England and Wales Court of Appeal (Criminal Division) Decisions

IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM INNER LONDON CROWN COURT
HIS HONOUR JUDGE CHAPPLE
T20077234

		Royal Courts of Justice Strand, London, WC2A 2LL
		30/03/2010

Mr Justice Jack :

1. This appeal raises two points in respect of a confiscation order. The first relates to a small part of the criminal benefit of the appellant, Wyatt Anderson, and the appellant has the single judge's leave in respect of it. The second relates to a large part of the available assets, and there the application for leave is renewed having been refused by the single judge.
2. On 12 December 2006 after a 2 month trial before HHJ Chapple and a jury the appellant was convicted with his co-defendant, Mensur Hassan, of conspiracy with others to effect illegal entries into the United Kingdom, sometimes called people trafficking. He was sentenced to imprisonment for 7 years and Hassan for 10 years. Their appeals against conviction and sentence were dismissed by this court on 15 January 2008. In the course of his judgment Lord Justice Tuckey set out the facts relating to the conspiracy as follows:

"2. The prosecution resulted from Operation Perigee by the National Crime Squad, an investigation into the smuggling of illegal Turkish immigrants into the United Kingdom. The immigrants were flown into small airfields in the United Kingdom on a private six seater Cherokee Piper aeroplane and then driven to London. The operation started following two sightings of illegal immigrants in the vicinity of an airfield in May 2004 and the police conducted surveillance on all the defendants between that time and July 2004.

3. It was alleged that Hassan organised the flights into the country and that Anderson was part owner and pilot of the plane. The other five defendants played lesser roles, collecting and distributing the immigrants once they had landed in the United Kingdom.

4. The prosecution relied on video surveillance of Anderson landing the plane twice on 2nd July and immigrants disembarking, airfield logs of flights into and out of the country, evidence from a hand held GPS recovered from the plane, evidence of reconnoitering activities at remote airfields, credit card receipts, hotel bookings and telephone calls."

The appellant did not give evidence at the trial. Hassan did although it was curtailed when he refused to be cross-examined further.

3. In dismissing the appeal of the appellant against sentence LJ Tuckey said:

"27. When the judge came to sentence these applicants, he said that it was impossible to tell how many people had been smuggled into the country as a result of the well-oiled conspiracy in which they were involved, which owed much to the extensive experience Hassan had required from people smuggling over the years. He had admitted that he had been at it for 10 years. He needed partners to assist and he found one in Anderson who possessed both a plane and knowledge of remote air strips and was willing to fly in the illegal cargo. When not flying Anderson often reconnoitered new air strips. The operation was commercial and lucrative. This was 'club class smuggling'. Account was taken of the fact that the illegal entrants were not exposed to any danger. However the offences were aggravated by the fact that a number of the illegal entrants were relatives, friends or associates of established, violent and often ruthless Turkish criminals operating in this country. Both applicants had withdrawn their pleas of guilty, so were not entitled to any credit for admitting guilt, indeed neither of them had shown a jot of contrition. The judge rejected their defences of duress and was able to do so because he had heard all the evidence in the case. He said that Anderson was an essential part of the conspiracy. The deceptions he practiced to operated the illegal flights became all the more understandable in the light of his extensive previous convictions which demonstrated that for the majority of his life he had made it his business to cheat and deceive.

28. It is submitted on behalf of Anderson that he should not have been treated as a principal in this conspiracy. It had emerged that his plane was merely one of many methods used by the organisers of this wider conspiracy in their people smuggling operations. He should be treated therefore as a mere courier and as such his sentence was manifestly excessive.

29. We do not accept this submission. The judge clearly formed the view that Anderson was playing a far larger role than that of courier. The use of a plane on a number of occasions and a plane of which he was a part owner clearly put him in a much higher league than some of the others involved in this conspiracy who merely made single trips in cars from airports to cafes in London to deposit those who had been flown illegally into this country. The application in respect of Anderson for leave is therefore refused."

