|
OUTER HOUSE, COURT OF SESSION [2006] CSOH 176 |
|
|
P260/04 |
OPINION OF LORD DRUMMOND YOUNG in the petition of THE SCOTTISH MINISTERS Petitioners; against LINDA DOIG, STEVEN DOIG AND DAVID DODDS CAMERON Respondents: ________________ |
Petitioners: Currie, QC, R Crawford; Solicitor to the Scottish Executive
First Respondent: Shead; Drummond Miller WS
Third Respondent:
The parties' averments
[1] The
petitioners are the enforcement authority for
[2] The
petitioners aver that the following unlawful conduct has occurred. The third respondent has been, they say,
concerned in the supplying of controlled drugs since at least 1997. He is said to have an extensive criminal
history including numerous convictions for theft by housebreaking dating from
1964 to 1972. On 5 February 1997,
following a guilty plea, he was convicted of a charge of being concerned in the
supplying of controlled drugs under section 4(3)(b) of
the Misuse of Drugs Act 1971 and sentenced to six months imprisonment. At the same time he was admonished in respect
of a conviction under section 5(2) of the same Act, relating to possession of
controlled drugs. It is further averred
that on
[3] The petitioners
further aver that the first respondent, who is the wife of the third
respondent, assisted her husband in concealing the financial proceeds of the
unlawful conduct previously specified.
It is averred that the second respondent, the first respondent's son,
has also assisted the third respondent in concealing the financial proceeds of
unlawful conduct; he
was not represented in the present proceedings.
Details of property held by the first and third respondents are then
given; these are as follows. The first
respondent opened a
[4] The
petitioners then make averments about the declared income of the first and
third respondents. Those averments are
detailed, and are broken down by financial or calendar years, but for present
purposes it is sufficient to provide a summary.
In her applications for the policies with Britannic Assurance, the first
respondent stated that her joint income with the third respondent was £524 per
month from benefits in one case and £362 per month from benefits in the
other. As income, the first respondent
received job seekers' allowance and invalidity benefits totalling £6,415.20
during the three years ended
[5] The
income of the third respondent during the corresponding period is averred to be
as follows. During the years ended
[6] The
petitioners further aver that the acquisition of the property referred to above
could not be attributed to any legitimate income, and that the first and third
respondents' lifestyle indicated that they were living well above their
legitimate means. Certain further
averments are made in relation to the earnings and assets of the second
respondent; it is unnecessary, however, to rehearse these because he was not
represented and no submissions were made in relation to the averments
concerning property in his name.
[7] On the
basis of the foregoing averments, the petitioners contend that the property
specified in Part II of the Schedule to the petition is (i) property obtained
through unlawful conduct or (ii) property obtained through unlawful conduct held
by persons into whose hands it may be followed or (iii) represents property
obtained through unlawful conduct. The
primary remedy sought in the prayer of the petition is a recovery order in
terms of section 266 of the Proceeds of Crime Act 2002 in respect of the
property mentioned in Part II of the Schedule to the petition. That property is as specified in paragraphs
[3]-[5] above. It comprises the house at
[8] Both
the first and third respondents have lodged answers to the petition. The answers for the first respondent are
fairly skeletal; they
include a denial of the whole of the petitioner's averments relating to
property held by the first and third respondents. Those answers do, however, contain a number
of legal contentions, which were repeated in counsel's argument; I discuss those
below. The answers for the third
respondent are considerably fuller. The
third respondent admits his conviction under section 4(3)(b). He further admits his arrest on 16 August
2002 by Tayside Police, the finding of 2 kg of amphetamine in a Land Rover
Discovery vehicle which he was driving, that he was charged with an offence
under section 4(3)(b) of the 1971 Act, and that the
Crown had deserted proceedings in the High Court because certain evidence was
ruled to be inadmissible. By way of
explanation, however, he avers that he had not placed the amphetamine within the
Land Rover Discovery vehicle and that the vehicle had previously been parked in
an area where many people would have access to it. In relation to the averments of income and
property acquired by the third respondent, he admits the receipt of state benefits
in the years ended
The Proceeds
of Crime Act 2002
[9] The petition is
brought under Part 5 of the Proceeds of Crime Act 2002. Part of 5 is headed "Civil recovery of the
proceeds etc. of unlawful conduct". The
general purpose of the Part is stated in section 240, which is in the following
terms:
"(1) This Part has effect for the purposes of --
(a)
enabling the enforcement authority to recover, in civil
proceedings before the ... Court of Session, property which is, or represents,
property obtained through unlawful conduct,
...
(2) The powers conferred by this Part are exercisable in relation
to any property (including cash) whether or not any proceedings have been
brought for an offence in connection with the property".
Subsection (1) indicates that the proceedings
contemplated by Part 5 are to be civil proceedings, pursued through the civil
courts. Subsection (2) is important,
because it makes it clear that criminal proceedings are not required for Part 5
to be applicable.
[10] Section
241 then defines unlawful conduct. So
far as conduct within the
"A person obtains property
through unlawful conduct (whether his own conduct or another's) if he obtains
property by or in return for the conduct".
These provisions make it clear that, for Part 5 to
apply, what is required is the obtaining of property through conduct that is
unlawful under the criminal law. The
identity of the perpetrator is immaterial.
That is clearly a major distinction from criminal proceedings. Moreover, it is immaterial whether the person
from whom the property is recovered has been guilty of any criminal offence; the property is
still recoverable, subject to an exception, contained in section 308, for
persons who have acquired property in good faith, for value and without notice
that it was recoverable property.
[11] Civil
recovery in the Court of Session is dealt with in Chapter 2 of Part 5 of the
2002 Act. The main operative section for
"Proceedings for a recovery
order may be taken by the enforcement authority in the Court of Section against
any person who the authority thinks holds recoverable
property".
Under section 316 of the Act, the petitioners are
designated the enforcement authority for
[12] Section
244(1) refers to "recoverable property".
This is defined in section 304 in the following terms:
"(1) Property obtained through unlawful
conduct is recoverable property.
(2) But if property obtained through unlawful
conduct has been disposed of (since it was so obtained), it is recoverable
property only if it is held by a person into whose hands it may be followed.
(3) Recoverable property obtained through unlawful
conduct may be followed into the hands of a person obtaining it on a disposal
by --
(a)
the person who through the conduct obtained the property, or
(b)
a person into whose hands it may (by virtue of this
subsection) be followed".
In the following sections provision is made for the
tracing of property that represents recoverable property and for mixed funds that
include recoverable property that has been inmixed with other property. All these provisions are subject to section
308, which provides a general exception for any person who obtains property in
good faith, for value and without notice that it was recoverable property.
[13] The
powers and duties of the court are set out in sections 266-280. Section 266 provides as follows:
"(1) If in proceedings
under this Chapter [Chapter 2 of Part 5] the court is satisfied that any
property is recoverable, the court must make a recovery order.
(2) The
recovery order must vest the recoverable property in the trustee for civil
recovery".
Subsection (3), however, places two
important limitations on the making of recovery orders. In the first place, it provides that the
court may not make in a recovery order any provision in respect of any
recoverable property if the conditions specified in subsection (5) are met and
it would not be just and equitable to do so.
