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	England and Wales Court of Appeal (Criminal Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Criminal Division) Decisions >> Bagnall & Anor v R. [2012] EWCA Crim 677 (18 April 2012) URL: http://www.bailii.org/ew/cases/EWCA/Crim/2012/677.html Cite as: [2012] Lloyd's Rep FC 614, [2012] EWCA Crim 677, [2012] WLR(D) 118, [2013] 1 WLR 204

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IN THE COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM MANCHESTER CROWN COURT and
WINCHESTER CROWN COURT
His Honour Judge Atherton and
His Honour Judge Longbotham
T20060633 and T20050051/T20067084

		Royal Courts of Justice Strand, London, WC2A 2LL
		18/04/2012

Lord Justice Moses:

Introduction to Both Appeals

1. These two appeals against Confiscation Orders raise related issues. They share a fundamental concern as to the fairness and proportionality of the orders which were made. In both, the appellants came within the scope of the relevant confiscatory provisions by reason of offences which appear minor in comparison with the consequences of the imposition of the Confiscation Orders. In Bagnall the appellant was convicted on one count of money-laundering, after being caught with a bag containing £99,200.00 in Bank of England notes. Three years after that conviction, in February 2010, a Confiscation Order in the amount of £1,818,619.97 was made against him. In Sharma, the appellant was convicted, after a retrial, of nine offences of procuring the execution of a valuable security, one count of false accounting, and one of doing an act tending and intended to pervert the course of public justice, which resulted in a benefit of just under £40,000.00. But in his case, a Confiscation Order was made nearly three years later in the sum of £4,101,339.00. Bagnall was sentenced to 15 months' imprisonment and ordered to serve in default six years' imprisonment; Sharma was sentenced to 39 months' imprisonment in all but in respect of the Confiscation Order the period in default was eight years' imprisonment. Bagnall suggests that the process which led to the Confiscation Order deprived him of his rights enshrined in Article 6 of the European Convention on Human Rights, Sharma that the order made was disproportionate and was in any event made in disregard of the evidence he adduced as to the legitimate source of the money transferred to or held by him.

