Ahmed & Anor, R v [2004] EWCA Crim 2599

[2004] EWCA Crim 2599Case No 2003/1628/4092/4390 & 2004/1032 D1
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM WOOD GREEN CROWN COURT
HHJ WINSTANLEY
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 28/10/2004
Before
LORD JUSTICE LATHAMMR JUSTICE PITCHERSMR JUSTICE ROYCE
Between
THE QUEENRespondentMUNTAZ AHMED & GHULAM QURESHIAppellant
Mr Michael J Brompton (QC)& Miss Janet Weekes (instructed by HM Customs & Excise) for CrownMr Michael House (instructed by Bindman & Partners for Appellant Muntaz AhmedMr Simon Farrell, QC (instructed by the Registrar) for Appellant Ghulam QureshiHearing Hearing dates : 15th October 2004
JudgmentLord Justice Latham :
[1]The appellant Qureshi pleaded guilty to two counts of conspiracy to contravene s. 93C(2) of the Criminal Justice Act 1988, contrary to Section 1(1) of the Criminal Law Act 1977. The particulars were that he, together with others, conspired to convert cash which he knew or had reasonable grounds to suspect was, in whole or in part directly or indirectly or indirectly represented, another persons proceeds from criminal conduct for the purpose of assisting another person to avoid prosecution. The appellant Ahmed was convicted of a conspiracy to contravene Section 49(2) of the Drug Trafficking Act 1994 and/or Section 93C(2) of the Criminal Justice Act 1988, contrary to Section 1(1) of the Criminal Law Act 1977. The particulars were that he together with others conspired to convert cash which he knew or had reasonable grounds to suspect was, or in whole or in part directly represented, another persons proceeds of either drug trafficking or other criminal conduct or both for the purpose of assisting another to avoid prosecution for either a drug trafficking offence or an offence to which Part VI of the Criminal Justice Act 1988 applied. We have dismissed the appellant Ahmed’s appeal against his conviction and allowed in part his appeal against sentence in so far as it related to the sentence of imprisonment which was imposed upon him. On the 8th July 2003, the judge made confiscation orders against both appellants. In the case of the appellant Qureshi, he made a confiscation order in the sum of £226,152.90; and in the case of the appellant Ahmed he made a confiscation order in the sum of £27,424.52. In each case he imposed a sentence of imprisonment in default of payment. They both appeal against those orders. At the hearing, we dismissed those appeals and now give our reasons.[2]Each appeal raises a similar question of some practical importance in relation to the application of the confiscation provisions of the Criminal Justice Act 1988, as amended. In the case of the appellant Qureshi, the judge assessed the benefit figure, that is the figure which, in accordance with the Act, was to be taken as the benefit that he had obtained from his criminal activity at £12,257,135.88; and in the case of the appellant Ahmed he assessed the benefit figure in the sum of £1,385,000. The confiscation orders that he made were based on his assessment of their respective realisable assets. In computing the latter, he took into account the value in each case of the appellants half share in his matrimonial home. He accepted evidence from the families that in each case the probability was that the homes would have to be sold to meet the confiscation order. The appellants submitted to the judge that he had a discretion as to whether or not to include the value of those shares. The judge accepted those submissions. He nonetheless concluded that there were no exceptional circumstances which justified his excluding them. The appellants submit to us that the judge was correct in concluding that he had a discretion, but that he was wrong in exercising the discretion as he did. The prosecution submit as, as they did to the judge, that he had no such discretion, but that if he had, he was entitled to come to the conclusion that he did.[3]There is no doubt that prior to the amendment of the 1988 Act, the court did have a general discretion in relation to the making of a confiscation order under Section 71. If the prosecution applied for a confiscation order, Section 71 gave to the court a power to make an order “requiring him to pay such sum as the Court thinks fit”. These words clearly gave the court a discretion not merely in relation to the amount of an order but also as to whether to make any order at all. We have been referred to two cases decided by this court under the original provisions of the 1988 Act, Lee [1996] 1Cr App R (S) 135 & Taigel [1988] 1 Cr App R (S). In both cases the courts were concerned with the same question as that which has been raised before us. In both the judge had included the value of the appellant’s interest in the matrimonial home when determining the amount of the confiscation order. In each there was evidence that in order to raise the sum required to be paid by the confiscation order so assessed, the matrimonial home would have to be sold as a result of which the family would be rendered homeless. In both cases, this court held that whilst there was no justification for a rule precluding the court from taking into account the value of the offender’s interest in the matrimonial home, nonetheless on the facts of those cases, the court, in the exercise of its discretion, should not have done so.[4]The Proceeds of Crime Act 1995, however, made substantial changes to the confiscation provisions of the 1988 Act. Section 71, as amended provided:
