Jersey Unreported Judgments

[2008]JRC172A

ROYAL COURT

(Samedi Division)

1^st October 2008

Before     :

J. A. Clyde-Smith, Esq., Commissioner, sitting alone.

The Attorney General

-v-

Raj Arjandas Bhojwani

Transposition, purpose element and admissibility applications.

Advocate M. T. Jowitt for the Attorney General.

Advocate J. D. Kelleher for the Defendant.

JUDGMENT

THE commissioner:

1.        The defendant stands indicted for two counts of converting the proceeds of criminal conduct and one count of removing the proceeds of criminal conduct, contrary to the provisions of Article 34(1)(b) of the Proceeds of Crime (Jersey) Law 1999 ("the 1999 Law").  His trial is due to commence on 26^th January 2009.

2.        On 11^th July 2008, I ordered that a number of matters were suitable for a preparatory hearing under Part 10 of the Police Procedures and Criminal Evidence (Jersey) Law 2003 ("PPCE") which hearing took place on 16^th September 2008.  One issue, namely the admissibility of the defendant's statement of 11^th October 2002 (Exhibit PG/1), has been adjourned to a later date.  I deal with the issues that were argued before me in the order set out below. 

Transposition

3.        Article 34(1) of the 1999 Law is in the following terms:-

"(1)     a person is guilty of an offence if the person -

(a)       conceals or disguises any property that is or in whole or in part represents the person's proceeds of criminal conduct; or

(b)       converts or transfers that property or removes it from the jurisdiction.

for the purpose of avoiding prosecution for an offence specified in Schedule 1 or the making or enforcement in the person's case of a confiscation order".

4.        "Criminal conduct" is defined in Article 1 as follows:-

"criminal conduct" means conduct, whether occurring before or after Article 3 comes into force, that -

(a)       constitutes an offence specified in Schedule 1; or

(b)       if it occurs or has occurred outside Jersey, would have constituted such an offence if occurring in Jersey".

5.        Schedule 1, after setting out the articles to which it applies, is in the following terms:-

"OFFENCES FOR WHICH CONFISCATION ORDERS MAY BE MADE

Any offence in Jersey to which a person is liable on conviction to imprisonment for a term of one or more years (whether or not the person is also liable to any other penalty), but not being -

(a)       any drug trafficking offence; or

(b)       an offence under any of articles 15 to 18 of the Terrorism (Jersey) Law 2002".

6.        The indictment has been further particularised and count 1 is now in the following terms:-

"Count 1

Statement of Offence

Converting the proceeds of criminal conduct contrary to article 34(1)(b) of the Proceeds of Crime (Jersey) Law 1999.

Particulars of Offence

Raj Arjandas Bhojwani, between the 1^st October 2000 and 30^th October 2000, in respect of criminal conduct, namely:

(a)       the dishonest inflation of true prices for motor vehicles sold by him to Nigeria;

(b)       the making of false representations that:

(i)         the inflated prices were genuine prices;

(ii)         it was necessary to pay US$ 148, 940, 000 plus freight and other charges or about that sum in order to obtain the vehicles sold under one contract; and

(iii)        it was necessary to pay US$ 28, 961, 192 or about that sum in order to obtain the vehicles sold under the other contract.

(c)       the obtaining of dishonestly inflated payments for the vehicles out of Nigerian public funds;

(d)       the dishonest receipt for the benefit of himself and others of the inflated payments thereby obtained;

(e)       the dishonest payment of monies by or on the instructions of the said Raj Arjandas Bhojwani to bank accounts connected to Nigerian public officials involved in the award of vehicle-supply contracts to Tata Overseas Sales and Services Ltd.

(conduct which, if it occurred in Jersey, would have constituted offences of fraud, conspiracy to commit fraud, fraudulent conversion, conspiracy to commit fraudulent conversion, and bribery),

converted his proceeds of such criminal conduct, namely credit balances held in the names of TaTa Overseas Sales and Services Ltd SA and Britannic Trade Corporation at the Bank of India in Jersey, into six bankers' drafts totalling approximately US$43.9 million, for the purpose of avoiding prosecution for an offence listed in Schedule 1 to the said Law or the making or enforcement of a confiscation order against him."

The remaining two counts are for the purposes of these contentions in the same terms.

7.        There are three elements to the offences with which the defendant is charged, namely:-

(i)        conversion or removal of

(ii)       property that represents the defendant's proceeds of criminal conduct

(iii)      for the purpose of avoiding prosecution or the making or enforcement of a confiscation order or both.

8.        The criminal conduct alleged concerns two contracts negotiated between the defendant and officials of the military dictatorship of the President of the Republic of Nigeria, General Sani Abacha, in 1996 and 1997 for the supply of vehicles to the Republic of Nigeria at what the prosecution say were vastly inflated prices.  The prosecution will seek to prove that the sums payable under these contracts, which it claims included an illegal surplus of some US$ 130M, came to the defendant's company accounts at Bank of India in Jersey.  Many millions were then allegedly transferred by the defendant to bank accounts in other countries linked to the Abacha regime.  The alleged conversion and removal, which are the subject of the indictment and which involve some six banker's drafts, are said to have taken place in October and November 2000. 