Bagnall

2. This appellant was convicted of a single count of entering into or becoming concerned in an arrangement involving criminal property contrary to s.328 of the Proceeds of Crime Act 2002 (PoCA 2002) at Manchester Crown Court. He was sentenced to 15 months' imprisonment on 2 March 2007. The trial judge, His Honour Judge Atherton, made a Confiscation Order at the same court on 23 February 2010 in the sum of £1,818,619.97 under s.6 of the Proceeds of Crime Act 2002. The court also made a Financial Reporting Order pursuant to s.76 of the Serious Organised Crime and Police Act 2005 for a period of four years. This also is the subject of appeal.
3. The course of the confiscation proceedings demonstrates their complication and the scrupulous approach adopted by HHJ Atherton throughout the tortuous and lengthy proceedings. For the purposes of resolving this appeal it is not necessary to detail the facts to anything like the extent disclosed in the model judgments crafted by HHJ Atherton.
4. The appellant was a wealthy businessman who had, through a number of companies, traded in the wholesale distribution of mobile telephones until November 2004 and CPUs. He had traded through, at first, Compcell Ltd and subsequently, Ashcor Associates Ltd. In October 2004 the appellant incorporated Venture Tech Inc. as an American corporation. At the date of his arrest in November 2005 the appellant was trading through Ashcor Consultancy Ltd and Venture Tech LLC (it became an LLC about one month before).
5. The subject matter of the Order finally made by the judge was, to a large extent, money credited to bank accounts held jointly by the appellant and his wife over the period of six years up to his conviction. The sources of those credits were the businesses to which we have referred. When ordered to serve a statement pursuant to s.18 PoCA following his conviction on 6 February 2007, the appellant contended that he was conducting a legitimate trade in the wholesale distribution of mobile telephones and CPUs throughout the relevant period. This was disputed by the Crown. From its first statement dated 13 July 2007, served pursuant to s.16 PoCA, the Crown asserted that the sums in excess of £50m which had passed through the personal bank accounts of the appellant from 10 May 2000 (the start of the relevant period) were wholly or in part related to the appellant's criminal conduct "particularly VAT fraud and drug trafficking".
6. During the rest of 2007 there were further exchanges of statements. It is central to this appeal to record that besides the exchange of statements for PoCA there was close consideration of whether the appellant should be prosecuted for an MTIC fraud. This consideration stemmed from a document seized at the time of his arrest, known as CL/02. This consisted of lines representing 52 chains of dealing in CPUs between September and November 2005, put together by the appellant as a consultant to Ashcor Consultancy and/or as representative of Venture Tech International. Each line referred to persons or companies with figures relating to the purchase price of the CPUs and, in some cases, currency exchange rates. From 2006 officers of the financial investigation team had a strong suspicion that they revealed that the appellant had been involved in MTIC frauds.
7. Between 2006 and 4 February 2008 when a position statement was served by the Crown, consideration was given as to whether to prosecute the appellant or seek to recover the proceeds of that fraud through confiscation proceedings. The nature of those discussions was summarised in the Crown's skeleton argument prepared for the purposes of the confiscation proceedings. The view was taken that bearing in mind the appellant was likely to receive a custodial sentence in respect of the money-laundering offence, it was not worth spending resources on a criminal prosecution for MTIC fraud when the appellant's benefit could be recovered by way of confiscation proceedings. The skeleton argument also records the view of some Customs officers that there was an insufficient prospect of conviction. The approach, therefore, finally adopted by the Crown was that allegations of participation in MTIC fraud would be made against the appellant for the purposes of the confiscation proceedings but that there would be no prosecution. The position statement of 4 February 2008 made clear to the appellant that he would not be prosecuted for criminal conduct in respect of MTIC fraud. It was said that this would avoid any risk of "double jeopardy" and that the Crown's undertaking not to prosecute would not prevent him being named as a potential co-conspirator or accomplice in criminal proceedings against others. The position statement made it clear that allegations of participation in MTIC fraud would be made in the course of the confiscation proceedings.
8. It is this stance which forms the foundation of the essential argument advanced on behalf of the appellant in this appeal. It is contended that to pursue the allegations of MTIC fraud in the confiscation proceedings whilst declining to prosecute for them led to violation of the appellant's rights enshrined in Article 6.1 and 6.2 and furthermore, amounted to an abuse of process.
9. This argument was deployed by the appellant on a number of occasions during the course of the lengthy confiscation hearings. The hearings went on from preliminary arguments on 16 July 2008 to final resolution on 23 February 2010. The judge considered evidence not only from the appellant but from Customs officers and a forensic accountant. The judge ruled that there had been no breach of Article 6.
10. HHJ Atherton assiduously followed the scheme of Part II of PoCA 2002. There is no dispute but that the court was required to decide whether the defendant had a criminal lifestyle (s.6(4)(a)). He had been convicted of an offence before the Crown Court (s.6(2)(a)) and the prosecutor had asked the court to proceed under s.6 (s.6(3)(a)). Nor was there any dispute but that the defendant had a criminal lifestyle because he had been convicted of an offence contrary to s.328 of PoCA, an offence under Schedule 2 (s.75(1) and (2)(a)).
11. It was with that background that the controversy, both before the judge and on appeal, arose. There was no dispute that property (i.e., the money in the bank accounts) had either been transferred to or held by the appellant. Once the court decided that the appellant had a criminal lifestyle it was required to make the four assumptions identified in s.10 for the purposes of deciding whether he had benefited from his general criminal conduct and for the purpose of deciding the benefit from that conduct (s.10(1)(a)(b)). Section 10 required the court to make the assumptions that that property was obtained by him as a result of his general criminal conduct (there is a dispute as to the application of the third assumption to which we will have to turn later).
12. The essential argument advanced by Mr Pickup QC on behalf of the appellant was that the court ought not to have applied the assumptions set out in s.10 because the prosecution, in the particular circumstances of this case, had charged the appellant with a criminal offence other than that of which he had been convicted and was thus required to prove that offence to the criminal standard in order to safeguard his rights enshrined in Article 6(2) and, more generally, in Article 6(1) of the Convention. This submission turns on whether the prosecution's reliance upon a detailed analysis of CL/02, coupled with the conclusions drawn by Officer Downer, all of which formed a part of the prosecutor's second statement served pursuant to s.16 of PoCA, amounted to the bringing of a criminal charge within the autonomous Convention meaning. If it did, then the confiscation proceedings violated the presumption of innocence and required the prosecution to prove the charge to the criminal standard. The prosecution made it clear, at least by the time it served its second statement, that it was accusing the appellant of being a controlling mind in a series of pre-contrived transaction chains used to facilitate MTIC fraud.
13. The test whether the prosecutor's second statement amounted to "an official notification" given by the competent authority of an allegation that (the appellant) had committed a criminal offence (see, e.g., Deweer v Belgium 2 EHRR 439 paragraph 46) is:

