Serious Organised Crime Agency v Gale and another
| Jurisdiction | England & Wales |
| Judge | LORD PHILLIPS,LORD JUDGE,LORD CLARKE,LORD BROWN,LORD DYSON,LORD MANCE,LORD REED |
| Judgment Date | 26 October 2011 |
| Neutral Citation | [2011] UKSC 49 |
| Date | 26 October 2011 |
| Court | Supreme Court |
[2011] UKSC 49
Lord Phillips, President
Lord Brown
Lord Mance
Lord Judge
Lord Clarke
Lord Dyson
Lord Reed
Appellant
Andrew Mitchell QC
Jonathan Lennon
(Instructed by Rahman Ravelli Solicitors)
Respondent
Anthony Peto QC
John Law
Robert Weekes
(Instructed by Serious Organised Crime Agency Legal Department)
Intervener (Secretary of State for the Home Department)
James Eadie QC
(Instructed by Treasury Solicitors)
Heard on 23 and 24 May 2011
LORD PHILLIPS (WITH WHOM LORD MANCE, LORD JUDGE AND LORD REED AGREE)
The Proceeds of Crime Act 2002 (" POCA"), as amended by the Serious Organised Crime and Police Act 2005, is designed to prevent the enjoyment of the fruits of criminal activity. Part 2 focuses on the criminal. To the extent that it is proved, in the manner prescribed, that a criminal has benefitted from criminal conduct, a levy can be made upon his assets, whether or not those assets are themselves the product of his criminal conduct, by a process inaccurately described as "confiscation". A conviction of the criminal is a precondition to the power to confiscate.
Part 5 concentrates on the fruits of crime themselves. The Serious Organised Crime Agency ("SOCA") is given the task of tracking down and recovering the fruits of criminal activity, whether they remain in the hands of the criminal or have been passed on to someone else – subject to exceptions for which POCA makes provision. The fruits of criminal activity can be recovered under Part 5 whether or not anyone has been convicted of the crime or crimes that have produced them.
This appeal is concerned with Part 5 proceedings. SOCA has obtained an order for the recovery of property to the value of some £2m ("the property") held by the appellants, David Gale and his former wife Teresa Gale. SOCA did so by persuading Griffith Williams J, sitting in the High Court, that the property was derived from criminal activity on the part of one or other or both of the appellants, in the form of drug trafficking, money laundering and tax evasion in the United Kingdom, Spain, Portugal and other jurisdictions. The judge so found notwithstanding that David Gale had never been convicted of drug trafficking – albeit that in Portugal he was prosecuted and acquitted of drug trafficking and in Spain criminal proceedings against him for drug trafficking were brought but discontinued.
In order to recover property under Part 5 SOCA has to prove that it was obtained by unlawful conduct, or that it is property obtained in place of such property. Section 241 defines unlawful conduct as being conduct which is unlawful under the criminal law of the country in which it occurs, whether this is the United Kingdom or elsewhere. The section requires the court to decide "on a balance of probabilities" whether it is proved that any of the matters alleged to constitute unlawful conduct occurred. Section 242 provides that in deciding whether property was obtained through unlawful conduct it is not necessary to show that the conduct was of a particular kind if it is shown that the property was obtained through conduct of one of a number of kinds, each of which would have been unlawful conduct. Thus it is not necessary to prove that individual items of property were derived from specific offences.
"Balance of probabilities" is the standard of proof applied in civil proceedings under English law ("the civil standard of proof"). In criminal proceedings guilt has to be proved "beyond reasonable doubt" ("the criminal standard of proof"). In concluding that the property recovered was the product of criminal conduct on the part of the appellants, Griffith Williams J applied the civil standard of proof, albeit that he used language that suggested that the criminal standard might well have been satisfied. It is the appellants' case, advanced without success in the Court of Appeal, that this was contrary to the Human Rights Act 1998 in that it infringed their right to a fair trial under article 6 of the European Convention on Human Rights ("the Convention"). They urge that, despite the language of section 241(3), we should "read down" the subsection so as to accord to it the meaning that the court must decide whether it is proved beyond reasonable doubt that matters alleged to constitute unlawful conduct occurred. Alternatively, they submit that the Court should declare the subsection to be incompatible with the Convention pursuant to section 4 of the Human Rights Act. This is the only issue concerning the recovery order that arises with regard to the recovery order; other issues that were raised below have not been pursued.
