Clark & Anor, R v [1996] EWCA Crim 1636 (5 December 1996)

THE LORD CHIEF JUSTICE: On 4 January 1995, in the Crown Court at Maidstone, the applicant John Preston Bentham pleaded guilty on re-arraignment to conspiracy to produce a controlled drug of class B, namely amphetamine, contrary to section 1(1) of the Criminal Law Act 1977. Sentence was adjourned pending a Newton hearing into the basis of the plea, an inquiry under the Drug Trafficking Offences Act 1986 and the trial of co-defendants. On 17 January 1995 the applicant Paul John Clark pleaded guilty on re-arraignment to the same count. In April and May there was a Newton hearing which extended over more than three weeks and an inquiry under the 1986 Act, at the end of which the case was adjourned with rulings having been given on various issues. The trial judge, His Honour Judge Griffiths, delivered judgment on 18 July 1995 and passed sentence on the two applicants as follows. The sentence in the case of the applicant Bentham was one of 12 years' imprisonment for the substantive offence. In addition, a confiscation order for £3,139,599 was made under the 1986 Act and a consecutive sentence of 10 years' imprisonment was imposed in default of payment. In the case of the applicant Clark, the sentence was one of seven years' imprisonment. Again a confiscation order was made under the 1986 Act, for £83,189.25 with a sentence of two years' consecutive imprisonment in default. Both applicants sought leave to appeal against sentence but were refused by the single judge following an oral hearing. Both now renew their application for leave to this court.

The thrust of the prosecution case briefly summarised was this. The Crown alleged that the applicant Bentham enlisted his nephew, the applicant Clark, and another friend Watkins (who was tried separately) to assist him in a conspiracy, which lasted for approximately 10 months, to produce amphetamine. On the Crown case the conspirators had acquired enough chemicals to produce 190 to 285 kilogrammes which would produce 3.8 tonnes of amphetamine sulphate, which in turn was estimated to change hands on the street for something up to £35m. The applicant Clark had some previous experience as a laboratory technician.

There was evidence before the trial court as to how amphetamine was made. Attention was in particular concentrated on the drugs which are used as ingredients in its manufacture, the most important chemicals being Benzylmethylketone (BMK), which is made from phenylacetic acid, acetic anhydride and sodium acetate. A reaction is then achieved with ammonium formate by boiling which produces amphetamine. There was expert evidence called at the hearing before the judge in order to elucidate these technical matters.

There was evidence that the ingredients were acquired in very large quantities by the two applicants from a number of different sources between 10 September 1992 and 25 May 1993. They were both involved; false names were used; accommodation addresses were used; and the considerable quantities of chemicals so acquired were those which are necessary for the manufacture of amphetamine. Since the purchase of some of the chemicals is notifiable, the police learned of these bulk purchases at an early stage and that enabled them to monitor what happened thereafter.

There was evidence that on 16 November 1992, relatively early in the history of the conspiracy, the applicant Clark bought a house known as Primrose Cottage, Wrotham, Kent, very largely with money supplied to him by the applicant Bentham. There was evidence to show that, preceding the purchase, Clark had deposited large sums of money in a number of different banks and building societies, enabling the inference to be drawn that he was anxious that the source of these monies should not be easily traced.

There was evidence of the purchase of a number of items necessary for this manufacturing process. The first of these purchases was dated back to 1980, a fact of some possible significance, when Bentham bought a blue metal cylindrical oven that could reach temperatures of over 1000 degrees centigrade. There was evidence of further purchases in June 1993 of a filtration funnel, and in July 1993 of the supply of a large boiling pot and of stainless steel tubing.

There was also evidence that both the applicants were seen at Primrose Cottage on a number of occasions. On one occasion Clark was seen taking in overalls; on another occasion he collected something from the boot of a car and took it inside; on another occasion while Clark was at the house the police saw smoke coming from the premises, and at that point Bentham arrived. Acting covertly, and without disclosing their presence, the police took samples of refuse and foliage from Primrose Cottage. These were tested and traces of amphetamine were found, indicating to their expert that amphetamine had been produced from BMK and that the BMK had been produced from phenylacetic acid.