"The court looks to the realities of the procedure in question and not to the form. The test to be applied has been set out in many cases dating back to the earliest decisions relating to confiscation under the Drug Trafficking Offences Act 1986 in Welch v the United Kingdom (judgment at 9 February 1995 Series A No. 307-A, BAILII: [1995] ECHR 4). The court is required to consider three criteria: the classification of the proceedings under national law, their essential nature and the type and severity of the penalty that the applicant risked incurring" (Phillips v The United Kingdom 11 BHRC 280 paragraph 31).

14. It is now well established that if the prosecution bring confiscation proceedings they do not amount to the bringing of a criminal charge within the autonomous meaning under the Convention. That proposition was not disputed in the instant appeal. If authority is required for so well established a proposition it is to be found in McIntosh v Lord Advocate and Another [2003] 1 AC 1078 paragraph 14 and in Rezvi v R [2003] 1 AC 1099 paragraph 30 (the first referring to Proceeds of Crime (Scotland) Act 1995 and Rezvi to section 72 AA of the Criminal Justice Act 1988). The appellant does not seek to disturb that proposition but rather to suggest that in the particular circumstances of this case the reliance on a specific accusation that the applicant was involved in MTIC fraud requires that allegation to be proved to the criminal standard.
15. This submission depends to a substantial extent on the decision of the European Court of Human Rights in Phillips (qv supra). Phillips was decided (on 12 December 2001) shortly before the decisions in Rezvi and McIntosh. It reached the same conclusion. It concluded that the purpose of the confiscation procedure under The Drug Trafficking Act 1994 was not conviction or acquittal of the applicant for any other drug-related offence. The assumption that the applicant, in that case, had benefited from drug trafficking in the past was not reflected in his criminal record and the purpose of the procedure was to assess the amount at which the confiscation order should properly be fixed. It was, accordingly, a procedure analogous to determining a fine or the length of a sentence (see paragraph 34).
16. The court went on to consider whether, even though the Confiscation Order did not amount to bringing a new charge within the meaning of Article 6.2, nevertheless the applicant should be protected from the assumptions made. It is on the paragraph following the court's conclusion that the Confiscation Order did not amount to the bringing of a criminal charge that the appellant in the instant appeal most strongly relies. The court said:-

"35. the Court has also considered whether, despite its above finding that the making of the confiscation order did not involve the bringing of any new 'charge' within the meaning of Article 6 § 2, that provision should nonetheless have some application to protect the applicant from assumptions made during the confiscation proceedings.

However, whilst it is clear that Article 6 § 2 governs criminal proceedings in their entirety, and not solely the examination of the merits of the charge (see, for example, Minelli v. Switzerland, judgment of 25 March 1983, Series A no. 62, pp. 15-16, § 30; Sekanina v. Austria, judgment of 25 August 1993, Series A no. 266-A; and Allenet de Ribemont v. France, judgment of 10 February 1995. Series A no. 308), the right to be presumed innocent under Article 6 § 2 arises only in connection with the particular offence 'charged'. Once an accused has properly been proved guilty of that offence, Article 6 § 2 can have no application in relation to allegations made about the accused's character and conduct as part of the sentencing process, unless such accusations are of such a nature and degree as to amount to the bringing of a new 'charge' within the autonomous Convention meaning referred to in paragraph 32 above (see Engel and Others v. the Netherlands, judgment of 8 June 1976. Series A no. 22. pp. 37-38 § 90)."

