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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Assets Recovery Agency v Customs and Excise & Ors [2005] EWCA Civ 334 (21 January 2005) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2005/334.html Cite as: [2005] EWCA Civ 334

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IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
ADMINISTRATIVE COURT LIST
(MR JUSTICE COLLINS)

		Royal Courts of Justice Strand London, WC2
		21 January 2005

1. LORD JUSTICE LAWS: This is a renewed application for permission to appeal against the decision of Mr Justice Collins given in the Administrative Court on 12 July 2004 when he made an order for summary judgment, under Part 24 of the Civil Procedure Rules, against the applicant and in favour of the Director of the Assets Recovery Agency. Permission to appeal was refused by myself on consideration of the papers on 12 November 2004.
2. The applicant Mr Charrington was the second respondent in the proceedings before Mr Justice Collins. The relief sought by the director was a recovery order pursuant to Sections 243 and 266 of the Proceeds of Crime Act 2002 in the sum of about £3.5m which, when the proceedings were issued, was being held by HM Commissioners of Customs and Excise.
3. The genesis of the claim was the seizure by the Customs in June 1992 of some £2.25m in cash at the applicant's home after the applicant had been arrested in connection with the importation of very substantial quantities of cocaine into the United Kingdom.
4. The background is fully explained in the judgment of Mr Justice Collins as follows:

"3 ..... On 19 October 1991, four containers containing lead ingots were landed at Felixstowe. Those ingots concealed approximately 500 kilograms of cocaine, which would have had a street value of approximately £80 million. That importation was not detected and the containers were taken by rail to Liverpool and stored at a warehouse in Aintree. The drugs were removed, the ingots disposed of as scrap and the drugs no doubt placed upon the market.

4 Charrington at this time had entered into an arrangement with an officer of the Cleveland Force to act as an informant, and this involved, in addition to informing against burglars, robbers and relatively small time drug dealers, informing about the arrival of substantial consignments of cocaine. The person who was largely behind those importations was the fourth respondent, Curtis Warren. I can say that because there is, as I understand it, from the

submissions that have been made, no issue that Warren was indeed the mastermind behind the importation I have been describing.

5 In addition, a man called Mario Halley, who was a Dutch citizen but who was part South American by origin, was also deeply involved. There was no direct evidence before me as to the precise nature of his involvement, but it clearly was at a relatively high level. Charrington appears to have been used, among other things, as a launderer of the proceeds of the sales of the drugs. In addition, he may have arranged for some transport. Further, he assisted Halley in November and December 1991 in purchasing a number of BMW motor cars. Those were paid for in cash. They have been seized by the Customs and have been sold, and the claim includes a sum of money representing the proceeds of those sales. There is no dispute, certainly no issue has been raised before me, that those BMWs did belong to Halley. They were no doubt part of his benefit from the enterprise, and therefore, it is appropriate that their proceeds be the subject of summary judgment. I will deal with the precise amounts in due course.

6 I should say that Halley has disappeared .....

7 Following the first consignment, in December 1991 a second consignment left Venezuela en route to Felixstowe where it arrived on 12 January 1992. In the meantime, a number of containers, which should have been part of the first shipment and which were apparently destined for Greece, arrived in Holland. They were seized by the Dutch authorities and were found to contain 800 kilograms of cocaine. That led to a number of arrests in Holland, including that of Halley, who was sentenced to a term of six years' imprisonment because of his involvement in that importation, which itself was part of the first importation that got through Felixstowe successfully.

8 The second importation was not immediately collected from Felixstowe, perhaps because it was appreciated that the Customs might be aware of it as a result of what had happened in Holland. But eventually arrangements were made for its collection and the containers were moved between a number of warehouses until, on 30 March 1993, Customs officers arrested several of the principals and seized the ingots, which were found to contain 900 kilograms of cocaine with a street value of about £150 million.

9 Charrington was not immediately arrested. He was, as I have said, acting as an informant, and indeed there is some evidence that he was permitted to launder a very substantial sum of money in order to further the conspiracy and, no doubt, to be able, as the police and Customs believed, to tell them what was going on so as to enable them in due course to arrest those who were principals in the enterprise. Unfortunately, it seems that Charrington was playing one side off against the other and was taking advantage of the position he was placed in in order to advantage himself. Far from carrying out the laundering process for the benefit of the law enforcement agencies, he was doing it for his own benefit, which is perhaps not entirely surprising.