On 23 July 1993 both applicants were arrested at Primrose Cottage. Searches were carried out. A number of exhibits were seized and a video recording was made of the scene at that time. The applicant Bentham's home address at Yew Tree Cottage, Snodland, was also searched. It was judged to be an illicit laboratory for the manufacture of amphetamine in substantial quantities. Barrels of phenylacetic acid were found which matched those ordered from one of the chemical suppliers. Also found were text books which explained the means of preparing BMK and explained the process used to convert BMK to amphetamine. There were also price lists and leaflets, some of them going back a number of years.

The inquiry which preceded the making of the confiscation orders was conducted pursuant to the Drug Trafficking Offences Act 1986. The object of that Act, as is common ground, is to strip drug traffickers of their ill-gotten gains, whether or not those gains are the product of the offence giving rise to the inquiry. It is in our judgment plain from the terms of the Act that Parliament recognised that it would in many cases be very hard, if not impossible, for the Crown to establish that funds held by a drug trafficker were indeed the product of drug trafficking, a matter which would ordinarily be outside the knowledge of the Crown and peculiarly within the knowledge of the drug trafficker. Accordingly the Act contains an unusual statutory assumption on which the court may rely, if it thinks it appropriate to do so, within the limits laid down in the Act. That assumption is in any event provisional, in the sense that it has to be rebutted by a defendant and shown to be an incorrect assumption to draw.

The effect and meaning of the Act have been summarised by Lord Lane CJ with characteristic clarity and accuracy in R v Dickens [1990] 2 QB 102, a judgment which is accepted by all parties as a correct statement of the law. The Act has also been considered in later authority, in particular R v Redbourne (1993) 96 Cr App R 201, R v Rose (1993) 97 Cr App R 253 and R v Khan (CA 26.2.96, unreported). Those decisions relieve us of the need to recite the terms of the Act or to attempt any comprehensive description of how the Act operates. It is clear to us that there are a number of stages in the application of the Act which it might nonetheless be helpful to summarise, stressing that we are not suggesting that these stages should be accomplished in a mechanical, chronological sequence. A trial judge may well wish to hear argument and evidence relative to one point before he forms a view on another. Nonetheless, the Act discloses, as we read it, a number of matters which the judge at first instance must at some stage of his inquiry consider.

The first question to be asked is: does the defendant appear before the Crown Court to be sentenced for one or more drug trafficking offences? That is the trigger of the procedures contained in the 1986 Act, as is evident from section 1(1). The definition of drug trafficking offences is found in section 38(1) of the Act. It is plain on the present facts (as all agree) that the answer is affirmative. That therefore is not a subject of contention in this case.

The next matter which must at some stage be considered is: in answering the second question, should the court make the statutory assumptions in section 2(3) of the Act? It is plain, as already indicated, that the court is not bound to do so. Under the Act, as it was enacted in 1986, the court has a discretion. That raises the question: in what circumstances should the discretion be exercised? That was the question to which Staughton LJ, giving the judgment of the court, directed attention in R v Redbourne at page 207, where he said:

"That takes us back to our own analysis of section 2(2) and (3) and Lord Lane CJ's judgment in Dickens and the contrary stance of this court in Redbourne, Rose and Chapman. It also leaves one still unanswered question. As Parliament gave the courts a discretion whether to make the assumptions in each case, what considerations did it have in mind should guide that discretion? We do not attempt to answer that question. It may be that Parliament has recognised the illogicality of giving such a discretion in relation to the initial making of the assumptions by making them obligatory, subject to certain derogations, in the consolidating and amending 1994 Act.

The next stage is in our judgment this. If the court provisionally decides or is minded to make the statutory assumptions in section 2(3)(a) or (b), then the court must go on to ask one or other of two questions. First: does the property appear to the court to have been held by the defendant at any time since conviction or to have been transferred to him at any time since 25 July 1987? That is the date relevant to this case. The second question is: was any expenditure of the defendant since 25 July 1987 met out of payments received by him? Those are factual questions to be answered on the basis of prima facie evidence.

