England and Wales Court of Appeal (Criminal Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM CROYDON CROWN COURT
HIS HONOUR JUDGE POLLOCK
0007005Z2

		Royal Courts of Justice Strand, London, WC2A 2LL
		09/03/2004

The Recorder of Newcastle:

1. On 15 June 1999 at the Crown Court at Croydon before His Honour Judge Pollock and a jury this applicant was convicted on two counts of being knowingly concerned in the fraudulent evasion of the prohibition on the importation of a class A controlled drug namely cocaine. On 23 June 1999 Judge Pollock sentenced him to 14 years' imprisonment in respect of each count concurrent.
2. In November 2000 Judge Pollock conducted the drug trafficking inquiry. The learned judge found that the appellant's benefit from drug trafficking was £149.433 and that his realisable assets were £125.369. He therefore made a confiscation order in that latter sum under s 2 of the Drug Trafficking Act 1994 with a sentence of 30 months imprisonment in default of payment to be served consecutively to the 14 years. He provided for £869 to be paid within 28 days and the balance no later than 31 July 2001.
3. An application for leave to appeal against conviction was dismissed by the Full Court on 1 August 2000. However, following a refusal to grant leave to appeal against sentence by the single judge the Full Court granted leave to appeal on a single fresh ground on 17 March 2003.
4. It is that single fresh ground with which this court is concerned.
5. It is as follows:

"The confiscation order was unlawful to the extent of £118,578 in that the learned judge, having appeared to find that a serious risk of injustice existed in respect of 5 particular items of property and expenditure under s 4(4)(b) of the Drug Trafficking Act 1994, nonetheless held that the risk could be eliminated by reducing the value of the assumptions by a notional amount of 25% in each case."

6. It is submitted that on a proper construction of s 4 of the Drug Trafficking Act 1994 once the judge found that a serious risk of injustice arose in relation to any particular item of property or expenditure, he could not make any assumption in respect of that item. The question of whether it is lawful to make a partial reduction of the type made by the learned judge by virtue of s 4(4)(b) of the Drug Trafficking Act 1994 also falls for consideration.
7. For the purpose of this hearing the facts can be very shortly stated and we adopt with gratitude the short summary set out in the judgment of the Court when it granted leave.
8. In August and September 1998 there were two importations of cocaine at Gatwick Airport from Jamaica in luggage carried out by other men who became this appellant's co-accused in the trial. Each importation was of something over half a kilogram of cocaine at 100% purity. At the trial one of the co-accused gave evidence that it was he, the appellant, who had organised the importations. Such was the basis upon which the judge sentenced.
9. In due course, after proper postponement, the drug trafficking enquiry was held by Judge Pollock. That enquiry was governed by the statutory scheme for confiscation of the proceeds of drug trafficking as provided for by sections 2-10 of the Drug Trafficking Act 1994. So far as this appeal is concerned it is only necessary to set out section 4. That provides as follows:

"4(1) For the purposes of this Act -

(a) any payments or other rewards received by a person at any time (whether before or after the commencement of this Act) in connection with drug trafficking carried on by him or another person are his proceeds of drug trafficking; and

(b) the value of his proceeds of drug trafficking is the aggregate of the values of the payments or other rewards.

(2) Subject to subsections (4) and (5) below, the Crown Court shall, for the purpose -

(a) of determining whether the defendant has benefited from drug trafficking, and

(b) if he has, of assessing the value of the proceeds of drug trafficking, make the required assumptions.

(3) The required assumptions are -

(a) that any property appearing to the court -

(i) to have been held by the defendant at any time since his conviction, or

(ii) to have been transferred to him at any time since the beginning of the period of six years ending when the proceedings were instituted against him,

was received by him, at the earliest time at which he appears to the court to have held it, as a payment or reward in connection with drug trafficking carried on by him;

(b) that any expenditure of his since the beginning of that period was met out of payments received by him in connection with drug trafficking carried on by him; and

(c) that, for the purpose of valuing any property received or assumed to have been received by him at any time as such a reward, he received the property free of any other interests in it."

