High Court of Justice in Northern Ireland Queen's Bench Division Decisions

The claim in the Originating Summons is in the following terms -

"1. The Plaintiff claims that the property particularised below and held by or on behalf of the Defendant as set out in the Interim Receiving Report by the Receiver, Louise Rivers, dated 21st June 2004, but is not limited thereto, is recoverable property under Part 5 of the Proceeds of Crime Act 2002.

Particulars

1.1 the real property situated in Limavady, Co Londonderry (property A) registered in Land Registry Folio (A) County Londonderry in the name of William Wilson.

1.2 the real property situated in Limavady, Co Londonderry (property B) registered in Land Registry Folio (B) County Londonderry the names of William Wilson and Christine Wilson.

1.3 the real property situated in Coleraine, Co Londonderry, (property C) in the names of William Wilson and Christine Wilson.

1.4 the real property situated in Coleraine, Co Londonderry, (property D) in the name of William Wilson and Christine Wilson.

1.5 the investment in MGM Assurance Endowment Policy Account Number (1) in the name of William Wilson.

1.6 the credit balance held in the First Trust Bank, Current Account, Account Number (2) in the name of William and Christine Wilson.

1.7 Toyota Land Cruiser Jeep.

1.8 Vauxhall Corsa 1.2 Hatchback Car.

1.9 Volvo S40 Saloon Car.

1.10 BMW Car.

1.11 All livestock situated on land at property B.

1.12 All livestock identified by the Receiver as belonging to William Wilson located on land at 59 Killunaghty Road, Feeney, County Londonderry.

1.13 All chattels situated on land at property B including all items uplifted from the site by the interim receiver and placed in secure storage.

1.14 Domestic pets.

2. And the Plaintiff further claims that :

2.1 the interest held by the Abbey National PLC in Mortgage Account Number (3) in the name of William Wilson in respect of a mortgage in relation to property A is associated property within the meaning of section 245 of the Proceeds of Crime Act 2002;

2.2 the interest held by the First Trust Bank in Loan Account Number (4) in the name of William Wilson in respect of a mortgage in relation to property B is associated property within the meaning of section 245 of the Proceeds of Crime Act 2002;

2.3 the interest held by the First Trust Bank in Buy to Let Loan Account Number (5) in the name of William and Christine Wilson in respect of a mortgage in relation to property C is associated property within the meaning of section 245 of the Proceeds of Crime Act 2002;

2.4 the interest held by the First Trust Bank in Buy to Let Loan account Number (6) in the name of William and Christine Wilson in respect of a mortgage in relation to property D is associated property within the meaning of section 245 of the Proceeds of Crime Act 2002.

3. The Plaintiff therefore seeks the following specific orders:

A Recovery Order pursuant to section 266(1) of the Proceeds of Crime Act 2002 in respect of all the property particularized in paragraph 1 above.

An Order pursuant to Section 267(1) of the Proceeds of Crime Act 2002 that Alan McQuillan, Assistant Director of the Assets Recovery Agency, P0 Box 592 Belfast, BT4 3YR, be appointed trustee for civil recovery.

An Order pursuant to Section 266(2) of the Proceeds of Crime Act 2002 vesting the recoverable property particularised in paragraph I above, together with any additional property which the court may deem recoverable, in the appointed trustee for civil recovery.

An order pursuant to Section 272 of the Proceeds of Crime Act 202 that the associated property particularised in paragraph 2 above be vested in the appointed trustee for civil recovery with the requirement that, as soon as reasonably practicable, subject to the provision the trustee satisfies the loans and charges in respect of:

(i) The interest in property A held by Abbey National PLC by way of Mortgage Account Number (3) in the name of William Wilson by payment of the amount outstanding to Abbey National PLC;

(ii) First Trust Bank Loan Account Number (4), in the name of William Wilson, in respect of property B by payment of the amount outstanding to First Trust Bank;

(iii) The First Trust Bank Buy to Let Loan Account Number (5) in the name of William and Christine Wilson in respect of property C by payment of the amount outstanding to The First Trust Bank;

(iv) The First Trust Bank Buy to Let Loan Account Number (6) in the name of William and Christine Wilson in respect of property D by payment of the amount outstanding to First Trust."

