DSS founder wins appeal in $.65m cash detention case

The Court of Appeal has ruled in favour of Kerron Clarke, founder of the Drugs Sou Sou (DSS), overturning a magistrate’s decision to extend the detention of $656,200 under the Proceeds of Crime Act (POCA).

The judgment, written by Justice of Appeal Mark Mohammed, found Clarke’s rights to due process and natural justice had been violated.

Justice Maria Wilson agreed with the decision.

In 2020, officers of the now-defunct Special Operations Response Team (SORT) and other divisions raided DSS’s headquarters at Kathleen Warner Drive in La Horquetta. Police seized $656,200 in cash from Clarke’s home during a search for unlicensed firearms.

While no firearms were found, the cash was confiscated under the Proceeds of Crime Act (POCA), with police suspecting it to be linked to money laundering or other specified offences.

A magistrate granted an initial detention order allowing the cash to be held for three months, and just before the initial order expired, police sought an extension, which was granted for a further three months.

Clarke appealed this decision on several grounds.

Clarke’s appeal raised multiple issues, including the lack of evidence disclosure, procedural fairness and the magistrate's improper weighing of considerations.

The Court of Appeal found merit in the first six grounds of the appeal, identifying significant errors.

In his ruling, Mohammed noted that while POCA does not explicitly mandate that police officers provide documentation to support detention extensions, the rules of natural justice required disclosure of such evidence to ensure fairness. By failing to demand these documents, the magistrate deprived Clarke of the opportunity to challenge the application effectively.

“That cannot be what the POCA intended. This is so because issues of fundamental rights and the deprivation of property are involved,” Mohammed said.

He added, “It is undeniable that the legislature omitted to provide that a Customs and Excise officer or a police officer must provide supporting documentation to buttress his or her application for a further detention order.

“However, such a myopic reading of the POCA is not consistent with the spirit of the act and is not the end of the matter. Because of the draconian nature of the POCA, and because section 38 permits specified persons to deprive individuals of their property, the omission of the legislature to provide sufficient safeguards to ensure that there is no abuse of such further applications must be supplied by the common law, and this court.

“This omission requires the court to hold that affected parties must be provided with the documentary evidence upon which a further detention order is predicated.

He also emphasised that constitutional protections, including fair trial rights, were implicit in POCA and said they must guide detention orders.

Mohammed also agreed with Clarke’s complaint that the police provided no evidence to extend the detention order and this deprived him of the opportunity to challenge the application. He also agreed with Clarke’s contention that the magistrate erred when she held that further consideration of section 38(A) on the extension was not necessary, since the police were still investigating the matter.

“The POCA specifically provides that upon each consideration for an order of continued detention, the magistrate must be satisfied of both sections 38 (2) (a) and (b). Such a provision is critical in order for due process to be attained. It provides a procedure and a critical procedural safeguard…

“Natural justice in the circumstances of this case included a right to make representations after a decision had been made with a view to procuring its modification.

“Further, it must be observed that the right to make representations is of little or no value unless the appellant had knowledge in advance of the considerations which, unless effectively challenged, would or may lead to an adverse decision against him.

“The appellant was entitled not only to the grounds upon which the order was made, but also to challenge such grounds in an effort to demonstrate that the reasonable grounds for the suspicion either did not now or did not then continue to exist.

“The failure to address the first limb of section 38 (2) was a material omission on the part of the magistrate.”

Mohammed also held that the magistrate placed undue emphasis on the imminent expiration of the detention order, constraining Clarke's ability to prepare a defence. The court criticised this approach, emphasising that fairness must take precedence over administrative convenience.

“In the present appeal, there was no reasonable explanation for the filing of the application the day before the order was due to expire and the notice of the application was only electronically served the day before the hearing of the matter.

“Those were all matters to be taken into account in the exercise of the magistrate's discretion.

“In this matter, the magistrate having placed undue reliance on the fact that the order was due to expire on the following day, failed to demonstrate that the balancing exercise was properly carried out and this had the effect of constraining the fair hearing of the matter.”

He said natural justice principles must be incorporated to ensure fairness.

In deciding Clarke’s appeal, Mohammed concluded that the failure to provide evidence to support the extension, combined with procedural missteps, rendered the detention order invalid.

“The temporary nature of the detention order does not circumvent the necessity for natural justice principles,” Mohammed said.

Clarke’s appeal was allowed and the magistrate's order was set aside.

In 2022, Clarke was charged with two offences under the POCA and was granted $300,000 bail. One of the charges alleges that between May 2019 and February 2021, Clarke received a television as collateral for a loan which the recipient was unable to repay. He is also accused of receiving $1,850 in interest on a loan while running a moneylender’s business without a licence.

Some of the money seized from Clarke in the subsequent raids was returned after the police were denied applications to extend its detention.