No: 96/2853/W4

IN THE COURT OF APPEAL
CRIMINAL DIVISION
                               Royal Courts of Justice
                               The Strand
                               London WC2
 
                          Thursday 3rd October 1996

                    B E F O R E :
 
                LORD JUSTICE BROOKE 
 
                MR JUSTICE McCULLOUGH
 
                         and
 
             HIS HONOUR JUDGE RIVLIN QC
           (Acting as a Judge of the CACD)
 
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                    R E G I N A

                       ‑ v ‑

                   ANDREW BUCKMAN

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   Computer Aided Transcript of the Stenograph Notes of
           Smith Bernal Reporting Limited
          180 Fleet Street, London EC4A 2HD
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         (Official Shorthand Writers to the Court)
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MR S PARISH appeared on behalf of the Appellant
MR C PARKER appeared on behalf of the Crown
 
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                      JUDGMENT
             (As Approved by the Court)
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                   Crown Copyright 
                          Thursday 3rd October 1996
                      JUDGMENT
LORD JUSTICE BROOKE: On 15th December 1995 the appellant pleaded guilty at the Southampton Crown Court to five counts of an indictment which were concerned with the possession or supply of drugs and to one count on which he was charged with dangerous driving.  On 28th March 1996 he was sentenced to a term of four years' imprisonment and a confiscation order was made in the sum of £18,406 with an additional term of 12 months' imprisonment to be served in default of payment.  The only issue that arises on this appeal relates to the confiscation order.  It is sufficient to say that he received two concurrent sentences of four years' imprisonment on charges of conspiracy to supply cannabis and cannabis resin respectively and the other four sentences of 12 months or less were ordered to be served concurrently.  At the same time a co‑accused, Paul Johnson, was sentenced to concurrent terms of 14 months' imprisonment when he pleaded guilty to similar conspiracies, and a very small confiscation order of £5 was made in his case.  The appellant now appeals against sentence by leave of the single judge.
      The essence of the prosecution's case was that over a 16‑month period between 27th January 1994 and  17th May 1995 the appellant and Mr Johnson, who was in effect the appellant's runner, conspired together to supply cannabis resin and cannabis to up to 30 dealers in the south of England.  The minimum street value of drugs passing through the appellant's hands was put at just under £180,000 but the proceeds of drug trafficking were agreed and assessed in the sum of £51,000.
      The only realisable asset that was said to be suitable for confiscation was said to be the mobile home at East Grinstead which was bought for £21,750 in the joint names of the appellant and his wife in March 1995.  This property was sold on 16th February 1996 and the proceeds of sale amounting to £18,406.50 was placed in a bank account in their joint names.  This account was subsequently frozen by a court order.  On 28th March 1996 Judge McLean conducted a hearing to determine whether the amount of the confiscation order the Crown were seeking should be reduced by reason of any legitimate interest the appellant's wife might have in the proceeds of sale.
      The judge was told that the purchase price had been made up of £11,700 in cash and a cheque for £10,050 drawn on the parties' joint account with the Birmingham Midshire Building Society.  The investigating officer said that £4,000 of the money in this building society  account had been carried forward from an earlier account book and the balance had been made up of payouts from insurance companies and housing benefit cheques.  He also accepted that there was no evidence that any of the money in the account came from the proceeds of drug trafficking.  He considered, however, that by placing the benefit cheques into the account the appellant and his wife must have used money from tainted sources to live on.
      The appellant's wife told the judge that £4,500 of the £11,700 cash that had been paid for the property was hers.  She had worked as a catering assistant since leaving school and had saved up the money over a period of seven years before she met or married the appellant. The marriage had taken place in April 1987.  She had kept her savings in a locked tin at their home because it was her own personal money.  She stopped working in about September 1994 and they then lived on the child benefit she received and the income support/sickness benefit her husband received.  The £4,000 which was carried over in September 1994 from an earlier building society account represented money they had saved.
      In a very short ruling the learned judge said this:
"It is intended by this Act that a person who acquires property by contravening the criminal law shall not be  allowed to hold on to that property.  In my view this mobile home comes within the definition of realisable property.  It cannot be intended that a drug dealer should be able to avoid responsibility or protect his assets by putting the house or property into a joint name with his wife and in my view that is the case here.  This is his property and if it can be said that he put it into her name and thereby passed half the property then that is a gift caught by the Act.  In my view he is liable for the whole amount.  I do not accept the evidence that the wife provided £4,500 from her savings from child benefit and the like towards the purchase of property." 
He therefore certified the amount of assets available for realisation as £18,406.
