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Johnson, R

In this case the defendant sold a house to her daughter for £20,000 below value - the balance being a 'gift'. When the property was later repossessed a £44,000 debt remained. However, the court refused to grant an appeal that the order was disproportionate despite the gift being no longer available.

http://www.bailii.org/ew/cases/EWCA/Crim/2016/10.html

The defendant was convicted of acquisitive crime and it was accepted that she had a criminal lifestyle. Her benefit was assessed at over £77,000 with the recoverable amount being assessed at £20,000 - the value of the tainted gift.

She was ordered to pay that sum within 6 months or face 12 months' imprisonment in default.

She failed to pay and the default sentence was triggered. However, having spent 7 days in prison, the order was settled in full and she was released. The funds apparently derived from family.

The defendant had appealed the order claiming it was unjust.

The sentencing judge acted in accordance with Section 81(1) of the Proceeds of Crime Act 2002, which states:

(1) The value at any time (the material time) of a tainted gift is the greater of the following-
(a) the value (at the time of the gift) of the property given, adjusted to take account of later changes in the value of money;
(b) the value (at the material time) of the property found under subsection (2).

As the valuation requires assessment of the greater of the above it follows that the judge in the confiscation proceedings correctly identified the value as being £20,000 that being the value at the time the gift was made since the value of the daughter's interest at the time of the hearing was nil, the property having been repossessed and sold at a loss.

Held:
The judge was correct in her application of the Act according to the statutory wording. The court also considered the proportionality of the order as required by Waya [2012] UKSC 28 and the amendment to s.6 (5) of the Proceeds of Crime Act 2002 by the Serious Crime Act 2015.

The Court stated that, where the Crown sought to recover the value of a tainted gift which appeared to be worthless at the date of the making of the order, the judge should carefully consider three matters:

(a) the robustness of the evidence of the value of the tainted gift;
(b) the proportionality of making an order in the sum sought; and
(c) whether the term of imprisonment to be imposed in default should be reduced.

It was further stated that, in exceptional cases, a substantial reduction of the term in default could be made by the judge where the court was satisfied that enforcement was impossible. This would depend on the defendant satisfying the court that that was the case and that the gift that had been given away was not recoverable or that settlement of the order could not be achieved by any other means. In this case the Court upheld the Judge's decision, did not find it disproportionate and rejected the appeal.

21 March 2016

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