England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT

		Royal Courts of Justice Strand London WC2
		5th December 2003

Friday, 5th December 2003

J U D G M E N T
1. MR JUSTICE PITCHFORD: This is an application to review a decision of a district judge sitting at Burnley Magistrates Court on 16th April 2003. It is brought with the permission of the single judge. Although the defendant, Burnley Magistrates Court, and the interested party have served acknowledgments of service, they have not served grounds of resistance, and neither has appeared today. Mr Bird, counsel for the claimant, the Chief Constable of Lancashire Constabulary, recognises that that failure does not constitute a consent to the review. The parties have simply decided that they will take no part in them.
2. The factual background to the review is as follows. On 8th January 2003 officers of the Lancashire Constabulary entered the home of the interested party, Mushtaq David Anthony Ahmed, at Colne Road, Burnley. There they recovered £36,421 in cash. They thought they had good reason for believing that the cash represented the proceeds of unlawful conduct within the meaning of sections 241 and 304 of the Proceeds of Crime Act 2002.
3. The Act came into force on 30th December 2002. By section 294 of the Act:

"(1) A customs officer or constable may seize any cash if he has reasonable grounds for suspecting that it is-

(a) recoverable property, or

(b) intended by any person for use in unlawful conduct.

(2) A customs officer or constable may also seize cash part of which he has reasonable grounds for expecting to be-

(a) recoverable property, or

(b) intended by any person for use in unlawful conduct,

if it is not reasonably practicable to seize only that part."

I need not read subsection (3) for these purposes.

4. By section 295 of the Act:

"(1) While the customs officer or constable continues to have reasonable grounds for his suspicion, cash seized under section 294 may be detained initially for a period of 48 hours.

(2) The period for which the cash or any part of it may be detained may be extended by an order made by a magistrates' court ... but the order may not authorise the detention of any of the cash-

(a) beyond the end of the period of three months beginning with the date of the order,

(b) in the case of any further order under this section, beyond the end of the period of two years beginning with the date of the first order."

I need not read subsection (3).

"(4) An application for an order under subsection (2)-

(a) in relation to England and Wales and Northern Ireland, may be made by the Commissioners of Customs and Excise or a constable ...

(b) ...

and the court ... or justice may make the order if satisfied, in relation to any cash to be further detained, that either of the following conditions is met.

(5) The first condition is that there are reasonable grounds for suspecting that the cash is recoverable property and that either-

(a) its continued detention is justified while its derivation is further investigated or consideration is given to bringing (in the United Kingdom or elsewhere) proceedings against any person for an offence with which the cash is connected, or

(b) proceedings against any person for an offence with which the cash is connected have been started and have not been concluded.

(6) The second condition is that there are reasonable grounds for suspecting that the cash is intended to be used in unlawful conduct and that either-

(a) its continued detention is justified while its intended use is further investigated or consideration is given to bringing (in the United Kingdom or elsewhere) proceedings against any person for an offence with which the cash is connected, or

(b) proceedings against any person for an offence with which the cash is connected have been started and have not been concluded.

(7) An application for an order under subsection (2) may also be made in respect of any cash seized under section 294(2), and the court ... or justice may make the order if satisfied that-

(a) the condition in subsection (5) or (6) is met in respect of part of the cash and

(b) it is not reasonably practicable to detain only that part.

(8) An order under subsection (2) must provide for notice to be given to persons affected by it."

5. The officers had interviewed the interested party about the provenance of the cash and were not satisfied with his explanation. They wished to continue their enquiries. I shall henceforward, for convenience, refer to the actions of the officers responsible for the furtherance of this investigation as those of the Chief Constable.
6. Accordingly, the Chief Constable made an application to the Burnley Justices on 9th January 2003 for an order that the period during which the cash could be detained be extended under section 295(2). The application was supported by a witness statement from Detective Constable Sarson attached to the force Intelligence Bureau. He gave evidence about the seizure of the cash and the grounds for suspicion. The interested party gave evidence and called witnesses in support of his contention that the cash was lawfully acquired.
7. The justices refused the application in the following terms:

"We are refusing the application to seize and detain the cash found at Mr Ahmed's house.

We have considered the submission by DC Mike Sarson that on the basis of police intelligence the £36,421.00 found in the house had been obtained in or was for the use in criminal activity. He asserted that the answers given by Mr Ahmed in interview were insufficient to account for so much cash and that connections with certain associates pointed to involvement with drugs.

In response Mr Ahmed has produced evidence which accounts for about £32,000 of the cash, leaving some £4,000 unaccounted for. Mr Ahmed accepted that he could not give details for this £4,000 but thought that he would be able to given time.

