Morgan v R. [2008] EWCA Crim 1323

[2008] EWCA Crim 1323Case No 200705013 B1 200704858 B1
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM CHELMSFORD CROWN COURT
HIS HONOUR JUDGE MITCHELL
ON APPEAL FROM BOURNEMOUTH CROWN COURT
HIS HONOUR JUDGE JARVIS
T20050045. S20060143.
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 20/06/2008
Before
LORD JUSTICE HUGHESMR JUSTICE ANDREW SMITHHIS HONOUR JUDGE LORAINE- SMITH (SITTING AS A JUDGE OF THECOURT OF APPEAL CRIMINAL DIVISION)
Between
John MorganAppellantThe QueenRespondentRosemary BygraveAppellantThe QueenRespondent
(Transcript of the Handed Down Judgment ofWordWave International LimitedA Merrill Communications Company190 Fleet Street, London EC4A 2AGTel No: 020 7404 1400, Fax No: 020 7831 8838Official Shorthand Writers to the Court)
Mr C Coltart (instructed by Russell Jones and Walker) for Appellant John MorganMr D Walbank (instructed by Crown Prosecution Service) for CrownMr I Wheaton (instructed by Andrews McQueen) for Appellant Rosemary BygraveMr S Ellacott (instructed by Crown Prosecution Service) for CrownHearing Hearing dates : 5 TH AND 6 TH June 2008
Judgment
[1]We have heard together two applications for leave to appeal against confiscation orders because they raise similar questions about a limited class of cases, namely those where demonstrably(i) the defendant’s crimes are limited to offences causing loss to one or more identifiable loser(s),(ii) his benefit is limited to those crimes,(iii) the loser has neither brought nor intends to bring any civil proceedings to recover the loss but(iv) the defendant either has repaid the loser, or stands ready willing and able immediately to repay him, the full amount of the loss.[2]The first case, Morgan, falls to be decided under the Criminal Justice Act 1988 (‘CJA 1988’), as amended by the Proceeds of Crime Act 1995 (‘the 1995 Act’). The critical provisions are section 71(1C) and 72(7). The second case, Bygrave, falls to be decided under the Proceeds of Crime Act 2002 (‘POCA 2002’). The critical provisions are section 6(6), 13(5) & 13(6).[3]We draw attention to the fact that although the two critical sets of provisions here in question are in broadly similar terms, confiscation legislation has passed through a number of changes since it first appeared in the Drug Trafficking Offences Act 1986. Moreover, until 24 March 2003 when POCA 2002 came into force, there were parallel regimes, similar but different, for drugs cases on the one hand and non-drug offences on the other. It is essential that in any application for a confiscation order close attention is paid to the type and date of the offence(s) and to which of different statutory rules applies to the case.[4]That said, these two cases do have two important questions in common. After the amendments made by the 1995 Act, the making of a confiscation order under CJA 1988 became mandatory, rather than discretionary as it previously had been. But an exception was made where the victim of the offending had made, or intended to make, a civil claim to recover his or her loss. In that event, the confiscation order is discretionary. That position has been retained in POCA 2002. In the present two cases, the defendant either had repaid, or asserted that s/he stood prepared to repay, what had been stolen from the victim. That meant that there was no occasion for the victim to make a civil claim. In neither case is there any suggestion that the defendant has committed any crime other than those involved in the present convictions. Nor is there in either case any suggestion that the benefit of the defendant extends beyond the sum stolen from the identifiable victim, either because the defendant used the money in the meantime or for any other reason. The effect of the confiscation orders made is likely to be, in both these cases, that the defendant pays a great deal more than he would have been ordered to pay if he had left the victim to make a civil claim. Accordingly, the questions are: i) in such a case is the making of a confiscation order mandatory if the Crown asks for it, even though it would have been discretionary if the defendant had chosen not to repay or to offer to repay, and the victim had made a civil claim ? and if so, ii) what if any are the limits upon the Crown’s power to decide to seek a confiscation order ?[5]For Morgan the relevant statute was the Criminal Justice Act 1988. Section 71 sets out the process for making a confiscation order. So far as material, it provides as follows: “71 (1) Where an offender is convicted, in any proceedings before the Crown Court or a magistrates' court, of an offence of a relevant description, it shall be the duty of the court— (a) if the prosecutor has given written notice to the court that he considers that it would be appropriate for the court to proceed under this section, or (b) if the court considers, even though it has not been given such notice, that it would be appropriate for it so to proceed, to act as follows before sentencing or otherwise dealing with the offender in respect of that offence or any other relevant criminal conduct. (1A) The court shall first determine whether the offender has benefited from any relevant criminal conduct. (1B) Subject to subsection (1C) below, if the court determines that the offender has benefited from any relevant criminal conduct, it shall then— (a) determine in accordance with subsection (6) below the amount to be recovered in his case by virtue of this section, and (b) make an order under this section ordering the offender to pay that amount. (1C) If, in a case falling within subsection (1B) above, the court is satisfied that a victim of any relevant criminal conduct has instituted, or intends to institute, civil proceedings against the defendant in respect of loss, injury or damage sustained in connection with that conduct— (a) the court shall have a power, instead of a duty, to make an order under this section; (b) subsection (6) below shall not apply for determining the amount to be recovered in that case by virtue of this section, and (c) where the court makes an order in exercise of that power, the sum required to be paid under that order shall be of such amount, not exceeding the amount which (but for paragraph (b) above) would apply by virtue of subsection (6) below, as the court thinks fit. ……. (6) Subject to subsection (1C) above the sum which an order made by a court under this section requires an offender to pay shall be equal to— (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) if the prosecutor has given written notice to the court that he considers that it would be appropriate for the court to proceed under this section, or (b) if the court considers, even though it has not been given such notice, that it would be appropriate for it so to proceed, to act as