Neutral Citation Number:  EWCA Crim 8 Case No: 200402882 C5 200506515 B5 200801921 B1 200006003 D2 200103019 D2 IN THE SUPREME COURT OF JUDICATURE COURT OF APPEAL (CRIMINAL DIVISION) ON APPEAL FROM WOOLWICH CROWN COURT, SOUTHWARK CROWN COURT, CARDIFF CROWN COURT AND BIRMINGHAM CROWN COURT Royal Courts of Justice Strand, London, WC2A 2LL Date: 20/01/2009 Before: LORD JUSTICE LATHAM (VP OF CACD) LORD JUSTICE HUGHES LORD JUSTICE TOULSON MRS JUSTICE RAFFERTY DBE and MR JUSTICE MADDISON --------------------- Between: SYLVIA ALLPRESS Appellants DEBORAH SYMEOU MIGUEL CASAL PAUL WINTER MORRIS STEPHEN MARTIN - and - R Respondent --------------------- A Mitchell QC and C Sherrard for the Defence A Bird and D Connolly for the Prosecution in the case of Allpress T Owen QC and A Bodnar for the Defence A Bird and D Connolly for the Prosecution in the case of Symeou T Owen QC and A Bodnar for the Defence D Farrell QC for the Prosecution in the case of Casal A M Shaw QC and P Lawton for the Defence A Bird for the Prosecution in the case of Morris Z Ali and N Rimmer for the Defence D Aubrey QC and R Griffiths for the Prosecution in the case of Martin Hearing dates: 25 November 2008 --------------------- Approved Judgment Judgment Approved by the court for handing down. Allpress & Ors v R Lord Justice Toulson: 1. In May  UKHL 28, Jennings  UKHL 29 and Green  UKHL 30 the House of Lords considered a number of questions about the law relating to the confiscation of criminal assets. 2. In May the order under appeal was a confiscation order made under the Criminal Justice Act 1988 as amended (“CJA 1988”) against an offender who had been involved in a conspiracy to cheat HM Customs and Excise of VAT through a “missing trader” scheme, from which he and other conspirators benefited jointly. It was held to be immaterial in assessing the value of his benefit how much remained to the offender by way of net profit after deduction of expenses or any amounts payable to other conspirators. As a joint beneficiary, the benefit was as much his in law as if he had been a sole beneficiary. 3. In Jennings a restraint order was made under the Criminal Justice Act 1988 against a defendant charged with a conspiracy to carry out an advance fee fraud. Before the case reached the House of Lords, the defendant was convicted. The fraud was carried out through a limited company of which the defendant was an employee. His appeal against the making of the order was dismissed, but the central issue argued before the House of Lords was how the benefit obtained by the defendant was to be assessed. The prosecution’s case was that he should be treated as obtaining a benefit equal to the total amount of the monies obtained by the fraud, the greater part of which had gone through the company’s books. The House of Lords rejected that approach as too broad and gave guidance to the court on how it should determine what benefit had been obtained by the defendant when it came to hearing the confiscation application (which had been adjourned pending the appeal to the House of Lords). 4. In Green the House of Lords considered the following question: “Where any payment or other award 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 award?” 5. The Court of Appeal had answered the question in the affirmative and the House of Lords upheld that decision. 6. The opinion of the judicial committee in May contained (as stated in paragraph 2 of its report) a broad overview of the legislative schemes in force from time to time and a review of a number of the leading authorities. That review included a comparison of the language of CJA 1988, the Drug Trafficking Act 1994 (“DTA 1994”) and the Proceeds of Crime Act 2002 (“POCA 2002”). 7. The confiscation provisions of DTA 1994 applied, as the title of the Act would suggest, to cases of drug trafficking. The confiscation provisions of CJA 1998 applied to crimes other than drug trafficking. POCA 2002 brought the two jurisdictions together in a single statute. In paragraph 8 of May the judicial committee Judgment Approved by the court for handing down. Allpress & Ors v R observed that despite much refinement and differences between the confiscatory provisions of statutes passed in 1986, 1988, 1993, 1994 and 1995, their essential structure was the same. The court is required, before making a confiscation order, to address and answer three questions: “1. Has the defendant (D) benefited from the relevant criminal conduct? 2. If so, what is the value of the benefit D has so obtained? 3. What sum is recoverable from D?” 8. None of the cases before the House of Lords involved money laundering (although some of the cases reviewed in the course of the opinion in May did), and the judicial committee concluded its opinion in May with the caveat that the position of a money launderer might be different from that of a mere courier or custodian of tangible property who was rewarded by a fee and had no interest in the property or proceeds of sale. 9. The present appeals all arise from confiscation orders made against defendants who had varying degrees of involvement in the safeguarding or transfer of funds which represented proceeds of crime. They have been listed together in order for the court to consider the application of the confiscation legislation to such cases in the light of the recent judgments of the House of Lords. Summary of the appeals 10. We begin with a brief summary of the facts of the different cases. 11. Sylvia Allpress pleaded guilty on 7 February 2000 at Woolwich Crown Court to assisting another to retain the benefit of drug trafficking, contrary to s50(1)(a) of DTA 1994. On 15 September 2000 she was made the subject of a confiscation order under that Act in the sum of £154,301.99. 12. A man called Michael was involved with others in smuggling cocaine and cannabis into the UK on a large scale. A substantial part of the proceeds would be sent to Spain, France or Holland to purchase further drug supplies. Allpress acted as a courier for Michael on two occasions. She made trips to Paris on 7 and 17 April 1998. A ledger kept by Michael showed that the amount carried by her on the first occasion was 350,000 French francs, 80,000 Swiss francs and £10,000, amounting to a total sterling value of £78,105. It was assumed on the evidence that the amount carried by her on the second occasion was similar. On each occasion the money was handed to Allpress by another accomplice of Michael, who also travelled to Paris at the same time but on a different flight, and was returned by Allpress to that accomplice in Paris. Allpress believed that the money which she was carrying came from trafficking cannabis but she did not know the exact amount. On each occasion she was paid £800 for herself plus her expenses. 13. It was accepted on behalf of Allpress that she benefited in the sum of £3,600 by way of payments and costs, but the prosecution submitted and the judge found that she Judgment Approved by the court for handing down. Allpress & Ors v R benefited additionally in the sum of £156,210 representing the sterling value of the money which she carried as a courier. The appeal is against that finding. 