Retention of Seized Property
Do prosecuting authorities have the right to hold on to seized property, once it ceases to be required as evidence, where its return might facilitate offending? First published in the Criminal Law & Justice Weekly (2013) 177 JPN 363.
There are many statutes enabling enforcement authorities to seize property, but generally there is no statutory power, absent a forfeiture order, to retain such property once the purpose for the seizure has ceased. Should the property be returned even if it is of such a nature that it is likely to give rise to (further) offending?
Forfeiture
There are some very wide statutory provisions which enable criminal courts to order the forfeiture of seized property. S.143(1) of the Powers of Criminal Courts (Sentencing) Act 2000 provides that the court which convicted an offender may, if it is satisfied that property was used, or intended to be used, to commit or facilitate an offence, order that such property lawfully seized from him or which was in his possession or control at the time when he was apprehended for the offence or when the summons was issued be forfeited. S.143(2) gives the court a similar power in relation to offences which it takes into consideration. The effect of forfeiture is to deprive the offender of any rights he had in the property and to place the property into the possession of the police. Alternatively, s.145 enables the court to order that the property be sold in order to compensate someone who has suffered personal injury, loss or damage as a result of the offence or of an offence taken into consideration. The order - see R v. Kearney [2011] EWCA Crim 826 - only affects the rights of the offender and cannot affect the rights of others in the property such as those of a finance company. The making of a forfeiture order gives statutory legitimacy to the retention of seized property albeit that it is subject to challenge on appeal or under the Police (Property) Act 1897 ("PPA"), if brought within 6 months, or other civil proceedings.
Legislation creating some offences contain specific provisions relating to the forfeiture of relevant property – see, for example, s.27 of the Misuse of Drugs act 1971, s.51A of the Firearms Act 1968 and s.108 and s.114A of the Copyright, Designs and Patents Act 1988. S.97 of the Trade Marks Act 1994 ("TMA") enables any person in possession of goods, in connection with the investigation or prosecution of a relevant offence, which bear a sign identical to or likely to be mistaken for a registered trade mark, to apply for an order for the forfeiture of those goods. Although it was held in R v. London Borough of Brent & Harrow Trading Standards Service ex p UNIC Centre Sarl [2000] 2 All ER 449, [2000] 1 WLR 2112, that proceedings under s.97 TMA are civil proceedings, an order under that section can only be made if there is a conviction or if the court is satisfied that a relevant offence has been committed in relation to the goods. A finding therefore has to be made to the criminal standard of proof. The court may infer that an offence has been committed in relation to any goods, if it is satisfied that such an offence has been committed in relation to representative goods. Forfeited goods must be destroyed as directed by the court which also has the option of ordering the release of the goods to a specified person on condition, inter alia, that the offending sign is erased, removed or obliterated.
It is in relation to counterfeit goods that there is the clearest non-statutory authority enabling the retention, and indeed prohibiting the return, of seized property.
Retention of counterfeit goods
Case law has held for some time, at least in relation to counterfeit property, that once it has come into the hands of a third party who is aware of the infringement of the intellectual property proprietor's rights, such party should not release the property in circumstances where those rights would be further infringed. In Norwich Pharmacal Co v. Customs & Excise Commissioners [1974] AC 133, the Plaintiff company, owned the patent for a chemical compound. They brought a civil action against the Commissioners seeking discovery of the names and addresses of alleged pirate importers of the compound. Discovery was ordered by the High Court. On appeal to the Court of Appeal it was held that, as the Commissioners did not have possession or control over the infringing goods, there could be no cause of action against them. In coming to this conclusion, the Court of Appeal distinguished Upmann v. Elkan (1871) 7 Ch App 130, where it was held that the, albeit innocent, importer of goods bearing an infringing trade mark were under a duty, to give all the information they possibly could to the trade mark proprietor and to offer redress. Sending the goods back would not have amounted to redress as it would have enabled the consignors to repeat the fraud, but, completely erasing the trade marks would have sufficed. The Plaintiff appealed to the House of Lords. Allowing the appeal, the House of Lords held that Upmann v. Elkan, ante, did apply and that if a person, in this case the Commissioners, became involved, even if innocently and with no personal liability, in the tortuous acts of others, he came under a duty to assist an injured party by giving him full information by way of discovery and disclosing the identity of the wrongdoers. Of significance to the retention of counterfeit goods, Buckley LJ had said, in the Court of Appeal:
"If a man has in his possession or control goods the dissemination of which, whether in the way of trade or, possibly, merely by way of gifts (see Upmann v. Forester [1883] 24 Ch D 231), will infringe another's patent or trade mark, he becomes, as soon as he is aware of this fact, subject to a duty, an equitable duty, not to allow those goods to pass out of his possession or control at any rate in circumstances in which the proprietor of the patent or mark might be injured by infringement ensuing. The man having the goods in his possession or control must not aid the infringement by letting the goods get into the hands of those who may use them or deal with them in a way which will invade the proprietor's rights. Even though by doing so he might not himself infringe the patent or trade mark, he would be in dereliction of his duty to the proprietor. This duty is one which will, if necessary, be enforced in equity by way of injunction: see Upmann v. Elkan, [ante]."
Buckley LJ, however, considered that the Commissioners had never come under such a duty as the goods had never come into their possession. Lord Reid, in the House of Lords, disagreed. Applying Upmann v. Elkan, he said that: "[I]f through no fault of his own a person gets mixed up in the tortious acts of others so as to facilitate their wrong-doing he may incur no personal liability but he comes under a duty to assist the person who has been wronged by giving him full information and disclosing the identity of the wrongdoers. I do not think that it matters whether he became so mixed up by voluntary action on his part or because it was his duty to do what he did." It is apparent that, although the House of Lords did not agree that the Court of Appeal was right to distinguish Upmann v. Elkan, it made no criticism of that part of Buckley LJ's judgment which is set out above. Indeed, as the House of Lords' decision applied Upmann v. Elkan, it tends to endorse what Buckley LJ said about the equitable duty which lies with a person in possession or control of counterfeit goods and hence those observations remain good law. The principle involved is that a person should not facilitate a civil wrong. That principal ought to apply, a fortiori, to a criminal wrong.
Seizure and retention under PACE
Under s.19 of the Police and Criminal Evidence Act 1984 ("PACE"), a constable has a general power, when lawfully on premises, to seize anything if, inter alia, he has reasonable grounds for believing it has been obtained in consequence of the commission of an offence or it is evidence in relation to an offence and, in either case, it is necessary to seize it in order to prevent it being concealed, lost, damaged, altered or destroyed. S.22(1) of PACE enables anything seized under s.19 thereof to be retained, unless a photograph or copy of it would suffice, "so long as is necessary in all the circumstances".
In Chief Constable of Merseyside Police v. Owens [2012] EWHC 1515 (Admin), (2012) 176 JP 688, the police, acting under their powers in s.19(3) of PACE, seized a CCTV video from Owens' house which showed a person apparently setting fire to his house. The video images were unclear and, even when enhanced, did not enable the person to be identified. The police closed their investigation and Owens applied to the magistrates' court for an order under s.1(1) PPA for the return of the video. The police resisted the application on the basis that they had the power to retain the video under s.22(1) of PACE as they reasonably believed that returning it might lead Owens to seek revenge on the person, possibly a mistaken innocent third party, who he thought was shown in the video. The Deputy District Judge concluded that the application was straightforward and as, in his view the PPA dealt with ownership and nothing else, he ordered the return of the video. The police appealed. In dismissing the appeal, the Divisional Court rejected the Chief Constable's contention that s.22(1) was wide enough to allow the police to retain property seized under s.19 of PACE even after the investigation was closed. Sir John Thomas P relied on four points: Firstly, on Lord Denning MR's statement of the common law position in Ghani v. Jones [1970] 1 QB 693 namely that: "The police must not keep the article, nor prevent its removal, for any longer than is reasonably necessary to complete their investigations or preserve it for evidence. If a copy will suffice, it should be made and the original returned. As soon as the case is over, or it is decided not to go on with it, the article should be returned". Secondly, "the terms of s.22(2), (3) and (4) make clear that specific circumstances to which s.22 is directed is retention for use as evidence at trial or for investigation in connection with an offence." Thirdly, "although both subsections are expressed to be without prejudice to the generality of the power in subs (1), there is nothing in s.22 which suggests that the power of retention can be for any purpose other than a purpose for which it was originally seized" and, fourthly, "in Scopelight Ltd v. Chief Constable of Northumbria Police [2009] EWCA Civ 1156, the Court of Appeal ... concluded ... that the phrase 'so long as necessary' meant necessary for carrying out the purposes for which the powers given by s.19 and s.20 had been conferred."
