Harmer v R [2005] EWCA Crim 1

Case No 2004/02156D2

[2005] EWCA Crim 01

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CRIMINAL DIVISION)

ON APPEAL FROM MIDDLESEX GUUILDHALL

HIS HONOUR JUDGE SIMON SMITH

T20027127

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date Friday, 21 January 2005

Before

THE RIGHT HONOURABLE LORD JUSTICE MAY

THE HONOURABLE MR JUSTICE BEATSON

SIR CHARLES MANTELL

Between

ROY PETER HARMERAppellant

RRespondent

(Transcript of the Handed Down Judgment of

Smith Bernal Wordwave Limited, 190 Fleet Street

London EC4A 2AG

Tel No: 020 7421 4040, Fax No: 020 7831 8838

Official Shorthand Writers to the Court)

Mr Kane instructed for Appellant

Mr Ross (instructed by The Crown) for Respondent

Judgment

Introduction

[1]This is another appeal in a prosecution for money laundering, in which the prosecution have run into difficulties from the terms of, and inter-relation between, section 93C of the Criminal Justice Act 1988 and section 49 of the Drug Trafficking Act 1994. Some of the problems may be alleviated for the future by the modified re-enactment of these provisions in Part 7 of the Proceeds of Crime Act 2002, but those provisions did not apply to the prosecution of the appellant, Roy Peter Harmer.

[2]The appellant was charged jointly with a co-defendant, Paul Andrew Hadley, on an indictment which originally contained three counts. They were tried before HH Judge Simon Smith and a jury at Middlesex Guildhall. The trial lasted 15 days. At the end of it, on 15th March 2004, they were each convicted on count 2 of the indictment. This in summary form charged them with conspiracy to convert or transfer property, namely currency, which they had reasonable ground to suspect in whole or in part represented another person’s proceeds of criminal conduct and/or drug trafficking. The jury’s verdict was unanimous, reached after less than 2 hours deliberation. On 22nd March 2004, the appellant was sentenced to 3 years imprisonment. Hadley was sentenced to 4 years imprisonment, with a consecutive period of 6 months for failure to answer bail. On 24th August 2004, the judge made a confiscation order against the appellant in the sum of £104,325.00, with two years’ imprisonment in default of payment.

[3]The appellant appeals against conviction, by leave of the single judge, given on limited grounds. This court gave unopposed leave to add a further ground of appeal. This relied on the very recent decision of the House of Lords in R v Montila

[2004] 1 WLR 3141

;

[2004] UKHL 50

, 25th November 2004, a decision necessarily not available to the trial judge. Hadley has not appealed his conviction. We are told that he has absconded.

The indictment

[4]Count 1 of the indictment charged the appellant and Hadley with conspiracy “… to convert property, namely currency, which in whole or in part represented the proceeds of criminal conduct … [and/or] … drug trafficking … in contravention of section 93C(1)(b) of the Criminal Justice Act 1988 [and/or] section 49(1)(b) of the Drug Trafficking Act 1994.” Count 3 charged them with conspiracy “… to enter into or otherwise be concerned in an arrangement whereby the retention or control by or on behalf of another person of his proceeds of criminal conduct [and/or] drug trafficking was facilitated … [with the requisite knowledge or suspicion] … in contravention of section 93A(1)(a) of the Criminal Justice Act 1988 [and/or] section 50(1)(a) of the Drug Trafficking Act 1994 ”.

[5]Each of these counts was withdrawn from the jury’s consideration, because the prosecution conceded that they could not prove that the various amounts of money in question were the proceeds of crime, let alone that they were the proceeds of criminal conduct on the one hand, or drug trafficking on the other; nor that, if they were, they were the proceeds of a particular person’s criminal conduct, whether that person was the appellant or Hadley for the purpose of count 1, or another person for the purpose of count 3.

