CONFISCATION ORDERS
Criminal procedure - apportionment - benefit from criminal conduct

R v Raymond George May: HL (Lord Bingham of Cornhill, Lord Phillips of Worth Matravers, Baroness Hale of Richmond, Lord Carswell, Lord Brown of Eaton-under-Heywood): 14 May 2008

The appellant (M) appealed against a decision ([2005] EWCA Crim 97, [2005] 1 WLR 2902) upholding a confiscation order made against him in the sum of £3,264,277. M had pleaded guilty to conspiracy to cheat contrary to section 1(1) of the Criminal Law Act 1977 after taking part in a 'missing trader' or 'carousel' fraud involving the sale of high-value computer processing units. The VAT unaccounted for during the period of M's involvement totalled £4,439,533. In determining the extent of M's benefit, however, the judge subtracted from that figure sums amounting to £1,175,256 in respect of money recovered from the missing traders' bank accounts and the proceeds of the sale of a number of computer processing units, leaving a net figure of £3,264,277. It was now common ground that the judge had erred in reducing the benefit figure in that way: he had confused benefit with realisable assets. The judge valued M's realisable assets at £3,887,198, an amount exceeding the benefit figure. He accordingly made the confiscation order in the full sum of £3,264,277. M argued that Parliament had intended to establish a confiscation regime which was effective but fair. It intended to strip wrongdoers of their ill-gotten gains but not to deprive them of that which they had never had, to permit recovery of the same sum against different defendants or to permit recovery of a sum exceeding what the victim had lost. Such results were oppressive and disproportionate. Sixteen conspirators had been named in the indictment. Had each been found to have shared jointly in the proceeds of the fraud and made liable (assuming they had realisable assets of the required value) for the full sum ordered against M, the same sum would have been recovered 16 times over and the state would have gained more than HM Revenue & Customs had lost. The solution in such a case was to apportion the overall loss among those held to be jointly liable.


Held: The sum which M, jointly with others, was found to have fraudulently obtained from HM Revenue & Customs was, in law, as much his as if he had acted alone. That conclusion led ineluctably to the further conclusions that he benefited from his offending, and benefited to an extent substantially greater than the confiscation order made against him (because of the deduction wrongly made by the judge). The order made was less than his realisable assets. It was entirely consistent with the legitimate objects of the legislation, and it required that he be ordered to pay such sum, which involved no injustice or lack of proportionality. The legislation was, as Lord Steyn described it in R v Rezvi (Syed) [2002] UKHL 1, (2003) 1 AC 1099, 'a precise, fair and proportionate response to the important need to protect the public', Rezvi applied. R v Porter (Jeremy) [1990] 1 WLR 1260 CA (Crim Div) was not authority for the proposition that the court had the power to apportion liability between parties jointly liable, a procedure which would be contrary to principle and unauthorised by statute, Porter considered. The Appellate Committee reviewed the legislation and authorities relating to confiscation orders and emphasised the broad principles to be followed by those called upon to exercise the jurisdiction to make such orders.



Appeal dismissed.



Andrew Campbell-Tiech QC, Gavin Irwin (instructed by Pattichi Hill & Croques) for the appellant; Oliver Sells QC, Ivan Pearce (instructed by in-house solicitor) for the Crown.






  FINANCEAgreements - loans - overdrafts - possession orders - promissory estoppel - securityRoyal Bank of Scotland Plc v Luwum: CA (Civ Div) (Sir Andrew Morritt [chancellor], Lords Justice Rix, Rimer): 15 May 2008

The appellant (L) appealed against a decision of a judge to make a possession order against him in favour of the respondent bank (B).



L had opened a particular type of bank account with B that operated as a joint account with a secured overdraft repayable in full within 20 years. The terms of the account provided that, if the overdraft limit was exceeded at any time, B had the right to demand repayment of the total overdraft and that, if B's demand was not met, it had the right to repossess the property against which the overdraft was secured. Thereafter, L was made redundant and exceeded the authorised overdraft limit. B made a formal demand which stated that the overdraft facility was terminated and that, if the amount borrowed was not repaid or the account returned to a satisfactory state, B would realise the security and apply for a possession order. It advised L to contact a named officer at the bank as a matter of urgency. L raised various monies through borrowing from friends and family and made a number of payments to the account, but B ultimately sought a possession order.



