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Her Majesty's Advocate & Anor v. McIntosh (Scotland)  UKPC D1 (5 February 2001)
 3 WLR 107,
 2 Cr App R 27,
 2 All ER 638,
 AC 1078,
 2 Cr App Rep 27,
2001 SLT 304,
2001 GWD 6-206,
 UKHRR 463,
2001 SC (PC) 89,
 1 AC 1078,
 UKPC D 1,
 UKPC D1,
2001 SCCR 191,
 HRLR 20
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Her Majesty's Advocate & Anor v. McIntosh (Scotland)  UKPC D1 (5 February 2001)
DRA No. 12 of 2000
(1) Her Majesty's Advocate and Appellants
(2) Her Majesty's Advocate General for Scotland
Robert McIntosh Respondent
THE HIGH COURT OF JUSTICIARY
JUDGMENT OF THE LORDS OF THE JUDICIAL COMMITTEE OF THE PRIVY COUNCIL
Delivered the 5th of February 2001
Present at the hearing:-
|Lord Bingham of Cornhill
|Lord Hope of Craighead
Lord Bingham of Cornhill
- The respondent (Robert McIntosh) was charged jointly with his co-habitee Isobel Black with being concerned in the supply of heroin in contravention of section 4(3)(b) of the Misuse of Drugs Act 1971. Ms Black pleaded not guilty to that charge on 30th June 1999 at the High Court of Justiciary in Paisley and her plea was accepted. On the same date the respondent pleaded guilty to the charge. On the respondent's conviction the prosecutor applied for the making of a confiscation order and a prosecutor's statement supported by detailed schedules was duly served on him at court. Proceedings on the confiscation application were adjourned to enable the respondent to lodge answers, which he did, putting the prosecutor to proof of the matters set out in the schedules and expressly challenging the prosecutor's assertion that certain funds held in the name of Ms Black were "implicative gifts" by him to her. In adjusted answers by the respondent to the prosecutor's statement it was further contended on his behalf that section 3(2) of the Proceeds of Crime (Scotland) Act 1995 ("the 1995 Act"), on which the prosecutor intended to rely, was incompatible with article 6(2) of the European Convention on Human Rights and that under section 57(2) of the Scotland Act 1998 the Lord Advocate as prosecutor had no power to act incompatibly with the Convention. These contentions were recognised to raise a devolution issue within the meaning of paragraph 1(d) of Part I of Schedule 6 to the Scotland Act, and a diet of debate was fixed.
- At that diet the judge (Lord Marnoch) was asked to pronounce a declarator that the "Crown has no power to invite the court to make the assumptions set out in section 3(2) of the Proceeds of Crime (Scotland) Act 1995". He declined to make the declarator sought and the respondent raised a petition to the nobile officium for review of Lord Marnoch's decision. The Advocate General for Scotland exercised her right to take part in the proceedings. The petition was heard by Lord Prosser, Lord Kirkwood and Lord Allanbridge, who on 13th October 2000 (Lord Kirkwood dissenting) allowed the respondent's appeal and made the declarator sought: see 2000 SLT 1280. Leave to appeal to the Judicial Committee of the Privy Council was granted to the Lord Advocate and the Advocate General.
- The issue now before the Committee is whether the prosecutor is or would be acting incompatibly with the respondent's rights under article 6(2) of the Convention in inviting the court to rely on the assumptions set out in section 3(2) of the 1995 Act.
- As applicable in Scotland, the criminal law relating to controlled drugs is largely found in two statutes. The first is the Misuse of Drugs Act 1971, which creates a number of offences relating (among other things) to the production, importation and supply of such drugs. The other is the 1995 Act (which governs the confiscation of assets of convicted persons and is not restricted to crimes related to drugs). This body of legislation rests (so far as it concerns drug trafficking offences) on a series of important premises: that the unlawful consumption of drugs, particularly class A drugs, is a very grave, far-reaching and destructive social evil; that persistence of this evil depends on the availability of an adequate supply of drugs for consumption; that the availability of an adequate supply of drugs in its turn depends on the activity of those who traffic in drugs by manufacturing, importing, buying and re-selling them; that those who traffic in drugs reap rich rewards from their activity; that those who traffic in drugs go to great lengths to conceal their activities, cover their tracks and conceal their assets; that the evil consequences of drug trafficking are such as properly to engage the sanctions and procedures of the criminal law; that those convicted of trafficking in drugs should be liable to imprisonment for what may be very long periods, to punish them, to prevent them offending again and to deter others from similar offending; and that it is desirable to deprive traffickers of their ill-gotten gains, so that the hope of profit is heavily outweighed by the fear of punishment. These premises are reflected in the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances adopted in Vienna on 19 December 1988, which the United Kingdom ratified in June 1991, and in the experience and practice of very many states all over the world.
- Part I of the 1995 Act is entitled "Confiscation of the Proceeds of Crime". Section 1, so far as it relates to drugs, is in these terms:
"1(1) Subject to the provisions of this Part, where in respect of any offence to which this Part applies -
(a) the accused is convicted, whether in solemn or summary proceedings; or
(b) in the case of summary proceedings (without proceeding to conviction) an order is made discharging him absolutely,
the court, on the application of the prosecutor, may make an order (a 'confiscation order') requiring the accused to pay such sum as the court thinks fit.
