England and Wales Court of Appeal (Criminal Division) Decisions

IN THE COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM A CROWN COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		20/11/2012

The President of the Queen's Bench Division:

1. This is an application for leave to appeal with the hearing of the appeal to follow immediately (if leave is given) against a ruling of a Crown Court judge made at what is said to have been a preliminary hearing under s.29 of the Criminal Procedure and Investigations Act 1996 (CPIA). As a trial will follow, we have stated the facts on the main issues before us in the briefest terms so that the issues that arose on the application and appeal can be set out in an open judgement. We allow that to be published, but in accordance with s.37 of the CPIA the Annex to this judgment is not to be published until after the conclusion of any trial.

The facts

2. X was involved for a period of some months period prior to 2001 in a conspiracy to import and supply drugs. He was charged with conspiracy. An order was made restraining him from dealing in his assets; the assets restrained exceeded £100,000 in value. In 2001 he was convicted on his plea of participation in that conspiracy. Proceedings for the making of a confiscation order under the provisions of the Drug Trafficking Act 1994 (DTA 1994) were commenced; it was the Crown's contention in the statements served that the benefits attributable to the conspiracy exceeded £1.5 million. The court issued in the course of those proceedings, under the provisions of the DTA 1994 to which we shall refer, a certificate in the following terms:

"The Court Certifies that

The value of the defendant's proceeds of drug trafficking is £[100,000]

To be paid before …….. 2002."

X's realisable assets exceeded the amount of £[100,000] set out in the certificate. A Drug Trafficking Order (DTO) was then made in the sum of £[100,000]. As a result, various assets which had been the subject of the restraint order were returned to him. The material which might explain why the certificate was issued in those terms has been destroyed in accordance with retention policies. No-one involved has any recollection about it, save that the amount set out in the certificate appears to have been agreed.

3. Some years later, in 2010, Y and Z (the applicants for leave to appeal) were charged with and subsequently indicted on a multi-count indictment for money laundering under s.327(1) of the Proceeds of Crime Act 2001 (POCA 2002). X had in the meantime died. It is the Crown's case that the acts of laundering charged all occurred in the period 2003-2010. The Crown contends that in respect of all but two of the counts on the indictment, the money laundered was the proceeds which X derived from the six months conspiracy prior to 2001 to which we have referred in paragraph 2 and in respect of which the DTO had been made.
4. Y & Z's principal argument can be summarised as follows:

i) The value of the proceeds of X's drug trafficking had been certified by the court in the sum of £[100,000].

ii) The certification of X's proceeds was a certification as against the whole world and the Crown could not go behind it.

iii) The amount certified had been satisfied in 2001 through the realisation of assets seized.

iv) It was not therefore permissible for the Crown to contend that any further sums were obtained by X from that conspiracy.

v) Y and Z could not therefore be guilty of money laundering any proceeds of crime after 2001 insofar as such proceeds were alleged to be derived from the six month conspiracy prior to 2001.

There is no authority in point; CPS (Sussex) v Mattu [2009] EWCA Crim 1483 was a case where the point on a money laundering charge related to the basis of plea that the same defendant had made in earlier proceedings.

5. Y and Z also contended that, even if that certification was not binding as against the world, each, on the facts of the case, could rely upon that certification as making it unfair for the Crown to proceed against them in respect of any sums alleged to have been derived from the six month conspiracy.
6. Both contentions were advanced on the basis that it was an abuse of process to continue the proceedings.

The hearing before the judge

7. In 2012, a hearing took place before the judge on various issues. The first matter raised was the application by Y and Z that the continuation of the proceedings was an abuse of process on the basis we have set out.
8. Counsel for the Crown told the judge that both the Crown and those acting for Y and Z were agreed that the issues raised by Y and Z should be determined by way of a preparatory hearing and that the judge should order the hearing to continue as a preparatory hearing under s.29 of the CPIA.
9. After some discussion, and after counsel for the Crown had pointed out that it was not enough that counsel were agreed and the judge must exercise his own independent judgment in deciding whether there should be a preparatory hearing, the judge confirmed that the hearing would be a preparatory hearing under s.29.
10. The argument then proceeded in front of the judge on the basis that the hearing was a preparatory hearing. Some days after the conclusion of the argument, the judge delivered a written ruling. In that ruling he confirmed that he had made an order that the hearing was to be treated as a preparatory hearing under s.29 so as to permit an appeal. He then set out his reasons for determining the issue against Y and Z. At the end of his judgment the judge concluded, after referring to various cases, that there was no conflict of authority that would justify a preparatory hearing. Everything turned on the facts. He therefore revoked the direction for a preparatory hearing.

