R (Director of the Assets Recovery Agency) v Olupitan
| Jurisdiction | England & Wales |
| Judge | Carnwath LJ,Lord Justice Toulson |
| Judgment Date | 22 February 2008 |
| Neutral Citation | [2008] EWCA Civ 104 |
| Docket Number | Case No: C1/2007/0538 |
| Court | Court of Appeal (Civil Division) |
| Date | 22 February 2008 |
[2008] EWCA Civ 104
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
(ADMINISTRATIVE COURT)
MR JUSTICE LANGLEY
CO/3153/2005
ON APPEL FROM QUEEN'S BENCH DIVISION
The President Of The Queen's Bench Division
Lord Justice Carnwath And
Lord Justice Toulson
Case No: C1/2007/0538
Ivan Krolick (instructed by Stephen Fiddler & Co) for the Appellants
James Eadie (instructed by Assets Recovery Agency) for the Respondent
Hearing dates: Tuesday 6th and Wednesday 7th November, 2007
Introduction
This is an appeal from a decision of Langley J to make a recovery order under Part 5 of the Proceeds of Crime Act 2002 (“ POCA 2002”) made by the Director of the Assets Recovery Agency (the “Director”). The order as upheld by the judge related to two properties: 157 Wellington Drive, Dagenham and 23 Hazelmere Road, Northolt. He refused to make a recovery order in respect of a third property, 30 Wellstead Road, London. Also included in the order were two Abbey National accounts in Mr Olupitan's name, but they did not give rise to any separate issue in the appeal, the amounts in them currently being negligible.
Mr Olupitan is Nigerian. He came to this country in October 1989, and was given leave to remain until June 199Thereafter he has been an illegal overstayer. His passport contained counterfeit stamps dating from 1992 and 1994. The judge rejected Mr Olupitan's evidence that he believed he was entitled to stay indefinitely. His attempted explanations were “close to absurd and certainly incoherent and incredible” (para 26). He had never paid any tax in this country. On this too, as the judge said, the burden of explaining his own inconsistent evidence “proved well beyond his invention and ingenuity” (para 27). He had also lied about two previous relatively minor convictions dating from 1992 and 1993.
On 25 th February 2002, Mr Olupitan was convicted of conspiracy to defraud and was sentenced to 18 months imprisonment. This related to his part in a conspiracy to defraud computer and mobile telephone companies, which had begun apparently in October 2000, and involved goods worth some £250,000. Mr Olupitan was arrested in December 2000, in the course of a “dummy” delivery organised by the police. The prosecution conceded for the purpose of sentence that Mr Olupitan had only joined the conspiracy on the day of his arrest. In the light of that concession, it was held in this court that a confiscation order could not be made against him (under what was then the Criminal Justice Act 1988), because there was no evidence that he had obtained any benefit from the conspiracy (see [2004] 2Crim App R(S) 70). One of the issues in the present appeal is whether the Director should have regarded himself as bound by that concession.
157 Wellington Drive was bought in the name of Mr Olupitan at auction in December 1998 for £25,500. The deposit was paid by way of a £2,550 cheque debited to his Abbey National account, and the balance paid by a Halifax counter cheque dated 21 st December 1998 debited to a Halifax account in Mr Olupitan's name. The property is estimated to have a current value of about £100,000 and is let at a rental of £550 per month. The judge rejected Mr Olupitan's explanation of the source of the funds:
“In a context in which I am quite satisfied that Mr Olupitan is both capable of dishonesty and is readily prepared to lie when he thinks it suits him, I have no hesitation in rejecting his evidence that the monies to purchase Wellington Drive came from his family. I am therefore left with no evidence of a lawful source of those funds and an attempt to give one which is a lie.” (para 50)
23 Hazelmere Road was bought on 26 th October 2000 for £155,000. Title is registered in the names of Mr Olupitan and Ms Makinde and they live there with their two children. The purchase price was paid by way of a cash deposit of £31,000 and a mortgage from Bristol & West of £124,000. £15,500 of the deposit was paid from Mr Olupitan's Abbey National account and the balance plus fees was paid from an account in the name of Ms Makinde. 23 Hazelmere Road is estimated to have a current value of about £280,000. The mortgage interest payments have substantially been kept up to date.
