Zuman & Anor v R

In confiscation proceedings under the Proceeds of Crime Act 2002, the statutory assumptions require a fact-sensitive judicial assessment. They may be displaced by evidence or information showing that an assumption is incorrect or would create a serious risk of injustice. A defendant’s failure to give oral evidence does not prevent that conclusion.

Confiscation proceedings proceed on information as well as evidence. The court must assess all relevant material and its weight. Where a trial judge has wrongly excluded relevant material from that assessment, the Court of Appeal should not itself make missing factual findings or apply the assumptions anew. It should remit the matter for fresh determination.

The appellants had been convicted of conspiracy to defraud mortgage lenders. Following those convictions, the Crown Court at Birmingham made confiscation orders of £8,010,811.05 against Mr Khan and £4,058,852.02 against Mr Zuman, with substantial default terms.

On appeal, the Crown accepted that the equity and rental income from three properties already owned before fraudulent re-mortgages could not be benefit from particular criminal conduct. It contended that the same assets should instead be included under the criminal-lifestyle assumptions. The appellants also challenged the treatment of further long-held properties and the finding that their available amounts equalled their benefits.

The court considered whether to reopen an earlier refusal of permission to appeal and whether the confiscation proceedings should be remitted.

1. Appeals allowed. The confiscation orders were quashed and the cases were remitted to the Crown Court at Birmingham for a hearing de novo before a different judge.

2. The court accepted the Crown’s concession that the equity in, and rent derived from, the three properties already owned before the fraudulent re-mortgages were not obtained as a result of, or in connection with, the fraudulent loans. They therefore could not be included as benefit from particular criminal conduct under section 76(4) of the Proceeds of Crime Act 2002.

3. Those assets could in principle engage the assumptions for general criminal conduct. However, the Crown Court had made no proper fact-finding assessment of whether the assumptions should be made. The Court of Appeal was not a fact-finding court and could not safely substitute its own assessment. The same error affected the additional long-held properties.

4. Confiscation proceedings under the Proceeds of Crime Act 2002 proceed on information, not evidence alone. Applying Clipston [2011] EWCA Crim 446, the court held that the judge should have considered the appellants’ relevant information and assessed its weight. Their failure to testify did not itself prevent a finding that an assumption was incorrect or that the available amount was below the benefit.

5. The court reopened the earlier refusal of permission concerning the available amount. Although reopening is exceptional under rule 36.15 of the Criminal Procedure Rules, the judge’s erroneous exclusion of relevant information and the Crown’s concession that remittal would follow created a potential manifest injustice without an effective alternative remedy.

6. The fresh proceedings were to begin from the Crown’s February 2016 section 16 statements, subject to directions. The new determination could not exceed the original benefit figures, but all other issues were at large.

• Court of Appeal (Criminal Division) — in [2021] EWCA Crim 399, allowed both appeals, quashed the confiscation orders and remitted the proceedings for fresh determination before a different judge.
• Crown Court at Birmingham — on 4 January 2018, made confiscation orders of £8,010,811.05 against Mr Khan and £4,058,852.02 against Mr Zuman.