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Cite as: [2000] ScotHC 83

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HER MAJESTY'S ADVOCATE v. THOMAS FOWLER BURNS [2000] ScotHC 83 (4th August, 2000)

 

HIGH COURT OF JUSTICIARY

OPINION

by

THE HONOURABLE LORD PENROSE

in causa

HER MAJESTY'S ADVOCATE

against

THOMAS FOWLER BURNS

___________

Minuter: Devlin, Beveridge Herd & Sandilands, W.S.

Respondent: Howlin, Advocate Depute

4 August 2000

On 11 June 1999, Thomas Fowler Burns pled guilty to drug trafficking offences, within the meaning of section 49(5) of the Proceeds of Crime (Scotland) Act 1995. He was sentenced to two years' imprisonment. The Crown seek a confiscation order against Mr Burns under that Act. It is alleged that Mr Burns' former wife, Mrs Margaret Rose Smart Burns, holds items of property which fall to be treated as having been received from him as implicative gifts and therefore potentially liable to be realised in settlement of any confiscation order made. These include her home, a car and funds at credit of a bank account in her name. Mrs Burns lodged two minutes challenging the Crown's contentions. In the first of these minutes she contended that in initiating the proceedings the Lord Advocate infringed Articles 6 and 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, and Article 1 of the First Protocol to the Convention. In the second she sought an order excluding her property from the scope of any confiscation order made. The present opinion deals only with the parties' arguments under Article 8 of the Convention and Article 1 of the Protocol.

The Advocate Depute contended that the Minute was premature, and in any event unnecessary to protect Mrs Burns' convention rights on a proper interpretation of the 1995 Act.

The provisions of the Human Rights Act 1998 empowering the court to adjudicate on the compatibility of legislation of the United Kingdom Parliament with the Convention are not in force. Some of the discussion appeared to anticipate those powers and cannot be commented on. But it is necessary in any event to consider the Advocate Depute's analysis of the 1995 Act.

The Advocate Depute argued that it was important to bear in mind three factors in considering the Minuter's application: (a) what the Crown was seeking at the present stage in the proceedings; (b) what the Crown did not seek at this stage; and (c) what the Crown might not seek or achieve at the end of the day. One had to distinguish the controls currently in operation under section 57 of the Scotland Act 1998, and those yet to be brought into force under section 4 of the Human Rights Act. In the present case the United Kingdom legislation applied without qualification. The Crown had made an application to the court. Subject to the eventual disposal of the application, the Lord Advocate's decision to apply might lead to an order by the court, but it was much too broad and too vague a proposition to say that a step in procedure which might lead to an order after due process was an "act" of the Lord Advocate. In the context of the legislation, the making of an application for a confiscation order and the lodging of a prosecutor's statement could not properly be categorised as an "act" of the Lord Advocate. It had no practical effect other than to engage the court's jurisdiction in respect of the matters raised.

Section 1 (1) of the Proceeds of Crime (Scotland) Act 1995 provided that the court "may" make an order requiring the "accused" to pay a sum of money. The order was not directed towards any item of property taken into account for computational purposes. In this provision no distinction was drawn between the proceeds of drug trafficking and other criminal activities. Section 1(4) applied specifically to drug trafficking offences. In that context the court's powers were not restricted to the benefit derived by a drug trafficker from his activities related to illicit drugs. The focus was on the proceeds of the crime, irrespective of where the benefit was distributed. Section 1(5) conferred further discretionary powers. The court might make no order, or limit the amount of the order in relation to the value of the proceeds of crime. Paragraph (b) of that sub-section imposed a limitation related to realisable property. The limitations required to be considered in parallel. The lower amount brought out was the effective limitation. There were supplementary provisions applicable to each branch of the exercise. Section 3 contained supplementary provisions relating to the assessment of the value of the proceeds of crime. The assumptions provided for related exclusively to section 1(5)(a). Section 4 supplemented section 1(5)(b), and restricted the amount of the realisable property which was relevant to the sum of (i) the accused's realisable property and (ii) the value of any implicative gifts. The estate of a third party might be included only in so far as it was brought within the scope of the meaning of implicative gift.

