McCready, R v

On 9^th December 1998 in the Crown Court at Harrow before HHJ Lockhart and a jury Michael McCready and 3 co-accused were convicted of offences of being concerned in the importation of controlled drugs, namely cocaine, ecstasy and amphetamine. McCready was sentenced to 18 years imprisonment. His co-accused received substantial but lesser terms. McCready’s appeal against conviction and his renewed application for leave to appeal against sentence were dismissed by the Full Court in February and March 2000.

On 8^th March 2001 in the Crown Court at Southend at a confiscation hearing under the provisions of the Drug Trafficking Act 1994 (“the Act”) HHJ Lockhart found that McCready had benefited from drug trafficking in the sum of £251,828.50. A confiscation order was made for that amount. The appellant was ordered to pay the sum by 31^st March 2002 or serve 4 years imprisonment in default. He now appeals against the confiscation order by leave of the Single Judge.

No complaint is made about the confiscation hearing itself, the conclusions of the judge about the amount by which the appellant had benefited or the amount of the confiscation order. The short point taken by the appellant is that the judge failed to postpone the hearing of the confiscation proceedings under the Act before passing sentence, or in the alternative he failed to postpone the proceedings for a specified period. Those failures are, it is said, fatal to the subsequent confiscation proceedings. The court had no power to hold the confiscation hearing and any confiscation order was thus a nullity and must be quashed.

In the light of the discrete issue raised, the facts may be stated shortly. On 12^th November 1996 customs officers intercepted a van which had travelled from Ostend to Ramsgate on a cross-channel ferry, driven by two of the appellant’s co-accused. In the van the officers found 2.94 kilos of cocaine, 30,000 ecstasy tablets and 9.95 kilos of amphetamine. The estimated street value of the drugs was £1.85 million. The appellant was the organiser and financier of the importation.

The appellant was arrested in November 1996. He was tried at Basildon Crown Court in October 1997 but that trial was aborted and the jury discharged in April 1998. On 1^st September 1998 the re-trial began in the Harrow Crown Court. On 3^rd December the jury retired to consider their verdicts, which they returned on 9^th December. On that day the appellant was convicted and sentenced. He lodged an application for leave to appeal against conviction and sentence in about January 1999. On 22^nd April 1999 in the Crown Court at Southend the hearing of the confiscation proceedings was postponed pending the determination of the appellant’s applications to the Court of Appeal Criminal Division. Those applications were finally determined on 7^th March 2000 and the confiscation order was made on 2^nd June 2000.

In the light of the issues raised we must examine in some detail the events of 9^th December 1998. The court sat shortly after 10.00 a.m. The jury were sent out to continue their deliberations. At 11.30 a.m. the court assembled and the jury returned verdicts of guilty on the appellant and his co-accused. Counsel for the Crown, Mr Hewitt, then produced the antecedents of the appellant and added:

The judge invited submissions from defence counsel on the prosecution’s application. The defence made no objection to the application for postponement but did object to the length of time sought by the prosecution for the service of the section 11 statement, pointing out that the Crown had had over 2 years to investigate the appellant’s financial circumstances. Mr Dein, counsel for the defence, submitted that the prosecution should be given until the end of January at the very best. He went on:

Having heard the application by the prosecution and the response of the defence the following exchange took place.

The judge then heard short submissions in mitigation and adjourned for a short time, no doubt in order to consider what had been submitted to him and to formulate his sentencing remarks.

On returning to court the judge passed sentence. His sentencing remarks were understandably reasonably full: he set out the extent of the importation and identified the roles of each of the accused. After announcing the sentences, counsel for a co-accused invited the judge to make an order in relation to the retention of exhibits for the purpose of any appeal. The judge did so. At that point Mr Hewitt returned to the question of the Drug Trafficking Act enquiry.

Mr Hewitt said that he had hoped to have the opportunity to respond to the alternative timetable advanced by the defence before the judge ruled on it. He thereafter sought to persuade the judge to amend his ruling. The judge however re-affirmed the order he had made. After hearing Mr Hewitt’s further submissions he said: “I see. I will order that it be filed by 31^st January. The defence to reply by 31^st March”

It is submitted by Mr Johnson on behalf of the appellant (who did not appear below) that the judge failed to postpone the confiscation inquiry prior to passing sentence and having failed to do so all subsequent proceedings in relation to confiscation are a nullity. That is so, submits Mr Johnson, even though there had been no objection to the application for a postponement – indeed it is clear that the defence accepted there should be a postponement – and the judge had proceeded to hear the defence representations about the time-tabling of the confiscation procedure on the basis of such acceptance. It is submitted that, since the judge did not announce his decision until after passing sentence, he should not be regarded as having made his decision to postpone until after passing sentence. Thus, the subsequent procedure was a nullity which could not be cured and, despite the lack of any prejudice to the appellant, the confiscation order must be set aside.

