Hussain & Ors, R v

MR JUSTICE RICHARDS: On 5th February 2002, at Manchester Crown Court, after a trial before His Honour Judge Ensor and a jury, Sirmed Hussain, Thomas Joyce and Anthony Marshall were convicted of conspiracy to supply a Class A drug (cocaine). Hussain and Joyce were sentenced to 8 years' imprisonment, Marshall to 11 years' imprisonment. On 6th August 2002 they were each made subject to a confiscation order in the following amounts: Hussain £235,000 with a consecutive term of 3 years' imprisonment in default of payment; Joyce, £400,000 also with a consecutive term of 3 years in default, and Marshall £2,520,000 with a consecutive term of 5 years in default. A co-accused by the name of Lally pleaded guilty and was sentenced to 4 years' imprisonment. Two other co-accused by the names of Jarvis and Walker were acquitted.

All three appellants appeal with leave of the Single Judge against the confiscation orders made against them on 6th August 2002. Hussain also renews an application for leave to appeal against the custodial sentence of 8 years, following refusal by the Single Judge.

We can deal relatively briefly with the facts relating to the conspiracy offence itself. The period during which the three appellants and their co-accused were alleged to have conspired together to supply cocaine was from 9th to 15th May 2001. The evidence relied on by the Crown included observations by police officers conducting surveillance of comings and goings at the addresses of Joyce and Marshall, meetings in car parks and handovers of carrier bags, and the fact that the appellants were found in possession of large quantities of cash. There was expert evidence concerning the presence of minute traces of cocaine in the dust recovered from the seats and boots of cars belonging to Joyce and Hussain, and traces of cocaine were found on scales at a house used by Joyce and on a knife found on Marshall. Sheets of paper, alleged by the Crown to be dealing lists, were found inside the handles of two domestic brushes at Marshall's house.

As regards the chronology, on 9th May all three appellants were seen together at a car auction where Marshall bought a van. On 10th May Joyce called at Marshall's house four times, leaving each time within a short period with a carrier bag, following which he was seen to meet up with third parties. In the early evening of the same day Hussain visited Marshall's house before setting off to meet the co-accused Walker at a public house car park where he handed a carrier bag over to Walker.

On 14th May Hussain called at Joyce's house and handed over a carrier bag. Joyce took the bag and other items to his car. Joyce later parked his car alongside Lally's car in a car park and handed over the bag which Lally then put into the boot of his car. Lally's car was followed by the police and was stopped. Under some cardboard in the boot the police found two blocks of cocaine, weighing just under 1 kilogram at 25% purity and with a value of about £100,000.

In searches following the various arrests Joyce was found to have the sum of £5,000 in cash in his waistband. There was a cash counting machine and the sum of £1,900 at his girlfriend's house. Traces of cocaine were found on a set of scales at his home and cocaine dust was found in his car. Hussain was found with £2,000 in cash on him and a further £2,600 at home, together with two motorcycles acquired on hire purchase which were relied on as evidence of lifestyle. In addition cocaine dust was found in his car. In the case of Marshall the sum of £22,000 in cash was found at his home, together with a cash counting machine, plastic bags and the sheets of paper found inside the brush handles.

In sentencing, the judge said that there was clear evidence of a wholesale business trafficking in cocaine, passing it on to retailers to sell to users. He stated that the roles of the accused in the enterprise had been different and he took this into account in the sentences imposed. Marshall was the leader of the enterprise. It was an extensive operation and Marshall must have had a close connection with the masterminds and importers of cocaine. Joyce was Marshall's lieutenant. He ran Marshall's errands and was in active participation with him. He was more than a courier and in particular was trusted to move the valuable consignment of cocaine on 14th May. Hussain participated in a similar way to Joyce and the judge did not believe that he could distinguish them. Hussain was not just a courier but trusted on 14th May to take the parcel of cocaine to Joyce for onward transmission. Lally had been caught with that one consignment and was a trusted ally of the others but the sentence on him would be reduced quite considerably because he had pleaded guilty and saved the authorities substantial expense and time.

In support of Hussain's renewed application for leave to appeal against the custodial sentence Mr Barry, on his behalf, advances a number of points. He points out that this was a conspiracy lasting only about 5 days. The high watermark, so far as Hussain was concerned, was his carrying of what was subsequently discovered to be an amount of cocaine equivalent to 225 grams at 100% purity, though Mr Barry acknowledges that there was also other evidence concerning his involvement in the conspiracy. It is submitted that, having regard to the fact that Hussain was still relatively young (he was aged 26 at the time), this was his first experience of custody and he was of previous good character, and having regard to the sentence of 4 years imposed on Lally, albeit upon a plea, a sentence of 8 years on Hussain was manifestly excessive and involved an unjust disparity between Hussain and Lally.