The vulnerability of property in the hands of a third party depended on proof of the factors identified in section 6. There had to have been a gift. There was a time limit. Before the Minuter's property could be earmarked as an implicative gift, there had to have been a gift within the statutory period. The onus of proof of those facts was on the Crown. There were no relevant statutory assumptions. If the Crown discharged that onus, there remained a discretionary power, exercisable on the application of the recipient of the gift, to exclude property from the scope of recovery: section 6(3). It was impossible to predict the outcome of the procedures in this case. It could not be forecast that the Minuter's application would fail. One could not predict that the Crown's application would succeed. There was no risk to the Minuter's property unless and until those questions were resolved in the Crown's favour.

The prosecutor's statement in terms of section 9 was not material to the disposal of the present issue. The effectiveness of the section 9 statement was limited to the matters provided for in that provision. In this case, the Crown had included material relevant to implicative gifts, and had intimated the statement to the Minuter as an interested party, to make the presentation of the financial information comprehensive and to give Mrs Burns notice of what might happen in due course. But that could not affect issues between the Minuter and the Crown. The mechanism for determining matters of fact in a question with the accused was limited to questions properly brought within section 9: it did not affect the recipients of implicative gifts.

In my opinion, the Advocate Depute's analysis of the 1995 Act is correct. There are no assumptions adverse to the interests of the alleged recipient of an implicative gift in the provisions of the Act. The operation of these provisions was illustrated in Donnelly v H. M. Advocate 1999 S.C.C.R. 508, in the opinion of Lord Bonomy at pages 521 to 527, where he considered the evidence relied on by the Crown in deciding whether it had been proved that there had been implicative gifts. His approach was discussed, on appeal, in the opinion of Lord Coulsfield at pages 540-1 without adverse comment. In the same case the general discretionary nature of the court's jurisdiction is discussed at pages 538-9. The approach was not dissimilar to that adopted by Lord Sutherland in H. M. Advocate v McLean 1993 S.C.C.R. 917 at 927, a case decided under the Criminal Justice (Scotland) Act 1987, the predecessor of the current drug trafficking provisions. I was also referred to Rowan Petitioners 1996 S.C.C.R. 887. But it is not relevant to the present point. The onus of proof of the facts necessary to establish that the property in question was received by the Minuter as a gift, and of the other factors necessary to qualify any gift as an implicative gift within the scope of these provisions, lies on the Crown. These provisions form the background to the discussion of the submissions for the Minuter. Until the procedures have been completed there is no basis for forming a view whether the Minuter's Convention rights have been infringed. However, it is appropriate to set out the arguments and discussion I heard.

Mr Devlin developed three main submissions. These were:

    1. The act of the Lord Advocate in making an application for a confiscation order in terms of section 1 of the 1995 Act, in so far as it seeks to rely on the assumptions contained in section 3(2), and section 6(1) of that Act is incompatible with Article 6(2) of the Convention, and as such is an act which the Lord Advocate had no power to do in terms of section 57(3) of the Scotland Act 1998;
    2. The act of the Lord Advocate in making an application for a confiscation order in terms of section 1 of the 1995 Act in so far as it proceeds on the basis of a prosecutor's statement which includes the dwelling house of the Minuter among the realisable assets of the accused is incompatible with Article 8 of the Convention and as such is an act which the Lord Advocate had no power to do in terms of section 57(3) of the 1998 Act;
    3. The act of the Lord Advocate in making an application for a confiscation order in terms of section 1 of the 1995 Act in so far as it proceeds on the basis of a prosecutor's statement which includes the Minuter's dwelling house, the contents of her bank account no 7270728, her Honda Civic motor car and items of jewellery among the realisable assets of the accused is incompatible with Article 1 of the First Protocol to the Convention, and as such is an act which the Lord Advocate had no power to do in terms of section 57(3) of the 1998 Act.

In outlining the facts, Mr Devlin said that Mrs Burns and the accused separated in 1992, and that they were divorced following contested proceedings on 12 December 1995. Mrs Burns lived at the house in Kirkcaldy alone. The accused did not live there. These factual observations were not accepted by the Crown without qualification. But they represented the Minuter's position. The Advocate Depute intimated that it was the Crown's understanding that Mr Burns and the children of the family lived in the Minuter's home. It is impossible to resolve the factual differences at this stage.