"S.240 General purpose of this Part

(1) This Part has effect for the purposes of—

(a) enabling the enforcement authority to recover, in civil proceedings before the High Court or Court of Session, property which is, or represents, property obtained through unlawful conduct,

(2) The powers conferred by this Part are exercisable in relation to any property (including cash) whether or not any proceedings have been brought for an offence in connection with the property.

Unlawful conduct is defined in section 241 as –

"(1) Conduct occurring in any part of the United Kingdom is unlawful conduct if it is unlawful under the criminal law of that part."

For the purposes of section 240 and 241 no specific crime need be identified nor alleged.

1991/2.

The first defendant opened an account with the Northern Bank, Portrush, on 17 September 1991. The Northern Bank do not keep details of bank accounts after a certain period of time. There are no banking records for that year. The first defendant was in receipt of unemployment benefit.

1991/2.

Inland Revenue records show that the first defendant was employed by Bituseal Limited between 18 May 1992 and 18 September 1992. His gross pay was £6,06268, £4946.26 net. He was also in receipt of benefits during this year. Taking into account motor trade profit and living expenses the first defendant would have had few surplus funds available. There are no banking records for this year.

1993/4.

Inland Revenue records show that the first defendant was employed by Bituseal Limited between 14 June 1993 and 22 October 1993. His gross pay was £7194.03, £5965.15 net. He was in receipt of benefits when not employed. Taking into account motor trade profit and living expenses the first defendant would have had few surplus funds available. There are no banking records available for this year.

1994/5.

The first defendant was in receipt of benefits throughout this year. Bank account records show £1496 carried forward from the previous year, with lodgements of £2544.59 from unknown sources. Debits of £2140 are shown but the destinations are unknown. There would have been few surplus funds in this year.

1995/6.

The first defendant was in receipt of benefits including incapacity benefit. His Bank account shows an opening balance of £404.59. £903 was lodged in the account and £1158 debited. A second account with the Northern Bank was opened in March '96 with lodgements of £950 the source of which was not identified. There would have been few surplus funds in this year.

1996/7.

The first defendant was in receipt of unemployment benefit throughout the year and income support for part of the year. The opening balance in the bank account was £161 with £7834 lodged and £7834 debited. Direct debits to Hutchinson Cellular of £174 were identified. The source of the lodgements was not identified. There would have been few surplus funds in this year. The Interim Receiver comments that the trading levels claimed do not match the funds passing through the bank account.

1997/8.

The Interim Receiver had no information from Social Security relating to benefits however there was evidence before the court of Job Seekers Allowance being claimed during this period. The bank account had an opening balance of £326. Lodgements of £110 and debits of £339 are shown with direct debits of £226.39 to Hutchinson Cellular. There is little to show where any of the money was coming from and there would have been few surplus funds in this year.

1998/9.

There was evidence that the first defendant was in receipt of job seekers allowance during this year. The Bank account has an opening balance of £98. On 254 (25 or 24?) June 1998 one of the Northern Bank accounts was closed with £42 transferred to the other account. A current account, account number 2 with First Trust Bank in joint names of the defendants was opened on 25 November 1998 with a £100 deposit. On 9 February 1999 £6000 was lodged to the First Trust current account the source of which is unknown. On 19 February 1999 the first defendant opened a First Trust Call account, account number (7) in his sole name and deposited £14,000 on the same day. The source of this deposit is unknown. On 19 February 1999 £6100 was transferred from the Call Account to an unidentified location. On 25 March 1999 £6000 was withdrawn from the Call Account and a bankers draft obtained made payable to a solicitor. This was the cash deposit for property A. Lodgements amounting to £21,191 are shown as well as an account transfer of £1041. Debits of £12,147 are shown with direct debits of £157 to Hutchinson Cellular. The remaining Northern Bank account was closed in September 98. The Interim Receiver noted that Bank deposits and cash expenditure of £27479 were identified but no source was identified, other than the allowance for motor trading of £3000 and benefits of £2765, and commented that reported trading did not match funds passing through the account.