Was the hearing before the judge a preparatory hearing? If so, was he entitled in his ruling to revoke the order he made?

11. The first matters we were therefore asked to determine was whether the hearing before the judge had been a preparatory hearing by order of the judge, and if so, whether he was entitled to revoke that order.
12. It was common ground before us and is clear from the transcript, that the judge did, in fact, order that the hearing before him continue as a preparatory hearing. That was his own clear and definite decision; it was not qualified in any way, even if such a qualification was permissible. After his decision, the argument continued for the greater part of that day and continued into the following day.
13. It seems to us clear that the conditions in s.29 of the CPIA were satisfied as he was being asked, under s.31(3)(b) of the CPIA, to determine a question of law. The ruling the judge made was a ruling on that question. As we have set out, it is clear that the first of the issues raised by Y and Z as set out at paragraphs 3 and 4 was plainly a question of law.
14. In those circumstances, the question arose as to whether the judge had power to revoke the order he had made. In R v C [2011] Crim LR 396, [2011] 3 All ER 509, this court held that it was not permissible to declare retrospectively after the relevant ruling had been given that a pre-trial hearing had been a preparatory hearing for the purposes of s.29 of the CPIA.
15. Similarly it seems clear that it is not permissible, once a decision has been made to hold a preparatory hearing, for the judge in the course of his judgment to revoke that decision. The Act contains no such power. It is wrong in principle to allow a judge to take this course which would, in the instant case, have prevented any appeal.
16. We have reached this conclusion on our own analysis. However we must point out that counsel for both appellants, Y and Z, and counsel for the Crown all contended that the judge had no such power.
17. We therefore turn to consider the principal issue in the appeal, namely whether the certificate had the effect contended for by Y and Z.

The effect of the certificate

(a) The provisions of the DTA 1994

18. It was common ground that the effect of the certificate was a matter of the interpretation of the DTA 1994. When the DTA 1994 took effect, it replaced the Drug Trafficking Offences Act 1986 as regards the confiscation regime; a number of features of the Act were considered by Parliament to be unsatisfactory: see Dr David Thomas: The Criminal Justice Act 1993: Part 1: Confiscation orders and drug trafficking [1994] Crim LR 93. The DTA 1994 in turn has been superseded by POCA 2002.
19. Under s.2 of the DTA 1994, when a person was convicted of a drug trafficking offence, a confiscation order was initiated either by the prosecutor asking the court or the court considering it was right to do so; the process was not mandatory, unlike the position under the earlier legislation.
20. If the court proceeded to consider making an order, the court first had to determine whether the defendant had benefited from drug trafficking: s2(2). If it determined that he had benefited then the amount to be recovered was to be determined in accordance with s.5: s.2(4). The court was then to order him to pay that amount: s.2(5).
21. Under s.4, the court was required to make statutory assumptions for the purposes of determining whether the person had benefited from drug trafficking and, if he had, assessing the proceeds of drug trafficking.
22. S.5 set out the amount that was to be recovered.

"Amount to be recovered under confiscation order.E+W

(1) Subject to subsection (3) below, the amount to be recovered in the defendant's case under the confiscation order shall be the amount the Crown Court assesses to be the value of the defendant's proceeds of drug trafficking.

(2) If the court is satisfied as to any matter relevant for determining the amount that might be realised at the time the confiscation order is made (whether by reason of the acceptance of an allegation made in a statement given under section 11 of this Act or made in the giving of information under section 12 of this Act, or otherwise) the court may issue a certificate giving the court's opinion as to the matters concerned, and shall do so if satisfied as mentioned in subsection (3) below.