The conditions set out in subsection (5) deal with persons who obtain
recoverable property in good faith and take steps in reliance on obtaining that
property. That subsection was not
invoked in the present case and it is accordingly unnecessary to say anything
more about it. In the second place,
under subsection (3)(b) the court may not make any provision in a recovery
order which is incompatible with any of the Convention rights within the
meaning of the Human Rights Act 1998.
That provision was invoked, and I discuss its implications below. Section 266(2) refers to the trustee for
civil recovery; the trustee's functions are described in section 267. The trustee for civil recovery is a person
appointed by the court to give effect to a recovery order; his functions are to secure the
detention, custody or preservation of any property vested in him by the
recovery order and to realize the value of such property for the benefit of the
enforcement authority. The net receipts
from recovery orders are paid into the Scottish Consolidated Fund.
[14] Proceedings
for civil recovery under Part 5 of the 2002 Act are subject to special rules
for prescription and limitation. These
are enacted by section 288 of the Act.
Subsection (2) of that section enacts a new section 19B of the
Prescription and Limitation (
"19B Actions
for recovery of property obtained through unlawful conduct etc.
(1) None of the time limits given in the preceding
provisions of this Act applies to any proceedings under Chapter 2 of Part 5 of
the Proceeds of Crime Act 2002 (civil recovery of proceeds of unlawful
conduct).
(2) Proceedings under that Chapter for a recovery
order in respect of any recoverable property shall not be commenced after the
expiration of the period of twelve years from the date on which the Scottish
Ministers' right of action accrued.
(3)
Proceedings under that Chapter are commenced when --
(a) the proceedings are served, or
(b) an application is made for an interim
administration order,
whichever
is the earlier.
(4) The Scottish Ministers' right of action
accrues in respect of any recoverable property --
(a) in the case of proceedings for a
recovery order in respect of property obtained through unlawful conduct, when
the property is so obtained,
(b) in the case of proceedings for a recovery
order in respect of any other recoverable property, when the property obtained
through unlawful conduct which it represents is so obtained.
(5)
Expressions used in this section and Part 5 of that Act have the same meaning
in this section as in that Part".
Subsection (1) has the effect of
excluding all other periods of prescription and limitation from proceedings
under Part 5. Such proceedings are
subject to the special twelve year limitation period set out in subsection (2),
that period being calculated in accordance with subsections (3) and (4). It is noticeable that under subsection (4)
the Scottish Ministers' right of action accrues at the date when property is
obtained, rather than the date of the unlawful conduct by which it was
obtained. As in the provisions discussed
previously, the emphasis is on the acquisition of property rather than on the
commission of a crime.
[15] The
civil recovery provisions in Part 5 of the Proceeds of Crime Act 2002 must be
contrasted with the confiscation provisions in Part 3. The provisions governing the making of a
confiscation order under Part 3 are found in section 92. The conditions for such an order are set out
in section 92(2)-(4). These are, first,
that an accused person is convicted of an offence; secondly that the prosecutor
asks the court to act under the section; and, thirdly, that the court decides
to order some disposal in respect of the accused. Section 92(5) then provides as follows:
"If the court
acts under this section it must proceed as follows --
(a) it must decide whether the accused
has a criminal lifestyle;
(b) if it decides that he has a criminal
lifestyle it must decide whether he has benefited from his general criminal
conduct;
(c) if it decides that he does not have a
criminal lifestyle is must decide whether he has benefited from his particular
criminal conduct".
Section 92(6) provides as follows:
"If the court
decides under subsection (5)(b) or (c) that the
accused has benefited from the conduct referred to --
(a) its must decide the recoverable
amount, and
(b) it must make an order (a confiscation
order) requiring him to pay that amount".
A number of important features appear
from these provisions. First, a
confiscation order can only follow a successful prosecution. Secondly, it can only be granted at the
request of the prosecutor. Thirdly, such
an order is made specifically against the accused person. Fourthly, under subsection (5) the court must
consider the criminal conduct of the accused; the court's attention is thus directed
towards criminal conduct per se rather than, as in Part 5, the acquisition of
property through criminal conduct. Fifthly,
under subsection (6) the court must determine a recoverable amount and make an
order against the accused requiring him to pay that amount. That provision is directed against the
accused person rather than against the property; it involves an entirely personal
obligation. Under Part 5, by contrast,
the court's order is for the recovery of specific property; that creates a
right in the enforcement authority that is much more closely akin to a real
right. These differences are not merely
differences of wording; in my opinion they are differences of
substance. Indeed, the entire structure
of the civil recovery proceedings in Part 5 is wholly distinct from the
structure of the confiscation proceedings in Part 3. This point is of some importance, for reasons
that will appear subsequently.
Arguments for the
respondents
[16] Counsel
for the third respondent submitted that the petition should be dismissed on the
ground that it was incompetent and ultra
vires, and also on the ground of irrelevancy and lack of
specification. He presented three
arguments. First, he submitted that in
the present proceedings the Scottish Ministers, one of whom is the Lord Advocate,
made a specific allegation of criminal conduct on the part of the third
respondent. They did so, however, in the
face of an acquittal following prosecution; that acquittal had taken place under
section 95(1) of the Criminal Procedure (
[17] The
foregoing arguments appear to me to raise interesting and important questions
as to the application of Part 5 of the Proceeds of Crime Act 2002, and I propose
to deal with each of them individually.
Counsel for the first respondent also presented certain arguments, which
in part repeated the second argument for the third respondent. In addition counsel argued that the
proceedings constituted an abuse of process and that they had not been brought
within a reasonable time in terms of article 6(1) of the European Convention on
Human Rights. I will deal with these
arguments subsequently.
Significance of
acquittal; article 6(2)
[18] The
first argument for the third respondent was that the present petition involved
a specific allegation of criminal conduct by the third respondent, but that
contradicted the earlier acquittal of the third respondent following a criminal
prosecution. That, it was said, involved
a breach of article 6(2) of the Convention.
Article 6(2) is in the following terms:
"Everyone
charged with a criminal offence shall be presumed innocent until proved guilty
according to law".
In a series of cases before the
European Court of Human Rights it has been held to be implicit in the
presumption of innocence that, following a person's acquittal of a criminal
charge, no public authority should allege in any further criminal proceedings
that that person has been guilty of the same offence. Counsel referred to the discussion of this
issue in Sekanina v
"Such
affirmations -- not corroborated by the judgment acquitting the applicant or by
the record of the jury's deliberations -- left open a doubt both as to the
applicant's innocence and as to the correctness of the
[19] A
similar principle was applied in two further cases decided on the same date, O v
Norway and Y v Norway, 11 May 2003, applications nos.
29327/95 and 56568/00. In the former
case, the applicant had been charged with various sexual offences but was
acquitted by the High Court. The
applicant subsequently requested compensation for pecuniary and non-pecuniary
damage caused by the criminal proceedings.
In the compensation proceedings, the High Court, sitting with the same
judges as at the trial, rejected the applicant's claim. In its decision it repeated certain
information derived from the criminal proceedings. In the latter case the District Court
convicted the applicant of charges of assault, sexual assault and homicide, and
ordered him to pay compensation to the victim's parents. He appealed to the High Court, which
ultimately decided to acquit the applicant of the criminal charges but upheld
the District Court's decision to award compensation to the victim's
parents. In doing so, the court relied
on substantial parts of the evidence against the applicant in the criminal
proceedings. The High Court's decision
was ultimately upheld by the Supreme Court.
