Judgments - R v Briggs-Price (Appellant) (On appeal from the Court of Appeal (Criminal Division))

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28.  In Phillips v United Kingdom (2001) 11 BHRC 280 the issue in confiscation proceedings had been whether identified property that had been proved to be or have been in the possession of the defendant represented benefits from drug trafficking. The court had determined that they were by applying the statutory assumptions. The relevant issue before the Strasbourg Court was whether the application of these assumptions infringed the presumption of innocence required by article 6(2). The Court decided that it did not because article 6(2) did not apply to the confiscation proceedings. In so finding the Court was influenced by the purpose of the proceedings. This was not to obtain a criminal conviction but was analogous to the determination of the penalty that should be imposed as a consequence of a conviction that had already been recorded. In these circumstances the defendant to confiscation proceedings could not be said to be “charged with a criminal offence". The Court held, at para 35, that Article 6(2) did not apply to the sentencing process unless this involved accusations “of such a nature and degree as to amount to the bringing of a new ‘charge’ within the autonomous Convention meaning” as defined in Engel v The Netherlands (1976) 1 EHRR 647.

29.  The Strasbourg Court reached the same decision for the same reasons in an application that related to confiscation proceedings in the Netherlands in Van Offeren v The Netherlands (Application No 19581/04) decided 5 July 2005.

30.  These two decisions establish that confiscation proceedings fall to be treated as part of the process of sentencing after conviction and do not, of themselves, involve charging the offender with offences other than that or those of which he has been convicted and which have given rise to the sentencing process. Thus they do not engage article 6(2) of the Convention. The decisions also establish that applying a reverse burden of proof to the source of identified assets is compatible with article 6(1). This was made clear by the decision in relation to two further applications against the United Kingdom that were heard together.

31.  In Grayson & Barnham v United Kingdom (Application Nos 19955/05 and 15085/06) each applicant had been held in confiscation proceedings to have benefited from drug trafficking to a specified amount. It is noteworthy that in the case of Barnham this amount was largely based on inference of the amounts that he must have paid to purchase two consignments of cannabis which he had mentioned to an undercover police officer but which had not formed the subject of the charges against him (para 14). The Court recorded that neither applicant seriously complained about the first stage of the confiscation procedure under which the benefit from drug trafficking was calculated (para 46).

32.  The Court identified the following safeguards that were built into the system. In each case the assessment was carried out by a court with a judicial procedure including a public hearing, advance disclosure of the prosecution case and the opportunity for the applicant to adduce documentary and oral evidence. Each applicant was represented by the counsel of his choice. The burden was on the prosecution to establish that the applicant had held the assets in question during the relevant period and that he had the opportunity to rebut the assumption that these represented benefit from drug trafficking (para 45). The Court held that, given the existence of these safeguards, it was not incompatible with the concept of a fair trial under article 6 to place the onus on the applicant, once he had been convicted of a major drug dealing offence, to establish that the source of money or assets that he had been shown to have possessed was legitimate (para 46).

33.  What was particularly challenged in these cases was the fact that, in the absence of evidence that the applicants still possessed the benefits that they had derived from trafficking, the courts had held that the burden was on the applicants to establish to the civil standard of proof that the amount that could be realised from their assets was less than the amount assessed as benefit. This also the Court ruled to be compatible with article 6(1). It held that it was not unreasonable to expect the applicants to explain what had happened to all the money shown by the prosecution to have been in their possession, any more than it was unreasonable at the first stage of the procedure to expect them to show the legitimacy of the source of such money or assets. Such matters fell within the applicants’ particular knowledge (para 49).

34.  In this decision the Court followed its own decision in Phillips. It observed that in that case the judge had been satisfied, on the basis either of the applicant’s admissions or of evidence adduced by the prosecution, in respect of every item taken into account, that the applicant had owned the property or spent the money and the obvious inference was that it had come from an illegitimate source. Thus

“...the applicant demonstrably held assets whose provenance could not be established; …these assets were reasonably presumed to have been obtained through illegal activity; and…the applicant had failed to provide a satisfactory alternative explanation” (para 41)

35.  This quote was from the decision of the Court in Geerings 46 EHRR 1222, para 44. The Court was there describing the facts of Phillips in order to distinguish them from those before it. I now turn to the decision in Geerings. In the Court of Appeal Richards LJ, at para 43, remarked that the decision had to be approached with some care and I agree with that observation.