10. There then follows the important subsection so far as this appeal is concerned.

"(4) The court shall not make any required assumption in relation to any particular property or expenditure if -"

(a) that assumption is shown to be incorrect in the defendant's case; or

(b) the court is satisfied that there would be a serious risk of injustice in the defendant's case if the assumption were to be made;

and where, by virtue of this subsection, the court does not make one or more of the assumptions, it shall state its reasons."

11. In the appropriate statement served under the Act the prosecution invited the learned judge to make section 4 assumptions in respect of eight items of income and three items of expenditure totalling nearly £640,000. The judge heard evidence from the appellant and considered documents placed before him by the applicant. He also had regard to evidence given during the trial by a Miss Josiah who was the appellant's girlfriend. The judge gave a long and careful judgment and found, as we have stated earlier, that there had been a benefit from drug trafficking of £149,433. and that there were realisable assets of £125,269.
12. Complaint is made of five of the judge's findings and is broadly the same in each instance. There are a number of items of income for which the appellant had no obvious explanation. His account in respect of these five findings was that he had legitimate sources of income one of which was a business described as an "off the books property business". This was said to have provided large sums of money. The evidence for this came partly from the appellant and partly from Miss Josiah who had said during the trial that this business had been extremely successful. Although the appellant had not made a good impression on the judge - he was described as evasive and extremely vague - the judge was prepared to give credence to Miss Josiah's evidence.
13. The judge then had to consider the application of section 4(4)(a) and 4(4)(b) and approached his task in this way. Rather than finding that the assumption had been shown to be incorrect as to part of the disputed sum under sub-section (a) he made a percentage reduction in order to avoid injustice under sub-section (b).
14. We consider each of the individual five findings of which complaint is made adopting the original enumeration:

(i) The assumption made under this heading was as to £120,000 introduced into Galaxy Estates. That figure had not been shown to be incorrect under s4(4)(a). The judge considered that allowance ought to be made for any part of the £120,000 that could have been borrowed from the appellant's associate, one David White, or could also have come from the so-called "off the book property sales." He went on to say that any serious risk of injustice if the assumptions under s4(4)(a) were made "could be eliminated if I deduct from that figure of £120,000 the £10,000 said to have been borrowed from David White, leaving £110,000 and if I deduct from that figure a further 25% leaving £82,000."

(ii) The assumption under this heading related to an account number no 40355445. The amount was £7,460 and had not been shown to be incorrect. The judge then said: "However, having made all due allowance having regard to the appellant's evidence about 'off the book property sales', having regard to the evidence which Miss Josiah gave at the trial and having regard to all the material presented on paper by the defence I consider that any serious risk of injustice, if the assumptions were to be made, can be eliminated if I deduct 25% from that figure of £7,460, leaving £5,595."

(iii) The assumption made under this heading related to account number 70118648 and the sum concerned was £57,698,65. The judge found that the assumption was not shown to be incorrect. He went on to say that in the light of the appellant's evidence that the credits came from a legitimate source or sources "any serious risk of injustice if the assumption were to be made can be eliminated if I deduct the credit for £13,000….and then deduct a further 25% which, rounded down to the nearest pound, amounts to £33,523."

(vii) This heading concerned money transfers totalling £33,880. The judge accepted that the money had come from Galaxy Estates and that a figure of £10,000 had been sent to a Mr Bailey as a refund on a deposit on a property. He continued - "In the circumstances I shall deduct £10,000 from that figure of £33,880, making £23,880, and then, giving due weight to all the evidence including the material produced on paper by the defence, I find that any serious risk of in justice if the assumption were to be made can be eliminated by making further deduction of 25% which comes to £17,910."

(x) the findings under this heading were as follows:

(a) the prosecution had established a total expenditure of £4,152 in respect of air travel by the appellant.

(b) that the assumption had not been shown to be incorrect.

(c) however, in considering what allowance ought to be made for expenditure which could have come from legitimate earnings the judge said "I find that any serious risk of injustice if the assumption were to be made will be eliminated if I reduce that figure of £4,152 by 25% so that I find that the defendant's benefit under this heading is £3,114."

