H
120060330
IN THE CROWN COURT AT MOLD
The Law Courts,
Civic Centre,
Mold.
Thursday, 19" April, 2007
Before
MR. RECORDER N. PARRY
REGINA
PROCEEDINGS
Transcript prepared from the official record by
Cater Walsh Transcription Limited
1" Floor, Paddinator
DY10 1AL
MR. S. AP MIHANGEL appeared on behalf of the Prosecution
MR. W. LLOYD JONES appeared on behalf of the Defendant
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Thursday, 19" April, 2007
MR. AP MIHANGEL: Your Honour, we thought it may be a good idea to call this
case on to explain to your Honour the stage where we're at.
MR. RECORDER PARRY: Do we need to translate what's being said at the
moment. Who represents SNE [Short conversation in Welsh between
His Honour and Mr. Lloyd Jones] I was just checking whether we needed to
translate anything as we go on but unless I'm told otherwise, carry on, Mr. Ap
Mihangel.
MR. AP MIHANGEL: Thank you very much your Honour. I thought it would be
prudent or the Bar thought it would be prudent just to explain to your Honour as a
matter of courtesy where we're at. There are ongoing discussions. I haven't
communicated with my learned friend the extent of what’s being discussed at the
moment but I don’t think we’ll be in a position to agree anything as it stands at
the moment, I’m still waiting for another telephone call to come through. Your
Honour may not have and it will be handed in in due course a second
prosecutor's statement which is only dated yesterday which sets out the revised
figures put forward by the Post Office. As it stands currently the total benefit is
assessed at £82,285.96 and that is made up as follows. The sum which
appeared in the indictment is £48,454.87, taken together then with the ----
MR. RECORDER PARRY: Increase in the value.
MR. AP MIHANGEL: Increase in the value by way of interest is £3,306.80.
MR. RECORDER PARRY: 80.
MR. AP MIHANGEL: 80. This may be an aspect, the second limb which makes
it up to the 82, which we may need your Honour’s assistance. Your Honour may
well have read in the other statement report and it is simply mirrored in this new
report that the sum of £28,519.76 was in fact salary paid to the defendant and I'l
call him the defendant, he’s in fact the respondent, during his period of
employment. It's a novel argument that’s put forward but it's in these terms, that
if the Post Office had been made aware of his offending conduct then under his
contract he would not have been paid his wages and it is argued therefore that
he has benefited by virtue of receiving his salary during the offending period
which totals the £28,000. That may be an aspect which we will ask your Honour
to adjudicate upon, I don’t think we're going to be in any position to agree that.
There is a case which we're still considering. It is the case of Carter in the Court
of Appeal reported in 2006. It deals with the old legislation under the Criminal
Justice Act 1988 but the test is more or less the same. If a person benefits from
an offence, if he obtains property as a result of his conduct then that is assessed
as being a benefit. The test is more or less the same under the .....
MR. RECORDER PARRY: As the current test.
MR. AP MIHANGEL: ..... Proceeds of Crime Act.
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MR. RECORDER PARRY: Yes.
MR. AP MIHANGEL: If it is then to be considered that it is a benefit to an
individual in receiving money he wouldn't otherwise have received because he is
offending, then it is certainly arguable that he has benefited from that salary, in
which case then the benefit of £28,000 is something to be considered and also
the interest or the increase in that.
MR. RECORDER PARRY: Just for finality. The increase on the 2851?
MR. AP MIHANGEL: Is £2,004.53.
MR. RECORDER PARRY: Which gives us the £82,000?
MR. AP MIHANGEL: £82,285.96. Now I may be speaking out of turn but ! don’t
think we’re going to be arguing over the 48,000 and the 3,000 which takes it up
to something like 51,700. There may be an argument then as to the remainder,
the 30,000 which we [inaudible] but I thought we'd just canvass this with your
Honour at this stage just as a matter of courtesy to explain where we’re coming
from. So it -----
MR. RECORDER PARRY: This is a case, forgive me for interrupting, this is a
case where it is a lifestyle offence but the Crown take the view don’t they that the
assumptions shouldn't be made in this case, it would be unjust to do so and I
think that’s perfectly proper. So it’s the benefit from the conduct as you say, the
certain one which is the 48,000 .....
MR. AP MIHANGEL: Certainly.
MR. RECORDER PARRY: ..... and then the lesser. Yes?
MR. AP MIHANGEL: So that’s the benefit aspect of where we're at. If of course
your Honour finds that that is then the case we move on to consider the
realisable assets.
MR. RECORDER PARRY: Yes. So the recoverable amount obviously equates
to the benefit and then we want to see what's the available amount and here we
come to the .....
MR. AP MIHANGEL: To the crux.
MR. RECORDER PARRY: ..... crux of the matter where the property in Anglesey
increases at the dramatic rate referred to in the Crown's papers. This is the nub
of it isn’t it. I doubt if Anglesey has increased in value by that rate.
MR. LLOYD JONES: I'm sure we all wish it.had.
MR. AP MIHANGEL: Well, certain individuals in this court have certainly
benefited from it if that’s the case. But be that as it may, we now have a new
valuer’s report served on us Tuesday of this week which values it at £120,000.
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MR. LLOYD JONES: Can I take it - - has your Honour in fact had that?
MR. RECORDER PARRY: No. As I said before this morning, we mentioned it in
your absence. It's just simply because I enquired. I didn’t have the second
affidavit nor have I the valuation. I have the letter from your instructing solicitors I
think of the 29" March explaining the difficulties but nothing since then.
MR. LLOYD JONES: We have a copy of the letter that was sent. It has been
sent, it probably hasn’t been tied up. Can we provide your Honour with another
copy?
