R v Scott King
| Jurisdiction | England & Wales |
| Judge | Lord Justice Fulford |
| Judgment Date | 03 April 2014 |
| Neutral Citation | [2014] EWCA Crim 621 |
| Docket Number | Case No: 201301052 B2 |
| Court | Court of Appeal (Criminal Division) |
| Date | 03 April 2014 |
[2014] EWCA Crim 621
Lord Justice Fulford
Mr Justice Holroyde
and
His Honour Judge Lakin
Case No: 201301052 B2
IN THE COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM Wood Green
His Honour Judge Pawlak
T20100674
Royal Courts of Justice
Strand, London, WC2A 2LL
N Yeo (instructed by The Stokoe Partnership) for the Appellant
R Birch (instructed by The London Borough of Barnet) for the Respondent
Hearing dates: 7 March 2014
Introduction
On 9 September 2010 in the Crown Court at Wood Green the appellant pleaded guilty to an offence of falsely claiming or creating the impression that a trader is not acting for purposes relating to his trade, business, craft or profession, contrary to Regulations 12, 13 and Paragraph 22 of Schedule 1 of the Consumer Protection from Unfair Trading Regulations 2008 (count 1).
On 8 March 2011 he received a community sentence comprising a 100-hour unpaid work requirement.
On 21 August 2012 he was ordered to pay a confiscation order in the sum of £109,970 within 6 months, pursuant to section 6 Proceeds of Crime Act 2002 (" POCA 2002"). The default term was set at 2 years' imprisonment. He was also ordered to pay prosecution costs of £8,000.
Before this court he appeals against the confiscation element of his sentence by leave of the single judge who also granted an extension of time.
The Facts
The appellant was in the business of buying and selling used cars under the trading name Winton Cars. Between 26 May 2008 and 27 February 2009 he advertised and sold 58 vehicles as a private seller, whereas in reality this formed part of his business activities. The reason the appellant represented that these were private sales was to avoid providing a guarantee or warranty.
We note that the appellant pleaded guilty on the basis (which was not accepted by the court) that he mistakenly believed that because he had no business premises or partners he was selling the vehicles as a private seller. He suggested he had not attempted to deprive the purchasers of their consumer rights.
The Confiscation Proceedings
It was agreed that this was not a criminal lifestyle case and the benefit figure relied on by the prosecution was the turnover of the business: £109,970. The judge observed during the course of his judgment that the net trading profit was approximately £11,140.
There was an issue in the court below as regards the appellant's realisable assets. This is only of historic interest because it is not an issue raised on this appeal. Put shortly, the realisable assets were assessed as being £109,970, namely the equity in a property at 1 Colne Way, Watford (which was owned by the appellant) and £16,000, the value of the vehicles held in stock at the time of his arrest. The appellant's case – which the judge did not accept – was that his stepmother, Anne King, had an equitable interest in the property because she had advanced the purchase monies.
The Grounds of Appeal
By way of background to the issue raised on this appeal, the revenue or turnover from the sale of the 58 vehicles during the period of the indictment was £109,970: the aggregate of the payments made by the purchasers. Allowing for the original cost of the vehicles and the work undertaken by the appellant prior to sale, his profit was £11,140. Therefore, it is said the business operated "on a margin" of approximately 10%, although the appellant also had to pay the other overheads of the business.
The issue on this appeal is whether, on these particular facts, the judge's order which was based on the revenue or turnover of the 58 sales was disproportionate within the meaning of Article 1 of Protocol 1 to the European Convention on Human Rights ("A1P1") (as applied to the Proceeds of Crime Act 2002 (" POCA 2002")), in light of the majority judgment of the Supreme Court in R v Waya [2012] UKSC 51; [2013] 1 A C 294.
Mr Yeo submits that it is arbitrary, having confiscated the appellant's profit, additionally to make him pay what is described as a penalty or fine by adding the original purchase price of the cars, along with the value of the work he undertook on them, given the objective of confiscation proceedings is to access the financial benefit of the offender, as opposed to deterring others. It is argued that the appellant gave full value to the purchasers when they bought the cars. Moreover, Mr Yeo submits this case is analogous to the position in "full restoration" cases when, on the particular facts of the case, a confiscation order that is greater than the profit made by the offender is deemed to be disproportionate. Therefore, given the appellant passed the value of the motor vehicles to the purchasers, it is said to be unreasonable to require him to pay the same sum a second time and Mr Yeo contends that the present order breaches the prohibition on double counting.
