Bestel & Ors v REGINA

Factual and Procedural Background

On 18 June 2013, the court considered three applications for extensions of time to apply for leave to appeal against confiscation orders made following convictions for mortgage fraud offences. The applicants sought extensions ranging from two months to over a year to challenge the confiscation orders which were based on benefit assessments calculated by reference to mortgage loans secured by charges over properties. The Supreme Court decision in Waya [2012] UKSC 51 altered the legal approach to assessing benefit in mortgage fraud cases, holding that the defendant does not obtain the mortgage loan sum as property but rather a bundle of contractual rights, typically of nominal value, and that benefit should be assessed by reference to any increase in property value attributable to the tainted investment.

The applicants sought to have their confiscation orders quashed and re-assessed according to the principles in Waya. The court also examined the principles governing extensions of time to appeal where the law has changed, with reference to prior case law and the principle of finality in criminal proceedings. The court heard submissions from counsel and reserved judgment, delivering a single judgment addressing all three applications.

Legal Issues Presented

1. Whether an extension of time should be granted to permit appeals against confiscation orders made under a previous legal understanding, in light of the Waya decision altering the assessment of benefit in mortgage fraud cases.
2. How the principle of finality applies to criminal confiscation orders when the law changes after the order is made.
3. The extent to which enforcement proceedings and the availability of section 23 Proceeds of Crime Act 2002 applications affect the assessment of substantial injustice in extension of time applications.
4. The proper approach to assessing benefit and available amount in confiscation orders involving mortgage fraud, including consideration of equitable interests and charges over property.
5. The legal effect of a defendant's absence from a confiscation hearing and whether such absence constitutes absconding under section 27 Proceeds of Crime Act 2002.

Arguments of the Parties

Applicants' Arguments

• The confiscation orders were made based on an erroneous legal principle, resulting in disproportionately high benefit figures.
• The applicants would suffer substantial injustice if forced to pay amounts far exceeding their actual benefit under the Waya principles, including the risk of imprisonment in default.
• The available amount should be reassessed to reflect the equitable interest after deduction of mortgage charges and current property values.
• In one case, the applicant argued absence from the confiscation hearing was due to unawareness of the date and medical condition, not deliberate avoidance.
• The applicants contend that the principle of finality should not prevent re-opening cases where the law has fundamentally changed and substantial injustice results.

Respondent's Arguments

• The confiscation orders were properly made under the law as it stood at the time and the principle of finality requires respect for those decisions absent exceptional circumstances.
• Extensions of time are not routinely granted for change of law cases unless substantial injustice would otherwise occur, which is a high threshold.
• The applicants had remedies available under section 23 Proceeds of Crime Act 2002 to apply for variation of confiscation orders based on changes in available assets.
• Absence from a confiscation hearing does not amount to absconding unless the defendant deliberately places himself beyond the court's reach; mere non-attendance is insufficient.
• Applicants who agreed to benefit figures or failed to challenge them at the time should be held to those agreements unless good reason is shown.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Waya [2012] UKSC 51	Clarified the correct method of assessing benefit in mortgage fraud cases to avoid disproportionate confiscation orders.	Formed the legal basis for applicants' challenge to confiscation orders and the court's consideration of re-assessment principles.
Jawad [2013] EWCA Crim 644	Outlined the court's approach to extensions of time in change of law cases, emphasizing substantial injustice as a threshold.	Guided the court's approach to extension of time applications here, emphasizing the non-routine nature of such extensions.
Cottrell and Fletcher [2007] EWCA Crim 2016	Confirmed that extensions of time for appeals based solely on change of law are unlikely unless substantial injustice is shown.	Supported the court's emphasis on finality and the requirement for more than a mere change of law to justify extension.
Mitchell [1977] 65 Cr App R 185	Recognized rare exceptions to finality where continuing imprisonment would result from changed law.	Discussed as an example of the principle of finality tempered by justice in exceptional cases.
Hawkins [1997] 1 Cr App R 234	Described the court's reluctance to grant extensions except for short delays and good reasons, especially where defendants pleaded guilty or chose not to appeal.	Informed the court's approach to extension applications and the importance of substantial injustice.
A v Governor of Arbour Hill Prison [2006] IEFC 45	Addressed the problematic effects of absolute retroactivity of judicial decisions on finality in criminal cases.	Used to support the principle that finality must be preserved to avoid dysfunctional effects in justice administration.
Cadder v HM Advocate [2010] UKSC 43	Applied principles of finality and fair trial rights, emphasizing that new legal interpretations do not automatically invalidate completed cases.	Reinforced the court's position on upholding finality of orders made under previous law.
Serious Organised Crime Agency v O'Docherty and Manncherty SL [2013] EWCA Civ 518	Confirmed that final orders remain binding despite subsequent changes in legal interpretation, absent exceptional injustice.	Supported the application of finality to confiscation orders and related enforcement proceedings.
Gokal v Serious Fraud Office [2001] EWCA Civ 368	Established that applications to vary confiscation orders cannot challenge findings made at the confiscation hearing without new evidence.	Clarified limits on re-litigating asset valuations in enforcement proceedings.
Younis [2008] EWCA Crim 2950	Affirmed that section 23 applications cannot be used to challenge Crown Court findings of hidden assets made at confiscation hearings.	Reinforced the principle that enforcement proceedings cannot reopen settled factual findings.
Jones [2002] UKHL 5	Considered the fairness of trials in the absence of defendants who have absconded.	Informed the court's interpretation of 'absconding' in the context of confiscation hearings.
Gavin and Tasie [2010] EWCA Crim 2727	Explored the consequences of defendants' absence from confiscation hearings and the application of section 10 assumptions.	Used to assess the propriety of proceeding in a defendant's absence without treating them as absconders.
R v Lesser [1939] 27 Cr App R 69	Emphasized that applications for leave to appeal out of time are not allowed absent special reasons.	Supported the court's strict approach to extension applications based solely on change of law.

