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Judgments - R v Green (Appellant) (On Appeal from the Court of Appeal (Criminal Division))

HOUSE OF LORDS

SESSION 2007-08

REPORT

[2008] UKHL 30

on appeal from:[2007] EWCA Crim 1248

APPELLATE COMMITTEE

R
v
Green (Appellant) (On Appeal from the Court of Appeal (Criminal Division))

REPORT

Counsel

Appellants:

Tim Owen QC

Andrew Bodnar

(Instructed by Stokoe Partnership)

Respondent:

David Perry QC

Duncan Penny

(Instructed by Crown Prosecution Service)

Hearing dates:

10-12 MARCH 2008

ON

WEDNESDAY 14 MAY 2008

REPORT

from the Appellate Committee

14 MAY 2008

R v Green (Appellant) (On Appeal from the Court of Appeal (Criminal Division))

ORDERED TO REPORT

The Committee (Lord Bingham of Cornhill, Lord Phillips of Worth Matravers, Baroness Hale of Richmond, Lord Carswell, and Lord Brown of Eaton-under-Heywood) have met and considered the cause R v Green. We have heard counsel on behalf of the appellant and respondent.

1.  This is the considered opinion of the Committee.

2.  The point of law of general public importance certified by the Court of Appeal as involved in its decision in this case was expressed in these terms:

“Where any payment or other reward in connection with drug trafficking is received jointly by two or more persons acting as principals to a drug trafficking offence as defined in section 1(3) of the Drug Trafficking Act 1994, does the value of each person’s proceeds of drug trafficking within the meaning of section 4(1)(b) of that Act include the whole of the value of such payment or reward?”

The Court of Appeal (Moore-Bick LJ, David Clarke and Swift JJ), for reasons given by David Clarke J, gave an affirmative answer to that question ([2007] EWCA Crim 1248, [2007] 3 All ER 751), which the Crown as respondent supports before the House. Mr Green, the appellant, contends for a negative answer.

The facts

3.  The appellant pleaded guilty on 13 May 2004 at Manchester Crown Court before Judge Steiger QC to three counts of drug-related offences: conspiracy to supply Class A and B drugs, conspiracy to launder the proceeds of drug trafficking and conspiracy to import controlled drugs. He was sentenced on 2 August 2004 to a term of 13 years’ imprisonment. A number of fellow-conspirators were charged with him, some of whom pleaded guilty and others were convicted after trials. These other defendants were sentenced to terms varying from eleven years’ down to five years’.

4.  The conspiracy, a sophisticated scheme for the obtaining and distribution of large quantities of drugs, mostly a form of cannabis known as “skunk", involved their importation by post from mainland Europe in large padded envelopes, delivered to numerous mailboxes rented by or on behalf of the appellant, who used a number of false identities. The conspirators changed much of the proceeds of sale of the drugs into cash, exchanged the money into foreign currencies in bureaux de change and used it for the purchase of more drugs. It was not in dispute that the appellant was the principal directing mind behind the conspiracy.

5.  The Crown sought confiscation orders from the defendants and a series of hearings was held, which resulted in the making of orders against the other convicted persons before the proceedings against the appellant. Those proceedings were conducted over three days in January 2006 by Judge Steiger, who gave a written judgment on 17 February 2006, in which he made a confiscation order in the sum of £2,500,000.

6.  The appellant pleaded guilty on the basis of a written document submitted by him, in which he admitted his involvement in the conspiracy between March 2001 and his arrest in September 2003. He claimed in this plea to have been concerned in the distribution of just under one and a half tonnes of cannabis and a small quantity of Class A drugs. He subsequently filed an affidavit, in which he claimed that the quantity imported was in fact two tonnes, at prices higher than those estimated in the Crown evidence. As David Clarke J remarked in the Court of Appeal, the judge regarded this amendment as nothing more than a device to explain the source of all the money that had been laundered through the bureaux de change.

7.  The prosecution case was that the appellant’s “benefit” calculated from the aggregate of the overall purchase and sale prices of the cannabis at the figures and quantity claimed by the appellant (totalling £9.4m), together with expenditure of £1.2m, amounted to an overall total of £10.52m. The appellant claimed, on the other hand, that his benefit came to £4,832,761.80. In computing this sum he sought to deduct from the benefit received by him a proportion of the profits retained by two of his co-defendants.

8.  The judge arrived at a figure for benefit of £7,345,450, made up as follows. He took the quantity of 1.5 tonnes of cannabis admitted by the appellant in his basis of plea and applied to it the purchase and sale prices propounded on behalf of the Crown, which gave a sum of £5.25m. He added a sum of £1m, which he estimated to represent the proceeds of trading between the start of the conspiracy in July 2000 and the appellant’s admitted commencement date of March 2001. To that he added the sum of £1,095,450, representing unexplained assets to which the statutory presumption under section 4(3) of the Drug Trafficking Act 1994 applied. This total came to some £2,471,731 more than the combined benefits assessed to have been received by the other defendants.

9.  The judge then assessed the appellant’s realisable assets at a total of £2.5m. It was not in dispute that assets amounting in all to £577,533 were available. The judge considered that the substantial gap between the benefits attributed to the appellant and his known assets indicated that there must be considerable hidden assets. As the appellant had elected not to give evidence, he had produced no explanation for the gap. In determining the amount of the hidden assets which he considered must exist the judge discounted the realisable assets of the other defendants which had been confiscated, amounting to a total of £157,290. Allowing for this, he assessed the hidden assets as £2m and the appellant’s total realisable assets at a rounded figure of £2.5m. He accordingly made a confiscation order in that sum.

