May & Ors, R. v

Under Criminal Justice Act 1988, a defendant who jointly controls property obtained by a fraudulent company obtains the whole of that property for confiscation purposes. Benefit depends on obtaining property, rather than retaining it. Apportionment may nevertheless be appropriate where full orders would produce a disproportionate recovery.

A judge who has seen undisclosed PII material may determine later issues without special counsel or recusal if the judge can fairly disregard it. A reasonable sentencing indication on which a defendant pleaded guilty must be honoured. An agreed factual basis of plea also binds the court when it makes a confiscation order.

The appellants participated to differing degrees in a conspiracy involving missing-trader and carousel VAT fraud. The fraud caused an unpaid VAT loss of about £12 million.

At the Central Criminal Court, the defendants were convicted or pleaded guilty to conspiracy to cheat. Confiscation orders were made under Criminal Justice Act 1988, and May and Lawrence also appealed their custodial sentences. An earlier interlocutory appeal had upheld rulings on surveillance evidence and disclosure: [2001] EWCA Crim 1829.

The appeals raised common questions about PII material and special counsel, the assessment of benefit and realisable assets, and the effect of sentencing guidance given before guilty pleas. They also raised issues particular to the individual appellants.

1. PII and special counsel. The court dismissed the challenges based on undisclosed material. Edwards and Lewis v United Kingdom concerned a judge determining a factual issue by reference to undisclosed material. It did not prevent a judge from disregarding such material when deciding a later issue. The trial judge had expressly done so, and there was no reason to doubt that statement. Neither recusal nor special counsel was required; fairness remained the governing consideration.

2. Benefit. The court upheld the general approach to benefit under Criminal Justice Act 1988, Part VI. Benefit is property obtained in connection with the offence, not merely property retained. Once the corporate veil was pierced, VAT retained by a company jointly controlled by conspirators was their joint property. Each controller therefore obtained the whole amount, without a necessary apportionment. Multiple recovery can arise where criminal property passes through several hands. Apportionment may be appropriate where otherwise full orders would be disproportionate, but the orders here totalled less than the VAT fraud.

3. Pre-plea indication. The judge’s reference to “provable assets”, read objectively in its setting, could reasonably be understood as limiting confiscation to identifiable assets. Stapleton and Bravard pleaded guilty in reliance on that understanding. Fairness required their orders to be reduced accordingly.

4. Realisable assets and agreed facts. Under the amended Act, the court had no statutory discretion at the order-making stage to exclude a matrimonial home once the defendant held the full beneficial interest. Article 8 considerations affected enforcement, not valuation. In Fowles’s case, the agreed basis of plea bound the court’s factual assessment in confiscation proceedings. It did not support a finding that he controlled the companies; his benefit was therefore his wages of £40,000.

5. The confiscation appeals of Stapleton, Bravard and Fowles were allowed and their orders substituted. May’s confiscation appeal was dismissed. May’s five-year sentence was quashed and replaced with four years’ imprisonment. Lawrence’s sentence appeal was dismissed.

• Court of Appeal (Criminal Division): Allowed the confiscation appeals of Stapleton, Bravard and Fowles; dismissed May’s confiscation appeal; reduced May’s sentence to four years; and dismissed Lawrence’s sentence appeal.

• Court of Appeal (Criminal Division): In an earlier interlocutory appeal, upheld the trial judge’s rulings on surveillance evidence and disclosure: [2001] EWCA Crim 1829.

• Central Criminal Court: The appellants were convicted or pleaded guilty to conspiracy to cheat. Confiscation orders were made on 2 August 2002 under Criminal Justice Act 1988.