The European Court of Human Rights held that the decisions of the
domestic courts in both cases amounted to violations of article 6(2). In its judgments the
"Thus, the
compensation claim not only followed the criminal proceedings in time, but was
also tied to those proceedings in legislation and practice, with regard to both
jurisdiction and subject matter. Its
object was, put simply, to establish whether the State had a financial
obligation to compensate the burden it had created for the acquitted person by
the proceedings it had instituted against him.
Although the applicant was not 'charged with a criminal offence', the
Court considers that, in the circumstances, the conditions for obtaining
compensation were linked to the issue of criminal responsibility in such a
manner as to bring the proceedings within the scope of Article 6(2), which
accordingly is applicable".
In Y, the European Court of Human Rights held that a person acquitted
of a criminal charge might still be liable in a civil compensation claim in
tort or delict arising out of the same facts (paragraph 41). If, however, the national court's decision
relating to compensation contained a statement imputing the criminal liability
of the acquitted party, that might raise an issue falling within article 6(2)
(paragraph 42). The Court therefore
required to consider whether the domestic courts
"acted in such a way or used such language in their reasoning
as to create a clear link between the criminal case and the ensuing
compensation proceedings so as to justify extending the scope of the
application of Article 6(2) to the latter" (paragraph 43).
The High Court in its judgment had
found that it was "clearly probable that [the applicant] has committed the
offences ... with which he was charged", and that judgment had been upheld by
the Supreme Court. On this basis, the
[20] The
foregoing cases indicate that, following an acquittal, the state is prohibited
by article 6(2) from doing two things.
First, it may not raise criminal proceedings against the person
acquitted on a basis that is inconsistent with that acquittal;
double jeopardy (using that
expression in a somewhat loose sense) is prohibited. Secondly, the state may not take action
(including the refusal of a remedy that is otherwise available) against the
person acquitted by means of proceedings that are so closely linked to the
earlier criminal proceedings that they are incompatible with the acquittal. For the petitioners it was submitted that a
petition for a recovery order under Chapter 2 of Part 5 of the Proceeds of
Crime Act 2002 did not involve criminal proceedings. Thus the first prohibition did not apply. It was further submitted that, at least in
the circumstances of the present case, a petition for a recovery order was not
so closely linked to the criminal proceedings brought against the third
respondent in 2002 and 2003 as to be incompatible with the third respondent's
acquittal in those proceedings. I will
consider those arguments separately.
Characterization of
proceedings as criminal
[21] Article
6(2) applies only to criminal proceedings, or to proceedings which are so
closely linked to criminal proceedings that they must themselves be considered
criminal in nature. It refers to persons
who are "charged with a criminal offence", an expression that is also used in
article 6(3), which confers certain minimum rights on persons charged with
criminal offences. Article 6(1) refers
to the determination of "any criminal charge".
The foregoing expressions have been the subject of considerable case law
both in
[22] In
the European case law, three criteria have been treated as significant in determining
whether proceedings are criminal in nature.
The first criterion is the classification of the proceedings in domestic
law; the relevant question has been formulated as "whether or not the domestic
law regards the person in question, placed in the position in which he has been
placed, as a person charged with a criminal offence": S v Miller, per Lord Macfadyen at paragraph [32]. If the proceedings are regarded as criminal
by the domestic law, that is conclusive for the purposes of article 6. If not, it is necessary to go on to consider
the second and third criteria. The
second criterion is the objective classification of the situation in which the
person concerned finds himself, bearing in mind the object and purpose of the
Convention: ibid. at paragraph
[33]. In this connection, the following
remarks by Lord Macfadyen appear to me to be significant:
"Just as the
approach of domestic law may focus in some circumstances on the nature of the
offence and in others on the nature of the proceedings, so to the objective
assessment of the nature of the situation of the person concerned may in some
circumstances be determined by the nature of the offence and in others by the
nature of the proceedings. That concentration
exclusively on whether the 'offence' is objectively of a criminal nature cannot
be appropriate is, in my view, demonstrated by the fact that an allegation of,
for example, assault may be the subject of a criminal charge or the subject of
a civil claim for damages. Thus although
assault is a crime, it does not follow that in all proceedings in which it is
alleged that the person concerned committed an assault, that person faces a
criminal charge. Regard must also be had
to the nature and purpose of the proceedings.
One important element may be the identity of the person making the
allegation. That the allegation is made
by a private citizen pursuing a remedy for harm done to him as an individual
may be sufficient to show that no criminal charge is involved. Another element that may, in my view, be
significant is the purpose for which the proceedings are brought. If the purpose is to inflict punishment in
the public interest, that will tend to support the
conclusion that objectively proceedings involve the allegation of a criminal
charge. Conversely, however, the absence
of the possibility of punishment may support the conclusion that no criminal
charge is involved ...".
The third criterion is the nature and
severity of the punishment that may be inflicted as a result of the proceedings
in question. In this connection, Lord
Macfadyen points out that it is taken for granted that a criminal charge
ordinarily involves a penalty or punishment of some sort: ibid. at paragraph
[33]; the same point is made by the Lord President at paragraph [21]. Hence if there is no possibility of
punishment in the proceedings, that is a strong indication that the proceedings
are not criminal in nature. The third
criterion is therefore concerned with cases which do not fall, or at least do
not clearly fall, within the scope of article 6 by virtue of the application of
the first two criteria: ibid. at paragraph [34].
[23] On
the basis of the three criteria described in the last paragraph, I am of
opinion that the present proceedings cannot be characterized as criminal in
nature. So far as domestic law is
concerned, the proceedings are clearly civil in nature. They are brought in a civil court, using
civil forms of procedure. No indictment
or complaint against any of the respondents is involved; no conviction is
sought; nor is any sanction resulting from a conviction. The remedy sought in the proceedings is, in
essence, the transfer of certain property to the trustee for civil recovery and
the realization of that property by the trustee; that is clearly a civil
remedy. Moreover, it can be regarded as
a remedy directed against the property rather than the perpetrator of any
criminal conduct. The proceedings are
brought by the Scottish Ministers as enforcement authority acting through the
Civil Recovery Unit; as
explained in paragraph [11] above, the latter body is independent of the
prosecutorial function in Crown Office.
The powers in Part 5 can be exercised by the enforcement authority
regardless of whether any criminal proceedings have been brought at any
time. Finally, although in terms of
section 240 of the 2002 Act it is necessary to demonstrate that conduct
unlawful under the criminal law has occurred, it is not necessary to establish
the identity of the perpetrator of that conduct, and it is immaterial whether
the person against whom the order is sought has been guilty of such conduct:
see paragraph [10] above. Establishing
the identity of the perpetrator is an essential element in any criminal
prosecution in
[24] So
far as the second criterion is concerned, I am of opinion that proceedings
under Chapter 2 of Part 5 of the 2002 Act must be classified objectively as
civil in nature. In S v Miller, at paragraph
[33], Lord Macfadyen identifies a number of factors that may be relevant to the
classification of proceedings. These are
the nature of the offence that is alleged, the nature of the proceedings
themselves, the identity of the person making the allegation, and the purpose
for which the proceedings are brought.
