Scottish Sheriff Court Decisions

SHERIFFDOM OF TAYSIDE, CENTRAL & FIFE AT DUNDEE   Case Number: PC31/11
	Judgment by   JOHN K MUNDY, Esq. Advocate Sheriff of Tayside, Central & Fife   in the cause   THE SCOTTISH MINISTERS   Pursuers   against   (FIRST) PETER DEVANEY (SECOND) ROSEMARY ANDERSON and (THIRD) GRAEME STARK Defenders     ­­­­­­­­­­­­­­­­­________________

 

Act: Collins

 

Alt: No appearance (first defender)

 

Fraser (second and third defenders)

 

 

DUNDEE, 9th May 2012

 

The Sheriff, having resumed consideration of the cause, repels the first plea-in-law for the second defender and the first plea-in-law of the third defender; excludes from probation the following averments: (1) last sentence in each of Answer 5 for the second defender and Answer 5 for the third defender beginning: " In any event..." and ending: "...Act of 2002." and (2) the last sentence in each of Answer 19 for the second defender and Answer 19 for the third defender beginning: "Esto they do..." and ending: "...proceedings."; sustains the second plea-in-law for the pursuers to that extent; repels the third plea-in-law for the pursuers as not being insisted upon; quoad ultra appoints the cause to a hearing on a date to be afterwards fixed on the questions of expenses and further procedure; reserves all questions of expenses meantime.

 

 

 

 

 

NOTE:

 

Background

 

[1] This is a summary application at the instance of the pursuers under section 298 of the Proceeds of Crime Act 2002 ("POCA") in which they seek an order for forfeiture of a total sum £1,893, being the total amount of cash seized by a police constable at an address in Dundee on 2 April 2011 in the course of a search in terms of a warrant granted by the Sheriff. There are three defenders. Of the total seized, it is accepted that the amount seized from the second defender was £125 and from the third defender £128, the balance of £1,640 being seized from the first defender.

 

[2] The case was warranted on 17 October 2011 and after sundry procedure, the matter was, on 24 January 2012, assigned for a Debate "in respect of the second and third named defender, and also to regulate further procedure, after outcome, of the first named defender". All three defenders have lodged Answers, the second and third defenders taking pleas to the competency. The matter came before me for debate. While the interlocutor appointing the debate did not specify what the debate was to be about, it became clear that the issue was the one of competency raised by the second and third defenders under their first pleas-in-law and supported by certain averments in Answers 5 and 19 of each of their Defences. There was no such plea on behalf of the first defender. Mr Collins, solicitor, appeared for the pursuers and Mr Fraser for the second and third defenders. There was no appearance for the first defender. There was some indication that the agent for the first defender may have withdrawn from acting, although there was no letter as yet to the court in that regard. In any event, it did not appear that the first defender was concerned with the issue of competency and the debate proceeded in his absence.

 

[3] The pursuers' make averments as to the background to the seizure. They aver that Tayside Police received credible and reliable intelligence that the second and third defenders were concerned, along with the first defender, in the supply of controlled drugs from their home address, a flat in Dundee. They sought and obtained a warrant under the Misuse of Drugs Act 1971 ("the 1971 Act") to search the property. The warrant was enforced on 2 April 2011. In the course of the search, all accused were detained under section 23 of the 1971 Act for the purpose of search. The first defender was found to be in possession of two amounts of cash - £710 and £930. The second defender was found to be in possession of a quantity of cannabis and also diamorphine, the latter being concealed internally ("banked"). The flat was searched and various items were recovered, including SIM cards, mobile phones, four further quantities of cannabis, digital scales, foil, clingfilm and a wallet containing £128 in cash of which the third defender claimed ownership. In addition, a wallet containing further amounts of £105 and £20 (the said total of £125) in cash was found of which the second defender claimed ownership. The total cash recovered was thus £1,893 which is the sum sought to be forfeited. In their averments, the second and third defenders admit the recovery of the sums of £105, £20 and £128 and that they claimed ownership as averred. The pursuers make lengthy averments in support of the proposition that the cash was recoverable property or was intended for use in unlawful conduct for the purposes of the forfeiture provisions (section 298(2) of POCA) with reference to drug dealing. In answer, the second and third defenders dispute this and give explanations as to their possession of the cash, which, if proved, may be exculpatory.

