England and Wales Court of Appeal (Criminal Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM Derby Crown Court
His Honour Judge Benson
T20030317

		Royal Courts of Justice Strand, London, WC2A 2LL
		06/12/2006

Lady Justice Smith :

Introduction

1. This is an appeal against a confiscation order imposed by His Honour Judge Benson at the Derby Crown Court on 7^th April 2004. The circumstances leading to its imposition are as follows.
2. On the 29^th April 2003, at Derby Crown Court, the appellant pleaded guilty to an offence of the theft of a Porsche motor car. On the 12th May 2003, he pleaded guilty to four counts of making off without payment for petrol and one count of dangerous driving. He also appeared before the court in respect of 3 offences of theft of petrol for which he had been committed for sentence by the Magistrates Court.
3. On 17^th July 2003, the prosecution served a statement showing the results of an investigation into the appellant's financial affairs. They sought a confiscation order under the Criminal Justice Act 1988, as amended by the Criminal Justice Act 1993 and the Proceeds of Crime Act 1995. We will refer to this legislation as 'the Act'.
4. On 6^th October 2003, a confiscation order for £18,650 was made pursuant to section 71 of the Act in respect of the stolen Porsche motor car, with 12 months imprisonment in default of payment.
5. On 4^th March 2004, before HH Judge Benson, the appellant was sentenced to a custodial sentence of 27 months comprising 12 months imprisonment for dangerous driving, 9 months consecutive for making off without payment and 9 months consecutive for theft of the Porsche. There was a concurrent sentence for the offences of theft for which he had been committed for sentence.
6. On the 7^th April 2004, Judge Benson made a confiscation order under section 71 of the Act in the sum of £1,566,911 with a default period of 6 years imprisonment. The appellant was also ordered to pay prosecution costs in the sum of £65,348. On 14^th April, a Recovery of Defence Costs Order was made in the sum of £88,681.15 and the prosecution costs order was increased to £71,592.57.
7. The appellant now appeals with leave of the single judge against this second confiscation order. As the main grounds of appeal are that the judge was biased and the hearing unfair and because of the view we have taken of these grounds, it is necessary to set out in some detail a history of the course of the proceedings and the evidence given.

The Facts of the Offences

8. The offences of making off without payment were committed over a period of time. On two occasions in October 2001 and two in August 2002, the appellant made off from petrol stations in Derbyshire and Nottinghamshire without paying for the fuel he had put in his tanks. His cars had been adapted to provide additional fuel capacity. On 8^th August 2002, police saw the appellant at a petrol station. The car he was driving had false registration plates. After filling the tanks, the appellant drove off without paying with the police in pursuit. The appellant drove very dangerously in his attempt to shake off the police. The police gave up the chase but the appellant was identified from CCTV film. The total value of the petrol taken was £219.58.
9. The theft of the Porsche occurred in the following way. The vehicle was stolen by a person unknown from the person entitled to possession. It had been bought on hire purchase so that when it was stolen the finance company became entitled to possession. The finance company discovered that the vehicle was at the appellant's house and sent an agent to take possession of it. When the appellant realised that the car had been taken, he pursued the agent and demanded that it be handed over to him. He was not entitled to it. The demand was reinforced by threats of violence and the agent allowed the appellant to take the car. Initially the appellant was charged with robbery but a plea to theft was accepted.

The Preliminary Stages of the Confiscation Proceedings.

10. On 8^th April 2003, that is shortly before the appellant pleaded guilty to the qualifying offences, the Crown sought a civil restraint order in the High Court. The witness statement in support set out the basis of the confiscation case which was to be presented. The Crown proposed to rely on the provisions of Section 72AA. The Crown would allege that very large sums of money had been transferred into various bank accounts in the appellant's name during the six years prior to his expected conviction and the Crown would contend that these receipts were derived from criminal activity. The High Court granted a restraint order governing all the appellant's property, whether in the UK or elsewhere.
11. It is convenient at this stage to set out the provisions of section 72AA.

"72AA

(1) This section applies in a case where an offender is convicted, in any proceedings before the Crown Court or a magistrates' court, of a qualifying offence which is an offence of a relevant description, if –

(a) the prosecutor gives written notice for the purposes of subsection (1)(a) of section 71 above;

(b) that notice contains a declaration that it is the prosecutor's opinion that the case is one in which it is appropriate for the provisions of this section to be applied; and

(c) the offender –

(i) is convicted in those proceedings of at least two qualifying offences (including the offence in question); or

(ii) has been convicted of a qualifying offence on at least one previous occasion during the relevant period.

(2) In this section 'qualifying office', in relation to proceedings before the Crown Court or a magistrates' court, means any offence in relation to which all the following conditions are satisfied, that is to say –

(a) it is an offence to which this Part of this Act applies;

(b) it is an offence which was committed after the commencement of section 2 of the Proceeds of Crime Act 1995; and

(c) that court is satisfied that it is an offence from which the defendant has benefited.

(3) When proceeding under section 71 above in pursuance of the notice mentioned in subsection (1)(a) above, the court may, if it thinks fit, determine that (subject to subsection (5) below) the assumptions specified in subsection (4) below are to be made for the purpose –

(a) of determining whether the defendant has benefited from relevant criminal conduct; and

(b) if he has, of assessing the value of the defendant's benefit from such conduct.

(4) Those assumptions are –

(a) that any property appearing to the court –

(i) to be held by the defendant at the date of conviction or at any time in the period between that date and the determination in question, or

(ii) to have been transferred to him at any time since the beginning of the relevant period.

was received by him at the earliest time when he appears to the court to have held it, as a result of or in connection with the commission of offences to which this Part of this Act applies;

(b) that any expenditure of his since the beginning of the relevant period was met out of payments received by him as a result of or in connection with the commission of offences to which this Part of this Act applies; and

(c) that, for the purposes of valuing any benefit which he had or which he is assumed to have had at any time, he received the benefit free of any other interests in it.

(5) Where the court has determined that the assumptions specified in subsection (4) above are to be made in any case it shall not in that case make any such assumption in relation to any particular property or expenditure if -

(a) that assumption, so far as it relates to that property or expenditure, is shown to be incorrect in the defendant's case;

(b) that assumption, so far as it so relates, is shown to be correct in relation to an offence the defendant's benefit from which has been the subject of a previous confiscation order; or

(c) the court is satisfied that there would (for any other reason) be a serious risk of injustice in the defendant's case if the assumption were to be made in relation to that property or expenditure.

(6) Where the assumptions specified in subsection (4) above are made in any case, the offences from which, in accordance with those assumptions, the defendant is assumed to have benefited shall be treated as if they were comprised, for the purposes of this Part of this Act, in the conduct, which is to be treated, in that case, as relevant criminal conduct in relation to the defendant.

(7) In this section 'the date of conviction' means –

(a) in a case not falling within paragraph (b) below, the date on which the defendant is convicted of the offence in question, or

(b) where he is convicted of that offence and one or more other offences in the proceedings in question and those convictions are not all on the same date, the date of the latest of those convictions, and

"the relevant period" means the period of six years ending when the proceedings in question were instituted against the defendant."

In the event, it was never to be disputed that Section 72AA applied in the appellant's case because he had been convicted of the necessary qualifying offences.

The Prosecutor's first Section 73 Statement

12. On 17^th July 2003, the Crown served the prosecutor's first statement pursuant to section 73 of the Act in which they set out their case on unexplained transfers into the appellant's bank accounts made during the relevant six year period (1^st December 1996 to end November 2002). The Prosecution had identified 16 such accounts but it was later found that there were in fact 17. The statement invited the court to apply the statutory assumption that the transfers were made in connection with the commission of criminal offences. If the court were prepared to apply the assumption, the effect would be that the appellant would bear the burden of showing, on the balance of probabilities, that the transfers were not made in connection with criminal offences but were the result of lawful transactions. The Crown alleged that the assumption should be applied to transfers into his accounts in the sum of £7,673,637.66. The Crown also contended that the assumption should be applied to other items of property so that the total benefit from criminal activity contended for was £7,803,857.24. This did not include a sum, believed to be of the order of £50,000, which the Crown alleged the appellant had received as state benefits to which he was not entitled.
13. The Crown alleged that the total value of the appellant's realisable property was £669,058.03. This property comprised the contents of his various bank accounts, (most notably £500,000 in an account with Lloyds TSB, Geneva), a property known as The Barn and a Land Rover worth £10,000.
14. The Crown asserted that the appellant was a single man, born in 1960. At the time of his arrest he was living at a house in Sheffield. He had sold that property in March 2003 and by July 2003 was living at The Barn which was outside Sheffield. It was alleged that, although this property was not in the appellant's name, it belonged to him. It had been subject to a number of transfers between the appellant and his associates, Ms L and Mr F. At the time of his arrest, the appellant had said that he was a mobile phone dealer. The Crown alleged that the appellant was the controlling director of two companies. One, named Windyacre Ltd, had recently purchased a business called Edgley Distribution Express Ltd (Edgley) for an estimated purchase price of about £650,000. The value of this company had not at that time been included in the assessment of the appellant's realisable assets. The other company, Hillfoot Developments Ltd (Hillfoot), was thought to be a property development company.
15. Further, the Crown alleged that a firm of solicitors named Taylor and Emmett were acting for the appellant in connection with the proposed purchase of a number of companies. This firm had provided the police with a copy of a curriculum vitae (CV) by which the appellant had introduced himself to them as a client. It stated that from 1981 to 1990, the appellant had been a sole trader as a building contractor and shopfitter. From 1990, he had been a property developer and property investor. It claimed that the appellant was a typical self made man without formal qualifications who had relied on hard work and a shrewd grasp of the mechanics of property investment and development. It said that he had turned a very modest starting capital into a sizeable asset base. Apart from property and other holdings, he had provable funds of about £1million on deposit with clearing banks and had a similar sum on deposit in offshore accounts. His standing with many major lending institutions was such that very extensive credit lines were available to him. He was now wishing to move some of his investments into 'more corporate areas' and was seeking suitable acquisitions. He was a 'hand's off' investor preferring to acquire companies with incumbent management or companies into which he could introduce one or more specialists from a small team he retained for the purpose. His preferred operating strategy was to acquire, expand, restructure, consolidate and exit in around five years, a strategy which had paid handsome dividends in the past. The Crown's case was that this was a work of fiction.
16. The Crown pointed to evidence which it was suggested indicated dishonest dealing. The appellant and two associates had cross-fired cheques for very large sums of money.