1999/00.

The first defendant was in receipt of benefits. The opening balance in his bank accounts was £8031. Lodgements of £5929 were made with debits of £3799.

On 16 April 1999 the first defendant purchased property A for £65,000. It is a detached bungalow and one of twelve similar properties in a cul de sac. He is registered as the sole owner in full. This was financed by a loan of £50,000 from Abbey National who registered a charge for that amount on the property on 29 April 1999. The deposit of £6000 was withdrawn from his First Trust Bank account as noted above. A Personal Finance Review for the purposes of a mortgage application for property A, lists the first defendant as a motor trader with an address at 651, Glenmanus Park, Portrush with an income of £18,000 and drawings of £1100. The document states that he is single and is a sole trader having established his business in April 1996. The document which is dated 12 March 1999 confirms that the information given is correct and is signed by the first defendant. The application to Abbey National for the mortgage dated 3 March 1999 states that he is a joiner by occupation and had been so for 5 years with an address at 651, Glenmanus Park, Portrush. In an affidavit dated 12 May 2005 the first defendant averred that the deposit of £6,000 came from his dealing and sales in vehicles and that the mortgage was obtained on his behalf by accountants T J Garvin. In interview he said the deposit was paid from 'out of the like of cars and White Mountain Quarry'. In interview with the Interim Receiver he said the deposit came from £13,000 he received for several person injury claims. In an affidavit sworn on 12 March 2005 he stated the deposit came from selling cars and dealing. In evidence he said the deposit came from selling cars and that the repayments on the mortgage came from savings from selling cars. Loan repayments on the mortgage and premiums for associated policies were made throughout the year totally £3719. Five motor vehicles were purchased during this fiscal year totalling £29,250. These included a BMW M3 (£11000) and a Vauxhall Corsa (£4500). In addition a cash sum of £26,810 was identified. Bank deposits and cash expenditure of £67,582 were identified for this year with no evidence to verify the source of these amounts. The Interim Receiver commented that 'In view of the stated level of income reported by the respondent, the trading does not match the funds passing through the bank accounts. Nor does the stated level of trading account for the subsequent acquisition of assets, without an additional source of funding.'

2000/01.

The first defendant was in receipt of benefits. There was an opening balance in the bank accounts of £10,554. Lodgements of £61,500 were made with debits of £25,426. The cash lodgements included a lodgement of £26,740 on 3 April 2001. The source of this money was not identified. A Fixed Term Deposit account, Account Number (8) was opened on 8 December 2000 with an initial lodgement of £10,000 and another £10,000 lodged on 22 December 2000. Direct debits and loan repayments totalled £4400. On 17 July 2000 £10,475 was withdrawn from the Call account. The first defendant purchased a BMW 323i for £7800 and another for £8750. The Interim Receiver identified Bank deposits and cash expenditure of £76,647 with no evidence to show the sources of this money. The Interim Receiver commented that 'In view of the stated level of income reported by the respondent, the trading does not match the funds passing through the bank accounts. Nor does the stated level of trading account for the subsequent acquisition of assets, without an additional source of funding.'

2001/2.

The opening balance in the bank accounts was £46,774. Lodgements of £87,100 and debits of £106,426 were identified. Five cash lodgements totally £14,600 were identified but no source for these monies was identified. On 11 March 2002 a cash lodgement of £17,818 was made but the source was not identified. Direct debits and loan repayments of £3900 were made. £48,200 was transferred from the current account to the Fixed Term Account. A deposit of £54,250 was paid on 17 December 2001 for the four properties at Berryfields Park, Ballymoney. The Interim Receiver comment that this was 8 months after the first defendant was receiving Job Seeker's Allowance. A Toyota Colorado Jeep was purchased at a cost of £26,500. The source of these funds was not traced. The Interim Receiver commented as previously. During this year the defendants married and the second defendant came to live permanently at property A.

2002/3.

