England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL
CRIMINAL DIVISION

		Royal Courts of Justice Strand London WC2A 2LL
		8th May 1996

LORD JUSTICE SWINTON THOMAS: Mr Justice Douglas Brown will give the judgment of the Court.

MR JUSTICE DOUGLAS BROWN: The Home Secretary has referred, under section 17 (1)(a) of the Criminal Appeal Act of 1968, the case of Alan Robert Michael Kearley (deceased) so that the Court should have an opportunity of hearing argument as to whether a confiscation order made under the Drug Trafficking Offences Act 1968 should be varied or set aside. The application is made in these circumstances.

In May 1989, in the Crown Court at Bournemouth, Kearley was convicted of unlawfully supplying a controlled drug, Count 5, possessing controlled drugs with intent to supply, Count 6, and two counts of possessing controlled drugs, Counts 7 and 8. On other indictments he pleaded guilty to one count of possessing a controlled drug and four counts of handling stolen goods. Following conviction there was an enquiry under the Drug Trafficking Offences Act which resulted in a confiscation order of the £10,371.34 being made. Kearley was sentenced to two years' imprisonment concurrent for the two offences involving supplying and twelve months concurrent for the two offences of possessing a controlled drug. On the indictment containing the handling counts he received five years on each count to run concurrently, and on another indictment, for possessing a controlled class B drug, six months' imprisonment consecutive, a total of 5½ years' imprisonment. His appeal against conviction was dismissed on 29th November 1990. On the same day the appeal against sentence was allowed in part. The sentences for the drug offences on the first indictment stood, the handling sentences were reduced to four years and the consecutive sentence of six months reduced to one month. The appeal against conviction was based on an assertion that what personal callers and telephone callers to Kearley's house said to police officers at the house was inadmissible as being hearsay. The Court of Appeal decided that the evidence was admissible and provided cogent evidence, together with the quantity of drugs and other items found at appellants house, to establish that he was a drug dealer. Kearley appealed to the House of Lords, and his appeal was successful in that the counts linked to the disputed evidence, i.e. possessing amphetamine with intent to supply and the two counts of possessing amphetamine, were quashed: see R. v. Kearley (1992) 2 AC 228. The count involving supplying amphetamine, Count 5, was unaffected by the admissibility argument and that conviction stood. The case was remitted to this Court under section 35(3) of the Criminal Appeal Act 1968 for determination as to whether the confiscation order should be set aside or varied. Lord Oliver of Aylmerton said, at page 260, of Kearley:

".....he submitted to the making of an order for the confiscation of a sum of £10,371 pursuant to the Drug Trafficking Offences Act 1986. He claims, and it is reasonable to accept, at any rate for present purposes, that he agreed to submit to the confiscation order solely on the basis of his conviction on count 6, since count 5 related only to a relatively small number of non-commercial transactions."

Before the case could be re-listed, the Registrar was informed by Kearley's solicitors that he had been murdered. The matter came before this Court on 11th November 1993. In short, this Court decided that the death of Kearley had caused the appeal to abate. That decision was also challenged in the House of Lords. On 14th July 1994 the House of Lords held that the Court of Appeal had no jurisdiction to consider the question of the confiscation order because of the appellant Kearley's death: that is R. v. Kearley (No 2) [1994] 3 All ER 246. It is in these circumstances that after representations from Kearley's widow that the Home Secretary has referred the matter to this Court. It was held by this Court in R. v. Maguire and Others (1992) 94 Cr.App.R. 133, that the wide meaning of section 17(1)(a) of the Criminal Appeal Act 1968 gave the Court power to consider a reference by the Home Secretary in respect of a deceased defendant.

Before coming to the contentions on behalf of Kearley's representatives and the Crown, we must refer to the facts in a little more detail.

On 6th October 1988 Drug Squad officers were keeping observation on Kearley's address in Christchurch. A number of youths were seen entering and leaving. The following day the officers saw, through field glasses, Kearley weighing out amphetamine and supplying it to a man called Doidge. It was alleged that the amphetamine was supplied in exchange for jewellery. Kearley was acquitted on this count. The address was raided by officers the same day. Plastic bags were found in the rubbish which contained traces of amphetamine. Tuinal tablets were found hidden in a bathroom bin, and 17.4 grammes amphetamine, worth £208 on the street, were found in the roof of a rabbit hutch. Kearley was wearing 15 items of jewellery valued variously at between £8,000 and £12,000. He had on him £1,250 mainly in £50 notes. Then there was the disputed evidence that a number of persons called seeking drugs, either personally or on the telephone. They were dealt with by officers purporting to act for Kearley. Kearley was not present and did not hear these calls. One of the personal callers was a man called Andrew Fry. His evidence, which was clearly accepted by the jury, related to the count of supplying amphetamine, the count which survived, and for which Kearley had been sentenced to two years' imprisonment. Fry's evidence was that for about 18 months he was supplied with amphetamines by Kearley. He got about a gramme each time which, if he had had to pay for it, it would have cost £10. He did not, however, pay for it. He was able to obtain Valium tablets on prescription from his doctor and he exchanged or bartered Valium tablets for amphetamine. In return for 20 Valium tablets he would receive one gramme of amphetamine. Originally in his evidence he said he visited Kearley to conduct this kind of transaction once a month, but when cross-examined he was prepared to accept there might have been only six occasions in all that this particular deal was struck.