"(2) This Part applies to any offence which has been prosecuted -
(a) on indictment; or
(b) on summary complaint if the offence is punishable by a fine of an amount greater than the amount corresponding to level 5 on the standard scale or by imprisonment for a period longer than 3 months or by both such fine and imprisonment,
but it does not apply to an offence under Part III of the 1989 Act (financial assistance for terrorism).
"(3) A confiscation order shall not be made unless the court orders some other disposal (including an absolute discharge) in respect of the accused.
. . .
"(5) The sum which a confiscation order requires an accused to pay in the case of a drug trafficking offence shall be an amount not exceeding -
(a) subject to paragraph (b) below, what the court assesses to be the value of the proceeds of the person's drug trafficking; or
(b) if the court is satisfied that the amount that might be realised in terms of this Act at the time the confiscation order is made has a value less than that of the proceeds of the person's drug trafficking, what it assesses to be that amount.
. . .
"(7) Any application under this section shall be made -
(a) in proceedings on indictment, when the prosecutor moves for sentence or, if the accused is remitted for sentence under section 195 of the 1995 Act, before sentence is pronounced; and
(b) in summary proceedings, following the conviction of the accused.
"(8) For the purposes of any appeal or review, a confiscation order is a sentence."
- A number of points on the construction of this section are noteworthy:
(1) In proceedings on indictment the making of a confiscation order is dependent on conviction of the accused.
(2) The conviction must be of a drug trafficking offence, as defined in section 49(5) of the Act to embrace offences of importing, producing and supplying controlled drugs.
(3) The sum confiscated need not be the profit made from the drug trafficking offence of which the accused has been convicted (in contrast with the ordinary procedure in relation to other offences).
(4) An order may be made only on the application of the prosecutor.
(5) Where such application is made the court has a discretion whether to make an order or not.
(6) The court is required to assess the value of the proceeds of the accused's drug trafficking.
(7) "Drug trafficking" has a meaning distinct from and wider than "drug trafficking offence": it is defined in section 49(2), (3) and (4) of the 1995 Act so as to include conduct which would, but also conduct which would not, give rise to criminal offences under Scots law.
(8) The assessment made by the court is not final, but may later be adjusted (under sections 11 and 12 of the 1995 Act) if new information comes to light.
(9) A confiscation order is regarded as a sentence, and is subject to appeal like any other sentence.
- Section 2 of the Act is largely concerned with non-drug offences, but contains a definition in broad terms of "property". Section 3 lies at the heart of this appeal and provides:
"3(1) For the purposes of this Act -
(a) any payments or other rewards received by a person at any time (whether before or after the commencement of this Act) in connection with drug trafficking carried on by him or another are his proceeds of drug trafficking, and
(b) the value of his proceeds of drug trafficking is the aggregate of the values of the payments or other rewards.
"(2) Without prejudice to section 9 of this Act the court may, in making an assessment as regards a person under section 1(5) of this Act, make the following assumptions, except in so far as any of them may be shown to be incorrect in that person's case -
(a) that any property appearing to the court -
(i) to have been held by him at any time since his conviction; or, as the case may be,
(ii) to have been transferred to him at any time since a date six years before his being indicted, or being served with the complaint,
was received by him, at the earliest time at which he appears to the court to have held it, as a payment or reward in connection with drug trafficking carried on by him;
(b) that any expenditure of his since the date mentioned in paragraph (a)(ii) above was met out of payments received by him in connection with drug trafficking carried on by him, and
(c) that, for the purpose of valuing any property received or assumed to have been received by him at any time as such a reward, he received the property free of any other interests in it.
"(3) Subsection (2) above does not apply if the only offence by virtue of which the assessment is being made is an offence under section 14 of the Criminal Justice (International Co-operation) Act 1990 or section 37 or 38 of the Criminal Law (Consolidation) (Scotland) Act 1995.
"(4) The court shall, in making an assessment as regards a person under section 1(5) of this Act, leave out of account any of his proceeds of drug trafficking that are shown to the court to have been taken into account in a case where a confiscation order (whether under this Act or under and within the meaning of -
(a) section 2 of the 1994 Act; or
(b) any corresponding provision in Northern Ireland),
has previously been made against him."
- A number of points are again noteworthy in the construction of this section:
(1) The court has a discretion whether to make the statutory assumptions or not.
(2) The assumptions are rebuttable by the accused, on a balance of probabilities.
(3) The proceeds in question relate to drug trafficking and not the commission of drug trafficking offences.
(4) The assumptions relate to property which appears to the court to meet the conditions specified and to expenditure of the accused during the relevant period.
- Section 4 deals with the definition of "realisable property". Section 6 defines "implicative" gifts in the following way:
"6(1) In this Act references to an 'implicative gift' are references to a gift (whether made before or after the commencement of this Act) -
(a) made not more than six years before the date on which, in respect of a person suspected of, or charged with, a drug trafficking offence, the proceedings were commenced or a restraint order was made (whichever first occurs); or
(b) made at any time if the gift was of property -
(i) received by the giver in connection with drug trafficking carried on by him or another, or
(ii) which, in whole or in part, directly or indirectly represented in the giver's hands property received by him in that connection."