4. The confiscation proceedings took place in October 2008. The appellant's legal team had felt bound to withdraw early on because they had become professionally embarrassed. Judge Chapple urged the appellant to have fresh representation and an adjournment, but the appellant wanted to go ahead. Shortly before the judge's ruling the appellant changed his mind, but the judge rightly refused an adjournment at that late stage. The ruling was given on 24 Oct 2008 and the order was made on 27 Oct. The judge held that the benefit for the purpose of section 8 of the Proceeds of Crime Act 2002 was £189,224. He found that the available assets for the purpose of section 7 were £229,964. The recoverable amount was therefore the former, and an order was made in that sum. The appellant was given 6 months to pay, with 2 years to be served in default.
5. The appellant did not give evidence at the confiscation hearing. Nor did he call other evidence. The greater part of the sum of £189,224 was made up by the values of assets which were treated as the proceeds of criminal conduct pursuant to the assumptions provided by section 10. The judge had been concerned that Mr Anderson had not given evidence. Between pages 49E and 51B of his ruling he referred to the work which had been done by Mr Anderson's legal team before their departure and said that he had taken it into account. He recorded that Mr Anderson had not wanted to put any questions to Mr Saville, the financial investigator. He recorded that he had told Mr Anderson that his submissions would carry more weight if he gave evidence, but Mr Anderson had not done so.
6. We have read e-mails from Mr Anderson dated 15 September 2009,and 14 and 16 March 2010, and also a long document headed 'Appeal Synopsis'. The main purpose appears to procure the court to open up the whole of the judge's findings as to criminal proceeds. There are no grounds for doing that. Mr Anderson's decision to proceed as he did was made by him at the hearing, contrary to the urging of the judge. He cannot now say that he would like to have what would be a rehearing.
7. The first point, that on which the appellant has leave, arose outside the assumptions provided by section 10. The judge held that the benefit of the appellant from his part in the conspiracy of which he was convicted was £30,000. That was assessed in this way. The judge took the Crown's figure of £40k, namely 40 immigrants at £1k each and reduced it to £30k in the light of the applicants' submissions. He took this as 'the benefit accruing to all co-conspirators': we refer to page 53 A - D of the ruling where the judge stated:

"I have already explained to Mr Anderson in the course of his submissions this morning it is not the benefit accruing solely to Mr Anderson as a result of the operation of this conspiracy that I must take into account, it is the benefit accruing jointly to all co-conspirators; that is clear from the case of May, from which I have read."

8. The reference to the earlier explanation is to page 17f to 18a of the transcript. There the judge had said:

"Mr Anderson, like it or not, there is a case called R v May [2008] UKHL 28, decided in the House of Lords not very long ago and what that says is that the benefit figure from criminal conduct is the benefit to all the conspirators in this case because they all hold that jointly."

9. If the judge was entitled to hold that the proceeds calculated as £30,000 were the joint property of the appellant and his co-conspirators, it is accepted that in accordance with the decision of the House of Lords in May [2008] 1 AC 1028, the judge's approach was correct. The submission that is made by Mr Andrew Bodnar on behalf of the appellant is that the judge had no basis on which to find a joint entitlement to the proceeds of the conspiracy but should have taken the proceeds to have been divisible between the three main conspirators, Hassan , the appellant, and a man named Gulsen, giving a benefit of £10k to each. Mr Ian Hope for the Crown accepts that this would be the correct approach if the proceeds of the conspiracy are not to be treated as the joint property of the appellant and Hassan. But, he says, the judge was right to treat them as joint property.
10. Because of the view which we have come to on the second point, which very substantially reduces the available assets, the disputed £20,000 is at present of no importance. But Mr Bodnar has asked that it be determined having regard to the right of the prosecution to apply for a reconsideration of the available amount under section 22 of the Act if the appellant subsequently comes into further money.
11. The relevant section of the Proceeds of Crime Act 2002 is section 76, which is headed 'conduct and benefit'. It provides in part:

"(4) A person benefits from conduct if he obtains property as a result of or in connection with the conduct.

(7) If a person benefits from conduct his benefit is the value of the property obtained."

12. As May and also Jennings v Crown Prosecution Service [2008] 1 AC 1046 emphasise, a defendant must be shown to have obtained the property. So in paragraph 13 of Jennings:

"This must ordinarily mean that he has obtained the property so as to own it, whether alone or jointly, which will ordinarily connote a power of disposition or control, as where a person directs a payment or conveyance of property to someone else."

13. In Green [2008] 1 AC 1053, the third of the trilogy of confiscation cases in which opinions were delivered by the House of Lords on 14 May 2008, the House had to consider whether sums retained by the appellant's co-defendants should be deducted from the figure for total benefit. It was held that, as the proceeds were held jointly, they should not. Lord Bingham stated in paragraph 15 of the opinion:

"15… As David Clarke J pointed out in the Court of Appeal, the judge approached the assessment of the appellant's proceeds on the basis that any moneys received by his associates from the sale of the drugs were held by them jointly with the appellant as proceeds in which they were all fully interested."

Lord Bingham approved the following paragraph in the judgment of David Clarke J:

"46.  Whether the proceeds of sale received by [the appellant's associates] in the present case were initially received on their own personal behalf or on behalf of the conspirators as a whole was a matter for the judge to decide on the evidence before him. In fact, there was evidence on which he could find that the appellant was the ringleader and controller of the conspiracy and in those circumstances he was entitled to infer that the others were acting in accordance with his instructions, receiving proceeds of sale on behalf of the conspirators as a whole before retaining for themselves such amounts as had been agreed with the appellant. In our view this part of the judge's decision is not open to criticism."

