Jeremiah Timbut Useni v HM Attorney General

JurisdictionJersey
CourtCourt of Appeal
JudgeWolffe JA
Judgment Date23 September 2022
Neutral Citation[2022] JCA 197
Between
Jeremiah Timbut Useni
Appellant
and
His Majesty's Attorney General
First Respondent

and

Standard Chartered Bank Jersey
Second Respondent

[2022] JCA 197

Before:

Clare Montgomery KC, President;

Jonathan Crow Kc., And

James Wolffe KC

COURT OF APPEAL

Court of Appeal — forfeiture proceedings.

Authorities

Forfeiture of Assets (Civil Proceedings) (Jersey) Law 2018.

Proceeds of Crime (Jersey) Law 1999.

Human Rights (Jersey) Law 2000.

States Police v. Minwalla [2007] JLR 409.

Chief Officer, Customs & Excise, Immigration & Nationality Service v. Garnet Investments Ltd GCA 19/2011.

Gichuru v. Walbrook Trustees (Jersey) Ltd and Others [2008] JRC 068.

AG v. Ellis [2020] JCA 098.

SOCA v. Azam [2013] EWCA Civ 970.

R v. Luckhurst [2020] EWCA Crim 1579.

R v Luckhurst [2022] UKSC 23.

R v. Kenward [2000/64].

In re O'Brien [2003] JRC 001.

Gichuru v. Walbrook Trustees (Jersey) Ltd [2008] JLR 131.

Court of Appeal (Jersey) Law 1961.

Leung v. Commissioner of Police [2021] HKCFI 3118.

Serious Organised Crime Agency v. Gale [2011] 1 WLR 2760.

Serious Organised Crime Agency v. Azam [2013] EWCA Civ 970.

Proceeds of Crime Act 2002.

Money Laundering (Jersey) Order 2008.

Steel and Morris v. United Kingdom, Application No. 68416/01.

McVicar v. United Kingdom, Application No. 46311/99.

Advocate H. B. Mistry for the Appellant

Crown Advocate S. C. Brown for the First Respondent

Advocate J. Harvey-Hills for the Second Respondent

JUDGEMENT
Wolffe JA
Introduction
1

This appeal arises from forfeiture proceedings brought by the Attorney General under Articles 10 and 11 of the Forfeiture of Assets (Civil Proceedings) (Jersey) Law 2018 (“the 2018 Law”). The proceedings are directed at funds in four accounts held by the Appellant with the Standard Chartered Bank, Jersey (“the Bank”). The accounts contain, in aggregate, the equivalent of around £1.9 million.

2

The Royal Court pronounced a forfeiture order in respect of those funds. The Appellant appeals against: (i) two interlocutory decisions, in which the Royal Court refused applications directed to securing release of funds from the accounts to pay the Appellant's legal expenses; and (ii) the forfeiture order itself. The Respondents in the appeals are, respectively, the Attorney General and the Bank. The Bank has adopted an essentially neutral position in these proceedings.

3

This is the judgment of the Court to which we have all contributed.

The statutory regime
4

The statutory provisions relevant for the purposes of this appeal are: (i) Articles 30–32 of the Proceeds of Crime (Jersey) Law 1999 (“the 1999 Law”); (ii) Part 3 of the 2018 Law; and (iii) the relevant provisions of the Human Rights (Jersey) Law 2000 (“the 2000 Law”).

The 1999 Law
5

Articles 30 and 31 of the 1999 Law prescribe money laundering offences. It is an offence under Article 30 to acquire, use, or have possession or control of, criminal property. For these purposes, “criminal property” includes (Article 29):

  • “(a) any property derived from or obtained, in whole or in part, directly or indirectly, through criminal conduct, if the alleged offender knows or suspects that the property is derived from or obtained, directly or indirectly, through criminal conduct; and

  • (b) any property that is used in, or intended to be used in, criminal conduct, if the alleged offender knows or suspects that the property is used in, or is intended to be used in, criminal conduct.”

6

Article 32 of the 1999 Law provides:

  • “(1) Paragraphs (2) and (3) apply where a person makes a disclosure to a police officer –

    • (a) of a suspicion or belief that any property constitutes or represents proceeds of criminal conduct or property used in or intended to be used in criminal conduct and of any matter on which such suspicion or belief is based; or

    • (b) of information, for the purposes of a criminal investigation or criminal proceedings in Jersey .

  • (2) The disclosure –

    • (a) shall not be treated as a breach of any restriction upon the disclosure of information imposed by any enactment or contract or otherwise; and

    • (b) shall not involve the person making it in liability of any kind .