9.        We are concerned here with the second element of the offence, specifically the process of transposition and the extent of the conduct that has to be transposed.

10.      Before turning to the contentions of the parties, it is helpful to refer first to the two House of Lords cases in which transposition has been considered, namely Cox v Army Council Respondents (1962) 2 WLR 950 and Norris v Government of the United States of America (2008) 2 WLR 673.

11.      In Cox, the House of Lords was concerned with Section 70 of the Army Act 1955 by which any person subject to military law who commits a civil offence, whether in the United Kingdom or elsewhere, is guilty of an offence against the section.  "Civil offence" is defined as meaning any act or omission punishable by the law of England which, if committed in England, would be punishable by that law.  The appellant, while serving with the British Army in Germany, was charged before the District Court Martial held there with committing a civil offence contrary to section 70 of the Army Act 1955, that is to say driving without due care and attention contrary to section 3(1) of the Road Traffic Act 1960, in that at Sundern on 15^th September 1960, he drove a motor vehicle on the road without due care and attention.  Lord Reid said at page 70:-

"So the statute requires us to imagine another act committed in England.  It cannot require that that other act should be precisely the same in every detail because that would be impossible.  So it must require that we can imagine another act committed in England which is similar in all relevant respects.  With many types of offence that is easy.  For example, murder and theft are the same all the world over.  At the other end of the scale there are acts or omissions so closely connected with conditions which are peculiar to England, or at least which are absent in the place where the act was committed, that it would be impossible to find the necessary degree of similarity between the act or omission committed abroad and any act or omission which could be committed in England.

The requisite degree of similarity must depend on the nature of the offence.  In this case the appellant was found guilty of driving a motor-vehicle on a road without due care and attention contrary to section 3(1) of the Road Traffic Act, 1960.  But the question is not whether that Act applies to Germany, or whether the road on which he was driving was a road within the meaning of that Act.  The question is whether there is the requisite degree of similarity between what the appellant did and an act done in England which would be contrary to that section.  I can see no relevant difference between the two.  No doubt traffic regulations are different in Germany from those in England.  But conditions vary greatly in England and the essence of the offence is failure to drive with due care and attention having regard to all the circumstances at the particular place and time.  I therefore find no difficulty in equating failure to drive with due care and attention in particular circumstances in Germany with a similar failure in England, and that is sufficient to dispose of this case".

Lord Radcliffe said (at page 71):-

"Secondly, the occurrence that is said to constitute the offence is always the actual occurrence itself as it took place outside England and that means importing into the hypothetical English occurrence the circumstances and conditions that prevailed at the place where and the time when the thing that is complained of was done or omitted.  The difficult question, as I see it, is to decide in any particular case how far those circumstances and conditions are an essential element of the act which it is said would have constituted an offence if committed in England, and how far the English offence is capable of being applied to the non-English occurrence".

12.      Norris is an extradition case where the alleged crime had been committed in the USA, which was the requesting state.  Before there can be extradition, there has to be criminality according to both the law of the requesting state and English law and it is therefore necessary to show that if the conduct had occurred in England, it would have constituted an offence under English law.  It is worth setting out the unanimous judgment of the House of Lords on transposition in full:-

"94     An exercise in transposition has been an essential part of the law since the enactment of section 10 of the Extradition Act 1870 (quoted, at para 66 above).  It is the means by which Parliament gives effect to a policy that, before there can be extradition, there should have been criminality according to both the law of the requesting state and English law.  As Mr Perry emphasised, the proper interpretation of the current provision in section 137(2)(b) of the 2003 Act is essential to the smooth functioning of the system of extradition under Part 2.

95       The most recent and authoritative guidance on the way that section 10 of the 1870 Act was to be applied is to be found in the opinion of Lord Millett in R (Al-Fawwaz) v Governor of Brixton Prison [2002] 1 AC 556.  The United States sought the extradition of Al-Fawwaz on charges of conspiring to murder American citizens, officials, diplomats and others, both in the United States and elsewhere.  He had never been in the United States.  Lord Millet explained, at paras 109-110:

'109 .... Given that the court is concerned with an extradition case, the crime will not have been committed in England but (normally) in the requesting state.  So the test is applied by substituting England for the requesting state wherever the name of the requesting state appears in the indictment.  But no more should be changed than is necessary to give effect to the fact that the court is dealing with an extradition case and not a domestic one.  The word 'mutandis' is an essential element in the concept; the court should not hypothesise more than necessary.

110.    The one point to which I would draw attention is that it is not sufficient to substitute England for the territory of the requesting state wherever that is mentioned in the indictment.  It is necessary to effect an appropriate substitution for every circumstance connected with the requesting state on which the jurisdiction is founded.  In the present case the applicants are accused, not merely of conspiring to murder persons abroad (who happen to be Americans) but of conspiring to murder persons unknown because they were Americans.  In political terms, what is alleged is a conspiracy entered into abroad to wage war on the United States by killing its citizens, including its diplomats and other internationally protected persons, at home and abroad.  Translating this into legal terms and transposing it for the purpose of seeing whether such conduct would constitute a crime 'in England or within English jurisdiction', the charges must be considered as if they alleged a conspiracy entered into abroad to kill British subjects, including internationally protected persons, at home or abroad'.