MR. RECORDER PARRY: Thank you. [Handed]
MR. AP MIHANGEL: The relevance of this is that we’re more or less now singing
from the same hymn sheet in that the property is now valued at £120,000. The
Post Office's approach and I say this now and it’s not meant in any way to be
discourteous because I was taking instructions as we were called on, I was
invited to consider another figure by my learned friend. May I make it clear that it
is the Post Office’s position that if 120 is the value then that’s what we’re working
from.
MR. RECORDER PARRY: And are we then talking about a tainted gift situation?
MR. AP MIHANGEL: Indeed. The test is -----
MR. RECORDER PARRY: And we're talking 20,000?
MR. AP MIHANGEL: Indeed. The test, forgive me for interrupting, the test of
course is it has to be significantly less and percentage wise 100 over 120
multiplied by 100 of course gives us 87% so it's been sold at 13% under value,
market value. I think it’s important to put it in percentage terms because if we
were talking about property worth half a million pounds and £20,000 was the
difference it may not be considered to be significantly less, but we’re only talking
about 100 and 120 here and so it's a difference of 13% and in those
circumstances we maintain that that is significantly less. The other figures -----
MR. RECORDER PARRY: Again, forgive me. Let's take this. The benefit is
£82,000-odd, maximum. The recoverable amount, let's say for a moment it was
that, and we're talking about the available amount. The house of course is no
longer owned by the respondent.
MR. AP MIHANGEL: Owned by his son.
MR. RECORDER PARRY: Owned by his son, and the other assets, save for the
house?
MR. AP MIHANGEL: The assets then would be £1,500 from Norwich Union, that
is an annuity. My investigating officer, who isn’t present I hasten to add but is the
other side of a phone so I'm taking instructions throughout, he has
communicated with Norwich Union and they have said that if the court were to
order the release of that annuity, tax having been paid and all other liabilities, the
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estimated realisable sum would be £1,500, so that is another available asset. In
addition, there is the Alliance and Leicester current account. It currently has
£4,800 or thereabouts, £4,812.04. From that is to be deducted the sum of
£2,835.12 because that would be a sum due to the wife when the Phoenix Life
Insurance was surrendered, which leaves us a rough and ready figure of just
below £2,000.
MR. RECORDER PARRY: And what's the Crown’s position regarding the
property being in the name of the respondent's son?
MR. AP MIHANGEL: That's a tainted gift and that was under-sold with a view to
escaping liability for these proceedings.
MR. RECORDER PARRY: And the consequence of that would be?
MR. AP MIHANGEL: We would be due half, if it’s in joint names and it was in the
joint names, we would be entitled to half the £20,000 plus the increase in value
of the tainted gift as well.
MR. RECORDER PARRY: But the available property clearly wouldn't be
affected by the value of that property.
MR. AP MIHANGEL: No but the point is this, it shouldn’t have been sold in the
first place.
MR. RECORDER PARRY: No, but it has been.
MR. AP MIHANGEL: But the point there is it wasn’t properly sold and so efforts
must be made to find the available assets.
MR. RECORDER PARRY: I'm not saying that but this is not a case where a sale
of that property could be ordered. That's the point I'm making.
MR. AP MIHANGEL: No, no, but I’m afraid to say it’s a position of the defendant
is found to have sold it in those circumstances the onus is on him otherwise there
would be a period in custody in default. But there is also the increase in value of
that tainted gift as well. So hopefully your Honour ----
MR. RECORDER PARRY: That's helpful. Mr. Lloyd Jones?
MR. LLOYD JONES: Yes. Your Honour, can I hand in the report and the second
statement and on top are copies of the covering letters to prove that they actually
have been sent to the court. It matters not, it wouldn’t take a moment for your
Honour to read them because your Honour now knows the point. If I can recover
those letters. Your Honour will see that they have been sent on the 12 Mand 16"
I think of April. [Handed]
MR. RECORDER PARRY: Yes.
MR. LLOYD JONES: Your Honour, can I deal with these matters very very briefly
by way of an opening shot. I had hoped to persuade my learned friend that he
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ought to be concentrating on the indictment figure because what happened in
this case of course is that the defendant was originally charged with theft. The
Crown eventually accepted on an agreed basis which your Honour has in the
papers .....
MR. RECORDER PARRY: Yes.
MR. LLOYD JONES: ..... a plea of guilty to false accounting so it then becomes
a question of the benefit and of course there was, because of the way the
defendant acted, a deferment of the payment of the money and it’s in that way
the Crown say that the forty odd thousand is benefit. Now, the likelihood is that
we won't argue against that.
MR. RECORDER PARRY: No.
MR. LLOYD JONES: And the way that your Honour has viewed it I’m sure will
understand why the defence might take the view that it’s not proper to argue
points which are really unarguable. Now the question of the salary on the other
hand is a different matter in the sense that the Crown never charged him with
obtaining by deception. Now, I asked my learned friend whether there were
authorities and my learned friend has been able I think through the good services
of the officer to provide me this morning with this - I’m not complaining in any
way, I’m simply setting out the facts. I've been able to read part of it. Now this is
a case and I'll read the rest of it in a moment if your Honour would be good
enough to grant us the time, but it does rather appear that in this case there was
an actual charge of obtaining pecuniary advantage by deception because it looks
from what I've read quickly so far that the defendant or one of them in this case
certainly had been in paid employment and therefore a salary through that
employment as a result of lying, as he accepts, so my learned friend needs to
reflect on that. I point that out ----- .
MR. RECORDER PARRY: You draw that distinction between that case and this
because of the circumstances.
MR. LLOYD JONES: Yes.
MR. RECORDER PARRY: On that authority.
