Serious Organised Crime Agency v Gale and another
| Jurisdiction | England & Wales |
| Judge | Mr Justice Griffith Williams |
| Judgment Date | 12 May 2009 |
| Neutral Citation | [2009] EWHC 1015 (QB) |
| Docket Number | Case No: HX08X02569 |
| Court | Queen's Bench Division |
| Date | 12 May 2009 |
[2009] EWHC 1015 (QB)
Before : The Honourable Mr Justice Griffith Williams
Case No: HX08X02569
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Mr Anthony Peto, Mr Robert Weekes (instructed by Serious organised Crimes Agency) for the Claimant
Mr David Lederman QC, Mr Jonathan Lennon (instructed by Rahman Ravelli Solicitors) for the 1st & 2nd Respondents. 3rd and 4th Respondents did not appear and were not represented.
Hearing dates: To be inserted:
–6, 9–13, 16–20 February 2009
SOCA v. David Gale & Teresa Gale
Mr Justice Griffith WilliamsPART A
INTRODUCTION
These are civil recovery proceedings brought by the Serious Organised Crime Agency [“the claimant”] under the provisions of Part 5 of the Proceeds of Crime Act 2005 [“ POCA”] in respect of properties and other assets valued at some £2million alleged to be recoverable property owned by the 1 st Respondent, David Gale [“DG”] either in his own name or that of the 2 nd respondent, his former wife Teresa Gale [“TG”] or the 3 rd respondent, his son David Kenneth Gale [“DKG”] or the 4 th Respondent, his mother, June Patricia Peel [“JP”]. On 28 July 2005, on the application of the Director of the Assets Recovery Agency – the functions of the Director and the Agency were transferred to the Serious Organised Crime Agency on 1 April 2008 pursuant to the provisions of the Serious Crime Act 2000 – Collins J made an Interim Receiving Order (varied on 25 August 2005 on the application of the Interim Receiver to include in the Order assets in Spain which he had discovered) and appointed Mr James Earp, an insolvency practitioner and partner, of Grant Thornton as Interim Receiver [“the Receiver”]. The Receiver then began his investigation and filed his first final report on 11 January 2006. The claimant issued the claim for civil recovery on 3 March 2006. On 18 October 2009, proceedings against the 3 rd and 4 th respondents were stayed by order of Openshaw J until the conclusion of this trial. The Receiver's final report [“the Report”] was served on 3 July 2008.
In the Report, the Receiver stated he had identified receipts of money into identified bank accounts in the names of DG and TG in the period 1989 to 2005 of about £3 million from “unknown sources” and that between 1989 and 1991, over £1.3 million of this money was transferred by DG and TG into accounts in their name with Allied Dunbar, Isle of Man. He had identified no jurisdiction where, over the last 20 years, DG has declared income for tax purposes. He had been unable to identify any independent documentary evidence of any successful businesses run by DG and/or TG in the United Kingdom or in Spain and DG and TG had not provided any specific addresses for their business enterprises and many of the properties which they asserted they or JP owned. He stated the pattern and quantum of bankings into the Allied Dunbar accounts does not match the history of assets realisations which they have stated occurred in Spain prior to their moving to the United States of America [“USA”] in 1991. He found no evidence of a successful flying related business in the USA or of any documented commercial activity in Portugal once DG and TG had moved there in about 1993. The Executive Summary in the Report concluded [ paragraph 1.19]:-
“We have not identified any independent documentary evidence which would support DG's and TG's assertion that the assets they have accumulated have been derived from legitimate activities. We have not identified evidence of declared income (or tax payments) in the UK, Spain, USA and Portugal which would provide evidence of the means to support the family and allow for the significant accumulation of wealth. There is evidence of unlawful conduct and in particular complex financial dealings indicative of money laundering and concealment. As a consequence, though it is for the Court to decide, it is not unreasonable to conclude that the property and assets have been obtained by unlawful conduct and are recoverable property.”
