to the observations sent by his trial counsel and solicitors to the criminal appeal office. In that response he took exception to their observations concerning his complaints contained in his original self-drafted grounds of appeal, on the basis that those original grounds were no longer relied upon. Those were the only grounds which contained any complaint about the pursuit of evidence about Mr Avery’s gambling. In Mr Greet’s memorandum dated 16 October 2001 there is a complaint (at para 14) that his solicitors had failed to follow up his suggested lead regarding Mr Avery’s gambling. However, Mr Greet has made it clear that his original grounds are not relied upon. In any event trial counsel’s comments were:

“Extensive enquiries were carried out following the obtaining of his instructions and at his request…To our recollection, potential witnesses contacted were either (i) unable to give material evidence; (ii) unwilling to assist; or (iii) positively damaging.”

[64]Trial solicitors’ comments were to similar effect: and they too confirmed that all the enquiries which Mr Greet requested were carried through. They added:

“those persons interviewed provided evidence which would have been positively damaging to the defendant’s case as they repeatedly failed to confirm that which they said they could assist us on, or in the alternative, it was established that he had spoken to the witnesses prior to our attending upon them and suggested what they should say.”

Discussion and conclusion as to leave to appeal against conviction

[65]In these circumstances, we set out below the reasons which have led us to conclude that there is no properly arguable case for leave to appeal against conviction.

[66]First, the application is very substantially out of time. Mr Greet’s original grounds were filed some eighteen months out of time, and they are no longer relied on. Counsel’s superseding grounds were filed some twenty months out of time, and only after the conclusion of the confiscation proceedings, during which Mr Greet was represented by Mr Jones.

[67]Secondly, during the whole of this period Mr Greet was aware of Mr Avery’s gambling and of the matters which lie behind Mr Nightingill’s report, even if he might not have had every last detail at his fingertips. As it is, the witness statements about Mr Avery’s gambling are dated from April to August 2002, a year and more before his notice of appeal. The time when he first learned of Mr Avery’s admissions to Mr Wike has not been made clear: it could well have been by the time of trial. In any event, the inference that Mr Avery was supporting his gambling with stolen cash, given the surrounding circumstances and his stealing from Thorpe & Thorpe, was a strong one. As for the Nightingill report, it was produced at the last moment, after two applications for legal aid had been refused. A submission is made that the funds to instruct Mr Nightingill only came forward at that time, but again there is no evidence on this matter either, and the proper inference is that the report was only produced when the last opportunity for doing so was closing. As it is, it is plain that Mr Nightingill was in essence repeating the materials relied on in cross-examination at trial: and to the extent that he may have gone beyond them, there is no evidence that this is not merely the result of further input from Mr Greet. Mr Jones’ grounds say that Mr Greet was working on the accounting material in prison.

[68]Thirdly, there has therefore been no reasonable explanation for any failure to adduce the “new” evidence at trial (see Criminal Appeal Act 1968, section 23(2)(d)).

[69]Fourthly, any attempt to rely on Mr Avery’s gambling or on his admissions for a concerted attempt to say that the whole or even a substantial part of the deficiency and client losses proved at trial were due to Mr Avery was fraught with peril and ultimately doomed. Mr Avery’s admissions did not implicate Mrs Ferris but exonerated her; and, as the bookkeeper, she was far more important to Mr Greet as the potential culprit than Mr Avery. Moreover, Mr Avery would have implicated Mr Greet directly, as his remarks to Mr Wike show. Even at trial, as the waiver material demonstrates, his defence team were very concerned that the jury should not learn that Mr Greet knew about Mr Avery’s history of dishonesty.

[70]Fifthly, so far as Mrs Ferris is concerned: numerous points were made in the written grounds concerning the judge’s summing up of her evidence, but these were not addressed in oral argument. Similarly, there was some further evidence about her previous business affairs which barely went further than that with which she had already been taxed at trial. We have considered all these matters, but they do not amount to anything. The half-hearted attempt to tie Mrs Ferris in with Mr Avery’s gambling or stealing has not even arguably succeeded.

[71]Sixthly, Mr Nightingill’s report does not even on its own terms eliminate the unexplained balance of transfers from client to office account, nor does any cash stealing by Mr Avery. And the unchallenged evidence of Mr Biracowz and the other clients remains.

[72]Seventhly, there has been no evidence of any explanation for the formidable delay in bringing this application.

[73]For these reasons, we would refuse Mr Greet’s application to extend time; and even if we had been satisfied by an explanation for the delay such as would have led us to extend time, we would nevertheless have refused his application for leave to appeal against conviction.

[74]We therefore turn to the appeal against the confiscation order. The issues raised by the confiscation order appeal: in outline.

[75]The facts relating to this appeal are both complex and obscure, and the issues which were raised below and on appeal have become extremely refined as well as protean. It is therefore not easy to state either the former or the latter with confidence and conciseness. In essence, however, the issues relate to the July 1997 transfer to Ms Thompson, the second Mrs Greet, of the whole of the beneficial interest in Pembroke Road. This had been the matrimonial home of Mr Greet and his first wife, which they had owned jointly. Three months after the transfer, in October 1997, Pembroke Road was sold, and Chantry Road was bought, by Ms Thompson. It has become the matrimonial home of Mr Greet and his second wife, but owned solely by her. The judge found that the whole of the net equity of some £110,000 in Pembroke Road was transferred into Chantry Road, and that, as of the date of his confiscation order, the net equity in Chantry Road was £160,000. The judge(1) found that the transfer of Pembroke Road to Ms Thompson was a gift to her by Mr Greet (see section 74(1)(a), (3), (10) of the 1988 Act);

(2) assessed the current value of that gift by reference to the value of the net equity in Chantry Road (see section 74(7) and (8)); (3)considered that it was appropriate to take that gift into account (see section 74(10)(b)); (4) found that Chantry Road was realisable property within the meaning of the 1988 Act (see section 74(1)) – and acknowledged the common ground that there was no other property which was potentially realisable property; (5) therefore found the current value of that gift, namely the £160,000, to be the amount that might be realised at the time of his order (section 74(3)), and thus, being less than the assessed benefit derived by Mr Greet from his offences, the sum which his order must not exceed (section 71(6)); and (6) in his discretion thought it fit to make an order requiring Mr Greet to pay that sum (section 71(1)).

[76]In his appeal Mr Greet challenges each of those conclusions. He submits:(1) That the transfer of Pembroke Road was not a gift for the purposes of the Act, in whole or in part. (a) The first Mrs Greet’s half-share was not such a gift, for it was not a gift made by the defendant (section 74(10)(a)). (b) Neither Mrs Greet’s nor Mr Greet’s half-shares were a gift, for Ms Thompson gave consideration for the transfer. (c) In any event, the transfer was subject to be defeated by the claim by Mr Greet’s trustee in bankruptcy that Pembroke Road vested in him: and that claim was compromised by Ms Thompson. She therefore ultimately took an indefeasible title to Pembroke Road from the trustee in bankruptcy under the compromise, for which she gave further consideration, and not under the transfer from Mr and the first Mrs Greet. Therefore she did not hold the equity transferred from Pembroke Road into Chantry Road by way of gift from Mr Greet but by way of compromise with his trustee. (d) Further, the content of any gift had to be evaluated only after taking into account two amounts which Ms Thompson transferred into Mr Greet’s IVA: a sum of £15,000 paid on 24 July 1996 (“the £15,000”) and a further sum of £33,324 paid in late October 1997 (“the £33,000”).

(2) That the value of the gift in any event fell to be assessed only after account had been taken of the £15,000 and/or the £33,000 transferred to Mr Greet’s IVA and/or other consideration provided by Ms Thompson.

(3) That it was not appropriate for any gift to be taken into account by reason of the facts and matters otherwise relied upon, such as the consideration provided by Ms Thompson, and/or her payments of £15,000 and £33,000, and/or the payments which she had made under the mortgages of Pembroke Road and Chantry Road.

(4) That Chantry Road was not realisable property because Ms Thompson was not a person to whom Mr Greet had made a gift within the meaning of the Act.

(5) That £160,000, the net equity in Chantry Road, was not the amount that might be realised, because there had been no gift of Pembroke Road or at any rate no gift of the whole of Pembroke Road.

(6) That the judge’s ultimate discretion to make a confiscation order in the amount of £160,000 or indeed in any amount as he thought fit should have been exercised against the making of such an order, inter alia for the reasons relied upon in relation to the question of the appropriateness of taking any gift into account (see under (3) above) but also for the additional reason that the making of such an order would cause Ms Thompson to lose the family home which housed her and her children.

