Hussain, R v

LORD JUSTICE LAWS: On 4th June 2008 before Her Honour Judge Barnes at the Kingston Crown Court Shabbir Hussain was convicted by the jury on five counts of possessing a controlled drug of Class C with intent to supply, and seven counts of evading the prohibition on the unauthorised use of a trademark in relation to goods. The drugs offences were charged as counts 1 to 4 and 6 on the indictment. The trademark offences counts 8 to 14. On 8th July 2008 the appellant was sentenced to concurrent terms of 4 years' imprisonment on each count. There were four co-defendants. The appellant now appeals against conviction by leave of the single judge limited to counts 2, 3 and 6. He renews his application in relation to counts 1 and 4. He also seeks leave to appeal against his sentence, that application having been referred to the Full Court by the single judge. This is the court's judgment on the appeal against conviction and the application for leave to appeal against conviction.

The appellant ran a business from his home called AST International, whose trade was the purchase and sale of medicines. He ran it by himself with help as and when from others. Two of his co-defendants, Zaidi and Abbas, were part-time employees.

On 13th June 2006 the premises were searched by officers of the Medicines and Health Care Regulatory Products Agency. Only the appellant was there at the premises when they arrived. The officers found a large number of perfectly legitimate products but also quantities of Class C drugs and counterfeit medicines in the shed, garage, loft and kitchen. Some were in boxes, some in bags, some just left open. During the search a man speaking Russian on his mobile and a little later the co-defendants, Zaidi and Abbas, arrived at the premises. The following class C substances (all steroids except for the Diazepam) were found.

Neither the appellant, his co-defendant, nor AST International had the required Home Office licence for the purpose of possessing, supply, importing or exporting any of these Class C drugs. There was a distinction between counts 2, 3 and 6, for which, it will be recalled, the single judge gave leave and 1 and 4 for which he did not. The drugs the subject of counts 2, 3 and 6 were not listed as Class C controlled substance in the Chemist and List Book produced at court by the appellant. His defence in relation to counts 1 and 4 was that he had not been in possession of the drugs covered by those counts at all. It is unnecessary to describe the counterfeit medicines that were found at the premises, there being no appeal in relation to the convictions on counts 8 and 14.

Officers seized a number of note pads and documents at the premises. They showed that the illicit products came from a company, Eurogulf, via legitimate couriers. Delivery addresses in the Hendon and Wembley areas appeared on some documents. The drugs had subsequently been taken to the appellant's address. The products were described on the delivery notes as vitamins and food supplements. Other documents recovered however showed the true contents of each of the parcels. A number of the delivery addresses used or said to be used were linked to the appellant and the co- accused. There were also seized a number of documents containing handwritten references to "Valium" and "DD", "Oxy" "Sustanon", "Susta" and "Sus" and also "Deca". However the Crown did not present any expert handwriting evidence relating to these materials. A laptop computer was seized. It showed that the appellant's own email account had been used in connection with the ordering of the illicit products. Some of the email exchanges with other parties continued across a number of months. There were also emails seemingly from the appellant to Zaidi giving him instructions about these products. Two mobile phones had been used, or so it appeared to keep track of the deliveries of the illicit products. Both phones were either registered in the name of the appellant or to his address.

The Crown case, on all counts, was that the appellant was running a business in the purchase and sale of Class C drugs.

The defence on counts 1 and 4, as we have said, was that the appellant did not know that the drugs referred there to there were on his premises. He ran the same defence on counts 5 and 7, on which he was acquitted. As for counts 2, 3 and 6, he accepted he had been in possession of the relevant drugs but his case was that he neither suspected or believed or had any reason to suspect or believe that the products named in those counts were controlled.

The appellant gave evidence in his own defence. He described his business. He said he thought that the drugs charged in counts 2, 3 and 6 were unclassified. He alleged that any illegitimate business, as was apparently disclosed by the documents, was being conducted in his absence by a man called Imran, who together with another man, Jawad, had effectively hijacked his business, taking the opportunity to do so because he, the appellant, had spent a lot of time in Pakistan visiting his sick mother. None of the incriminating emails, he said, had anything to do with him. He had purchased the laptop for Imran's sole use. In short he had never knowingly possessed Class C drugs save for those charged in counts 2, 3 and 6 which he did not realise were classified.

In relation to counts 2, 3 and 6 the appellant submitted at trial, at the end of the evidence and before closing speeches, that he could in any event only be guilty of possession with intent to supply, if it were proved that he intended to supply within the United Kingdom.

His case was that, as it were, if he intended to supply at all, he intended to send the products in question to third countries outside the European Union via professional courier services, as his skeleton argument before the Crown Court showed. He so asserted in a further (but not the original) defence case statement at trial.

