England and Wales Court of Appeal (Criminal Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM Preston Crown Court
His Honour Judge Slinger

		Royal Courts of Justice Strand, London, WC2A 2LL
		02/04/2009

Mrs Justice Slade:

1. This is an appeal by Mark Peacock and Michael Gillett from the orders of His Honour Judge Slinger made on 26^th October 2007 as amended on 17^th November 2007 increasing the amounts to be recovered under confiscation orders made pursuant to the Drug Trafficking Act 1994.
2. It is unnecessary for the purpose of considering these appeals to set out the facts which gave rise to the making of the original confiscation orders save to say that Peacock and Gillett pleaded guilty to conspiracy to supply large amounts of controlled drugs. An account of those offences, described by Sachs J as on any view serious, is set out in the judgment of the Court of Appeal on 5^th October 1998 which reduced to 10 years the appellants' sentences of imprisonment on two counts.
3. On 7^th January 1997 at the Crown Court at Preston before His Honour Judge Slinger the appellants pleaded guilty to two counts of conspiracy to supply a Class A controlled drug MDMA (counts 1 and 2); conspiracy to supply a Class B controlled drug, amphetamine (count 5) and two counts of conspiracy to supply a Class B controlled drug, cannabis (counts 6 and 7).
4. On 8^th January 1997 the appellants were sentenced to 12 years' imprisonment on counts 1 and 2 to run concurrently; 8 years' imprisonment on count 5 to run concurrently and 6 years' imprisonment on counts 6 and 7 to run concurrently.
5. The prosecution applied for confiscation orders under section 2 of the Drug Trafficking Act 1994.
6. On 10^th July 1997 His Honour Judge Slinger found that the total value of the proceeds of drug trafficking by these appellants was £547,435.00. Each appellant was found to have benefited from drug trafficking in the sum of £273,717. 50. Peacock was found to have realisable assets in the sum of £823.00. A confiscation order was made in that sum to be paid within 14 days. Gillett was found to have realisable assets in the sum of £245.00. A confiscation order was made in that sum to be paid within 14 days.
7. On 5^th October 1998 the Court of Appeal (Rose LJ, Sachs J, Moses J) allowed an appeal against sentence and reduced the sentence on counts 1 and 2 to 10 years' imprisonment for both appellants.
8. On 18^th March 2005 Richards J made Restraint Orders against each of the appellants prohibiting disposal of certain assets.
9. The prosecution made an application under section 16 (2) of the Drug Trafficking Act 1994 to the High Court for certificates that the amounts that might be realised in respect of each appellant was greater than the amounts taken into account in making the confiscation order. On 18^th May 2005 Mitting J granted the certificates.
10. The application by the prosecution under section 16(4) for an increase in the amount to be recovered under the confiscation orders was set down for a hearing before the Crown Court on 16^th October 2006.
11. On 21^st September 2006 the appellants were arrested and charged with blackmail and assault following an allegation made against them by a business associate, Christopher Mark Scott. They were remanded in custody. Documents found following their arrest led to further claims in relation to assets identified as having been held by each appellant. The confiscation proceedings were postponed. However, in February 2007, the blackmail charges were withdrawn and the appellants were released from custody on 15^th February 2007.
12. After a hearing lasting seven days at which both appellants were represented and gave evidence, on 26^th October 2007 His Honour Judge Slinger found that Peacock had realisable assets in the sum of £348,315.54. A confiscation order was made requiring him to pay £237,717.50 within 6 months or in default to serve 3 years' imprisonment. Gillett was found to have had realisable assets in the sum of £222,712.60. A confiscation order was made requiring him to pay £237,717.50 within 6 months or in default to serve 3 years' imprisonment.
13. The figure of £237,717.50 was a typographical error. The figure to be recovered under the confiscation order in respect of each appellant should have been £273,717.50. The prosecution brought the matter back before the Judge for rectification. Following a hearing on 16^th November 2007 in which the Judge considered whether in each case injustice would be caused by doing so, he concluded that the figure of £273,717.50 should be substituted in respect of each appellant.
14. Pursuant to the Drug Trafficking Act 1994 Section 16(4), on an application by the prosecutor for an increase in the amount to be recovered under a confiscation order the court may:

'(a) substitute for that amount such amount (not exceeding the amount assessed as the value referred to in subsection (1) above) as appears to the court to be appropriate having regard to the amount now shown to be realisable;'