We reject those submissions. In our judgment, the judge cannot be faulted in his description of this conspiracy as a wholesale business or in his assessment of the seriousness of the offence. Even for a relatively young man of previous good character, a sentence of 8 years' imprisonment after conviction was properly open to the judge. He had heard the evidence at trial and was best placed to assess the respective roles and degree of involvement of the various accused. Neither his decision that no distinction should be drawn between Hussain and Joyce, nor his decision to draw the distinction he did between those two appellants and the co-accused, Lally, could be said to give rise to any objectionable disparity. Accordingly, the renewed application for leave to appeal against the sentence of imprisonment in Hussain's case is refused.

We turn to the appeals of all three appellants against the confiscation orders made against them. At the material time the matter was governed by the Drug Trafficking Act 1994. Section 4 of that Act lays down the assumptions required to be made for the purpose of determining whether a defendant has benefited from drug trafficking and, if he has, of assessing the value of the proceeds of drug trafficking. Section 5 deals with confiscation orders and provides:

The confiscation proceedings in the present case were adjourned on 26th April 2002 and came back for hearing on 5th August 2002. In the meantime prosecutor's statements, under section 11 of the 1994 Act, were served in relation to each appellant and financial statements were prepared on behalf of each.

On 5th August, in the course of an introductory discussion, counsel for the Crown observed, in the context of the case against Joyce, that the contention as set out in the prosecutor's section 11 statement was that the total benefit was £1.7 million and the minimum benefit some £142,000. Counsel stated that provided the benefit figure was greater than the realisable assets, that is the realisable property within the meaning of the Act, the court might be more concerned with the realisable assets than with the details of the benefit. The judge responded that that was right. He did not want to enter into a fine argument as to whether it was £1.7 million or £142,000 if there was less than £142,000 available for confiscation. Counsel for the Crown said that the Crown did not necessarily ask the court to go into the minutiae of the benefit figure but was quite content for the court to take a pragmatic approach if that was thought to be appropriate and consistent with the legislation.

The court then heard evidence and argument. The officer who had prepared the section 11 statements confirmed their contents and was cross-examined. Each of the appellants gave evidence and was cross-examined. Other witnesses were also called on the appellant's behalf. On 6th August the judge gave his judgment. In the context of this appeal, it is a great misfortune that, because his microphone was switched off, the transcript of his judgment includes reference to many inaudible passages, making it very difficult to follow the detail of what he said. Nor has the court before it any other note of the full judgment, though Mr Price, for Joyce, has read out one part of a note taken at the time.

So far as one can tell, however, the judgment proceeded in this way. At the outset the judge said that he took into account that all the appellants had lied to the jury at trial and he rejected the further evidence of each of them at the confiscation hearing in its entirety. He said it was of no value to him. He took the same view of witnesses called by the appellants at trial and in the hearing before him. It had all been a complete pack of lies, a device to ensure that the ill-gotten gains from the drugs enterprise could be protected while they were able to do so. He expressed himself as satisfied that they had all benefited from trafficking in drugs and he went on to consider their individual involvement separately.

In relation to Joyce the judge found that the total benefit he had received was of the order of £400,000. He appeared then to find that the realisable assets were £70,000 or, more precisely, £70,116, but to make a confiscation order against Joyce in the sum of £400,000.

Next, in relation to Hussain, the judge found that the total benefit was £235,000. He appeared to find that the realisable assets were £63,447 but to make a confiscation order in the sum of £235,000. Finally, in relation to Marshall, the judge made a confiscation order in the sum of £2,520,000. The deficiencies in the transcript make it impossible to be sure at this stage what he was saying about benefit figures and realisable assets but it appears from later discussion that he had identified a benefit figure of £2,520,000 and a figure for realisable assets of £213,000.

After the judge had delivered the judgment prosecuting counsel addressed him and took him through the figures that he had stated, pointing out that if the judge was saying that the realisable assets were less than the benefit figure, then the confiscation order in each case should be for that lesser sum. In the course of dialogue with the judge, however, counsel elicited that the judge was not satisfied that the true figure for realisable assets in the case of any of the appellants was less than the benefit figure. The judge referred to the need for the appellant to disgorge funds secreted away.