Consideration of the purpose for which proceedings are brought appears
to me to involve two aspects; the first is the remedy that is sought in the proceedings, and in particular its practical effect; the
second is the ground or grounds on which the remedy is sought. In relation to the remedy, the question of
whether punishment is involved is important.
This list is clearly not intended to be comprehensive;
nevertheless, it provides a
useful starting point for consideration of the second criterion. I will accordingly deal with each of these
factors in turn.
1. In relation to the nature of the
offence that is alleged, the petition deals with property that is said to have
been derived from the supplying of controlled drugs. It is expressly averred that the third respondent
was concerned in that activity. This
factor, accordingly, is consistent with the classification of the proceedings
as criminal.
2. The proceedings themselves, however,
are in my opinion plainly civil in nature.
They are brought in a civil court, using civil forms of procedure. Moreover, for the purposes of proceedings
under Chapter 2 of Part 5 of the 2002 Act, the identity of the perpetrator of
the relevant criminal conduct is immaterial; that appears very clearly from
sections 241 and 242 of the Act: see paragraph [10] above. That is a distinct pointer towards the
classification of proceedings under Part 5 as civil. Finally, the remedy that
is sought is in my opinion very clearly civil in nature; I deal with this
matter separately.
3. The present proceedings are brought
by the Scottish Ministers as enforcement authority acting through the Civil
Recovery Unit. The latter body is kept
separate from the parts of Crown Office that exercise the function of prosecuting
crime, in the manner described in paragraph [11]. I am satisfied that the distinction between
the Civil Recovery Unit and the remainder of Crown Office is real, and not
contrived, and that the functions performed by the Unit do not involve the
prosecution of crime. I accordingly
conclude that the person making the allegations in the present case is a body
whose responsibilities are civil rather than criminal in nature. The fact that it is an emanation of the state
does not affect this result. The state
is frequently a party to civil proceedings, including civil proceedings
following criminal conduct; if, for example, a civil servant embezzled public
funds, it is clear that proceedings could be brought for recovery of those
funds or for damages regardless of whether a prosecution had taken place. The same principle applies to recovery orders
under the 2002 Act.
4. The remedy sought in the present
proceedings is a recovery order in terms of section 266 of the 2002 Act. The effect of such an order is to remove
property from its existing owner and transfer it to the trustee for civil
recovery. That amounts to a vindication
of the property; as such it is an essentially proprietary remedy. No doubt there is a detriment to the person
from whom the property is taken.
Nevertheless, the primary function of such a remedy is not to cause loss
to that person so much as to ensure that property is transferred to a person
with a better right. Such a remedy is
clearly civil in nature.
5. The ground on which a recovery order
may be sought is that the property specified in the order represents the
proceeds of criminal conduct. It is
accordingly clear that the primary function of the proceedings is to secure the
recovery of property that has been wrongfully obtained. In my opinion proceedings of that nature are closely
analogous to proceedings brought to recover property obtained dishonestly or
through breach of trust or breach of a fiduciary duty. A striking example of such proceedings is
found in Reading v AG, [1951] AC 507. In that case an Army sergeant serving in
Egypt accompanied civilian trucks transporting illicit spirits. He wore military uniform to avoid inspection
by the police. For his services he
received sums totalling nearly £20,000.
It was held that the Crown, which occupied a position analogous to an
employer, was entitled to recover those sums because they had been earned
through the abuse of his official position, and thus in breach of his fiduciary
duty. In cases under Part 5 of the 2002
Act, property has been obtained through unlawful conduct, in breach of the
general duties imposed by the criminal law.
The Crown, acting through the relevant enforcement agency, seeks to
recover such property for the public benefit; and that may be regarded as
justified because the unlawful conduct through which the property has been
obtained represents the breach of duties imposed by the criminal law for the
benefit of the public. In these
circumstances the parallel with proceedings to recover property obtained dishonestly
or in breach of trust or breach of fiduciary duty is very obvious. This parallel extends to the forms of remedy
that are available. Under section 304
and the following sections of the 2002 Act property may be traced into the
hands of transferees from the person responsible for the original unlawful
conduct, and provision is made for mixed funds and profits accruing. These provisions are subject to a general
exception, found in section 308, for bona fide onerous transferees. All of these provisions closely parallel the
remedies that are available in respect of property obtained dishonestly or in
breach of trust or breach of fiduciary duty.
The analogy between proceedings of this sort and proceedings for a
recovery order is in my opinion a strong indication that proceedings for a
recovery order are civil and not criminal in nature.
6. The final issue that is relevant to
the objective classification of the proceedings is the question of whether a
recovery order involves punishment. In
my opinion it does not. As indicated
above, I consider that the primary function of a recovery order is the transfer
of property that has been wrongfully obtained to the Crown for the public
good. The detriment suffered by any
person against whom such an order is made is not the primary function of the
order; it is rather the inevitable consequence of the vindication of property
by a person who has a better right (both morally and legally). A detriment of that nature is no different
from the detriment that is inevitably suffered by a person who is ordered in civil
proceedings to transfer property or to pay a debt or damages. It cannot in my opinion be considered
"punishment", as that word is used in the case law on article 6. A further significant feature of a recovery
order is that, if the court decides that property has been obtained through
unlawful conduct, it is obliged to pronounce a recovery order in respect of
such property; that follows from the use of the word "must" in section
266(1). There is no discretion to
mitigate the effects of the order. Where
a criminal penalty is imposed, however, except in relation to relatively minor
offences, it is not common for a fixed penalty to be imposed; instead, the
court is given a discretion as to the level of
penalty, and that discretion must be exercised according to the circumstances
of the particular case. In particular,
the court is normally required to take into account the degree of culpability
of the person on whom the penalty is imposed.
That is a feature that is wholly lacking from the régime in Part 5 of
the 2002 Act.
When the foregoing matters are
considered as a whole I am of opinion that they demonstrate clearly that
proceedings under Part 5 of the 2002 Act are civil in nature. That is so despite the fact that the
proceedings are based on averments that the third respondent had committed a
criminal offence. As Lord Macfadyen
points out in S v Miller, a criminal act may be the subject of a civil claim, and
thus the existence of a criminal offence as an essential feature in the
proceedings cannot be decisive in categorizing those proceedings. The same point is made by the Lord President
at paragraph [15], where it is pointed out that in S the reporter was seeking to show that S had committed an assault
to severe injury, a criminal offence.
That was not decisive as indicating that S was "charged with a criminal
offence"; in
deciding the latter question it was necessary to have regard to the nature of
the proceedings as a whole. Apart from
the allegation of a criminal offence, the other factors listed above point
clearly to the civil nature of the present proceedings.
[25] The
third criterion only applies in cases where it appears that a punishment is
inflicted, and the question of its nature and severity then becomes
important. This criterion is perhaps
most typically used to distinguish criminal from disciplinary proceedings. In the present case, however, I consider that
no punishment is involved; the third criterion is accordingly not
relevant. Overall, therefore, my
conclusion is that proceedings under Part 5 of the 2002 Act cannot be
characterized as criminal in nature, with the result that the prohibition on
double jeopardy contained in article 6(2) does not apply.
