Senel Ahmet v David Paul Tatum

Hearing date: 22 February 2024

Approved Judgment

This judgment was handed down remotely at 10.30am on 15 March 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

On 23 May 2023, Michael Green J (“the Judge”) struck out a claim brought by the appellant, Ms Senel Ahmet, on the basis that it was an abuse of process. Ms Ahmet now challenges that decision in this Court. The appeal raises an important question as to the circumstances in which the ownership of properties relevant to applications under the Proceeds of Crime Act 2002 (“ POCA”) must be litigated in the Crown Court rather than in civil proceedings.

Basic facts

The appeal relates to the ownership of a property known as Brindles Farmhouse (“Brindles Farmhouse”) in Brindles Close, Hutton, Brentwood. The first respondent, Mr David Tatum, is the registered proprietor of the property, but Ms Ahmet contends that she has a beneficial interest in it.

Ms Ahmet and Mr Tatum have a long-standing relationship and three children. According to Ms Ahmet, they lived between 2010 and 2014 in a house which they had bought together. They moved to rented accommodation, but in 2017 Brindles Farmhouse was purchased in their joint names. The property was transferred into the sole name of Mr Tatum in 2019, but Ms Ahmet maintains that that was to facilitate the obtaining of a loan and that she continued to be beneficially interested in it.

On 15 April 2021, Mr Tatum was arrested and charged with offences relating to class A drugs and money laundering. On 4 August 2021, on the application of the second respondent, the Crown Prosecution Service (“the CPS”), Her Honour Judge Holt, sitting in the Crown Court, made a restraint order under POCA which, among other things, prohibited disposals of Brindles Farmhouse and money held in an account which Mr Tatum and Ms Ahmet had with Barclays Bank. In March 2022, Ms Ahmet applied for the restraint order to be varied to allow her unfettered access to half the balance on the Barclays account, asserting a beneficial interest in both that money and Brindles Farmhouse. In May 2022, it was agreed that £3,800 a month could be paid from the Barclays account to service a mortgage over Brindles Farmhouse and the matter was listed for a contested hearing on 19 August 2022. At that stage, Ms Ahmet limited her application to asking for the release to her from the Barclays account of £23,070. His Honour Judge Johnson, however, refused the application.

The present proceedings were issued on 9 November 2022. By them, Ms Ahmet seeks an inquiry into the extent of the beneficial interests of Mr Tatum and herself in Brindles Farmhouse and a declaration as to those interests. The defendants were named as Mr Tatum and the CPS.

On 7 December 2022, the CPS applied to have the claim struck out on the basis that it had been brought for an improper or collateral purpose and/or was susceptible to determination under a procedure laid down in POCA for the resolution of such issues. It was that application which came before the Judge, on 23 May 2023. In an extempore judgment ( [2023] EWHC 1492 (Ch), [2023] 1 WLR 3076) (“the Judgment”), he concluded that he should accede to it.

In the meantime, Mr Tatum had been convicted on two counts. He had entered not guilty pleas on 22 November 2022, but on 3 March 2023 he changed his plea to the two counts to guilty. On 4 April 2023, he was sentenced to 15 years' imprisonment and a timetable for confiscation was set.

On 5 February 2024, His Honour Judge Edmunds KC gave directions, including as to the service by Ms Ahmet of a witness statement and the mutual provision of relevant documents, with a view to a hearing at the end of July with a time estimate of two to three days. The directions were, however, expressed to be contingent on the outcome of this appeal.

The statutory framework

Part 2 of POCA, which comprises sections 6 to 91, contains provisions allowing for the confiscation of assets of persons convicted of criminal offences. Where someone has been convicted of a relevant offence and has benefited from his criminal conduct, section 6(1) provides for a confiscation order to be made requiring him to pay the “recoverable amount”. By section 7, the “recoverable amount” is “an amount equal to the defendant's benefit from the conduct concerned” unless, among other things, the “available amount” is less, in which case the “recoverable amount” cannot exceed the “available amount”. Section 9(1) explains that the “available amount” is:

“the aggregate of—

(a) the total of the values (at the time the confiscation order is made) of all the free property then held by the defendant minus the total amount payable in pursuance of obligations which then have priority, and

(b) the total of the values (at that time) of all tainted gifts.”

By section 78, a person is to be treated as making a “gift” if he “transfers property to another person for a consideration whose value is significantly less than the value of the property at the time of the transfer”, and a gift will be “tainted” if made in circumstances such as are described in section 77.

Section 10A of POCA applies where someone other than the defendant may have an interest in property that could be used to satisfy a confiscation order. It allows the Crown Court to determine the extent of the defendant's interest in the property and for anyone else who may have an interest in it to have the chance to make representations. It is in these terms:

“(1) Where it appears to a court making a confiscation order that—

(a) there is property held by the defendant that is likely to be realised or otherwise used to satisfy the order, and

(b) a person other than the defendant holds, or may hold, an interest in the property,

the court may, if it thinks it appropriate to do so, determine the extent (at the time the confiscation order is made) of the defendant's interest in the property.

(2) The court must not exercise the power conferred by subsection (1) unless it gives to anyone who the court thinks is or may be a person holding an interest in the property a reasonable opportunity to make representations to it.

(3) A determination under this section is conclusive in relation to any question as to the extent of the defendant's interest in the property that arises in connection with—

(a) the realisation or destruction of the property, or the transfer of an interest in the property, with a view to satisfying the confiscation order, or

(b) any action or proceedings taken for the purposes of any such realisation or transfer.

(4) Subsection (3)—

(a) is subject to section 51(8B), and

(b) does not apply in relation to a question that arises in proceedings before the Court of Appeal or the Supreme Court.

(5) In this Part, the ‘extent’ of the defendant's interest in property means the proportion that the value of the defendant's interest in it bears to the value of the property itself.”

Section 10A was inserted into POCA by section 1 of the Serious Crime Act 2015 “SCA 2015”). The explanatory notes to SCA 2015 stated as regards section 1:

“19. In general, it is most appropriate for third party interests to be dealt with substantively at the enforcement stage of a confiscation order given that the existence of such interests only crystallises against specific property at that stage. However, in some cases waiting until enforcement to determine the extent of a third party's interest in the defendant's property can complicate, lengthen and otherwise frustrate the confiscation process ….

20. This section inserts a new section 10A into POCA to confer on the Crown Court, when making a confiscation order, a power to make a determination as to the extent of the defendant's interest in particular property (new section 10A(1) and (5)). Given that a consequence of making such a determination will be to determine the extent, if any, of any third party interest in the property, new section 10A(2) affords third parties who have, or may have, an interest in the property the right to make representations to the court about the extent of their interest. The right to make representations also extends to the defendant. Subject to two exceptions, any determination as to the extent of the defendant's interest in particular property is binding on any court or other person involved in the enforcement of the confiscation order (new section 10A(3)). The exceptions are where it is open to a court which has appointed an enforcement receiver to hear representations (see section 4) or in proceedings before the Court of Appeal or Supreme Court (new section 10A(4)).

21. It is envisaged that the Crown Court would only make such determinations in relatively straightforward cases, that is where the court considers that it can, without too much difficulty, determine the defendant's interest in particular property. In deciding whether to make a determination in any particular case, it is expected that judges will exercise this power to determine the defendant's interest in property only in those cases where their...