Forfeiture of assets - application to release monies from a bank account
[2022]JRC078
Royal Court
(Samedi)
30 March 2022
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Before :
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J. A. Clyde-Smith O. B.E., Commissioner, and
Jurats Ramsden and Le Cornu
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Between
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Her Majesty’s Attorney General
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Representor
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And
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Jeremiah Timbut Useni
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First Respondent
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And
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Standard Chartered Bank, Jersey Branch
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Second Respondent
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S. C. Brown Esq. Crown Advocate.
Advocate H. B. Mistry for the First
Respondent.
Advocate J. Harvey-Hills for the Second Respondent.
judgment
the COMMISSIONER:
1.
This is an
application by the First Respondent for the Court to grant permission to the
Second Respondent to release monies held in a bank account in order to
discharge the legal fees of Advocate Mistry and of the First Respondent’s
Nigerian lawyers.
2.
The First
Respondent has four bank accounts with the Second Respondent in Euros, Dollars
and Sterling, totalling approximately £2M. The very brief uncontested facts are as
follows:
(i)
The First
Respondent is a retired Lieutenant General of the Nigerian military, where he
served in various roles between 1966 and 1993. He then held the position of Minister of
the Federal Capital Territory between 1993 and 1998, during the rule of General
Sani Abacha. The First Respondent
explains in his second affidavit that he was in name the number two in the
Abacha regime.
(ii) The first bank account with the Second
Respondent was opened in March 1986 in the name of a “Tim Shani”
who does not exist. The First
Respondent was the true holder of this and the subsequent accounts.
(iii) On 27th February 2003, the Second
Respondent was refused consent to operate the accounts by the Joint Financial
Crimes Unit. That “no
consent” has continued until the present day.
(iv) On 28th May 2021, the Attorney
General served a notice upon the First Respondent and the Second Respondent
invoking the summary procedure under Article 10 of the Forfeiture of Assets
(Civil Proceedings) (Jersey) Law 2018 (“the 2018 Forfeiture
Law”), the Attorney General having reasonable grounds to believe that the
property held in the bank accounts is tainted property.
(v) The First Respondent was represented at the
hearing required by the notice and pursuant to Article 11 the question of
whether or not the property contained in the bank accounts is tainted, will be
determined on 25th and 26th April 2022.
(vi) Pursuant to Article 11(2) the onus will be upon
the First Respondent to satisfy the Court that the property held in the bank
accounts is not tainted.
The application
3.
The
amended summons setting out the First Respondent’s application is in
these terms:
“1. That
pursuant to:
i)
Article 6
of the Human Rights (Jersey) Law 2000 (as amended) (the “Law”),
being the right to a fair trial; and/or
ii)
Article 1
of the First Protocol of the Law, being the protection of property; and/or
iii)
on the
grounds that the First Respondent has no other available assets (legally or
beneficially owned) to apply towards pay [sic] his legal expenses; and/or
iv)
upon the
Royal Court exercising its inherent jurisdiction
the Court grants permission to
the Second Respondent to release property located in the following bank account
located at the Second Respondent:
Account No: …….
to Mistry Law, upon receipt of
its invoices and breakdowns to discharge the First Respondent’s legal
expenses. The legal expenses
covered by this order is also to cover the First Respondent’s Nigerian
legal expenses in dealing with this matter, which is being conducted by The Law
partners, Barristers and Solicitors, 10 Lachlan Close, Off Osun Crescent,
Maitama, Abuja, Nigeria, such firm’s invoices and breakdowns to be
included as a disbursement and appended to Mistry Law’s invoices for
discharge.”
The reference to Article 6 of the Human
Rights (Jersey) Law 2000 (“the Human Rights Law”) should be a
reference to Article 6 of the Convention for the Protection of Human Rights and
Fundamental Freedoms (“the Convention”).
4.
The First
Respondent’s position is as follows:
(i)
He does
not have available assets to pay for his legal expenses in these proceedings.
(ii) Even if he has available assets, Advocate
Mistry’s bank will not allow him to make payment to Advocate Mistry for
his legal expenses because he is a “PEP” connected with a
potentially high risk country.
