Blight and Ingram [2019] EWCA Crim 280

R v Blight and Ingram [2019] EWCA Crim 280 concerned appeals by the Court of Appeal (Criminal Division) against sentences imposed for fraud committed by dishonestly failing to disclose possession of wreck to the receiver under the Merchant Shipping Act 1995.

Mr John Blight and Mr Nigel Ingram were convicted after trial at Canterbury Crown Court in June 2018 of fraud contrary to sections 1 and 3 of the Fraud Act 2006. Mr Blight was convicted on two counts and sentenced to a total of three and a half years’ imprisonment. Mr Ingram was convicted on four counts of fraud and one count of possessing criminal property contrary to section 329 of the Proceeds of Crime Act 2002, and was sentenced to a total of four years’ imprisonment. Both men appealed. Leave was granted by the single judge, who observed that the unusual facts raised a novel question about the application of the relevant sentencing guidelines.

The offending related to breaches of section 236(1) of the Merchant Shipping Act 1995, which requires a person who finds or takes possession of wreck to notify the receiver of wreck and, if not the owner, either hold it to the receiver’s order or deliver it. The evidence showed that Mr Ingram, an expert diver, and Mr Blight, owner and skipper of the fishing vessel De Bounty, had engaged in a sustained joint enterprise to raise items of wreck from the seabed and sell them without declaring them. Mr Ingram was to receive ten per cent, later increased to fifteen per cent, of the proceeds. A notebook entitled “De Bounty Diver Recovery Book” recovered from Mr Ingram’s address recorded dates between May 2010 and December 2012, the names of shipwrecks and items raised, their weights and estimated values, and that Mr Blight owed Mr Ingram £14,000. The notebook and photographs found on Mr Ingram’s computer showed that items taken included large brass articles, some weighing more than two tonnes. Between May 2012 and December 2015 Mr Ingram had made thirty five visits to a scrap metal dealer, selling the wreck as scrap. On one occasion, French coastguard officials boarded the De Bounty and found no wreck, but the evidence showed that the appellants continued diving that day and removed a large brass condenser weighing over two tonnes from HMS Hermes, a First World War wreck. The items all came from commercial or First World War naval wrecks; with one exception none was designated as protected. A search of Mr Ingram’s address also recovered £16,000 in cash from a safe.

Count one alleged fraud between May 2010 and December 2012, covering the period of Mr Ingram’s notebook. Both men were convicted. Count two covered January 2013 to September 2014; only Mr Ingram was convicted, Mr Blight having been acquitted. Both were convicted on count three, concerning the Hermes condenser in September 2014. Count four covered October 2014 to December 2015; Mr Ingram was convicted but Mr Blight was acquitted on the judge’s direction. Count five charged Mr Ingram alone with possession of the £16,000; he was convicted. Her Honour Judge Norton sentenced Mr Blight to three and a half years on count one and eighteen months on count three, concurrent. She sentenced Mr Ingram to three and a half years on count one, four years on each of counts two and four, and eighteen months on each of counts three and five, all concurrent.

The judge applied the Sentencing Council’s Definitive Guideline for Fraud offences. She assessed culpability as high, finding that the fraudulent activity was conducted over a sustained period and involved a sophisticated operation requiring significant planning. Both men had played leading roles in the joint venture. The prosecution estimated the value of the property taken during the period of count one at £100,000, a figure not disputed by counsel at trial. This estimate was conservative compared with figures derived from Mr Ingram’s own notebook. Taking £100,000 placed the offence at the top of category three or the bottom of category two in the guideline, which for high culpability pointed towards a sentence of the order of four years. The judge then assessed the harm as having medium impact, justifying some upward movement. She regarded wrecks of vessels sunk during the First World War as a unique source of information about maritime heritage, a finite and fragile resource, and held that removal of items from such vessels constituted stealing part of the national story. The removal of many items without the owners’ consent from many different wrecks was of considerable detriment. The judge gave both men some credit for good character. She imposed a longer total sentence on Mr Ingram because his fraudulent activities continued for much longer.