One then moves on to the next stage which is this. If the court provisionally decides or is minded to make the statutory assumptions or either of them, it must then ask whether the assumption that property falling within section 2(3)(a) was received as payment or reward in connection with drug trafficking carried out by the defendant and whether the assumption that expenditure falling within section 2(3)(b) was met out of payments received by the defendant in connection with drug trafficking carried out by him were shown to be incorrect in the defendant's case and if so to what extent. That inquiry reflects the exception in section 2(2) of the Act when applied to the assumptions in section 2(3)(a) and (b).

The next stage is to ask, applying the assumptions, or in the light of other evidence, or both, whether the court determines that the defendant has benefited from drug trafficking and if so what is the value of his proceeds of drug trafficking. That inquiry reflects section 2(2) of the Act and also section 2(3)(a), (b) and (c) of the Act. The question then arises: what is the amount to be recovered from the defendant? That is the question provided in section 1(4), section 4 and section 5 of the Act. The court, having answered that question (assuming it reaches that stage), is then obliged to make an order in that sum by section 1(5)(a). It is, however, important to record that it is open to a defendant to return to the court for variation of the confiscation order if the realisable property is shown to be inadequate for the payment of the amount remaining to be recovered. So much is provided by section 14(1).

With that by way of preface we turn to the specific complaints which are made on behalf of the applicant Bentham. In presenting his first complaint it is accepted that the judge recognised that the making of the statutory assumptions was a matter for his discretion. Furthermore it appears from his judgment that he recognised that the assumptions, if made, might assist the court to be satisfied so as to feel sure that the prosecution had made out its case. Counsel representing Bentham criticises the judge for having erroneously concluded that the court could make the assumption merely on prima facie evidence that the property had been held or transferred or expended within the scope of the Act.

There is, in our judgment, some force in this criticism of the learned judge's approach. It is one thing to exercise a discretion to make an assumption; it is another to identify the property or expenditure to which, if the assumption is made, it may be applied. The judge did, in our judgment, fall into the error of treating the identification of the property or expenditure to which, if the assumption were made, it could be applied as itself a ground for exercising that discretion. This was, as we read it, a "boot straps" argument, involving a logical error.

It was not however, in our judgment, an error which vitiates the decision of the judge, because if he had approached the exercise of the discretion in what we would consider a correct manner, he could not, in our view, have reached any conclusion other than that the statutory assumptions should be made. So much is, in our judgment, quite plain from the passage in his judgment where the learned judge gives his reasons for holding that the assumptions had not been shown to be incorrect. That is a passage dealt with in particular on page 21 and following of his judgment. It has to be recalled that the applicant Bentham was coming before the court as a multi-millionaire, namely as a man with assets running into millions. He also came before the court as a man with a very serious criminal record, having been released from an 11-year sentence for robbery in 1977. The judge, having had the opportunity of absorbing his evidence on more than one occasion, formed the conclusion that it was not only entirely unreliable but that at an earlier stage in the proceedings it had been perjured. In the course of his evidence seeking to justify his enormous assets, the applicant Bentham claimed to have a number of business interests which the judge referred to in his judgment. There was, however, nothing to substantiate those alleged business interests -- no records, no accounts, no tax returns, no documents of any sort and no supporting evidence which weighed with the judge. He furthermore was entitled to conclude, in the light of the evidence before him, that the applicant Bentham was by no means a man without knowledge of the drugs field. He had first begun to acquire equipment necessary for this purpose in 1980; he was in possession of leaflets dating back to the 1980s; he had a price list also dating back to the 1980s; there was a transcript of a conversation suggesting some significant knowledge of the drugs market; and there was, as is clear from the judge's conclusion, no explanation which began to hold water as to where these very large sums of money had come from if they had not come from trafficking in drugs.

The second complaint argued on behalf of the applicant Bentham is that the judge erred in law in concluding that the words "held by him since his conviction" in section 2(3)(a)(i) of the Act applied to any property or funds held by a defendant on the date when he was actually convicted, irrespective of the date at which he had begun to hold them. That argument is in our judgment incompatible with the decision of this court in R v Chrastny (No 2 ) [1991] 1 WLR 1385 at 1392F, as Mr Jones, on behalf of the applicant, was constrained to acknowledge. In our judgment the ruling of the court in that case, which is in any event binding, was plainly correct on the unambiguous language of the statute.