 

[4] The second and third defenders each have a plea-in-law (No. 1) in the following identical terms:

 

"The action for recovery against the Third Defender being incompetent, should be dismissed."

 

The plea is supported by the following identical averments in Answer 5 for each of the second and third defenders, which follow their explanations for the possession of the cash:

 

"...In any event, this action is incompetent relative to an amount for less than £1,000, such as that seized from the Third Defender in terms of the Proceeds of Crime Act 2002 (Recovery of Cash in Summary Proceedings; minimum amount) Order 2006 and Section 303 of the Act of 2002."

 

Again, in Answer 19 for each of the second and third defenders, the following passage occurs, following an averment that the monies recovered from the Third Defender did not constitute recoverable property in terms of the Act under reference to Answer 5:

 

"Esto they do, which is denied, the amount is below the statutory limit which can be recovered in these proceedings."

 

Clearly, in the Answers for the second defender, the intention was to make reference to the second defender and not the third defender, the argument being the same in respect of each, and I will proceed on that basis.

 

Statutory Provisions

 

[5] Part 5 of POCA, headed "Civil Recovery of the proceeds etc of unlawful conduct" includes the following provisions:

 

"Chapter 3 Recovery of cash in summary proceedings

...

Section 289 SearchesE+W+S+N.I.

(1)If a customs officer or constable who is lawfully on any premises has reasonable grounds for suspecting that there is on the premises cash-

(a)which is recoverable property or is intended by any person for use in unlawful conduct, and

(b)the amount of which is not less than the minimum amount,

he may search for the cash there.

(2)If a customs officer or constable has reasonable grounds for suspecting that a person (the suspect) is carrying cash-

(a)which is recoverable property or is intended by any person for use in unlawful conduct, and

(b)the amount of which is not less than the minimum amount,

he may exercise the following powers.

(3)The officer or constable may, so far as he thinks it necessary or expedient, require the suspect-

(a)to permit a search of any article he has with him,

(b)to permit a search of his person.

(4)An officer or constable exercising powers by virtue of subsection (3)(b) may detain the suspect for so long as is necessary for their exercise.

(5)The powers conferred by this section-

(a)are exercisable only so far as reasonably required for the purpose of finding cash,

(b)are exercisable by a customs officer only if he has reasonable grounds for suspecting that the unlawful conduct in question relates to an assigned matter (within the meaning of the Customs and Excise Management Act 1979 (c. 2)).

(6)Cash means-

(a)notes and coins in any currency,

(b)postal orders,

(c)cheques of any kind, including travellers' cheques,

(d)bankers' drafts,

(e)bearer bonds and bearer shares,

found at any place in the United Kingdom.

(7)Cash also includes any kind of monetary instrument which is found at any place in the United Kingdom, if the instrument is specified by the Secretary of State by an order made after consultation with the Scottish Ministers.

(8)This section does not require a person to submit to an intimate search or strip search (within the meaning of section 164 of the Customs and Excise Management Act 1979 (c. 2)).

 

 

Section 294 Seizure of cashE+W+S+N.I.

 

(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 suspecting 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.

(3)This section does not authorise the seizure of an amount of cash if it or, as the case may be, the part to which his suspicion relates, is less than the minimum amount.

 

Section 295 Detention of seized cash

 

(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 or (in Scotland) the sheriff; 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.

(3)A justice of the peace may also exercise the power of a magistrates' court to make the first order under subsection (2) extending the period.

