HM Revenue & Customs v Chott

Section 43(1) of the Drug Trafficking Act 1994 confers a discretion to forfeit cash, rather than imposing an automatic obligation. The discretion must, however, be exercised reasonably, on a proper consideration of all the evidence and an accurate understanding of the statutory principles.

Cash may be forfeited where it was intended by any person for use in drug trafficking, even if part of it was advanced by an innocent person for an apparently legitimate transaction. The court must consider the statutory test and the evidence relating to the whole sum. Evidence is not properly treated as unchallenged merely because it was admitted in a statement where the surrounding material placed it in issue.

HM Revenue and Customs appealed by way of case stated from the decision of Hillingdon Magistrates’ Court concerning £24,580 seized from Gary Ullah Chott at Heathrow Airport. The magistrates found that the money was intended for use in drug trafficking, but ordered forfeiture of only £10,000 and directed that £14,000 be returned to two alleged owners.

The magistrates’ stated case asked whether they were entitled to return part of the money and whether they were correct to take account of Mr Grant’s statement as unchallenged evidence. The Administrative Court had to determine the proper scope of the forfeiture discretion under section 43(1) of the Drug Trafficking Act 1994 and whether the magistrates had applied the evidence and legal principles correctly.

1. Appeal allowed. The magistrates’ decision was quashed, and an order forfeiting the whole of the £24,580 was substituted.
2. Section 43(1) of the Drug Trafficking Act 1994 gives a magistrates’ court a power, not an invariable duty, to order forfeiture. The issue was whether the magistrates could reasonably decline to exercise that power after properly considering the facts and applying the correct legal principles.
3. The statutory condition is satisfied where the cash directly or indirectly represents proceeds of drug trafficking or is intended by any person for use in drug trafficking. As explained in George Thomas v HM Customs and Excise CO/1297/94, money provided by a person for what he believes to be a legitimate business venture may nevertheless be liable to forfeiture where the recipient intended it to be used for drug trafficking.
4. The magistrates found in the stated case that the money was intended for use in drug trafficking. Their failure to refer to use of the money in their written reasons did not alter that finding, which was consistent with their oral reasons and the evidence.
5. The magistrates wrongly treated Mr Grant’s statement as agreed or unchallenged. The correspondence and inconsistencies in the account placed it in issue. Giving proper weight to that evidence, the drug contamination evidence and the other circumstances, no reasonable bench could have declined to exercise the section 43 power in respect of the whole sum.
6. The answer to both questions in the stated case was no. The appeal was allowed and the appellant received its costs in the magistrates’ court; no costs were sought for the Administrative Court hearing.

• High Court (Administrative Court): [2005] EWHC 2641 (Admin) allowed the appeal by way of case stated, quashed the magistrates’ decision and substituted an order forfeiting the whole sum.
• Hillingdon Magistrates’ Court: ordered forfeiture of £10,000 and directed the return of £14,000.