Zamira Hajiyeva v National Crime Agency
| Jurisdiction | England & Wales |
| Judge | Burnett of Maldon,Davis,Simon |
| Judgment Date | 05 February 2020 |
| Neutral Citation | [2020] EWCA Civ 108 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: C1/2018/2417 |
| Date | 05 February 2020 |
[2020] EWCA Civ 108
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
The Hon Mr Justice Supperstone
Royal Courts of Justice
Strand, London, WC2A 2LL
THE RT HON THE LORD Burnett Of Maldon
LORD CHIEF JUSTICE OF ENGLAND AND WALES
THE RT HON LORD JUSTICE Davis
and
THE RT HON LORD JUSTICE Simon
Case No: C1/2018/2417
James Lewis QC and Ben Watson (instructed by Gherson) for the Appellant
Jonathan Hall QC and Tom Rainsbury (instructed by the NCA) for the Respondent
Hearing date: 12 December 2019
Approved Judgment
The Lord Burnett of Maldon, Lord Justice Davis and Lord Justice
Introduction
This is an appeal from the decision of Supperstone J, dated 3 October 2018, dismissing an application made by Mrs Hajiyeva (the ‘appellant’) to discharge an Unexplained Wealth Order (‘UWO’) that he had previously made at a ‘without notice’ hearing on 27 February 2018.
The facts are set out fully in the judge's comprehensive and clear judgment [2018] EWHC 2534 (Admin); and, for the purposes of this appeal, it is unnecessary to do more than summarise some of the more material points.
The appellant is a national of Azerbaijan, a state outside the European Economic Area, and is married to Mr Jahangir Hajiyev. The case for the respondent, the National Crime Agency (the ‘NCA’), was founded on her connection with identified property in London SW3 (‘the Property’). The Property was purchased on 22 December 2009 by Vicksburg Global Inc, a company incorporated in the British Virgin Islands. The price which was said to have been paid for the Property was £11,500,000. Vicksburg Global Inc was, and remains, registered as the sole proprietor. On the same day that the Property was purchased, a mortgage was secured against it in favour of Barclays Bank (Suisse) SA. The charge was executed in relation to a loan facility for ‘up to £7,475,000’. On 23 December 2014, Vicksburg Global Inc applied to the Land Registry to discharge the charge against the Property; and Barclays Bank (Suisse) SA confirmed that the Property was no longer charged as security.
On 3 June 2015, in her application for indefinite leave to remain in this country, the appellant informed the Home Office that she was the beneficial owner of Vicksburg Global Inc. On 31 January 2018, the British Virgin Islands Financial Investigation Agency informed the NCA that the beneficial owner of Vicksburg Global Inc was in fact Mr Hajiyev.
From March 2001 to March 2015, Mr Hajiyev was the chairman of the International Bank of Azerbaijan (‘the Bank’). At all material times the Bank was the largest bank in the country; and the Azerbaijan Democratic Republic (the ‘State’) had a controlling shareholding of not less than 50.2%. Mr Hajiyev resigned from the Bank in March 2015. On 5 December 2015, he was arrested in Azerbaijan and subsequently charged with various offences in connection with his employment at the Bank. These included charges of misappropriation, abuse of office, large-scale fraud and embezzlement. On 14 October 2016, he was convicted after a trial in the Serious Crimes Court in Baku and sentenced to a term of 15 years' imprisonment. In addition, he was ordered to pay to the Bank a sum of approximately US$39m.
It appears that, on or about 23 June 2016, the appellant was ‘arrested’ in her absence by the State authorities and declared to be ‘wanted’ in connection with avoiding an investigation into the Bank.
On 19 February 2018, the NCA filed its application for a UWO, together with an application for an Interim Freezing Order, in respect of the Property. That application was granted at the ‘without notice’ hearing on 27 February 2018. The court also granted an application for a second UWO in respect of another property. That order was discharged and replaced by a further UWO and a freezing order on 27 April 2018. The implementation of these further orders is presently stayed pending the resolution of these proceedings.