(iii) As the First Respondent has no available assets
and as his counsel cannot get paid from assets belonging to the First
Respondent, it is incompatible with the First Respondent’s right to a
fair trial for him not to have legal representation due to a lack of funding
from the funds held in the bank accounts.
5.
We take
these submissions in the order requested by Advocate Mistry.
Available Assets
6.
The First
Respondent has filed two affidavits in support of this application to have
access to the bank accounts, in which he deposes that he is now 78 years of
age, retired and with no income. He
lives in modest accommodation and has no significant spending or assets. We quote from these passages in his
second affidavit:
“26 Most of the
assets that I have been living on since I retired after being denied access to
my life savings in Jersey has, apart from my brief service in the Nigeria
Senate, been via the sale (sometimes below market value) of my property/land in
Nigeria and from the support of my family members who have continued to cater
for my wellbeing.
27 Before the Court and/or the AG
get excited by the notion that I have land in Nigeria that I have sold, I wish
to clarify how land ownership works in Nigeria and from the outset I wish to
state that I have had the Nigerian High Court confirm that the land that I own
in Nigeria and that my family own in Nigeria has been allocated legitimately to
me and my family.
28 In Nigeria, all land legally
belongs to the Government of the State where such land is located or in the
case of the Federal Capital Territory, it is owned by the President through the
Minister responsible.
29 To own land in Nigeria, every
citizen is entitled to a) apply for land and b) be granted the same. It is also common practice for a senior
government office holder to be granted land as part of his engagement or
severance payment.
30 Save for the day to day expenses
of running my house and every day expenses, I confirm I do not have any other
expenditure. I also do not have any
other sources of income and I cannot borrow funds from others to assist me to
pay for my legal expenses. I am
retired, 78 years of age and have no means to pay people back.
31 I have done my best to set out
my assertions that I do not have available other assets to pay for my legal
expenses, however add, that even if I am not in the eyes of the Court able to
discharge this burden, my application does not fail. If the AG alleges otherwise, he is
required to evidence the basis of his suspicions rather than on assumptions.
32 I therefore respectfully ask the
Court to find that I do not have any other available asset to pay for my legal
expenses other than the funds held in the Bank Accounts.”
7.
In his
third affidavit, the First Respondent sets out his monthly expenses, which
total £1,069. He states that
he derives no income and his monthly living expenses are relatively low,
showing that he is not someone who lives a lavish lifestyle.
8.
Advocate
Mistry submits that the test for whether the First Respondent has available
assets to pay for his legal expenses is that set out in the English Court of
Appeal decision of SOCA v Azam [2013] EWCA Civ 970 at paragraph 66:
“66 i) It
is for the applicant to show that, in all the circumstances, it is just to
permit him to use funds which are subject to the PFO [property freezing order]
in order to pay his legal expenses.
ii) If
on the evidence the court is satisfied that there are other available assets
which may be used for this purpose, to whomsoever they may belong, it will not
allow the affected assets to be used.
iii) If
the court is not satisfied of that, the court has to come to a conclusion as to
the likelihood that there are other available assets on the basis of the
evidence put before it. If the
evidence leaves the court in doubt, but with specific grounds for suspicion
that the applicant has not disclosed all that he could and should about his
assets, then it may resolve that doubt against the applicant, as it did in SFO
v X But if the evidence does not
provide any such specific indications or grounds for suspicion then even if the
court rejects the applicant’s evidence as unreliable, it may not have any
adequate basis for concluding that there are other available assets. In that case (Mrs Azam’s
application being an example) the court should not resolve the impasse against
the applicant on the basis that it was for him to prove positively the absence
of available assets. There may be
objective factors which cast light on the probabilities one way or the other,
as there were in the case of Mrs Azam.
But if there is nothing of that kind, and nothing which indicates the
existence of unexplained or undisclosed available assets, then the fact that
the applicant has previously concealed relevant assets is not sufficient by
itself to show that he is still concealing such assets, and thereby to deprive
him of the ability to use his own assets, despite the constraints of the PFO,
to defray the cost of legal representation to defend himself in the
proceedings. I would therefore
reject the proposition that there is a specific burden of proof on the
applicant which requires him to prove that there are no other available assets
which could be used for the relevant purpose, such that if he does not
discharge that burden, his application must fail.”
