The Serious Organised Crime Agency v Robb

In civil recovery proceedings under Part 5 of the Proceeds of Crime Act 2002, the claimant must prove unlawful conduct and the acquisition of recoverable property on the balance of probabilities. Serious allegations do not create a heightened standard of proof, although inherent probability is relevant when weighing the evidence.

The court may adopt a global assessment of the evidence and need not trace every transaction individually where the property and unlawful conduct form part of a connected scheme. Repeated contractual breaches are not, without more, proof of fraud. However, the evidence may establish that a legitimate business later became fraudulent. Where the account funds represented customer money obtained and transferred through a fraudulent scheme, the recoverable property comprised the whole balance in the specified account.

The Serious Organised Crime Agency brought a Part 8 claim under sections 266 and 243 of the Proceeds of Crime Act 2002 concerning approximately £1.6 million frozen in a bank account. The money had been transferred from accounts associated with property developments in the Turkish Republic of Northern Cyprus towards the defendant’s personal account and intended onward transfer to Thailand.

The third parties claimed proprietary interests as victims of the alleged unlawful conduct. The immediate issue was whether the claimant could obtain a declaration as to its rights against the defendant before those third-party claims were determined. The central questions were whether the defendant had engaged in unlawful conduct, whether the funds were recoverable property, and whether the whole account balance or only an apportioned part was recoverable.

1. Declaration and recoverable property. The court found on the balance of probabilities that, from February 2005, the defendant acted dishonestly and fraudulently with others to extract customer money from the property business and transfer it to Thailand. The sum standing to the credit of the specified National Westminster Bank account was recoverable property within section 304 of the Proceeds of Crime Act 2002 (paras [54]–[57], [68], [71], [77]).
2. Standard and mode of proof. The claimant bore the burden of proving unlawful conduct and the acquisition of property through that conduct on the balance of probabilities. The seriousness of the allegations affected the assessment of inherent probability and the cogency required, but did not raise the legal standard. The court could draw inferences from primary facts, provided the conclusion was plainly established and not based on light conjecture (para [7]).
3. Global assessment. Part 5 permitted a broad or global assessment of the evidence. The claimant was not required to identify a particular offence for each transaction or to trace every item of money individually in a complex case (paras [72]–[73]).
4. Fraud and contractual breach. Repeated breach of contract was distinguishable from fraud, especially fraud from the outset. The evidence did not establish that the business was fraudulent from inception, because commercial incompetence, opportunistic deceit and other explanations could not be excluded. It did establish that the business later became fraudulent, with the turning point occurring by early February 2005 (paras [65]–[68]).
5. Dual criminality. The transfers were capable of constituting obtaining property in England and Wales because property was despatched from or received there. Accordingly, section 241(1) applied and dual criminality under section 241(2) was unnecessary. In any event, the evidence established equivalent criminality under the relevant Northern Cyprus and Republic of Cyprus provisions (paras [58]–[64]).
6. Mixing and tracing. Although a proportionate apportionment could have been attempted by analogy with trust tracing principles, it was neither necessary nor desirable. The defendant’s unlawful conduct encompassed both the collection of the funds and the conspiracy to remove them from the jurisdiction. The appropriate declaration therefore covered the whole account balance (paras [69]–[77]).

The court would hear counsel on the appropriate form of order.