follows before sentencing or otherwise dealing with the offender in respect of that offence or any other relevant criminal conduct. (a) determine in accordance with subsection (6) below the amount to be recovered in his case by virtue of this section, and (b) make an order under this section ordering the offender to pay that amount. (a) the court shall have a power, instead of a duty, to make an order under this section; (b) subsection (6) below shall not apply for determining the amount to be recovered in that case by virtue of this section, and (c) where the court makes an order in exercise of that power, the sum required to be paid under that order shall be of such amount, not exceeding the amount which (but for paragraph (b) above) would apply by virtue of subsection (6) below, as the court thinks fit. (b) the amount appearing to the court to be the amount that might be realised at the time the order is made,[6]Then, in section 72, the Act provides for the inter-relation of confiscation and compensation orders. First, by s 72(5)(b) it stipulates that the confiscation order shall be left out of consideration in deciding whether or not to make a compensation order, though it must, by section 72(5)(a), be taken into account before imposing a fine. Then, by section 72(7), it provides as follows:
“(7) Where— (a) a court makes both a confiscation order and an order for the payment of compensation under section 130 of the Powers of Criminal Courts (Sentencing) Act 2000 against the same person in the same proceedings; and (b) it appears to the court that he will not have sufficient means to satisfy both the orders in full, it shall direct that so much of the compensation as will not in its opinion be recoverable because of the insufficiency of his means shall be paid out of any sums recovered under the confiscation order.” (a) a court makes both a confiscation order and an order for the payment of compensation under section 130 of the Powers of Criminal Courts (Sentencing) Act 2000 against the same person in the same proceedings; and (b) it appears to the court that he will not have sufficient means to satisfy both the orders in full, it shall direct that so much of the compensation as will not in its opinion be recoverable because of the insufficiency of his means shall be paid out of any sums recovered under the confiscation order.”
[7]Although POCA 2002 alters the law of confiscation in a number of important areas, its provisions relevant to the present cases are very similar to those of the CJA 1988. Sections 6 and 7 set out the process for making a confiscation order. So far as material, they provide as follows:
“6 Making of order (1) The Crown Court must proceed under this section if the following two conditions are satisfied. (2) The first condition is that a defendant falls within any of the following paragraphs— (a) he is convicted of an offence or offences in proceedings before the Crown Court; (b) he is committed to the Crown Court for sentence in respect of an offence or offences under section 3, 4 or 6 of the Sentencing Act; (c) he is committed to the Crown Court in respect of an offence or offences under section 70 below (committal with a view to a confiscation order being considered). (a) he is convicted of an offence or offences in proceedings before the Crown Court; (b) he is committed to the Crown Court for sentence in respect of an offence or offences under section 3, 4 or 6 of the Sentencing Act; (c) he is committed to the Crown Court in respect of an offence or offences under section 70 below (committal with a view to a confiscation order being considered). (3) The second condition is that— (a) the prosecutor…. asks the court to proceed under this section, or (b) the court believes it is appropriate for it to do so. (4) The court must proceed as follows— (a) it must decide whether the defendant has a criminal lifestyle; (b) if it decides that he has a criminal lifestyle it must decide whether he has benefited from his general criminal conduct; (c) if it decides that he does not have a criminal lifestyle it must decide whether he has benefited from his particular criminal conduct. (5) If the court decides under subsection (4)(b) or (c) that the defendant has benefited from the conduct referred to it must— (a) decide the recoverable amount, and (b) make an order (a confiscation order) requiring him to pay that amount. (6) But the court must treat the duty in subsection (5) as a power if it believes that any victim of the conduct has at any time started or intends to start proceedings against the defendant in respect of loss, injury or damage sustained in connection with the conduct. ……… 7 Recoverable amount (1) The recoverable amount for the purposes of section 6 is an amount equal to the defendant's benefit from the conduct concerned. (2) But if the defendant shows that the available amount is less than that benefit the recoverable amount is— (a) the available amount, or (b) a nominal amount, if the available amount is nil. (3) But if section 6(6) applies the recoverable amount is such amount as— (a) the court believes is just, but (b) does not exceed the amount found under subsection (1) or (2) (as the case may be).”
[8]The inter-relation of confiscation and compensation orders is covered by section 13 in terms very similar to those of section 72 CJA 1988. First, by s 13(3)(a) the Act stipulates that the confiscation order shall be left out of consideration in deciding whether or not to make a compensation order, though it must, by section 13(2)(a), be taken into account before imposing a fine. Then, sections 13(5) and (6) provide as follows:
“(5) Subsection (6) applies if— (a) the Crown Court makes both a confiscation order and an order for the payment of compensation under section 130 of the Sentencing Act against the same person in the same proceedings, and (b) the court believes he will not have sufficient means to satisfy both the orders in full. (6) In such a case the court must direct that so much of the compensation as it specifies is to be paid out of any sums recovered under the confiscation order; and the amount it specifies must be the amount it believes will not be recoverable because of the insufficiency of the person’s means.” (a) the Crown Court makes both a confiscation order and an order for the payment of compensation under section 130 of the Sentencing Act against the same person in the same proceedings, and (b) the court believes he will not have sufficient means to satisfy both the orders in full. (6) In such a case the court must direct that so much of the compensation as it specifies is to be paid out of any sums recovered under the confiscation order; and the amount it specifies must be the amount it believes will not be recoverable because of the insufficiency of the person’s means.”