Court's Reasoning and Analysis

The court began by reaffirming the principle of finality: decisions properly made under the law as it stood at the time should not be disturbed unless substantial injustice would result. This principle was supported by extensive authority from both criminal and civil jurisdictions, including cases from the UK and Ireland. The court recognized the tension between individual justice for defendants affected by changes in the law and the public interest in finality and certainty in criminal justice.

In applying this principle to the present cases, the court considered the practical impact of the confiscation orders, including pending enforcement proceedings and the possibility of imprisonment in default of payment. The court acknowledged that section 23 of the Proceeds of Crime Act 2002 provides a mechanism for defendants to apply to vary confiscation orders based on changes in asset values or availability, but noted that this remedy may not fully address situations where defendants have already paid amounts exceeding their actual benefit.

Regarding the assessment of benefit, the court noted that the Waya decision fundamentally changed the legal approach to mortgage fraud benefit calculations, focusing on the equitable interest and any increase in property value rather than the gross mortgage advance. The court found that in at least one case, the confiscation judge failed to properly consider the impact of mortgage charges on available assets, and insufficient inquiry was made into the equitable interest, justifying a re-hearing.

On the question of defendants' absence from confiscation hearings, the court interpreted 'absconding' under section 27 as requiring deliberate evasion of the court's jurisdiction. Mere non-attendance, even if voluntary, did not amount to absconding where the defendant remained within reach and in communication with solicitors and the prosecution.

In considering the applicants' conduct and legal representation, the court emphasized the burden on applicants to show substantial injustice and explained that acceptance of benefit figures on legal advice, without evidence of misrepresentation or misunderstanding, weighs against granting extensions.

Holding and Implications

Jean Pierre Bestel: The court granted the extension of time, allowed leave to appeal on specified grounds, quashed the confiscation order, and remitted the matter to the Crown Court for a re-hearing before a different judge. The re-hearing is to apply the Waya principles and reconsider both benefit and available amount, with a new timetable to be set within 28 days.

Naim Raza: The court refused the extension of time. It held that the confiscation order was properly made under the law as it stood, and the principle of finality precluded re-opening the case despite the change in law. The applicant has remedies under section 23 for reassessment of available assets, and no substantial injustice was found to justify extension.

Sajid Bashir: The court refused the extension of time. The applicant had agreed to the benefit figure after legal advice, and there was no evidence that the agreement was based solely on an incorrect understanding of the law. The principle of finality and the absence of substantial injustice led to refusal.

The court’s decisions reinforce the primacy of finality in criminal cases, particularly in confiscation proceedings, and clarify that extensions of time to appeal based solely on changes in law are exceptional and require demonstration of substantial injustice. The availability of statutory remedies such as section 23 applications mitigates the need for reopening concluded cases. The ruling sets no new precedent but confirms established principles and applies them to mortgage fraud confiscation cases in light of the Waya decision.