Changing all those elements which required to be changed, Lord Millett translated the American charge of conspiracy abroad to kill United States citizens, including internationally protected persons, at home or abroad, into a charge of conspiracy abroad to kill British citizens, including internationally protected persons, at home or abroad.

96.      Support for that approach is to be found, over a century ago, in the decision of Duff J in the Canadian case, In re Collins (No 3) (1905) 10 CCC 80.  The United States sought the extradition of Collins on a charge of perjury which was alleged to have taken place when he made an affidavit containing a wilfully false statement of fact in the course of an action of alimony in California.  A whole host of technical points against the proposed extradition were raised and rejected.  The key argument was to this effect.  Under section 2(b) of the Canadian Extradition Act, the extradition crime might mean any crime, 'which, if committed in Canada, or within Canadian jurisdiction, would be one of the crimes described in the first schedule' to the Act.  The judge was satisfied that perjury was indeed a crime described in that schedule.  According to the Californian Penal Code, the offence of perjury was committed by someone who lied after having taken an oath 'that he will testify, declare, depose, or certify truly before any competent tribunal, officer, or person ...'.  There was nothing, however, in the law of Canada which made it perjury to make a false deposition before any competent Californian tribunal or officer.  Therefore, it was said, the crime for which Collins's extradition was sought was not a crime which, if committed in Canada, would be one of the crimes described in the first schedule to the Extradition Act.  It followed that it was not an 'extradition crime' within the meaning of section 2(b) of that act.

97.      Duff J rejected that argument.  On the basis that the approach to be applied was to conceive the accused, and the acts of the accused, transported to Canada, he said, at pp 100-101:

'It is contended by the applicant that on these authorities to which I have referred, you have to go through the conduct upon which the criminal charge is based, and you have to come to the conclusion that his identical acts, if done in this country, would have constituted a crime in accordance with the law of Canada.  Taken with due qualifications, we need not quarrel with that; but it is obvious from the outset that there must be some qualification.  In the first place, the treaty itself, which, after all is the controlling document in the case, speaks not of the acts of the accused, but of the evidence of 'criminality,' and it seems to me that the fair and natural way to apply that is this - you are to fasten your attention not upon the adventitious circumstances connected with the conduct of the accused, but upon the essence of his acts, in their bearing upon the charge in question.  And if you find that his acts so regarded furnish the component elements of the imputed offence according to the law of this country, then that requirement of the treaty is complied with.  To illustrate, I apprehend that in the case of perjury, the accused cannot be heard to say, 'the oath on which the charge is based was administered by AB, an officer who had no authority to administer oaths in Canada (although duly authorized in the place where the oath was taken); and, consequently, if I had done here the identical thing I did there (viz: the taking of an oath before AB), perjury could not have been successfully charged against me.'  The substance of the criminality charged against the accused is not that he took a false oath before AB but that he took a false oath before an officer who was authorized to administer the oath.  Any other view would, I conceive, simply make nonsense of that treaty.'

Another passage from Duff J's judgment is also helpful.  Proceeding again on the same basis, he said, at p 103:

'if you are to conceive the accused as pursuing the conduct in question in this country, then along with him you are to transplant his environment; and that environment must, I apprehend, include, so far as relevant, the local institutions of the demanding country, the laws effecting the legal powers and rights, and fixing the legal character of the acts of the persons concerned, always excepting, of course, the law supplying the definition of the crime which is charged.'

While Duff J referred specifically to the terms of the particular extradition treaty between the United States and Canada, his reasoning has been adopted in subsequent cases in relation to the Canadian extradition legislation - for instance, by Sharpe JA giving the opinion of the Court of Appeal of Ontario in Federal Republic of Germany v Schreiber (2006) 206 CCC (3^rd) 339, 361, para 42.

98.      In Australia the same general approach can be seen in the judgment of Gibbs CJ, and Wilson and Dawson JJ in Riley v The Commonwealth of Australia (1985) 159 CLR 1.  The definition of 'extradition offence' in the relevant Australian extradition statute required inter alia that 'any equivalent act or omission, would, if it took place in' the relevant part of Australia, 'constitute an offence against the law in force in that part of Australia ...'.  Their Honours said, at p 8:

'The reference in the subsection to an 'equivalent act or omission' is to an act or omission which would be the same as the act or omission which is an element of the offence against the law of the foreign state were it not for the fact that the law of the foreign state requires (whether or not for reasons of jurisdiction) that the act or omission should have occurred in or in relation to some place or thing in or connected with the foreign state.  For example, the act of importing narcotics into Australia is an 'equivalent act' to the act of importing narcotics into the United States.' (Emphasis added.)