Morgan: the facts

[9]Morgan was a serving police officer of previous good character. He befriended but also cheated an elderly lady. Between July 2001 and his arrest in March 2004 he obtained from her a total of £279,872.02. Adjusted for RPI inflation (see s 74(5)(a) and R v Barwick [2001] 1 Cr App R (S) 129 at 445), his benefit from the offences was £306,913.93. Between his arrest and the confiscation hearing, he repaid the loser about five-sixths of these defalcations. Very early on, at the conclusion of his police interviews he relinquished to her the sum of about £170,000 which remained in one or more joint bank accounts in his name and hers, which he controlled, and later he transferred to her the flat in which she lived, which had been bought in his name. That left £51,967.83 outstanding, which he said that he stood ready to repay. He was convicted by the jury after denying dishonesty and sentenced to four years imprisonment.

Morgan: the judge’s order

[10]At the confiscation hearing, the Judge duly determined the defendant’s benefit at £306,913.93. He found the defendant’s realisable assets to be £106,259.46. He was asked by the defendant to construe s 71(1C) CJA 1988 in such a way as to make a confiscation order discretionary, rather than mandatory, where repayment had been made, or was about to be made, without the necessity for civil action, but he felt unable to do so. He determined that a confiscation order was mandatory once the Crown had given notice invoking the confiscation procedure, and had to be made either for the full amount of benefit, or, as here, for the lesser sum of the defendant’s realisable assets. Accordingly he made a confiscation order in the sum of £106,259.46, with a term of three years additional imprisonment in default of payment. He directed, pursuant to section 72(7) CJA 1988, that the outstanding loss suffered by the victim (£51,967.83) should be paid out of the sum confiscated. He expressed considerable sympathy for the defence submissions(a) that the effect of the order was to add to the defendant’s punishment an additional financial penalty of about £55,000 beyond repayment of the loss, and(b) that that might mean that the defendant would have been better off if he had refused to repay, and waited to be sued. However, he concluded that the removal of his discretion by the statutory amendment made by the 1995 Act had these inevitable results once the Crown required the court to follow the confiscation route.

Bygrave: the facts

[11]Miss Bygrave was employed as an accounts clerk. She was in her mid forties and of previous good character. Between January 2004 and October 2005 she stole a total of £12,768.17 from her employers by falsifying expenses and/or salary claims for herself. When interviewed she initially denied what she had done, but at the end of lengthy interviews admitted it. She pleaded guilty at the first opportunity. The money had been spent, whether upon her family as she asserted or otherwise does not matter for present purposes. She appeared at the Crown Court in July 2006 offering to repay. She had, it would appear, borrowed upon her home to enable her to do so. The judge passed a suspended sentence of imprisonment, coupled with an order for unpaid community work.