14. Deborah Symeou also acted as a courier for Michael. Between January 1997 and April 1998 Symeou made eight or nine trips to Paris on behalf of Michael to deliver parcels of cash with a total value of £1,017,752.13. On 4 September 2000 at Woolwich Crown Court she pleaded guilty to assisting another to retain the benefit of criminal conduct, contrary to s93A of CJA 1988. The basis for her plea was that she believed that the money she was transporting came from prostitution. Like Allpress, she was paid £800 per trip plus expenses. 15. On 4 May 2001 a confiscation order was made against her in the sum of £154,301.99, representing her realisable assets. It was accepted on her behalf that she had benefited in the total sum of £8,803.20 by way of payment for and the cost of the trips. The prosecution submitted and the judge found that she benefited additionally in the sum of £1,017,752.13 representing the total sums of currency carried by her as a courier. She appeals against that finding. 16. Miguel Casal pleaded guilty on 23 May 2005 at Southwark Crown Court to assisting another to retain the benefit of drug trafficking contrary to s50(1)(a) of DTA 1994. The background was that a number of conspirators (not including Casal) were involved in a multi-million pound drug smuggling operation in which cocaine was imported to the UK from Columbia for sale here and the profits were sent back to Columbia. One of the conspirators, named Carranza-Reyes, was Casal’s brother-in- law. At the instigation of Carranza-Reyes, premises were bought in the name of Casal at 770-772 Holloway Road and run as a Columbian Café under the name “La Gran Columbia”. Casal did not provide the purchase money. Above the café Carranza- Reyes ran a money transfer business, sending parcels of cash to Columbia via a money transfer broker, TTT Money Corp. Bogus paperwork was prepared by Carranza-Reyes to give the appearance of legitimacy to the money transfers. 17. Casal pleaded guilty on the written basis that his role in relation to the money transfers was limited to physically taking parcels of cash from the La Gran Columbia to TTT Money Corp. Casal was a director of the money transfer business run by Carranza-Reyes, but it was his case that he did not in fact exercise any managerial control over the business. 18. In the confiscation proceedings there was a schedule of agreed facts. The schedule recorded the fact that Casal agreed to act as a director for the money transfer business operating from La Gran Columbia, but also stated: “The defendant acted as courier, taking parcels of money from La Gran Columbia to TTT Money Corp. Over the indictment period the defendant carried parcels of cash totalling £9,842,949.99 in value. The defendant was paid a total of £66,148 in wages and disbursements by Carranza-Reyes. To the knowledge of the prosecution he received no other payment or reward for the services which he provided to the money transfer operation save that he ran his café business from the premises.” Judgment Approved by the court for handing down. Allpress & Ors v R 19. We heard argument about whether Casal should be regarded as having a greater role in relation to the offence to which he pleaded guilty than that of a courier of parcels of cash, by reason of the fact of his directorship, but we have concluded that on the bare facts set out in the schedule he should not. The fact of his directorship does not of itself show that he played a greater role in relation to the money transfers than that which was expressly agreed between the parties. 20. The definition of a drug trafficking offence in s1 of the DTA 1994 includes an offence under s50. In the confiscation proceedings it was accepted on Casal’s behalf that he received payments or other rewards in connection with drug trafficking amounting to £66,148. The prosecution submitted and the judge found that the money which passed through his hands, and which Casal knew to be the proceeds of drug trafficking, constituted payments received by him in connection with drug trafficking. That figure was assessed by the judge at £4.5 million, because Casal had accepted in his written basis of plea that he knew that at least that amount of the cash carried by him was the proceeds of crime. (It had been his case that when he first started to act as a cash courier he believed that the monies constituted sums of cash legitimately earned by Columbian nationals working in the country, which were being remitted to their families in Columbia, but that the time came when he realised that the money must in part at least be the proceeds of crime.) The judge made a confiscation order on 2 November 2005 in the sum of £487,352.67, representing the agreed value of Casal’s realisable assets. He appeals against that order. 21. Paul Morris was found guilty by a jury at Birmingham Crown Court on 19 March 2003 of three offences of assisting another person to retain the benefits of criminal conduct contrary to s93A(1)(a) of CJA 1988. The particulars of the first offence were that between 18 June 2000 and November 2000, knowing or suspecting that Raymond Woolley was or had been engaged in criminal conduct or had benefited from criminal conduct, he entered into an agreement or was concerned in an arrangement whereby the retention or control by or on behalf of Raymond Woolley of his proceeds of criminal conduct, namely money from the account of Viltern Limited, was facilitated. The particulars of the second offence were similar except that it referred to money from the account of Hocus SL rather than Viltern. The particulars of the third offence were that between 24 September 2000 and 11 January 2001, knowing or suspecting that Raymond Woolley was or had been engaged in criminal conduct or had benefited from criminal conduct, he entered into an agreement or was concerned in an arrangement whereby the retention or control by or on behalf of Raymond Woolley of his proceeds of criminal conduct, namely money in the client account of A H Brooks and Co, was facilitated by removing it from the jurisdiction and transferring it to the bank accounts of Thornbush Entertainment Inc (USA) and Raymond Woolley (Spain). 22. The background was that Woolley (but not Morris) had been involved in a conspiracy to cheat HM Customs and Excise of VAT through a “missing trader” scheme. The estimated loss to the Revenue amounted to over £38 million. 23. Morris was a solicitor and a partner in the firm of Brooks. The VAT owed, but not paid, was diverted by Woolley to a bank account in the name of Viltern, a Dublin based company, and a bank account in the name of Hocus SL, a Spanish based company. Both these bank accounts had Woolley as sole signatory. By an arrangement between Woolley and Morris, Viltern transferred £5,288,694 and Hocus Judgment Approved by the court for handing down. Allpress & Ors v R transferred £2,639,988 into the account of Brooks. The first two offences of which Morris was convicted related to the inflow of these funds from Viltern and Hocus to Brooks. 