[77]In effect, these submissions raised the questions whether there had been any gift to Ms Thompson and if so, of what interest in Pembroke Road or in what amount; what was the present day value of any such gift (“present day” value in the sense of value at the time of the judge’s order), which in turn raised the question of how much of the equity in Chantry Road was represented by any such gift; whether it was appropriate to take any such gift into account; and whether the judge was acting judicially in making an order in the amount he chose or in any amount having regard to the matters relied on by Mr Greet and in particular Ms Thompson’s position. Those were the questions which in essence the judge asked himself, which he expressed as follows:

“1. Was there a gift of the Defendant’s interest and on his behalf of the first Mrs Greet’s interest in 93 Pembroke Road to [Ms Thompson]? 2. The value of that gift. 3. Is it appropriate in all the circumstances to take the gift into account and make a Confiscation Order?”

The facts

[78]It had been Mr Greet’s case at trial that an oral agreement to transfer Pembroke Road to Ms Thompson had been originally made on 12 October 1992, but the jury’s verdict on count 2 found in favour of the Crown’s case that the trust deed had been agreed and made at about the time the form first surfaced in May 1997. Since that trust deed was, on the jury’s verdict, a fraudulent document, it can be ignored and attention can be concentrated on the transfer itself, which is dated 24 July 1997. Any gift therefore took place during the period of Mr Greet’s thefts under count 1, which were charged as going back to 30 April 1995.

[79]Mr Greet and the first Mrs Greet separated in 1991, even though they did not divorce until 1997. In September 1992 Provincial Bank obtained judgment against Mr Greet for over £900,000, charged on Pembroke Road. In July 1993 Mr Greet entered into an IVA. On 24 October 1995 Mr Greet contacted Provincial Bank with an offer of £5,000 to release their charge. At that time he was contemplating a transfer of the first Mrs Greet’s half-share to himself, for on the same day he wrote to Eagle Star, who were the first mortgagees of the property:

“To confirm the request made during [the] telephone conversation that you give consent to the transfer of the property from the joint names of MH and J Greet to the sole name of MH Greet…[W]e hope that it will be possible for you to agree to release Mrs Greet from her covenants under the mortgage leaving Mr Greet as the sole borrower”

. Eagle Star were prepared to consider the transfer of the property into Mr Greet’s sole name but not to release Mrs Greet from her mortgage covenants. Negotiations ensued with both creditors. By March 1996 Mr Greet had succeeded with Provincial Bank for on 20 March he sent them a cheque for £5,000 and on 2 April 1996 they issued a discharge certificate discharging their charge. Eagle Star meanwhile enquired whether Ms Thompson, whom Mr Greet had told Eagle Star to be his new partner and to have put in £135,000 of her own money to clear debts and keep mortgage payments going, could be substituted for Mrs Greet. Mr Greet responded to say that that was not something which he was considering. On 7 May 1997, however, he wrote to Eagle Star to ask whether they would consent to the transfer of the property from both the first Mrs Greet and himself to Ms Thompson. To this they now agreed, as well as to the substitution of Ms Thompson for the first Mrs Greet as a covenantor on the mortgage. The transfer, which was said to be made in pursuance of the trust deed, recorded the transfer, the release of the first Mrs Greet, and Ms Thompson’s covenant to observe all the provisions of the mortgage.

[80]The first Mrs Greet had given evidence at the trial as to how she had come to transfer her interest in the property to Ms Thompson. Her evidence was of course relevant to count 2. She appeared as a witness for the prosecution. She confirmed an affidavit in which she had said that she could not recall the exact circumstances surrounding the trust deed’s execution but it was possible that it was in 1992. She was then cross-examined on behalf of Mr Greet. The following passage of evidence occurred:

“Q….whenever it was signed by you, was it not your intention, in signing the deed, to divest yourself of any remaining interest that you had in Pembroke Road? A. I think it is fair to say that. There may have been some sort of conversation in which Mr Greet said that in view of all the circumstances it would be better if I had no interest in Pembroke Road because there was no equity in the property – I do not know whether that was correct or not, I have no way of judging – and that, given all the circumstances, it would be better it was invested in Jane.”

[81]It is not clear if Mrs Greet knew that Provincial Bank’s charge had been bought off for £5,000. At any rate, it appears that her interest was in freeing herself from any responsibility for a property in which there was, as she believed, no equity. There is no suggestion in that evidence that she was intending to give her interest to Mr Greet and only gave it to Ms Thompson as a means of short-circuiting his intention to pass the interest immediately on to Ms Thompson. It is true that she had no reason to think kindly of Ms Thompson, a point made by Mr Mott. But then she had no reason to think kindly of Mr Greet either, a point made by Mrs Greet herself in her evidence:

“Q…a lot of acrimony between you? A. Yes, I would say there was…”

[82]Three months later on 30 October 1997 Ms Thompson completed the sale of Pembroke Road and the purchase of Chantry Road: the sale price was £365,000 and the purchase price was £225,000. The financial details of these transactions have all been spelled out by the Crown in Schedule 1 to its “Opening on Confiscation” which it deployed at the first stage hearing in July 2003. Those details are not we think in dispute. The £365,000 sale price discharged the Eagle Star mortgage liability in the sum of £247,671.49 and fees and VAT in the sum of £6,433.12 to leave a net equity of £110,895.39. The purchase price of £250,000 was met initially by a deposit of £25,000 (paid presumably out of the £28,500 deposit generated by the sale of Pembroke Road) and the balance of £225,000 was financed as to £194,342.74 by the rolled-over mortgage facilities and by the introduction of a balance of further equity in the sum of £30,657.26. The net equity on purchase was therefore £55,657.26 (£25,000 plus £30,657.26). The balance of the £247,671.49 paid to Eagle Star went to support the advance by Eagle Star on Chantry Road (£194,342.74), stamp duty on the purchase and various fees (£3,328.75), and a retention by Eagle Star of £50,000 which was designed to be advanced in stages against architect’s certificates pending building works on the new property. There remained a balance of £58,171.25 out of the completion proceeds which was paid into Mr Greet’s office account. The surplus of £3,500 on the exchange of deposits went into client account. Thus the equity on Pembroke Road went as to £55,657.26 into the purchase of Chantry Road, and, less a sum of £6,433.12 spent on fees on the sale of Pembroke Road, as to £58,171.25 into Mr Greet’s office account and as to £3,500 into client account: producing the net Pembroke Road equity of £110,895.39.

[83]The judge, however, found that the whole of the net equity had been put into Chantry Road: eg “The net proceeds of sale amounted to some £110,000 and were applied, together with the rolled-over mortgage facilities from the Eagle Star, for the purchase of 8 Chantry Road…”; and passim. Moreover, there is no complaint about this in the grounds of appeal. Even so, the Crown’s case had been, not that the whole of the £110,000 had been applied to the purchase of Chantry Road, but that the whole of the net equity in Chantry Road at the time of purchase had been fed from the net equity in Pembroke Road. These matters are not perhaps unconnected with the question of the £33,000.

[84]The £33,000 had been paid by Ms Thompson into Mr Greet’s IVA in late October 1997 at about the time of the property completions. The cheque came out of Mr Greet’s office account, and the Crown accepted that it was funded by the proceeds of the sale of Pembroke Road. Mr Jones therefore submitted that it reduced (because it was in effect the return of) the gift, alternatively it represented consideration for the gift, or at least reduced the value of the gift. Mr Mott submitted that since the payment was made three months after the transfer of Pembroke Road, it could not affect whether that transfer was a gift. The Crown’s skeleton before the judge accepted that the £33,000 “came from the proceeds of sale of Pembroke Road…and amounts only to the return of part of the gift”.

[85]The £15,000, however, had been paid by Ms Thompson into Mr Greet’s IVA some 12 months before the transfer, by cheque dated 24 July 1996. The cheque was her personal cheque.

[86]Following the purchase of Chantry Road, there were a number of payments or transactions connected with it. They are reflected in a further schedule drawn up by the Crown, Schedule 2 to the Crown’s Opening before the judge, headed “Contributions to Equity – 8 Chantry Road”. Schedule 2 shows a number of payments being made and received in respect of Chantry Road. Payments made up to the time of Mr Greet’s bankruptcy (on 14 April 1998) came from Mr Greet’s office account. The schedule purports to show that £350,877.32 was paid and £342,704.09 was received. The balance of some £8,000 is relied on by Mr Jones as a further contribution by Ms Thompson to the equity in Chantry Road. The most significant transaction in this period (apart from a second mortgage from HSBC and a remortgaging from Eagle Star to RBS) was the sale of the basement flat for £115,000 on 4 August 1999. It is not at all clear to us how these payments and receipts should be evaluated.