(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)in relation to Scotland, may be made by the Scottish Ministers in connection with their functions under section 298 or by a procurator fiscal,

and the court, sheriff 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, sheriff 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.

 

Section 298 Forfeiture

 

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)(in Scotland) to the sheriff by the Scottish Ministers.

(2)The court or sheriff 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.

(3)But in the case of recoverable property which belongs to joint tenants, one of whom is an excepted joint owner, the order may not apply to so much of it as the court thinks is attributable to the excepted joint owner's share.

(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.

 

 

 

 

Section 303 "The minimum amount"E+W+S+N.I.

 

(1)In this Chapter, the minimum amount is the amount in sterling specified in an order made by the Secretary of State after consultation with the Scottish Ministers.

(2)For that purpose the amount of any cash held in a currency other than sterling must be taken to be its sterling equivalent, calculated in accordance with the prevailing rate of exchange.

 

Chapter 4 General Recoverable property

 

Section 304 Property obtained through unlawful conductE+W+S+N.I.

 

(1)Property obtained through unlawful conduct is recoverable property..."

 

The Proceeds of Crime Act 2002 (Recovery of Cash in Summary Proceedings: Minimum Amount) Order 2006, which came into force on 31 July 2006, provides inter alia:

"2.  The minimum amount specified for the purposes of Chapter 3 (recovery of cash in summary proceedings) of Part 5 (civil recovery of the proceeds etc. of unlawful conduct) of the Proceeds of Crime Act 2002 is £1,000."

 

 

Submissions for second and third defenders

 

[6] With reference to the foregoing provisions, Mr Fraser pointed out that recovery of cash was, for reasons of practicality, subject, to a "minimum amount" of £1,000 and that accordingly forfeiture was not available for amounts under that sum. He observed that the provisions as to search in section 289 were subject to the proviso that the amount is not less than the minimum amount (section 289(2)(b). Further, the provisions in section 294 as regards seizure of cash were also subject to that constraint (section 294(3)). Mr Fraser submitted that on the face of the pleadings the pursuers accept that the monies which related to each of the second and third defender were below the statutory minimum amount. While he was not arguing that the search itself was unlawful, he submitted that the seizure of these particular amounts was, having regard to the terms of section 294(3), and that accordingly the pursuers' claim relative to the second and third defenders was incompetent and fell to be dismissed.

 

[7] Mr Fraser submitted that it was not competent to aggregate the amounts seized from the three individuals and present the claim in one crave when, in reality, only certain sums were sought from certain individuals. The history of the individuals, circumstances of the search and items seized were not relevant when one considered the statutory minimum amount of £1,000 and for the purposes of this debate the pursuers' pleadings should be read pro veritatae. Even assuming that the cash was recoverable property or intended by any person for use in unlawful conduct, this could not allow forfeiture of an amount following below the statutory minimum. Were it otherwise POCA would have provision for it, perhaps in section 306 dealing with "mixing property" or the statutory instrument would be in different terms. It was also pointed out that the terms "joint and several" did not feature in the pleadings. He acknowledged the case of Commissioners of Customs & Excise v Duffy [2002] EWHC 425 (Admin), a decision of the Divisional Court, and founded upon by the pursuers, suggested a contrary approach, but indicated that this was of persuasive authority only and that there was no Scottish case on the point. Thus put, Mr Fraser's point was a narrow one of competency. If I was not with him, Mr Fraser submitted that a proof would be appropriate on the merits of whether in the circumstances the cash detained was recoverable property or intended by any person for use in unlawful conduct.

