Serious Organised Crime Agency v James Thomas O'Docherty (also known as Mark Eric Gibbons) and Another
| Jurisdiction | England & Wales |
| Judge | Lord Justice Leveson,Lord Justice Richards,Lord Justice Mummery |
| Judgment Date | 16 May 2013 |
| Neutral Citation | [2013] EWCA Civ 518 |
| Docket Number | A. Appeal: A2/2012/2578 |
| Court | Court of Appeal (Civil Division) |
| Date | 16 May 2013 |
[2013] EWCA Civ 518
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
His Honour Judge Shaun Spencer Q.C.
AND AN APPLICATION TO RE-OPEN AN ORDER OF
THE COURT OF APPEAL DATED 17 MAY 2012
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Mummery
Lord Justice Richards
and
Lord Justice Leveson
A. Appeal: A2/2012/2578
B. Application: A2/2012/0048(A)
Andrew Sutcliffe Q.C. and Jonathan Hall instructed by the Legal Department for the Serious Organised Crime Agency
Andrew Mitchell Q.C and Nicholas Yeo instructed by Stokoe Partnership, London for James O'Docherty and Manncherty SL
Hearing date : 20 February 2013
Approved Judgment
The Proceeds of Crime Act 2002 ('the 2002 Act') is draconian legislation intended to ensure that those who engage in criminal or unlawful conduct, whether in the UK or abroad, should be deprived of the property which is or which represents the proceeds of their crimes or unlawful conduct. Part 5 of the Act deals with cases where there has been no criminal conviction in this country but applies to conduct which is unlawful in the UK or is criminal abroad and would be recognised as criminal here. Where the statutory conditions are satisfied, the court is required to make what is known as a civil recovery order after which the enforcement authority is able to take appropriate steps to enforce it.
Property which may be made the subject of the confiscation process is defined by s. 316(4) of the 2002 Act in these terms:
"Property is all property wherever situated and includes — (a) money, (b) all forms of property, real or personal, heritable or moveable, (c) things in action and other intangible or incorporeal property."
This wide definition and, in particular, the words "wherever situated" had been interpreted as permitting the relevant authorities to pursue proceeds of crime to wherever they are situated, thereby specifically targeting those who move these assets around the world, seeking to keep them hidden from the authorities. That understanding, however, was undermined by the decision of the Supreme Court (reversing the decision of the Court of Appeal and the prior general understanding of the law) in Serious Organised Crime Agency v. Perry (Nos 1 & 2) [2012] UKSC 35, [2013] 1 AC 182 (' Perry'). The relevant part of the majority decision in the case (Lord Phillips, Baroness Hale, Lord Kerr, Lord Wilson, Lord Reed, Hughes LJ and Lord Brown, Lord Judge and Lord Clarke dissenting) can be summarised from the headnote:
"[N]otwithstanding the definition of 'property' in s. 316(4) of the 2002 Act, whether the location of 'property' to which a provision of the Act referred was subject to a territorial restriction depended upon the context; that, having regard to the scheme and language of Part 5 of the Act and to relevant principles of international law, the jurisdiction of the High Court of England and Wales to make a civil recovery order applied only in relation to property within England and Wales; and that, accordingly, the court had no jurisdiction under s. 245A to make the worldwide property freezing order, which should be re-drawn so that it applied only to property within the jurisdiction."
Needless to say, the form of the order in that case, seeking to exercise wide-ranging jurisdiction over property outside England and Wales was not unique to that case. Similar orders had been made in other cases and, in particular, in this case, purported to cover considerable property in Spain and elsewhere. The question which now falls to be decided is what, if anything, can or should be done in relation to these orders, valid at the time they were made, but now far wider in their coverage than the Supreme Court has concluded is consistent with a proper interpretation of the law.
Before dealing with the issues, one submission can be addressed immediately. Mr Andrew Sutcliffe Q.C., on behalf of the Serious Organised Crime Agency ('SOCA') made it clear that the Government intends to use the Crime and Courts Bill presently before Parliament retrospectively to reverse the decision in Perry (see Hansard, 14 January 2013, column 636) and that, on the basis that the Spanish court gave effect to the property freezing order ("PFO"), there is every prospect that SOCA will be able to recover the proceeds of the property subject to the civil recovery order. It is sufficient to note that legislative change has not, as yet, been effected; it is irrelevant to the issues of law that now fall to be determined: if authority is required for what seems to me to be a self evident proposition, it is to be found in Willow Wren Canal Carrying Co Ltd v British Transport Commission [1956] 1 All ER 567 per Upjohn J at 569E-G.
The Facts
Following abortive criminal proceedings in 2001 and 2003 (both of which were stayed as an abuse of process for want of proper disclosure) an investigation undertaken by SOCA into the activities of James O'Docherty concluded that he had obtained an income from drugs which had been laundered through investment in property and some trading and that this income had been supplemented by mortgage frauds. Accordingly, SOCA believed that property held by Mr O'Docherty and Manncherty SL (a company controlled by him) along with property held in the names of others (but in reality belonging to him) was obtained directly or indirectly through unlawful conduct.
On 12 November 2008, on the application of SOCA, Sir George Newman made a PFO under s. 245A of the 2002 Act. It prohibited the respondents to the order (including Mr O'Docherty) "from dealing with the property and assets set out" and required disclosure in writing of certain matters. Paragraph 17 of the Order provides:
"Anyone affected by this Order may apply to the Court at any time to vary or discharge this Order (or so much of it as affects that person) pursuant to section 245B of the Proceeds of Crime Act…"
On 14 April 2011, the terms of the Order were varied by King J following an ex parte application which, if a variation as opposed to a fresh order, should have been made on notice (see s. 245B(5) of the 2002 Act). In the event, Mr O'Docherty was served with the order that afternoon and did not then (or at any time since) seek to set it aside.
On 21–22 June 2011, the trial of the issue came before Kenneth Parker J. Mr O'Docherty instructed leading and junior counsel to apply for a stay of the proceedings as an abuse of process but, when that application failed, the judge was told that counsel had no further instructions and they withdrew from the case. There was no challenge advanced in relation to the merits. Having reserved judgment, on 18 October 2011, Kenneth Parker J had to return to the case when Mr O'Docherty disposed of one of his overseas properties in breach of the property freezing order either as made or varied by King J: he was committed to prison for 9 months for contempt although the warrant has not yet been executed.
On 16 December 2011, Kenneth Parker J gave judgment in the substantive action and decided that SOCA had "proved its claim to the requisite standard of proof" ( [2011] EWHC 3332 QB at para. 129). In the course of the judgment, he said:
"In assessing the above evidence it is important to bear in mind that O'Docherty has not in the course of these proceedings taken any steps to seek to rebut the inferences of unlawful conduct that can fairly be drawn from it. He has had ample opportunity to participate substantially in the proceedings. He has deliberately chosen not to do so. …. I do not have the impression that O'Docherty lacks resources when he chooses to take issue with a case put against him (as on the application in respect of contempt of court that was brought by SOCA after the substantive hearing). Rather I feel that, with the help of his legal team, he is seeking to play a long strategic game, keeping his cards as close to his chest as is legally permissible and waiting for an opportune moment at which he and they believe that he might be able to challenge any adverse outcome on the merits of the claim. However, as I have stated, in response to the evidence of unlawful conduct there has been, beyond mere denial, a deafening silence from O'Docherty and his lawyers."
Essentially, the judge found that, for over two decades, Mr O'Docherty had been engaged in drug dealing and money laundering (the former being the only reliably identifiable source of his income) and that, in the latter 1990s, he started moving his assets (being the proceeds of his crimes) from the UK mainly to Spain but also to France, Switzerland and Dubai. The judge made a civil recovery order pursuant to s. 243 and s. 266 of the 2002 Act and declared that the domestic and overseas property was recoverable; he ordered that it would vest immediately in a trustee for civil recovery who should have such further rights to the recoverable property to which he was or might become entitled under the law of the place where that property was situated (in addition to other powers set out in Schedule 7 of the 2002 Act). He varied the property freezing order so as not to impede the realisation of the recoverable property and required Mr O'Docherty to comply with the trustee in the exercise of his powers.
In addition Kenneth Parker J ordered ("for the avoidance of doubt") that the property freezing order "shall continue in force"; he granted liberty to apply "for the purpose...
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