99.      Despite the very tentative indication of view by the Divisional Court in R v Secretary of State for the Home Department, Ex p Norgren [2000] QB 817, we consider that, for the reasons which Duff J gave In re Collins (No 3) 10 CCC 80, section 137(2)(b) of the 2003 Act must be interpreted and applied in the way that he indicated.  If, then, we ignore the adventitious circumstances connected with the conduct alleged against Mr Norris in counts 2-4 of the indictment and concentrate instead on the essence of his alleged acts, the substance of the criminality charged against him is not that he obstructed the criminal investigation into price fixing in the carbon products industry being carried out by the Pennsylvania grand jury, but that he obstructed the criminal investigation into that matter being carried out by the duly appointed body.  Making the necessary changes, we would have to translate counts 2-4 into counts of obstructing in England a criminal investigation into price fixing in the carbon products industry being conducted by the appropriate investigatory body in this country".

13.      The defence argued that Norris must be regarded with some caution in that it was an extradition case involving a double criminality test. Cox on the other hand was concerned with a single criminality test and was to be preferred as authority for the purposes of the 1999 Law. However Norris was concerned with the same exercise in transposition as that required under the 1999 Law, albeit in the context of extradition, namely whether "the conduct would constitute an offence under the law of the relevant part of the United Kingdom...if it occurred in...the United Kingdom" (section 137 of the Extradition Act 2003). 

14.      I extract from both authorities the following, namely, that in the context of the 1999 Law, for the purpose of transposing the conduct which occurred outside Jersey to Jersey, you must not fasten upon the adventitious circumstances connected with the conduct but upon the essence or essential elements of that conduct which it is said would constitute a crime or crimes if it occurred in Jersey.

15.      The defence drew my attention to academic criticism of the single criminality test, namely that it offends the principle of legal certainty that is the cornerstone of any criminal justice system based upon the rule of law, in particular that the proceeds from conduct that is lawful in the place where it occurs can be rendered criminal by legal fiction.  The defence cited the example of bullfighting in Spain which is legal in Spain but not in Jersey. If proceeds from bullfighting were to come to Jersey, they would be liable to confiscation under the 1999 Law. Furthermore any conversion or removal to avoid this would potentially be an offence under article 34 (1) (b) of the 1999 Law.

16.      The potential for injustice that is imbedded in the single criminality test is however, in the defence's view, mitigated by the device of transposition under which, on the authority of Cox and in particular the judgment of Lord Radcliffe, the local conditions and circumstances prevailing in Nigeria at the material time should be taken into account.  Specifically, the defence argued that the exercise of transposition should include the nature of General Abacha and his powers and whether what it was alleged that he did in Nigeria was unlawful.  It accepted that this came very close to imposing a double criminality test.

17.      I agree with the prosecution that the principle of legal certainty is not engaged here and there is nothing in the judgments in Cox to suggest that its reasoning was designed to give effect to it. The legislature have taken a policy decision to be consistent in the conduct it criminalises (by reference to its own criminal law); a decision by which we are bound. If bullfighting gives rise to differing opinions what, says the prosecution, about slavery or other forms of exploitation that may be legal in other parts of the world?

18.      The defence further submitted that the House of Lords in Cox expressly envisaged certain categories of offences which were unsuitable for transposition and hence placed a limitation upon the general language of the statute containing the single criminality test in that case.  Viscount Simonds said this at page 68:-

"But it is, of course, obvious that the whole body of our criminal law cannot be thus translated to a foreign country, and attempts were made in the course of the argument to formulate a qualification which would be a guide to courts-martial before which a similar question might arise.  The learned Solicitor-General deprecated any such attempt.  He was content to urge that at any rate the act of driving a motor vehicle on a road without due care and attention fell precisely within the language of section 70.  In this he was, in my opinion, clearly right.  It is true that in the Road Traffic Act, 'road' means a road in England.  But the essence of the offence lies in driving without due care and attention on a road to which the public have access.  I see no difficulty in at least this degree of translation.  Nor should the issue be confused by saying that in England and (say) Germany the traffic regulations are different.  A driver shows due care and attention by observing the regulations which prevail in the country where he is driving.  Nor, again, does it appear to be relevant that the Road Traffic Act contains numerous provisions in which 'road' can only have a sensible meaning if it is confined to roads in England, and other provisions, for example, in regard to the Menai Bridge, which by their nature can have no application except to a particular subject-matter.  It appears to me that here at least in a negative sense is the test of the applicability of the section. I need say no more than that it is otherwise which such acts as driving without due care or, it may be, dangerously on a highway or larceny from a dwelling-house or an offence against the person.  All such acts have what, for want of a better expression, I will call a character of universality which makes it sensible to bring them within the scope of section 70.  I mean the same thing whether I refer to them being done at Sundern or at Surbiton".

19.      Although I have found in an earlier judgment that misconduct in public office is not an offence known to Jersey law (which decision is under appeal) the defence would have argued that such an offence was not susceptible of transposition at all, because it is an offence that is so closely intertwined with the political circumstances and cultural values of Jersey that it would be impossible to criminalise conduct occurring in another country by analogy through transposition.  However, the defence conceded that the Jersey offences now particularised in the indictment are susceptible to transposition but maintain that the process must take into account the prevailing circumstances in Nigeria.

