|
EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
|
Lord Osborne
Lord McEwan
Sir David Edward, QC
|
[2006] CSIH 54
P292/04
OPINION OF THE COURT
delivered by LORD OSBORNE
in
PETITION FOR AN INTERIM ADMINISTRATION
ORDER
in terms of the Proceeds
of Crime Act 2002
of
THE SCOTTISH MINISTERS
Petitioners;
against
GEORGE McGUFFIE and OTHERS
Respondents:
_______
|
Act: Cullen, Q.C.; The Solicitor to the Scottish Executive
Alt: Woolman, Q.C., Shead; Wilson Terris & Co., S.S.C. (Morrison
Haggerty, Dunfermline)
14 November 2006
The background
circumstances
[1] In this
petition at the instance of the Scottish Ministers, who are the enforcement
authority in relation to Scotland for the purposes of the Proceeds of
Crime Act 2002, the petitioners seek an interim administration order in terms
of Chapter 2 of Part V of that Act and warrant for inhibition and
arrestment. Sections 256 to 265 of the
2002 Act provide for the making of interim administration orders by the Court
of Session and for certain other matters relating to such orders. The petition has been served upon the three
person designed in paragraph A of Part I of the Schedule to the petition, but
only the first named respondent in the petition has lodged answers to it.
[2] The factual
circumstances in which the petition has been brought are set forth in detail in
paragraphs 5.1 to 5.3 of it. In the
prayer of the petition a number of orders are sought, including an interim administration
order in terms of section 256 of the 2002 Act for the detention, custody and
preservation of the property described in Parts II and III of the Schedule to
the petition. On 3
March 2004 the
Lord Ordinary granted an order in terms of section 256 of the 2002 Act for the
detention, custody and preservation of the property mentioned, following an ex parte hearing. In outline, he granted the orders sought in
paragraphs (1) to (3) and (5) to (14) of the prayer of the petition. In particular, an interim administrator was
appointed. In due course, the first
named respondent lodged answers, in which, for the present purposes, only
answer 5.1 is pertinent. In that answer,
he avers, inter alia, as follows:
"Admitted that the respondent has a
number of previous convictions. Quoad ultra denied. Explained and averred that, with limited
exceptions, the petition seeks recovery of property in respect of criminal
offences which were alleged to have been committed by the first respondent
before the Act came into force. Separatim apart from the offences which
have resulted in conviction it is alleged that the first respondent has
committed a number of other offences. ... In respect of the convictions referred
to (with the exception of those in 2003 and 2004) the petitioners are seeking
to reopen the cases after an unreasonable time has elapsed. To invite the court to make the orders sought
would be for the petitioners to act incompatibly with the first respondent's
rights under Articles 6(1) and 7(1) of the Convention (the European Convention
on Human Rights and Fundamental Freedoms).
Such an Act would be ultra vires. Reference is made to section 57(2) of the
Scotland Act 1998."
The first named respondent has also tabled a number of pleas
in law. The first of these was to the
effect that the orders sought being ultra
vires, the petition should be dismissed.
The petitioners also tabled a single plea in law to the effect that the
averments in answer for the first named respondent being irrelevant et separatim lacking in specification,
should not be remitted to probation and the prayer of the petition should be
granted de plano. In due course the
petition and answers were appointed to the Procedure Roll for the purpose of
consideration of these preliminary pleas in law. By an interlocutor dated 28
February 2006,
the Lord Ordinary sustained the petitioners' single plea in law and repelled
the first named respondent's preliminary plea, appointing the proceedings then
to be called in the By Order roll.
Against that interlocutor the first named respondent has reclaimed.
Submissions for the
first named respondent
[3] When the
reclaiming motion came before us, senior counsel for the first named respondent
made two submissions. First, he
contended that Article 7(1) of the European Convention on Human Rights and
Fundamental Freedoms, hereafter referred to as "the Convention", had been
engaged in this case. Secondly, he
contended, in particular, that the order sought by the petitioners was contrary
to that Article, because they were seeking to impose upon the first named
respondent a "retrospective penalty", in contravention of that Article. The Lord Ordinary had erred in rejecting
these contentions. The position of the
first named respondent was more fully set out in the grounds of appeal, which
are in the following terms:
"1. The
Lord Ordinary erred in holding that Article 7(1) of the European Convention on
Human Rights is not engaged in this case.
