No: 200503280/B3 
Neutral Citation Number: [2006] EWCA Crim 872
IN THE COURT OF APPEAL 
CRIMINAL DIVISION 
Royal Courts of Justice
Strand
London, WC2 

Thursday, 9th March 2006
 
B E F O R E:

LORD JUSTICE MAURICE KAY 

MR JUSTICE DAVID STEEL 
 
THE RECORDER OF MANCHESTER
(Sitting as a Judge of the Court of Appeal Criminal Division) 

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R E G I N A 

-v- 

ALAN CHRISTOPHER TAYLOR
 
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MISS S NAQSHBANDI appeared on behalf of the APPELLANT
MR P ROGERS appeared on behalf of the CROWN
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J U D G M E N T
1.	THE RECORDER OF MANCHESTER: On 4th March 2003 at the Crown Court at Lewes the appellant, Alan Christopher Taylor, was convicted of various offences.  There were six counts on the indictment altogether: counts 1 to 3, possessing the class A drug heroin with intent to supply it; count 4, assault with intent to resist arrest; count 5, possessing a prohibited firearm; and, count 6, possessing ammunition without a firearms certificate.  He was sentenced by His Honour Judge Hayward to serve a total of 14 years and nine months' imprisonment.  On 11th August 2003 a drug trafficking confiscation order was made in the sum of £90,269.96 with two years' imprisonment consecutive being ordered in default of payment within 12 months.
2.	He appeals against the confiscation order on a reference by the Criminal Cases Review Commission under section 9 of the Criminal Appeal Act 1995 on the basis principally that the calculation of the proceeds of drug trafficking contained an error to the extent of £7,000.
3.	In view of the subject matter of the appeal it is not necessary to recite the facts in any detail.  Suffice it to say, that the case arose out of the finding of substantial quantities of heroin at the appellant's flat in Redhill and at two storage units in Brighton, the finding of a semi-automatic handgun and 42 rounds of ammunition at another storage unit in Redhill, and the appellant's assaulting a police officer during the course of his arrest.  All of the offences were committed in June 2002.
4.	A hearing within the confiscation proceedings took place on 7th July 2003.  By that time the prosecution had served on the court and the defence a statement pursuant to section 11 of the Drug Trafficking Act of 1994, that being the statute that governed the confiscation proceedings.  The appellant had been ordered to serve a response to the section 11 statement by 6th May 2003 but had failed to do so.  
5.	The first decision that the judge would ultimately have to make under sections 2(2) and (4) of the 1994 Act would be whether or not the appellant had benefitted from drug trafficking and, if so, in what sum.
6.	At the hearing of 7th July the prosecution submitted that the appellant had benefitted in the total sum of £97,269.96.  The total sum was itemised on page 6 of the section 11 statement.  Of this total sum it is necessary to refer to two component parts.  One was a sum of £7,000 that had been found in the appellant's possession on 18th May 2000 on his arrest for an earlier drugs offence.  The other was cash expenditure in the total sum of £19,385.16.  That total was further broken down into 28 separate items in the appendix to the section 11 statement and, insofar as those items of expenditure were dated in the appendix, the earliest was on 6th November 2001 and the latest on 11th June 2002.  We have been told by Mr Rogers, who appears today on behalf of the respondent, that the undated items related to expenditure incurred at or around the time of the offences, which, as we have indicated, were committed in June 2002.
7.	At the hearing in July 2003 Mr Wakeham, counsel then representing the appellant, made two observations about the £7,000.  First, he said that the appellant had satisfied the police back in 2000 that this £7,000 had come from a legitimate furniture business whereupon the money had been returned to the appellant.  The £7,000, it was said, should, therefore, not be taken into account.  Further, Mr Wakeham said that the case should proceed on the basis that the total cash expenditure of £19,385.16 had been met as to £7,000 from what may be referred to as the furniture business money returned to the appellant.  Thus, said Mr Wakeham, the £7,000 should, in effect, be deducted twice and the benefit figure contended for reduced by £14,000 to £83,269.96.
8.	The prosecution were taken by surprise by what was being said about the £7,000 and not surprisingly so given the absence of any defence response to their section 11 statement.  The prosecution asked for time to investigate the matter.  The judge postponed the confiscation proceedings until 11th August 2003, and, again, ordered the appellant to serve a response to the section 11 statement, this time by 25th July 2003.
9.	By 11th August 2003 there was still no defence response to the section 11 statement.  However, prosecution enquiries had established that the £7,000 had indeed been treated as unconnected with drug trafficking and had been returned to the appellant in August 2000.  Accordingly, the benefit contended for by the prosecution was reduced to £90,269.96 and, indeed, that figure was agreed in terms by Mr Scamardella, who now appeared as counsel for the appellant.  The point that of the cash expenditure of £19,385.16, £7,000 should be assumed to have been met from the money returned to the appellant in 2000, was not pursued.
