Fletcher v Leicestershire Constabulary [2013] EWHC 3357 (Admin)

Case No CO/4437/2013

[2013] EWHC 3357 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

IN THE ADMINISTRATIVE COURT

Venue Birmingham Civil Justice Centre,, 33 Bull Street, Birmingham,

B4 6DS

Date 01/11/2013

Before

MR JUSTICE LEWIS

Between

STEVEN FLETCHERAppellant

CHIEF CONSTABLE OF LEICESTERSHIRE CONSTABULARYRespondent

(Transcript of the Handed Down Judgment of

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Mr Stephen Taylor (instructed by the Appellant) for Appellant

Mr James Varley (instructed by East Midlands Police Legal Services) for Respondent

Hearing Hearing date: 16 th October 2013

Judgment

INTRODUCTION

[1]This is an appeal by way of case stated from the Leicester Crown Court. In March 2011, there was a fire at a flat in King Street, Leicester. The flat remained unoccupied after the fire. On 11 September 2011, the Appellant, Stephen Fletcher, set about repairing the flat in the course of his business. In the course of the refurbishment, he found a metal box hidden in the kitchen under a kitchen unit. Inside the box was a sum of £17,940, all in £20 notes, all neatly bundled into £1,000 bundles bound with elastic bands. Mr Fletcher is an honest man. He took the find, as any honest person would, to the police. The Chief Constable of the Leicestershire Constabulary considered that the money was the result of unlawful criminal conduct. They applied to the magistrates’ court for an order, pursuant to section 298 of the Proceeds of Crime Act 2002 (“the 2002 Act”), forfeiting the sum. The magistrates’ court made the order. Mr Fletcher considers that the powers of forfeiture do not apply on the facts of this case. He appealed against the forfeiture order to the Crown Court. Mr Recorder Readings, sitting with two magistrates, dismissed the appeal and granted the Chief Constable an order forfeiting the money. The Crown Court stated a case for the consideration of the High Court.

THE CASE STATED

[2]The relevant facts as found by the Crown Court and set out in the case stated are as follows:

“(a) Mr Fletcher is a man of good character and is not suspected of any wrongdoing whatsoever; (b) in the period to March 2011, Mr Brucciani was the assured shorthold tenant of the Flat and a Ms Elizabeth Hamilton held the long lease of the Flat; (c) both Mr Brucciani and Ms Hamilton are of good character and neither is suspected of any wrongdoing whatsoever; (d) there was a fire (the Fire) at the Flat in March 2011 when Mr Brucciani was in occupation; (e) the Flat was not legitimately occupied after the Fire was unsecured (door damaged in process of extinguishing the fire) until the Find; (f) the money, all £20 notes, was found on 11th September 2011 (six-months after the Fire), neatly bundled in £1000 bundles bound with elastic-bands, hidden in a metal box with a screw-down lid), itself concealed under a kitchen unit, on the floor below the plinth. (g) the money comprised of notes, nearly all of which were issued after Mr Brucciani became the tenant of the Flat (so not a historic hoard); (h) only one partial and smudged finger-print was found on the money and metal box; (i) Mr Brucciani’s tenancy came to an end between the date of the Fire and the Find, and he removed his belongings from the Flat at that time (but, if the money was under the sink at that time, he obviously did not remove it); (j) the police made enquiries of Mr Brucciani and Ms Hamilton and were satisfied that neither of them had hidden the money (the police established that Mr Brucciani lived with his fiancée, a solicitor); (k) the bank-notes were tested for illegal drugs and, whilst a small percentage showed traces of cocaine (and a very small number of notes showed higher readings), the drug testing was inconclusive; (l) the identity of the person who hid the money (the Hider) was unknown; and (m) Mr Fletcher did not intend to use the money for any unlawful purpose. ”

[3]The Crown Court found as a fact that on a balance of probabilities the money had originally been obtained by unlawful conduct of an unidentified kind. That is, the Crown Court decided that the money was the result of criminal conduct on someone’s part but were unable to identify the type of criminal conduct involved (for example, whether it was the result of drug dealing, or theft, or handling stolen goods or some other kind of criminal conduct). In reaching that conclusion, the Crown Court regarded the following facts as significant:

“(a) The money was neatly sorted in uniform bundles of notes of one denomination, and was therefore unlikely to be the profits of legitimate cash trading. (b) The money was hidden. (c) The money was not taken away while the Flat was unoccupied. (d) The money has not been claimed by anybody claiming to be the true owner. ”

[4]The Crown Court made the following inferences from the facts:

“(a) at the time the money was hidden, the Hider knew that the money had been obtained by unlawful conduct; (b) the purpose of hiding the money was to keep it safe for the Hider to spend at some time in the future; (c) in the period following the hiding of the money and before it was found, the Hider intended to return and retrieve the money; (d) the Hider has been prevented by some unknown event from retrieving the money.”