Turning to the confiscation order, it was not suggested on behalf of Kearley that the order was anything other than properly made until Counts 6,7 and 8 were quashed. The procedure the Judge had to follow was this, derived from the provisions of the Drug Trafficking Offences Act of 1986.

1. Under section 1 the Court must determine whether a defendant who has been convicted of a drug trafficking offence has benefitted from drug trafficking (whether or not such benefits are directly related to the offence for which he stands convicted: see R. v. Preston [1990] Crim LR 528.)

2. If so, then under section 2 the Court must determine the value of the defendant's proceeds of drug trafficking, which sum is, prima facie, the amount to be recovered under the confiscation order.

3. If the defendant does not dispute his ability to pay, then the Court must make a confiscation order for the amount of the value of the proceeds or, if the defendant does dispute his ability to pay, determine the amount that might be realised.

4. Having made that determination the Court "Shall then, in respect of the offence or offences concerned -

(a) Order him to pay that amount."

The provisions of this Act have been described as draconian, and nowhere is this more clearly seen than in section 2. In summary this provides that unless the defendant showed them to be incorrect, the Court may make a number of assumptions, e.g. that the property held by him since conviction, or transferred to him at any time since the beginning of a period of six years ending when the proceedings were instituted against him was, received by him as payment or reward in connection with drug trafficking. Kearley, through his counsel, submitted to the making of the confiscation order in the sum £10,371.34. He declined the opportunity to call evidence to rebut the assumptions in section 2 had such evidence been available. Before the Judge his counsel admitted and accepted that Kearley had benefitted from drug trafficking in excess of that precise figure, and it was further accepted that the amount available for confiscation amounted to that sum. Before us Mr Aspinall QC, who, as junior counsel, appeared for Kearley at his trial, has argued, as he argued before the House of Lords, that the circumstances of Kearley's conviction on Count 5 (the "Fry" count) do not in themselves warrant confirming the confiscation order in the sum of £10,371.34. Mr Aspinall's cogent submissions came down to this. The concession or admission that he had benefitted from drug trafficking was made after conviction in a trial in which he did not give evidence. He had a previous conviction for drug trafficking in that in 1986 he had been sentenced to 18 months' imprisonment for supplying controlled drugs. The evidence of numerous callers to the flat, if the evidence was admissible, was indicative of drug dealing on a considerable scale, and although he served a counter schedule claiming his assets were the product of his profits from dealing in jewellery and from gambling, it was in the highest degree unlikely that the Judge would believe him. The Judge was bound to reject any evidence Kearley gave to that effect, and he would inevitably find that Kearley had benefitted from drug trafficking. The basis of that finding would have been the evidence later ruled inadmissible. This was recognised by Lord Oliver of Aylmerton in the passage we have referred to. Mr Aspinall's contention, in these circumstances, is:

1. With only the very limited evidence of the Fry incident of supplying, with profits from the six swap transactions being so small as to be de minimis, the Judge would not have proceeded along the drug trafficking offences order route. Neither should this Court now. It is extremely unlikely that the Judge, with only the conviction on Count 5 to go on, would have formed the view that Kearley had benefitted from drug trafficking to the extent that financial statements should be prepared by the Prosecution and a potentially lengthy hearing take place.

2. If Kearley had been alive, the Crown could have contended before this Court, when the matter was remitted, that his conviction, the possession of jewellery and money, and of drug dealing impedimenta such as scales, justified the conclusion that he had benefitted from drug trafficking. Kearley would have, however, been in a position to answer all this by instructions to his solicitors and counsel and by evidence. It could not, in the circumstances of this case, be successfully held against him that he had conceded drug trafficking benefit following his conviction. Because Kearley is dead and is not available to contest the Crown's assertion, it would be unjust to allow the confiscation order to stand now that Counts 6, 7 and 8 have gone.

Mr Carter-Manning QC, for the Crown, rightly abandoned a contention that because the enquiry was inquisitorial in nature the evidence ruled inadmissible could nevertheless be relied on by the Crown. He further expressly did not rely on section 3(1) of the Act which provides that where a defendant accepts, to any extent, statements tendered to the Court by the prosecutor, the Court may treat his acceptance as conclusive of the matters to which it relates. He recognised that a new situation was created by the quashing of the counts by the House of Lords, and Kearley could not have been held to the concession. Nevertheless, he submitted that concession or admission was a factor to be considered. The Crown's contention was that the evidence of the supplies to Fry would in itself be enough to sustain a finding of benefit. As these supplies were over a long period, it was clear that Kearley constantly had amphetamine available for supply, and did supply it. Once that was established, the Court was entitled to investigate the whole of the appellant's drug trafficking activity "at any time", the words of section 1(3). Because the Act is expressly retroactive, the Court could have regard to his previous conviction for drug trafficking. In addition, his unexplained income, weighing scales found to be present, the jewellery, the money found on him, and his lavish and expensive lifestyle, of which considerable detail was provided in the Prosecution's statement, all could be considered. Although the convictions in respect of these matters were quashed, the Court could also have regard to the traces of amphetamine found in the plastic bags (Count 7) and the Tuinal found in the bathroom (Count 8). All of those matters would properly have been material for the Court to consider on a contested application for confiscation.