[26] The
foregoing conclusion is supported by the decision of the Court of Appeal of
Northern Ireland in Walsh v Director of the Assets Recovery Agency,
[2004] NIQB 21 (High Court); [2005] NICA
6 (Court of Appeal). In that case
proceedings for the recovery of assets were taken by the enforcement agency in
Northern Ireland against the appellant under Part 5 of the 2002 Act. At first instance Coghlin J. held that such
proceedings were civil in nature and did not engage article 6(2) of the
Convention. The appellant had been found
not guilty of three charges of obtaining services by deception; nevertheless, the
enforcement authority raised proceedings for recovery of assets. The Court of Appeal agreed that the
proceedings were civil in nature for the purposes of article 6(2). In relation to the classification of the
proceedings in national law, Kerr LCJ stated (at paragraph [26]):
"[W]e do not accept that it is in any way in inevitable that the
recovery proceedings will be confined to an examination of specific offences
committed by the appellant. We consider
that it would be open to the agency to use evidence that the appellant had no
legal means of obtaining the assets without necessarily linking the claim to
particular crimes. Finally, the purpose
of the recovery action is to obtain from the appellant property, it is claimed,
he should not have -- property that has been acquired by the proceeds of
crime. It is not designed to punish him
beyond that or to establish his guilt of a precise offence".
In relation to the second of the
criteria followed in the case law, the objective classification of the
proceedings, the opinion of Lord Macfadyen in S v Miller was cited with
approval. The court concluded that,
objectively, the proceedings should be regarded as civil rather than criminal
in nature. It then went on to consider
whether a penalty was imposed. On this
matter, Kerr LCJ commented (at paragraph [38]):
"A
distinction between confiscation orders and recovery proceedings can be drawn
in that, as Lord Bingham pointed out in McIntosh
[v HM Advocate, 2001 SC (PC) 89], the
sum ordered to be confiscated need not be the profits made from the drug
trafficking offence of which the accused has been convicted, whereas recovery
may only be ordered in relation to assets that have been acquired by proven
unlawful conduct. The recovery of assets
may more readily be described as a preventative measure, therefore. After all, the person who is required to
yield up the assets does no more than return what he obtained illegally. It is clear, however, from the judgment in Welch that the European Court
considered that a provision will not be classified as non-penal simply because
it partakes of a preventative character and, since it is unnecessary for us to
decide the point, we will refrain from expressing any final view on whether
recovery of assets should be regarded as penal within the autonomous meaning of
that term".
Despite those considerations, the
court concluded that the even if the proceedings were to be regarded as
imposing a penalty, that was not sufficient to require them to be classified as
criminal for the purposes of article 6.
[27] The
distinction between punishment and a civil remedy is clearly of critical
importance. It is not easy to state any
precise criterion for making this distinction, because criminal punishment and
the remedies afforded by the civil law have important features in common; in
particular, both are designed to enforce norms of conduct, and both are liable
to have an adverse effect on the person against whom the order is made. Nevertheless, the best criterion for making
the distinction is in my opinion the identification of the primary function of
the court's order: if that primary
function is the penalization of the person against whom it is made, it is
likely that the order is a form of criminal punishment; if, by contrast, the primary function
is the compensation or other benefit of the person in whose favour the order is
made, that is likely to be a civil remedy.
That criterion is not necessarily comprehensive, however; for example,
contempt of a civil court may well be an exception. In determining whether an order of the court
involves punishment or a civil remedy, analogy with other established forms of
remedy may be helpful. In the present
case, I consider the analogy with proceedings to recover funds obtained
dishonestly or in breach of trust or breach of fiduciary duty to be
pertinent. That analogy reinforces my
conclusion, expressed above, that the primary function of a recovery order
under section 266 is to transfer property to the enforcement agency as a person
having a better right, rather than to penalize the person against whom the
order is made. No doubt the latter
person is penalized, but that is also true of the analogous remedy for property
obtained dishonestly or in breach of trust; in neither case can be said that
the penalty is the primary function of the court's order. This is recognized in Walsh, where Kerr LCJ stated (at paragraph [39]):
"Even if the
proceedings in this case are to be regarded as imposing a penalty on the
appellant, we are satisfied that this is not sufficient to require them to be
classified as criminal for the purposes of article 6 .... [W]e consider that the predominant character of [a] recovery
action is that of civil proceedings. The
primary purpose is to recover proceeds of crime; it is not to punish the
appellant in the sense normally entailed in a criminal sanction".
At paragraph [41] Kerr LCJ described
proceedings for a recovery order as "predominantly proceedings in rem"; he continued "They are designed to
recover the proceeds of crime, rather than to establish, in the context of
criminal proceedings, guilt of specific offences". That summarizes the primary function of such
proceedings.
[28] I
should also refer at this point to the decision of Lord Kinclaven in Scottish Ministers v McGuffie, [2006] CSOH 34.
That case involved a challenge to the provisions of Part 5 of the 2002
Act on the ground that they involved a retrospective criminal penalty, in
contravention of article 7 of the European Convention on Human Rights. Lord Kinclaven rejected that contention; I deal with this
matter later, at paragraph [39].
Nevertheless, at paragraph [134] of his opinion he drew attention to
certain features of proceedings under Part 5 which are relevant to the application
of article 6(2), and in particular to the question of whether proceedings for a
recovery order are civil or criminal in nature.
The relevant passage in his opinion is as follows:
"The present
proceedings are clearly 'civil' rather than 'criminal' in our domestic law but
that is only a starting point. They seek
orders relating to civil recovery of property.
They are at the instance of the Scottish Ministers. They are not at the instance of the Lord
Advocate or prosecuting authority. They
have been initiated by civil Petition.
They have not been initiated by indictment or complaint or other form of
criminal procedures. They are being
heard in [the] Outer House of the Court of Session which is a civil court. They are not being heard in [the] High Court
of Justiciary or other criminal court.
The procedures involved for making and implementing the order are
clearly civil rather than criminal. The
rules of evidence and procedure which apply are civil rather than
criminal. The proceedings are directed
against property (in rem) rather than
against Mr McGuffie's person. The
recovery procedures are under the control of a civil court. Mr McGuffie's guilt is not in issue. He is not facing a criminal charge. He is not an accused person. He cannot be arrested or remanded or
compelled to attend. There has been no
formal accusation by the prosecuting authorities. He will not be subject to a criminal
conviction or a finding of guilt. He
will not be imprisoned. He will not
receive a sentence. A civil recovery
order will not form any part of his criminal record. There have been some criminal proceedings in
the past but the present proceedings are of a different nature and character. The orders sought are separate and distinct
from previous criminal proceedings.
Those earlier criminal proceedings have been concluded. They have not been re-opened. The essential focus of Part 5 is the civil
recovery of property rather than the imposition of a criminal penalty. Even if there is a 'penalty' in the sense of
detriment it is a 'civil' matter and not a 'criminal' one. Part 5 seeks to recover property, reduce
crime and benefit the community rather than to punish a particular respondent
or visit him or her with a criminal sanction.
In those circumstances, in my view, the Scottish Ministers are not
seeking a retrospective criminal penalty".
I respectfully agree with those views.