“(1) Where an offender is convicted in any proceedings before the Crown Court or a Magistrates Court, of an offence of a relevant description, it shall be the duty of the court – (a) if the prosecutor has given written notice to the court that he considers that it would be appropriate for the court to proceed under this section, or (b) if the court considers, even though if it has not been given such notice, that it would be appropriate for it so to proceed, to act as follows before sentencing or otherwise dealing with the offender in respect of that offence or any other relevant criminal conduct. (1A) The court shall first determine whether the offender has benefited from any relevant criminal conduct. (1B) ….. If the court determines that the offender has benefited from any relevant criminal conduct, it shall then _ (a) determine in accordance with sub-section (6) below the amount to be recovered in his case by virtue of this section, and (b) make an order under this section ordering the offender to pay that amount. …… (6) …. The sum which an order made by a court under this section requires an offender to pay shall be equal to – (a) the benefit in respect of which it is made; or (b) the amount appearing to the court to be the amount that might be realised at the time the order is made, whichever is the less. …..” (a) if the prosecutor has given written notice to the court that he considers that it would be appropriate for the court to proceed under this section, or (b) if the court considers, even though if it has not been given such notice, that it would be appropriate for it so to proceed, (a) determine in accordance with sub-section (6) below the amount to be recovered in his case by virtue of this section, and (b) make an order under this section ordering the offender to pay that amount. …… (a) the benefit in respect of which it is made; or (b) the amount appearing to the court to be the amount that might be realised at the time the order is made, whichever is the less. …..”
[5]Section 74 of the 1988 Act in its relevant form identifies how the court is to assess “the amount that might be realised”. It provides: “(1) In this Part of this Act, “realisable property” means, subject to sub-section (2) below –(a) any property held by a defendant; and(b) any property held by a person to whom the defendant had directly or indirectly made a gift caught by this Part of this Act. …. (3) For the purposes of this Part of this Act the amount that might be realised at the time a confiscation order is made is – (a) the total of the values at that time of all the realisable property held by the defendant, less (b) where there are obligations having priority at that time, the total amounts payable in pursuance of such obligations, together with the total of the values at that time of all gifts caught by this Part of this Act. (4) Subject to the following provisions of this section for the purposes of this Part of this Act the value of property (other than cash) in relation to any person holding the property – (a) Where any other person holds an interest in the property, is – (i) The market value of the first mentioned person’s beneficial interest in the property less (ii) The amount required to discharge any encumbrance (other than a charging order) on that interest; and (b) And in any other case, is its market value. …..” (a) any property held by a defendant; and (b) any property held by a person to whom the defendant had directly or indirectly made a gift caught by this Part of this Act. (a) the total of the values at that time of all the realisable property held by the defendant, less (b) where there are obligations having priority at that time, the total amounts payable in pursuance of such obligations, together with the total of the values at that time of all gifts caught by this Part of this Act. (a) Where any other person holds an interest in the property, is – (i) The market value of the first mentioned person’s beneficial interest in the property less (ii) The amount required to discharge any encumbrance (other than a charging order) on that interest; and (b) And in any other case, is its market value.[6]Parliament’s intention in amending the 1988 Act in those terms would appear to be clear. What was a power to make a confiscation order has been changed to a duty where the prosecution gives the appropriate notice. Subject to what was said in R –v- Bengafield [2003] 1 AC the court accordingly has no discretion in those circumstances as to whether or not to make an order. As to the amount of the order, the court is required to make an order calculated in accordance with Section 71(6). On its face, this also appears to preclude the exercise of any judicial discretion, properly so called. Leaving aside the assessment of benefit, with which we are not concerned in these appeals, the assessment of “the amount that might be realised at the time the order is made” would appear to require a simple application of the provisions of Section 74. On behalf of the appellant Ahmed, it was submitted that the court’s discretion was retained by the use of the phrase “the amount appearing to the court” in sub-section (6)(b). We have little hesitation in rejecting that argument. It seems to us that that phrase is not intended to import any discretion. It merely refers to the evaluation or valuation process which the court has to carry out under Section 74.[7]Both appellants submit, however, that the making of a confiscation order is capable of engaging Article 8 of the European Convention on Human Rights. This provides:
“(1) Everyone has the right for respect of his private and family life, his home and his correspondence. (2) There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of National Security, public safety or the economic well being of the country, for the prevention of disorder or crime, for the prosecution of health or morals, or for the protection of the rights and freedoms of others.”
