Morgan, R (on the application of) v Justices of Dyfed Powys Magistrates' Court [2003] EWHC 1568 (Admin)

Case No CO/3855/2002[2003] EWHC 1568 Admin
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Venue Royal Courts of JusticeDate Wednesday, 18 June 2003
Strand
London WC2
B E F O R E:
MR JUSTICE ELIAS
Between
THE QUEEN ON THE APPLICATION OF MORGANClaimant-v-
Between
JUSTICES OF DYFED POWYS MAGISTRATES' COURTDefendant
Computer-Aided Transcript of the Stenograph Notes ofSmith Bernal Wordwave Limited190 Fleet Street London EC4A 2AGTel No: 020 7404 1400 Fax No: 020 7831 8838(Official Shorthand Writers to the Court)
MR STRAKER QC and MS PETER (instructed by HENNEBERRY & CO) appeared for CLAIMANT for The DEFENDANT did not attend and was not represented
J U D G M E N T(As Approved by the Court)
Crown copyright©
[1]MR JUSTICE ELIAS: This is an application by way of judicial review seeking to quash an order made by the defendant magistrates under section 1(1) of the Police (Property) Act 1897. The order was made on 17th May 2002. The magistrates ordered that a sum of money (some £17,500 plus interest, which has accrued for almost 20 years), which was held by the police authority, should be awarded to the state. The money was originally seized by the police authority, an interested party in these proceedings. That was in 1983. The police discovered the money following a lawful search of a farmhouse, when they were investigating a criminal offence by one Kenneth Morgan. The farmhouse was occupied by John Rhys Morgan and his brother, Thomas Morgan. They were the uncles of Kenneth Morgan. The money was found in a cowshed which adjoined the farm in which they lived. Kenneth Morgan was subsequently convicted of a number of offences, including offences of dishonesty, at Swansea Crown Court on 31st January 1984. The Crown Court ordered that, in addition to a sentence of imprisonment of 4 years, he should be deprived of the sum of £17,500 that had been found. The basis of that was that this money was the proceeds of crime. There was an appeal against the deprivation order to the Court of Appeal, who allowed the appeal. The court, in the course of its judgment, said this:
"... the evidence at the end of the day was in a very confused state as to precisely what the source of this money was, and on any view there was no clear evidence that it was the proceeds of the crime."
Accordingly, there was no power to deprive the nephew of that sum.[2]Following this decision of the Court of Appeal, proceedings were issued by the two brothers against the police, seeking a declaration that they were entitled to the property. For reasons that are not clear, that action was not pursued and finally it was struck out in 2001. During this period, the police authority had retained the money. They made an application under section 1(1) of the 1897 Act to the magistrates to provide for the proper disposal of the money. Initially, they made this application ex parte, but the magistrates, quite properly, required that notice of the hearing should be given to John Rhys Morgan and Kenneth Morgan, the nephew. By then, John Rhys Morgan's brother, Thomas Morgan, had died, and John Rhys Morgan was the only beneficiary of his estate.[3]The matter came before the magistrates on 17th May 2002. The claimant was submitting that the money belonged to John Rhys Morgan and to Thomas Morgan. It was said that they had saved the money over many years through their earnings as coal miners, and from their pensions. They were both, it is alleged, frugal and financially unsophisticated, and they kept their savings hidden in various places around the farmhouse. At the hearing, John Rhys Morgan produced various bundles of payment dockets to demonstrate that the brothers had savings substantially in excess of £17,500. In addition, expert evidence was given by a clinical psychologist, Dr Christopher Williams, to the effect that John Rhys Morgan suffered from a learning disability, had a limited social awareness, was financially unsophisticated, and would, in the light of his own upbringing, have regarded the keeping of large sums of paper money at his home as normal practice. The police at these proceedings called no oral evidence, nor did they seek to examine the claimant or the expert witness. However, the chair of the bench did raise a number of queries about the evidence of Dr Williams, and they made the order to which I have made reference: namely, that the money should be paid into central funds, less £5,000 to defray the interested party's costs.[4]The relevant legislation, as I have said, is section 1(1) of the 1897 Act, which reads as follows:
"Where any property has come into the possession of the police in connection with their investigation of a suspected offence, a court of summary jurisdiction may, on application either by an officer of police ... or by a claimant of the property, make an order ... for the delivery of the property to the person appearing to the magistrate or court to be the owner ... thereof, or, if the owner cannot be ascertained, make such order with respect to the property as to the magistrate or court may seem meet."