[29] The
importance of the imposition of a penalty for the purposes of article 6 has
been recognized in English cases, notably R
(McCann) v Manchester Crown Court,
[2003] 1 AC 787, where an anti-social behaviour order was held not to be a
penalty, and B v Chief Constable of Avon and Somerset Constabulary, [2001] 1 WLR
340, where a sex offender order was likewise held not to be a penalty. In the former case, Lord Hope of Craighead
stated (at paragraph 64):
"The
underlying idea is that proceedings do not lie within the criminal sphere for
the purposes of article 6 unless they are capable of resulting in the
imposition of a penalty by way of punishment.
In B v Chief Constable of Avon and Somerset Constabulary, [supra,] Lord Bingham of Cornhill CJ said
that he was aware of no case in which the
A similar view is expressed by the
Lord President in S v Miller, supra; at paragraph [21] he points out that
the French text of article 6 makes clear that a penal element is one of the
defining characteristics of the term "criminal charge". In the present case I am of opinion, for the
reasons stated at paragraph [24].6 above, that proceedings under Part 5 of the
2002 Act are not designed to result in the imposition of any punishment or
penalty, but are rather designed to achieve the recovery for the public good of
property that has been wrongfully obtained.
That by itself would be a sufficient reason for holding that the present
proceedings are not criminal in nature.
Linkage to criminal
proceedings
[30] Article
6(2) contains a further prohibition on action by the state against a person
acquitted of criminal charges by proceedings that are so closely linked to the
earlier criminal proceedings that they are incompatible with the
acquittal. Counsel for the third
respondent relied on three factors as demonstrating linkage: the parties, he
submitted, were the same in the earlier criminal proceedings and the present
proceedings for a recovery order; the subject matter was the same; and the
function of the present proceedings was in part to call into question the third
respondent's earlier acquittal.
[31] In
my opinion such linkage as exists between the present proceedings and the
earlier criminal proceedings is not sufficient to indicate that the third
respondent's acquittal in the earlier proceedings is called into question; thus
there is no contravention of the prohibition contained in article 6(2). In the first place, I am of opinion that the
parties to the criminal proceedings and the parties to the present proceedings
are not the same. The present pursuers
are the Scottish Ministers acting as enforcement authority under Part 5 of the
2002 Act; as such they have very specific functions under that Act. Criminal prosecutions, by contrast, proceed
at the instance of the Lord Advocate as the country's chief prosecutor, or at
the instance of the local procurator fiscal acting as a member of the
prosecution service. Those functions,
although they are carried out by an arm of the state, are quite distinct from
the other functions of the state; this is an important constitutional point
which runs through the whole administration of Scottish criminal
procedure. The Lord Advocate and
prosecution service cannot in my opinion be equiparated with the Scottish
Ministers acting in another capacity.
[32] In
the second place, I am of opinion that the subject matter of the present
proceedings is not the same as the subject matter of the earlier criminal
proceedings. Four points are of critical
importance in this connection. First,
the purpose of the present proceedings is to recover property that has been
wrongfully obtained; thus the proceedings are essentially proprietary in
nature. The earlier criminal
proceedings, by contrast, were not concerned with that property, but rather
with the question whether the third respondent had been guilty of the conduct
libelled in the indictment. Secondly,
for the present proceedings to succeed it is not necessary for the petitioners
to prove that the respondent has been guilty of any criminal charge; it is sufficient that they prove that the
property that they allege to be recoverable property represents the proceeds of
criminal activity, although the criminal activity alleged is that of the third
respondent. Thirdly, the proceedings do
not seek a conviction, or any form of punishment, but merely the recovery of
property that has been wrongfully obtained by some person at an earlier stage. Fourthly, the proceedings are conducted in a
civil court, using civil forms of procedure.
[33] In
the third place, I am of opinion that the function of the present proceedings
is not to call into question the third respondent's earlier acquittal. In the
present proceedings the court is not entitled to make any finding of guilt, to
the effect that the third respondent committed any particular criminal
offence. The function of these
proceedings is rather to recover property that has been wrongfully obtained
through criminal activity. That criminal
activity need not have been that of the third respondent. In fact averments are made about such
activity. Nevertheless, such averments
are not essential. In Walsh v Director of the Assets Recovery Agency, supra, Kerr LCJ points out
(at paragraph [26]) that the enforcement authority may rely on evidence that
the respondent has assets which he had no legal means of obtaining; from that
the inference may be drawn that those assets represent the proceeds of criminal
conduct. Such averments are made, at
considerable length, in the present case.
That clearly demonstrates that the question of whether the third
respondent committed any particular criminal activity is only of evidential
significance; it is not a critical issue in the case.
[34] I
accordingly conclude that there is no sufficient linkage between the present
proceedings and the earlier criminal proceedings to contravene article
6(2). I should add that this conclusion
is supported by the decision of the Court of Appeal in Northern Ireland in Walsh v Director of the Assets Recovery Agency, supra, and also by the
decision in the English High Court of Collins J. in R (Director of the Assets Recovery Agency) v T and Others, [2004] EWHC 3340 (Admin).
Imposition of
retrospective criminal penalty: article 7(1)
[35] The
second argument for the third respondent was that in the present proceedings
the petitioners were attempting to impose a penalty in respect of criminal
conduct that had allegedly been committed before Part 5 of the 2002 Act came
into force. That penalty, it was said,
was heavier than any penalty that could have been imposed before the Act came
into force; consequently there was a breach of article 7(1) of the European
Convention on Human Rights. Article 7(1),
which deals with punishment for criminal offences, provides as follows:
"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".
The second sentence of that article
raises two important issues: first,
whether the proceedings under consideration are to be characterized as relating
to a "criminal offence" for the purposes of the article; and secondly, whether
the remedy sought is a "penalty" within the meaning of the article. The two concepts are linked because, as
indicated at paragraph [29], proceedings will not normally be considered
criminal unless they may result in the imposition of a penalty.
[36] The
concept of a "penalty" for the purposes of article 7(1) was considered by the
European Court of Human Rights in Welch v United Kingdom, 1995, 20 EHRR 247. In that case the applicant had been convicted
of offences concerning controlled drugs, for which he was imprisoned. In addition, the trial judge imposed a
confiscation order under the Drug Trafficking Offences Act 1986. It was not in dispute that the provisions of
the 1986 Act had retrospective effect in relation to the offences of which the
appellant was convicted. Consequently
the only issue was whether the confiscation order constituted a penalty within
the meaning of article 7(1). The Court
began by pointing out (at paragraph 27) that the concept of a "penalty" was an
autonomous Convention concept. It
continued (at paragraph 28):
"The wording
of Article 7(1), second sentence, indicates that the starting point in any
assessment of the existence of a penalty is whether the measure in question is
imposed following conviction for a 'criminal offence'. Other factors that may be taken into account
as relevant in this connection are the nature and purposed of the measure in
question; its characterization under national law; the procedures involved in
the making and implementation of the measure; and its severity".
Under the 1986 Act, before a
confiscation order could be made the accused must have been convicted of a drug
trafficking offence; that obviously pointed towards a penalty. It was accepted that the Act had been
introduced to overcome the inadequacy of existing powers of forfeiture. Nevertheless, the Court concluded (at
paragraph 33 and 34) that several further aspects of such an order were in
keeping with the idea of a penalty.