[6]Count 2, as it was left to the jury, was in these terms:

“ Statement of Offence Conspiracy to convert property, contrary to section 1(1) of the Criminal Law Act 1977. Particulars of Offence Paul Andrew Hadley and Roy Peter Harmer, on diverse days between the First day of December 2000 and the Twenty-ninth day of September 2001 conspired together and with others to convert or transfer property, namely currency, which they had reasonable grounds to suspect in whole or in part represented another person’s proceeds of criminal conduct and, alternatively or, drug trafficking for the purpose of avoiding prosecution or the making or enforcement of a confiscation order in contravention of section 93C(2)(b) of the Criminal Justice Act 1988 and, alternatively or, section 49(2)(b) of the Drug Trafficking Act 1994.”

There had been two amendments to this count. On 22nd February 2004, the words “or transfer” had been added after the words “to convert” in the Particulars of Offence (but not in the Statement of Offence). On 4th March 2004, the words “knew or” had been deleted from the Particulars before the words “had reasonable grounds to suspect”. Thus, the prosecution had accepted that they could not establish that the various amounts of money were the proceeds of crime; and, by the second of these amendments, they were not alleging that the appellant and Hadley knew that the money was another person’s proceeds of criminal conduct or drug trafficking. The case rested alone on the allegation that the appellant had reasonable grounds to suspect this. Particulars of Offence

The legislation

[7]Section 49 of the 1994 Act provides:

“(1) a person is guilty of an offence if he – (a) conceals or disguises any property which is, or in whole or in part directly or indirectly represents, his proceeds of drug trafficking, or (b) converts or transfers that property or removes it from the jurisdiction, for the purpose of avoiding prosecution for a drug trafficking offence or the making or enforcement in his case of a confiscation order (2) a person is guilty of an offence if, knowing or having reasonable grounds to suspect that any property is, or in whole or in part directly or indirectly represents, another person’s proceeds of drug trafficking, he – (a) conceals or disguises that property, or (b) converts or transfers that property or removes it from the jurisdiction, for the purpose of assisting any person to avoid prosecution for a drug trafficking offence or the making or enforcement of a confiscation order.” (a) conceals or disguises any property which is, or in whole or in part directly or indirectly represents, his proceeds of drug trafficking, or (b) converts or transfers that property or removes it from the jurisdiction, for the purpose of avoiding prosecution for a drug trafficking offence or the making or enforcement in his case of a confiscation order (a) conceals or disguises that property, or (b) converts or transfers that property or removes it from the jurisdiction, for the purpose of assisting any person to avoid prosecution for a drug trafficking offence or the making or enforcement of a confiscation order.”

[8]Section 93C of the 1988 Act is in substantially the same terms except that:

“(a) instead of referring to “drug trafficking”, it refers to “criminal conduct” or “an offence to which this Part of this Act applies”; and (b) the words “in his case” additionally appear after the word “enforcement” in the concluding phrase of section 93C(2).”

Section 93C is in Part VI of the 1988 Act. The effect of sections 93A(7) and 71(9)(c) is that Part VI of the Act does not apply to a drug trafficking offence. Section 93C of the 1988 Act and section 49 of the 1994 Act therefore provide for separate offences.

Facts

[9]Between April and September 2001, the Customs and Excise conducted surveillance on the appellant and Hadley. They observed regular meetings between them, when they arrived at and departed from various places, such as a local hotel and station car parks. On occasions, packages were passed between them. They were also seen to meet others, including Hooshang Lanjani, Kaushik Taylor and Paul Kennedy. After his meetings with Hadley, the appellant was seen on the same day visiting various branches of Barclay’s Bank in Essex, where he made cash deposits of up to £20,000 into various corporate bank accounts. Large amounts of money were then regularly transferred to bank accounts in Spain. Each of these Spanish accounts was bogus. They had been opened using passports with photographs of Walter Callinan or Barry Smith, who was Paul Kennedy’s father-in-law.

[10]The prosecution case was that the purpose of the meetings was to facilitate money laundering. It was alleged that from the 1st December 2000 to the 29th September 2001 the appellant and Hadley had conspired with others to launder the proceeds of another person’s crime or drug trafficking. It was alleged that during this period over £1.2m was transferred out of the jurisdiction from accounts to which the appellant was a signatory. Before it was transferred abroad, the money had been transferred between different corporate bank accounts in order to mix it up and make it difficult to trace.