Adjournment of Confiscation Hearing

17. The confiscation hearing had originally been fixed for 24^th November 2003, but this date was vacated at the appellant's request and a new date fixed for the hearing to begin on 1^st March 2004. This was to allow further time for the appellant's accountant to prepare a report to accompany the appellant's response.

The Appellant's Response

18. On 30^th January 2004, the appellant served his response, to which was annexed his accountant's draft report. We do not intend to set out all the contentions advanced in this response. Suffice it to say at this stage that the accountant had identified a seventeenth bank account in the appellant's name and had demonstrated that the Crown's calculation of the transfers into the accounts was seriously inaccurate. He calculated that the sums transferred into the accounts during the relevant period amounted in total to £4,558,765. Of that total, the appellant claimed that £2,533,941.43 could be attributed to lawful trading in mobile phones. The rest (£2,085,130) could not be specifically accounted for but, it was contended that they had in fact arisen from lawful trading. The appellant claimed that he had been 'actively involved in providing finances to entrepreneurs to establish business links regarding motor vehicles and also mobile telephones and property transactions'. Evidence of this would be set out in his accountant's report. The appellant claimed that he had also been actively involved in the purchase and sale of companies.
19. In the response, the appellant accepted that he had received some state benefits to which he was not entitled. If that was intended to suggest that he had been entitled to some of the benefits received, he did not say how much he had been entitled to.
20. The appellant described the purchase arrangements for The Barn, which he said had been bought by Ms L (his girlfriend) in 1999. He accepted that the property had been transferred to him (but in the name of W. Sherwin) in November 2000. Mr F had witnessed the transfer. In November 2002, he had transferred the property to Mr F for no consideration. Ms L had witnessed this transfer. The property had been sold to a third party in October 2003. The appellant claimed that, before this sale, he had not owned the property but had had an equitable interest in it. Pursuant to the restraint order, the proceeds of sale were frozen in an account with Taylor and Emmett.
21. As to the CV, the appellant said that he had not typed it. He claimed, however, that in some important respects it was accurate or nearly so. At the time, he had had £890,000 in a Bank of Scotland account. Moreover he had wealthy backers. He mentioned one Alan Arnold who he said had access to 'extensive credit lines, funds and investors'. Mr Arnold had provided him with £500,000 which had been used to finance the purchase of motor vehicles and business interests in mobile phones during the period 1997/98.
22. The main thrust of the accountant's report was that, during the relevant period, 1996 to 2002, the appellant had been involved in the business of buying and selling second hand cars. It was accepted that there were no accounts to demonstrate this but reference was made to a diary on which it was said the appellant would rely to demonstrate that he had been trading lawfully in motor cars. The accountant said that he had not had time to complete his examination of this diary and to take full instructions from the appellant.

Mention Hearing

23. On 13^th February 2004, there was hearing for mention not attended by the appellant. The judge learned that the appellant, who was on conditional bail at the time, had breached the terms of his bail on 8^th January 2004 by travelling to the Cayman Islands, where he had been refused entry.
24. On this occasion, the appellant's counsel asked for a further adjournment of the hearing date so that the accountant could complete his report. This was refused and the mention was adjourned to 20^th February.

Hearing on 20^th February and Service of the Prosecutor's second Section 73 Statement

25. On 20^th February the appellant surrendered to bail. The judge was dissatisfied with his explanation about his trip to the Cayman Islands and remanded him in custody awaiting sentence.
26. On the same day, the Prosecution served a second statement in which it was accepted that the sums allegedly transferred into the bank accounts had previously been overstated. The sum now alleged as benefit from crime was £4,932,832.55 of which £52,454.97 was interest. The Crown was now prepared to accept that £2,533,941.43 of the transfers into the accounts had been referable to mobile phone trading. This was not accepted to be the product of lawful trading. In addition to the banking benefits, the Crown was contending that about £50,000 had been received in state benefits. £219.58 (from the theft of petrol) was to be included as a benefit. The Crown contended that the statutory assumptions should be applied to all those sums. The grand total of benefit to which the assumptions should be applied was alleged to be £5,412,915.23.
27. By this time, the appellant's realisable assets had been reassessed. Included on this occasion was the value of Edgley, estimated at £1,076,227 (on a company breakdown basis rather than as a going concern). Also included was some £337,000 held to the appellant's account at solicitors Halliwell Landau in Manchester. A further sum of £227,252, the proceeds of sale of The Barn was held at Taylor Emmett. It had been found that the appellant had insured various items of jewellery with Norwich Union, with alleged values totalling £83,600. The total alleged value of realisable assets was £2,236,411.

The Confiscation Hearing

1^st to 3^rd March

28. The confiscation hearing began on 1^st March. At that time, the appellant was represented by solicitors and two counsel. Both sides disclosed additional material. The appellant had still not disclosed any of the usual range of business records that would normally be kept evidencing the transactions of a legitimate business. A Collins Diary printed for use in 1996 was to be relied on as evidence of the appellant's legitimate dealing in second hand cars and other goods during the years 1996 to 2000. The appellant was also claiming that business documents (including other diaries) had been seized from his home during a search conducted upon his arrest for the offence relating to the Porsche motor car. He was alleging that the police had failed either to return these diaries and business documents to him or to disclose them in the course of the confiscation proceedings. The Crown's case was that everything that had been seized had been either disclosed in the course of the confiscation proceedings or returned to the appellant as irrelevant.
29. Shortly before the hearing began, the Crown said that it would no longer allege that the sums received into the bank accounts which were attributable to mobile phone dealing were the product of criminal activity. Accordingly, the Crown's new figure for alleged benefits, to which the statutory assumptions should apply, was £2,255,267.
30. DC Mapp, who had conducted the financial investigation for the Crown, gave evidence. He produced his reports and said that he had found no evidence that the appellant had been involved in a legitimate trade of dealing in second hand cars. He had seen some documents from various auction houses that showed that cars had been purchased at auction in the name of Autoways of Sheffield which was a business name associated with the appellant but these documents did not show that the appellant had been the purchaser. The appellant was later to accept that other people besides himself bought cars under the name of Autoways. DC Mapp was cross-examined by counsel on a limited range of issues, mainly the origin of some transfers into the accounts and the officer's method of valuing Edgley.
31. The court did not sit on 2^nd March but, on 3^rd March, as the result of the previous cross-examination of DC Mapp, the Crown made further concessions in respect of the unexplained transfers into the accounts. The battle lines were finally drawn with the Crown alleging that the statutory assumptions were to be applied to £1,884,523 (unexplained transfers into bank accounts) and Social Security payments received which were agreed at £57,446. Thus the total alleged benefit was £1,942,188. The Crown's position on realisable assets was £2,378,639. The valuation of some items was agreed. There was before the court a list of issues which the judge had to determine. These were:

1. Whether the judge should exercise his discretion to make the assumption in respect of some or all of the transfers into the appellant's bank accounts. He should not, if to do so would give rise to a serious risk of injustice.

2. If he did draw the statutory assumption, whether the appellant had satisfied the Court that the transfers (or any of them) into his bank accounts were from lawful activity.

3. Whether the appellant had been lawfully entitled to some or all of the social security payments received.

4. The valuation of Edgley.

5. The value of the appellant's interest in The Barn.

32. Also on 3^rd March, the appellant was taken through his evidence-in-chief by counsel. First, there was evidence about car dealing. The appellant referred extensively to the 1996 Collins diary and explained that it illustrated his business dealings with various colleagues (mainly in respect of motor cars) and showed his position at the bank, in particular in respect of what he claimed was his main 'trading' bank account with the Royal Bank of Scotland (RBS). The gist of his evidence was that he had started to trade in second hand cars at the age of 21. In 1993 he had received a large injection of cash (£500,000) which was a loan from Alan Arnold. He had then traded in cars more extensively until 1996. At that time, he was injured in a road traffic accident. Also in 1996, the local authority stopped him from trading from his home. After that, he had stopped trading in cars himself but had financed others to trade in cars and other things, such as motorcycles and watches. In particular, he named two colleagues whose purchases he regularly financed; they were DH and GP. It was later to transpire that DH had convictions for 'clocking' cars, as did the appellant himself. The appellant later named another man 'Matt' whose trading he had financed. He too had convictions for 'clocking' cars.
33. So far as state benefits were concerned, the appellant accepted the Crown's figure but did not give evidence that he had been entitled to receive the benefits.
34. When asked why he had purchased Edgley, the appellant said that he wished to purchase several distribution companies and put them together so that they would be more valuable. He hoped in this way to be in a position to repay Mr Arnold. He claimed that interest had been accruing on the £500,000 loan at 8% compound since 1993 so that by 2003 he owed Mr Arnold well over £1 million. He produced what purported to be a loan agreement with Mr Arnold's company, Kerdiala Investments Ltd as evidence of the terms of the loan. When asked how he had purchased Edgley, he said that he had put up £120,000 (in February and April 2003) and the rest (£555,000) had been raised by mortgaging Edgley's own assets, a process which the appellant described as 'whitewash'. He said that he had sold Edgley to Mr Arnold in March 2003 and the value (£170,000) had been set against his outstanding debt. There were no documents to evidence this transaction.
35. The next topic was The Barn and the various financial dealings and transfers associated with that property. The appellant's evidence was confused and confusing but in essence was as follows. The purchase price in 1999 had been £40,000 of which he had provided £4,000 and Ms L the rest. It was purchased in her name. It required renovation. The appellant said that he lent Ms L £56,000 for that purpose and told her to put it into seven different building societies because there was a chance of a windfall if one of them demutualised. However, he asked for that money back and it was not spent on renovation. He then lent Ms L £36,000 which was spent on renovation. Some of the work was carried out by Mr F who was a plasterer. He was not paid for his work at the time. Before the work was finished the property was transferred, for no consideration, to the appellant, but in the name of W. Sherwin. Sherwin was his mother's maiden name and he had intended to change his name by deed poll. In the event he never did. He was advised that it would cause problems for his business dealings in Denmark and would affect his credit rating. The reason for the transfer to him was so that he could raise a mortgage on the property when it was finished. In the event he did not do so because he already had a mortgage on his house in Sheffield. So then, in 2002, the property was transferred to Mr F, again for no consideration. He was suffering from cancer at the time. He was going to raise a mortgage on it but in the end he did not. There were no documents evidencing the financial contributions which Ms L and the appellant had made.
36. The appellant was asked about the cross-firing of cheques between himself, Mr F and Ms L. His explanation was that he had had to move large sums of money about because he was expecting to complete two property deals and was afraid that he would be away on business at the moment of completion.
37. The day's hearing ended with a session in camera, in which the appellant's counsel explained that the appellant's relationship as an informant with Customs and Excise (Customs) and the HM Inland Revenue (IR), which were then separate organisations, explained the absence of any business records. He had been encouraged not to keep accounts. The judge appeared sceptical but made it clear that, if this assertion was to be advanced, it would have to be proved by evidence. It appeared that the appellant would need an adjournment. Counsel was given time and permission to consult with the appellant (who was in the middle of his evidence). Meanwhile the judge enquired as to dates when the hearing could be resumed. Three days could be made available, 5th to 7^th April, which were the last 3 working days before the Easter vacation and, as it happened, the last three working days before the judge was due to retire. The appellant's counsel gratefully agreed that the confiscation hearing be adjourned to 5^th April.
38. The judge was asked to issue various witness summonses and/or production orders to compel the appellant's proposed witnesses to attend court with any relevant documentation. Various summonses were issued returnable on 22^nd March.
39. The following day, 4^th March, the appellant was sentenced to 27 months imprisonment.