(3) If the court is satisfied that the amount that might be realised at the time the confiscation order is made is less than the amount the court assesses to be the value of his proceeds of drug trafficking, the amount to be recovered in the defendant's case under the confiscation order shall be—

(a) the amount appearing to the court to be the amount that might be so realised; or

(b) a nominal amount, where it appears to the court (on the information available to it at the time) that the amount that might be so realised is nil."

It is under s.5(2) that the certificate set out in paragraph 2 was issued.

23. SS.13-18 of the DTA 1994 dealt with the ability of the court to take further proceedings after sentence or after the making of the confiscation order. One of the powers given to the court was a power to revise the amount determined under s.2(4). S.15 provided, where material, as follows:

"(2) Where the prosecutor is of the opinion that the real value of the defendant's proceeds of drug trafficking was greater than their assessed value, the prosecutor may apply to the Crown Court for the evidence on which the prosecutor has formed his opinion to be considered by the court.

…..

(4) If, having considered the evidence, the court is satisfied that the real value of the defendant's proceeds of drug trafficking is greater than their assessed value (whether because the real value at the time of the current section 2(4) determination was higher than was thought or because the value of the proceeds in question has subsequently increased), the court shall make a fresh determination under subsection (4) of section 2 of this Act of the amount to be recovered by virtue of that section.

…..

(15) No application shall be entertained by the court under this section if it is made after the end of the period of six years beginning with the date of conviction; and in this subsection "the date of conviction" has the same meaning as in section 13 of this Act."

(b) Our conclusion

24. We have set out the main submission made on behalf of Y and Z at paragraph 4. It was supplemented by reference to the provisions of s.15 and in particular s.15(15); if re-opening the value of the proceeds of the drug trafficking obtained by the person engaged in drug trafficking was barred after 6 years, Parliament must have intended that it was not possible to re-open the amount of the proceeds in any circumstances. If Parliament had barred action against the principal, it must have intended that proceedings were barred against accessories. Reliance was also placed on the provisions of s.49(2) which made it an offence knowingly to conceal, disguise or transfer property for the purposes of assisting any person to avoid a prosecution for drug trafficking or the enforcement of a confiscation order.
25. Attractively presented though these submissions were by Mr Daw and Mr Gozem QC, in our judgment there is nothing in the language of the 1994 Act which suggests that the certificate is a certificate which has effect against anyone other than the person in respect of whom it is made. Although that person cannot after the lapse of six years have the value of the proceeds of drug trafficking re-assessed against him, we can discern no reason why Parliament would have intended that a person who held any proceedings of that drug trafficking should not be the subject of criminal prosecution in respect of proceeds that were greater than the amount certified. Ordinarily and unless the context otherwise requires, a certificate issued by a court only affects the parties to the proceedings in which the certificate was issued; the provision for re-opening the value of the proceeds of drug trafficking is entirely consistent with that, as there would be reasons of finality in confining the period in which the certificate could be re-opened to a limited period.
26. However, we can think of no reason why Parliament would have intended that the certificate should have any effect on any other person. The legislation was designed to impose a punitive regime on all who participate in drug trafficking or assisted in the laundering of proceeds. If many years later it was discovered that an associate was knowingly dealing with what could be proved to be proceeds of the drug trafficking in excess of the amount certified, could Parliament have intended that such a person could rely on the certificate given in proceedings to which he was not a party? We can think of no reason why Parliament would have any such intention given the purpose of the 1994 Act. There is nothing in the language of the Act that would support any such intention. Confiscation orders were referred to in s.49(2) as one way of committing the offence was for the purpose of avoiding the making of a confiscation order. The reference to confiscation orders has no other relevance.
27. We are satisfied from the purpose of the Act and from its language that Parliament had no such intention as is contended by the appellants. Whatever may have been enacted to provide for finality for the person subject to the confiscation proceedings, that does not affect the position of any other person. Thus the appeal on the primary ground fails.

The alternative contention

28. The alternative contention that even though the certificate could not be relied on as a certificate good against the world barring the Crown from proceedings, it was unfair to allow the Crown to proceed on the specific facts of this case.
29. This is a contention that turns on the specific facts of the case. For reasons set out in an annex which cannot be published until after the conclusion of the proceedings against Y and Z, we consider that this contention fails.

Conclusion

30. Although we give leave to appeal, we dismiss the appeal.