Court of Appeal
Rex v Hughes (Ronan)
[2024] EWCA Crim 357
2023 Sept 28;
2024 April 12
Holroyde LJ, Snowden, Jeremy Baker JJ
CrimeSentenceConfiscation orderDefendant pleading guilty to 39 offences of manslaughter and conspiring to assist unlawful immigration sentenced to 20 years’ imprisonmentJudge assessing defendant’s benefit as including 50% equitable interest in house built by him on land registered in names of father then of interested party in Republic of IrelandInterested party submitting in affidavit defendant having no interest in house and house of no realisable valueJudge making confiscation order in sum of £182,078.90Defendant applying for leave to appeal against confiscation order and interested party applying for leave to appeal against judge’s rulingWhether paying for house to be built on land owned by another giving defendant equitable interest in completed house or land Proceeds of Crime Act 2002 (c 29), ss 10A, 84
CrimeCourt of Appeal (Criminal Division)JurisdictionApplication by defendant for leave to appeal against sentence and application by interested party for leave to appeal against judge’s rulingDefendant convicted in Crown Court with right to seek leave to appeal against sentence applying for leave to appeal against judge’s determination of interest in property in confiscation orderInterested party aggrieved by determination of defendant’s interest in property also applying for leave to appeal against judge’s ruling Whether Court of Appeal (Criminal Division) having discretion to direct Crown Court to hear confiscation proceedings afresh following quashing of confiscation order Criminal Appeal Act 1968 (c 19), ss 9, 11(3A), 50(1)(ca) Proceeds of Crime Act 2002 (c 29), ss 10A, 31, 32, 50(1)(a)

The defendant played a leading role in using his haulage company to smuggle illegal immigrants into the United Kingdom. After two of his employees took part in transporting 39 Vietnamese nationals in an airtight trailer from France to Essex all those inside were found dead. The defendant pleaded guilty to 39 offences of manslaughter and one offence of conspiring to assist unlawful immigration. He was sentenced to 20 years’ imprisonment less time spent in custody. In confiscation proceedings the defendant accepted the lifestyle provisions under section 6 of the Proceeds of Crime Act 2002 applied to his case, his benefit from his general criminal conduct was £182,078.90 and in calculating the available amount under section 9 he had available assets to a total value of £55,265.23. There was an issue as to the value of any interest he might have had in a property in the Republic of Ireland comprising a house which the defendant occupied with his wife and children which he had paid to have built on farmland which, at the time was registered in his father’s name but was later registered in his mother and father’s joint names and, subsequently, in his mother’s sole name following his father’s death. It was agreed there was no material difference between Irish and English law relating to the registered title to land and the creation of equitable interests in land. The principal issues between the defendant and the Crown were whether the defendant held any interest in the house and land and if he did, what was its value. The defendant’s mother was joined as an interested party to the confiscation proceedings under section 10A of the 2002 Act. The Crown contended that the defendant and his wife each owned an equitable half share in the house. The interested party submitted that the defendant had no interest relating to the house that could be included in his property within the meaning of section 84 of the 2002 Act and any such interest would have no realisable value. Without hearing any oral evidence, the judge ruled that the defendant had a 50% equitable interest in the house built on the land in Ireland amounting to £150,000 which was added to the agreed figures and concluded that the defendant had not discharged the burden of showing the available amount was less than the benefit figure. The judge made a confiscation order in the sum of £182,078.90. The defendant applied for leave to appeal against the confiscation order under section 9 of the Criminal Appeal Act 1968 and the interested party against the judge’s ruling under section 31(4) of the 2002 Act on the ground that he had erred in finding that the defendant had a 50% interest in the property in the light of the defendant’s contention that he was the owner of the house not of the land, and the interested party’s sworn evidence that he only had a right occupy the house with his family. The interested party submitted, inter alia, that the defendant only had an equity but not an equitable proprietary interest in the land and there was no evidence of a shared intention that the defendant would have a right to acquire the land in future. She was afforded no opportunity to respond to the Crown’s case on appeal which was based on a common intention constructive trust. Issues arose at the hearing as to the powers of the Court of Appeal (Criminal Division) under section 11(3A) of the Criminal Appeal Act 1968 and section 32(2A)(b) of the 2002 Act.

On the applications—

Held, applications granted, appeals allowed and confiscation order quashed. (1) Since under both Irish and English law a house built on land became part of the land and belonged in law to the person who owned the land it was not possible as a matter of land law to separate ownership of the house from the land on which it was built and sell the house alone. It followed that merely paying for a house to be built on land owned by another did not of itself give the person paying for the building works any equitable interest in the completed house, still less in the land on which it sat. Whether the defendant, nevertheless, had some proprietary interest in the land depended on evidence which provided an identifiable legal or equitable principle to support the judge’s conclusion that he had such an interest but none had been given. It was unfortunate that neither the parties nor the judge found it necessary for oral evidence to be heard and tested in cross-examination but there was force in the Crown’s submissions that the defendant would not have invested such a large sum in building the house if he did not stand to acquire any proprietary interest in the land on which it stood. It might have been possible for an inference to be drawn of a common intention, promise or assurance given by the defendant’s father that if the house was built he would hold it on trust for his son and if asked he would convey the land to him and grant a right of way over the remainder of the family farm to enable the house to be accessed but it was not clear that any such argument was made before the judge and there was force in the interested party’s submission that she did not have any opportunity to address it. If the Crown’s submissions had been made in the court below they would have required the interested party’s clear assertions to the contrary to be challenged in cross-examination. The judge’s reference to the reaction of a bystander observing the situation was no basis on which to invoke the principles of a common intention constructive trust or of proprietary estoppel. Although the existence of that shared intention was to be deduced objectively from the words and actions of the parties the trust was not simply a solution to be imposed upon them and the first and essential element of a proprietary estoppel was a finding that a promise or assurance was actually given by the legal owner. A finding that it would be unconscionable for a promisor to renege on a promise, representation or assurance given in relation to property might give rise to an equity but it did not decide the remedy that should be granted by the court to address the unconscionability and do justice between the parties. There had been no evidence sufficient to support the judge’s findings and no evidence on which he might have reached similar findings by a different route. The judge’s conclusion that the defendant should be taken to have a proprietary interest in the house built on the land registered in the name of the interested party could not stand and had to be set aside. It would not be necessary to direct the case be heard afresh by a judge with particular expertise in property disputes and constructive trusts (paras 38–39, 42–45, 50–51).