2. The
present proceedings are penal in nature because the petitioners seek to impose
a heavier penalty than the one that was applicable at the time of the alleged
unlawful conduct by the respondent.
3. The
concept of a 'penalty' is an autonomous Convention concept (Welch v The United Kingdom 1995 20 EHRR 247). Whether a particular measure is a 'penalty' for
the purposes of Article 7 depends upon the following:
·
Is
it imposed following a criminal conviction?
·
What
is the nature of the purpose of the measure?
·
What
are the procedures involved in the implementation of the measure?
·
What
is its severity?
4. The
present proceedings, so far as retrospective, are penal in that:
(a) A
recovery order can only be made in respect of property obtained
through unlawful conduct. That involves the court making a finding that
the respondent is guilty of such conduct.
(b) If
it is satisfied that property is recoverable, the court must make a
recovery order, subject to a very
limited discretion.
(c) A
recovery order would have no compensatory function, because
payment would be made to the
petitioners, not to any victim.
(d) The
respondent would not have the safeguards available to an accused
person at a criminal trial.
(e) The
petitioners seek to recover all property obtained by unlawful
conduct, not just any actual
enrichment or profit.
(f) The
powers available to the petitioners go beyond those available to
civil victims.
5. More
generally, recovery orders are punitive in nature given that they may relate to
property derived from conduct (a) in respect of which a respondent has been
acquitted many years before; or (b) where the Crown, after conviction, chose
not to seek a confiscation order.
6. Looked
at objectively, proceedings under Part IV are in substance penal in nature."
[4] Senior
counsel went on to explain that it was a matter of agreement that, if the court
were minded to grant the reclaiming motion, the case should be heard in the By
Order roll, to enable the petitioners to seek a more limited form of order than
that which they currently sought. If the
reclaiming motion were to be refused, the petitioners would apply for a full
recovery order in terms of a separate petition for that remedy lodged on 19
January 2005,
but sisted on 6 April 2005, pending the determination of the
present challenge.
[5] Senior
counsel continued his submissions by drawing our attention in detail to the
provisions of the 2002 Act, which had received the Royal Assent on 24
July 2002. It had come into force in accordance with
provisions made by the petitioners and the Secretary of State. Chapters 1 and 2 of Part V of the Act had
come into force on 30 December 2002 and 24
February 2003
respectively (S.I. 2002 No. 3015 and S.I. 2003 No. 120). The provisions of the relevant parts of the
Act had been helpfully quoted in the Opinion of the Lord Ordinary. Section 240 of the 2002 Act provided for
recovery by the enforcement authority in civil proceedings before the Court of
Session of property which was, or represented, property obtained through
unlawful conduct. These powers were
exercisable in relation to any property, whether or not any proceedings had
been brought for an offence in connection with the property. Section 241 defined "unlawful conduct" as
conduct unlawful under the criminal law of that part of the United Kingdom in which it occurred. The court had to decide on a balance of
probabilities whether it was proved that any unlawful conduct had
occurred. Section 244 of the 2002 Act
provided for the range of persons against whom proceedings for recovery might
be taken. Section 245 defined
"associated property" for the purposes of the Act. Sections 256 to 265 made provision in
relation to applications for interim administration orders and associated
matters. It was not necessary to
consider those provisions in detail since the present reclaiming motion was
concerned only with the issue of principle outlined. Section 266 was important. It provided that, if the court was satisfied
that any property was recoverable, it had to make a recovery order subject to
the limited qualifications set out in subsection (3) and following
subsections. Section 288 of the 2002 Act
made provision for a new section 19B of the Prescription and Limitation
(Scotland) Act 1973, creating a limitation period for actions for recovery of
property obtained through unlawful conduct, it being provided that such
proceedings should not be commenced after the expiration of the period of 12
years from the date on which the Scottish Ministers' right of action
accrued. Finally, section 316 of the
2002 Act was an interpretation section.
It was evident from subsection (3) of that section that it was intended
that the legislation should have retrospective effect.