24. The way in which Morris dealt with these receipts was complex. They were transferred to the firm’s client account in the names of six different clients, not all of which appeared to have been under the direct control of Woolley. Individual disbursements were then made in respect of what purported to be ordinary solicitor and client transactions, but were a cover for transfers of a very different kind, for example, for the purchase of a yacht or an expensive car. Over £4.5 million was transferred from Brooks to a company called Thornbush Entertainment Inc (USA). Sums in excess of £1.5 million were transferred from different clients’ ledgers to Woolley. These transfers were all for the benefit of Woolley and formed the subject of the third offence of which Morris was convicted. 25. In the confiscation proceedings it was argued on behalf of Morris that he had not himself obtained any property within the meaning of s71(4) of the CJA 1988; he was merely a trustee of funds for Woolley, and he received no personal benefit, direct or indirect, from funds in his firm’s client account. The trial judge, H H Judge McCreath, rejected the argument that the true nature of Morris’ connection with the relevant monies was that of a bare trustee. He said that it was “far more than that”. He referred to “the lack of any substantial evidence at trial of any communications between Mr Woolley and Mr Morris by which instructions were given by the former to the latter and the evidence about the transfers to Thornbush, an organisation to which substantial transfers were made and with which Mr Morris had a considerable pre-existing connection but with which Mr Woolley had none”. He concluded that the true nature of the receipt of the relevant funds by Morris was such as to amount to an obtaining of them within the meaning of s71(4). He assessed the amount obtained by Morris as £7,928,682.47 and, after a further hearing to consider the amount of Morris’s realisable assets, he made a confiscation order on 20 April 2004 in the sum of £410,077.20. Morris appeals against that order. 26. Stephen Martin pleaded guilty at Cardiff Crown Court on 3 July 2006 to possessing criminal property between 1 July and 9 December 2004, contrary to s329(1)(c) of POCA 2002. He pleaded guilty on the agreed written basis that he allowed his brother Michael to store proceeds of Michael’s criminal activity (which included drug dealing) at Stephen Martin’s shop premises in Bargoed, but that at no time did he use any of the property for the running of his business or for any other purpose. 27. The background was that brother Michael (but not Stephen) was involved in a conspiracy to supply cannabis and amphetamines. On 8 December 2004 the police raided Stephen’s shop and recovered £132,000 in cash from a safe. It was common ground that this money had been deposited with Stephen by Michael and, as Stephen knew, it represented proceeds of criminal activity. Stephen also admitted that he had previously received £35,000 in cash from his brother, which he had subsequently returned to his brother. So the total amount of cash physically received by Stephen, knowing that it was the proceeds of crime, came to £167,000. 28. At the outset of the confiscation hearing counsel for the prosecution said that it was his submission that Michael was using Stephen’s premises as a storage base for his cash (meaning Michael’s cash), and this was not disputed. The prosecution submitted Judgment Approved by the court for handing down. Allpress & Ors v R that the money in the safe and the £35,000 which Stephen had returned to Michael constituted property which Stephen obtained in connection with his criminal conduct, within the meaning of s76(4) of POCA 2002, and therefore constituted a benefit within s8. It is apparent from the transcript of the proceedings that the judge, H H Judge Denyer QC, was unhappy with that proposition and he reserved his judgment. In a carefully reasoned judgment, delivered on 6 March 2008, the judge reviewed the authorities. From them he concluded that, applying the relevant statutory provisions, “the fact that the property may belong to someone else or that the defendant was simply looking after it for someone else is nothing to the point” and that he was bound on authority to accept the prosecution’s submission. His conclusion was correct on the authorities as they stood, but that was before the decisions of the House of Lords in May and others. He also considered whether Article 1 of the First Protocol to the European Convention on Human Rights might enable him to avoid having to make a confiscation order, but rightly concluded that it did not. He made a confiscation order in the sum of £88,255.83, representing the amount of Stephen Martin’s available assets. Stephen Martin appeals against that order. May and others: General principles 29. In Sivaraman  EWCA Crim 1736, para 12, this court set out the following general principles derived from the trio of cases recently decided by the House of Lords: “12. In the trio of cases recently decided by the House of Lords a number of matters were made plain: (1) The legislation is intended to deprive the defendants of the benefit they have gained from the relevant conduct within the limits of their available means. It does not operate by way of fine: May, paragraph 48(1); Jennings, paragraph 13. (2) The benefit gained is the total value of the property or pecuniary advantage gained, not the particular defendant's net profit: May, paragraph 48(1). (3) In considering what is the value of the benefit which the defendant has obtained, the court should focus on the language of the statute and apply its ordinary meaning (subject to any statutory definition) to the facts of the case: May, paragraph 48(3) and (4); Jennings paragraph 13. (4) "Obtained" means obtained by the relevant defendant: Jennings, paragraph 14. (5) A defendant's acts may contribute significantly to property or to a pecuniary advantage being obtained without that defendant obtaining it: Jennings, paragraph 14. (6) Where two or more defendants obtain property jointly, each is to be regarded as obtaining the whole of it. Where Judgment Approved by the court for handing down. Allpress & Ors v R property is received by one conspirator, what matters is the capacity in which he receives it, that is, whether for his own personal benefit, or on behalf of others, or jointly on behalf of himself and others. This has to be decided on the evidence: Green, paragraph 15. By parity of reasoning, two or more defendants may or may not obtain a joint pecuniary advantage; it depends on the facts.” 30. It was submitted on behalf of the prosecution in some of the appeals that the court was wrong to say in para 12(6) of Sivaraman that “Where property is received by one conspirator, what matters is the capacity in which he receives it, that is, whether for his own personal benefit, or on behalf of others, or jointly on behalf of himself and others.” We will come to the question whether any of the legislation requires a different approach in relation to money, but we remain of the view that the sentence quoted correctly states the effect of May and others. Otherwise, the judicial committee would not have concluded its report in May by observing that mere couriers or custodians are unlikely to be found to have obtained the relevant property. A mere courier or custodian is a bailee who receives physical possession of property for another. 