At the hearing for the possession order, a matter arose as to what had occurred after the demand was served on L. L maintained that he had contacted B and been told that if he brought the account below its overdraft limit within a three-month period, B would not bring any proceedings against him within that period and would review his account at the end of that period. L contended that B had breached that agreement by bringing proceedings for a possession order within the three-month period. B disputed that and maintained it had not bound itself not to bring proceedings within the three-month period. The judge found that on balance L had had a conversation with one of B's employees, but the most that had been said was that if the account was kept below the overdraft limit the bank would keep the matter under review and reconsider it after three months. The judge concluded that B had reserved all its legal rights and had not bound itself not to bring legal proceedings, so that it was entitled to the possession order that it sought. L contended that the judge had erred in failing to find that B was estopped from seeking a possession order against him within the three-month period in which his account was under review.



Held: On the facts, the judge had been entitled to find that the parties had agreed for the account to be brought below its overdraft limit within a three-month period, after which time B would reconsider its position and possibly seek possession of the property on which the overdraft was secured. B had not committed itself never to issue proceedings, even if the account was brought below the agreed overdraft limit. B had, however, on the judge's finding, undertaken not to commence enforcement before the end of the relevant three-month period, and L had altered his position by borrowing money from friends and family in an attempt to reduce the overdraft. Accordingly, B was estopped from commencing proceedings seeking a possession order within the three-month period that it had agreed to and the possession order had to be set aside.



Appeal allowed.



In person for the appellant; Stephen Eyre (instructed by Shakespeare Putsman, Birmingham) for the respondent.





PERSONAL INJURYNegligence - accidents - breach of duty of care - supervision - adequacy of level of supervision of bouncy castle Samuel David Harris (a minor and a patient suing by his mother and litigation friend Janet Harris) v (1) Timothy Perry (2) Catherine Perry (3) David Harris:?QBD (Mr Justice David Steel): 8 May 2008
 The claimant (H) claimed damages for personal injury caused by the negligence of the defendants. The first defendant husband and the second defendant wife (P) had organised a birthday party for their children. They hired a bouncy castle and a bungee run and erected them on a playing field which was open to the public. On the same day H, who was 11-years old, attended football training on the playing field with his father (F), the third defendant. H and a friend asked F if they could go on the bouncy castle. F said that it was not possible because it was a private party. Nonetheless, they went over to the bouncy castle and asked P whether they could join in. H's case was that P agreed, however, P maintained that she refused permission. In any event, they got on to the bouncy castle, where H's friend performed a somersault. H then did likewise, but before he had got up again, another boy (S), who was older and taller than H, also somersaulted and as he did so his heel struck H on the forehead causing serious injury.



H submitted that P and her husband had been in breach of their duty of care towards him in that they had failed to maintain continuous supervision of those using the bouncy castle, failed to forbid the children from doing somersaults and failed to ensure that only children of a similar size and weight played on the bouncy castle at the same time. P contended that F was in part to blame for the accident given the continuing duty of a parent to a child.



Held: (1) On the evidence it was probable that P had given permission for H to use the bouncy castle. (2) P had to supervise the use of two pieces of equipment at the same time, both of which needed uninterrupted supervision, and it was not possible to maintain such supervision. The level of supervision for the bouncy castle was therefore inadequate.



(3) H had to establish that the absence of continuous supervision was causative of the accident. There was no evidence to suggest that there had been any somersaulting during the morning. Further, while it was true that the incident was not observed by P, it was clear that it happened very quickly, and the question was whether it would have made any difference if she had been watching. The complaint was that no-one was in a position to intervene to stop the activity as soon as H's friend could be seen to try a somersault. While a fairly rapid response was required, it was S's evidence that if he had been told to be careful, he would have refrained from somersaulting. It followed that the shortfall in supervision was causative of the accident.



(4) The risks of a damaging collision were manifestly enhanced by mixing children of different sizes on a bouncy castle. Avoidance of such a situation was at the forefront of all the various recommendations for safe use. S should not have been allowed to use the bouncy castle at the same time as the younger and smaller children and that too was causative of the accident. H had therefore made out his case against P. (5) It was F's position that the party appeared to be properly monitored and he was content for H to seek permission from P to use the bouncy castle. F's perception was reasonable, so the claim against him must fail.



Judgment for claimant.



Susan Rodway QC (instructed by Julie Reynolds) for the claimant; Graham Eklund QC (instructed by Keoghs) for the first and second defendants; Rohan Pershad (instructed by Greenwoods) for the third defendant.