17. Mr Pickup QC invited us to construe that paragraph as covering a case such as this where, even in the confiscation process, a process analogous to the sentencing process, the accusations in the instant case were of such a nature and degree as to amount to bringing a new charge. They were specific, they were made as a result of a conscious decision to pursue the appellant by way of confiscation proceedings rather than prosecution, and incorporated a specific agreement under the position statement of 4 February 2008, an assurance to the appellant that he would not be prosecuted as a result of "a policy decision".
18. In our judgment, the mere fact that the Crown has accused the appellant of specific offences and adduced evidence to make that accusation good does not amount to the bringing of a new charge. It is of significance that in the passage we have cited at paragraph 35 of Phillips the court specifically refer to paragraph 90 of Engel and Others. In Engel (1979) 1 EHRR 647 conscript soldiers had suffered various penalties for offences against military discipline. In the case of two of them, the Supreme Military Court had taken account of their participation in a forbidden publication for which participation they had never been prosecuted. It was alleged, therefore, that in taking into account that participation the Supreme Military Court had disregarded the presumption of innocence proclaimed by Article 6(2). The court said:-

"In reality, this clause (Article 6.2) does not have the scope ascribed to it by the two applicants. As its wording shows, it deals only with the proof of guilt and not with the kind or level of punishment. It thus does not prevent the national judge, when deciding upon the penalty to impose on an accused lawfully convicted of the offence submitted to his adjudication, from having regard to factors relating to the individual's personality…

It was for the sole purpose of determining their punishment in the light of their character and previous record that the said court also took into consideration certain similar, established facts, the truth of which they did not challenge. The court did not punish them for these facts in themselves…" (paragraph 90)

19. In the instant case the appellant was not at risk of any further conviction, there was no finding of guilt, and the findings reached by the judge, on the application of the assumptions under s.10 of PoCA, merely went to the amount of the Order the court was obliged to make.
20. The prosecution is obliged to include in its statement of information that which is relevant in connection with the making by the court of assumptions required under s.10 (s.16(4)(a)). It was, accordingly, obliged to set out the information it had, relevant to the fraudulent MTIC activity in which it said that the defendant was involved. As a matter of fairness and obligation it set out all it knew and suspected in relation to the source of the assets which it was not disputed had been transferred to the appellant or were held by him. The appellant sought to contend that the assumptions should not apply because the source of the assets was lawful trading in CPUs. The prosecution, therefore, was entitled to produce what information and evidence it could in rebuttal of the defendant's assertions. In so doing, the prosecution did not in any way take upon the burden of proving that the source of those assets was criminal conduct. As HHJ Atherton recognised, it would be perverse if where the Crown relies upon the assumptions set out in s.10, and there is no evidence to assist the court as to whether the assumption is correct, the burden remains on the defence to establish that the source was lawful on the balance of probabilities, whereas if it had evidence to rebut any assertion that the source of the assets was lawful, the Crown would be compelled to prove that the source of the assets was criminal beyond a reasonable doubt.
21. The decision of the majority in R v Briggs-Price [2009] 2 WLR 1101 is nothing to the point. The issue in that case concerned the logically prior question of whether the defendant had been in possession of property in the past (see R v Whittington [2010] 1 Cr. App. R.(S) 83 paragraph 18). In the instant appeal there was no dispute but that the defendant held the assets in question; the only question was their source. Since that was the only question, the assumptions did apply and the mere fact that the prosecution had material and evidence to rebut the defendant's assertion that the assumptions should not apply did not shift a criminal standard of proof onto the shoulders of the prosecution. As the judge put it so trenchantly in his ruling of 30 July 2008:- "There are many cases in which the prosecutor does not know whether the defendant has committed other offences which have provided his assets but may have information which may assist the court in determining whether the defendant's contention that he has acquired them honestly or not is true. There may be cases in which more positive information is available to the prosecutor to contend that the defendant's claim of an honest origin is untrue. Is it to be suggested that if a prosecutor has information which strongly undermines the defendant's contention that he has acquired the property honestly, he should not disclose it to the court or if he does so, the court must regard it as making a new charge within the autonomous meaning?"
22. As a related ground, the appellant relies upon his rights enshrined in Article 6(1) in contending that it was unfair to use the confiscation proceedings as a means of imposing the burden on the defendant of having to disprove his involvement in MTIC fraud.
23. The appellant is correct in his contention that Article 6(1) applies to confiscation proceedings (see Phillips paragraph 40). But that is no warrant for an assertion that the proceedings were unfair to the appellant in this particular case. The consideration of a similar contention in Phillips disposes of this ground of appeal. As the ECrtHR observed in Phillips, the statutory assumption was applied, not to facilitate a finding of guilt, but rather to assess the amount of the Confiscation Order (42). The appellant was entitled to rebut the assumption that the source of the assets was criminal, on the balance of probabilities. The ECrtHR described this as a "principal safeguard" (paragraph 43). Moreover, if the appellant's account of his financial dealings had been true, it would not have been difficult for him to rebut the statutory assumption (paragraph 45). That is equally true in this case. There can be nothing unfair in requiring the appellant to demonstrate that two of the companies through which he was trading were carrying out lawful business. What was the difficulty? We can perceive no unfairness in requiring the appellant to establish that the trade in which his companies were involved was not MTIC fraud. We dismiss this ground of appeal.
24. As an additional argument, the appellant contends that it was an abuse of process for the prosecution to decline to prosecute for MTIC fraud but rather to pursue the defendant through confiscation proceedings. The answer to this contention lies in the reasons we have already advanced. In McIntosh v Lord Advocate [2003] 1 AC 1078, 1096 paragraph 35 Lord Bingham said:-