14. In cases where there are two or more principal conspirators and where there is no direct evidence as to the rights to the proceeds of the conspiracy, the relationship of the conspirators may justify the conclusion that the proceeds were jointly owned. It is a matter of inference, to be decided on the balance of probabilities with the burden being on the prosecution. That was the approach of the judge in Green.
15. In some situations there will be no evidence enabling the court to decide whether the proceeds had been obtained jointly. In paragraph 32 of May Lord Bingham stated:

"32. In R v Gibbons [2003] 2 Cr App R (S) 169 the defendant was one of four conspirators who had between them obtained £220,000 by fraud. Bu there was no evidence before the trial judge to enable him to determine how the proceeds had been divided between the conspirators or, it seems, to decide that they had been obtained jointly. He therefore divided the sum between the four, although failing (para 66) to specify the sum of benefit which he attributed to the defendant. This equal division was criticised in argument in the Court of Appeal, but was rightly upheld. The case was one which clearly called for a confiscation order. It would have defeated the purpose of the legislation to allow lack of information, which only the defendant and her co-conspirators could provide, to preclude the making of an order. An equal division was the fairest solution available in the circumstances."

In contrast in May the appellant 'was found to be the joint principal, indeed the driving force, behind the fraud' once he had become involved: see [2008] 1 AC at 1033B. In Jennings the court was concerned with a restraint order pending the criminal trial. The Committee concluded in paragraph 14 of its opinion:

"Whether the appellant obtained the benefit of the fraud jointly with his co-defendant remains to be decided, but there was clearly sufficient material to support the making of a restraint order."

16. Where a party to a conspiracy has a minor role it is less likely that the proceeds belong to him jointly with the others, and it may be inappropriate to treat him as having a share of the proceeds as in Gibbons. A clear example is the case of Sivaraman [2009] 1 CARS 80, where the garage manager was held not to have benefited in the value of off-road diesel improperly sold through the garage but in the amount he was paid by the garage owner for his participation in the fraud. The manager had never obtained the diesel so that he owned it, either by himself or jointly with others.
17. The issue is whether in the circumstances of this case the judge was right to proceed on the basis of the proceeds being joint property. The problem is that the judge did not anywhere state the basis on which he had concluded that it was right to do so. He said at page 17 that 'the benefit figure is the benefit to all conspirators in this case because they all hold that jointly'. In his ruling he referred to 'all co-conspirators'. Clearly he was referring to more conspirators than Hassan and the appellant. The indictment named five others in addition to 'persons unknown'. Of these Anthony Davies was sentenced to 15 months, Jeannette Davies to 8 months suspended for 2 years, Baskaya to 12 months suspended for 2 years, Oztaz was acquitted, and Gulsen received three years. It is apparent from these sentences that all save Gulsen had minor parts. We refer also to paragraph 3 of the judgment of Tuckey LJ quoted above. It appears that the judge thought, wrongly, that it followed from the decision in May that any party to the conspiracy was to be treated as a joint holder of the proceeds of the conspiracy. We are very conscious that, if Mr Anderson had been represented as the judge wished, the point would have been taken on Mr Anderson's behalf, and the judge could then have considered the position and given a considered ruling.
18. It follows that the judge never gave any appropriate consideration to the question whether the proceeds of the conspiracy were held by Hassan and the appellant jointly. It is therefore our task to consider the evidence such as it was and reach such conclusion as we may. The evidence available to us is very limited. That is in contrast with the position of the judge, who had presided at the trial and might have made appropriate findings had he seen the need to do so.
19. It may be appropriate to mention at this point that the proceeds of the conspiracy had been found to be £200,000 in Hassan's case, that being an agreed figure of £5,000 for each person trafficked and 40 persons. We have referred in paragraph 9 to Gulsen. As we have said he was sentenced to 3 years and it seems that his role was to receive the persons trafficked at his café in Green Lanes. He also appears to have had some role as an organiser. His proceeds from the conspiracy were assessed at £18,000 being £1,000 for each of 18 people taken to his café. The contradictions with the figure of £1,000 taken for each person in the appellant's case are evident.
20. It is clear that here the appellant was far more than just the pilot. However we do not think that it would be fair to conclude from that alone that the proceeds of the conspiracy were the joint properties of the two. Hassan was the primary organiser, who had the connections in particular connections with the Baybasin group.. He also had a previous conviction for people trafficking. Mr Hope informed us that in his sentencing remarks the judge stated that Hassan 'needed partners to assist' him, a phrase also used by Tuckey LJ. The use of the word 'partner' there is ambiguous. It does not necessarily mean that the appellant should be taken to have played a sufficiently significant part in the conspiracy such that any property would be jointly received.
21. Given the lack of clear evidence here and any appropriate finding by the judge, we consider that the assumed division of the proceeds is an acceptable solution as Gibbons shows. As we have said, the Crown accept that this should be the outcome if the finding of joint ownership is not sustained. We have some uncertainty as to whether it is right to divide the proceeds three ways. But that is agreed between counsel, and the contrary was not argued. The effect is to reduce the amount of the order by £20,000.
22. The second point relates to the appellant's interest in a house at 63 London Road Camberley. The beneficial interests in the property were defined by a deed of trust dated 11 September 1998 made between the appellant and Mrs Akemi Yamaguchi, who was shortly to be his wife. The beneficiaries were named as the appellant, Mrs Yamaguchi, and her two children. The house had been sold and the proceeds were being held under the terms of the deed. As to the appearance of the deed in the case and the appellant's reliance on it, the judge said :