In our view once it is conceded by the Crown that the concession made on behalf of Kearley at Bournemouth Crown Court cannot stand, this confiscation order must be set aside. The Crown is clearly able to present a formidable case that Kearley benefitted from drug trafficking, quite apart from the inadmissible evidence of visitors to his premises. It may well be that after the matter had been remitted, Kearley would not have been able to persuade this Court that the orders should be set aside or varied. However, Mr Aspinall is right when he says that Kearley's death changed the situation. Because he is not available to meet the Crown's case put in the new circumstances created by the quashing of Counts 6, 7 and 8, injustice could result. The circumstances of this reference are unusual and exceptional, if not unique, but in all the circumstances, for the reasons we have given, this confiscation order is set aside.

MR TRAVERS: May it please you, my Lord. In relation to costs I am instructed to make two applications. The first concerns legal aid for counsel. Legal aid was granted for counsel in this case on the basis of single counsel. I am asked to invite the Court to extend that to leading counsel. As your Lordship is aware, there were two cases preceding this matter which were dealt with by Mr Aspinall prior to him taking silk and in

the ----

LORD JUSTICE SWINTON THOMAS: Just let me interrupt you for a moment. The papers, if my recollection is correct, and I am confident that it is, gave legal aid for single junior counsel, Mr Aspinall, to appear as such if he wished to, so that Mr Aspinall then had a clear choice as to whether he wished to continue to act as junior counsel or say "No", he did not want to.

MR TRAVERS: My Lord, you have had the benefit of seeing the papers which I have not. However, my Lord, I would say, having spoken to Mr Aspinall, that it may possibly be that that was an inadvertent oversight. I know not, my Lord. In any event, I would ask the Court to consider that the Crown was represented by leading counsel ----

LORD JUSTICE SWINTON THOMAS: That is true.

MR TRAVERS: ---- and in all the circumstances of the case, given the fact, my Lord, that Mr Aspinall had represented the defendant in two related cases, I would ask the Court to take the view that it is appropriate to extend the legal aid, even if this application has not been made, perhaps, at the most appropriate point in time.

LORD JUSTICE SWINTON THOMAS: Thank you. I am sorry, I thought you said you had two applications.

MR TRAVERS: There are. There is a second application, and it concerns the costs of the solicitors who made the initial application to the Home Secretary for a reference. I am asked to invite the Court to extend legal aid to cover the costs of that application.

LORD JUSTICE SWINTON THOMAS: Just a moment (slight pause).

In relation to your first application, Mr Travers, what is the difference? It means that Mr Aspinall will get better paid. Simple as that, is it?

MR TRAVERS: My Lord, I take it that is the benefit, yes.

LORD JUSTICE SWINTON THOMAS: Yes, I suppose that is probably right.

So far as your second application is concerned, what troubles us is that the work was not done in relation to this reference to the Court. It was done prior to that. Have you any authority, or any learning, which would assist us as to whether we have power?

MR TRAVERS: My Lord, I have not been able to find any authority on that point to assist the Court.

LORD JUSTICE SWINTON THOMAS: What we were going to suggest, Mr Travers, is this. So far as your second application is concerned, you should put it in writing, and I think that we would like to consider the position with the papers as to the time when the work was done and, bearing that in mind, whether we have any power to extend the certificate, and, for my own part, I would like to consult the Criminal Appeal Office, who are usually knowledgable about these matters, and deal with it on paper.

MR TRAVERS: Yes.

LORD JUSTICE SWINTON THOMAS: Unless you object to that.

MR TRAVERS: No.

LORD JUSTICE SWINTON THOMAS: If we deal with it on paper and your solicitors are dissatisfied they would, in any event, have the right to come back and make oral representations.

MR TRAVERS: Yes, my Lord. The procedure being then for them to make the application via the Criminal Appeal Office.

LORD JUSTICE SWINTON THOMAS: What I suggest you do is - you recollect, in general terms, what I have said, and the Criminal Appeal Office will be told, and you invite your solicitors to write a letter to the Criminal Appeal Office setting out the facts and indicating to the Criminal Appeal Office that I suggested that that should be referred to me.

MR TRAVERS: Thank you, my Lord.

LORD JUSTICE SWINTON THOMAS: All right?

MR TRAVERS: Yes.

LORD JUSTICE SWINTON THOMAS: So far as the first application is concerned, we will grant it. That is we will grant legal aid to cover one leading counsel.

MR TRAVERS: Thank you.