Appellant Respondent

William Boyce QC Andrew Mitchell QC

Joanna Martin Martin Evans

(Instructed by Smith (Instructed by Appeals and

Leaning) Reviews Unit CPS)

LORD NEUBERGER AND LORD REED: (with whom Lord Mance agrees)

1. This appeal raises a short point in relation to the Proceeds of Crime Act 2002

(“POCA”), namely whether, in assessing the amount of the benefit obtained by a

company for the purpose of a confiscation order, any Value Added Tax accounted

for and/or paid for to Her Majesty’s Revenue and Customs should be subtracted

from the turnover figure prior to any final calculation of the benefit. The appellant’s

arguments involve consideration of the VAT collection system, the interpretation of POCA, and the effect of article 1 of the First Protocol to the European Convention

on Human Rights (“A1P1”).

The factual and procedural background

2. In 1972, the appellant, Jack Harvey, established a company, JFL Harvey Ltd

(“the Company”), whose business was the hiring out of items of machinery. The

Company traded from premises in Cornwall, and at all times the appellant owned 98.9% of the shares, the balance being owned by his wife. The Company was registered for VAT, and its accountants ensured that the requirements of the VAT legislation were duly complied with by the Company.

3. Following an arson attack orchestrated by the appellant on premises owned by a competitor of the Company, the police raided the Company’s premises in May

2009, and discovered that a significant proportion of the items of machinery present had been stolen. The appellant was in due course convicted at the Truro Crown Court of nine counts of handling stolen goods and sentenced to 15 months imprisonment. (He was also convicted on a separate indictment of five counts of arson, for which he was sentenced to a consecutive terms of 12 years imprisonment. On appeal, the total sentence was reduced to nine years and six months.)

4. Following his conviction for handling stolen goods, there was a five day hearing before His Honour Judge Elwen, starting on 19 March 2012, pursuant to

section 6 of POCA. It was conceded on his behalf that the appellant had a “criminal

lifestyle” as defined by section 75(3)(a) of POCA. Accordingly, the judge had to

decide to what extent, if any, he had benefited over the relevant period from his

“general criminal conduct”, as defined by subsections (1) and (2) of section 76 of

POCA. As the appellant had been charged on 11 November 2009, the relevant period for the purpose of assessing the extent of his benefit began on 11 November 2003.

5. It was common ground that by no means all the items of machinery hired out by the Company were stolen, and the Crown…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading R v Harvey (Appellant)

Details

AGLC: R v Harvey (Appellant) [2015] UKSC 73
Case: [2015] UKSC 73
Decision Date

CaseChat Overview and Summary

In this case, the appellant, Jack Harvey, was convicted of handling stolen goods and arson. He appealed against a confiscation order made pursuant to the Proceeds of Crime Act 2002, arguing that Value Added Tax (VAT) which he had accounted for to HMRC should have been subtracted from the turnover figure prior to the calculation of the benefit obtained for the purposes of the confiscation order. The Supreme Court held that although VAT accounted for to HMRC should not be included in the assessment of the benefit obtained, the question of what to do if the VAT has not been paid or accounted for remains undecided. The majority of the court found that including VAT in the confiscation order would amount to double recovery and be disproportionate, while Lord Hughes and Lord Toulson dissented, arguing that VAT should be treated like any other tax or outgoing and disregarded in the assessment of the benefit obtained. The final orders of the court were to allow the appeal and to remit the case to the Crown Court for reconsideration of the confiscation order in light of the court's decision.

Orders