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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Heron v Serious Organised Crime Agency & Anor [2013] EWCA Civ 1106 (22 July 2013) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2013/1106.html Cite as: [2013] EWCA Civ 1106

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IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
(MR JUSTICE COLLINS)

		Royal Courts of Justice Strand London WC2A 2LL
		22nd July 2013

LADY JUSTICE ARDEN:

1. This is an appeal from the refusal of Collins J sitting in the Administrative Court to grant permission for judicial review of the decision of the Crown Court, namely the decision of HHJ Baker QC sitting in the Crown Court at St Albans on 17 December 2009 in the matter of R v Mr Jones and Ms Heron.
2. He was concerned with the argument put forward by Ms Heron that it was not within the jurisdiction of the Crown Court to treat as within the confiscation order made against the first defendant, Mr Jones, property registered in her name at 5 Augustine Court, Waltham Abbey.
3. The judge rejected the argument that the Crown Court had no jurisdiction.
4. Before I go to the judge's judgment I must briefly explain the legislative scheme regarding confiscation orders. Under the Proceeds of Crime Act 2002 confiscation orders may be made in the Crown Court following a conviction. If the conditions for making such an order are satisfied with regard to the crimes the subject of the convictions, the court must decide whether the defendant had a criminal lifestyle, and if so, whether he has benefited from his criminal conduct. If the answer to that question is also yes, the court must decide the amount recoverable from the defendant and make an order for that amount. This procedure is referred to as "stage 1".
5. A defendant is considered to have a criminal lifestyle if one of certain criteria are satisfied, for instance that the offence for which he has been convicted is one of those specified in Schedule 2 of the act. If the court decides that the defendant has a criminal lifestyle, as it did in this case, it must make four assumptions when determining the amount of the benefit from the defendant's general criminal conduct, unless the application of those assumptions can be shown by the defendant to be incorrect or would lead him to suffer a serious risk of injustice.
6. The first assumption is that any property transferred to the defendant at any time after the relevant day was obtained by him as a result of his criminal conduct, and the relevant day is the day six years preceding the earliest date of commencement of proceedings against him. The second assumption is that any property held by the defendant at any time after the date of the conviction was obtained by him as a result of his criminal conduct. The third assumption is that any expenditure incurred by the defendant at any time after the relevant date was met from property obtained by him as a result of his criminal conduct, and the fourth assumption is that, in valuing the property obtained, the defendant has obtained it free of any other interests in it. We are concerned particularly with the third of those assumptions which is to be found in section 10(4) of the 2002 Act.
7. So far as the available amount is concerned, section 9(1) provides that:

"For the purposes of deciding the recoverable amount, the available amount is the aggregate of (a) the total of the values (at the time the confiscation order is made) of all the free property then held by the defendant minus the total amount payable in pursuance of obligations which then have priority, and (b) the total of the values (at that time) of all tainted gifts."

Free property is defined in section 82 as property which is free of other confiscation orders.

8. Then I need to turn to tainted gifts. These are dealt with according to whether or not the defendant is found to have had a criminal lifestyle. If he had a criminal lifestyle the gift will be deemed to be tainted if it was made by the defendant at any time after the relevant day, or if it was obtained by the defendant as a result of or in connection with his general criminal conduct or represented in the defendant's hand property obtained by him as a result of or in connection with his criminal conduct: on that, see section 77(3) of the 2002 Act. That means that in certain circumstances, if possible, gifts can be clawed back beyond the usual period of six years.
9. So far as third parties who may be interested, for example because they are the donees of gifts, as indeed Ms Heron was in the present case, the third party is not involved during the course of the confiscation hearing as a party but can make an application at the enforcement stage (called "stage 2). However, it would have been open to the defendant to call a third party, such as Ms Heron as a witness at the time of the making of the confiscation order, but for reasons that will become clear, that did not in the event occur.
10. The Assets Recovery Agency ("ARA") and now the defendant, SOCA, to which the ARA's functions have been transferred, can apply in the civil court to enforce any confiscation order. The powers are subject to a number of restrictions, for instance that they must be exercised with a view to the value for the time being of the realisable property being made available for satisfying the confiscation order: see section 69(2) of the 2002 Act. However – and this is an important provision in the present case – section 69(3)(b) provides the restriction on the powers in section 69(2) has effect subject to certain rules. These rules include a rule that "in the case of realisable property held by a recipient of a tainted gift, the powers must be exercised with a view to realising no more than the value for the time being of the gift". Accordingly, if the recipient has other property, the confiscation order cannot apply to that other property.
11. The third party, as I have said, can make an application to court to recover her property if it is included in the confiscation order, which is precisely had happened in the present case. The essential point on this appeal is whether it was open to the court on application to proceed on the basis that a confiscation order treated a property in the hands of the recipient as a tainted gift, even if the judge on the making of the confiscation order had not in terms found that it was in fact a tainted gift.
12. As I have said, Collins J rejected the argument and refused permission to apply for judicial review. His judgment was extremely short, and it is therefore convenient if I read it.