20.      In any event we are not dealing here with acts which of their nature can only be committed in Jersey.  All of the acts alleged here, namely fraud, fraudulent conversion (and conspiracy to commit the same) and bribery have what Viscount Simonds described as a character of universality. 

21.      The defence placed reliance on Lord Radcliffe's reference in Cox to importing into the hypothetical English occurrence the circumstances and conditions that prevailed at the place where and the time when the thing that is complained of was done or omitted and submitted that transposition consisted of three distinct stages:-

(i)        Identification of the acts and omissions outside of Jersey alleged to constitute an offence if committed within Jersey and the relevant circumstances and conditions prevailing at the place and time of those acts and omissions.

(ii)       Assessment of the extent to which the circumstances and conditions identified in (i) are an essential element of the acts that are alleged to constitute an offence in Jersey.

(iii)      On the basis of (ii), determination as to whether the Jersey offence can be applied to the non-Jersey occurrence.

22.      This places upon the Court, as part of the transposition process in this case, the burden of inquiring into and identifying the circumstances and conditions in Nigeria in 1996 and 1997 and determining firstly which of those are relevant to the acts alleged and secondly which of them are essential to those acts. In my view this would involve the court in embarking upon a potentially wide ranging exercise when the essence or essential elements of those acts alleged are already clear.

23.      This is because by particularising the criminal conduct alleged in the indictment, the prosecution has now set out the essence or essential elements of the conduct alleged, which it will seek to show, if proved, would constitute the Jersey offences if it occurred in Jersey. That is its case and it accepted that it has the burden of proving each of the particulars to the criminal standard.

24.      In my view and in principle, the Jurats should be directed to approach the second element of the offence in the following manner and this in respect of each count:-

(i)        The first stage, which is evidential, is for the Jurats to determine whether they are sure that the conduct set out in each of the sub-paragraphs of the particulars in the count took place.  If they are not sure that any of the conduct particularised took place, then they will acquit.  If they are sure that some, if not all, of the conduct set out in the particulars took place, then they will move on to the second stage.

(ii)       The second stage, also evidential, is for the Jurats to determine whether they are sure that "the property" referred to in the count represents the defendant's proceeds of such conduct, to the extent proved. If they are sure, then they will move on to the third stage. If not sure they will acquit.

(iii)      The third stage is the process of transposition of the conduct, to the extent proved, to Jersey, which in this case can be achieved with very little substitution of the circumstances (as referred to in the extract of Lord Millet's judgment cited in paragraph 95 of Norris).  Assuming, for the sake of argument, all of the particulars of the alleged conduct in count one are proved, that conduct can be transposed to Jersey by making the following limited amendments to the particulars (the amendments are underlined):-

"(a)      the dishonest inflation of true prices for motor vehicles sold by a person (through a company) to Jersey.

(b)       the making of false representations that:

(i)         the inflated prices were genuine prices;

(ii)         it was necessary to pay US$ 148,940,000 plus freight and other charges or about that sum in order to obtain the vehicles sold under one contract; and

(iii)        it was necessary to pay US$ 28,961,192 or about that sum in order to obtain the vehicles sold under the other contract.

(c)       the obtaining of dishonestly inflated payments for the vehicles out of Jersey public funds;

(d)       the dishonest receipt for the benefit of himself and others of the inflated payments thereby obtained;

(e)            the dishonest payment of monies by or on the instructions of the person to bank accounts connected to Jersey public officials involved in the award of vehicle-supply contracts to the company"

I will refer to this as "the transposed conduct".

(iv)      The fourth stage is the process by which the elements of the Jersey offences are applied to the transposed conduct. It is only if all the elements in respect of at least one of the Jersey offences are found by the Jurats to be present in the transposed conduct, that the conduct is constituted "criminal conduct". They will be directed as to the elements of the Jersey offences. If they find that all the elements of at least one Jersey offence are present in the transposed conduct then the second element of the offence charged in the count is proved.. If not they will acquit.

25.      This does not deprive the defence of the ability to adduce  evidence  relevant to the issue of whether the conduct alleged took place (which may well include evidence as to the local conditions and circumstances) or whether the property represents the defendant's proceeds of that conduct but once the Jurats have found (if they do) that, for example in relation to sub paragraph (a) of the particulars, there was a dishonest inflation of true prices for motor vehicles sold by the defendant to Nigeria, then it is that finding as to conduct which is transposed.  The fact that the person with whom the defendant was dealing was a dictator and the other prevailing circumstances in Nigeria at the time are adventitious and irrelevant to the transposition process. In particular, the fact that the conduct proved may have been lawful or acceptable or tolerated in Nigeria is irrelevant to that process.

26.      I therefore find against the defence in its submissions as to the process of transposition. In setting out how in principle the Jurats should be directed to approach the second element of the offence charged, I have gone further than the matters canvassed in argument. To the extent that I have done so, it is subject to any further submissions the parties may wish to make, when, in the usual way, I seek their comments on the precise directions I intend giving the Jurats.