9.
We observe
in passing that SOCA v Azam was concerned with a property freezing order
made under section 245 of the Proceeds of Crime Act 2002 and an
application by Mr Azam under section 245c to vary the property freezing order
so as to permit him to apply some of his assets in paying his future legal
fees. Under that section, property
can be excluded from the property freezing order to pay legal expenses that the
person in question has incurred or may incur in respect of the proceedings
against him. The test set out above
relates to applications under that statutory scheme and as we observe below,
there is no equivalent statutory scheme here.
10. Having considered the evidence filed by the
First Respondent, the Court has grounds for suspicion that the First Respondent
has not disclosed all that he should about his assets for the following
reasons:
(i)
His
affidavits make very general assertions as to his having no significant income
or assets. No detail is
provided. He does not set out in
clear terms his income, assets and liabilities as would be expected in any
affidavit of means, apart from making very vague assertions as to owning land. Whilst he sets out his monthly
expenditure, he does not state how that expenditure is paid for. He makes no reference to having any bank
accounts in Nigeria or being in receipt of a pension, which presumably he must
receive, bearing in mind the senior positions he has held.
(ii) It is counter-intuitive that a retired general
and minister has no accumulated capital from his years in those positions with
which to pay for legal representation in what are summary proceedings in
Jersey, the only burden upon him being to satisfy the Court on the balance of
probabilities that the property held in his bank accounts is not tainted.
(iii) The financial position he now paints is in
marked contrast to what he disclosed to the Second Respondent in 2007/8 when
trying to regularise the position over these bank accounts. In that correspondence:
(a) He was described by his Nigerian lawyer in a
letter of the 24th December 2007 to the Second Respondent as having
interests in property, oil and gas, transportation and hospitality businesses,
with some eleven companies being named. He was described as being fully involved
in the day to day running of these businesses following his retirement from
service.
(b) In his letter of 31st May 2008 to
the Second Respondent giving information as to the source of funds, he stated
that he deals in property development and owns a shopping complex, comprising
48 shops, from which he earns “good revenue”. Detailed
schedules of each of those shops and the rental income were provided. He also said he invested in bank shares
and other companies from which he received “good dividends”. He said he owned and operated two petrol
filling stations, a domestic gas station, a farm and a medium size rice mill. He thus disclosed himself to be a man of
very substantial wealth.
(iv) The First Respondent refers to receiving
support from family members but gives no detail of that support or of the
ability or willingness of his family to provide funding towards his legal
fees. Bearing in mind the amount
held in the bank accounts in Jersey, it might be thought that it would be in
the interests of his family to provide that support.
11. The First Respondent makes no attempt in his
two affidavits to explain what has happened to that wealth and how it is that
he now appears to have no material income or assets. Quoting from paragraph 57 of SOCA v
Azam:
“57 It is more likely that the evidence will
leave the court with specific grounds for suspicion that the applicant has
other available assets, because of lifestyle factors, or because he has not explained
what has become of assets formerly recorded as his; SFO v X was such a
case. In those cases, the Court may
well not be satisfied, overall, that the applicant has discharged the burden of
showing that it would be just for him to be allowed to spend assets which are
subject to the PFO.”
12. The Court is left with a very considerable
doubt that the First Respondent has disclosed all that he could in relation to
his assets and resources that might be made available to him, and if applying
the test under SOCA v Azam we would resolve that doubt against him,
finding that he has not shown that in all the circumstances it is just to
permit him to use the funds in the bank accounts to pay his legal expenses. However, in the context of the summary
procedure with which we are concerned and simply considering the evidence
before us on what is the First Respondent’s application in which the
burden is upon him, the First Respondent has not satisfied us that he does not
have assets or resources (beyond these bank accounts) available to him to pay
for his legal expenses.