      Mr Parish, for whose careful submissions the court is indebted, has submitted that the judge was wrong to have adopted such a broad brush approach to the issue he had to decide.  A matrimonial home in joint names belongs prima facie to the parties in equal shares when they are husband and wife.  Money in a joint account belong prima facie to the holders of that account in equal shares if they are husband and wife, and the beneficial interests in a house conveyed into the joint names of husband and wife are prima facie owned by them equally.  He submits that the judge ought to have started from this point, and then gone on, if need be, to make specific findings as to whether anything that the wife owned beneficially represented a gift caught by the language of the Drug Trafficking Act 1994.  He did not press any argument that the judge's finding that he  disbelieved Mrs Buckman (as she then was) on the money which had been saved before the marriage, was a finding that the judge could not legitimately make.  At the centre of his submissions was the bold submission that whatever their possessions may be before a house is acquired by husband and wife in joint names, and wherever the money may have come from, from that time onwards it is a joint property and they own the beneficial interests in it equally, and it is quite wrong, Mr Parish submits, in the context of husband and wife acquiring a matrimonial home, for a court to find that any money that the husband contributes which is more than a half share of the purchase price of the house represents a gift to his wife within the language of the Act.  He submits that in the context of matrimonial life this is a contribution made out of love and affection for the wife to the property that they now own jointly, their matrimonial property, and that it should not be looked at as if it was any ordinary type of gift.  He accepted that gifts made from husband to wife or from wife to husband under other circumstances might be gifts caught by the Act, but he submitted that the contributions they made to the matrimonial home were different.
      He was unable to cite any authority for this bold  submission.  He did refer us to the recent decision of this court in a judgment given by Mr Justice Scott Baker in Gregory 94/7098/W4, an unreported case which is summarised on page 149 of the second cumulative edition to the 1996 Edition of Archbold in the Criminal Appeal Office Index where it is quite clear that Mr Justice Scott Baker took for granted that the husband only had a half share in the house which he occupied with his cohabitee, and no greater share.  Mr Parish also referred us to, among other authorities, Preston (1990) CLR 528 where in his commentary to the case Dr David Thomas says:
"It is well established in the cases that a court should not make a compensation order which can be satisfied only by the sale of the matrimonial home, but this principle has no application to confiscation orders made under the Drug Trafficking Offences Act 1986.  The sentencer, in such a case as this, must value the offender's beneficial interest in the property by determining the market value, and setting off the amount required to discharge any incumbrance.  Complications will undoubtedly arise in many cases where the matrimonial home is in issue in determining its value in uncertain market conditions, and in assessing the value of the wife's interest in the property where she has acquired an equitable interest, the court appears to have no discretion to leave the value of the matrimonial home out of account, whether or not the home was purchased out of the proceeds of drug trafficking." 
With those sentiments this court would agree.
      Mr Parker for his part made the very bold submission that if someone is found to be joint legal owner of a property in which he or she has however small  a beneficial interest, then the whole of the beneficial interest and the whole of the value of that property is to be attributed to him or her as his or her property within the meaning of the Act.  He made this surprising submission in reliance on the definition of property in section 62(5)(a) of the Act which provides:
"For the purposes of this Act property is held by any person if he holds any interest in it." 
In our judgment this is convenient language to show that if someone holds, say a 15% or 30% or 50% beneficial interest in property in which the legal title is either held by him or her or by somebody else, then that beneficial interest pro tanto is property which is caught by the language of the Act.  It certainly does not mean, in our judgment, that he or she holds the whole beneficial interest in the property in question, or that it should be regarded as being wholly his or her property.
      We turn therefore to Mr Parish's principal submission which was that the court should have started with the proposition that this matrimonial home was held by them jointly as husband and wife and ought not to have enquired into the provenance of the cash which the husband provided towards that purchase.  In our judgment this submission is not well founded.  It is not founded  on any principle of matrimonial law, property law or criminal law that this court is aware of.  In the eyes of the law the husband and wife hold their assets separately except in so far as they may hold any of them by agreement jointly and if, in order to acquire joint property, one of them provides more than the other, pro tanto that one is making a gift to the other of the relevant share in the property.  In our judgment the judge having made a finding, after seeing the witness, that he did not believe that the wife had contributed any share of the cash, he was entitled to form the view that the contribution of cash towards the joint property, in so far as it represented a gift pro tanto to the wife, was a gift caught by the Act.
      However, in our judgment the position of the money in the building society account falls to be treated differently.  This was prima facie money held by the parties jointly.  On the presumption that equity is equality, particularly where the parties are husband and wife, this money was owned jointly.  It would have been open to the judge, having made the finding that prima facie the beneficial interests of the money in the building society account were held jointly for him to proceed to make a specific finding that the husband's more than 50% contribution towards that building society  account represented, as to the appropriate amount, a gift caught by the Act.  But he did not make any such finding.  Mr Parker sought to persuade us that in the extremely broad brush approach that the judge adopted to the evidence in the case, the court should discern a finding of that kind, but in our judgment it is impossible to do so from the judge's judgment.  The correct approach in a case of this type, where property is held in joint names, is for the court to start with the prima facie position as to where the beneficial interests lie and then to go on to find whether there are gifts caught by the Act which ought then to increase the realisable value of the property within the meaning of section 6 of the Act.  This the judge did not do. The appropriate course for us to take is not to remit the matter for a further finding.  We take the view that as the judge did not make a finding as to whether the money in the building society account included gifts caught by the Act, the wife should be entitled to maintain that half the sum of £10,050 in the joint account represented money which should not be caught by the confiscation order.  The house's eventual net proceeds of sale was only 85% of its purchase price and accordingly the appropriate amount to be deducted is 85% of £5,025.  We consider, by the broad brush approach we  are adopting, a figure of £4,300 would be an appropriate amount to represent the wife's share.  The certified amount will therefore be reduced by £4,300 and to that extent the appeal succeeds.