National Crime Agency v Andrew J Baker
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Lang |
| Judgment Date | 08 April 2020 |
| Neutral Citation | [2020] EWHC 822 (Admin) |
| Date | 08 April 2020 |
| Docket Number | Case Nos: CO/1540/2019, CO/1541/2019, CO/1542/2019 CO/1543/2019, CO/1544/2019, CO/1545/2019 |
| Court | Queen's Bench Division (Administrative Court) |
[2020] EWHC 822 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mrs Justice Lang DBE
Case Nos: CO/1540/2019, CO/1541/2019, CO/1542/2019 CO/1543/2019, CO/1544/2019, CO/1545/2019
Jonathan Hall QC and Tom Rainsbury (instructed by National Crime Agency Legal Department) for the Applicant
Clare Montgomery QC and Ben Watson (instructed by Mishcon de Reya LLP) for the First Second and Fifth Respondents
Alison Pople QC and Aaron Watkins (instructed by Mishcon de Reya LLP) for the Third and Fourth Respondents
Hearing dates: 10 & 11 March 2020
Approved Judgment
This is an application by the Respondents, dated 4 September 2019, to discharge three unexplained wealth orders (“UWOs”) and related interim freezing orders (“IFOs”) (together “the Orders”) made by Supperstone J. on 22 May 2019, pursuant to sections 362A to 362R of the Proceeds of Crime Act 2002 (“ POCA 2002”).
Supperstone J. made the orders at an ex parte hearing of applications by the National Crime Agency (“NCA”), which were filed without notice to the Respondents. In accordance with usual practice, the Orders provide that the Respondents to the UWOs, and anyone affected by the IFOs, may apply to the Court for their discharge or variation, which the Respondents subsequently did. Paragraph 12.1A of the CPR Practice Direction for Civil Recovery Proceedings sets out the procedure for “Variation or discharge of order or warrant”.
The Orders obtained by the NCA, and the Respondents' relationship to them, are as follows:
i) UWO1 (CO/1540/2019) concerns 32 Denewood Road, London N6 4AH (Property 1). It is directed against the First Respondent (“Mr Baker”), who is President of the Second Respondent (“Villa Magna”), which is the registered owner of the property. It is accompanied by IFO1 (CO/1541/2019) directed against Mr Baker and Villa Magna.
ii) UWO2 (CO/1542/2019) concerns 33 The Bishops Avenue, London N2 0BN (Property 2). It is directed against the Third Respondent (“Manrick”), and is accompanied by IFO2 (CO/1543/2019) directed against Manrick and the Fourth Respondent (“Alderton”). Manrick and Alderton are the registered owners of the property.
iii) UWO3 (CO/1544/2019) concerns Apartments 9 and 14, 21 Manresa Road, London SW3 6LZ (Property 3). It is directed against Mr Baker, who is President of the Fifth Respondent (“Tropicana”), which is the registered owner of the property. It is accompanied by IFO3 (CO/1545/2019) directed against Mr Baker and Tropicana.
The NCA adduced extensive evidence in support of the applications from its investigator, Ms A. Kelly, to the effect that the properties were acquired as a means of laundering the proceeds of unlawful conduct by Mr Rakhat Aliyev (“RA”), a national of Kazakhstan, who died in prison in Austria on 24 February 2015.
Each UWO required the named Respondent to provide the information specified in the schedule to the UWO, by way of a video statement and production of documents. In summary, the UWOs sought information about the purchases and transfers of the three properties (in particular, how they were funded), and details about the registered owners and ultimate beneficial owners (“UBOs”) of the properties. The response period in relation to all three UWOs was originally set at 22 July 2019, it was subsequently extended by consent, first to 9 August 2019, and then to 6 September 2019.
In a letter dated 9 August 2019 (“the 9 August letter”), the Respondents, together with the UBOs of the three properties, voluntarily provided extensive information about the purchase and transfer of the properties, their registered owners, and the UBOs. The letter disclosed that the UBO of Property 1 and Property 3 is Mrs Dariga Nazarbayeva (“DN”), the ex-wife of RA. The UBO of Property 2 is their son, Nurali Aliyev (“NA”). However, the 9 August letter explained that the basis of the NCA's application was factually incorrect, as the purchases of the properties were unconnected to RA and his supposed criminal activities, and he was never the UBO of the properties.