Indirectly assisting or encouraging a criminal act
In Owens, ante, Sir John Thomas P acknowledged that the power under s.1 PPA, or in a civil action, to order the return of property was a discretionary one and hence that, although the police could not rely on s.22 of PACE to retain the video, there may be circumstances in which ordering its return should be refused. In Webb v. Chief Constable of Merseyside Police [2000] QB 427, the Court of Appeal ordered the return of money in a civil action even though the Judge had found on a balance of probability that the money had been derived from crime. Sir John Thomas P noted, however, that in Webb, May LJ had referred to the decision of Hutchison J in Thackwell v. Barclays Bank Plc [1986] 1 All ER 676. The effect of that decision was that relief could be refused where it would be an affront to public conscience, if, by giving a plaintiff a relief sought, a court was seen to be indirectly assisting or encouraging the plaintiff in his criminal act. May LJ said he would not rule out "the possibility that circumstances might arise where the court would refuse relief where to grant it would be 'indirectly assisting or encouraging the plaintiff in his criminal act'." Accordingly, Sir John Thomas P said: "We are therefore prepared to assume, whether the claim is brought in a civil court in an ordinary action or in a magistrates' court under the [PPA], the court could refuse to grant relief and refuse to order the return if on the facts it could be established that the return of property would indirectly encourage or assist a person in his criminal act." Although the Divisional Court in Owens concluded that it had the discretion not to return the video to the owner, it decided that it should do so, in the circumstances of that case, as there was no evidence that the District Judge, as opposed to the police, had been satisfied that the video might enable Owens to commit a criminal act.
Although Norwich Pharmacal Co v. Customs & Excise Commissioners, ante, was not relied upon in Owens, ante, and although the points of law relating to retention of property in each case are not the same, they nonetheless complement one another. Certainly a prosecuting authority in possession of counterfeit goods faced with a civil claim for their return could cite both cases as authority for the proposition that they should not be returned (at least not in a condition where they would infringe intellectual property rights) as this would both breach the authority's equitable duty to keep them in his possession and enable criminal acts to be perpetrated. A prosecuting authority in possession of property, not infringing intellectual property, but the return of which might give rise to offending might also find that Norwich Pharmacal bolsters Owens through the extrapolation that the court, not only has a discretion not to return goods when they are likely to be used for criminal purposes but, is under a duty by proxy not to do so.
What to do with retained property?
Although Norwich Pharmacal, ante, and Owens, ante, may give comfort to an enforcement authority, particularly in relation to counterfeit goods, that it can, or even must, hold on to certain seized property even without the authority of a court order, retaining such property could prove to be an unwelcome and costly burden. It was noted by Newman J in the UNIC case, ante, that whereas the local authority had a duty to enforce the provisions of s.92 TMA, it did not have a duty to apply for a forfeiture order, "although it is plainly a great convenience for them to be able to do so, in order to avoid being in possession of an enormous number of infringing objects". Wherever possible obtaining a forfeiture order remains the safest, and may ultimately be the cheapest, course. But, even if the criteria for a forfeiture order are not met, prosecuting authorities should still not return property, where there is a high risk that this would facilitate offending, unless ordered to do so or it is agreed with the owner that the characteristics of the property giving rise to that risk be removed.