The judge found that Mr Olupitan had obtained the mortgage by fraud, as result of a number of material and deliberate misstatements in the application form (paras 31–4). He also rejected Mr Olupitan's explanations of the source of the deposit funds in his name (para 52). As to Ms Makinde's share, he noted that she had put forward a number of explanations, which changed during the proceedings. They included references to christening gifts, a pyramid savings scheme called “Righteous Purse”, and money from the sale of land in Nigeria. The judge rejected them. He held that it was “more probable than not” that the source of her funds also was Mr Olupitan (para 58).
The judge concluded, in respect of both properties that:
“… the Director has fully satisfied me on a balance of probabilities that Mr Olupitan is a dishonest man who has employed dishonesty to obtain or seek to obtain property (the mortgage fraud and his conviction for conspiracy) and to seek to secure an immigration status to which he knew and knows he was not entitled. The Director has also satisfied me that Mr Olupitan has had no significant legitimate source of income whilst living in this country and has lied again and again in his evidence about the sources of the money (in particular cash) which undoubtedly came into his bank accounts. On that basis and all the evidence, I conclude that any significant asset of Mr Olupitan was obtained by or was the proceeds of his dishonest acquisitive criminal conduct and is recoverable property. In the case of Hazelmere Road, the property was also obtained by the specific fraud on Bristol & West which I have found occurred. I do not think the Director is required by law or the burden of proof to establish more than that. As stated, in my judgment the Director has also made out her case of money laundering.” (para 67)
The statute
Part 5 of POCA 2002 created a new statutory scheme for the recovery in civil proceedings of property obtained through unlawful conduct. Unlike confiscation proceedings under Part 2, the powers are exercisable regardless of any criminal proceedings (s 240(2)). Examples are given in the Explanatory Notes 1:
“… civil recovery and cash forfeiture proceedings may be brought whether or not proceedings have been brought for an offence in connection with the property. Cases where criminal proceedings have not been brought would include cases where there are insufficient grounds for prosecution, or where the person suspected of the offence is outside the jurisdiction or has died. Cases where criminal proceedings have been brought may include cases where a defendant has been acquitted, or where a conviction did not result in a confiscation order.” (para 290)
Section 240(1) gives power to the Director to recover in civil proceedings property which “is, or represents, property obtained through conduct unlawful conduct” (s 240(1). Property so obtained is referred to as “recoverable property” (s 304(1)).
Further explanation of unlawful conduct and property obtained thereby is given in sections 241–2:
“241 (1) Conduct occurring in any part of the United Kingdom is unlawful conduct if it is unlawful under the criminal law of that part.
(2) ….
(3) The court … must decide on a balance of probabilities whether it is proved –
(a) that any matters alleged to constitute unlawful conduct have occurred, ….
242 Property obtained through unlawful conduct.
(1) 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.
(2) (a) ….
(b) 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 to be noted (under s 242(1)) that the property must be obtained “by or in return for” the unlawful conduct. The Explanatory Notes give examples:
“A person will obtain property through unlawful conduct if he obtains it:
—by the conduct —for example by stealing it, or by obtaining it by means of dealing in illicit drugs, or
—in return for the conduct —for example by being paid to commit murder or arson, or taking a bribe to give false evidence or corruptly award a contract.” (para 294)
The Explanatory Notes also help to explain the reference to “kinds” of unlawful conduct (s 242(2)(b)):
“Subsection (2)(b) provides that it is not necessary to show that property was obtained though a particular kind of unlawful conduct, so long as it can be shown to have been obtained through unlawful conduct of one kind or another. So it will not matter, for example, that it cannot be established whether certain funds are attributable to drug dealing, money laundering, brothel-keeping or other unlawful activities, provided it can be shown that they are attributable to one or other of these in the alternative, or perhaps some combination.” (para 296)
Under s 240(1) the order may also relate to property which “represents” property obtained by unlawful conduct. This concept is explained by sections 305 to 307:
) Under section 305 (“Tracing property etc”), if a...
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