The NCA refused to withdraw the UWOs, insisting that the named Respondents must comply with the terms of the UWOs. The Respondents and UBOs issued judicial review proceedings challenging that decision, and seeking interim relief from the UWOs' response deadline. The application for interim relief was granted by Supperstone J. on 5 September 2019, with the response time extended until seven days after the final resolution of the claim. Thereafter, on 7 October 2019, Supperstone J. refused permission on the papers on the basis that the discharge proceedings “will give the Claimants the opportunity that they seek to put their full case before the court for the discharge of the Orders…”. Their renewed application for permission has since been stayed by consent pending determination of this application.
Facts
The facts relied upon by the NCA were set out in the core statement and three supplementary statements made by Ms Kelly, and the exhibits thereto. Ms Kelly also made a statement in response to the new matters in the 9 August letter. Counsel for the NCA provided a factual chronology to Supperstone J. which is attached as an Appendix to the judgment. It is not agreed.
The Respondents relied upon the facts as set out in the 9 August letter, and supporting documents, which were exhibited to the witness statement of Johanna Walsh, their solicitor. Ms Walsh also exhibited a copy of legal advice obtained from a Panamanian law firm regarding the legal position of the President of a Private Foundation in Panama which I considered on a de bene esse basis only, since Mr Hall QC objected to its admissibility, and it was not in the form of an expert report. After I expressed surprise at the absence of a witness statement from Mr Baker, he filed a short witness statement during the course of the hearing, which he attended.
Statutory framework
Introduction
UWOs were introduced by the Criminal Finances Act 2017 and inserted into Part 8 of POCA 2002, at sections 362A to 362R. They came into force with effect from 31 January 2018, and have retrospective effect.
Part 8 comprises a “toolkit” of investigative powers. UWOs are one of a number of investigation tools available to the NCA.
According to the Explanatory Notes to the Criminal Finances Act 2017:
“ Overview of the Act
1. The Criminal Finances Act 2017 makes the legislative changes necessary to give law enforcement agencies and partners new capabilities and powers to recover the proceeds of crime, and to tackle money laundering, corruption and terrorist financing.
2. The measures in the Act aim to: improve cooperation between public and private sectors; enhance the UK law enforcement response; improve our capability to recover the proceeds of crime, including international corruption; and combat the financing of terrorism.
……
Unexplained wealth orders
12. The Act creates unexplained wealth orders (UWOs) that require a person who is suspected of involvement in or association with serious criminality to explain the origin of assets that appear to be disproportionate to their known income. A failure to provide a full response would give rise to a presumption that the property was recoverable, in order to assist any subsequent civil recovery action. A person could also be convicted of a criminal offence, if they make false or misleading statements in response to a UWO. Law enforcement agencies often have reasonable grounds to suspect that identified assets of such persons are the proceeds of serious crime. However, they are often unable to freeze or recover the assets under the previous provisions in POCA due to an inability to obtain evidence (often due to the inability to rely on full cooperation from other jurisdictions to obtain evidence).
13. The Act also allows for this power to be applied to politicians or officials from outside the European Economic Area (EEA), or those associated with them i.e. Politically Exposed Persons (PEPs). A UWO made in relation to a non-EEA PEP would not require suspicion of serious criminality. This measure reflects the concern about those involved in corruption overseas, laundering the proceeds of crime in the UK; and the fact that it may be difficult for law enforcement agencies to satisfy the evidential standard at the outset of an investigation given that all relevant information may be outside of the jurisdiction.”
A revised Code of Practice was introduced with effect from 31 January 2018 to take account of the amendments made by the Criminal Finances Act 2017. Its purpose is to guide law enforcement officers in the exercise of their functions (paragraph 1).
The statutory provisions
The UWO provisions were considered by the Court of Appeal in Hajiyeva v National Crime Agency [2020] EWCA Civ 108.
Section 362A POCA 2002 provides, under the heading, “Unexplained wealth orders”:
“(1) The High Court may, on an application made by an enforcement authority, make an unexplained wealth order in respect of any property if the court is satisfied that each of the requirements for the making of the order is fulfilled.”
Section 362B POCA 2002 sets out the “Requirements for making of unexplained wealth order”:
“(1) These are the requirements for the making of an unexplained wealth order in respect of any property.
(2) The High Court must be...
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