National Crime Agency v Gediminas Simkus and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Edis |
| Judgment Date | 12 February 2016 |
| Neutral Citation | [2016] EWHC 255 (Admin) |
| Docket Number | >Case No: CO/5844/2014 POCA No 3380 of 2015 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 12 February 2016 |
[2016] EWHC 255 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Edis
Rupert Bowers, Q.C. (instructed by Hodge Jones & Allen) for Mr Simkus,
Jonathan Lennon instructed by Rahman Ravelli for Mr Ghulam and for the Jardine Respondents
James Fletcher (instructed by the National Crime Agency) for the Applicant in the case of Mr Simkus
Andrew Sutcliffe QC and Sarah Harman (instructed by the National Crime Agency) for the Applicant in the case of Ghulam and Jardine
Hearing dates: 20 th and 21 st January 2016
In each of these cases I am considering an application by a respondent to an order obtained by the National Crime Agency (NCA) from the High Court seeking the discharge of that order. I heard the first case, Mr Simkus' application, on the 20 th January 2016 and the second and third cases, the Ghulam and the Jardine applications on the 21 st January 2016. Mrs. Justice Cheema-Grubb ordered that the two cases heard on the 21 st January 2016 should be heard together and Mr Simkus' application was listed before me on the day before that hearing administratively because it had been appreciated, as is the case, that the three cases involve some common issues. The orders were made under Part 5 and Part 8 of the Proceeds of Crime Act 2002 (the Act) and the submission is made in each case that the procedure by which the NCA obtained the order was inappropriate. The cases are entirely separate and are being addressed at the same time only because of the similarity of the issues. In Ghulam and Jardine the challenge is to a disclosure orders (DO) made under Part 8 of the Act. In Simkus it is to a property freezing order (PFO) made under Part 5 of the Act.
I propose to identify the statutory regimes involved and to address the common issues in principle and then to deal with each case separately and give my decision, applying those principles. The issues are as follows
i) All 3 cases: are PFOs and DOs improperly made and liable to be set aside where
a) They are granted by a High Court Judge in chambers without a hearing after consideration of an application made by the NCA on paper?
b) The Judge granting the order gives no reasons which explain to persons affected by the order why it was made?
ii) In Ghulam and Jardine: is the DO too wide because it is capable of requiring disclosure relating to property which is not specified in it? For reasons which will appear, I will call this the "roving commission" submission.
iii) Ghulam only: is a DO liable to be set aside where the evidence on which it was granted is either not served at all on the person affected by it, or served in a redacted form?
iv) Jardine only: are the arguments in support of (i) above strengthened by material non-disclosure in a case where it is accepted that the non-disclosure is not so grave as to require the discharge of the DO?
v) Simkus only: Is an order granted on an application made by the NCA without notice where no good reason exists why the application cannot be made on notice liable thereby to be discharged?
vi) Simkus only: was the PFO application by the NCA an abuse of process, given that the CPS had decided not to pursue confiscation in criminal proceedings based on the same evidence?
vii) Simkus only: should the PFO granted by Mr Justice Jay be set aside for material non-disclosure by the NCA and, if so, should a new PFO be granted now that civil recovery proceedings have been started?
The NCA is the enforcement authority which may take civil recovery proceedings under Part 5 of the Proceeds of Crime Act 2002 ("the Act") against any person who it suspects holds recoverable property. Recoverable property is property that has been obtained through unlawful conduct or property that represents such property. The proceedings must be brought in the High Court and are dealt with in the Administrative Court. They are civil proceedings as a matter of domestic law, although I was told that there is a case pending in the European Court of Human Rights in which that position is being challenged. The NCA may apply for a PFO to prevent the property being dissipated whether before or after starting proceedings for a civil recovery order. Before taking such proceedings, the NCA will generally conduct an investigation. Its investigatory powers are contained in Part 8 of the Act. They include the power to seek a DO.
The Investigation: Part 8 of the Act
Part 8 provides investigatory powers for different types of investigation but I will only deal with them where they are in pursuit of a civil recovery investigation. An investigation of this kind is usually designed to identify criminal cash and to trace it into any property into which it has been converted. It is not designed to establish the criminal conduct of any individual and the extent to which that person may have benefited from that conduct. That is the function of criminal proceedings and confiscation proceedings following conviction under Part 2 of the Act. Of course, evidence concerning the conduct of individuals will be relevant to determining whether any particular property is recoverable and not infrequently those whose crimes have generated the recoverable property will remain in control of it, sometimes having good title to it in law. Any recovery order will deprive those people of their assets. Those people have been referred to in argument as the "targets" of the investigation and subsequent proceedings. Their property rights are engaged both as a matter of domestic law and Article 1 Protocol 1 of the Convention. Procedural fairness to them is therefore required as a matter of principle.
Part 8 of the Act provides a toolkit of investigatory powers. A precondition of the exercise of any of them is the existence of an investigation of a defined kind. A civil recovery investigation is one of the types of investigation for which Part 8 powers can be used and this kind of investigation has been in existence in each of the three present cases. The Act was amended with effect from 1 st June 2015 by the Crime and Courts Act 2013 in circumstances which I will address below, but the statutory regime before that amendment applies to investigations started before that date which was the case in each of the present cases. It defined a civil recovery investigation by s.341(2) as
"….an investigation into
(a) whether property is recoverable property or associated property,
(b) who holds the property, or
(c) its extent or whereabouts."
The amendment reads as follows
"…an investigation for the purpose of identifying recoverable property or associated property and includes investigation into-
(a) whether property is or has been recoverable property or associated property,
(b) who holds or has held property, or
(c) what property a person holds or has held, or
(d) the nature, extent or whereabouts of property."
It is now plain that an investigation qualifies for the use of the Part 8 powers where its purpose is to find out whether any recoverable property exists or has existed. One issue which I have to resolve is whether the amendment merely makes the previous meaning of the provision plain beyond argument or whether it changed the law. The same issue arises in relation to s.341A, introduced at the same time as the amendment to section 341(2). This reads
" 341A Orders and warrants sought for civil recovery investigations
Where an application under this Part for an order or warrant specifies property that is subject to a civil recovery investigation, references in this Part to the investigation for the purposes of which the order or warrant is sought include investigation into-
(a) whether a person who appears to hold or to have held the specified property holds or has held other property,
(b) whether the other property is or has been recoverable property or associated property, and
(c) the nature, extent of whereabouts of the other property."
The powers available include production orders, search and seizure warrants, disclosure orders, customer information orders, and account monitoring orders. In civil recovery proceedings all these powers require the grant of an appropriate order by a High Court Judge. A Code of Practice must be prepared under s. 377 of the Act and those exercising the Part 8 powers have a statutory duty to comply with it. The Code to which I have been referred is that published in June 2015, but neither side suggested that it was different in any relevant way from its predecessors. The Code is not binding on the court, but it is admissible in proceedings and the court may take any failure to comply with it into account in determining any question in the proceedings.
Of those Part 8 tools, I am only directly concerned with DOs. Whereas the production order and the search and seizure warrant are orders of a kind which is familiar from other jurisdictions, the DO is not. It is an order which may be made if the judge is satisfied that each of the requirements is met: s. 357(1). The requirements...
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