Mr Yeo accepts that in certain instances it is appropriate and proportionate for the confiscation order to reflect the business's turnover rather than the profit alone. By way of example, Mr Yeo concedes that when the value of the "spoils of the crime" is unknown or if it would be impractical to enquire into the financial dealings as between offenders, it may be legitimate to adopt this course. In a similar vein, it is suggested that there is a distinction to be drawn between cases where the underlying activity is unlawful, such as when prohibited drugs are sold or imported, and cases in which the underlying activity is legitimate. Using this example, trading in prohibited drugs is a criminal offence and Mr Yeo accepts that any property received in connection with that offending, such as the purchase price of the drugs, should be treated as benefit, whereas it is argued that trading in cars is not unlawful and therefore the purchase price of each car should not be treated as the benefit. It is argued that distinctions of this kind indicate where the court should draw the dividing line between the situations in which the confiscation order should be for the revenue/turnover/spoils of crime and those in which a lesser figure (for instance the profit) is appropriate.
Additionally, it is suggested that the sentence of 100 hours community service was a just sentence and that as a result of the confiscation order the appellant has lost his home and what is described as a legitimate business. In the latter regard, Mr Yeo emphasises that invoices were issued for all of the sales and the appellant complied with the record keeping requirements for the purposes of the car sales margin scheme which relates to claims for VAT (the appellant was registered at all material times).
As to the appellant's intention of avoiding providing a guarantee, it is highlighted that by his plea he accepted he had been dealing in the course of trade, and accordingly section 14(2) Sale of Goods Act 1979 applies and a term of quality was implied. Furthermore, by section 6(2)(a) of the Unfair Contract Terms Act 1977, the terms of a contract cannot exclude or restrict the effect of section 14(2) as regards the consumer. Accordingly, it is highlighted that the appellant had failed in his objective: the purchasers got full value because of the protection of these statutory provisions. The appellant had tried to gain a pecuniary advantage but the operation of the law stopped him from achieving his objective.
It is argued that this is analogous to a full restoration case and in any event the purchasers of these cars received full value and there has been double counting. It is suggested that the present facts are to be distinguished from R v Beazley [2013] EWCA Crim 567 and that the approach of this court in R v Sale [2013] EWCA Crim 1306 should be applied. These authorities are considered below.
The submissions of the respondent
It is submitted that this was not akin to a full restoration case. The appellant had not given full value because, in reality, he avoided selling the vehicles with a warranty. Given he ran his business in breach of the 2008 Regulations, which provide protection for the purchaser, it is submitted the order was not disproportionate.
It is emphasised that the appellant sold 58 vehicles and that this operation was illegal from the outset. The appellant was seeking to avoid providing a warranty by maintaining that these were private sales. Section 14(2) would not in reality have altered the position: it would be unrealistic to assume that the purchasers of the motorcars, which were of relatively low value, would usually incur the expense of seeking legal advice, or of commencing proceedings, in order to enforce their statutory rights; and in any event they would have been taken in by his representation that there was no warranty because it appeared to be a private sale. The appellant was only prepared to consider paying a refund on the sole vehicle about which there was a complaint after the proceedings had been brought. Therefore, he did not give full value, and he funded successive sales of vehicles by his repeated breaches of the law.
The Legislation
Section 6 POCA , as relevant, provides:
"Making of order
(1) The Crown Court must proceed under this section if the following two conditions are satisfied.
(2) The first condition is that a defendant falls within any of the following paragraphs—
(a) he is convicted of an offence or offences in proceedings before the Crown Court;
[…]
(3) The second condition is that—
(a) the prosecutor […] asks the court to proceed under this section, or
(b) the court...
To continue reading
Request your trial
-
Stanley Leslie Miller v R
...identified in Prest. Fifth, regard should be had to the nature and extent of the criminality involved, referring to R v King (Scott) [2014] EWCA Crim 621, [2014] 2 Cr. App. R. (S) 54. Sixth, “even where a company mixed up in relevant wrong doing is solely owned and solely controlled by th......
-
Boyle Transport (Northern Ireland) Ltd v R
...regard should be had to the nature and extent of the criminality involved. We think that the approach taken by the court in the case of King (Scott) [2014] 2 CAR(S) 54, [2014] EWCA Crim 621 is informative. That was not, it should be said, a case itself concerning the doctrine of lifting or......
-
R v Andrewes
...as just satisfaction but did not make any ruling on the proportionality of the confiscation order. 33 The next case which we address is R v King (Scott) [2014] EWCA Crim 621; [2014] 2 Crim App R (S) 54. In this case a trader, who bought and sold used cars represented himself to his custome......
-
R (London Borough of Haringey) v Boruch Roth
...subject of a confiscation order: see, for example, the discussion by Fulford LJ, giving the judgment of the court, in King (Scott) [2014] EWCA Crim 621, [2014] 2 Cr. App. R (S) 59 It is clear how the present case is to be categorised. Here, as we have indicated, the entire activity of lett......