If that ground fails, Mr Johnson advances the alternative ground that in any event the judge failed to specify the period for which he made the postponement, that failure itself being fatal to the subsequent confiscation proceedings.

The relevant provisions of the Act are as follows:

(b) if the court considers that, even though the prosecutor has not asked it to do so, it is appropriate for it to proceed under this section,

it shall act as follows.

(a) in subsection (4), the words “before sentencing or otherwise dealing with him in respect of the offence or, as the case may be, any of the offences concerned” were omitted; and

The effect of those provisions has been considered by this court on a number of occasions. It is now well recognised that the decision to postpone the confiscation procedure is a judicial decision involving the exercise of the court’s discretion: see, for example, Steele and Shevki [2001] 2 Cr. App. R. (S) 40, and Ross [2001] 2 Cr. App R (S) 484. The judicial decision must be made before sentence is passed and the decision must be made obvious by the judge. Potter LJ put the matter thus in Ross at Paragraphs 25 and 26:

It has since been made clear that it is not necessary for the judge actually to announce his decision before imposing sentence. What he must do is to reach a decision about whether or not to postpone the confiscation inquiry before sentence. If he does so, it matters not whether he articulates that decision before or after passing sentence: see Steven Davies [2001] EWCA(Crim) 2902.

In Davies (supra) prosecuting counsel made an application for a DTA inquiry prior to the imposition of sentence but asked the judge to postpone that inquiry until after sentence. He invited the judge to set a time-table, the suggested details of which he set out, adding that if his proposed time-table was ordered it would be possible to deal with the matter within the 6-month period. Counsel for the defence then addressed the judge in mitigation, confining herself to submissions about the length of sentence. She said nothing in response to the application to postpone. That contrasts with this case, where Mr Dein did make submissions about the application, making clear that the defence did not object to the postponement and simply seeking a shorter period for the Crown to set out its case. In Davies, having heard counsel on both sides the judge proceeded to pass sentence. He announced a sentence of 10 years imprisonment and immediately thereafter ordered that the defendant must disclose his assets on affidavit, directing that the prosecution would have 28 days thereafter to serve its case under the Act with the defendant having 28 days to respond.

The appellant appealed on the ground that the order directing an inquiry had been made after sentence had been passed. The court rejected that argument. Giving judgment, Pitchford J said:

The court distinguished Ross (supra) on the basis that there the court was concerned with facts which made it abundantly clear that the trial judge specifically did not make a decision whether to postpone his determination before passing sentence.

In this case we intended to hand down judgment on 8^th November 2002. However the court learned that three appeals raising similar issues had recently been argued before another division of this court (Lord Woolf CJ, Holland & Keith JJ) in Sekhon, Shangara Singh, Satnam Singh & Ors[2002] EWCA Crim 2954 and judgment had been reserved. We accordingly adjourned the announcement of our decision pending judgment in that case, which was handed down on 16^th December 2002. The judgment in this appeal must be read in the light of the conclusions in Sekhon et al (supra) and in particular the observations of the court about earlier decisions where confiscation orders have been set aside when there had been a failure strictly to comply with the statutory regime.

Basing his submissions on Ross, Mr Johnson submits that the judge did not make a decision that there was to be a postponement before he imposed sentence. Although the judge had invited submissions on the application for a postponement before sentence he did not rule on them before passing sentence. Further, having passed sentence he had to be reminded of the application under the Act by counsel. His observation before sentence – “I will deal with this aspect later then” - is described by Mr Johnson as the crucial observation. It demonstrates, he submits, that the judge was deferring the decision on postponement until later in the proceedings. Strength is added to that submission by the fact that the judge had to be reminded that he had failed to deal with the point in his sentencing observations.

For the Crown Mr Gratwicke submits that it is clear there was no dispute between the prosecution and the appellant that there should be a postponement. It was simply the timetable for service of the Statement which was in issue. He argues that the observations of the judge in dealing with the application demonstrate that he had already made a decision to postpone before ever he passed sentence and that he made that decision manifest by the words he used.