[8]They submit that where there is evidence, as there was in this case, that a confiscation order based upon the inclusion of the offenders share in the matrimonial home could, on the balance of probabilities, only be met if the matrimonial home was sold, that would result in interference with not just the appellants Article 8 rights, but the Article 8 rights of innocent members of the family, such as his wife and children. Accepting that the interference with the offenders rights could be justified and proportionate under Article 8(2), they submit that the interference may not be proportionate in so far as it may affect the other members of the family. Accordingly, they submit that the phrase “the amount appearing to the court” should be construed in such a way as to grant to the court a discretion, so as to ensure compliance with the Convention.[9]In support of their submissions, they referred us to R –v- Benjafield [2003] 1AC 1099. This report deals with two conjoined appeals, by the appellant Benjafield, who was appealing against a confiscation order made pursuant to the Drug Trafficking Act 1994 and the appellant Rezvi, who appealed against a confiscation order made under the provisions with which we are concerned in the 1988 Act as amended. Those appeals raised different issues from the present. Nonetheless, it is submitted, there are statements of principle which support the argument that the court is concerned to ensure that no injustice arises as a result of the making of a confiscation order, and accordingly must retain a discretion in relation to its exercise. The passage to which we have been referred is contained in paragraph 15 of the speech of Lord Steyn who was dealing with the argument as to proportionality in the Rezvi appeal. He said:
“It is clear that the 1988 Act was passed in the furtherance of a legitimate aim and that the measures are rationally connected with that aim: see de Freitas –v- Permanent Secretary of Ministry of Agriculture, Fisheries, Lands and Housing [1999] 1 AC 69, 80 for the three–stage test. The only question is whether the statutory means adopted are wider than is necessary to accomplish the objective. Counsel for the appellant submitted that the means adopted are disproportionate to the objective in as much as a persuasive burden is placed on the defendants. The Court of Appeal [2001] 3WLR 75, 103 carefully considered this argument and ruled: “86. The onus which is placed on the defendant is not an evidential one but a persuasive one, so that the defendant will be required to discharge the burden of proof: see Lord Hope’s third category of provisions in R –v- Director of Public Prosecutions Ex p Kebilene [2000] 2AC 326, 379. This is therefore a situation where it is necessary to carefully consider whether the public interest in being able to confiscate the ill-gotten gains of criminals justifies the interference with the normal presumption of innocence. While the extent of the interference is substantial, Parliament has clearly made efforts to balance the interest of the defendant against that of the public in the following respects. (a) It is only after the necessary convictions that any question of confiscation arises. This is of significance, because the trial which results in the conviction or convictions will be one where the usual burden and standard of proof rests upon the prosecution. In addition, a defendant who is convicted of the necessary offence or offences can be taken to be aware that if he committed the offences of which he has been convicted, he would not only be liable to imprisonment or another sentence, but he would also be liable to confiscation proceedings. (b) The prosecution has the responsibility for initiating the confiscation proceedings unless the court regards them as inappropriate …. (c) there is also the responsibility placed upon the court not to make a confiscation order when there is a serious risk of injustice. As already indicated, this will involve the court before it makes a confiscation order standing back and deciding whether there is a risk of injustice; if the court decides there is, then the confiscation order will not be made (d) there is the role of this court on appeal to ensure there is no unfairness. 87. It is very much a matter of personal judgment whether a proper balance has been struck between the conflicting interests. Into the balance there must be placed the interests of the defendant as against the interests of the public, that those who have offended should not profit from their offending and should not use their criminal conduct to fund further offending. However, in our judgment, if the discretions which are given to the prosecution, and the court are properly exercised, the solution which Parliament has adopted is a reasonable and proportionate response to a substantial public interest, and therefore justifiable.” (Emphasis supplied.)