"…for the reasons I have indicated, this is an application which cannot succeed. The attempt to suggest that the tainted gift issue has to be decided at the confiscation hearing is not borne out by a true reading in context of the passages relied on in Norris and Buckland. Provided, as was the case, the property was included as realisable, it is open of course to any individual who has an interest in that property to contend that it should not be enforced against because of that interest. But at that stage all issues as to whether it is indeed realisable are open. The judge decided as a matter of fact that it was a tainted gift because of the criminal lifestyle of the defendant and the circumstances in which this property was acquired. There is no error of law in that conclusion. Nor is there any merit, I am afraid, in the contention that the judge in 2009 was not entitled to act as he did. This application therefore is refused. Permission is refused."

13. I go next to the judgment of the Criminal Division of this Court (Keene LJ, Butterfield and Plender JJ) with respect to an appeal which it heard from the making of the confiscation order in 2007. It is in the matter of R v Mr Jones [2009] EWCA Crim 177. Keene LJ, giving the judgment of the court, usefully sets out a large amount of the background:

"15. The confiscation proceedings in the Crown Court occupied four working days, beginning on 1 May 2007. As often in these cases, a voluminous amount of material was placed before the court. Amongst other things, two expert reports by an accountant, Mr Whittam, were put before the court on behalf of the present appellant, Mr Jones, though the only witness to give oral evidence on that side was the appellant himself.

16. In what, in our view, was a careful and lucid reserved judgment, Judge Finlay Baker found that the appellant had a criminal lifestyle. He noted that while that had not been formally conceded the defence had not sought to contend the contrary.

17. As to determining benefit from general criminal conduct, he also recorded that both parties had proceeded on the basis that all the defendant's wealth had had as its ultimate source the profits of his business enterprise. The judge adopted this basis (paragraph 10)."

14. One of the arguments raised before the Court of Appeal concerned the Augustine Court property with which we are concerned, but before I go to those passages, I will return to the 2007 judgment, by which HHJ Baker QC, sitting in the Crown Court at St Albans, made a confiscation order. He identified the benefits which were in issue before him at paragraph 14 of his judgment:

"14. The total sum finally advanced on behalf of the ARA as being the benefit derived from the defendant's general criminal conduct is made up as follows: 1) deposits from the 28^th March 2000 into business accounts held, £3,762,264,33p; 2) property at 5 Augustine Court, Beaulieu Drive, Waltham Abbey, £600,000; 3) the balance of the HSBC money market account 60154555 and 20256050, the first account being opened on 9^th April 2002, £1,632,936.52p; 4) EMI, shares purchased on 7^th February 2001and held by the defendant at the present time, £337,688,76p. Total £6,332,889.61p. The dates of acquisition are relevant for the purposes of the statutory assumptions. It will later be necessary to consider in a little more detail the acquisition of the house at Augustine Court."