The third complaint advanced on behalf of this applicant turns on two documents: 'appendix L', which contains a summary of Mr Bentham's cash expenditure, and 'appendix M', which summarises the applicant's assets in property, bank accounts, vehicles and cash. The complaint made is that the learned judge should not have lumped all the items in both these schedules together and dealt with them on an aggregate basis. Instead it is argued that he should have taken each of the items one by one and considered in respect of each whether the statutory assumption could safely be made in regard to that item, and whether the statutory assumption was displaced in regard to that item. It was (in counsel's submission) wrong of him to treat all the items together.

We would, for our part, accept that there may very well be cases in which the 1986 Act inquiry could not be fairly carried out without taking in turn each item alleged to be covered by the assumptions and considering both the evidence in relation to it and the evidence relied on to displace the assumption. Here, however, in our judgment, there was no need for that approach to be followed and it would indeed have been inappropriate to follow it. The applicant was unable to satisfy the judge that he had throughout the period since his release from prison had any significant source of income other than the proceeds of drug trafficking. Although it was apparently suggested that some of the money was the result of other crimes, in particular (as it was understood) other armed robberies, nonetheless no indications were given which would have entitled the judge to make any finding on that basis. It was in the circumstances open to the applicant to prove other sources and dispute specific items, but since he failed to satisfy the judge that he had any source of income other than the inferred income from trafficking in drugs it was, in our judgment, appropriate for the judge to approach the matter in the manner in which he did.

The fourth complaint has not in the circumstances been pursued. The complaints numbered 5, 6, 7, 8, 9, 10 and 13 all relate to specific items of property and are complaints that the learned judge did not treat these specific items as he should have done. In our judgment he was entitled to apply the assumptions in relation to them for reasons we have already given. All these items, some of them property, some of them cash, fell within section 2(3)(a) and (b) and in all the circumstances the judge was fully entitled to hold that those assumptions had not been shown to be incorrect. In the circumstances therefore those complaints cannot succeed.

So far as the eleventh complaint is concerned, it is said that the judge erred in equating a gift with expenditure. In our judgment expenditure means any form of disbursement. It would indeed be absurd if, by giving something away, a drug trafficker could remove it from the application of the Act. The inference that that is not permitted is very strongly reinforced by section 5(9) of the Act. We would reject this complaint.

The twelfth complaint, which although it appears in the notice has not been argued orally by Mr Jones, is that the judge was wrong to treat two Liberian companies which held property or funds as being agents or nominees of the applicant Bentham or as being a sham. In our judgment the judge was fully entitled to treat those Liberian companies in precisely that way. There is nothing to suggest that these companies were anything other than the applicant's alter ego.

However, there are further grounds advanced by him which call for more specific treatment. It is argued on his behalf that the evidence before the court did not justify the judge's conclusion that at the time when Clark received money from Bentham to purchase Primrose Cottage he (Clark) had intended to use those premises for the manufacture of drugs. In our judgment the judge's ruling on that point was abundantly justified. It appears that Bentham gave Clark a very large sum of money for the purchase of his house (something in excess of £100,000), but there was evidence that he himself intended to retain a measure of control over it. There was evidence strongly suggesting that the funds used to purchase the house were distributed in a number of different accounts in order to conceal their origin and it is the case that the purchase of this house coincided with the delivery of a tonne of ammonium formate to the third conspirator. Furthermore, it appears that this house was used for the purpose of manufacturing drugs. That being so, it appears to us that the judge was fully justified in treating this house in the way in which he did. It is then said that the judge miscalculated the sums which had been received by Clark from Bentham towards the purchase of Primrose Cottage and failed to give any or any proper consideration to the origin of monies that were in Clark's bank or building society accounts before the purchase. It is, as already mentioned, the case that the full purchase price did not come to Clark from Bentham. Nonetheless the overwhelming bulk of the funds did come from Bentham and the figure which the learned judge treated as the recoverable figure was less than the sum assessed to be the overall receipt from drug trafficking of Clark. Accordingly it would make no difference, and therefore avail this applicant nothing, even if a nominal reduction were to be made.

