Winters v R

Under Drug Trafficking Act 1994 section 4(3)(b), the prosecution must prove that expenditure was incurred by the defendant before the statutory assumption may be made that it was funded by drug trafficking. The wording distinguishes expenditure from property which merely appears to the court to have been held or transferred.

For realisable assets, legal ownership creates an initial presumption of beneficial ownership. The defendant may rebut it on the balance of probabilities by showing that the transferor did not intend to make a gift of the beneficial interest. A proposed future surrender of a beneficial share does not itself effect a surrender.

The appellant had been convicted of serious drug-trafficking conspiracies. On 12 December 2007, HHJ Hooton made a confiscation finding under the Drug Trafficking Act 1994. He found a benefit of £317,000 but no realisable assets, and made a nominal order of £1.

The appellant appealed the inclusion in benefit of mortgage payments relating to two houses. The Attorney General referred the finding of no realisable assets as unduly lenient. The issues were whether the appellant had funded mortgage payments on 2 Stavordale Road from drug-trafficking proceeds and whether he retained beneficial interests in that property and in 64 Westmead.

1. The appeal was allowed and the Attorney General’s reference was allowed in part. A calculation error and the absence of evidence that the appellant had funded mortgage payments on 64 Westmead required a reduction of £70,496.20 in the assessed benefit.

2. The further £18,193.52 attributed to mortgage payments on 2 Stavordale Road was also removed. Although the statutory assumptions under Drug Trafficking Act 1994 section 4 materially lighten the prosecution’s task, section 4(3)(b) requires proof, to the civil standard, that the expenditure was incurred by the defendant. The prosecution did not prove that the appellant funded his father’s cash mortgage payments. The evidence of cash deposits did not establish funding of the much larger total, and the unchallenged evidence was consistent with the father paying the mortgage.

3. The appellant retained a legal and beneficial half share in 64 Westmead. An intention or agreement to surrender that interest to his former wife was not an actual surrender. Its value therefore formed part of his realisable assets, subject to any rights which she might establish.

4. The appellant had shown, on the balance of probabilities, that he held no beneficial interest in 2 Stavordale Road. Although sole legal ownership raised an initial presumption of sole beneficial ownership, the evidence supported the finding that the parents transferred legal title only to permit a remortgage and did not intend to give their home to their son. Their continued occupation and mortgage payments reinforced that conclusion. The appellant’s later treatment of the property as his own did not displace the compelling evidence of the parties’ intention at the 1987 transfer.

5. The court indicated a revised benefit of £214,817.21 and realisable assets of £147,500, subject to written submissions on payment and default. It also invited consideration of an irrevocable deed confirming the father’s beneficial ownership of 2 Stavordale Road, subject to the mortgage.

• Court of Appeal (Criminal Division): Allowed the appellant’s challenge to the benefit calculation and allowed the Attorney General’s reference in part by finding that the appellant had a beneficial half share in 64 Westmead.
• Crown Court at Winchester: HHJ Hooton found benefit of £317,000 under the Drug Trafficking Act 1994, found no realisable assets, and made a nominal confiscation order of £1.