31. In Sivaraman the court also addressed two misconceptions which subsequent cases suggest may still be common. One was that in assessing benefit in a conspiracy case each conspirator is to be taken as having jointly obtained the whole benefit obtained by “the conspiracy”. A conspiracy is not a legal entity but an agreement or arrangement which people may join or leave at different times. In confiscation proceedings the court is concerned not with the aggregate benefit obtained by all parties to the conspiracy but with the benefit obtained, whether singly or jointly, by the individual conspirator before the court. The second misconception is a variant of the first. It is that anybody who has taken part in a conspiracy in more than a minor way is to be taken as having a joint share in all benefits obtained from the conspiracy. This is to confuse criminal liability and resulting benefit. The more heavily involved a defendant is in a conspiracy, the more severe the penalty which may be merited, but in confiscation proceedings the focus of the inquiry is on the benefit gained by the relevant defendant. In the nature of things there may well be a lack of reliable evidence about the exact benefit obtained by any particular conspirator, and in drawing common sense inferences the role of a particular conspirator may be relevant as a matter of fact, but that is a purely evidential matter. 32. Before turning to the arguments for treating money differently from other forms of property we should refer to certain relevant passages in May. 33. In para 15 the judicial committee referred to R v Simons (1994) 98 Cr App R 100 (brought under the Drug Trafficking Offences Act 1986) and commented as follows: “In that case the appellant had bought five consignments of drugs from a Hong Kong supplier and sold them on to an African buyer, from whom in each case he had received the purchase price which he had paid on to the supplier. The proceeds of sale, the court of appeal held (p 102), were not profit made in the sale but the sale price. The court regarded as clear (p 104) that where there is a chain of contracts each Judgment Approved by the court for handing down. Allpress & Ors v R purchase price is a payment. The court went on to observe, obiter (p 104), that this result could not be avoided by treating the intermediary as a postman, and that those acting as a conduit should not be treated differently. But this, with respect, is more problematical: under the 1986 Act the first question was always whether, on the facts (and allowing permissible inferences) the defendant had benefited by the receipt of any payment or other reward, which a mere intermediary might possibly not…” 34. In para 17 the judicial committee referred to a case under DTA 1994, which is directly analogous to Allpress, Symeou and Casal. It said: “R v Simpson (David)  2 Cr App R (S) 111 is a more difficult case. Simpson pleaded guilty to conspiring to posses the proceeds of drug trafficking. He had made five trips to Ireland taking with him a total of £2.5m, the proceeds of drug trafficking. He had been paid £25-30,000 for each trip and on arrest en route to Dublin had £540,000 with him. The trial judge found that he had benefited from drug trafficking to the extent of £3m. He assessed the proceeds of drug trafficking (p 116) as equivalent to the aggregate value of the drug deals and not the aggregate value of the rewards paid to the money launderers for their money laundering, basing himself on R v Simons above. The court of appeal, following R v Banks, above, accepted (pp 117-118) that there might be multiple recovery for the same sum passed through the hands of successive dealers, but found no reason ( p 118) to construe the definition of proceeds of drug trafficking as requiring as a pre- condition that property or other rewards should pass to a defendant. It may be agreed that words, not in the statute, should not be read into it. But the question under sections 2(3) and 4(1) of the 1994 Act is whether a defendant has received any payment or other reward in connection with drug trafficking, and this would ordinarily require a payment or reward to him, whether on his own or jointly.” 35. The judicial committee concluded its report in May at para 48(6) as follows: “D ordinarily obtains property if in law he owns it, whether alone or jointly, which would ordinarily connote a power of disposition or control, as where a person directs a payment or conveyance of property to someone else. He ordinarily obtains a pecuniary advantage if (among other things) he evades a liability to which he is personally subject. Mere couriers or custodians or other very minor contributors to an offence, rewarded by a specific fee and having no interest in the property bought with the proceeds of sale, are unlikely to be found to have obtained that profit. It may be otherwise with money launderers.” Judgment Approved by the court for handing down. Allpress & Ors v R 36. The general principle stated in para 48(6) of May was reiterated in para 13 of Jennings, with an important observation about the common nature of the approach to be taken to the question of obtaining a benefit under CJA 1988 and DTA 1994. The committee stated: “In its opinion in R v May, the committee endeavoured to explore the meaning of section 71(4) [of CJA 1988]. It refers, without repetition, to what it there said. …The focus must be and remain on the language of the subsection. The committee regards the meaning of the subsection as in substance the same as the equivalent provisions of the drug trafficking legislation…the rationale of the confiscation regime is that the defendant is deprived of what he has gained or its equivalent. He cannot, and should not, be deprived of what he had never obtained or its equivalent, because that is a fine. This must ordinarily mean that he has obtained property so as to own it, whether alone or jointly, which would ordinarily connote a power of disposition or control, as where a person directs a payment or conveyance of property to someone else.” 37. It was argued on the present appeals that because the House of Lords did not overrule Simpson, that case remains binding on this court. If so, it would be dispositive of the present appeals or at least the appeals by Allpress, Symeou and Casal. We do not accept that submission. It would obviously be otherwise if the House of Lords had positively affirmed the decision in Simpson, but the terms in which it referred to the decision were far from an endorsement of its correctness. Arguments for a different approach in cases of money laundering 38. We note first that Part 7 of POCA 2002 is headed “Money Laundering”, and that money laundering is defined for the purposes of that part of the Act by s340(11) as an offence under ss327, 328 or 329 (and associated secondary or inchoate offences). However, ss327, 328 and 329 are not confined to activities involving money but are very much broader. Section 327(1)(a) makes it an offence if a person conceals criminal property. Property is defined by s340(9) as including all forms of property, real or personal, heritable or moveable, and things in action and other intangible or incorporeal property. Property is criminal property if it constitutes a person’s benefit from criminal conduct and the alleged offender knows or suspects that it does: s340(3). So a burglar’s wife or partner who allows him to store property in their home, which she suspects he has stolen, may be guilty of a money laundering offence in terms of the statute. 