PROCURATOR FISCAL, EDINBURGH AGAINST PY AND TPY AND WAY AND MSY
SHERIFFDOM OF LOTHIAN AND BORDERS AT EDINBURGH
2015SCEDIN35
PC72/13
JUDGMENT OF SHERIFF T WELSH QC
In the cause
THE PROCURATOR FISCAL (EDINBURGH)
Applicant;
Against
PY
First Respondent and minuter:
TPY
Second Respondent:
WAY
Third Respondent:
MSY
Fourth Respondent:
Act: Hood, PF Depute, Edinburgh
Alt: Lobjoie; Lobjoie and Co, Glasgow
EDINBURGH 11 MAY 2015
The issue
[1] A minute for variation of a Restraint Order (RO) called before me on 5 May 2015, for an evidential hearing. The minute was lodged by the first respondent, on 12 February 2015, in terms of section 121(5) of the Proceeds of Crime Act 2002. The RO was originally granted on 17 October 2013 against the minuter and three other respondents, all four of whom appeared, that day, on petition. They faced charges alleging a series of bogus workman frauds.
[2] The effect of the RO is to interdict the respondents and Santander Bank PLC from dealing on certain bank accounts pending the conclusion of prosecution of the respondents in respect of the fraud offences contained in the Petition. If the present variation of the RO is granted, the net effect will be to allow the minuter, alone, access to certain specified bank accounts, one containing £117,714.89, pending prosecution.
[3] But note this. On 18 August 2014 all four respondents were indicted to the High Court of Justiciary on an indictment libelling 20 charges of fraud against vulnerable complainers in Lochearnhead, Alexandria, Inverness and Edinburgh, totalling some £538,917. There has been at least one preliminary hearing in the High Court; on the 11 September 2014. Further procedure is scheduled there on 8 June 2015. I was informed by the minuter’s agent that trial is not anticipated, before 2016. No trial diet has been allocated. Accordingly, the issue which arises for me to determine, before I embark on a proof is the extent to which, if at all, the sheriff has power to vary a RO over property, originally competently granted in the sheriff court but in respect of which the High Court is now seized of jurisdiction, when proceedings for the offences connected with the RO have been instituted in that court but not concluded.
Background
[4] When this case called I was informed that there were three witnesses available to give evidence, one of them a forensic accountant. The minute craves the court to vary the RO of 17 October 2013 to the extent of excepting from it two named and numerically identified Santander Bank accounts and one named Santander Bank account. The minute narrates that the minuter owns the funds in these accounts but has no money to meet his reasonable living expenses or to finance his business. The minuter’s sole income is averred to be what he can earn from casual day work. No other specification is provided in the minute. On that basis, relief is sought, in terms of section 121(7)(b) of the 2002 Act, which gives the court discretion to vary the terms of a RO.
[5] The purpose of the hearing fixed before me was to lead evidence to ascertain the disputed liquidity of the minuter and his related businesses with a view to allowing him access to restrained funds. A large black lever‑arch folder was passed up to the bench. This contained 170 tight pages worth of historical benefits data, copious HMRC tax returns and revenue correspondence, miscellaneous statements, the High Court indictment and sundry other documents, all said to relate to the proof and lodged by the Crown on the morning of the hearing. Miss Hood indicated there might be an additional witness for the Crown, as well. Both agents said they had little practical experience of an application to vary a RO.
[6] However, I was informed by Miss Hood, that the RO in question had already been varied in this court on 2 December 2014 to allow the second respondent, TPY, access to a separate account containing £5000 which was held in the name of the present minuter. It was said that, inadvertently, the Crown was not represented at that variation hearing and a separate inquiry is on‑going into the circumstances surrounding the grant of that order. I also had sight of papers in the court process which disclose that in April 2014, the Crown agreed to vary the RO by excepting from it a named and identified Santander account belonging to the third respondent, WAY.
[7] I was invited to hear evidence and decide on further variation of the RO. Parties informed me the issue would come down to a dispute about how much (if any) money should be freed to the minuter. The Crown’s primary position, on the merits, was that the sums remaining restrained are entirely the proceeds of the crimes libelled in the indictment and no further variation should be sanctioned but if the court does sanction variation, relief should be restricted to £500 per week. On that basis, parties indicated they were ready to embark upon the proof.
Discussion
[8] I invited Miss Hood to address me on the competency of the application given that a High Court indictment had now been served. I referred her to section 119(10) of the 2002 Act which provides:
“(10) In this section, sections 120 to 140 and Schedule 3’the court’ means—
(a) the Court of Session, where a trial diet or a diet fixed for the purposes of section 76 of the Procedure Act[1] in proceedings for the offence or offences concerned is to be, is being or has been held in the High Court of Justiciary;
(b) the sheriff exercising his civil jurisdiction, where a diet referred to in paragraph (a) is to be, is being or has been held in the sheriff court.”