 

[8] Mr Fraser indicated that neither the second nor third defender had legal aid for this matter as any application would not be granted in a case such as this on the basis that it would not be regarded as being reasonable for public funds to be used in proceedings for the recovery of sums regarded as de minimus. Even if successful, it would be unlikely that they would be successful in recovering expenses from the pursuers provided the latter were acting honestly, reasonably, properly and on grounds which appear to be reasonably sound in the exercise of their public duty (Regina (Perinpanathan) v City of Westminster Magistrates' Court and Another [2010] 1 WLR 1508; followed by Sheriff A E Swanson in Scottish Ministers v Omar Sharif, Glasgow Sheriff Court, 27 July 2011). If legally aided, the claw back provisions would apply and the whole amounts recovered would go to meet expenses. Mr Fraser was not suggesting that there was a breach of their rights to a fair hearing under human rights law. If however the pursuers were permitted to aggregate funds in the manner sought, then the advice from any solicitor would be to do nothing to defend such proceedings.

 

Submissions for the pursuers

 

[9] For the pursuers Mr Collins submitted that the action was competent in relation to the second and third defenders. It was the unequivocal position of the pursuers, the Scottish Ministers, that sums which individually fall below the "minimum amount" could be aggregated with other sums so as to meet or exceed the minimum amount. That was subject to the proviso that there was a connection or nexus between the individual sums concerned. Such a nexus existed in this case. It was submitted that the competency issue should be disposed of at debate before further substantive procedure was assigned quoad the second and third defenders.

 

[10] He pointed out the Scottish Ministers, as constituted by section 44 of the Scotland Act 1998, are the enforcement authority in Scotland for the purposes of part 5 of POCA (of which section 298 is part). Part 5 of POCA made provision for a régime of asset and cash recovery often referred to as a system of non-conviction based forfeiture.

 

[11] In terms of their summary application the Scottish Ministers sought forfeiture of the cumulo sum of £1,893 from the defenders. The clearly pled position was that the Defenders were all long-term drug users and drug dealers and that the cash at issue represented the proceeds of their involvement in unlawful conduct, specifically, drug dealing. Alternatively, the cash was intended for use by the defenders (or any person) in the furtherance of unlawful conduct. He submitted that should either of these cases be made out on the merits then decree for forfeiture should be granted.

 

[12] Mr Collins explained that the cash at issue was recovered during the course of a search (under warrant) of the flat in question, then occupied by all three defenders. This search disclosed cash totalling £1,893. £1,640 was recovered from the first defender and was, demonstrably, in excess of "the minimum amount" of £1,000 set by the 2006 Order. The sums of £125 and £128 were recovered from and were claimed as belonging to, respectively, the second and third defenders. These sums represented their entire interest in this action. At the conclusion of the search, the constituent sums of cash together with various drugs and drug related paraphernalia were seized pending a report to the Procurator Fiscal at Dundee. The cash was, on 14 October 2011, seized and detained in terms of sections 294 and 295 of POCA. The pursuers having raised this summary application, the cash became lawfully detained under section 298(4) of POCA until such time as the forfeiture process was concluded.

 

[13] Mr Collins referred to the various statutory provisions including the definition of cash in section 289(6) of POCA. That definition embraced the cash seized in this case. Section 294 of POCA conferred upon a constable or customs officer the power to seize cash if there are reasonable grounds to suspect that the cash is either recoverable property or, alternatively, if cash is intended for use by any person in unlawful conduct. "Recoverable property" was defined in terms of section 304 of POCA as "property obtained through unlawful conduct". However, section 294(3) of POCA provided: "This section does not authorise the seizure of an amount of cash if it or, as the case may be, the part to which his suspicion relates, is less than the minimum amount". Section 295(1) of POCA provided that cash seized under section 294 may be lawfully detained for an initial period of 48 hours. It was indicated that the present action was raised within that initial 48 hour period. Section 298 made provision for the forfeiture of cash if a sheriff was satisfied (on a balance of probabilities) that the cash is recoverable property or, alternatively, is intended for use by any person in the furtherance of unlawful conduct.

Section 303 of POCA provided that the "minimum amount" was "the amount in sterling specified in an order made by the Secretary of State after consultation with the Scottish Ministers" and in terms of the 2006 Order that amount was £1,000.

