Executive Jet Support Ltd & Anor v The Serious Organised Crime Agency (SOCA)

For the purposes of sections 308 and 314(4) of the Proceeds of Crime Act 2002, consideration is executed only when all contractual promises forming the consideration have been performed. Partial performance does not suffice where the consideration is indivisible. The statutory protection for an innocent purchaser who gives value therefore applies only once the contract has been completed. Economic loss does not alter that construction. The forfeiture provisions pursue the legitimate aim of removing criminal property from circulation and may be compatible with Article 1 of Protocol No 1 where the affected person has had a proper opportunity to challenge the order and a fair balance is struck.

Executive Jet Support Ltd and Simon Browse appealed by way of case stated against a District Judge’s order at Bristol Magistrates’ Court on 14 April 2011 forfeiting £143,472.23 under section 298 of the Proceeds of Crime Act 2002. The money represented the unspent balance of cash paid towards the purchase of three aircraft. The appellants argued that airworthiness inspections and ferry permits constituted executed consideration, so that the statutory protection for a good-faith purchaser for value under section 308 applied. They also relied on Article 1 of Protocol No 1 to the Convention. The central issues were whether the consideration was divisible and whether partial performance satisfied section 314(4).

1. Appeal dismissed. The appellants had not obtained the recoverable property for value, and the cash therefore remained recoverable under sections 308(1)(b) and 314(4) of the Proceeds of Crime Act 2002.

2. As a matter of contractual construction, the mutual promises were payment of the purchase price and delivery of the aircraft with the ferry permits. The inspection, airworthiness and bill-of-sale provisions were conditions precedent, or at most steps towards performance, rather than separate executed consideration. The consideration was indivisible. Even if the wider contractual provisions were treated as consideration, partial performance would not satisfy section 314(4).

3. The language of section 314(4), read with section 308(1), requires the consideration to have become executed. That means that all contractual promises forming the consideration must have been performed. The statutory test is concerned with statutory construction, not the contractual doctrines of restitution, partial failure of consideration or unjust enrichment. Economic loss suffered by an innocent purchaser is irrelevant to that test.

4. The court rejected the Convention challenge. Part 5 of the Act pursued the legitimate aim of removing criminal property from circulation and preventing money laundering. The appellants had been represented and had ample opportunity to challenge the forfeiture. The provisions struck a fair balance between the general interest and their property rights.

5. Pursuant to section 28A(3) of the Senior Courts Act 1981, the appellants were ordered by consent to pay the respondent’s costs of £20,550 within 28 days.

• Bristol Magistrates’ Court: On 14 April 2011 the District Judge ordered forfeiture of £143,472.23 under section 298 of the Proceeds of Crime Act 2002.
• High Court (Queen’s Bench Division): The appeal by way of case stated was dismissed. The forfeiture order was upheld.