Gary Hyde v The Queen

A sentence for deliberately evading United Kingdom controls on international arms trading must reflect the nature, quantity and value of the weapons, the risk arising from their destination, the defendant’s role, planning, persistence, sophistication and mitigation. A defendant cannot treat a personal view of the transaction’s safety as a substitute for the licensing authority’s assessment.

A director-disqualification order may properly follow where corporate vehicles have been used to commit or conceal dishonest criminal conduct. Under Firearms Act 1968, however, property owned by an unconvicted company cannot be forfeited as part of an individual’s sentence unless there is a lawful basis to disregard the company’s separate personality.

The applicant was convicted at the Crown Court at Southwark of two offences of knowingly being concerned in the movement of controlled goods, contrary to Article 9(2) of the Trade in Goods (Control) Order 2003, and of concealing criminal property contrary to section 327 of the Proceeds of Crime Act 2002. The offences arose from his United Kingdom-based role in arranging variations and assignment of an arms contract between China and Nigeria.

He received concurrent terms of seven years’ imprisonment, a seven-year director-disqualification order and a confiscation order. The Crown Court also ordered the forfeiture and destruction of 14,231 lawfully stored firearms, which were unconnected with the offences and owned by Jago Ltd. The applicant challenged the sentence, disqualification and forfeiture order. The central issue on forfeiture was whether firearms owned by the company could be treated as in his possession for section 52 of the Firearms Act 1968.

1. Forfeiture appeal allowed. The court granted leave to appeal against the forfeiture order and quashed it. It refused the renewed applications concerning the custodial sentence and director disqualification.

2. The seven-year sentence was severe but neither wrong in principle nor manifestly excessive. The court endorsed the non-exhaustive sentencing considerations identified in R v Knight [2008] EWCA Crim 478. The quantity, value and resulting risk of the weapons were on a wholly different scale from the comparator cases. The applicant’s United Kingdom role in keeping the transaction operative through variation and assignment was material to the transfer, rather than peripheral. His view that the governmental purchasers made the trade safe could not replace the licensing authority’s decision.

3. The director-disqualification order was within the judge’s discretion. The offences had a relevant factual connection with company management. The applicant used English and offshore corporate vehicles to facilitate the offending and conceal its proceeds. A seven-year period reasonably matched the custodial term, while leaving ordinary employment open to him.

4. An appeal lay against the section 52 order by analogy with the relevant conviction-related order considered in R v P (Shane Tony) [2004] EWCA Crim 287. Section 52 was not confined to objects used in offending, but its exercise required firearms to be in the convicted person’s possession.

5. The stored firearms were owned by Jago Ltd, an unconvicted company. The court did not need finally to determine the effect of the storage company’s lien, but held that there was no basis to pierce Jago Ltd’s corporate veil. Applying Prest v Petrodel Resources Ltd [2013] UKSC 34, the company had not been interposed to evade an existing legal obligation or restriction. Its lawfully acquired property could therefore not be forfeited under section 52 as part of the applicant’s sentence.

6. The court observed, without deciding, that section 45 of the Firearms Act 1968 might provide a route for safe and lawful disposal. Jago Ltd was left to liaise with the storage company and relevant authorities.

• Court of Appeal (Criminal Division): In the present decision, [2014] EWCA Crim 713, the court refused the challenges to sentence and director disqualification, granted leave to appeal against forfeiture, and quashed the forfeiture and destruction order.
• Crown Court at Southwark: The applicant was convicted on 26 October 2012 and sentenced on 5 December 2012. Ancillary orders included director disqualification, confiscation and, on 28 June 2013, forfeiture and destruction of firearms under section 52 of the Firearms Act 1968.
• Court of Appeal (Criminal Division): Before trial, the court reversed the trial judge’s no-case ruling and held that renegotiation leading to variation or assignment could fall within Article 4 of the Trade in Goods (Control) Order 2003: [2012] EWCA Crim 1113.