The Scottish Ministers V. Marie Buchanan For Recovery In Terms Of Section 266 Of The Proceeds Of Crime Act 2002
| Jurisdiction | Scotland |
| Judge | Lord Penrose |
| Neutral Citation | [2006] CSOH 121 |
| Court | Court of Session |
| Docket Number | P861/05 |
| Published date | 04 August 2006 |
| Date | 04 August 2006 |
| Year | 2006 |
| OUTER HOUSE, COURT OF SESSION [2006] CSOH 121 | |
| P861/05 | OPINION OF LORD PENROSE in Petition of THE SCOTTISH MINISTERS Petitioner; against MARIE BUCHANAN AND OTHERS Respondents: for Recovery Order in terms of Section 266 of the Proceeds of Crime Act 2002 ________________ |
Petitioner: Cullen, Q.C., Heaney; Scottish Ministers
Respondent: Holmes; Jardines
4 August 2006
[1] On 10 March 2006, following preliminary proof, I held that the petitioners had established on a balance of probabilities that from 1987 at the latest Mr George Buchanan had been concerned in the supplying of controlled drugs contrary to section 4 (3)(b) of the Misuse of Drugs Act 1971, and that he had been a significant player in the illicit drugs trade over the whole period on which the petitioners relied in seeking a recovery order in terms of section 266 of the Proceeds of Crime Act 2002 ('the 2002 Act').
[2] As noted in my opinion of 10 March, Mr Holmes had indicated that, in the event of an adverse finding on that issue, he might wish to propose further issues for consideration by the court. The case was duly put out by order to investigate what further procedure, if any, was appropriate. Mr Holmes sought leave to amend the answers for all respondents. He was given leave to lodge a minute of amendment, the petitioners were given an opportunity to answer any amendment proposed, and both parties were ordered to lodge written notes of argument before further consideration of the issues that might be focused in any proposed amendment of the pleadings. In due course a minute of amendment was lodged, the petitioners tendered answers, and both parties lodged notes of argument setting out their respective positions. The procedures adopted have been of considerable assistance in focusing the issues that have now to be determined.
THE DEVOLUTION ISSUE
[3] The first issue proposed in the respondents' minute of amendment relates to an alleged breach of section 57(2) of the Scotland Act 1998 ('the 1998 Act'). The respondents seek an opportunity to argue that proceedings under the 2002 Act are criminal in character, and that the adoption of a standard of proof on the balance of probabilities is incompatible with the presumption of innocence to which Mr Buchanan is entitled in terms of Article 6 of the European Convention on Human Rights by imposing on him a burden of proof. A fair trial is said to be impossible on such a basis. It is said that the petitioners' actions are incompatible with Mr Buchanan's Convention rights, and within the prohibition set out in section 57(2) of the 1998 Act.
[4] Two broad questions arise on this branch of the case: (a) whether the respondents should be allowed to introduce a devolution issue at this stage in the proceedings, having previously deleted averments to the same effect prior to the preliminary proof, the waiver question, and (b) whether there is a live issue relating to the compatibility of the 2002 Act with the respondents' Convention rights that requires judicial determination in Scotland.
[5] In respect of the second, and more substantial, question, Mr Holmes argued that the compatibility of the 2002 Act with Mr George Buchanan's Convention rights raised an important, and unresolved, issue in Scotland. He recognised that the Court of Appeal in Northern Ireland had decided that proceedings under Part 5 of the 2002 Act did not involve a criminal charge: Walsh v Director of the Assets Recovery Agency [2005] NICA 6. He recognised that the House of Lords had refused leave to appeal that decision on 7 July 2005. He recognised that the decision had been followed in England and Wales in Director of the Assets Recovery Agency v Commissioners of Customs & Excise and other [2005] EWCA Civ 334. Further the decision had been followed in Scottish Ministers v McGuffie [2006] CSOH 34. However, he contended that all of these decisions were wrong. In particular the characterisation of the proceedings as in rem was a fundamental error. They were truly in personam, and operated as a penalty against any person who was shown to have been in breach of the criminal law. The issue was important. There were a number of outstanding cases that depended on an authoritative decision. It was necessary to have the law settled. For the petitioners, Mr Cullen argued that the law was settled, and that the existing decisions of the courts of the three jurisdictions provided a conclusive answer to Mr Holmes.