The section provides a defence for a person in innocent receipt of an implicative gift and a right of appeal for the recipient of an implicative gift. Section 8 provides that the court shall make its decision on the application for a confiscation order before imposing any other financial penalty on the accused.
- Section 9 governs the submission of a statement by the prosecutor:
"9(1) Where the prosecutor applies for the making of a confiscation order, the prosecutor may lodge with the clerk of court a statement as to any matters relevant -
(a) in connection with a drug trafficking offence, to the assessment of the value of the accused's proceeds of drug trafficking; ..."
The section goes on to provide for the service of the statement on the accused, the making of a response to the statement by the accused and the acceptance of the statement if the accused fails to respond to it. The attention of the Committee was drawn to subsections (7) and (8) of this section which provide:
"(7) Where the judge presiding at a hearing held under subsection (6) above is not the trial judge he may, on the application of either party, if he considers that it would be in the interests of justice to do so, adjourn the hearing to a date when the trial judge is available.
(8) No acceptance by a person under this section that any payment or other reward was received by him in connection with drug trafficking carried on by him or another shall be admissible in evidence in any proceedings, whether in Scotland or elsewhere, in respect of an offence."
It is evident that, although no reliance may be placed on evidence given by an accused during confiscation proceedings in any prosecution for a drug trafficking offence other than that of which he has just been convicted, there is no bar to a prosecution for such a drug trafficking offence which may have given rise to proceeds which form part of his assessed proceeds of drug trafficking. Section 10 permits the court to adjourn the confiscation proceedings for up to six months if it considers that it has received insufficient information.
- Where a confiscation order is made, a term of imprisonment in default may be imposed to ensure compliance (see sections 214-219 of the Criminal Procedure (Scotland) Act 1995 as applied by section 14 of the 1995 Act). Any such term will run from the expiry of any other sentence imposed for the offence (see section 14(4) of the Act).
- Section 6 of the Human Rights Act 1998 makes it unlawful for a public authority to act incompatibly with a Convention right. The expression "public authority" is defined in terms which include the Lord Advocate, who by section 57(2) of the Scotland Act has no power to do any act which is incompatible with a Convention right unless exempted by section 57(3). The Convention right central to this appeal is article 6, the terms of which are very familiar and need not be quoted in full. Article 6(1) begins:
"In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law . . ."
Article 6(2), with which the making of assumptions under section 3(2) of the 1995 Act is said to be incompatible, provides:
"Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law."
Article 6(3) guarantees to "Everyone charged with a criminal offence" certain specified minimum rights. Attention was also briefly drawn to Article 1 of the First Protocol to the Convention, entitled "Protection of property", which provides:
"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties."
The first issue
- The first issue in the appeal is whether, in relation to the application made against him for a confiscation order, the respondent is a person "charged with a criminal offence" within the meaning of article 6(2) of the Convention and so a person entitled to rely on the presumption of innocence guaranteed by that provision.
- It was not contended on the respondent's behalf in the Court of Appeal that, in relation to an application for a confiscation order, he was a person charged with a criminal offence as that expression would be understood in Scots domestic law (see the judgment of Lord Prosser, paragraph 6). There are a number of compelling reasons why he would not be so regarded:
(1) The application is not initiated by complaint or indictment and is not governed by the ordinary rules of criminal procedure.
(2) The application may only be made if the accused is convicted, and cannot be pursued if he is acquitted.
(3) The application forms part of the sentencing procedure.
(4) The accused is at no time accused of committing any crime other than that which permits the application to be made.
(5) When, as is standard procedure in anything other than the simplest case, the prosecutor lodges an application under section 9, that application (usually supported by detailed schedules) is an accounting record and not an accusation.
(6) The sum ordered to be confiscated need not be the profit made from the drug trafficking offence of which the accused has been convicted, or any other drug trafficking offence.
(7) If the accused fails to pay the sum he is ordered to pay under the order, the term of imprisonment which he will be ordered to serve in default is imposed not for the commission of any drug trafficking offence but on his failure to pay the sum ordered and to procure compliance.
(8) The transactions of which account is taken in the confiscation proceedings may be the subject of a later prosecution, which would be repugnant to the rule against double jeopardy if the accused were charged with a criminal offence in the confiscation proceedings.
(9) The proceedings do not culminate in a verdict, which would (in proceedings on indictment) be a matter for the jury if the accused were charged with a criminal offence.
It is of course true that if, following conviction of the accused and application by the prosecutor for a confiscation order, the court chooses to make the assumptions specified in section 3(2) of the 1995 Act or either of them, an assumption is made (unless displaced) that the accused has been engaged in drug trafficking which, as defined in section 49(2), (3) and (4), may (but need not) have been criminal. But there is no assumption that he has been guilty of drug trafficking offences as defined in section 49(5). The process involves no inquiry into the commission of drug trafficking offences. Unless Strasbourg jurisprudence points towards a different result, I would not conclude that a person against whom application for a confiscation order is made is, by virtue of that application, a person charged with a criminal offence.
