England and Wales High Court (Administrative Court) Decisions

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

		Royal Courts of Justice Strand London WC2A 2LL
		17 October 2012

1. MR JUSTICE FOSKETT: This is an application for judicial review made by permission of a Divisional Court comprising Hooper LJ and Singh J on 9 December 2011: see [2011] EWHC 3811 (Admin). Mitting J had refused permission on the papers previously. The permission granted by the Divisional Court was on a limited basis only and I will turn to that basis shortly after summarising the events that give rise to the application.
2. On 25 September 2006 a sum of a little in excess of £452,000 in cash was seized by the Serious Organised Crime Agency ("SOCA") from the Harrods' Safe Depository contained in two safety deposit boxes leased in the name of the claimant in these proceedings. This application would appear to have been taken pursuant to section 50 of the Criminal Justice and Police Act 2002.
3. In due course, on 15 September 2008, SOCA issued an application in the City of Westminster Magistrates' Court for a forfeiture order in respect of the money under section 298 of the Proceeds of Crime Act 2002. Its case was that the money represented the proceeds of a leasing fraud or was to be used in connection with fraud. An alleged participant in the leasing fraud was a Mr Leslie Thompson. It is unnecessary for present purposes to say more about the circumstances because in due course District Judge Michael Snow found that the cash was "recoverable property" within the meaning of the 2002 Act in that it represented the proceeds of the leasing fraud.
4. The victims of the leasing fraud were a number of finance companies that had provided finance for, it was believed, CCTV equipment being provided by a company known as Amco Fire and Security Limited. It was, in effect, money belonging to those finance companies that found its way into the safe deposit boxes.
5. In the period between the issue by SOCA of the application under section 298 and the substantive hearing before the District Judge on 23 November 2009 various finance companies joined in the proceedings, claiming that the seized cash belonged to them and seeking its release as appropriate under section 301 of the Proceeds of Crime Act.
6. On 24 November 2009, after he had found that the cash was "recoverable", the District Judge ordered that it should be released to the finance companies. The claimant had been unwell at the time and played no part in the proceedings. Although it was the claimant's case that the cash represented the proceeds of legitimate business transactions, no challenge is now made to the forfeiture order made by the District Judge and the order for release of the cash to the finance companies.
7. The District Judge gave directions concerning the issue of the costs of the proceedings before him and on 15 July 2010 he made an order that the claimant should pay 75 per cent of the costs sought by SOCA and by the finance companies and that Mr Thompson should pay 25 per cent. Since it is only the order made in favour of the finance companies that is under challenge in this application, I merely record that the District Judge's order was that the claimant should pay £31,230.73 to those companies (that figure representing 75 per cent of £41,640.97).
8. It emerged during those proceedings that the finance companies had paid £27,500 towards the costs of SOCA, which SOCA agreed to return to the finance companies in the event that it recovered its costs.
9. The short point taken in this application is that the District Judge had no jurisdiction to make an order in favour of the finance companies. His power to make an order for costs is conferred by section 64 of the Magistrates' Courts Act 1980 and it is possible to make an order under that section only in favour of a "complainant" and, it is argued, the finance companies were not complainants within that section. That is the point the Divisional Court considered arguable and upon which permission to apply for judicial review was granted.
10. I will set out first of all the relevant parts of section 64. They are as follows:

"(1) On the hearing of a complaint, a magistrates' court shall have power in its discretion to make such order as to costs—

(a) on making the order for which the complaint is made, to be paid by the defendant to the complainant;

...

as it thinks just and reasonable ...

(2) The amount of any sum ordered to be paid under subsection (1) above shall be specified in the order ...

(3) ... costs ordered to be paid under this section shall be enforceable as a civil debt."

11. As I have said, the short issue is whether the finance companies, or each of them, were complainants or whether SOCA was the only complainant. If the latter was the case then there would not have been power to make the order for costs directly in favour of the finance companies.
12. The Divisional Court did not have the benefit of any oral argument when it granted permission and the written material relating to the issue upon which permission was granted was sparse. We have now had the advantage of receiving submissions, in effect, from SOCA and from the finance companies and there are, in my judgment, grounds for concluding that the provisional view previously expressed cannot be sustained.
13. Although I have said we have received submissions from SOCA and from the finance companies, in fact the strict procedural position is this: given the rejection of the other grounds advanced by the claimant by way of challenge to the District Judge's decision, SOCA had no further direct interest in this case. However, it was of the view that the ground concluded by this court as being arguable did not reflect a correct analysis of the position and submitted Detailed Grounds for Resisting the Claim. Those grounds have been adopted by the finance companies, a number of which have been represented before us today by Miss Torode and she has relied upon and briefly enlarged upon a skeleton argument prepared by Mr Stephen Hellman.
14. In essence, what is said is that there were two categories of application before the District Judge (not one) under which SOCA was a complainant in the section 298 proceedings and each finance company was a complainant in the section 301 proceedings. Each set of proceedings is provided for in Chapter 3, Part 5 of the Proceeds of Crime Act. The procedure governing each type of application is set out in the Magistrates' Court (Detention and Forfeiture of Cash) Rules 2002, the material parts of which are as follows:

"6.—(1) An application under section 297(3) or 301(1) of the Act for the release of detained cash shall be made in writing and sent to the justices' chief executive for the petty sessions area of the court before which the applicant wishes to make the application.

...