10 In due course, he was arrested. It is suggested that he knew that he was going to be arrested, he having been given some weeks warning that that would take place. Be that as it may, after his arrest, he having arrived at Teesside Airport from Tangiers, in the attic in his home were found 12 holdalls containing a total of £1,759,210 in cash (Sterling). In addition, in his bedroom were found 1,184,490 Swiss Francs, with a value of approximately £500,000. When tested, the cash was found to be contaminated with cocaine to a greater extent than would be expected for cash which had been in general circulation. There was also found at his business premises a note on an envelope on which had been written 'Mario debt'. It appeared to be a record of sums received and paid out between December 1991 and March 1992, and the total recorded for the end of February was £4,845,396. The suggestion was that this was a record of the money laundering that Charrington had dealt with on behalf, it was said, of Halley.

11 He was interviewed the next day by Customs officers. He admitted that he had travelled to Venezuela with Warren in September 1991, that he knew Halley and he had been involved in the purchase of motor cars for Halley. After the conclusion of the formal interview, he spoke to the officers in private. He told them that he had been acting as informant and that he had been asked to launder money from the sale of drugs, and that the monies which had been seized were bagged up ready to be laundered. He said that, after the money was changed, it went to Mario's people in Holland. Indeed, as later appeared, it seems that what was being said was that this money was to go to Halley and he was to pay the suppliers of the cocaine.

12 He was charged with conspiracy to import cocaine. His solicitors obtained statements from two police officers and one Customs officer, who had been using him as an informant. I have seen those statements and I emphasise those were statements obtained on his behalf in order, it was believed, to assist him, as indeed in due course they did. The statement of the police officer who was his main contact, a police officer called Weedon, who I think was a Detective Sergeant at the time, consisted of what

effectively was a record of information that Charrington had given him mainly during the latter part of 1991 when he indicated that there was, he was pretty sure, 500 kilograms of cocaine en route to the United Kingdom and that a further shipment of 2,500 kilograms was being prepared to come in within a few weeks.

13 Halley and Warren, he said, had asked him to get more involved and to provide transport, and had also asked him to become involved in the laundering of the money. On 11 November it is recorded that Charrington had told the officer that he had been with Halley to London and had changed £1.4 million into US dollars and that that was part of the money laundering. Charrington, on 19 November, is recorded as having told the officer that he was heavily involved with Halley in importing cocaine and he organised the transport and subsequent laundering of cash on behalf of Halley.

14 Finally, in February 1992, there is a record of Charrington having told the officer and a Customs officer that he had purchased a ship financed by Halley and that he had a large amount of Halley's unlaundered cash. That was on 29 April 1992, some two months before the money that I have referred to was discovered in his premises.

15 Since his arrest, largely as a result of the information that he was being run as an informant, and in circumstances in which there had been, I need not go into details, a less than satisfactorily liaison between the police and the Customs about what was really going on, it was decided after seeking advice from leading counsel, who was then instructed on behalf of the prosecution, that Charrington should not be prosecuted. Warren was prosecuted, and of course Halley was in custody in Holland at this time."

5. The director, of course, had to prove that the cash in question was the proceeds of crime. The defence put forward by the applicant was that in fact it represented commission paid to him for his part in a legitimate transaction or transactions concerning diamonds and had nothing whatever to do with the importation of drugs, or laundering the proceeds of criminal drug sales. Two statements from a Mr K, who was alleged to have arranged for the payment of the commission, were deployed in support of this case. An interlocutory order had been made by Mr Justice Stanley Burnton in June 2004 requiring the director to produce (I summarise) any documents he had which might tend to support the applicant's case. That, as I understand it, yielded nothing.
6. Mr Justice Collins proceeded to deal with the applicant's case on the merits as follows:

"28 Of course, it is a strong thing to give summary judgment without the matter being tested by the giving of evidence by, and cross-examination of, relevant witnesses. But it is necessary for me to form a view if this application is brought before me. It seems to me that the story that is now given is truly incredible. Everything that was said at the material time and the note that was discovered (and I, of course, recognise that he now says it was a fabrication) all point to the direction that Charrington was indeed involved and heavily involved in these importations of cocaine and was laundering the money on behalf of those who were behind the importation. That is what he admitted, that is what he told a number of officers, that was the information that he himself obtained in order to enable him not to be prosecuted. At no time was the diamond suggestion raised until the question arose of seeking this confiscation, for want of a better word, on behalf of the Director of the Asset Recovery Agency.

29 In those circumstances, I have no hesitation whatever in rejecting the evidence that is now sought to be relied upon and in deciding that Charrington's account is simply unbelievable. I cannot imagine that any judge would believe it, were it to be put forward, even if Mr [K] appeared to be a satisfactory witness - I say appeared to be because one knows that witnesses can come forward and can appear to be very plausible, but when the story they are conveying is so incredible, one is entitled to reject them. I do not forget or put out of my mind the fact that Charrington, albeit in custody at the moment in Germany as a result of a conviction for drug smuggling (incidentally he apparently asserts that that was another wrongful conviction), has made, and there is reason to believe that he has made, millions out of his activities. It is not difficult to find people who are prepared to speak on one's behalf if financial rewards are in the offing. I do not, of course, have any direct evidence that that has happened, but all I can say is that I am singularly unimpressed with the evidence that has been put forward about how this diamond enterprise was begun and how it happened. It is not entirely consistent with the note that has been discovered, to which I have already referred, and the suggestion made is that that note is merely a suggested possible route in due course for trying to get his hands on the money and pretending that it was legitimate rather than from the proceeds of drug smuggling."