[5]The Crown Court further found as a fact:

“on the balance of probabilities that the Hider never abandoned his intention to recover the money, in order to use it, because it is extremely unlikely that anybody would willingly abandon £17,940, and because the purpose of hiding the money had been to make it available to be used at some time in the future.”

[6]In those circumstances, the Crown Court noted that if the hider spent the money it would amount to a criminal offence of converting criminal contrary to section 327 of the 2002 Act and that virtually any dealing with the money would involve committing a criminal offence under section 327 of the 2003 Act, other than handing the money over to the police.

[7]Consequently, the Crown Court, acting pursuant to section 298(2)(b) of the 2002 Act, granted the application for an order forfeiting the money. The Crown Court also found that, as it was unable to identify the type of unlawful conduct through which the property had been obtained, it would not have been able make the order under section 298(2)(a) of the 2002 Act.

[8]The Crown Court asked the following four questions: “(1) In the absence of any direct evidence as to how the money was obtained, was it permissible for the Court to find as fact (from the fact and circumstances of the hiding, in particular those facts set out in paragraph 5 herein) that the money had been obtained by unlawful conduct of some unspecified kind? (2) in the absence of any direct evidence as to:(a) the Hider’s intention; and/or

(b) the reason or event that had prevented the Hider from retrieving the money: was it permissible for the court to find as fact that the Hider never abandoned his intention to recover the money, in order to use it and, instead, intended, at all material times, to spend the money at some time in the future? (3) Assuming that it was permissible to find that the money had been originally obtained by unlawful conduct of some unspecified kind, and to find that the Hider always intended to recover the money and spend it, was it permissible to grant forfeiture on the basis that the Hider intended the money be used in unlawful conduct because any plausible use of the money by the Hider would amount to unlawful conduct (because of the money laundering provisions in the 2002 Act)? (4) In the case of hidden money (earlier obtained by an unknown person and by unspecified unlawful conduct) found by an innocent finder and handed to the police, is the Hider’s intention, at the moment immediately before the money is found (and/or at any later date), to retrieve the money and use it, sufficient to justify forfeiture under section 298 (2)(b) of the 2002 Act, when the innocent finder has no intention to use the money for unlawful purposes, and when an application under section 298(2)(a) of the 2002 Act could not succeed?” (a) the Hider’s intention; and/or (b) the reason or event that had prevented the Hider from retrieving the money: was it permissible for the court to find as fact that the Hider never abandoned his intention to recover the money, in order to use it and, instead, intended, at all material times, to spend the money at some time in the future?

THE RELEVANT LEGAL FRAMEWORK

[9]The relevant statutory provisions are contained in the 2002 Act. They are complex. The preamble to the 2002 Act states that it is:

“An Act …. to provide for confiscation orders in relation to person who benefit from criminal conduct …..to allow the recovery of property which is or represents property obtained through unlawful conduct or which is intended to be used in unlawful conduct, to make provision about money laundering…”

[10]Part 5 of that Act is entitled the “Civil Recovery of the Proceeds Etc. of Unlawful Conduct”. Chapter 1 of Part 5 is headed “Introductory”. Section 240 provides as follows:

“240 General purpose of this part “(1) This part has effect for the purposes of – (a) enabling the enforcement authority to recover, in civil proceedings before the High Court or Court of Session, property which is, or represents, property obtained through unlawful conduct, (b) enabling cash which is, or represents, property obtained through unlawful conduct, or which is intended to be used in unlawful conduct, to be forfeited in civil proceedings before a magistrates’ court or (in Scotland) the sheriff. “(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.” (a) enabling the enforcement authority to recover, in civil proceedings before the High Court or Court of Session, property which is, or represents, property obtained through unlawful conduct, (b) enabling cash which is, or represents, property obtained through unlawful conduct, or which is intended to be used in unlawful conduct, to be forfeited in civil proceedings before a magistrates’ court or (in Scotland) the sheriff. “(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.”