39. Three arguments were advanced by the prosecution for treating money, in one form or another, differently from the guidance given by the House of Lords in May and others in relation to other forms of property. 40. One argument was that money laundering offences, in so far as they involve money in any form, constitute a special category of offences to which a separate approach should apply. Judgment Approved by the court for handing down. Allpress & Ors v R 41. A second argument was based on the legal nature of money in the form of cash. It was argued that different considerations should apply to cash from any other form of property. This argument was not an alternative to the first but a separate and additional argument. The third argument was that the language of the statutes, especially DTA 1994 and POCA 2002, requires a different approach to be taken in relation to money. We will consider these arguments in turn. Money Laundering Offences – a special category? 42. Mr Bird argued that a different approach from the guidance given by the House of Lords in the recent trio of cases should be taken in cases involving money (whether in cash or in another form) received by a person in connection with the commission of any of the following offences: CJA 1988, s93A (Assisting another to retain the benefit of criminal conduct) CJA 1988, s93B (Acquisition, possession or use of proceeds of criminal conduct) CJA 1988, s93C (Concealing or transferring proceeds of criminal conduct) DTA 1994, s49 (Concealing or transferring proceeds of drug trafficking) DTA 1994, s50 (Assisting another person to retain the benefit of drug trafficking) DTA 1994, s51 (Acquisition, possession or use of proceeds of drug trafficking) POCA 2002, s 327 (Concealing criminal property, etc.,) POCA 2002, s328 (Being concerned in an arrangement facilitating the acquisition, retention, use or control of criminal property) POCA 2002, s329 (Acquisition, use and possession of criminal property) Terrorism Act 2000, s15 (Fund raising for the purposes of terrorism) Terrorism Act 2000, s16 (Use and possession of money or other property for the purposes of terrorism) Terrorism Act 2000, s 17 (Being concerned in an arrangement by which money or other property is to be made available to another which may be used for the purposes of terrorism) Terrorism Act 2000, s18 (Being concerned in an arrangement facilitating the retention or control by or on behalf of another person of terrorist property) 43. We reject the argument. The offences themselves may involve dealing with money or other forms of property. Mr Bird’s approach would involve treating them as constituting a special category of offence for the purpose of confiscation if, but only Judgment Approved by the court for handing down. Allpress & Ors v R if, the offending took the form of dealing with money. Mr Bird’s approach would also involve treating money received in connection with, or as a result of, an offence in his list differently from money received in connection with, or as a result of, an offence not on the list. No statutory foundation has been identified which would support Mr Bird’s approach, and it would produce obvious anomalies. 44. To give an example, the language of POCA 2002 s329 is so wide that many offences of burglary or handling stolen goods could be charged under that section, and there has been some disquiet that this may be happening. Concerns about this were expressed by Maurice Kay LJ in R(Wilkinson) v Director of Public Prosecutions  EWHC 3012 (Admin), para 8, and by Richards LJ in CPS Nottinghamshire v Kevin Rose  EWCA Crim 239, paras 19-20. It would be unsatisfactory if as a result of the prosecution choosing to lay a charge under POCA 2002, s329, the confiscation provisions of the Act would apply differently than if on the same facts the offender had been charged with burglary or handling stolen property. The legal nature of cash 45. Mr Bird argued that the legal nature of currency is such that the holder necessarily has a power of disposition or control over it of a kind which is different from that of a bailee of tangible property. He cited the following passage from the speech of Viscount Haldane LC in the well-known case of Sinclair v Brougham  AC 398, 418: “In most cases money cannot be followed. When sovereigns or banknotes are paid over as currency, so far as the payer is concerned, they cease ipso facto to be the subjects of specific title as chattels. If a sovereign or banknote be offered in payment it is, under ordinary circumstances, no part of the duty of the person receiving it to enquire into title. The reason of this is that chattels of such a kind form part of what the law recognises as currency, and treats as passing from hand to hand in point, not merely of possession, but of property. It would cause great inconvenience to commerce if in this class of chattel an exception were not made to the general requirement of the law as to title.” 46. However, Viscount Haldane continued in the next paragraph: “But the exception is not extended beyond the limits which necessity imposes. If money in a bag is stolen, and can be identified in the form in which it was stolen, it can be recovered in specie. Even if it has been expended by the person who has wrongfully taken it in purchasing some particular asset, that asset, if capable of being earmarked as purchased with the money, can be claimed by the true owner of the money. This is a principle not merely of equity, but of the common law.” 47. We were also referred to Mann on the Legal Aspect of Money (6th Ed). It is a complex subject and this judgment is not an appropriate place for attempting a detailed analysis. We are concerned with the construction of provisions in criminal statutes Judgment Approved by the court for handing down. Allpress & Ors v R designed, as the House of Lords has emphasised, to deprive criminals of the benefit which they have gained from the relevant conduct and not to operate by way of fine. 48. To take an everyday example away from the criminal context, if a shopper in a supermarket gives money to a till operator at the checkout, which the till operator puts in the till, nobody would ordinarily think of the till operator benefiting from that sum of money or of the money being under the till operator’s power of disposition or control in the sense in which the judicial committee used that expression in May and Jennings. The money in specie would be the shop’s money from the moment that the till operator took it from the customer. It may be that the till operator would have physical power to dispose of the money elsewhere; it may be that he or she could put it in their pocket undetected, but that is no different from the physical power of any bailee to use the property for a different purpose from that of the bailment. Moreover, one would not ordinarily regard the till operator’s physical possession of the money as a benefit to the till operator, or as the possession of money which was theirs to control or dispose of, merely because if the operator were to misappropriate and spend it, an innocent recipient would obtain good title. It is a fallacy to argue that because the recipient would obtain a valid title, therefore the money was the till operator’s. The exception to the nemo dat rule exists for commercial reasons, but does not operate so as to confer title on a thief. Were the position otherwise, Viscount Haldane would not have said that money stolen in a bag, and identifiable in the form in which it was stolen, could be recovered in specie. 