The position apparently adopted in relation to the appellants emerges from this exchange between prosecuting counsel, Mr Cadwallader, and the judge in relation to Hussain:

The main submission made on behalf of all the appellants is that the position was very far from clear and the judge had indeed fallen into fundamental error. The matter was put in this way by Mr Mackinnon on behalf of Hussain. Mr Mackinnon pointed out that the judge had started by referring to a pragmatic approach and indicating that the concentration should be on realisable assets rather than spending time on the minutiae of the total benefit figure. It is said that at no time during Hussain's evidence was it put to him by prosecuting counsel, in cross-examination, that he had hidden assets in addition to the specific items listed as potential assets in the section 11 statement. It is further said that at no time did the judge suggest this, either during evidence or during the course of legal submissions. Reference is made to what was said in the judgment and the ensuing discussion. It is submitted that it is evident from the transcript - for all its deficiencies - that the judge got into a muddle about the application of section 5 of the 1994 Act. In particular, it was only when prosecuting counsel suggested that the sole possibility for reconciling the judge's confiscation order with section 5 was that the judge had concluded that there was money taking it up to the amount of the benefit figure secreted somewhere, that the judge had given any indication that this possibility was in his mind. During the entire two days of the hearing it is said that neither the prosecution nor the judge had previously mentioned that possibility of hidden assets and the defence had simply not been put on notice that this was a live issue. There had been specific examination of various items in the section 11 statement but the matter had not gone beyond that. It is therefore contended that everything points to the conclusion that the judge found as a fact, in his judgment at the conclusion of the hearing, that the realisable assets of Hussain were those that he had stated as realisable assets, namely £63,447 rather than the higher benefit figure. That is the figure that ought to have been included in the confiscation order.

For Joyce, Mr Price adopts Mr Mackinnon's submissions. He too says that he has no recollection of any reference having been made during the hearing to Joyce having had hidden assets or to there having been any similar discussion. Similarly, in relation to Marshall, Mr Dockery adopts the submissions already made. He has one additional point of detail specific to Marshall's case. His submission is not simply that the confiscation order should have been made in the sum of £213,000 mentioned by the judge as realisable assets, but in a lower sum because the judge was wrong to include one item in the figure for realisable assets. The reference is to a property which was assessed as having a value of £125,000. That property was purchased by the mother of Marshall's girlfriend for a purchase price of £48,000, of which £30,000 was funded by a mortgage. Marshall lived in the property with his girlfriend and her mother. It was not alleged by the prosecution that he had contributed to the deposit. The evidence against him related to cash lodgments in a bank account from which the monthly payments were made towards discharging the mortgage. Those cash lodgements were in a total sum of £47,392. Mr Dockery submits that, although the section 4 assumptions allow that expenditure to be treated as having been met out of the proceeds of drug trafficking and therefore that sum can be taken into account, there was no evidence going back to the date of acquisition and nothing to support the proposition that the defendant had acquired a beneficial interest in the property such that the current market value of the property could be taken into account. On that basis it is submitted that the £125,000 should be reduced so as to take account only of the cash lodgements of £47,392. That would produce a figure for realisable assets of £135,392.

For the Crown, Mr Cadwallader, who has appeared before us as he did before Judge Ensor, starts by reminding the Court of the provisions of section 5(3) of the 1994 Act. He submits that the burden of proof under that provision is on the appellants and that the standard of proof is on the balance of probabilities. The possibility of there being realisable assets beyond the known assets identified in the section 11 statements was, it is submitted, flagged up in those statements. For example, in the section 11 statement relating to Hussain, it is said that the onus is on the defendant to provide the court with full details of all his realisable property. The only person who can fully appraise the court of the true extent of realisable assets is the defendant. In the case of Marshall the section 11 statement also goes on to state that he appeared to have been involved in drug trafficking on a substantial scale for a considerable period and to have gone to some lengths to conceal his records and disguise the proceeds of his drug trafficking in order to avoid the making of a confiscation order.

So it is said that the issue had been raised. It is further submitted that the whole of the cross-examination of the appellants and their witnesses was designed to show that the case being put forward by the appellants was false, albeit Mr Cadwallader acknowledges that he cannot say that the cross-examination referred in terms to hidden assets. He submits that it is for each appellant to persuade the court, on all the evidence, that they had no other realisable assets. That they failed to do. The judge found that they had lied to the jury and that they had lied at the confiscation hearing itself. Their evidence had all been a device to ensure that the ill-gotten gains from the drug enterprise were protected. Once the judge rejected the defence evidence then, it is submitted, he had no choice but to make an order in the total amount of the benefit figure. No other evidence had been led that could justify his making an order in a lesser sum pursuant to section 5(3). Section 5(1) confers no discretion and required the result that the judge produced in this case.

