Smith, R. v

Under Proceeds of Crime Act 2002, the recoverable amount ordinarily equals the offender’s benefit. The offender bears the burden of proving that the available amount is lower. The Crown need not first prove that hidden assets exist.

A finding that an offender has been dishonest about assets does not automatically justify confiscation of the whole benefit. The court must assess all the evidence. However, where the offender fails to give a clear and cogent account of the shortfall, particularly where the assets are within personal knowledge, the burden will not be discharged. There is no residual discretion outside the statutory scheme to reduce the order.

The appellant pleaded guilty to possessing cannabis with intent to supply. Following a Newton hearing, he received concurrent sentences of 30 months’ imprisonment. The Crown Court later made a confiscation order after finding that the offences gave him a criminal lifestyle under the Proceeds of Crime Act 2002.

The judge assessed the appellant’s benefit at £153,000, a finding which was not challenged. He found an available amount of £131,000 and made a confiscation order for that sum. The appellant contended that the judge had wrongly inferred hidden assets and that the evidence did not support the order.

The central issue was whether the appellant had proved that his available amount was less than the sum ordered.

1. Appeal dismissed. The Crown Court applied the correct statutory principles and was entitled to make a confiscation order of £131,000.

2. Under section 7 of the Proceeds of Crime Act 2002, the recoverable amount equals the benefit from the relevant conduct unless the defendant proves that the available amount is lower. The burden lies on the offender: Barwick [2001] 1 Cr App R (S) 129. The Crown has no obligation first to establish a prima facie case that hidden assets exist: Summers [2008] EWCA Crim 872.

3. The court accepted the guidance in McIntosh and Marsden [2011] EWCA Crim 1501. Dishonesty or untruthful disclosure does not compel an order equal to the whole benefit. The court may conclude from the evidence as a whole that the available amount is lower. Conversely, an offender who has not given truthful disclosure may be unable to discharge the statutory burden.

4. The sentencing judge had not simply assumed that dishonest conduct established hidden assets. He had examined the evidence carefully, accepted parts of the appellant’s account, and reduced the order below the benefit figure. In the circumstances, the appellant’s repeated dishonesty and failure to explain the shortfall were highly material because the nature and value of his assets were principally within his personal knowledge.

5. The judge’s reference to hidden assets added nothing material beyond the permissible conclusion that the appellant had failed to prove, on clear and cogent evidence, that his available assets were limited to the amount he asserted. There was no basis for appellate interference. Nor was there any residual discretion outside the statutory scheme to grant relief after that burden had not been discharged.

• Court of Appeal (Criminal Division): Appeal dismissed. The confiscation order of £131,000 was upheld.
• Worcester Crown Court: His Honour Judge Christopher Plunkett made the confiscation order on 11 March 2011 after assessing benefit at £153,000 and available amount at £131,000.