Mustafa, R. v Ayhan

MR JUSTICE BUTTERFIELD: Ayhan Mustafa appeals against the terms of a confiscation order imposed following his conviction for conspiracy to supply a Class A controlled drug. The appellant was the principal in a well-established and extensive conspiracy to supply heroin. He was the organiser. He co-ordinated the supply of drugs and he and his fellow conspirators supplied heroin in industrial quantities over a significant period. In August 2004 in the Crown Court at Reading, the appellant was convicted of that conspiracy and sentenced to 15 years' imprisonment.

In March 2007 confiscation proceedings pursuant to section 6 of the Proceeds of Crime Act 2002 came before the same court. Those proceedings were compromised. The appellant accepted that the benefit figure properly attributable to his activities amounted to £3,675,000, with a recoverable amount of £1,159,000. The court imposed a confiscation order in the sum of the recoverable amount with a period of 5 years 6 months' imprisonment consecutive in default of payment. On 26th April 2007 the confiscation order was varied under the slip rule, some assets having been somewhat overvalued, and the recoverable amount was reduced by a few thousand pounds.

The benefit calculation, and indeed the recoverable amount, included a figure of £440,000 that represented the value of an interest in two flats at Frome Road in London. The sum was included in the benefit calculation because the court found that the appellant had an interest in the flats, that he had a criminal lifestyle within the meaning of section 75 of the Proceeds of Crime Act, and that he had benefited from his general criminal conduct within the meaning of that Act. The court therefore applied the assumptions within the Act and found that as the appellant's interest in the flats was property held by him after the date of conviction, it was obtained by him as a result of his general criminal conduct.

In September 2007 solicitors for the appellant's father wrote to the prosecution asserting a claim to a number of the assets that been included in the calculation of both the benefit figure and the recoverable amount. The assets to which the appellant's father laid claim included the flats at Frome Road.

In October 2007 the prosecution applied for the appointment of an enforcement receiver. That application was listed for a contested hearing, the appellant's parents claiming third party rights under section 69(3) of the Act with respect to certain of the assets, including the flats. The enforcement application, and the cross-application by the appellant's parents, came on for hearing before His Honour Judge Critchlow on 19th January 2009. The applications were resolved by consent.

In summary, the court appointed an enforcement receiver, with his appointment suspended until 14th April 2009. The flats at Frome Road were removed from the confiscation order, so far as they formed part of the recoverable amount figure, and from a restraint order that was in force in respect of the appellant's assets. The amount payable under the confiscation order was recalculated, by the reduction of the value of the flat, from £1,147,232 to £707,232. The appellant's parents agreed to pay off the balance of the total confiscation sum in instalments, with a final instalment due on or before 13th April 2009. Provided that sum was paid by the due date, the prosecution agreed that they would not oppose an application by the appellant to vary the confiscation order.

The order of January 2009 acknowledges that the flats at Frome Road did not belong to the appellant but to his parents. That is why the prosecution has agreed in principle that the amount of the confiscation order should be reduced. As the flats did not belong to the appellant, and never have done, they were not property held by him after the date of conviction, and accordingly they were not obtained by him as a result of his general criminal contact or unlawfully. That is the sole ground of appeal.

The Crown Court has ordered effectively that the confiscation order should be reduced by £440,000, in respect of the realisable amount, to reflect the acknowledged fact that the appellant does not have a realisable interest in the flat. However, the benefit figure has not been so reduced and there is no power to reduce it other than by appeal to this court. A reduction in the benefit figure would not be entirely an academic exercise. If the appellant were to acquire fresh assets in the future, it would be open to the prosecution to apply to the Crown Court under section 22 of the Act for an order to increase the amount of the realisable assets up to the amount of the appellant's benefit as originally found. It is therefore a matter of some importance to the appellant that the benefit figure should not, as it presently is, be artificially inflated. This court has jurisdiction to hear such an appeal notwithstanding that the appellant agreed the benefit figure at the confiscation hearing.

The respondents do not oppose this appeal and, for the reasons sufficiently expressed, we allow it and reduce the benefit figure in the confiscation order to the sum of £3,223,000. To that extent, and for those reasons, the appeal is allowed.