In supplement of the submissions set out above, Mr Devlin contended that in relying on sections 3(2) and 6(1) of the Proceeds of Crime (Scotland) Act, the Crown sought to reverse the onus of proof of guilt of drug trafficking offences and therefor infringed Article 6(2) of the Convention. He wished to reserve argument on that topic, and on the first submission as a whole, pending the disposal of cases currently before the Appeal Court. But the other issues could be disposed of. The attempt to treat the Minuter's home as included in the accused's realisable assets was an infringement of the right to respect for private and family life. And the attempt to treat her home, car, bank account and jewellery as realisable assets of the accused similarly involved infringement of the right to peaceful enjoyment of her possessions. These two arguments were developed separately.

Article 8 of the Convention secured the right to respect for a person's home, the place where that person lived on a settled basis. The house identified, in Kirkcaldy, was the Minuter's settled home. It was accepted that even on the making of a confiscation order the Minuter would not be expelled or evicted immediately. But the making of the order would give rise to a real risk of expulsion at some later date. That was sufficient to engage the State's responsibilities. "Home" had an autonomous meaning in the Convention. It did not depend on any legal right arising from domestic law. The Commission and Court of Human Rights had not been influenced by any domestic classification of rights of occupancy. What was relevant was the character of the occupancy: Loizidou v Turkey (1996) 23 EHRR 513, especially at paragraph 66 of the Court's opinion. (The Advocate Depute intimated that the Crown did not dispute that the house in question was the Minuter's home.) There could be no interference with a person's home unless the act fell within one of the permitted derogations. A confiscation order interfered in the relevant sense even though it did not impact directly on the occupation of the home. There was an ultimate threat and the domestic court was obliged to intervene to prevent a threatened violation of the Article. In the present case there would be a real threat of expulsion because it could be anticipated that the accused himself would have no interest in the order. He would not pay within the year allowed and that would lead to proceedings to realise his assets, including the Minuter's home. The making of the order was predicated on the need for the assets to be realised in due course to meet it. The criterion for action by the court was the emergence of a real risk of interference with the Convention right: Marckx v Belgium (1979) 2 EHRR 330. The risk in this case could not be disregarded as merely theoretical: paragraphs 26 and 27 of the opinion. When there was a risk that a measure could affect a person, that risk might amount to a violation even though the action envisaged might not be implemented. In the present case the risk existed even before the order was made. These provisions were draconian in character. One must proceed on the basis that the more serious the consequences might be the more important was the protection of any fundamental right that was threatened: State v Coetzee & Others [1997] 2 L.R.C. 593. In the opinion of Sachs J at page 677. The achievement of a proper balance required one to proceed on that basis. In considering the derogations from Article 8 one had to avoid proceeding on a presumption of guilt. Confiscation was a penalty for putative drug trafficking prior to conviction of offences covering the period provided for. The court had to be aware of the context and circumstances. The application of the derogations depended critically on their being "necessary" to serve a pressing social need: Sunday Times v United Kingdom (1979) 2 EHRR 245 at paragraphs 59, 62 and 67. In the present case it could not be said that making a confiscation order which included the Minuter's home was necessary to secure any of the legitimate aims of the legislation. The conditions which the state must establish to show necessity were: (i) that the interference proposed corresponded to a pressing social need; (ii) that the interference was proportionate to a legitimate aim which the state sought to secure; and (iii) that the means adopted were properly related to the significance of the impact of the action intended. It was not suggested that there was not a pressing social need to combat drug trafficking. But there was a question whether taking a person's home corresponded to that need. The home had such a high intrinsic value that only the most extreme cause could be relied on in taking i