(4) The justices' clerk shall fix a date for the hearing of the application, which, unless he directs otherwise, shall not be earlier than seven days from the date on which it is fixed, and the justices' chief executive shall notify that date to the applicant and to every person to whom a copy of the application is required to be sent under paragraph (3).

(5) At the hearing of an application under section 301(1) of the Act, the court may, if it thinks fit, order that the applicant shall be joined as a party to all the proceedings in relation to the detained cash.

...

7.—(1) An application under section 298(1) of the Act for the forfeiture of detained cash shall be in Form G and shall be sent to the justices' chief executive to whom applications for the continued detention of the cash under section 295(4) of the Act have been sent.

...

(3) The applicant shall send a copy of the application to every person to whom notice of an order made under section 295(2) of the Act in respect of the detained cash has been given and to any other person identified by the court as being affected by the application.

(4) The justices' clerk shall set a date for a directions hearing, which, unless he directs otherwise, shall not be earlier than seven days from the date on which it is fixed, and the justices' chief executive shall notify that date to the applicant and to every person to whom a copy of the application is required to be sent under paragraph (3).

(5) At the directions hearing, the court may give directions relating to the management of the proceedings, including directions as to the date for the hearing of the application ...

...

11.—(1) At the hearing of an application under Chapter 3 of Part 5 of the Act, any person to whom notice of the application has been given may attend and be heard on the question of whether the application should be granted, but the fact that any such person does not attend shall not prevent the court from hearing the application.

(2) Subject to the foregoing provisions of these Rules, proceedings on such an application shall be regulated in the same manner as proceedings on a complaint, and accordingly for the purposes of these Rules, the application shall be deemed to be a complaint, the applicant a complainant, the respondents to be defendants and any notice given by the justices' chief executive under rules 5(3), 6(4), 7(4), 8(4) or 10(4) to be a summons: but nothing in this rule shall be construed as enabling a warrant of arrest to be issued for failure to appear in answer to any such notice..."

15. Miss Torode submits that since application notices were issued by each finance company pursuant to section 301, asserting that the detained cash belonged to them and seeking its return, the operation of Rule 11(2) deemed those companies to be complainants and the claimant a respondent to such proceedings. The same applied, it is said, to the proceedings brought by SOCA under section 298 which were dealt with at the same time.
16. In my judgment, that represents the answer to the issue upon which permission was granted. Had those provisions been drawn to the attention of the court, permission would not, in my view, have been granted.
17. I would dismiss the application on the basis that the District Judge plainly had the jurisdiction to make the order that he did.
18. THE PRESIDENT: I agree. We ought to just ask you this: at 11.20 this morning a firm called Ormond Legal, described as Legal Costs Accountant at the Ormond Building, 31/36 Ormond Quay Upper, Dublin 7, where the principal is Mr Troy Cremlin LLB LLM LLD, Commissioner for Oaths, with a UK office at 138 University Street, Belfast, sent a letter to the court which says as follows:

"I refer to the case which is down for a Hearing later today.

I hereby intimate that the claimant, Patrick Doherty is to Appeal and hereby Appeals the decision of the Court of yesterday to refuse the Application for an Adjournment at his instance on medical grounds.

Mr Doherty remains unable to attend Court today due to his medical condition as per the Medical Reports lodged in court in support of his Application for an Adjournment.

In these circumstances it is submitted that it is not appropriate for the Hearing fixed in this case to proceed today and such Hearing should be postponed pending Mr Doherty's Appeal against the decision of the Court."

19. This arrived in this court after my Lord had commenced giving judgment in the case. In any event, there is no appeal from a decision refusing an adjournment. There were insufficient grounds in the papers put before the court yesterday, and in any event this case has been going on for an inordinate length of time and the point is completely hopeless, as my Lord has just explained.
20. MISS TORODE: My Lord, I dare to raise the issue of costs.
21. THE PRESIDENT: Does it matter? Has he got money?
22. MISS TORODE: Essentially the finance companies seek to make Mr Doherty bankrupt.
23. THE PRESIDENT: Okay. What do you want by way of costs?
24. MISS TORODE: The total for the costs is £14,936.80.
25. THE PRESIDENT: Where do we find that?
26. MISS TORODE: A statement of costs was sent to the court. I have spare copies here. (Handed)
27. THE PRESIDENT: I do not recall seeing them. Where are your solicitors based?
28. MISS TORODE: Birmingham.
29. THE PRESIDENT: The rates are modest in comparison to those in London. It breaks down in a sense. Your fees are £5,000, the solicitor's fees are £7,000 and then there is some VAT.
30. MISS TORODE: Yes.
31. THE PRESIDENT: How long was allowed for today's hearing? 8 hours travel and waiting time. There are two: there is numbered 6 hours at £170 and 8 hours. "Attendance at Hearing B"; what is that one?
32. MISS TORODE: There would be one hearing for the May hearing and then another hearing. The second one is today's hearing.
33. THE PRESIDENT: We have not been 8 hours.
34. MISS TORODE: From Birmingham.
35. THE PRESIDENT: Yes, I know, but it is an hour and a half away. So we have to knock something off.
36. MISS TORODE: If I return within the next 2 hours, so 2 o'clock. So probably nearer 6 hours for today's hearing by the time we return to Birmingham.
37. THE PRESIDENT: We will summarily assess this at £13,500.
38. MISS TORODE: I am grateful, my Lords.