MR. LLOYD JONES: For my learned friend to deal with that as He thinks fit.
Now when one comes to the question of realisable assets, the defendant is 60
years of age, he’s now getting a tiny pension from his Post Office salary, he’s
been working in the Post Office for many, many years and it is small, there is this
tiny annuity which is coming his way. Now, if my learned friend's instructing
solicitors have made these enquiries and Norwich Union say that it can be
realisable then so be it, there’s nothing I can say about that. If that turns out at
any date to be wrong the matter can be mentioned and the order amended.
MR. RECORDER PARRY: And if Norwich Union are right, there’s nothing I can
do either, is there?
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MR. LLOYD JONES: Exactly. And when it comes to the question of the Alliance
and Leicester, well there's a joint account, there’s £4,000-odd in it, my learned
friend very fairly has agreed because some, fairly recently money from the
Phoenix Insurance Company was paid in but some of that related to the wife, that
that can be knocked off, then there’s nothing I can say, it’s a fair compromise.
MR. RECORDER PARRY: Yes.
MR. LLOYD JONES: Now when it comes to the question of the house, these
matters very rarely come before the court thankfully and when they do they settle
and therefore many cases which are by way of application don’t necessarily
come to the attention of either the judiciary or the practising legal
representatives, but the question is has there been a transfer for a consideration
that is significantly less. It’s not less, it is significantly less and that’s the test. If
there is then the court has to work out the difference and in this particular case,
because it’s jointly owned, whatever the difference is it then has to be halved
again. There is a complicating factor in this case in that the defendant and his
wife had very very substantial debts, in fact £100,000 didn’t even get rid of the
legal expenses and the secured charges, the defendant had to give his solicitor
more money to clear the rest of that off and he’s still left with the best part of
about £50,000 worth of debt insecured. Now what we've done is, your Honour
may not have or perhaps your Honour does following the sentencing hearing, the
completion statement.
MR. RECORDER PARRY: What I have is a completion statement regarding the
sale of Derwen Post Office which shows a balance due from the respondent of a
little in excess of £900.
MR. LLOYD JONES: Yes, that’s right, that’s what I’m referring to. So your
Honour has it already.
MR. RECORDER PARRY: Yes.
MR. LLOYD JONES: We have been wondering where that document was and
we've got a replacement but it’s been there clearly since the sentencing hearing.
Now, what we've done is, we've had it valued, we’ve got the expert here, Mr.
Dafydd Rowlands from Morgan Evans and Co., and we've been able to discuss
matters with him and I’ve also said to my learned friend that my learned friend is
quite at liberty to speak to the expert to try and sort this out. Now, the simple
point it is this. 120 is the paper valuation, yes. What do you if somebody turns
up and offers say 5% less or 10% less, is that reasonable and the answer is
clearly yes it is reasonable. If the property hadn't been sold in this way the
chances are that eventually it would have been dragged into the reckoning by a
civil court or by your Honour or one of your Honour’s brothers sitting in this court
and it could have been in the end a false sale and the court really has to take all
these matters into account.
Now these are the matters that really I've been asking my learned friend to reflect
upon with those who give him instructions as to whether or not one really ought
to take the 120,000 or to look at the realities of life, because the simple fact is
that if this property hadn’t been sold because of the dire financial position the
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defendant was in he was not able to pay the mortgage and therefore the interest
was going up and up and up, so whatever less there would have been of the sale
proceeds to some extent would have been offset by the increase in interest paid
to the financial institutions which were secured on the property and what I’ve
been asking my learned friend to do is really to reflect upon all these matters
because in the end the court has to be left with two columns, benefit and
realisable assets and that's where it comes into it. There has to be a certain
amount of give and take and common sense in these circumstances and what I
think my learned friend and I would like to do if we can is to reflect on this case to
see whether my learned friend has a point at all about salary and also to see
whether we can deal with the question of the house.
Now Mr. Rowlands is here. If we can't deal with the matter relatively quickly I
know he has another commitment in Anglesey where he has to be I think at the
latest about 3 o'clock and if we end up having to in any way contest this matter
then I would ask certainly that he gives his evidence before lunch so that your
Honour will have heard what he has to say and he can go on his way.
MR. RECORDER PARRY: Well we'll certainly accommodate that.
MR. LLOYD JONES: I’m grateful.
MR. RECORDER PARRY: What I’m going to do then is to adjourn this matter
until a quarter to 1. Hopefully that will if necessary allow us to hear from Mr.
Rowlands if I feel that’s necessary.
MR. LLOYD JONES: Yes. Now I know that your Honour wouldn't in any way
give any final indications but my learned friend has very fairly if I may say so laid
out his stall, I have I hope equally fairly set out some of the arguments that can
be advanced. I don’t know if any of these matters in any way as far as your
Honour is concerned are matters which your Honour would feel able to say
anything that would assist the parties because clearly this test of significantly
less, when one puts into the equation the question of would it be unreasonable to
accept a bit less as one does in the market place and still fall foul of significantly
less and what I'm talking about there is a percentage reduction for a quick sale,
whether those are matters which your Honour feels the Crown ought to have
regard to. If they are then it would no doubt assist my learned friend in his
discussion perhaps because he would know where he stands.
MR. RECORDER PARRY: Was the valuation prepared in the context of and with
the benefit of knowing about the history, the opening of the other shop, the
opening of Post Office facilities at other premises? Were they factors that
Morgan Evans and Company were aware of?