"It is now known that a trust deed was executed at the time of purchase. It surfaced very late in the day and by way of a side issue. It came to light to the Crown and to the court's attention during the course of Mrs Anderson's application to release some of the funds, which were restrained by this court. The surfacing and knowledge of that trust deed is in sharp contrast to the statement of Mr Anderson served in the course of these proceedings. I read from that statement, which is signed by Mr Anderson and dated 9 February 2007 :

'My wife and I remain the legal owners of the property. It was our intention that it would be held for the joint benefit of the whole family, both as a result of our natural affection and because of the contribution each member made and would ultimately have been inherited by my two step-children. There has never been a trust deed or other agreement setting out in what shares the beneficial interest of the property was handled in. I believe, therefore, that the property is subject to a constructive trust and that I need legal advice as to the extent of my own interest in the property.'

It is abundantly plain that by paragraph 13 of Mr Anderson's statement that he and his legal advisers (no doubt acting on his instructions), were setting up the argument that Mr Anderson had no share in Rowan House, that the intention was for his wife and her children from her first marriage to inherit the property. In other words, there would be a 100% resulting trust in favour of wife and daughters. The trust deed of course flies in the face of that contention, because, looking at the trust deed, the intention of the parties, I am satisfied beyond per adventure at the time that the trust deed was signed, was as set out in the trust deed."

23. The judge held that the appellant's interest in the proceeds in accordance with the deed was one third. It accounted for £186,281.71 in the confiscation order.
24. The deed provided that the cost of the property, £295,000, was to be provided by a loan of £100,000 by way of mortgage to the appellant and Mrs Yamaguchi and by a payment by Mrs Yamaguchi of £195,000 on behalf of herself and her children. The appellant owned a property at 23 Malvern Mews, London NW6. The deed recited the intention that the proceeds of sale of 23 Malvern Mews should be used by the appellant to repay the loan of £100,000, and that until that happened Mrs Yamaguchi and her two children should have 33.3% each of the 63 London Road property. When the repayment was made by the appellant, then he was to have 35%, and the others 21.66% each. These were defined as "the relevant proportions".
25. Paragraph 1 of the deed provided :

"1. THE TRUST

The Trustees shall hold the Property and, when it is sold, mortgaged, or otherwise disposed of, the proceeds of any such sale, mortgage, or other disposition upon the following trusts:

1.1 until the Property is sold, as a family home to be shared by the Beneficiaries; and,

1.2 when the Property is sold, (or when any disposition other than a sale is effected), the proceeds of such sale or other disposition shall, after the repayment of any mortgage(s) to which the Property is then subject, be held by the Trustees to pay the same to each of the Beneficiaries in the relevant proportions, each Beneficiary to be entitled to receive his or her or their relevant proportion."

26. 23 Malvern Mews was sold by the appellant but the proceeds were not used to pay off the £100,000 loan on 63 London Road. The event which would have given the appellant a 35% beneficial interest therefore never came about. He did not contribute the £100,000 which would have given him a 35% share in the property. Instead the appellant paid the instalments of the mortgage on 63 London Road, and when that property was sold, the mortgage was paid off from the proceeds.
27. The judge held that because the mortgage was paid off the appellant obtained a 35% interest. But the appellant only got his 35% interest if he paid off the loan from the proceeds of 23 Malvern Mews, that is to say, he himself contributed £100,000 towards the property. That never occurred. The judge treated £186,281.71 being the one third share of the net proceeds of sale of 63 London Road as an asset of the appellant. That was an error because the appellant did not have a one third share. The effect is to reduce the available assets to £43,683.27.
28. Mr Hope also made an alternative submission which had not been raised before. He submitted that the appellant had paid the mortgage instalments and so was entitled to a beneficial interest reflecting what he had paid. The short answer is that this is not what the deed provides.
29. The effect is to reduce the criminal benefit by £20,000, namely to £169,224 but also to reduce the available assets to £43,683.27. So the latter figure must be substituted in the confiscation order. The period to be served in default of payment will now be 18 months. Leave is granted on the second point. The appeal is allowed accordingly.