The Receiver identified, as recoverable property, 2 properties in Spain in the name of JP (Las Hortensias and Mezquita) together worth £2,088,000, the proceeds of sale of 120 Hurn Road, Christchurch, Bournemouth (£449,786), £218,302 in 5 frozen bank accounts and motor vehicles and a boat under construction together valued at £57,240. The total value was said to be £2,813,328 but this has been reduced by withdrawals towards living and legal costs and the fall in property values. The Receiver's Claim is expressly restricted to the recoverable property identified in paragraphs 6,7,8,9 and 12.1 of the Report dated 11 January 2006 as amended in the list set out at paragraph 1.19 in the Report but the claimant allege there are a number of other assets whose whereabouts and value are at present unascertainable.
The claimant's case is that DG's wealth has been acquired through money laundering and tax evasion in the United Kingdom, Spain, Portugal and other jurisdictions and that notwithstanding the discontinuance of criminal proceedings in Spain against DG for drug trafficking (“the 'Hanja' incident”) and his acquittal in Portugal of drug trafficking offences (“the Gale Beach incident”), there is clear evidence of drug offending in the United Kingdom, Spain and Portugal which has contributed to his wealth. It is alleged that TG has played an important part in his money laundering and that assets in her name or in their joint names or in the names of nominees were acquired as a result of his criminal activities. It is alleged that the overall evidence establishes that DG has been leading a life of serial drug trafficking, money laundering and tax evasion; it is alleged that he went to extreme lengths to avoid detection by using:-
i) a web of lies, false names, multiple passports, nominees and off-shore corporate fronts;
ii) at least 68 bank accounts both on and offshore and in a number of different jurisdictions which together have received millions of pounds from unidentified sources;
iii) needlessly complicated bank transfers and
iv) fleeing his country of residence (from the UK to Spain, from Spain to the USA and from USA to Portugal via the Bahamas) when he feared the authorities were or maybe interested in his criminal activities.
The claimant relies also on evidence of: -
v) his criminal record from his youth until when he was 32 years old together with his criminal associates;
vi) police intelligence material which reveals that he was suspected of drug trafficking in the United Kingdom before he emigrated to Spain and on his return to the United Kingdom between 2001 and 2005;
vii) an attempt to breach the Interim Receiving Order within days of service by opening a new bank account in the name of Mrs Peel with a transfer of €167,000 from a Solbank account;
viii) the compromise of proceedings bought in Ireland to restrain funds which were the proceeds of crime;
ix) his access to funds, not identified by the Interim Receiver or disclosed to the Interim Receiver, which he has used to fund his living expenses from July 2005 to date.
It is alleged that the absence – in large part due to his deliberate failure to co-operate with the Receiver's investigation —of any paper trail of records, financial documents, accounts, invoices, receipts, bank statements and tax returns and any detail of business transactions, customers, suppliers and profits establishes that the millions of pounds he acquired could not have been acquired through a legitimate business or businesses.
The case for DG and TG is that DG was at all material times a genuine businessman who acquired wealth by his honest endeavours in building work, property investment and business ventures of varying kinds, which included the sale of cars and boats. It was submitted there is no evidence that DG was in Spain when cannabis was brought on the Hanja to Ampuriabrava; that his acquittal in Portugal is conclusive of his innocence of the offending there alleged and the claimant should not be allowed to re-litigate the criminal proceedings in Portugal without access to all the transcripts (some of which are missing or unavailable) and without hearing from the witnesses who gave evidence in those proceedings; that the evidence relied upon in the proceedings in Portugal does not (in any event) establish any drug trafficking by him; that his criminal record is of no relevance and that the police intelligence reports, the details of which he cannot challenge as they are based on untested hearsay, have no evidential weight. Both DG and TG rely upon the passage of time and delay to explain the absence of documentary business records and their inability to recall details of bank accounts. It was submitted also that if the Court were to be satisfied on the balance of probabilities that DG and/or TG obtained recoverable property from the unlawful conduct alleged, proceedings must be commenced within 12 years of the date on which the Claimant's cause of action accrued, which by agreement was 28 th July 1993 but the Claimant were aware by 10 March 1992 that DG was suspected of being a drug trafficker and so their action is limitation barred.
THE RELEVANT STATUTORY PROVISIONS
Proceeds of Crime Act 2002 : -
240 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...
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