15. The judge then dealt with Augustine Court at various subsequent paragraphs in his judgment:

"39. Augustine Court. The defendant lives at this address with his partner Mandy Heron. The defendant claims that in May 2998, which of course was before the relevant date, he purchased a property, 21 Old Bellgate Wharf, Westferry Road, E1 for £205,000 and made a gift of it to Ms Heron in order to avoid inheritance tax. Augustine Court was bought with the proceeds of sale of Old Bellgate. In fact, the house at Augustine Court was purchased on 18^th July 2000 for £328,000, but the house at old Bellgate was sold only on 4^th August and it realised £240,000. In order to bridge the gap the defendant accepts that he provided a loan of the full purchase price. In part this came from a Swiss bank account at Bank Hofman, in the sum of £303,000. When Old Bellgate was sold the proceeds of £240,000 were credited to the defendant's Bank Hofman account. On the defendant's evidence, the details of which were vague, I understood that the $20,000 of the purchase price of Augustine Court may therefore be traced to the proceeds of sale of the previous house at Old Bellgate. The balance is from the unrepaid loan originally used to fund the purchase of Augustine Court.

44. It is obvious to me that number 5 Augustine Court is particular property within the meaning of section 10(6). I have no difficulty regarding the balances of the money market accounts and EMI shares also as particular property, but I have to strain the English language to find that numerous deposits made over the period of years and amounting to over 3.7 million pounds in all can be treated compendiously as particular property. Nevertheless because my finding is that the proportion of illegitimate to legitimate business was the same throughout the period covered by these deposits, and because it therefore seems to make no practical difference to the outcome whether the deposits are considered transaction by transaction or compendiously as a whole, and because the parties have not sought to persuade me to act otherwise, I am prepared to treat the deposits as one particular item of property. I shall come back to that.

58. Should that finding lead me to disapply the statutory assumptions? I will consider them first in relation to Augustine Court. I am not persuaded that the assumption that the expenditure incurred by the defendant on the bridging loan was met by funds obtained by him as a result of his general criminal conduct has been shown to be incorrect. If at least 85 per cent of his business measured in terms of its financial yield was run criminally, and if the course of the bridging loan was, as I find it was, the fund which was created from the monies made by the business, then the loan was made from the property obtained as a result of general criminal conduct. The fact that 15 per cent of the monies made by the business was legitimate is not sufficient to displace that assumption.

59. Nor would there be a serious risk of injustice in assuming that Augustine Court was purchased as a result of general criminal misconduct. It cannot fairly be said that all that the defendant provided was a bridging loan and that the true source of the bulk of the funds used by Augustine Court was the proceeds of sale of Old Bellgate Wharf, and that the bridging loan was largely repaid when Old Bellgate was sold. After all, the funds used to buy Old Bellgate also came entirely from the profits of the defendant's business, and therefore the bulk of them too were obtained as a result of general criminal conduct. Again the fact that 15 per cent of the monies made y the business was legitimate does not displace that.

65. Recoverable Amount. I am led to understand that none of the victims of the defendant's general criminal conduct have started proceedings against the defendant to recover any of their loss and none of them intend to do so. The recoverable amount must therefore be measured by reference to the amount of funds the defendant has available to meet the benefit. I understand that figure to have been agreed, subject to various adjustments, at £3,042,671.92p made up as follows:

…

Value of Property 5 Augustine Court,

Beaulieu Drive, Waltham Abbey, Essex EN9 1JJ £600,000,0.

…

TOTAL - £3,042,671.92."

16. It will be seen from that last paragraph which I have quoted that there was agreement between the parties before the judge as to the recoverable amount which was to be measured by reference to the amount of funds the defendant has available to meet the benefit, and the judge stated that he understood that figure to be agreed at the figure of £3,042,671.92 made up as set out in paragraph 65. With those passages in mind, I go back to the judgment of Keene LJ in the Court of Appeal, Criminal Division. He dealt with Augustine Court at paragraphs 49 to 51 and 54 and 57 of his judgment:

"49. We turn to the topic of St Augustine's Court. It is submitted that that should not have been included in the benefit calculation as property held by the appellant. Mr Bogan emphasises that the legal title was vested in the appellant's partner, Mandy Heron, with whom there had been a long-standing relationship and that the presumption that she held the beneficial interest had not been rebutted. Indeed, the issue of who held the beneficial interest in the property was not addressed by the judge and therefore he arrived at no finding in respect of the section 10(3) assumption.

