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
		24 October 2005

1. MR JUSTICE GOLDRING: In this case stated Her Majesty's Revenue and Customs appeal against the decision of the Hillingdon Justices sitting at Uxbridge Magistrates' Court on 28th January 2005. It concerns an order they made under section 43(1) of Drug Trafficking Act 1994, by which they ordered forfeiture of £10,000, although £24,580 was seized from the respondent.
2. The respondent is not present. He had, until last Friday, solicitors. In August 2005 they were notified of the present hearing. They stated consistently to the appellants that they wished to be kept informed of the proceedings. They were. It seems that last Friday they ceased formally to act. However, it is clear the respondent knew of today's hearing.
3. In the circumstances I have decided to hear this appeal. I will, however, give the respondent 28 days' liberty to apply to make any submissions to me should he wish to do so in the light of the decision reached.
4. In their stated case, at paragraph 2, the magistrates said that they found the following facts:

"A. The sum of £24,580 was found in the possession of Gary Ullah Chott at Heathrow Airport on 15th December 2002. Mr Chott was travelling from London to Jamaica. The cash was seized by a Customs officer.

B. £7,000 had been given to Mr Chott by Mr Ledford Edwards to enable Mr Chott to buy him a pick-up truck in the UK. The money had been given to Mr Chott by Mr Edwards' sister.

C. Mr Edwards, a farmer in Jamaica, had chosen to buy the truck via the respondent because the respondent purported to offer a better deal than that of the other suppliers.

D. Mr Kenneth Grant gave Mr Edwards £8,000 to give the respondent to buy a pick-up truck for Mr Grant. Mr Grant later wanted the money back because his business had suffered a downturn.

E. Mr Grant and Mr Edwards acted in good faith, but the respondent did not take the money in good faith. He admitted that his business interests in the UK were conducted on the 'black market'.

F. The banknotes seized were contaminated with higher levels of illegal drugs than notes in general circumstances.

G. Mr Edwards chose to buy the truck via the respondent because the respondent offered a better deal than that of other suppliers.

H. The money was more likely than not in the hands of the respondent to have been intended for use in drug trafficking."

5. The magistrates set out in the case a summary of the evidence. It is not necessary for me to go through it.
6. Mr Edwards gave evidence as to the £7,000. A written statement had been made by Mr Grant. It was produced to the court as an exhibit. In that statement he gave an account, the effect of which I have already summarised.
7. As to the contentions on each side, the magistrates say this:

"3. It was contended by the appellant that because of the greater level of drug contamination of the seized cash than one would expect on the average banknote in general circulation, that on the balance of probabilities the money directly or indirectly represented any person's proceeds of drug trafficking or was intended by any person for use in drug trafficking.

It was also contended by the appellant that the accounts given by the respondent were inconsistent and implausible. There was no paper trail for any of the cash and no written evidence to support that Mr Edwards had been paid out on an insurance claim for his allegedly written-off vehicle.

It was further accepted by the appellant that section 43(1) of the Drug Trafficking Act confers a discretion and not an obligation to forfeit.

4. It was contended by the respondent that the cash was for use for legitimate purposes as outlined in the evidence."

8. The findings are set out in paragraph 6 in these terms:

"We were of the opinion that although we found that the money had been intended to be used in drug trafficking, we had a discretion whether to order the forfeiture of any cash seized under section 42. Accordingly we ordered the £7,000 and the £8,000 respectively belonging to Mr Edwards and Mr Grant to be returned to them and the £10,000 claimed by the respondent to be his to be forfeited."

9. The question is in these terms:

"Given the magistrates' finding that the money had been used for drug trafficking, were the magistrates entitled to conclude that some of the money should be returned?"

10. As my summary of the findings makes clear, the magistrates, on the basis of the case stated, did not find that the money had been used for drug trafficking. It is somewhat surprising that question 1 is posed in the form it is until the oral reasons expressed at the time of their decision are referred to. I shall do so shortly.
11. Question 2 is in these terms:

"Were the magistrates correct to take into account that the evidence of Mr Grant given in a statement and admitted under section 2 of the Civil Evidence Act 1995 was unchallenged?"