Purpose

27.      The third element of the offence is that the conversion or removal should have been 'for the purpose of avoiding prosecution or the making or enforcement of a confiscation order or both'.  In my judgment of  15^th August 2008 I set out at paragraph 70 how I would intend directing the Jurats in relation to the purpose element of the offence as follows:-

"The issue for them is whether they are sure that one of the purposes of the conversion and/or transfer of the funds was the avoidance of a prosecution in Jersey for a serious offence (i.e. an offence for which he would have been liable on conviction to imprisonment for a term of one or more years) or the making or enforcement of a Jersey confiscation order or both" (my emphasis)

28.      The defence submitted that the requirement must be for the prosecution to prove that, where two purposes are made out, the purpose argued for by the prosecution was the defendant's dominant or in the alternative substantial purpose.

29.      As authority for these propositions, the defence relied on a number of civil cases:-

(i)        In 4Cast Limited v Mitchell (Inspector of Taxes) (2005) S.T.C. (S.C.D.) 287, the judgment of the Commissioner records that although he was not required to construe the words 'for the purpose of' within the meaning of section 289(1)(b) of the Income and Corporation Taxes Act 1988, he nevertheless concluded that if he had been required to do so, he would have construed them as meaning 'for the dominant purpose of'.

(ii)       In Regina v Southwark Crown Court ex parte Bowles (1998) AC 641, the Divisional Court had made an order of certiorari to quash a production order made under section 93H of the Criminal Justice Act 1988 for the production of documents, on the ground that the dominant reason for the application had been to further the investigation into the alleged criminality of the business owners and that such purpose fell outside the ambit of section 93H.  The House of Lords held that on its true construction, section 93H had been enacted solely for the purpose of assisting the recovery of the proceeds of criminal conduct and did not permit applications relating to the investigation of criminal offences involving the obtaining of money or other property which ought properly to be brought under section 9 of and schedule 1 to the Police and Criminal Evidence Act 1984.  In cases where it appeared that an application under section 93H was activated by a plurality of purposes, the judge was to grant the application if the true and dominant purpose was to enable investigation to be made into the proceeds of criminal conduct, even though, as an incidental consequence, evidence might thereby be obtained relating to the commission of an offence.  Accordingly, on the Divisional Court's finding that the dominant purpose of the application had been to investigate whether an offence had been committed rather than to recover the proceeds of crime, the order of certiorari quashing the production order would stand.  In his judgment, Lord Hutton approved the dominant purpose test as stated in Wade & Forsyth on Administrative Law 7^th edition 1994 at page 436 as follows:-

"Sometimes an act may serve two or more purposes, some authorised and some not, and it may be a question whether the public authority may kill two birds with one stone.  The general rule is that its action will be lawful provided that the permitted purpose is the true and dominant purpose behind the act, even though some secondary or incidental advantage may be gained for some purpose which is outside the authority's powers.  There is clear distinction between this situation and its opposite, where the permitted purpose is a mere pretext and a dominant purpose is ultra vires".

(iii)      In Inland Revenue Commissioners v Hashmi and another (2002) EWCA Civ 981, the court construed section 423(3) of the Insolvency Act 1986 under which transactions can be set aside if, inter alia, the court is satisfied that it was entered into 'for the purpose .... of putting assets beyond the reach of a person ....'.   It was held that the purpose did not have to be the only or dominant purpose for which the transaction was entered into.  What was required was that the claimant showed that the vendor or settlor was 'substantially' motivated by one or another of the aims set out in the section.  The court commented that it was 'not necessarily helpful to apply the construction placed on similar words in different provisions and none was suggested'.

The defence accepts that in these cases the courts were dealing with the juxtaposition of one or more civil or legitimate purposes and not civil and criminal purposes.

30.      The defence submits on the basis of these authorities that hypothetically, the Jurats might conclude that the defendant had two (or more) purposes in converting or removing his proceeds of criminal conduct:-

(i)        One purpose being to avoid prosecution for an offence or the making or enforcement of a confiscation order (which I will describe as the 'criminal purpose') and

(ii)       The other purpose being perfectly legitimate (which I will describe as the 'legitimate purpose'). 

Having found the existence of two purposes, the Jurats would then have to be sure that the criminal purpose was the dominant or alternatively the substantial purpose in order to find that element of the offence proved. If they conclude that the dominant or alternatively the substantial purpose of the defendant may have been the legitimate purpose, then they will acquit.

31.       The notion that a legitimate purpose can so displace a criminal purpose would lead to the surprising result, in my view, of the defendant being acquitted even though the Jurats had found that one of his purposes, albeit not dominant or substantial, was criminal.

32.      I agree with the written submission of the prosecution as follows:-

"The principal difference between a criminal and civil case in this context is the nature of the concept of criminality.  As pointed out above, if something is criminal it remains criminal and punishable no matter how many non-criminal activities are engaged in at the same time.  It is hard to overemphasise this distinction.  A criminal mens rea whether trivial or negligible remains a criminal mens rea and if the tribunal of fact is sure it exists a conviction will follow.  It follows that the simple direction to the Jurats that they must be sure that one of the defendant's purposes was a purpose set out in Article 34 must be the correct one".