15. The Crown Court on such an application determines the amount now shown to be realisable and, having regard to that amount determines the amount to be recovered under the confiscation order.
16. The appellants agreed that they had acquired assets since their release from prison. The Judge considered whether the prosecution had proved to the requisite standard that each appellant had realisable property greater than that assessed when making the original confiscation orders, and if so the value or the minimum value of that property. In the light of his findings on that issue he considered how to exercise his discretion as to whether, and if so, in what amount the order that each appellant pay confiscation should be increased.
17. The Judge recorded at paragraph 42 of his judgment of 26^th October 2007 that the law applicable to his determination under Drug Trafficking Act 1994 section 16(4) was not in dispute. He decided the issue of the amount of realisable assets each appellant now had on the basis that the burden of proof was on the prosecution to establish on a balance of probabilities that each appellant now had such assets.
18. His Honour Judge Slinger set out the matters he took into account in exercising his discretion whether and if so by how much to increase the amount to be recovered under the confiscation orders in respect of each appellant. In considering the exercise of his discretion amongst other matters the Judge took into account the length of time that had elapsed since their respective release from prison; 9^th November 2000 in the case of Peacock and 25^th September 2001 in the case of Gillett. He held:

"41. Having found that there are assets now available to each Defendant, I turn to the question as to whether an Order should be made for payment in full of the outstanding balances, or whether in the exercise of the Court's discretion, I should order no payment or payment of an amount below that which I adjudge to be available.

42. The law is not in dispute and has been identified by me, together with the relevant authorities. Had I found these Defendants to be credible witness[es], men who, having paid their debt to society in terms of punishment, had set out to lead law-abiding and responsible lives, the Court might have felt able to give, at least sympathetic consideration, to submissions that the Court's discretion should be exercised in their favour.

43. I have, as I must, considered the case of each separately. In fact the same considerations apply to both men. I am entirely satisfied that they have lied to the Court, and have [set] out quite deliberately to deceive the Court and others as to the truth as to their financial affairs and assets. In my view, this is entirely the type of case for which statute has provided the opportunity for Society to recoup some of the damage caused to it by criminality. I have also considered the length of time which has elapsed since their respective releases from prison – but the reality is that the State cannot be expected to monitor the financial affairs of all those released from prison and in relation to whom there are outstanding Confiscation Order debts. Once the authorities became aware of the evidence of assets, they acted with proper expedition, notwithstanding the efforts of the Defendants to evade full investigation."

19. Fundamental to the Judge's decision on both issues he had to decide, that of the value of assets of each appellant now realisable and the exercise of his discretion, was His Honour Judge Slinger's finding as to the credibility of each appellant.

Michael Gillett

20. Mr Bodnar on behalf of Gillett submitted that the Judge erred:

i) in taking into account assets that had not been identified in the proceedings as 'hidden assets', and concluding that they had been 'shown to be realisable' for the purposes of section 16(4) DTA;

ii) in exercising his discretion to take into account a sum of money passed to a man named Scott, there being no evidence that even if that money could be brought within the definition of 'realisable assets' of Gillett, there was any realistic prospect of it being recovered by any lawful means.

If Gillett were successful on both these grounds the effect would be to reduce the amount to be recovered under the order by £146,000 to £127,717.50.

Unidentified assets

21. It was contended on behalf of Gillett that the Judge erred in including in the sum of realisable assets those which he inferred existed as well as those which had been identified. HH Judge Slinger held at paragraph 44:

"D1. I have identified recoverable assets in the sum of £222,712.60. In addition, he has continuing income by way of rents, and an income from his car dealings which on a pro rata basis from the last four months identified by him, of at least £35,000, I have no doubt that he has other assets available to him to meet the shortfall of some £10,000. I, therefore, order payment of £237,717.50."

22. The Judge found Gillett to have identified assets of £222,712.60. He observed at paragraph 39 b:

'That is not, necessarily, the end of the matter. A good deal of evidence was, eventually, extracted from D1 relating to various sources of income and financial ventures.'

He considered whether the Crown had established to the requisite standard of proof that Gillett had unidentified assets. The Judge was not so satisfied in relation to some assets and transactions. However the following findings of fact led to the conclusion that Gillett had unidentified assets:

"ii. Unidentified sources of income.

D1 Gave evidence, that in early 2004, the deposit on 5 Hodson St, over £6700, "came from my money", that the rent he paid on Raby Hall Farm Cottage came, amongst other things, "cash I get from time to time", that he had "little bits of money from all different sources – people which owed me bits of money here and there - £400's here, £500's there – for bits of work done and vehicles sold" and "money comes in and goes out."

