Sandhu v Chief Constable of the West Midlands Police

Forfeiture of cash under Proceeds of Crime Act 2002, section 298(2)(b), concerns cash intended for use in unlawful conduct. It is legally distinct from forfeiture under section 298(2)(a), which concerns recoverable property. The requirement in section 242(2)(b) to identify a class of unlawful conduct applies to the first limb and does not govern the second. For the second limb, the authority need not identify the precise type of predicate crime where the circumstances give rise to an irresistible inference that the cash derives from crime and the intended use would constitute money laundering. The statutory difference between the limbs is not impermissibly irrational. Evidence of an earlier cash seizure and return may be considered as part of the surrounding financial circumstances.

Cash of £54,000 was seized from the appellant. A magistrates’ court ordered forfeiture under section 298(2)(b) of the Proceeds of Crime Act 2002 on the basis that the cash had an unknown criminal origin and was intended for future concealment, transfer or conversion. The Crown Court at Birmingham dismissed the appellant’s appeal on 17 January 2019.

On appeal by way of case stated, the issues were whether the authority had to prove the class of predicate crime under section 298(2)(b), whether the test was the same under both limbs of section 298(2), and whether the Crown Court could consider the fact of an earlier cash seizure which had been resolved in the appellant’s favour.

1. Prior seizure evidence. The Crown Court was entitled to consider the fact that £85,989 had previously been seized from a bank account and later returned. The appellant had relied on that money in explaining the £54,000, and the earlier seizure formed part of the overall financial circumstances. Its return did not establish that it had an innocent origin.
2. Separate statutory limbs. Section 242(2)(b) defines “property obtained through unlawful conduct” for Part 5. It therefore bears on the first limb of section 298(2), under which the authority must establish that the cash was obtained through conduct of one of a number of kinds, each unlawful. The decision in Angus v UK Border Authority [2011] EWHC 461 (Admin) was confined to that situation. It did not govern an application under the second limb.
3. Second limb. The court approved the analysis in Fletcher v Chief Constable of Leicestershire Constabulary [2013] EWHC 3357 (Admin). Under section 298(2)(b), the question is whether the cash is intended for use in unlawful conduct. Applying R v Anwoir and others [2008] EWCA Crim 1354, it is unnecessary to identify the precise type of crime from which the property was acquired where the circumstances give rise to an irresistible inference that it could only derive from crime.
4. The Crown Court’s findings established, on the balance of probabilities, that the cash came from criminal activity and that the appellant intended to conceal, transfer or convert it. Its intended use would therefore constitute a money laundering offence and unlawful conduct. All elements of section 298(2)(b) were satisfied.
5. The different burdens arising under the two limbs were the inescapable result of the statutory language and consistent with Parliament’s intention. The appeal was dismissed and all three questions posed by the Crown Court were answered “No”.

• Crown Court at Birmingham: dismissed the appellant’s appeal against the magistrates’ forfeiture order on 17 January 2019.
• High Court (Administrative Court): answered all three questions in the negative and dismissed the appeal by way of case stated.