Bygrave: the Judge’s order

[12]There was no separate confiscation hearing. There was no occasion for it, since all the figures were agreed. It was highly desirable for the matter to be dealt with all at once and as soon as possible. But the transcript makes it clear that one consequence of that was that the issue of confiscation/compensation was dealt with in the course of a very busy list and we cannot avoid saying without the Judge being given the assistance which he was entitled to expect.[13]The Crown told the Judge that it applied for both a confiscation order and a compensation order in favour of the losing employers. As to confiscation, the Crown put the benefit, clearly correctly, at £12,768.17, the sum stolen. There was no dispute that the defendant had assets equal to that sum; she had come to court ready and willing to repay exactly that amount to the losers. Accordingly, the statutory calculation of confiscation led to an order in that sum. As to compensation, the Crown contended that the amount of the order should be an identical sum of £12,768.17, since that was the loss sustained by the employers. We regard it as plain from the transcript that the Judge was troubled by the prospect of making cumulative orders for 2 x £12700 viz a little over £25,000, when the only sum the defendant had ever stolen was half that. The Crown’s advocate told the Judge no more than that there was authority for making both confiscation and compensation orders. She did, though not immediately, identify the authority she had in mind as R v Roy Williams [2001] 1 Cr App R (S) 140 at 500. She had not got the case for the Judge, nor was she able to tell him anything about what it said. It is not directly analogous because the counts there were sample counts, so that the defendant’s benefit was not confined to the sums charged and repaid. The Crown Prosecution Advocate did make reference to section 13(5) POCA 2002 as justifying the making of both orders. What she did not at any stage do was to say clearly that the Judge had power to make an order under s 13(6) for compensation to be paid out of the confiscated monies. It may well be that that was what was anticipated by whoever had drafted the prosecution financial statement, and if anyone had taken the Judge to its concluding part that might have become apparent. Unfortunately, this did not happen even though the Judge made it clear that he was troubled by the prospect of double payment, and this, if it had been appreciated, was the simple answer to his anxiety. Nor was such an order suggested on behalf of the defendant; the Judge was simply told that she was ready to repay the £12,700 odd, but could not pay double. The Judge declined to make both orders. He probably regarded himself as obliged to make a confiscation order, but in any event he did make such in the sum of the benefit, viz £12,768.17. He declined to make a compensation order. In passing sentence and making the confiscation order, he said:
“In this case I believe that justice will be served by my making a confiscation order only.”
[14]There had until then been no occasion for the employers to make any civil claim because the defendant had said all along that she would repay them the whole of the loss. However, when such money as she had went to satisfy the confiscation order, and thus disappeared into the coffers of the State, they eventually wrote, through their solicitors, to the defendant to indicate that a claim would be made. That was in the Summer of 2007, about a year after sentence had been passed. In consequence the defendant then sought to appeal the confiscation order and asks us for the necessary extension of time of about 13 months.

The “statutory anomaly” complained of

[15]Mr Coltart complains that the statutes create an anomaly. If the defendant waits to be sued by the victim and the victim sues or indicates an intention to do so, section 71(1C) CJA 1988, or section 6(6) POCA 2002 as the case may be, creates a discretion in the court whether to make a confiscation order or not. It does not follow that the court will not make a confiscation order. At least if there appear to be benefits obtained from criminal conduct which go beyond the loss caused to the suing loser, it ought ordinarily to make an order. There may be other reasons why an order should be made in a particular case. But it would not necessarily be improper, if there were no benefit to the offender beyond the loss which will be recovered by civil action, for the judge to decline to make a confiscation order. And if an order is made in such a case, the Judge is not bound to make it for the full amount of benefit obtained, up to the defendant’s realisable assets, but instead can make it for such sum as he thinks fit or just: see section 71(1C)(c) CJA 1988 or section 7(3) POCA 2002, as the case may be. Thus the order can be made for the amount of any excess benefit obtained by the defendant beyond that which is being removed by the loser’s civil action, or by a compensation order made to relieve the loser from having to go through with that civil action. In that way the defendant can be made to disgorge all criminal benefit obtained, up to the amount of his assets, but need not be required to pay more than he has obtained.[16]If, however, instead of waiting to be sued, the defendant repays the loser before he comes to court, or indicates that he stands ready to repay immediately, there will probably be no actual or intended civil action by the loser. In that event, section 71(1C) CJA 1988, or section 6(6) POCA 2002, will not apply. That will mean two things. First, the making of a confiscation order is mandatory once the Crown asks for it. Second, the order which must be made can only be for the full sum of benefit obtained, up to the amount of the defendant’s realisable/available assets. If the only benefit the defendant has obtained is the amount which he has repaid to the loser, this has the inevitable consequence that there must be a confiscation orders for the same sum again, so long as the defendant has assets to meet it. That means he pays up to double the benefit he has obtained from crime. And if there is excess benefit obtained beyond the sum due to the identified loser, there is no power in the court to tailor the confiscation order to that excess; rather the order must be for the whole benefit obtained.[17]We accept that this is the position. It is, however, important that the extent of the suggested anomaly should not be overstated.[18]The confiscatory jurisdiction has consistently been interpreted as deliberately draconian. It is not restitutionary. One consequence of that is that it will not infrequently happen that a defendant is obliged by a confiscation order to pay more than the profit he has made from his crime. The books are littered with examples, and we are grateful to Mr Walbank, for the Crown in Morgan, for taking us carefully through them. We mention only some. They include the case of two or more defendants who obtained and shared the benefit of crime; each has obtained the full value of the benefit and each is liable to confiscation orders up to that full value: see the very recent decision of the House of Lords in R v May [2008] UKHL 28. Similarly liable to confiscation order in the full value of the property obtained are the defendant who has made no profit because the criminal property has been recovered from him by the investigators (R v David Smith [2001] UKHL 68; [2002] 1 WLR 54), and the defendant whose profit from his crime is, because of expense incurred, far less than his gross receipts (R v Banks [1997] 2 Cr App R (S) 110). There are many other examples.[19]The difference in the present limited type of case is said to be the high public interest in encouraging the voluntary repayment to victims by criminals.

