Attorney General v Jonathan Reid and 3 others (Bahamas)

On an ex parte application for a restraint order, a public authority owes a duty of full and frank disclosure. An obvious typographical error is not material non-disclosure where the surrounding evidence makes the error plain and an argument based on it could not undermine the application. In proceeds-of-crime cases, discharge is not automatic: the court must consider whether the public interest requires the order to stand in light of the true position. In mutual legal assistance cases, that interest includes treaty commitments and international co-operation against crime. An appeal remains practical where restrained funds, or assets acquired with them, may still be realisable property. An appellate court should determine any genuine factual issue underlying an alleged disclosure breach.

The Attorney General of The Bahamas obtained an ex parte restraint order under the Proceeds of Crime Act 2000, as modified for foreign proceedings by the Proceeds of Crime (Designated Countries and Territories) Order 2001, following a United States mutual legal assistance request concerning alleged fraud proceeds transferred to Bahamian accounts.

Grant-Thompson J later discharged the restraint order for abuse of process and lack of a sufficient nexus between the alleged fraud and the named respondents. The Court of Appeal dismissed the Attorney General’s appeal without determining those merits, holding that material non-disclosure in an application to join CWI required the joinder order to be set aside. The central issue before the Board was whether the erroneous account-closure date amounted to material non-disclosure and justified dismissal of the appeal.

Disposition. The Board advised His Majesty that the appeal should be allowed and the matter remitted to the Court of Appeal of The Bahamas for adjudication on the merits.

1. Duty of disclosure. A public authority applying ex parte for a restraint order owes the same duty of full and frank disclosure as other applicants. Everything relevant to the decision, whether helpful or harmful, must be placed before the court. The Board reaffirmed the approach in Director of the Serious Fraud Office v A [2007] EWCA Crim 1927, In re Stanford International Bank Ltd [2010] EWCA Civ 137 and Jennings v Crown Prosecution Service [2005] EWCA Civ 746.
2. No material non-disclosure. The reference to closure of the Sun Trust accounts in 2015 was an obvious error. It was contradicted by the opening date, the transfer from Boeing, subsequent cheques and account transactions. Any argument based on the inconsistency had no prospect of undermining the application. There was therefore no material non-disclosure or breach of the duty of fair presentation.
3. Consequences of non-disclosure. If material non-disclosure had been established, discharge would not have followed automatically. The court would have had to consider whether the public interest required the order to stand in light of the true position, taking account of the prior failure and whether it was deliberate or accidental. In a mutual legal assistance case, the public interest includes treaty commitments and international co-operation against crime. The Court of Appeal had misdirected itself by relying on principles applicable to private commercial disputes, including those associated with Brink’s Mat Ltd v Elcombe [1988] 1 WLR 1350, without considering that wider public interest.
4. Further procedural errors. If there had been a genuine issue about the date, the Court of Appeal should have decided the relevant factual questions itself or provided for their determination. Evidence concerning an issue not raised below would not have been fresh evidence under Ladd v Marshall principles. CWI was already a proper respondent because it had applied to discharge or vary the order, pursuant to paragraph 5 of the order and section 26(5) of the modified Proceeds of Crime Act 2000.
5. Mootness. The appeal was not moot. The funds, if still held in another account, or assets purchased with them, could remain realisable property under section 4(3) of the modified Act, and a restraint order could be made under section 26(1). Even if the appeal had become moot, it would have been appropriate to decide the issues to clarify the law.

1. Privy Council. Appeal allowed and matter remitted to the Court of Appeal for determination on the merits.
2. Court of Appeal of the Commonwealth of The Bahamas. The appeal from the first-instance discharge of the MLAT restraint order was dismissed without consideration of the merits because of alleged material non-disclosure in the CWI joinder application.
3. Supreme Court of The Bahamas. Grant-Thompson J discharged the MLAT restraint order on grounds of abuse of process and lack of a sufficient nexus between the alleged fraud and the named respondents.