Payment to Advocate Mistry’s bank accounts
13. Advocate Mistry filed a position statement with
the Court, at its request, to which he attaches correspondence between him and
his bank, the outcome of which appears to be:
(i)
His bank
will accept funds ordered by the Court to be released from the bank accounts
with the Second Respondent, for which it would need to see the relevant Act of
Court.
(ii) Funds remitted directly by the First
Respondent, being a “PEP” connected with a potentially high-risk
country, would be unlikely to be accepted into Advocate Mistry’s office
account as a result of the sophisticated screening systems the bank has in
place.
14. We note that in his first email to his bank on
9th February 2022, Advocate Mistry stated that the First Respondent
was under criminal investigation with extant proceedings in Jersey, which he
accepts is incorrect; the proceedings in Jersey are civil proceedings under the
2018 Forfeiture Law. There is no
suggestion of a criminal investigation in Jersey or elsewhere.
15. A similar argument was run unsuccessfully in SOCA
v Azam in that the second ground of appeal in that case was that even if Mr
Azam had undisclosed assets, they could not in practice be used for legal
expenses because no solicitor could accept payment from such a source. The judgment of Lloyd LJ says this at
paragraph 68:
“68 The second of these seems to me to be a bad
point, since if there were concealed assets of the appellant it is quite likely
that he could deal with them in such a way that they could be used for payment
through a third party without the solicitor being put on notice of their
source. Moreover, the availability
of assets to meet the legal expenses does not, as I have said, necessarily
depend on there being assets of the appellant. Mr Coppel touched on this second ground
of appeal in his skeleton argument but not at all in his oral submissions. It seems to me that, in that respect, he
was wise. I would refuse permission
to appeal on the second ground.”
16. The same point can be made in this case. The First Respondent disclosed ownership
of very substantial assets in Nigeria in 2007/8 and now deposes as to having
family support. We do not accept
that funds cannot be produced from a legitimate source to discharge Advocate
Mistry’s legal fees, let alone the fees of the Nigerian lawyers.
The First Respondent’s Convention rights
17. Advocate Mistry’s submissions in relation
to the First Respondent’s Convention rights would only come into play if
the Court was satisfied that the First Respondent does not have available
assets or resources to apply towards the payment of his legal fees. However, Crown Advocate Brown approached
this application from a different standpoint. He submitted that the First Respondent
seeks to argue a species of relief, that is not recognised by authority or
principle in Jersey or England.
18. Before setting out those submissions in more
detail, it is important to have regard to the statutory framework. These are summary proceedings in which
the property in the bank accounts remains held under the banking contract
between the First Respondent and the Second Respondent. The bank accounts do not come under the
control of the Court. The Court has
the following functions, firstly to consider the making of a forfeiture order
on the application of the Attorney General if the account holder does not
attend the hearing fixed under the notice (Article 11(1)) and secondly, if the
account holder does attend, to consider whether the account holder has
satisfied the Court that the property is not “tainted property” as
defined (Article 11(2)). Thirdly,
if the Court is not so satisfied then it shall make a forfeiture order on the
application of the Attorney General (Article 11(4)).
19. By way of contrast under a property restraint
order made under Article 12(1) of the 2018 Forfeiture Law, the property vests
in the Viscount (Article 13(1)) and therefore comes under the control of the
Court which is given power under Article 14(4) “to order the
release of so much of the property in question as it considers appropriate to
enable the applicant to meet legal expenses in connection with the application
for variation or discharge” of a property restraint order.
20. As noted above in the case of SOCA v Azam
the property concerned was similarly under the control of the English court
pursuant to a property freezing order.
The other authorities cited to the Court all concerned property that was
under the control of the court whether under a restraint order under section 41
of the Proceeds of Crime Act 2002 (R v Luckhurst [2020] EWCA Crim
1579) or cash seized on arrest for drugs offences (R v Kenward [2000/64)
or cash held pursuant to a saisie pursuant to the Drug Trafficking
Offences Law 1988 (In re O’Brien [2003] JRC 001).
21. Advocate Mistry prayed in aid the First
Respondent’s right under the Convention to a fair trial. He referred in particular to Article
6,3(c) of the Convention which is in these terms:
“3 Everyone charged with a criminal
offence has the following minimum rights –
(a) …..