"He (the defendant) must know the source of his assets and what he has been living on."

In Revzi Lord Steyn, adopting Lord Bingham's speech in McIntosh, said:-

"The application by the Crown to apply primary legislation (subject to control by the court and subject to a full right of appeal on the part of the convicted defendant) could not amount to an abuse of the process of the court. The procedure is fair in as much as the sentencing court is duty bound not to make the assumptions if it might be unfair to do so. There was therefore no abuse of the process of the court." (paragraph 20)

This applies equally to PoCA which requires the court not to make a required assumption if there would be a serious risk of injustice (s.10(6)(b)). The judge rightly rejected the contention of abuse of process.

25. There remains one issue upon which the appellant is correct. As a discrete ground of appeal the appellant contended that the amount of £200,000.00 loaned to the appellant in October 2004 to provide working capital for his company Venture Tech Inc. was to be counted as part of the appellant's benefit. The judge had relied, in reaching that conclusion, on the decision of this court in R v Waller [2009] 1 Cr. App. R.(S.) 76. The judge had rightly regarded the loaned sum as analogous to the money used to purchase the tobacco in Waller. Since the judge's decision, this court has reconsidered Waller, particularly in the lights of criticisms in Archbold (paragraph 51051) and Criminal Law Week (08-35/30). In R v Ahmad [2012] EWCA Crim 391 this court took the view that Waller was not only "clearly wrong" but it was not bound by that decision. The court analysed the decision in Waller and advanced four reasons as to why it was wrong (paragraph 53). It said:"To say that in assessing the benefit the Court does not take into account the costs incurred by the criminal in committing the offence is very different from saying that the costs should be added on to the benefit. The robber's benefit is what he steals, the robber cannot deduct the costs of undertaking the robbery, but surely those costs should not be added on to the benefit?" (paragraph 53).
26. We are, in our view, bound by the most recent decision of this court and in any event we would wish to follow it. In those circumstances, through no fault of his own, HHJ Atherton erred in adding to the amount of the benefit the sum of £200,000.00. That sum should be deducted from the Order but, in our view, ought to make no difference to the period of imprisonment of 6 years which the appellant was ordered to serve in default. We shall grant permission to advance this discrete ground (ground 6) and allow the appeal on that ground by reducing the amount assessed as benefit in the Confiscation Order by £200,000.00.
27. The appellant also challenges the making of a Financial Reporting Order, pursuant to s.76 of the Serious Organised Crime and Police Act 2005. Such an Order should only be made if there is a sufficiently high risk of the defendant committing another of the specified offences, such as cheating the Revenue. The argument advanced on behalf of the appellant was that the judge should have confined his consideration to the one offence of which Mr Bagnall was convicted, namely, money-laundering, rather than rely upon his view as to the source of his assets. Since this ground of appeal was advanced, this court has ruled that a judge is entitled to have regard to the whole picture of the defendant's lifestyle (see, e.g., R v Webb [2011] EWCA Crim 882 paragraph 24 and its citation of Hancox v The Queen [2010] EWCA Crim 102 and R v Bell [2011] EWCA Crim 2728). Those cases make it clear that the judge was entitled to take into account the defendant's very high standard of living and luxury, and his evasive and dishonest evidence in relation to confiscation. There was a sufficiently high risk to justify the making of an Order. We dismiss the appeal against the Order.

