SHERIFFDOM OF GRAMPIAN, HIGHLAND AND ISLANDS AT INVERNESS

Act: Nicholson

Alt: MacKenzie

INVERNESS, AUGUST 2008

The sheriff, having resumed consideration of the cause, Dismisses the minuters' minute; Finds the minuters liable to the defender in the expenses of the minute and answers procedure, Allows an account thereof to be given in and Remits same, when lodged to the auditor of court to tax and to report.

NOTE

Introduction

[1] This action was an application by way of minute by the Scottish Ministers under section 298 of the Proceeds of Crime Act 2002 for forfeiture of £5,694.02 ('the cash') detained by interlocutor of this court on 15 November 2007, following an application by the Procurator Fiscal for the public interest. The cash had been seized from the defender. The minuters aver that Northern Constabulary held substantial intelligence implicating the defender in criminal activity. On his arrest on 13 November 2007 the defender said ' I sold a tranny van for £5,800 yesterday to a man in Wick.' Search of the defender disclosed the cash. The defender had a criminal record demonstrating his propensity for offending and involvement in controlled drugs. The minuters aver that the cash represented the proceeds of unlawful conduct or was intended for use in unlawful conduct. Of significance the minuters aver in Article 7 of Condescendence:

'Since the initial cash seizure [the defender] has failed to provide any verifiable information in relation to the sale of a motor vehicle. Since the said cash was seized [the defender] has failed to provide a verifiable explanation as to its derivation and provenance. These failures are founded upon.'

[2] The defender originally averred that he had sold a Ford Transit pickup on 16 September 2007 for £5,700. On 10 June 2008 the defender expanded his written averments to include the registration number of the pickup and to identify the individual to whom he said he had sold the vehicle.

[3] Armed with that detailed information the minuters had enquiries made, the result of which led them to decide no longer to insist on their minute for forfeiture. They conceded that the defender was entitled to expenses. However, given the history of the action, they submitted that he was entitled to expenses only from the date of disclosure of the detailed information, namely 10 June 2008.

[4] The action came before me for a hearing on the issue as to whether the award of expenses in favour of the defender should be thus limited. The minuters were represented by Mr Nicholson, solicitor, Edinburgh, and the defender by Mr MacKenzie, solicitor, Inverness.

Submissions for the parties

Minuters

[5] Mr Nicholson had very helpfully prepared his submissions in writing. Those submissions are with the papers and need not be repeated herein.

Defender

[6] In response Mr MacKenzie argued that the approach should be straightforward. Expenses should follow success. The minuters had brought the defender to court and then decided no longer to insist on their minute. The original application by the Procurator Fiscal had made it clear that the provenance of the cash was alleged to have been from unlawful activity as opposed to its use being thought to be for a criminal purpose. It was now accepted by the minuters that the source had been lawful, namely the sale of the vehicle.

[7] The defender's position had the case gone to proof would have been that he had been intoxicated through alcohol at the time of being interviewed by the police, that he had only met the purchaser of the vehicle for that purpose and he had been under no obligation as seller to retain the details of the purchaser. Once the cash had been seized, the defender required to make enquiries in order to identify the purchaser. He had done that and then passed the information obtained on to his solicitor who then was able to expand the averments regarding the vehicle and the purchaser.

[8] The defender had criticisms of the specification of the minuters' averments and might have objected at proof to any detailed evidence being led on the basis of no record.

[9] The decision of Muneka was not of assistance. It had followed the leading of evidence and dealt with a quite different factual situation from the present case.

[10] In the present action there was no good reason to depart from the normal rule. The pursuers had decided not to insist on their minute and accordingly expenses should follow success: the defender was entitled to his expenses as taxed from the inception of the proceedings until their conclusion.

