Halliday v R

In confiscation proceedings involving a criminal lifestyle, a required assumption under section 10 of the Proceeds of Crime Act 2002 must not be made where the defendant proves, on the balance of probabilities, that it is incorrect. It must also be disapplied where making it would create a serious risk of injustice. Fresh evidence may establish that a mortgage advance was not obtained through the defendant’s general criminal conduct, even where false income figures appeared in lenders’ records. The appellate court may admit such evidence where it is capable of belief, could affect the result, and there is a reasonable explanation for its absence below.

Halliday v R concerned an appeal against a confiscation order made following guilty pleas to five tax-credit fraud offences. The Crown Court treated the appellant as having a criminal lifestyle and included mortgage and re-mortgage advances in her benefit figure on the basis that false income information had been supplied to the lenders.

The appellant obtained fresh evidence, including evidence from the mortgage intermediary and the lending institutions. She contended that she had not supplied the inaccurate income figures and that the statutory assumptions concerning the mortgage transactions were therefore incorrect. The central issue was whether the fresh evidence rebutted the assumptions under section 10 of the Proceeds of Crime Act 2002, or made their application unjust.

1. Appeal allowed. The court admitted the appellant’s fresh evidence under section 23 of the Criminal Appeal Act 1968. The evidence was capable of belief, would have been admissible below, and might provide a ground for allowing the appeal. There was a reasonable explanation for its earlier absence because the appellant’s advisers had not obtained focused instructions on the alleged mortgage fraud until the final hearing.
2. Under section 10(2) of the Proceeds of Crime Act 2002, the relevant assumption was that property transferred to the appellant through the mortgage transactions had been obtained as a result of her general criminal conduct. The court had to decide the issue itself on the evidence now available, rather than speculate about how the judge would have decided it.
3. The fuller evidence showed, on the balance of probabilities, that the assumption was incorrect. The intermediary’s evidence and the contemporaneous Nationwide document supported the appellant’s evidence that her income figures had not been supplied by her and were not material to the first loan. The evidence concerning the Halifax loan did not establish that she had dishonestly provided the income figures recorded by that lender. The transactions were understood by the appellant to depend on her partner’s income and the substantial equity in the property.
4. Accordingly, any required assumption was disapplied under section 10(6)(a). Independently, the failure of the appellant’s advisers to investigate the figures before the confiscation hearing meant that making an assumption would create a serious risk of injustice within section 10(6)(b).
5. The court did not decide the remaining legal grounds concerning the characterisation and valuation of mortgage advances, because they were unnecessary. The Crown Court confiscation order was quashed and replaced by an order for £14,610, with the benefit figure set at that sum. Payment was directed within 28 days, with nine months’ imprisonment in default.

• Court of Appeal (Criminal Division): In Halliday v R, [2014] EWCA Crim 620, the appeal against the confiscation order was allowed. The order was quashed and replaced with an order for £14,610.
• Crown Court at Stafford: On 7 January 2009, a confiscation order was made for £53,749.41, later amended to £53,703.41, following findings of benefit from general criminal conduct.
• Crown Court at Stafford: On 20 December 2007, the appellant received an eight-month sentence, suspended for two years, on two of the fraud charges.
• South East Staffordshire Magistrates’ Court: On 6 August 2007, the appellant pleaded guilty to five offences contrary to section 35 of the Tax Credits Act 2002 and was committed for sentence.