The Hearing on 22^nd March

40. On 22^nd March, the parties attended for the return date of the summonses. Counsel for the appellant immediately informed the judge that the appellant wished to change solicitors. The judge was agreeable to that provided that the new solicitors would be ready to resume the hearing as arranged on 5^th April. Counsel informed him that they would not be; the appellant wanted a further adjournment to allow his new solicitors to prepare. The judge asked whether counsel was still able to accept instructions from the appellant. Counsel said that they were, provided they had a solicitor. The judge was of the view that that the new solicitor could accept instructions given that he had counsel familiar with the case. When he was told that the new solicitor was not prepared to accept instructions if the hearing was to resume on 5^th April, the judge formed the view that the application for an adjournment was a ruse, designed to achieve a fresh start in front of another judge. He refused the application. Counsel indicated that they would have to withdraw from the case and from that time onwards the appellant acted in person.
41. Witnesses who had brought documents were then dealt with. The South Yorkshire Police had not attended as required. Another date was fixed for their attendance. Also the appellant asked for and obtained another production order, this time against the RBS, whom he said had frustrated his attempts to secure documents. A production order was issued returnable on 29^th March.

The Hearing on 29^th March

42. On 29^th March, a representative of the RBS attended and averred that the bank had no more documents relating to the appellant's affairs. They had produced all they could to the police some time earlier. The police and prosecution stance was that everything they had received from the bank had been disclosed to the appellant. Other persons summonsed had attended and had produced documents which were later handed to the appellant.
43. The judge informed the parties that, since the last hearing, he had been asked by South Yorkshire Police, (to whom a production order and/or witness summons had been issued) to hear their representative in camera for public interest reasons. The judge had done so. In the light of what he had heard, he had directed two police officers to prepare statements of what they would say if asked to give evidence. These statements were given to the appellant. It is apparent that the witnesses were not going to say what the appellant hoped they would say. The judge explained to the appellant that, if he called these witnesses, he would not be able to challenge their evidence.
44. At the appellant's request, the court then sat in camera. The appellant wanted to see files produced by the police, Customs and Excise and what he described as the Department of Health and Social Security, probably meaning the Department of Work and Pensions. The judge allowed the appellant to see some of this material but refused access to any police material partly on public interest grounds and partly on the grounds of irrelevance. The judge told the appellant that the case was concerned with where the money in his accounts had come from and his contention that it had come from lawful activity. It would not help him to show that he had been encouraged to act unlawfully. Counsel for the Crown reminded the judge that, in addition to considering where the money had come from, the judge also had to decide whether there would be a serious risk of injustice in making the assumptions.
45. The appellant also asked about the summons issued to the Inland Revenue. Counsel for the Crown said that the witness would attend court with the file and that he would call the witness so that the appellant would be able to cross-examine. The appellant had also indicated that he wanted to cross-examine the police officers who had searched his home because he was convinced that documentation (including diaries) had been taken and not returned. The Crown offered to call these witnesses so that the appellant would be able to cross-examine them. The appellant also asked if he could cross-examine DC Mapp and the judge agreed that he should be recalled for that purpose.

The Resumed Confiscation hearing.