First, under the 1986 Act sweeping statutory assumptions were made that
all property passing through the offender's hands over a six-year period were
the fruit of drug trafficking unless he could prove otherwise. Secondly, the confiscation order was directed
to the proceeds of drug dealing and not to actual enrichment or profit. Thirdly, the trial judge was given a discretion, in fixing the amount of the order, to take
into consideration the degree of culpability of the accused.
[37] In
my opinion proceedings for a recovery order brought under Part 5 of the 2002
Act are not to be characterized as relating to a "criminal offence" for the
purposes of article 7(1). Nor is a recovery
order to be considered a "penalty" within the meaning of that order. My reasons for these conclusions are
essentially those set out in paragraphs [24] and [27] above in relation to
article 6(2). First, the remedy sought,
a recovery order, is proprietary in nature; its primary function is to enable
property that has been wrongfully obtained to be recovered by the enforcement
authority, acting in the public interest.
Its primary function is not the punishment or penalization of the person
from whom the assets are taken.
Secondly, it is not necessary for the enforcement authority to establish
that the person from whom the assets are recovered has been guilty of any
criminal offence. Indeed, it is not
necessary that any criminal proceedings should have been instituted, against
that person or anyone else. Thirdly, no
conviction is sought in proceedings for a recovery order; nor is any sanction
for a conviction sought. Nor does the
issue of the respondent's guilt or innocence of any crime arise in any such
proceedings. Fourthly, the proceedings
are brought in a civil court, according to civil procedures. There is nothing analogous to an indictment
or complaint against the person from whom the property is to be recovered. Fifthly, the enforcement authority, although
an emanation of the state, is distinct from the authority, in
[38] Welch v
[39] This
conclusion is supported by the decision of Lord Kinclaven in Scottish Ministers v McGuffie, supra. His
reasoning, with which I am in full agreement, is set out at paragraph [28]
above.
Relevancy of
petitioners' averments
[40] Counsel
for the third respondent further submitted that one of the critical averments
in the petition, namely the averments that the third respondent had been
concerned in the supplying of controlled drugs since at least 1997, was not
supported by sufficient averments to allow evidence to be led to support such a
finding. That was so even on the civil
standard of the balance of probabilities.
Counsel submitted that the only unlawful conduct relied on by the
petitioners to support the recovery order that they sought was the foregoing
averment relating to the third respondent.
That averment involved a specific allegation of particular criminal
conduct; consequently it was incumbent on the petitioners to make detailed and
specific averments of criminal conduct in such a way that the court might
conclude that the allegation was proved on a balance of probabilities. In the present case, all that the petitioners
founded on was a conviction, which was in fact spent, the facts that led to the
failed prosecution of the respondent in 2003, and the respondents'
lifestyle. That, counsel submitted, was
not a sufficient to justify an averment of serious criminal conduct. Reliance was placed on Royal Bank of Scotland PLC v
Holmes, 1999 SLT 564, where Lord Macfadyen stated (at 569K-L):
"It is in my
view is essential for the party alleging fraud clearly and specifically to
identify the act or representation founded upon, the occasion on which the act
was committed or the representation made, and the circumstances relied on as
yielding the inference that that act or representation was fraudulent. It is also, in my view, is essential that the
person who committed the fraudulent act or made the fraudulent misrepresentation
be identified".
Similar principles applied, it was
submitted, to any allegation of serious criminal conduct.
[41] Counsel
for the third respondent presented certain further arguments on the petitioners'
averments of criminal conduct. First, counsel
criticized an averment made by the petitioners which adopted the content and
conclusions of the reports produced by the interim administrator in the present
case and incorporated those reports into the pleadings brevitatis causa. Senior
counsel for the petitioners immediately accepted the force of this criticism,
which was plainly well founded, and deleted that averment from his
pleadings. Secondly, counsel for the
third respondent submitted that an averment to the effect that the third
respondent had an extensive criminal history, including numerous convictions
for theft by housebreaking dating from 1964 to 1972, was irrelevant, in that it
had no bearing on the property that the petitioners sought to recover. Thirdly, counsel submitted that the petitioners'
averment relating to the 1997 conviction (set out at paragraph [2] above) was
irrelevant because that conviction was spent by virtue of section 5 of the
Rehabilitation of Offenders Act 1974.
[42] In
my opinion it is necessary for the petitioners to aver that property had been
obtained by or in return for a particular kind, or one of a number of kinds, of
unlawful conduct. This involves two elements.
First, the petitioners must aver facts and circumstances from which one
or more categories of unlawful conduct can be inferred. Secondly, the petitioners must make averments
from which it can be inferred that property was obtained by that unlawful
conduct. It is not necessary,
however, that the petitioners should make averments sufficient to infer that
any specific criminal offence has been committed. Those propositions have been accepted in
[43] In
the present case the petitioners make averments of unlawful conduct; they refer to the
third respondent's conviction in 1997 for being concerned in the supplying of
controlled drugs and to the events that are said to have occurred in August
2002, when amphetamine was found in a vehicle driven by the third
respondent. In addition, elaborate
averments are made about the respondents' unexplained sources of income; on the
basis of these, it is said that the court can infer that property has been
obtained by unlawful conduct, in the form of being concerned in the supplying
of controlled drugs. In my opinion these
averments are sufficient to satisfy the test of relevancy, which is whether, if
all the averments are proved, the petitioners are bound to fail. If the averments in question are proved, it
cannot in my view be said that the court will be unable to draw an inference
that the property in question represents the proceeds of a course of unlawful
conduct. The averment relating to
housebreaking convictions in the period from 1964 to 1972, however, does appear
to me to be irrelevant; such a long time has elapsed since then
that I do not think that it would be proper to infer that any part of the third
respondent's present assets is derived, to any significant degree, from
housebreaking activities at that time. I
may say that counsel for the petitioners made no attempt to defend this
averment.
[44] Counsel
for the third respondent's final point was based on the application of the
Rehabilitation of Offenders Act 1974 to the 1997 conviction. Section 1 of this Act provides that, subject
to certain exceptions, a person convicted of an offence shall, after the end of
the relevant rehabilitation period, be treated as a rehabilitated person. None of the exceptions applies in the present
case. The relevant rehabilitation
periods are specified in section 5 of the Act; in the present case the relevant
period is seven years, which had obviously expired. Thus the third respondent was a rehabilitated
person. The effect of rehabilitation is
set out in section 4(1) of the Act; this provides as follows:
"Subject to
sections 7 and 8 below, a person who has become a rehabilitated person for the
purposes of this Act in respect of a conviction shall be treated for all purposes
in law as a person who has not committed or been charged with or prosecuted for
or convicted of or a sentenced for any offence or offences which were the
subject of that conviction; and, notwithstanding the provisions of any other
enactment or rule of law to the contrary, but subject as aforesaid --
(a) no evidence shall be admissible in
any proceedings before a judicial authority exercising its jurisdiction or
functions in Great Britain to prove that any such person has committed or been
charged with or prosecuted for or convicted of or sentenced for any offence
which was the subject of a spent conviction;...".
One further provision of the Act is
relevant. Section 7 provides certain
limitations on rehabilitation.