12. As I have just observed, the magistrates gave oral reasons for their decision. Mr Mullins on behalf of the appellant helpfully summarises them in these terms:

"Heroin contamination has been shown on the money seized at the airport. On average, of the money in circulation, 3% could be expected to be contaminated. This money was divided into five packages and the contamination was on average 27%. This indicates that these bundles of money have been subject to a much higher degree of contamination than notes in general circulation. We feel that the money has been used for drug trafficking." [my emphasis]

13. The statutory provisions are as follows. By section 42(1) of the Drug Trafficking Act 1994:

"A customs officer or constable may seize and, in accordance with this section, detain any cash which is being imported into or exported from the United Kingdom if—-

(a) its amount is not less than the prescribed sum; and

(b) he has reasonable grounds for suspecting that it directly or indirectly represents any person's proceeds of drug trafficking, or is intended by any person for use in drug trafficking."

Section 42(6) states:

"At any time while cash is detained by virtue of the preceding provisions of this section—-

(a) a magistrates' court ... may direct its release if satisfied--

...

(ii) on an application made by any other person, that detention of the cash is not for that or any other reason justified ..."

By section 43(1):

"A magistrates' court ... may order the forfeiture of any cash which has been seized under section 42 of this Act if satisfied, on an application made while the cash is detained under that section, that the cash directly or indirectly represents any person's proceeds of drug trafficking, or is intended by any person for use in drug trafficking."

By subsection (3):

"The standard of proof in proceedings on an application under this section shall be that applicable to civil proceedings; and an order may be made under this section whether or not proceedings are brought against any person for an offence with which the cash in question is connected."

14. There is one relevant authority; George Thomas v HM Customs and Excise, CO/1297/94. It was not drawn to the attention of the justices. In the course of giving a judgment with which Waterhouse J agreed, Kennedy LJ dealt with the provisions of section 43. In that case somebody called Rasool said that he had provided £30,000 of the money seized believing it was to be used as an investment. The suggestion made was that the court's order should not extend to that £30,000. In giving judgment Kennedy LJ referred to the phraseology of section 43(1). He said this as to the justice of ordering forfeiture of that sum of money:

"It may be thought unjust that if a man advances money to another for what the first man believes to be a normal business venture but the intention of the second man is that the money should be used for drug trafficking, the money becomes liable for forfeiture under section 26 [as it then was] but, in my judgment, that is what the plain words of the statute provide."

15. Mr Mullins makes a number of points.
16. First, he draws my attention to the apparent confusion between the case stated and question 1 and the oral reasons given by the justices at the time. He submits that on the basis of the evidence, the only decision which the magistrates could reasonably have come to was that the money had, as they stated in their oral reasons, been used for drug trafficking.
17. Second, he submits that no reasonable bench of magistrates could have refused to make the orders sought once they had found as they did in respect of the money and the drugs. He agrees that they might to some extent have been misled by the absence of the case of Thomas.
18. Third, he submits that they were wrong when they stated that the evidence of Mr Grant was not in dispute. It clearly was, as the correspondence before them indicated. It is correspondence which I have read.
19. Fourth, Mr Mullins points out that there were inherent contradictions in Mr Grant's evidence. Initially he said that he gave the cash to Mr Chott: see the letter of 10th March 2003 where he spelt Mr Chott's name as 'Chatt'. In a letter of 16th May 2003 he said that he gave the cash to Mr Edwards to give to Mr Chott. He claimed also to know Linford Evan Edwards very well despite getting his first name wrong in his statement: the correct name was not 'Linford' Edwards but 'Ledford' Edwards as he said.
20. In my view section 43(1) gives the magistrates a power to make an order in the circumstances there set out. By definition, it does not oblige them invariably to do so. The issue here is whether the magistrates could reasonably have failed to exercise that power on a proper consideration of all the facts in this case and an accurate understanding of the legal principles to apply.
21. It seems to me the following were relevant to their decision here.
22. First, the money was intended to be used for drug trafficking. The magistrates so found in the case stated. Although in the written reasons they did not speak of it having been used for drug trafficking, the question posed in the case stated appears to assume it was. That would accord with the oral reasons they gave on the day for their decision. It would accord too with common sense.
23. Second, section 43 is in terms of an intention by any person to use the money for trafficking drugs, as Kennedy LJ made clear in Thomas. The possible injustice of forfeiture in that context was made clear by Kennedy LJ. Thomas, of course, was not drawn to the magistrates' attention.
24. Third, the magistrates wrongly thought that the statement of Mr Grant was agreed when it plainly was not. Moreover, Mr Mullins' observations as to the inconsistencies in the face of that account have substance.
25. It seems to me that, on a proper understanding of the legal principles as adumbrated in Thomas, giving proper weight to Mr Grant's statement and the rest of the evidence, no bench could reasonably, have failed to exercise its power under section 43 in respect of the whole of the sum of money seized.
26. In those circumstances I must allow the appeal, quash the decision reached. I shall hear Mr Mullins' submissions as to what precisely he now wants me to do.
27. I finally return to the questions posed by the magistrates. As to question 1, albeit somewhat difficult to follow for the reasons I have given, the answer to the question would appear to be, no. The magistrates were not entitled to conclude that some of the money should be returned. As to question 2, "Were the magistrates correct to take into account that the evidence of Mr Grant was unchallenged" the answer was, no, they were not correct and for the reasons I have given.
28. MR MULLINS: My Lord, in respect of the remedy, I had put in my grounds that we sought your Lordship to substitute.
29. MR JUSTICE GOLDRING: Yes.
30. MR MULLINS: And I took that from Part 52.
31. MR JUSTICE GOLDRING: Yes, if you can persuade me that is the appropriate thing to do, I am quite happy to do that, Mr Mullins - anything to save unnecessary costs.
32. MR MULLINS: Part 52 is at page 1473.
33. MR JUSTICE GOLDRING: 1473, thank you. (Pause.) Yes.
34. MR MULLINS: It appears that under --
35. MR JUSTICE GOLDRING: Which paragraph are you looking at?
36. MR MULLINS: I am looking at rule 52.10(2):