Mr Cadwallader accepts that the judge, having dealt with the matter in this way at the outset of his judgment, then became muddled. What he submits, however, is that it is tolerably clear that the judge then proceeded in this way. First, he identified the benefit. Then he found the appellants had not discharged the burden of proving that their realisable assets were in a lesser sum than the total benefit, so it followed that a confiscation order had to be made in the full amount of the benefit. Third, the judge went on to deal with known realisable assets; he should not have done that and that was the muddle, but it does not alter the point that on the facts, as found, the judge had no choice but to make confiscation orders in the total amount of the benefit.

With regard to the separate point advanced by Mr Dockery, in relation to the property purchased by the mother of Marshall's girlfriend, Mr Cadwallader concedes that the point is well-founded.

As to the correct general approach to the making of confiscation orders under section 5, Mr Cadwallader is plainly correct. In particular, section 5(3) places the burden squarely upon the defence to satisfy the court that the amount that can be realised is less than the amount of the total benefit. This was confirmed in R v Ilsemann (1990) 12 Cr App R(S) 398, in relation to the materially identical provisions of the Drug Trafficking Offences Act 1986. Taylor LJ, giving the judgment of the Court, said this:

Nothing we say about the particular facts of the present case should be taken to detract in any way from those general principles.

The present case illustrates the problems that can occur if thos principles are not borne clearly in mind. Although we see considerable attraction in Mr Cadwallader's submissions that the judge's decision can be analysed in the way that he put forward, in effect as turning on the burden of proof, we have to say that we are very troubled by the judge's approach. The reasoning elicited by prosecuting counsel in enquiries made after the judgment had been given does not sit happily with the way in which matters were expressed in the judgment itself. In the judgment the judge made what were, on their face, specific findings about realisable assets, with not a hint that these were really just the figures for known assets and that, applying the burden of proof under section 5(3) and not being satisfied of the non-existence of secreted assets, he considered the true figure for realisable assets to be the total amount of the benefit. Account must also be taken of what was said at the outset about the need to adopt a pragmatic approach and to concentrate on realisable assets rather than dealing with the minutiae of the benefit figures if the realisable assets were lower. From what we have heard from counsel - we do not have a transcript of the evidence itself - it is not altogether clear whether or to what extent the possibility of hidden assets was explored in evidence, let alone to what extent the judge was applying his mind to the statutory test in section 5 by reference to such evidence.

It seems to us that there was a real muddle here and that it is far from clear that the judge had the correct statutory test in mind. Whatever conclusions might have been open to him had the matter been dealt with properly, we are not satisfied that he followed a process of reasoning that properly justified the making of confiscation orders in the full amount of the benefit. In circumstances where the judge has not applied his mind as he should have done to the statutory test, we do not feel able to accede to Mr Cadwallader's argument that confiscation orders in the full amount of benefit are a necessary result of the judge's rejection of the appellant's evidence. In the circumstances, this is not a satisfactory basis for the making of confiscation orders. Accordingly, for the reasons that we have given, we will quash the confiscation orders actually made and we will substitute orders in the following amounts. In the case of Hussain, the correct figure for the confiscation order is £63,447. We will specify a period of 21 months' imprisonment in default of payment. In the case of Joyce, the correct figure for the confiscation order is £70,116. Again, we will specify a period of 21 months' imprisonment in default of payment. In the case of Marshall, allowing for the additional specific point to which we have referred and which we accept, the correct figure is £135,392. In his case we will specify a period of 27 months' imprisonment in default. To that extent, and for those reasons, these appeals are allowed. The periods in default, as was specified below, are to run consecutively to the custodial terms imposed for the substantive offence.

We turn to consider a separate matter relating only to Sirmed Hussain. On 9th October 2002, at Manchester Crown Court, he was convicted on a count of possessing a controlled drug of Class A, namely cocaine, with intent to supply. On 22nd November 2002 he was sentenced by His Honour Judge Humphries to a term of 4 years' imprisonment to be served consecutively to the sentence of 8 years' imprisonment imposed on 5th February 2002, in respect of his involvement in a conspiracy to supply cocaine, the matter with which this Court has just dealt. That meant a total sentence of 12 years' imprisonment. He now renews applications for leave to appeal against both conviction and sentence, following refusal of leave by the Single Judge.

The facts are briefly these. In December 2001 police arrested a man named Jones in possession of cocaine. A search of the flat to which Jones had a key revealed about 2 kilograms of cocaine at 100% purity found in a holdall. Also discovered were scales, a Pyrex jug containing crack cocaine, a microwave oven, a vacuum packing machine, press and plastic bags. The jury were invited to infer that this was a crack cocaine factory.

