Shahid, R. v

A defendant’s bankruptcy does not prevent the making of a confiscation order. Property vested in a trustee in bankruptcy remains property held by the defendant for confiscation purposes under the Criminal Justice Act 1988. Bankruptcy may restrict enforcement, but it does not remove the court’s jurisdiction to assess realisable assets and make the order.

The serious-risk-of-injustice safeguard in section 72AA(5)(c) concerns assumptions about particular property or expenditure. It does not require a general review of the resulting benefit figure and does not apply merely because bankruptcy restricts disposal of assets. A defendant who asserts deductions or that assets are unavailable must support that assertion with clear and cogent evidence.

The appellant was convicted of two specimen counts of cheating the public revenue after claiming income support and council tax benefit without declaring capital above the prescribed limits. The agreed benefit from the offences was £15,178.91.

At the confiscation hearing, the Crown relied on the assumptions in the Criminal Justice Act 1988 to treat substantial sums paid into the appellant’s accounts, and his interest in property, as proceeds of crime. The judge made a confiscation order for £135,524.60 after assessing his realisable assets.

The appellant had been made bankrupt shortly before the order. His appeal challenged the court’s power to make the order, the interaction between bankruptcy and confiscation, the statutory assumptions, and the inclusion of his transferred interest in the matrimonial home.

1. Appeal dismissed. The appellant’s bankruptcy did not deprive the Crown Court of power to make the confiscation order.

2. Under sections 74(1) and 102(8) of the Criminal Justice Act 1988, property vested in a trustee in bankruptcy is treated as property held by the defendant. Bankruptcy may materially affect enforcement, but not the prior task of determining the defendant’s realisable assets and making a confiscation order. Sections 84(1) and 84(2), concerning the priority between restraint and bankruptcy, did not require a different result. The court also rejected the suggested public-interest objection: a defendant should not be able to avoid confiscation merely by petitioning for bankruptcy before the hearing.

3. The judge was not required to investigate preferential debts under section 74(3) where neither the appellant nor counsel identified any. The defendant bore the burden of showing that property was unavailable for realisation and had to provide clear and cogent evidence.

4. The serious-risk-of-injustice safeguard in section 72AA(5)(c) was confined to assumptions about particular property or expenditure. Following the approach in Neuberg [2008] 1 Cr.App.R(S) 84, it did not impose a general duty to review the final benefit calculation. Bankruptcy restrictions on disposal of assets had no bearing on whether the assumptions concerning criminal benefit should be made.

5. The judge was entitled to include the appellant’s transferred interest in the matrimonial home. She had rejected his unsupported account of the alleged consideration for the transfer, leaving no basis to find it inappropriate to take the gift into account under section 74(10)(b). The judge had also lawfully exercised her discretion to make the section 72AA assumptions. Her findings as to the source of deposits and property were not open to challenge on the material before the court.

6. The judge’s reference to an assumption when valuing the appellant’s former property interest was inexactly expressed but disclosed no error. The assumption concerned the criminal origin of the property; the value of the appellant’s interest had been proved by the evidence.

• Court of Appeal (Criminal Division) — dismissed the appeal against the confiscation order: [2009] EWCA Crim 831.
• Coventry Crown Court — on 30 September 2005 imposed concurrent suspended sentences, ordered compensation, and made the confiscation order.
• Birmingham Crown Court — on 11 April 2005 convicted the appellant of two specimen counts of cheating the public revenue.