  • (3) Where the person making the disclosure does any act or deals with the property in any way which apart from this provision would amount to the commission of an offence under Article 30 or 31, the person shall not be guilty of such an offence if the conditions set out in paragraph (4) are fulfilled .

  • (4) The conditions mentioned in paragraph (3) are that the disclosure is made in good faith and either –

    • (a) if the disclosure is made before the person does the act in question, the act is done with the consent of a police officer; or

    • (b) if the disclosure is made after the person does the act in question, it is made on the person's own initiative and as soon as reasonably practicable after the person has done the act in question.”

7

In States Police v. Minwalla [2007] JLR 409, the Deputy Bailiff (Birt) observed (paragraph 17) that these provisions have “the effect of achieving an ‘informal’ freezing of assets without the need for a court order”. He explained the position in the following passage:

“18. … if a bank forms a suspicion that its customer may be engaged in criminal conduct, it files a suspicious transaction report (“STR”) [which may also be called a “suspicious activity report” or “SAR”] with the police. If the police then consent to the bank thereafter complying with its customer's instructions to pay out the money, all well and good; the bank is protected. But if the police do not consent, the bank is on the horns of a dilemma. On the one hand, it has its customer demanding that it make payment in accordance with the mandate. On the other hand, it has a suspicion that its customer has been engaged in criminal conduct and, if it makes the payment, it will clearly facilitate the retention or control of the money by its customer. Accordingly, if it were subsequently to transpire that the money in the account was in fact the proceeds of the customer's criminal conduct, the bank would have committed the criminal offence of money laundering under Article 32. As the bank does not know, at that stage, whether the money in the account is in fact the proceeds of criminal conduct, it invariably errs on the side of caution and refuses to make the payment. The result is that the account is informally frozen for so long as the bank has the relevant suspicion and the police do not consent .

19. This is clearly capable of causing great hardship and unfairness. There may never be a prosecution, yet the bank may retain its suspicion. The result may be that a person, against whom no criminal charges have been brought and where there lies only a suspicion, finds his assets informally frozen without there ever having been a court order to achieve this. Furthermore, the freezing of the account may continue for an indefinite period.”

8

The Deputy Bailiff contrasted this situation with “the carefully structured protections” provided in Article 15 of the 1999 Law in respect of a saisie judiciaire over a defendant's property in anticipation of criminal proceedings for which a confiscation order could be made. The statutory provisions provide for the discharge of the order if proceedings have not been raised within such time as the court considers reasonable. The Deputy Bailiff also observed that the equivalent legislation in the United Kingdom had been amended to require the police to respond to a SAR within seven days. Under the UK legislation, if no response is given, the police are deemed to have consented to the bank dealing with the funds in question. If the police decline to consent, they have a further 31 days within which to apply for a restraint order; if at the end of 31 days they have taken no such action, the bank may safely proceed.

9

In Chief Officer, Customs & Excise, Immigration & Nationality Service v. Garnet Investments Ltd GCA 19/2011, Montgomery JA, giving the judgment of the Court of Appeal of Guernsey, pointed out, whilst an “informal freeze” may be the practical effect of the regime, it would be wrong to characterise the consent provisions of the legislation as a species of informal restraint. The reason why the bank will not deal, or permit dealing, with the funds (and therefore, for practical purposes, “freezes” the accounts) is the statutory money laundering offence, and the consequent risk of criminal prosecution. The consent provisions exist not to enable the police to “freeze” assets, but to allow the police to give an exemption from criminal liability by consent, where that would be in the interests of law enforcement.

10

Both the Deputy Bailiff in Minwalla and Montgomery JA in Garnet identified two remedies which are available to a banking customer who cannot, following a SAR, obtain access to funds in an account. The customer may seek to judicially review the decision of the police not to consent to any payment. In judicial review proceedings, the customer would face the “high threshold of showing that the decision of the police was one to which they could not reasonably have come” (or, one might add, of establishing some other relevant ground for review). Alternatively, the customer may institute an ordinary action against the bank seeking an order that it comply with the mandate and pay the money out as instructed. In the event of the court finding, on a balance of probabilities, that the funds were not the proceeds of crime, the court would order the money to be paid out.

11

In Minwalla, the Deputy Bailiff recommended that consideration should be given to reforms with a view to introducing appropriate controls and limits on the effective freezing of assets which occurs if, following a SAR, the police decline consent to dealing with funds in an account. He reiterated that...

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