MR. LLOYD JONES: As I understand it, it's a bricks and mortar valuation but I'll
check. Bricks and mortar excluding any business value to the property. To assist
your Honour on that and I'm doing this now from memory, the property was going
to be sold a considerable time previously by other agents that your Honour has
seen mentioned and what my instructions are are to this effect, that it would have
been bricks and mortar plus an increase for the goodwill based really on how
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much money was coming in from the Post Office salary which if I remember
correctly was a factor of about 2’ --—--
MR. RECORDER PARRY: Yes. It came to 70,000. It was 70,000 and the
calculation was that due to the delay, due to the opening up of competition, that
was then discounted and it left in the region of 115 to 120,000.
MR. LLOYD JONES: Your Honour has that from the defendant’s own
statement?
MR. RECORDER PARRY: Yes.
MR. LLOYD JONES: So that’s the position. It’s whether the Post Office really
ought to be in pursuing this case fairly to be sticking to a paper figure or whether
they ought to be using a modicum of reality is really the way I put it. Now I don’t
know if your Honour has -----
MR. RECORDER PARRY: Well I’m bound to say my preliminary view was and
it’s a preliminary view only that I agree with Mr. Ap Mihangel that the relevance of
the salary is indeed a novel argument, it's not an argument that I had anticipated
and I'll take some persuading in respect of that argument. I did have a concern
regarding the tainted gift. Having said that, I’m almost certain that the reality is
that if somebody advertised a property on the market for 120,000 they'd accept
110. Those are the kind of figures that I had marked down but as I say I didn’t
have the valuation but I did have Mr. Thomas’ first statement.
MR. LLOYD JONES: Yes.
MR. RECORDER PARRY if that's of any assistance, those are the views I
formed before hearing any representation.
MR. LLOYD JONES: No, of course. That's helpful because of course we've
invited them with a view to try and sorting out what is clearly a difficult situation
and I’m sure we both understand that those are preliminary views without hearing
full arguments. Now when it comes to the question of where we go from here,
we would value a few minutes to consider those and we don't -----
MR. RECORDER PARRY: Well, can I say this. First of all, can I thank Mr.
Rowlands for attending court, it’s extremely helpful and I know that efforts had
been earlier to value this property and you were hindered through no fault of your
own. I certainly am quite content if Mr. Ap Mihangel - - for you to be released to
attend on other business. In those circumstances, I’m here all day and at your
convenience. I think if we are to have a hearing about this matter, a decision
needs to be made by no later than 2 o'clock, I'd commence a hearing at 2
o'clock. I have another matter as well which is at a similar stage, possibly not as
advanced.
MR. LLOYD JONES: Now if you need to hear Mr. Rowlands then we'll do that at
a quarter to.
MR. RECORDER PARRY: Yes.
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MR. LLOYD JONES: I'm grateful. Thank you very much indeed. In terms of
other pieces of paper, I’m sure your Honour probably has the others by
implication from some of the matters your Honour is saying. Sometimes matters
don’t through no-one’s fault don’t tie up. There are many files in this building,
there have been many upheavals recently if I can put it in those terms.
MR. RECORDER PARRY: I think I have everything I need.
LATER
MR. AP MIHANGEL: May we thank your Honour for the time and the kind
assistance provided before hand. May I make this position clear. I think we may
be in a position
MR. LLOYD JONES: I’m taking final instructions before my learned friend says
anything. It may well be that we will be able to deal with the second aspect of the
case, can we put it in those terms.
MR. RECORDER PARRY: That is the tainted gift aspect.
MR. LLOYD JONES: Yes and the other assets.
MR. RECORDER PARRY: Which then leaves the quest ion of the salary.
MR. LLOYD JONES: Yes.
MR. AP MIHANGEL: And on that point we appreciate and have taken on board
your Honour’s comments. We would simply ask for a determination because
otherwise, if we’re simply going to be accepting the point, it will keep cropping up
for the Post Office in later cases and -----
MR. RECORDER PARRY: It’s not, I can tell you now that it’s not an improper
application.
MR. AP MIHANGEL: Well, I'm grateful for that.
MR. RECORDER PARRY: It is appropriate in certain circumstances and the
provisions do in fact make it quite clear that if I was to find that the salary was the
benefit of the criminal conduct, the court wouldn't in fact have the discretion to
reduce that to reflect that which was honestly earned and so clearly it is an
application that’s always properly put before the court for consideration but I think
it always will have to be decided on it's individual facts but I certainly don’t think
that I would, not that I would be able to in any event, but I don’t think I'd be able
to establish or would want to establish any principle. It couldn’t be put forward as
a matter for consideration because clearly it can.
MR. AP MIHANGEL: Yes. I'm most grateful for that indication. As I said, all we
would simply ask is then and I think I dealt with them in broad outline in any
event moments ago but we’d simply ask for a determination of that one point. It
would assist others, I think your Honour would understand, in due course if that
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were to be the case. If we could do that now, deal with those essential features,
ask your Honour to determine that, then I think we're going to be in a position to
agree the benefit figure and then we can move on and then instructions can be
taken I think as to the realisable assets.
MR. LLOYD JONES: I don’t want to appear awkward but I need to sort out the
realisable assets and get final instructions because if that’s sorted Mr. Rowlands
can then go and your Honour will understand he has to get to Anglesey.
MR. RECORDER PARRY: Yes. I’ve already made it clear that -----
MR. LLOYD JONES: What I would ask your Honour to do if it is at all possible is
to let me deal with this now in the next few minutes, then perhaps at 2 o'clock
deal .....
MR. RECORDER PARRY: Come back and deal with all matters.
with the arguments because it’s not going to be a very
Can we ask that, simply in the interests of Mr.
MR. LLOYD JONES:
long argument at 2 o'clock.
Rowlands.
MR. RECORDER PARRY: Yes. So you're asking me to rise?
MR. LLOYD JONES: Please.
MR. RECORDER PARRY: You don't want me back before 2 o’clock?