The opening bank balance was £29,275. Lodgements and bank transfers totalling £45,600 were identified with debits of £71,421.56. Direct debits and loan repayments amounted to £2750. Cash and cheque lodgements totalling £16,457 were shown with no evidence as to the source of these monies. Other lodgements of £11,700 were made with no source identified. On 24 May 2002 £29,075 was withdrawn from the Fixed Term account. £15,000 was placed in the current account but the destination of the balance of £14,075 was not identified. On 30 April 2002 the purchase of the four houses at Berryfields Park, Ballymoney, was completed. Each was purchased at a price of £54,250. They were funded by a deposit of £54,250 by the first defendant and four mortgage accounts with a company known as the Mortgage Company. The total mortgage involved was £162,748. Each house required a kitchen and bathroom which were put in by the first defendant at a total cost of £60,000 which was paid in cash. During interview the first defendant stated that he rented them out for about twelve months and the rent received amounted to £15,328. They were sold on different dates during 2003 for profits ranging between £31,550 and £32,700 approximately and the monies paid into the first defendant's bank account. In his affidavit dated 12 May 2005 the first defendant averred that the money for the deposit was 'made in my business dealings and trading in the car market'. He told the Interim Receiver it was part of his savings. In an interview with the Assets Recovery Agency he said the deposit came from savings from his employment with Bituseal in the early 1990s. In his evidence he said this money came from selling cars. On 21 November 2002 5.905 hectares of land, property B, was transferred to the defendants for the sum of £80,000. This included a farmhouse and a building site. First Trust Bank Plc registered a charge on the property on the same date. The purchase was financed through a £56,000 loan from the Bank and a banker's draft for £24,000, withdrawn from his current account, was used to pay the deposit. The original asking price was £120,000. The vendor said he agreed to sell the property for £90,000 and received £80,000 with a digger in lieu of the other £10,000. The first defendant acknowledged that his mortgage repayments in respect of this property were £553 per month. In June 2004 the Interim Receiver valued this property at £350,000. In addition to these transactions a tractor was purchased for £41,125, a quad for £3900 and livestock to the value of £10,000 all of which were paid in cash. While the first defendant paid for the tractor in two instalments the invoice was made out to a third party for the purpose of a possible reclaim of VAT, for which the first defendant was not entitled or registered. The Interim Receiver identified bank deposits and cash expenditure of £140,653. No source could be identified for £117,459 of this money. The Interim Receiver commented as previously. The second defendant was working during this fiscal year and her wages, between £150 and £170 per week, were paid into the joint account. T J Garvin & Co prepared a profit and loss account for the year ended 5 April 2003. This showed sales of £775,986 with purchases of £712,699 and expenses of £19,699 leaving a profit of £42,813. Mr Cochrane of TJ Garvin said the figures were supplied by the first defendant, which he denied. A Tax Return was submitted by the first defendant to the Inland Revenue for the year ended 5 April 2003 showing a projected trading loss of £970 on a turnover of £13,137 less expenses of £14,107. T J Garvin & Co is named as the first defendant's agent and his business described as property rentals and sales.

2003/4.

The bank accounts had an opening balance of £3531. Lodgements or transfers to the value of £147,520 were noted with debits of £93,483. The latter included direct debits and loan repayments amounting to £16,010. Lodgements of £129,658 included the sale, at a profit, of the four properties at Berryfields Park in July, September, October and November 2003. Rental of £5000 was noted as was a lodgement of £10,000 from ML Motors. Cheque payments for the building works at property B to the value of £4000, the purchase of a Red Rock trailer for £7637, the purchase of a digger for £20,000 and miscellaneous building material for £1275 were identified. The first defendant purchased two properties, property C and property D, on 23 January 2004 though the negotiation took place earlier in 2003. Each property cost £68,300 and a deposit of £30,583 was paid. A mortgage was obtained from the First Trust Bank Plc for each property in the sum of £54,400 with the balance from the first defendant's current account with that Bank. The prices were reduced from £74,000 as the first defendant undertook to paint and tile the houses and to install kitchens, bathrooms and fireplaces himself. Other items purchased included a digger for £41,125. This was paid for with a cheque for £20,000 drawn on the current account and £21,125 in cash, the source of which was not identified. The Interim Receiver commented as previously. The second defendant's wages continued to be paid into the joint account. However it was apparent the first defendant was contributing towards her maintenance which was beyond her income.