At a hearing before the judge, which took place between 24 and 26 July 2018 in conditions of anonymity, the appellant applied to discharge the UWO on eight grounds. The judge rejected all these grounds in his judgment of 3 October 2018 and refused leave to appeal. The appellant's application for leave to appeal was accompanied by an urgent application for permission to appeal an order, also made on 3 October, revoking the anonymity order which had been made on the first day of the hearing. On 9 October, Sales LJ refused permission to challenge the revocation of the anonymity order. On 29 March 2019, Haddon-Cave LJ granted permission to appeal the substantive order on five grounds, on the basis that the appeal raised issues in relation to what was the first UWO case to come before the courts; and that it would be beneficial to have guidance from the Court of Appeal on the scope of statutory powers underlying UWOs.
Although the appellant had been arrested on 30 October 2018, pursuant to an extradition request from Azerbaijan, on 30 September 2019, Senior District Judge (Chief Magistrate) Emma Arbuthnot found that her extradition to Azerbaijan would be incompatible with her rights under the European Convention on Human Rights, as incorporated by the Human Rights Act 1998, and discharged the appellant under section 87(2) of the Extradition Act 2003.
Before turning to the five grounds of appeal, we set out the material parts of the applicable statutory and regulatory scheme.
The statutory and regulatory scheme for UWOs
Unexplained Wealth Orders were introduced under part 8 of the Proceeds of Crime Act 2002 (‘ POCA’) by the Criminal Finances Act 2017. They are part of an investigative regime.
Section 362A of POCA provides, under the heading, ‘Unexplained wealth orders’:
(1) The High Court may, on an application made by an enforcement authority, make an unexplained wealth order in respect of any property if the court is satisfied that each of the requirements for the making of the order is fulfilled.
(2) An application for an order must —
(a) specify or describe the property in respect of which the order is sought, and
(b) specify the person whom the enforcement authority thinks holds the property (“the respondent”) (and the person specified may include a person outside the United Kingdom).
(3) An unexplained wealth order is an order requiring the respondent to provide a statement —
(a) setting out the nature and extent of the respondent's interest in the property in respect of which the order is made,
(b) explaining how the respondent obtained the property (including, in particular, how any costs incurred in obtaining it were met),
(c) where the property is held by the trustees of a settlement, setting out such details of the settlement as may be specified in the order, and
(d) setting out such other information in connection with the property as may be so specified.
(4) The order must specify —
(a) the form and manner in which the statement is to be given,
(b) the person to whom it is to be given, and
(c) the place at which it is to be given or, if it is to be given in writing, the address to which it is to be sent.
(5) The order may, in connection with requiring the respondent to provide the statement mentioned in subsection (3), also require the respondent to produce documents of a kind specified or described in the order.
(6) The respondent must comply with the requirements imposed by an unexplained wealth order within whatever period the court may specify (and different periods may be specified in relation to different requirements).
(7) In this Chapter ‘enforcement authority’ means —
(a) the National Crime Agency,
Section 362B sets out the ‘Requirements for making of unexplained wealth order’:
(1) These are the requirements for the making of an unexplained wealth order in respect of any property.
(2) The High Court must be satisfied that there is reasonable cause to believe that —
(a) the respondent holds the property, and
(b) the value of the property is greater than £50,000.
(3) The High Court must be satisfied that there are reasonable grounds for suspecting that the known sources of the respondent's lawfully obtained income would have been insufficient for the purposes of enabling the respondent to obtain the property.
(4) The High Court must be satisfied that —
(a) the respondent is a politically exposed person, or
(b) there are reasonable grounds for suspecting that—
(i) the respondent is, or has been, involved in serious crime (whether in a part of the United Kingdom or elsewhere), or
(ii) a person connected with the respondent is, or has been, so involved.
…
(7) In subsection (4)(a), ‘politically exposed person’ means a person who is —
(a) an individual who is, or has been, entrusted with prominent public functions by an international organisation or by a State other than the United Kingdom or another EEA State,
…
(8) Article 3 of Directive 2015/849/EU of the European Parliament and of the Council of 20 May 2015 applies for the purposes of determining —
(a) whether a person has been entrusted with prominent public functions (see point (9) of that Article),
(b) whether a person is a family member (see point (10) of that Article), and
(c) whether a person is known to be a close associate of another (see point (11) of that Article).
We should note that section 362B(7)(a) has been amended by the Law Enforcement and Security (Amendment) (EU Exit) Regulation 2019, but not in a way that is material to this appeal. Its effect is to remove the implicit reference to the UK as being ‘another’ EEA State.
Directive 2015/849/EU, referred to in s.362B(8) of POCA, contains 68 recitals of which it is only necessary to refer to the following:
Whereas:
…
(4) Money laundering and...
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