(b) …
(c) to defend himself in person or through legal
assistance of his own choosing or, if he has not sufficient means to pay for
legal assistance, to be given it free when the interests of justice so
require;”
22. Advocate Mistry maintained that these are “quasi
criminal” proceedings because forfeiture is usually associated with
criminal investigations and is based on alleged unlawful activity. Accordingly, he said the First Respondent
was entitled to the rights under Article 6,3(c). That submission cannot stand in the light
of Article 26 of the 2018 Forfeiture Law which expressly provides that these
are civil proceedings and any issue in such proceedings shall be determined on
the balance of probabilities.
23. Advocate Mistry also relies on Article 1 of the
First Protocol of the Convention (“A1.P1”) which provides that
every person is entitled to the peaceful possession of his possessions. These are the First Respondent’s
bank accounts (albeit still in the name of Tim Shani) and there has been no finding
that they are the proceeds of crime.
24. Crown Advocate Brown submitted, and we agree,
that Advocate Mistry was seeking to argue a novel form of relief from the mere
existence of Convention rights, when there are clear remedies available to the
First Respondent should he wish to access his bank accounts. Under Article 7 of the Human Rights
(Jersey) Law 2000, it is unlawful for the Court or the Attorney General, as
public authorities, to act in a way which is incompatible with a Convention
right. As the Court of Appeal said
in AG v Ellis [2020] JCA 098 at paragraph 35:
“35 ……. It is not so much a question
of the court remedying a violation of A1.P1. Rather, the fact that the court is a
public authority under Article 7 of the 2000 Law means that it cannot do
otherwise than make a forfeiture order which is compatible with the Convention
rights, including A1.P1, in the first place. It does that by (among other things)
applying the test of proportionality”
25. The First Respondent’s Convention rights
do not fall to be asserted against the Attorney General, as under the summary
procedure neither the Attorney General nor the Court play a part in denying the
First Respondent access to his bank accounts. The bank accounts do not vest in or come
under the control of the Court unless and until a forfeiture order is made. The only way to clear a channel through
which the First Respondent can access his bank accounts is through a private
law action against the Second Respondent or a Judicial Review of the police
decision to refuse consent, options open to but not pursued by the First
Respondent since 2003.
26. Since Ani v Barclays Private Bank and Trust
Limited [2004] JLR 165, it has been clear in Jersey that there are two
distinct remedies available to a person in the position of the First
Respondent. At paragraph 21 of the
judgment, the Court cited with approval the judgment of Tomlinson J in Amalgamated
Metal Trading Limited v City of London Financial Investigation Unit [2003]
1 WLR 2711:
“…….it was never
in my judgment appropriate for AMT to seek as against the police a declaration
that the monies are not the proceeds of criminal conduct. It was never an issue between those
parties whether the monies were such proceeds, and there was and is no occasion
for the creation of a lis between them directed to determination of that
point. The only question which the
police …. were asked was whether they consented to the payment being
made. Had they given their consent,
SMT would have a defence under Section 93A. The Act is however silent as to the
basis upon which consent is to be given or refused. The provision would manifestly be
unworkable if the constable could only justify the withholding of consent if he
could demonstrate his satisfaction, to whatever might be the appropriate
standard, that the funds are in fact derived from or used in connection with
criminal conduct. It seems clear
from the section as a whole that the existence of a suspicion is sufficient to
ground a proper refusal of consent.
It is important to note that there has been no public law challenge to
the propriety of the exercise by the constable of his discretion. It would surely be odd if a legitimate
withholding of consent which can be justified on grounds of suspicion were to
lead to the situation in which the police must defend (and perhaps pay the
costs of) proceedings directed towards determination of a question wholly
different from that which they were asked, viz the ultimate question whether
the funds are in fact derived from or used in criminal conduct. I cannot think that either Parliament or
the Court of Appeal envisaged that this would be the procedure to be followed
consequent upon a proper withholding
of consent. Such a procedure places
an undue and inappropriate burden upon the police, effectively requiring them
to litigate at public expense what are in truth private disputes between
financial institutions and their customers. The arising of such disputes is one of
the ordinary commercial risks which any financial institution faces
……”
27. The summary proceedings under Part 2 of the
2018 Forfeiture Law are concerned with the forfeiture of bank accounts, not the
ability to use them. The ability to
use these monies raises no lis between the Attorney General and the
First Respondent. The First
Respondent’s access to the money in the bank accounts is governed by the
inter relationship between the Bank’s decision not to execute the
customer mandate and the police refusal of consent for it to do so.
