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
		29 April 2015

1. LORD JUSTICE LAWS: In this case the Commissioner of Police for the City of London seeks judicial review (with permission granted by McGowan J on 8 December 2014) of an order made by the City of London Magistrates' Court on 4 September 2014 in effect that the police should release cash, which was the subject of a forfeiture application under section 298 of the Proceeds of Crime Act 2002 ("POCA"), to the interested party to fund his criminal defence. Because the forfeiture proceedings were outstanding such an order is said to be prohibited by section 298(4) of the 2002 Act and thus beyond the magistrates' jurisdiction. I will come to the statute shortly.
2. On 21 January 2013 the City of London Police arrested the three occupants of a vehicle in Southwark. One of them (the driver and registered keeper of the vehicle) was the interested party. Inside the vehicle was a blue plastic bag found to contain £49,605. This was seized by the police under the provisions of section 294 of POCA. The following day on 22 January police officers went to the premises of a money service bureau owned by the interested party and took possession of more cash to the tune of about £300,000. The same day the interested party and another were charged with conspiracy to enter into an arrangement to facilitate the acquisition, retention, use or control of criminal property (in effect money laundering). The magistrates' court thereafter made continued detention orders under section 295 of POCA in relation to both quantities of seized cash.
3. On 12 July 2013 the police applied for forfeiture of the £49,605. Section 298 of POCA provides as follows:

"(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 [an accredited financial investigator] or a constable

...

(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.

...

(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."

4. On 17 October 2013 a forfeiture application under that provision was made in respect of the estimated sum of £300,000. Among other things it is stated in the application that the sum seized included €37,000 in €500 notes. The €500 notes had been taken out of circulation in 2010 as being a favoured currency medium for money launders. It is also stated in the application that:

"It is intended that any detained cash which is not shown to be recoverable property and has been sufficiently legitimised will be returned to Mr [T]."

5. On 29 October 2013 the interested party's solicitors wrote to the CPS seeking release of some £263,000 on the footing that it had been confirmed the day before at the Central Criminal Court that the interested party would only face charges relating to the £49,000 odd seized from the vehicle and the €500 notes stated to be £37,000 rather than €37,000.
6. The solicitors wrote again on 20 December 2013. There was also a letter from the interested party himself to the magistrates' court dated 30 June 2014 stating that:

"It has been agreed between the CPS and the Defence that there are no basis for the retention of the monies seized from [FE] [the name of the money service bureau.]"

The interested party also indicated that he required the money to be released. Paragraph 10 of the letter states:

"I ask for the matter to be listed for an urgent hearing before 21/7/2014."

7. At length the forfeiture applications came before the City of London Magistrates for a directions hearing on 4 September 2014. The order made is stated to be an agreed order and is signed by counsel for the interested party and by Andrew Morris (a financial investigator with the City of London Police). Paragraph 1 of the order reads:

"The Defence team representing Mr[ T] in the Central Criminal Court (trial currently listed for 29/9/14) shall provide an account of the legal costs budget required for Mr [T]'s legal representation so that the officer can release such sums required to meet Mr [T's] costs of legal representation."

I should also set out paragraph 2:

"In respect of the balance of funds seized and not released per paragraph 1 above, the application for forfeiture and cross application for release of the funds to Mr [T] be listed first open date after 27/10/14 with a time estimate of 2 hours."

I refer to that provision because it makes it clear that the hearing on 4 September 2014 was not fixed to determine any application for release whether made in the interested party's letter of 30 June 2014 or otherwise.

8. By these proceedings the City of London Police seek an order quashing the provision in paragraph 1 on the footing that the magistrates had no power to direct release of any of the detained money on 4 September 2014 since the forfeiture proceedings were not by then concluded. Any such release was prohibited by section 298(4). The statute does contain a power of release of detained cash given by section 297 which provides:

"(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)[An officer of Revenue and Customs], constable [or accredited financial investigator]... 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."

9. The conditions in section 295 which are referred to in section 297 are that there are reasonable grounds for suspecting that the cash is recoverable property (section 295 (5)) or that it is imprisoned to be used in unlawful conduct (section 295(6)) 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."

Here the court has at no time indicated that it is satisfied under section 297(3) that neither of the section 295 conditions is any longer met.

10. Customs and Excise Commissioners v Harris [1999] 163 JPR 408, addressing a provision in the Drug Trafficking Act 1994 (which is parallel to section 298(4)), makes it plain that there is no implied power of release. The magistrates' court is a creature of statute and cannot go outside the statute.
11. It is Mr Fletcher's submission for the claimant that the provisions in the statute concerning release set out in section 297 grant no power whatever to the court once the application for forfeiture has been made. That is by force as I have said before of section 298(4).
12. The interested party has been represented this morning by Mr Peter Carter QC leading Mr Chhotu who appeared in the Magistrates' Court. The court is obliged to Mr Carter for his careful and succinct submissions. In written submissions the interested party asserts first that he has not been served with a judicial review application. There is plainly nothing in that. It is then said that the judicial review application is an attempt to circumvent the 30-day time limit for bringing a statutory appeal under section 299. That is misconceived. The right of appeal only bites on the order for forfeiture or refusal to make such an order. The direction on 4 September 2014 was neither.
13. It is then said again in the written argument that there is substantial evidence (not least in the shape of an expert report from Mr Friel) that just under £250,000 of the money held by the police is the legitimate property of the interested party or his business. There is a potential issue about that. Mr Chadha (a solicitor employed by the City of London Corporation) states in his witness statement (I summarise) that the Central Criminal Court have been informed on 28 October 2014 that the prosecution would be contending that the balance of the cash (that is beyond the £49,000 and the €500 notes) is in effect to be introduced at the forthcoming trial as bad character evidence.
14. It is also the interested party's case that Mr Morris who as I have said attended the hearing on 4 September and was party to the agreed order:

"...all along he intended to authorise the release of the seized funds notwithstanding the making of his application for forfeiture..."

Mr Morris has made a witness statement. He made it on 15 September 2014, thus only 11 days after the order in the Magistrates' Court. I should cite some passages from it: referring to 4 September proceedings:

"It was my understanding that I had agreed to the defence forwarding on costs for consideration to be released if any funds were not going to form part of the forfeiture application..."

"I confirmed with Mr Chottu that I would need to seek advice prior to any agreement of funds being released. It was my inclination that the Police stance would not change and that the Police application for forfeiture would be for the entirety of seized funds. This had been my position and response to previous requests from defence in respect of the release of POCA funds to pay for the defence team of the criminal trial."

...

It was my understanding that I had agreed to the defence forwarding on costs for consideration to be released if any funds were not going to form part of the forfeiture application. I first appreciated the misinterpretation after re-reading the signed handwritten documented on the morning of the 15th September 2014 [the day he made his witness statement] whilst at the Central Criminal Court for a mention hearing in respect of the criminal investigation against Mr [T]. I was unaware that I had signed a document which states 'the officer can release such sums required to meet Mr [T's] costs and legal representation'."

15. It would appear that Mr Morris had at least been very careless on 4 September. But for my part I see no reason to doubt the truth of his witness statement, despite the interested party's vigorous assertions in writing that there is no room for mistake. There is no documentary material which I have seen to contradict what Mr Morris has said.
16. There are other points made in the skeleton argument which perhaps I may be forgiven for not reciting. This morning Mr Carter has put his case crisply as follows: he says that where the parties agree that the ambit of the proposed forfeiture is curtailed that fact may be given effect to by the magistrate. He says that is what has happened here. However (a) a jurisdiction cannot be conferred by consent, (b) no application to withdraw the forfeiture application was made or has been made and (c) Mr Morris thought that he was signing up to something rather different from an unqualified order for the release of part of the funds.
17. Mr Carter's submission is that the magistrates' court were entitled to proceed on the facts as they appeared to the court, but in my judgment that cannot escape the jurisdictional bar of section 298(4). The reality is that once the forfeiture application had been made under section 298(1) the magistrates' court lacked all power to release the cash until the forfeiture proceedings were concluded. Power of release under section 297 has no application once the forfeiture application is made. That is the effect of section 298(4). Nor as it happens has the right[?] power of release under section 297F which applies while cash is detained under section 297C or 297D. It is not necessary to go into those provisions which do not bite in the present case. In the result then there was no power in the magistrates' court on 4 September 2014 to direct release of any of the detained funds.
18. I should say last of all that there is no violation of Article 1 of the First Protocol to the European Convention on Human Rights. This was not expressly referred to by Mr Carter this morning (although he has submitted that the statute should in effect be read so as to allow the magistrate in effect to require an interim release in circumstances like this). It is enough to say that the statute creates a balanced regime under which allegations that money is criminally tainted may be properly tested. An application for forfeiture made in bad faith (were that ever to happen) could no doubt in principle be challenged by judicial review. The case of R v Waya [2013] 1 AC 294 referred to in the skeleton argument is an important case on the confiscation order regime, but contradicts nothing of what I have said in this case. For my part I would allow this application.
19. MR JUSTICE WILLIAM DAVIS: I agree.
20. MR FLETCHER: In the circumstances the claimant will draft an order quashing --
21. LORD JUSTICE LAWS: Agree it with Mr Carter and hand it in for the assistance of the associate.
22. MR FLETCHER: We do not make any application for costs in this case.
23. LORD JUSTICE LAWS: So be it. Thank you for your assistance. Thank you Mr Carter.
24. MR FLETCHER: My Lord may I make one point? I have suddenly considered that there are ongoing proceedings against Mr T. Would your Lordship consider that any judgment should be anonymised with reference to him perhaps with a "T" and the name of the money service bureau as "FE"?
25. LORD JUSTICE LAWS: I will if that is thought to be a good idea. I do not think I said anything particularly incriminating other than stating the history of the matter. What do you think Mr Carter?
26. MR CARTER: I think it is a very good idea that Mr Fletcher is suggesting because one part of your Lordship's judgment concerned an application yet to be made under bad character provisions.
27. LORD JUSTICE LAWS: Quite right.
28. MR CARTER: That is the only thing which is potentially contentious.
29. LORD JUSTICE LAWS: We will direct that any report of the judgment be anonymised so that the identity of the interested party is not revealed and he is not named. Thank you very much.