Discussion

[11] The decision of Muneka is authority for the proposition that the absence of an explanation for the holding of cash which is the subject of interest by an authority (in that case the Commissioners of Customs and Excise, in this case the police) in terms of the 2002 Act is of itself inferential of unlawful conduct. It is worth noting that in Muneka the holder of the money had given at different times different accounts as to the source of the money found in his possession. The district judge found that he had lied and the fact that he had done so entitled her to conclude that the very suggestions being put to him were in fact true on the balance of probabilities. That approach was upheld on appeal by Mr Justice Moses in the High Court of Justice, Queen's Bench Division The Administrative Court. I agree with all that is said in the report of that decision. However, in my view, the factual position in the present case is somewhat different. In this case the defender had always given substantially the same account of the source of the cash, namely the sale of a Transit van to an individual in Wick, Caithness. I attached no significance to the slightly differing versions which he gave as to the sale price, £5,700 or £5,800. Further, once investigated it transpired that he had indeed sold such a vehicle to a James McLean, who resided in Thurso, Caithness, for £5,700. That was quite a different set of circumstances from those found in Muneka. In that case there had been evidence led, it had been decided that the appellant had been lying and that accordingly there had been no explanation at all for his possession of an amount of cash.

[12] So far as it can be stated in the absence of the hearing of evidence, it seemed likely that on the balance of probabilities the defender would be found to have been telling the truth about the sale of the van. Given that, and the closeness between the amount of the cash found in the defender's possession (£5,694.02) and the sale price actually paid (£5,700) it can be readily understood why the minuters decided no longer to insist on their minute. Equally I can understand why, until the details of the sale had been ascertained, the minuters had considered that, on the authority of Muneka, there was the prospect of success had the case gone to proof. In my view, the minuters' averments appeared relevant and if the defender had failed to substantiate the bald averment that he had sold a Ford Transit pickup on 16 September 2007 for £5,700, then he certainly faced the possibility of the minuters succeeding at proof.

[13] However, in my view the stage in the proceedings at which the defender introduced the detailed averments as to the vehicle and the purchaser are secondary to the apparent truth of the original averment and the minuters' decision effectively to abandon their application. Although the detailed averments were introduced close to the date assigned for proof, it did not seem to me to be an unreasonably long time after the lodging of the original answers, namely 26 March 2008. That view is founded on the fact that, as the private seller of a vehicle, the defender was under no legal obligation to retain details of the sale transaction. In my view, he was entitled to a period of time to make enquiries and ascertain the identity of the purchaser. I did not consider it incumbent on him to make such enquiries between the original detention of the cash in November 2007 and the lodging of the minuters' minute for forfeiture on 14 February 2008.

[14] In his submission, the solicitor for the minuters characterises the defender's averments as lacking candour until adjusted on 10 June 2008. In Shepherd v Elliott (1896) 23 R. 695 the Lord President said, at page 696,

'The principle upon which the Court proceeds in awarding expenses is that the cost of litigation should fall on him who has caused it. The general rule for applying this principle is that costs follow the event, the ratio being that the rights of parties are to be taken to have been all along such as the ultimate decree declares them to be, and that whosoever has resisted the vindication of those rights, whether by action or by defence, is prima facie to blame. In some cases, however, the application of the general rule would not carry out the principle, and the Court has always, on cause shewn, considered whether the conduct of the successful party, either during the litigation, or in the matters giving rise to the litigation, has not either caused or contributed to bring about the law suit.'

[15] The question therefore arises: what conduct on the part of the defender has caused or contributed to bring about this summary application. The answer is clearly nothing. His early assertion that he had an innocent explanation for the substantial sum of cash found in his possession is now not to be questioned. The sheriff allowed both parties time to adjust their averments until two weeks prior to the final hearing of the application and the detailed averments were introduced within that time limit. An explanation for the timing of the introduction of those additional averments has been given. He has only expanded the original averments which themselves were consistent with the position adopted by the defender since his arrest on 13 November 2007.

[16] The minuters have extensive powers under the 2002 Act. The burden of exercising them responsibly is a heavy one. As a consequence of his relatively late identification of the purchaser of the vehicle, the defender has been deprived of access to his funds since November 2007. In my view that deprivation represents the appropriate sanction against him for such delay as occurred. Otherwise the minuters must bear the responsibility for their attempt to resist the vindication of the defender's right to enjoy his property by being found liable in his expenses since the inception of the proceedings.

[17] On a separate matter, I have noted that although the minuters are no longer insisting in their minute for forfeiture, it has not yet been dismissed. I have therefore dealt with that in today's interlocutor by dismissing the minute.