The words of the judge: “I am sorry, I should have dealt with that” related not to the decision (already taken) to postpone, but to the directions as to time for service of the Statement and Reply which immediately followed. That was plainly the case because Mr Dein had, prior to sentence, indicated that he had no objection to postponement, at which stage the judge proceeded to receive submissions as to directions on the basis that such postponement would occur. Thus, say the Crown, the judge made a judicial decision to postpone which he communicated to the appellant and his legal advisers in the course of the sentencing process.

Having considered the transcript of the proceedings we are satisfied that the judge did reach a decision on the application for postponement before passing sentence and, by the form of words he used immediately after announcing the sentence he made that decision manifest. In context, the judge’s words prior to sentence “I will deal with this aspect later then” referred not to the decision as to whether to order postponement (as to which there was no issue) but to the timetable in relation to the postponed hearing. We are not persuaded that the words after sentence “I am sorry, I should have dealt with that” are an indication that the judge had not reached a decision about postponement until reminded of the application. On the contrary, the words in our judgement demonstrate clearly that he had indeed reached a decision but had simply omitted to announce it before that point in the proceedings. It must have been manifest to anyone sitting in the Harrow Crown Court on 9^th December 1998 that Judge Lockhart had decided before sentence was passed to postpone the determination of the DTA inquiry. That ground of appeal accordingly fails.

We turn to the second ground of appeal, the alleged failure of the judge to specify the period for which the postponement was made. It was a failure of such a kind which was ultimately determinative of the appeal in Davies (supra). In that case on 16^th March 2001 the judge did postpone the inquiry, and set a timetable. But he gave no indication, nor did counsel on either side, as to when the hearing might take place. At a later hearing in August 2001, and after the decision of this court in Ross, the judge sought to justify his approach on the basis that the period of the postponement was the aggregate of the time fixed by his procedural timetable. Not good enough, said this court. At Paragraph 35 the court said:

Further support is given for this proposition by the recent decision of Pisciotto[2002] EWCA (Crim) 1592. In that case, at the sentencing hearing and before passing sentence, the Judge announced that he would adjourn the application under the Drug Trafficking Act so that the prosecution could serve the appropriate statement under the Act and the defence could serve any counter-statement. He indicated that he assumed that would take some time. The only reference to any length of postponement was that the matter would have to come back on a future date.

This court set aside the confiscation order later made on the basis that the judge failed to comply with the statutory requirements of Section 3. Giving the judgment of the Court, Keene LJ said:

Giving guidance to judges required to exercise this jurisdiction the Court said:

We respectfully endorse the general observations made by the court in Pisciotto. If it is possible to fix an actual hearing date for the confiscation inquiry, that is the best possible outcome. However the reality is that in many cases that will simply not be possible. It will not at that stage be known how long the hearing will take; further, the hearing date must accommodate (at the very least) the availability of the judge, two counsel, the witnesses and a court, not necessarily in the same building or even in the same town. Thus it will often be appropriate not to fix an actual date but simply to give directions in such a way that it is clear to all those affected that the confiscation inquiry will take place within a band of dates prior to the expiry of 6 months from the date of conviction.

We consider that the question for our determination is whether the proceedings before Judge Lockhart, considered in their entirety, were such that the judge failed to comply with the terms of Section 3(1) and (3). Mr Johnson submits that the transcript demonstrates a clear failure on the part of the Judge either to specify a period for the postponement, or to adopt the 6 month time limit, as in Pisciotto. All he ordered, it is said, is an exchange of information in such a way that it could not be clearly discerned for what period the postponement was ordered.

Again, we have considered the exchanges before the trial Judge. The Crown in making the application to proceed under the Drug Trafficking Act 1994 made it clear that it was their application that following the service of the appellant’s response by the end of March 1999 a hearing would take place in April/May 1999, which would of course have been within the 6-month period. Counsel for the appellant opposed the Crown’s application for a 2 month period within which to serve the Section 11 statement but himself envisaged a hearing in May 1999. The ruling of the trial Judge as to the time-table was consistent with a hearing in April/May 1999 as mooted by Counsel. If the judge had actually added to his order that the prosecution serve their statement under section 11 by 31^st January and the defence must serve their reply by 31^st March the words: “Thereafter the hearing will take place in April or May 1999”, there could be no complaint.

The order made by the judge, in the context in which he made it, demonstrates in our judgment that he had made following decisions: