Serious Organised Crime Agency v Trevor Hymans and Others
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE KENNETH PARKER,Mr Justice Kenneth Parker |
| Judgment Date | 16 December 2011 |
| Neutral Citation | [2011] EWHC 3332 (QB) |
| Docket Number | Case No: HQ11X01098 |
| Court | Queen's Bench Division |
| Date | 16 December 2011 |
[2011] EWHC 3332 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Kenneth Parker
Case No: HQ11X01098
Andrew Sutcliffe QC and Jonathan Hall (instructed by Serious Organised Crime Agency) for the Applicant
Michael Wolkind QC and Nicholas Yeo (instructed by Stokoe Partnership) for the Third Respondent
Hearing dates: 21 and 22 June 2011
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
The Claimant, the Serious Organised Crime Agency ("SOCA") alleges that the Third Respondent, James Thomas O'Docherty ("O'Docherty"), has, for over two decades, been engaged in drug dealing and money laundering using a variety of individuals and corporate entities to assist him in attempting to disguise the criminal nature of his assets.
SOCA alleges that in the latter part of the 1990s O'Docherty started moving his criminal property from the UK to Spain (where the majority of his known property now is), France, Switzerland and Dubai.
SOCA alleges that the principal, and only reliably identifiable, source of O'Docherty's income is drug dealing. He was charged in 1999 but his case never came to trial, being stayed as an abuse of process in 2001 following disclosure failures before the magistrates' court. Further criminal charges were brought but finally stayed in 2003.
In 2004 SOCA commenced a civil recovery investigation against O'Docherty. As a result of that investigation SOCA contends that O'Docherty had invested his drugs income in property and possibly some trading. SOCA alleges that O'Docherty's income from property was supplemented by mortgage frauds committed by him and his associates. SOCA's primary case is that the entirety of O'Docherty's property has always been the proceeds of drug dealing, supplemented by the proceeds of mortgage fraud and/or property that represents such proceeds and/or profits on such proceeds.
SOCA's secondary case is that even if predicate offences cannot be identified the entirety of O'Docherty's property has always been the proceeds of money laundering and all property that represents such proceeds and/or profits on such proceeds.
The First Respondent, Trevor Hymans, is the registered proprietor of the property at 52 Roche House in respect of which SOCA seeks a civil recovery order. The Second Respondent, Stephen Keeble, is the registered proprietor of the property at 22 Arrowsmith Path, Chigwell, in respect of which SOCA seeks a civil recovery order. The Fourth Respondent, Manncherty SL is a company owned and controlled by O'Docherty, which is the registered owner of property at Central Commercial El Elzambra Porto Buenos, Marbella 29660, Spain, in respect of which SOCA also seeks a civil recovery order.
By a letter dated 6 April 2010, Manncherty, by its solicitors, formally admitted such beneficial ownership.
The Statutory Regime: Part 5 POCA
By section 243(1) of the Proceeds of Crime Act 2002, proceedings for a recovery order may be taken by the enforcement authority in the High Court against any person who the authority (here, the Serious Organised Crime Agency) thinks holds recoverable property. Each of the Respondents holds recoverable property subject to this claim.
Section 266(1) ("Recovery Orders") provides that:
"266. (1) If in proceedings under this Chapter the court is satisfied that any property is recoverable, the court must make a recovery order.
(2) The recovery order must vest the recoverable property in the trustee for civil recovery.
(3) But the court may not make in a recovery order –
a) any provision in respect of any recoverable property if each of the conditions in subsection (4) or (as the case may be) (5) is met and it would not be just and equitable to do so, or
b) any provision which is incompatible with any of the Convention rights (within the meaning of the Human Rights Act 1998 (c. 42)).
(4) In relation to a court in England and Wales or Northern Ireland, the conditions referred to in subsection (3)(a) are that –
a) the respondent obtained the recoverable property in good faith,
b) he took steps after obtaining the property which he would not have taken if he had not obtained it or he took steps before obtaining the property which he would not have taken if he had not believed he was going to obtain it,
c) when he took the steps, he had no notice that the property was recoverable,
d) if a recovery order were made in respect of the property, it would, by reason of the steps, be detrimental to him.
(5) In relation to a court in Scotland … [not relevant].