[87]In the autumn of 1998, leading to consolidated points of claim dated 7 December 1998, Mr Greet’s trustee in bankruptcy brought proceedings against Mr Greet and Ms Thompson in which he alleged that the trust deed was a fabrication and the July 1997 transfer was ineffective to grant any beneficial interest in Pembroke Road to Ms Thompson. He claimed inter alia a declaration that Chantry Road belonged entirely to Mr Greet and therefore vested in himself as trustee; and he also claimed certain pension policies. In her defence dated 30 April 1999, Ms Thompson disputed both claims. As to Chantry Road, she relied on the trust deed, payment by her of £4,500 pursuant to it (in 1992), payment of the £5,000 paid to Provincial Bank to discharge its security over Pembroke Road, the acquisition of Chantry Road in her name, the use of £25,000 of her money to buy Chantry Road, and “spending substantial amounts of her own money to refurbish Chantry Road and pay the mortgage”: in sum she counterclaimed a declaration that she was the sole legal and beneficial owner of Chantry Road. She also counterclaimed (inter alia) that she was beneficially entitled to the pension policies and to the proceeds of sale of certain shares.

[88]On 9 July 1999, that is to say even before Mr Greet was committed for trial by the magistrates court in these criminal proceedings, the trustee in bankruptcy and the Greets (Mr Greet and Ms Thompson) entered into a consent order whereby the trustee agreed to vacate the cautions he had registered against Chantry Road (and other properties), the proceeds of the pension policies and the shares were declared to be vested in the trustee, all other claims and counterclaims were dismissed, and no order was made as to costs. Mr Greet relies on this compromise as vindicating Ms Thompson’s title to Chantry Road free of any attack from his trustee in bankruptcy and thus superseding any gift. He also told us that the proceeds of the pensions and the shares totalled some £63,000.

The 1988 Act

[89]Because the offences with which we are concerned were in part committed before 1 November 1995 but the criminal proceedings were commenced after 3 February 1995 it follows that the relevant statutory provisions are contained in the Criminal Justice Act 1988 as amended by the Criminal Justice Act 1993. The provisions added by the Proceeds of Crimes Act 1995 are not applicable. The relevant law may be most conveniently found set out in Archbold 1997 at paras 5-475ff or in Halsbury’s Statutes, 4th ed, 2002 reissue, at pp 951ff. These and analogous provisions of the Drug Trafficking Offences Act 1986 have been described as constituting a draconian code, albeit one that is not disproportionate to the public and legitimate interest in depriving criminals of the proceeds of their crime; for they are also subject to the need to avoid any serious risk of injustice. See in general R v. Benjafield

[2002] UKHL 2

, R v. Rezvi [2002]UKHL 1,

[2003] 1 AC 1099

[90]The relevant provisions for the purpose of the submissions made on this appeal are as follows. Section 71, headed “Confiscation orders”, contains some basic provisions, viz – “71. (1) The Crown Court and a magistrates’ court shall each have power, in addition to dealing with the offender in any other way, to make an order under this section requiring him to pay such sums as the court thinks fit… (7) The sum which an order made by a court under this section requires an offender to pay must be at least the minimum amount, but must not exceed – (a) the benefit in respect of which it is made; or (b) the amount appearing to the court to be the amount that might be realised at the time the order is made, whichever is the less.” (a) the benefit in respect of which it is made; or (b) the amount appearing to the court to be the amount that might be realised at the time the order is made,

[91]Section 74, headed “Definition of principal terms used”, is the most important for present purposes for it covers the concept of a gift by a defendant to a third party. Thus – “74. (1) In this Part of this Act, “realisable property” means… – (a) any property held by the defendant; and (b) any property held by a person to whom the defendant has directly or indirectly made a gift caught by this Part of this Act… (3) For the purposes of this Part of this Act the amount that might be realised at the time a confiscation order is made is – (a) the total of the values at that time of all the realisable property held by the defendant, less (b) where there are obligations having priority at that time, the total amounts payable in pursuance of such obligations, together with the total of the values at that time of all gifts caught by this Part of this Act… (7) Subject to subsection (12) below, references in this Part of this Act to the value at any time (referred to in subsection (8) below as “the material time”) of a gift caught by this Part of this Act are references to – (a) the value of the gift to the recipient when he received it adjusted to take account of subsequent changes in the value of money; or (b) where subsection (8) below applies, the value there mentioned, whichever is the greater. (8) Subject to subsection (12) below, if at the material time he holds - (a) the property which he received (not being cash); or (b) property which, in whole or in part, directly or indirectly represents in his hands the property which he received; the value referred to in subsection (7) above is the value to him at the material time of the property mentioned in paragraph (a) above or, as the case may be, of the property mentioned in (b) above so far as it so represents the property which he received, but disregarding any charging order… (10) A gift…is caught by this Part of this Act if – (a) it was made by the defendant at any time after the commission of the offence or, if more than one, the earliest of the offences to which the proceedings for the time being relate; and (b) the court considers it appropriate in all the circumstances to take the gift into account… (12) For the purposes of this Part of this Act – (a) the circumstances in which the defendant is to be treated as making a gift include those where he transfers property to another person directly or indirectly for a consideration the value of which is significantly less than the value of the consideration provided by the defendant; and (b) in those circumstances, the preceding provisions of this section shall apply as if the defendant had made a gift of such share in the property as bears to the whole property the same proportion as the difference between the values referred to in paragraph (a) above bears to the value of the consideration provided by the defendant.” (a) any property held by the defendant; and (b) any property held by a person to whom the defendant has directly or indirectly made a gift caught by this Part of this Act… (a) the total of the values at that time of all the realisable property held by the defendant, less (b) where there are obligations having priority at that time, the total amounts payable in pursuance of such obligations, (a) the value of the gift to the recipient when he received it adjusted to take account of subsequent changes in the value of money; or (b) where subsection (8) below applies, the value there mentioned, whichever is the greater. (a) the property which he received (not being cash); or (b) property which, in whole or in part, directly or indirectly represents in his hands the property which he received; (a) it was made by the defendant at any time after the commission of the offence or, if more than one, the earliest of the offences to which the proceedings for the time being relate; and (b) the court considers it appropriate in all the circumstances to take the gift into account… (a) the circumstances in which the defendant is to be treated as making a gift include those where he transfers property to another person directly or indirectly for a consideration the value of which is significantly less than the value of the consideration provided by the defendant; and (b) in those circumstances, the preceding provisions of this section shall apply as if the defendant had made a gift of such share in the property as bears to the whole property the same proportion as the difference between the values referred to in paragraph (a) above bears to the value of the consideration provided by the defendant.”

[92]Thus, a gift is caught by the Act if it was made by a defendant after the commission of his earliest relevant offence (there is no issue as to that) but only if the court considers it appropriate in all the circumstances to take it into account (section 74(10)). That definition, however, tells you nothing about what is meant by a gift. Nevertheless, section 74(1)(b) and (12)(a) indicate that a gift may be indirect as well as direct, and that a transfer at a significant under-value will also be treated as a gift. The gift must be valued as at the date of the contemplated order for the purpose of arriving at the amount that might be realised (section 74(3)). For the purposes of that valuation, in the case of property other than cash, the court is to take the value of the property, if the donee still holds it, or, as in our case, the “value to him” of any other property which represents the original gift “so far as” it does so (section 74(8)): provided that that value is greater than the value of the gift at the time he received it adjusted to take account of the value of money (section 74(7)). It is only for the latter purpose that the value of the gift at the time it was made has to be directly taken into account. If a gift is caught by the Act, then the whole of the donee’s property can be taken into account for the purposes of “realisable property”.

[93]Where, as here, a confiscation order is made on the basis of property gifted to a third person, the order of course remains against the defendant himself and not against the donee: but the effect of the order is that a charging order is liable to be made on the property of the donee (see section 78) and the defendant is in any event liable to serve an alternative period in prison, in default of payment, unless the authorities are able to obtain for the purpose of payment the current value of the gift in discharge of his obligations under the order. This may put pressure on the donee to sacrifice his property without further dispute for the sake of the defendant. The pressure may arise in an acute form where the donee, as here, is the wife or partner of the defendant. An analogous problem arises where the matrimonial home may have to be sold in any event because the husband is the defendant and his own half-share interest in the home is itself liable to realisation under his confiscation order. A number of cases have discussed such issues: see R v. Lee

[1996] 1 Cr App R (S) 135

, R v. Taigel

[1998] 1 Cr App R (S) 328

, In re Norris

[2001] 1 WLR 1388

, R v. Ahmed and Qureshi

[2004] EWCA Crim 2599

(28 October 2004, unreported).