The claimant submits that the magistrates erred in law in reaching the conclusion that they did and that, on a proper analysis of the matter, they ought to have concluded that the property belonged to him.[5]Before considering the legal arguments in this case, I should make reference to a preliminary matter. Mr Straker QC, counsel for the claimant, properly brought to my attention the fact that there is an alternative statutory procedure for dealing with this matter: namely, an appeal by way of case stated. When permission to apply for judicial review had been granted by Maurice Kay J, this had not been drawn to his attention. I think it likely that he would have been aware of the fact, in any event. But Mr Straker, as I have indicated, wanted to make it clear that there was that procedure, and that I may think it right to consider whether, in all the circumstances, in my discretion I should let the case go ahead by way of an application for judicial review. I am satisfied in the circumstances that I should. Justice would be served by that procedure. The case stated procedure requires that the justices are asked to state a case within 21 days. That was not done here and there is no power to extend the time (see Michael v Gowland [1977] 1 WLR 296). Had the matter been pursued by way of case stated, it would still have come to this court, albeit in a slightly different form. I am satisfied that there has been no prejudice to any party as a result of the matter coming before me in this way. Furthermore, there have been numerous cases where orders under the 1897 Act have been challenged by way of judicial review (see, for example, R (on the application of Chief Constable of Northamptonshire Police) v Daventry Justices [2001] EWHC Admin 446). In the circumstances, it seems to be plain that this is a matter which can and should properly be heard by way of judicial review, so I go on to consider the substance of the case.[6]The original grounds of appeal set out four principal bases on which it is said that the magistrates erred in law. First, it is said that they wrongly sought to determine who was the "rightful owner" of the money and, as a consequence, analysed the evidence improperly. Second, it is said that their decision did not properly give effect to the decision of the Court of Appeal, to which I have referred, where the court had concluded that there was no clear evidence that the money was the proceeds of crime. Third, it is said that the magistrates wrongly rejected the evidence of the expert called on behalf of the claimant, notwithstanding that there was no expert evidence to contrary effect. Finally, it is said that the magistrates acted on the basis of legal advice which had not been notified to representatives of the parties in open court as it ought to have been, so that those representatives could have the opportunity to comment.[7]In the course of the hearing, it seemed to me that the matter could be decisively resolved in the light of the Court of Appeal decision in the case of Webb v Chief Constable of Merseyside Police [2000] QB 427. I have heard submissions from Mr Straker on that particular authority, and have considered the matter carefully because, although Mr Straker is here acting on behalf of the claimant, there is no representation for either the magistrates or the police. It seems to me, has the effect of that decision is that the only conclusion that the magistrates could properly have reached, in the circumstances of this case, was that they should have ordered that the property be returned to John Rhys Morgan, the claimant. I ought, therefore, to consider the Webb case in a little more detail.[8]Webb was a decision of the Court of Appeal. It involved two actions where proceedings were brought for the seizure of money which had been lawfully taken by the police on suspicion that it constituted the proceeds of drug trafficking. One of the actions was brought by Roy Webb, and the decision of the court focused in particular on this action. The facts of that case are worth considering in the context of this application. In December 1992, the police seized £36,000 from Roy Webb. They thought the money had been obtained as a result of drug trafficking. The alleged trafficking involved not only Roy Webb but also his brother, Colin Webb. The Webbs were not, in fact, prosecuted to conviction. Roy Webb claimed that the money should be returned to him. Alternatively, he said that he was entitled to damages for conversion. The Chief Constable, the defendant in the action, accepted that he was liable to return the money to the true owner, but said that he did not believe that Roy Webb was the owner, and he put him to proof of that fact.