R v Dimsey (Dermot Jeremy) ; R v Allen (Brian Roger)

JurisdictionEngland & Wales
CourtCourt of Appeal (Criminal Division)
JudgeLORD JUSTICE LAWS,MR JUSTICE MOSES
Judgment Date11 October 1999
Judgment citation (vLex)[1999] EWCA Crim J1011-15
Date11 October 1999
Docket NumberNo: 9800627/W4

[1999] EWCA Crim J1011-15

IN THE COURT OF APPEAL CRIMINAL DIVISION

Royal Courts of Justice

The Strand

London WC2

Before:

Lord Justice Laws

Mr Justice Moses

and

His Honour Judge Crane

(Sitting as a Judge of The Court of Appeal Criminal Division)

No: 9800627/W4

Regina
and
Dermot Dimsey

and

Brian Roger Allen

MRS A HARDY and MISS T DAVEY appeared on behalf of the Appellant Dimsey

MR A NEWMAN QC and MR J KESSLER appeared on behalf of the Appellant Allen

MR P F ROOK QC and MR J FISHER appeared on behalf of the Crown

1

11th October 1999

LORD JUSTICE LAWS
2

On 7th July 1999 this court dismissed appeals brought by Brian Roger Allen and Dermot Jeremy Dimsey against their convictions, in Dimsey's case of an offence of conspiracy to cheat the public revenue, and in Allen's case of 13 substantive counts of cheating the public revenue. On that occasion the court also granted permission to appeal in Allen's case against a confiscation order, made in the Knightsbridge Crown Court on 20th February 1998, in the sum of £3,137,165 with seven years' imprisonment in default. The court ordered that should the default sentence fall to be served it should be consecutive to the term of seven years' imprisonment imposed for the 13 offences of which Allen had been found guilty.

3

Allen's appeal relating to the confiscation order is now before this court together with his renewed application for permission to appeal against the substantive sentence of seven years. In addition, both appellants ask the court to certify a point of law of general importance, in Allen's case a series of points, said to arise out of the court's judgment of 7th July 1999 and to grant permission to appeal to the House of Lords.

4

The facts of these cases are described in detail in our judgment of 7th July 1999 and we do not repeat them now.

5

We turn, first, to the appeal relating to the confiscation order. In the Crown Court it was agreed between counsel that the amount of the appellant's benefit arising from his offences was £4 million and that his realisable assets amounted to £3,137,195. In addition, the Crown gave an undertaking that upon a confiscation order being made it would not pursue the appellant for pre-existing tax liabilities, in effect the shortfall of £900,000, out of any income which he might acquire in the future. The judge accepted these figures and the Crown's undertaking and made the confiscation order in the sum we have stated of just over £3 million.

6

Mr Newman QC, for the appellant Allen, submits that the confiscation order is unlawful essentially because a statutory precondition required to be met before a confiscation order can be made has not been fulfilled. He says that the appellant has not obtained a pecuniary advantage by his fraudulent failure to pay or declare tax due. At least he has certainly not obtained a pecuniary advantage to the tune of £4 million; and a pecuniary advantage has to be shown if the confiscation order is to be a lawful one.

7

The power to make confiscation orders was first introduced into the law by the Drug Trafficking Offences Act 1986 and extended so as to cover offences other than drug trafficking by the Criminal Justice Act 1988. The relevant provisions of that statute were amended by the Proceeds of Crime Act 1995 which, so far as material, came into effect on 1st November 1995. The appellant's offending straddled periods before and after that date. The essential change in the legislation was that, whereas under the original statute of 1988 the court was empowered to make a confiscation order if certain conditions were met, under the Act of 1995 it was, subject to exceptions, required to do so.

8

The central provisions for present purposes are section 71(4) and subsection (5) of the Criminal Justice Act which were not amended in 1995. Section 71(4) states:

"For the purposes of this Part of this Act a person benefits from an offence if he obtains property as a result of or in connection with its commission and his benefit is the value of the property so obtained."

9

Subsection (5):

"Where a person derives a pecuniary advantage as a result of or in connection with the commission of an offence, he is to be treated for the purposes of this Part of this Act as if he had obtained as a result of or in connection with the commission of the offence a sum of money equal to the value of the pecuniary advantage."