36.  Article 36(e) of the Dutch criminal code provides in paragraph 1 that any person who has been convicted of a criminal offence may be ordered in a separate judicial decision to pay a sum of money to the State so as to deprive him of any illegally obtained advantage. Paragraph 2 provides that the advantage in question is that obtained “by means of or from the proceeds of the criminal offence in question or similar offences or offences…in connection with which there exist sufficient indications that they were committed by him". The confiscation proceedings were based on estimated benefits obtained by the defendant from a series of offences with which he had been charged. He had been acquitted of a number of those offences. The Court of Appeal held that confiscation could none the less be founded on estimated benefits from these offences on the basis that there existed “sufficient indications that they were committed by him".

37.  Lord Mance has set out the relevant passage of the reasoning of the Strasbourg Court in para 124 of his opinion. Mr Owen’s submissions as to the effect of this passage were set out in his Case as follows:

“So long as the extended benefit is referable to assets clearly shown to have been in the possession of the accused in circumstances where the accused fails to establish their lawful origin, then the fact that any confiscation order is based on a finding of criminal conduct beyond the index offence will not offend either Art 6(1) or 6(2). Where however no suspicious assets are capable of being identified so as to require an explanation from the accused, then an order which necessarily assumes the existence of suspicious hidden assets going beyond those obtained by the index offence will violate Art 6”

38.  This reads too much into the passage in question. There are two ways of proving, with the aid of assumptions, the existence of benefit derived from drug trafficking. The first is to prove the existence of property and to make a reasonable assumption that it was derived from drug trafficking. The second is to prove the existence of drug trafficking and to make a reasonable assumption as to the benefit that must have been derived from it. In Geerings the prosecution attempted to adopt the latter approach. They sought to prove the existence of offences by charging the applicant with them. Article 6(2) applied. The offences had to be proved to the criminal standard, ‘beyond reasonable doubt'. The prosecution failed to prove a number of offences but none the less successfully contended that there were “sufficient indications that they were committed by [the applicant]” and that the benefit derived from them could be inferred. What the Court found objectionable was that neither the commission of the offences nor the alleged benefits had been proved. In these circumstances the findings against the applicant had been based on a “conjectural extrapolation” and “a presumption of guilt” which was in conflict with article 6(2) (paras 46 and 47).

39.  The passage in question supports two propositions. The first is that where a defendant is charged with criminal offences from which the prosecution seek to infer the derivation of benefit, article 6(2) applies, so that the defendant is presumed innocent of those offences. The second is that, if the defendant is acquitted of offences with which he is charged, it is not legitimate to infer that he has benefited from those offences. What one cannot deduce from the passage is that, if the prosecution seek to rely on proof of offences other than those with which the defendant is charged in order to prove the derivation of benefit, he is to be deemed to be charged with those offences also, so that article 6(2) applies in their case also. Geerings does not decide that question one way or another.

40.  Your Lordships were not referred to other Strasbourg jurisprudence bearing on the question of whether the allegations of the cannabis offences that were advanced by the prosecution in this case constituted “criminal charges". There is authority that establishes that both the adjective “criminal” and the noun “charge” are autonomous concepts but that the Strasbourg Court attaches significance to the way in which they are treated in domestic law and looks to the substance rather than to the form. Not without hesitation, I have concluded that the allegations that were made in relation to the cannabis offences did not constitute “criminal charges". First they were not so treated under our law. Secondly, they could not and did not lead to criminal convictions. Thirdly, and most significantly, their consequence, the confiscation of the property of a convicted drug dealer, is precisely the same as that in Phillips and Grayson & Barnham. Those cases required a finding that the property confiscated was derived from criminal offending, albeit that the precise offences did not have to be specified but could be inferred. The Strasbourg Court accepted that the safeguards of article 6(2) did not apply in such circumstances. It would seem illogical to impose them where the details of the offending are alleged with more particularity.