Subsection (3) is in the following terms:
"If at any
stage in any proceedings before a judicial authority in Great Britain ... the
authority is satisfied, in the light of any considerations which appear to it
to be relevant (including any evidence which has been or may thereafter be put
before it), that justice cannot be done in the case except by admitting or
requiring evidence relating to a person's spent convictions or to circumstances
ancillary thereto, that authority may admit or, as the case may be, require the
evidence in question notwithstanding the provisions of subsection (1) of
section 4 above, and may determine any issue to which the evidence relates in
disregard, so far as necessary, of those provisions".
[45] Counsel
for the petitioners submitted that, in considering the application of sections
1 and 4 to proceedings for a recovery order under Part 5 of the 2002 Act, it
was important to bear in mind that such proceedings are not designed to
establish that a particular respondent has committed any offence. The intention of such proceedings was rather
to establish that assets represented the proceeds of criminal activity. In the present case, the petitioners sought
to prove that the third respondent had been involved in a particular category
of criminal activity, namely the supplying of controlled drugs. Nevertheless, the sole function of the
reference to the 1997 conviction was to provide an adminicle of evidence in
support of the foregoing contention. The
distinction appeared to be between a reference to a spent conviction for the
purpose of establishing the fact of the conviction, or the underlying offence,
and a reference to a spent conviction as an indication of a general category of
criminal activity.
[46] The
foregoing distinction appears to me to be somewhat fine. Section 4(1)(a) is
quite plain in its terms: "no evidence
shall be admissible ... to prove that any such person has committed or been ...
convicted of ... any offence which was the subject of a spent conviction". Even if a reference to a spent conviction is
designed to support a more general proposition, such as the contention that a
respondent was concerned in the supplying of controlled drugs, a reference to
the conviction must still be made, and that seems to fall within the terms of
section 4. That, as counsel pointed out,
may create a difficulty when section 4 is considered along with section 10 of
the Law Reform (Miscellaneous Provisions) (
Relevancy of
respondents' case
[47] The
petitioners further submitted that the defenders' averments were irrelevant and
that decree should be pronounced de
[48] It
would not in my opinion be appropriate to grant decree de
[49] The
other matter that the petitioners must establish is that the property that they
seek to recover is recoverable property.
To do that, they must demonstrate that the assets in question have been
obtained through unlawful conduct; in other words, a link must be shown between
the unlawful conduct and the assets that the petitioners seek to recover. In the present case the petitioners offer to
prove such a link as a matter of inference, from unlawful conduct on the part
of the third respondent and the existence of substantial assets for which no
legitimate explanation has been given.
On this part of the case the petitioners' averments are very detailed
and the third respondent's averments are rudimentary; he states that between
1997 and 2002 he acquired money from dealing in cars and jewellery and won
money in casinos; in
particular, he states that in 2001 and 2002 he won approximately £10,000 in
casinos. These averments were described
by counsel for the petitioners as unspecific and unvouched, and that criticism
is amply justified. In the circumstances
I propose to follow the course adopted by Lord Penrose in Scottish Ministers v
Buchanan, supra. In that case, detailed
financial averments were made by the petitioners, and the respondents met these
with bare denials, failing to point to a single source of legitimate income
that had not already been identified and dealt with by the interim
administrator. Lord Penrose continued
(at paragraph [42])
"It would be
an abuse of the processes of the court to put the petitioners to proof of the
financial position as set out in this case at this stage, when that might prove
to be wholly unnecessary as events develop".
A preliminary proof was allowed, but
to the extent only of allowing the petitioners an opportunity to establish that
the relevant respondent had engaged in unlawful conduct of the kind
averred. Lord Penrose pointed out that,
if that were established, it might be that it would then be an irresistible
inference that the property identified by the petitioners was recoverable
property; requiring proof of that aspect of the case was not justified at that
stage.
[50] In
the present case, the third respondent has made certain averments about the
source of funds, but these are wholly unspecific and are not supported by any
form of vouching. At least in the case
of the sale of cars and jewellery, it would be expected that some documentation
would be available; at the very least, it should be possible to link
transactions to entries in bank or building society accounts. No attempt is made to make any such case,
however. In these circumstances I am of
opinion that the present case is not distinguishable from Buchanan, and I propose to follow the same course of action. I will accordingly allow a preliminary proof,
but to the extent only of allowing the petitioners an opportunity to establish
that the third respondent engaged in unlawful conduct of the kind averred. For the avoidance of doubt such proof is not
confined to the averments in statement and answer 5, which deal with the
specific instances of unlawful conduct that are said to have occurred; it
extends to the specific issue that I have identified.
Arguments for first respondent
[51] Counsel
for the first respondent presented two arguments which were not adopted by
counsel for the third respondent. First,
he argued that the proceedings constituted an abuse of process, in that they
were designed to act as a substitute for a prosecution. That applied in
particular to the failure of the Crown to prosecute the third respondent for
being concerned in the supplying of controlled drugs during the period
between 1997 and 2002. It was
submitted that article 6(1) of the European Convention on Human Rights
applied; that provision, it was said, is not confined to the fairness of the
proceedings themselves but has a wider import, extending to the fairness of the
conduct of the state authorities as a whole.
Reference was made to Teixeira de
Castro v Portugal, 44/19, 97/82,
8/134, 9 June 1998, a case dealing with entrapment by police officers, and
to Brown v HM Advocate, 2002 SCCR 684. I do not doubt that the protection afforded
by article 6(1) extends more widely than the fairness of the court
proceedings themselves, and may apply to anything in the entire process of
investigation and prosecution that amounts to an abuse of process. In the present case, however, I am quite
unable to discover anything that can be regarded as an abuse of process in this
sense. The present proceedings are for
the recovery of certain assets that are said to represent the proceeds of
criminal conduct. For the reasons discussed
at length above, that does not involve a criminal prosecution; nor can it be
described in any intelligible way as a substitute for a criminal prosecution;
its function is totally different. The
failure of the Crown to prosecute the third respondent between 1997
and 2002 is a matter that is quite extraneous to proceedings for a
recovery order.
[52] Secondly,
counsel for the first respondent argued that the present proceedings had not
been brought within a reasonable time in terms of article 6(1) of the
European Convention on Human Rights. He
submitted that, in view of the plea of guilty in 1997, an application for
a confiscation order could have made at that stage; the time that had elapsed
since then was not reasonable. I asked
counsel whether there was any authority on this matter, and he made reference
to the "general standards of civilized legal systems"; he was unable
to cite any authority. In my opinion
this argument is wholly without foundation.
In Scots law, except in relation to the enforcement of certain
categories of obligation, the standard period of prescription is 20 years. That must be taken as the domestic norm, and
the present proceedings are well within that period. The 2002 Act makes special provision for
prescription and limitation in section 288, which is quoted at
paragraph [14] above. Section 19B
of the Prescription and Limitation (
Conclusion
[53] For the
reasons stated, I will repel the first and second pleas in law for each of the
respondents; these challenge the petition as incompetent and the remedy sought
as ultra vires and, in the case of
the first respondent, oppressive. I
will, however, sustain the third respondent's third plea in law to the extent
of refusing probation of the averments relating to housebreaking activities
identified at paragraph [43] above.
The third respondent has a further plea in law to the effect that the
order sought involves a disproportionate interference with his convention
rights; that plea was not argued, and I will accordingly repel it. Quoad
ultra I will allow a preliminary proof, confined to the question of whether
the third respondent engaged in unlawful conduct of the kind averred in the petition.