46. At the resumed hearing, on 5^th April, the appellant was permitted to interpose the evidence of his accountant, Mr Paul Burke, notwithstanding the fact that his own evidence was not complete. Mr Burke's report was put in and he explained that it dealt mainly with his attempts to prove that the figures in DC Mapp's report were wrong. In fact, he had succeeded in that to a large extent. He said that due to difficulty in obtaining further funding he had not yet had time properly to examine the appellant's claim that the bulk of the unexplained transfers into his accounts could be attributed to car dealing. He had not had the chance properly to correlate the entries in the diary, the bank statements and some information from car auction houses which had come to hand only on 19^th February. This correlation would not be a straightforward process and at present he could not say whether it would be possible to explain the unexplained transfers.
47. As is often the way when litigants in person are questioning a witness, the appellant himself was at times giving evidence rather than posing questions. It emerged that that appellant was contending that he had had a turnover from car trading in the relevant period of about £1.5 million to £1.8 million from which there had been very little profit. After taking into account the losses he had made on mobile phones, there would have been virtually no profit and no income tax to pay. When the judge pointed out that the appellant seemed to have £2.3 million in assets, the appellant replied that he did not. Edgley had debts because it had been bought by mortgaging its own assets. Also he, the appellant, owed Alan Arnold more than £1 million pounds.
48. The judge then asked Mr Burke whether it was possible for him to estimate the profitability of 'what had been going on' meaning, we understand, the alleged car dealing in cars or the financing of car dealing. The witness said that £1,837,346 of transfers into the account were unexplained. Assuming that that represented the turnover from car trading, he would expect a tax inspector to assess the profitability at 7% of that sum. That was an approach that would be taken by a tax inspector to whom no detailed accounts had been produced. Adopting that rule of thumb, Mr Burke assessed the profit which the appellant would have made from car dealing at £128,614. However he accepted that he could not say that there had been a turnover of £1.8 million from car trading. He said that if he had the time it might be possible to demonstrate what the turnover from car trading was. At present he could not.
49. In cross-examination he agreed that however much time he had it would be impossible to carry out a full reconciliation between the bank statements and the diary entries. Counsel also suggested to Mr Burke that the bank accounts showed that year on year about 10% more money was going into the accounts than was coming out. Mr Burke did not dissent. He agreed that the movement of money into and out of the accounts could represent many other kinds of transaction which was nothing to do with car trading.
50. When this evidence was completed, the judge asked whether any evidence was going to be heard from Mr Alan Arnold. The appellant told him that he had been told by his former solicitor that the Crown had accepted that the loan had come from Mr Arnold and that there was no need to call him. The judge was plainly surprised to be told that and asked when the solicitor could attend court. There was a discussion about legal privilege. The applicant said he would waive privilege so as to enable the solicitor to give evidence about what had been said. That was arranged. In due course the solicitor attended.
51. DC Mapp was recalled for cross-examination by the appellant personally. The point he wanted to explore was why the police had decided to investigate his finances. He had only been convicted of the theft of petrol and a motor car. Thousands of others are convicted of offences of that nature and are not investigated. The judge wanted to know why the appellant was asking these questions. The appellant said that he believed that he had been targeted by a particular police officer named Walker who had a grievance against him. The appellant claimed that he had reported Walker for improper conduct. He believed that documents in police files would reveal this. The judge said that he was satisfied (from the PII hearing he had conducted) that there were no such files. The judge said that in any event it was irrelevant what motive the police had; they were entitled to investigate because the appellant had been convicted of the qualifying offences. However, later in the day, the judge's attention was drawn to a document disclosed at the time of the application for a civil restraint order which made it plain that the investigation had been begun because various banks and building societies had reported to NCIS the movement of large sums of money through accounts belonging to the appellant, Ms L and Mr F.
52. The appellant also alleged to DC Mapp that the police had taken a large amount of documentation and diaries from his house at the time of the search in 2002 and had not been returned. Without them he could not prove his case. He contended that the diaries would help to show that the investigation had been initiated for improper motives. DC Mapp said that he had not been involved in the search. He had only seen very limited documentation and he had never seen any diaries other than the one which had been produced in evidence.
53. The court then heard the first of several witnesses to the appellant's arrest and the search of his home in 2002. We will summarise their evidence later. The Crown also called a witness, Mr Honeywell, from the Inland Revenue (IR). He had produced a file of papers relating to the appellant from which it emerged that, in about 1992, the appellant had told the IR that he had never submitted a tax return since he left school. He had then been investigated and in 1995 the IR had agreed his tax liability for past years at £12,000. £10,000 of that had been paid. There was evidence that the appellant had filed a nil tax return for the year 1997/98. That return had been accompanied by a letter in the appellant's own hand, dated July 1998, saying that he had closed his business down in 1996 and had been unemployed and on sickness benefit ever since. He hoped to start a job in August that year, health permitting.
54. Mr Honeywell also said that there was a record to the effect that in 1995 the appellant had offered to provide information about traders which would be of assistance to the IR. Mr Honeywell said that the IR had never encouraged the appellant to be lax in the keeping of his accounts, had never encouraged him not to keep proper books of account and had never suggested to him that laxity would be acceptable because he was an informant.
55. In cross-examination, the appellant suggested to Mr Honeywell that, in 1997, he had called the appellant in to challenge the nil tax return he had submitted for the previous year. Mr Honeywell had in his possession a document which showed that the appellant had transferred a large sum of money to Denmark. He had accused the appellant of submitting a false return. The appellant had explained that he was working covertly for Customs and Excise on mobile phone fraud and had given Mr Honeywell a contact at Customs who could confirm this story. It was put that the contact, Mr Norcliffe, had indeed confirmed the position and that Mr Honeywell had then taken no action on the nil return. Mr Honeywell said that he could not remember any such conversation. Although the name Norcliffe sounded familiar, he could not recall in what context. The appellant told the judge that he had made a tape recording of Mr Norcliffe admitting that this conversation had taken place. However he no longer had this tape as the police and taken it. He claimed that, in 2001, the Home Secretary Mr David Blunkett had arranged for him to see the 'Chief Investigating Officer' in London. He asserted that the Home Secretary knew about his involvement as an informant for Customs and how this involvement had resulted in him losing money in mobile phone deals in Denmark. When the judge asked what the relevance of this evidence was, the appellant said that it explained why he had not kept proper books of account during this period. He had been in real financial difficulty because he had sent £1 million to Denmark, helping Customs in respect of mobile phone fraud. His money had got stuck in Denmark and he did not know how much he was going to get back. At that stage, he owed £700,000 to Mr Arnold and so he did not know where he was. He had 'just stalled'. That was why there were no proper books of account.
56. On 6^th April, the Crown called Miss Rowland from the solicitors, Taylor and Emmett, who had formerly acted for the appellant. This was at the appellant's request. She produced a file of papers related to the purchase of Edgley by Windyacre. She said that the appellant had contributed £85,000. The firm was holding on to the file because they had not been paid for some of their professional services. Asked how the CV had come into the possession of her firm, she said that it had come from either the appellant or the man who had introduced the appellant to the firm. In cross- examination, she agreed that at the time of buying Edgley in 2002/2003, the appellant had been trying to buy three transport companies. The appellant told the judge that the relevance of this evidence was that it showed that what he was doing was 'above board'. However, the judge explained that what the court was interested in was where his acquired wealth had come from in the relevant six year period and not what he was doing with it afterwards.
57. We have said that the Crown called a number of the officers who had taken part in the search of the appellant's premises. The appellant was able to cross-examine them. Much of the appellant's questioning was discursive and irrelevant and the judge found the process trying. The effect of the evidence was that all the officers denied that there had been any diaries taken from the house and that all the documentation taken had been disclosed. They had been investigating only the theft of petrol and the Porsche; they were not seizing property for the purpose of a financial investigation. In the event, some of the papers taken had been used in the financial investigation and had been disclosed.
58. This evidence revealed that the search had not been conducted to proper professional standards – the judge described it as 'a shambles'. It had not been done methodically with the identity and position of each item taken recorded. The contents of some items such as briefcases were not individually listed. At the end of this evidence the judge said that the officers' credibility had been 'pretty well destroyed'. However, the judge went on to express the view that, even if there had been other diaries taken and not returned, they could only account for a 'trifling amount' of the money involved in the case. The appellant disagreed. The judge said that the appellant's own accountant had only assessed his profit from car trading at £128,000 over the whole period. The appellant agreed but said that what the other diaries would show was how he was operating with the police and Customs. The judge asked him whether he had been getting money for passing information to these bodies. The appellant said that he had not but that the diaries contained details of the deals that were done; these were not dishonest deals but were deals by which he lent money to someone to buy something and that was how he found out information about what was 'going on'.
59. At that stage, the long interruption of the appellant's evidence-in-chief was brought to an end. He returned to the witness box and the judge asked him what else he wanted to say about the source of his wealth. He said that he had borrowed £500,000 from Alan Arnold in 1993. It had been given to him in cash (£20 and £50 notes), in instalments of about £100,000 paid over a period of about 5 weeks. Originally it was intended for buying cars. The judge pointed out that the written agreement did not refer to instalments. Asked where Mr Arnold lived, the appellant said that he did not know the address either of his present or former homes, although he had visited the former one. He said that Mr Arnold was a very secretive man. If the appellant needed to contact him, it would be by telephone. Ms L had the number in her mobile phone. But, he said, it would not be possible to telephone Mr Arnold now because he had just had heart surgery and was in hospital. The appellant said he had last been in touch with Mr Arnold in February 2004 when he had promised to look out some paperwork that the appellant needed. The appellant had told Mr Arnold that he would resolve the debt which was now over a million pounds and Mr Arnold had accepted that.
60. The appellant then produced a file of papers relating to property deals connected with Hillfoot. He said that the documents showed that at the time when the Crown contended he was cross-firing cheques for dishonest reasons, he was in fact doing property deals. That was why he had been moving money from one account to another. He said that one property deal had been for £300,000 and he had made £50,000 out of it. That money was frozen in an account with Halliwell Landau. There had been another deal for just over £500,000 to which he had contributed two-thirds of the purchase price and had reaped two-thirds of the profit. It should be noted that the evidence of apparent cross-firing had been adduced as evidence of general dishonesty. All the sums involved in cross-firing had been excluded from the unexplained transfers.
61. It was put to the appellant that his car business was 'totally crooked'. The appellant denied it but admitted that he had convictions for 'clocking'. He said that he could not say how many; he had lost count. He agreed that 'Matt' also had convictions for 'clocking'. Counsel drew attention to the fact that at a time (in 2002) when the appellant appeared to be involved in business deals of about £0.75 million, he was stealing petrol. He suggested that this was because the appellant was 'totally dishonest'.
62. The appellant said that the sum of £500,000 in the Lloyds TSB account in Geneva had come from a balance of £890,000 which had been in a tracker account. £300,000 of the balance had gone into one of property deals that he had described. He had sent £500,000 to Geneva in April 2003 for the purpose of paying Mr Arnold. He had not sent it to Mr Arnold directly because he did not have his bank details at the time and Mr Arnold had not decided where he wanted to have the money sent to. The appellant then said that, in September 2003, he had transferred the money to Mr Arnold at his account with Bank of Scotland in London. However, the judge had before him a statement dated 2^nd February 2004 obtained by the appellant's former solicitors which described the transactions on the Geneva account between December 2002 and September 2003. It said nothing about a transfer out to a bank in London. The appellant said that the transfer out must have been a little later, possibly in October 2003. For the sake of completeness we mention at this stage that at the end of the appellant's case, the Crown called evidence in rebuttal to show that neither the Bank of Scotland nor the Royal Bank of Scotland had an account in the name of Alan Arnold.
63. After the short adjournment, Mr Booth, the appellant's former solicitor came to give evidence on the question of whether he had ever told the appellant that the prosecution had accepted that he had received a loan of £500,000 from Mr Arnold in 1993 and that there was therefore no need to call any evidence about it. Mr Booth said that he had attended a conference with counsel in early March at which that had been said. He was released from the court but did not immediately leave.
64. There followed a discussion between the judge and counsel for the Crown at which the judge expressed concern that, due to an apparent misunderstanding, the appellant could properly say that he had good reason not to call any evidence on what was plainly an important issue. Counsel for the Crown submitted that, if there had been a misunderstanding, it could not have arisen until March 2004. Before that the appellant must have believed that he would have to call evidence to prove that the source of the loan was a lawful banking source and he must have prepared that evidence in readiness for the trial.
65. Matters were left there and the appellant returned to the witness box for cross-examination. However, soon afterwards, Mr Booth sent a message to counsel that he wished to say something further and a while later he returned to the witness box. He said that, when preparing the appellant's case for the confiscation hearing, he had wished to secure Mr Arnold's cooperation. He had taken instructions from the appellant and the appellant had made himself responsible for any contact with Mr Arnold. The appellant had told Mr Booth that he had seen Mr Arnold on 10^th February 2004. However, he did not tell Mr Booth in any detail what had been discussed; nor did he provide Mr Arnold's address or telephone number. Asked if he had received any instructions about the possibility of calling Mr Arnold as a witness at the hearing, Mr Booth said that the appellant had been 'reticent' about that. Mr Booth had the impression that the appellant was rather in awe of Mr Arnold. The appellant's attitude was that it was the company that would provide any assistance. Accordingly, on 23^rd February 2004, he, Mr Booth, had written to Mr Arnold's company, Kerdiala Investments Ltd, at the address in Jersey shown on the loan agreement. He had explained that, for the purpose of confiscation proceedings, it was hoped to demonstrate that a loan of £500,000 made in 1993 had come from a legitimate banking source. Mr Booth had received no reply to that letter.
66. The appellant's cross-examination was resumed. Asked about the loan from Mr Arnold, the appellant said that he had first met Mr Arnold at Doncaster Races. He had agreed to lend him £500,000 at 8% compound interest. He had not provided any security and had not submitted a business plan, as required by the letter preceding the loan agreement. The appellant agreed that the transfer of the £500,000 to Geneva had been shortly before the civil restraint order was made but he said that at the time of the transfer he had not known that the civil restraint order was to be made. He agreed that, if there had been a transfer out of the Geneva account in September or October 2003, it had been made after the restraint order. He claimed that that transfer did not amount to a breach of the order because this was not a British account. It was pointed out to him that the order covered all the appellant's assets wherever they were. The appellant's answer to that was that the £500,000 in the Geneva account was not his asset; it was Mr Arnold's. He also said that he had not read that part of the order which restrained him from dealing with assets wherever they were.
67. The appellant said that when he had told Mr Arnold that he had £500,000 for him, Mr Arnold had told him to put the repayment on hold. He did this because he knew that the appellant was buying some companies. This was all a verbal arrangement. When asked what Mr Arnold thought about the fact that the appellant was facing confiscation proceedings, he said that he had not told him that, only that he was having some trouble with his tax.
68. There were then some questions about the insurance of valuable watches. The gist of the appellant's response was that he had an insurance policy with Norwich Union which covered various identified items of jewellery, mainly expensive watches. The policy was renewed from year to year although the actual items he had in his possession would change as he traded in them. He said that he would buy and sell watches and would also take them on sale or return from a jeweller in Sheffield.
69. He was asked about cross-firing of cheques. Mr Mapp's schedule showed that sums totalling about £5.5 million had been cross-fired during the relevant six year period. The appellant's explanation was that all these transactions related to legitimate mobile phone deals. He denied the suggestion that the money was being moved about so that his accounts looked busy and the introduction of a large amount would not stand out.
70. The appellant was also asked at some length about the financing of work done on The Barn while it was in the name of L. Also he was asked about his reasons for having the house transferred to himself in the name of 'W. Sherwin'. He was also asked about transactions involving Edgley and Hillfoot. Finally it was put to him that everything in his business life had been dishonest. He denied that. It was put to him that even his CV was dishonest. He accepted that it was, in his words, 'slightly misleading' but stressed that it had not been used to gain anything. Anyway he had not written it himself.
71. The appellant then called Ms L. He asked her questions about their life and financial dealings. The questions were usually of a leading nature and the answers were accordingly of little forensic value. From time to time the judge intervened. On one such occasion he asked Ms L if she knew Mr Arnold. She said she knew of him. She did not know his telephone number but she said that it was stored inside the appellant's mobile phone. That was at home. The appellant said he would ask Ms L to bring the mobile phone to court the next day. The appellant observed that Mr Arnold was in hospital having a heart operation. Further leading questions were put to Ms L and the hearing was adjourned until the next day.
72. Ms L did not provide Mr Arnold's telephone number. She produced a broken mobile phone and another mobile phone on which there was a text message which apparently contained information about Mr Arnold's medical condition. The explanation seems to have been that he had initially had treatment for a heart condition but then it was suspected that he had cancer of the thyroid. Tests showed that this was so and he had been taken back into hospital only the day before for the removal of that organ.
73. The appellant resumed examination-in-chief of Ms L. Still the questions were in leading form. He put it to her that she had helped him with record keeping because he was 'a bit dyslexic'. The judge expressed surprise at this as the appellant's writing in the 1996 diary appeared clear, well-formed and free of spelling mistakes. Ms L said that there had been more diaries than the one which was available and she used to write down all the things that the appellant had done. She also gave some evidence about the police search.
74. In cross-examination, she was asked about transactions relating to The Barn and the £56,000 which she had put into seven different building societies. She denied that these transactions were, in truth, money laundering activities for the appellant. It was also suggested to her that £890,000 that had gone into her account was for the purpose of money laundering but she said it had just been put there in case it was needed for property deals while the appellant was away on holiday. When it was suggested that the appellant could have left cheques for her to hand over if necessary, she said that the appellant never dealt in cheques because he was not confident in writing them. The judge found that answer incredible in the light of the writing he had seen in the 1996 diary.
75. The appellant called Mr F and asked leading questions about the £890,000 that had been through his account as well as Ms L's. The judge attempted to stop the appellant from asking leading questions and to prevent him from answering questions put by the judge which the witness could not answer. It is clear to us that this evidence was utterly worthless. Much of it was concerned with the reason why The Barn had been transferred into his name. In cross-examination, it was put to Mr F that his dealings with the appellant and Ms L and their plan to raise a mortgage on The Barn had been a fraud on the building society and, after being warned against self incrimination, the witness declined to answer detailed questions.
76. The appellant then called DH, one of the colleagues to whom he claimed he lent money to finance dealing in second hand cars. Again many of the appellant's questions were in a leading form. The gist of the evidence was that the witness had worked for the appellant in his car dealing business until 1996 when the appellant had ceased to trade on his own account but had lent DH money to trade in cars. He would buy cars at auction, using the name Autoways. Usually he would pay in cash. The appellant would lend him money and he would use that to trade and from time to time he would repay the loan and draw some more cash from the appellant. He said that he had burned any records he had had in 2002. By leading questions, the appellant suggested and the witness agreed that the business had run into difficulties in 1998 due to bad debts and to the purchase of some almost unsaleable cars. He also volunteered that he had had a number of 'wrong cars' and had gone to prison for that. The judge asked what he meant by 'wrong cars' and he said that he meant cars that had been 'clocked and things like that'. He said that it was not he who had 'clocked' the cars and it was not the appellant either, although he knew that the appellant had convictions for 'clocking' cars. The judge asked him what profit margin he put on the cars he bought and sold and he said he put on a mark-up of £1,000, whether the purchase price had been as little as £4,000 or as much as £7,000.
77. In the course of DH's evidence, the judge told the appellant that he was prepared to accept that he (the appellant) traded in cars. The appellant replied that he did not; it was DH who was trading.
78. In cross-examination, DH admitted that his method of trading was to buy fairly new high mileage cars, the kind of cars that an unscrupulous dealer would like to have because it could be 'clocked'. Then most of the cars would be put out to dealers on a sale or return basis. It was put to him that he used this method in order to distance himself from the transaction but he denied this.
79. The appellant called GP, the other colleague whose car dealing he claimed to have financed. Before the questions began, the judge intervened to say that he had already said that he accepted that the appellant dealt in motor vehicles and he was prepared to accept the figures produced by the accountant. The appellant replied that the issue was that he did not make all that money because he was lending the money to other people for them to trade. The judge questioned the witness who said that the appellant had lent him money; he could not say how much. They had a running account. He would repay the appellant and borrow more. The judge seemed satisfied with that. The appellant wanted the witness to explain how the business had become insolvent. The witness said that this was due to bad accountancy and 'owing people'. He said that no accounts had been kept and no tax or NIC ever paid. The appellant wanted the witness to explain how it had come about that the appellant had received a cheque for £50,000 in 2000. The witness said that when he decided to stop trading in cars with the appellant because he was not making money, his brother bought all the remaining stock from the appellant for £50,000.
80. As the appellant was not represented, the Crown was not allowed to make a closing submission. When asked to make his closing submission the appellant said that he did not feel that he had the chance to put his case properly. He had been in difficulty because of being in prison and not having photocopying facilities. The judge said that had been able to look at all the papers produced by the appellant but that they did not address the main issues. The appellant said that he had had the money from Alan Arnold in his accounts in 1995. He said that, although he had a lot of bank accounts, only four of them were active. He said that he had not laundered any money. He said that he had 'signed on' because he owed £1 million. He said that he had been unable to prove what had been going on with the mobile phone business because he could not call David Blunkett. He complained that he had not been able to get the RBS to court. He submitted that it would be unfair to draw the assumptions. The judge asked whether he was submitting that he had shown on the balance of probabilities that his funds had been tracked down and had been acquired honestly. The appellant replied that his funds had been honestly borrowed. They had been used for the purposes of the police and Customs as a 'worm to catch the crooks'. He alleged that the police were aware of all that and the confiscation proceedings had been brought by way of revenge for what he had done to Walker six or seven years earlier. The judge put it to him that he had voluntarily committed the qualifying offences. He agreed but said that he had been 'set up' in relation to the theft of the Porsche. In summary, he submitted that everything he had done had been honest; he had borrowed money from Alan Arnold and, in 2002 he was collecting together all his assets so that he could repay the loan and interest.