41.  Although I have concluded that the requirements of article 6(2) and 6(3) did not apply in this case, those of article 6(1) were none the less applicable. The requirements of a fair trial in confiscation proceedings are not poles apart from those imposed by article 6(2) and 6(3). Where, as here, the prosecution rely on criminal offending to prove the existence of benefit, they have to prove that offending. The defendant is presumed innocent until proved guilty, albeit by the civil standard of proof. When, in Grayson & Barnham, the Strasbourg Court set out the safeguards in our system that had led it to conclude that our procedure satisfied article 6(1) it might well have been carrying out a check list of the relevant requirements of article 6(3).

42.  The facts of this case are unusual. The prosecution, as part of their case on the conspiracy to import heroin, gave the defence particulars of evidence that they intended to adduce of other drug offences. The appellant challenged these at his trial and could have challenged them again in the confiscation proceedings. The judge was sure on the evidence that the relevant offences were proved. He deduced the benefit from the proved offending. In the Court of Appeal Richards LJ held that the procedure adopted was compatible with article 6(2). There is no basis for suggesting that the fair trial requirements of article 6(1) were not satisfied.

43.   For these reasons I reject the interpretation of section 4 of the 1994 Act advanced by Mr Owen. It is open to the prosecution to prove the derivation of benefit from drug trafficking by proving the commission of drug trafficking not charged on the indictment. In this case they did so. For these reasons this appeal should be dismissed.

LORD RODGER OF EARLSFERRY

My Lords,

44.  The appellant stood trial on an indictment on which he appeared with three co-defendants. Two of them were acquitted. The fourth, John Barton, absconded and was tried in his absence. Both he and the appellant were convicted of a count of conspiracy to contravene section 170(2) of the Customs and Excise Management Act 1979, contrary to section 1(1) of the Criminal Law Act 1977. The offence covered a period from 1 September 1999 to 21 June 2000 and concerned a conspiracy to evade the prohibition on the importation of diamorphine, contrary to section 3(1) of the Misuse of Drugs Act 1971.

45.  The general thrust of the prosecution case at trial was that the appellant had a pre-existing network for the supply of cannabis and was going to use it to distribute the diamorphine which Barton was going to import. So, much of the most important evidence was designed to prove that the appellant was indeed engaged in distributing cannabis through this network. That evidence tended to show - at the least - that the appellant had been concerned in the supplying of cannabis contrary to section 4(3)(b) of the 1971 Act. Despite this, for reasons which Mr Lucraft QC - who had not been instructed at that stage - understandably had difficulty in identifying, far less explaining, the indictment contained no section 4(3)(b) count. This is the first unsatisfactory aspect of the case.

46.  In Scotland, the absence of a section 4(3)(b) charge would have rendered the evidence relating to the cannabis distribution network inadmissible, as being evidence of a crime not charged. In this case, however, the evidence was led at the trial and, on an application to the Full Court for leave to appeal on the basis that the judge should not have admitted evidence showing that the network was for the distribution of cannabis, the Court of Appeal (Thomas LJ, Jack J and HH Judge Radford) [2005] EWCA Crim 368 were unable to see that there was an arguable ground of appeal.

47.  Plainly, the evidence relating to the cannabis network was very relevant to the Crown’s case. And, if the indictment had included a count relating to that matter, all would have been well. The absence of such a count means, however, that the appellant was never charged with an offence relating to the cannabis network. And, although the evidence about the network formed an important part of the prosecution case at trial, the judge, HH Judge Stokes QC, directed the jury that, even if they rejected that evidence, they could still convict the appellant of the count on the indictment. It is, accordingly, impossible to tell whether the jury were satisfied that the appellant was involved in the network. Putting the matter another way - and in the way that Mr Owen QC put it on behalf of the appellant - the approach adopted by the Crown meant that the jury were not given the opportunity, if so advised, to declare the appellant’s innocence of any involvement in a cannabis network by acquitting him of a count relating to it.