[6] Senior
counsel went on by drawing attention to the provisions of Article 7 of the
Convention. He explained that his
argument depended upon his showing that the second part of paragraph (1) of
that Article was inconsistent with section 316(3) of the 2002.
[7] Senior
counsel explained that the Lord Ordinary had helpfully narrated the submissions
of the first named respondent in detail at paragraph [38] and following of his
Opinion. It was important to note that
the petitioners averred that the first named respondent had obtained property
through unlawful conduct during a period from 1981 to 2004. Accordingly, the interim administration order
in this case was retrospective in effect and any recovery order would also be
retrospective. The orders granted and to
be sought were contrary to Article 7(1) of the Convention, since the
petitioners sought to impose a heavier penalty than that which was applicable
at the time that any criminal offence was committed. The concept of a "penalty" was an autonomous
Convention concept. It was for the court
to assess whether any particular measure amounted to a "penalty", as appeared
from Welch v The United Kingdom. It was
submitted that the present proceedings were penal in nature having regard to
seven factors. First, the orders made
under the Act involved a finding, direct or indirect, of guilt on the part of
the first named respondent. That
occurred in the absence of all of the safeguards available to an accused person
in criminal proceedings. Second, if the
court was satisfied that any property was recoverable, it required to make a
recovery order, subject to a very limited discretion. Third, orders might relate to property
allegedly derived from conduct in respect of which the first named respondent
had been acquitted many years before. It
might also relate to conduct resulting in a conviction, where the Crown had chosen
not to seek a confiscation order.
Fourth, orders sought had no compensatory function because payment under
a recovery order was made to the petitioners, not to the victim of any criminal
activity. Fifth, the property was
recoverable because it derived from crime, not because anyone was unlawfully
deprived of the property in the first place.
Sixth, the enforcement agency sought recovery of all property obtained
by unlawful conduct, not just any actual enrichment or profit obtained from
such conduct. Seventh, the powers which
could be exercised against the first named respondent by the petitioners went
beyond those which would be available to civil victims. While it had to be acknowledged that the 2002
act classified such proceedings as the present as civil proceedings, that was
the least important factor. Any other
view would mean that domestic law could deprive individuals of the protection
of their Convention rights.
[8] Senior
counsel for the first named respondent went on to consider the effect of such
authorities as were pertinent to the issue involved. He frankly recognised that the single case
that supported his position was Welch v
United Kingdom.
He referred to paragraphs 22 and 23 of the report as showing the
submissions of the applicant, paragraphs 23 and 24 as demonstrating the
position of the United Kingdom Government, paragraph 25 as showing the position
of the Commission and paragraphs 26 to 36 as containing the decision of the
court, which was to the effect that the confiscation order in question, which,
in the particular circumstances, was retrospective in effect, amounted to a
penalty. There had therefore been a
breach of Article 7(1) of the Convention.
It was contended, following the approach in that case, that the recovery
order contemplated here was of the nature of a penalty because the first named
respondent faced a more far reaching detriment than that which he faced when
committing the offences in question.
[9] Senior
counsel recognised that there were certain differences between a confiscation
order, such as had been in issue in that case, and a recovery order, such as
was contemplated here. In particular,
there was little discretion involved in the latter kind of order, in
distinction to a confiscation order;
further, there was no sanction of imprisonment capable of being imposed
in connection with a recovery order , whereas the position was different in
connection with a confiscation order.
[10] Senior counsel
very properly drew our attention to a number of other cases which were relevant
to the issue before the court. The first
of these was the Assets Recovery Agency v
Walsh [2004] NIQB 21. In that case, a full recovery order had been
sought. The circumstances of the case
were described in detail in the Opinion of the Lord Ordinary at paragraphs [102]
to [109]. The judge of first instance,
Coghlin J. had considered in detail the three tests identified in Engel v The Netherlands (No. 1)
(1976) 1 EHRR 647. These tests were set
out in paragraph [105] of the Lord Ordinary's Opinion. The conclusion of Coghlin J. at paragraph
[21] of his Opinion was that civil recovery proceedings within the meaning of
Part V of the 2002 Act ought to be classified as civil rather than criminal.
[11] The decision
was appealed to the Court of Appeal in Northern Ireland.
The decision of that court was to be found in Walsh v Director of the
Assets Recovery Agency [2005] NICA 6.