(S) 96 at 570, Thomas LJ said at paragraph 31:

“We consider it important in the overall interest of justice that those engaged in criminal enterprise should make as quickly as possible full restitution, including any benefits derived from their criminal activities such as the profitable results or fruits of any investments made. Restitution is often made without a formal agreement. It is in the general interests of justice to encourage the making of full restitution of the benefits without the need for confiscation proceedings and therefore to protect the person making full restitution if ever the Crown were unjustly or without proper cause to seek to go behind an agreement reached with full and proper disclosure or an understanding reached or representation made in similar circumstances.” ii) In R v Farquhar [2008] EWCA Crim 806 this court said this at paragraph 13: “We add this: we say nothing to discourage early and voluntary payments to make full restitution in such cases. On the contrary we echo the observations of the court in Mahmood and Shahin in encouraging them. In this area there is scope for good sense on the part of all parties, including the prosecution and, in the give and take of compromise there will be ample benefits in the shape of early payment… ”
[20]We accept that there is an important public interest in encouraging voluntary repayment to victims by criminals, and that this distinguishes from the other cases the position of the defendant who makes voluntary repayment, or is ready immediately to do so, rather than waits to be sued.

The construction of section 71(1C) CJA 1988 and s 6(6) POCA 2002

[21]Mr Coltart renewed before us the argument which he presented to the Judge in Morgan’s case. He asks us to say that the ‘anomaly’ which he identifies should mean that section 71(1C) should be construed as if it read as follows:
“If, in a case falling within subsection (1B) above, the court is satisfied either that the offender has repaid the victim or that a victim of any relevant criminal conduct has instituted, or intends to institute, civil proceedings against the defendant in respect of loss, injury or damage sustained in connection with that conduct— …….”
If that were to be done, then the making of a confiscation order would become discretionary rather than mandatory in a case of repayment of the victim. In fact, in Morgan there had not been full repayment. The implied words would have to be yet further expanded to cover the case. …….”[22]We have been shown the report of a Home Office working party which considered the unamended CJA 1988 in November 1992 and recommended, inter alia, that the making of a confiscation order should become mandatory rather than discretionary, subject to exception where necessary to take account of the interests of victims. We do not doubt that this was part of the background work which led to the amendments made by the 1995 Act. It is to be noted that that report referred to the danger of double recovery and adopted a proposal, which emanated from the Crown Prosecution Service, that in assessing an offender’s benefit the court should be required to deduct the amount of any compensation order made.[23]Whilst this report is of some limited significance in identifying the desirability of avoiding double recovery in a case where the victim is repaid, it is of no assistance in construing section 71(1C) CJA 1988, and Mr Coltart wisely did not submit otherwise. The solution proposed by the Working Party was not the one adopted by the statute. For the same reason it can be of no assistance in construing section 6(6) POCA 2002.[24]Whilst we accept the existence of the difference in statutory treatment which Mr Coltart identifies, there is simply no canon of statutory construction which empowers any court to write into a statute words which are not there, on the grounds that Parliament ought to have enacted a provision which it has not. It may be that if Parliament had had the case of the voluntary repayer brought to mind, it would have made different provision. We do not know. But Parliament has not done so. Moreover, the same statutory solution which it did enact has been repeated in the subsequent Proceeds of Crime Act 2002.[25]We are quite satisfied that it is impossible to construe section 71(1C) CJA 1988 in the manner suggested. Although, as will appear, it is not necessary for the purposes of Bygrave to decide the construction of section 6(6) POCA 2002, we are equally sure that the same applies to that section.