On appeal Mr Rhodes, counsel for Mr Blight, advanced a single substantive ground. Mr Trollope QC for Mr Ingram sought to challenge both the assessment of culpability as high and the judge’s reliance on the £100,000 estimate of value, but his main submission mirrored that made for Mr Blight. The central issue was whether the judge had been correct in treating the estimated value of the property as the appropriate measure of loss. The appellants contended that, although £100,000 was an appropriate measure of their gain, gain and loss were not in this case opposite sides of the same coin. It was argued that, in assessing loss to the owners, it was necessary to consider what they would have received if the wreck had been salvaged legitimately, namely the value less any salvage award payable to a legitimate salvor. The appellants accepted that they were not legitimate salvors and that section 236(2) of the 1995 Act disqualified anyone who failed without reasonable excuse to declare wreck from claiming salvage. Nevertheless it was submitted that an allowance for hypothetical salvage should be made in assessing the loss caused to the owners.

Lord Justice Leggatt, giving the judgment of the court, held that if a person who had fraudulently chosen not to declare wreck wished to suggest that he would have been entitled to a salvage award if he had acted honestly, he bore the onus of making good that claim. The court was satisfied that the appellants could not show that they were legitimate salvors of any item. Their whole operation was conducted outside the law. It was likely that in addition to the fraud offences they were guilty of a raft of further criminal offences, such as using a vessel to remove items from the seabed without a licence where one was required, causing criminal damage, theft and wrongfully carrying away wreck contrary to section 246 of the 1995 Act. Under section 224 of the 1995 Act the 1989 International Convention on Salvage had the force of law in the United Kingdom. Article 1A defined a salvage operation as any act or activity undertaken to assist a vessel or other property in danger. Article 12 stated that salvage operations which had had a useful result gave right to a reward. It was questionable whether the items taken could be characterised as having been in danger if left on the seabed. But even assuming that the operations were salvage operations, the court held that it was impossible to characterise them as having had a useful result. Removing and disposing of items taken from wrecks which were causing no obstruction, without the consent of their owners, could not be regarded as a useful activity, still less when it involved plunder of wrecks of historic interest. Accordingly it was untenable to suggest that if the appellants had declared the items they would have been entitled to any salvage award.

Mr Rhodes further submitted that even if the appellants would not themselves have been entitled to salvage awards, it was appropriate in estimating loss to the owners to deduct costs the owners would have had to incur, including salvage awards to legitimate salvors, if the property had been salvaged legitimately. The court rejected that submission. The offences were of dishonestly failing to disclose wreck. If the appellants had complied with their duties under section 236, the owners would have been entitled to receive the items or their proceeds of sale. They therefore prima facie lost the value of those items. In circumstances where the persons who had recovered the items would not have been entitled to any reimbursement or reward, the owners would have been entitled to receive the whole value if the items had been declared. That was accordingly the proper measure of loss.

The court accepted one complaint raised on behalf of Mr Ingram, namely that the sentences of four years on counts two and four were unjustified. There was no reliable evidence of the value of property covered by those offences, and the prosecution accepted it was unlikely to have been on the same commercial scale as count one. The judge had been justified in imposing a total sentence of four years on Mr Ingram, but it was not legitimate to achieve that result by passing sentences for counts two and four which were far longer than the facts merited when count one had already fully reflected the offending. A proper approach would have been to impose a sentence on count one that was not intended to reflect totality and then to pass appropriate concurrent sentences on the other counts. The court therefore varied Mr Ingram’s sentences to four years on count one and eighteen months on counts two and four. The sentence on count three and the total sentence of four years remained the same.

After judgment was delivered counsel for Mr Ingram sought permission to make written submissions on whether it was appropriate to increase the sentence on count one. Mr Trollope accepted that section 11(3) of the Criminal Appeal Act 1968 permitted the variation, as overall it did not deal with Mr Ingram more severely. He submitted that instead of increasing the count one sentence the court should reduce counts two and four to six months consecutive, thus avoiding any increase to the sentence for count one considered by itself. The court rejected that submission. It would replace sentences that were too long with sentences that would be too short to reflect the criminality of those offences. The appropriate course was to take account of totality by passing concurrent sentences for a series of offences of the same kind and to reflect overall criminality in the sentence for the lead offence, as the Sentencing Council’s guideline on totality expressly provided.

In short, the Court of Appeal held that the proper measure of loss caused by dishonest failure to declare wreck was the full value of the items taken, with no deduction for hypothetical salvage awards, as the appellants were not legitimate salvors and the owners would have been entitled to receive the whole value had the items been declared; Mr Blight’s appeal was accordingly dismissed and Mr Ingram’s appeal succeeded only in varying the sentences to reflect proper concurrent sentencing, leaving the four-year total unchanged.