The Attorney General v Ian Joseph Ellis

• Jurisdiction: Jersey
• Court: Court of Appeal
• Judge: Jonathan Crow,David Perry,Sir William Bailhache,Perry,Crow,Bailhache, JJ.A.
• Judgment Date: 01 June 2020
• Neutral Citation: [2020] JCA 98
• Date: 01 June 2020

[2020] JCA 98

COURT OF APPEAL

Before:

Jonathan Crow, Q.C., President;

David Perry, Q.C., and;

Sir William Bailhache.

The Attorney General

and

Ian Joseph Ellis

M. T. Jowitt, Solicitor General appeared for the Attorney General

Advocate P. G. Nicholls for the Respondent.

Authorities

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

AG v Ellis [2019] JRC 141.

Ahmed v HMRC [2013] EWHC 2241 (Admin)

AG v Ellis [2019] JRC 219.

Court of Appeal (Jersey) Law 1961

AG v Ellis [2019] JRC 220.

Crociani v. Crociani [2014] (1) JLR 426.

In the Matter of the Désastre of Blue Horizon Holidays [1997] JLR 124.

Gosselin v. Minister of Social Security [2017] JCA 074.

R v. Okedare [2014] EWCA Crim 1173, [2014] 1 WLR 4088.

Wilson v. First County Trust (No. 2) [2004] 1 AC 816.

R v. Harvey (Jack) [2017] AC 105.

In re Doraville [2016] (2) JLR 44.

Doraville Properties Corp v. Attorney General [2017] (1) JLR 64.

Gogitidze v. Georgia (2016) 62 EHRR 14.

Veits v. Estonia (App. No 12951/11, 1 June 2015).

AGOSI v. UK (1998) 25 EHRR CD 141.

Džinić v. Croatia (App. No 38359/13, 17 May 2016).

Telbis & Viziteu v. Romania (App. No 47911/15, 26 June 2018).

Balsamo v. San Marino (Apps No 20319/17 & 21414/17, 8 October 2019).

Philips v. UK (App No 41087/98, 5 July 2001).

Grayson & Barnham v. UK (Apps No 19955/05 & 15085/06, 23 December 2008).

Air Canada v. UK (Apps No 456/94 & 537/94, 26 April 1995).

Yildrim v. Italy (App No 38602/02).

Ismayilov v. Russia (App No 30352/03, 6 November 2008).

Boljevic v. Croatia (App No 43492/11, 31 January 2017).

Barnes v. Eastenders Cash & Carry Plc [2015] AC 1.

AXA General Insurance Ltd v. HM Advocate [2012] 1 AC 868.

R v. Waya (Terry) [2013] 1 AC 294.

Arthur v. AG [2020] JCA 016.

R v. Fulton [2019] EWCA Crim 163.

Human Rights (Jersey) Law 2000

Appeal — forfeiture of assets

THE PRESIDENT:

Introduction

1 This is the judgment of the court. It arises in the context of proceedings under the Forfeiture of Assets (Civil Proceedings) (Jersey) Law 2018 (the “Forfeiture Law”).

The background facts

2 For the purposes of this appeal, the background facts may be summarized briefly on the basis of the findings made by the Royal Court (Samedi Division), Commissioner Clyde-Smith sitting with Jurats Olsen and Dulake, in a judgment dated 22 July 2019 AG v Ellis [2019] JRC 141 (the “July judgment”).

3 The Respondent was born and brought up in Scotland. About 35 years ago, he set up a successful taxi business there. He opened a bank account (the “Account”) in April 1988 with the Jersey branch of Standard Chartered Bank (the “Bank”). Funds amounting in aggregate to about £42,500 were credited to the Account in the period up to 1992, including at least £18,000 in cash deposits made through various banks in Glasgow. The funds were derived partly from the Respondent's taxi business and partly from the sale of used cars: para. 39 of the July judgment. The funds paid into the Account accordingly derived from legitimate businesses, but the Respondent paid the money into the Account “ as part of a dishonest scheme by which he under-declared the true amount of his income to the United Kingdom tax authorities”: para. 42 of the July judgment.

4 Various withdrawals were also made from the Account over time, but it has been dormant since 1992. It currently holds just under £34,000.

5 On 4 September 2001, the Respondent was convicted in Scotland of drugs offences and sentenced to 12 months' imprisonment. A confiscation order was also made against him. In the course of the confiscation investigation, the existence of the Account came to light. On 11 October 2002, the Bank made a suspicious activity report to the Joint Financial Crimes Unit (“JFCU”) in connection with the Account. Consent to operate the Account was withheld by the JFCU on 11 October 2002. Efforts were then made, both by the Bank and by the JFCU, to obtain evidence from the Respondent as to the source of the funds in the Account, but at that stage he refused to cooperate.

6 In 2003, the Respondent moved to Cyprus. He satisfied the Scottish confiscation order, but at about the same time an investigation was launched here into the source of funds in the Account.

