Yu & Anor, R v

Under the Proceeds of Crime Act 2002, benefit, the value of benefit and the recoverable amount are distinct questions. Expenses do not reduce benefit, but may be relevant to the available amount. The defendant nevertheless bears the burden of proving that the available amount is less than the benefit.

A court must assess all the evidence and must not infer that hidden assets equal the whole benefit merely because it disbelieves the defendant. Where the defendant’s evidence is rejected and there is no other proper evidential basis for finding a lower available amount, the court may make an order for the full benefit. Expenditure already incurred before funds were transferred abroad will not, without more, show that those overseas funds are unavailable.

The respondents, husband and wife, pleaded guilty in the Crown Court at Oxford to four offences under section 92(1)(b) and (c) of the Trade Marks Act 1994. Following confiscation proceedings, HHJ Mowat found that they had benefited by £1,537,016.18 and made confiscation orders under sections 6 and 7 of the Proceeds of Crime Act 2002 for £768,508.41 against each respondent.

The judge rejected their explanations for funds transferred between the United Kingdom and China and found that they had not proved that their available amount was below their benefit. On appeal, they adduced credit-card evidence showing substantial United Kingdom expenditure. The central issue was whether that expenditure was factually capable of rebutting the finding that funds remained available to them in China.

1. Appeal dismissed. The judge had correctly treated the recoverable amount as a question distinct from benefit and its value. The three questions identified in R v May, [2008] UKHL 28, had not been elided.
2. Expenses are excluded from the calculation of benefit, which is the value of property obtained. They may, however, be relevant to the available amount under section 7 of the Proceeds of Crime Act 2002. That qualification remains subject to the defendants’ statutory burden to prove, on the balance of probabilities, that their available amount is lower than their benefit.
3. The judge did not make an impermissible leap from rejecting the respondents’ account to finding hidden assets equal to their benefit. The proper approach, explained in Lee, [2013] EWCA 657, requires examination of the evidence as a whole. Disbelief alone does not necessarily establish hidden assets equal to benefit. But where there is no credible evidence from which a lower available amount can properly be found, the statutory burden remains unsatisfied.
4. The fresh credit-card statements did not assist. The parties agreed that the respondents had spent about £881,000 from United Kingdom bank accounts through credit and debit cards. Those expenses had already been met before further sums were transferred to China. There was no suggestion of hidden United Kingdom assets. The expenditure therefore did not reduce, as a matter of fact, the funds available to the respondents in China.
5. The judge was entitled to reject the respondents’ inconsistent explanations for the transfers to and from China. Once those explanations had been rejected, there was no proper evidential foundation for finding that their realisable property was less than their benefit. The confiscation orders were accordingly upheld.

• Court of Appeal (Criminal Division): Dismissed the respondents’ appeals and upheld the confiscation orders: [2015] EWCA Crim 1076.
• Crown Court at Oxford: HHJ Mowat found benefit of £1,537,016.18 and made confiscation orders under sections 6 and 7 of the Proceeds of Crime Act 2002, requiring each respondent to pay £768,508.41.