28. As the Guernsey Court of Appeal said in the
leading case of The Chief Officer, Customs & Excise, Immigration &
Nationality Service v Garnet Investments Limited (CA) 19/2011 at paragraphs
58 and 59:
“58 The appropriate remedy for a person in the
position of Garnet is to bring proceedings against the person or entity holding
the funds. This enables the status
of the funds to be determined by a court in circumstances where (unlike in
public law proceedings) evidential issues may be fully explored and the fund
owner and the fund holder are represented.
59 In
Amalgamated Metal Trading Tomlinson J held at paragraph 27 that the procedure
to be followed consequent upon a proper withholding of consent was the
commencement of a private law claim to settle the ‘private disputes
between financial institutions and their customers. … The ultimate
substantive question whether the funds are derived from criminal conduct ---
only permits of a final answer, not a temporary answer, and it is only
appropriate to answer it as and when it arises, and then as between the parties
between whom it arises. Then it is
decided, if it is necessary so to do, upon the basis of such evidence as the
parties place before the court, and having regard to the incidence of the
burden of proof.’”
29. Garnet is a
highly persuasive authority in Jersey.
The Guernsey refusal of consent regime is the same in all material
respects, the jurisdictions are similar and the same policy aims lie behind the
refusal of consent regime in a small international finance centre.
30. As Sir Michael Birt, then Deputy Bailiff, said
in Gichuru v Walbrook Trustees (Jersey) Limited and Four Others [2008]
JLR 131 at paragraph 28:
“I hold therefore that a
customer facing an informal freeze of his funds continues to have two
alternative remedies which he may follow and it is a matter for him which he
chooses. He may seek to bring a
public law action for judicial review of the police refusal to consent to
payment. In those circumstances,
the focus of the Court’s attention will be on whether the police’s
decision can be successfully challenged on conventional judicial review
grounds. Alternatively, the
customer may bring a private law action against the financial institution
seeking to enforce his contractual or other right to seek payment. In this event, the issue for the Court
is likely to be whether the funds are in fact the proceeds of criminal
conduct. If the Court finds that
they are, then it will not enforce payment because to do so would cause the
financial institution to commit a criminal offence and there is clear authority
for the proposition that a court should not make such an order (see Bank of
Scotland v A Limited [2001] WLR 751 at 760 applying Rowell v Pratt [1938] AC
101. If, on the other hand, the
Court concludes that the funds are not the proceeds of criminal conduct, it
will order the financial institution to act in accordance with its contractual
or other duty towards the customer and, for the reasons already mentioned, the
financial institution will thereby be protected from any criminal prosecution
for making such payment”.
31. Terminology in this area is important. Although the practical reality for the
customer is that his funds are “frozen”, this is nothing
more than shorthand to describe the situation he faces. Quoting from paragraph 29 of the judgment
in Garnett:
“Any funds reported to the
police or the FIS for the purpose of seeking consent are in effect frozen, not
by virtue of any refusal of consent, but by virtue of the ordinary operation of
the criminal law which in the absence of consent will make the person seeking
consent unwilling to transact for fear of punishment.”
32. The judgment goes on at paragraph 31:
“31 Although the Royal Court
refers to the effect being that of an informal freeze (the same turn of phrase
was used by the Royal Court of Jersey in Ani v Barclays Private Bank &
Trust Ltd and The Attorney General [2004] JLR 165 and Chief Officer of States
of Jersey Police v Minwalla [2007] JLR 409), it seems to us that this is an
observation as to the practical impact of the criminal law on the bank rather
than an accurate characterisation of the consent regime as an aid to the
freeing of property.”