49. So far we have been considering the position of a custodian of untainted money. It is difficult to see why the nature of a custodian’s interest in money should be different merely because the custodian knows or suspects that it is tainted by crime. If a criminal asks D, for a reward, to deliver stolen property to a professional receiver and to collect an envelope containing the price which the receiver has agreed to pay, and D does so, we do not see why as a matter of general principle D should be regarded as having an interest in the money which he collects (any more than in the property which he delivers to the receiver) simply because he knows or suspects that the property was stolen, or simply because if D had instead spent the money in a shop the shop keeper would have obtained a good title to it. 50. We turn from these general arguments to the language of the statutes. CJA 1988 and DTA 1994 51. CJA 1988 s71(4) provided: “For the purposes of this Part of this Act a person benefits from an offence if he obtains property as a result of or in connection with its commission and his benefit is the value of the property so obtained.” 52. DTA 1994 s2(3) provided: “For the purposes of this Act, a person has benefited from drug trafficking if he has at any time (whether before or after the commencement of this Act) received any payment or other Judgment Approved by the court for handing down. Allpress & Ors v R reward in connection with drug trafficking carried on by him or another person.” 53. As already noted, in Jennings the judicial committee said that it regarded the meaning of CJA 1988 s71(4) as in substance the same as the equivalent provisions of the drug trafficking legislation, that is, DTA 1994 s2(3) and its statutory predecessors. 54. CJA 1988 and DTA 1994 also contained materially indistinguishable provisions for assessing the value of property. 55. CJA 1988 s74 provided: “(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) in any other case, is its market value. (5) References in this Part of this Act to the value at any time (referred to in subsection (6) below as “the material time”) of any property obtained by a person as a result of or in connection with the commission of an offence are references to- (a) the value of the property to him when he obtained it adjusted to take account of subsequent changes in the value of money; or (b) where subsection (6) below applies, the value there mentioned, whichever is the greater. (6) If at the material time he holds- (a) the property which he obtained (not being cash); or (b) property which, in whole or in part, directly or indirectly represents in his hands the property which he obtained, the value referred to in subsection (5)(b) above is the value to him at the material time of the property mentioned in paragraph (a) above or, as the case may be, of the property Judgment Approved by the court for handing down. Allpress & Ors v R mentioned in paragraph (b) above so far as it represents the property which he obtained, but disregarding any charging order.” DTA 1994 s7(1), (2) and (3) contained similar provisions. 56. It was argued on behalf of the prosecution that where a courier or custodian receives a parcel of cash to pass on or safeguard in return for a fee, the fee and the parcel of cash both constitute payments received by him (for the purposes of DTA 1994 s2(3)) or property obtained by him (for the purposes of CJA 1988 s71(4)). 57. The difficulty with that argument was identified by the judicial committee in May, para 17 (set out in para 34 above), where it observed in relation to the decision of the Court of Appeal in Simpson: “But the question under 2(3) and 4(1) of the 1994 Act is whether a defendant has received any payment or other reward in connection with drug trafficking, and this will ordinarily require a payment or reward to him, whether on his own or jointly.” 58. The phrase “payment or other reward” implies that the payment must be in the nature of a reward in order to fall within the relevant section, and that is consistent with the rationale of the confiscation scheme as explained by the House of Lords. The final sentence of para 17 in May would make no sense if physical receipt of a sum of cash by D constitutes ipso facto the receipt of a payment or other reward, whether the payment is for himself or not. 59. We therefore reject the argument that the language of DTA 1994 s2(3) and CJA 1988, s71(4) compels a different approach to sums of cash than to other forms of property. POCA 2002 60. Section 6(4) requires the court to decide whether D has benefited from his criminal conduct (either general or particular). Section 76 provides: “(4) A person benefits from conduct if he obtains property as a result of or in connection with the conduct. (5) If a person obtains a pecuniary advantage as a result of or in connection with conduct, he is to be taken to obtain as a result of or in connection with the conduct a sum of money equal to the value of the pecuniary advantage. (6) References to property or a pecuniary advantage obtained in connection with conduct include references to property or a pecuniary advantage obtained both in that connection and some other. (7) If a person benefits from conduct his benefit is the value of the property obtained.” Judgment Approved by the court for handing down. Allpress & Ors v R 61. Section 84 provides: “(1) Property is all property wherever situated and includes- (a) money; (b) all forms of real or personal property; (c) things in action or intangible or incorporeal property. (2) The following rules apply in relation to property – (a) property is held by a person if he holds an interest in it; (b) property is obtained by a person if he obtains an interest in it; (c) property is transferred by one person to another if the first one transfers or grants an interest in it to the second; (d) references to property held by a person include references to property invested in his trustee in bankruptcy… (e) references to an interest held by a person beneficially in property include reference to an interest which would be held by him beneficially if the property were not so vested; (f) references to an interest, in relation to land in England and Wales or Northern Ireland, are to any legal estate or equitable interest or power; … (h) references to an interest, in relation to property other than land, include references to a right (including a right to possession).” 