[11]The defence case was that the appellant had legitimately handled large sums of cash from his employment agency businesses. These provided labour to office cleaning and building contracting industries. All his casual workers were paid in cash. He admitted transferring money to Spain. He said that this was to establish venture capital among intending investors in a property development scheme. At Hadley’s request, he had been paid a fee to transfer the capital to the investors’ named Spanish accounts, over which he would then have control when they purchased property and began development. At no time did he know or suspect that he was dealing with the proceeds of criminal conduct or drug trafficking.

[12]The prosecution evidence in support of the general case against the appellant was very detailed and, we think, in general terms very strong. Documentary evidence established the movement of the various large sums of money, often in cash, and the details of the Spanish bank accounts. There was evidence from bank staff from branches of Barclay’s Bank; the appellant’s accountant; clients of his agencies; and two forensic accountants. The appellant had given the explanations on which he relied in interviews after his arrest on 28th September 2001. Neither he nor Hadley gave evidence at their trial. John Cronin, whose group of companies had employed Hadley from 1996 to 2001, gave evidence on Hadley’s behalf.

[13]The judge directed the jury in orthodox terms on the law relating to the offence of conspiracy. The offence of conspiracy to do something is, he said, achieved by agreement between two or more people. It is not simply an agreement with another to commit a crime, but an agreement that a crime be committed. He then said at page 4 line 15 “So what is it that the prosecution have to prove that these defendants were in a conspiracy to do? It is, as set out here, to convert or transfer property, namely currency, which they had reasonable grounds to suspect, in whole or in part, represented another person’s proceeds from criminal conduct, or drug trafficking, for the purpose of avoiding prosecution or the making or enforcement of a confiscation order.” He then said at page 5 line 14:

“What is vital is that before you could convict either defendant on this charge, you be sure that what he was agreeing to do was to convert or transfer currency which he had reasonable grounds to suspect represented another person’s proceeds of criminal conduct or drug trafficking. You have to consider all the circumstances in which, provided you were sure of it, he had agreed to take part in converting or transferring the currency and then conclude whether or not you are sure that he had reasonable grounds to suspect that it was the proceeds of crime of some person. You do not have to draw a distinction in your verdict and say, well do we think it was criminal conduct generally or drug trafficking?”

[14]At no stage did the judge direct the jury that the prosecution also had to prove that the relevant money was the proceeds of criminal conduct or the proceeds of drug trafficking. His omission to do so was in accordance with the understanding of the legal requirements of the substantive offences under section 93C of the 1988 Act and section 49 of the 1994 Act, as it was before the House of Lords decision in Montila. As we have said, the prosecution had accepted that they could not prove this. Their evidence was very strong as to the suspicious movement of what in general may have looked like illicitly obtained money. But they called no evidence to attempt to establish its provenance. As Mr Ross, for the prosecution, said, the evidence might have surely sustained an inference that the provenance of the money was illicit, but the jury were not invited to draw such an inference, nor did the judge direct them as to that possibility. Whether the evidence might have surely sustained an inference that the provenance of the money was drug trafficking on the one hand or criminal conduct on the other is not clear to us.

[15]Indeed, the prosecution had, so it seems, three related difficulties. First, they were unable to establish the criminal provenance of the various amounts of money. Second, they were unable to establish the person or persons whose proceeds of crime it was. Third, they were unable to establish whether it was the proceeds of drug trafficking or of criminal conduct. The first of these difficulties is central to what is now the main ground of appeal in the present case. The second would be relevant to the question whether to charge an offence under sub-section (1) or sub-section (2) of the relevant sections in the 1988 Act and the 1994 Act respectively. In the present case, the prosecution ended up alleging that the money was the proceeds of the crimes of others than the appellant and Hadley. All that was left to the jury was count 2 of the indictment, which alleged conspiracy to commit an offence under sub-section (2) of the respective sections. The third problem would be relevant to the question whether to bring the charge under the 1988 Act or the 1994 Act.

