YOUNG v. THE UNITED KINGDOM
Inadmissible
George Nicolaou;Ineta Ziemele;Krzysztof Wojtyczek;Nona Tsotsoria;Päivi Hirvelä;Paul Mahoney
1. The applicant, Noel Young, is a British national born in 1976. He is currently detained at HMP Frankland. He is represented by Mr C. MarshFinch, counsel, of the Creed Lane Law Group. 2. 3. The applicant and five others (including his wife and sister) were charged with conspiracy to defraud and money laundering offences arising out of the importation into the United Kingdom of high value motor vehicles. On the first day of the trial the applicant pleaded guilty to one count of conspiracy to defraud Her Majesty’s Customs and Excise (HMCE) by evading the liability to pay VAT on imported vehicles between 1 April 2003 and 2 February 2005 and to a further count of concealing criminal property during the same period. Guilty pleas from his codefendants followed the next day. On 9 June 2006 the applicant was sentenced to twenty-eight months’ imprisonment on each count. 4. The prosecution’s case was that the applicant had been the organiser of, and driving force behind, a scheme to import high-value motor vehicles from other European Union countries and to sell them on while evading VAT. The scheme worked as follows. On first registration in the United Kingdom the imported vehicles became subject to VAT. However, the vehicles were registered by the applicant using false or fraudulently obtained documentation and false names. The vehicles, once falsely registered, would be sold on. The purchasers of the vehicle would pay VAT to the applicant, which – as a result of the false registration – would not be passed on to HMCE. The applicant and his co-conspirators would thus profit from the sale of the vehicles and the VAT they had not passed on to HMCE. Bank accounts were opened through which the proceeds of the conspiracy were channelled. 5. The conspiracy was said by the prosecution to cover a large number of motor vehicles but for the purposes of the criminal trial it limited the number of vehicles upon which it would rely to prove its case. 6. Thus, when the applicant entered his guilty pleas he did so on the basis that he was party to a conspiracy to evade liability for the payment of VAT on the importation and registration of fifteen motor vehicles. These fifteen vehicles were particularised in a written document recording the factual basis upon which the applicant had pleaded guilty. It was the applicant’s case, as set out in that written “basis of plea”, that in pursuit of the conspiracy he had passed money through his own and other people’s bank accounts and that he had taken advantage of his wife and sister by using their bank accounts to pass monies related to the sale and purchase of specific vehicles. 7. That basis of plea was accepted by the court and the prosecution for the purposes of sentencing. However, it was not accepted by the prosecution for the purpose of the intended confiscation proceedings which were to follow the criminal trial. 8. Those confiscation proceedings started in the Crown Court on 4 March 2008. The judge heard evidence over eight days. The prosecution relied on a schedule which set out the value of (and the VAT payable on) the vehicles the applicant had dealt with in pursuance of the conspiracy. A further schedule set out details of lodgements into six bank accounts which were either in the name of the applicant or were known to have been used by him in furtherance of the conspiracy. The applicant himself gave evidence over two days. 9. The judge gave his ruling on 18 April 2008. He noted that the applicant had admitted that all the vehicles referred to by the prosecution (more than two hundred vehicles) had “passed through his hands” when he was engaged in the buying and selling of them. The applicant maintained, however, that he had only received a commission of between GBP 500 and GBP 100 per vehicle from others on whose behalf he had acted. The applicant said that he had not acted dishonestly in relation to the motor vehicles. This was despite his guilty pleas and the fact that, prior to being sentenced, he had written a letter to the judge stating that he had taken a leading role in the conspiracy and expressing his regret for committing the offences. 10. The judge rejected the applicant’s account and concluded that “he was the driving force, organiser, architect and brain behind this conspiracy ... [and] that he ran it for the purposes of making vast profit”. The judge also found that the applicant was “a manipulative, deceitful person who cannot distinguish fact from fiction and will lie to anyone at any time if he perceives that it is to his advantage and that it will suit his own ends”. Examples were given by the judge, including the fact that the applicant had lied at the sentencing stage of proceedings by telling the court that he had a young child when he did not and acquiring assets – including his house – under false names. The judge concluded: “...I regret to say that in my judgment the [applicant] is the sort of man who cannot lie straight in bed at night. Indeed, in my judgment, he would not recognise the truth if it stood up and bit him.” 11. The judge proceeded to calculate the amount of benefit that the applicant had obtained from his criminal conduct, as required under the 2002 Act (“the benefit figure”). 