England and Wales Court of Appeal (Criminal Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM WOOD GREEN CROWN COURT
MR RECORDER KNOTT
(T2005 0369)

		Royal Courts of Justice Strand, London, WC2A 2LL
		26 May 2006

Lord Justice Pill :

1. On 30 September 2005 in the Crown Court at Wood Green before Mr Recorder Knott and a jury, Barrington Payton was convicted of possessing a Class C controlled drug with intent to supply. On 7 November 2005, he was sentenced to 12 months imprisonment. No separate penalty was imposed for an offence of possession of a Class C controlled drug, to which Payton had earlier pleaded guilty. He appeals against conviction by leave of the single judge.
2. On 10 January 2005, police officers entered a flat in which the appellant was living, following a report of a suspected burglary. They discovered 46.38grams of cannabis in a sports bag, divided into eleven sealed bags. A search revealed one thousand self-seal plastic bags, similar to the ones containing cannabis, small digital scales and a safe containing £7,800 in cash, made up mainly of twenty pound notes in good condition. No lists of customers, debts or suppliers were found. The appellant was courteous and co-operative throughout the search and provided the key with which to open the safe. The street value of the cannabis was about £115.
3. At interview, the appellant said that the scales and some of the self-seal bags were not his but he had found them at the flat. The money had come to him as a result of purchasing and selling at a profit salvage vehicles. He said that the cannabis was all for his personal use. He was saving up for plastic surgery to his face. A police officer gave evidence that a drugs dealer handed cash by his customers would not normally want to retain the bank notes he had actually received, and which may be contaminated. She said that very often drugs money was laundered.
4. The appellant gave evidence. He was depressed and unhappy following an attack on him and he had started smoking cannabis to cheer himself up. His habit cost him thirty to forty pounds a day and the quantity found by the police would last him for three or four days. He preferred to buy a larger amount to keep him going for a few days. He measured the cannabis out in packets so that he could space out his consumption. He was trying to save £10,000 to finance cosmetic surgery on his face.
5. Of the £7,800, just over £2,000 belonged to a woman who had been paying him instalments in expectation that he would find her a car, do it up, and sell it to her. He gave particulars of a Vauxhall Tigra and a VW Polo which he had purchased and re-sold. The documentation had been lost. He had never supplied or intended to supply cannabis to anyone.
6. The woman gave evidence that she had given the appellant the sum of just over £2,000 which was her way of saving for a cheap car. She produced bank statements showing appropriate payments out. There was also evidence from a spray painter and a mechanic confirming that they had done some work for the appellant on a salvaged Vauxhall Tigra and a salvaged VW Polo. Another witness said that he had bought a motor cycle from the appellant.
7. We propose to take several points raised on behalf of the appellant very briefly. By reference to the case of Morris [1995] 2 Cr App R 69, it is submitted that evidence of the substantial sum of money found in the flat should not have been admitted. Having regard to the circumstances, the judge was in our view entitled to admit the evidence. The judge gave an appropriate direction to the jury which included a statement that possession of the money was only relevant to the issue in the case if the jury rejected any explanation for that money which had been put forward. The judge made clear that the issue in the case was whether the appellant was in possession of the cannabis with an intention to supply it. The judge also summed-up, in considerable detail, the evidence of and on behalf of the appellant giving reasons for possession of the money.
8. We do not accept the submission that the judge should not have permitted the prosecution to cross-examine the appellant in the way they did about his possession of the money. The prosecution were entitled to test his explanation in cross-examination. The judge directed the jury as to the burden and standard of proof at the beginning of his summing-up. Near the end, he added:

"He [the appellant] has, of course, given evidence and brought forward evidence about the money but it is not for him to prove his defence, it is for the prosecution to prove the case against him".

9. It is submitted that a fuller direction should have been given as to what was meant by money laundering, an expression used by the judge in his summing-up. The point arose because of the evidence of the police officer, as summarised by the judge:

"In particular she explained what perhaps is really perfectly obvious, that a drugs dealer who is handed cash by his customers would not normally want to retain the bank notes which he had been given and very often drugs money is laundered, that is to say one way or another it is changed into money or property which cannot be traced. Money which is clean, you might say."

