R v Hockey, England and Wales Court of Appeal (Criminal Division), Judgment, Law, casemine.com

Citation Codes

Equivalent Citations

citation codes

Attorney(S)

Philip Bown (instructed by Cartwright King Solicitors) for the Applicant
Hearing date: 9 May 2018

Judges

MR JUSTICE STUART SMITH
LORD JUSTICE MCCOMBE
HIS HONOUR JUDGE CLEMENT GOLDSTONE QC

See more information ...

Click here to read the full judgment

R v. Hockey

Smart Summary

Factual and Procedural Background

On 21 March 2006, the Applicant pleaded guilty in the Magistrates Court to six offences involving obtaining money transfers by deception and using false instruments. These offences related to fraudulent mortgage applications to two financial institutions, resulting in mortgage advances used to purchase property. The Applicant was sentenced in the Crown Court to a suspended prison term with unpaid work requirements.

Following sentencing, the Prosecution sought a Confiscation Order under the Proceeds of Crime Act 2002 for the amount of the mortgage advances obtained by fraud. Initially refused by the sentencing judge, the order was later allowed on appeal by a different court constitution in 2007, with the sum agreed by the parties and subsequently paid.

Years later, the Applicant applied for permission to appeal the confiscation order, accompanied by a request for a significant extension of time, over ten years after the original order.

Legal Issues Presented

Whether the assessable benefit for the confiscation order should be calculated as the value of the properties purchased less the encumbrances in favour of the mortgage lenders, in light of the legal principles established in R v Pattison and R v Waya.
Whether the Applicant can reopen a confiscation order made by agreement, on the basis that the wrong legal analysis was applied at the time.
Whether an extension of time should be granted for the Applicant to bring the appeal, given the delay of over ten years.

Arguments of the Parties

Applicant's Arguments

The Applicant relies on the decisions in R v Pattison and R v Waya to argue that the assessable benefit should be the value of the properties less the mortgage encumbrances, asserting that the present case aligns with Waya.
It was contended that the Applicant did not obtain the loan monies themselves but rather the properties purchased with those monies represented the true benefit.
The Applicant does not base the appeal on a change in law but on the contention that the original legal analysis was incorrect.

Court's Observations on Evidence and Legal Machinery

The Applicant has not provided evidence regarding the legal arrangements underpinning the mortgage transactions, unlike in Waya, where the legal machinery was clearly established and agreed.
The Applicant's solicitors from the time have destroyed their files and do not provide evidence on the transaction details.
Advice submitted by the Applicant's current counsel suggests the legal machinery may differ from that in Waya, but no conclusive evidence is presented.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
R v Pattison [2007] EWCA Crim 1536	Whether the value of property transferred subject to an encumbrance should be reduced by the encumbrance amount when calculating benefit.	The court found Pattison distinguishable because it involved direct property transfer subject to encumbrance, unlike the present case involving fraudulent mortgage loans to purchase property.
R v Waya [2012] UKSC 51	Clarification that under certain legal machinery, a mortgage advance never becomes the defendant’s property but passes directly to the vendor, affecting the calculation of benefit.	The court held that Waya is not directly applicable as there is no evidence the same legal machinery applied in this case, and the Applicant did not prove that he never obtained the loan monies.
Abbey National Building Society v Cann [1991] 1 AC 56	Principle that a purchaser relying on a mortgage loan acquires only an equity of redemption, with the loan secured on the property from inception.	Relied upon in Waya and referenced here to explain the legal machinery affecting ownership of mortgage advances.
Morfitt [2017] EWCA Crim 669	Confiscation orders made by consent can only be set aside in the most exceptional circumstances and where unfairness is demonstrated.	Applied to refuse reopening of the consent order absent exceptional circumstances.
Perkes [2017] EWCA Crim 10	Reinforces the principle that consent orders are final unless exceptional unfairness is shown.	Supported the court’s refusal to disturb the agreed confiscation order.
Kirman [2010] EWCA Crim 614	The court will not ordinarily revisit consent orders even if based on erroneous advice, except in exceptional circumstances.	Cited to justify refusal to set aside the consent order despite claims of erroneous advice.

Court's Reasoning and Analysis

The court began by examining the Applicant’s reliance on the decisions in Waya and Pattison. It noted that Waya involved a specific legal arrangement whereby the mortgage funds never became the defendant’s property, passing directly to the vendor through a solicitor’s client account. This legal machinery was assumed or agreed in Waya, but no such evidence or agreement exists in the present case. The Applicant failed to provide documentary or testimonial evidence explaining the nature of the mortgage transactions or the legal arrangements involved. The destruction of files by the Applicant’s former solicitors and lack of recollection from counsel further undermined his position.

Regarding Pattison, the court distinguished it as a case about property transferred subject to an encumbrance, which did not raise the question of whether the defendant ever obtained loan monies. The present case involves fraudulent mortgage loans used to purchase property, a materially different factual scenario.

The court emphasized that reopening a confiscation order made by consent requires exceptional circumstances and well-founded submissions of unfairness. The Applicant’s assertion that he was not present when the order was made and that the legal analysis was wrong did not meet this high threshold. The court referred to established authorities underscoring the finality of consent orders and the reluctance to revisit them absent exceptional reasons.

On the application for an extension of time, the court rejected it as unjustified. The Applicant could have raised these issues earlier, especially since the confiscation sum was agreed. The court recognized that any potential injustice arising from alleged poor legal advice would be a matter for a claim against the Applicant’s former legal advisers, not a reason to extend time for appeal. The sparse explanation for the delay and the Applicant’s late research into the matter further weakened the application.

Holding and Implications

The court DISMISSED the Applicant’s renewed application for permission to appeal the confiscation order and refused the extension of time sought.

The direct effect of this decision is that the confiscation order made in 2007 remains final and enforceable. No new precedent was established. The court reaffirmed the principle that consent orders in confiscation proceedings are final except in the most exceptional circumstances, and that delays of this magnitude without compelling justification will not be tolerated.