50. By reference to various authorities, including the case of Stack v Dowden, a House of Lords' decision, [2007] UKHL 17, it is contended that the appellant should be regarded as having no beneficial interest in that property unless the Crown have been able to show otherwise, and it was not able to do so.

51. We accept that the judge did make no finding as to who held the beneficial interest in this particular property but that was for good reason. The judge was not seeking to apply the assumption in section 10(3), which concerns property held by a defendant when one is coming to calculate the benefit obtained. As several paragraphs in the judgment show, the judge dealt with this on the basis that the acquisition of St Augustine's Court involved expenditure by the appellant (see paragraphs 58 and 59). That was the same basis upon which the ARA had proceeded. That involves the assumption to be found in section 10(4), not section 10(3). The judge held that the expenditure on the loan made by the appellant in order that this property could be purchased derived from the appellant's business and as such the expenditure amounted to benefit. We can see nothing wrong in that particular finding.

…

54. Some attempt has also been made in the course of this morning's hearing to argue that the judge was wrong in his assessment of the "available amount" in respect of St Augustine's Court. The available amount, however, as we have indicated much earlier in this judgment, was not a matter in issue in the court below and we are not prepared to see it opened for the first time in this court. Not merely does the judge record that the available amount was not in issue, but that was expressly said by Mr Godfrey QC on behalf of the appellant in the course of the Crown Court proceedings (see the transcript of 4 May 2007, page 35 letter G).

…

57. In all those circumstances we are not persuaded that there is anything wrong with the amount in which the confiscation order was made. It follows that this appeal against it must be dismissed."

17. It will be noted that Keene LJ dealt with Augustine Court on the basis that it was expenditure by the appellant which constituted a benefit. He found no error in that conclusion.
18. I also draw attention specifically to paragraph 54 of the judgment of Keene LJ, which confirmed paragraph 65 of the judgment of HHJ Baker in 2007. It is there held that the available amount was not a matter in issue in the court below, and the Court of Appeal refused permission for it to be opened for the first time in the Court of Appeal. In addition, paragraph 57 specifically shows that the court upheld the order made by HHJ Baker.
19. I am not concerned with the details of the offences for which Mr Jones was convicted, or how they were committed. It is sufficient to set out the summary in paragraphs 1 and 3 of the judgment of Keene LJ:

"1. This is an appeal against sentence, being an appeal against a confiscation order made under Part 2 of the Proceeds of Crime Act 2002 ('the 2002 Act') by His Honour Judge Finlay Baker QC at St Albans Crown Court on 11 May 2007. The appellant had pleaded guilty on 10 July 2006 before the same judge at the same court to two offences of supplying goods to which a false trade description was applied, contrary to section 1 of the Trade Descriptions Act 1968. A further six trade description offences were taken into consideration. He had earlier pleaded guilty before magistrates to eight summary offences contrary to the Unsolicited Goods and Services Act 1971 and had been committed on those to the Crown Court for sentence under section 70 of the 2002 Act. On 11 May 2007 he was sentenced to a total of three months' imprisonment and a confiscation order was made in the sum of £3,042,671.92.

2. He now appeals against that order by leave of the single judge, who granted leave, however, only on three grounds, those being numbered 4, 5 and 6 in the appellant's notice.

3. We emphasise at the start that the sum of just over £3 million in which the order was made reflected the limitation resulting from the 'available amount' as defined by section 9 of the 2002 Act. The judge in fact found that the appellant had benefited in a far greater sum than that, a sum in excess of £6.3 million, but since the available amount was less than that, the recoverable amount for the purposes of a confiscation order was limited by section 7(2) to the smaller sum."