[11]As appears from that section, the 2002 Act contemplates two situations. The first is whether cash is or represents “property obtained through unlawful conduct”. The second is where cash is “intended to be used in unlawful conduct”.

[12]Section 241 of the 2002 Act provides a definition of unlawful conduct and is in the following terms. “241 Unlawful conduct “(1) Conduct occurring in any part of the United Kingdom is unlawful conduct if it is unlawful under the criminal law of that part. “(2) Conduct which –(a) occurs in a country outside the United Kingdom and is unlawful under the criminal law of that country, and

(b) if it occurred in a part of the United Kingdom, would be unlawful under the criminal law of that part, is also unlawful conduct. “(3) The court or sheriff must decide on a balance of probabilities whether it is proved – (a) that any matters alleged to constitute unlawful conduct have occurred, or (b) that any person intended to use any cash in unlawful conduct.” “(1) Conduct occurring in any part of the United Kingdom is unlawful conduct if it is unlawful under the criminal law of that part. “(2) Conduct which – (a) occurs in a country outside the United Kingdom and is unlawful under the criminal law of that country, and (b) if it occurred in a part of the United Kingdom, would be unlawful under the criminal law of that part, is also unlawful conduct. “(3) The court or sheriff must decide on a balance of probabilities whether it is proved – (a) that any matters alleged to constitute unlawful conduct have occurred, or (b) that any person intended to use any cash in unlawful conduct.”

[13]Section 242 of the 2002 Act provides a definition of “property obtained through conduct” in the following terms. “242 Property obtained through unlawful conduct “(1) 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. “(2) In deciding whether any property was obtained through unlawful conduct –(a) It is immaterial whether or not any money, goods or services were provided in order to put the person in question in a position to carry out the conduct,

(b) it is not necessary to show that the conduct was of a particular kind if it is shown that the property was obtained through conduct of one of a number of kinds, each of which would have been unlawful conduct.”

[14]The provision governing the recovery of cash in summary proceedings are contained in Part 3 of the 2002 Act. Sections 294 and 295 provide for the seizure and detention of cash. The material provision, dealing with forfeiture of cash, is contained in section 298 of the 2002 Act which is in the following terms: “298 Forfeiture “(1) While cash is detained under section 295, an application for the forfeiture of the whole or any part of it may be made –(a) to a magistrates’ court by the Commissioners of Customs and Excise or a constable.

(b) (in Scotland) the sheriff by the Scottish Ministers “(2) The court or sheriff may order the forfeiture of the cash or any part of it if satisfied that the cash or part – (a) is recoverable property, or (b) is intended by any person for use in unlawful conduct. “(3) But in the case of recoverable property which belongs to joint tenants, one of whom is an excepted joint owner, the order may not apply to so much of it as the court thinks is attributable to the excepted joint owner’s share. “(4) Where an application for the forfeiture of any cash is made under this section, the cash is to be detained (and may not be released under any power conferred by this Chapter) until any proceedings in pursuance of the application (including any proceedings on appeal) are concluded.” (a) to a magistrates’ court by the Commissioners of Customs and Excise or a constable. (b) (in Scotland) the sheriff by the Scottish Ministers (a) is recoverable property, or (b) is intended by any person for use in unlawful conduct.

[15]The first limb of section 298(2) refers to “recoverable property”. That is defined in section 304 of the 2002 Act. “304 Property obtained through unlawful conduct “(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 unto 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.” “(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 unto 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.”

[16]As is apparent, that section provides that property obtained through unlawful conduct is recoverable property. Whether property has been obtained through unlawful conduct it to be determined having regard to section 242 of the 2002 Act. The Divisional Court has held that, on a proper interpretation of section 242(2)(b) of the 2002 Act, the applicant has to establish that the property was obtained through conduct of one of a number of kinds each of which would have been unlawful conduct. It is not sufficient to establish that the property was obtained through criminal conduct of an unidentifiable kind: see Carol Angus v United Kingdom Border Agency

[2011] EWHC 461

(Admin.).