48.  Following the appellant’s conviction on the conspiracy charge, the prosecutor asked Judge Stokes to proceed under section 2 of the Drug Trafficking Act 1994 (“the 1994 Act”) - in other words, to consider whether to make a confiscation order. The judge was then obliged to do so. In terms of section 2(2) he had first to determine whether the appellant had benefited from drug trafficking. To determine that, subject to section 4(4) and (5), a court “shall… make the required assumptions” which are set out in subsection (3): see section 4(2).

49.  The second unsatisfactory feature of the case emerges at this point. Those representing the prosecution and the appellant simply agreed to proceed with the confiscation proceedings on the basis that the assumptions in section 4(3) of the 1994 Act should not be applied. The prosecution, at least, seems to have considered that the presentation of a case based on the assumptions would have involved extremely difficult accountancy issues and would have been lengthy and expensive. Plainly, if the position had been explained to the judge by counsel and he had then made his own decision that, for a reason covered by section 4(4), the assumptions should not be applied, there would have been no problem. Here, however, while apparently accepting that the assumptions should not be applied, the judge did not make any determination in terms of section 4(4).

50.  In my view, the matter was mishandled. The requirement in section 4(2) to apply the assumptions binds the court. That is consistent with the wider position that it is the court which acts under section 2 - and which can indeed do so, even though the prosecutor has not asked it to. No unilateral action by the prosecution, or joint action by the parties, can relieve the court of its obligation under section 4(2) to apply the assumptions. But suppose that the prosecutor had indeed realised that, so far as the actual expenditure and property which the prosecution could identify were concerned, the appellant could show that they derived from his legitimate business as a hotelier etc. In that event, if the position had been explained to the court, in all probability the judge would indeed have disapplied the presumptions, on the ground that they had been shown to be incorrect (subsection (4)(a)). So the failure to observe the provisions of section 4(2) and (4) was probably one of form rather than of substance.

51.  The statutory assumptions are fairly draconian - and are intended to be. Contrary to Mr Owen’s submission, they are not conceived in favour of the defendant and a failure to apply them cannot be regarded as any kind of detriment to him. On the contrary, because the judge did not apply the assumptions in this case, the appellant enjoyed the (probably, fully justified) advantage of not having his hotel and other property, and all his expenditure over the preceding six years, deemed to be derived from drug trafficking.

52.  What led to the confiscation order being made against the appellant was not the failure to apply the assumptions. Rather, it was the fact that, even without the help of those assumptions, the judge was satisfied that the appellant had benefited from drug trafficking. The judge’s conclusion to that effect was based on the evidence which he had heard during the trial about the quantities of cannabis which were being bought for, and distributed through, the cannabis network. So far as the appellant’s involvement in the distribution of cannabis was concerned, the judge had “no doubt that this was the case.” The judge based his calculation of the benefit which the appellant had received from that involvement on two matters: first, police evidence about the value of various quantities of cannabis and, secondly, his estimate of the quantities of the drug in which - the evidence showed - the appellant had been trafficking over a six-month period. On these matters the judge applied the civil standard of proof, in accordance with section 2(8) of the 1994 Act. There is no appeal against the calculation which the judge made and so I need say no more about it, save that it worked out at £4 million.

53.  Mr Owen accepted that, if the appellant had been convicted of a drug trafficking offence, then - even without the assistance of the presumptions - the court could consider evidence that he had benefited from that trafficking. So, for instance, if a defendant were convicted of an offence of supplying a bulk quantity of diamorphine and the supply had taken place, say, ten years before the proceedings began, the court could consider evidence as to the price which he could have been expected to receive for that quantity. Equally, the court could consider evidence of the purchase of an Aston Martin by the defendant the day after the supply. But, said Mr Owen, where the court was considering an alleged benefit not deriving from an offence of which the defendant had been convicted, the structure of the 1994 Act meant that it could proceed only on the basis of the assumptions in section 4(3).

