Davis, R. v

LORD JUSTICE MOORE-BICK: On 31st March 2008 at the Crown Court at Chelmsford, before Mr Recorder Abell, this appellant pleaded guilty on rearraignment to obtaining a money transfer by deception (count 4 of the indictment). On 4th April, before the same judge, the appellant was convicted by a majority of 11 to one of acquiring criminal property (count 3 of the indictment). On 25th July 2008 he was sentenced to 18 months' imprisonment on count 3 and 6 months imprisonment on count 4, to be served consecutively.

He now appeals against conviction on count 3 alone by leave of the single judge.

Before describing the circumstances which gave rise to the appellant's conviction, it may be helpful to refer briefly to the legislation under which he was charged. Section 329(1) of the Proceeds of Crime Act 2002 provides as follows:

Section 340 provides that for the purposes of Part 7 of the Act, which deals with money laundering and within which section 329 falls:

Subsection (4) provides:

However, section 329(2)(c) provides that a person does not commit such an offence if he acquired or used or had possession of the property for adequate consideration.

Count 3 of the indictment concerned a sum of £82,000, which was part of a larger sum of £220,000 which had been obtained from the Chelsea Building Society by means of a forged cheque made out in favour of "Simply Lighting", a trading name used by one Simon McLellan. The cheque, which was dated 18th May 2006, was presented for payment on 24th May 2006 and the proceeds paid into the Simply Lighting bank account. McLellan later pleaded guilty to one count of using criminal property between 23rd May and 6th June 2006.

On 31st May £82,000 was paid out of the Simply Lighting account into the appellant's account with the Woolwich Building Society. Thereafter, various amounts of money were withdrawn from the appellant's account, either in cash or by transfers into other accounts.

The prosecution's case was that the sum of £82,000 was criminal property because it was or represented the proceeds of crime, having been stolen from the Chelsea Building Society and subsequently laundered by McLellan through the Simply Lighting bank account. It was said that the appellant knew or suspected that to be the case.

The appellant's case was that the money had been paid to him to settle gambling debts. The prosecution said that that was simply a smokescreen to explain the sudden appearance of a large amount of money in his bank account.

The sole ground on which the single judge gave leave to appeal in this case is that the Recorder failed to give the jury a proper direction in relation to section 329(2)(c) because he failed to tell them in terms that if the property had been acquired for adequate consideration, it did not matter that the appellant suspected, believed or even knew that it represented the proceeds of crime.

The Recorder directed the jury as follows:

It will be seen that in the first part of that passage the Recorder was directing the jury in relation to the state of mind necessary to be guilty of this offence. In the second part, he was directing himself first to the question of adequate consideration and then to a summary of the defendants' cases.

It is true to say that the Recorder did not deal with the question of adequate consideration at great length, but in truth there was not much more that he could have said about it in this case. In some cases there may be room for argument about whether the consideration, usually the amount of money that has changed hands, was a fair reflection of the value of the goods or services for which it was paid, but in this case the issue was whether there had been any gambling debt at all, not about the amount of any such debt.

Mr Cogan drew our attention to the case of Hogan v Director of Public Prosecutions [2007] 1 WLR 2944, in which one finds in paragraph 16 the following comment:

As one can see from the report itself, the principal issue in Hogan was whether the question of adequate consideration was to be judged objectively and, more importantly, upon whom lay the burden of proof. It was not a case concerned with the manner in which to direct a jury in a case of this kind and the sentence to which we have drawn attention was simply a comment made in passing.

The submission in this case is that the Recorder ought to have emphasised that the defence of adequate consideration was separate from that of not knowing or suspecting that the money was the proceeds of crime. Indeed, Mr Cogan submitted that it was incumbent upon the Recorder to direct the jury using words substantially the same as those to be found in the passage in Hogan to which we have referred.

However, it seems to us that the nature of the direction required in any particular case will depend on the circumstances of that case. Here the issue was very simple: was the £82,000 paid in settlement of a gambling debt? Having dealt with the need to prove knowledge or suspicion, the Recorder told the jury that the prosecution also had to prove that the money was not acquired for adequate consideration, in other words not in satisfaction of a gambling debt. It is accepted that that was a correct statement of the law and in our view it was an adequate direction to the jury. Moreover, he went on to summarise the defendants' case in a nutshell by saying that they neither knew nor did they suspect that the money credited to their accounts was the proceeds of crime, and also pointed to the fact that it was acquired for adequate consideration.

In our view, the directions given to the jury in this case were quite clear and there is no ground for saying that the conviction is unsafe. Accordingly, the appeal must be dismissed.

Nonetheless, Mr Cogan, thank you very much for your assistance.

MR COGAN: Thank you, my Lords.