[9] Initially, Miss Hood did not question the competency of these proceedings and referred me to chapter 3, Part XIX, of the Consolidated Act of Sederunt (Summary Applications, Statutory Applications and Appeals etc Rules) 1999. These rules regulate sheriff court procedure in respect of applications to vary ROs, in terms of section 121 of the 2002 Act, that are competently before the court. According to the rules an application to vary must be made by minute. Implicit in the rules is the expectation that the court is dealing with a competent application. I did not consider reference to chapter 3, Part XIX helped because section 119(10) of the 2002 Act is primary legislation which specifies the court which can competently hear an application, inter alia, made under section 121 and in my view, on a true reading, indicates the minute is incompetent, in the sheriff court, at this stage of the prosecution.
[10] Mr Lobjoie for his part readily acknowledged the apparent difficulty in bringing this minute before the sheriff, after a High Court indictment has been served, given the terms of section 119(10). He indicated he had only recently taken on instruction in this matter and that counsel had also been involved. He referred to the fact there had been a prior variation of the RO, in the sheriff court, at the instance of another respondent on 2 December 2014, after the indictment was served. Mr Lobjoie, then raised the question of a possible remit of these proceedings, to the Court of Session. However, parties asked for time to consider their positions.
[11] On resuming, both parties conceded that the present application was incompetent. However, Miss Hood, moved me to remit the sheriff court process to the Court of Session. She cited Macphail Sheriff Court Practice 3rd Edition at 13.65-13.66, as authority. Mr Lobjoie conjoined in the motion, in so far as it related to the minute also being transferred.
Decision
[12] Quite apart from the clear absence of specification of the issue for the court to decide being properly formulated in the pleadings, such as they are, the minute is indeed incompetent. However, for reasons of expediency, as this is not an academic issue, I ignored the specification point. In my opinion, once the criminal case was indicted to the High Court, jurisdiction over the restrained property and power to vary the RO transferred to the Court of Session, de jure. In this case the High Court indictment was served on 18 August 2014. After that date, any recall or variation of the order could only be made by the Court of Session.
[13] In my view, any application to recall or vary the RO, after service, must track the High Court criminal proceedings, at the appropriate level of gravity within the civil court structure. Furthermore, as an important corollary of that fact, the administration of the recall or variation process, should it arise, will then be, handled by supreme courts staff, rather than having staff from two different court tiers involved. There is no provision for two tier tracking in the 2002 Act. The layout of the scheme introduced is deliberate. In my opinion the creation of a regime which introduced same tier parallel tracking of ROs was the clear and obvious intention of the legislation.
[14] For the purposes of the present proceedings, section 119(10)(a) has the practical effect of excluding the civil jurisdiction of the sheriff to recall or vary a RO in all cases indicted to the High Court and section 119(10)(b) confers civil jurisdiction to recall or vary ROs on the sheriff but only in respect of orders connected to cases indicted for trial before a sheriff and jury.
[15] In my opinion, the language used in section 119(10)(a) is deliberately chosen to reflect the trial procedure currently adopted in the High Court. It is necessary to read section 72 and section 72A of the Criminal Procedure (Scotland) Act 1995 together with section 119(10)(a) of the 2002 Act. Thus, in those cases indicted to the High Court but still subject to section 72 procedure, that is, before a trial diet has been appointed, the trial in those cases “is to be” held in the High Court where that phrase is used in section 119(10)(a) and any recall or variation of a RO must be made in the Court of Session.
[16] In cases where a trial diet has already been allocated under section 72A, the trial “is being” held in the High Court and again the recall or variation jurisdiction is exclusive to the Court of Session. Thus, section 72, section 72A and section 119(10)(a) work in harmony. Civil jurisdiction to vary or recall the RO tracks the indictment.
[17] The presence of the phrase “or has been held” in section 119(10)(a) is consistent with the holistic and flexible scheme for prior restraint introduced by the 2002 Act. Restraint Orders which facilitate proactive intervention to freeze and prevent dealing in suspected proceeds of crime are available to the Crown at various distinct, progressive stages, of investigation and prosecution, up to and including conviction and beyond, if, the conditions set out in section 119 are met.
[20] The same logic applies mutatis mutandis to the symmetry between section 119(10)(b) of the 2002 Act and section 71 of the 1995 Act, in relation to the procedure currently governing sheriff court indictments. The statutory mechanism thereby created is necessary to take account of the procedural bifurcation of prosecution in Scotland, where all serious prosecutions commence on the same track, on petition, in the sheriff court but the most serious are routed to the High Court while other serious cases continue on the sheriff court line.