(6) In deciding whether it would be just and equitable to make the provision in the recovery order where the conditions in subsection (4) or (as the case may be) (5) are met, the court must have regard to –
a) the degree of detriment that would be suffered by the respondent if the provision were made,
b) the enforcement authority's interest in receiving the realised proceeds of the recoverable property.
(7) A recovery order may sever any property.
(8) A recovery order may impose conditions as to the manner in which the trustee for civil recovery may deal with any property vested by the order for the purpose of realising it.
(9) This section is subject to sections 270 to 278."
Recoverable property is defined by section 304(1) as "property obtained through unlawful conduct" (whether domestically, or overseas, in which case there is a double criminality requirement). It includes property which "represents" such property (section 305), and profits accruing on such property (section 307).
A Court may make a civil recovery order, and vest property in the trustee, in respect of overseas property: Perry and others v SOCA [2011] EWCA Civ 578.
It is not necessary to specify the unlawful conduct precisely; it is enough for the enforcement authority to set out the matters which constitute the particular kind or kinds of unlawful conduct by which the property was obtained: R (Director of the Assets Recovery Agency and others) v Green [2005] EWHC 3168 (Admin). In so doing, the mere fact of a lack of lawful income to support lifestyle is insufficient; but a failure to account for how a lifestyle is maintained or a false explanation for lifestyle may well lead to an inference that property is recoverable: Director of Assets Recovery Agency v Olupitan [2008] EWCA Civ 104. The authorities have been helpfully analysed by Griffith Williams J in SOCA v Gale [2009] EWHC 1015 (QB) at [12] to [17] (a decision upheld by the Court of Appeal at [2010] EWCA Div 759).
Section 241(3)(a) of Proceeds of Crime Act 2002 expressly provides that the standard of proof in civil recovery proceedings for proving that unlawful conduct has occurred is the "balance of probabilities". This section, its compatibility with Article 6 ECHR, and the relationship generally of criminal and civil proceedings were recently considered by the Supreme Court in Gale [2011] UKSC 49.
The Supreme Court was unanimous in rejecting the proposition that the criminal standard of proof applied to civil recovery proceedings: see in particular Lord Phillips at paras 35, 54; Lord Clarke at para 56; Lord Brown at paragraph 111; Lord Dyson at para119.
There is also no procedural link between criminal proceedings and civil recovery proceedings. The clearest statement of this is in the speech of Lord Dyson at para 133: civil recovery proceedings are
"free-standing proceedings instituted whether or not there have been criminal proceedings against the respondent or indeed anyone at all."
Lord Clarke (with whom Lords Phillips, Mance, Judge, Reed and Brown agreed) expressly agreed with this at para 56.
A majority of the Supreme Court held that an acquittal in criminal proceedings did not conclusively establish that the respondent did not commit the criminal act. The acquittal showed only that the evidence against him in the criminal proceedings was insufficient to discharge the enhanced burden of proof: see Lord Phillips (with whom Lords Mance, Judge, and Reed agreed) at para 19; Lord Brown at paragraph115.
An acquittal in criminal proceedings does not preclude the Court from considering the (or part of the) evidence that formed the basis of those charges: see Lord Phillips (with whom Lords Mance, Judge, Reed and Brown agreed) at para 35; Lord Clarke (with whom Lords Phillips, Mance, Judge, Reed and Brown agreed) at para 56. A Court may find in different proceedings that, applying the balance of probabilities, a respondent committed the same act as that of which he was acquitted to the criminal standard: see Lord Phillips (with whom Lords Mance, Judge, Reed and Brown agreed) at para 19; Lord Dyson at para 138.
The only qualification is that it is not open to a State to undermine the effect of an acquittal: see Lord Clarke at paragraph 60. This proposition was articulated as follows by Lord Brown at para 115:
"in all proceedings following an acquittal the court should be astute to ensure that nothing that it says or decides is calculated to cast the least doubt upon the correctness of the acquittal."
See also Lord Dyson at para 138: a court should not decide a civil case using language which casts doubt on the correctness of an acquittal. This will not happen if the court's language and reasoning go no further than is necessary for the purpose of determining the issue before that court and without making imputations of criminal liability....
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