Turning to Article 1 of the First Protocol, Mr Devlin argued that each of the items of property mentioned in the minute fell within the autonomous meaning of "possession" in the Article. The Article comprised three separate rules. Peaceful possession and enjoyment of possessions were protected by the first sentence. Deprivation of possession was conditional, as set out in the second sentence. The state could control possession only in particular circumstances as envisaged in the third sentence. The second and third sentences allowed derogations. The first did not. The first rule was absolute: Poiss v Austria (1987) 10 E.H.R.R. 231, at page 252, paragraph 64. The confiscation order would not effect a transfer of property unless the accused failed to make payment. It was accepted that a confiscation order did not, like a restraint order, control positively the use of the property. It was the first rule that was relevant in this case. There was a dearth of positive authority. One had to consider the position of a third party. In considering whether the first rule was complied with, one had to apply a test of fair balance: Sporrong & Lonnroth v Sweden (1982) 5 E.H.R.R. 35, at page 52 paragraph 69. In the present case a fair balance was not being achieved. There was no general interest in the making of the order in this case. There was no strong public interest at all. The accused and the Minuter were divorced in 1985 and did not cohabit. He had no access to the assets. He had no assets of his own. He would have no intention of paying. There could not be a fair balance in making the order. Making an order in this case would violate the Minuter's rights.

Having analysed the provisions of the 1995 Act as set out above, the Advocate Depute emphasised that the Crown did not have the benefit of any assumptions in relation to implicative gifts. The Crown had to live with the onus of proof. The Minuter's argument based on the application of statutory assumptions was misconceived. The prosecutor's statement did not change the position by giving notice that there was to be an argument that the realisable assets of the accused should take account of implicative gifts. Thus far in the proceedings, nothing had happened to show that the property would be taken at any time. Even if the property were otherwise held to be within the scope of the provisions as implicative gifts, the Minuter's application under section 6(3) had still to be disposed of. In order for the subject matter of any implicative gift to be taken from the Minuter, a number of conditions had to be met. The first, that the accused had to be convicted of a relevant offence, had been satisfied. Next there had to be a confiscation order made by the court. A proof would be required, and a diet had not yet been fixed. There would have to be negotiations on the details of the prosecutor's statement under section 9: that had not been done. The court had elements of discretion. One did not know whether there would ever be an order at all. If an order were made, the accused could apply for time to pay by instalments. It was a condition of enforcement against third parties that the accused should fail in making payment. It could not be assumed that he would not take advantage of the provisions. There were penal consequences of failure: section 14 of the 1995 Act. It could not be assumed that the accused would choose to return to prison. There could have been a restraint order against the Minuter disposing of the subject matter of the implicative gifts in terms of sections 38 and 39. The Crown had chosen not to apply for such an order. At very least there had to be an order under section 1(1)(b) before the Minuter could say that her home was at risk. And the court's power was discretionary. There was a considerable chain of events that had necessarily to occur before the property in question could be subject to a real risk of which the court should take notice. These were not theoretical. In practice and in reality something must happen involving the accused, such as his non-payment of any order made, before action could be taken against the Minuter. The making of an order was not a foregone conclusion: the court might or might not make an order. The statement in this case showed that the deposit taken into account in respect of the house was 1,498.68. If the court were to be asked by the Crown to appoint an administrator to realise the house it was my no means certain that the appointment would be made. The proceedings were in truth premature.

The Advocate Depute declined in the circumstances to comment in detail on the Convention jurisprudence, preferring, as he said, to skim like a summer firefly over the stream, touching down only occasionally to sip from the surface of the water. For the sake of argument, he accepted the hypothesis against the interests of the Crown that there had already occurred what amounted to an interference with the Minuter's rights in her home. The central issues came then to be whether one could identify one or other of the purposes in Article 8(2) justifying derogation, and whether a confiscation order was necessary for that purpose. The purpose was the prevention of crime. It could not be pretended that the making of a confiscation order would prevent crime directly. But achieving that purpose was the objective. Was confiscation necessary to that end? There was no other way available than attacking the assets of those convicted of trafficking. Mr Devlin had followed a typical path, by minimalising what was going on on the accused's side of the picture. The United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (Miscellaneous No 14 (1989)) showed that one was concerned with the tracing of funds through the accused. One was not concerned whether he personally benefited. If one accepted that what the state was trying to do was to implement domestically its international obligation to suppress drug trafficking, there was no other way of achieving its aims. If one envisaged a stage at which the Crown had proved that the assets in question were implicative gifts, and if the State's duty were to trace the proceeds of drug trafficking, there was no course open other than to take the assets themselves if all means of enforcement against the accused personally had failed.