iii. He accepted that he and his [girlfriend] drove a series of expensive cars. I accept his evidence that he had been dealing in vehicles belonging to others, on the basis that anything over an agreed figure, would be his commission for sale and that in the meantime they were able to use the vehicles pending sale. He was evasive as to details but finally, at the last moment, on 11^th September he gave evidence, unsupported by acceptable documentation that in the latest four month period he had earned about £12,500 in commission. I find that he has been dealing in cars, not just since his release from custody in February ? 2007, but for a number of years. Amongst the people for whom he sold were Paul McGibbon who, in 2004, had felt able to lend him £10,000 as a deposit on 6, Brindle Court, and Gavin Baker to whom he was able to make a present of a £5000 safari holiday "as a treat." In real life, a treat of this kind to a man whose only connection is, on the evidence, a business contact is not made unless that business connection has produced a very substantial business return. In evidence about the "treat", D1 stated, inter alia, "I had earned more than that off Baker." And "It was not declared to the Tax Man." I also note, his specific evidence that he was deliberately not putting any money into Banks because "I'm scared you'll stop my life."

vi. Rents. D1 receives a total monthly rental income of £579. In addition, he disclosed, in his September evidence, that a property had been acquired owned by his [girlfriend]. He claimed not to know the address, but he, himself, handled the monthly rental income of £550 which was said to be handed, cash in envelope, to the garage of Paul McGibbon, from whom it was collected by the Defendant. The girl friend is said to be unemployed: there was no further information. I find, it to be a proper inference, from all the evidence in the case, that this is an asset of D1."

23. HH Judge Slinger held at paragraph 39c:

"I am entirely satisfied that D1 for many years has been involved in transactions which have produced income which [has] not been disclosed to the Revenue and which [has] enabled him to maintain a life style above that which would have been possible on the income originally disclosed to the Court. I bear in mind his domestic responsibilities – both at the present time and from his previous relationships. He has felt able to purchase a high priced vehicle with Hire Purchase commitments of over £6000 per annum and changed addresses between the May and September hearings. It is my finding that there are assets available to him which have not yet been identified."

24. Realisable property within the meaning of the Drug Trafficking Act 1994 is any property held by the defendant (Sec 6(2)). It is not confined to that which is specifically identified. Money received is a realisable asset even though its source is described generically and its exact provenance is not established. Further, a court is entitled to draw reasonable inferences as to the existence of realisable assets from evidence satisfying it to the requisite standard of proof.
25. In our judgment the findings of fact made by the Judge fully supported his conclusion that Gillett had realisable but not specifically identified assets sufficient to meet the difference between the sum of identified assets and the total payment ordered to be recovered pursuant to section 16(4) under the confiscation order.
26. When it became apparent that there had been a typing mistake in the original order and that it should have been £273,717.50 against each defendant and not £237,717.50 HH Judge Slinger considered at a hearing on 16^th November 2007 the application by the prosecution for rectification. Mr Biddle represented both appellants at the hearing. Whilst he accepted that the lengthy hearing had proceeded on the basis that £273,717.50 was the correct figure, the terms of the judgment of 26^th October 2007 may lead the defendants to feel that in assessing assets and in exercising its discretion the court had done so on the ability to pay the lower figure. The Judge revisited the amount shown to be realisable. He concluded of Gillett:

"He was a dishonest witness who had for some years since his release from prison sought deliberately to conceal both income and assets. I specifically found that in addition to the assets identified there are other assets available to him which have not yet been identified. That remains the position. I have not the slightest hesitation in finding that he could meet a shortfall of £10,000, and, after reconsideration of the evidence in the case I come to the same conclusion in relation to the higher shortfall resulting from correction of the order. I find that there are other assets to enable payment to be made. He too must meet the full amount of the original order.'

27. In our judgment there was ample evidence on which His Honour Judge Slinger could conclude for the purposes of DTA section 16(4) that Gillett had unidentified realisable assets which, taken together with identified assets amounted to £273,717.50. He did not err in law in concluding that unidentified assets were realisable assets nor was his conclusion in this regard perverse.

£100,000 held by Scott

28. Both Gillett and Peacock appeal from the decision of HH Judge Slinger to take into account in relation to each of them their half share of £200,000 which they gave to Scott.
29. At the hearing before us, Mr Bodnar for Gillett agreed that there was no issue before the judge as to Scott's liability to pay Gillett and Peacock the sum of £200,000. Although ground 2 of Mr Bodnar's skeleton argument referred to the issue as one of the exercise of discretion under the statute, there was in fact a prior question, namely whether this debt was realisable property. If it was irrecoverable, because, for instance, Scott was a man without the means to repay it, it would not be realisable property. On the other hand, if he could pay it, there would normally be no reason why it should not be included in the value of Gillett's realisable property at its nominal value. In the absence of any evidence that Scott could not pay the debt, the judge was entitled to treat it as recoverable. The only evidence before HH Judge Slinger that the debt was irrecoverable was that 'Various requests were made during 2004 for return of the money' and that when a private investigator traced Scott he made false allegations against Gillett and Peacock. Gillett said in evidence in chief that there was no prospect of recovering the money. (Judgment paras 14 and 15). Mr Bodnar contended before us that in any event the Judge, in exercise of his discretion, should have excluded the sum of £100,000 from the realisable assets of Mr Gillett since there was no realistic prospect of it being recovered by any lawful means. However, legal proceedings could have been taken to recover the money. This had not been done.
30. The Judge disbelieved the accounts given by Gillett and Peacock as to the money given to Scott. Gillett and Peacock had changed their story regarding that money several times giving a different account in their defence case statements in the criminal proceedings in which Scott was the complainant from the varying accounts given in evidence to the Judge in the section 16(4) hearing.
31. In light of the fact that apart from asking Scott for the £200,000 in the past, no steps to recover the money had been taken, it cannot be said that the Judge erred in including the debt in the appellants' realisable property. Proceedings could have been pursued to recover the money.
32. Furthermore, no basis has been put forward for impugning his exercise of his discretion under section 16(4) in relation to this asset. In our judgment, therefore, the Judge did not err in exercising his discretion to include in the amount to be recovered under the confiscation order £100,000 each in respect of Gillett and Peacock.