Procedural history & rulings in the court below

7 Notice was served on the Respondent under Article 10 of the Forfeiture Law on 3 December 2018 requiring him to show cause why the Account should not be forfeited. After an exchange of evidence, the matter came on for hearing in the Royal Court, at which the Respondent was represented by Counsel.

8 Under Article 11(4) of the Forfeiture Law, the burden was on the Respondent to satisfy the court that the property was not ‘tainted property’ within the meaning of Article 2. The Royal Court held that: “ The respondent has failed to satisfy the Court that the Account is not tainted property”: July judgment, para. 49(ii). i In particular, having described the dishonest tax-evasion scheme (quoted in para. 3 above) the Royal Court went on to say this: “ The Account was used in, or intended to be used in, that unlawful conduct”: para. 42 of the July judgment. This meant that “ the Account falls fully within the definition of tainted property in Article 2 of the [Forfeiture Law]”: para. 42 of the July judgment.

9 Nevertheless, the Royal Court refrained from making a forfeiture order at that stage. It noted the English judgment in Ahmed v. HMRC [2013] EWHC 2241 (Admin), where the court held that an order made under a comparable English regime had to be compatible with the right to peaceful enjoyment of possessions under Article 1 of the First Protocol to the European Convention on Human Rights (“A1.P1”). Taking that approach into account, the Royal Court in this case noted that it had “ no information on the amount of tax evaded by the respondent” and decided that, since the funds paid into the Account came from “ legitimate businesses” the court needed to be addressed “ on whether it is proportionate to forfeit the whole of the Account or just that part that represented the taxes evaded”: July judgment, para. 48.

10 A subsequent hearing before the Royal Court (Commissioner Clyde-Smith sitting alone) led to a further judgment on 31 October 2019, AG v Ellis [2019] JRC 219 (“the October judgment”). The issues at that hearing where essentially threefold: (i) first, whether A1.P1 was a relevant consideration at all, and if so (ii) where the burden of proof lay in relation to the question of proportionality under A1.P1, and (iii) what impact A1.P1 has on the scope of any appropriate forfeiture order.

11 In dealing with the issues under appeal, it is important to understand the precise nature of the learned Commissioner's findings, and also the sequence in which he reached them:

• (i) First, he held that, as a matter of principle, “(i) the Forfeiture Law must be read and given effect compatibly with A1.P1; (ii) a forfeiture order which does not respect the principle of proportionality would involve a violation of A1.P1; (iii) it is incumbent on the court to provide a remedy for any such violation; (iv) the appropriate remedy lies in the duty of the court not to make an order which involves such a violation”: October judgment, para. 22.

• (ii) Second, he held that “ as a matter of construction” of the Forfeiture Law “ it would be disproportionate for the entire Account, comprising, as it does, the respondent's legitimately earned moneys, to be forfeited”, adding that “ As the Court found in Ahmed v. HMRC, the forfeiture order should be limited to that part which represents the evaded tax and, arguably, penalties and interest”: October judgment, para. 23.

• (iii) Third, he held that, since the Attorney-General is the applicant in proceedings under Article 10 of the Forfeiture Law, the burden is on him “ to satisfy the Court that the forfeiture order he is seeking is proportionate”: October judgment, para. 28.

12 Being dissatisfied with the learned Commissioner's rulings on (i) the application of A1.P1 and (ii) the burden of proof, the Attorney General wished to appeal. It is common ground that the October judgment was an ‘interlocutory judgment’ within the meaning of Article 13(1)(e) of the Court of Appeal (Jersey) Law 1961 (the “1961 Law”). As a result, the Attorney General needed leave to appeal. That led to another ruling from the learned Commissioner, dated 4 November 2018, AG v Ellis [2019] JRC 220 (“the November judgment”) in which he dealt with two issues:

• (i) First, he considered whether the Attorney General could satisfy the test for permission to appeal, as laid down in Crociani v. Crociani [2014] (1) JLR 426. So far as that is concerned, he said that he was “ provisionally of the view” that permission should be granted, because (i) this is the first time the court has been asked to construe the Forfeiture Law, and (ii) a decision of the Court of Appeal on the two issues raised by the Attorney General would be to the public advantage: para. 4 of the November judgment.

• (ii) He then considered whether the Attorney General had any right of appeal in relation to an interlocutory ruling made in forfeiture proceedings under Article 11 of the Forfeiture Law. So far as that is concerned, he held that it was “ arguable” that the Attorney General did not have a right of appeal: paras. 8 & 9 of the November judgment. Although he expressed himself in this qualified way, he must be taken to have concluded that there was no right of appeal, because he held that the Attorney General had to demonstrate to this court that he has a right of appeal: para. 10 of the November judgment.

13 The matter then came before Bailhache JA, sitting as a single judge of this court, on 27 February 2020. He directed the permission application to be referred to the full court. That is what is before us, together with the substance of the appeal if permission is granted.

The...