 

Mr Collins explained some background to the "minimum amount". POCA had been in force since 2003. Initially, the "minimum amount" for the purposes of cash forfeiture was £10,000. This sum was set so as to bring the cash seizure/detention provisions of POCA into line with the cash detention provisions of the Drug Trafficking Act 1994 ("the 1994 Act"). The 1994 Act was the precursor legislation to POCA. The minimum amount had been decreased in stages to £1,000 since the inception of POCA. The reduction of the minimum amount was, he submitted, consistent with the strategy underlying POCA: that the legislation should be used to disrupt unlawful conduct at all levels.

 

[14] He referred to the pleadings and submitted that the case for the pursuers was clearly and robustly pled as to the background of the police operation on 2 April 2011, the search that took place that day under the authority of a warrant granted at Dundee Sheriff Court under section 23 of the 1971 Act. The police operation on 2 April 2011 was intelligence led. He observed that the section 23 search warrant would not have been granted unless the Sheriff at Dundee was satisfied regarding the weight and reliability of intelligence upon which the police were relying. The pleadings also dealt with the defenders' police interviews which took place after the search, the criminal records relating to the first, second and third defenders, a previous of seizure of cash from him the first defender under POCA and the various adminicles of evidence which supported the contention that the entire cash is recoverable property.

 

[15] Mr Collins submitted that cash could be seized and detained if the cash at issue is or exceeds "the minimum amount" as provided for in terms of section 303 of POCA and as currently provided for in terms of the 2006 Order. There was nothing in either the primary or subordinate legislation to suggest that "the minimum amount" must be a single sum and that, as a consequence, the aggregation of separate sums (which, individually, fall below "the minimum amount") was precluded. The second and third defenders argued that the aggregation of sums which, individually, fall below the "minimum amount" is, in some manner, incompetent. This was inconsistent with the persuasive English authority of Commissioners of Customs & Excise v Duffy and if correct, both undermined the underlying strategic objectives of the cash forfeiture regime provided for in terms of part 5 of POCA and ran contrary to the well-recognised principle of concert.

 

[16] Mr Collins referred to the facts in the case of Duffy, a case under the 1994 Act. Three men were detected at Gatwick Airport. All were travelling to Malaga. All were travelling together and all were sitting in adjacent seats on the flight. Each man was carrying, respectively, £7,000, £6,000 and £7,000. Section 42(1) of the 1994 Act provided that a customs officer might seize cash being exported from the United Kingdom if there was a reasonable suspicion that the cash directly or indirectly represented the proceeds of drug trafficking or was intended for use by any person in the furtherance of drug trafficking. This was subject to the proviso that the cash "is not less than the prescribed sum". In terms of section 48(3) of the 1994 Act "the prescribed sum" as at September 2001 was £10,000. The parallels between section 42 of the 1994 Act and sections 294 and 295 of POCA were, submitted Mr Collins, clear. The sums of cash being carried by Duffy and his associates were, individually, below "the prescribed sum" in terms of the 1994 Act. However, these sums were aggregated so as to exceed "the prescribed sum". Having been thus aggregated the cash was then seized. When the issue came before the Magistrates Court it was contended for Customs and Excise that "the prescribed sum of not less than £10,000" could consist of more than one sum taken from more than one individual provided that the amount seized, taken as a whole, was not less than "the prescribed sum". It was argued that there was a nexus between the separate sums of cash involved in that Duffy and his associates were travelling together and were seated next to each other on the outbound flight to Malaga. In those circumstances the separate sums being carried by Duffy and his associates could be added together so as to meet or exceed "the prescribed sum". This approach was later upheld in the High Court. It was held that the aggregation of funds (so as to meet or exceed "the prescribed amount") was necessary in order to avoid the circumvention of section 42 of the 1994 Act through the practice of "smurfing". "Smurfing", explained Mr Collins, is the practice whereby individuals acting with common intent divide cash between them in order that no one individual is carrying more than the seizable amount either under the 1994 Act or POCA. "Smurfing" was a well recognised tactic as at September 2001 and is still routinely attempted in an attempt to avoid cash seizure and detention under POCA.