Turning to the question of infringement of Article 1 of the First Protocol, the Advocate Depute submitted that the Minuter's contentions were again predicated on the notion that the proceedings to date had already involved interference with peaceful possession of the property. The first sentence did not stand alone. Convention jurisprudence had attenuated the tests. One was left with a balancing act, with proportionality central to the question whether the state had gone beyond what was necessary for the proper protection of the public interest. Crucially a proper approach on proportionality had to have regard to the fact that the issue was related to a gift, not to property purchased by the holder. There were parallels in insolvency law. Gratuitous alienations could be reduced. There were parallels in trust law. If property was transferred in breach of trust and the recipient was unable to show that the property was acquired in good faith and for valuable consideration there could be an order for repayment or re-delivery. Cases of unjust enrichment also offered parallels. There were a number of questions arising from the operation of statute which were crying out for explanation if the Minuter's approach was correct. The position might be different if there had been a restraint order. It was also to be observed that the provisions implemented obligations of the state under the United Nations Convention. Tracing of the proceeds of trafficking, subject to an exception for bona fide third parties, was central to that Convention. The Convention recognised that third parties might be affected to their prejudice. They were protected in limited circumstances only.

The Crown's central position, however, was that nothing had happened which could constitute an act of the Lord Advocate for the purposes of the Scotland Act.

In response Mr Devlin argued that there was nothing inconsistent with his argument in the United Nations Convention. Further the Scottish Law Commission had been influenced by the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds of Crime. Under that Convention also there were provisions ensuring that the rights of bona fide third parties were protected. But one had to have regard to the very broad terms of the language used in such Conventions. The expression of their provisions in terms of domestic legislation involved interpretation, and one had to have regard to the danger of analysing them in terms of rights and interests as those concepts might apply in domestic law. Returning to the First Protocol, Mr Devlin repeated his analysis and contended that while the second and third paragraphs allowed Parliament a wide margin of appreciation, the same latitude did not apply to the first test. He resisted the Crown suggestion that his submissions involved a full frontal attack on the 1995 Act. That might come after October, but was not inherent in his submissions in the present case. What the Lord Advocate had done in initiating these proceedings was clearly an act of the Lord Advocate. The act was directed, not simply against the proceeds of the accused's drug trafficking, but against the Minuter as owner of the assets alleged to have been the subject of implicative gifts. In summary one should look at the realities and avoid hypothetical situations figured by the Advocate Depute. In reality the normal procedure was that the prosecutor's statement was lodged in support of an application, and the application proceeded to an order. Similarly, though the prosecutor's statement included in respect of the house a sum less than 1,500, the whole house was subject to diligence in the end of the day.

In my opinion, the making of an application for a confiscation order was an act of the Lord Advocate. The implement of any executive or administrative decision must involve an "act", in my opinion, having regard to the unqualified use of that broad expression in the Scotland Act. I regard the repeated assertion that what had been done or omitted in pursuance of such decisions did not constitute an act to be wholly sterile. However, it is not every act, or as the case may be omission, that may be open to examination. The focus is not on the administrative or executive action in the abstract, but on the effect of the act on a person whose Convention rights might have been affected by it. The question is whether the implement of executive or administrative decision is in fact incompatible with any of the complainer's Convention rights. If that question is answered in the affirmative it becomes a matter of pure semantics whether one characterises the causative event as an act. One would not, of course, wish to inhibit intellectually stimulating argument simply because it involved semantics. But one might have hoped that mature reflection would have persuaded those concerned that there were more important issues in this and similar cases than the meaning to be given to the word "act". If there were a case in which a convention right had been infringed in some obvious way by the implement of an executive decision it might be less than clear that it reflected well on the department involved to seek to avoid responsibility by denying that it had acted, on the basis of a purported narrow interpretation of the Scotland Act. However, I am of the firm opinion that taking the steps of preparing an application for submission to the court, having that application completed and signed in common form, and submitting the application to the court with an invitation to the court to grant warrant for intimation and to make consequential orders singly and in combination constitute acts and an act. I am equally firmly of opinion that so to characterise those steps is of little if any significance. The issue is as to the effect of the act on any person affected, and whether the consequence is to take the act outwith the scope of executive power.