The Judgment

81. The judgment was given ex tempore as soon as the submission was complete. It began with a summary of the applicable law. This was correct save that the judge became slightly confused as to the test by which his discretion should be exercised to make the statutory assumptions. He said that he should not make the assumption if he was "satisfied that there would be a further risk of injustice, a serious risk I should say, of serious injustice by doing so". He continued: "The obligation requires the court to stand back and decide whether there is or might be a risk of serious or real injustice, and if there is or might be, not to make the relevant assumption or a confiscation order, as the case may be." In fact, section 72AA(5)(c) directs that the judge should not make the assumption if he is satisfied that there would be a serious risk of injustice in the defendant's case.
82. The judge then rehearsed the circumstances in which the appellant had lost his representation and had continued in person at the adjourned hearing. He considered that the appellant and his team had had plenty of time to prepare for the hearing and the adjourned hearing.
83. As to the evidence, the judge declared himself satisfied that the CV was a 'work of fiction' designed to delude the solicitors to whom he was introduced into believing that the appellant was a man of substance.
84. The judge held that the loan agreement with Mr Alan Arnold was a sham. He was of the view that any money the appellant had received was part of a money laundering exercise. He considered that Ms L and Mr F were also involved in laundering. He did not accept the explanation for the transactions in respect of The Barn.
85. The judge expressed his indignation that the appellant should have drawn some £57,000 in state benefits while holding assets of the order of £1 million.
86. He described the police search of the appellant's house as 'inept, shoddy and pathetic'. However, he did not accept that the police were part of a conspiracy against the appellant; they were just inept.
87. Turning to the appellant's evidence and his reliance on the 1996 Collins diary, the judge said that although the appellant had been dishonest in many aspects of his evidence and had tried to pull the wool over the judge's eyes, he did accept that the 1996 diary was a genuine document. He did not accept that there were any others as alleged. He said that the appellant had some income from trading in cars although the time had come when he was not conducting the business but was having intermittent contact with DH and GP. The judge then accepted Mr Burke's theoretical assessment of the profit (£128,614) which the appellant would have made over the years from trading in cars if his turnover had been £1.8 million. He did not apply his mind to the question of whether or not that trading was honest.
88. The judge then referred again to the appellant's evidence in relation to Mr Arnold and dismissed it all as untrue. He dealt with the appellant's claim that Mr David Blunkett had been involved in helping him in relation to his problems with the money which was stuck in Denmark. He referred to a letter produced by Mr Blunkett's department to the effect that the appellant's foray into the mobile phone business in Denmark was 'a frolic of his own'. He referred to the statements taken from the South Yorkshire Police which denied that they were involved as the appellant claimed. He referred to the evidence of Mr Honeywell which he said showed that the IR had not in any way sanctioned the appellant's failure to keep proper accounts. He described the appellant as 'more extraordinary than Walter Mitty'. The judge also dealt with various other aspects of the appellant's evidence, in each case rejecting his evidence as inconsistent or otherwise incredible. He was satisfied that the appellant had been cross-firing cheques for the purpose of suppressing anxiety in the banks about the passage of unexpected large transfers. He summarised his view of the appellant's credibility by saying that he would not believe anything the appellant said unless there was independent support.
89. The judge's conclusion was that the appellant had failed to discharge the burden which lay upon him. Moreover, having considered whether there was a serious risk of injustice, he did not believe there was any injustice in the findings he was about to make.
90. The judge then embarked, mistakenly, on the process of confiscating various specific assets. In fact, when it was pointed out to him, he accepted that what he had meant to do was to assess the value of the assets. He accepted all the prosecution figures save for the value they had put on the shares in Edgley, which he thought were over valued. He assessed Edgley at £700,000, a reduction of £376,227 from the Crown's figure. He then asked for assistance with the arithmetic and there was further confusion. The judge then deducted £376,227 from the Crown's benefit figure (rather than the asset figure) and announced that the asset figure was £1,565,911. That was a mistake in that he had deducted the £376,227 from the total benefit figure rather than the asset figure. Counsel tried to explain and the judge said that he was going to take the same sum off the benefit figure. Then he realised he was wrong and said that the benefit figure should remain the same and only the asset figure should be reduced. Counsel then mistakenly advised the judge that the sum of £376,227 should be taken from the benefit figure, thereby producing a total benefit of £1,566,911. That was accepted by the judge and that sum became the confiscation order. Everyone seems to have forgotten that the judge had said that he was going to accept that the appellant had made some money from car dealing as suggested by the accountant Mr Burke. He had never said how he was going to deal with that issue and he never did deal with it.
91. The judge went on to consider whether he could make an order for costs against the appellant. He concluded that he could because the asset figure (which he mistakenly thought was £1,828,341) exceeded the benefit figure (which he had mistakenly set at £1,566,911) by £261,223. After some discussion, the judge ordered the appellant to pay £62,864.50 towards the prosecution costs. The proceedings concluded with the judge fixing a term of six years imprisonment in default and warning the appellant that he would make another costs order later. In the event, the judge later made two costs orders, a recovery of defence costs order in the sum of £88,681 and the prosecution costs order was increased to £71,592.

