McMillan-Smith, R. v

Under the Drug Trafficking Act 1994, the court must determine benefit and the realisable amount as distinct questions. Once benefit has been established, it will ordinarily be treated as remaining available unless the defendant proves, on the balance of probabilities, that the realisable amount is lower.

The realisable amount is not confined to identifiable proceeds of the offending. It may include assets from other sources. A court therefore errs if it estimates hidden assets solely by comparing a defendant’s share of known criminal earnings with identified property and allowing for assumed dissipation.

The Attorney General referred as unduly lenient a confiscation order of £273,000 made against Geoffrey McMillan-Smith after his conviction for conspiracy to produce cannabis. The Crown Court had assessed benefit at £1,971,923.83, including an amount derived from the statutory assumptions in section 4 of the Drug Trafficking Act 1994, and found £223,000 in identified assets plus £50,000 in hidden assets.

The reference challenged the method used to assess the realisable amount. McMillan-Smith then obtained permission to appeal out of time and to give fresh evidence. The central issues were whether the original judge should have made an order for the full benefit figure and whether the fresh evidence proved that McMillan-Smith had no hidden assets.

1. The Attorney General’s reference succeeded in law, but McMillan-Smith’s appeal against the confiscation order was allowed on the fresh evidence. The original judge had erred by treating the £50,000 estimate of hidden assets as the balance of McMillan-Smith’s share of the factory earnings after assumed dissipation.

2. Section 5 of the Drug Trafficking Act 1994 required the court first to determine benefit and then to determine the realisable amount. Applying Barwick [2001] 1 Cr App R (S) 129, once benefit was proved, it ordinarily remained available unless the defendant proved otherwise on the balance of probabilities. The realisable amount could be unrelated to identifiable proceeds of the particular drug trafficking.

3. McMillan-Smith had given no evidence at the original hearing and had not addressed the allegation of hidden assets. On the material then before the judge, he had failed to prove a realisable amount lower than the benefit figure. The original order was therefore quashed; absent the appeal and fresh evidence, it would have been replaced by an order for the full benefit.

4. The court permitted fresh evidence because McMillan-Smith had not been fully advised that the legal burden lay upon him. Although it approached his evidence cautiously, it accepted his explanations of the prison correspondence and his detailed account of expenditure. The correspondence did not disclose concealed assets, and the evidence established that he had no hidden assets.

5. The benefit figure of £1,971,923.83 was confirmed. The realisable amount and confiscation order were fixed at £215,000, with three years’ imprisonment in default and six months to pay.

• Court of Appeal (Criminal Division) Allowed McMillan-Smith’s appeal after receiving fresh evidence, while holding that the Attorney General’s unduly lenient sentence reference had correctly identified an error of law. It substituted a confiscation order for £215,000.
• Crown Court at York sitting in Bradford Assessed benefit at £1,971,923.83 and made a confiscation order for £273,000 following a confiscation hearing on 7 January 2008.