It is also important to define the context in which that issue has to be considered. In Montgomery v H. M. Advocate, unreported, 16 November 1999, in relation to Article 6(1), the Lord Justice General said:

"The only right which Article 6(1) protects is the right to a fair trial and so, in considering a case founded upon that Article, the court is concerned only with whether the appellants will receive a fair trial ... The appellants' rights under the Human Rights Convention exist ... to ensure that any trial which the appellants face is fair."

That approach was followed in Michael McKenna v H. M. Advocate, also unreported, which involved an attack on the act on the Lord Advocate in intimating a notice or notices under section 259 of the Criminal Procedure (Scotland) Act 1995. It was held that the argument for the accused anticipated a course of events which might or might not happen at the subsequent trial. The court refused the declarations sought. In my opinion a similar approach is appropriate in this case, both in respect of the need to define the context, and the need to consider the issues in the light of the ultimate outcome of the proceedings. Article 8 secures for everyone "the right to respect for his private and family life, his home and his correspondence". The proper focus is whether the executive acts brought to the attention of the court in themselves infringe that right or give rise to a real risk that those actions will in due course infringe that right. It is difficult to envisage circumstances in which making an application to the court under the Proceeds of Crime Act could be said in fact to infringe a right to respect for the home occupied by the recipient of an implicative gift. Without an order of the court granting the application, it would be of no effect whatsoever. Whether an application for a restraint order should be considered to have a different effect is irrelevant for present purposes. But a simple application for a confiscation order, uncomplicated by any restraint proceedings, is a request to the court to exercise its jurisdiction in a particular way, and unless and until the court disposes of the application there is no consequence of the application which could be said to undermine respect for the home, whatever the Lord Advocate as applicant might wish to achieve.

Further, in my opinion, the application does not give rise to a real risk that there will be infringement of the right. The test was expressed in Marckx at paragraph 27 on page 340. One has to consider whether the act, in that case a legislative act and in this an executive act, created a risk of the complainer "being directly affected by it". If the court should in the end of the day make a confiscation order which takes into account the Minuter's home, that will be in exercise of powers conferred on the court which the court will exercise independently of any will of the Lord Advocate, and not as a direct result of the Lord Advocate's acts in pursuing the application. As the Advocate Depute's analysis of the 1995 Act demonstrated, the characterisation of the Minuter's home as realisable property of the accused involves proof of the fact that the property was a gift made by the accused to the Minuter, within the statutory period. The onus of proof of the essential facts relating to that transaction lies on the Crown. The Crown and the Minuter will be parties to an adversarial process in which the Court will, in the absence of agreement between them, ultimately make a decision. That decision will be open to appeal. Among other possibilities is the possibility that the decision of the Appeal Court may be challenged before the Privy Council or before the European Court of Human Rights. The notion that there is a real risk that the Lord Advocate's act in making the application might at the end of the day infringe the Minuter's convention rights fails to recognise the role of the several courts in the hierarchy which may in due course come to adjudicate on the application. If the process should eventually result in an order which affects adversely the interests of the Minuter, there is little doubt that any further challenge would relate to the exercise of the court's jurisdiction in the matter. In this case, in addition to the uncertainties inherent in the litigation process in respect of the Lord Advocate's application, there is a minute seeking the exclusion of the assets of the Minuter if the Crown establishes that there were implicative gifts in her favour. One cannot anticipate the outcome of that process.

There is no justification for the implied assertion that the disposal of either aspect of the cause will favour the Crown in any event. Rather the assumption must be that the court will dispose of the Lord Advocate's application and of the Minute under section 6(3) on a proper application of the relevant legal rules and principles. Each party has an opportunity to present a case, and ordinary adversarial principles will apply.

In my view the application under Article 8 is premature. The same applies to Article 1 of the First Protocol. In the circumstances, I reserve my views on the wider issues debated. Many of these are of great interest, and they will become of greater interest after full implementation of the Human Rights Act. But they do not arise for decision at this stage. Since the contentions based on Article 6 of the Convention have been reserved, I shall have the case put out By Order to consider further procedure.

 

 

HIGH COURT OF JUSTICIARY

OPINION

by

THE HONOURABLE LORD PENROSE

in causa

HER MAJESTY'S ADVOCATE

against

THOMAS FOWLER BURNS

___________

 


© 2000 Crown Copyright


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URL: http://www.bailii.org/scot/cases/ScotHC/2000/83.html