R v May (Appellant) (On Appeal from the Court of Appeal (Criminal Division))

Confiscation legislation deprives an offender of the total value of property or pecuniary advantage obtained through relevant criminal conduct, whether or not the benefit was retained. Benefit means gross receipts, without deductions for expenses or payments to accomplices.

Property owned jointly is obtained in full by each joint owner. Accordingly, each offender who jointly obtains criminal property may be assessed as having received its whole value; the court has no general power to apportion that benefit between joint recipients. The confiscation order remains limited by the offender’s available means.

The court must answer separately whether the offender benefited, the value of that benefit, and the amount recoverable. Each question turns on the governing statutory language and facts found, applying ordinary principles of ownership and control.

The appellant was a joint principal in two phases of a conspiracy to cheat HM Customs and Excise through a missing-trader VAT fraud. He and others jointly controlled companies used to retain and reclaim VAT. The trial judge assessed his benefit at £3,264,277 and found realisable assets of £3,887,198, although the benefit figure had mistakenly been reduced by sums recovered elsewhere.

The Court of Appeal, in [2005] EWCA Crim 97, dismissed the appeal against the confiscation order. It held that property obtained and controlled jointly could be treated as obtained in full by each participant.

The issue before the House was whether criminal proceeds jointly obtained must be apportioned among the conspirators, or whether each joint recipient may be assessed as having obtained the whole benefit.

1. Appeal dismissed. The Appellate Committee delivered a single considered opinion. The sum fraudulently obtained jointly by the appellant and others was in law as much his as if he had acted alone. His benefit substantially exceeded the order, and the order was below his realisable assets. It therefore involved neither injustice nor disproportionality.

2. Confiscation requires three distinct questions: whether the defendant benefited from relevant criminal conduct; the value of the benefit obtained; and the amount recoverable. The questions and answers must not be elided. Benefit and realisable assets perform different functions.

3. The legislation targets the total value of property or pecuniary advantage obtained, rather than net profit. Expenses, subsequent disposal and amounts paid to co-conspirators do not reduce benefit. The recoverable amount is nevertheless limited by the defendant’s available means.

4. A defendant ordinarily obtains property when he owns it, alone or jointly. Ownership ordinarily connotes disposition or control and includes directing payment or conveyance to another. Jointly owned criminal proceeds are obtained in full by each joint owner. Ordinary common-law principles of ownership and entitlement apply.

5. R v Porter [1990] 1 WLR 1260 was not authority for a power to apportion liability among parties who had jointly received the proceeds. On its unchallenged factual finding of joint receipt, full several orders should have been made against each recipient. Apportionment of jointly obtained property would be contrary to principle and unauthorised by statute.

6. The tribunal must first find the facts as best it can, using statutory assumptions where appropriate. It should then apply the language and definitions of the governing statute directly. Judicial glosses and paraphrases require caution. Where neither joint receipt nor the parties’ shares can be established, an equal division may be the fairest factual solution.

7. Mere couriers, custodians and very minor contributors who receive a fixed fee and have no proprietary interest are unlikely to have obtained the relevant property. Money launderers may stand differently. Whether property or a pecuniary advantage was obtained remains a fact-sensitive statutory inquiry.

1. House of Lords: The appeal against the confiscation order was dismissed unanimously. The House generally agreed with the Court of Appeal’s reasoning and rejected any general power to apportion jointly obtained benefit.

2. Court of Appeal (Criminal Division): In [2005] EWCA Crim 97, reported at [2005] 1 WLR 2902, the court reduced the sentence from five to four years’ imprisonment but dismissed the appeal against the confiscation order.

3. Central Criminal Court: Following the appellant’s guilty plea to conspiracy to cheat, the court sentenced him to five years’ imprisonment and subsequently made a confiscation order for £3,264,277 under the Criminal Justice Act 1988.