MR. LLOYD JONES: I'm going to ask your Honour to rise for a moment so I can
take just final instructions in privacy, if we need to call Mr. Rowlands he’s still
here, so just to rise literally for a couple of minutes.
MR. RECORDER PARRY: I'll wait for your call.
MR. LLOYD JONES: Yes, thank you very much. We're very grateful.
LATER
MR. AP MIHANGEL: I think we’re going to be in a position to agree matters.
May I just as a matter to save a little bit of public funds, I don’t think we'll be
needing the translators any further and they can be released.
MR. LLOYD JONES: I agree with that. The only matter they were to deal with
was the evidence of Mr. I and in the circumstances it won't be necessary
for him to give evidence.
MR. RECORDER PARRY: [Translators spoken to in Welsh] I’ve just thanked
the staff for coming to assist the court and made the point if they hadn’t been
here we wouldn’t have been able to start and make any progress. Thank you
very much indeed.
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MR. LLOYD JONES: Can I deal your Honour, if your Honour will forgive me just
without notes now in round figures deal with it in this way. We've now sorted out
the realisable property and it is, following the enquiries made by my learned
friend, £1,500 from the Norwich Union and if that turns out not to be correct or if
there's any problems with it then clearly the matter can be mentioned at a later
date because otherwise it would be quite wrong for the court to make an order
that he has to pay money which it turns out was never available. Now the next
matter is the Alliance and Leicester account. In round figures it's £2,000 - we'll
work out the exact figure in a moment - and that is a figure that’s been arrived at
by my learned friend after giving credit for Mrs. [EE Phoenix Life Insurance
policy, whatever one wants to call it, that's been paid into the account. Now as
far as the house is concerned, the figure has been compromised because these
matters are matters of art rather than science as the valuer pointed out, £6,000,
in other words 112. Can I say that we're very grateful that your Honour felt able
after hearing short argument to say something that enabled my learned friend to
take realistic instructions and as I say it’s a satisfactory compromise.
MR. RECORDER PARRY: So that’s a half of 12 which reflects Mr. [J
interest, excludes Mrs. Thomas’ interest.
MR. LLOYD JONES: Yes. So in round figures -----
MR. AP MIHANGEL: Well, there’s the 119.76 which is the increase in value of
that is 112 -----
MR. LLOYD JONES: Yes, there'd a tiny bit of interest.
MR. AP MIHANGEL: The interest then on 6 has been calculated at £119.76.
MR. LLOYD JONES: Well, I can’t argue with that because it’s clearly right. So
that deals with all those matters. Now, we're then left with the legal argument.
Now I've read most of that authority now, I haven't read all of it. Your Honour
had said 2 o'clock and I'm afraid I took that as read that it would be 2 o'clock.
Now, I’m in your Honour’s hands.
MR. RECORDER PARRY: No, 2 o'clock, unless that causes Mr. Ap Mihangel
any difficulty?
MR. LLOYD JONES: I think he was here for the day so I don't think it does
although he may ----
MR. RECORDER PARRY: I'll need a copy of the authority to consider myself
and I'm sorry it's [spoken in Welsh]
MR. LLOYD JONES: Your Honour will see from that that it’s another case on its
own facts but there actually is a charge there of obtaining.
MR. RECORDER PARRY: So 2 o'clock. [Speaks in Welsh] Be back by 2
o'clock.
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MR. LLOYD JONES: Your Honour I don’t imagine the legal argument will take us
probably more than a quarter of an hour in total and by then we’ll have worked
out the exact figures on the Alliance and Leicester.
- Mid-day adjournment -
MR. AP MIHANGEL: May I thank your Honour for that additional time. We're
now in a position to proceed to the full hearing. May I just pause for a moment. I
think I’ve left my actual papers next door but I can work without them.
MR. RECORDER PARRY: Do you need a moment, Mr. Ap Mihangel? It’s no
problem.
MR. AP MIHANGEL: I’ve brought the wrong papers but it doesn’t matter. We've
provided your Honour now with the available assets. I think we'll be able to
provide you with a proper figure in due course.
MR. LLOYD JONES: Yes.
MR. AP MIHANGEL: I’m grateful to my learned friend for that and I indicated
before lunch that the only issue which remained to be resolved by your Honour
today is that second aspect of the benefit figure. The investigating officer,
Michael Matthews, has provided in his statement to the court and may I refer
your Honour to that. It is the original statement that your Honour has before you I
suspect.
MR. RECORDER PARRY: 16" January '07?
MR. AP MIHANGEL: May I just hand in the April one which has been shown to
my learned friend and page 2. [Handed] May I just refer to page 2 of that. It’s
not necessary your Honour with respect to go through it all with you because
we're now going to be in a position to resolve the rest of it but your Honour will
see the first page deals with the total at 82 or thereabouts with 48 being the
figure which reflected the indictment, and over the page then at paragraph 2.5 at
page 3, the sum of 28,519.76 which I will loosely label remuneration. It is
essentially the salary that he received. It is calculated between October 2004
and October 2005, a period of 12 months which reflected what was in the
indictment. This would have been money received by this respondent as part of
his salary. Paragraph 2.4 makes it clear that had the Post Office been aware of
his criminal activity, that is to say his false accounting from an early stage, so for
example if they had been told in October 2004 or November 2004 of such an
activity then of course under the terms of his contract they could have dismissed
him or dealt with him in another way.
MR. RECORDER PARRY: They could have offered help.
MR. AP MIHANGEL: Indeed, or another means of resolving the situation. By
remaining silent and continuing the offence of false accounting he compounded,
the respondent that is, his own situation. In other words it is the Post Office’s
case or the Crown’s case on behalf of the Post Office, that he was essentially
benefiting from his criminal activity, the criminal activity being the false
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accounting. The benefit is that he was receiving a salary. Had he not have been
conducting this criminal activity he would not have received a salary.