10. Reference should have been made, it is submitted, to the definition of money laundering in the Proceeds of Crime Act 2002 ("the 2002 Act") with its reference to "the process by which the proceeds of crime are converted into assets which appear to have a legitimate origin, …"
11. We see no merit in this ground. Of course money laundering had not been charged as an offence in itself but the evidence was potentially material to the prosecution allegation that the appellant intended to supply drugs. Replacing old bank notes with notes in good condition is a form of money laundering and, depending on what they made of the evidence, the jury would easily have understood the relevance of the term. It was also open to the jury to accept the defence submission that any replacement of notes was not money laundering because it would not be particularly effective for that purpose.
12. Mr Stradling's submission on behalf of the appellant that the judge misdirected the jury on the issue of the appellant's character requires more detailed attention. The appellant had two cautions for possession of cannabis and two convictions for possession of cannabis. He had pleaded guilty to those offences, as he had to the charge of possession in cannabis in the present case. His defence was that he possessed the cannabis found in the flat for his personal use. On that basis, the convictions were admitted in evidence.
13. Counsel submitted, in the absence of the jury, that in those circumstances, a good character direction should be given. The judge stated:

"I do not think a full good character direction is appropriate but I will certainly bear in mind what you say in giving a direction which will fall a little short of the full good character direction".

14. In his summing-up, the judge stated:

"We cannot say strictly speaking can we that he is a man of good character because he has that one previous conviction and two previous cautions but what I am saying to you is that you must not hold those against him because they do not throw any light on the issue in this case".

In the absence of the jury, counsel requested a further direction but his request was declined.

15. Thus the admitted criminal conduct was small in scale and limited to possession of cannabis. The appellant had admitted the offences and also admitted being a continuing user of cannabis. His defence was that the cannabis found in his flat was for his own use. The issue in the trial was as to whether he intended to supply cannabis to others. That depended on his credibility. He gave evidence, and gave detailed explanations, as to which there was some supporting evidence, of his conduct. There was nothing adverse to his credibility in his record.
16. Where a person of good character has given evidence, he is entitled to a direction in the summing-up which accords with the principles stated in R v Vye [1993] 97 Cr App R 134. The question is whether, in present circumstances, the appellant had lost that entitlement. It is also in issue whether such entitlement as he did have was met by the judge's direction that the jury "must not hold those [conviction and cautions] against him because they do not throw any light on the issue in the case".
17. Mr Stradling relied on the decision of this court, Russell LJ presiding, in Heath (unreported, 1 February 1994). The judge told the jury, as in effect the judge in the present case told them, "entirely to ignore them [the convictions] as far as this case is concerned". The convictions, this court held, were "so lacking in significance to the extent that the appellant should be regarded as a man of good character" and the court held that a good character direction was required. The conviction was quashed.
18. In more recent cases, for example Durbin[1995] 2 Cr App R 84, Aziz [1996] 1 AC 41 and Gray [2004] EWCA Crim 1074, guidelines on the subject of character have been stated and re-stated. It is not necessary for the purposes of this appeal to set them out. Neither is it necessary to consider the difficult question of the extent of the judge's discretion not to give a good character direction when there are convictions but they are old, or limited in nature, or remote from the issue in the case.
19. However, once the judge formed the view he had formed, and formed to the extent of directing the jury not to hold the convictions against him, the appellant was entitled at least to a direction to the effect that his credibility was intact and undamaged either by the convictions or otherwise, and that the jury should take that into account in assessing the credibility of his evidence and the explanations he had given. A judge who has decided that a defendant is, for the purposes of the trial, of good character, must confer the benefit on him of a good character direction. The failure to do so, in present circumstances, amounting to a fatal misdirection and the conviction must be quashed.
20. The judge retains a discretion, in the light of the authorities, as to how full the direction as to good character needed to be. A judge also retains a discretion, in our judgment, as to whether, in other circumstances, a direction need be given at all. In applying the basic principles, the jury should be directed as to the relevance of character in the particular circumstances of the case and what is said should be tailored to provide what is fair in the particular circumstances. The very detailed principles set out in cases such as Gray, valuable as they are, should not, in our judgment, be taken as prescribing precisely what a judge is to do. Circumstances vary infinitely and the judge's task is to ensure fairness to the parties in the particular case, having regard to the underlying principles and the issues before the court.
21. A further ground of appeal is in an alleged abuse of process. Defence advisers became aware that a claim to forfeiture was proceeding in the magistrates' court, with respect to the sum of £7,800, concurrently with the Crown Court proceedings. The appellant had disclosed a considerable amount of material in the forfeiture proceedings in advance of the criminal trial. Mr Stradling made written representations to the magistrates' court (he was not instructed in these proceedings), suggesting adjournment of proceedings there. The appellant did not have legal aid for, and was not represented in, the proceedings before the magistrates.
22. The primary submission is that, in being required to defend the forfeiture proceedings in advance of or at the same time of the criminal trial, there is a risk that the appellant's defence at the trial will be prejudiced. Other parties, such as the woman who claimed that a substantial part of the money was hers, were also involved in the forfeiture proceedings.
23. The judge summed-up in this way:

"In this context it appears that while we have been preparing for the defendant's trial in this court, in another court they have been preparing for a completely different hearing to decide what should be done with the money, the £7,800.