15. It is submitted on behalf of the appellant that in each of the five headings to which we have referred the learned judge made a finding that a serious risk of injustice would arise if the assumptions were to be made in full. Accordingly, the argument went, he should not have made any assumptions whatever in respect of those items. It is argued that the language of the section is clear. Where a court is satisfied that there would or might be a serious risk of injustice if the assumption were to be made the consequence is mandatory and, by virtue of subsection (4) "the court shall not make any required assumption."
16. It is submitted that the court had no power to make the assumption in respect of any particular proportion of these items once it had found that a serious risk of injustice had arisen. It is further submitted that there is no power under subsection (4) for the court to eliminate any risk that the court might have perceived there to be by making a percentage reduction.
17. In reply it is submitted by the prosecution:

1. that the learned judge properly directed himself as to the law.

2. That on a proper construction of his remarks the judge made no finding that there would be a risk of serious injustice to the appellant if the assumptions were made.

3. What the judge did was to guard against any possible risk of serious injustice to the appellant by deducting certain items from his calculations and rounding down by 25% where he thought it appropriate to do so. In so doing, it is argued, he was properly exercising his discretion under subsection 4.

18. We have been referred to the speeches of Lord Steyn in R v Rezvi [2002] 1AER 801 and R v Benjafield [2002] 1 AER 815 where he said (at page 818)

"The procedure devised by Parliament is a fair and proportionate response to the need to protect the public interest is that under the 1994 Act, as under the 1988 Act, the judge must be astute to avoid injustice. If there is or might be a serious or real risk of injustice he must not make a confiscation order."

19. This, in our judgment, is precisely what the judge sought to do in this case. In fact, it might be said that he lent over backwards to reach conclusions which were most favourable to the appellant. We reject the submissions of the appellant, attractively presented as they were by Mr Hall, and do not accept their initial and superficial appeal.
20. Nowhere does the Act refer to "items", only to "property or expenditure". The judge was concerned with monies passing through bank accounts or global heads of expenditure. Every payment into a bank account is property "transferred to him"; every airfare is an "expenditure." The Act does not recognise categories of property held by or transferred to the defendant. Each holding, transfer, or expenditure must, on a strict construction of the Act, be considered separately. It cannot be the law that if a judge concludes in respect of any single item of holding, transfer or expenditure that there would be a serious risk of injustice if the assumptions were to be made, that prohibits the application of the assumptions in respect of any holding, transfer or expenditure in the same category. In our judgment, therefore the words "any particular property or expenditure" in S 4 (4) do not preclude a finding that there would be a serious risk of injustice in relation to part of a particular item but not to the whole.
21. This, in reality, was what the judge did in each of the five disputed headings. He reached his conclusions on the evidence and made his findings on the specific figures. To eliminate any serious risk of injustice he made the additional deduction of 25%. During argument that was described as a "safety first" approach. We see nothing unlawful or improper in that. True, he did not confide the basis for his finding of 25%. But he heard the evidence and weighed up the whole situation. He expressly found that the risk of serious injustice would be eliminated if he adopted that percentage. He was not saying that he considered that 25% of the fund came from legitimate dealings – for otherwise he would have held that the assumptions had been shown to be incorrect in relation to that percentage. Thus he is inevitably in the realm of uncertainty and cannot be expected to articulate a precise and logical basis for his figure. What he was saying, as it seems to us, is that the percentage he selected is a generous discount to guard against the remote possibility that a small part of the fund under consideration was in fact legitimate. By taking that approach he avoided the serious risk of injustice in the defendant's case if the assumption were to be made.
22. The judge was then entitled to make the required assumptions as to the balance of each particular item. In our judgment he was, in the words of Lord Steyn, being "astute to avoid injustice."
23. Any different conclusion to the one that we have arrived at would be an affront to common sense. We can detect no fault in the very sensible approach adopted by the judge.
24. Accordingly, this appeal is dismissed.