The Appeal

92. The appellant instructed solicitors and counsel and a notice of appeal was drafted. Leave was granted in respect of three grounds. First, it was said that the judge had wrongly exercised his discretion in considering the issue of whether there would be a serious risk of injustice if the assumptions were made. The judge had already pre-judged the appellant as evidenced by a number of comments made both before and during the confiscation hearing. Second, it was said that the order had been made on a wrong factual basis. The judge had found that the appellant had made some profit from car trading as suggested by the accountant Mr Burke. The judge should have reduced the benefit figure by the turnover on which Mr Burke had made his profit estimate. Had that been done, the confiscation order would have been only £104,842. Third, it was alleged that the hearing had been unfair because the appellant had been unrepresented. He had been unable adequately to present the evidence relating to car trading.
93. An application was made to this court for the provision of funding for further work to be done by Mr Burke. It was contended for the appellant that Mr Burke had never had the opportunity to analyse the contents of the Collins diary and the schedules of cars purchased at auction in the name of Autoways and to attempt a reconciliation between them and the appellant's bank accounts. Further funding was granted. The Crown was given leave to put in further accountancy evidence in response to Mr Burke's further work.
94. Shortly before the appeal was due to come on for hearing in October, the appellant's counsel sought yet further funding. A limited sum was allowed and directions given for the exchange of any further accountancy evidence.
95. When the appeal came on for hearing, we were informed that the appellant's solicitor and counsel had felt obliged to withdraw from the case. No explanation was offered. The appellant asked for an adjournment to instruct another team but in view of the history, we directed that the appeal must continue. Fortunately, the appellant's counsel had submitted a detailed skeleton argument, upon which the appellant could still rely. Also, counsel remained in court so as to assist with the documentation with which he was fully familiar. We were grateful for his help.
96. The appellant presented his own appeal. We gave him a good deal of assistance by steering him through the issues set out in the skeleton argument. For reasons we will explain in due course, we also allowed him a good deal of latitude to digress into explanations of factual matters which he felt the judge had not understood or had not been properly presented at the hearing. We allowed him to put in additional documents, for example a schedule by which car deals were related to transactions in the bank accounts. We received Mr Burke's additional report but no application was made to call Mr Burke, as it appeared that he was unwilling to give evidence due to the fact that the solicitor who had instructed him had withdrawn.

The First Ground of Appeal

97. This was fully set out in counsel's skeleton argument. It was alleged that the judge had formed an unfavourable view of the appellant even before the hearing began. He made a number of remarks from which it appeared that he was biased. Also, it was alleged that the judge's tone and manner, which are not always apparent from the transcript, demonstrated bias. The following complaints were made:

(i) On 13^th February 2004, at an application for an adjournment for the appellant accountant to complete his work, the judge observed that it was outrageous that the public should be paying for the appellant to obtain accountancy evidence to 'try and prove that he is entitled to keep some of his money'. We agree that this was an inappropriate remark. As counsel had pointed out, the appellant bore the burden of proof. Moreover, the accountant had successfully demonstrated that the Crown's initial figures were grossly in error.

(ii) On 20^th February, the judge refused to renew the appellant's bail. He had breached its terms and gone to the Cayman Islands. While that decision itself cannot be criticised, complaint is made of the judge's words to the effect that he was not going to take any risk with "somebody who has assets overseas which he has not disclosed". He added: "for all I know there may be other assets in the Channel Islands, the Isle of Man, Lichtenstein, all sorts of places where people can keep money and this man has been going through huge sums of money. He will remain in custody." We accept the submission that these comments were unwarranted. There was no evidence of hidden assets and it was no part of the Crown case that there were such assets.

(iii) On 1^st March, the first day of the hearing, when the judge asked where the appellant's business accounts were, counsel told him that the appellant's case was that the diaries containing his records of car trading had been seized by the police and not returned. The Judge said: "Call me an old cynic, but it is one of the oldest tricks in the book isn't it? The police have seized all my business records and they are not prepared to let me have them". We accept that this comment, made without hearing any evidence on the subject, was quite inappropriate. It gave the impression of bias. In the event, however, the judge did hear evidence about the search, concluded that it had been 'a shambles' but also that the officers involved had been inept rather than dishonest.

(iv) On 3^rd March 2004, the judge made an observation which showed that even at that early stage he had decided that the appellant would be paying the costs of the case. He said: "In due course he will be paying the total costs of the case and so each side is now to start preparing and that includes all the accountant's expenses, every single last penny, because he has got the wherewithal, on any basis …every last penny and he will pay the lot. I do not see why the public should contribute a penny toward the expense". We accept that these remarks were inappropriate and appeared to show that the judge had made his mind up before hearing the evidence.

(v) Also on 3^rd March, before evidence had been heard, the judge made the observation that, if he gave evidence, the appellant would be asked "what he was doing cross-firing all these cheques and manipulating all these bank accounts other than to make it extremely difficult for anybody to establish what he had been doing. In other words he was, as they say in the Navy, making smoke". We accept the submission that this comment was inappropriate and gave the impression that the judge had already decided that the cross account transfers had been made for a dishonest purpose.

98. Those were the only examples cited by counsel in the skeleton argument. However, as we have read through the transcript for ourselves, we have noted numerous occasions when the judge made a sarcastic remark. We regret to say that we have no doubt that an impartial observer, sitting in court on these various occasions, would have had the impression that the judge was biased against the appellant. We will return to the consequences of that finding in due course.

The Second Ground

99. This ground concerns the way in which the judge dealt with or failed to deal with his acceptance that the appellant had been trading in cars. As we have already explained in our summary of the evidence, the judge said that he accepted that the appellant had made some money from car trading. He told the appellant that he did not need to adduce further evidence about car trading. In his judgment the judge said (starting at page 72 of the day's transcript):

"I do accept that he had some income from trading in cars, albeit that there came a time on his own account if it when he was not conducting the business at all and having intermittent contact with (H and P).

His accountant has produced figures which show a total profit of £128,614, which works out at approximately £18,373 per annum during the period under review, and I am prepared to accept that there was some profitability to that extent. So I need not dwell any further on the question of the diary and anything to do with trading in cars."

100. The point made by Counsel in the skeleton argument was that, if the judge was accepting that there was a profit from car trading of £128,614 on the basis of the estimate made by Mr Burke, he was also, by implication, accepting the premise underlying Mr Burke's calculation. This was that the turnover which had produced that profit was of the order of £1.8 million. As the whole exercise was to establish the origin of unexplained transfers into the accounts, it was clear that, if there was a profit of £128,614, there had been a turnover of £1.8 million which accounted for £1.8 million of transfers into the accounts.
101. We can see the logic of counsel's argument. But it is apparent to us that the judge had completely lost sight of the basis on which Mr Burke had given his evidence. Mr Burke had not said that £1.8 million transfers-in came from car trading. Indeed he specifically said that he could not say how many transfers-in (if any) were attributable to car trading. He only said that, if it were assumed that the £1.8 million of transfers-in came from car trading it would be reasonable to infer (and a tax inspector would so infer) that the profit would have been about 7% of turnover, namely £128,614. The only evidence about the extent of car trading turnover came from the appellant who asserted that, over the six year period, it amounted to between £1.5 and £1.8. However no documentary evidence was produced to back up that estimate.
102. It seems to us that the judge's finding was completely without evidential foundation. All he was in a position to say was that he accepted that the appellant had been involved in car trading. He never properly applied his mind to how much car trading there had probably been. Even on the appellant's own evidence, it could not seriously have been suggested that all the unaccounted for transfers-in related to car trading. He acknowledged that he did other types of dealing (besides cars and mobile phones). Even more importantly, the judge never applied his mind to the question of whether the car trading had probably been honest.
103. In any event, it is clear that, although the judge said he was satisfied that there had been some profit from car trading, he did not reflect that in his assessment of the benefit which the appellant had received from criminal activity. He did not deduct £128,614 from the benefit figure as the skeleton argument suggests that he intended to do. Instead he quite mistakenly deducted £376,227 which was his estimate of the overstatement of the value of Edgley. He was confused about that but he never stopped himself to wonder what had happened to his supposed intention to deduct £128,614.
104. We would accept that, if the judge had found, on a tenable basis, that the appellant had made profit of £128,614 from lawful car trading, that trading would have accounted for £1.8 million transfers-in. But he did not and there was no evidential basis on which he could have done. We will return to this issue later.

The Third Ground of Appeal.