12. He arrived at a benefit figure of more than GBP 10.5 million. This was based on: the value of the motor vehicles which were the subject of the indictment and the VAT evaded (more than GBP 2.8 million); the value of other motor vehicles transferred to the applicant and the VAT evaded (more than GBP 5.1 million); credits into known bank accounts (over GBP 1.9 million); other vehicles seized (almost GBP 300,000); personal assets, including the applicant’s home, jewellery and a GBP 36,000 watch (more than GBP 223,000 when added together); and three further vehicles (GBP 150,000). 13. The judge then determined the recoverable amount. By section 7 of the 2002 Act the recoverable amount was equal to the benefit from the criminal conduct unless the defendant could show that the available amount was less than the benefit amount. 14. In determining the recoverable amount the judge first identified that the realisable assets in the applicant’s possession were worth over GBP 446,000 (based on his motor vehicles, half a share in his home, his jewellery, watch and other items recovered from the home). The judge declared himself satisfied that the applicant also had appreciable and significant hidden assets and that he had provided the court with no assistance whatsoever in identifying them. However, the judge said that he would stand back and take a broad view to try to assess justly the value of the property that the applicant had failed to disclose. He put that value at GBP 6.5 million. Adding that to the realisable assets, the judge determined the recoverable amount to be GBP 6.9 million. He accordingly made a confiscation order for that sum. The applicant was ordered to pay the sum within six months, failing which he would be given a sentence in default of ten years’ imprisonment. 15. The applicant appealed against the confiscation order to the Court of Appeal. His main ground of appeal was that, in arriving at the benefit figure, the judge and the prosecution had double counted. They had done so by taking into account the value of each individual vehicle upon which VAT had been evaded. The approach they had taken meant that the benefit figure included the initial price for which each vehicle had been bought, the value of the vehicle itself, the value of the sale of the vehicle, and the amount of VAT evaded on that particular vehicle. However, the charge had been evading VAT so the only benefit was the VAT amounts proven to have been evaded. 16. The Court of Appeal heard the following explanation from the prosecution. They had been very aware of the dangers of double accounting when assessing the benefit arising from transactions relating to the vehicles. Initially the benefit figure they had arrived at was in the region of GBP 64 million. This was recognised as unjust and the figures ultimately relied upon by the prosecution and accepted by the judge included only the value of the vehicle transferred to the applicant and the VAT relating to it. As to the bank accounts where the proceeds had been channelled, in order to avoid complexity and to adopt a pragmatic approach, the prosecution had ignored all transactions under GBP 5,000. Moreover, the prosecution relied only upon lodgements into known bank accounts of the applicant, disregarding, for instance, a transfer of GBP 250,000 out of a bank account in the Isle of Man. 17. As to the recoverable amount that had been set by the judge, namely GBP 6.9 million, the prosecution reminded the Court of Appeal that the judge had rejected the evidence given by the applicant and found that there was significant evidence of the applicant dealing with assets in different names. The prosecution had invited the judge not to treat the benefit figure as the recoverable amount but to take a pragmatic approach based on an assessment of the evidence and the justice of the case. In the event, the judge had determined the recoverable amount to be approximately twothirds of the benefit figure. 18. Having heard the applicant’s and the prosecution’s submissions, the Court of Appeal was satisfied that neither the approach of the judge nor the conclusion he reached was susceptible to proper criticism and dismissed the appeal. 19. The Court of Appeal also heard submissions from the applicant’s counsel that the confiscation proceedings had been unfair because some of the judge’s comments during the hearing would have indicated to a reasonable onlooker that the applicant had not received a fair hearing because of the court’s annoyance at having been misled in relation to his personal circumstances at the time of sentencing. It was not suggested that the judge was intentionally biased but that subconsciously he might not have given the applicant a sufficiently fair hearing. However, having considered the transcript of the hearing and the judge’s ruling, the Court of Appeal was satisfied that there had been no unfairness. 