EMPLOYMENTHealth and safety at work - control - employers' liability - falls from height - ladders - personal injuryAdam Mason (claimant) v Satelcom Ltd (defendant/respondent) & East Potential Ltd (part 20 defendant/appellant): CA (Civ Div) (Lords Justice Ward, May, Longmore): 14 May 2008
 The appellant property owner (E) appealed against a decision (2007) EWHC 2540 (QB), (2008) PIQR P4 that it was liable under part 20 of the Civil Procedure Rules to make a contribution of 25% in respect of the liability for personal injury of the respondent employer (S) to one of its employees (M). S cross-appealed.



M had suffered spinal injury when he fell from a ladder in the course of his employment. The court held S liable for breach of the Construction (Health, Safety and Welfare) Regulations 1996 and the Provision and Use of Work Equipment Regulations 1998 and for negligence at common law for failure to provide a safe system of work. The court stated that the ladder was too short to provide safe access for the operation for which it was needed, that the ladder was work equipment and that it was reasonably foreseeable that its shortcomings would affect the safety of any person using it to carry out the work in question. However, the injury had occurred in a room in a building owned by E. The room had been unlocked on M's arrival by a member of E's staff, and M had noticed the ladder leaning against a wall in the room and had used it without asking permission. S had been aware that a ladder would be required, but had not provided one for M. E had been aware of the ladder's presence in the room and could have removed it at any time. S applied under part 20 for a contribution from E in respect of its liability to M. The court held that E was bound to make a contribution of 25% on the grounds that E would have been liable to M in the same way as S, because non-employers who controlled work equipment were liable under the 1998 regulations for its foreseeable non-suitability under regulation 4(1) and regulation 4(4) just as much as employers were. E appealed, and S cross-appealed. E submitted that even if it did have some control over the ladder it was limited, and did not extend to controlling its use once M had entered the room. E argued that M had used the ladder in his own way for his own purpose and that E had no control over his decision as to whether the ladder was to be used or not. E therefore contended that the ladder was not unsuitable under regulation 4(1) and regulation 4(4), because it was not reasonably foreseeable that the ladder would be used for an unsuitable purpose. S submitted that the judge had been right to hold that E had a sufficient degree of control of the ladder to render the 1998 regulations applicable to it, as the ladder was in a locked room to which only E had access and which E had to unlock for M to perform his duties. S further submitted in cross-appeal that, by way of alternative, E was liable under regulation 13 of the Workplace (Health, Safety and Welfare) Regulations 1992.



Held: (1) Although E did have some control over the ladder, it was only to the extent that E could have removed it elsewhere or placed some kind of notice on it, but that was the limit of its control. If E had owned the ladder it might have been possible to say that control existed for the purpose of maintaining the ladder in the state in which it needed to be in order to be an effective ladder. However, the ladder could have belonged to other users of the building or have been left by an unknown workman, and in the absence of such a finding it was difficult to say what the purpose of E's control was beyond that of ensuring that the ladder did not get in anyone's way, Ball v Street [2005] EWCA Civ 76, (2005) PIQR P22 distinguished. Further, the 1998 regulations imposed a large number of obligations including that of inspection, the imparting of health and safety information and instructions, and training users of the equipment. It would be incorrect to say that E had all such obligations in respect of a ladder that just happened to be on its premises.



In addition, E could not have known or reasonably anticipated that M would use a perfectly ordinary ladder for a purpose for which it was never designed, so it could not be said that E had control of the ladder pursuant to regulation 4(1) for the purposes of ensuring that it was constructed or adapted so as to be suitable for the purpose for which it was used. Therefore, the extent of E's control, if any did actually exist, did not reach as far as determining the suitability of the ladder, with the result that there was no breach of regulation 4.



(2) Regulation 13 of the 1992 regulations concerned the risk of falling as a result of a danger inherent in the workplace, as opposed to a danger inherent in some piece of equipment that happened to be brought into the workplace. Matters concerning a piece of equipment in the workplace were more naturally dealt with by the 1998 regulations than the 1992 regulations, and where possible the regulations were not to be interpreted so as to overlap. Therefore, the 1992 regulations were not applicable to E.



Appeal allowed, cross-appeal dismissed.



Christopher Purchas QC (instructed by Vizards Wyeth) for the appellants; Christopher Russell (instructed by Bond Pearce) for the respondents.