Crown Prosecution Service v C & Anor

Legal title does not conclusively establish beneficial ownership. Where the evidence suggests that transfers were sham transactions designed to conceal a defendant’s assets, the court may look behind the documentation and determine the true equitable ownership. The issue is decided on the balance of probabilities, considering all the evidence, including inconsistencies, unexplained transactions, unreliable accounts and the absence of expected supporting evidence. A receiver may accordingly be appointed to realise property beneficially owned by a defendant in satisfaction of an unsatisfied Confiscation Order.

The Crown Prosecution Service applied for the appointment of a receiver to sell 61 St Mary’s Way, Hucknall, towards satisfaction of an unsatisfied Confiscation Order for £173,906 made against ‘C’ following his conviction and sentence for conspiracy to steal.

Edward Rooney, the registered proprietor and interested party, opposed the application. He claimed to have bought the property for value from William McCarthy and to be its legal and beneficial owner. The Prosecutor alleged that the registered transfers were sham transactions and that ‘C’ remained the beneficial owner. The central issue was whether Mr Rooney owned any, or all, of the equity in the property.

The application was granted. The court found, on the balance of probabilities, that ‘C’ was and remained the true owner of 100 per cent of the equity in the property.

1. The court was required to determine the beneficial ownership of the property by assessing all the evidence. It was not confined by the Land Registry entries showing Mr Rooney as legal owner.
2. The evidence justified looking behind the documented transfers. The alleged purchase by Margaret McCarthy, the purported transfer to William McCarthy, and the later sale to Mr Rooney were all unsatisfactorily explained. There was no satisfactory evidence establishing William McCarthy’s existence or involvement, and Mr Rooney had not attempted to locate him despite considering him capable of providing important supporting evidence.
3. Mr Rooney’s account of paying £120,000 in cash, the source and destination of the money, and the circumstances of the transaction was not accepted. The attempted resale shortly after acquisition was also significant in the context of the other evidence.
4. The court rejected the explanation that ‘C’ had falsely claimed ownership merely to enable the property to be sold towards the Confiscation Order without loss to himself. Confiscation proceedings involve assessment first of the defendant’s benefit and then of his realisable assets. The property had been included in both assessments, making the suggested scheme inherently implausible.
5. The purported sales were therefore a sham intended to conceal ‘C’’s ownership. A receiver was appointed to sell the property in part satisfaction of the Confiscation Order.