First Trust Bank Account Number (2) in name of W and C Wilson.

This account was opened on 25 November 1998. When it became a joint account was not disclosed. By March 1999 £7100 had been lodged. Between April 2000 and April 2001 over £41,000 was lodged to the account. In the following year a further £23,450 was lodged. Between April 2002 and March 2003 over £45,000 was lodged. Between April 2003 and January 2004 over £147,000 was lodged. Some of these lodgements would have derived from the sale of some of the properties referred to above, but the source of much of this money, believed to be about £117,000, was not identified. As at 16 October 2003 there was £83,674.69 in the account.

First Trust Bank Fixed Term Deposit Account Number (8) in name of W Wilson.

This was opened on 8 December 2000 with a deposit of £10,000 and further cash lodgements in excess of £70,000 were made between December 2000 and May 2002. These lodgements took place at a time when the first defendant was claiming benefits. In interview the first defendant suggested the £10,000 deposit was the result of the sale of a BMW M3, but he had no records to verify this amount.

First Trust Bank Market Yield Account Number (7) in name of W Wilson.

This account was opened in February 1999 with a deposit of £14,000 and a further deposit in May of £3,000. Withdrawals were made subsequently.

First Trust Bank Loan Account Number (4) in name of W and C Wilson.

This opened with a loan of £56,000 to which payments of over £1000 and later £553 were made monthly.

"The foregoing Trading and Profit and Loss Accounts has been prepared by us from the records and from information produced to us by Mr Wilson and we certify that it is in accordance therewith."

"As this is the first case under the civil recovery procedure established by the Proceeds of Crime Act 2002 it may be helpful if I were to give some guidance as to how these cases should be progressed. Such applications are by way of originating summons supported by affidavit and are brought under Part V of the 2002 Act. Thus Order 28 of the Rules of the Supreme Court applies. Ordinarily such applications proceed on affidavit evidence only. However provision is made for oral evidence. Thus on completion of the affidavit and any other documentary evidence the parties should decide whether or not the case can proceed on affidavit evidence only. If they are so agreed the Review Judge should be informed and an order made or direction given in writing to that effect. If the parties are agreed that oral evidence is required then the Review Judge should be informed and his direction or an order sought as to the nature of the oral evidence and the persons to be called. His order or directions should be recorded in writing. The Review Judge may take a different view from the parties as to the nature of the oral evidence and person(s) to give it. If the parties are not in agreement and one party or both parties wish to adduce oral evidence then the plaintiff should seek the order or direction of the Review Judge as to the nature of the evidence to be given and by whom. It will always be open to the Judge to give directions on his own motion, particularly where there is lack of agreement. The order or direction of the Review Judge should be recorded in writing. If these directions are followed this should enable the case to be listed at an appropriate date for the required number of days and the necessary witnesses informed.

Where oral evidence is to be adduced the witness should be sworn and examined in the usual way. However where the witness has already provided an affidavit or statement which sets out their evidence in chief the witness may be sworn and their affidavit or statement identified and the contents verified. Any additional questions may then be asked and the witness cross-examined. That procedure should be followed where the parties are agreed about it. If the parties are not agreed the procedure should nonetheless be followed where a) the witness's affidavit or statement has already been served on the other party, or b) where the affidavit or statement has been served on the other party in sufficient time in advance of the witness giving evidence and in either case where the affidavit is signed or the statement contains the usual declaration as to its truth such as is used in criminal investigations and the opposing party has not established good and cogent reasons why the procedure should not be followed.

The parties are not in agreement in this case. It may be helpful therefore if I give some directions in this matter. The papers tend to show that certain matters are in dispute and I will hear oral evidence in accordance with this guidance in relation to them. They are – the lawfulness of the search at 1 Roslea Gardens; the weight of the powder found during that search; the forensic examination of the scales; the forensic examination of the knife; and the forensic examination of the cash. If the evidence of Florence Hanson is relied on the issue relating to it appears to be as to the weight if any to be attached to it. On the defendant's case the issue in dispute appears to be the origins of his wealth and I will hear evidence relating to that should he wish to do so."

