Neuberg, R. v

Under Criminal Justice Act 1988 section 71(4), an offender obtains property where the criminal conduct materially contributes to its acquisition. The offender need not retain or control the property. The benefit is the gross value of property obtained, rather than net profit or the offender’s personal gain.

A court has no general obligation to reconsider a correctly calculated confiscation sum merely because it may be harsh. The serious-risk-of-injustice safeguard for statutory assumptions does not create such a general discretion. Any residual proportionality protection under Article 1 of the First Protocol would, if available, arise only in the most exceptional case.

The appellant pleaded guilty to trading under the prohibited style of Neuberg Metal Spinners after the liquidation of Watergate Services Ltd. The unlawful trading period generated turnover of £288,948.

Following postponed confiscation proceedings, the Crown Court at Birmingham held that use of the prohibited name had enabled the appellant to trade and assessed her benefit by reference to turnover. As her realisable assets were £100,000, it made a confiscation order for that lesser sum.

The appellant appealed, contending that the unlawful name gave her no benefit, that benefit should be net profit, and that the court had a general discretion to reduce an otherwise correct order to avoid injustice.

Disposition

1. The court dismissed the appeal. The judge was entitled to find that the appellant’s use of the prohibited trading name materially contributed to the business obtained during the unlawful period.

2. Under section 71(4) of the Criminal Justice Act 1988, the inquiry is first whether the offender obtained property as a result of, or in connection with, the offence. The criminal conduct need only make a material, rather than trivial, contribution to obtaining it. It is irrelevant that the property was not retained or was received through a business vehicle. The appellant used the established name to obtain its goodwill and preserve the business’s identity. That use was therefore a cause of the turnover.

3. The second inquiry is valuation. Benefit means the value of property obtained and is not confined to the offender’s personal profit or net gain after expenses. The judge correctly assessed benefit by the gross turnover of £288,948. By section 71(6), however, the order could not exceed the £100,000 then realisable from the appellant.

4. The court rejected the asserted general duty to stand back after applying section 71(4) and reduce an order wherever it risked injustice. R v Rezvi [2003] 1 AC 1099 concerned the separate statutory assumptions in section 72AA, for which section 72AA(5) expressly provided a serious-risk-of-injustice safeguard. It did not establish a general residual discretion governing every confiscation calculation.

5. Article 1 of the First Protocol permits the state to impose penalties, subject to proportionality. The statutory cap at realisable assets already produces a proportionate response in this setting. The court doubted that any further residual discretion existed and held that, if it did, it could operate only in the most exceptional cases. This case was not such a case. The confiscation order of £100,000 remained in force.

• Court of Appeal (Criminal Division) Dismissed the appellant’s appeal and upheld the confiscation order of £100,000: [2007] EWCA Crim 1994.
• Crown Court at Birmingham Judge Ross found that the appellant had benefited from unlawful trading under a prohibited name, assessed benefit at £288,948 turnover, and made an order limited to £100,000 realisable assets.