Crown Prosecution Service v Adaka

For property to be treated as realisable property because it was the subject of a gift caught by the statutory confiscation regime, the prosecution must prove on the balance of probabilities that the defendant made the gift directly or indirectly to the person holding the property. A confiscation order made in proceedings to which that person was not party does not prevent an application to discharge a restraint order on the ground that the property is not realisable property. The court must assess the evidence relating to each alleged recipient separately and determine whether a genuine transaction for value is more probable than a gift or sham transaction.

Following the conviction of Reginald Oyiborojaze Adaka for money laundering, the Crown Court made a confiscation order which included funds transferred from an account controlled by him to accounts connected with Mr Williams and Mr Chukwu, and property acquired using part of those funds. The applicants had not been parties to the confiscation proceedings. They applied under section 77(7) of the Criminal Justice Act 1988 to discharge the restraint order, arguing that the assets were not Adaka’s realisable property because they had given full value in Nigerian naira and had not received gifts. The CPS sought a declaration that the assets were realisable property.

1. Burden of proof. The CPS bore the burden of proving, on the balance of probabilities, that the disputed property was realisable property under section 74 of the Criminal Justice Act 1988. Since the property was not held by Adaka, the CPS had to prove that it was held by persons to whom Adaka had directly or indirectly made a gift caught by the Act.
2. The confiscation order did not determine the applicants’ rights because they had not been parties to those proceedings. They were entitled to invite the court to decide whether the disputed assets fell within section 74.
3. The evidence was assessed separately for each applicant. The court considered three possibilities: genuine foreign-exchange transactions for value; receipt of the funds as gifts with knowledge or suspicion of fraud; and fictitious transactions designed to disguise gifts. The absence of a direct link between the applicants and Adaka or the underlying fraud weakened the latter two hypotheses.
4. The banking documents, supporting evidence and the applicants’ oral evidence were sufficiently credible. The documentary omissions, inconsistencies and unexplained features did not establish, on the balance of probabilities, that the transactions were sham arrangements or that the applicants had received gifts.
5. The applications were allowed. The CPS’s application for a declaration that the assets formed part of Adaka’s realisable property was dismissed.

The judgment describes earlier proceedings but is a first-instance determination of the applicants’ applications.

• Maidstone Crown Court: Adaka was convicted and a confiscation order was made including the disputed sums.
• High Court (Administrative Court): the applicants’ applications to discharge the restraint order were allowed and the CPS’s declaration application was dismissed.