10.	Attention was then turned to the realisable assets of the appellant and these, too, were agreed in the total sum of £44,534.80.  
11.	Argument then followed as to whether the confiscation order should be made in the sum of £90,269.96 or £44,534.80.  For present purposes it suffices to say that in reliance on the case of R v Islemann 12 Cr App R(S) 398 the learned judge accepted that the confiscation order should be made in the greater sum.  He allowed 12 months for payment and, as we have indicated, ordered a consecutive sentence of two years in default of payment.
12.	The appellant then sought leave to appeal against the amount of the confiscation order and, indeed, the period of imprisonment in default, but leave was refused by a single judge of this court on 18th November 2003.
13.	Undaunted, on 12th January 2004 the appellant applied to the Criminal Cases Review Commission for a review of various aspects of his case relating both to conviction and to sentence.  Of these the Commission considered that only one, relating to the confiscation order, should be referred to this court.  The argument submitted by the Commission, and adopted by the appellant today and by Miss Naqshbandi on his behalf, is exactly the same argument as that originally submitted by Mr Wakeham on 7th July 2003.  In the circumstances, no useful purpose would be served by repeating it.  The upshot is a submission that the amount of the confiscation order should be reduced by a further £7,000.
14.	The Commission did consider whether the point that Mr Scamardella had accepted the benefit figure of £90,269.96 precluded an appeal to this court against that figure.  Without having heard full argument on the point, we are prepared to assume for present purposes that we do have jurisdiction to hear the appeal. 
15.	The Commission went on to consider whether section 4 of the 1994 Act presented a statutory obstacle to the confiscation order being adjusted in the way contended for by the Commission and now on behalf of the appellant.
16.	The effect of section 4(2), (3)(b) and (4) of the 1994 Act read together is that when assessing the value of a defendant's proceeds of drug trafficking the court shall assume that any expenditure of the defendant in the six years before the proceedings were instituted against him was met out of payments received by him in connection with drug trafficking carried on by him, unless the assumption was shown to be incorrect in the defendant's case, or the court is satisfied that there would be a serious risk of injustice were the assumption to be made.  The Commission and the appellant submit, in effect, that it would be wrong to assume that the cash expenditure of £19,385.16 to which we have referred, was met from the proceeds of drug trafficking in its entirety since it may have been met in part from the £7,000 returned to the appellant in the year 2000.
17.	We do not accept that submission.  We do accept the counter submission made on behalf of the respondent.  To begin with the respondent points out that it is for the appellant to show on the balance of probabilities that the assumption is incorrect in his case.  That much is clear from R v Dickens [1990] 2 QB 102.  The respondent further submits that the appellant did not discharge the burden upon him and with that we agree.  In this case the appellant submitted no written response to the Crown's section 11 statement despite being required by the court on two separate occasions to do so.  Neither did he give or call any evidence in the confiscation proceedings.  In these circumstances, there was, in our judgment, no justification for assuming in his favour, and without evidence on the matter, that he used all or part of the £7,000 returned to him in 2000 when incurring the expenditure of £19,385.16.
18.	Indeed, such information as is available points in the opposite direction.  The dates of expenditure of the £19,385.16, as we have indicated, were dates which followed by at least a year the return of the £7,000 to the appellant.  We see no reason why it should be assumed, again in the appellant's favour, that he saved the £7,000 until embarking on items of expenditure more than one year later.  We, therefore, see no grounds for reducing the amount of the confiscation order.
19.	There is a further ground of appeal in relation to the period in default.  The Commission only invited reconsideration of that period if this court were to reduce the amount of the confiscation order and we have not done so. In any event, the amount of the confiscation order is very close to the top of the bracket for which two years' imprisonment is the maximum default term.  We can see no reason to interfere with the judge's order in that regard.
20.	We have been assisted by helpful, realistic and concise submissions by counsel on both sides, but for the reasons that we have explained we have come clearly to the conclusion that this appeal must be dismissed.