It was argued that the learned judge should not have accepted the figure which was given for the value of this house. The value which he took was within the range given to him in evidence and his duty, under section 4(3) of the Act, was to treat as the amount to be recovered in the confiscation order the amount appearing to the court to be the amount that might be so realised. It is plain that the sum which the judge included was the sum which appeared to him to be the amount that might be so realised. That was, in our judgment, a sustainable conclusion.

The same applies to the car which was the subject of similar criticism. There was also an argument that the judge should not have treated this car as a benefit from drug trafficking. In our judgment the judge was fully entitled to make the statutory assumption in relation to it. The car was used to collect a drum of chemicals from the third conspirator. It was the car which adopted a route judged to be chosen for the purposes of avoiding surveillance and it was a car which, although registered in the name of Mrs Bentham, was the subject of a free gift by Bentham to his nephew. We have been reminded of the authority of R v Osei (1988) 10 Cr App R(S) 289, and we conclude that this was a reward which could properly be treated as a benefit from drug trafficking.

THE LORD CHIEF JUSTICE: We have now heard argument on two matters which were not the subject of the judgment given earlier this afternoon. Both applicants seek leave to challenge, first, the period of imprisonment ordered to be served in default of payment of the sum payable under the respective confiscation orders. In the case of the applicant Bentham the period ordered to be served in default was 10 years' imprisonment consecutive. In the case of the applicant Clark, the period ordered to be served in default was 2 years' imprisonment consecutive. Those orders were made by virtue of section 6 of the Drug Trafficking Offences Act 1986, which makes section 31(3)(a) of the Powers of Criminal Courts Act 1973 applicable in these circumstances. It was obligatory to impose such a term of imprisonment in default, as is made plain by section 31(2) of the 1973 Act and R v Popple (1993) 14 Cr App R(S) 60 at 64.

It appears to this court that the question which a judge must ask himself when imposing a period of imprisonment in default is this: What period of imprisonment not exceeding the statutory maximum is necessary to coerce this defendant into realising and paying the sum payable under the confiscation order? It is, as we see it, plain that the larger the sum of money to be paid, the greater the incentive to serve an additional term of imprisonment to avoid payment. The court is accordingly entitled to take account of that factor when making its judgment as to what period should be served in default, and it is also entitled to rely on its assessment of the defendant gained in the course of the proceedings. Further, it is to be borne in mind that the term of imprisonment to be served in default is not served if payment is made and that there is a procedure, to which we have already referred, for varying the amount of the confiscation order if it turns out that a defendant has been ordered to make a larger payment than his assets realise.

Taking account of those factors in the case of the applicant Bentham, it is apparent that the sum of money which he is ordered to pay exceeds by a substantial margin the maximum figure of £1m from which the highest bracket starts. The learned trial judge had every opportunity to assess his character and the likelihood of payment. In all the circumstances we conclude that there is no basis for holding that the term of imprisonment which he ordered to be served in default was longer than that necessary for ensuring that the sum ordered to be paid was in truth paid.

A similar argument has been advanced on behalf of the applicant Clark. In his case the figure which he is ordered to pay under the confiscation order is not the maximum in his bracket, but it is a good deal closer to the top of the bracket than to the bottom. Again the judge had the opportunity of hearing Mr Clark and assessing the probability of payment, albeit in the smaller sum which he was obliged to pay. We have no reason for concluding that the period of two years' imprisonment, which he ordered to be served in default, was longer than was necessary for the purpose indicated. We do not therefore grant leave to appeal against the term of imprisonment ordered to be served in default.

The next matter raised on behalf of each applicant relates to the term of imprisonment imposed on each, in Bentham's case 12 years and in Clark's, seven. The argument on behalf of Bentham has been put under three heads: first, that insufficient credit was given for the applicant's plea of guilty; second, that the sentence imposed was manifestly excessive, having regard to the circumstances of the case and the role played by Bentham; and third, that insufficient allowance was made for the revised early release provisions under the Criminal Justice Act 1991.

The first argument is founded in particular on the fact that, when passing sentence, the learned judge did not say to Bentham that he was giving him credit for his plea of guilty. He did, however, observe at page 34C that the potential yield of Primrose Cottage was enormous, and in his view would justify the maximum sentence. It is furthermore clear that he must have had in mind that both the applicants had pleaded guilty since he had been concerned intimately in the case over a period of months. In addition, it is apparent that he did impose a sentence which was below the maximum, despite his view that the offence would justify the maximum.

