Post Waya: Can Applicants Take Advantage from a Change in the Law?

Andrew Mitchell QC and Martin Evans appeared in R. v Bestel (Jean Pierre), R. v Bashir (Sajid) and R. v Raza (Naim) (Court of Appeal (Criminal Division)) 

The court gave guidance on the relevant principles when considering whether to grant an extension of time to appeal against a confiscation order when the effect of granting the application would be to allow the applicant to take advantage of a change in the law post R. v Waya (Terry) [2012] UKSC 51, [2013] 1 A.C. 294

 The applicants (X1, X2 and X3) applied for extensions of time to apply for permission to appeal against confiscation orders imposed for offences involving mortgage fraud. The Crown Court judges had assessed the benefit received by the applicants for the purposes of the Proceeds of Crime Act 2002 s.6 by reference to sums received by them as loans from mortgage lenders secured by charges over property purchased with a deposit and the mortgage advance.

It was subsequently held in R. v Waya (Terry) [2012] UKSC 51, [2013] 1 A.C. 294 that, contrary to former practice, benefit derived from mortgage fraud was not to be assessed as the value of the mortgage advance or the value in the market of the property obtained by means of the mortgage without reference to the underlying mortgage debt, because otherwise an assessment was likely to lead to a disproportionate confiscation order in breach of the European Convention on Human Rights 1950 Protocol 1 art.1.

The applicants sought extensions of time in order to seek to have their confiscation orders quashed and re-assessed according to the principles in Waya . X1 sought an extension of two months, X2 one year and five months, and X3 one year and five weeks. They challenged the Crown's assertion that the proceedings in their cases were finalised when the confiscation orders were made. They argued that they would suffer substantial injustice if faced with the prospect of having to serve a period of imprisonment in default solely because the court had made an assessment of benefit subsequently found to be erroneous. 

Judgment accordingly. (1) The applicants' submissions failed to recognise the principle of finality, namely that decisions made under the law as it was then understood should not be disturbed unless substantial injustice would follow. Their arguments also failed to recognise the decision in Serious Organised Crime Agency v O'Docherty [2013] EWCA Civ 518, [2013] C.P. Rep. 35, where it was held that it could not be said to be necessary for the avoidance of injustice to re-open the refusal of permission by reference to a point of law that could have been but was not taken at the time, O'Docherty applied.

The relevant date was the date of the confiscation order, not of the enforcement proceedings. On the other hand, within the criminal jurisdiction, the enforcement proceedings and their consequences were relevant when considering whether a substantial injustice might follow if an extension of time was refused. The availability of an application under s.23 of the Act to vary a confiscation order was also a relevant factor. In particular, where the "available amount" under s.23 was represented by the value of the property which the tainted loans enabled the applicant to acquire, it had to follow that when at the enforcement stage it was known that the property was subject to a charge in the lender's favour, that charge had to be brought into account so as to reduce the available amount if it had not already been considered.

Equally, if the market value of the property had decreased since the making of a confiscation order based on the market value of the property, s.23 would enable the Crown Court to reflect that fact. Where, however, as a result of an erroneous assessment of benefit, a defendant had been required to meet a confiscation order from assets which could be clearly demonstrated to be untainted, the availability of the s.23 application might not act to ameliorate the stringency of the finality principle (see paras 25-26, 31 of judgment).

(2) In X1's case, since there was material which demonstrated the clear probability that the available amount would be substantially lower than the benefit, it had been necessary for the judge to make further enquiries of the prosecutor. However, the judge instead proceeded to find, without giving reasons, that the benefit figure was at least matched by the available amount. That finding provided X1 with proper grounds to appeal against the confiscation order.

Accordingly, it was appropriate to grant X1 an extension of time, allow his appeal, and remit the matter for a rehearing. At the rehearing, the benefit figure would be re-assessed on the law as amended, and so would be evaluated according to the Waya principle of proportionality, Waya considered (paras 53, 58). (3)

The principle of finality had to apply to X2 and X3's applications. It was not, without more, a substantial injustice for a defendant's benefit to be accurately and properly assessed under the law as it was when the assessment was made, even if a person in the same position would be assessed very differently in the present day. Their applications were refused (paras 71, 77).

Click below for the judgment

Source: http://www.bailii.org/ew/cases/EWCA/Crim/2...