REGINA v JOHN BRUCE

In confiscation proceedings, a pecuniary advantage based on avoided costs or tax must be assessed by reference to a coherent lawful counterfactual. The court must not combine elements of alternative counterfactuals, such as off-site gate fees and on-site landfill-tax liabilities, because that produces a false and disproportionate assessment of benefit.

Double counting must be avoided. Where particular criminal receipts are assumed to be within bank-account receipts of which only a stated percentage is criminal, the whole particular-benefit sum must be deducted from that criminal component. Property payments already reflected in that calculation must likewise be excluded from the property-benefit figure.

The appellant pleaded guilty to six offences under the Environmental Permitting (England and Wales) Regulations 2010 arising from substantial unlawful waste operations at Ridgeway Park Farm. He was sentenced to 26 months’ imprisonment after a Newton hearing.

HHJ Cole made a confiscation order under the Proceeds of Crime Act 2002. The judge assessed benefit at £5,071,008 and the available amount at £2,102,208.66, ordering payment of the latter sum.

The appeal challenged the calculation of benefit. The issues were whether avoided landfill costs had been calculated using an impermissible combination of counterfactuals, whether particular criminal receipts had been double counted in general criminal conduct, and whether the value of the farm had been double counted.

Decision

1. The court allowed the appeal on ground 1. It granted leave and allowed grounds 2 and 3. The benefit figure was reduced from £5,071,008 to £3,998,815.06.

2. Under section 76(5) of the Proceeds of Crime Act 2002, avoided liabilities may constitute a pecuniary advantage. Consistently with R v Morgan [2013] EWCA Crim 1307, the relevant liabilities are those for which the offender would personally have been responsible if acting lawfully. The judge had wrongly combined two alternatives: off-site disposal, which involved gate fees, and lawful on-site landfill, which involved landfill tax. The appellant’s advantage included landfill tax on wood actually disposed of as landfill and on non-hazardous waste, but not gate fees. The resulting reduction was £158,177.71.

3. The £348,000 assessed as receipts from particular criminal conduct had to be deducted in full from the criminal component of the bank-account receipts. Deducting it before applying the 8.5 per cent criminal-receipts percentage gave credit for only 8.5 per cent of that sum and therefore double counted the balance. The Crown could not contend on appeal that there was no evidence the money entered those accounts, because its section 16 statement had proceeded on the contrary footing. The reduction was £318,420.08.

4. The farm’s value also required adjustment. Mortgage payments and the final redemption payment totalling £491,917.15 had come from the sole-trader account already used in the 8.5 per cent calculation. That amount had to be deducted from the property value. The appellant had not rebutted the statutory assumption concerning the initial equity of £356,000.

5. A further agreed arithmetical error reduced benefit by £103,678. The confiscation order was amended to record the revised benefit figure. The amount payable was unchanged because it remained limited by the available amount.

• Court of Appeal (Criminal Division) — Allowed the appeal and amended the benefit figure in the confiscation order: [2021] EWCA Crim 1896.
• Sentencing judge — HHJ Cole made a confiscation order under the Proceeds of Crime Act 2002 on 22 December 2020, assessing benefit at £5,071,008 and the available amount at £2,102,208.66.