[94]Although the confiscation order is not made against the donee, the effect of the Act’s provisions is to treat the donee’s property, to the extent of the amount that might be realised, as if it were the defendant’s. Thus sections 78 and 79 concerning charging orders and section 80 concerning the realisation of realisable property contain provisions dealing with property held by the defendant or by the donee alike, since both are realisable property. However, the matter of charging orders and realisation is put in the hands of the high court, as those sections make clear. Moreover, section 78(3)(c) provides that on an application by the prosecutor for a charging order, such order “shall provide for notice to be given to persons affected by the order”; and section 78(8) provides that “An application for the discharge or variation of a charging order may be made by any person affected by it”. Similarly, section 80(8) provides that the court shall not exercise any of its powers of realisation under that section “unless a reasonable opportunity has been given for persons holding any interest in the property to make representations to the court”. Moreover section 82 (headed “Exercise of powers by High Court or receiver”) provides:

“(3) In the case of realisable property held by a person to whom the defendant has directly or indirectly made a gift caught by this Part of this Act the powers shall be exercised with a view to realising no more than the value for the time being of the gift. (4) The powers shall be exercised with a view to allowing any person other than the defendant or the recipient of any such gift to retain or recover the value of any property held by him.”

[95]In re Norris was concerned with a wife who claimed to have the complete beneficial interest in the matrimonial home. At the confiscation proceedings the wife gave evidence about her interest, but the trial judge did not believe her and found that the home belonged to the defendant. He made an order on that basis. The wife then applied to the high court in the enforcement proceedings to vindicate her interest. The high court judge held that he had no jurisdiction to revisit an issue which had already been determined by the trial judge. The court of appeal held that the wife was entitled (under the statute) to make representations, but that it would be an abuse of process for the court to allow a third party to relitigate issues already determined in the crown court on substantially the same evidence and submissions. The House of Lords allowed the wife’s appeal on the basis that the proper and sole place for such a third party to be heard on such an issue was the high court at the enforcement stage and not in the crown court at the confiscation order stage. Lord Hobhouse of Woodborough, with whose speech their Lordships all agreed, said this:

“17. The scheme of the Act [there, the Drug Trafficking Offences Act 1986] is thus to enable the monetary order made against the convicted defendant to be enforced by effecting recovery from the defendant’s property including property which he has given away during the six-year period. This extension of the statutory powers takes into account the obvious possibility that those engaging in drug trafficking may transfer their wealth to others in order to try and frustrate the attempts of the authorities to recover them but without affecting the trafficker’s expectation that he will ultimately be able to benefit from the proceeds of his trafficking. The concept of realisable property is used both as a measure of the defendant’s current wealth for the purpose of fixing the monetary amount of the confiscation order made and for defining what assets can be used for the purpose of enforcing the order and recovering the relevant sum. Property “held” being widely defined so as to include property in which any relevant person has an interest, it must be contemplated that there is realisable property in which two or more people will have an interest. It is therefore part of the structure of the Act that questions may have to be determined as to the respective interests of different persons in the same property. Although the extent of the defendant’s interest is relevant to the Crown Court’s assessment of the value of his realisable property, the question of what other persons, if any, have an interest and what is the extent of their interests must be decided by the High Court in the exercise of its jurisdiction.”

[96]Later, Lord Hobhouse also said this:

“23…Once the view taken by Buxton J was shown to be erroneous and the requirement of the High Court to hear the representations of interested parties recognised, the Court of Appeal should have given effect to the division of responsibility and function between the Crown Court exercising the criminal jurisdiction and the High Court exercising the civil jurisdiction. The criminal jurisdiction is concerned alone with what order to make under sections 1 to 4 of the Act. The procedure of the criminal court is solely concerned with the parties before it, the prosecution and the defendant…The English system of criminal justice does not itself confer any civil jurisdiction upon the criminal courts and it takes a clear and express provision in a statute to achieve that result. The 1986 Act does not contain any such provision; indeed, as already explained, its clear intention is to preserve the distinction between the respective jurisdictions. The time and place for Mrs Norris to assert her civil law rights over 7 Berryfield Close was when the Customs and Excise attempted in the High Court to deprive her of her interest. It is at this stage that she becomes directly affected and has the right to invoke the remedies of the court in defence of her civil law rights. In the criminal court she was a mere witness with no right of representation and no control of the proceedings and no right of appeal.”

[97]In re Norris was concerned with a different Act, but the scheme of that Act was for relevant purposes the same or very similar to that of the 1988 Act. Furthermore, that case was not concerned with the particular problem of a donee third party, but it has been common ground before us that its logic applies as much to Ms Thompson qua donee as to Mrs Norris as a non-donee third party. That has been the Crown’s position and, although Mr Jones on behalf of Mr Greet has sought to argue that the issues raised by him can all be settled in his favour in this court, he has accepted that Ms Thompson would be entitled to be heard at the stage of enforcement in the high court. We are prepared to assume that that is correct (seeing that we have not heard argument on what has been a matter of common ground) since, although the statute in certain respects treats donees and their property as though they were the defendant and his property and therefore requires the crown court judge to take a view as to whether there has been a gift and whether it should be taken into account, nevertheless the donee appears to be ultimately in the same position as any other third party, with a right to protect his interests before the high court and no where else. Just as the crown court has to take a view about realisable property in general and the amount which might be realised, so it has to take a view about gifts and transfers at an under-value and all relevant questions of value. But all such questions may affect the unrepresented third party, who may wish to say, in defence of his property, that there was no gift caught by the Act, or that the property was purchased not given so that he is, after all, an ordinary third party, or that the ultimate value (as of the time of the confiscation order) of the traced property represents his own contributions and not the original gift.

[98]In this connection we recognise that the analogy between donees and other third parties for these purposes is not watertight. At para 16 of In re Norris Lord Hobhouse, referring to the equivalent of section 82(4) of the 1988 Act, said:

“Section 13(4) expressly provides that the powers shall be exercised with a view to allowing any person, other than the defendant or the recipient of a gift caught by the Act, “to retain or recover the value of any property held by him”

. This would be implicit even in the absence of an express provision since the confiscation order only applies to the convicted defendant and, indirectly through such a defendant, donees caught by the Act. To apply it so as to confiscate the property of innocent third parties would be not only exorbitant but also outside the purpose of the Act. Any such confiscation would now also raise human rights issues.”

[99]We are nevertheless, as stated above, prepared to assume that the Crown’s submission is correct, seeing that at any subsequent hearing in the high court the Crown would not, in the light of the position it has taken up, in any event be able to object to the representations of Ms Thompson.

[100]Finally, section 83 contains provision for variation of a confiscation order. A defendant may apply to the high court for a certificate that the realisable property is inadequate for the payment of any amount remaining to be recovered under the confiscation order. Such a certificate must be accompanied by the high court’s reasons. Thus, if the high court were persuaded by the representations of a third party, such as Ms Thompson is assumed to be, to the effect that her property should not be regarded as realisable property at all, or that the value of the gift was less than the crown court assessed it to be (cf section 82(3)’s “with a view to realising no more than the value for the time being of the gift”), it could grant a certificate under section 83(1). For these purposes there is an anti-avoidance provision contained in section 83(2)(b). Armed with such a certificate from the high court, a defendant may apply to the crown court to vary both the amount of the confiscation order and the term of imprisonment to be suffered in default (section 83(4)). The crown court shall “substitute for the amount to be recovered under the order such lesser amount as the court thinks just in all the circumstances of the case”.

The issues discussed

[101]We return to the submissions made on behalf of Mr Greet (see at para 76 above). The first submission raises the question whether there was any gift at all. That submission falls into four parts, of which the first, concerning the first Mrs Greet’s half-share of Pembroke Road, assumed a major part of the submissions before us. Issue 1(a): Was there a gift within the 1988 Act of the first Mrs Greet’s half-share of Pembroke Road?

[102]Leaving on one side for the moment any submission that the transfer of Pembroke Road to Ms Thompson was not a gift at all because Ms Thompson gave consideration for the transfer, there was of course a gift of the first Mrs Greet’s half-share interest, and the question is whether there was a gift of it by the defendant. For these purposes the statute tells us that such a gift may be made by a defendant directly or indirectly. In other words regard should be paid to the substance of the matter and not its mere form. The judge concluded that in substance the defendant had gifted Mrs Greet’s half-share to Ms Thompson. He stressed the role that Mr Greet had played in persuading his first wife to give up her share, rejected any question of consideration being given by Ms Thompson, and otherwise said this:

“In my judgment the transfer of the Defendant and Mrs Jean Greet’s interest, at his request and instigation to Jane Thompson, the second Mrs Greet, was a gift and a gift which is caught by this Act…I am satisfied that there was a gift and one which is caught by this Act. There was a direct gift by Mr Greet of his interest in 93 Pembroke Road to Mrs Jane Greet; there was an indirect gift by him of Mrs Jean Greet’s interest and which she gave up or surrendered to him at his request and instigation”

(emphasis added).