62. Sections 79 and 80 contain provisions about valuation similar to CJA 1988 s74(4)– (6), but expressed at greater length. The effect of s79(3) is that if a person obtains a limited interest in property, it is the market value of that limited interest which is relevant for the purpose of confiscation proceedings against that person. 63. It is not in dispute that “obtaining” in the present context includes assuming an interest in property (whether unlimited or limited). In other words, a thief cannot be heard to say in confiscation proceedings that the relevant value is not the market value of the stolen property, but the value of his interest subject to the interest of the true owner, which would result in a nil or nominal valuation on the part of the thief. By stealing the property the thief has assumed the rights of the true owner, and his benefit is what it would have cost him to acquire the property lawfully, i.e. its open market value: CPS Nottinghamshire v Rose  EWCA Crim 239. 64. It was submitted on behalf of the prosecution that, whatever may have been the position under CJA 1988 and DTA 1994, the statements of the judicial committee in May, para 48(6), and Jennings, para 13, set out in para 36 above, (to the effect that Judgment Approved by the court for handing down. Allpress & Ors v R ordinarily D will obtain property only if he owns it or, we interpolate, assumes the rights of an owner, which would ordinarily connote a power of disposition or control), cannot properly be applied to POCA 2002, because s84(2) provides a wider statutory definition of property. It was further submitted that in so far as those comments were intended to guide courts dealing with confiscation applications under POCA 2002, they were obiter and wrong. 65. The first point to note is that logically this submission is not confined to property in the form of money. The effect of the submission is that in any case where D has possession of criminal property in connection with an offence, D is liable to a confiscation order in the amount of the market value of the property (or the amount of the money, where the property is money). 66. Para 145 of the explanatory notes to POCA 2002 states: “Sections 79-81 set out how the Court is to work out the value of property held by a person, the value of property obtained from criminal conduct and the value of a tainted gift. These sections broadly reproduce the property valuation principles set out in the earlier legislation.” 67. The explanatory notes to an Act are an admissible aid to its construction by providing a pointer to the mischief at which the legislation was aimed: Westminster City Council v NASS  UKHL 38, para 5 (Lord Steyn). 68. The submission that the observations of the judicial committee in relation to POCA 2002 were obiter is accurate in the strictest sense, but it is plain that the judicial committee considered in some detail the provisions of that Act, which it summarised in paragraph 14 of May without giving any hint of a suggestion that POCA 2002 required a difference in approach to the key questions which the judicial committee was considering. It described the Act as bringing together the regimes, hitherto distinct, previously established and also providing for the making of confiscation orders against those found to have a criminal lifestyle. In the endnote to its opinion in May the judicial committee gave guidance to courts specifically under POCA 2002 (see para 48(5) of the opinion) on how to determine whether D has obtained property or a pecuniary advantage and, if so, the value of any property or advantage so obtained. Such guidance may have been technically obiter, but that is indeed in the circumstances a technicality. The guidance given represents the judgment of the judicial committee on issues central to the confiscatory framework, after consideration of the relevant sections. The report in May, para 14, referred explicitly to the definition of property in s84(1), and we do not believe it credible to suppose that the members of the committee were unaware of the provisions of s84(2). 69. We consider that the point made by the prosecution in relation to s84(2), and in particular para (h) (“references to an interest, in relation to property other than land, include references to a right (including a right to a possession)”) is a red herring. 70. It is important to note that s84(2)(h) speaks not of de facto possession (i.e. mere custody) but of “a right to possession”. There is a significant difference between the two. Judgment Approved by the court for handing down. Allpress & Ors v R 71. In Ancona v Rogers (1876) 1 Ex D 285, 292 Mellish LJ said that: “…there is no doubt that a bailor, who has delivered goods to a bailee to keep them on account of the bailor, may still treat the goods as being in his own possession, and can maintain trespass against a wrong doer who interferes with them. It was argued, however, that this was a mere legal or constructive possession of the goods, and that in the Bills of Sale Act the word “possession” was used in a popular sense, and meant actual or manual possession. We do not agree with this argument. It seems to us that goods which have been delivered to a baileee to keep for the bailor, such as a gentleman’s plate delivered to his banker, or his furniture warehoused at the Pantechnicon, would, in a popular sense, as well as in a legal sense, be said to be still in his possession.” 72. In the case of the statute which we are considering, the answer to the question whether a person is intended to be regarded as holding an interest in property by mere manual possession, or whether something more is required, is put beyond doubt by the words “a right to possession”. 73. Some bailments may be on terms which give to the bailee a right to possession as against the bailor, that is, a right to possession for his own benefit, and others will not. 74. Crossley Vaines on Personal Property (5th Ed), (1973) p 70 states: “Bailment eludes precise definition because the term covers a host of legal relationships which have as a common denominator only that one is in possession of another’s chattel. Possession is the salient feature, but the forms and incidents of bailment are miscellaneous…The bailment may be for the benefit of the bailor e.g., a deposit, or for that of the bailee, e.g., a loan.” 75. That general statement remains accurate. To return to the example of the till operator in the supermarket, he or she has manual possession of the money paid by the customer until it is placed in the till (and will continue to have some manual control over the contents of the till during the operator’s shift, because he or she can take money from the till to give to another customer by way of change), but the till operator has no right to possession of the money; he or she holds the money for the employer. 