There is a second issue. On 28 July 2005 Collins J made an Interim Receiving Order pursuant to section 246 of POCA. The findings of the Interim Receiver's report formed the basis for commencing the proceedings for civil recovery. At the end of those proceedings the judge made an order for costs against the appellants. He refused, however, to direct that those costs should include the costs of the Interim Receiver's investigation and report. SOCA cross-appealed successfully against that refusal. The appellants seek to reverse the Court of Appeal on this issue and to restore the order of the judge.
The Secretary of State, represented by Mr Eadie QC, has intervened because of the possibility of a declaration of incompatibility. The Secretary of State has supported the respondent, SOCA, in relation to the first issue. Mr Eadie has submitted, however, that regardless of the merits of the human rights challenge there can be no question of reading down section 241(3). This is because it represents a clear, advised expression of Parliamentary intent lying at the heart of the statutory scheme. This submission runs counter to an obiter view that Iexpressed at para 24 in R v Briggs-Price [2009] UKHL 19; [2009] AC 1026, when dealing with analogous provisions of the Drug Trafficking Act 1994. Lord Rodger of Earlsferry expressed the same view at para 79. I see the force in Mr Eadie's argument and, if necessary, it will be necessary to reconsider the views that I and Lord Rodger expressed. The first issue is, however, whether section 241(3), if given its natural and very clear meaning, is compatible with the Convention.
Section 241(3) forms part of a statutory code of some complexity. I do not believe that for the purposes of resolving the issue raised on this appeal it is necessary to give a more detailed explanation of the legislation than that which I have given. A summary of the relevant provisions of POCA can, however, be found in paras 5 to 11 of the judgment of Carnwath LJ in the Court of Appeal [2010] EWCA Civ 759, [2010] 1 WLR 2881.
The judgment of Griffith Williams J [2009] EWHC 1015 (QB) runs to nearly 60 closely printed pages. I would endorse the commendation of Carnwath LJ of this "meticulous and comprehensive judgment". The judge started by quoting from the Executive Summary of the Report of the Interim Receiver to the effect that there was no documentary evidence that supported the appellants' assertion that their assets had been derived from legitimate activities but, on the contrary, evidence of unlawful conduct and complex financial dealings indicative of money laundering and concealment.
The judge then addressed the burden and standard of proof. He held:
"9. The burden of proof is on the claimant and the standard of proof they must satisfy is the balance of probabilities. While the claimant alleged serious criminal conduct, the criminal standard of proof does not apply, although 'cogent evidence is generally required to satisfy a civil tribunal that a person has been fraudulent or behaved in some other reprehensible manner. But the question is always whether the tribunal thinks it more probable than not' – see Secretary of State for the Home Department v Rehman [2003] 1 AC 153 at para 55, per Lord Hoffmann."
The judge went on to quote from Lord Carswell's elaboration of this approach, in which the other members of the House concurred, in In re D (Secretary of State for Northern Ireland intervening) [2008] UKHL 33, [2008] 1 WLR 1499.
In para 18 of his judgment the judge set out his approach to the evidence, in the context of the question of the attitude that he should take to the acquittal of David Gale by the Portuguese Court:
"It is not contended that the doctrine of issue estoppel applies and clearly the criminal law principle of autrefois acquit has no application in civil proceedings. On behalf of DG, it was submitted that the Portuguese charges cannot be re-litigated without hearing from all the relevant witnesses or considering a full transcript which is not available. However, I do not accept this contention. To consider the evidence adduced in the Portuguese proceedings is not to re-litigate because what is in issue in these proceedings is not the commission of the specific offences alleged against DG in Portugal but whether on the evidence before this court of the material considered by the Portuguese Court, together with the evidence available to the Spanish Courts and other material not considered by the courts in either jurisdiction, the claimant has proved on the balance of probabilities that DG's wealth was obtained through unlawful conduct of a particular kind or of one of a number of kinds, each of which would have been unlawful conduct: see section 242(2)(b) of POCA – that is to say drug trafficking, money laundering and tax evasion."
The judge gave detailed consideration to the acquisition of numerous assets by the appellants and the explanations, or lack of explanations, proffered to explain...
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