[103]Thus the judge’s conclusion was that Mrs Greet surrendered her half-share to Mr Greet and he was the conduit through which it went from him to Ms Thompson. The judge gave no other reasons for this conclusion. The question is whether it can stand.

[104]The most complicated arguments of law were raised before the judge and again before us as to whether this conclusion could be supported as a matter of law, having regard to the requirement of writing and the law of constructive and resulting trusts. The judge himself referred to this passage of the argument as one that “might sit more comfortably in the Chancery Division than in the Crown Court”. We have every sympathy for that remark. There would, as we assume, be opportunity for Ms Thompson to address the high court in due course. Even so, we think that the crown court judge’s primary task was to assess the facts for the purposes of characterising the transaction in question. It is plain that Mr Greet played a primary role in instigating the Pembroke Road transaction and that, again subject to any question of consideration, the transfer of his half-share interest to Ms Thompson was a gift. But how did that make the transfer of Mrs Greet’s half-share interest to Ms Thompson a gift by Mr Greet? If that half-share had indeed passed, in substance if not in form, through his hands, then that would have been a direct rather than an indirect gift by him; but the judge regarded it as an indirect gift.

[105]The Crown’s primary submission before the judge had been that the Pembroke Road transaction had all been part of a larger divorce settlement between Mr and the first Mrs Greet. If that had been the case, then there would indeed have been reason to regard Mrs Greet’s half-share as passing in substance into Mr Greet’s hands before ending up with Ms Thompson. However, the judge rejected that submission. He said:

“Mr Jones QC has argued strenuously that there can be no such gift. The arrangement made between Mr Greet and Mrs Jean Greet in relation to the property in Wales was part of a compromise, the resolution of the financial aspects of their separation and subsequent divorce. Looked at in isolation, and were that the only transaction, there may be some merit in that argument but I am not persuaded that there is anything of significance in it. The reality is bearing in mind the jury’s verdict in relation to Count 2, that the document of 12th October 1992 was a false document. The Defendant sought to persuade his first wife to relinquish her interest in 93 pembroke Road on the basis that there was no equity in it. As she said in her evidence to the jury and myself “I do not know whether that was correct or not, I have no way of judging”.”

[106]In that passage the judge had been right to ascribe to Mr Jones the overall submission that there was no gift, but in error in appearing to ascribe to him as well, rather than to the Crown, the following submission in relation to the transfer of Pembroke Road as part of a divorce settlement. At any rate, having rejected that way of characterising the Pembroke Road transaction and having accepted Mrs Greet’s evidence in this regard, the judge was really bound, in our judgment, to have concluded that it had been her simple intention to give her interest in the house to Ms Thompson on the basis that she was giving away nothing of value (see para 80 above).

[107]What is wrong with that inevitable conclusion? Of course, there was presumably no love lost between the two women, but that was also true as between Mr and Mrs Greet (see para 81 above). We recognise that in October 1985 Mr Greet was contemplating that Mrs Greet’s half-share would come to him (see para 79 above, part of the history which the judge relates and which may have influenced him): but that was on the basis that he would become the sole obligee under the Eagle Star mortgage. In the ultimate transaction it was Ms Thompson who became that sole obligee. In other words Mrs Greet was willing to give up what she thought was a worthless interest in order to be freed from her liability in respect of the mortgage. But that merely goes to confirm her own evidence, and the evidence of the transfer itself, that her intention was to pass the property to Ms Thompson, and not to Mr Greet. In our conclusion the judge gave no reason, and had no reason, to conclude that there was a series of direct gifts, by Mrs Greet to Mr Greet and by Mr Greet to Ms Thompson. We cannot see why or how the purposes of the statute are advanced by seeking to capture a gift of an innocent third party’s property. On this issue therefore we are in favour of Mr Greet’s appeal.

Isssue 1(b): Did Ms Thompson give consideration for the transfer?

[108]For the purpose of this issue, we leave out of account the separate argument raised under issue 1(c) below relating to the compromise with Mr Greet’s trustee in bankruptcy. We consider instead the various other elements of consideration relied upon by Mr Jones. There is the £4,500 mentioned in the trust deed as being paid by Ms Thompson: but that was a false document and cannot be relied upon. The reference to the £4,500 in the trust deed, however, and the transfer’s reference back to the trust deed make it very difficult to say that any other payment was agreed as the consideration for the transfer. There is the £5,000 said to be paid by Ms Thompson for the discharge of the Provincial Bank’s charge: but that was an entirely separate and earlier transaction. There is the £15,000 paid by Ms Thompson into Mr Greet’s IVA on 24 July 1996: but that was again an entirely separate and earlier transaction and there is nothing in the evidence to link it with the transfer. There is the £33,000 paid by Ms Thompson to the trustee of bankruptcy from the proceeds of the sale of Pembroke Road: but that was paid three months after the transfer and again there is nothing to link the transfer itself with that payment. It is in theory possible that Mr Greet and Ms Thompson had agreed, when Mr Greet transferred his share of Pembroke Road to Ms Thompson, that she would return some part of the equity in the house, when it came to be sold, for payment into Mr Greet’s IVA: but it is equally possible and perhaps more likely that all such decisions lay in the future, and would depend on the cost of a new home. The judge did not refer separately to the £33,000, but he said in general that he was not persuaded that the various payments made by Ms Thompson inter alia to the IVA represented consideration for the transfer: and we agree that there is nothing to link the £33,000 specifically to the transfer as consideration for it.

[109]In a somewhat different category, there is the fact that under the transfer itself Ms Thompson agreed to take upon herself the obligations under the Eagle Star mortgage. Mr Jones submitted that such an obligation was consideration which deserved separate valuation: and he relied in this regard upon Carlton v. Goodman

[2002] 2 FLR 259

at para 22(v). We think that that could in principle be regarded as an element of consideration, albeit in business terms it would be hard to put a value on it, for the value would change in accordance with all the prevailing circumstances. Where, however, there was, as it seems, substantial equity in the house, as the completion of its sale a bare three months later would indicate, and there appears to have been an intention to put it on the market at an early opportunity, it does not seem to us to change the fact that under the transfer there was a gift of the house subject to the borrowing on it. In effect, that was the conclusion, mutatis mutandis, in Carlton v. Goodman itself. The transfer would still, at best, have to be treated as a gift within the meaning of section 74(12)(a) and there was no attempt by Mr Jones to compute a proportionate value within section 74(12)(b).

[110]Finally, Mr Jones also relied on the ongoing mortgage payments under the rolled-over mortgage for Chantry Road as consideration for the transfer. We reject that submission. The Pembroke Road mortgage, although rolled over by agreement, was in truth discharged upon the sale of Pembroke Road. What was then agreed with Eagle Star represented a new transaction: it was not consideration for the transfer of Pembroke Road. The same is true of any other subsequent dealing with Chantry Road. Issue 1(c): did the transfer cease to count as a gift by reason of the compromise with Mr Greet’s trustee in bankruptcy?

[111]Mr Jones submitted that the compromise between Ms Thompson and Mr Greet’s trustee in bankruptcy meant that thereafter she held the proceeds of Pembroke Road (traced into Chantry Road) under that compromise, for which she had given consideration, and not by way of gift from Mr Greet. The essential matter to focus on was the capacity in which she held the property at the time of the confiscation order, and not at the time of a transaction which, because of Mr Greet’s bankruptcy, was liable to be upset by his trustee. It was only under the compromise that her title became indefeasible. In this connection he referred to section 74(1)(b) and submitted that “held” there must refer to the time of the order and not to the past. Otherwise a person who had received a gift, had then returned it, and had then bought back the property at a full market price would still be treated as a donee when he was nothing of the kind.