[9]It is worth noting that, initially, Roy Webb made a complaint under section 1 of the 1897 Act. However, he did not pursue that and the complaint under that section was dismissed by the magistrates. It was accepted, however, that he was entitled to take these separate proceedings to the county court. The matter was heard by an assistant recorder. He heard evidence from Roy Webb, who sought to provide an explanation as to how this sum had come into his possession. He also heard extensive evidence from the police, designed to demonstrate that, on the balance of probabilities, the money had been obtained as a result of the drug trafficking. He reached two relevant findings of fact. First, he rejected, on the balance of probabilities, the explanation given by Roy Webb as to how the money had come into his possession. Second, he found on the balance of probabilities that the money was indeed the proceeds of dealing in drugs. In the circumstances, he held that since the money had been obtained by illegal activity, it would be wrong to permit it to be returned to Roy Webb.[10]The appeal to the Court of Appeal was successful. It is necessary to note that in giving the principal judgment in the court, May LJ indicated that the position was essentially the same whether proceedings were taken against the police directly, as in the Webb case, or whether proceedings were taken pursuant to 1897 Act. In each of the cases, the police initially lawfully seized the money, but the statutory power to retain it was exhausted. Essentially, what May LJ held was that where the police had exercised a statutory right to obtain money, such as in the course of an investigation, they could not lawfully retain that property once the statutory authority was exhausted. At page 446 E he said this:
"... the court should not, in my view, countenance expropriation by a public authority of money or property belonging to an individual for which there is no statutory authority."
Having then set out various statutory provisions which may lead to the confiscation of property, he said this:
"I recognise that there may be circumstances where for a variety reasons a prosecution may not take place. But that does not, in my view, justify expropriation by means of a defence to a civil claim for return of money which has been seized from persons who are not convicted. It is one thing to prosecute to conviction and to take positive steps authorised by statute to confiscate the proceeds of crime from the convicted defendant. It is quite another to resist the claim of an innocent person by asserting some or all of the ingredients of what might have been a prosecution; or to effect confiscation in this way from a convicted person against whom statutory confiscation machinery has not been used."
His Lordship held that in circumstances where the claimant was entitled to possession, he could assert that title as against the police, and in those circumstance the police had no right to withhold the property from him. At paragraph 448 C, he says this:
"As to entitlement to possession, there is an instructive analysis in the decision of the Supreme Court of Victoria in Field v Sullivan [1923] VLR 70. The essence of an extended passage in the judgement of Macfarlan J, at pp 84-87, is that if goods are in the possession of a person, on the face of it he has the right to that possession. His right to possession may be suspended or temporarily divested if the goods are seized by the police under lawful authority. If the police right to retain the goods comes to an end, the right to possession of the person from whom they were seized revives. In the absence of any evidence that anybody else is the true owner, once the police right of retention comes to an end, the person from whom they were compulsory taken is entitled to possession. "
Roy Webb's entitlement to possession of the money which he claims was in issue in his proceedings. But the basis of the Chief Constable's case was that Roy Webb was not the true owner because the money was the proceeds of drug trafficking. The contention that the Chief Constable was entitled to retain the money until the true owner was found was, as I have said, fanciful. What was not in issue was that, apart from drug dealing, Roy Webb was entitled to possession of the money. The assistant recorder did not deal with this, because it was not in issue. No one else claimed to be entitled to the money. Specifically Colin Webb had disclaimed any entitlement. The fact that the assistant recorder rejected Roy Webb's evidence about the loan from Mr Harrison is not in point, since Roy Webb did not have to establish where the money came from. The evidence about the loan was in attempted opposition to the Chief Constable's case about drug dealing, which was not itself a defence to the claim. In my judgement, there is no proper basis for remitting the question of entitlement to possession in Roy Webb's case for further consideration. I would accordingly allow his appeal."