The conclusion of the court was that the Part V provisions were designed
to recover the proceeds of crime, rather than to establish, in the context of
criminal proceedings, guilt of specific offences. The proceedings were civil in nature. An application had been made for leave to
appeal that decision to the House of Lords, but the application was refused.
[12] A further
relevant case was Belton v The Director of the Assets Recovery Agency
[2006] NICA 2. The conclusion of the
court, in paragraph [17] was that none of the provisions in Part V of the 2002
Act imposed a penalty, criminal or civil.
Accordingly, Convention rights were not engaged.
[13] Certain
English decisions were relevant. The
first of these was Regina v Jia Jin He and Dan Dan Chen [2004] EWHC 3021. The issue was whether the
provisions of Part V of the 2002 Act were to be construed as criminal with the
result that Articles 6 and 7 of the Convention would apply. Collins J. considered that the observations
of Coghlin J. in The Director of the
Assets Recovery Agency v Walsh were
correct, as was his decision that proceedings under Part V of the 2002 Act were
civil proceedings.
[14] Senior counsel
also drew attention to the Director of
the Assets Recovery Agency v Commissions
of Customs & Excise and Others [2005] EWCA Civ 334. The Court of Appeal concluded that the
Opinions of Coghlin J. in Director of
Assets Recovery Agency v Walsh
and of Collins J. in Regina v Jia Jin He and Dan Dan Chen were
entirely right.
[15] Senior counsel
also referred to Regina v Ashton [2006] E.W.H.C. 1064, where it
was contended that the civil recovery procedure in Part V of the 2002 Act
offended against Article 7 of the Convention.
Newman J., in the light of the weight of existing authority and other
considerations, decided that the recovery procedure was not incompatible with
Article 7 of the Convention.
[16] Finally, in Scottish Ministers v Buchanan and Others [2006] CSOH 121,
Lord Penrose, in the light of the authorities cited to him, concluded that
proceedings under Part V of the 2002 Act were not penal. Senior counsel concluded his submissions by
recognising that the weight of authority stood in the way of their
success. However, he contended that the
court should take the view that, in the various authorities cited, an erroneous
view of the recovery provisions in the 2002 Act had been given effect. Welch
v The United Kingdom had been
misconstrued. In all the circumstances
the reclaiming motion should be allowed.
Submissions of the
Scottish Ministers
[17] Senior counsel
for the petitioners moved us to refuse the reclaiming motion and to affirm the
Lord Ordinary's interlocutor. He submitted
that the petitioners' submission was that the civil recovery provisions in the
2002 Act provided for civil proceedings, which were fundamentally different
from criminal proceedings, because the aim of the former proceedings was not to
establish that some particular offence had been committed and to impose an
appropriate penalty; rather the purpose
was to effect the seizure or recovery of property derived from unlawful
conduct. The civil recovery proceedings
were not concerned with issues of guilt or innocence and they lacked the
features of punishment and retribution, which were characteristics of the
criminal law. As a matter of domestic
law, the civil recovery provisions were not to be regarded as criminal in
character. They did not relate to any
particular offence, even though the Scottish Ministers might be required to
prove that some person had committed an offence and thus acquired
property. To effect recovery was not to
impose punishment, but rather to remove property from the "criminal economy"
and thus prevent the beneficiaries of that economy from acting as role models
to others.
[18] Recovery
proceedings had to be seen as proceedings in
rem, so there could be a situation in which there was an acquittal in
criminal proceedings, but recovery proceedings based on the same criminal
activity might succeed according to the civil standard of proof involving a
balance of probabilities. The basic
response to the reclaimers' submissions was the simple contention that the
purpose of recovery proceedings differed fundamentally from that of criminal
proceedings. In the former type of
proceedings there was no question of retrying an individual in respect of some criminal
offence.
[19] Senior counsel
drew our attention to what was said by the Lord Ordinary in paragraph 133 of
his Opinion. He wished to make clear
that it was not wholly accurate. The
position in fact was that the Civil Recovery Unit acted on behalf of the
Scottish Ministers in the exercise of their functions under Part V of the 2002
Act. The position had been outlined to
the Scottish Parliament by the Scottish Justice Minister when the Bill which
resulted in the 2002 Act, introduced into the United Kingdom Parliament, had
been debated in the Scottish Parliament.