"The appeal court has power to affirm, set aside or vary any order or judgment made or given by the lower court" --

37. MR JUSTICE GOLDRING: Is that 2005 that you have?
38. MR MULLINS: Yes, it is, my Lord.
39. MR JUSTICE GOLDRING: Needless to say I have got 2004, which is the one here. Read that out again.
40. MR MULLINS: I read subsection (1) to make sure I have this absolutely right:

"In relation to an appeal" --

41. MR JUSTICE GOLDRING: You are looking at?
42. MR MULLINS: The rule itself, my Lord.
43. MR JUSTICE GOLDRING: So the pages are different. 52?
44. MR MULLINS: 10.
45. MR JUSTICE GOLDRING: Yes, let me read it. (Pause.) Yes, so you say that my powers include those?
46. MR MULLINS: Yes. If it had been a situation where an exercise of the discretion was still open, then your Lordship would have to remit the matter back because this is an appeal by way of case stated on a point of law.
47. MR JUSTICE GOLDRING: No, I am quite content to quash the order and substitute for it an order forfeiting the entire sum of £24,580.
48. MR MULLINS: My Lord, I am grateful.
49. There falls then for me to submit in relation to the costs. Now in relation to today's hearing, because certainly it being my instructing solicitor's opinion that because this was not resisted, and therefore neither Mr Grant nor Mr Edwards could actually have any control over the final order made by the magistrates, that it was not appropriate to seek costs for today's hearing, but those instructing me seek costs for the hearing in the court below. I hope your Lordship has been given sight of schedule of costs.
50. MR JUSTICE GOLDRING: I do not think I have actually.
51. MR MULLINS: I have my copy of the schedule of costs.
52. MR JUSTICE GOLDRING: (Same handed.) Thank you. (Pause.) Yes, you can have your costs below.
53. MR MULLINS: I am grateful.
54. MR JUSTICE GOLDRING: (Pause.) Do you want me to assess them? I have assumed when I say 'costs', I am saying that is the amount of costs you may have.
55. MR MULLINS: My Lord, yes, that is what I am asking for.
56. MR JUSTICE GOLDRING: Yes, and that is what I am saying. The order can go out, but it will include giving him 28 days to apply to me in relation to it.
57. MR MULLINS: Just for the record, may I say that those instructing me reserve their position in relation to costs in a future hearing if it is opposed by Mr Chott or one of the other parties.