On the basis of this evidence we do not think that the evidence of the Chief Constable meets the condition in s295(5) or s295(6) for the detention of the cash."

8. The Chief Constable disagreed with the decision. There was, however, no avenue of appeal: only the possibility of an application to the High Court. The outcome was unknown and could not amount to a rehearing and reassessment of the evidence. It is difficult to imagine that the High Court would have found that the justices had no basis upon which to reach the decision that they did.
9. The Chief Constable turned his attention to section 298 of the Act, which concerned forfeiture. Section 298 provides:

(1) While cash is detained under section 295, an application for the forfeiture of the whole or any part of it may be made-

(a) to a magistrates' court by the Commissioners of Customs and Excise or a constable,

(b) ...

(2) The court ... may order the forfeiture of the cash or any part of it if satisfied that the cash or part-

(a) is recoverable property or

(b) is intended by any person for use in unlawful conduct."

I need not read subsection (3) for present purposes:

"(4) Where an application for the forfeiture of any cash is made under this section, the cash is to be detained (and may not be released under any power conferred by this Chapter) until any proceedings in pursuance of the application (including any proceedings on appeal) are concluded."

10. The cash was detained pursuant to section 295(1). The Magistrates confined their examination, despite the opening words of their judgment, to justification for an extension of the period of detention. Section 295 gave to the magistrates no power to bring to an end the detention by the police under section 295(1). Accordingly, before the 48 hours granted by section 295(1) had expired, the Chief Constable made a further application, this time for forfeiture of the cash. The effect of the application was to continue the right to detain the cash until such time as the forfeiture proceedings were concluded.
11. The application was made under the terms of paragraph 7 of the Magistrates Court (Detention and Forfeiture of Cash) Rules 2002. Pursuant to paragraph 7(4) the Justice's clerk set a date for a directions hearing. Directions were given on 12th March. Counsel tells me that the directions included the disclosure of evidence by each party.
12. On 7th April District Judge Firth heard argument upon the interested party's contention that the forfeiture proceedings should be stayed as an abuse of the process of the court. Mr Bird, counsel for the claimant, helpfully and rightly handed to me the skeleton argument presented to the District Judge on behalf of Mr Ahmed by leading counsel.
13. On 16th April 2003 the District Judge provided his written judgment. He held that the application was a manipulation of the process of the court and an abuse. In consequence he ordered a stay of the proceedings. It is this decision which is the subject of review.
14. The first submission made to the District Judge on behalf of Mr Ahmed was that the application must be dismissed as out of time, since the justices had brought the statutory period of detention to an end before the application for forfeiture was made. If the money was no longer detained under section 295, then an opportunity to make an application for forfeiture under section 298 was never triggered. The District Judge, rightly in my view, rejected this submission. The decision the Justices had made was whether there were grounds for extending the 48-hour period. The test they had to apply, was that to be found in section 295(5) and (6). The Justices were not deciding whether the seizure and detention were lawful under sections 294(1) and 295(1). That was not a function required of them under section 295(2) and the following subsections.
15. I shall return to this issue at the end of my judgment, since I regard the terms of the Justice's decision as critical. They had a power to order return of the cash before the expiration of the 48-hour period, but they did not exercise it. Furthermore, as the District Judge observed, he had not been asked to examine the question whether, following the Justices' decision not to extend time, the officers had acquired reasonable cause to suspect and he declined to make a ruling. The District Judge was satisfied that the application for forfeiture was made while the cash continued in detention under section 295(1).
16. A further submission was made to the District Judge to the effect that an application for forfeiture had to be heard during the first 48 hours of detention. It was rejected on good grounds; and I need not repeat it.
17. This brings me to the last and critical submission made to the District Judge. Having earlier found that the Justices were not deciding whether the original seizure and detention were unlawful, the District Judge went on to say at paragraphs 17 and 18 of his judgment:

"17 ... There are a number of issues to be considered in this regard and I shall begin with the timing of the forfeiture application. It will be recalled that the hearing of 9th January had lasted well into the afternoon. I have seen the Justices' reasons for refusing to make the detention order and it is plain to me that they were not satisfied that there were reasonable grounds for suspecting that the cash was either recoverable property or intended to be used in unlawful conduct. These are the primary conditions laid down by s295(5) and (6) which must be met before a detention order can be made. There are secondary conditions, relating to the need for the money to be detained while investigations continue, but I am satisfied from a perusal of the Justices' reasons that they did not need to consider the secondary conditions, since the application fell at the earlier stage.