MR. RECORDER PARRY: Had he not been conducting the criminal activity he
would not have received a salary?
MR. AP MIHANGEL: Sorry.
MR. RECORDER PARRY: If it was known.
MR. AP MIHANGEL: Yes, if it was known and it is on that basis your Honour, as
can be seen from paragraph 2.5 that this money would not have been paid had
the Post Office been aware of the true facts in this matter as the defendant's
contract to provide services would have been suspended and the officer has
quite helpfully then provided a schedule setting out the money owed. So that is
essentially what is being asked. I'll develop the point a little further if I may but
that is essentially what it is that we suggest and submit at this stage.
The law, I've already dealt with that briefly with your Honour before hand. The
case of Carter in fact deals with the old law but it more or less in my submission
mirrors -----
MR. RECORDER PARRY: Well it quotes an identical test, doesn't it?
MR. AP MIHANGEL: Indeed it does and so I don’t propose to go through that
and I know your Honour is well versed with what it is that must be satisfied. If
there was criminal activity has there been a benefit, if there is a benefit then an
order can be made or should be made in fact. The case which is before the
court of Carter I accept is different in its consideration so far as the offences are
concerned, namely that the defendants in that case were charged with obtaining
a pecuniary advantage by deception. However, the principle as set out in that
case remains a feature which in my respectful submission can be applied to any
case and it must be decided on its own merits. Paragraph 25 of the case of
Carter, I shall quote it in its entirety, it’s only three sentences:
“In our judgment section 71 is clear. The benefit is not receipts, it is
not net profit, nor is it the sum after distribution, nor is
it the sum
after sharing it with others. It is the amount obtained. A
person who controls the funds in a bank account has
obtained them.”
That's essentially a quite obvious point. The point I think of this argument is
whether or not it can be considered a benefit because otherwise, if it is to be
considered a benefit, it must follow that that benefit, sorry, the salary was as a
result of the benefit and if that’s the case it was inappropriately obtained.
Paragraph 39 touches on the point in this case. It is dealing there with the offer
of an employment and it says:
“Once made it continues to have an effect throughout the
employment which has been taken up.. At any stage had the
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representation been correct it is plain the employment would have
ceased. Although the question as formulated in the case of King
was directed towards a different statutory provision from the one
which we are considering, namely whether or not the benefit was
obtained, the formulation of the question in our judgment is
nevertheless apt. Substituting benefit for property the question is
this: was the deception an operative cause of obtaining? In our
judgment the answer to that question is plainly ..
So that was their conclusions in that case but the test nevertheless is, was the
deception an operative cause of obtaining and with respect I think that is the
approach which your Honour has to adopt today and so with that test in mind let
me conclude the Crown's position in this way. Had this respondent made his
position known at an early stage rather than compounding the situation and
remaining silent for a period of 12 months, the salary which he has received
would not have been paid either in full or in part. If that is the case and your
Honour is satisfied that that is the case, then in my respectful submission he has
benefited from his criminal conduct, namely the false accounting and if that is so,
either in full or in part, the Post Office would be entitled to the full remuneration
as set out. I don’t think I can take it much further. Those are my submissions.
MR. RECORDER PARRY: Very concise and very helpful, Mr. Ap Mihangel,
thank you? Mr. Lloyd Jones?
MR. LLOYD JONES: Your Honour, earlier on this morning my learned friend told
your Honour that there was a novel point that he was going to raise with your
Honour. If one stands back for moment and considers why is it a novel point, the
answer in my submission is blindingly obvious. It's a novel point because there’s
no merit in it. It's not something that happens in the courts. Can I your Honour
for a moment invite your attention to examples. Take the example that happens
all too often of a postman who over a period of years helps himself to parcels
which look like birthday cards or Christmas cards and the like and he quietly
removes them and takes home and helps himself to the contents and he does
that over and over and over again. These cases come two years, three years
and then one day some little thing alerts somebody to carry out a check and they
find a whole mountain of things, usually in the attic or somewhere like that. If my
learned friend is right it would mean that that postman, once a Proceeds of Crime
application was made in respect of the benefit that he’d had from the theft, could
then go on to find the earliest date of the earliest letter and ask for all his salary
back. It doesn’t happen. It doesn’t happen because the legislation doesn’t go
that far and wasn't intended to go that far.
Take another example, bringing it closer to home. The lady who works behind
the till who helps herself over a period of years to money. The shopkeeper
always suspects that there's money going missing but he can't prove it and then
a camera is installed and one day the employee is found to be taking something
from the till. That's another example. Do we ever hear of applications of this
kind being done? The answer is no.
The person who works in a warehouse, similarly, sometimes very very expensive
equipment is taken from warehouses. Your Honour knows exactly the sort of
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cases I'm talking about, electrical items and things happen, other people get
involved, a conspiracy to steal and so on. There’s benefit. Do they ask for the
salary back? The doctor who perhaps prepares false prescriptions and sells
them. Is he ever asked after a period of time to pay his salary back from the
National Health Service. I can’t think of a single example, I’m sure your Honour
can’t either. It's novel. It's novel because it goes further in my submission than
the legislation in any way ever envisaged.
Your Honour, can I deal with general matters. The defendant pleaded guilty to
false accounting. The charge of theft was not proceeded with, no evidence was
offered and a not guilty verdict was entered, there was a basis of plea and all
matters were dealt with in that way. As far as the benefit flowing from the false
accounting is concerned, there’s no issue about it. What he did was to cover up
those losses which were in the till. How can it be said that his salary flows from
that particular offence? His salary was paid to him as a result of his contract of
engagement. The benefit to him comes from the contract, it does not come from
the offence.