- That is the view which courts in Scotland have consistently taken (see, for example, HM Advocate v McSalley 2000 JC 485 at 493G ; HM Advocate v Monaghan and Monaghan (unreported), High Court of Justiciary, 5 May 2000, at page 16) as have the courts in England (see, for example, R v Hussein, Court of Appeal Criminal Division (unreported), 20 April 1999, paragraph 29; R v Delaney and Hanrahan (unreported) Court of Appeal Criminal Division, 14 May 1999, at page 20, the latter cases not being concerned with drugs). It is accordingly necessary to consider the Strasbourg case law.
- Engel v The Netherlands (No 1) (1976) 1 EHRR 647 concerned a number of Dutch servicemen who had been penalised for breaches of military discipline. In some of the cases the breaches were more serious and the penalties more severe than in others. The European Court of Human Rights considered the distinction between disciplinary and criminal offences, a question on which the decision of the European Court (rather than the classification of the delinquency in domestic law) will ultimately be determinative (paragraphs 81-2). Two of the applicants complained that the military proceedings against them infringed the presumption of innocence guaranteed by article 6(2), but this contention was rejected. In paragraph 90 of its judgment the Court ruled:
"In reality, this clause does not have the scope ascribed to it by the two applicants. As its wording shows, it deals only with the proof of guilt and not with the kind or level of punishment. It thus does not prevent the national judge, when deciding upon the penalty to impose on an accused lawfully convicted of the offence submitted to his adjudication, from having regard to factors relating to the individual's personality.
Before the Supreme Military Court Mr Dona and Mr Schul were 'proved guilty according to law' as concerns the offences there alleged against them . . . It was for the sole purpose of determining their punishment in the light of their character and previous record that the said court also took into consideration certain similar, established facts the truth of which they did not challenge. The court did not punish them for these facts in themselves."
This statement of principle is plainly unhelpful to the respondent.
- In Deweer v Belgium (1980) 2 EHRR 439, a butcher said to have sold meat at an illegal profit complained of a prosecutor's order that his shop be provisionally closed until either judgment was given against him in proposed criminal proceedings or he paid a substantial fine in settlement of the proceedings. The butcher paid the fine under protest but complained that his rights under article 6(1), (2) and (3) and article 1 of the First Protocol had been infringed. The Court found a breach of article 6(1), and did not find it necessary to examine the other provisions. In reaching its conclusion the Court paid attention to the realities of the procedure in question and not to appearances (paragraph 44) and concluded that the case had a criminal character: the official notification given to an individual "that he has committed a criminal offence" is to be treated as the charge for purposes of article 6(1) (paragraph 46). In the present case no notification was given to the respondent, in connection with the confiscation proceedings, that he had committed a criminal offence.
- The complaint in Eckle v Federal Republic of Germany (1982) 5 EHRR 1 was of unreasonable delay in prosecuting criminal proceedings, contrary to article 6(1). To investigate that complaint it was necessary to consider when the criminal proceedings began and the case focused on that issue. The court did, however, make the important and valuable ruling that article 6(1) does not cease to apply when a defendant is convicted, but continues during the imposition of sentence and any appeal. In paragraph 76 of its judgment the Court held:
"As regards the end of the 'time', in criminal matters the period governed by Article 6(1) covers the whole of the proceedings in issue, including appeal proceedings."
In paragraph 77 of its judgment the Court continued:
"In the event of conviction, there is no 'determination . . . of any criminal charge', within the meaning of Article 6(1), as long as the sentence is not definitively fixed. Thus, in the Ringeisen judgment [(1971) 1 EHRR 455, paras. 48 and 110] the Court took as the close of the proceedings the date on which the trial court had decided, following appeal proceedings, that the entire period spent by the applicant in detention on remand should be reckoned as part of the sentence . . ."
It is thus plain that in the confiscation proceedings the respondent has the benefit of article 6(1), for anything it may add to his rights under the common law of Scotland, whether or not he has the benefit of article 6(2).
- Foti v Italy (1982) 5 EHRR 313 also concerned the reasonable time provision of article 6(1). The importance of the case is in recognising that on appropriate facts the proceedings may be held to begin, for purposes of article 6(1), at a date earlier than the official notification to the defendant that he is alleged to have committed a criminal offence.
- Proceedings for a road traffic offence had been brought against the applicant in Lutz v Germany (1987) 10 EHRR 182, and had been discontinued as time-barred, but he had been left to bear his own costs. He complained that the failure to reimburse him infringed his rights under article 6(2). The Court held that article 6(2) applied in principle but that it had not been violated in that case. (A different result was reached in Minelli v Switzerland (1983) 5 EHRR 554 where a criminal prosecution against a defendant for defamation was terminated before judgment on the ground that the statutory limitation period had expired, and he was ordered to pay costs to the court and the prosecutor. He complained, successfully, that this outcome violated the presumption of innocence to which he was entitled under article 6(2). The Court held (in paragraph 30 of its judgment) that article 6(2) governed criminal proceedings in their entirety, irrespective of the result of the prosecution, and not solely the examination of the merits of the charge. The good sense of this decision is obvious: to impose a burden of costs on a defendant against whom nothing has been proved is in effect to treat him as guilty despite his acquittal).
