The two appellants, John Blight and Nigel Ingram, were convicted of fraud offences involving the taking of undeclared wreck items after a trial at Canterbury Crown Court in June 2018. The items came from shipwrecks of commercial vessels which had been lost at sea or from naval warships lost during the First World War.

The issue in the appeals was whether, in making the initial assessment of harm under the sentencing guideline, the judge was right to treat the estimated value of the property as a suitable measure of loss. The argument made was that, even if the figure of GBP 100,000 adopted by the judge was an appropriate measure of the gain made by the appellants, the appellant's gain and the loss caused by the offence were not opposite sides of the same coin. It was argued that, in assessing the loss caused to the owners of the wreck, it is necessary to consider what amount of money they would have received if the wreck had been salvaged legitimately. When any item of wreck comes into the possession of the receiver it must generally be held for a year. If within that time someone establishes ownership of the item, the owner is entitled to receive the wreck or its proceeds of sale on paying any salvage fees and expenses due. If no-one establishes ownership, title passes to the Crown. In either case a legitimate salvor of the wreck may claim a salvage award. The appellants conceded that they were not legitimate salvors. Section 236(2) of the Merchant Shipping Act 1995 (UK) (MSA) expressly provides that a person who fails without reasonable excuse to comply with the duty to declare wreck to the receiver shall forfeit any claim to salvage. The appellants accordingly accepted that no allowance for salvage should be made in assessing the gain made by the appellants from their fraudulent conduct. It was submitted, however, that such an allowance should be made in assessing the loss caused to the owners of the wreck.

Held: Appeal dismissed, save for one variation in calculating sentences.

Pursuant to s 224 of the MSA, the provisions of the 1989 International Convention on Salvage (Salvage Convention 1989) have the force of law in the UK. Article 1.a of the Convention defines a 'salvage operation' as 'any act or activity undertaken to assist a vessel or any other property in danger in any waters'. Article 12 states: 'Salvage operations which have had a useful result give right to a reward.'

It is questionable whether the items of wreck taken by the appellants can reasonably be characterised as having been in danger if left where they were on the seabed. But even assuming in favour of the appellants that their operations were salvage operations within the meaning of the Convention, it is impossible to characterise those operations 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 cannot be regarded as a useful activity, all the less when it involved the plunder (as in some cases it did) of wrecks of historic interest. In these circumstances, it is untenable to suggest that, if the appellants had declared to the receiver the items of wreck which they brought ashore, they would have been entitled to any salvage awards.

Counsel nevertheless sought to argue that it is appropriate, in estimating the loss caused to the owners of the wreck, to deduct the costs that the owners would have had to incur, including salvage awards payable to salvors, if they had chosen themselves to salvage their property or if it had been salvaged legitimately. There is no evidence of what the amount of any such salvage award would have been, save that it would have been a proportion and quite possibly a very large proportion of the value of the salvaged property. Counsel submits that this ought to have been taken into account and a downwards adjustment made in estimating the loss caused by the offences.

If the wreck brought ashore by the appellants had been salvaged legitimately, a significant sum would have been payable to the salvor as a reward. But that consideration is irrelevant to how the loss caused by these offences should be assessed. The offences of which the appellants were convicted were offences of dishonestly failing to disclose to the receiver the items of wreck which they had raised. If they had complied with their duties under s 236 of the MSA, the owners of the wreck would have been entitled to receive the items raised or their proceeds of sale. Prima facie, therefore, they lost the value of those items. In circumstances where the persons who had recovered those items (ie the appellants in this case) would not have been entitled to receive any reimbursement of costs or other reward, the owners would have been entitled to receive the whole value of those items if they had been declared to the receiver. Accordingly, that was the proper measure of loss caused by the offences.