Bestel & Ors v R, Court of Appeal - Criminal Division, July 19, 2013, [2013] EWCA Crim 1305,[2013] WLR(D) 296

Issuing Organization:Criminal Division
Actores:Bestel & Ors v R
Resolution Date:July 19, 2013
 
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Case No: 201300388, 201300874, 201206134

Neutral Citation Number: [2013] EWCA Crim 1305

IN THE COURT OF APPEAL (CRIMINAL DIVISION)

ON APPEAL FROM

(1) His Honour Judge Macdonald QC at Maidstone Crown Court

(2) His Honour Judge Potter at Bradford Crown Court

(3) His Honour Judge Hunt at Bradford Crown Court

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 19/07/2013

Before :

LORD JUSTICE PITCHFORD

MR JUSTICE MITTING

and

MR JUSTICE OPENSHAW

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Between :

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(1) Simon Farrell QC and Gerard Hillman (instructed by Kangs Solicitors) for the First Applicant ????

(1) Andrew Mitchell QC and Tom Little (instructed by CPS Proceeds of Crime Unit) for the Respondent

(2) Richard Wright QC (instructed by Murrays Solicitors) for the Second Applicant

(2) Christopher Tehrani (instructed by CPS Proceeds of Crime Unit) for the Respondent

(3) Stephen Grattage (instructed by Opus Law) for the Third Applicant

(3) Martin Evans (instructed by CPS Proceeds of crime Unit) for the Respondent

Hearing date: 18 June 2013

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Judgment

Lord Justice Pitchford :

Introduction

1. On 18 June 2013 the court considered three applications for an extension of time within which to apply for leave to appeal against sentence, in the cases of Naim Raza (Sadik), Sajid Bashir and Jean Pierre Bestel. In Mr Raza's case the extension sought was 1 year 5 months; in Mr Bashir's case, 1 year and 5 weeks; and in Mr Bestel's case, 2 months. Each of the applicants seeks to challenge a confiscation order made in the Crown Court following convictions for offences generically described as mortgage fraud. The Crown Court judge had assessed the benefit received for the purposes of section 6 Proceeds of Crime Act 2002 by reference to sums received by the applicant as loans from mortgage lenders secured by a charge over property purchased with a deposit and the mortgage advance.

2. In Waya [2012] UKSC 51, [2012] 3 WLR 1188, in which the Supreme Court delivered judgments on 14 November 2012, it was held that, contrary to former practice, the benefit to the defendant 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. Such an assessment was likely to lead to a disproportionate confiscation order in breach of Article 1, First Protocol ECHR. The Supreme Court found that the defendant did not ``obtain'' the sum of the loan as ``property'' for the purposes of section 76(4) Proceeds of Crime Act 2002 but a bundle of contractual or equitable rights whose value for the purpose of section 80 was likely to be nil at the date of purchase of the property with the tainted money. Accordingly, the defendant's benefit was in general to be assessed as the proportion of any increase in the value of the property represented by the original tainted investment. Each of these applicants seeks to have his confiscation order quashed and re-assessed according to the principles described in Waya.

3. By section 76(4):

``(4) A person benefits from conduct if he obtains property as a result of or in connection with the conduct''

We were informed by counsel that before the decision in Waya in the Supreme Court, property obtained by means of a mortgage fraud would be identified either as the mortgage advance or the property purchased with it (as in Waya in the Court of Appeal, [2010] EWCA Crim 412). Section 80 applied to valuation. The value of the property obtained was, on this analysis, to be taken as its value at the time of acquisition (the mortgage advance/purchase) adjusted for the value of money or, if the mortgage advance had been converted to other property, to the value of that other property, whichever was the greater. When, however, it came to valuation of the available amount under section 7(2) of the 2002 Act, it was recognised that the defendant's realisable assets represented by the tainted property would be the value of his equitable interest in the net proceeds after redemption of the legal charge over the property. Since the benefit figure was, under the foregoing analysis, artificially high, the defendant's untainted assets, if any, were exposed to confiscation. We shall refer to some of the consequential effects later in this judgment. The Supreme Court has, by declaring that the defendant in a mortgage fraud does not obtain the sum of the mortgage advance or the property purchased but a bundle of rights, removed the unfairness or, in the words of the Supreme Court, the disproportionality of the confiscation order.