18. On the late afternoon of 9th January, the court was not satisfied on the evidence taken over some hours that there were reasonable grounds for suspecting that the cash was recoverable property or intended to be used in unlawful conduct. It seems to me extremely unlikely that by the next morning the Applicant's evidence in support of that suspicion would be any different. Certainly at the hearing of 7th April the Applicant did not seek to suggest otherwise. It is plain to me that the sole purpose behind the Applicant's lodging of the forfeiture application on the next morning was to avoid the need, in the face of the Justice's decision, to return the money to the Respondent or face proceedings for unlawful detention of the money. I am sure that the Applicant wished to retain the money so that further investigation could take place, in the hope that additional evidence could be placed before another court to satisfy that second court of the much higher test to be applied in forfeiture proceedings by virtue of section 298(2)."

This, the District Judge concluded, was manipulation of the court's process. At paragraph 24 of his judgment he said:

"Having come to the earlier conclusion that the Applicant, by his conduct on the morning of 10th January, manipulated the proceedings of the court, and having examined the plain words and the spirit of the Act, I have come to the view that the Act is intended to protect the citizen from having his property detained by the State in circumstances where, as here, the State has failed to meet the statutory criterion at the first and lowest hurdle, even when the State says almost immediately thereafter that either it has sufficient to meet the later and much higher hurdle or it will eventually have sufficient so to do and should be allowed to use another provision in the Act to circumvent the proper decision of the Justices. I cannot see anything in the Act taken as a whole to suggest that Parliament's intention was to allow the detention decision to be circumvented in this way..."

Finally, at paragraph 25, the District Judge said:

"In conclusion, I am satisfied that the conduct of the applicant on 10th January amounted to a manipulation of the process of the court; that the Applicant's case could not have differed then from that rejected by the Justices on the previous day; that the sole purpose of the Applicant was to avoid returning the money to the Respondent until the Applicant had had further time to gather evidence, if such evidence exists, to meet a standard higher than that already required before the Justices; that the clear framework of the Act is to provide the Respondent with some protection against what would be, apart from the terms of the Act, the unlawful detention of the property; and that the manipulation by the Applicant of the process of the court has deprived the Respondent of that protection. For this reasons I would stay the forfeiture proceedings in this case as being an abuse of the process of the court."

It should be noted that the District Judge heard no evidence before reaching the conclusions which I have extracted from his reasons.

18. What the decision comes to, in my view, is this. The Chief Constable had been told he did not have reasonable grounds to suspect that the cash represented the proceeds of unlawful conduct. Accordingly the cash should not be detained beyond the 48-hour period. In order to buy himself time to carry out further investigations in an attempt to prove a case under section 298, the Chief Constable made an application for forfeiture. That was a manipulation of the court's process to the prejudice of Mr Ahmed.
19. The Chief Constable relied before the District Judge, and before me, upon a decision of the Court of Appeal, Civil Division, in R v Luton Justices ex parte Abecasis [2000] 164 JP 265. I have been provided with a transcript of the judgment delivered on 9th March 2000.
20. The appeal concerned applications for detention and forfeiture of cash under the equivalent provisions of sections 42 and 43 of the Drugs Trafficking Act 1994. The Justices had ordered extensions of time to detain cash on three occasions. The third period expired on 4th February 1999. Customs officers had intended just before 4th February to seek a further extension, but were thwarted by the court's failure to serve the requisite notice on the defendant. To avoid the disaster with losing the detention, a customs officer served an application for forfeiture, whose effect, as in this case, was to preserve detention of the cash until the completion of the forfeiture proceedings.
21. Several points were taken by the appellant, all of them unsuccessful. Of the suggestion that the application was a device to secure further detention, May LJ said at paragraph 19:

"... Even if there were narrative merit in this contention, I am quite unpersuaded that what Mr Wales [the customs officer] did was an abuse. The strength or otherwise of substantive grounds for applying for forfeiture would be tested at the forfeiture hearing. Those conducting these matters on behalf of the Customs are entitled to change their minds quickly or, more specifically, to take the decision which had not been made on the previous day; and they were entitled, I think, generally to take any legitimate steps in the public interest to preserve the proper possibility of a forfeiture order if they had got into procedural difficulties. On assumptions of fact favourable to the appellant, that is what Mr Wales did. It is not, in my judgment, an abuse, nor should it be stigmatised as having been done in bad faith."

