Confiscation - UK Supreme Court hearing today

I have treated myself to the luxury of viewing the live broadcast of the UK Supreme Court today.  It has been Day 1 of a three day hearing of a confiscation case in relation to a mortgage fraud.

Unusually there are no less than 9 judges hearing this appeal.  I speculate that this is because the appellant's contentions - if accepted - would overturn a great deal of legal precedent in relation to confiscation.

I have put my own summary of Day 1 online HERE if anyone is interested.  I am only a spectator and doubtless my summary falls far short of doing justice to a full day of legal argument but I hope it gives a flavour of what went on.

David

Comments

Interesting indeed

Stephen Morris | | Permalink

It will be interesting to see how the Supreme Court resolves these issues. I look forward to their judgements

davidwinch's picture

Summary of Day 2

davidwinch | | Permalink

I have now added a summary of Day 2 (follow the same link and scroll down).

David

davidwinch's picture

Summary of Day 3

davidwinch | | Permalink

I have now added a summary of Day 3 (follow the same link and scroll down).

David

davidwinch's picture

My own view

davidwinch | | Permalink

Having attempted to produce a reasonably fair summary of the arguments in the Supreme Court, I am taking the opportunity to express my own views.

Factually this was a reasonably simple case involving the benefit of only particular criminal conduct.  D dishonestly obtained a mortgage advance which he used to purchase a flat.  The flat went up in value.  He legitimately obtained a new and larger mortgage, repaying the first mortgage in full.  The flat continued to increase in value.  D was convicted of mortgage fraud and subject to confiscation under PoCA 2002.  The sole question before the court was the amount of his benefit.

Yet we have some of the best legal minds in the country coming up with a wide range of different figures for benefit.  The only thing they seemed able to agree on was that the Crown Court judge had not been correct.

That means PoCA 2002 confiscation is neither simple nor straightforward.  It lacks either clarity or certainty.

The explanatory notes to the Act said: "The purpose of confiscation proceedings is to recover the financial benefit that the offender has obtained from his criminal conduct. The court calculates the value of that benefit and orders the offender to pay an equivalent sum (or less where a lower sum is available for confiscation)".

PoCA does not do what it says on the tin.

Added to that parliament attempted to place Crown Court judges into a straitjacket to force them to do what government wanted in the name of being tough on crime.

The results have been manifestly unjust and the PoCA regime apparently inflexible.

What attracted me in the course of legal argument in Waya was the possibility that Crown Court judges might find release from the straightjacket by adopting an analysis based on the 'pecuniary advantage' obtained by the convicted defendant.  That concept would take into account not simply the 'snapshot' or moment in time when the defendant 'obtained' property, but also the surrounding circumstances and events both before and after the 'snapshot' was taken.

In that way a judge could assess what the defendant's real financial benefit from his crime was and make a confiscation order related to that.

Is that too much to ask?

I would even suggest that adopting that approach in the Crown Courts requires no amendment to PoCA 2002 nor any authority in case law since the legislation is already to be found in s76(5).  It has simply been the case up until now that prosecutors and judges have not read past s76(4).  I wish they would do so.

It has to be admitted however that this approach would be of little assistance in those cases in which the defendant is held to have a 'criminal lifestyle' and a significant benefit arises from the operation of the statutory assumptions (which were not relevant to Waya).  In those cases s10(6)(b), on paper at least, affords the Crown Court judge some discretion but in practice that provision has been interpreted narrowly.  For example it has been suggested that there might be a serious risk of injustice if the defendant suffers from some mental infirmity or he had records which have been destroyed by fire - but not where the operation of the statutory assumptions simply produces a result which appears unfair.

David

nogammonsinanundoubledgame's picture

Only a side issue, I know, but ...

nogammonsinanun... | | Permalink

... am I the only one to be curious as to how this fraud ever saw the light of day?

With kind regards

Clint Westwood

davidwinch's picture

Background

davidwinch | | Permalink

Clint

It may be that Mr Waya came to the attention of the police in the course of enquiries into another matter and that as a result investigations were made into his finances which brought the mortgage fraud to light.

David

Will there be a judgement from the Supreme Court?

Stephen Morris | | Permalink

Will the Supreme Court adjudicate on this matter? If so, I hope they apply some common sense and dismiss the esoteric arguments put forward by the prosecutors who seem to be stretching definitions somewhat. 

My view is that that if the benefit is so difficult to quantify then it is non-existent. Waya obtained the mortgage fraudulently. He should be punished for this and this alone, via a gaol term / fine or both. He has repaid the amount he fraudulently obtained so why the confiscation proceedings? The victim of his crime, if ever there was one, has been compensated.

What about a job applicant who successfully persuades an interview panel to employ him/her and then 6 months later it turns out the applicant is incapable of living up to the expectations of the job? In retrospect, suppose the interview panel believes the applicant "bigged" themselves up at the interview to the point of fraudulent misrepresentation, despite there being no falsehoods on the application form. Would this be fraud? If so, how would the benefit of the crime be ascertained? The salary obtained? The employer's employment costs? The loans secured on the salary? In any case, it seems to me there can be a fine line between selling oneself and fraud.

I an curious as to whether Waya just "bigged up" his original mortgage application so as to get the advance. There seems to have been no intention of depriving the mortgagee and it seems as if the money obtained was used for the purpose for which it was granted. Every mortgage application is made for the purpose of obtaining a pecuniary advantage, usually the benefit of realising a holding gain on rising house prices. I am struggling to see the crime here, still more to see why confiscation proceedings are being pursued.

If everyone who "bigged up" their mortgage application were prosecuted there would be few mortgage advances!  Let us hope that selling oneself at job interviews does not expose applicants to fraud and confiscation proceedings!

davidwinch's picture

Judgment day (not yet)    2 thanks

davidwinch | | Permalink

Stephen

The Supreme Court will hand down a judgment - probably in about June / July.

There have been cases where a job application form has been prepared dishonestly.  For example a Mr Paulet falsely represented to potential employers that he was entitled to work in the UK, with the aid of a false identity document.  In truth Mr Paulet was a visitor to the UK whose immigration status did not permit him to work here.  His benefit for confiscation purposes was held to be the net pay he had received during his employment in the UK.  There was no deduction for the value of the legitimate work he had performed for his employers.  See CPS (Durham) v N [2009] EWCA Crim 1573 particularly paras [49] & [50].

Saying "I am a brilliant accountant" is probably not dishonest - even if one is "bigging" oneself up.  Saying "I have an MBA from Harvard" is dishonest if, in fact, you do not hold that degree.

As for the offence in a case of mortgage fraud, note that an intention to "expose another to a risk of loss" is sufficient for the purposes of s2 Fraud Act 2006.  I would say that anyone who obtains a mortgage exposes the lender to a risk of loss.

David

Time has flown.

AddsUP2Me | | Permalink

Did they hand down a judgement yet?

Thanks for the summaries David

kudlit | | Permalink

Whatever happened to the case?

 

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Transfinance

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