England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL
CRIMINAL DIVISION

		Royal Courts of Justice Strand London, WC2
		MONDAY, 10th July 2006

1. THE VICE PRESIDENT: This is an appeal by the Crown under section 31 of the Proceeds of Crime Act 2002, (the Act), in relation to orders made by His Honour Judge Bidder QC on 26th October 2005, in proceedings under the Act. Those proceedings related to the assessment of benefit and consequential orders to be made as a result in relation to four defendants who were then before the court and are represented before us today.
2. The background facts need to be stated only very shortly for the purposes of these proceedings. All four of the defendants were involved in one form or another with drugs, particularly heroin, in Bridgend. The proceedings resolved in the following way. The first defendant to plead guilty was Natalie Richards, who on 14th March 2005 pleaded guilty to conspiracy to supply a controlled drug of Class A and she was sentenced to a community rehabilitation order for 2 years. On 24th March 2005 Barry Jones pleaded guilty to an offence of being the occupier of premises the knowingly permitted or suffered the supply of a controlled drug, namely diamorphine on those premises, and was sentenced to 2 years' imprisonment. On 7th April 2005 Paul Lawes, on rearraignment, pleaded guilty to the conspiracy to supply a controlled drug of Class A and was sentenced to 3 years' imprisonment. There was a consequential order in relation to a Drug Treatment and Testing Order as a result of which he was sentenced to a further 6 months' imprisonment. On 15th June 2005 Samantha Jones pleaded guilty to supplying a controlled drug and was sentenced to a 12 month Drug Treatment and Testing Order.
3. The proceedings with which we are concerned were preceded by the usual investigations which were carried out by a Detective Constable Wynn Lewis, who prepared statements under section 16 of the Act, in relation to each of the defendants. His conclusions were that as far as Barry Jones, Samantha Jones and Natalie Richards were concerned, they had each benefited to the extent of £31,500, but that there were no assets. As far as Paul Lawes was concerned, he concluded that he had benefited to the extent of £87,343.64p but, again, he had no assets. If those reports had been accepted they would have resulted in a nominal order in relation to each of the defendants under section 6 of the Proceeds of Crime Act 2002.
4. The judge, however, having heard argument from all parties, concluded the hearing in the following terms:

"In relation to Mr Lawes there is, in my judgment, on the face of the report, no evidence of any benefit. In relation to the others there is, on the basis of the reports, evidence from the Defendants' own interviews that they have got into their possession controlled drugs which had been used either for their own purposes or for the purposes of their co-Defendants, who are addicted to drugs. They no longer have any assets whatsoever and, given their chaotic life-styles, it is unlikely that they will have any substantial assets in the foreseeable future.

If I make the assumptions that I am entitled to make under Section 10 it seems to me that there is a serious risk of injustice to the three Defendants against whom there is some evidence of benefit, in that such benefit they have over a period of years was ephemeral, it was put into drug abuse and to have a Confiscation Order hanging over their heads in the future neither is of assistance to Society, because the enforcement of it leads to great expense, nor to the Defendants and I, therefore, make no Confiscation Orders in relation to any of these Defendants."

5. The Crown appeals that decision both generally in relation to the way the judge treated his approach to section 10 and, in particular, in relation to the defendant, Paul Lawes, on the basis that although he concluded that there was no evidence of any benefit there was clear evidence in a section 9 statement, in particular from Barry Jones, of benefit.
6. As to that latter discrete matter, there can be no doubt that the judge fell into error. There was evidence of benefit in the section 9 statement of Barry Jones, but it may well be that there is further evidence as well; and that aspect of the matter will have to be considered by the Crown Court in due course.
7. Turning then to the issue of general principle raised by the way in which the judge dealt with the other defendants, the Crown submits that the judge made a fundamental mistake. Having concluded that there was evidence of benefit, he was statutory obliged to make an order requiring the defendants to pay the "recoverable amount" pursuant to section 6(5)(b). Instead, he appears to have concluded that section 10(6) gave him a general discretion to make an order. This subsection, to which we will return in its context later provides:

"But the court must not make a required assumption in relation to particular property or expenditure if--

(a) the assumption is shown to be incorrect, or

(b) there will be a serious risk of injustice if the assumption were made."