[112]In our judgment, however, these submissions were without cogency. Section 74(1)(b) does indeed refer to the time of the confiscation order, but it also refers to any property then held by the recipient of a gift, even if such property has nothing to do with the gift and even if in the meantime the donee has given away the gift, let alone bought it back. In the present case Ms Thompson had received Mr Greet’s half-share in Pembroke Road by way of gift in July 1997. If she had then made that gift more valuable by buying off a claim by Mr Greet’s trustee in bankruptcy in July 1999, that might affect the value of the gift to be assessed at the time of a confiscation order, and might also in theory affect the question of whether it would be appropriate to take the gift into account as a gift caught by the Act or the court’s ultimate discretion under section 71(1): but it could not affect the underlying question of whether there had ever been a gift. In any event, the crown court was not bound by the compromise made by the trustee in bankruptcy. He had not then known, as the crown court knew at the time it made its confiscation order, and as we know, that the trust deed relied on by Ms Thompson as taking Pembroke Road entirely outside the trustee’s grasp had been adjudged by the trial jury to be a fraudulent document. We therefore know that that aspect of the defence to the trustee’s claim was bogus. We do not know what if any value can be placed on the counterclaim in respect of the pensions and shares. Unless, therefore, there is some other reason for concluding that the gift of Mr Greet’s half-share interest ought not to have been taken into account, we can found none in the submission currently under consideration.

[113]Mr Jones also relied in this connection on the judgment of Mr Roger Henderson QC sitting as a deputy high court judge, which we think he rendered in July 2002, that is to say between Mr Greet’s conviction and the making of the confiscation order. The judgment was made in proceedings in the high court in which the Crown had on 31 January 2002 obtained a restraining order from Keith J under section 77 of the 1988 Act against Mr Greet and Ms Thompsonin respect of Chantry Road. Ms Thompson applied to discharge or vary that order on the basis(a) that it was not “realisable property” and

(b) that the restraint order was obtained in want of full and frank disclosure by the Crown. She relied on the compromise effected with the trustee in bankruptcy, which had not been drawn to the attention of Keith J by the Crown. Mr Henderson concluded thus:

“29. In those circumstances, this order is fit to be discharged because although the disclosure may well have been entirely frank on the part of the officer in the case, it was signally lacking in centrally important information which strongly suggests that Mr Greet had and has no relevant interest in Chantry Road and that there was no “gift caught by this part of this Act”

. I make no such finding because it is unnecessary and inappropriate for me to do so.”

[114]In other words Ms Thompson succeeded on the basis of submission (b), and Mr Henderson’s remark with respect to submission (a) was expressly obiter. We have given our reasons for concluding otherwise with respect to submission (a).

Issue 1(d): what effect should be given to the payments of £15,000 and £33,000 respectively?

[115]We have already concluded that neither amount can be regarded as consideration for the transfer of Pembroke Road. The remaining question is whether either payment in some way has to be deducted from the gift otherwise made of Mr Greet’s half-share interest to Ms Thompson. We will consider the value of Mr Greet’s gift below. For the present, we are considering whether such payments render the gift of Mr Greet’s half-share interest to be something less than it appears under the transfer to have been.

[116]It seems plain to us that no such deduction should be made in respect of either sum. The £15,000 payment preceded the transfer by about a year. The £33,000 payment followed the transfer by some three months. The most that can be said is that, three months after the gift, Ms Thompson returned to Mr Greet £33,000 out of the proceeds of the sale of Pembroke Road. We will consider the ramifications of that return below. Issue 2: Should the value of the gift be assessed only after account is taken of the above payments or any consideration provided by Ms Thompson? And how should the value of the gift be assessed?

[117]We have already concluded that Ms Thompson gave no consideration for the transfer other than might be found in her agreement to undertake the Eagle Star mortgage obligations under the Pembroke Road mortgage; that there is no evidence under which such obligations could be valued, and that it in any event remains the fact that the sale of Pembroke Road produced an equity of some £110,000.

[118]There remains the question as to how the value of the gift of Mr Greet’s half-share interest in Pembroke Road should be assessed and in that context whether the £15,000 or £33,000 payments should in some way go in reduction of that value. We can say straightway that the £15,000 payment is for these purposes entirely irrelevant, for it was made a year before the transfer of the property. That leaves the £33,000 in issue. The judge arrived at his assessment on the basis that the gift in question was the whole of the legal and beneficial interest in Pembroke Road, and not merely half of it; and also on the basis that the whole of the equity in Pembroke Road was put into Chantry Road (“The net proceeds of sale were, together with the mortgage funds from the Eagle Star used to purchase 8 Chantry Road”). He therefore concluded that the value of the gift as at the time of his order was the whole of the then equity in Chantry Road, which he valued at £160,000. He considered it “unnecessary for the purposes of this judgment to detail specific payments or other contributions of money.” However, we have now concluded first, that the gift made by Mr Greet was of only his half-share interest in Pembroke Road; secondly, and this by concession of the Crown, that the £33,000 effectively came from the proceeds of Pembroke Road and amounted to a return of part of the gift (see para 84 above); and thirdly, that the only equity which went into the purchase of Chantry Road out of the proceeds of Pembroke Road was a sum of £55,657.26 (para 82 above).

[119]That sum of £55,657.26 is just over half of the net proceeds of Pembroke Road (£110,895.39): 50.19% to be precise. Let us assume for the sake of simplicity that the figure is exactly 50%. One possible solution to the question of value would be to adopt the judge’s analysis, and to ascribe the whole of the initial equity in Chantry Road to Mr Greet’s gift in his half-share all by itself: that would leave the position where it was. Another possible solution would be simply to ascribe half rather than the whole of the ultimate equity in Chantry Road to Mr Greet’s gift: producing a value of £80,000 rather than £160,000. Both those solutions, however, would ignore(a) the role of the £33,000 returned to Mr Greet for the purpose of payment to his IVA; and

(b) the other elements of the net proceeds of Pembroke Road. Moreover, it is not clear to us that because the whole (or half) of the net equity on purchase derives from a tainted source, therefore the whole (or half) of the net equity at a later time “represents the property which he received” (section 74(8)). Such a calculation would mean that the ultimate value of the gift would not change with any change in the proportion which the initial net equity in the new property bears to the total cost of the new property, which seems counter-intuitive.

[120]Mr Jones submitted that the £33,000 should be regarded as coming from Mr Greet’s half-interest, so that only £22,000 of the sum invested in Chantry Road represents his gift. Mr Mott, however, submitted that the £33,000 should be regarded as coming equally from both gifts, so that the infusion of the Pembroke Road proceeds into Chantry Road should be taken as being £77,000 (£110,000 - £33,000) of which half or £38,500 represents Mr Greet’s gift. On that basis he submitted that the gift should be valued at £80,000 (half of the £160,000), or, were Mr Jones to be right to say that the relevant infusion into Chantry Road was only £22,000, then a lesser share of the net equity: which we understood him to suggest would be 40%, perhaps on the basis that £22,000 was 40% of the £55,000 equity invested in Chantry Road (but the matter was not entirely clear because, after all, the figure of £77,000 referred to above exceeded the £55,000 injected into Chantry Road).

[121]We would conclude as follows.(i) The £33,000 should be regarded as being funded equally from the whole of the two parts of the gift. Ms Thompson was free to use the whole of the proceeds as she wished and it is unrealistic to suppose that any part of the proceeds of Pembroke Road was ear-marked for the £33,000. Therefore we reject Mr Jones’ figure of £22,000.

(ii) The available proceeds for investment into Chantry Road were therefore £77,000; but in fact only £55,000 of that £77,000 were so used.

(iii) Consistently with (i) above, Mr Greet’s gift should be regarded as funding that investment equally with the first Mrs Greet’s gift. Therefore the amount invested in Chantry Road which represents Mr Greet’s gift was £27,500 (half of £55,000) being half the initial equity in Chantry Road.

(iv) However, the remaining question is: how much of Chantry Road “represents the property which [Ms Thompson] obtained” (see section 74(8))? We are, of course, working on the basis that the exercise has to be done under section 74(8), seeking the value of the gift, as translated into Chantry Road, as at the date of the judge’s order.

[122]There are, it seems to us, essentially two ways of looking at that last question. One way is simply to ask, how much of the equity in Chantry Road was funded by the tainted gift? That is Mr Mott’s submission. The other way, which is Mr Jones’ approach, is to ask what proportion of the total cost of Chantry Road was provided by Mr Greet’s gift: on the above findings that would be only 11% (27.5 parts of 250). That figure would then have to be applied to the total value of Chantry Road, as of the date of the confiscation order, on the assumption that there was sufficient equity in the property to give it any value to Ms Thompson at all (cf section 74(8)’s “value to him at the material time”). All of this leaves out of account for the moment any changes wrought in the equity value by Ms Thompson’s subsequent dealings with the property, also relied on by Mr Jones.