105. The third ground argued by counsel in the skeleton argument was that the proceedings were unfair. It was said that the appellant had to shoulder the burden of proof and yet was unrepresented for much of the hearing. He was unable to present his case adequately. Particular reliance was placed on the appellant's alleged failure to deal properly with the schedules of car trading.
106. Second, it was said that on 13^th February, the judge had unfairly refused to adjourn the main hearing beyond 1^st March in order to allow the appellant's accountant to complete his examination of the documents. We do not think that the judge could be criticised for that decision. He did not say that the accountant would be prevented from putting in additional work. There was still two weeks' further preparation time.
107. Next it is said that, when on 22^nd March, the judge was told that the appellant wanted to instruct new solicitors, he should have vacated the date for the resumed hearing (5^th April) and put the case back more generally, even if that meant that there would have to be a fresh start because he was due to retire at Easter. We think that the judge was right to refuse this application. The new solicitors had two weeks in which to prepare for the resumed hearing. They had two counsel fully familiar with the case. They did not advance any adequate reason as to why they could not be sufficiently prepared within that time. There is no merit in that submission.
108. Fourth it is said that, had he been represented, the appellant could have been advised as to which evidence of car trading should have been put in. That is so and we readily accept that in most cases an unrepresented party will not present his case as well as his advocates would have done. But that cannot amount to unfairness. This appellant made his own decision to withdraw instructions from his solicitors. We pass no comment on the judge's conclusion that this was a ruse to try to secure a fresh start. The motive is irrelevant for present purposes. The fact is that there was no unfairness in what happened.
109. Finally, it is said that the judge was disparaging of Mr Paul Burke. We accept that the judge's language was ill-advised particularly when he referred to the fact that Mr Burke was not a qualified chartered accountant but a tax specialist. Mr Burke had never claimed to be a chartered or even a certified accountant. Moreover, it is apparent that Mr Burke had done some valuable work on the prosecution's statement of case. Also it seems to us that when he gave his oral evidence, he was very careful not to overstate the appellant's case. He explained frankly the basis of his conclusion. He should not have been disparaged in any way. That said, this treatment cannot have made any difference to the result because, as we have explained in respect of the second ground of appeal, the judge purported to accept Mr Burke's evidence, and mistakenly purported to give it far greater effect than Mr Burke had ever suggested it should have.
110. We observe also that, although complaint was made of the judge's conduct and appearance of bias, it was not alleged that the judge was actually biased. He made a number of decisions favourable to the appellant.
111. We have read the whole of the transcripts of the preliminary and substantive hearings of this case. We deprecate the way in which the judge expressed himself from time to time but we are quite satisfied that all his decisions were appropriate. We have dealt with the two failed applications for adjournment, noting in passing that there were two applications for adjournment which had been granted. No criticism is made of the conduct of the hearing while counsel were involved. It seems to us that, once the appellant was acting in person, the judge gave him a great deal of leeway. He allowed him to call witnesses in any order he chose and to recall witnesses to ask questions he had forgotten to ask. He was allowed to put in additional papers throughout the trial. The prosecution undertook to call various witnesses at the appellant's request, thereby allowing him to challenge their evidence in cross examination if they did not say what he hoped they would say. Standing back and looking at the proceedings as a whole, we are quite satisfied that they were fair.
112. Considering now our conclusions in respect of all three grounds of appeal, we have come to the conclusion that the judge's decision cannot stand. He gave an appearance of bias which leads to a concern that he did not approach the appellant's evidence with an open mind. Moreover, we are satisfied that the judge was confused about the process of assessing the amount of the confiscation order. Also, he appeared to make a finding of fact which was without evidential foundation and failed also to give the supposed finding any effect.
113. We have given anxious consideration as to what course we should take. The making of a confiscation order is a part of the sentencing process. If the judge below has fallen into error, we cannot remit the matter for rehearing. Are we to say, as the appellant urges us to do, that because the proceedings below were flawed, we should simply quash the confiscation order? Or should we, as the prosecution argues, substitute our own decision for the flawed decision of the judge? There is no doubt in our minds that we have the power to do so by virtue of section 11(3)(b) of the Criminal Appeal Act 1968, this being an appeal against sentence within the meaning of that section. If we do so, we must allow such reinvestigation of the issues as we think fair and just.
114. We have reached the conclusion that we should make our own decision on the basis of all the information that has become available to us. We have so decided for the following reasons. First, as we have said, we consider that the conduct of the hearing was perfectly fair. It was long and the evidence given was detailed. We have read all the transcripts and seen the documentary evidence. The prosecution was conducted with exemplary fairness. True the appellant was in person but that was of his own making. Second, the appeal hearing lasted for one and half days and for most of that time, the appellant was addressing us. As is often the case with litigants in person, he found it difficult to make submissions to us; in effect he gave evidence again, seeking to explain why the judge had not understood this point or that and telling us what the real position was. We allowed him a good deal of latitude, in effect allowing him to give evidence again without the disadvantage of being cross-examined. It was because we realised, from our reading of the papers, that we might reach this position that we gave the appellant a generous allowance of time to address us.
115. We received the new accountancy evidence although we did not hear from the accountant. In the event, it was apparent from reading Mr Burke's second report and the prosecution's response to it that the accountancy evidence was not controversial.