20. On 16 June 2011 the applicant sought leave from the Court of Appeal to appeal to the Supreme Court. By letter of 3 August 2011 the applicant was notified that on 29 July 2011 the Court of Appeal had granted leave to appeal. However, on 9 September 2011 the applicant was notified that the previous directions had been given in error and that the Court of Appeal had in fact not given leave to appeal. A hearing was set for 10.30 a.m. on 25 October 2011 for the Court of Appeal to formally hand down its decision to refuse leave to appeal to the Supreme Court. The applicant asked to be able to make representations at that hearing. When his counsel arrived at 10.15 a.m. on that date he was informed that the court had decided to sit early and had delivered its decision. There was therefore nothing more that could be done. 21. Confiscation proceedings are governed by the Proceeds of Crime Act 2002 (“the 2002 Act”). Section 6(4) sets out the approach to be followed by the court: “(a) it must decide whether the defendant has a criminal lifestyle; (b) if it decides that he has a criminal lifestyle it must decide whether he has benefited from his general criminal conduct; (c) if it decides that he does not have a criminal lifestyle it must decide whether he has benefited from his particular criminal conduct.” 22. Section 6(5) provides that where the court decides that the defendant has benefited from the conduct referred to, it must decide the recoverable amount and make a confiscation order requiring him to pay that amount. Section 6(7) requires any question arising under subsections (4) or (5) to be decided on the balance of probabilities. 23. Section 10 provides for the making of four assumptions for the purpose of deciding whether a defendant has benefited from his general criminal conduct and deciding his benefit from that conduct. Where relevant, it provides: “(1) If the court decides under section 6 that the defendant has a criminal lifestyle it must make the following four assumptions for the purpose of — (a) deciding whether he has benefited from his general criminal conduct, and (b) deciding his benefit from the conduct. (2) The first assumption is that any property transferred to the defendant at any time after the relevant day was obtained by him — (a) as a result of his general criminal conduct, and (b) at the earliest time he appears to have held it. (3) The second assumption is that any property held by the defendant at any time after the date of conviction was obtained by him — (a) as a result of his general criminal conduct, and (b) at the earliest time he appears to have held it. (4) The third assumption is that any expenditure incurred by the defendant at any time after the relevant day was met from property obtained by him as a result of his general criminal conduct. (5) The fourth assumption is that, for the purpose of valuing any property obtained (or assumed to have been obtained) by the defendant, he obtained it free of any other interests in it. (6) But the court must not make a required assumption in relation to particular property or expenditure if — (a) the assumption is shown to be incorrect, or (b) there would be a serious risk of injustice if the assumption were made.” 24. The “relevant day” referred to in subsections (2) and (4) is normally the day six years before proceedings were started against the defendant (section 10(8)). Thus, any property transferred to the defendant at any time in the six years before his conviction will be assumed to have been obtained by him as a result of his general criminal conduct. 25. Section 7 provides guidance on fixing the recoverable amount: “(1) The recoverable amount for the purposes of section 6 is an amount equal to the defendant’s benefit from the conduct concerned. (2) But if the defendant shows that the available amount is less than that benefit the recoverable amount is– (a) the available amount, or (b) a nominal amount, if the available amount is nil.” 26. Under section 76(4), a person benefits from conduct if he obtains property as a result of or in connection with the conduct. Section 76(7) provides that if a person benefits from conduct, his benefit is the value of the property obtained. 27. Section 33 of the Criminal Appeal Act 1968 provides: “Right of appeal to [Supreme Court] (1) An appeal lies to the Supreme Court at the instance of the defendant or prosecutor from any decision of the Court of Appeal on an appeal to that court ... (2) The appeal lies only with the leave of the Court of Appeal or the [the Supreme Court]; and leave shall not be granted unless it is certified by the Court of Appeal that a point of law of general public importance is involved in the decision and it appears to the Court of Appeal or the [the Supreme Court] (as the case may be) that the point is one which ought to be considered by [the Supreme Court]. (3) Except as provided for by this part of this Act ... no appeal shall lie from any decision of the Criminal Division of the Court of Appeal.” 28. The Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds of Crime 1990 entered into force in September 2003. It aimed to facilitate international co-operation and mutual assistance in investigating crime and tracking down, seizing and confiscating the proceeds thereof. Parties undertake in particular to criminalise the laundering of the proceeds of crime and to confiscate instrumentalities and proceeds (or property the value of which corresponds to such proceeds).