Nirmal Sharma

28. The appellant Sharma was an accounts auditor with his own company, Sharman Associates. He was convicted of offences of procuring execution of a valuable security by deception, false accounting and doing acts tending and intended to pervert the course of public justice arising out of a deception upon two clients. He persuaded them to issue cheques on the basis that their companies were liable in tax, either to the Inland Revenue or to Customs and Excise. The sums derived from those offences amounted to £39,726.52.
29. At trial it appeared that funds derived from third parties had been diverted to offshore accounts in the name of the appellant and members of his family. The appellant himself claimed to own no real property, no motor car nor shares, and had never declared income over £17,500.00. Yet the bank accounts associated with or controlled by him were found to contain transactions in excess of £16m. The prosecution contended for total assets of £4,286,085.64.
30. At the confiscation hearing the applicant had contended in his written statements and through numerous statements of witnesses that the explanation for the bank transactions lay in Hawala Banking. When the prosecution indicated that it proposed to challenge the appellant and his witnesses the appellant responded that he was intending to call witnesses both at court and through video-link arranged from India.
31. At the confiscation hearing before His Honour Judge Longbotham at Winchester Crown Court the appellant did not give evidence. Nor did he call any witnesses, merely relying on some 105 witness statements. The judge made a Confiscation Order pursuant to s.72AA of the Criminal Justice Act 1988, as amended by the Proceeds of Crime Act 1995.
32. Mr Campbell-Tiech QC, on behalf of the appellant, contends that there is an absence of proportionality between the offences of which Sharma was convicted and the offences he was assumed to have committed for the purposes of s.72AA.
33. The assumption contained within s.72AA(4) applies in any case where the offender is convicted in proceedings before a crown court or a magistrates court of at least two qualifying offences (s.72AA(1)(c)(i)). These are offences to which Part VI of the 1998 Act applies (s.72AA(2)(a)). Part VI applies to an indictable offence other than a drug-trafficking offence (s.71(9)(c)(ii)). Accordingly, the assumptions in s.72AA did apply and property which it was not disputed had been held by the defendant at the date of conviction was assumed, by virtue of s.72AA(4), to have been received by him as a result of or in connection with the commission of offences to which Part VI applied.
34. There can, in our view, be no question of absence of proportionality. For the reasons we have already advanced in the case of Bagnall, it is not disproportionate to require a defendant to establish that the source of monies which he holds in his accounts or accounts with which he has a connection are from a legitimate and not a criminal source. There is nothing unfair in requiring the appellant to disclose and explain where monies that he holds had come from. We refer again to the speech of Lord Steyn in R v Rezvi. In R v May [2008] 1 QC 1028 Long Bingham reiterated that the legislation was neither oppressive nor disproportionate (paragraph 43).
35. Mr Campbell-Tiech QC complains, with some justification, that the judge did not specifically deal with his complaint of an absence of proportionality. However, although the judge's rulings do not condescend to much detail, in the context of this case that is not surprising. The large number of statements did not lead to any live evidence, and the prosecution was therefore deprived of the opportunity of cross-examining as to those statements. In those statements witnesses made identical assertions that the payments, which included cheques provided with a blank payee name, were made in consideration for "accounting, auditing and other legitimate services" provided by the appellant or his associates. Further statements followed in which it was asserted that the witnesses wished to transfer funds for the purposes of business transactions in India. Such witnesses described the facilities in India as "frustrating and unacceptable". They therefore took advantage of funds provided by the appellant's brother and arranged to reimburse the appellant in sterling (see, e.g., a statement made by the witness Satish Sharma (no relation) dated 14 August 2009).
36. Quite apart from the fact that no live witnesses were called the judge was entitled to reject that evidence on the basis of the completely unexplained and inexplicable discrepancy between an assertion on the one hand that the money could be explained as payments for accountancy or related services and on the other that it was a form of Hawala Banking. We dismiss any suggestion that the view that the judge took was disproportionate or unfair. It was quite unacceptable for the appellant to rely upon a vast amount of written material, which was internally inconsistent and in respect of which no witness gave live evidence.
37. Mr Campbell-Tiech QC advances a separate ground of appeal based upon the particular wording of s.72AA(6). This provides:- "Where the assumptions specified in sub-section (4) above are made in any case, the offences from which, in accordance with those assumptions, the defendant is assumed to have benefited shall be treated as if they were comprised, for the purposes of this Part of this Act, in the conduct which is to be treated, in that case, as relevant criminal conduct in relation to the defendant."
38. This opaque sub-section has the effect, so Mr Campbell-Tiech contended, of deeming the defendant to be guilty of indictable offences. In those circumstances he contends that the burden is placed upon the prosecution to prove guilt of those offences to a criminal standard. In reliance upon Briggs- Price he contends that since the appellant had not been convicted of such offences they must be proved by the prosecution to the criminal standard.
39. We disagree. The purpose of s.72AA(6) is to bring s.72AA within the scope of s.71. Section 71(1) and (1)(a) require a court to determine whether an offender has benefited from "any relevant criminal conduct". Relevant criminal conduct is defined in s.71(1)(d):- "In this part of this Act (relevant criminal conduct), in relation to a person convicted of an offence in any proceedings before a court, means (subject to s.72AA(6) below that offence taken with any other offences of a relevant description which are either (a) offences of which he is convicted in the same proceedings, or (b) offences which the court will be taking into consideration in determining his sentence for the offence in question."
40. Absent s.72AA(6), a Confiscation Order could only be made in respect of benefit derived from offences of which he was convicted in the proceedings and offences taken into consideration which were indictable offences, other than drug-trafficking offences (we exclude from consideration convictions before a magistrates court). The purpose and effect of s.72AA(6) is to deem a defendant to have been guilty of offences of which he is convicted in the same proceedings or offences which the court will be taking into consideration in determining his sentence. Section 72AA(6) enlarges the scope of s.71 to cover benefit derived from offences other than those of which the defendant is indicted. For the reasons given in the appeal of Bagnall, there is no basis for contending that to impose the burden upon the defendant of showing that the source of his property is legitimate is unfair, nor contrary to Article 6 of the Convention.