10.  In the Court of Appeal the appellant argued that the judge was wrong to hold that money retained by two of his co-defendants from the sale of drugs was held by them jointly with him as proceeds in which they were all fully interested. He should therefore not be regarded as having received such money as payment or reward. The Court of Appeal rejected this argument, for reasons summarised below.

11.  The court did not, however, agree with the judge’s calculation of the proceeds received by the appellant. They held that he was not justified in rejecting the figures for quantities and prices agreed between the appellant and the Crown. If he had gone on the basis of importation of two tonnes of cannabis with a resale price of £2800 per kilo, there would not have been such a significant discrepancy between the amount of money laundered and the proceeds of the sale of the cannabis. The evidence pointed to the conclusion that substantially all the money that was laundered through the bureaux de change, some £4.2m, was the proceeds of drugs supplied pursuant to the conspiracy. In consequence there would not have been grounds for finding that the appellant had another substantial source of income. The Court of Appeal accordingly adjusted the buying and selling prices of cannabis imported during the period accepted in the appellant’s plea to a total of £5.6m. They then reduced the figure for the earlier period between July 2000 and March 2001 from the sum of £1m assessed by the judge. They held, following R v Lazarus [2004] EWCA Crim 2297, [2005] 1 Cr App R (S) 552, that to count in this period was not inconsistent with the basis of plea. The Crown had proved proceeds during this period of only £135,725, and one could not assume on the facts of the case that other property had passed through his hands. The figure of £1,095,450 for unexplained assets, which was no longer in issue, was added and the total for benefit or proceeds came to £6,831,175.

12.  The Court of Appeal upheld the judge’s finding on the amount of realisable assets, being a round figure of £2.5m. It decided not to disturb his decision to give credit to the appellant for the amounts recovered from the other conspirators and for the value of the proceeds which they received. The committee will take the same course, although there does not appear to be a sustainable basis for the deduction. The confiscation order was accordingly reduced to the sum of £1,985,725.

13.  For purposes of this appeal the committee will treat so much of its opinion in R v May [2008] UKHL 28 as bears on this appeal as if it were incorporated in this opinion.

The issue

14.  This appeal turns on what, in R v May, the committee called “the second question". In a well-presented argument for the appellant, Mr Tim Owen QC contended that the appropriate measure of benefit is the total value of the property actually received by the particular defendant the court is considering. The sums retained by the appellant’s co-defendants should therefore have been deducted from the amount specified in the confiscation order, reducing it to £1,218,468.80. The international conventions to which the UK is party do not, it was submitted, sanction recovery of the same sum from different offenders, which was contrary to the objects of the UK legislation, unlike the confiscation regimes in Australia, New Zealand, the United States and Canada (some of which countries were parties to the same conventions) and inconsistent with article 1 of the first Protocol to the European Convention. Parliament must, it was said, have intended the legislation to operate fairly and proportionately. In R v May [2005] EWCA Crim 97, [2005] 1 WLR 2902 the Court of Appeal had fallen into error.

15.  Attractively though it was put, this argument was, in the committee’s opinion, subject to a fatal flaw. As David Clarke J pointed out in the Court of Appeal, at para 40, the judge approached the assessment of the appellant’s proceeds on the basis that any moneys received by his associates from the sale of drugs were held by them jointly with the appellant as proceeds in which they were all fully interested. It was submitted that the judge’s approach had been based on a misunderstanding of the Court of Appeal’s judgment in R v May, but that submission was rejected: the ratio of that decision was rightly stated by David Clarke J to be (para 42) that where two or more defendants obtain control of property jointly each of them has obtained the whole of it within the meaning of the 1988 Act. The same principles were held to apply to the drug trafficking legislation (para 43) and David Clarke J summarised the court’s opinion in paras 45-46 of his admirable judgment:

“45.  [Counsel for the appellant] submitted that where part of the proceeds of sale of drugs has been retained by some of the defendant’s co-conspirators the court is required to identify the payments or rewards that have actually passed through the defendant’s hands and cannot treat him as having received the whole amount. For the reasons given earlier, however, we consider that where money or property is received by one defendant on behalf of several defendants jointly, each defendant is to be regarded as having received the whole of it for the purposes of section 2(2) of the Act. It does not matter that proceeds of sale may have been received by one conspirator who retains his share before passing on the remainder; what matters is the capacity in which he received them.

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

The appellant’s objection based on the possibility of multiple recovery is weakened by his apparent acceptance, at least in his written case, that there may be multiple recovery where there is a string of contracts as, for example, in R v Simons (1993) 98 Cr App R 100. For reasons given in its opinion in R v May, the committee considers that the Court of Appeal’s decision in that case was correct, and it follows that this appeal cannot succeed.

16.  It is a curious feature of this case that the confiscation order made by the judge was, as a result of errors made by him (see paras 9 and 11 above), very much smaller than the statute required on the findings made. But that does not affect the principle. The committee cannot, however, regard it as disproportionate to make an order depriving a defendant of a benefit which he has in fact and in law obtained, within the limits of his realisable assets, and it notes that challenges to the proportionality of the confiscation regime (as in Phillips v United Kingdom (2001) 11 BHRC 280 and R v Rezvi [2002] UKHL 1, [2003] 1 AC 1099) have not succeeded. In construing a UK statute, the meaning of which it judges to be clear, the committee cannot be influenced by the legislation of other countries, even if (as may be the case) those countries have chosen to give effect to common international obligations in a different way.

17.  The committee is of opinion that the Court of Appeal reached the right conclusion for the right reasons. The appeal must therefore be dismissed. The parties are invited to make written submissions on costs within 14 days.

 
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Prepared 14 May 2008