My learned friend says oh, if we’d known the full facts then we’d have suspended
him and matters of that kind. In my submission, that is to miss the point, it’s to
look at it from the wrong point of view. In my submission the court ought to be
looking at it from this point of view. Where does his salary come from, why is it
paid? It’s paid because of the contract. It’s not paid because of the false
accounting. It's not a benefit that comes because of the offence of false
accounting. In any event, your Honour, your Honour may have the indictment
and may have seen count 2 on the indictment, the particulars of which relate to
the way that he would falsify entries on a particular weekly document. I’m afraid I
don’t actually have a copy of that count in front of me now but that’s the
recollection
MR. RECORDER PARRY: I’ve seen count 2.
MR. LLOYD JONES: Yes. There we are, your Honour has seen it and therefore
will recall that what I’ve said hopefully is correct. Is the court to have a situation
whereby the court has to examine, well, what documents were falsified? On
what particular day? Was it one day each week? Is the court then to apportion
matters relating to his salary. If it happened on a Wednesday, is it only to be the
salary for the Wednesday that is to be taken into account. These are questions
which are real questions which would flow if my learned friend’s argument is
right. There has to be a limit to it and in my submission the legislation entitles
your Honour to make a benefit figure relating to the amount to which the false
accounting relates and no more. That's the reason it’s a novel point, because it
simply isn’t done.
Now, could it have been done? Well, each case as your Honour very rightly in
my submission put it earlier on turns on its own facts. The case that my learned
friend relies upon is an entirely different case. That is a case in which it seems
from my reading and understanding of it that there was a conviction for obtaining
a pecuniary advantage by deception. If! can for a moment invite your Honour's
attention to paragraph 6 in the report, where it says this. The defendant in
question was convicted of an offence of obtaining pecuniary advantage by
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deception and then sentenced. The case then deals with money laundering.
Paragraph 7:
“The central allegation against him was that he, being a person not
entitled to work, had obtained employment by deception namely
that he was entitled to work.”
This is an entirely separate case because the fact is that Mr. Hl had been a
good and faithful employee of the Post Office for many, many years. He did not
obtain his employment by deception, he was an employee who because of
matters which he simply still cannot explain found the till was down and then hid
what was going on. It’s an entirely separate case to a case in which perhaps he
had lied to get his job and then having got the job then plundered the till. In
those circumstances the prosecution would have been entitled to have charged
him of simply with theft or false accounting in the alternative but also a charge
relating to the actual obtaining of the employment itself. That’s the reason why
cases like this in my submission do not come before the court. The prosecution
are trying to force a legislative square peg into a round hole and it simply won't fit
in the circumstances of this case and that’s the way in which I put it. Your
Honour, I don’t think that I can assist further without going into repetition because
in my submission it’s an application without any merit whatsoever although in
some cases on particular facts it might be but not this one. Can I assist further?
MR. RECORDER PARRY: I'm very grateful, thank you. Well I’m asked to
determine whether the salary of the respondent earned during the period of the
commission of the offence admitted on the 29"" September 2006 and for which
he was sentenced on the 6" November 2006 should be included as benefit
derived from his particular criminal conduct. I think it’s right to put on record that
although this offence falls strictly within the definition of criminal lifestyle offences
I do, as I’m very reasonably invited to do so by the prosecution, agree that to
deal with it in such a manner would pose a serious risk of injustice and as invited
by the prosecution I limit myself to considering the benefit derived by the
respondent from his particular criminal conduct. The relevance of the salary of
course is the fact that he was in the employment of Royal Mail, the victims of the
crime, during the relevant period and in certain cases it is entirely appropriate it
appears to me that the respondent's salary in a similar position could be a
question for consideration.
I must be satisfied on the balance of probability that the respondent's salary was
obtained as a result of or in connection with criminal conduct. I’ve been helpfully
referred to the case of Carter and have regard to it. That's a case under the
Criminal Justice Act 1988 and not the Proceeds of Crime Act, 2000 and I
distinguish that case on its facts from this particular case due to the fact that the
salary of the defendants in the quoted case were in fact the subject matter of
specific charges and therefore it appears to me indisputably they were obtained
as a result of or in connection with the particular criminal conduct. The salaries
referred to in those cases were the direct benefit of the charges.
The test that I apply in this case is, was the deception the operative cause or an
operative cause in the obtaining by the respondent of his salary. As I made clear
throughout I take the view that these matters must be decided on their unique
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individual facts, and having read all of the papers and in particular having regard
to everything I have read about the respondent, the unique particular facts of this
case undoubtedly are that for many years, including the year of the commission
of the offence, the respondent provided a high quality, highly regarded service to
his employers, its customers and the community that it served and that his salary
was derived from those services and not as a result of or in connection with the
fact of his criminal conduct over the particular 12 months and for those reasons
it's my determination that the salary should not form part of the benefit by the
respondent as a result of his particular criminal conduct.
MR. LLOYD JONES: As far as the figures are concerned, I’ve worked it out on
the papers, I don’t think my learned friend has the statement in front of him now,
but it’s £1,500 from the Norwich Union, 1976.92 money from the Alliance and
Leicester after deducting the figure that’s owing to Mrs. MEE There's then
the £6,000 and the interest, I think my learned friend has the figure for that, it
was a hundred and something pounds but I’m afraid I was unable to note -----
MR. RECORDER PARRY: While Mr. Ap Mihangel calculates that, the benefit
figure now is £48,454.87 plus the increase in value on that sum.
MR. AP MIHANGEL: Indeed. Forgive me. The total then is as follows: the
benefit is £48,454.87 and £3,306.80. If one looks then at page 6 of Mr.