It is not in the circumstances to be held against either applicant that his plea of guilty was entered at a late stage. But it is true, particularly in the case of Bentham, that having entered his plea he had then at length given evidence which was inconsistent with his plea and had denied conspiring with those whom he had pleaded guilty to conspiring with, and thereby deprived himself of some of the benefit which would ordinarily have flowed from his plea of guilty. It is also true that the facts of this case were such that the possibility of successfully contesting the charge would have been very slight. In those circumstances we are not satisfied, despite his absence of an express reference to giving credit for the plea, that the judge failed to do so, or that he should have given more credit than he evidently did.

So far as the sentence being manifestly excessive is concerned, reliance is placed in particular on two cases: first, R v Shaw (1986) 8 Cr App R(S) 16, in which, on a plea of not guilty in a similar case, a sentence of 10 years' imprisonment was described as "thoroughly merited", though it is not apparent what the court felt an appropriate sentence would have been; it simply declined to reduce a sentence of 10 years'. So far as the second case is concerned, R v Popple (1993) 14 Cr App R 60, a sentence of 14 years' imprisonment was reduced to 12 in relation to an offence of a somewhat similar character to this, simply because no credit whatever had been given in a case in which a plea of guilty had been entered.

Those amounts were 3.8 tonnes of amphetamine sulphate with a street value of £35m. Although it appears that in some respects the equipment which the applicants were proposing to use was rudimentary, it also appears that they were in a position to produce large quantities of this prohibited controlled drug. Further, it must be borne in mind that, after the first batch had been duly made, there would no doubt be the capacity to make subsequent batches. It is also evident that they were succeeding, by one means or another and in one place or another, in producing amphetamine of a very high level of purity. However rudimentary their hardware, therefore, it certainly would appear that they had the skill, the expertise and the materiel necessary to produce a controlled drug of very high purity. In all those circumstances we do not conclude that the sentence imposed by the judge was manifestly excessive in Bentham's case.

Thirdly, it is submitted that insufficient allowance was made for the revised early release provisions under the Criminal Justice Act 1991. Reliance was placed on the Lord Chief Justice's Practice Direction relating to that Act and its effect on length of sentences. In this particular case we do not conclude that any reduction from the level of sentences imposed is justified since this is not a class of case in which early release, even under the old provisions, would have been expected. In the case of the applicant Bentham therefore we do not grant leave to appeal against sentence.

We turn to the case of the applicant Clark. The grounds relied on are essentially the same. So far as credit for the plea of guilty is concerned, the same argument is not readily available. It is true that in his case also no reference was made to his plea of guilty, but it passes belief that the trial judge did not have that in mind. He was in the best possible position to judge the relative responsibilities both of these two applicants and of the third conspirator who is not before us. We do not therefore conclude that insufficient credit was given to the applicant Clark for his plea of guilty.

We have considered whether in his case the sentence was manifestly excessive. Particular reliance was made in argument by Mr Turner on his behalf of the alleged lack of sophistication. We have already referred to that. The dominant facts here are that, however unsophisticated they may in some respects have been, the applicants had the capacity to produce large quantities of a controlled drug and apparently had already done so in circumstances which enabled them to produce a high quality of product. Furthermore, as we have already indicated, the figures only relate to the first batch; there was nothing to prevent subsequent batches. Again we repeat: the judge was in much the best position to make sure that his sentences reflected the relative responsibility of the three conspirators and we can see no reason to interfere.

England and Wales Court of Appeal (Criminal Division) Decisions

PAUL JOHN CLARK JOHN PRESTON BENTHAM, R v. [1996] EWCA Crim 1636 (5th December, 1996)

	[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	England and Wales Court of Appeal (Criminal Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Criminal Division) Decisions >> Clark & Anor, R v [1996] EWCA Crim 1636 (5 December 1996) URL: http://www.bailii.org/ew/cases/EWCA/Crim/1996/1636.html Cite as: [1996] EWCA Crim 1636, [1997] WLR 557, [1997] 2 Cr App R (S) 99, [1997] 1 WLR 557