[17]The second limb of section 298(2), however, focuses on whether the cash is intended “by any person” for use in “unlawful conduct”. That is defined in section 241 of the 2002 Act as conduct in any part of the United Kingdom which is unlawful under the criminal law of that part. The relevant provisions of the criminal law in the present case are sections 327 and 340 of the 2002 Act, the material provisions of which provides as follows. “327 Concealing etc “(1) A person commits an offence if he –(a) conceals criminal property

(b) disguises criminal property;

(d) transfers criminal property;

(e) removes criminal property from England and Wales or from Scotland or from Northern Ireland. “(2) But a person does not commit such an offence if – (a) he makes an authorised disclosure under section 338 and (if the disclosure is made before he does the act mentioned in subsection (1)) he has the appropriate consent; (b) he intended to make such a disclosure but had a reasonable excuse for not doing so; (c) the act he does is done in carrying out a function he has relating to the enforcement of any provision of this Act or of any other enactment relating to criminal conduct or benefit from criminal conduct. …..” and “340 Interpretation “(1) This section applies for the purposes of this Part. “ (2) Criminal conduct is conduct which— (a) constitutes an offence in any part of the United Kingdom, or (b) would constitute an offence in any part of the United Kingdom if it occurred there. “(3) Property is criminal property if— (a) it constitutes a person's benefit from criminal conduct or it represents such a benefit (in whole or part and whether directly or indirectly), and (b) the alleged offender knows or suspects that it constitutes or represents such a benefit. “(4) It is immaterial— (a) who carried out the conduct; (b) who benefited from it; (c) whether the conduct occurred before or after the passing of this Act. “(5) A person benefits from conduct if he obtains property as a result of or in connection with the conduct. “(6) If a person obtains a pecuniary advantage as a result of or in connection with conduct, he is to be taken to obtain as a result of or in connection with the conduct a sum of money equal to the value of the pecuniary advantage. “(7) References to property or a pecuniary advantage obtained in connection with conduct include references to property or a pecuniary advantage obtained in both that connection and some other. “(8) If a person benefits from conduct his benefit is the property obtained as a result of or in connection with the conduct. “(9) Property is all property wherever situated and includes— (a) money; (b) all forms of property, real or personal, heritable or moveable; (c) things in action and other intangible or incorporeal property. …..” “(1) A person commits an offence if he – (a) conceals criminal property (b) disguises criminal property; (c) converts criminal property; (d) transfers criminal property; (e) removes criminal property from England and Wales or from Scotland or from Northern Ireland. (a) he makes an authorised disclosure under section 338 and (if the disclosure is made before he does the act mentioned in subsection (1)) he has the appropriate consent; (b) he intended to make such a disclosure but had a reasonable excuse for not doing so; (c) the act he does is done in carrying out a function he has relating to the enforcement of any provision of this Act or of any other enactment relating to criminal conduct or benefit from criminal conduct. …..” and “340 Interpretation “(1) This section applies for the purposes of this Part. “ (2) Criminal conduct is conduct which— (a) constitutes an offence in any part of the United Kingdom, or (b) would constitute an offence in any part of the United Kingdom if it occurred there. “(3) Property is criminal property if— (a) it constitutes a person's benefit from criminal conduct or it represents such a benefit (in whole or part and whether directly or indirectly), and (b) the alleged offender knows or suspects that it constitutes or represents such a benefit. “(4) It is immaterial— (a) who carried out the conduct; (b) who benefited from it; (c) whether the conduct occurred before or after the passing of this Act. “(5) A person benefits from conduct if he obtains property as a result of or in connection with the conduct. “(6) If a person obtains a pecuniary advantage as a result of or in connection with conduct, he is to be taken to obtain as a result of or in connection with the conduct a sum of money equal to the value of the pecuniary advantage. “(7) References to property or a pecuniary advantage obtained in connection with conduct include references to property or a pecuniary advantage obtained in both that connection and some other. “(8) If a person benefits from conduct his benefit is the property obtained as a result of or in connection with the conduct. “(9) Property is all property wherever situated and includes— (a) money; (b) all forms of property, real or personal, heritable or moveable; (c) things in action and other intangible or incorporeal property. …..” (a) constitutes an offence in any part of the United Kingdom, or (b) would constitute an offence in any part of the United Kingdom if it occurred there. (a) it constitutes a person's benefit from criminal conduct or it represents such a benefit (in whole or part and whether directly or indirectly), and (b) the alleged offender knows or suspects that it constitutes or represents such a benefit. (a) who carried out the conduct; (b) who benefited from it; (c) whether the conduct occurred before or after the passing of this Act. (a) money; (b) all forms of property, real or personal, heritable or moveable; (c) things in action and other intangible or incorporeal property. …..”