10

In the light of counsel's argument we should also note section 72(3) of the unamended statute and section 71(1C) of the amended Act which is the substitute of section 72(3). 72(3) provided:

"When considering whether to make a confiscation order the court may take into account any information that has been placed before it showing that a victim of an offence to which the proceedings relate has instituted, or intends to institute, civil proceedings against the defendant in respect of loss, injury or damage sustained in connection with the offence."

11

Section 71(1C) of the amended Act:

"If, in a case falling within subsection (1B) above, the court is satisfied that a victim of any relevant criminal conduct has instituted, or intends to institute, civil proceedings against the defendant in respect of loss, injury or damage sustained in connection with that conduct—

(a) the court shall have a power, instead of a duty, to make an order under this section;

(b) subsection (6) below shall not apply for determining the amount to be recovered in that case by virtue of this section; and

(c) where the court makes an order in exercise of that power, the sum required to be paid under that order shall be of such amount, not exceeding the amount which (but for paragraph (b) above) would apply by virtue of subsection (6) below, as the court thinks fit."

12

We should add that section 71(1B) and subsection (6) require the court to make an order in a sum equal to the benefit derived by the offender from his offence or his realisable assets whichever is the less. Those provisions are thus modified in a case to which section 71(1C) applies.

13

Section 72(7), which was not amended in 1995, is also to be borne in mind:

"Where—(a) a court makes both a confiscation order and an order for the payment of compensation under section 35 of the Powers of Criminal Courts Act 1973 against the same person in the same proceedings; and

(b) it appears to the court that he will not have sufficient means to satisfy both the orders in full,

it shall direct that so much of the compensation as will not in its opinion be recoverable because of the insufficiency of his means shall be paid out of any sums recovered under the compensation order."

14

Mr Newman in essence advances two arguments: (1) The appellant's failure to pay or declare tax due did not, on the facts of the case, offer him any pecuniary advantage because the tax remains due and payable. Had he, perhaps between the commission of the offence or some one of the offences and its coming to light, gained interest on the money withheld that might have been a pecuniary advantage, but the principal sum of tax due, says Mr Newman, cannot amount to a pecuniary advantage. It remains due and payable to the Revenue.

15

(2) As regards the corporation tax liability evaded by the appellant, counts 1 to 7 in the indictment, the tax liability was that of the off-shore companies in the case. The only pecuniary advantage which the appellant might have gained would have been an increase in the value of the shares by virtue of the non-payment of corporation tax, but, Mr Newman submits by his skeleton argument, the evasion scheme reduced the value of the shares.

16

We turn to the first of these arguments. Pecuniary advantage it not defined in the Criminal Justice Act and should, in our judgment, be accorded its ordinary meaning. In The United States Government v Montgomery [1999] 1 All ER 84 at 96D to E Stuart-Smith LJ indicated that there was no reason to accord a restricted meaning to the expression in section 71(5) of the Criminal Justice Act. So much, I think, would not be disputed by Mr Newman. The ordinary and natural meaning of pecuniary advantage must surely include the case where a debt is evaded or deferred. The sense of the expression matches, in our judgment, with that accorded to the same phrase in another statutory setting, namely, section 16(2)(a), now repealed, of the Theft Act 1968 under which a pecuniary advantage arose where:

"Any debt or charge for which he makes himself liable or is or maybe liable (including one not legally enforceable) is reduced or in whole or in part evaded or deferred."

17

Discussing this subsection Lord Reid said in R v Turner [1974] AC 357, 365G:

"An obligation is evaded if by some contrivance the debtor avoids or gets out of fulfilling or performing his obligation."

18

In short, the fact that the tax remains due does not mean that its evasion did not confer a pecuniary advantage, nor indeed that that pecuniary advantage consisted of the whole of the tax withheld, the value of the liability that was evaded. By his crime the appellant evaded payment of £4 million tax. That sum constituted the proceeds of the offence. On the agreed figures, as we have indicated, he had realisable assets of £3.1 million. The fact that he remained in law liable to pay the tax, the fact even, were it so, that the Revenue might later recover it, does not, in our judgment, yield the proposition that the proceeds of his crime were one penny less than the whole of the tax evaded.

19

It is of interest to note what was also said in Turner's case, to which we have briefly referred. At 365H and following Lord Reid said this:

"An obligation is reduced if the creditor agrees with the debtor that the...

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