33.      Furthermore, the only direct authority on the points supports the prosecution position.  In R v Causey (unreported 18^th October 1999) the English Court of Appeal said this in relation to the equivalent English offence:-

"The learned judge when rejecting the submission said this:

'...

Secondly, for the purpose of avoiding prosecution for an offence under Part VI of the Criminal Justice Act 1988 ...If, in disposing of monies to David Wood, Wayne Causey was repaying monies he owed to David Wood, in that he had previously held those monies for him, that does not, in my judgment, preclude the existence at the same time of the purpose of avoiding prosecution for such an offence by the transfer of funds to Wood.  It would be open to the jury, in my judgment, on the evidence, to be sure, if that was their conclusion, that there was such a purpose, even if they concluded that there was also a purpose;  that is of repaying the monies.  There could also be at the same time, in my judgment, a purpose of avoiding a confiscation order.  Given my ruling that the funds as a whole at this time belonging (I say belonging to; possessed by or under the control of rather) Wayne Causey were as a whole a mixture of direct and indirect proceeds of these conspiracies, any reduction of the fund (that is by transferring money to Wood) must, or could, prejudice any potential confiscation'.

It is clear therefore that the learned judge had correctly analysed s.93(1)(c) ..."

34.      In Mitchell, Taylor & Talbot on Confiscation and the Proceeds of Crime, the following passage appears at paragraph 9.015:-

"In Causey the Court of Appeal held that provided one of the purposes was such a purpose it was immaterial that the defendant carried out the act for another innocent purpose as well".

35.      That Causey is authority for this proposition appears to have been accepted by the English Court of Appeal in R v Montila [2004] 1 WLR 624 at paragraph 26:-

"In R v Causey (unreported) 18 October 1999, the Court of Appeal approved the trial judge's view that a defendant might have more than one purpose and that provided one of the purposes was as described in the subsection, the offence was committed".

36.      The contentions of the prosecution are in my view conceptually correct and are supported by authority.  I conclude therefore that the proposed direction, namely that the Jurats have to be sure that one of the defendant's purposes was a purpose set out in Article 34 of the 1999 Law, is correct.

Admissibility of evidence

37.      The defence challenged the admissibility of evidence relating to an attempted payment to Hong Kong in 2002.  The evidence which the prosecution seeks to adduce in this respect is as follows (quoting from the prosecution's skeleton argument):-

"1.       After the transactions which form the subject of this indictment, the funds were used by the Defendant to purchase India Millennium Deposits ('IMDS'), some of these were held at Bank of India in Jersey.  Others were held at the Bank of India in London, in the names of 4 companies: (a) 'Jasone'; (b) 'Bromwich'; (c) 'Sound'; and (d) 'Rubie'.

2.        On 9th December 2002, the Bank of India in London telephoned the company administrator for the four companies and sent them a fax.  The fax reads:

"We refer to your above account and telephone talk our Mr Thaker had with you today. Recently your account had come up for scrutiny by local regulatory authorities i.e. FSA and that they have made certain observations.  In order to enable us to comply with their requirements we request you to send us the following documents/papers..."

3.        On the same day, the Bank of India in London sent a letter to each of the four companies.  This letter read in part:

'Re: Your Loan Against IMD facility with us

We request you to submit the following documents in order to fulfil requirements of the Financial Services Authorities, the Controlling authorities in UK.

1.        A certificate issued by the Registrar of Companies, Nuie stating therein:

...

e.        Owners or shareholders (Name and address of all the owners/shareholders holding more than 10% shares/beneficial interest to be given)

f.         Nature of companies' business.

...'

4.        The same day, the Defendant sent a letter from each of the four companies to the Bank of India in London, requesting that the IMDs be transferred to Hong Kong."

38.      The prosecution contended that this attempt to move the IMDs in 2002 is admissible because:-

(i)        It is evidence of the defendant's guilty knowledge as to the criminal origins of the funds.

(ii)       It is relevant to rebut the suggestion that he thought he had done nothing wrong in negotiating the contracts in Nigeria.

(iii)      It is relevant to his purpose in converting and removing the funds in 2000 (the subject matter of the charge).

39.      The prosecution will seek to demonstrate a consistency of conduct on the part of the defendant in relation to these funds from the outset by which it can be inferred that one of his purposes in converting and removing the funds in 2000 was the avoiding of a prosecution for an offence (in Jersey) or the making or enforcement of a confiscation order (in Jersey).