22. The District Judge distinguished Ex parte Abecasis on its facts. In essence he said that it could not be said that what the Chief Constable did here was to protect the public interest from a procedural difficulty. A decision adverse to the Chief Constable had been made, on the face of the Justices' decision on the merits, that the Chief Constable did not have reasonable grounds to detain the cash. The Chief Constable sought to circumvent that decision by what was, in effect, a device.
23. Mr Bird, for the Chief Constable, submits that the District Judge adopted the wrong approach. First, the scheme of the sections to which I have referred should be examined. Section 294 gives the officer power to seize cash provided he has reasonable grounds for suspecting that it is recoverable property or intended by any person for use in unlawful conduct. That is the commencement of the proceedings, in my view, contemplated by Parliament when these sections were enacted. There is no point in detention for its own sake.
24. The final stage of the proceedings is the forfeiture hearing, in which the Justices make a decision whether or not the cash must be forfeited as being recoverable property or intended by any person for use in unlawful conduct. Section 295 provides that the constable shall have detention of the cash, provided he has a reasonable ground for his suspicion, for a period of 48 hours initially. Should he require time to investigate the provenance of the cash with a view to forfeiture proceedings, then he must apply, under section 295(2) and the rules to which I have earlier referred, for an extension of time which the section contemplates may, in an appropriate case, extend the period by succession to a total of two years. Accordingly, the District Judge's approach to the scheme of this part of the Act should have been that the detention of cash is not an end in itself, but that forfeiture is the final step to which the earlier steps of seizure and detention naturally lead.
25. The officers were persuaded that Mr Ahmed's explanations were inadequate and suspicious. The Justices disagreed with that analysis. In Mr Bird's submission, in the performance of his public duty, the Chief Constable was required to make an assessment whether there was, nevertheless, a prospect of proving a case for forfeiture. If there was, then he should act immediately because, if he did not, the opportunity to apply would be lost at the expiration of the 48-hour period. The period during which the cash would remain detained under section 298(4) was a comparatively short one. If it became apparent that the Chief Constable was delaying without proper cause, the remedy was to bring the forfeiture proceedings to an early hearing. If, contrary to the Chief Constable's expectation, the application failed on its merits and the suspect could establish exceptional loss, he could make application for compensation under section 302.
26. Mr Bird submits that it was simply not open to the District Judge to find that the Chief Constable had used the device. His submission is helpfully put at paragraph 20 of his skeleton argument:

"The first criterion on an application for extended detention is whether reasonable grounds for suspicion exist. At such a hearing the applicant will typically call a single officer to give his grounds for suspicion, usually based on hearsay, and the Court decides whether such grounds are reasonable. Such hearings (particularly the first hearing) have to be arranged at short notice and effect only temporary periods of detention. It will therefore not generally be appropriate or possible to deploy all first-hand evidence available. At the first hearing such evidence may well not yet have been obtained in statement form."

27. It is noteworthy that in this particular case DC Sarson, who gave evidence before the Justices, relied on what he called "intelligence" about the activities of Mr Ahmed. This serves to illustrate the point made by Mr Bird in his skeleton.
28. The Chief Constable could have moved straight to an application for forfeiture without bothering to ask for an extension of detention. He could not have been accused of manipulation and abuse of the court process if he had, since by making such an application all he was doing was requiring that a forfeiture hearing should be held at which he would marshal all the evidence then available to him. In the result Mr Ahmed was in no worse position than that.
29. Mr Bird further submits that in his judgment the District Judge confused the concepts of purpose and effect of the action taken by the Chief Constable. The Chief Constable had no alternative but to apply for a forfeiture hearing when he did if he did not wish to lose the opportunity altogether. There was no evidential or other basis upon which the District Judge could have found that the purpose of the application was to preserve detention of the cash rather than prepare for and pursue a forfeiture hearing. It is important in this context to distinguish between the two applications, the first being for detention, the second being for forfeiture. It was not possible for the District Judge to infer that the intention behind the second application was merely to overcome the decision of the Justices and to ensure that detention continued. Mr Bird submits that the District Judge erred in drawing the inference that because the Chief Constable had no further evidence in support of his case by the time of the forfeiture application his purpose must have been to secure detention of the cash. At paragraph 11 of his reasons the District Judge appeared to have come to the opposite conclusion, namely that he should not draw an inference as to the state of the constable's suspicion by the time the application for forfeiture was made. There is no statutory requirement that all available evidence should be in place before the application is made. The Chief Constable was entitled to gather his evidence in time for the hearing. Thus, submits Mr Bird, there is no inconsistency between the court not being satisfied of reasonable grounds on 9th January and the Chief Constable's honest and proper belief that he will have further admissible evidence sufficient to prove forfeiture by the time a final hearing takes place.
30. Finally, I am reminded that the power to stay summary proceedings on the grounds of abuse is a power which is sparingly exercised.
31. My conclusions upon these submissions are these:

(1) It was not possible to characterise the Chief Constable's decision as an abuse without having considered carefully the proper ambit of the exercise of his duty to the public: see Ex parte Abecasis paragraph 19.