33. And at paragraphs 38 to 42:
“38 True it is that in practice the process of
reporting a suspicious transaction and seeking consent might be used by the
reporting institution for delaying possibly difficult decisions as to whether
to transact and may also in practice provide a period in which the police may
consider whether they wish to commence an investigation or seek any restraint
orders, but the practical utility of the hiatus that is created whilst an
application for consent is pursued does not mean that this was the sole or
dominant purpose of the consent regime and does not support the argument that
this was the intention of the legislation.
39 For
the reasons set out above we do not consider it was In our opinion the principal purpose of
the consent regime was to provide an opportunity to the police to give an
exemption from criminal liability by consent but only where it was in the interests
of law enforcement to do so; it was not to create an informal mechanism to be
used by the police for freezing funds.
40 It
follows that we do not accept the basic premise contended for by Garnet
and accepted by the Lieutenant Bailiff as to the statutory purpose of the
consent regime to the effect that FIS is ‘able to deny a person access to
their property by refusing to give consent and yet not seek judicial oversight
of that refusal by applying for a restraint order.’
41 In
our judgment, it is not the FIS that is denying Garnet access to its property
and preventing judicial oversight, it is the impact of the width of the
criminal law and its chilling effect upon the person holding the fund, namely
BNP.
42 Furthermore,
for the reasons we set out below, the refusal of consent does not preclude
judicial oversight by the courts.
The legality of any refusal to transfer funds may be challenged by a
private law claim brought against the person holding the funds before the
Courts of the Bailiwick.’
34. Thus, a refusal to consent is not an order; it
is simply a decision by the Financial Intelligence Unit not to give consent to
an act when a bank files a SAR. It
is the bank that declines to comply with the customer’s instructions and
not the police who prevent the operation of an account otherwise than in
accordance with the mandate--see also Interush Ltd v Commissioner of Police
[2019] HKCA 70, citing with approval the judgment in Garnet at paragraph
6.49.
35. Returning to the judgment in Gichuru it
continues at paragraph 32:
“32 The Attorney General’s response to
this was that financial institutions are under a duty to contest the
customer’s claim in such circumstances and must lay before the Court all
available evidence which justifies their suspicion that the funds are the
proceeds of criminal conduct. I
agree and would summarise the position as follows:
At para 23 of the judgment in Minwalla,
the Court approved the observation of Tomlinson J at para 32 of Amalgamated
Metal when he said:-
‘it is to my mind inconceivable
that there could be criminal proceedings brought … against a bank or
other financial institution which has taken such steps as are reasonable in
all the circumstances to resist proceedings but has nonetheless been
ordered by the court to pay over money which has subsequently been proved to be
the proceeds of criminal conduct’.
[Emphasis added]
It follows from the emphasised
passage that, if it wishes to obtain protection against a future criminal
prosecution, a financial institution must take all reasonable steps to defend
the customer’s claim and to put forward all available evidence in support
of the argument that the funds in question are the proceeds of criminal
conduct. If a financial institution
allows the customer to obtain a decision in his favour without putting up a
proper contest, it will not have fulfilled this requirement. A financial institution should know a
fair amount about the funds which it holds. In the first place it has a duty under
the various anti-money laundering Orders and Codes of Practice to know its
customer and to be aware of the source of funds. If there comes a time when it begins to
have concerns about the source of funds, it should pose questions of the
customer in order to see if those concerns can be allayed. It is only if those concerns are not
allayed that it may end up having the necessary suspicion and make an SAR. All of the information in its possession
should be made available to the Court in a private law action. Although the Court will be considering
the issue of whether the funds are in fact the proceeds of criminal conduct
rather than whether the financial institution has a suspicion, the grounds upon
which the financial institution has a suspicion will nevertheless be highly
relevant to determination of the issue of whether the funds are the proceeds of
criminal conduct. Although, for the
reasons given earlier, the police will not normally be a party to the action, a
financial institution which finds itself the subject of such an action should
of course consult and liaise closely with the police.”
