National Crime Agency v Aurang Zeb Khan (Also Known as Aurange Zeb Khan) and Others
| Jurisdiction | England & Wales |
| Judge | Mrs Justice O'Farrell |
| Judgment Date | 20 January 2017 |
| Neutral Citation | [2017] EWHC 27 (QB) |
| Date | 20 January 2017 |
| Docket Number | Case No: HQ14X1476 & HQ15X02585 & TLQ16/0595 |
| Court | Queen's Bench Division |
[2017] EWHC 27 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mrs Justice O'Farrell DBE
Case No: HQ14X1476 & HQ15X02585 & TLQ16/0595
Jonathan Hall QC and Will Hays (instructed by the National Crime Agency) for the Claimant
Henry Spooner and Andrew Judge (instructed by 2 nd Opinion Now) for the Defendants
Hearing dates: 18 th October 2016, 19 th October 2016, 20 th October 2016, 21 st October 2016
Judgment Approved
This matter concerns a claim by the National Crime Agency ("the NCA") under Part 5 of the Proceeds of Crime Act 2002 (" POCA") for the recovery of property and bank accounts owned by the First and/or Second and/or Fourth Defendants alleged to be property obtained through unlawful conduct.
The property the subject of the claim is:
i) 11 Marlo Heights, Bangor, County Down BT19 6NQ, registered in the name of the Second Defendant ("Property 1");
ii) 30/30a Albert Street, Bangor, County Down BT20 5EF, registered in the name of the First Defendant ("Property 2");
iii) 190 Cherrywood Road, Bordesley Green, Birmingham B9 4UR, registered in the names of the First and Fourth Defendants ("Property 4");
iv) 263 Stoney Lane, Yardley, Birmingham B25 8YG, registered in the name of the Second Defendant ("Property 6");
v) Bank of Ireland bank account no. 90542080 in the name of the Second Defendant for Bilal Khan, her son ("Property 14");
vi) Bank of Ireland bank account no. 39227413 in the name of the Second Defendant for Samara Khan, her daughter ("Property 15").
The First Defendant, Aurang Khan, lives at 11 Marlo Heights (Property 1) with his wife (the second Defendant) and children. He has lived in Northern Ireland since 1989 and is a chef. Between about 1995 and 2010 he ran a business with various others, the Taj Tandoori restaurant. Since 2012 he has run an Indian Takeaway called Bilal's. He is the sole legal owner of 30/30a Albert Street (Property 2) and he is the joint owner of 190 Cherrywood Road (Property 4).
The Second Defendant, Shakar Khan (also known as Shakar Begum) is the wife of Aurang Khan. She is the sole legal owner of 11 Marlo Heights (Property 1) and 263 Stoney Lane (Property 6). She is the legal owner of the bank accounts with the Bank of Ireland in the names of her children (Properties 14 and 15).
The Fourth Defendant, Jamila Shabnam, is the wife of Alam Zeb Khan, who is the brother of Aurang Khan. Jamila Shabnam is the joint legal owner of 190 Cherrywood Road (Property 4).
On 19 June 2012 the predecessor to the NCA obtained a freezing order against various defendants, including the First, Second and Fourth Defendants, preventing them from disposing of or dealing with the above properties. The freezing order, as subsequently amended, remains in place pending the conclusion of these proceedings.
On 7 April 2014 the NCA issued a claim for civil recovery against the defendants in respect of 13 items of real property and 9 bank accounts, including Properties 1, 2, 4, 6, 14 and 15.
On 29 October 2014 the Twelfth Defendant was substituted for the Eleventh Defendant.
On 12 May 2016 summary judgment was granted against the Third, Tenth and Twelfth Defendants in respect of the civil recovery of 3 of the properties claimed.
On 10 October 2016 the NCA entered into a settlement agreement with the Fifth, Sixth, Seventh, Eighth and Ninth Defendants, under which some of the properties claimed were recovered and others were discharged from the freezing orders, as set out in a consent recovery order.