- In Raimondo v Italy (1994) 18 EHRR 237 the applicant was charged with offences based on alleged association with the Mafia, but was acquitted of those charges. At the same time he was subject to special supervision as a preventive measure directed to restraining further offences. He complained that these measures violated the reasonable time provision of article 6(1) and an issue was raised whether that article applied at all. The court held that article 6 did not apply to the special supervision and said in paragraph 43 of its judgment:
"The Court shares the view taken by the Government and the Commission that special supervision is not comparable to a criminal sanction because it is designed to prevent the commission of offences. It follows that proceedings concerning it did not involve 'the determination . . . of a criminal charge.'"
- A confiscation order was made against the applicant in Welch v United Kingdom (1995) 20 EHRR 247, and in due course he complained that his rights under article 6(1) and (2) and article 7 of the Convention had been infringed. His article 6 complaints were held by the Commission to be manifestly ill-founded and inadmissible. His complaint under article 7 in relation to the confiscation order was rejected by the Commission but upheld by the Court. It was clear that the confiscation order had been made retrospectively (judgment, paragraph 26) and the question was whether it amounted to a penalty within the meaning of article 7. The reasoning of the Court is illuminating:
"28. The wording of Article 7(1), second sentence, indicates that the starting point in any assessment of the existence of a penalty is whether the measure in question is imposed following conviction for a 'criminal offence'. Other factors that may be taken into account as relevant in this connection are the nature and purpose of the measure in question; its characterisation under national law; the procedures involved in the making and implementation of the measure; and its severity. "29. As regards the connection with a criminal offence, it is to be observed that before an order can be made under the 1986 Act the accused must have been convicted of one or more drug trafficking offences. This link is in no way diminished by the fact that, due to the operation of the statutory presumptions concerning the extent to which the applicant has benefited from trafficking, the court order may affect proceeds or property which are not directly related to the facts underlying the criminal conviction. While the reach of the measure may be necessary to the attainment of the aims of the 1986 Act, this does not alter the fact that its imposition is dependent on there having been a criminal conviction."30. In assessing the nature and purpose of the measure, the Court has had regard to the background of the 1986 Act, which was introduced to overcome the inadequacy of the existing powers of forfeiture and to confer on the courts the power to confiscate proceeds after they had been converted into other forms of assets. The preventive purpose of confiscating property that might be available for use in future drug trafficking operations as well as the purpose of ensuring that crime does not pay are evident from the ministerial statements that were made to Parliament at the time of the introduction of the legislation. However, it cannot be excluded that legislation which confers such broad powers of confiscation on the courts also pursues the aim of punishing the offender. Indeed, the aims of prevention and reparation are consistent with a punitive purpose and may be seen as constituent elements of the very notion of punishment."
- The Court briefly considered other matters before continuing:
"33. However, there are several aspects of the making of an order under the 1986 Act which are in keeping with the idea of a penalty as it is commonly understood even though they may also be considered as essential to the preventive scheme inherent in the 1986 Act. The sweeping statutory assumptions in section 2(3) of the 1986 Act that all property passing through the offender's hands over a six-year period is the fruit of drug trafficking unless he can prove otherwise; the fact that the confiscation order is directed to the proceeds involved in drug dealing and is not limited to actual enrichment or profit; the discretion of the trial judge, in fixing the amount of the order, to take into consideration the degree of culpability of the accused; and the possibility of imprisonment in default of payment by the offender – are all elements which, when considered together, provide a strong indication of inter alia a regime of punishment."34. Finally, looking behind appearances at the realities of the situation, whatever the characterisation of the measure of confiscation, the fact remains that the applicant faced more far-reaching detriment as a result of the order than that to which he was exposed at the time of the commission of the offences for which he was convicted."35. Taking into consideration the combination of punitive elements outlined above, the confiscation order amounted, in the circumstances of the present case, to a penalty. Accordingly, there has been a breach of Article 7(1). 36. The Court would stress, however, that this conclusion concerns only the retrospective application of the relevant legislation and does not call into question in any respect the powers of confiscation conferred on the courts as a weapon in the fight against the scourge of drug trafficking."
The Court was not here considering whether a defendant was entitled to rely on the presumption of innocence guaranteed by article 6(2) when meeting an application for a confiscation order. But it is plain that the court considered in detail the provisions of the Drug Trafficking Offences Act 1986, applicable to England and Wales, which was in terms similar although not identical to the 1995 Act, and perceived no apparent incompatibility with article 6(2).
- A similar complaint of retrospectivity under article 7 was made in Taylor v United Kingdom (Application No 31209/96, 10 September 1997). He had been convicted of drug trafficking offences in 1986 and 1994. On the second occasion a confiscation order was made which included the trafficking between 1974 and 1979 which had been the subject of the earlier conviction. The complaint was held by the Commission to be inadmissible. In Elton v United Kingdom (Application No 32344/96, 11 September 1997) complaint was made of a confiscation order as violating article 6(2) as well as article 7 of the Convention, but both complaints were held to be inadmissible. The Commission noted the assumptions which the court could make when making a confiscation order but observed:
"the Commission cannot find that the making of the confiscation order against the applicant raises any issues regarding the principle of presumption of innocence guaranteed by Article 6 para. 2 of the Convention."
