Basso & Anor v R

Under the Proceeds of Crime Act 2002, criminal benefit is the value of property which the offender obtained as owner, alone or jointly, usually with power of control or disposition. It is not the offender’s net profit. Expenditure after receipt, including legitimate operating expenses, taxes, rent and socially worthwhile payments, does not reduce benefit.

Once the statutory conditions are met, confiscation is mandatory. A business conducted lawfully in other respects remains an unlawful activity if it is operated in breach of a planning enforcement notice. A stay for abuse of process is exceptional. It cannot rest merely on an oppressive result produced by the proper application of the statutory regime.

The appellants pleaded guilty in the Crown Court to offences of failing to comply with a planning enforcement notice. The offences arose from their continued operation of an airport parking business after planning permission had been refused and the enforcement process exhausted.

In confiscation proceedings, the judge found that both appellants had a criminal lifestyle and had obtained the receipts paid into the partnership account over which they had exclusive control. He assessed benefit at £1,881,221.19 and made a confiscation order of £760,000 against the first appellant, whose available assets were assessed at that amount. The second appellant was bankrupt and had a nil recoverable amount.

The appeals challenged the use of gross receipts rather than net profit, alleged abuse of process, and contended that a later authority required reconsideration.

1. Appeals dismissed. The court upheld the confiscation order and the judge’s refusal to stay the proceedings.
2. Under sections 6 and 76(4) of the Proceeds of Crime Act 2002, the relevant inquiry is what property the particular offender obtained, not what profit remained after expenditure. Applying R v May [2008] UKHL 28 and Jennings v Crown Prosecution Service [2008] UKHL 29, property obtained as owner, alone or jointly, normally entails power of disposition or control. Its later use is irrelevant to benefit. The appellants exclusively controlled the partnership account and were neither minor participants nor mere custodians. The judge was therefore entitled to treat the receipts as their benefit without deducting staff costs, tax, VAT, rent or other business expenditure.
3. The later decision in R v Seager; R v Blatch [2009] EWCA Crim 1303 did not affect that conclusion. It required focus on property obtained by the offender. The judge had done so and had also declined to pierce the Parking Company’s corporate veil, thereby excluding receipts obtained directly by that company.
4. The statutory confiscation process was mandatory once its conditions were met. The fact that the business otherwise honoured employment, tax and contractual obligations did not make operation in breach of the enforcement notice lawful.
5. The abuse jurisdiction must be exercised sparingly. Following R v Nelson, R v Pathak and R v Paulet [2009] EWCA Crim 1573, an allegedly oppressive outcome flowing from proper statutory application cannot itself make proceedings abusive. R v Shabir [2008] EWCA Crim 1809 was distinguishable: there had been no artificial choice of charges to invoke the criminal-lifestyle regime. The appellants deliberately and repeatedly continued the unlawful business despite enforcement and earlier convictions.

1. Court of Appeal (Criminal Division): dismissed the appeals in [2010] EWCA Crim 1119, affirming the confiscation determinations.
2. Crown Court at St Albans: following guilty pleas for non-compliance with an enforcement notice, His Honour Judge Michael Baker QC gave confiscation rulings dated 28 July 2008 and 10 July 2009. He found benefit of £1,881,221.19, made a £760,000 confiscation order against the first appellant, and determined a nil recoverable amount for the second appellant.