Fresh View Swift Properties Limited v Westminster Magistrates’ Court

Forfeiture under Part 5 of the Proceeds of Crime Act 2002 is an in rem proceeding against identified property. Property is obtained by unlawful conduct where a person comes into possession of it through human steps forming part of criminal conduct. Ownership or personal benefit is unnecessary, and the identity of the person guilty of the unlawful conduct is immaterial.

Where recoverable property is transferred, its recoverability may be followed into the hands of the recipient. Once the statutory conditions for forfeiture are satisfied, forfeiture should almost invariably follow, subject to a short proportionality check. The order should be set aside only where it is clearly manifestly disproportionate to the unlawful conduct.

The claimant sought judicial review of a decision by District Judge Minhas at Westminster Magistrates’ Court ordering forfeiture of £67,372.51 and accrued interest under section 303Z14 of the Proceeds of Crime Act 2002.

Permission was granted on the question whether money received through an unlicensed money service business was recoverable property, but refused on a related argument concerning customer ownership. The proportionality ground was renewed and heard with that issue. The central questions were whether the forfeited sum had been obtained by unlawful conduct and whether forfeiture was a disproportionate interference with property rights.

1. Recoverable property. The claim on Ground 1(a) was dismissed. A Part 5 forfeiture application is an in rem proceeding against identified property in specie, rather than a judgment for a general monetary sum. The statutory words require five elements: property, obtained, by, conduct and unlawful conduct. “Obtained” means coming into possession; it does not require ownership or benefit. “Conduct” requires human action or steps directed to a particular end. Because the proceedings are in rem, it is immaterial who was guilty of the unlawful conduct.
2. Receipt through an unlicensed MSB. Operating an unlicensed money service business was criminal conduct under regulations 56(1)(b) and 86(1) of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. The operator’s steps in offering the service, establishing a receiving account, providing its details and arranging the transfer constituted unlawful conduct. The receipt of the money was not purely passive. The operator therefore obtained the sum by unlawful conduct, even though the payer’s conduct was not itself unlawful.
3. Tracing and forfeiture discretion. The sum later paid to the claimant remained recoverable under section 305(1) and could be followed into the claimant’s account under section 305(3). The statutory conditions having been met, the discretion under section 303Z14(4) should almost invariably be exercised in favour of forfeiture.
4. Proportionality. An order under section 303Z14 necessarily interferes with Article 1 of Protocol 1. The court must conduct a short disproportionality check. The order should be disturbed only if clearly manifestly disproportionate to the unlawful conduct. The distinction between a lawful business involving separate unlawful acts, where only profit may be forfeited, and an inherently unlawful enterprise did not assist the claimant. The forfeiture was not manifestly disproportionate. Ground 2 and the renewed application for permission were refused.
5. The claim for judicial review was dismissed, permission to appeal was refused, and the claimant was ordered, by consent, to pay the first interested party’s costs of £18,000.

• Westminster Magistrates’ Court: On 28 April 2022, District Judge Minhas ordered forfeiture of the relevant sum under section 303Z14 of the Proceeds of Crime Act 2002.
• High Court (Administrative Court): Heather Williams J granted permission on Ground 1(a) and refused permission on Ground 2. Mr Justice Mostyn heard Ground 1(a) and the renewed Ground 2 application, dismissed the claim on Ground 1(a), and refused permission on Ground 2.