It had been made clear that the Lord Advocate would remain responsible
for the system of criminal confiscation in Scotland, while the responsibility for civil
recovery would be imposed upon the Scottish Ministers. However, the day to day administrative
responsibility for civil recovery was to be delegated to the Lord Advocate in
his capacity as a Scottish Minister. The
intention was that there should be a clear demarcation between the function of
the Lord Advocate, as public prosecutor, and his performance of civil recovery
responsibilities on behalf of the Scottish Ministers. In practice, steps had been taken to
establish a demarcation between the two functions. The Civil Recovery Unit reported to the Lord
Advocate, as a Scottish Minister, not as head of the prosecution service. Administrative arrangements had been
established to support the independence of the Civil Recovery Unit.
[20] Turning to the
provisions of the 2002 Act, senior counsel drew attention to section
244(1). It authorised the taking of
proceedings for recovery against "any person who the authority thinks holds
recoverable property." That was possible
even though the person from whom recovery was sought had not been guilty of any
unlawful conduct. The significance of
section 244(1) was to demonstrate that the process of civil recovery did not
involve the imposition of a penalty. It
was certainly true that the existence of criminal convictions against an
individual might be relied upon in part, but that was a distraction. It was fallacious to conclude from the
existence of criminal convictions that what was happening in recovery
proceedings was a retrial of the issues determined prior to such
convictions. Putting the matter in
another way, the legislation provided the means whereby the State might recover
property which the holders were not entitled to hold, because that property had
been derived from criminal conduct. It
had to be recognised that the enforcement authority might prove the necessary
factual ingredients for recovery by means of inference from evidence quite
separate from the existence of criminal convictions.
[21] It was
illuminating to consider further features of the 2002 Act. Section 266(3) and (5) set out certain
qualifications and exceptions to the recovery procedure. The full characteristics of civil recovery
proceedings had been correctly recognised by the Lord Ordinary in paragraph 134
of his Opinion, although what he said in paragraph 136 might be
misconceived. In the circumstances, a
balancing exercise was not required; the question was whether in a particular
set of factual circumstances there was a right to make recovery. Section 278 of the 2002 Act imposed certain
limits on recovery; the language of that section demonstrated that Parliament's
intention was to focus upon the recovery of recoverable property, rather than
impose a penalty. Section 305 of the Act
provided for the tracing of property through transactions affecting it,
although section 266 provided for limits on the tracing of recoverable
property, based on considerations of equity. The rules were designed to ensure that there
would be recovery only to the extent necessary to ensure recovery of the
original property unlawfully obtained.
[22] Senior counsel
went on to draw attention to relevant Scottish jurisprudence, in particular S. v Miller
2001 S.C. 977, a case concerned with the character of the children's hearing
system. In paragraphs [32] to [34], at
page 1041 and following, Lord Macfadyen discussed the criteria derived from Engel v The Netherlands. Plainly if
proceedings were classified as criminal by domestic law, that determined their
character; if they were classified as
civil by that law, then other factors had to be considered. An important consideration was whether the
public prosecutor was involved in the proceedings. That was not so in recovery proceedings, in
any meaningful respect.
[23] Senior counsel
went on to consider other authorities. Belton v The Director of the Assets Recovery Agency was precisely in point
in relation to the present case. The first
named respondent had contended that that case should not be followed. However, it would be most undesirable for United Kingdom legislation to be differently
interpreted in different parts of the United Kingdom, unless there was very good reason
to take that course, which there was not.
The court ought to follow the reasoning in that case, particularly what
was said between paragraphs [11] and [16] in relation to the case of Welch v The United Kingdom. There
was no sound analogy between confiscation orders and civil recovery
orders. The reasoning of Lord Penrose in
Scottish Ministers v Buchanan was soundly based. While senior counsel had made his submissions
in relation to a civil recovery order, the position was the same in relation to
an interim administration order. The
reasoning in Regina v Ashton, particularly in paragraphs [41]
to [43], was also commended.