For my part I think that this reasoning is correct, notably in explaining the role of the court in standing back and deciding whether there is or might be a risk of serious or real injustice and, if there is, or might be, in emphasising that a confiscation order ought not to be made. The Crown accepted that this is how the court, seized with the question of confiscation, should approach its task. In my view this concession was rightly made.” “86. The onus which is placed on the defendant is not an evidential one but a persuasive one, so that the defendant will be required to discharge the burden of proof: see Lord Hope’s third category of provisions in R –v- Director of Public Prosecutions Ex p Kebilene [2000] 2AC 326, 379. This is therefore a situation where it is necessary to carefully consider whether the public interest in being able to confiscate the ill-gotten gains of criminals justifies the interference with the normal presumption of innocence. While the extent of the interference is substantial, Parliament has clearly made efforts to balance the interest of the defendant against that of the public in the following respects. (a) It is only after the necessary convictions that any question of confiscation arises. This is of significance, because the trial which results in the conviction or convictions will be one where the usual burden and standard of proof rests upon the prosecution. In addition, a defendant who is convicted of the necessary offence or offences can be taken to be aware that if he committed the offences of which he has been convicted, he would not only be liable to imprisonment or another sentence, but he would also be liable to confiscation proceedings. (b) The prosecution has the responsibility for initiating the confiscation proceedings unless the court regards them as inappropriate …. (c) there is also the responsibility placed upon the court not to make a confiscation order when there is a serious risk of injustice. As already indicated, this will involve the court before it makes a confiscation order standing back and deciding whether there is a risk of injustice; if the court decides there is, then the confiscation order will not be made (d) there is the role of this court on appeal to ensure there is no unfairness.[10]The appellants submit that this makes it clear that the court should construe the Act so as to ensure that there should be no injustice, and that accordingly, this court should read the words of section 71(6) so as to import the discretion necessary to achieve this objective. But it seems to us that it is important to read the words of Lord Woolf, as approved by Lord Steyn, in their context. The argument in Rezvi was concerned with the possible impact of Article 6 on the provisions for determining whether the offender had benefited from the relevant criminal conduct and if he had of assessing the value of that benefit in accordance with section 72AA of the 1988 Act. That section requires the court to make certain assumptions in relation to an offender’s property or expenditure unless it is shown to be incorrect in the particular case, or the court is satisfied that there would be a serious risk of injustice if the assumptions were made. The reference to the discretions given to the prosecution and the court in Lord Woolf’s judgment seems to us to be clearly references to the decisions made on the one hand by the prosecution under section 71(1)(a), and on the other the court under section 71(1)(b). Whatever may be the mechanism for the control of the exercise of the prosecution’s discretion, that is a discretion capable of review. Further the courts in Rezvi considered that where no true benefit could sensibly be said to have been obtained by the offender, it would be inappropriate to make an order. The provisions of 72AA which entitle the court to decline to make the assumptions where there would be a serious risk of injustice are clearly there for that purpose..[11]But in the present appeals, we are not concerned with the question of whether or not there has been any benefit. The judge concluded that both appellants had benefited from criminal activity and made findings as to the extent of that benefit. There is no appeal against those findings. We are therefore concerned with the next stage of the process, which is the assessment of the value of realisable property. It seems to us that that exercise is prescribed by the provisions of the Act as we have already indicated. The court is merely concerned with the arithmetic exercise of computing what is, in effect, a statutory debt. That process does not involve any assessment, in our judgment, of the way in which that debt may ultimately be paid, any more than the assessment of any other debt. No questions therefore arise under Article 8 at this stage in the process.[12]Different considerations, will, however arise if the debt is not met and the prosecution determine to take enforcement action, for example by obtaining an order for a receiver. As the House of Lords explained in Re Norris [2001] 1WLR 1388, this is the stage of the procedure in which third party’s rights can not only be taken into account but resolved. If the court is asked at that stage to make an order for the sale of the matrimonial homes, Article 8 rights are clearly engaged. It would be at that stage that the court will have to consider whether or not it would be proportionate to make an order selling the home in the circumstances of the particular case. That is a decision which can only be made on the facts at the time. The court would undoubtedly be concerned to ensure that proper weight is given to the public policy objective behind the making of confiscation orders, which is to ensure that criminals do not profit from their crime. And the court will have a range of enforcements options available with which to take account of the rights of third parties such as other members of the Ahmed family.[13]For these reasons, we consider that the judge’s decision was right, albeit that he wrongly concluded that he had a discretion in this case.

Cited in 9 later judgments