Jones v Kernott [2012] 1 AC 776, SC(E) and Guest v Guest [2022] 3 WLR 911, SC(E) applied.

Inwards v Baker [1965] 2 QB 29, CA considered.

(2) A defendant who had been convicted in the Crown Court had a right to seek leave to appeal against sentence under section 9 of the Criminal Appeal Act 1968. Where a defendant appealed against a confiscation order the Court of Appeal (Criminal Division), upon quashing the confiscation order, had a discretion under section 11(3A) of the 1968 Act to direct the Crown Court to hear the matter afresh. Although the application of section 50(1)(ca) of the 1968 Act meant that an appeal under section 9 of the 1968 Act could not be brought solely in respect of a determination under section 10A of the Proceeds of Crime Act 2002, such a determination could be challenged as part of an appeal against a confiscation order. Since an appeal against a confiscation order might well include a challenge to a determination by the Crown Court of the defendant’s interest in a property, that determination might have been an important part of the court’s overall decision as to the defendant’s available assets and a factor in the computation of the confiscation order which was the subject of the appeal. Those provisions of the 1968 Act did not assist a third party with an interest in property who was aggrieved by the Crown Court’s determination of the defendant’s interest in that property. The relevant provisions in their case were in sections 31 and 32 of the 2002 Act. Notwithstanding that the defendant had a right of appeal under section 9 of the 1968 Act, the definition in section 31(5)(b) of the 2002 Act included a defendant. Section 31(5)(b) might provide a route of appeal for a third party who had or claimed to have an interest in the property concerned but there was nothing in it to exclude such a route of appeal for a defendant who faced a serious risk of injustice if effect was given to the Crown Court’s determination of his interest. The effect of section 50(1)(a) of the 2002 Act was that an appeal against a determination under section 10A was not an appeal against sentence and there was a procedural distinction between the two potential routes of appeal which were open to a defendant. An appeal against a confiscation order pursuant to section 9 of the 1968 Act had to be commenced by filing Form NG Confiscation Order whereas an appeal against a determination of interest in property pursuant to section 31(4) of the 2002 Act had to be commenced by filing Form POCA 1. Where, in the present case, the defendant made his application for leave on Form NG Confiscation Order and his grounds of appeal stated initially that the application for leave was being made under section 31(4) of the 2002 Act but in later submissions the application was stated to be under section 9 of the 1968 Act, the combination of the defendant’s appeal under section 9 and the interested party’s appeal under section 31(4) of the 2002 Act, together with the Court of Appeal (Criminal Division)’s powers under sections 11(3A) of the 1968 Act and section 32(2A)(b) of the 2002 Act enabled the Court of Appeal (Criminal Division) to make appropriate decisions and avoid unfair prejudice to any party. When hearing appeals brought under section 31(4) of the Proceeds of Crime Act 2002 the wide terms of section 32(2A) which permitted the Court of Appeal (Criminal Division) to make such order as it believed was appropriate extended to the making of an order remitting the matter to the Crown Court. That interpretation enabled the Court of Appeal (Criminal Division) in appropriate circumstances to ensure that all parties were able to have a fair hearing of complex factual issues which the Court of Appeal (Criminal Division) was not equipped to resolve. It needed to be borne in mind that a successful appeal by a third party intervener may have the consequence that the assets available to a defendant to meet a confiscation order were reduced, particularly if the defendant and third party advanced competing arguments. The Court of Appeal (Criminal Division)’s powers under section 32(2A) of the 2002 Act were to be distinguished from those under section 32(1) where if a prosecutor appealed under section 31(1) against the making of a confiscation order there was no power under section 32(1) to remit. In the defendant’s case, the confiscation order should be quashed and the Court of Appeal (Criminal Division) would exercise its power under section 11(3A) of the 1968 Act to direct the Crown Court to proceed afresh. Further, since giving effect to the judge’s determination would result in a serious risk of injustice to the interested party, in her case the court the court would exercise its broad power under section 32(2A)(b) of the 2002 Act by remitting the matter to the Crown Court for a fresh hearing (paras 54–64, 65, 68–71).

R v Pawelski (Simon) [2023] EWCA Crim 653, CA considered.

Tim Moloney KC (assigned by the Registrar of Criminal Appeals) for the defendant.

John Townsend (instructed by McNamee McDonnell Solicitors, Newry) for the interested party.

Paul Jarvis (instructed by Crown Prosecution Service, Serious Economic, Organised Crime and International Directorate, Proceeds of Crime Division) for the Crown.

Georgina Orde, Barrister

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