On 30 November 2000 the Court held admissible a complaint made against a confiscation order under article 6(2) in Phillips v United Kingdom (Application No 41087/98), observing that:
"it raises a serious question under Article 6(2) of such complexity that its determination should depend on an examination of the merits."
This application awaits final determination.
- None of these authorities, in my opinion, provides substantive support for the respondent's contention. He cannot overcome the problem of showing either that he is "charged" or that he is accused of any "criminal offence". He faces a financial penalty (with a custodial penalty in default of payment) but it is a penalty imposed for the offence of which he has been convicted and involves no accusation of any other offence.
- Lord Kirkwood, dissenting in the Court of Appeal, reached a similar conclusion. In his leading opinion for the majority, Lord Prosser (in paragraph 33) gave a weight to the decisions in Eckle and Foti, summarised above, which in my view they will not bear. He was impressed (in paragraph 35) by the title of the 1995 Act, which is indeed directed to ensuring that crime does not pay, but it is still plain that to obtain a confiscation order the prosecutor makes no accusation of criminal conduct against an accused.
- Since the decision appealed against, the Court of Appeal Criminal Division (Lord Woolf CJ, Judge LJ and Collins J) in R v Benjafield (unreported) 21 December 2000, construing similar legislation applicable in England and Wales, has reached the same conclusion as the Court of Appeal on this point. It regarded article 6(2) as a specific example of the more general obligations in article 6(1) (paragraph 69 of the judgment) and concluded that the confiscation procedure "has to be considered on the assumption that it is subject to the requirements of both article 6(1) and (2) taken together" (paragraph 84). I do not think this conclusion does justice to the language of article 6(2), nor does it reflect the reasoning of the European Court in the cases which have come before it so far.
- In concluding, as I do, that article 6(2) has no application to the prosecutor's application for a confiscation order, I would stress that the result is not to leave the respondent unprotected. He is entitled to all the protection afforded to him by article 6(1), which applies at all stages, the common law of Scotland and the language of the statute. If the court accedes to the application of a prosecutor under section 1(1) of the 1995 Act, it will order an accused to pay "such sum as the court thinks fit". In making a confiscation order the court must act with scrupulous fairness in making its assessment to ensure that neither the accused nor any third person suffers any injustice.
The second issue
- If the answer given above to the first issue is correct, the second does not arise. But if it be assumed that article 6(2) applies to the application for a confiscation order following conviction, the issue arises whether reliance on the assumptions permitted under section 3(2) of the 1995 Act violates or would violate the respondent's rights guaranteed by that article.
- The European Court has made clear its approach to article 6(2) and reversal of the onus of proof in Salabiaku v France (1988) 13 EHRR 379 and Hoang v France (1992) 16 EHRR 53, and the topic has been discussed at some length by the House of Lords in R v Director of Public Prosecutions Ex parte Kebilene  2AC 326 and by the Judicial Committee of the Privy Council in Brown v Stott 2001 SLT 59. It is unnecessary for present purposes to rehearse those authorities. It is plain that the right is not absolute but equally plain that encroachments on the presumption are not to be uncritically accepted. As the Court put it in Salabiaku (in paragraph 28 of its judgment):
"Article 6(2) does not therefore regard presumptions of fact or of law provided for in the criminal law with indifference. It requires States to confine them within reasonable limits which take into account the importance of what is at stake and maintain the rights of the defence."
As Lord Hope of Craighead put it in Ex parte Kebilene at page 384:
"As a matter of general principle therefore a fair balance must be struck between the demands of the general interest of the community and the protection of the fundamental rights of the individual: see also Sporrong and Lönnroth v Sweden (1982) 5 EHRR 35, 52, para. 69."
- The general interest of the community in suppressing crime, however important, will not justify a state in riding roughshod over the rights of a criminal defendant, as graphically pointed out by Sachs J in State v Coetzee  2 LRC 593 at 677 (paragraph 220). But it is not irrelevant. Nor is the position of the defendant. In weighing the balance between the general interest of the community and the rights of the individual, it will be relevant to ask (as Lord Hope suggested in Ex parte Kebilene at page 386) what public threat the provision is directed to address, what the prosecutor must prove to transfer the onus to the defendant and what difficulty the defendant may have in discharging the onus laid upon him. In some cases the acceptability of a reverse onus provision will turn not on consideration of the provision in the abstract but on its application in a particular case (Hoang v France, above, paragraph 33). The right to a fair trial, guaranteed by article 6(1), will ensure that any reverse onus provision is fairly applied in the given case.
- The nature of the public threat to which the Misuse of Drugs Act 1971 and the 1995 Act are directed sufficiently appears from the factors listed in paragraph 4 above. It is significant that the United Nations Convention already referred to provides, in article 5.7:
"Each Party may consider ensuring that the onus of proof be reversed regarding the lawful origin of alleged proceeds or other property liable to confiscation, to the extent that such action is consistent with the principles of its domestic law and with the nature of the judicial and other proceedings."
In a 1991 report on "The Confiscation of the Proceeds of Crime" (LRC 35–1991) the Irish Law Reform Commission recommended the adoption of such a presumption (see page 75 of the report; and, as made clear on page 55, paragraph 32, it regarded the presumption of innocence as inapplicable following conviction).