[18]In procedural terms, the application to forfeit the cash is made to the magistrates’ court in England and Wales. The magistrates must be satisfied (which I take to mean satisfied on a balance of probabilities) that the property is recoverable property or was intended to be used in unlawful conduct. Any party to the proceedings who is aggrieved by the order may appeal to the Crown Court pursuant to section 299 of the 2002 Act and that appeal is to be by way of rehearing. A person who claims that any cash detained under the relevant provisions of the 2002 Act belongs to him may also apply to a magistrates’ court for the cash to be released to him pursuant to section 301 of the 2002 Act.

THE ISSUES

[19]Two issues arise out of the questions posed by the Crown Court in the present case, namely:(1) Was the Crown Court entitled to draw the inferences that it did in the present case regarding the origins of the cash and the intention of the hider of the cash?

(2) On a proper interpretation of section 298(2)(b) of the 2002 Act, is the cash capable as a matter of law of being forfeited in the present case?

ANALYSIS

[20]In my judgment, the Crown Court was entitled to infer that the money was obtained by unlawful conduct of an unidentifiable kind. There were a number of features, taken together, which entitled the Crown Court to reach that conclusion. The amount of money involved was large. It had been concealed at least for a period in a derelict and unoccupied flat. The owner of the money did not come forward to claim the cash. Those factors pointed towards the fact that the money did not have a legitimate source. The Crown Court were also entitled to take into account that the fact that the notes were all in one denomination as indicating that it was unlikely to represent the profits of a legitimate trade. The Crown Court could also, had it wished to do so, have relied upon the fact that there were no finger prints on the money and only one smudged print on the box itself. Those facts indicated that the person who placed the money in the box and then hid the box was at pains to ensure that he could not be identified from the money or the box. That, again, would have reinforced the conclusion that the money represented the proceeds of criminal conduct and were not derived from a legitimate source.

[21]It is possible to provide other explanations for the presence of such a large amount of money, hidden in a derelict flat, which remained unclaimed. It could, theoretically, represent honest savings or earnings. The person concerned might have decided to leave the money hidden in a derelict flat and been prevented by ill health, death or other reasons from recovering it or claiming it. However, the Crown Court was, in my judgment, entitled to infer from the facts, that on a balance of probabilities the money was or represented the proceeds of some kind of unlawful criminal conduct.

[22]Similarly, in my judgment, the Crown Court were entitled to find on the balance of probabilities that the hider had not abandoned his intention to recover the money. The money was not an historic hoard as nearly all the notes had been issued after Mr Brucciani commenced his assured shorthold tenancy of the flat. Neither Mr Brucciani nor the owner of the flat had hidden the money. In those circumstances, the Crown Court was entitled to find that the person hid the money in the flat intending to recover it. It would be extremely unlikely that the person would have taken the trouble of concealing such a large amount of money and then abandon it. The Crown Court was entitled to find, on the balance of probabilities, that the hider intended to return to recover the money.

[23]Thirdly, the Crown Court was entitled to find that the hider intended to use the money in unlawful conduct. Given the finding that the money was criminal property, any further use by the hider would almost inevitably have involved the hider in committing a criminal offence under section 327 of the 2002 Act. If he concealed it, spent it (which would amount to conversion), transferred it to another person or removed it from England and Wales, he would have committed a criminal offence under section 327 of the 2002 Act.The Crown Court was entitled, therefore, to make the findings that it did, on the basis of the inferences that it drew from the facts as found by it.

[24]The second, and more difficult, issue is whether, on a proper interpretation of section 298(2)(b) of the 2002 Act, the cash is capable as a matter of law of being forfeited in the present case. Mr Taylor, appearing on behalf of Mr Fletcher, submitted that the provisions of section 298(2)(b) of the 2002 Act were not intended to enable the forfeiture of cash where the cash had been found by an honest, and innocent, finder such as Mr Fletcher. There were essentially three strands to his argument. First, as a matter of common law, the rights of Mr Fletcher as the finder would take priority over the rights of the police (see, by analogy, Parker v British Airways Board [1982] Q.B. 1004 where the a finder of a gold bracelet in an airport lounge acquired rights of possession over the bracelet as against the airport authority who occupied the lounge but who did not intend to exert control over objects found in the lounge). It was submitted that Parliament should not be taken to have intended to have altered pre-existing common law rights in the absence of clear language. Secondly, it was submitted that Parliament should not be taken to have legislated in a way that would create unjust and unfair outcomes. Injustice and unfairness would arise here, submitted Mr Taylor, if an innocent finder who handed in money to the police then saw the money being forfeited by the police.