Our Review of the Decision

116. It will now be apparent why we have set out the evidence given at the hearing in such detail. We propose to analyse the issues again on the basis of the evidence before us. We start from the premise that, although the appellant is a man with convictions for dishonesty, it must not be assumed that everything he says is untrue or that everything he does is dishonest. Having said that, it must be stated immediately that there were many features of the evidence which pointed to dishonest conduct besides that of which he had been convicted. We mention the use of the dishonest CV. The appellant may not have written it himself but he allowed it to be put forward and it was thoroughly misleading. Second, we have seen the breakdown of the benefits the appellant received between 1996 and early 2003. He received income support and sufficient to cover his mortgage payments, water rates, and community charge - later council tax. These were plainly means-tested benefits and he was claiming them at a time when he had substantial amounts of money in the bank. That was dishonest. His attitude to the insurance of property was plainly less than honest. He had convictions for 'clocking' cars and was associating with others who had similar convictions. He was in possession of the stolen Porsche in unexplained circumstances. At the time of his arrest for dangerous driving and making off without payment he was driving a car on false plates. Those matters were not seriously contested.
117. Other matters were contested. The Crown alleged that the cross-firing of cheques was dishonest. The appellant said that it was not. These movements of money were related either to property deals (of which there were only two) or to mobile phone transactions. We have looked at these movements and we find ourselves unable to accept as capable of belief the suggestion that these movements were for genuine and honest reasons.
118. At the heart of the appellant's explanation as to how he had been able to trade in such large sums of money as shown in the bank statements, was that he had borrowed £500,000 from Mr Arnold in 1993. This had been his working capital. Without that, it would be hard to imagine how a man with this appellant's humble commercial beginnings could ever have traded at the level he achieved. The documentary evidence relating to the loan was not satisfactory. The letter accompanying the loan agreement was on paper headed 'Kerdalia Investments Limited' but there was no telephone or fax number; nor was there a typist's reference. That is unusual. The letter offered a loan of £500,000 subject to sight and approval of two years' accounts. None existed so could not have been submitted. The loan was stated to be for a period of 6 years at the end of which time capital and rolled-up interest were to be repaid together. That had not happened and there was no evidence of any attempt by Mr Arnold to recover his money in 1999 or thereafter. On the contrary, the appellant claimed that, when offered £500,000 on account of repayment in 2003, Mr Arnold had postponed acceptance. Without confirmation from Mr Arnold, we find that incredible. That confirmation was not forthcoming in circumstances we outlined earlier. We think it much more likely that the £500,000 was put into an account in Geneva in the hope that it would be out of the way of the British authorities. We also cannot accept the truth of the appellant's claim that he had transferred £500,000 to Mr Arnold's account at the Bank of Scotland in London in October 2003. In short, so far as Mr Arnold is concerned, we cannot accept that the appellant has demonstrated, on the balance of probabilities, that he had in his possession, for use as trading capital, any substantial sum from a legitimate source.
119. The explanations proffered by the appellant, Ms L and Mr F as to the transfers of ownership of The Barn seem to us to be inherently unlikely to be true. We consider that it was far more likely that those transactions were effected in order to keep a distance between ownership of that property and the appellant.
120. One of the appellant's major difficulties in shouldering the burden of proving that the unaccounted for transfers into his accounts related to legitimate business deals was the absence of any records or trading accounts. His explanations for the absence of these were twofold. First, he claimed that he had been told by the Inland Revenue that he need not keep books of account or submit tax returns. Mr Honeywell said that was not true. The appellant claimed that he had been summoned to see Mr Honeywell because he believed that the nil tax return recently submitted was false. However, it was the appellant's case that by this time he was in financial difficulty in Denmark to the knowledge of Customs and he gave Mr Honeywell the name of Mr Norcliffe who could and did verify those facts. Thereafter, the appellant was not pursued in respect of the nil return. Mr Honeywell admitted that the name of Norcliffe rang a bell. Giving due allowance to the appellant's case, it does seem to us possible that Mr Norcliffe told Mr Honeywell of the appellant's Danish difficulties and that satisfied him that he had been mistaken in thinking that the nil tax return was false. But that evidence falls far short of showing, on a balance of probabilities, that anyone in either the IR or Customs told the appellant that he need not keep accounts.
121. The appellant's second argument was that, although he had not kept formal accounts, he had kept informal records. But these had been taken by the police. The judge accepted that the search of the appellant's home had been a shambles. We accept that assessment as it is in the appellant's favour. We discount the judge's finding that the police were simply inept but not dishonest. We are prepared to acknowledge that there might have been some other diaries besides the Collins 1996. We cannot say.
122. If there were what might they have shown? We have regard to Ms L's account of what the diaries contained. She said that she made notes of what the appellant told her he had done, what transactions he had entered into. We accept that it is possible that there was some more information about dealings, in particular covering the years 2000 to 2002 which were not covered by the Collins 1996 diary. We find it hard to understand why the appellant would want to keep a second set of notes about the transactions in the years 1996 to 2000 which had already been recorded in the 1996 diary. Also we have regard to what the appellant told us about the nature of his activities in the last two years of the relevant period. He told us that after 2000 the car trading ceased and he sold all the remaining stock to GP's brother for £50,000. After that, he was much occupied with trying to recover money he had lost in Denmark. He had also turned his mind to property and company deals and, through Windyacre, had bought Edgley.
123. There is nothing in the evidence to suggest that the other diaries would have been more informative than the 1996 diary (other than that they might have covered the later period). The appellant suggested that if he were to have the diaries he would be able to show that his transactions were entered into for the purpose of getting close to crooked dealers so that he could give useful information to the police. We find it hard to understand how the kind of diary notes that we envisage he is talking about could help him show that his own dealings were honest.
124. We turn now to consider each of the types of benefit which the Crown alleges have come from criminal conduct and in particular to those for which the Crown relies on the statutory assumption.
125. First, there is no need for the statutory assumption in respect of the value of the stolen petrol, namely £219.58.
126. Second, the Crown claims that the appellant received state benefit of £57,446.86. That was agreed as a figure.
127. The appellant argues that the assumption should not be made in respect of this sum. He admits that he received these sums but says that he has never accepted that he was not entitled to them. He claims that he has been prevented from proving that he was so entitled. He says that the Department of Work and Pensions had asked to see him about his past claims for benefit but then cancelled the appointment, thereby preventing him from sorting the matter out. On the face of it, this appellant would not be entitled to receive means tested benefits at any time between July 1996 and February 2003 because he had substantial sums in his bank accounts as we can see. Moreover, his own evidence is that he was in business in effect as an entrepreneur, lending money to others to trade in cars and other things. We think it is clear that this money was obtained dishonestly. But, if the statutory assumption is needed, it should be made. The appellant has failed to show on the balance of probabilities that he was entitled to the money and has failed to raise any concern in our minds that there would be any risk of injustice if the assumption is applied. We find that the appellant has benefited during the relevant period to the extent of £57,446.86.
128. We turn to the unexplained transfers into the accounts. Before we deal with the main issue, there is a matter of calculation which we think should be raised in fairness to the appellant. The Crown's calculation of the unexplained transfers-in came to £1,884,523 and that sum was agreed as a figure. However, that included interest of £52,454.97 which had accumulated over the relevant period. The Crown contended that it was entitled to include interest as, if the principal sum came from crime, interest followed the principal and should be included. That we accept is so. However, it appears to us that the Crown had calculated the interest on the whole of the unexplained transfers before deducting those which they were eventually to accept were referable to mobile phone trading and not the product of crime. It seems to us that the interest sum should be reduced pro rata We cannot do a precise calculation but taking a broad brush approach, we think it would be fair to the appellant to reduce the unexplained receipts by £30,000 to £1,854,523.
129. We now turn to the main areas of contention which are whether the statutory assumptions should be applied to any or all of that sum.
130. The appellant argues that we should not apply the assumption at all because he has been hindered - even prevented - from demonstrating how those sums came to be lawfully transferred to him. He relies first on his claim that he had been encouraged not to keep proper accounts. We have already dealt with that. He relies next on his claim that the police have stolen his diaries. We have already dealt with that. Next he submits that he was at a grave disadvantage at the hearing and on this appeal because he was unrepresented. He did not have the skill to present the material as clearly as it could have been. His difficulties during the hearing were compounded by the fact that he was in prison. We acknowledge his difficulties but nonetheless we reject that submission. We do not know the circumstances in which the appellant came to act in person so we will assume that it was not through any fault of his own. However, we are quite satisfied that he was given a great deal of leeway at both hearings and that he is capable of getting his points across. He was allowed to put in documents throughout the hearing even though they had not been copied as they should have been. We do not underestimate the difficulty that litigants in person experience but, if the hearing is conducted fairly, these are not such as render the result unreliable. Indeed, to hold to the contrary would mean that any defendant could torpedo any proceedings by dismissing his representatives. We consider that although, as we have said, the judge gave a perception of bias, he did conduct the proceedings fairly and we are satisfied that the appellant had a very fair hearing in this court.
131. The appellant also claimed that he had been prejudiced by his inability to obtain from RBS the vouchers which would show from whom he had received money by cheque. He had asked RBS to provide them but RBS said that they did not have them; they had given everything they had to the police. The prosecution contended that they received only bank statements from RBS and that when they had asked for further help, RBS had provided annotated statements showing which payments-in had been in cash and which by cheque. That was all the information available. We accept that there is some mystery about why RBS could not provide these vouchers. If available, they might have been helpful to the appellant. But in our view, it does not avail a man who has not kept any proper records himself, as he should have done, to complain that other people are unable to provide the records they once had.
132. Next, the appellant relied on the judge's refusal to allow him to see files held by Customs and the police. This he submitted had hindered him and gave rise to the risk of injustice. The judge had refused disclosure on the ground of relevance, it being the appellant's case that the files would disclose that he had been working for or 'assisting' both organisations. The appellant did not allege that he had received money for these services. His case was that because of the assistance he had rendered to the state, he had been encouraged not to produce any accounts or to file any tax returns. In effect, he had been encouraged or allowed to 'drop out of the system'. The judge heard evidence in camera from the police and said that he was satisfied that there was nothing held by the police which would assist the appellant. The appellant did not suggest that the judge had been untruthful about that and we must be satisfied that what he said about the police material was true and accurate.
133. Accordingly we conclude that the appellant has not been significantly hindered from demonstrating how the transfers came about by anything other than his own free choice not to keep proper records and accounts.
134. The appellant also contends that it there is a risk of injustice if the assumptions are made because he was unable to demonstrate satisfactorily that the police had only embarked upon confiscation proceedings as an act of revenge against the appellant who had drawn attention to the improper conduct of the officer named Walker. He alleged that the investigation had been commenced and conducted in bad faith. We accept his submission that it is unusual for a full-blown investigation to follow upon minor convictions of the kind with which we are concerned. However, those submissions are completely undermined by the evidence that the NCIS had received information from banks and building societies about the amounts of money going through the appellant's accounts. These financial institutions are now under a duty to disclose information to the authorities where they have reason to suspect the possibility of money laundering. It seems to us that, having received this information, the Crown was obliged to investigate the appellant's financial affairs once it was clear that he had committed two qualifying offences. We do not think that there is any basis to suspect that the confiscation proceedings were brought in bad faith.
135. We recognise that, if the assumption is drawn, the burden of explaining the origin of over £1.8 million of transfers into his accounts will be shifted onto the appellant. Standing back and looking at all the factors raised by the appellant, we do not think that either separately or cumulatively they give rise to any serious risk of injustice if the assumptions are made. Accordingly we make the assumption in respect of all the unexplained transfers.
136. We turn to consider to what extent if any the appellant has satisfied us on the balance of probabilities that any or all of the transfers resulted from lawful activity. The appellant's case is that he had legitimate business activities, mainly relating to the second hand car trade. He was lending money to his colleagues so that they could buy and sell cars and other things. It was not helpful to his case that he had never produced any proper books of account for what was, if he was to be believed, quite a substantial business. Nor had he submitted any tax return that might help to explain his business. His contention was that all or virtually all the transfers into his accounts in the years 1996 to 2000 were explained by his business activity as evidenced by the diary. The trade had not been very profitable; indeed the business had folded in 2000 and all remaining stock had been sold for £50,000.
137. As we have said, Mr Burke's second report contained an analysis of the diary entries for some specific periods. He was able to show that there was a possible correlation between the diary entries, the information from the car auctions and the bank statements. It was not possible to establish this with any degree of certainty. For one thing, much car trading took place for cash and one would not expect to see exact correlation between the amounts of cash drawn out or paid into the accounts and the amounts paid for or received for individual cars. Also when a car was sold, sometimes another car was taken in part exchange. The evidence was that lump sums would be put into the bank when surpluses had accumulated. One would not expect those sums to tally with the proceeds of sale of any particular car. Mr Talbot for the Crown agreed that it was possible to identify either 31 or 32 cars where there was an exact correlation between the bank statements and the diary. These transactions amounted in total to about £138,000.
138. The appellant was anxious that we should examine some schedules which the judge had either not seen or had not referred to. We have done so. We acknowledge that the appellant has put an enormous amount of work into these schedules and that to some extent it is possible to find a correlation between the diary, the statements and the car auction documents.
139. We are prepared to accept, as was the judge, that the appellant was providing money to DH, GP and 'Matt' for them to trade in second hand cars. We think it quite likely that the appellant also continued to do some trading on his own account. We think that he also traded in jewellery, mainly high value watches. We accept that the 1996 diary was an informal running record of his activities and his financial position. We would be prepared to accept that most of the unexplained transfers into his account were to be explained by some form of trading, whether by himself or through friends. However, where, as here, the assumption is made that he has acquired his property through criminal activity, he cannot rebut the assumption merely by showing that he has traded. He has to go further and show that the trade was probably honest.
140. We are far from being satisfied that on the balance of probabilities that the appellant's trading was honest. There are many reasons why we should not be satisfied of that. He had a stolen Porsche in his possession in 2002. When arrested, he was driving a car on false plates. He had convictions for 'clocking' cars in 1998. So did DH and Matt. DH, who was working quite closely with the appellant admitted that he had had 'wrong cars'. He admitted that his policy was to buy fairly new high mileage cars which he accepted would be suitable for 'clocking'. We accept that cars bought at auction are acquired lawfully. But if they are then 'clocked' and sold, the proceeds are the proceeds of crime. We think it likely that a significant proportion of the dealing done by the appellant and his colleagues involved 'clocking'. In any event, the number of cars purchased at auction cannot account for all the car dealing over the period 1996 to 2000. Cars must have been acquired in other ways. There is no record of legitimate purchases and we have not been satisfied that they were probably acquired honestly. We think it likely that some cars had been stolen. That is not to say that we think there was no honest trading. There almost certainly was some. The problem is we have no idea how much.
141. We are prepared to accept that the receipt of £50,000 from GP's brother was probably honest. That was received in payment for the appellant's residual stock. He says the stock was not good; some bad purchases had been made. He got rid of them for a lump sum. We do not know the origin of these cars and it is possible that some of them had been dishonestly acquired but, as they were apparently not readily saleable, we are prepared to accept that at least they had probably not been clocked.
142. We have considered whether we should be satisfied that the deals involving the 32 cars which the Crown was able to identify by reference to a specific entry in the bank statements were honest deals. We regret to say that we are not. The mere fact that a cheque was accepted does not indicate to us either that the car had not been clocked or that it had been honestly acquired in the first place.
143. We have said that some of the appellant's trading was not in cars but in other things such as watches. We were concerned about the appellant's description of his trading in watches. It seemed to us to be redolent of handling stolen property. We cannot say that it was but we have certainly not been satisfied on the balance of probabilities that it was not.
144. The appellant also told us of two land deals which he claimed were honest. They might have been. In any event, he has not identified the transfers into his account which relate to these transactions. If he is right, they must have been large sums and should be readily identifiable. Further it is not clear to us when these deals took place and whether they were within the relevant six year period.
145. Our impression of the appellant derived both from the transcript evidence and from his submissions to us is that he is an energetic and intelligent man but is completely without any sense of right or wrong. We think he is highly motivated to make money and will deal in anything from which he can make a profit. From the totality of the evidence, we think that the appellant lives his life on either side of the law without discrimination. If he has the chance to make money by an honest deal, we have no doubt that he will do it, but we do not think that the fact that the deal is dishonest would make any difference to his willingness to enter it. In the end, although we accept that some of the appellant's dealing probably was honest, we cannot say how much. There is not even any proper basis on which we could estimate which deals were honest or what proportion of deals were honest. That being so, we have no alternative but to hold that, save for £50,000, the appellant has failed to satisfy the evidential burden upon him.
146. There has been no challenge to the judge's assessment of the value of the appellant's assets. He considered that Edgley had been overvalued by the Crown and the true value was £700,000. Accordingly, the true figure for assets should have been £2,002,412. To the figure we found as the total unexplained transfers, (£1,854,523) we add £57,446.86 in respect of state benefits and £219.58 for stolen petrol. That gives a total benefit of £1,912,189.44. From that we deduct £50,000 (the cheque from P's brother) and find that the appellant has benefited from criminal conduct to the extent of £1,862,189.44. As that figure exceeds the sum mistakenly ordered by the judge and as we cannot increase the order, the effect is that the judge's order will stand. No issue as to the costs order was raised on this appeal. Accordingly for the reasons we have given the appeal is dismissed. We direct that time for payment should be allowed. Subject to the receipt of further submissions on this topic, we propose that the appellant should have six months from the date of this decision in which to satisfy the order. The term in default will remain 6 years.
147. In view of the criticisms of the judge's decision which we have upheld and the fact that we have had to exercise our discretion afresh in this matter, we do not think that it would be appropriate to make any further order for costs.