National Crime Agency v Davies and Others
| Jurisdiction | England & Wales |
| Judge | Mrs Justice McGowan |
| Judgment Date | 25 April 2016 |
| Neutral Citation | [2016] EWHC 899 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | Case No: CO/25/2015 & CO/27/2015 |
| Date | 25 April 2016 |
[2016] EWHC 899 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mrs Justice McGowan
Case No: CO/25/2015 & CO/27/2015
Jamas Hodivala (instructed by Blackfords LLP) for Applicants (1) and (3)
Jonathan Lennon (instructed by Rahman Ravelli Solicitors) for Applicant (2)
Andrew Sutcliffe QC and Alexander Cook (instructed by National Crime Agency) for the Respondent
Hearing dates: 14/01/2016
Judgment Approved
The three named Applicants seek to set aside the orders of Supperstone J of January 16 th 2015 which granted the National Crime Agency, ("NCA") a Property Freezing Order, ("PFO"), and a Disclosure Order, ("DO"), against each of them and six other Respondents. The orders were granted pursuant to sections 245A and 357 of the Proceeds of Crime Act 2002, (" POCA") following an ex parte hearing.
The NCA is a designated " Enforcement Authority" under section 316(1) of POCA which has the statutory duty of tracing and recovering the proceeds of unlawful conduct ( s304(1) of POCA). That duty is not predicated upon a criminal conviction, nor is the grant of the orders that were sought in these proceedings. In determining whether property acquired has been " obtained through unlawful conduct" it is not necessary to show that the conduct was of a particular kind if it can be shown that it was obtained through conduct of one of a number of kinds, each of which would have been unlawful, section 242(2)(b) POCA.
The first applicant, Shane Davies, ("SD"), is the main protagonist in these applications. He is joined in his application by Rhianna Davies, his wife. He is the son of the second applicant, Sheila Davies. The other defendants in the criminal proceedings were members of his extended family or his friends.
Lengthy skeleton arguments have been produced in this application and two lever arched files of authorities have been relied upon, in addition to many transcripts of the Crown Court proceedings which took place in Bristol in 2013. In reality what falls to be determined is what happened at the ex parte hearing on 16 th January 2015; whether the NCA complied with its statutory and common law duties of disclosure and whether the court hearing the application was misled, deliberately as is alleged, or at all. If such failings or deliberate action is proved against the NCA then the court would have to go on to consider whether the public interest nonetheless demanded the grant of the PFO and DO. Denial of orders which operate in the public interest is not the appropriate means of marking such failings or misconduct. All submissions, written or oral, have been considered but it is only necessary to decide those matters which determine the outcome of the applications.
The Background
The NCA has been interested in the activities of the first applicant, SD, for a number of years. It is believed that he has been involved in, at least to the extent of benefitting from, unlawful conduct by the supply of controlled drugs. It is believed that his friends and family, including the other applicants, have assisted him in the accumulation or consolidation of funds from this unlawful conduct. He has amassed a property portfolio, said to be worth in excess of £8m. Much of that group of properties is held in the names of his family and friends.
In an investigation launched by the police, the Crown Prosecution Service ("CPS"), alleged that a substantial part of that portfolio was acquired by the benefit of mortgages obtained by frauds on the lending institutions. The frauds were said to be the provision of false representations as to the income and financial status of the individual applying for a particular mortgage. Simply put the applicants for mortgages were falsely claiming to have incomes or financial status which was untrue. There was evidence, capable of belief as admissions against interest, that SD had instigated the use of fraudulent information by co-accused on mortgage applications for properties which were in reality to be treated as his, irrespective of the name of any putative purchaser.
These three applicants, with others, stood trial at the Crown Court sitting in Bristol in 2013. In simple terms they faced allegations that they had conspired to defraud mortgage lenders by providing false details as to income. Some connected defendants had earlier pleaded guilty to similar related charges. In the course of the trial evidence emerged which showed that the provision of false details had not operated as an effective deception on the staff employed by those lending institutions and that some of those details had not actually been provided by the applicants themselves. A financial advisor to SD, Mr Giblin, gave evidence that he completed the application forms on occasion and " embellished" the details. Staff of the lending institutions explained that they were not, at that time, necessarily concerned with the actual income declared by borrowers. The market in property was such that the likely increase in the value of a house and/or its potential rental income were so great that an ability to meet mortgage repayments was immaterial. Those two pieces of evidence, either alone or in combination, which had not been anticipated by the CPS, meant that the prosecution did not continue. Counsel prosecuting took the view that in the light of that evidence a properly directed jury would be unlikely to convict.
In due course those who had pleaded guilty were to be allowed to withdraw their pleas and no evidence was offered against them. After the " collapse" of the prosecution case against these applicants, counsel drafted a document for the court explaining their position and seeking to resist the application by the other defendants who had pleaded guilty to other charges to re-open their pleas and change them to pleas of not guilty. That short note titled " Response to Applications to Re-open Plea" with footnotes is very much at the core of this application to discharge.
After the unsuccessful prosecution the Avon and Somerset police referred the matter to the NCA who then commenced a civil recovery investigation. This investigation is still ongoing. As part of this investigation the NCA made an ex parte application to Supperstone J for a Property Freezing Order under s. 245A POCA. The NCA also applied for a Disclosure Order under s.357 POCA. As is common practice, having satisfied the burden of establishing a risk of dissipation, the applications were heard ex parte. The hearing, on 16th January 2015, was recorded...
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National Crime Agency v Javanshir Feyziyev
...A PFO is one such interim measure which does not require a final determination that a recovery order must be made ( NCA v Davies [2016] EWHC 899 (Admin)). POCA 2002 s245A provides: “245A Application for property freezing order (1) Where the enforcement authority may take proceedings for a ......