The Chief Constable of Lincolnshire Police, R (on the application of) v Lincoln Magistrates' Court

MR JUSTICE EYRE:

1. On 8 th October 2024, the Lincoln Magistrates made orders to the following effect. First, they refused the Claimant’s application, under section 295 of the Proceeds of Crime Act of 2002 (“the Act”) for an extension of time to detain seized cash. The Claimant makes no challenge to that decision. Second, the Magistrates ordered the return of seized cash to the Interested Party, Mrs Krishna Sharma. The Claimant challenges that order for return. The Defendant (the Magistrates’ Court) has not taken part in these proceedings, save for filing an Acknowledgement of Service and providing notes of the hearing.

2. The Magistrates and the Interested Party contend that the order for the return of the cash was properly made under section 297 of the Act. The Claimant contends that the order was irrational and unlawful or unfair in the following respects: i) That no application under s297 was made by the Interested Party. ii) That there was no power for the Magistrates to waive the requirement as to the form in which such an application should be made, such requirements being laid down in The Magistrates’ Courts (Detention and Forfeiture of Cash) Rules 2002 (“the Rules”). iii) Alternatively, if there was such a power, that it was unreasonable and/or unfair and unjust for the requirements to be waived in the circumstances of this case.

3. The Interested Party’s response is to say that such an application under the Act was made; that the Court had power to waive strict procedural compliance with the Rules; and that there was neither unfairness nor irrationality. The Issues.

4. It follows that the issues to be considered are: i) An interpretation of what happened is required. Was there an application made under s297 of the Act? ii) Whether such an application (if made) was invalid or its consideration by the Magistrates unlawful because of an absence of strict compliance with the requirements of the Rules Putting it another way, is compliance with the particular requirement of the Rules a bright-line standard such that absence of compliance invalidates the application? Or can there be validity, provided that there has been substantial compliance? That is really the other side of the coin of the waiver point, as I will explain, in due course. iii) Whether, if an application was made and was not necessarily or inherently invalid through non-compliance with the Rules, it was irrational or unjust for the Magistrates to treat the particular application as being a valid and substantially compliant application. That will involve the consideration of the circumstances and of the asserted prejudice to the Claimant.

5. There is a dispute about the interpretation of the dealings at the Magistrates’ Court. At one point, it was being suggested (on behalf of the Interested Party) that the Claimant had agreed to waive the requirement of written notice. The Interested Party no longer suggests there was an express agreement to that effect.

6. Jay J refused permission on paper. I gave permission, on 15 th July 2025, following the oral renewal of the application. I also gave permission for oral evidence, in light of the dispute (as there was at that stage) as to whether there had been an agreement to waive the requirements I heard oral evidence from Karl Meakin, the solicitor advocate, who had acted for the Claimant at the hearing, and Abbas Lakha KC who had appeared for the Interested Party.

7. I make clear at the outset that I am satisfied that in their evidence both of those gentlemen were seeking to give their honest recollection as to what happened at a hearing now 14 months ago. I will deal later with the differences in their evidence. The Legislative Framework.

8. The relevant provisions are in Part 5 of the Act. The general purpose of that part of the Act is set out in section 240, which provides: “(1) This Part has effect for the purposes of— (a) enabling the enforcement authority to recover, in civil proceedings before the High Court or Court of Session, property which is, or represents, property obtained through unlawful conduct, (b) enabling property which is, or represents, property obtained through unlawful conduct, or which is intended to be used in unlawful conduct, to be forfeited in civil proceedings before a Magistrates’ court…and, in certain circumstances, to be forfeited by the giving of a notice.”

9. Recoverable property is defined at section 304 and following, and for current purposes, it is sufficient to quote s304(1) which says that: “(1) Property obtained through unlawful conduct is recoverable property.”

10. Section 294 of the Act, so far as is material, provides as follows: “(1) An officer of Revenue and Customs, a constable, an SFO officer, or an accredited financial investigator may seize any cash if he has reasonable grounds for suspecting that it is— (a) recoverable property, or (b) intended by any person for use in unlawful conduct.”

11. Section 295 then deals with the detention of seized cash. Subsection (1) provides that: “(1) While…[a] constable…continues to have reasonable grounds for his suspicion, cash seized under s294 may be detained initially for a period of 48 hours. (2) The period for which the cash or any part of it may be detained may be extended by an order made by a Magistrates’ court…but the order may not authorise the detention of any of the cash— (a) beyond…the period of six months…[or] (b) in the case of any further order…beyond the end of…two years beginning with the date of the first order. (4) An application…under subs (2) [that is for an extension]— (a) …may be made by…a constable [and others]… (b) … and the court…may make the order if satisfied, in relation to any cash to be further detained, that either of the following conditions is met. (5) The first condition is that there are reasonable grounds for suspecting that the cash is recoverable property and that either— (a) its continued detention is justified while its derivation is further investigated or consideration is given to bringing (in the United Kingdom or elsewhere) proceedings against any person for an offence with which the cash is connected, or (b) proceedings against any person for an offence with which the cash is connected have been started and have not been concluded. (6) The second condition is that there are reasonable grounds for suspecting that the cash is intended to be used in unlawful conduct and that either— (a) its continued detention is justified while its intended use is further investigated or consideration is given to bringing…proceedings against any person for an offence with which the cash is connected, or (b) proceedings against any person for an offence with which the cash is connected have been started and have not been concluded.”

12. Subsection 8 provides that notice must be given to persons affected by an order extending the seizure.

13. Section 297 deals with the release of detained cash, and provides that: “(1) …[it] applies while any cash is detained under s295. (2) A Magistrates’ court…may direct the release of the whole or any part of the cash if the following condition is met. (3) The condition is that the court…is satisfied, on an application by the person from whom the cash was seized, that the conditions in s295 for the detention of the cash are no longer met in relation to the cash to be released.”

14. Rule 6 of the Rules provides, as follows: “(1) An application under s297(3)…for the release of detained cash [must] be made in writing and sent to…the court before which the applicant wishes to make the application. (3) The…[court] shall send a copy of the application to— (b) the chief officer of the police force to which the constable belongs … (7) A direction under…s297(2) …shall provide for the release of the cash within seven days of the date of the making of the order or direction, or such longer period as, with the agreement of the applicant, may be specified, except that cash shall not be released whilst s298(4) of the Act applies.”

15. Then the material parts of Rule 11 provide thus: “(2) Subject to the foregoing provisions of these Rules, proceedings on such an application [that is an application under s297] shall be regulated in the same manner as proceedings on a complaint, and accordingly for the purposes of these Rules, the application shall be deemed to be a complaint, the applicant a complainant... (3) At the hearing of an application under Chapter 3 of Part 5 of the Act, the court shall require the matters contained in the application to be sworn by the applicant under oath, may require the applicant to answer any questions under oath and may require any response from the respondent to the application to be made under oath.”

16. The burden of proof on a s297 application rests on the party seeking an order under s297 and the position in that regard was explained by Mackay J in the Divisional Court case of R (Chief Constable of Greater Manchester) v City of Salford Magistrates’ Court) [2008] EWHC 1651 (Admin) . At [27] Mackay J referred to those wishing to obtain release of the funds, and said: “ If they wish to do so at the interim stage then they have a burden of proof to discharge to the civil standard, to show that there is no basis in law on which the money could reasonably be suspected of having been obtained through criminal conduct.”

17. Then, at [29]: “I accept the argument that s297 (3) puts the burden on him [that is the applicant] in this connection, to the civil standard, to prove what I have set out at paragraph 27 above. It is to my mind significant that at the forfeiture stage the position is different; there is then a clear burden on the applicant constable to satisfy the court of the matters in s242…”

18. Typically, a s297 application will be made after a s295 order has been made. The structure of the Act is that a s295 application for an extension has to be made within 48 hours of the initial seizure. The test is whether there are reasonable grounds for suspicion of the matters set out in s295, together with the other requirements in the first or second conditions S297 typically will arise when a person is later seeking the return of detained cash.

19. Thus, in the circumstances of the Salford case, the s295 order was made on 14 th November 2007, and the s297 application was being made on 13 th February 2008. However, that is not the invariable position, and a s297 application can be heard at the same time as a s295 application for extension and detention. Thus, in Salford the 297 application was being heard at the same time as an application for an extension under s295 of the already extended detention.

20. Pitchford J (as he then was) addressed these matters in the case of R (Chief Constable of Lancashire) v Burnley Magistrates [2003] EWHC 3308 (Admin) . In that case, the issue was whether it was an abuse of process for the Chief Constable to make a s298 application where a s295 application had been refused, as I will explain in due course.

21. However, it is of note that Pitchford J envisaged an order under s297 being made at the same hearing as and after a refusal of a s295 application. Thus, at [15] he said that he regarded the terms of the justices’ decision as critical adding: “They had a power to order return of the cash before the expiration of the 48-hour period, but they did not exercise it.”

22. Then at [32] to [33], His Lordship set out the provisions of s297, having said at the end of [31] that: “(4) Had the justices wished, they could on 9th January have brought an end to the period of detention under…s295…”

23. At [33] he said: “Subsection (1) [that is of s297] must, of course, embrace a detention under…s295(1). It follows…had the Justices been asked to do so and had they thought it right to do so, they could have ordered the release of the cash, thus arguably bringing to an end the 48-hour detention under…s295…and the right to apply for forfeiture.”

24. Pitchford J next considered the effect of the seven-day period, to which I will turn in a little while, for the return of funds, but then added: “…the Justices quite clearly did not exercise their power under…297(1) and the 48-hour period continued to run.”

25. It follows, therefore, that certainly Pitchford J envisaged a s297 order being made before the end of the 48-hour period under s294 and s295. There is no reason, in principle, why such an order cannot be made.

26. If a s297 order is not made before the end of the 48-hour period, then that period continues, even if an extension application is refused. The refusal of a s295 application for an extension does not bring the 48-hour period to an end.

27. That means that for a person claiming money which has been detained to recover that money within the 48-hour period there has to be an order under s297.

28. Returning to the statutory provisions, it is appropriate to have regard to the provisions of section 298. That provides for forfeiture and says that: “(1) While cash is detained under…ss295, 297C or 297D, an application for the forfeiture of the whole or any part of it may be made— (a) to a Magistrates’ court by…[the various parties, including] a constable… (b) … (2) The court…may order the forfeiture of the cash or any part of it if satisfied that the cash or part— (a) is recoverable property, or (b) is intended by any person for use in unlawful conduct. (4) Where an application for the forfeiture of any cash is made under this s, the cash is to be detained (and may not be released under any power conferred by this Chapter) until any proceedings in pursuance of the application (including any proceedings on appeal) are concluded.”

29. As I have already indicated, in Burnley , Pitchford J concluded that where an extension of time under s295 has been refused it was not an abuse of process for a s298 application to be made within the 48-hour period. The s298 application must, however, be made while the cash is still detained. An order under s297 ends the detention and so precludes a s298 application, subject to a potential gloss, which I will deal with in a little while.

30. Mr Hone, who appeared for the Claimant, said that there is a practice of whereby prosecutors, to some extent, keep their cards up their sleeves and do not put their full evidence before the Court on a s295 extension application. Mr Hone says that is to avoid forewarning a criminal or a person involved in organised crime, or related nefarious activity of the information which the prosecution have. That is with a view to avoiding the advance preparation of explanations – on Mr Hone’s hypothesis false explanations – for the possession of the money. It is possible that might be a legitimate course in some circumstances I am not ruling (one way or another) on the legitimacy of that course in all circumstances However, the adoption of such a course does involve the prosecuting authority taking a deliberate risk. It involves taking the risk of a s295 application, which would otherwise have been successful if the full information had been put forward, not succeeding.

31. Moreover, considerable care will be needed if that course is taken to avoid misleading the Court. If an order under 295 for an extension of time is being sought it is incumbent on the prosecuting authorities to give the Court the full picture. I have considerable reservation as to the extent to which it is legitimate deliberately to give the Court a partial picture. Such a course runs the risk that the material being kept back is material which, in fact, would operate as a factor against a s295 extension. I am not suggesting that those keeping material back in this way believe that the material would militate against a s295 extension. Nonetheless, t it might well be that the Court would see the material differently and would regard the material as detracting from the case for an extension. It follows that there is a risk of the Court being misled in such circumstances.

32. Even without that, there is a risk of a s295 application which would otherwise been successful being rejected and a risk of a s298 application being forestalled by a s297 order. The latter is what the Interested Party says happened in this case.

33. The requirements under s298 are more rigorous than those under s295. Under s295, reasonable grounds for suspicion have to be shown, albeit the supplementary elements are also required. Conversely, under s298 the Magistrates have to be satisfied that the money in question is recoverable property or intended for use in unlawful conduct.

34. It follows that if a prosecutor fails to obtain a s295 order, because there are no reasonable grounds for suspecting that the money is recoverable property or intended for use in unlawful conduct the prosecutor will not get an order under s298, unless there is further evidence that is put forward in support of that application. As a matter of simple logic, a court – having found there are no reasonable grounds for suspicion will not on the same material be satisfied the property is recoverable property.

35. Mr Hone emphasised the differences between the burdens of proof on ss295 and 297. The requirement is the same in both cases, subject to the supplementary elements in s295 but in s295 the burden is on the prosecutor to show reasonable grounds while in s297 the applicant has to prove there are not reasonable grounds, and the supplementary elements are not present.

36. Mr Hone sought to convince me that that was a significant difference. Underlying Mr Hone’s submission is the point that an applicant under s297 might prove to be an unimpressive witness when being cross-examined. In reality, Mr Hone is submitting that the significance is that if an applicant is forced to answer questions then the weakness of the applicant’s explanation for having the money will be shown and the Magistrates will be able to see through the implausibility of the contentions being put forward.

37. There is some force in this point but it has rather less force than Mr Hone suggested for the following reasons. In many cases, a s297 application will be made after a s295 order has already been made. In such circumstances it makes sense for the burden to be on applicant to show the s295 grounds are no longer made out. However, as I have already indicated – and as Burnley and Salford show – a s295 application and a s297 application can be heard at the same hearing. As a matter of logic, there could be a conclusion that the prosecution had failed to prove reasonable grounds under s295 but the applicant had also failed to prove that there are not reasonable grounds under s297. In the real world, however, that would be a wholly artificial and unrealistic outcome. As a matter of practicality, if magistrates conclude that the prosecution have not shown there are reasonable grounds for suspicion then they will not conclude that the applicant has failed to prove that there are not reasonable grounds In such circumstances the applicant will be able to point to the magistrates’ logically prior finding that the s295 grounds are not made out as a potent indication that there are not, in fact, reasonable grounds The Factual Background.

38. Against that legislative framework, I turn to the background history of this matter.

39. The Interested Party is now aged 82. She owns a number of properties in Lincoln.

40. On 21 st March 2023, in a course of a criminal investigation into organised crime and the making of money from drug production, a search warrant was executed at the Interested Party’s home. Police officers seized £653,860 in cash and a modest amount of Hungarian currency at that property. The officers were engaged in an investigation into the activities of an Albanian organised crime group. A number of properties owned by the Interested Party and which had been let to tenants were found to have contained cannabis factories A total of seven of the properties owned by the Interested Party (out of rather greater number which she owned) were found to contain cannabis factories

41. The police then turned to an investigation into the Interested Party. Their suspicions were based on: i) Her believed association with the crime group. ii) The cannabis factories. iii) The discrepancy between the amount of cash, which the Interested Party had said was at her home, and the amount which was seized. In interview the Interested Party had said that there had been something of the order of only about £6,000 at her home. iv) The differences between figures said to be the Interested Party’s rental income in one set of documents and in another. v) Underlying all of that the presence of over £650,000 in cash in the Interested Party’s home.

42. The investigation into the Interested Party continued but investigation concluded in October 2024 and the Interested Party was told then that she was not facing any criminal charges.

43. At 14:47 hours, on Friday 4 th October 2024, the cash was seized, under s294, and an extension application was made on 4 th October.

44. As 4 th October was a Friday the 48 hour period under s294 expired at 14:47 on Tuesday 8 th October 2024.

45. The hearing before the Lincoln Magistrates was on 8 th October. I will address the circumstances of that hearing in detail shortly. To complete the history however, following the hearing the Claimant applied to the Magistrates for reconsideration of the decision; for clarification of the terms on which the order had been mad; and for a Forfeiture Order under s298.

46. On 5 th December 2024, the Deputy District Judge said that the October order had been made under s297. He ruled that the Claimant was out of time to make a s298 application because the 297 order had forestalled such an application by providing for the immediate release of the funds

47. The Claimant does not challenge the s295 refusal of the extension of time nor the finding that the 298 application was precluded by the s297 order. He does challenge the 297 order.

48. The fact that the Claimant is not challenging the decision that the s298 application was precluded once the s297 order was made means that it is not necessary for me to consider the effect of subrule (7) of Rule 6 which has provision for payment after seven days, nor the dicta of Pitchford J, in Burnley at [33], about the effect of that seven-day period. The parties before me have proceeded on the footing that the order which was made on 8 th October 2024 was for an immediate release of the funds The hearing on 8 th October 2024

49. It is no longer suggested that the Claimant expressly agreed to the waiver of the procedural failings in relation to s297.

50. The evidence and the attendance notes are relevant to three points: i) Whether the Interested Party was asking the Magistrates for immediate release of the funds and so invoking the s297 power albeit without doing so expressly. ii) The basis for the Magistrates’ decision. iii) Whether the Magistrates made an order under s297.

51. I have already recorded my assessment that both Karl Meakin and Abbas Lakha KC were giving their honest recollection of matters. Both rightly accepted they did not have a note of what they, themselves, had said or answers they were given while they were on their feet addressing the court or engaging in the examination of Miss Woods.

52. Not only was the hearing a short one but it was conducted at short notice. The seizure of the cash was at 14:47 on Friday 4 th October The hearing was in the morning of Tuesday 8 th October.

53. Mr Lakha can only have been instructed at some point after 14:47 on the Friday afternoon. He said, and this was not disputed, that he was drafting his skeleton argument on the evening of 7 th October, having been occupied with other matters during the course of 7 th October.

54. To compound Mr Lakha’s difficulties he was delayed in travelling to court. There were difficulties with trains and he had to change his arrangements and to drive to court rather than travelling by train. Mr Lakha had contacted the court to say that he was delayed and arranged for the start of the hearing to be delayed.

55. Mr Meakin was instructed with even less notice. He is an employed solicitor, working for East Midlands Legal Services. That is a body which provides legal services to police forces in the East Midlands on an instruction basis. By chance Mr Meakin happened to be at Lincoln Magistrates’ Court on the morning of 8 th October. He was appearing four domestic violence cases He received a message, that he was to be instructed in the current matter at 10:19 when he was in court engaged on those other cases. He replied at 10:46, saying that he was still dealing with other matters but would turn his attention to the current issue when he had finished the hearings in those cases. Therefore, it was only after he had finished with those cases, which was at some point after 10:46, that Mr Meakin was able to take instructions on this matter which was entirely fresh to him. Mr Meakin was given Mr Lakha’s skeleton argument when Mr Lakha arrived at court.

56. It follows that both Mr Lakha and Mr Meakin were addressing this matter at short notice. In Mr Meakin’s case he was doing so at extremely short notice. It is not surprising, in those circumstances, that their positions were not set out in the detail with which they would have been if there had been time for more considered and detailed reflection. It is also relevant to note that Mr Meakin said, and I accept, that things became rather chaotic at the end of the Magistrates’ Court hearing.

57. It is, of course, also the position that the Magistrates were dealing with the matter under the pressure of time. Unless a decision was made by 14:47 the detention of the cash would come to an end automatically.

58. I have various attendance notes and responses about the hearing. There are differences between them on matters of emphasis and on unimportant details. The differences are not surprising given the brevity and nature of the hearing.

59. The following points are of note in relation to timing: i) The hearing began at 12:15. ii) At 12:20, after a very brief opening by Mr Meakin, the Magistrates retired to read the s295 application (which Miss Woods, the financial investigator, had prepared) and Mr Lakha’s skeleton argument. iii) The Magistrates returned to court at 12:40. Miss Woods then gave evidence. She confirmed the statement which she had provided and was cross-examined by Mr Lakha. Mr Meakin and Mr Lakha then made closing submissions. iv) The Magistrates retired with their legal adviser, at 13:05 and returned at 13:15 when they announced their decision.

60. In that period, they had had Mr Lakha’s skeleton argument. At section 2 of that skeleton argument, Mr Lakha had set out the background. In the concluding bullet point of that section he said: “In total, Lincolnshire Police have, therefore, been investigating the matter for over 18 months, in which time Mrs Sharma was interviewed at length, in which she provided her full account. Her accountants handed over all her accounting records Her conveyancing solicitors provided all the files relating to her other various property purchases and sales over the last 40 years.”

61. The legal framework was set out extremely shortly with a reference only to s295 and to the fundamental importance of protection of property rights.

62. Mr Lakha then set out the balance of his argument and, in the section headed, “Conclusion and Relief Sought”, he said: “In light of the Lincolnshire Police’s failure to substantiate their claims, despite an 18-month-plus investigation, the Respondent respectfully requests the Court deny the application for detention and order the immediate release of the funds.”

63. There then followed an invocation of fundamental property rights as well as a reference to the Interested Party’s human rights.

64. Mr Meakin made a note of Mr Lakha’s oral submissions records they concluded thus: “He submitted the Lincolnshire Police have failed to establish that there are reasonable grounds to suspect, ‘dirty money’. Not a dot of evidence on which the Court could reasonably suspect that. It has been long enough. This lady should have her money back now.”

65. After hearing the submissions, the Magistrates retired. At paragraphs 7 to 9 of her attendance note Miss Woods sets out the following account of what happened on the return of the Magistrates: “7. On returning, the Chair advised the courtroom of their decision [she says this was approximately 13:20], advising that they had considered the application with the assistance of a legal clerk and Stone’s , due to it not being a matter encountered often. The 295(2) order was refused, on the basis that there was insufficient grounds to suspect the cash to be recoverable property. But had the grounds been present, there was no justification for the period of further detention. They ordered the cash to be returned to the Respondent.

8. Mr Meakin advised the Court that whilst it was a matter for Listings, the Applicant would be submitting an application for the forfeiture of the cash imminently and within the initial 48-hour period. This was questioned by the legal clerk, who advised that any application for forfeiture could not be made due to the cash no longer being detained, as the Bench had ordered its release.

9. This was questioned by Mr Meakin, that the application was for the continued detention of the cash via Lincolnshire Police. There had been no application under s297 by the Respondent. Mr Lakha interjected, by advising that during his rebuttal argument, he had ended with asking the Bench to order the release of funds The Chair of the Bench also interjected, advising that in making their decision, their understanding was that they had been asked to consider ordering the release of the cash, which they agreed, and the hearing then concluded.”

66. Miss Woods then goes on to say that the s298 application was sent to the Magistrates Court at 13:47. There is some slight issue between the parties as to that timing but the difference is not material for the current purposes

67. The Acknowledgement of Service by the Defendant set out the court’s record of what had happened. However, before I turn to that I will note that Mr Meakin had emailed the Magistrates’ Court and received this response, on 11 th October 2024: “Please see the note below, the notes of the application being refused, from the legal adviser.”

68. The notes were then quoted in these terms: “Application refused. Reason: Lincolnshire Police have had 18 months to investigate and bring proceedings and have not done so. Not satisfied there are reasonable grounds to suspect this is recoverable property obtained through unlawful conduct, not a view continued detention justified, nor is there a reasonable suspicion that it is intended for unlawful use. Detained cash to be released in whole, s297(2) of Proceeds of Crime Act, having heard oral application from Abbas Lakha, King’s Counsel, under s297(3) of POCA.”

69. The Acknowledgement of Service reflects the note prepared in rather more detail by the legal adviser. It referred to Mr Lakha’s skeleton argument and then said: “Sworn testimony was heard from Miss Woods The Court heard there had been no further action relating to the associated criminal investigation. The application was resisted by Mr Lakha, on behalf of Mrs Sharma. The application was refused, as the Court were not satisfied there were reasonable grounds to suspect the cash was recoverable property obtained through unlawful conduct. The reasons given by the Court were that Lincolnshire Police have had 18 months to investigate and bring proceedings and have not done so, "We are not satisfied there are reasonable grounds to suspect this is recoverable property obtained through unlawful conduct. We are not of the view that continued detention is justified, nor is there a reasonable suspicion that it is intended for unlawful use".”

70. That was a reference to the application under s295 but the Acknowledgement of Service went on to say: “An oral application was made by Mr Lakha, on behalf of Mrs Sharma, for release of the cash under 297(3). The Magistrates agreed to waive the requirement for the application to be in writing, as they can regulate their own proceedings, because they were represented as to the police in attendance and they had an opportunity to be heard. The Court was satisfied that the conditions under s295 for the detention of cash were no longer met in relation to the cash to be released, ordered the release of the cash forthwith and for it to be returned under s297. Mr Meakin then sought to make an oral application for forfeiture under 298, before the same Magistrates, stating the Form G was lodged at 13:47, but this was not before the Court. This application was refused as the cash was deemed no longer to be detained by the police having been released. It was noted that the same test would have applied to a forfeiture application as the test the Magistrates had already ruled on.”

71. Mr Lakha gave evidence as to what his understanding had been when he was making his oral submissions and drafting his skeleton argument. He said that he had the decision in Burnley in mind and, in particular, the scope for a s298 application to be made within the 48-hour period. He said that because of that he had been seeking two things: the defeat of the extension application and an order for the immediate release of the funds

72. Mr Meakin said his understanding of matters was that the sole issue was that of the continuation or otherwise of the detention under s295. He said that until he heard the Magistrates’ decision he did not believe the Magistrates were being asked to make an order under s297. He interpreted Mr Lakha’s references in his oral submissions to “now”, and in his skeleton to the “immediate release” of the funds as being references to what the position would be if the 48-hour detention period expired without being extended. He made the point that this would happen in just over an hour after the conclusion of the hearing.

73. Finding as to the Hearing on 8 th October 2024.

74. It is against that background that I set out my conclusion as to what was being done by the parties and, in particular, by the Magistrates at the hearing on 8 th October.

75. First, what was the basis for the s295 decision? The Magistrates concluded that reasonable grounds for suspecting that the cash was recoverable property had not been made out. That was a clear, distinct ground for their decision and was logically prior to the alternative ground that they were not satisfied that the continued detention was justified under s295(a) or (b). I am satisfied that Miss Woods’ note is accurate in recording the Magistrates as providing a primary reason, namely the lack of reasonable grounds for suspicion, and then an alternative reason, namely that even if there were reasonable grounds the continuation was not justified in light of the period of time in the particular circumstances of the case.

76. Next, was the Interested Party seeking an order under s297? I am satisfied that the Interested Party was seeking such an order. Mr Lakha was asking for “immediate release” of the funds and for the funds to be returned to the Interested Party “now”. He was doing that as a separate exercise from resisting the extension. The words “immediate release” and “now” must be a reference to the release of the funds rather than to the resistance to extension of the detention. That is because an order simply refusing an extension would not lead to the immediate release of the funds It is significant is that this was the understanding of the Chair of the Bench and is recorded in the note of the Magistrates’ reasons

77. In his evidence before me Mr Meakin accepted that there could well have been an element of the parties having been at cross purposes. It is of note that Mr Meakin had been dropped in this matter at very short notice. I am conscious that Mr Lakha’s skeleton argument made no express reference to s297. Nonetheless, I am satisfied that Mr Meakin was incorrect in believing that the Interested Party was not seeking the immediate release of the funds and was simply seeking to resist the extension of the detention.

78. Mr Lakha did have Burnley in mind and was aware of the risk of the forfeiture application being made before 14:47 if the funds were not released. I take into account the fact that Mr Lakha’s awareness of the matter does not advance the position unless it was articulated either in the skeleton or in his written submissions. I am, however, satisfied that it was so articulated.

79. It is right to note that there was no express reference by the Interested Party’s lawyers to s297. However, s297 of the Act was the only provision which gave the Magistrates’ Court the power to order the immediate release of the funds. In those circumstances the fact that the Interested Party did not refer to that section in terms is irrelevant. The Interested Party was asking the Court for the immediate release of the funds and so was asking the Court to exercise its power to order an immediate release. In doing so she was necessarily asking the Court to exercise its power under s297 because there was no other power that could be invoked.

80. The final question in this regard is whether the Magistrates were making an order under s297. There is no indication of the advice which they were given by the legal adviser. Nonetheless, it is clear that they were making an order under s297. First, that is because of the reasons I have already explained in relation to the Interested Party’s application. The fact is that s297 was the only provision giving power to order an immediate release. It follows that by ordering immediate release the Magistrates must have been purporting (at the very least) to exercise that power. Moreover, the notes say that they were exercising that power. Finally, when Mr Meakin said there had been no application under s297 the response of the Bench Chair was to say that the Court had been considering an application for immediate release.

81. That determines the questions of what happened at the hearing and of the provisions which were being invoked and under which the order was made. The Requirements for Validity of a s297 Application.

82. The next question is whether an application under s297 is necessarily invalid if it is not made in writing and/or supported by sworn evidence.

83. The approach to determining whether the requirements of rules 6 and 11 are such that a failure strictly to comply with them invalidates the application is that laid down by the House of Lords, in the case of R v Soneji [2005] UKHL 49, as explained by the Supreme Court decision in A1 Properties (Sunderland) v Tudor Studios [2024] UKSC 27 .

84. I have had regard to the judgments of Lords Steyn and Carswell in Soneji , at [15], [23], and [63] respectively and of Lords Briggs and Sales in the A1 case, at [57] to [65].

85. My understanding of the effect of that guidance is as follows. The court is not to engage in an attempt to characterize the relevant requirement as being either mandatory or directory. Instead, it is to engage in the construction of the particular statute or rule with a view to determining whether it operates, in the wording of Lords Briggs and Sales, “ strictly, as a bright line rule, so that any failure to comply with it invalidates the procedure which follows.” If the rule or statutory requirement does operate in that way, then there is no scope for waiver of the requirement nor for substantial compliance to be good enough. If the rule does not operate as a bright-line requirement it then becomes necessary to consider whether there has been substantial compliance in the particular case, and/or whether it is appropriate to waive the requirement. Substantial compliance and appropriateness of waiver are really different aspects of the same thing. A reference to substantial compliance is more apt when there is a step, such as serving a notice under an act or regulation, which by its service terminates an arrangement or compels another party to act in a particular way. Reference to waiver can be more apt to describe the situation where a court accepts and treats as valid an application which does not meet the strict requirements of the relevant rules. It matters little whether one describes the court as waiving a requirement or as accepting that the steps which have been taken are substantially compliant with the requirements of the rule. There is a logical distinction between those two positions but for practical purposes the difference is minimal.

86. The question of potential prejudice to the other party can be relevant at two stages in the process It is first relevant at the statutory construction stage where the court is considering whether the statutory rule or regulatory procedural requirement operates as a bright-line rule. The question of potential prejudice is relevant at that stage because if a failure to comply strictly with a particular requirement is inherently likely to cause prejudice to the other party that will be a potent factor pointing to the requirement being a bright-line rule.

87. Prejudice also comes into play at a second stage. If there is not a bright-line rule then the issue of whether there is prejudice in the particular circumstances will be a highly significant factor in determining whether there has been substantial compliance. A purported compliance where the failure to follow the strict requirements causes prejudice is unlikely to amount to substantial compliance. That is because such purported compliance will not achieve the objective which the requirement was intended to achieve.

88. I turn to the question of whether the requirements here, for the s297 application to be in writing and for there to be sworn evidence, are bright-line rules such that their absence was fatal to the invocation of s297 by, what is to be characterized in light of my decision as, an informal application under s297.

89. In favour of the Claimant's contention that those requirements are strict bright-line rules are the facts that rule 6(1) says that the application, “shall be made in writing” and rule 11(3) says that sworn evidence under oath, “shall be required”. Moreover, for the condition in s295 to be satisfied there have to be not just reasonable grounds for suspecting recoverable property but also fulfilment of the other requirements in the section. This point is relevant to the Claimant’s argument that prejudice can be caused if a s298 application is precluded by a s297 order made after an informal application. I note, however, that it will be a rare case where the Court can conclude there are reasonable grounds for suspecting that the property is recoverable property but not be satisfied that the other conditions have been met.

90. Notwithstanding those points I have concluded that the requirements in the Rules are not bright-line rules for the following reasons: i) The requirement for writing and for sworn evidence is a requirement set out in procedural rules not in the Act. There is a contrast, as Mr Normanton pointed out, between s295(8), in which the Act requires notice of the order to be given, and s297, which simply says an application could be made. ii) I am conscious of the general power of the Magistrates to control their procedure. Thus rule 3(a) of the Magistrates’ Court Rules places an emphasis on flexibility. However, the weight of this factor is markedly reduced by the fact that the power there is to vary directions not a power to vary the rules. iii) More significant is the fact the purpose of the requirement for the application to be in writing is to give notice of what is being contended and to enable the police and the Magistrates to know the argument which is being advanced. The purpose of the requirement for sworn evidence is so that any decision made by the Magistrates is based on evidence rather than on submission. Those objectives can be achieved, at least in some circumstances, without the application being in writing and without there being sworn evidence from the applicant. The circumstances of the current case are an example of that. Here, the Magistrates knew the Interested Party’s position from her approach to the Claimant’s s295 application. Her position had been set out in detail in the skeleton argument. The Magistrates had heard sworn evidence. That was the evidence of Miss Woods who had been subject to cross-examination. The Claimant's argument amounts to saying that the purpose of Rule 11 is to compel the applicant under a s297 application to commit him or herself to a position under oath or affirmation. Underlying that argument is the view that it will be possible for the contentions of an applicant to be undermined by a cross-examination. However, as Mr Normanton pointed out, the difficulty with that argument is that rule 11(3) gives the magistrates a discretion as to whether to require an applicant to answer questions under oath and to be cross-examined. In circumstances such as those here, where the magistrates have rejected the prosecution case and have concluded that there are no reasonable grounds for suspecting the cash is recoverable property, the magistrates are highly unlikely to exercise their discretion so as to require the applicant to then be cross-examined. I have already explained the limited importance I attach to Mr Hone’s argument about the burden of proof. In circumstances such as those here and in those circumstances, it is almost inconceivable that Magistrates would having rejected Miss Woods’ evidence then require that Mrs Sharma should then give evidence under oath. iv) A further factor is that a s297 application can be made in a number of markedly different circumstances It can be made after a s295 application has been granted for an extension. For example, that would be the case where, on the first of a particular month, an extension was granted and a s297 application is made a couple of months later. In such circumstances one can well see that it would be appropriate for there to be a written application. But a s297 application can be made, as was envisaged in Burnley (and as was the case in Salford ), as a counterpoint to a s295 application and at the same hearing as the determination of a s295 application. Very different considerations apply in those cases, and it is not necessarily appropriate to have a one size fits all requirement for applications invoking s297. v) Next, in the case of Burnley , Pitchford J seems to have envisaged a s297 application being made relatively informally; although, I accept, he was not addressing this point in terms. vi) The preceding factors indicate there will not always be prejudice from informality in the making of a s297 application. That is a significant factor against treating the requirement as a bright-line rule. If there is prejudice in a particular case that can be addressed in the particular case and can be a factor leading to a determination that there has not been substantial compliance in the case under consideration. To require a strict compliance, where there is no prejudice and where strict compliance does not further the purpose and objective of the statute, would be mere formalism. The Court should not interpret legislation as having that effect and as imposing formal rules without purpose unless driven to it by the wording of the provision in question. I am satisfied that I am not so driven here. vii) I also have regard to the purpose of this part of the Act as articulated in s 240. Ex hypothesi , a s297 application will only succeed if the magistrates conclude that there are no reasonable grounds for suspecting that there is recoverable property and that the other conditions are not satisfied. The force of this point is reduced by the fact that the court might be satisfied there are reasonable grounds for suspecting the property is recoverable property but not satisfied of the other elements but as noted above that is a highly artificial position, which will rarely occur.

91. I should add that I am not persuaded by the Claimant’s argument that there was prejudice from the effect of a s297 application stopping a s298 application. The Claimant’s argument is that there could be prejudice if a prosecutor is unable to bring a s298 application. I have already addressed the reservations I have about the practice, to which Mr Hone referred, of prosecutors keeping some of the available evidence up their sleeves on a s295 application so as to use that evidence in a s298 application. In any event, if that has happened, the prosecution should be in a position to say on the 297 application: “Well, we will be prejudiced if the court moves straight to a s297 application because we have evidence which we have not yet put before the court, and which shows matters in a different light”. One can anticipate that if that is done the court’s response might well not be sympathetic response. Nonetheless, if there is prejudice in those circumstances it can be invoked and the position considered. That is certainly not a prejudice which will arise in every case.

92. I have taken account of the fact that the s295 conditions may not be met even if there are reasonable grounds for believing the property is recoverable property because the other subsidiary requirements of s295 have not been satisfied. Conversely, a forfeiture application will succeed if it is established that the cash is recoverable property even if those other conditions are not fulfilled. However, the circumstances in which a prosecutor can show that there is recoverable property but in which the other s295 conditions are not met will be relatively rare. This is not an inherent prejudice which will necessarily follow from an informal s297 application.

93. There is no prospect of prejudice from the prosecution not being able to pursue forfeiture if the prosecution cannot show reasonable grounds for suspecting that the property is recoverable property. In that regard I will not repeat the points I have already made about the danger of keeping evidence up the prosecutor’s sleeve.

94. It follows that it is not a bright-line rule. The absence of a written application, confirmed on oath is not necessarily fatal to a s297 application. In many cases, an application which is not in writing or not confirmed on oath will not amount to substantial compliance with the requirements of the Rules. However, there will be cases where it is open to a court properly to conclude there has been substantial compliance and, if there has been, then the application can be treated as being validly made. Was there Substantial Compliance here?

95. I turn then to whether there was substantial compliance here, or rather whether it was rationally and lawfully open to the Magistrates, acting fairly, to conclude that there was substantial compliance or to waive the requirement of strict compliance.

96. The test is one of rationality and fairness. Were the Magistrates rationally able to conclude there had been substantial compliance? Was there unfairness to the Claimant in the Magistrates proceeding on the basis of treating the written skeleton argument and the oral submissions as an application under 297?

97. Answering those questions requires the Court now to look at the circumstances, as a whole, and to see if there was prejudice to the Claimant, or more strictly whether the Magistrates were acting unfairly or irrationally in concluding there was no prejudice.

98. The position here is that the investigation into the Interested Party had been under way since March of 2023. This is very different from a case where the seizure triggering the 48-hour period was the start of any police involvement with the Applicant. Miss Woods was the investigator who had been involved throughout. The Magistrates had considered the material that Miss Woods had put forward. They had heard her being cross-examined and answering the questions being put to her by Mr Lakha. They had heard the arguments which Mr Meakin and Mr Lakha had advanced. They had come to the conclusion that there were no reasonable grounds for suspecting that the cash was recoverable property. That decision is not challenged.

99. It may well be thought that that decision was a generous one to the Interested Party and it was arguably a decision that was hard on the Claimant. But it was made against the background of the decision not to charge the Interested Party after 18 months of investigation, and it is not being challenged.

100. It follows that the Claimant had put its full case as to the existence of reasonable grounds for suspicion and had been able to advance its arguments about s295. That case and those arguments had been rejected.

101. In the circumstances here, there was nothing more in the forfeiture application. The forfeiture application was made after the event and so cannot be relevant to the rationality or fairness of the Magistrates’ decision. Even so I do note that the forfeiture application repeated the material that had been put forward in support of the s295 application. This is not a case where the prosecutor was seeking to say, “Well, we failed on s295 but we have now got the silver bullet, which we have been holding up our sleeve and which we are now putting it into the chamber and firing.” The s298 application was premised on the same material as had been rejected on the s295 application.

102. The Magistrates, in the circumstances of this case, were entitled to conclude that there was nothing to be gained by putting off the s297 application to a separate hearing and requiring a formal s297 application. The absence of an opportunity to cross-examine the Interested Party was not in the particular circumstances of this case prejudicial to the Claimant. Mrs Sharma could have given a witness statement, in very short terms simply referring to the decision of the Magistrates to reject the s295 application and saying that decision was correct. It is unlikely in the extreme that the Magistrates, having rejected the s295 application and having rejected Miss Woods’ evidence would have then have required Mrs Sharma to be cross-examined,.

103. Requiring a more formal application from the Interested Party, and a fortiori , requiring her to give oral evidence would have amounted to giving the prosecutor a second bite of the cherry. If the s297 application had been heard before the same Bench then the exercise would have verged on the pointless. To benefit the Claimant it would have required the same Bench to come to a diametrically opposed conclusion from that which they had reached based on Miss Woods’ evidence. If the matter were put before a differently constituted Bench then that would run the risk of giving rise to inconsistent outcomes on the same material.

104. My conclusion, therefore, is that a different Bench might well have taken a different view of the matters on 8 th October 2024. However, the conclusion which the Bench, constituted as it was on 8 th October, reached – albeit not inevitable – was entirely rational. It was not unlawful and there was no unfairness to the Claimant.

105. There is, therefore, no basis for overturning the decision.

106. By way of conclusion, I note that in refusing permission on paper, Jay J said: “The Interested Party’s skeleton argument did not expressly mention s295; although, it must have been obvious that this was the provision on which she relied for seeking the return of the cash, and no evidence was filed in support of the 297 application. However, the issue under 297 was the mirror image of the issue under 295, and the IP’s case was based on admissions made by the Claimant before the hearing and further admissions made during cross-examination. There was, therefore, no need for the IP to file evidence. She had all the evidence she needed to satisfy the Defendant that the conditions in s295 were not met and that the condition in 295 was met. Furthermore, the Claimant did not object to the time the Court had taken. In any event, the failure to follow a requirement in the rules does not render the process invalid. The Claimant's contention that he was prejudiced because of forfeiture proceedings could not be brought once an order was made under 297 is unconvincing. Those proceedings could never have succeeded.”

107. I would add a gloss that the reference to the Claimant not objecting, while accurate, does not acknowledge that Mr Meakin did not object because he did not understand a s297 application was being made. However, subject to that gloss, Jay J’s reasons, concisely expressed set out the same conclusion as I have come to after hearing evidence and arguments. It follows that the claim must be dismissed. - - - - - - - - - - - - - Digital Transcription by Marten Walsh Cherer Ltd 2 nd Floor, Quality House, 6-9 Quality Court, Chancery Lane, London WC2A 1HP Telephone No: 020 7067 2900 DX: 410 LDE Email: [email protected] Web: www.martenwalshcherer.com