Grounds of Appeal

[16]As we have said, the main ground of appeal now relies on Montila. The grounds of appeal on which the single judge gave leave to appeal mainly concerned the content of the particulars in the indictment. The essence of the problem was two-fold. First, the Crown were in general well able to allege an agreement or series of agreements in which the appellant and Hadley participated, but were unable to say with confidence who the other alleged conspirators were. Second, although the Crown eventually proceeded on the case that the appellant and Hadley had conspired to convert or transfer currency which they had reasonable grounds to suspect represented another person’s proceeds of criminal conduct (not their own), there was a distinct possibility that it was the proceeds of the crime of one or more of the persons with whom the appellant and Hadley had made their agreement or agreements. Mr Ross eventually took the view that a person, whose proceeds of crime was the subject of a money laundering agreement, could not be named as a co-conspirator to commit an offence under sub-section (2) of the respective sections. Particulars had been given relating to this problem well before trial. The judge was invited at least twice to require the prosecution to name more conspirators than the appellant, Hadley and “others”. He eventually declined to do so. The grounds of appeal were that he was wrong for a variety of reasons. The issue was said to have more than cosmetic consequences, although Mr Kane, for the appellant, accepted that, by the time of trial, the defence knew with particularity what the prosecution’s factual case was.

[17]We heard submissions on these grounds. Our decision on the ground of appeal which relies on Montila makes a decision on these grounds unnecessary. We record our summary view that these grounds of appeal did not persuade us that the appellant’s conviction was unsafe.

R. v. Montila

[18]The issue before the Appellate Committee in Montila is set out in paragraphs 4 and 5 of their opinion as follows:

“The appellants, who are nine in number, are awaiting trial in the Crown Court at Canterbury. They were arraigned on 18 December 2002 on three indictments. Each of the three indictments has been laid against three of the appellants. Each of them contains counts laid in pairs against those named in the indictment. Each pair comprises one count of converting the proceeds of drug trafficking, contrary to section 49(2)(b) of the Drug Trafficking Act 1994, and one count of converting the proceeds of criminal conduct, contrary to section 93C(2) of the Criminal Justice Act 1988. The particulars of dates, places and sums of money are identical within each pair of counts. It is alleged that between 17 March 2000 and 20 September 2001 in 34 separate transactions the appellants used the services of one or another of two bureaux de change in London to convert a total of £3m in sterling banknotes into Dutch guilders. A preparatory hearing took place before Judge van der Bijl at Canterbury under section 29 of the Criminal Procedure and Investigations Act 1996. It was held to resolve a point of law which had been raised about the elements within each of the twin offences that the prosecution must prove to establish guilt. The question is whether it is necessary for the Crown to prove that the property being converted was in fact the proceeds, in the case of the 1994 Act, of drug trafficking and, in the case of the 1988 Act, of crime. The argument for the Crown was that, while it had to prove that the defendants knew or had reasonable grounds to suspect that the property being converted was the proceeds of drug trafficking or of criminal conduct, it did not have to prove that the property was in fact those proceeds.”

[19]The judge had ruled that it was for the Crown to prove that the property being converted was in fact the proceeds of drug trafficking or of criminal conduct. This court allowed an appeal by the Crown. It held that it was not necessary to prove an offence under sub-section (2) of either section 49 of the 1994 Act or section 93C of the 1988 Act that the property was in the case of the former the proceeds of drug trafficking or in the case of the latter the proceeds of crime. This court certified a point of law of general public importance under section 33(2) of the Criminal Appeal Act 1968, namely:

“In a prosecution under section 93C (2) of the Criminal Justice Act 1988 or under section 49(2) of the Drug Trafficking Act 1994 is it necessary for the Crown to prove that the property was, in the case of the 1988 Act the proceeds of crime and, in the case of the 1994 Act, the proceeds of drug trafficking?”