[11]In this case the position is, if anything, even clearer. There is no question here of the claimant obtaining this money as a result of any nefarious or criminal activities. In this case, too, the claimant's entitlement to possession of the money cannot be in doubt. It was found on his property. Even if it had originally been shared in some way between him and his brother, as a result of the fact that he is the sole beneficiary of his brother's estate, he would now have full entitlement to possession of that money. In the circumstances, it was not relevant to ask how he might have come by possession. That is the effect of the decision of the Court of Appeal, as it seems to me. He simply has to assert a right of possession. In this case, there is nobody else seeking to contend to the contrary. The nephew in this case has also specifically disavowed any interest in the property, in the same way that Colin Webb did in the Webb case. Accordingly, in my judgment, once it is clear that the claimant is entitled to possession of the money, then he must, within the terms of the 1897 Act, be treated as the person appearing to the court to be the owner thereof. It does not, of course, mean that he is necessarily the owner; and there is an opportunity for someone who claims to be the owner to take proceedings within six months against the person in possession of the property. That is a right conferred by section 1(2) of the 1897 Act.[12]In my judgment, the justices erred in this case in considering the basis on which the claimant may properly have come into possession of this property. They have acted on the premise that they were not persuaded that he and his brother would have such large amounts of cash on the property, but, plainly, that cash was on the property, and as such it gave them a right to possession, which could be asserted as against the police and, in the circumstances of this case, since nobody else was seeking to assert a right to the property, against anyone else.[13]For these reasons, it seems to me that the only decision which the justices could properly come to, and which I am sure they would have come to had they been properly directed in accordance with the Webb case, is that the property ought to be returned to John Rhys Morgan. I should add that the decision in Webb has been followed in other cases involving the 1897 Act, namely in R (on the application of Ian Carter) v Ipswich Magistrates' Court [2002] EWHC 332 Admin, a decision of Maurice Kay J, and also by the Court of Appeal in Costello v Chief Constable of Derbyshire Constabulary [2001] EWCA Civ 381. It is not, however, necessary for the purposes of resolving this matter to explore those cases.[14]I was also referred to the decision of the Divisional Court in Raymond Lyons & Co Ltd v Metropolitan Police Commissioner [1975] 1 All ER 335. It seems to me that some passages in that judgment do not sit altogether happily with the decision of the Court of Appeal in the Webb case, but, of course, the Webb case is binding upon me. It is not necessary to explore that decision in any more detail, save perhaps to observe that, no doubt, the decision itself was justified on the facts in that case.[15]Accordingly, it seems to me that the appropriate order to make now is to quash the decision of the magistrates, and to declare that the capital sum and the interests accrued thereon should be returned to John Rhys Morgan. The original judicial review application did not seek such a declaration, but it seems to me appropriate relief to grant. There is absolutely no purpose at all in sending this back to the magistrates with a direction requiring them to make the only order which, in my view, they can properly make as a matter of law.[16]MR STRAKER: I am very much obliged to your Lordship. May I mention one matter on the transcript. I think your Lordship said by a slip of the tongue -- either that, or I misheard it -- that I was appearing for the authority.[17]MR JUSTICE ELIAS: I am sorry. I will check that.[18]MR STRAKER: I am much obliged. Would it be of convenience if we sent through to the associate, in the course of the afternoon, a draft order reflecting the declaration that your Lordship has given?[19]MR JUSTICE ELIAS: Yes. Thank you very much.[20]I should perhaps add that in view of the fact that, in my judgment, the matter is determined by the Webb case, there is no purpose in exploring any other grounds which have been advanced in this matter.[21]For the record, I reject your application for costs, for reasons which I think I made clear.[22]MR STRAKER: I am much obliged, my Lord.