36. The Second Respondent takes a neutral role in
this application for funding from the bank accounts, but Advocate Harvey-Hills
submitted, with justification, that if monies were to be paid out of the bank
accounts, then the Second Respondent would need an order to that effect, rather
than being given the “permission” sought in the summons. Advocate Mistry accepted this and
indicated at the hearing that the summons would need to be amended, so as to
seek an order against the Second Respondent. It is important to note, however, that
whilst the summons is issued against the Second Respondent (as well as the
First Respondent), it is not premised upon the operation of the bank mandate,
citing instead a remedy based on the First Respondent’s Convention rights
and the inherent jurisdiction of the Court, and Advocate Harvey-Hills pointed
out that as a consequence, the Second Respondent has not, as per Gichuru
at paragraph 32(ii), taken all reasonable steps to defend the First
Respondent’s claim and put forward all available evidence in support of
the argument that the funds in question are the proceeds of criminal conduct.
37. Thus, we have a position in which the First
Respondent has not pursued either of the two remedies available to him in order
to get access to the funds in his bank account. Advocate Mistry argued that these
principles did not directly apply in the circumstances of the First
Respondent’s application because the case law had “moved
on”. There are Human Rights
considerations, he said, that also come into play which distinguish the facts
from those in Gichuru. The
First Respondent’s application sought to have his legal expenses paid
from the bank accounts in circumstances where he is not entitled to Legal Aid,
has no available assets and/or even if he had available assets, his Jersey
counsel would not be able to accept funds from him due to these proceedings and
by virtue of him being a PEP.
Advocate Mistry submitted that the circumstances in which this application
is brought are entirely different from the authorities cited above and he
submitted on Human Rights grounds alone that the Court should grant the relief
being sought.
38. As Crown Advocate Brown said the suggestion
that the law had moved on ignores the effect of the police refusal of
consent. The question of the First
Respondent’s access to his funds to pay for any kind of expenditure does
not change, unless and until the Second Respondent is granted consent on the
basis that neither it nor the police believe the accounts to contain tainted
property. As a result, the role of
the Court in these circumstances is limited to the form of redress applicable
in the two alternative actions available to the First Respondent.
39. In the case of a private law action, the Court
may order the Bank to act in accordance with the mandate and make the payment
requested. In the case of Judicial
Review, it can quash the decision of the police to (a) withhold consent or (b)
quash a refusal to review their original decision. It follows that there are only two
alternative and entirely distinct tracks for a customer to follow in this
situation, which, self-evidently, are configured according to very different
legal principles. These forms of relief
cannot be mixed with other more nebulous complaints, nor is there any authority
for the proposition that they should or can be.
40. The Court is being asked to ignore the clear
line of authority as to the remedies available to the First Respondent and to
graft some kind of new remedy on to the First Respondent’s Convention
rights, and in so doing, to override the Second Respondent’s suspicion as
to the bank accounts and the decision of the JFCU not to give consent to the
operation of the accounts. We decline
to depart from this line of authority and agree that there is no scope for the
First Respondent to raise the relief sought. If we are wrong in so finding, the First
Respondent has not satisfied us in any event that he does not have assets or
resources (beyond these bank accounts) from a legitimate source available to
him to pay for his legal expenses.
41. For all these reasons the application is
dismissed.
Authorities
Forfeiture of Assets (Civil
Proceedings) (Jersey) Law 2018.
Human Rights (Jersey) Law 2000.
SOCA v Azam [2013] EWCA Civ 970.
Proceeds of Crime Act 2002.
R v Luckhurst [2020] EWCA
Crim 1579.
Drug Trafficking Offences Law 1988.
In
re O’Brien [2003] JRC 001.
AG
v Ellis [2020] JCA 098.
Ani
v Barclays Private Bank and Trust Limited
[2004] JLR 165.
Amalgamated
Metal Trading Limited v City of London Financial Investigation Unit [2003] 1 WLR 2711.
The Chief Officer, Customs &
Excise, Immigration & Nationality Service v Garnet Investments Limited (CA)
19/2011.
Gichuru v Walbrook Trustees
(Jersey) Limited and Four Others [2008] JLR
131.
Interush Ltd v Commissioner of Police
[2019] HKCA 70