[6] The decisions of the Courts of Appeal in Northern Ireland and in England and Wales are highly persuasive. The reasoning in Walsh in particular was adopted by Lord Kinclaven in McGuffie. In my opinion the reasoning in Walsh is correct and I consider that Lord Kinclaven reached the right decision in relation to the application of these provisions in Scotland. It follows that there is no substance in the contentions advanced by Mr Holmes in seeking leave to introduce a Devolution issue into the case. It is unnecessary to repeat the analysis of the issues at length. However, it appears to me that there is little mystery about the policy and purpose of the Act, and that, properly understood, it provides mechanisms that are not penal in character on any view. Section 240 of the 2002 Act provides for the recovery of "property which is, or represents, property obtained through unlawful conduct". Parliament was entitled to legislate on the basis that no person should be able to acquire, and to assert in a question with the State a right to, property which he or she has obtained, or to which he or she obtains title, by unlawful conduct of the kind identified in section 241 of the Act or which represents property originally acquired by unlawful conduct. The recovery of such property is not obviously penal: the person obtaining the property by unlawful conduct never had a right to it. He or she may have obtained a title to it or to something that comes to represent it. But, essentially, it was a legitimate policy consideration that the target assets never were property to which the original recipient acquired a right. By definition the assets were acquired unlawfully. It is not obviously penal to take from someone what that person did not have a right to acquire and does not have a right to retain.
[7] The position can be contrasted with the imposition, in criminal proceedings, of a monetary penalty such as a fine. In imposing such a penalty one has regard to the offender's means. The object is to take, in money terms, from the offender's available assets an appropriate level of penalty to reflect the culpability of the offence he or she has committed. The exercise is focused on the offender's means and estate, on his 'property' in the widest sense. It is intended to take away part of what belongs to the offender, to deprive him or her of ownership, which is otherwise unquestioned, of something to which he or she has a right of property. For example, in a case of theft of a corporeal moveable such as a motor car, confiscation in criminal proceedings would remove the asset from the offender's possession, if still held by him, on the basis that he had neither right nor title to the stolen asset. If it were appropriate to impose a fine, it would be exacted from his assets, and that fund would be calculated excluding the stolen vehicle.
[8] In these circumstances I refuse to allow the respondents leave to amend their pleadings to introduce a Devolution issue on the ground that there is not a question of substance to try. However, I would in any event have refused leave at this stage in the proceedings. In the answers originally lodged to the petition, each of the respondents made reference to his or her Convention rights including those alleged to arise from Article 6 of the Convention. On 11 November 2005, an issue arose whether in their then form the averments raised a Devolution issue requiring intimation to the Advocate General. Lady Smith decided that such an issue did arise, and granted warrant for intimation. The Advocate General declined to intervene. Following procedure that drew attention to certain deficiencies in the respondents' Answers, and drew the attention of counsel then acting to the existing authorities on the respondents' human rights contentions, a minute of amendment was tendered on 7 December 2005. In substance it replaced the existing answers, and to minimise delay the document was received as substitute answers. These answers omitted the references to Convention rights. The proceedings thereafter were conducted on the basis of the new answers. In particular the preliminary proof was conducted on that basis.
[9] On 7 December 2005 counsel confirmed that he had no other submissions to make on the 2002 Act, or any other issue. By late 2005 there had been considerable delay in the earlier stages of the procedure, and it was essential to achieve a degree of finality in the pleadings. Counsel confirmed that he had no other issues to raise. The observations of the Judicial Committee of the Privy Council in Millar v Dickson 2002 SC PC 30 make it clear that one should avoid attributing knowledge of the law as a basis for waiver of Convention rights on a hypothetical basis. In this case, however, a Devolution issue was introduced, it was intimated to the Advocate General, and it was deleted in the light of counsel's knowledge of the then existing decisions in Walsh, Director of the Assets Recovery Agency v Commissioners of Customs & Excise and others, and Scottish Ministers v McGuffie.
[10] Rule 25A of the Rules of Court provides that it is not competent, without the leave of the court, for a party to introduce a devolution issue otherwise than before any evidence is led. Leave can only be granted on cause shown. Deletion of the existing averments relating to the respondents' Convention rights was, in the circumstances, a deliberate act, carried out in knowledge of the relevant law, and against the...
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