- In seeking to justify the reasonableness and fairness of the assumptions which the court is permitted to make under section 3(2) the Solicitor General drew attention to a number of points:
(1) The starting point of the confiscation order procedure is proof beyond reasonable doubt that the accused has committed a drug trafficking offence: section 1(1) of the 1995 Act.
(2) It is open to the accused to rebut the assumptions on a balance of probabilities.
(3) The facts upon which the accused will rely to rebut the assumptions are peculiarly within his personal knowledge.
(4) The proceedings are fully adversarial and the accused has every opportunity to challenge evidence against him and call witnesses: section 9(6).
(5) It is necessary for the prosecutor to prove the possession of property by and the expenditure of the accused under section 3(2).
(6) The court has a discretion whether to make an order and whether to make the assumptions and will order the accused to pay such sum as it thinks fit: sections 1(1), 3(2).
(7) The accused has a full right of appeal: section 1(8).
(8) The liability of the accused is limited to the sum which may be realised from him, which if over-estimated at first may be later reduced: section 12.
(9) The answers of the accused in the confiscation order proceedings cannot be relied upon against him in any later prosecution: section 9(8).
- Mr Targowski QC for the respondent submitted that the statutory assumptions were impermissible in particular because there was no onus on the prosecutor to raise any ground even for suspecting that the accused had during the relevant period engaged in drug trafficking. He placed strong reliance on Donnelly and Donnelly v HM Advocate  SCCR 508 in which Lord Coulsfield giving the opinion of the Court of Appeal said (at page 538):
"there is, in our view, nothing in the legislation to suggest that it is necessary that the court should have some evidence, or ground of suspicion, that the accused has profited from drug-dealing before it can make the order. There is nothing in the wording of section 1 to suggest such a requirement. Section 3(2) similarly provides that the court 'may' make the assumptions there set out, but there is nothing in the wording of section 3 which suggests that the court must have evidence or some ground of suspicion that the accused has profited from drug-dealing before it can make those assumptions, and the structure of the legislation suggests the contrary. The only preconditions for the making of the assumptions which can be found in the statute are that the court must be satisfied that the accused has received payments or incurred expenditure, or both."
At page 539 Lord Coulsfield added:
"In all the circumstances, in our opinion, it is not necessary that there should be either evidence that the accused has benefited from drug dealing or grounds for suspicion that he has so profited before the court can make the assumptions set out in section 3(2), and we therefore reject the main argument in principle advanced on behalf of the appellants."
Lord Prosser (in paragraph 31 of his judgment) and Lord Allanbridge (in paragraph 5 of his judgment) accepted Mr Targowski's submission. The Court of Appeal Criminal Division in R v Benjafield reached a different conclusion.
- On this point also I respectfully differ from the Court of Appeal. The confiscation order procedure can only be initiated if the accused is convicted of a drug trafficking offence. The court is therefore dealing with a proven drug trafficker. It is then incumbent on the prosecutor to prove, as best he can, the property held by the accused and his expenditure over the chosen period up to six years, including any implicative gifts relied on. In practice the prosecutor's statement lodged under section 9 will always particularise such of the accused's sources of income as are known to the prosecutor, and any source of income known to the prosecutor of any person to whom the accused is said to have made an implicative gift. The schedules served by the prosecutor in this case contained those details (whether accurately or not has not yet been determined) relating to the respondent and Ms Black, and had they not done so the court would inevitably have exercised its power under section 10 to enable further information to be obtained. It is only if a significant discrepancy is shown between the property and expenditure of the accused on the one hand and his known sources of income on the other that the court will think it right to make the section 3(2) assumptions, and unless the accounting details reveal such a discrepancy the prosecutor will not in practice apply for an order. It would be an obviously futile exercise to seek an order where the assets and expenditure of the accused are fully explained by his known sources of legitimate income. If a significant discrepancy is shown, and in the first instance it is for the prosecutor to show it, I do not for my part think it unreasonable or oppressive to call on the accused to proffer an explanation. He must know the source of his assets and what he has been living on. In the respondent's case (unlike Mr Donnelly's) the sums involved are relatively small, but it cannot be hard for the respondent to explain the source of his and Ms Black's assets and expenditure, matters very much within his knowledge.
- The statutory scheme contained in the 1995 Act is one approved by a democratically elected Parliament and should not be at all readily rejected. I would for my part endorse the conclusion of the Court of Appeal Criminal Division in paragraph 88 of its judgment in R v Benjafield:
"It is very much a matter of personal judgment as to whether a proper balance has been struck between the conflicting interests. Into the balance there must be placed the interests of the defendant as against the interests of the public, that those who have offended should not profit from their offending and should not use their criminal conduct to fund further offending. However, in our judgment, if the discretions which are given to the prosecution and the court are properly exercised, the solution which Parliament has adopted is a reasonable and proportionate response to a substantial public interest, and therefore justifiable."
- I discern no arguable breach of article 1 of the First Protocol to the Convention.
- I would resolve this issue also against the respondent and accordingly allow the appeal.