7. It is now said for the applicant that, among other things, the judge should not have been so ready to dismiss the potential of Mr K's evidence. I disagree. In my judgment, on the material before him, the judge was not only right but obviously right to dismiss the applicant's explanation out of hand for all the reasons which he gave.
8. It is said that other material was before the judge from two police officers and a Customs officer. As is stated at paragraph 15 of counsel's skeleton argument on behalf of the applicant, the net effect of that material was that the applicant had been an informant for the police and Customs. So much is undisputed. It does not go to support his tale of diamond sales. It is said that there is other evidence now available. A statement from a retired Detective Chief Superintendent is appended to the applicant's solicitor's third statement. I have read that; it does not seem to me to take the matter anywhere.
9. On 20 September 2004 the solicitor Mr Salhan made a further statement to which he exhibited an attendance note of a telephone conversation said to have been held with one of the police officers, a Mr Knaggs. He said that Mr Knaggs telephoned him on 17 September 2004. The note records Mr Knaggs as saying that documents taken from the applicant's briefcase - which was said by the police to show an attempt by the applicant to concoct a false story about diamond dealings - actually demonstrate that the applicant was telling the truth.
10. Then on 20 December 2004 Mr Knaggs signed a witness statement. He has left the police force, and is domiciled in Saudi Arabia. In a statement he said that he told the Customs that he would give evidence for Charrington if he was put on trial. He said that there followed a police inquiry into the conduct of himself and Detective Sergeant Weedon but nothing was found against them. He said he is satisfied that the money recovered from the applicant's home was not cocaine cash. He said that the applicant had spoken about diamond dealing, but -

"I cannot say that the money seized from Charrington's house was the product of diamond dealing but I cannot say it was not. I can say that he frequently spoke of being involved with diamond dealing and I have no real reason to disbelieve him. For him to have this amount of cash at his home would be consistent with diamond dealing on a large scale or may be it was part of his large scale money laundering effort."

11. Mr Knaggs had made a statement as long ago as 18 November 1992. In that, he gave a long history of police dealings with the applicant as an informant. That account includes references to the applicant telling Mr Knaggs or Mr Weedon of his involvement of and knowledge of importing drugs. There are many references; I will not set them out. The tenor of the statement is that the applicant's arrest was an error of judgment because he had been such an effective informer. There is no reference whatsoever to any diamond dealing there, which is, to say the least, surprising, if it was any part of this statement's purpose to persuade the relevant authority that the applicant should not be prosecuted.
12. In my judgment, Mr Knaggs' later statements can be entirely discounted. I see no reason why he would not have given the account he has now given earlier if it had any claim to be true. There is no sensible explanation for this information not having been put before Mr Justice Collins. In any event, his comment in the solicitor's attendance note about the documents begs more questions than it answers. How can he say that these documents are genuine rather than pretence? He gives no reasons. There is no argument based on the documents themselves. In his later statement of December he acknowledges in terms that he cannot say whether the very large sum of money found at the applicant's house was the product of diamond dealing. Mr Knaggs' account, including his account of the note to which Mr Dixon of counsel referred this morning, is tenuous to the point of disappearance and I have not the slightest doubt but that if these two fresh statements had been before Mr Justice Collins he would have arrived at the same result.
13. Mr Charrington's case is conspicuously lacking in merit, and, on the facts, Mr Justice Collins was obviously right to accept the director's claim.
14. There are two other points canvassed by Mr Dixon who has been admirably tenacious in his pursuit of his client's interests. It is said that the case should be classified as criminal proceedings for the purposes of Article 6 and Article 7 of the European Convention on Human Rights. Were that to be right, the relevant legislation here would fall to be condemned as retrospective and so repugnant to Article 7, and it would also be said that the applicant has not enjoyed the full protections to which he was entitled under Article 6 by way of a proper trial and the opportunity to call evidence.
15. The other point is a complaint of the delay since 1992 when the money was seized and the fact that the Customs held on to the money during times when they lacked any real or apparent authority to do so. That was before the enactment of the Proceeds of Crime Act 2002.
16. As regards the point on the Strasbourg Convention, for my part, I have been much assisted by a skeleton argument put in by Mr Barnard for the respondent. My Lord and I adjourned this case last week so we might have assistance on the Article 7 point which could properly be regarded as a pure point of law. Mr Barnard, in his skeleton argument, refers to two cases recently decided at first instance: Walsh, decided by Mr Justice Coghlin in the Northern Ireland jurisdiction, and Jia Jin He [2004] EWHC 3021 (Admin), a decision of Mr Justice Collins. I propose to deal with this point shortly.
17. First Mr Barnard submits at paragraph 5 of his skeleton argument:

"It is submitted that the argument that proceedings for recovery orders should be treated as 'criminal' for Convention purposes is untenable. The European Court of Human Rights has twice considered and rejected the argument that the cash forfeiture proceedings under the DTA are 'criminal proceedings' - see Butler v United Kingdom (2002) App 41661/98 and Webb v United Kingdom (2004) App no 56054/00. It is submitted that it is inconceivable that the reasoning of the Court would not apply equally to the cash forfeiture provisions in section 298 [Proceeds of Crime Act] which replace the DTA provisions. If that is correct, the argument being advanced by Mr Charrington must involve inviting the Court of Appeal to decide that the High Court procedures under Part 5 are 'criminal' in nature whereas the Magistrates' Court procedures under Part 5 are to be regarded as 'civil'. It is submitted that there is no prospect of the court so holding."

Then the skeleton argument refers to a number of authorities, including Mudie [2003] QB 1238. In the course of my judgment in that case I made reference to yet other cases which indicated that proceedings should not be classified as criminal unless they involved the use of State power to condemn or punish individuals for wrong doing. Mr Barnard sets out a short citation from my judgment (paragraph 36):

"It is certainly beyond contest that the concept of 'criminal charge' possesses an autonomous meaning in the European Court of Human Rights jurisprudence. It is also true that the first of the criteria, that is the domestic classification of the proceedings, is treated as no more than a starting point. But that proposition should not distract the court from the question whether, given the three criteria, the proceedings in issue are in substance in the nature of criminal charge. Are they an instance of the use of state power to condemn or punish individuals for wrongdoing? The European Court of Human Rights and our own courts have held that condemnation proceedings are not in any such category."

In the Northern Ireland case of Walsh, Mr Justice Coghlin said at paragraph 18:

"It seems to me that, in substance, proceedings by way of a civil recovery action under the provisions of Part 5 of the POCA differ significantly from the situation of a person 'charged with a criminal offence' within the meaning of Article 6. [Counsel] reminded the court of the fact that, in the circumstances of this particular case, the person from whom the Agency seeks to recover the property is the same person said to have engaged in unlawful conduct. That is certainly true but what seems to me of greater importance is the fact that there is no arrest nor is there any formal charge, conviction, penalty or criminal record, the serious personal consequences of involvement in criminal proceedings in respect of which the convention provides the enhanced protection of article 6 (2) and (3)."

Finally Mr Justice Collins at paragraph 58 of Jia Jin He said:

"I have no doubt that Coghlin J was correct in deciding as he did that these were civil proceedings. I do not need, I think, to say more than that I entirely agree with the reasons that he gives to reach that conclusion. His conclusion is entirely consistent with, and supported by, both domestic and Strasbourg jurisprudence."

It does not seem to me necessary to say any more.

18. We are told by Mr Dixon that permission has been given to appeal Mr Justice Coghlin's decision to the Court of Appeal in Northern Ireland. No application for permission has been made in the case of Jia Jin He. For my part, it seems to me that both Mr Justice Coghlin and Mr Justice Collins were entirely right.
19. As regards the point relating to the passage of time since 1992, Mr Dixon reminds us specifically of this time table: 1992 was the year when the money was seized. An extant restraint order was discharged in 1993. But the money that had been covered by the restraint order was not then returned to the applicant; it was retained by the Customs. A further restraint order was made in 1997 and discharged in 1999. The cash was not returned. All these events preceded the enactment of the coming into effect of the Proceeds of Crime Act 2002.
20. It is said that this history ought to disable the director from recovering the money on the basis that it should have been treated as unlawfully retained by the Commissioners during the period when it was not covered by a restraint order. That seems to me simply to involve a non sequitur. Whether or not the applicant might have taken proceedings for the recovery of the money from the Customs when it was not protected by any order of the court is one thing. It does not seem to me to follow from the fact that the Customs retained it - as it happens, without such proceedings being taken - that the director now is, in some way, disabled from putting forward his proper claim if, as Mr Justice Collins rightly held, the facts support it. There is nothing, in my judgment, in either of these two further points taken, with determination and some elegance, by Mr Dixon. The case is conspicuously and entirely without merit.
21. For my part, I would dismiss the application for permission.
22. LORD JUSTICE WALL: I entirely agree, and I have nothing useful to add.

Order: Application dismissed with the costs