It is, said DC Rourke, in the context of that other case that the defendant has supplied information about the money and the cars and, in particular, has given the police the names of witnesses who could verify his account."

24. No formal abuse of process application was made in the Crown Court. We do not consider that, in the event, abuse of process has been established (or prejudice to the appellant) but we were sufficiently concerned to invite written representations about the practice followed.
25. The result has been a very helpful note, for which we are grateful, submitted by Mr A Bird, based on a report from the Metropolitan Police to the Crown Prosecution Service ("CPS"). Chapter 3 of Part 5 of the 2002 Act empowers a magistrates' court to order the forfeiture of cash in summary proceedings initiated by a constable or customs officer on the basis that it is recoverable property, as defined. Amongst the points made are that it is inevitable in some cases that investigation for the purpose of magistrates' court proceedings takes place during the currency of criminal proceedings. It is pointed out that the parties to the civil proceedings will not be the same as the parties to the criminal proceedings. The CPS has no locus in the civil proceedings and third parties may, as in this case, claim an interest in the cash involved.
26. It is accepted that "close liaison" would be expected between investigators in the civil and in the criminal proceedings. It is submitted that "the overwhelming likelihood is that the police would lodge an application for forfeiture (and so effect the detention of the cash and preservation of the status quo) but then seek an adjournment of the application until criminal proceedings (including any appeal) are concluded." The advantages of this course are described in the note. They include the preservation of the status quo and ensuring that the defendant is "not embarrassed into having to rehearse what may be part of his defence to the criminal allegation". The defendant is unlikely to be in receipt of public funding in the civil proceedings. The potential saving of expense by adjourning civil proceedings is also mentioned.
27. In this case, magistrates authorised continued detention of the money seized on 12 January 2005. DC Naismith lodged an application for forfeiture on 16 March 2005. The appellant was charged with the criminal offence on 18 April 2005. There were directions hearings in the magistrates court and the hearing there was fixed for 3 October 2005, that is a date after the criminal trial.
28. The note continues:

"It is not clear whether this was fortuitous. Certainly had minds been turned to it this is a case where the finding of the cash was being relied upon as evidence of intention to supply, and submissions would have been made that the civil proceedings should not be tried until the conclusion of the criminal proceedings."

29. Witness statements were taken and other enquiries made by DC Naismith for the purpose of the civil proceedings. There is an issue as to whether he interviewed the appellant. The note continues:

"[The] witness statements were disclosed and so there was in fact no lack of disclosure. What is surprising is that the CPS were apparently completely unaware of the cash forfeiture proceedings, and so had not briefed counsel. There was clearly a lack of communication at some stage and lessons have been learned from this case."

30. Mr Stradling has also supplied a helpful note. He submits that it is highly undesirable that civil proceedings for forfeiture should take place before or concurrently with criminal proceedings. "There is a real potential unfairness for a defendant to be put in the position of giving evidence on oath about matters which could affect his criminal trial before his criminal trial takes place. If the defendant chooses not to give such evidence, it might well result in forfeiture of cash seized before his criminal trial has concluded, or even started". The protection provided for defendants by section 17(6) of the 2002 Act, in Part 2 dealing with confiscation proceedings, does not exist in Part 5, it is submitted.
31. The concern we expressed at the hearing is reflected in the contents of those notes, and the submissions of Mr Stradling. Other than to draw attention to the potential problems involved, we do not see a need, having determined the appeal, to investigate further in this case the issues arising. It is not necessary for us to do so and inappropriate in the absence of fuller oral argument and a live issue. It is, however, important that care is taken to ensure that the fair trial of a defendant is not prejudiced by anything arising in civil proceedings in the magistrates' court and steps should be taken accordingly. Liaison between police acting under Part 5 of the 2002 Act and the prosecuting authority is essential. In view of what happened in this case, the issue should be addressed by them.
32. It is for the reasons given earlier in this judgment that this appeal was allowed at the conclusion of the oral hearing.