Matthews’ statement -----
MR. RECORDER PARRY: But that to comes to a total of sorry?
MR. AP MIHANGEL: £51,761.67.
MR. RECORDER PARRY: I'm grateful.
. MR. AP MIHANGEL: The summary of available assets then is to be as follows:
the tainted gift, sale of the Post Office to his son, £6,000, increase in value of the
tainted gift, £119.76, the personal Alliance and Leicester account at £1,776.92,
and the money from the Norwich Union at £1,500. If my rough and ready
calculations are accurate, the total to be paid therefore amounts to £9,596.68.
MR. LLOYD JONES: I agree my learned friend’s arithmetic.
MR. RECORDER PARRY: And the -----
MR. AP MIHANGEL: An amount, sorry forgive me, an amount exceeding 5 but
not exceeding 10 carries with it a maximum in default of 6 months and the
maximum period for payment is one of 6 months, may be my learned friend can
address you as to that, and finally these are civil proceedings and it is
appropriate in such cases costs to be applied for, a schedule has been prepared,
I hand in a copy of that schedule, it is not a complete schedule given that the
financial costs for the investigation unfortunately have not been included but the
sum to be added for the investigation of these proceedings is 3825.
MR. RECORDER PARRY: And that is ---
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MR. AP MIHANGEL: Sorry, that should be reduced. It’s the financial, we’d
included the criminal one in that, that has already been dealt with under of course
the criminal matter before the court in Caernarfon, it's simply the financial
investigation that should be applied for and that is a sum of £1,125.
MR. RECORDER PARRY: That is in addition to the 13-12?
MR. AP MIHANGEL: It is.
MR. RECORDER PARRY: And that’s a matter within my discretion?
MR. AP MIHANGEL: It can be in full or a contribution towards.
MR. LLOYD JONES: Can I deal with these matters. First, as far as the period in
default is concerned, my learned friend I see has checked it and of course he’s
right, it is 6 months imprisonment in default. I would ask in the circumstances the
defendant has a maximum period of 6 months in which to raise the money. Can
I deal now with another matter and it’s this. It’s my recollection that at the
hearing before Mr. Recorder Roddick, Queen's Counsel, sitting in the Crown
Court, when the defendant was sent to prison the learned judge ordered him to
pay a contribution towards the prosecution costs in the sum of £750 and it’s my
recollection that he was given I think 12 months to pay that so he hasn't actually
yet come to the time for paying that sum. Now the court in this case has had the
advantage now of a whole mountain of paper if I can put it in that way and the
statement, the second major statement made by the defendant has attached to it
a number of appendices which show the financial position that he is in.
MR. RECORDER PARRY: Mr. Lloyd Jones, I’m going to take a practical and
pragmatic view with regard to costs as I would in the case of a normal defendant
bearing in mind possibly above everything else his ability to pay.
MR. LLOYD JONES: Exactly. He can't pay.
MR. RECORDER PARRY: [Speaks to defendant in Welsh] I'll say this in Welsh
first, I'll repeat it in English. [Speaks in Welsh] On the face of it this is a
draconian provision and Act but it was meant to be. I think it’s probably right to
say that it wasn’t intended for cases such as these but for far more serious
criminals but cases such as these are caught within the provisions of this
legislation and the court simply cannot circumvent those provisions and has a
duty to enforce them. I'm satisfied following today’s hearing that the benefit to
you Mr. IE from your particular criminal conduct is £51,761.67. That being
the benefit, that is also the recoverable amount. However, the court is permitted
to look at the actual amount available, the realisable amount and I’m satisfied
that that comes to £9,596.68 and for that reason the confiscation order is in that
sum and no more. I grant you the full period of 6 months to pay that and I make
you aware that if you require further time it's open to you to make application for
that further time to the court. I have to make it clear that if the sum is not paid
you would have to serve a further term of imprisonment of 6 months and I have
to make you aware also that even if you serve that period the sum would still be
due for payment. With regard to the question of costs I take very much into
account your financial position at the end of everything that has happened. I‘m
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quite satisfied that you simply don’t have the means to pay and exercising my
discretion I make no order of contribution towards the prosecution costs or the
investigative costs. Have I dealt with all matters, Mr. Ap Mihangel?
MR. AP MIHANGEL: Yes. Thank you very much.
MR. LLOYD JONES: Thank you very much, your Honour.
MR. AP MIHANGEL: I’m just busy filling in the confiscation order.
MR. RECORDER PARRY: I'll have to sign that, will 1?
MR. AP MIHANGEL: Indeed. May I just ask as well, there’s no reason for the
defendant to be present for this, that it is appropriate to ask that your Honour can
direct that the Proceeds of Crime be directed to the Royal Mail as a form of
compensation.
MR. RECORDER PARRY: That must be right.
MR. LLOYD JONES: Yes.
MR. AP MIHANGEL: Otherwise it simply goes into the Crown’s coffers. It needs
to be directed from your Honour.
MR. LLOYD JONES: Yes. I think the only other matter your Honour to raise is
this. It’s the question of who is going to deal with the Norwich Union matter
because in the end the enquiries have been made by the investigator. I don’t
suppose for one moment that Mr. Thomas would object to them approaching
Norwich Union if they wish.
MR. RECORDER PARRY: Well, I’m sure a brief letter of authority to that effect
could be signed today before anybody leaves the court.
MR. LLOYD JONES: Yes. Very sensible suggestion. Very grateful.
MR. AP MIHANGEL: May I hand in this form.
MR. RECORDER PARRY: Yes. I’m grateful to both counsel for their assistance.
These matters are far more happily resolved by agreement.
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