The Crown’s decision; abuse of process

[26]Once the Crown decides to invoke the confiscation process, the making of an order is mandatory, and its amount is arithmetically determined but cannot be moderated by judicial decision – see paragraph 16 above. It has been accepted before us by the Crown that that makes the decision to invoke the confiscation process a critical one. It is plain, and is also accepted, that it is not appropriate to seek confiscation in every single case where some benefit has been obtained by crime. Neither s 71 CJA 1988 nor s 6 POCA make confiscation proceedings automatic in every case where some benefit has been obtained from criminal conduct. Accordingly there is an individual decision to be made by the Crown in each case whether to ask the court to apply the confiscation process. Similarly, it is open to the Crown to discontinue the confiscation proceedings at any stage. Thus, it is accepted by the Crown, there is an individual exercise of judgment involved in each case.[27]The court retains the jurisdiction to stay an application for confiscation, as any other criminal process, where it amounts to an abuse of the court’s process. In the present context, that power exists where it would be oppressive to seek confiscation. That has been recognised in several cases and has been accepted before us. In Mahmood and Shahin (supra) Thomas LJ said this at paragraph 26:
“It was accepted on behalf of the Crown that a judge had in principle a discretion to stay proceedings if what the Crown was proceeding to do amounted to an abuse of process. We consider that that concession was rightly made by the Crown.”
The same was accepted in R v Hockey [2007] EWCA Crim 1577; [2008] 1 Cr App R (S) 50 at 279, paragraph 18, R v Nield [2007] EWCA Crim 993, and R v Farquhar (supra) at paragraph 12.[28]In none of those cases was abuse of process in fact established. The particular form of abuse considered in those cases was an application for confiscation where the Crown had given some form of undertaking or agreement not to seek it if repayment were made. We agree that abuse may arise in that way, but in the particular limited class of cases which we are here considering, abuse is not limited to agreement reneged upon.[29]It needs to be said immediately that it is not sufficient to establish oppression (and thus abuse of process) that the effect of a confiscation order will be to extract from a defendant a sum greater than his profit from his crime(s). That follows from the line of authorities discussed at paragraph 18 above, which clearly show that this may often be the effect of a confiscation order. This court said as much explicitly in Mahmood and Shahin at paragraph 21, and we respectfully agree. We here confine ourselves to the limited case described in paragraph 1 above, namely where demonstrably(i) the defendant’s crimes are limited to offences causing loss to one or more identifiable loser(s),(ii) his benefit is limited to those crimes,(iii) the loser has neither brought nor intends any civil proceedings to recover the loss, but(iv) the defendant either has repaid the loser, or stands ready willing and able immediately to repay him, the full amount of the loss.[30]In those cases, the Crown accepts, and we hold, that it may amount to an abuse of process for the Crown to seek a confiscation order which would result in an oppressive order to pay up to double the full restitution which the defendant has made or is willing immediately to make, and which would thus deter him from making it. In particular, although the confiscation jurisdiction is rightly described as draconian and often as penal in nature, we do not accept the contention that it is a sufficient justification for seeking a confiscation order in the limited class of cases which we are here dealing with that the Crown wishes to inflict an additional financial penalty upon the defendant. Whilst confiscation may well be draconian or penal in effect, it does not, as the House of Lords observed in R v May (supra), at paragraph 48(1), operate as a fine. Whether an application for confiscation is or is not oppressive in the limited class of cases we are considering will fall to be considered by the trial judge individually on the facts of each case. The jurisdiction to stay may be exercised either in advance of the confiscation hearing or during it if it becomes clear that the making of an order would be oppressive for the reasons here discussed.[31]We make no attempt to foresee all possible circumstances which may bear on the question whether a particular application is, or is not, oppressive. We draw attention, however, to three possible situations which are likely to recur which would, as it seems to us, be likely to demonstrate that it is not oppressive to seek a confiscation[32]Mr Coltart drew our attention to the fact that under the Criminal Justice System Business Plan, specific targets are set for the number and amounts of confiscation orders which ought to be obtained in the geographical area of each Local Criminal Justice Board. Those Boards will contain representatives of the Crown Prosecution Service, who will thus be well aware of the targets. The targets are no doubt designed to encourage the greater use of the confiscation jurisdiction, which history shows has tended to be underused at least until recently. It is also apparent that at a national level the various prosecuting agencies now receive a substantial part of the money which is paid under confiscation orders; the exact nature of the link between their budgets and the product of such orders is not in evidence, but some link there clearly is in the sense that the proceeds of confiscation are, to some extent, directed to funding the state’s prosecuting authorities. We do not accept Mr Coltart’s submission that the existence of such targets, and of such funding link as there is, necessarily mean that any decision to invoke the confiscation procedure will involve taking into account an illegitimate consideration, still less that the result will be oppressive. We think that it would be desirable for those who contemplate framing targets to consider their value and suitability, and the risk of misunderstanding of their object and application. But they do not carry the automatic implication that the jurisdiction will be abused by prosecutors, any more than they lead to the conclusion that judges, who may attend Criminal Justice Boards, will abuse the jurisdiction. What is clear is that both the targets and the funding link underline the critical importance of prosecutors exercising independent judgment on the facts of each case, which necessity should be very plainly in the mind of everyone considering such a decision. We are quite confident that if, in the restricted class of cases which we are here considering, an oppressive use of the confiscation jurisdiction is genuinely established, judges have ample powers to prevent it by way of stay.[33]We draw attention to the reference in Farquhar (supra at paragraph 19(ii)) to the desirability of sensible give and take in anticipation of confiscation proceedings. It is perfectly proper for a defendant to ask directly whether if he repays a particular specified sum by a specified time the Crown will continue to seek confiscation. If such question is asked, the Crown ought ordinarily to be in a position to respond. It might well be otherwise if the defendant sought to cast upon the Crown the onus of saying what would be acceptable.[34]We make it clear that if, in the particular class of case we are here considering, an oppressive decision to seek confiscation is alleged, the proper route of challenge is by way of application to the trial judge for a stay on grounds of abuse. There ought to be no occasion for applications for judicial review of the decision to seek confiscation. Quite apart from question of indirect evasion of section 29(3) Supreme Court Act 1981, such an application would be likely to be met by refusal on the grounds that the Crown Court process contains adequate remedy if oppression be established.[35]Nor do we wish to give any encouragement to routine applications for stays on grounds of abuse in confiscation cases. Our decision is limited to the particular category of cases which we have set out in paragraph 1. If a Judge is confronted with what appears to be a hopeless application for a stay in these or other cases he has ample power to require initially that the application be made in writing, and/or to abstain from directing any response from the Crown unless and until he is satisfied that there is an arguable case, and/or to refuse the application without an oral hearing and/or to make appropriate orders for costs if justified. Further, there should be full compliance with that part of the Lord Chief Justice’s Practice Direction relating to abuse applications; see [2002] 1 WLR 2870; Archbold 2008, paragraph 4.50a. Of course, it follows from what we have said, that if there is indeed an arguable case of abuse, the challenge should be made before the Crown Court where it can be investigated; a challenge on this basis not made below will seldom be capable of founding grounds of appeal.

