Serious Organised Crime Agency v Gale & Ors

In civil recovery proceedings under Part 5 of the Proceeds of Crime Act 2002, the claimant must prove on the balance of probabilities that property was obtained through unlawful conduct. It need not prove a particular offender, occasion or specific criminal offence, but it must identify and prove unlawful conduct of an identifiable kind, or one of several such kinds. An unexplained lifestyle cannot, by itself, establish the claim. It may, however, form part of the totality of evidence, especially where explanations are absent or rejected as deliberately untruthful. The civil standard remains constant, although serious allegations require careful scrutiny and cogent evidence. A receiver’s report has persuasive value but does not reverse the burden of proof. Deliberate concealment postpones limitation under sections 27A and 32 of the Limitation Act 1980.

The Serious Organised Crime Agency brought civil recovery proceedings concerning assets and properties said to be worth about £2 million, held by David Gale, his former wife Teresa Gale, his son and his mother. The claim followed an interim receiving order and an investigation by an appointed receiver. The claimant alleged that the assets represented proceeds of drug trafficking, money laundering and tax evasion across several jurisdictions. The respondents relied on legitimate business and property dealings, the passage of time, the Portuguese acquittal and limitation. The central issues were whether the wealth and identified assets were obtained through unlawful conduct, whether the Portuguese proceedings prevented reliance on the underlying evidence, and whether the claim was time-barred.

1. Burden and standard of proof. The claimant bore the burden of proving recoverable property on the balance of probabilities. The criminal standard did not apply. Serious allegations required appropriately careful consideration and cogent evidence, but did not create a different or variable standard. A failure to answer an important question could support an adverse inference where the respondent had the knowledge to answer, subject to ruling out delay as an explanation.
2. Unlawful conduct and unexplained wealth. The court adopted the reasoning in The Queen on the Application of the Director of Assets Recovery Agency and Ors v Geoffrey David Green and Ors, [2005] EWHC (Admin) 3168, as qualified by The Director of Assets Recovery Agency v Szepietowski & Ors, [2006] EWHC (Admin) 3228. The claimant need not prove a particular offence committed by a particular person on a particular occasion. It must nevertheless prove that property was obtained by or in return for criminal conduct of an identifiable kind, or one of several identifiable kinds. The court held that Green’s second answer was too restrictive: an unexplained lifestyle alone was insufficient, but the absence of any credible explanation could be powerful evidence when considered with the whole case.
3. Evidence. The court adopted the observations in The Director of the Assets Recovery Agency v Olupitan, [2007] EWHC (QB) 162, and The Director of the Assets Recovery Agency v Jackson, [2007] EWHC (QB) 255. The receiver’s report was independent and had considerable persuasive weight, but its findings were not binding and the primary evidence had to be scrutinised. The report did not reverse the burden of proof.
4. Foreign acquittal. The Portuguese acquittal did not create issue estoppel or autrefois acquit in these civil proceedings. The court could consider the underlying material, together with evidence from Spain and other evidence, for the different question whether the respondents’ wealth was obtained through unlawful conduct.
5. Findings and limitation. The court found that David Gale had engaged in drug trafficking and money laundering and that Teresa Gale had participated in money laundering. The identified property was recoverable. Sections 27A and 32 of the Limitation Act 1980 applied so as to allow deliberate concealment to postpone the limitation period. Knowledge held by police officers was not automatically attributable to the enforcement authority, and the evidence available in 1992 did not establish recoverable property. The claim was not time-barred.
6. Order. A recovery order was made in respect of each item listed in Schedule 2 to the interim receiving order.

Not an appeal. The judgment records prior interim receiving and case-management orders, but no appellate decision.