Assets Recovery Agency v Customs and Excise & Ors

Summary judgment may be entered where the evidence supporting a defence is so incredible that it can properly be rejected on the material before the court, despite the usual importance of oral evidence and cross-examination. Civil recovery proceedings under Part 5 of the Proceeds of Crime Act 2002 are civil, not criminal, for Convention purposes. The fact that property is recovered from the person alleged to have engaged in criminal conduct does not alter that character. The absence of arrest, formal charge, conviction, penalty and criminal record is significant. A possible claim concerning earlier retention of property by another public authority does not prevent a later proper recovery claim.

The Director of the Assets Recovery Agency sought a recovery order under sections 243 and 266 of the Proceeds of Crime Act 2002 concerning approximately £3.5 million held by Customs and Excise. Collins J entered summary judgment for the Director on 12 July 2004. Charrington renewed an application for permission to appeal after permission had been refused on the papers.

He challenged the rejection of his explanation that the money represented commission from diamond transactions. He also argued that the proceedings were criminal for the purposes of Articles 6 and 7 of the European Convention on Human Rights, and that the historical retention of the money by Customs disabled the recovery claim. The central issues were whether summary judgment was justified and whether the statutory recovery proceedings were civil or criminal in character.

The renewed application for permission to appeal was dismissed with costs. Laws LJ gave the judgment and Wall LJ agreed.

1. Summary judgment. Although summary judgment without oral evidence and cross-examination is a serious step, the court must form a view where the application is before it. Collins J was entitled to reject the diamond-commission explanation on the material available. The contemporaneous evidence, the applicant’s earlier admissions, the note found at his premises and the lateness and weakness of the further evidence made the account incredible. The Court of Appeal considered the judge not merely right, but obviously right. The later statements from Mr Knaggs were too tenuous to affect the result.
2. Convention classification. The court accepted the approach stated in Mudie [2003] QB 1238: domestic classification is only a starting point, and the substance of the proceedings must be examined, including whether they involve State power to condemn or punish wrongdoing. The court approved the reasoning in Walsh and Jia Jin He [2004] EWHC 3021 (Admin), and regarded the relevant Strasbourg jurisprudence, including Butler v United Kingdom (2002) App 41661/98 and Webb v United Kingdom (2004) App no 56054/00, as consistent with that conclusion.
3. Part 5 proceedings. Civil recovery proceedings under Part 5 of the Proceeds of Crime Act 2002 are civil rather than criminal. The absence of arrest, formal charge, conviction, penalty and criminal record supported that classification. The fact that the person from whom recovery was sought was also alleged to have engaged in unlawful conduct did not change it. The Article 6 and Article 7 arguments therefore failed.
4. Historical retention. Any possible claim against Customs arising from retention of the money without a restraint order was separate. That history did not disable the Director from pursuing a proper recovery claim where the facts supported it.

• Court of Appeal (Civil Division): On 21 January 2005, the renewed application for permission to appeal was dismissed with costs: [2005] EWCA Civ 334.
• Court of Appeal (Civil Division): Laws LJ had previously refused permission to appeal on consideration of the papers on 12 November 2004.
• High Court, Administrative Court: Collins J granted summary judgment for the Director on 12 July 2004 under Part 24 of the Civil Procedure Rules.