76. The point was made in argument that a bailee can maintain an action for the value of the goods against a third party who wrongly interferes with his possession. See, for example, The Winkfield  P 42. The reason is that as a matter of policy the law will not allow a wrongdoer to enquire into the nature or limitation of the possessor’s right, but as between the possessor and the wrongdoer the law will presume “that the person who has the possession has the property”, in the words of Lord Campbell in Jeffries v Great Western Railway Company (1856) 5 E & B 802, 806, cited by Collins MR in The Winkfield (p 55). That is far removed from the question whether a mere Judgment Approved by the court for handing down. Allpress & Ors v R custodian has a right to possession so as to have an interest in property for the purposes of POCA s84(2). 77. Moreover, even if the mere custodian were held to have a limited interest in the property, the relevant value would be the value of that interest, which if the property was being held purely for another would be nil. 78. In the criticised passages of May (para 48(6)) and Jennings (para 13), the committee used the word “ordinarily”. It was no doubt aware that there might be cases (which did not call for consideration in the trio of cases before it) where it might be said that D had a limited interest in goods. D might, for example, use criminal proceeds to pay for the charter of a yacht or the leasing of an aircraft or land vehicle. In such cases D would have a right to possession and the interest could be of substantial value. But the fact that POCA s84(2) and s79(3) contain provisions for cases where an offender obtains a limited interest in property, and for the means of valuing such an interest, is beside the point in the ordinary case where no suggestion is being advanced that the offender obtained a limited interest in the relevant property. 79. For those reasons we reject the argument that the judicial committee’s observations in May and Jennings were incorrect or inapplicable in relation to POCA 2002, either in cases involving other forms of property or in cases involving money. The cash courier 80. We conclude that if D’s only role in relation to property connected with his criminal conduct, whether in the form of cash or otherwise, was to act as a courier on behalf of another, such property does not amount to property obtained by him within the meaning of POCA 2002 s80(1) or CJA 1988 s71(4) or to “payment or other reward” within in the meaning of DTA 1994 s2(3). 81. It follows that the appeals by Allpress, Symeou and Casal are allowed. The amount of the confiscation orders will be reduced to £3,600 in the case of Allpress, £8,803.20 in the case of Symeou and £66,148 in the case of Casal. The cash custodian 82. We reach the same conclusion in relation to a mere custodian of cash for another. Accordingly the appeal by Stephen Martin is allowed and the confiscation order against him is quashed. The money launderer through the banking system 83. In Morris’ case Mr Shaw QC submitted that the same approach should be applied as if he had been a cash courier. He argued that Morris had no personal interest in the monies which went from Viltern and Hocus into the account of Brooks. The money was held in that account in accordance with the Solicitors Accounts Rules 1998. Morris was a mere trustee of the funds, acting at all times on behalf of Woolley and under Woolley’s instructions. Mr Bird submitted on behalf of the prosecution that the Solicitors Accounts Rules have no relevance since the Brooks account was not being used for a genuine professional purpose, and the use of the firm’s client account could give Morris no more protection than if the money had gone into another account Judgment Approved by the court for handing down. Allpress & Ors v R opened by Morris. Mr Bird also submitted that the trial judge had been entitled to reject on the evidence before him the argument that the true nature of Morris’ connection with the relevant monies was that of a bare trustee. 84. We agree with the prosecution’s submissions. The Solicitors Account Rules are irrelevant in considering the true nature of Morris’ interest in the money in circumstances where the firm’s account was being used as a mere façade. 85. The account was an account of Morris and his partners with their bank. Payment of monies into that account gave rise to a thing in action in favour of Morris (jointly with his partners). The starting point (as in R v Sharma  EWCA Crim 16,  2 Crim App R (S) 416), is that this was therefore his property. In Sharma the defendant caused the proceeds of a fraud in which he was engaged to be paid into a company account of which he was the sole signatory. It was held that the money in the account was money held for his benefit as the sole signatory on the account, and that decision was approved by the House of Lords in May (para 34). In this case the account was not only in the name of the firm of which Morris was a partner, so that he had a thing in action against the bank, but he also had in fact sole operational control over the account. 86. We do not exclude the possibility of a case where money is paid into a bank account in the name of D, but which is in reality operated entirely by P for the benefit of P, and where it would be wrong, unusually, to conclude that D obtained monies paid into the account. This is more likely to arise in a domestic than a commercial context. We have in mind, for example, the possibility of a husband or father operating an account in the name of his wife or child, which he treats entirely as his own and in respect of which the wife or child is a mere nominee. But in the present case the judge was not satisfied on the evidence that Morris was a bare trustee or nominee in relation to the funds in the account. It is true that the offences of which Morris was convicted all contained the ingredient of assisting Woolley to retain control of the proceeds of his criminal conduct, but with that ultimate objective Morris received funds, in respect of which he had legal ownership and also practical control. The case was no different in principle than if a dishonest money changer had been paid a £1million and had agreed to transfer an equivalent amount to an offshore account in a different currency. The £1million received by the money changer would have been money obtained by him. In this case Morris received funds in his account in England in exchange for which he remitted funds to the USA and Spain. 87. The appeal by Morris is therefore dismissed. Postscript 88. Before the orders in the various appeals are finalised we invite written submissions on any consequential matters. We are aware that Morris seeks an extension of time for payment and that the prosecution resists this both as a matter of jurisdiction and on the merits. The Court has not considered this question but will do so in the light of the parties’ written submissions. 89. The laundering of money or other criminal property can take many forms. This judgment does not attempt to address all of them, but only the types of case which we have been directly considering.
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