54.  That is an impossible contention. The mere fact that the assumptions are not applicable does not mean that the defendant has not benefited from drug trafficking: it merely means that the court cannot use the assumptions to determine either that he has benefited, or that he has benefited to a particular extent. If there is evidence to show the benefit, then the court can use it. If that were not so, as my noble and learned friend, Lord Mance, points out, it would mean, for instance, that, if the defendant had no property, there would be no way for a court to determine if he had received a benefit from drug trafficking offences committed more than six years before proceedings began. It would also mean that there was no way of determining whether a defendant had benefited from drug trafficking which did not constitute an offence. Yet both eventualities are contemplated by section 2(2) and (3).

55.  Similarly, there is nothing in the provisions relating to prosecution statements in section 11 or the provision of information by defendants in section 12 to restrict their application to benefit derived from the offence of which the defendant has been convicted. On the contrary, as would be expected - given that the court is concerned with benefit from “drug trafficking” rather than from drug trafficking offences - section 11(1) envisages that the prosecutor’s statement will concern matters which are relevant to determining whether the defendant has benefited from “drug trafficking” or to “assessing the value of his proceeds of drug trafficking". In the same way, under section 12(2) the court may order the defendant to give it specific information for “the purpose of obtaining information to assist it in carrying out its functions".

56.  There is a more fundamental objection to Mr Owen’s submission. As the definition in section 2(3) shows, a person has benefited from drug trafficking “if he has at any time ... received any payment or other reward in connection with drug trafficking carried on by him or another person.” In other words, the benefit comprises any payment or other reward, irrespective of whether the recipient has actually made a profit from his trafficking. The law does not draw up an account of the defendant’s income and expenditure on drug trafficking: it is concerned only with the payments and rewards which he receives. Lord Lane LCJ explained the position succinctly in R v Smith (Ian) [1989] 1 WLR 765, 769A-C:

“The words ‘any payments’ are on the face of them clear. They must mean, indeed it is clear from the wording, any payment in money or in kind. It does not mean, in the judgment of this court, net profit derived from the payment after the deduction of expenses, whether the expenses are those of purchase, travelling, entertainment or otherwise. The same consideration applies to the words ‘other rewards.’ They also have to be valued.”

The passage was cited with approval in this House in R v Smith (David) [2002] 1 WLR 54, 61-62, para 24.

57.  Suppose, therefore, that someone buys a large quantity of cannabis which he intends to sell through his network of dealers. A rival distributor floods the market, with the result that prices collapse and the first distributor has to sell his cannabis at a loss. Despite this, by receiving the payments for the cannabis, the distributor has “benefited” from drug trafficking. The same applies to a distributor who deliberately sells his drugs at a loss in order to drive a rival from the market. In calculating the amount to be recovered under any confiscation order under section 5(1) and 4(1), the defendant’s proceeds of drug trafficking comprise the sums he receives, even if he has never made a profit which he could spend on other things.

58.  In such cases, the assumptions in section 4(3) have no role to play since (apart from expenditure on drugs etc) they presuppose that the drug trafficker has made a profit which he has used to finance his lifestyle and to purchase property. The legislation is designed, however, to strip even an unsuccessful drug trafficker of any money or other reward which he receives in connection with his trafficking. If, therefore, the court is satisfied in any case that a defendant was selling quantities of drugs at a particular price, it may also infer that the value of the proceeds of his trafficking, for the purposes of section 5(1), was the aggregate of the sums he must have received for those drugs.

59.  Of course, usually, there will be no point in making a confiscation order in such cases since the defendant will have no assets from which to extract the payment. So, usually, a confiscation order will be made only in cases where the defendant has been successful and has used his profits to buy assets which can be confiscated. Then the assumptions in section 4(3) are the obvious starting point. But, if the defendant’s ownership of other assets actually makes it worthwhile, a confiscation order can properly be made simply on the basis of the payments or rewards which the defendant must have received from drug trafficking, even if he made no profit, or - whether due to concealment or otherwise - any profit cannot be identified. So the statutory assumptions are certainly not the only basis for confiscation proceedings under the Act.

 
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