Boyle Transport (Northern Ireland) Ltd v R. (Rev 1)

In confiscation proceedings, a company’s turnover and assets cannot be treated as property obtained or held by an individual defendant merely because the defendant controlled its day-to-day operations. The ordinary principles of separate corporate personality apply under the Proceeds of Crime Act 2002. Neither justice nor a generalised assessment of commercial reality supplies an independent basis for disregarding them.

The court must assess the benefit actually obtained, and the free property actually held, by the defendant. It may look behind a corporate structure where the facts establish concealment or evasion, but a legitimate and viable company is not an alter ego simply because criminal conduct occurred through its business. Sole ownership and control are material facts, not conclusive ones.

Patrick and Mark Boyle, directors and majority shareholders of a family road-haulage company, pleaded guilty to conspiracy involving falsified tachograph records. Confiscation orders were made against them in 2013. The available amounts included company assets, and later included vehicles and trailers transferred by the original company to a newly incorporated company.

The Crown Court found that the transfer to the new company was not genuine. It appointed an enforcement receiver over its assets after holding that the old company’s turnover and assets were, in substance, property of Patrick and Mark Boyle.

The new company appealed against that receivership order. Patrick and Mark Boyle then sought a substantial extension of time and leave to appeal against their agreed confiscation orders. The central issue was whether the corporate veil could properly be lifted so as to attribute the old company’s turnover and assets to them personally.

1. The appeal of the new company was allowed. The court set aside the order appointing an enforcement receiver over its assets. It also granted Patrick and Mark Boyle extensions of time and leave to appeal, allowed their appeals, quashed their confiscation orders and remitted the confiscation proceedings to the Crown Court.
2. The starting point was the separate legal personality affirmed in Salomon v A. Salomon & Co. Limited [1897] AC 22. A company’s assets do not belong to its directors or shareholders merely because they control it. The test is not what might appear just, nor an unstructured appeal to the reality of the matter. Those concepts cannot displace established company-law principles.
3. Prest v Petrodel Resources Limited [2013] UKSC 34 confirmed that the relevant principles apply equally in confiscation proceedings. The court may identify the real actors where a company conceals them. It may pierce the veil only in the limited evasion category, where a person subject to an existing obligation, liability or restriction deliberately interposes a controlled company to evade or frustrate enforcement.
4. The old company was a genuine and longstanding vehicle for a viable road-haulage business. It was not a sham or alter ego of Patrick and Mark Boyle. Their status as the operating minds of the company was unsurprising given that they were its executive directors. The inactive minority shareholders could not be disregarded without evidence that they held their shares as nominees. The company’s criminal conduct and its persistent regulatory breaches did not, without more, make its turnover and assets property obtained or held by the individual defendants.
5. Under the Proceeds of Crime Act 2002, confiscation recovers what the defendant has obtained; it does not supplement the criminal sentence by taking property never obtained by the defendant. The court therefore directed a recalculation of each individual’s benefit and available assets on the footing that they did not own the assets or turnover of either company. The remittal was made under section 11(3A) of the Criminal Appeal Act 1968.

• Court of Appeal (Criminal Division): In [2016] EWCA Crim 19, allowed the new company’s appeal against the receivership order. It granted the individual applicants an extension of time and leave to appeal, allowed their appeals, quashed the confiscation orders and remitted the matter to the Crown Court.
• Crown Court at Carlisle: Made confiscation orders against Patrick and Mark Boyle on 25 March 2013. On 27 March 2015 it appointed an enforcement receiver over their realisable property and specified assets held in the new company’s name.