[21] It is only appropriate that after indictment to the High Court a judge at that level takes over responsibility for restrained property, which ultimately may become available to satisfy the terms of a confiscation order, should conviction arise. In my opinion, the event, which signals cross over from the sheriff court track, to the Court of Session track, is the service of the High Court indictment. Accordingly, I have little difficulty in concluding that the minute lodged after 18th August 2014 and the evidential hearing set down, before me, in this court, invoking exercise of a non-existent civil jurisdiction to vary the RO, are both incompetent.
[22] Parties attempted to rescue this situation by, jointly, moving that, I, ex propio motu, remit the case to the Court of Session for further procedure. I regret I am not persuaded I have the power to do that. The rules governing ROs in the sheriff court, contained in Part XIX of chapter 3, of the Consolidated Act of Sederunt (Summary Applications, Statutory Applications and Appeals etc Rules) 1999, do not provide for a remit to the Court of Session, of minutes incompetently before the sheriff. Perhaps this is not surprising as the rules envisage variation and recall of ROs only tracking sheriff and jury proceedings.
[23] There is statutory power conferred by section 37 of the Sheriff Courts (Scotland) Act 1971 to remit an ordinary cause or, arguably, even a summary cause to the Court of Session, if it raises a point of difficulty or importance but I am presently dealing with a summary application, not an ordinary cause, which raises no issue of difficulty or importance, so, in my opinion, section 37 is of no relevance.
[24] The section in Macphail 3rd Edition, at 13.65-13.66, relied upon by Ms Hood relates to a procedure initiated beyond the sheriff court whereby the Court of Session, in cases of necessity or contingency, has the power to call up a sheriff court process. That is not the case here. The authority cited is irrelevant. Clearly the Court of Session does have power to call up a sheriff court process should a relevant minute be lodged there, to recall or vary a RO, should it be thought necessary but in my view the sheriff cannot ex proprio motu, remit an incompetent summary application to the Court of Session, to cure an inherent incompetence in a sheriff court process.
[25] So, for these reasons, I am not persuaded I can do other than dismiss the minute for want of competence.
Expense and Resources.
[10] Both parties are publicly funded. The minuter has legal aid. The case has called for procedure on seven occasions in this court before a series of sheriffs, all of which was a complete waste of public money and judicial resources. The responsibility for that state of affairs rests entirely with the Crown. I have some limited sympathy for the minuter, whose agent came late to the case and who might have thought the incompetent but unappealed grant of a variation of the RO, on 2 December 2014, was an indication that proceedings in this court were competent, false though that indication was. It might also be said in favour of the minuter that the legislation is complex and not easy to follow.
[11] However, the Crown, in my opinion, is in a totally different position. It has a dedicated specialist unit with specialist responsibility for managing the recovery of proceeds of crime. That specialism brings into play wider considerations. The specialists who deal daily with these cases should know the procedures introduced by the 2002 Act. When this minute was intimated to the Crown it was the public prosecutor’s duty to tell the minuter’s agents it was incompetent to raise the matter before the sheriff after the indictment, initiating High Court proceedings, had been served when the Court of Session was then the only appropriate court to minute in for variation. Equally, when the case called in the sheriff court, it was the duty of the Crown specialists to tell the sheriff that the proceedings were incompetent to avoid further waste of money, time and resources. In my opinion the order to vary the RO, incompetently granted, in this court, on 2 December 2014, which released £5000, unlawfully, from restraint, (when the Crown was inadvertently excluded from proceedings) should have been appealed by the Crown, before the order was extracted for implement, to rectify the situation. None of those things were done. They each contributed to this pointless proof being fixed. When confronted with a fiasco such as this, where inept proceedings are taken in the wrong court, it is the duty of this court to assert its authority and criticise the Crown for contributing to the waste of court time, judicial resource and public money, especially in times of austerity when public resources are under pressure. Otherwise, systems are not altered and proper checks are not put in place, to ensure this sort of serious and expensive mismanagement is not repeated.
[12] I must add that none of the criticisms I make attach to Ms Hood who appeared for the Crown. My impression was that she too came late to this evidential hearing. She conducted the case in an entirely professional manner and fully assisted the court at every turn to ascertain the precise history of the case and very properly, ultimately, conceded the proceedings were incompetent.
Sheriff T Welsh QC
Edinburgh Sheriff Court
11th May 2015.
[1] “the Procedure Act” means the Criminal Procedure (Scotland) Act 1995 (c. 46) see s154(1) of the Proceeds of Crime Act 2002.