 

[17] Mr Collins argued that Duffy was therefore firm and persuasive authority for the proposition that sums of cash which, individually, fall below a minimum or prescribed amount may be aggregated so as to meet or exceed a minimum or prescribed amount. That was subject to the proviso that there is a connection or nexus between the individual sums. In Duffy, the nexus was restricted to the fact that Duffy and his associates were travelling together and were sitting in adjacent seats on their outbound flight from Gatwick to Malaga. In the present case the nexus between the separate sums of cash was very powerful. The search of the flat was prompted by intelligence which suggested that all defenders were actively involved in drug dealing from that address. It was that specific intelligence that prompted the granting of a warrant in terms of section 23 of the 1971 Act. The subsequent search disclosed the cash with which we were now concerned. It also disclosed on open display quantities of drug related paraphernalia. Controlled drugs were found. Indeed, the second defender had controlled drugs "banked". All three defenders had lamentable records for drug related offending. All were convicted drug dealers. Against that background the nexus between the individual sums at issue, was submitted Mr Collins, irresistible. He recognised that Duffy did not bind a Scottish court. However, he submitted that it was high authority and must therefore be regarded as persuasive. He indicated that it had not at any point been either over-ruled or distinguished. Clearly, it was submitted, the ratio in Duffy could be read across to POCA and to the present case.

 

[18] Mr Collins submitted that the underlying strategy of part 5 of POCA is that individuals who have profited from unlawful conduct should be deprived of those profits. Since the inception of POCA the "minimum amount" that may be seized and detained and subsequently forfeited had been steadily reduced from £10,000 down to the existing minimum figure of £1,000. The inexorable reduction of the "minimum amount" since 2003 had been in furtherance of Parliament's intention that POCA should be used to disrupt unlawful conduct at all levels. If the view taken by the second and third defenders in this case is correct then the intention of Parliament in this regard could be circumvented with ease. Individuals acting together in the furtherance of unlawful conduct could "smurf" their cash so as to ensure that no one individual was carrying £1,000 or more. That would be contrary to the overall public interest.

 

[19] Further, submitted Mr Collins, if the second and third defenders' argument was correct then, inevitably, illogicalities would arise. By way of illustration, assume four people were stopped in a motor car late at night and in an area notorious for drug dealing. All four were the subject of active police intelligence suggesting that they were involved in drug supply Small quantities of drugs were recovered (consistent with personal use only) together with drug related paraphernalia. All four were each carrying £2,500. In those circumstances, very clearly, there would be a reasonable suspicion that the cash represented the proceeds of unlawful conduct or, alternatively, was intended for use in the furtherance of unlawful conduct. It would therefore follow that a single seizure of the entire cash would be appropriate. However, if the proposition advanced by the second and third defenders in this present case were to be taken to its logical conclusion then the aggregation of funds would never be appropriate. Thus, in the scenario set out four separate and individual cash seizures would be required. The logical inconsistency was, he submitted, clear. A different scenario was posed. Assume this time that there were three people involved who were in possession of £2,500 each. The fourth person was in possession of £900. When the money was found this fourth person tells the police "It's under £1,000. You can't touch it." Once again, all four were the subject of active intelligence suggesting they are dealing drugs. All four had relevant convictions. If the second and third defender's argument were to be accepted then notwithstanding the persuasive circumstances and the clear nexus between all sums detected then the £900 found would be immune from POCA cash seizure. Mr Collins submitted that that could not have been the intention of Parliament and, further, could not be in the overall public interest.

 

[20] It was submitted that the ratio adopted in Duffy was nothing other than an application of the well understood principle of concert. In the present case the circumstances were eloquent of the defenders' concerted involvement in drug dealing. If that was correct then the aggregation of the separate sums of cash disclosed in the search of the property then occupied by the defenders was appropriate and competent.

