The National Crime Agency v Gary John Robb (I) Patricia Anne Clarke and Others (Additional Claimants)
| Jurisdiction | England & Wales |
| Judge | Sir Terence Etherton |
| Judgment Date | 23 December 2014 |
| Neutral Citation | [2014] EWHC 4384 (Ch) |
| Docket Number | Case No: HC12C03233 |
| Court | Chancery Division |
| Date | 23 December 2014 |
2014 EWHC 4384 (CH)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION (on transfer from the Queens Bench Division)
THE CHANCELLOR OF THE HIGH COURT
Sir Terence Etherton
Case No: HC12C03233
and
Nicholas Cox (instructed by NCA Legal Department) for the Claimants
Robert Morris (instructed by Ison Harrison) for the Lead Additional Claimants
Hearing dates: 2 nd, 3 rd and 4 th December 2014
APPROVED JUDGMENT
The Chancellor ( Sir Terence Etherton):
Introduction
These are proceedings for the civil recovery of the proceeds of unlawful conduct within Part 5 of the Proceeds of Crime Act 2002 (" POCA"). They began as a CPR Part 8 claim in the Queen's Bench Division by the Serious Organised Crime Agency ("SOCA") against Gary John Robb to recover the funds standing to the credit of a specified NatWest Bank account ("the Fund") as recoverable property within the meaning of section 304 of POCA. Recoverable property, that is to say property obtained through unlawful conduct as defined by section 241 of POCA, is, practically speaking, forfeited to the State: POCA sections 266, 280 and 460(2).
Following a hearing over three days in the Queen's Bench Division in March 2012 Mr Justice Mackay made an order dated 30 March 2012 declaring that, without prejudice to any application by any third party, as between SOCA and Mr Robb the Fund represents recoverable property obtained by Mr Robb through unlawful conduct within the meaning of Part 5 of POCA.
Subsequently, the proceedings were transferred to the Chancery Division, the National Crime Agency ("the NCA") has been substituted for SOCA, which has ceased to exist and whose functions in relation to POCA have been assumed by the NCA, and 71 people have been reconstituted (having originally been third parties) or added as additional claimants. They are all people who seek declarations under section 281 of POCA ("section 281") that part of the Fund belongs them. As at 18 November 2014 the Fund stood at £1,499,487.09.
This is my judgment on the hearing of the section 281 applications of eight of the additional claimants ("the lead claimants").
Background
The following summary of the factual background is taken from the judgment of Mackay J. Save insofar as any details of the precise amounts and routes of payments may be inconsistent with the up-to-date figures mentioned in my findings below, the following facts have not been challenged by any of the parties represented before me.
Mr Robb was born in South Shields on 6 September 1962. His previous convictions include obtaining services by deception in January 1994 when he was fined, and in the following September for two counts of handling he received concurrent terms of six months' imprisonment.
In 1997 he stood trial at Teesside Crown Court on two counts of allowing club premises to be used for the supply of drugs. In the course of the trial he absconded to the Turkish Republic of Northern Cyprus ("TRNC"), an entity not recognised as a country by the UK (or by any country other than Turkey) and with which this country has no arrangements for extradition.
He worked as a builder-cum-developer of small scale projects. In February 1999 he formed a limited company Aga Developments Ltd (AGA), incorporated under the laws of the TRNC, and in due course embarked on two large scale and ambitious projects. The smaller of the two, Hz Omer, was to comprise about 65 properties and for which marketing began in late 2003. The larger was Amaranta Valley which was intended to consist of 250 properties initially, with the potential to grow even larger. Marketing of these began in the spring/early summer of 2004 through Unwins, an English run firm based in the TRNC, acting as agents for AGA.
Buyers (who were called "investors" by Mackay J and in the hearing before me and I shall call the same for consistency) were principally from the UK. They bought off plan, paid a deposit and thereafter agreed to make stage payments as the work on the ground reached certain defined stages of construction. Most of the Hz Omer houses were built albeit with a high number of complaints as to the conduct of Mr Robb and AGA's performance of its contractual obligations. Only one house has ever been completed at Amaranta, and that was achieved by an investor who took over the task of construction himself.
While Unwins were still acting as the agents they transferred a total of £1.675 million into an AGA account with Limassol Turkish Co-operative Bank ("Mr Robb/AGA's Account 2"). £1.384 million was from Amaranta investors and the balance mainly from Hz Omer investors.