His argument on counts 2, 3 and 6, therefore, on which the single judge gave leave is simple to state. The offence with which he was charged, provided for by section 5(3) of the Misuse of Drugs Act 1971, was possession of a controlled drug "with intent to supply it to another in contravention of section 4(1) of this Act". The appellant says that on the facts his case contemplated that there would be two transfers of the drugs: (i) the transfer to the courier, that would take place in England and Wales; (ii) the transfer by the courier to a customer abroad. While it is submitted that the first transfer to the courier would not amount to a supply at all within the meaning of Misuse of Drugs Act 1971 (see R v McGuinness[1987] 1 AC 303) and the second transfer from courier to customer abroad, while amounting to a supply, would not be in contravention of section 4(1) of the 1971 Act because that provision is of territorial effect within the United Kingdom only (see R v Seymour[2008] 1 AC 713).

The first point relating to transfer to the courier is clearly made good by what was said by Lord Keith in the McGuinness case. It is replicated in the appellant's skeleton argument. The passage relied on is replicated in the appellant's skeleton argument as appears at page 309 AB, and a further passage at 313D-E. So much then for the first transfer; however in relation to that, might it be said there is a distinction between transfer to a custodian or temporary keeper who is to transfer the drugs back to the person he got them from and transfer to a courier, whose obligation is to pass them onto a third party? That is a factual distinction from the McGuinness case. It seems to us the fact that the custodian may act for profit does not turn the transfer to him into a supply for the purpose of 1971 Act. The essence of a supply on Lord Keith's reasoning is "the transfer must be for the purposes of the transferee". We conclude that it is in effect beyond argument that the prospective transfer to the courier is not a statutory supply.

As for the second transfer, to the customer abroad, the appellant relies, as we have said, on R v Seymour[2008] 1 AC 713, cited in Archbold current edition paragraph 27-70. Seymour was a Privy Council case which concerned Bermudan legislation whose terms were identical to the relevant provision of the Misuse of Drugs Act. The Privy Council held that a supply, if it was to fall with the Bermudan statute, had to take place within the jurisdiction because of the presumption of territorial effect. That presumption of course is a general rule of the interpretation of criminal statutes.

There can, in our judgment, be no basis for not applying the reasoning in Seymour to this present case. Accordingly, if the intention may have been to supply customers outside the jurisdiction, no offence such as those charged in counts 1 to 4 and 6 could be committed. The learned trial judge never directed the jury that if they concluded that the drugs may have been intended for foreign customers that would not be a supply within the 1971 Act. No viable distinction can in our judgment be made between counts 1 to 4 and 2, 3 and 6. True it is, as we have said twice, that the appellant ran a different defence in relation to counts 1 to 4: indeed a defence that was inconsistent with his having supplied to anyone including foreign customers. But it is inescapable that if the jury were to convict, they could only lawfully do so on a proper basis, and a proper basis would only be established if the judge gave the jury the sort of direction to which we have just referred. She did not. The Crown submit, in paragraph 15 of their skeleton argument supported by Mr Bird's oral submissions this morning, that there was material to demonstrate that the appellant's account of supplying only foreign customers was false. We are by no means suggesting that there was no case against the appellant in relation to the possible supply of customers within the jurisdiction. As it happens the appellant distanced himself, or sought to distance himself from the incriminating documents at trial. It is entirely possible that the jury accepted that the supplies in the case were intended for third country customers but nevertheless convicted the appellant. They had no guidance as to how to deal with the position if they were satisfied that the supplies were only so intended. If they convicted the appellant while accepting that that is what might have happened, the convictions are unsafe, because they are in effect convictions of an offence not known to the law.

For those reasons we grant leave to appeal in relation to counts 1 to 4 and allow the appeal against conviction in relation to all counts to which that appeal relates.

We need not go into the details but it appears that subordinate legislation exempts a person in the appellant's position from any criminal liability for simple possession of drugs under the Misuse of Drugs Act such as those charged in counts 2 to 4 and 6, leaving only count 1 which was Valium. So we substitute a simple possession conviction in relation to count 1. The position then is that he stands convicted of simple possession of Class C drugs on count 1, and the convictions for the trademark offences remain.

In those circumstances you have an outstanding application for leave in relation to sentence, but quite apart from anything else it no needs to be adjusted given the offence that you are as now as it were relieved of.

LORD JUSTICE LAWS: We turn to the application relating to sentence. We grant leave.

The appellant is a man of 53 with no previous convictions. There are before the court as there were below character references in his favour. The judge below rightly emphasised the gravity of the trademark offences as well as those relating to drugs. As is submitted in a further written argument for the Crown, a sentence of 4 years may well be justified on past cases decided in this court for the offences of which the appellant still stands guilty. However, it seems to us that the appellant was sentenced to concurrent terms of 4 years for each of the offences for which he was before the learned sentencing judge, on the footing that was the judge's view of the appropriate totality, in the circumstances of this case. Justice would not be done if we now made no discount for the fact that he no longer stands guilty of possessing drugs with intent to supply.

We propose to quash all the sentences passed, to substitute sentences of 3 years' imprisonment concurrent for each of the trademark offences and a further sentence of 12 months' imprisonment, concurrent, on count 1. To that extent the sentence appeal succeeds.