 

[21] Mr Collins indicated that since this issue was raised by the second and third defenders enquiries had been made with law enforcement agencies throughout the United Kingdom. The aggregation of cash (in appropriate circumstances) for the purposes of POCA cash seizure and detention was a universal practice throughout the United Kingdom. He also indicated that it was a practice that had been followed unchallenged in Scotland almost on a daily basis. The aggregation of funds had not been challenged since the decision in Duffy. The aggregation of funds in the present case was accordingly consistent with principle and practice.

 

[22] In conclusion, it was submitted that the pleas to the competency should be repelled. He also submitted that the averments in Answers 5 and 19 for each of the second and third defenders in support of the pleas (referred to in paragraph [4] above) be excluded from probation and asked me to sustain his second plea-in-law to that extent. He recognised that, if I was with him, a proof would be required on the merits, the issue being whether the cash detained was recoverable property or intended by any person for use in unlawful conduct. He did not insist on his third plea-in-law, being content to rely on his fourth plea-in-law on the merits.

 

[23] Mr Collins acknowledged that the sums sought in relation to the second and third defender were very small. However, the competency issue that had been raised was a matter of importance and, as this was the first opportunity for a Scottish court to rule on the issue, he requested, as did Mr Fraser, that a written judgement be issued.

 

Discussion

 

[24] There appears to be no issue as to the fact that the sums seized and detained were cash for the purposes of the recovery of cash provisions in Chapter 3 of POCA. Further, there appears to be no dispute as to the amounts seized and detained. As indicated, no issue is taken with the search, and, aside from the competency point, no challenge as to the procedures adopted by the pursuers in relation to the seizure and detention of the cash in terms of sections 294 and 295. The point at issue between the parties is thus a narrow one and that is whether it can be legitimate to aggregate cash seized and detained for the purposes of Part 5 of POCA with the consequence in this case that that the total would exceed the "minimum amount" as currently set by section 303 and the 2006 Order. There was no dispute that the current "minimum amount" is £1,000.

 

[25] In considering the matter, the starting point must be the legislation, the terms of which are materially the same as its precursor, the 1994 Act. That Act provided, inter alia:

 

"Part II Drug trafficking money imported or exported in cash

...

 

Section 42 Seizure and detention

(1)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.

(2)Cash seized by virtue of this section shall not be detained for more than 48 hours unless its continued detention is authorised by an order made by a justice of the peace or in Scotland the sheriff; and no such order shall be made unless the justice or, as the case may be, the sheriff is satisfied-

(a)that there are reasonable grounds for the suspicion mentioned in subsection (1) above; and

(b)that continued detention of the cash is justified while its origin or derivation is further investigated or consideration is given to the institution (whether in the United Kingdom or elsewhere) of criminal proceedings against any person for an offence with which the cash is connected."

 

[26] Duffy concerned that legislation and the Divisional Court were considering an appeal from the Magistrates' Court which had dismissed an aplication by the Customs & Excise for continued detention of a sum of money under section 42(2). As with POCA, seizure was a pre-requisite of detention and the the crux of the argument was whether the seizure of the sums from different individuals could be aggregated with the result that the amount was not less than the prescribed sum. Mr Collins alluded to the facts and I will not repeat them here. The court allowed the appeal and in delivering his judgement Lord Justice Kennedy said (at paragraph 17):

 

"In my judgement, the words of the statute are silent as to where the cash is before it is seized; it may be with one individual, it may be with more than one individual, or it may be with no individual at all, as, for example, when it is an unattended parcel or perhaps in a postal packet. What matters is whether it is identifiably cash which is being exported which can be regarded as a single item in order to, first of all, examine its totality (see section 42(1)(a)), and, secondly, consider its origin or purpose (see section 42(2)). So if evidence shows only that there are various sums held by individuals who are apparently unconnected, those sums cannot be aggregated, but if it can be shown that the money comes from a common source or has a common destination, that may readily lead to the conclusion that in reality it is a single exportation of cash. The court asked to exercise its powers under section 42(2) is then entitled, in my judgement, to look to the reality."

