Secretary of State for the Home Department v Tuncel & Anor

Forfeiture of cash under section 298(2) of the Proceeds of Crime Act 2002 does not require proof that the original seizure was supported by reasonable grounds for suspicion. The statutory tests for seizure and detention are distinct from the test for forfeiture. An allegedly unlawful seizure does not prevent forfeiture unless the statutory scheme makes lawful seizure a condition of the forfeiture power. In civil forfeiture proceedings, a submission of no case to answer requires the defendant to elect not to call evidence. A court should not rule on that issue after evidence has been called from the defendant or without giving the required opportunity to elect.

Customs officers seized £50,000 from two travellers under section 294(1) of the Proceeds of Crime Act 2002. The cash was detained and later forfeiture was ordered by the magistrates’ court under section 298(2). On appeal, the Crown Court raised of its own motion whether forfeiture required proof that the officers had reasonable grounds for suspicion when the cash was seized. It ruled that the respondents had no case to answer and stated two questions for the High Court.

The central issues were whether reasonable suspicion at the time of seizure was a condition precedent to forfeiture, and whether the Crown Court had properly disposed of the merits and the respondents’ submission of no case to answer.

1. Statutory construction. The appeal was allowed on the legal issue. The answers to both questions stated by the Crown Court were “No”. Section 298(2) of the Proceeds of Crime Act 2002 requires the court to be satisfied that the cash is recoverable property or is intended for use in unlawful conduct. It contains no additional requirement that, when the cash was seized, the seizing officer had reasonable grounds for suspicion.
2. The requirements in sections 294(1) and 295(1) govern seizure and initial detention before the court has considered forfeiture. They should not be read into section 298(2). The statutory scheme provides protection against seizure on a whim through the requirement of reasonable suspicion, while forfeiture requires prior judicial satisfaction of unlawful provenance or intended use. There is no general doctrine preventing reliance on the fruits of an unlawful seizure where the statutory scheme does not make forfeiture dependent on lawful seizure. The reasoning in R (on the application of Hoverspeed Ltd) v Commissioners of Customs and Excise [2003] QB 1041 supported that conclusion.
3. Authorities and proof. Muneka v Commissioners of Customs and Excise [2005] EWHC 495 (Admin) did not support the Crown Court’s approach. It held that inconsistencies, lack of explanation and surrounding facts could establish the statutory test on the balance of probabilities without shifting the legal burden of proof. The factual distinction relied on by the Crown Court was immaterial. The reasoning in Director of the Assets Recovery Agency v Green [2005] EWHC 3168 (Admin) did not establish a reasonable-suspicion precondition, although it supported the need to identify the kind of unlawful conduct involved where possible. The later clarification in Angus v UKBA [2011] EWHC 461 (Admin) was relevant to the identification of unlawful conduct.
4. No case to answer and remission. These were civil proceedings. Under the approach explained by Mance LJ in Boyce v Wyatt Engineering [2001] EWCA Civ 692, a defendant seeking a ruling on no case to answer must elect not to call evidence if the ruling is adverse. The respondents had not made that election, evidence had been called on behalf of one respondent, and their witness statements had been read. The Crown Court therefore should not have ruled that they had no case to answer.
5. The determination that the respondents had no case to answer was set aside. The case was remitted to the Crown Court to continue the hearing in light of this judgment. If the original bench could not be reconvened, a rehearing before a different bench was required. The Crown Court was to decide whether to admit further evidence concerning the alleged supply of drugs.

• High Court (Administrative Court): The appeal by way of case stated was allowed. The Crown Court’s determination that the respondents had no case to answer was set aside, and the matter was remitted for continuation of the hearing.
• Crown Court: On appeal from the magistrates’ court, the Crown Court raised the reasonable-suspicion issue of its own motion, ruled that the respondents had no case to answer, and stated two questions for the High Court.
• Magistrates’ court: Ordered forfeiture of the cash under section 298(2) of the Proceeds of Crime Act 2002.