Therefore, the current proceedings are concerned only with the First, Second and Fourth Defendants in respect of Properties Nos. 1, 2, 4, 6, 14 and 15.
The NCA's case is that the defendants are part of the Zeb Khan network, an organised crime group led by Alam Zeb Khan and involved in the importation and supply of illegal drugs, primarily heroin. The properties, in respect of which recovery is claimed, have been acquired, held and transferred by various family members without any identifiable source of income. The only plausible explanation for acquisition of the properties, and the convoluted way in which the defendants have dealt with the properties, is that the funds used are the proceeds of crime, namely, drug dealing, money laundering, mortgage fraud and tax evasion.
The defendants' position is that the property transactions and holdings are a reflection of the family and community ties and support that exist in the Anglo-Pakistani community. In that community, it is usual for family members to hold property for other family members. It is also usual for family and friends to lend money to each other without any formal arrangements or documents. Although Alam Zeb Khan is a convicted drug dealer, there is no Zeb Khan network and no evidence that the remaining defendants are involved in such criminal activities. The NCA is unable to establish that the properties represent the proceeds of unlawful conduct, or items which have been purchased with the proceeds of unlawful conduct.
The Legal Framework – Civil Recovery Orders
Section 243 of POCA provides that proceedings for a recovery order may be taken by the enforcement authority in the High Court against any person whom the authority thinks holds recoverable property.
Recoverable property is defined by section 304(1) as property obtained through unlawful conduct.
Unlawful conduct is defined by section 241 as conduct which is unlawful under the criminal law of the country in which it occurs, whether this is the United Kingdom or elsewhere (provided that if the conduct occurs outside the United Kingdom it would be unlawful if it occurred in the United Kingdom). The court must decide on a balance of probabilities whether it is proved that any matters alleged to constitute unlawful conduct have occurred.
A person obtains property through unlawful conduct (whether his own conduct or another's) if he obtains property by or in return for the conduct (section 242). In deciding whether any 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. It is not necessary to prove that individual properties were derived from specific offences.
Section 305 provides for tracing property. Where property obtained through unlawful conduct is or has been recoverable but has been disposed of, property which represents the original property is also recoverable property unless the person who obtained it did so in good faith, for value and without notice that it was recoverable property.
If recoverable property is mixed with other property, the portion of the mixed property which is attributable to the recoverable property represents the property obtained through unlawful conduct (section 306).
Where a person who has recoverable property obtains further property which represents the profits accrued from the recoverable property, that further property is deemed to represent property obtained through unlawful conduct (section 307).
Section 266(1) stipulates that if the court is satisfied that any property is recoverable, the court must make a recovery order.
The recovery order must vest the recoverable property in the trustee for civil recovery (section 266(2)).
An exception to section 266(1) is contained in section 266(3). The court may not make a recovery order in respect of any recoverable property if:
(a) the respondent obtained the recoverable property in good faith,
(b) he took steps after obtaining the property which he would not have taken if he had not obtained it or he took steps before obtaining the property which he would not have taken if he had not believed he was going to obtain it,
(c) when he took the steps, he had no notice that the property was recoverable,
(d) if a recovery order were made in respect of the property, it would, by reason of the steps, be detrimental to him; and
it would not be just and equitable to do so, or it is incompatible with any of the Convention rights (within the meaning of the Human Rights Act 1998).
In deciding whether it would be just and equitable to make the recovery order, the court must have regard to (a) the degree of detriment that would be suffered by the respondent if the provision were made, and (b) the enforcement authority's interest in receiving the realised proceeds of the recoverable property.
Section 282A provides that a recovery order may not be made by the High Court of England and Wales in respect of property outside the jurisdiction unless there is or has been a connection between the case and this jurisdiction, as set out in Schedule 7.
The Issues
The issues that the court has to determine in this case are:
i) In respect of each property, whether the property was obtained through unlawful conduct so as to be recoverable property within the meaning of POCA;
ii) In respect of any recoverable property, whether it was obtained (wholly or in part) in good faith and steps have been taken without notice that it was recoverable property such that it would not be just or...
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