Cole, R. v

On a reconsideration under Proceeds of Crime Act 2002 section 22, the court must ask whether varying a confiscation order would be just in the general sense, rather than merely whether the variation would not be unjust to the defendant. In a mortgage-fraud case, it must apply the approach in R v. Waya [2014] 1 AC 294 when assessing that question. Benefit is derived from use of the fraudulently obtained mortgage and is not simply the whole mortgage advance. Rental income from property acquired through mortgage fraud requires a separate benefit analysis. It is not excluded merely because the property was held when an earlier confiscation order was made. A lender's commercial decision to continue the mortgage is irrelevant to the confiscation analysis.

The appellant had pleaded guilty in 2008 to offences including false accounting and concealing and converting criminal property arising from fraudulent mortgage applications. A confiscation order made in 2009 assessed benefit at £575,000 and required payment of £55,000, which was paid by others.

After further drug-trafficking convictions in 2014, the prosecution discovered that the two flats had not been sold and sought a reconsideration of the available amount under section 22 of the Proceeds of Crime Act 2002. The Crown Court held that further assets were available and made a later notional confiscation order of £1 for the 2014 offending.

The appellant sought to challenge the 2009 order in light of R v. Waya [2014] 1 AC 294, appealed the section 22 ruling, and challenged the treatment of rental income as benefit.

1. The court dismissed the renewed application for leave to challenge the agreed 2009 confiscation order. Although R v. Waya [2014] 1 AC 294 had changed the approach to benefit in mortgage-fraud cases, the appellant had shown no substantial injustice. The order had been agreed and satisfied, and the delay of more than eight years reinforced the absence of merit.

2. The court allowed the appeal to a limited extent against the section 22 ruling. Section 22(4)(a) required the Crown Court first to decide whether it was just to vary the order. That was a general question and was not confined to the appellant's position. The judge had instead asked whether the proposed order would be not unjust, which adopted the wrong starting point.

3. Once it was accepted that mortgage-fraud benefit fell to be calculated in accordance with R v. Waya [2014] 1 AC 294, the Crown Court could not decide the section 22 issue as though that decision had not been made. On the parties' agreed figures, the relevant 2009 benefit was £198,000, of which £55,000 had been paid. The court therefore allowed the appeal on that basis.

4. The court refused leave to appeal the treatment of rent received from the flats. Following R v. Oyebola [2013] EWCA Crim 1052, rental income involved a separate analysis from benefit obtained through acquiring the properties. It was not excluded by section 10(9)(b) of the Proceeds of Crime Act 2002. The lenders' decision to permit the mortgages to continue was irrelevant.

5. Because the successful section 22 appeal could affect the available amount for the 2017 order, the prosecution could make a further section 22 application in respect of that order if it wished.

• Court of Appeal (Criminal Division): Allowed the appeal to a limited extent against the section 22 reconsideration, dismissed the renewed application to challenge the 2009 order, and refused leave on the rental-income ground.
• Crown Court at Southwark: On 8 June 2017, recalculated the available amount under section 22 of the Proceeds of Crime Act 2002. On 23 June 2017, assessed benefit for the 2014 offending and made a notional confiscation order of £1 because it found no available assets.
• Crown Court sitting at Isleworth: Sentenced the appellant in 2008 and made the agreed 2009 confiscation order.