Clark & Anor v R

Under Proceeds of Crime Act, a defendant benefits where property is obtained as a result of, or in connection with, criminal conduct. Benefit is a statutory concept, not an ordinary assessment of net gain. Property obtained through the criminal transaction remains benefit even if the defendant might have made the same profit lawfully.

The statutory assumptions do not assist a defendant where the connection between the property and criminal conduct is established directly. A confiscation order removing such proceeds is proportionate unless the statutory regime produces the unusual result of serious injustice or disproportionality.

The applicants were convicted of conspiracies to defraud arising from fraudulent mortgage transactions and of attempting to convert criminal property. Their conviction for the latter offence engaged the criminal-lifestyle provisions of the Proceeds of Crime Act. Following confiscation proceedings in the Crown Court at Southwark, each applicant was ordered to pay £375,000.

They sought renewed permission to appeal against the confiscation orders. Their central contention was that proceeds received on the sale of Canister Hall represented Mrs Clark’s legitimate equity and would have been received even without the fraud. The issue was whether those sums were statutory benefit and whether including them in the orders was disproportionate.

1. Renewed permission to appeal was refused. The applications had no real prospect of success, and the confiscation orders remained in force.

2. The conviction for attempting to convert criminal property placed the applicants within section 75(2) of the Proceeds of Crime Act. This engaged the assumptions in section 10. However, the court did not need to rely on the first assumption because the evidence itself established the connection between the disputed sums and the criminal conduct.

3. Section 76(4) defines benefit by reference to property obtained as a result of, or in connection with, criminal conduct. The statutory concept is not an ordinary calculation of profit. The proceeds received on the fraudulent sale of Canister Hall were the direct consequence of the conspiracy. It was irrelevant that the applicants might have obtained a similar profit through a lawful sale, or that the £110,000 had been obtained through another participant’s separate criminal conduct.

4. The court applied Waya [2012] UKSC 51. In a mortgage fraud, the appropriate benefit for the property transaction was the increase in value attributable to the dishonesty. The court also had to consider proportionality. The statutory regime would only unusually produce a disproportionate order. Removing the pecuniary proceeds of these offences was proportionate and did not infringe A1P1.

• Court of Appeal (Criminal Division) Refused the applicants’ renewed applications for permission to appeal against the confiscation orders.
• Crown Court at Southwark Following confiscation proceedings heard on 19 April 2013, Judge Goymer made confiscation orders of £375,000 against each applicant.