The Crown alleged that the applicant, Hussain, had assisted in making crack cocaine or had been involved with the drug supplied. There was no direct evidence of involvement. Reliance was placed on the fact that his fingerprints had been found on a number of items in the flat which it was said showed his recent connection with the premises and with what was occurring there. The prints found were on a cardboard box in a closet, on the jug which had the crack cocaine in it, on a microwave oven, on plastic bags and a bin bag and on tape near the packaging machine, together with bags which had contained cocaine. There were also fingerprints discovered on a magazine at the premises.

The applicant remained silent during interview and did not give evidence at trial. The defence at trial pointed out that all the items on which his fingerprints had been found were portable and the fingerprints could not be dated. It was suggested that the applicant could have touched the items elsewhere before the items were placed in the flat. There was no evidence as to when the drugs had arrived in the flat, nor indeed any evidence that the applicant had been at the flat when they did arrive or at all, let alone when they were packaged. It was contended that the prosecution case was based on speculation and guesswork and that the argument put forward by the prosecution was not a valid one.

A submission of no case to answer was put forward on that basis, following the conclusion of the prosecution case. That submission was rejected, and the case went forward to the jury. The same defence was relied on before the jury.

In sentencing the applicant the judge said that there was no reason to believe that he was the leader of the enterprise, or that most of the drugs were his but he had played an important part. He had a previous conviction for the conspiracy offence, with which this Court has just dealt. The new offence was committed whilst he was on bail for the earlier offence so the sentence had to be consecutive. The judge said that he would have imposed a sentence of 8 years' imprisonment, but he reduced it having regard to the principle of totality. In that regard he took into account not just the sentence of 8 years imposed on the applicant for the earlier conspiracy but also the consecutive sentence that the applicant might have to serve in default of payment of monies under the confiscation order.

Mr Barry, in relation to the renewed application for leave to appeal against conviction, reminds the court that the relevant provision of the Misuse of Drugs Act 1971 is section 37(3), which states that for the purposes of the Act "... things which a person has in his possession shall be taken to be anything subject to his control which is in the custody of another."

What is submitted in this case is that there was no sufficient evidence upon which it could be said that the applicant was in control of the drugs that were found in the holdall at the flat. In particular, there was no evidence about the timings of the fingerprints that were found on the various items. Accordingly it is said that there was no proper inferential basis upon which it can be said that the applicant was controlling the drugs in the holdall. To the extent that it is said that this was a matter for the jury, what Mr Barry submits is that the jury were invited to make a series of inferences that simply went too far. This was too tenuous a basis upon which to be sure that the applicant had been in possession of the relevant drugs.

We reject those submissions. In our judgment, there was, here, a clear case to go forward to the jury. The series of fingerprints of the applicant, found on the various items to which we have referred, provided a basis upon which it was open to the jury to make the necessary inferences to sustain a finding of possession, notwithstanding the points made by the defence and put to the jury very clearly in the summing-up about the absence of evidence as to the time when the fingerprints were put on the articles and as to the time when the articles were taken to the flat, or the time when the drugs in question arrived at the flat. In our judgment, not only was this a case that could properly go forward to the jury but there is no arguable ground for doubting the safety of the conviction reached upon the evidence that we have summarised. Accordingly, the renewed application in relation to conviction is refused.

So far as concerns sentence, Mr Barry accepts that a consecutive sentence was here appropriate given, in particular, that the new offence was committed while the applicant was on bail for the earlier conspiracy offence. He accepts that the matter is made more serious by the fact of repeat offending within a very short time of that earlier offence. Nonetheless, he submits that if the cases had been dealt with at the same time the overall sentence imposed on the applicant should not have gone much beyond double figures. It is submitted that the sentence of 4 years that was imposed for the new offence was excessive, because it produced an excessive total when added to the 8 years for the earlier offence.

We have no hesitation in rejecting those submissions. It seems to us that the judge was entirely correct in what he indicated would have been the sentence if this offence had stood alone. He took proper account of the principle of totality in halving that sentence and, in our judgment, the resulting total was richly deserved. Accordingly, we also refuse the renewed application for leave to appeal against sentence.

THE VICE PRESIDENT: Mr Price, you had something to say?

MR PRICE: I am sorry about that. May I take it that the 6 months to pay runs from today and stands as part of the varied order?

THE VICE PRESIDENT: That would be very generous, bearing in mind the order was made 2 years ago.

MR PRICE: Once an application is lodged everything is suspended.

THE VICE PRESIDENT: Yes, very well. That applies to everybody- in so far as that order was made in relation to everybody, the 6 months applies in relation to all.

MR MACKINNON: My Lord, I hope that applies to Mr Hussain's order.

THE VICE PRESIDENT: In that I said it applied to "all", I think that is a safe assumption, Mr Mackinnon.