[20]The House of Lords answered the certified question yes. This was by a detailed process of construction with reference to the statutory background, including the Vienna Convention of 19th December 1988 (see paragraph 9 of the opinion), the Strasbourg Convention of 8th November 1990 (see paragraph 16), and EEC Council Directive 91/308/EEC of 10th June 1991. It is not necessary for present purposes to summarise the detailed reasoning. We do, however, need to refer to what the Committee said under the heading “The effect in practice” of their decision, as follows:

“42. Mr Perry submitted that, if the Crown has to prove the origin of the property, counts alleging that the money was the proceeds of drug trafficking on the one hand and that it was the proceeds of criminal conduct on the other would be mutually destructive if applied to the same property. As Scott Baker LJ put [it]in the Court of Appeal, the Crown would have to prove in every case a coincidence between the defendant’s view of origin and the origin itself [2004] 1 WLR 624, 632, para 34. So the jury would have to be told that they could not convict under section 49(2) of the 1994 Act if the defendant thought that the money which was said to be the proceeds of drug trafficking might be the proceeds of criminal conduct, and that they could not convict under section 93C(2) of the 1988 Act if he thought that the money which was said to be the proceeds of criminal conduct might be the proceeds of drug trafficking. 43. The problem which Mr Perry has identified is plain enough in theory. But it is not a sufficient reason for thinking, despite all the indications to the contrary, that Parliament intended that it should be solved by relieving the Crown of the burden of proving the coincidence. Proof that the origin of the property was of the kind which the subsection describes is, after all, a necessary element of the offence in subsection (1). The coincidence does not need to be proved, because the allegation in a count under subsection (1) is that the defendant is dealing with his own property. But the origin must be proved, and the evidence which goes to prove knowledge or reasonable grounds to suspect for the purposes of subsection (2) will often be sufficient to justify the inference that the origin of the property was coincident with that state of mind. 44. There are other answers to the problem, as Mr Grenfell pointed out. Where (as in this case) the counts are in pairs, the facts proved may be sufficient for a conviction pursuant to subsections (3) and (4) of section 6 of the Criminal Law Act 1967 of attempting to commit whichever of the two offences coincided with what the defendant suspected the origin of the property to be; for Scotland, see the Criminal Procedure (Scotland) Act 1995, section 294 and Schedule 3, para 10(1). Mr Grenfell conceded that the effect of section 1(2) of the Criminal Attempts Act 1981 was that an accused who dealt with such property in these circumstances would be guilty of an attempt: R v Shivpuri [1987] AC 1. Or it might have been open to the Crown, if there was a problem about proving origin, to charge the defendants with a conspiracy to launder money which had been obtained illicitly whether by way of drug trafficking or other criminal activity, as Latham LJ said in R v El-Kurd [2001] Crim L R 234, para 47. The suggestion that the appellants’ construction will put the Crown in an impossible position is not convincing. The problem appears to have been solved for the future by the approach which is taken in the 2002 Act to the definition of criminal property.”

[21]The indictments in Montila charged substantive offences. Count 2 of the indictment in the present appeal charged conspiracy. Mr Kane submits that the decision in Montila applies also to a conspiracy to commit the substantive offences. Mr Ross submits that for a charge of conspiracy, the Crown do not have to prove that the relevant money was the proceeds of crime. He submits, first, that the offence of conspiracy is committed upon the making of the agreement; and, second, that it is sufficient for a conviction under sub-section (2) of the respective sections if the conspirators agree to convert or transfer property which they have reasonable grounds to suspect represent or will represent another person’s proceeds of crime. He relies in the alternative on section 1(1)(b) of the Criminal Law Act 1977.

Conspiracy

[22]Section 1 of the Criminal Law Act 1977 provides: “(1) Subject to the following provisions of this Part of this Act, if a person agrees with any other person or persons that a course of conduct shall be pursued which, if the agreement is carried out in accordance with their intentions, either –(a) will necessarily amount to or involve the commission of any offence or offences by one or more of the parties to the agreement, or

(b) would do so but for the existence of facts which render the commission of the offence or any of the offences impossible, he is guilty of conspiracy to commit the offence or offences in question. (2) Where liability for any offence may be incurred without knowledge on the part of the person committing it of any particular fact or circumstances necessary for the commission of the offence, a person shall nevertheless not be guilty of conspiracy to commit that offence by virtue of sub-section (1) above unless he and at least one other party to the agreement intend or know that that fact or circumstance shall or will exist at the time when the conduct constituting the offence is to take place.” (a) will necessarily amount to or involve the commission of any offence or offences by one or more of the parties to the agreement, or (b) would do so but for the existence of facts which render the commission of the offence or any of the offences impossible, he is guilty of conspiracy to commit the offence or offences in question.

Submissions, discussion and decision

[23]Mr Kane’s central submission is that the statutory definition of conspiracy comprising section 1(1)(a) of the 1977 Act embraces an agreement whereby the conspirators intend and agree to commit “an offence or offences”. Montila decides that converting or transferring property which a defendant has reasonable grounds to suspect represents another person’s proceeds of crime is not an offence, unless the Crown also prove that the property is the proceeds of crime. The Crown, therefore, did not establish in the present case that the appellant was guilty of conspiracy under section 1(1)(a), since they did not establish that the object of the agreement was an offence. In our judgment, this is clearly a correct construction of the sub-section. Mr Kane could, if necessary, go further to say that the prosecution have to prove that it is the proceeds of another person’s crime – otherwise the charge would have to relate to the respective sub-sections (1). Mr Kane’s first point appears to have been conceded by the prosecution before this court in R v El Kurd [2001] Crim. LR 234 – but see paragraph 39 of Montila. We also note that this court said in paragraph 33 of its judgment in R v Hussain

[2002] EWCA Crim 06

;

[2002] 2 Cr App R 26

page 363 at 375 of equivalent conspiracy charges:

“… as we have already said, the Crown have to establish the Conspiracy Offence comprised in the making of the agreement. They do not have to establish as such that one or other of the Agreed Offences was committed, although they may incidentally do so as part of the evidence from which they would ask the jury to infer the agreement. They do have to establish that the Agreed Offences would, if the agreed course of conduct was carried out, be offences.”

[24]As we have said, Mr Ross submits that the Crown can rely in answer to Mr Kane’s submission on section 1(1)(b) of the 1977 Act. A person, who agrees with another person to convert or transfer property which he has reasonable grounds to suspect represents another person’s proceeds of crime, does agree that a course of conduct will be pursued which, if the agreement is carried out in accordance with their intentions, would necessarily amount to or involve the commission of an offence or offences, but for the existence of facts which render the commission of the offence or any of the offences impossible, if nevertheless the property does not represent the proceeds of crime. He submits that there is no difference in principle between a person who agrees to convert or transfer property which he has reasonable grounds to suspect is the proceeds of crime, when it is not, and a person who agrees to import a package which he believes to contain prohibited drugs, but where customs officers have removed the drugs which were previously there. These examples are not, in our judgment, equivalent. With the second, if the drugs had been there as the importer believed, an offence would have been committed. The prosecution can readily prove this. With the first, the offence would be an offence if the prosecution could prove that the property was the proceeds of crime. But in the present case they could not prove this. The substantive offence was not impossible to commit. It was simply that the prosecution could not prove that it had been committed. This is not a case where the prosecution could prove the agreement alone, apart from what they could show might be the substantive offence. They had to ask the jury to infer the agreement from the subsequent putting of it into operation. Although the offence of conspiracy comprises an agreement to commit an offence (not the subsequent committing of the agreed offence), the agreement has to have a material object. In the present case, the appellant was not alleged to have been party to an abstract agreement to convert or transfer theoretical property which might turn out opportunistically to be the proceeds of crime. The alleged agreement concerned the particular money to which the Crown’s evidence related and was, on the Crown’s case, to be inferred from that evidence.

[25]There is a further answer to Mr Ross’ submission, which, in our judgment, is fatal to it. It derives from the late Professor Sir John Smith QC’s commentary on Hussain in [2002] Crim. L.R. 407 at 409 where he said:

“Agreement to commit crime A or B as circumstances dictate. The parties agree to launder money illicitly obtained – i.e. obtained contrary to section 49(2) of the 1994 Act or (a different crime) contrary to section 93C(2) of the 1977 Act. The difficulty here lies in the very strict mens rea requirements of statutory conspiracy. Recklessness is not enough. The effect of section 1(2) (not mentioned in Siracusa, El Kurd or the judgment in the present case) is that D is not guilty of conspiracy to commit an offence by virtue of section 1(1) – “unless [D] and at least one other party to the agreement intend or know that [all the facts and circumstances necessary for the commission of the offence] shall or will exist at the time when the conduct constituting the offence is to take place”

. Can it be said that the parties “intend or know” that the money will be the proceeds of drug trafficking? Or that they “intend or know” that it will be the proceeds of criminal conduct other than drug trafficking? If it is one or the other, they cannot know both, so they cannot know either. A person who believes that there is a 50/50 chance that something is so can hardly be said to “know” that it is so; and “intend” appears to be irrelevant where the parties know they have no control over the existence of fact or circumstances - as here.” “unless [D] and at least one other party to the agreement intend or know that [all the facts and circumstances necessary for the commission of the offence] shall or will exist at the time when the conduct constituting the offence is to take place”.

[26]This commentary addresses the more complicated problem, alluded to earlier in this judgment and discussed in El Kurd and Hussain, when the prosecution cannot establish that the provenance of obviously illicit money is criminal conduct on the one hand or drug trafficking on the other. But the commentary emphasises the statutory requirement that, where, as in the present case, the substantive charge would only be that the defendant had reasonable grounds to suspect that the money was the proceeds of crime (i.e. the offence would be incurred without knowledge on the part of the person committing it), he is not to be guilty of conspiracy unless he and at least one other party to the agreement intend or know that the money will be the proceeds of crime when the agreed conduct takes place. This intention or knowledge is precisely what the prosecution in the present case accepted they could not prove when the words “knew or” were omitted from the particulars of count 2. If the prosecution cannot prove that the money was the proceeds of crime, they cannot prove that the appellant knew that it was. So section 1(2) of the 1977 Act applies and is not satisfied. Mr Ross drew our attention in this context to paragraphs 27, 28 and 34 of the judgment of this court in R. v. Singh

[2003] EWCA Crim 3712

(18 December 2003). This decision preceded Montila and, in so far as it might be seen to support Mr Ross’ argument, does not in our view survive Montila.

[27]The more sophisticated version of the difficulty addressed by Professor Smith appears from paragraph 43 of Montila to remain a difficulty. Paragraph 44 suggests that a solution might lie in charging an attempt under the Criminal Law Act 1967. Mr Ross half-heartedly invited us to consider substituting a verdict of guilty of an attempt to commit the offence charged as conspiracy under section 3 of the Criminal Appeal Act 1968. We were unclear whether he was suggesting an attempt to commit the offence of conspiracy, or a conspiracy to attempt to commit the substantive offence, or an attempt to commit the substantive offence, as in his written skeleton. It would, we think, have to be the first of these, since, on the Crown’s own case, the conspiracy allegation on the indictment did not in this case amount to or include the commission of the substantive offence – see section 6(3) of the 1967 Act. We found the concept of attempting to make an agreement an odd one.

[28]It may possibly be that to charge attempt would save a prosecutor who could establish that the relevant proceeds were illicit, but could not establish whether they derived from drug trafficking or criminal conduct. It could not, we think, save a prosecutor who, as in the present case, cannot establish that they are the proceeds of any crime. The same difficulty arises with section 6(4) of the 1967 Act as with section 1(1) of the 1977 Act. The prosecution have to prove that what was attempted was an offence – see also subsections 1(1) and (2) of the Criminal Attempts Act 1981, where there are equivalent problems. Further, as Mr Kane persuasively pointed out, this case was simply not conducted and the judge did not direct the jury with an eye to attempt; and it is not possible to say that the jury must have been satisfied of facts which proved the appellant guilty of attempting to commit the indicted offence.

[29]We also note that paragraph 44 of Montila contemplates the possibility of a conspiracy charge in the alternative, as in El Kurd, where the origin of illicit money cannot be proved. It does not contemplate a successful conspiracy charge when the Crown do not prove that the money is illicit, and when the judge does not direct the jury that this is a requirement of the substantive offence.

[30]For these reasons, in our judgment the jury’s verdict is unsafe, and this appeal against conviction is allowed.