40.      The defence referred me to Archbold 2008 edition chapter 13 'Evidence of bad character' and the test at English common law for the admission of what is called 'similar fact evidence' as set out in DPP v P (1991) 2AC 447, essentially that its probative value outweighs its prejudicial effect.  Archbold notes the advantage of P was that it rid the law of the notion that had developed that the test of admissibility was that there should be a striking similarity between similar fact evidence and the evidence relating to the charge being tried, but that its disadvantage was that it gave little assistance as to what should be taken to invest the similar fact evidence with a sufficient degree of probative value.  This disadvantage was more apparent than real because the Lord Chancellor's conclusion was expressed to derive from the five speeches in DPP v Boardman (1975) AC421.  The defence referred me in particular to paragraph 13-40 of Archbold 'The Unlikelihood of Coincidence' and the statement that there was abundant authority for the view that evidence would be admissible under the similar fact rule if the explanation of it on the basis of coincidence would be an 'affront to common sense', or would be 'against all probabilities' or would be an explanation subscribed to only by an 'ultra-cautious jury'.  If this were the case, then the evidence had the necessary probative force. 

41.      The defence submits that this evidence of the intended transfer of funds to Hong Kong in December 2002 at its height demonstrates that at that time the defendant was reluctant to answer the FSA's questions about the source of the funds.  However, it submits that such evidence is simply irrelevant to the issue of whether in October 2000 the defendant understood that he had committed an offence in Jersey or was at risk of prosecution in Jersey or that he had at that time acted for the purpose of avoiding prosecution for a Jersey offence.  The defendant became aware of the detail of the Jersey investigation in late 2001/early 2002 and in particular by December 2002 knew that a Jersey criminal investigation had been commenced and the prosecution assertion, therefore, that the defendant's conduct subsequent to the FSA inquiries in December 2002 can be taken into account by the Jurats when deciding whether they are sure that one of the defendant's motives in asking for the bank drafts in 2000 was to avoid prosecution for an offence in Jersey is entirely illogical. The fact that, subsequent to a fraud law interview, the defendant may well have been aware of the risk of a Jersey prosecution (and, if this is the effect of the evidence in relation to December 2002, wanted to avoid it) does not and cannot go any way towards disproving his case that he was unaware of that possibility prior to that interview or proving the prosecution case that his October 2000 conversion or transfer was to avoid such prosecution.  Therefore the defence submitted that evidence of the defendant's conduct in December 2002 has no probative force and is irrelevant to the issue which the prosecution seeks to prove by adducing it.

42.      Phipson on Evidence, 15^th edition, helpfully analyses the kinds of prejudice taken into account in relation to this test in P:-

(i)        The principal prejudicial effect to be weighed in the balance against probative value is what it terms 'disposition prejudice'; that is to say evidence that the defendant has a disposition to carry out certain types of activity.

(ii)       'Bad person prejudice'; that is to say evidence which shows that the defendant is generally a bad person who should not be roaming the streets.

(iii)      'Accumulation prejudice', which arises where there are a number of charges to try at the same time and the tribunal of fact  may be tempted to think there is 'no smoke without fire' and

(iv)      'Diversion prejudice' which arises where a dispute about similar fact evidence may lead a tribunal of fact to be diverted from the issues in the case, which the prosecution submits is unlikely to arise where there are professional fact finders such as Jurats.

43.      In my view neither disposition nor bad person prejudice apply; there is nothing inherently wrong in the transfer of funds, save potentially for the point I deal with below. Accumulation prejudice does not apply and although diversion prejudice could apply, I agree with the prosecution that it is unlikely to arise with professional finders of fact such as Jurats. The defence implicitly agrees that the evidence is not prejudicial in that it seeks to exclude the evidence on the grounds that it has no probative value and is irrelevant-not that it is prejudicial.

44.      I doubt whether this evidence comes within the descriptive term "similar fact evidence". It is evidence that relates to the defendant's handling of the very same proceeds of criminal conduct (allegedly) which form the subject matter of the indictment, which in my view invests it with a sufficient degree of probative value (for the purposes tendered by the prosecution) to outweigh the prejudicial effect it may have, if any.

45.      Mr Jowitt indicated that the attempted movement of these funds could constitute an attempt to money launder under UK legislation.  That it might be an offence under English law is not the purpose for which the prosecution seeks its admission and there is no reason to suggest that the Jurats may consider this possibility.  Rather than direct the Jurats to ignore that possibility (thus raising something which may not occur to them), I would propose (at this stage) giving the Jurats a positive direction as to the purpose for which this evidence is tendered by the prosecution.

46.       I therefore find that the evidence of the attempted payments to Hong Kong in 2002 is admissible.

Authorities

Proceeds of Crime (Jersey) Law 1999.

Police Procedures and Criminal Evidence (Jersey) Law 2003.

Cox v Army Council Respondents (1962) 2 WLR 950.

Norris v Government of the United States of America (2008) 2 WLR 673.

Army Act 1955.

Road Traffic Act 1960.

Extradition Act 2003.

4Cast Limited v Mitchell (Inspector of Taxes) (2005) S.T.C. (S.C.D.) 287.

Regina v Southwark Crown Court ex parte Bowles (1998) AC 641.

Inland Revenue Commissioners v Hashmi and another (2002) EWCA Civ 981.

R v Causey (unreported 18th October 1999).

Confiscation and the Proceeds of Crime, Mitchell, Taylor & Talbot.

R v Montila [2004] 1 WLR 624.

DPP v P (1991) 2AC 447.

DPP v Boardman (1975) AC421.

Phipson on Evidence, 15^th edition.