"1. Everyone has the right to respect for his private and family life, his home and his correspondence.

2. There shall be no interference by a public authority with the exercise of this right except such as in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others."

"245 'Associated property'

(1) 'Associated property' means property of any of the following descriptions (including

property held by the respondent) which is not itself the recoverable property—

(a) any interest in the recoverable property,

(b) any other interest in the property in which the recoverable property subsists,

(c) if the recoverable property is a tenancy in common, the tenancy of the other tenant,

(d) if (in Scotland) the recoverable property is owned in common, the interest of the other owner,

(e) if the recoverable property is part of a larger property, but not a separate part, the remainder of that property.

(2) References to property being associated with recoverable property are to be read accordingly.

(3) No property is to be treated as associated with recoverable property consisting of rights under a pension scheme (within the meaning of sections 273 to 275)."

There are other provisions relating to tracing and mixing property but no issues arose relating to them.

"266 Recovery orders

(1) If in proceedings under this Chapter the court is satisfied that any property is recoverable, the court must make a recovery order.

(2) The recovery order must vest the recoverable property in the trustee for civil recovery.

(3) But the court may not make in a recovery order—

(a) any provision in respect of any recoverable property if each of the conditions in subsection (4) or (as the case may be) (5) is met and it would not be just and equitable to do so, or

(b) any provision which is incompatible with any of the Convention rights (within the meaning of the Human Rights Act 1998 (c 42)).

(4) In relation to a court in England and Wales or Northern Ireland, the conditions referred to in subsection (3)(a) are that—

(a) the respondent obtained the recoverable property in good faith,

(b) he took steps after obtaining the property which he would not have taken if he had not obtained it or he took steps before obtaining the property which he would not have taken if he had not believed he was going to obtain it,

(c) when he took the steps, he had no notice that the property was recoverable,

(d) if a recovery order were made in respect of the property, it would, by reason of the steps, be detrimental to him.

(6) In deciding whether it would be just and equitable to make the provision in the recovery order where the conditions in subsection (4) or (as the case may be) (5) are met, the court must

have regard to—

(a) the degree of detriment that would be suffered by the respondent if the provision were made,

(b) the enforcement authority's interest in receiving the realised proceeds of the recoverable property.

(7) A recovery order may sever any property.

(8) A recovery order may impose conditions as to the manner in which the trustee for civil recovery may deal with any property vested by the order for the purpose of realising it."

(1) An Order pursuant to Section 267(1) of the Proceeds of Crime Act 2002 appointing Alan McQuillan, Assistant Director of the Assets Recovery Agency, P0 Box 592 Belfast, BT4 3YR, as trustee for civil recovery

(2) A Recovery Order pursuant to section 266(1) of the Proceeds of Crime Act 2002 in respect of all the property identified in paragraph 2 above and delineated from 1.1 to 1.14.

(3) An Order pursuant to Section 266(2) of the Proceeds of Crime Act 2002 vesting the recoverable property identified in paragraph 2 and delineated from 1.1 to 1.14 in the appointed trustee for civil recovery.

(4) An order pursuant to Section 272 of the Proceeds of Crime Act 202 that the associated property identified in paragraph 2 and delineated 2.1 to 2.4 be vested in the appointed trustee for civil recovery with the requirement that, as soon as reasonably practicable, the trustee satisfies the loans and charges in respect of:

(i) The interest in property A held by Abbey National PLC by way of Mortgage Account Number (3) in the name of William
Wilson by payment of the amount outstanding to Abbey National PLC;

(ii) First Trust Bank Loan Account Number (4) in the name of William Wilson in respect of property B by payment of the amount outstanding to First Trust Bank;

(iii) The First Trust Bank Buy to Let Loan Account Number (5) in the name of William and Christine Wilson in respect of property C by payment of the amount outstanding to The First Trust Bank; and

(iv) The First Trust Bank Buy to Let Loan Account Number (6), in the name of William and Christine Wilson in respect of property D by payment of the amount outstanding to First Trust Bank.