Factual and Procedural Background
The Court of Appeal (Criminal Division) heard two unrelated confiscation matters together because both concerned whether a change-in-value-of-money (“CVM”) uplift should apply to criminal benefits held in restrained bank accounts or property whose value had not increased correspondingly. [1][2]
Appellant had been convicted of fraud, money laundering and related offences. A restraint order was made over his assets, and Judge Tomlinson later imposed a confiscation order of £101,514,315.21. [3][4][5][6][7]
Applicant had been convicted in his absence of extensive fraud, false accounting, trademark and money-laundering offences. A restraint order and management receivership had operated over his assets for many years. Judge Everett imposed a confiscation order of £90,503,211.96. [8][9][10][11][12][13]
Third Party, Applicant’s former wife, separately appealed findings rejecting her claimed beneficial interests in two properties. The first-instance court had accepted her interest in the former matrimonial home but rejected her claims concerning the other properties. [14][15][16][17]
Legal Issues Presented
- Whether applying the CVM uplift to restrained criminal assets was disproportionate under Article 1 of Protocol 1 and the principles in R v Waya. [2][18]
- Whether Applicant had sufficient available assets to satisfy the confiscation order. [19][20]
- Whether Third Party had beneficial interests in the two disputed properties and whether the first-instance judge improperly relied on her failure to give oral evidence. [21][22]
Arguments of the Parties
Appellant’s Arguments
- The CVM uplift created an artificially inflated sum, was analogous to double recovery, and was disproportionate because restraint prevented him from using the relevant accounts or increasing their value. [23][24]
Applicant’s Arguments
- Applicant adopted Appellant’s CVM arguments and contended that the circumstances of the restraint order and receivership made the uplift disproportionate. [25][26][27]
- He argued that the first-instance court had irrationally concluded that sufficient available assets existed. [28][20]
Third Party’s Arguments
- Third Party claimed beneficial interests in the disputed properties, relying on registered ownership, declared rental income and the absence of evidence that the transactions were shams. [21][29]
- She argued that the judge wrongly treated her failure to give oral evidence as significant. [22]
Prosecution’s Arguments
- The prosecution contended that the CVM challenge was legally unsound and that Applicant had sufficient assets to meet the order. [30][13][20]
- It argued that the disputed property arrangements were sham transactions used to place assets beyond Applicant’s confiscation liability. [31][32][33]
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|
| R v Waya | Confiscation must be proportionate to the legitimate purpose of removing criminal benefits; restoration to the victim may make confiscation disproportionate. | The Court held that applying CVM to restrained assets did not constitute double recovery or an additional fine. [34][35][36][37][18] |
| R v May | Earlier principles concerning confiscation and valuation of criminal benefit. | Supported the value-based approach and the rejection of deductions for criminal expenses. [34][38][39][40] |
| R v Barwick | The defendant bears the burden of proving that the available amount is lower. | The Court applied that burden to Applicant’s challenge to available assets. [41][28][42] |
| R v Andrewes | The proportionality proviso principally prevents double recovery and applies narrowly where the benefit or its equivalent has been restored. | The Court treated the proviso as inapplicable to restrained assets whose value had not kept pace with inflation. [35][43][44][37] |
| R v Rezvi | The legislative purposes include depriving criminals of benefits and deterring crime. | These purposes supported the value-based confiscation scheme. [45] |
| R v Ahmad | Deterrence is a legitimate aspect of confiscation’s purpose. | The Court confirmed that deprivation of criminal benefits remains the essential purpose. [45] |
| R v Smith (David) | Subsequent seizure, destruction or loss generally does not reduce the value of the benefit when obtained. | The principle supported applying CVM despite restraint and the resulting limitation on use of assets. [46][47][48] |
| R v Islam | The value of criminal property is generally assessed when obtained despite later seizure. | The Court cited it as consistent with the treatment of seized criminal property. [49] |
| R v Kakkad | Seizure and forfeiture do not necessarily eliminate the criminal benefit. | The decision reinforced the Court’s approach to restrained or seized assets. [49] |
| R v Harvey (Jack) | The proportionality proviso may apply where VAT or its equivalent has been paid to the revenue authority. | The Court distinguished such restoration cases from the present CVM issue. [37] |
| Snook v London and West Riding Investments Ltd | A sham involves documents or acts intended to create an appearance of legal rights different from those actually intended. | The Court used this definition in assessing the disputed property registrations. [33][50] |
| R v Forte | A court may take account of a party’s failure to provide evidence capable of rebutting an evidential inference. | The Court held that the approach to Third Party’s non-attendance for cross-examination was permissible. [51][52] |
Court's Reasoning and Analysis
The statutory scheme values the criminal benefit when obtained but requires payment at the later date of the confiscation order. The CVM uplift therefore preserves the real monetary value of the original benefit and is not ordinarily a penalty. [53][54]
The Court held that later loss, seizure, destruction or lack of appreciation generally does not reduce the benefit, unless the case falls within the narrow category involving restoration to the victim or equivalent double recovery. [55][49][37]
A restraint order did not alter that conclusion. The defendants had chosen how to hold the proceeds before restraint, and the restraint itself resulted from their criminal conduct and the risk of dissipation. They could have disclosed the proceeds and agreed to their return, potentially avoiding restraint and further delay. [56][57]
The 2026 statutory amendments did not assist the challenges because they were either inapplicable to the orders under appeal or did not undermine the established treatment of restrained property. [58][59][60][61][62]
In Appellant’s case, some identified accounts were not shown to have been effectively frozen during the relevant period. Other accounts relied upon were later tracing accounts and had not formed part of the benefit on which the confiscation order or CVM uplift was calculated. [63][64][65]
In Applicant’s case, the Court rejected the argument that the first-instance judge had erred by addressing proportionality in relation to the benefit figure. Because available assets were sufficient, the benefit figure and the recoverable amount were effectively the same. The restraint, receivership costs and property performance did not make the uplift disproportionate. [66][27]
The Court also upheld the finding that Applicant had sufficient available assets. The burden was on him to prove that the available amount was lower, and the judge was entitled to infer the existence of further unidentified assets from Applicant’s conduct and lifestyle. [28][67]
Regarding Third Party, the Court treated the challenge as one to factual findings and inferences. It accepted that the property registrations were sham transactions because the surrounding evidence indicated that Applicant retained control and that Third Party was not intended to enjoy genuine beneficial ownership. [68][69][70][71][72]
For the pension-scheme property, Third Party was neither a genuine director nor an employee and the documents showed her acting as trustee rather than beneficial owner. The Court therefore concluded that Applicant was the beneficial owner. [73][74][75][76]
The Court held that the judge had not drawn an impermissible adverse inference. He was entitled to consider that Third Party had chosen not to provide evidence capable of explaining the alleged beneficial interests or answering the evidence against her. [77][78][52]
Holding and Implications
Appellant’s appeal was dismissed. Applying the CVM uplift to restrained assets was not disproportionate. [79][80]
Applicant’s application failed. Leave was granted on the CVM ground but the appeal was dismissed; leave was refused on the available-assets ground. [81][82]
Third Party’s appeal was dismissed. The findings that she lacked beneficial interests in the two disputed properties were upheld. [76][83]
The direct effect was that the confiscation orders remained undisturbed and the disputed property findings stood. The opinion established or reaffirmed the application of existing proportionality principles to restrained assets; no separate broader implication was identified. [18][79][82][83]