Morgan: decision

[36]No application was made to the Judge to stay the confiscation application as an abuse of process. That means that there has been no consideration of whether or not the application was oppressive in the particular circumstances. That being so, we could only quash the order made if satisfied that even without investigation of the arguments on that topic, and of any relevant evidence, it is quite clear that it was oppressive. We have seen a long transcript of the argument before the Judge. Much of it is concerned with the submission made to him, as also to us, that section 71(1C) CJA 1988 should be construed in the manner for which Mr Coltart has contended. Some of it encompassed generalised complaints by Mr Coltart that confiscation was unfair, and requests by him that the Crown justify its claim that both compensation and confiscation orders were appropriate. It is plain that Counsel for the Crown took his stance, in the absence of any application to stay, on the simple proposition that there was no bar to both compensation and confiscation orders co-existing. So far as it goes, that was plainly correct, as section 72(7) CJA 1988, inter alia, plainly demonstrates.[37]In this court we have called for, and seen, notes by Email sent by Mr Coltart to the Crown, making similar requests why compensation alone would not suffice. It is clear that they were not then answered, perhaps because the same stance which we have mentioned was being taken. We have also called for, and received, from Mr Walbank for the Crown, the reasons why he contends that there was no oppression in the making of a confiscation order. They are twofold: i) because the defendant was not making any immediate offer to repay the outstanding balance, but only contending that a compensation order should be made rather than a confiscation order; there was plain evidence that he was in financial difficulty, likely to be compounded by pending divorce and ancillary relief proceedings; and ii) because the nature of his offending had been to exploit a position of trust against a vulnerable victim and to obtain from her large sums which represented the bulk of her assets.[38]As we have held in paragraph 30 above, we do not accept that the second reason can, without more, prevent the application for confiscation from being oppressive if the case falls into the limited category which we are here considering. If it did, that would mean that it is proper to seek to use the confiscation process solely as a means of inflicting additional punishment upon the defendant because his offence was an unpleasant one. That the effect of properly obtained confiscation orders may well be in many cases to inflict additional punishment does not mean that such an order can be sought for that sole reason, if otherwise it would be oppressive for the reasons here discussed. The public interest in encouraging voluntary repayment exists in cases of offending which might be described as unpleasant, just as in those of less serious crime; indeed in this case prompt voluntary repayment was particularly desirable, given that the complainant was over 90 years old.[39]We agree with Mr Coltart that it is regrettablethat the first reason did not surface at the Crown Court. However, it is plain that it has substance. It is quite clear that the defendant was at no stage saying that he was ready, willing and able to make immediate repayment of the outstanding £52,000, or indeed of any sum. On the contrary, he was through counsel asking for a compensation order alone to be made, as well as setting out contentions now accepted to be doomed to failure that the benefit calculation ought to be reduced by repayments already made. It appears that the source of any further repayment would probably be the sale of the matrimonial home. With a divorce pending, together with inevitable financial claims between the spouses, there was every reason to fear that the defendant would not be in any position to make immediate repayment. It appears that the Crown feared routine requests in every confiscation case that they justify their application, and perhaps an attempt to set up a consequent reasons challenge, if not in this case then in others. For the reasons which we have given above (paragraphs 33-35), we do not think that such fears ought to be the consequence of our decision. It follows that with hindsight it would have been better if the Crown had responded that it was for the defendant to show that he was in a position to make immediate payment and of what sum. If, however, it had done so, it is far from clear that the defendant could have been in a position to pay immediately, and significantly more probable that he would not. There is a real difference in the efficacy of enforcement of confiscation orders, as compared with compensation orders. Moreover, the potential oppression which we have considered in this case exists where the prospect of a confiscation order being made would deter a defendant from making voluntary repayment in advance of, or at least at the outset of, confiscation proceedings. We are not satisfied that it is clear that this defendant was in that position; indeed it seems he was probably not.