[25]Thirdly, and this was the primary submission made on behalf of Mr Fletcher, an interpretation which permitted the police to forfeit the money under section 298(2)(b) of the 2002 Act if they could show only that the money had come from some unspecified and unidentified criminal conduct, would lead to absurd consequences. Section 298(2)(a) of the 2002 Act requires the court to be satisfied that the money is from one or more identifiable kinds of criminal conduct. That provision would be otiose and pointless if, nevertheless, the money could be forfeited under section 298(2)(b) of the 2002 Act if it could be shown that the money came from some, albeit unidentifiable, criminal conduct. By way of illustration of the absurdity, Mr Taylor pointed out that the Divisional Court need not have troubled with ruling that the money being carried by Carol Angus in that case could not be forfeited under section 298(2)(a) as the authorities could not show that the money came from identifiable types of unlawful conduct. Rather, the authorities could have proceeded on the basis of showing simply that the money came from some, albeit unidentifiable, criminal conduct so that any attempt to deal with that money (by transferring it to someone else or spending it) amounted to a criminal offence under section 327 of the 2002 Act. Mr Taylor put it this way at paragraphs 29 and 30 of his skeleton argument: it would be an absurd situation if forfeiture could be ordered if:

“the applicant cannot show that the money was obtained through unlawful conduct of an identifiable kind or kinds, he can nevertheless, always obtain an order for forfeiture merely by showing that the money was obtained by some unidentified unlawful conduct (because money obtained by unidentified unlawful conduct will always be intended for use in unlawful conduct because the mere hiding, transfer or conversion (etc.) of money obtained by unlawful conduct is itself unlawful conduct. 30. In other words, the interpretation urged upon the Court by the Applicant requires that the Applicant must: (a) Satisfy the Court that the money was obtained through unlawful conduct of an identifiable kind or kinds; but (at the same time) (b) Only has to satisfy the Court that it was obtained by some unidentified unlawful conduct.”

[26]Against that background, I consider first the proper interpretation of section 298(2)(b) of the 2002 Act. The question is whether the cash “is intended by any person for use in unlawful conduct”.

[27]The reference to intention by “any person” must include the person who hid the money in the present case. That person must intend it to be used in unlawful conduct, that is, in conduct which is unlawful under the criminal law of part of the United Kingdom. The relevant provision of the criminal law is section 327 of the 2002 Act. Concealing, converting, transferring or removing the cash from England and Wales would be an offence under section 327 of the 2002 Act if the cash were “criminal property” within the meaning of section 340 of the 2002 Act. The Court of Appeal has held at paragraph 21 of its judgment in R v Anwoir

[2008] EWCA Crim 1354

that: “there are two ways in which the Crown can prove the property derives from crime, a) by showing that it derives from conduct of a specific kind or kinds and that conduct of that kind or kinds is unlawful, or b) by evidence of the circumstances in which the property is handled which are such as to give rise to the irresistible inference that it can only be derived from crime”.

[28]On the facts as found by the Crown Court, the hider did intend to use money derived from criminal conduct for the purpose of acts rendered unlawful by section 327 of the 2002 Act. The cash was criminal property in that it was obtained from some kind of criminal conduct. The hider intended to recover the money and spend it. That is, he intended to convert the criminal property, which is a criminal offence within the meaning of section 327 of the 2002 Act. All the elements of section 298(2)(b) of the 2002 Act are therefore satisfied and the Crown Court was entitled to make the order for forfeiture.

[29]There is no alternative interpretation of section 298(2)(b) which is feasible given the wording of the sub-section and its purpose. It is not feasible, for example, to interpret the subsection as applying only when the money is intended “for use” in unlawful conduct in the sense of intended for use for further criminal activities (e.g. purchasing illegal drugs) as opposed to use of the money itself being unlawful conduct. If, for example, the hider had hidden cash from criminal activity and then recovered the money and sought to transfer the money to another person or sought to remove it from England and Wales, Parliament must have intended the money in those situations to be subject to forfeiture. It cannot have been the intention of Parliament that the money (coming as it does from some unidentified criminal conduct) could be forfeited if the hider intended to use it to buy drugs but not if he intended to give the money to another person. In each case, the policy of the Act is clearly to permit forfeiture of cash obtained by criminal conduct of some kind.