The third issue
- The Solicitor General submitted that even if both the foregoing issues were resolved against him, the Lord Advocate nonetheless had power to act as he proposed. In the light of the foregoing judgment this issue does not arise.
- I have had the advantage of reading in draft the judgments of my noble and learned friends Lord Bingham of Cornhill and Lord Hope of Craighead. For the reasons which they give I too would allow this appeal.
Lord Hope of Craighead
- I have had the advantage of reading in draft the judgment which my noble and learned friend Lord Bingham of Cornhill has prepared. I agree with it, and for the reasons which he has given I too would allow the appeal and recall the interlocutor of 1st November 2000 which was pronounced by the High Court of Justiciary. I would however like to add these comments, as I am conscious that we are differing from the views expressed by the majority.
- The first question is whether the prosecutor's act in inviting the court to make the assumptions mentioned in section 3(2) of the Proceeds of Crime (Scotland) Act 1995 involves charging the respondent with a criminal offence within the meaning of article 6(2) of the European Convention on Human Rights. Lord Prosser, with whom Lord Allanbridge agreed, said that it did. He said that the court could make the order sought by the prosecutor only if, by one means or another, it had reached the position of being able to say that there are proceeds of drug trafficking: 2000 SLT 1280, 1289I-J paragraph 29. As he saw it, this involved among other things an assertion by the prosecutor that there had been drug trafficking, an invitation made by him to the court to proceed on this basis and, if the court were to reach this point, the making of an order which would significantly affect the respondent. He said that, if one proceeds on the hypothesis that drug trafficking is criminal, the requirements of Eckle v Federal Republic of Germany (1982) 5 EHRR 1 and Foti v Italy (1982) 5 EHRR 313 would be met.
- In my opinion this approach is inconsistent with the Strasbourg case law: see Engel v The Netherlands (No 1) (1976) 1 EHRR 647, paragraph 90 and Elton v United Kingdom (Application No. 32344/96) 11th September 1997, where the Commission said at page 4 that it could not find that the making of a confiscation order raised any issues regarding the principle of the presumption of innocence guaranteed by article 6(2). It also overlooks the fact that the procedure on which the prosecutor is now engaged assumes that the accused has already been convicted of the offence with which he was charged: see section 1(1) of the Act. Article 6(2) provides that everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law. That stage is now passed. The court is concerned only with confiscation of the kind which the law prescribes where the conviction is for a drug trafficking offence. The respondent is not now being charged with another offence, nor is he at risk in these proceedings of being sentenced again for the offence of which he has been convicted. The assumptions on which the court is being asked to proceed do not require the court to hold that he has been engaged in criminal conduct. They have much more to do with the civil process of tracing (a restitutionary remedy), especially where, as in this case, the court is asked to bring the value of implicative gifts into the assessment.
- The second question is whether, if the prosecutor's act does involve a presumption of guilt within the meaning of article 6(2), the assumptions which the court is asked to make are compatible with that article. Lord Prosser criticised these assumptions on the ground that they were, as he put it, in a quite literal sense baseless: paragraph 31 1290F. His impression was that if section 3(2) had been in only slightly different terms they would have been within reasonable limits. But he found it difficult to see how a reasonable judge could make the assumptions unless further grounds for suspicion were available: paragraph 32 1290K.
- I agree that, in view of the answer which we have given to the first question, this point does not arise. But I also agree that, if it were necessary for an answer to be given to this question, it should be answered against the respondent. I do not think that it is right to say that the assumptions which the court is asked to make are quite literally baseless. The Act provides that they can only be made where the accused has been convicted of a drug trafficking offence: see section 1(4). In order to embark on this process the court must first prove that the accused is guilty of such an offence. That is the threshold that first must be crossed. Then there is the nature of those offences which the Act defines as drug trafficking offences: see section 49(5). The essence of drug trafficking is dealing or trading in drugs. People engage in this activity to make money, and it is notorious that they hide what they are doing. Direct proof of the proceeds is often difficult, if not impossible. The nature of the activity and the harm it does to the community provide a sufficient basis for the making of these assumptions. They serve the legitimate aim in the public interest of combating that activity. They do so in a way that is proportionate. They relate to matters that ought to be within the accused's knowledge, and they are rebuttable by him at a hearing before a judge on the balance of probabilities. In my opinion a fair balance is struck between the legitimate aim and the rights of the accused.
- Lastly, I should mention that Mr Targowski QC for the respondent suggested that the questions which in R v Director of Public Prosecutions, (Exp) Kebilene  2 AC 326, 386C-D I said it might be useful to consider were in need of being reformulated as they did not precisely fit the circumstances of this case. That however would be to read too much into what I was saying. The questions were not presented as a set of rules. They were no more than an indication of an approach which it might be useful to adopt when the interests of the individual are being balanced against those of society. Each case will vary, and they may be more helpful in some cases than others. But I would resist the suggestion that they need to be reformulated.
- I have had the advantage of reading in draft the speech of my noble and learned friend Lord Bingham of Cornhill. For the reasons he has given, I too would allow this appeal.
- I have had the advantage of reading in draft the judgment of my noble and learned friend Lord Bingham of Cornhill. I agree with it, and for the reasons which he gives I too would allow this appeal.
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