20. In his judgment, Keene LJ dealt with the legislative scheme. He also pointed out that the relevant day in this case was 2 July 1999.
21. It will be apparent from the passages which I have cited from his judgment that HHJ Baker was well aware that Mr Jones had made a gift of Old Bellgate Wharf to Ms Heron, or a gift of the sum of £205,000 to buy that property, and that Augustine Court was purchased in 2000 for £328,000, with the benefit of a bridging loan from Mr Jones. In fact, that was repaid by Ms Heron to the extent of £240,000 out of the proceeds of sale of Old Bellgate Wharf. He states that to have been his understanding.
22. The judge makes a finding at paragraph 44 that this was not a case in which a confiscation order should not be made with respect to Augustine Court because it would be unfair or unjust, because he there refers to section 10(6). He also states that he had considered how Augustine Court had been funded, and he holds at paragraph 58 that he was not satisfied that the assumption that the expenditure incurred by the defendant on the bridging loan was met from funds obtained as a result of his general criminal conduct had been shown to be incorrect. He also went on to find at paragraph 59 that the funds used by Bellgate came entirely from the profits of the defendant's business, and therefore the bulk of them too was out of proceeds resulting from criminal conduct. He also made it clear that the business had started in 1987, that is before the purchase of Bellgate Wharf. He therefore tracked through the provenance of the monies used to buy Augustine Court, and he traced them all the way back to the proceeds of the criminal business which Mr Jones had carried on, and from that into Old Bellgate Wharf and then into Augustine Court.
23. As I have said, the basis of the argument before the judge in 2007 was that the benefit of the bridging loan was expenditure, and that the expenditure was a benefit to Mr Jones.
24. When in 2009 an application was made for enforcement of the confiscation order, the judge treated the matter as one of tainted gift. He heard evidence from Ms Heron, which he rejected. He also heard evidence from Mr Jones. He found that the reality was, as regards the purchase of Old Bellgate, that the funds were all provided by the defendant, Mr Jones, and that the same had applied to the purchase or Augustine Court, except that £240,000 from the sale of Old Bellgate was credited back to the defendant's bank account. That bank account was with Bank Hofmann (see page 227 of the bundle). The judge was satisfied that the gift of Old Bellgate was a genuine gift and not a sham. He found that the defendant had found it convenient to gift Old Bellgate to Ms Heron, and that he was persuaded that inheritance tax was a further reason for making the gift. But he went to find (and this is page 229 of the bundle) that the bulk of the funds used to purchase both Old Bellgate and Augustine Court had as their ultimate source the dishonestly run business of the defendant.
25. The judge proceeded on the basis that there was a tainted gift. He concluded at page 230 as follows:

"My conclusion, therefore, is that Old Bell Gate was a tainted gift represented by the purchase price derived from the defendant's unlawfully run business and that the balance of the purchase price of Augustine Court was similarly a tainted gift."

The reference to the balance there is to the fact that there was a further sum of £88,000 paid by Mr Jones out of his own money and not paid by Ms Heron out of the proceeds of sale of Old Bellgate Wharf.

26. Mr Gregory, who appears for Ms Heron today, submits that the only basis of the argument before HHJ Baker in 2007 was that the expenditure was a benefit. I readily accept that that was so. He also relies on a passage from the transcript of the hearing on the appeal from the confiscation order before the Court of Appeal, Criminal Division as originally constituted. What happened was that that court ran out of time to finish the appeal and the therefore had to be terminated without a judgment, and it was then heard by a court presided over by Keene LJ. In the course of the exchanges between counsel and the court, Hallett LJ put it to Mr Bennett, then appearing as today for SOCA, "So we have a property, AC, that is registered in her name. For all intents and purposes she is legal owner, both beneficial and in title. She also, we happen to know, seems to have provided by means of an untainted gift, whatever the original source of the money, a large part of the proceeds. On what basis is the Crown Court judge entitled to bear in mind AC without hearing her or giving her the opportunity to be heard? This is her home as well."
27. As I have already explained, Ms Heron had no right to appeal as a party to the confiscation order proceedings, although she could have been called as a witness. Within that observation from Hallett LJ is the expression that the court now knew that the amount had been received by way of a untainted gift. Mr Gregory relies on that point as indicating that there was no finding in 2007 that it was a tainted gift. Indeed, I think he would go further and say it could also not be construed as a tainted gift, and that Hallett LJ was obviously accepting that point.
28. So far as I am concerned, without wishing to express any disrespect for that passage whatever, I would say that it does not constitute a precedent by which this court is bound because it was not an observation given as part of a judgment of the court. Therefore, while I have borne it in mind, I do not consider that it concludes the issue with which we must deal.
29. Mr Gregory proceeds that there was no ruling that Augustine Court was a tainted gift and that the real basis, as Keene LJ made clear, of the decision in 2007 was that the bridging loan was a benefit. He further relies on the final paragraph of the judgment of the Court of Appeal in R v Buckman [1997] 1 Cr App R (S) 325. In this case the judge had to deal with a joint property, and he made a brief decision that the wife had not established any interest in it. Brooke LJ in the final paragraph of his judgment, which was the judgment of the court, said:

"...in our judgment the position of the money in the building society account falls to be treated differently. This was prima facie money held by the parties jointly. On the presumption that equity is equality, particularly where the parties are husband and wife, this money was owned jointly. It would have been open to the judge, having made the finding that prima facie the beneficial interests of the money in the building society account were held jointly for him to proceed to make a specific finding that the husband's more than 50% contribution towards that building society account represented, as to the appropriate amount, a gift caught by the Act. But he did not make any such finding."

30. Mr Gregory particularly relies on that last sentence and on the further holding by the court in that paragraph that it was not appropriate to remit the matter back to the judge. Mr Gregory submits that these matters support his submission that it is critical that there should be a finding that there was a tainted gift at stage 1 to enable that point to be taken at stage 2. He submits that the judge's treatment of the gift to Ms Heron at stage 2 as a tainted gift is inconsistent with the description of the process set out by Lord Hobhouse in the decision in the House of Lords of R v Norris [2001] 1 WLR 1388. Lord Hobhouse explained at paragraph 13 of his judgment that the question of the amount that might be realised at the time of the confiscation order is made involves a different exercise. It is an exercise to be undertaken at the date of the making of the confiscation order. He continues, and he is here dealing with the equivalent provisions in the Drug Trafficking Act 1986:

"By s.5(3), the amount is the value at that time of the realisable property of the defendant together with the value at that time of any gift 'caught' by the Act. It thus has to take into account as well property which, maybe, is no longer held by the defendant. 'Realisable property' is defined in s.5(1) as meaning any property 'held' by the defendant and any property held by a person to whom the defendant has directly or indirectly made a gift caught by the Act. Property is defined so as to have an all embracing meaning and property is 'held' by any person if 'he holds any interest in it': s.38(7). A gift is 'caught' by the Act if it was made by the defendant at any time during the six year period or, if made by him at some other time, if it has been shown to have been, or to represent, the proceeds of drug trafficking: s.5(9). The presumptions in s.2(3) do not apply to s.5. The effect of sections 4 and 5 is that the amount that might be realised at the time the confiscation order is made is to be the market value of the property held by the defendant or donee or, where another also has an interest in that property, the market value of the defendant's or donee's beneficial interest in the relevant property: s.5(4)."

The point that is being made there is that the exercise of determining the realisable property must be undertaken the date of the confiscation order. Mr Gregory submits that that is a clear indication that the court should then determine whether or not it is a tainted gift.