On 21 October 2004 Mr Robb opened a personal account (Mr Robb's Account 1"), and £1.8m was transferred into it from Mr Robb/AGA's Account 2. On 24 May 2005 a further £125,000 was paid in from Mr Robb/AGA's Account 2, probably representing the remaining sums from investors that had been paid to Unwins.
In December 2004 Mr Robb went to Thailand for the first time. It is unclear how long he spent there or how many times he went. He made substantial capital investments there in development land and in a company.
In February 2005 Unwins' agency was determined and collection of deposits and stage payments was taken over by Mr Talat Kursat, Mr Robb's lawyer.
Mr Kursat operated three accounts of relevance. One account was a UK account with HSBC into which investor payments were received. He had another account at the same bank called "Talat Kursat & Co clients account". A third account ("Mr Kursat's Turkish Account 10") was a sterling account in the TRNC into which investor payments from the other two accounts were transferred. He also had what has been called a "ghost account" – "EFEKTIV YATAN 892 1009609 775 058688852 NOLU CEK TALAT KuRSATTR YT".
In March 2005 an incentive scheme was offered to Hz Omer investors under which those who paid in full in advance would be guaranteed completion of their home within three months. In April 2005 a second incentive scheme offering a 10 per cent reduction for cash purchasers was introduced and offered also to Amaranta investors.
In addition to the £1.8 million paid in October 2004, between 1 April 2005 and 22 July 2005 a further £1.476 million was paid into Mr Robb's Account 1, of which over £1 million came from Mr Kursat's accounts and the balance from another source which must as a matter of reasonable and probable inference also represent investor money.
Between 1 April 2005 and 22 July 2005 Mr Robb procured the transfer of a total of £1,119,757 to Thailand, either by Mr Kursat from Mr Kurst's Account 10 or by a Mr Alan Gowland, an associate of Mr Robb, or from Mr Robb's Account 1.
Investor disquiet began to express itself increasingly from about April 2005, the month in which the first of many inhibition orders (the TRNC equivalent of injunctions) were granted against AGA and Mr Robb. On 25 May 2005 a European Arrest Warrant was issued for Mr Robb by the Republic of Cyprus.
On 22 July 2005 Mr Robb gave written instructions from Thailand to transfer £1.495 million from Mr Robb's Account 1 to his personal account in Thailand. On 25 July those funds were restrained by Collins J when in the accounts of the Thailand Bank's corresponding bank in London.
On 21 December 2005 the TRNC Council of Ministers issued an edict prohibiting Mr Robb's return to the country. This was lifted on 22 February 2006.
In March or April 2006 (the date is not clear) Mr Robb says he was effectively deported to the TRNC on terms that he collaborate with the efforts of others to achieve the completion of the Amaranta development. He claims he was prevented from doing so.
In December 2007 a Protocol was entered into between the AGA Buyers Committee, AGA and Mr Robb as to steps to be taken to complete the project. It failed to achieve significant results.
In January 2009 the TRNC removed Mr Robb to England for "firearms offences". Mr Robb claims that was an illegal act as he was a citizen of the TRNC and no deportation treaty existed with the UK. On 8 July 2010 he pleaded guilty to two counts relating to offences under the Misuse of Drugs Act 1971 and was sentenced to five years' imprisonment. Having served that term he was then extradited to the Republic of Cyprus where he was charged with and pleaded guilty to charges relating to the illegal use of what the Greek part of the island considers to be stolen land; he was sentenced to 10 months' imprisonment.
On 17 September 2009 Walker J made a property freezing order in respect of the Fund pursuant to section 245A of POCA. That was subsequently extended by Mackay's J's order of 30 March 2012.
The judgment of Mackay J
Mackay J found that Mr Robb's instruction of 22 July 2005 to transfer a further £1.495 million from Mr Robb's Account 1 to Thailand, had the restraining order not been obtained, would have resulted in his removing a total of £2,693,757 of investor money (excluding the Gowland payments) from where it could be applied for the purposes for which it had been paid to AGA, and to a place where he could treat it as his own. Mackay J concluded in paragraph [57] that:
"this was plainly a course of action which [Mr Robb] set in train dishonestly and in order to defraud his customers, having abandoned such intention as he had to give them what they had contracted to receive."
Mackay J rejected, however, SOCA's case that all Mr Robb's actions in relation to the proposed development were always intended to be a vehicle by which he...
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