[40]In those circumstances, the issue not having been debated below, it is impossible for us to say that in this case the application for confiscation was oppressive. We give leave to Morgan to appeal, but his appeal must in consequence be dismissed.[41]We are invited by Morgan to enlarge the time for compliance with the confiscation order to enable his matrimonial home to be sold. There is no objection by the Crown. We extend time by three months to 1 December 2008. Bygrave: decision[42]Mr Wheaton sought to advance arguments which mirror those made in the case of Morgan. His written grounds traverse the construction of section 6(6) POCA 2002, the compatibility of the order made with the ECHR and the First Protocol, Article 1, and abuse of process. It seems to us, with great respect to those arguments, that it is unnecessary to consider them in Miss Bygrave’s case.[43]What the Judge wanted to do, we are satisfied, was to achieve a result in which the defendant was not required to pay more than the sum she had stolen. That was the correct approach because there was here, unlike many other cases, no hint of a suggestion that the defendant’s benefit, for the purposes of POCA 2002, exceeded what she had stolen from her employers. In particular, although this was, by statute, a criminal lifestyle case, because the defendant had been convicted of three or more offences from which she had benefited (section 75(2)(b) & 75(3)), there was no suggestion that any of the statutory assumptions available under section 10 ought to be applied in her case to show a benefit greater than the total of the thefts to which she pleaded guilty. Given that, we consider that if the judge had been afforded the opportunity to think about it, he would have regarded this as a clear case in which the interests of the losing employers should prevail over those of the taxpayer generally, so that, if legally possible, the defendant’s ill-gotten gains should be disgorged in the direction of the losers rather than into the public purse. This was entirely possible legally. The route is signposted by subsections 13(5) and (6). What justice required in this case was an order under section 13(6) for the losers to be paid their compensation out of the confiscation order. That was open to the Judge, since on the evidence, Miss Bygrave did not have the means to pay both confiscation and compensation. In this court, Mr Wheaton has asked us to do no more than to add to the confiscation order a direction to this effect. For the Crown, Mr Ellacott does not disagree. Accordingly, we extend time, give leave to appealand allow the appeal to the extent that we vary the confiscation order to attach to it a direction pursuant to section 13(6) that the whole sum of £12,786.17 be paid out of it to Messrs Haines Watts Business Recovery & Insolvency.

order

a) where the defendant, even if he has repaid the victim or is ready to do so, has significantly profited through use of the stolen money whilst it was in his hands and thus has obtained a benefit beyond the loss inflicted on the victim; examples include the defendant who invests the money profitably, or gambles with it successfully, or who buys or obtains property which is let out; b) ex hypothesi, where the Crown alleges that the statutory assumptions ought to be applied to demonstrate that the defendant has obtained a benefit beyond the loss inflicted upon the particular victim of the presently charged offences; if subsequently it turns out that the assumptions are not justified, and there is no benefit beyond the repayment made or immediately offered, it may at that stage become oppressive to continue; c) where although repayment in full is offered, it is uncertain that it will be accomplished; in such a case there can be significant advantages for the victim in a confiscation order being made coupled with a direction under section 72(7) CJA 1988 or section 13(6) POCA 2002 for payment to him; that is because a confiscation order carries more effective enforcement than a compensation order, and prosecutors might properly be cautious about accepting promises to pay in the future from defendants whose dishonesty forms the basis of their crimes; indeed we anticipate that it may be difficult to establish abuse in the kind of case we are here discussing unless the defendant has either already made restitution in full or is in a position to tender it immediately in a guaranteed form, such as a banker’s draft or funds in a solicitor’s hands.

Cited in 18 later judgments

and 9 more of the most senior