[123]We think that this is a difficult issue. The Crown’s way of looking at the problem is in effect to regard Mr Greet as though he was, through the donee, still a half-share owner in Chantry Road. That is a powerful analogy, for the statute does on the whole seek to equate the donee’s property with that of the defendant’s: both are realisable property. On the other hand, there is also great force in Mr Jones’ approach, for it does justice to the fact that 89% of the value of the property was bought either with untainted money derived from the first Mrs Greet’s gift or from a mortgage under which Ms Thompson bore the sole liability.

[124]On balance we prefer Mr Jones’ submission. The statute asks us to find the value to Ms Thompson of her Chantry Road property “so far as it represents the property which [she] obtained” (section 74(8)). “It” there refers to the new property. The question therefore is not what part of the equity value in the new property represents the property gifted, but what part of the new property represents the property gifted. The answer we would give also makes better allowance, in our judgment, for the obligations and gearing effect involved in borrowings. The burden of maintaining those borrowings and the ultimate risk of their gearing effect lie on the donee. It follows that the rewards of that burden and risk should count as the donee’s untainted property. In any event the rewards will remain liable to be captured as “realisable property” subject to any order made.

[125]These points can be illustrated by the following examples. Suppose the proceeds of gifted property fund 100% of the equity in a new property in the sum of £5,000: the new property costs £100,000 and the remaining £95,000 is borrowed by the donee. At the date of a confiscation order, the new property is assessed to be worth £200,000, and the new net equity is thus £105,000. The Crown would say the value of the gift under section 74(8) is £105,000. The gift has grown 21 times. Now suppose that the proceeds of gifted property fund 100% of the equity in a new property in the sum of £50,000: the new property costs £100,000 and the remaining £50,000 is borrowed by the donee. At the date of a confiscation order, the new property is assessed to be worth £200,000, and the new net equity is thus £150,000. The Crown would say that the value of the gift under section 74(8) is £150,000. The gift has grown 3 times. It is odd that the smaller the tainted investment and the larger the donee’s personal risk and obligation under his borrowings, the larger is the growth in the value of the gift. We would prefer to say that in the first case the tainted gift is represented by 5% of the new property (so that the relevant value is £10,000) and in the second case the tainted gift is represented by 50% of the new property (so that the relevant value is £100,000).

[126]Take another pair of examples. A donee invests £10,000 in a new property costing £100,000. The £100,000 is financed: as to £5,000 from the proceeds of a gift; as to £5,000 from the donee’s own untainted funds; and as to £90,000 from a mortgage. At the date of a confiscation order the new property is assessed to be worth a net £105,000. The Crown would say that the value of the gift should be assessed at half of the net equity of £15,000, viz £7,500. Now suppose that on the same investment the new property is assessed at the date of a confiscation order to be worth only £95,000. It could be argued that the value of the gift should be assessed at half of the net equity of £5,000, viz £2,500. Thus if the property increases or falls in value by 5%, the value of the gift rises or falls by 50%. But the whole reason for these large swings has been the donee’s individual decisions about the extent of borrowing risk he has been willing to take. In the latter case he has lost half his equity, but the Crown seeks to make him share that loss with his tainted source. We would prefer to say that the value of the gift is £5,250 and £4,750 in these cases respectively, or the same 5% of the value of the property as that 5% which the gift originally contributed. In the latter case, the donee would have lost all but £250 of his untainted money, for he remains responsible to return as much of his tainted gift as he can. It would be a question of calculation whether the assessment under section 74(7)(a) or (b) would render the greater amount.

[127]In the present case our conclusion would therefore be that, subject to Mr Jones’ final argument relating to Ms Thompson’s contributions to the value of Chantry Road in the period after its purchase, the value of the gift, as represented by Chantry Road, was 11% of the value of Chantry Road as at the date of the confiscation order. We are not sure what the assessed value of Chantry Road was upon which the judge concluded that the net equity was £160,000: but that figure can no doubt be supplied to us.

[128]There are two further matters which these conclusions and Mr Jones’ submissions throw up. The first relates to what account should be taken of (half of) that part of the proceeds of Pembroke Road as did not go into Chantry Road. The second relates to what account should be taken of the transactions involving Chantry Road following its purchase: see Schedule 2 to the Crown’s opening on confiscation (referred to at para 86 above).

[129]As to the first of these matters, the judge took no account of them, possibly because he regarded the whole of the net equity from Pembroke Road as going into Chantry Road, or possibly because there was in any event no realisable property other than Chantry Road and he had decided that the whole of its net equity represented Mr Greet’s gift. Now, however, that we have concluded that Mr Greet’s gift is confined to only his half-interest in Pembroke Road, it is clear that Ms Thompson’s equity in Chantry Road will exceed the value of Mr Greet’s gift to her. It is prima facie relevant therefore to enquire into the Pembroke Road proceeds which did not go into Chantry Road. We know that £33,000 went into Mr Greet’s IVA. That leaves about £21,000 unaccounted for, half of which represents Mr Greet’s gift. Section 74(7)/(8) does not easily read as applying to a gift part of which is transferred into cash and thus falls to be valued in one way and part of which is transferred into other property and thus falls to be valued in another way: but it is difficult to believe that the provisions are not to be applied to such a case. However, the Crown has not addressed us on this matter but has taken its stand on the value of Mr Greet’s gift as reflected in Chantry Road. It is unnecessary therefore to say anything more on this account.

[130]As to the second matter, the post-completion transactions in Chantry Road as reflected in Schedule 2, Mr Jones sought to persuade us that these reduced the value of the gift reflected in Chantry Road still further. We are not persuaded that this is so. To the extent that many of the entries on Schedule 2 represent mortgage payments to Eagle Star, they have already been taken into account in our conclusion that Ms Thompson’s responsibility for such payments affects the percentage of the total value of Chantry Road which represents the original gift. As it is, we have no evidence that these payments, which, down to March 1998, came out of office account, were properly funded by Ms Thompson herself. Next, in August 1998 Ms Thompson gave a second charge over Chantry Road to HSBC, which represents a further obligation on her account. At almost the same time she sold the basement flat for £115,000, which may be said to reflect(a) a reward for her own labours in preparing that flat for sale;

(b) a removal of equity from the property; and

(c) a reduction in the value of the remaining property. It has not been possible to understand the consequences of these transactions for the purpose of the arguments addressed to us on behalf of Mr Greet. It seems to us that these complications can only properly be addressed if Ms Thompson chooses to make representations to the high court in due course. We consider that that is the appropriate place for such matters to be discussed. Issue 3: Was it appropriate for Mr Greet’s gift of his half-share interest in Pembroke Road to be taken into account?

[131]We are at this point concerned with one of the conditions of a “gift…caught by this Part of this Act”, namely that “the court considers it appropriate in all the circumstances to take the gift into account” (section 74(10)(b)). The judge said that it was: he emphasised Mr Greet’s criminality and the history of the gift of Pembroke Road; he rejected the reliance on the compromise of the trustee in bankruptcy’s proceedings; he recognised Ms Thompson’s “unenviable situation”, namely the prospect of either losing her home for herself and her children or of her husband facing a further period of imprisonment. But his answer was that these latter considerations were for the high court rather than himself. He said: “She will no doubt participate in such proceedings before the High Court. She has quite properly not taken any part in these proceedings”.

[132]On this appeal Mr Jones has raised these matters anew: he relies on all the considerations which we have traversed in this judgment. He also referred the court to authorities in which the plight of a wife who faced the loss of her home was said by this court to be something which should properly be taken into account at the stage of proceedings in the crown court.

[133]Thus in R v. Lee

[1996] 1 Cr App R (S) 135

the confiscation order was in the sum of £75,958: a significant part, some £55,000, of the assessment of the amount which might be realised was ascribed to the defendant’s half-share in the matrimonial home. This court concluded that the judge had been wrong to take the husband’s half-share into account. No gift was involved in this aspect of the case, and thus the discretion in question was not section 74(10)(b) but the basic discretion in section 71(1). Evans LJ said (at 139/140):

“If there was a case where the matrimonial home was owned originally by the wife and perhaps paid for out of her own earnings, but then transferred into the joint names of herself and her husband with the intention that they should own it in equal shares, and if the husband was then convicted of offences which justified a confiscation order, and it could not be said that the wife had benefited from the crimes, as she might have done, for example, if they enjoyed a higher standard of living because of the proceeds, then we cannot doubt that the court should be slow to make an order which would result in her home having to be sold. If a sale would cause personal hardship for reasons of ill-health or other compassionate grounds, then the balance comes down even more heavily against making an order. Much will also depend, of course, upon the gravity of the crimes and the extent of the need for compensation [for] the victims in the particular case. It is just such a balance which, in our judgment, the court is required to strike. Returning to the present case, if the facts were as they were understood to be by the judge, and the appellant had made a significant contribution towards the purchase price of the house out of the proceeds of his crimes, then we would have had no hesitation in reaching the same conclusion as he did. But without that factor the house can be see to be the fruits of the wife’s as well as the appellant’s earnings and labour during the period from 1980 until 1989, before these offences began. The figures are such that the amounts of compensation, shared between up to 18 victims, will not be reduced by so much as to be likely to cause significant additional hardship in any individual case. The compassionate grounds for allowing the wife and the child top remain living in the house are very strong. We have come to the conclusion, not without hesitation, that no order should be made in respect of the value of the defendant’s interest in the property in question.”