4. The common issue in these applications is the identification of the principles upon which this court should act in considering whether to grant an extension of time within which to appeal when the effect would be to permit the applicant to take advantage of the change in the law. In Jawad [2013] EWCA Crim 644 (Hughes LJ, Vice-President, Foskett J and HHJ David Radford) the appellant argued that a confiscation order was disproportionate (contrary to paragraphs 10 - 35 of Waya) when both the confiscation order and a compensation order made on the same occasion were founded upon the same `benefit'. The court made an order which enabled the appellant to pay the compensation ordered by the Crown Court, on which condition the appeal would be allowed and the confiscation order would be reduced by an equivalent sum. Mr Jawad had been granted an extension of time within which to seek leave to appeal by the single judge. However, in his judgment on behalf of the court, the Vice-President, who had been a member of the Supreme Court in Waya, addressed obiter the issue of applications for extensions of time within which to appeal in other cases. Commencing at paragraph 29, he said:

``29. We nevertheless think that we should make clear the general approach of this court, over many years, to change of law cases. An extension of time will not be granted routinely in such a case simply because the law has changed. It will be granted only if substantial injustice would otherwise be done to the defendant, and the mere fact of change of law does not ordinarily create such injustice. Nor is the case where an extension will be refused limited to where, if the law had been correctly understood at the time of the proceedings in the Crown Court, a different charge or different procedure might well have left the defendant in a similar position to that in which he now finds himself. The line of authority setting out this court's approach culminates in R v Cotterall and Fletcher [2007] EWCA Crim 2016, [2008] 1 Cr App R 7, where the judgment was given by Sir Igor Judge P, as he then was. But that line of authority includes similar pronouncements by successive Lords Chief Justice from Lord Lane CJ onwards. An early example is R v Mitchell [1977] 65 Cr App R 185 in which Lane LJ (as he then was) expressly approved the decision of this court in R v Ramsden [1972] Crim LR 547. There, a defendant who had been convicted of dangerous driving before Gosney [1971] 55 Cr App R 502 had held that fault was a necessary ingredient of the offence, was refused leave to appeal out of time after the latter decision had been published. The court observed that alarming consequences would flow from permitting the general re-opening of old cases on the ground that a decision of a court of authority had removed a widely held misconception as to the prior state of the law on which the conviction on which it was sought to appeal had been based. No doubt otherwise everyone convicted of dangerous driving over a period of several years could have advanced the same application. A similar proposition was recently adumbrated by the Supreme Court of Ireland in A v Governor of Arbour Hill Prison [2006] IEFC 45 where the court held that absolute retro-activity would lead to ``dysfunctional effects in the administration of justice''. A further example from the jurisprudence from the Court of Appeal Criminal Division is R v Ballinger [2005] EWCA Crim 1060, [2005] 2 Cr App R 29.

30. Whilst the point does not arise in the present case, and we do not decide it, we think it important that defendants should not be encouraged to think that the effect of Waya is likely to be that confiscation orders made when no disproportionality point was taken, or was rejected, can now be re-opened. We doubt very much that, if an extension of time had been required in the present case, we should have granted it.'' [emphasis added]

Had the full court been required to grant an extension of time it would have amounted to ``a very few days extension'' (Jawad paragraph 28).

5. In order better to ascertain the principles upon which the court should act in cases where the issue of an extension of time does arise we heard submissions from counsel for each of the applicants and each of the respondents successively before considering submissions upon the facts of each case. Having heard argument we reserved judgment in all three applications and, with the agreement of counsel, it is convenient for the court to give its decisions and reasons in a single judgment.

Extension of time in the Court of Appeal Criminal Division

6. By section 18 Criminal Appeal Act 1968:

``18(1) A person who wishes to appeal under this part of this Act to the Court of Appeal, or to obtain the leave of that court to appeal, shall give notice of appeal or, as the case may be, notice of application for leave to appeal, in such manner as may be directed by rules of court.

(2) Notice of appeal, or of application for leave to appeal, shall be given within 28 days of the date of the conviction, verdict or finding appealed against, or in the case of appeal against sentence, from the date on which sentence was passed or, in the case of an order made or treated as made on conviction, from the date of the making of the...

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