[30]Similarly, it is not possible to interpret section 298(a)(b) of the 2002 Act, as submitted by Mr Taylor, as meaning “intended by any person for use in unlawful conduct but not including the mere hiding, transfer or conversion of money obtained by unlawful conduct of an unidentifiable kind”. That involves reading words into the subsection. Further, if the property is criminal property, and if the hider is intending to commit a criminal offence under section 327 of the 2002, there is no basis for reading in words which would prevent forfeiture.

[31]Nor is it not possible, in my judgment, to regard section 298(2)(b) as inapplicable in situations when an innocent finder intends to use the money. The subsection applies when “any” person intends to use the money for criminal conduct. That must include not only use by the innocent finder but by the person who hid the money. It is not possible to carve out an exception under section 298(2)(b) for innocent finders.

[32]For those reasons, in my judgment, the cash could be forfeited under section 298(2)(b) of the 2002 Act in the present case. I do not consider that the first two arguments advanced by Mr Taylor justify any alternative conclusion. The fact is that the words of section 298(2)(b) do alter the position under the common law in relation to property found by a person if the property that is found is the result of criminal conduct. Similarly, Parliament either did not regard the fact that the innocent finder would be deprived of a windfall as unjust and unfair, or considered that any unfairness or injustice was outweighed by the benefits of removing the proceeds of crime from circulation.

[33]In relation to the third argument, the risk of absurd consequences, I see the force of the argument that it is an apparent oddity to have two tests for forfeiture, one of which requires satisfying a more difficult test (requiring the type of the criminal conduct to be identifiable) than the other (where all that is necessary is to establish that the property comes from some, albeit unidentifiable, criminal activity). Suggestions were advanced in argument as to situations in which section 298(2)(a) may be available but not section 298(2)(b) of the 2002 Act. There may, conceivably be some such cases. The likelihood is, however, that many, probably the overwhelming majority of, cases falling within section 298(2)(a) could also fall within section 298(2)(b) of the 2002 Act.

[34]Ultimately, however, given the wording of section 298(2)(b) and given the present breadth of the section 327 offence, the fact of that matter is that that situation is unavoidable. If the money comes from some criminal activity, it is criminal property. If a person intends to transfer or convert or remove the money from the United Kingdom, then the person intends to use it in unlawful conduct. In those circumstances, section 298(2)(b) applies and permits the forfeiture of the property. That conclusion is consistent with Parliament’s intention. Parliament intended to enable property obtained through unlawful conduct or intended for use in unlawful conduct to be liable to forfeiture as appears from the preamble and the structure of the Act. Section 298(2)(a) and (b) achieve that purpose. The Act was not intended to restrict forfeiture to cases of property being obtained through criminal conduct. It intended to provide for forfeiture in a broader range of cases. The fact there may be very many cases where property could be forfeited under 298(2)(b), but could not be forfeited under section 298(2)(a) of the 2002 Act would not, therefore, lead to results which are contrary to the Parliamentary intention. In the circumstances, therefore, in my judgment, on a proper interpretation of section 298(2)(b), the cash was capable of being forfeited in the present case on the basis of the inferences that the Crown Court drew.

CONCLUSION

[35]The four questions asked by the Crown Court are therefore to be answered in the following way. First, it was permissible for the Court to find (from the fact and circumstances of the hiding) that the money had been obtained by unlawful conduct of some unspecified kind. Secondly, it was permissible for the court to find that the hider never abandoned his intention to recover the money and, instead, intended, at all material times, to spend the money at some time in the future. Thirdly, it was permissible to grant forfeiture on the basis that the hider intended the money be used in unlawful conduct because any plausible use of the money by the hider would amount to unlawful conduct. Fourthly, in the case of money hidden by an unknown person and obtained by unspecified unlawful conduct and found by an innocent finder and handed to the police, the intention of the hider at the relevant time to retrieve the money and use it is sufficient to justify forfeiture under section 298 (2)(b) of the 2002 Act, when the innocent finder has no intention to use the money for unlawful purposes, and when an application under section 298(2)(a) of the 2002 Act could not succeed. In those circumstances, this appeal is dismissed.