Recusal and the Appearance of Bias

41. Prior to consideration of confiscation HHJ Longbotham was told, on 26 January 2009, without the consent of the defence, by prosecuting counsel, that the appellant was prepared to agree at least to £3m in settlement of the confiscation proceedings. In fact no agreement was reached, as the judge was told on 14 April 2009. On that occasion counsel for the defendant, not Mr Campbell-Tiech QC, suggested that there might be an application for the confiscation proceedings to be heard by a different judge. He pointed out that Mr Sharma's credibility was at stake. The judge, who was not then dealing with an application for recusal, because no such application had been made, said:-

"it is entirely a matter for you to make whatever submissions you want to, but I recall clearly I think it was the last occasion saying that from my position this is like peering through a fog as I am just not given any information. I do not know anything. I have not seen one single sheet of paper. I just do not know what has been going on behind the scenes. And I still have not seen the draft order, which I understand I was going to be provided with when everybody was so confident that this was going to be settled. I never saw it"

42. In the light of the judge denying that he had been told the nature of the proposed settlement, defending counsel did not advance the proposed application for recusal. It is plain from the transcript of 26 January 2009 that the judge was told of the amount of the proposed settlement. It is now contended that despite his assertion that he had not been told, a fair-minded and informed observer would conclude there was a real possibility that the judge was biased (see Lawal v Northern Spirit Limited [2003] ICR 856 [2003] UKHL 35 paragraph 14). In our judgement, there is no real possibility of bias. Since the judge had forgotten what he was told, as he made clear on 14 April 2009, there is no possibility of bias, merely because he was aware that there was a suggestion of a settlement. We are far from saying that even if he had recalled the sum he ought to have recused himself, but that is not the case with which we are dealing.
43. Mr Campbell-Tiech QC also relied, as a discrete point, upon the judge's approach to this case. He had made trenchant comments on the character of the appellant in his sentencing remarks, describing him as fundamentally dishonest. Additionally, he had dealt shortly and dismissively as to the appellant's reliance upon the 105 witness statements and what was described as evidence of the legitimate source of the funds in the appellant's bank account and associated accounts. It is true that the judge gave nothing like as careful and reasoned a ruling as HHJ Atherton. But his approach does not in any way sustain an accusation of the appearance of bias. This ground is dismissed.
44. For those reasons, we dismiss the appellant Sharma's appeal.