(2) The Chief Constable was at liberty to make the application he did. The statutory provision permitted it and the decision of the Justices did not prevent it. There was no suggestion or evidence of malafides. The statutory provisions themselves contemplated an occasion upon which cash would remain detained while the Justices had ordered its release, a provision to which I shall come in a moment.

(3) The District Judge erred in concluding that the Chief Constable's motive was oblique. He had no evidence to that effect, but drew an inference (which in my view, for the reasons advanced on behalf of the Chief Constable, was not open to him on the admitted facts) that the purpose was to detain, not to forfeit, if he could.

(4) Had the justices wished, they could on 9th January have brought an end to the period of detention under section 295(1).

32. Section 297(1) provides as follows:

"(1) This section applies while any cash is detained under section 295.

(2) A magistrates' court ... may direct the release of the whole or any part of the cash if the following condition is met.

(3) The condition is that the court ... is satisfied, on an application by the person from whom the cash was seized, that the conditions in section 295 for the detention of the cash are no longer met in relation to the cash to be released.

(4) A customs officer, constable ... may, after notifying the magistrates' court ... under whose order cash is being detained, release the whole or any part of it if satisfied that the detention of the cash to be released is no longer justified."

33. Subsection (1) must, of course, embrace a detention under section 295(1). It follows that, had the Justices been asked to do so and had they thought it right to do so, they could have ordered the release of the cash, thus arguably bringing to an end the 48-hour detention under section 295(1) and the right to apply for forfeiture. I say "arguably" because it might be possible to construe section 298(1) as meaning that an application for forfeiture can be made while the cash is physically detained, since, for example, rule 6(7) of the 2002 Rules permits the justices to order the release of the cash within seven days, or such longer period as may be specified, with the agreement of the applicant. It should be noted that the cash may not be released, even upon application under section 297, if there is an application for forfeiture waiting to be heard. However, the Justices quite clearly did not exercise their power under section 297(1) and the 48-hour period continued to run. As long as it was running, it does not seem to me that the Chief Constable's decision to make the application could be characterised, without evidence, as manipulative or an abuse. On the face of it he did what statute permitted at short notice in performance of his duty to the public. It follows that I do not consider that it was open to the District Judge, on the facts available to him, to conclude that an abuse of the court's process had occurred. The claim therefore succeeds for the reasons I have given.
34. The District Judge's order of 16th April 2003 staying the forfeiture proceedings shall be quashed.
35. I take it, Mr Bird, you are still seeking a direction that the forfeiture proceedings continue before a court differently constituted.
36. MR BIRD: What I have suggested is that it is remitted to the Magistrates Court for directions, for a forfeiture hearing in due course.
37. MR JUSTICE PITCHFORD: Then that is the order I make.
38. MR BIRD: There are two matters in the judgment which may merit revision.
39. MR JUSTICE PITCHFORD: Thank you.
40. MR BIRD: Right at the beginning, my Lord said that neither the defendant nor the interested party has served an acknowledgement of service. They have, in fact, served an acknowledgement of service. I think they are in the bundle. They have not served any grounds of resistance.
41. MR JUSTICE PITCHFORD: Then perhaps in the second, or third, sentence of my judgment can we delete, "Neither the defendant nor the interested party has served an acknowledgement of service" and insert, "Although the defendant and the interested party have served acknowledgments of service, they have not served grounds of resistance", and continue, "and neither has appeared today."
42. Does that meet that difficulty?
43. MR BIRD: Yes, my Lord.
44. The only other matter. My Lord said that the Chief Constable disagreed with the decision that there was no avenue of appeal, the only possibility was judicial review. Technically there could have been an appeal by way of case stated. There may have been an argument over it, because it might have been said to be interlocutory, but--
45. MR JUSTICE PITCHFORD: Give me a moment.
46. MR BIRD: It comes just before reciting section 298 and after section 295.
47. MR JUSTICE PITCHFORD: I think then, instead of, "There was, however, no avenue of appeal: only the possibility of an application for judicial review", there should be inserted, "There was, however, no avenue of appeal: only the possibility of an application to the High Court."
48. MR BIRD: Yes.
49. MR JUSTICE PITCHFORD: And continue "The process and outcome is unknown and could not amount to rehearing and reassessment of the evidence".
50. MR BIRD: Yes, sir.
51. MR JUSTICE PITCHFORD: Is that it, Mr Bird?
52. MR BIRD: Yes. There is no application for costs.
(The Court Adjourned)