R (Director of the Assets Recovery Agency) v Jia Jin He
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE COLLINS |
| Judgment Date | 07 December 2004 |
| Neutral Citation | [2004] EWHC 3021 (Admin) |
| Date | 07 December 2004 |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | CO/3452/2004 |
[2004] EWHC 3021 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Royal Courts of Justice
Strand London WC2
MR JUSTICE COLLINS
CO/3452/2004
MR R DE MELLO (instructed by David Tang & Co) appeared on behalf of the CLAIMANT
MR A BIRD (instructed by the Treasury Solicitor) appeared on behalf of the DEFENDANT
The Proceeds of Crime Act 2002 established the Assets Recovery Agency. It is concerned with depriving persons of property obtained as a result of criminal activities. Parts 2 to 4 of the Act deal with confiscation in England and Wales, Scotland and Northern Ireland respectively, following conviction of criminal offences. Part 5, with which this case is concerned, is headed, "Civil Recovery of the Proceeds etc of Unlawful Conduct." Section 240, which introduces part five, reads under the heading, "General purpose of this part":
"(1) This Part has effect for the purposes of —
"(a) enabling the enforcement authority to recover, in civil proceedings before the High Court or Court of Session, property which is, or represents, property obtained through unlawful conduct,
"(b) enabling cash which is, or represents, property obtained through unlawful conduct, or which is intended to be used in unlawful conduct, to be forfeited in civil proceedings before a magistrates' court or (in Scotland) the sheriff.
"(2) The powers conferred by this Part are exercisable in relation to any property (including cash) whether or not any proceedings have been brought for an offence in connection with the property."
One of the weapons in the Director's armoury is an interim receiving order. Such an order appoints a receiver who may be authorised to take a number of steps for the purposes of identifying relevant property and ensuring that it is preserved. Section 247 sets out the functions of an interim receiver, and provides as follows:
"(1) An interim receiving order may authorise or require the interim receiver —
"(a) to exercise any of the powers mentioned in Schedule 6.
"(b) to take any other steps the court thinks appropriate,
"for the purpose of securing the detention, custody or preservation of the property to which the order applies or of taking any steps under subsection (2).
"(2) An interim receiving order must require the interim receiver to take any steps which the court thinks necessary to establish —
"(a) whether or not the property to which the order applies is recoverable property or associated property.
"(b) whether or not any other property is recoverable property (in relation to the same unlawful conduct) and, if it is, who holds it.
"(3) If —
"(a) the interim receiver deals with any property which is not property to which the order applies, and
"(b) at the time he deals with the property he believes on reasonable grounds that he is entitled to do so in pursuance of the order
"the interim receiver is not liable to any person in respect of any loss or damage resulting from his dealing with the property except so far as the loss or damage is caused by his negligence."
Broadly speaking, recoverable property is property which has been obtained through unlawful conduct, and associated property is property which is mixed in with recoverable property. For example, if a person has an interest in the property and that interest was obtained by virtue of criminal conduct, associated property covers the interest of perhaps an innocent party who was not concerned in the criminal conduct and thus is regarded, or may be regarded, as associated property.
Schedule 6 to the Act contains very wide powers indeed. Broadly, the powers include seizure, the requirement of information, search of properties to discover whether there is other property there, or to obtain documentary information, and management of the property in question.
The application for an interim receiving order is subject to a number of conditions precedent. By section 246(1), if the enforcement authority (that is the Assets Recovery Agency, which I will refer to as the "the Director") may take proceedings for a recovery order in the High Court, she may apply to the court for an interim receiving order, whether before or after starting those proceedings. It may be made without notice to the person or persons affected by it, if such notice would prejudice any right of the Director to obtain a recovery order in respect of any property. The conditions precedent are set out in subsections (5) and, where applicable, (6). Subsection (5) of 246 reads:
"(5) The first condition is that there is a good arguable case —
"(a) that the property to which the application for the order relates is or includes recoverable property, and
"(b) that, if any of it is not recoverable property, it is associated property."
Subsection 6:
"(6) The second condition is that, if —
"(a) the property to which the application for the order relates includes property alleged to be associated property, and
"(b) the enforcement authority has not established the identity of the person who holds it
"the authority has taken all reasonable steps to do so."
In order to see whether there is sufficient evidence to establish a good arguable case for making an interim receiving order, the Director will normally make use of her powers to obtain information from third parties. The most usual of those powers is a Production Order, which is dealt with by section 345 of the Act. That provides, so far as material:
"(1) A judge may, on an application made to him by an appropriate officer, make a production order if he is satisfied that each of the requirements for the making of the order is fulfilled.
"(2) The application for a production order must state that —
(a) …
"(b) property specified in the application is subject to a civil recovery investigation.
"(3) The application must also state that —
"(a) the order is sought for the purposes of the investigation;
"(b) the order is sought in relation to material, or material of a description, specified in the application;
"(c) a person specified in the application appears to be in possession or control of the material.
"(4) A production order is an order either —
"(a) requiring the person the application for the order specifies as appearing to be in possession or control of material to produce it to an appropriate officer for him to take away, or
"(b) requiring that person to give an appropriate officer access to the material
"within the period stated in the order."
The period is normally seven days. Production Orders are usually made against financial institutions such as banks or building societies, or sometimes against solicitors who have dealt with property transactions of one sort or another, and is an obviously important and useful means of obtaining information for the Director to see whether there is a good arguable case which would justify, if that is thought necessary, the request for an interim receiver.
In this case, an interim receiving order was granted by Keith J on 21st July 2004 against the respondents. The application before me is stated to be for a variation of that order, but it is clear that the respondents are submitting that the order should be discharged. Mr De Mello has submitted that proceedings under Part 5 of the 2002 Act should be construed in such a way that they are regarded as criminal, or, if not, that the criminal standard of proof should apply. He submits, too, that Article 6, in relation to criminal proceedings, and Article 7 of the European Convention on Human Rights apply, and further that the application for and the granting of the interim receiving order is contrary to, and incompatible with, the Convention, in particular, in relation to Article 1 of the First Protocol.
He further submitted that in this case it amounted to an abuse of the process and that, on the facts, no unlawful conduct had been established. There is thus a wide general attack on Part 5 of the Act and a need to consider how its provisions should be construed. In addition, there is an assertion that the interim receiving order cannot be justified on the facts of this case.
That introduction leads me to set out further relevant statutory provisions. One starts with the introduction to the Act itself, in section 2. This deals with the Director's functions and subsection (5) of section 2 provides that:
"(5) In considering under subsection (1) the way which is best calculated to contribute to the reduction of crime the Director must have regard to any guidance given to him by the Secretary of State."
Subsection (6) provides:
"(6) The guidance must indicate that the reduction of crime is in general best secured by means of criminal investigations and criminal proceedings."
Thus, the approach of the Director must be to let criminal proceedings take precedence, as it were, and only act if such proceedings are either not being taken, or for any reason may have failed, if, notwithstanding their failure or the inability for whatever reason to take them, she takes the view that she can establish within the requirements of the Act that the property in question was unlawfully obtained.
I have already referred to section 240 of the Act, which is the introduction to Part 5 and which, by subsection (2), makes clear that the powers conferred by Part 5 are exercisable whether or not any proceedings have been brought for an offence. Section 241 defines unlawful conduct as meaning conduct which is unlawful under the criminal law of any part...
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