Mark Peacock

33. Mr Biddle on behalf of Peacock contended that the Judge erred in three respects:

(1) taking into account 55 Geoffrey Street as a partnership asset of which Peacock is entitled to a half share worth £22,500.

(2) £29,000 which the Judge found to have been a loan from Mr Peacock's father should have been deducted from the amount to be recovered.

(3) £100,000, the money handed over to Scott, should not have been included as an asset.

If all these grounds of appeal were to succeed the figure to be recovered should be reduced to £196,815.54.

55 Geoffrey Street

34. 55 Geoffrey Street was held in the sole name of Peacock. Mr Biddle advanced before this court the argument he advanced before the Judge that since 55 Geoffrey Street became the home of Peacock's father and his original home, 215 Fletcher Road, was put into the partnership, 55 Geoffrey Street should be treated beneficially as his father's alone.
35. The Judge found that 55 Geoffrey Street was a partnership asset. He held at paragraph 40a:

"55 Geoffrey.

This property is held in the name of D2 alone. I am urged to find that, as it now is the home of Mr Peacock Snr, and as his father's original house, 215 Fletcher Road was placed into the partnership, 55 Geoffrey should be treated as beneficially his father's alone. I do not do so – the documentation is clear, it is an asset of the partnership. The Partnership Accounts prepared by Mike Egan & Co and which for the tax year 2003/4 refer to a swap, are of no evidential value, in this connection, bearing as they do, the caveat of having been prepared "on the books and on the information supplied to us by the partners." If, as D2 suggests, a mistake was made in Spring 2003 by his Solicitors, that is a matter for him to take up separately. I find a net value of £45,000 – Defendant's ½ share asset - £22,500"

36. Mr Biddle also contended before us that it was wholly unreasonable to find that 55 Geoffrey should be taken as a partnership asset. The effect of the order of the Judge will be that 55 Geoffrey Street will have to be sold and Mr Peacock senior a frail old man will be thrown out of his house. It is said that this cannot be a correct exercise of judicial discretion.
37. Mr Peacock senior was entitled to a half share of partnership assets. A half share was assessed at some £156,500. On the evidence before the Judge there was nothing to indicate that he would be left homeless if he had to buy out his son's half share in 55 Geoffrey Street. Further, his assets include a loan of £29,000 to his son. The repayment of this loan would more than enable Mr Peacock senior to buy out his son's half share in 55 Geoffrey Street. In our judgment it cannot be said that the Judge erred in failing to exercise his discretion to exclude Peacock's half share in 55 Geoffrey Street from the amount to be recovered in the confiscation order.

Failing to deduct £29,000

38. The Judge made a finding of fact at paragraph 40a that:

"…£29,000 is owed to Mr Peacock Snr from an original loan to his son, and is properly deductible."

39. The sum of £29,000 was not deducted by the Judge in finding Peacock's realisable assets to be £348,315.54.
40. Whilst the Judge erred in failing to deduct the sum of £29,000 in calculating the value of Peacock's realisable assets this failure had no effect in practice. Deducting this sum leaves realisable assets of £319,315.54 which is more than the sum of £273,717.50 ordered to be recovered under the confiscation order.

£100,000 held by Scott

41. We dismiss the challenge to the decision of the Judge to include in the realisable assets of Mr Peacock the £100,000 held by Scott for the same reasons as we dismissed a similar challenge to the Judge taking that sum into account in assessing the realisable assets of Gillett.

Elapse of time

42. Further, the Judge properly took into account in the exercise of his discretion the length of time which has elapsed since the respective dates of release of Gillett and Peacock.

Disposal

43. The appeals of Gillett and Peacock are dismissed.
44. The parties should seek to agree any order for costs. If there is any issue as to costs, submissions should be made in writing and responded to in writing. We do not anticipate that a further hearing on issues of costs will be necessary.