 

While that case was dealing with a detention application under the 1994 Act and this case is a forfeiture application under POCA, the material point is in my view the same in both cases and arises in the context of seizure of cash. Given that the provisions are in very similar terms, I consider the case to be valuable guidance as to the approach that the court should adopt in this case.

 

[27] Mr Fraser's challenge was founded on section 294(3) of POCA, which specifically does not authorise "the seizure of an amount of cash if it or, as the case may be, the part to which suspicion relates, is less than the minimum amount" [my emphasis]. As noted above the provisions as to search in section 289 have a similar exclusion in relation to the "minimum amount". However, echoing the observations of the court in Duffy in relation to the 1994 Act, there is in my view no indication in the language of those provisions or elsewhere within the provisions of Part 5 as to where the cash is before it is seized, whether it is to be with one individual or with more that one individual or indeed unattended. I do not consider that the absence of specific provision enabling aggregation of sums leads to a conclusion that it is not competent to do so. Rather, I have come to the view that the language of the statute does not impose a restriction in the manner contended for by Mr Fraser and leaves the matter of what can be regarded as "an amount of cash" to be determined according to the circumstances of the case. In that regard, it would be highly pertinent to consider whether there was a nexus between individual sums recovered, which might involve investigation of whether there is a connection between individuals and whether there is evidence of common purpose. If there is no connection between individuals holding separate sums, it would be difficult to argue that there should be aggregation of the sums. In this respect I would agree with the observations of Lord Justice Kennedy at paragraph 17 of Duffy.

 

[28] In the present case, the pursuers have set forth averments with a view to establishing a nexus between the sums recovered from all the defenders, the total of which would exceed the "minimum amount". It seems to me to be a matter of proof as to whether that nexus in fact exists and that within the larger question of whether the cash or any part of it is recoverable property (property obtained through unlawful conduct) or is intended by any person for use in unlawful conduct in terms of the forfeiture provisions in section 298.

 

[29] I am therefore in agreement with Mr Collins that aggregation of the sums seized is competently claimed in this case, there being averments as to a nexus between the sums seized. I derive support for my conclusions from the purpose of the statute, which is expressed in the introductory text as "to allow the recovery of property which is or represents property obtained through unlawful conduct or which is intended to be used in unlawful conduct" reflecting the language within the provisions noted above. The statute is clearly concerned with the origin of sums recovered (e.g. section 295(5)(a)) with a view to determining whether the property can be recovered in line with the said purpose and it seems to me to be wholly artificial to effectively exclude from consideration whether sums seized from different individuals are connected. I agree with Mr Collins that, where there is a common purpose amongst individuals who have in total cash of an amount more that the seizable and they divide the money they hold so that no one individual is carrying or keeping more than a seizable amount ("smurfing") it would defeat the purpose of the legislation to treat the individual sums separately for the purposes of recovery and so potentially exclude constituent amounts. I adopt the view expressed by court in Duffy (at paragraph 17) that in exercising it powers under the legislation, the court should look to the reality of the situation.

 

Conclusion

 

[30] I have accordingly come to the conclusion that the competency pleas advanced by the second and third defenders are not well founded. I have decided to repel those pleas and consider it appropriate in these circumstances to exclude from probation the defenders averments in support of the pleas contained in Answers 5 and 19 for each of the second and third defenders and to sustain the pursuers' second plea-in-law to the extent. I have repelled the pursuers' third plea-in-law as not being insisted upon. While it is a natural consequence of this decision that there will be a proof on the merits of the application, I have decided to put the case out to a hearing to determine further procedure, particularly in relation to the first defender. I was asked to reserve the question of expenses and that is another issue that may be dealt with at the hearing.