8. On behalf of the defendants, counsel have submitted to us that essentially the judge was, by that subsection, given a discretion in relation to the determination of what ultimate order ought to be made, which he exercised properly, taking into account relevant considerations, and accordingly is unassailable before us on appeal.
9. In order to understand the complaint by the prosecution it is necessary just shortly to indicate the structure of the Act. Section 6 requires the court, if certain preconditions are met, which they were in this case, to proceed to make certain determinations. In first instance it must decide whether the defendant has what is called a "criminal life-style". If it so decides, it must by section 6(4) decide whether he has benefited from his general criminal conduct. If it concludes that he has not a criminal life-style, it must decide whether he has benefited from the particular criminal conduct.
10. Having made the appropriate determination the court must then proceed, pursuant to subsection (5) to determine the recoverable amount which is defined in section 7 of the Act; it must then make a confiscation order requiring him to pay that amount.
11. A combination of those subsections and section 7, 8 and 9 essentially require the court to determine benefit, and then determine what is called the "available amount". The recoverable amount is essentially the lower of the benefit, so determined or the available amount so determined. Accordingly it is apparent from the structure of the Act that Parliament intended that in every case where the court has concluded that there is benefit, it must make an order.
12. In determining benefit, section 10 applies and entitles the court to make certain assumptions in cases where a person is held to have had a criminal life-style. Criminal life-style is defined in Schedule 2 to the Act; and all these defendants fall into the category of those who are to be held to have a criminal life-style. It follows that the assumptions in section 10 are to be applied to them when the court determines the benefit.
13. It is only when considering the appropriateness of applying those assumptions that section 10(6) bites. It is there in order to ensure that assumptions made under section 10 are not so unrealistic or so unjust in relation to a particular defendant that they should not be made. It provides a means of moderating the ultimate calculation of benefit.
14. Section 10(6)(a) is clear in its terms. As far as section 10(6)(b) is concerned, the question will arise, in relation to any case, as to what will be considered unjust in the circumstances. The prosecution submit that whatever meaning one gives to the phrase "serious risk of injustice", that cannot include the fact that an order will create hardship. Support for that can be gleaned from Blackstone's Criminal Practice 2006, paragraph E-217, at page 2129:

"The risk of injustice must arise from the operation of the assumptions in the calculation of benefit and not from eventual hardship in the making of a confiscation order (Dore [1997] 2 Cr App R(S) 152; Ahmed [2005] 1 WLR 122). What is contemplated is some unjust contradiction in the process of assumption (eg double counting of income and expenditure), or between an assumption and an agreed factual basis for sentence (see Lunnon [2005] 1 Cr App R(S) 111; Lazarus [2005] Crim LR 64)."

With that we agree. The purpose of the exercise is to ensure that there is ultimately a sensible calculation of benefit. It is not a discretionary exercise by the judge to determine whether or not it is fair to make an order against a particular defendant.

15. In the present case, from the citations from the ruling of the judge, it will be apparent that leaving aside for the moment the question of the defendant, Paul Lawes, as far as the other three defendants were concerned, he concluded that there was benefit. The fact that any benefit was ephemeral, in the sense that it may have been frittered away, perhaps on drugs, is irrelevant to the question. It remained benefit for the purposes of the Act. He was obliged to determine what that benefit was. He failed to do so.
16. It is only when the calculation is carried out applying the assumptions that the issues under section 10(6) can arise. But the judge appears not to have taken the matter to that stage of enquiry. In those circumstances, we allow the appeal of the Crown and remit the matter to the Crown Court for those calculations to be carried out in accordance with the Act.
17. THE VICE PRESIDENT: As far as the judge to whom the case should be allotted is concerned, have you any submissions to make, Mr Elias. Should it be Judge Bidder or not?
18. MR ELIAS: We thought it probably should go back to a new judge.
19. THE VICE PRESIDENT: Are there any submissions from the defendants?
20. MR BENNETT: I have none, thank you.
21. MR EVANS: My Lord, a practical point. The only thing that occurs to me of possible consideration is the question of the transcript of your Lordship's judgment in relation to this matter today. It is not often available until some months after the judgment is given, but whether the people--
22. THE VICE PRESIDENT: I would hope I would have it and have corrected it within the next 7 days, but I cannot promise that, but we will do our best.
23. MR ELIAS: I doubt this will be listed this side of 7 days.
24. THE VICE PRESIDENT: It will be remitted to the Crown Court at Cardiff, to be listed before a different judge from Judge Bidder QC. Thank you very much.