[134]R v. Taigel

[1998] 1 Cr App R (S) 328

raised a similar issue and the order there was also reduced in this court, from £44,000 odd to £15,000 odd, so as to leave out of account the appellant’s half-share interest in his matrimonial home. It was not an absolute rule, but the authorities ending in Lee suggested that orders which result in the sale of the matrimonial home are inappropriate.

[135]Customs and Excise Commissioners v. A

[2002] EWCA Civ 1039

[2003] 2 WLR 210

was decided after In re Norris. In the latter case (see paras 95/99 above) the House of Lords held that a wife could vindicate her personal interest in the matrimonial home in the high court even where she had been disbelieved in the crown court. Mrs Norris was the registered freehold owner of the home. The burden of proof lay upon the prosecution (at 1401A). The case was not concerned with the exercise of the crown court’s discretion, but rather emphasised the difference of function between the crown court’s jurisdiction in making a confiscation order and the high court’s function in enforcing it and at the same time protecting the interests of third parties. A was also concerned with proceedings in the high court: these followed the making of an order in the crown court which had left out of account the defendant’s half interest in the matrimonial home. The order in question had been made in December 1998, that is to say well before the House of Lords decision in In re Norris. The Commissioners nevertheless applied to enforce the order against the husband’s share in the matrimonial home on the basis that it was realisable property. In conjoined ancillary relief proceedings, the judge ordered that the husband’s share should be transferred to the wife and that this took precedence over the confiscation order. The court of appeal agreed. At para 88 Judge LJ said this:

“The starting point in the argument on behalf of the Customs is that under the statutory framework property innocently acquired by the offender is not exempt from the confiscation process. I agree. However, the wife enjoyed an interest in the matrimonial home, independently of and greater than her husband, acquired from her own sources, without involvement in drug or criminal activity, and before her husband’s criminality began…”

[136]Finally, in R v. Ahmed and Qureshi

[2004] EWCA Crim 2599

(28 October 2004, unreported) confiscation orders were made which took into account the defendants’ half-share interests in their matrimonial homes. The orders were made under the 1988 Act as amended by the Proceeds of Crime Act 1995, the effect of which was to remove from the crown court any discretion in the making of a confiscation order, once the benefit and the amount that might be realised have been assessed (see para 6). The orders were upheld. Latham LJ said this (at para 2):

“[The judge] accepted evidence from the families that in each case the probability was that the homes would have to be sold to meet the confiscation order. The appellants submitted to the judge that he had a discretion as to whether or not to include the value of those shares. The judge accepted those submissions. He nonetheless concluded that there were no exceptional circumstances which justified his excluding them.”

[137]Having pointed out that the judge was mistaken in thinking that he any longer had a discretion, Latham LJ concluded as follows (at para 12):

“Different considerations, will, however, arise if the debt is not met and the prosecution determine to take enforcement action, for example by obtaining an order for a receiver. As the House of Lords explained in In re Norris [2001] 1 WLR 1388, this is the stage of the procedure in which the third party’s rights can not only be taken into account but resolved. If the court is asked at that stage to make an order for the sale of the matrimonial homes, Article 8 rights are clearly engaged. It would be at that stage that the court will have to consider whether or not it would be proportionate to make an order selling the home in the circumstances of the particular case. That is a decision which can only be made on the facts at the time. The courts would undoubtedly be concerned to ensure that proper weight is given to the public policy objective behind the making of the confiscation orders, which is to ensure that criminals do not profit from their crime. And the court will have a range of enforcements options available with which to take account of the rights of third parties…”

[138]Mr Jones on behalf of Mr Greet relied in particular on Lee and Taigel and the cases which had preceded them as laying down a guideline that in the ordinary way a defendant’s half-interest in the matrimonial home would be left out of account, so as to protect the interests of the wife and family. Mr Mott on behalf of the Crown, however, submitted that In re Norris had changed and indeed reversed the practice by emphasising that such questions were to be left to the stage of enforcement, as indicated also by Ahmed and Qureshi.

[139]In our judgment, none of the cases relied on are precisely in point. First, none of them concerned a gift or the discretion under section 74(10)(b). It may be said nevertheless that it is, if anything, more difficult for the defendant to keep out of a confiscation order his own interest in the matrimonial home than his donee wife’s interest in the same. In the case of the defendant’s interest the court’s discretion arises only under the ultimate discretion in section 71(1) itself: whereas in the case of a donee wife the discretion arises first under section 74(10) and again under section 71(1). Secondly, Ahmed and Qureshi was a case in which there was no discretion, albeit when the crown court judge thought that he did have a discretion, he exercised it in favour of including the defendants’ interest in their homes. We are, however, unable to say on the basis of In re Norris and Ahmed and Qureshi that the older line of authority has definitively given way to a new view. Both In re Norris and A indicate, albeit at the high court stage, a continuing concern for the interests of the wife and family in the matrimonial home. The most that can be said of In re Norris is that it teaches that it may be better to deal with such issues at the stage of enforcement rather than at any earlier stage because it is only at the latter stage that the donee third party will be heard. But that cannot entirely remove a discretion which the statute gives to the crown court judge at the earlier stage.

[140]In the present case the judge exercised his discretion on the basis that the whole of Pembroke Road was gifted by Mr Greet to Ms Thompson, that the whole of the equity in Pembroke Road was transferred into Chantry Road, and that the £33,000 paid into Mr Greet’s IVA could be left out of consideration. We have differed in conclusions as to those three matters. Therefore, it seems to us that we have to exercise the question of discretion for ourselves. It seems to us, nevertheless, that the gift of Mr Greet’s half-share ought to be taken into account (under section 74(10)) and also that a confiscation order (in the sum of 11% of the value of Chantry Road as at November 2003) ought to have been made. We are influenced by the following considerations. Although Mr Greet’s interest in Pembroke Road went back to a time well before his offences, nevertheless its mortgage was paid out of Mr Greet’s office account, and its transfer to Ms Thompson took place towards the end of the period of Mr Greet’s thefts. Ms Thompson was closely connected with Mr Greet in the property transactions which, on the evidence before the jury, were both a source of his financial difficulties and a destination for the commitment of his (or his clients’) resources (see para 6 above). Moreover, the Crown placed evidence before the judge (see its section 73 Statement dated 28 March 2002 at pages 9/10) that in the period leading up to Mr Greet’s conviction in December 2001 Ms Thompson was registered for VAT as a “legal consultant” and that she had deregistered soon after that conviction: the inference which the Crown invited the court to draw was that Ms Thompson’s income as a legal consultant was in truth Mr Greet’s income. There is here material which lays Ms Thompson’s role open to suspicion. It cannot be asserted that the gift which she received from Mr Greet was untainted by Mr Greet’s crimes or that she can be put in the same category as the wives in Lee, Taigel, Norris and A. Moreover, there is no evidence before the court that Chantry Road would have to be sold if the confiscation order which we propose, as varied on this appeal, were to be made. It is accepted that the proper time for Ms Thompson to make her representations is before the high court. In all these circumstances, we think that the right order to make is one which allows these matters requiring further investigation to be resolved in the only court which can resolve them, namely the high court. Issues (4), (5) and (6).

[141]Mr Greet’s submissions recorded at para 76 above under sub-paras (4), (5) and (6) raise no further matters not already dealt with above, save perhaps for this. Whereas the section 74(10)(b) discretion seems to us to be an all or nothing decision, ie the gift as a whole has to be taken into account, or not, as the case may be, albeit that decision is made “in all the circumstances”; the section 71(1) discretion can be more tailored to the ultimately appropriate sum in which to make an order. We think that the figure which we have identified above is the “fit” amount in which to make a confiscation order.

Conclusion on appeal

[142]For these reasons, we would allow the appeal to the extent indicated above, namely, by quashing the confiscation order for £160,000 and substituting for it a confiscation order in the sum of £52,250, a figure now agreed. Subject to any further argument which might be addressed to us, we would be disposed to say that the period of imprisonment in default, which under the quashed order was 18 months, should instead be a period of 9 months.