The decision
[24] Article 7 of
the Convention, headed No Punishment Without Law, provides as follows:
"1. No
one shall be held guilty of any criminal offence on account of any act or
omission which did not constitute a criminal offence under national or
international law at the time when it was committed. Nor shall a heavier penalty be imposed than
the one that was applicable at the time the criminal offence was committed. ...
".
At the outset of the debate before us, senior counsel for the
first named respondent made it clear that he was inviting the court to decide a
single and strictly limited issue of principle, whether the provisions of Part
V of the 2002 Act, concerned with the civil recovery of the proceeds of
unlawful conduct, invoked against the first-named respondent, would involve the
infliction of a "penalty", within the meaning of Article 7.1 of the
Convention. If they did, then the
present proceedings would fall foul of the prohibition on retrospectivity
contained in the second part of Article 7.1.
Counsel frankly conceded that this issue had come before courts in the
different parts of the United Kingdom and had been decided in a manner inimical
to his submissions. Yet he invited us
not to follow those decisions, but to prefer the approach that was taken by the
European Court of Human Rights in Welch
v The United Kingdom, a case
concerned with the issue of whether the confiscation order imposed upon Mr.
Welch constituted the imposition of a retrospective criminal penalty, thus
violating the provisions of Article 7 of the Convention. It should be recorded that senior counsel for
the petitioners conceded that the imposition of a confiscation order upon an
individual did amount to a criminal penalty, but, of course, argued that that
was not what was involved in the present case;
rather here the proceedings were fundamentally different from
proceedings relating to a confiscation order, being for the civil recovery of
the proceeds of unlawful conduct.
[25] We have had
the benefit of the comprehensive quotation of the relevant statutory provisions
from Part V of the 2002 Act and the extensive consideration of the relevant
case law to be found in the Opinion of the Lord Ordinary. Again, before us, the relevant statutory
provisions and authorities were the subject of detailed submissions. In these circumstances, we do not intend to
replicate what the Lord Ordinary helpfully has done in his Opinion. What we intend to do is to examine briefly
certain of the crucial decisions taken in other parts of the United Kingdom and
draw attention to the implications of certain parts of the statutory provisions
in Part V of the 2002 Act.
[26] The issue of
principle before us and certain other issues were the subject of consideration
by Collins J. in Regina v Jia Jin He and Dan Dan Chen. That case was concerned with the implications
of the grant of an interim receiving order.
It was submitted that proceedings under Part V of the 2002 Act ought to
be construed in such a way that they are to be regarded as criminal, or, if
not, that the criminal standard of proof should apply. It was also contended that Articles 6 and 7
of the Convention applied to proceedings under Part V. Collins J. agreed with the view taken by
Coghlin J. in the first instance proceedings in Walsh v The Director of the
Assets Recovery Agency. Collins J.
considered that Coghlin J's conclusion was entirely consistent with and supported
by both domestic and Strasbourg jurisprudence. In paragraph [69] of his decision, Collins J.
expressed his view thus:
"The authorities to which I have
already referred make it plain that there is no question of any penalty
involved in these proceedings.
Furthermore, there has been no conviction of a criminal offence leading
to a penalty. Of course, property cannot
be recoverable unless, at the time it was acquired, it was obtained through
unlawful conduct. That conduct must have
been criminal at that time. To that
extent, the prohibition against retrospectivity will apply, but only because
the Act says that the property must be property which was obtained by criminal
conduct. In those circumstances, it is
quite clear that Article 7 has no application."
[27] In Walsh v The Director of the Assets Recovery Agency the decision of Coghlin
J. came before the Court of Appeal in Northern Ireland.
The central question in the appeal was whether the Agency should be
required to establish unlawful conduct on the basis of the criminal standard of
proof, beyond reasonable doubt. In that
case Kerr L.C.J., delivering the Opinion of the Court, was satisfied that all
the available indicators pointed strongly to the case being classified as a
form of civil proceeding. He recognised
a clear distinction between confiscation orders and recovery proceedings. In paragraph 41 of the Opinion he said:
"The essence of Article 6 in its
criminal dimension is the charging of a person with a criminal offence for the
purpose of securing a conviction with a view to exposing that person to
criminal sanction. These proceedings are
obviously and significantly different from that type of application. They are not directed towards him in the
sense that they seek to inflict punishment beyond the recovery of assets that
do not lawfully belong to him. As such,
while they will obviously have an impact on the appellant, these are
predominantly proceedings in rem. They are designed to recover the proceeds of
crime, rather than to establish, in the context of criminal proceedings, guilt
of specific offences. The cumulative
effect of the application of the tests in Engel
is to identify these clearly as civil proceedings."