31. Mr Gregory also points out that it was far too late by 2009 for SOCA to apply to extend the assets to which the order related since under section 21, where a court has made a confiscation order. There has to be evidence which was not previously available to the prosecutor to enable the prosecutor to persuade the court that the amount of the benefit is greater than the relevant amount.
32. Mr Gregory relies on that section as indicating also that the matter must be entirely dealt with at stage 1, and that if it was a tainted gift it must be identified as such at stage 1.
33. Mr Jones is an interested party in this appeal. He appears by Mr Stradling, who did not appear below. Mr Stradling adopted Mr Gregory's submission. He submits that there was a deliberate decision by SOCA not to argue tainted gift on the 2007 application, which I called the stage 1 application. He points out that Old Bellgate Wharf was not included in the list of benefits which are set out in paragraph 14 of the judge's judgment, nor indeed was the bridging loan or the gift of £204,000. He submits that that further supports the argument that there was no tainted gift in the present case, that the matter being relied upon was the bridging loan and not the gift constituted by Augustine Court or indeed Old Bellgate Wharf. Mr Stradling accepts, however, that if Ms Heron had been able to repay the bridging loan out of her independent assets, and the matter had been contested, then the only asset which could have been included in the realisable amount was the value of the bridging loan and not Augustine Court.
34. I now turn to my conclusions. The argument can be shortly summarised. What is being said is that the judge could not hold, had no jurisdiction to hold, in his 2009 judgment in the St Albans Crown Court that the amounts paid towards the acquisition of Augustine Court constituted a tainted gift because that finding and that holding had not been made at stage 1 in 2007. In my judgment, there were reasons why that matter was not held to be the case at stage 1. First, the entire focus of the argument was on the bridging loan point: ie that Mr Jones had been enabled to make the bridging loan because of the criminal activities which he had carried on. Second, the bridging loan was not in fact property of the defendant at the date of the confiscation order, and it will be recalled that section 9 requires the available amount to be composed, so far as it concerned property held by the defendant, of values then held by him. Furthermore, it was agreed by the defendant, Mr Jones, that Augustine Court was an asset which should be included in the available amount, and it was thus conceded by him that it was an asset against which the confiscation order against him could be enforced, and therefore the judge was entitled to take the course in 2007 that the confiscation order should include Augustine Court and not the bridging loan.
35. Third, it would have been duplicative for the judge to have found that there was a tainted gift as well as to proceed on the basis that he did proceed, that there was a bridging loan which was a benefit. That is, I think, an answer to the point Mr Stradling made, that there was a deliberate decision not to argue the tainted gift point, because there is a good reason not to have argued it if it is purely duplicative of the matters which the judge had to resolve in order to make the order.
36. Fourth, as against that, and this is fourthly, all the facts necessary to establish a tainted gift were found by the judge. He found that the gifts to Ms Heron were all along made out of the property which had been obtained as a result of criminal activities. He held that in relation to not only Augustine Court but also to Old Bellgate Wharf.
37. Fifth, there is no prejudice to Ms Heron in the court coming to the conclusion that what the judge did in 2007 was in substance to find that there was a tainted gift. The position is that Ms Heron in law could argue everything that she desired to argue at stage 2. In the event, her evidence was purely that she had contributed £6,000 towards the deposit. But the fact is that she had no control over what was argued at stage 1, and thus it would be giving her a windfall if she was able to benefit from this point.
38. Sixth, there is no suggestion that any evidence could have been produced to show that Augustine Court was not a tainted gift. As I have explained, she only argued before the judge in 2009 that she had contributed £6,000. Her evidence on that was rejected, and she did not take the point which has been mentioned in the appellant's skeleton argument that she was entitled to say that she had provided consideration as the home maker. Likewise, that point has not been advanced orally in this court. The fact is that Ms Heron was able to argue everything she wanted to argue at stage 2 and that she was not prejudiced by the fact that all the facts had been found in relation to the tainted gift at stage 1.
39. It is correct, as Mr Stradling submits, that nothing was ventilated on the tainted gift argument at stage 1, but there was nothing else that needed to be ventilated, and, as I have said, there was the concession about Augustine Court being within the available assets. That concession must have a role to play in this particular case.
40. As I see it, in those particular circumstances, all the facts having been found which are necessary to find a tainted gift, and that the only thing that was missing was that the judge should actually say, in the alternative, this transaction was a tainted gift for the purposes of the 2002 Act, in my judgment the jurisdiction to hold that there was a tainted gift at stage 2 was established by the judge's judgment in 2007. There was, as I see it, a clear finding of all the necessary facts, short of that one final conclusion. There is also the aspect of the way in which the proceedings were conducted in relation to the inclusion of the asset and the bridging loan. I would add that I do not think that this was an ideal way in which the matter should have been resolved at stage 1. It would have been possible surely for counsel to say that, if the point were necessary for him to take it, he would reserve the issue that there was a tainted gift or invite the judge to make a finding on that matter. That would have made it unnecessary to pursue this stage of the litigation. As it is, in my judgment the jurisdiction for stage 2 was clearly established in the circumstances of this case by the judge having found the facts and considered all the necessary steps towards establishing a tainted gift. He went into matters which it would otherwise have been unnecessary for him to go into simply to reach the conclusion on the bridging loan. I would therefore dismiss this appeal.

Lord Justice Patten:

41. agree.

Lord Justice Beatson:

42. I also agree.

Order: Appeal dismissed