[28] In Belton v Director of Assets Recovery Agency, also a decision of the Court of
Appeal of Northern Ireland, the issue of principle was again
considered. Once again, the court
concluded that none of the provisions of Part V of the 2002 Act imposed a
penalty criminal or civil. As Nicholson
L.J., in delivering the Opinion of the Court, in paragraph 15 said of those
provisions:
"The aim is to recover property, not
to pursue an individual. As the property
has been obtained by criminal conduct, it appears to us that it must be in the
public interest to recover the property for the benefit of the public."
[29] Finally, in Regina v Ashton
Newman J. was concerned with an issue identical to that involved in this case
in respect that it was contended that the civil recovery procedure in Part V of
the 2002 Act offended against Article 7 of the Convention governing
retrospectivity. As it happens, the
decision of the Lord Ordinary in the present case was cited. Newman J., in paragraph 39 and following of
his Opinion agreed with the conclusions of the Lord Ordinary in this case. It is pertinent to note that in paragraph 43
of his judgment Newman J. said:
"Equally I see no force in the
suggestion that simply because it involves deprivation, that in itself means
that the result of an order has to be regarded as penal vis-à-vis the person
who holds the property and against whom the director obtains an order ... in my
judgment the deprivation of this property carries no penal character to
it. The fact of the matter is that the
person who is in possession of the proceeds of crime has, in accordance with
the purpose and intention of Parliament, no right to hold that property. It is not a deprivation of anything. Parliament has said that such proceeds are
not the entitlement of anyone. That is
not to deprive anybody of anything."
[30] In the light
of these and the other authorities cited to us we have reached the conclusion,
which we find irresistible, that the issue before us must be determined in
conformity with the submissions of the petitioners. There is now a formidable body of authority
to the effect that proceedings brought under Part V of the 2002 Act do not
involve the infliction of any penalty in the sense of the autonomous concept of
penalty embodied in Article 7.1 of the Convention. We are in complete agreement with the cases
to which we have referred. Although, of
course, they are not binding upon us, they constitute strong persuasive
authority. In this case it is to be
recognised that we are dealing with the effects of a United Kingdom statute, the 2002 Act. In our opinion, it would be most undesirable
if this court were to reach an interpretation of that Act which conflicted with
its interpretation in Northern Ireland and England and Wales.
[31] Before parting
with the case, we wish to make clear that the interpretation of Part V of the
2002 Act reached in the various cases to which we have referred appears to us
to be sound having regard to another consideration, which arises out of the
terms of section 244(1) of the 2002 Act.
That subsection provides:
"(1) Proceedings
for a recovery order may be taken by the enforcement authority in the Court of
Session against any person who the authority thinks holds recoverable
property".
In our opinion, this provision reinforces the view that we
have formed on the basis of consideration of the foregoing authorities that
recovery proceedings are concerned with the recovery of property unlawfully
obtained, not the infliction of a penalty.
It is apparent from section 244(1) that Parliament contemplated that
proceedings might be brought against "any person who the authority thinks holds
recoverable property", regardless of whether that person had any responsibility
for the obtaining of the property through unlawful conduct. That view is reinforced by the provisions of
section 305 of the Act which provides for the tracing of property. That section contemplates, in subsection (3)
that: "the property may be followed into the hands of the person who obtains it
... ". In other words, the recovery
proceedings must be seen as proceedings in
rem, the purpose of which is the recovery of property obtained through
unlawful conduct, for the benefit of the public. It is plain from these provisions that the
wrongdoer who may have unlawfully obtained the property in the first place is
treated no differently and, in particular, no more harshly, than any other
person into whose hands the property may have come, even if that person be
entirely guiltless. That situation, in
our opinion is inconsistent with the notion that a penalty is involved in
recovery under the Part V provisions.
[32] In all the
circumstances, we consider that the decision of the Lord Ordinary is correct
and must stand. The reclaiming motion is
refused.
