Sutej v Governor of H.M. Prison Holloway & Anor

This is the judgment of the Court to which both members have contributed.

On 21 January 2002 the applicant appeared before District Judge Reece sitting at Bow Magistrates Court. The Government of Switzerland (the second Respondent to this application) sought her extradition for trial in Geneva. The District Judge committed her on 27 charges of obtaining property by deception and one of theft. She now applies for a writ of habeas corpus. She relies on section 11(3)(c) of the Extradition Act 1989. Her case is that the accusations against her are not made in good faith in the interests of justice; that having regard to all the circumstances, it would be unjust or oppressive to return her to Switzerland. Mr. Garlick QC, on behalf of the applicant, makes three basic submissions. First, the accusations have been made so that they can be used as a bargaining tool in civil complaints which each of the two complainants has made against the applicant. Second, each of the complainants has made factual assertions which are demonstrably untrue and third, that the first complainant has sought to manipulate the civil and criminal proceedings in Switzerland in a manner which is unfair to the Applicant.

The first complainant is a man called Georg Rafael. The 24 allegations concerning him encompass a period between 1 October 1997 and March 2000. 23 of the charges allege obtaining property be deception: one theft. The loss alleged is some $5,615,925 plus £94,254 plus FF672,500. The second complainant is a woman called Nina Brink. In her case the allegations encompass a period between 19 October 2000 and 24 January 2001. The alleged loss is some $1,483,000.

Because of the nature of this application, it is necessary to go into some of the detail of the allegations. In doing so, we shall seek to simplify them.

The applicant is South African. Her family originally came from Croatia. She is of good character. In her statement she speaks of a business background of some distinction. She was in international sports management, apparently, at the highest level. She founded a food company which packaged food for Marks and Spencer in South Africa. She produced shows and concerts for well known stars. One person with whom she states she became very good friends was Dame Kiri Te Kanawa. In 1996 the applicant states she became interested in creating and marketing a perfume named after Dame Kiri. Dame Kiri agreed. She states she approached a number of companies with a view to working with them to develop the perfume.

Mr. Rafael is a very wealthy businessman who lives in Monaco. He founded a hotel chain named after him which it seems he ultimately sold. He came to know the applicant. In 1997 she spoke to him about the perfume project. The two of them finally agreed that he would become involved in it. On 14 September 1997 an agreement was signed by each of them. By it a new offshore company would “immediately” be set up “to develop and own and market a new fragrance styled, endorsed and named after [Dame Kiri].” The new company became Deux Amis SA (“Deux Amis”). It was registered in the British Virgin Islands.

As to the new company’s bank account, the agreement stated that it “will operate a new bank account at Bordier Bank Geneva [“Bordier”]…A new account “Cocktail” has been established for [the new company] and will be adopted…as its account.”

As to financing the new company, the agreement provided that

In short, on the basis of this agreement, a new bank account called Cocktail would be set up and the applicant and Mr. Rafael would invest equally in the new company. Mr. Rafael states that the document represents what was orally agreed.

There was provision for profits to be shared equally. The applicant was to be responsible for the day-to-day work.

Although there is evidence that the applicant may at different times have made payments into or for the benefit of Deux Amis, the overwhelming investment into the company was made by Mr. Rafael. It is the applicant’s case that that reflected a further agreement dated 10 October 1997, which amended the agreement of 14 September 1997. That document apparently bears Mr. Rafael’s signature. He states there was no such agreement. His signature has been forged. As relevant, the document states,

In support of the authenticity of the second agreement the applicant relies on a letter dated 13 June 2003 written to her solicitors, apparently from someone called I. Dudhia, who lives in the United States. He produces what he describes as his invitation to a dinner concert on the weekend of the 17-19 October 1997. The document he produces, which he apparently has kept for over six years, has no address and is said to be “a confirmation of the details of the event.” It refers to the evening being a double celebration: “We will celebrate our newly formed company Deux Amis after the signing of our agreements of September 14 and October 10 1997 and we will celebrate our deal to create a new fragrance…”

On 18 November 1997 Deux Amis opened an account at Bordier. Mr. Rafael deposited substantial sums into it. The (seemingly three) payments into Bordier in 1997 were credited to an account called Cocktail. However, it was the applicant’s, not Deux Amis’ account.

“Annual Financial Statements” were provided to Mr. Rafael. Chartered accountants called Jari Cerny in South Africa prepared them. The Statement for the year ended 28 February 1998 refers to the “Capital Introduced” by the applicant as $$1,164,132: that for year ended 31 January 1999 refers to $3,000,112 having been introduced. In neither is there any reference to the arrangement as set out in the disputed agreement of 10 October 1997.

The applicant made from time to time requests for money. They were in terms of Mr. Rafael paying his half share of sums owed. Sometimes there is explicit reference to the applicant paying her half share.

Mr. Rafael continued to make payments. Six of the 1999 payments were made to the applicant’s personal account at UBS. Mr. Rafael says that was because she claimed she was making significant progress on behalf of the company by making payments from her personal account at UBS.

In 1999 Mr. Rafael states that the applicant talked of Deux Amis being sold to a company called Distell (Distillers) through another company called Doveland. The applicant produced documentation relating to that proposed sale. Mr. Rafael states that he has since discovered that there were in truth no such negotiations. This was a device to persuade him to provide further funds.

Mr. Rafael stopped making payments at the end of 1999. There were discussions during 2000 between him and the applicant in which the applicant indicated she would buy him out.

On 29 January 2001 Mr. Rafael states he for the first time checked the bank accounts of Deux Amis. He states

He goes on to say he has been the victim of an elaborate fraud. Among other things, the effect of what he states is that none of the money withdrawn by the applicant was used on Deux Amis business.

In summary, the applicant’s response is as follows.

First, the agreement of 10 October 1997 is genuine. It reflects what the parties agreed.

Second, this was a genuine commercial venture, as Mr. Rafael knew and knows. More than $1.85 million was spent with his agreement on sponsoring various concerts at which he or his hotel group were the acknowledged sponsors. She refers to evidence provided by Mr. Mackintosh, an accountant instructed by her. She produces programmes and invitations and Mr. Dudhia’s letter. Perfume was created. Bottles and packaging were designed and produced. $900,000 was paid to Dame Kiri for her endorsement. There was a formal agreement with her (drafted by Theodore Goddard). A test run of perfume was produced which appeared in the Mail on Sunday magazine. Substantial legal costs were incurred with Denton Hall, the company’s solicitors. Other things were done as part of the venture. Mr. Rafael knew all about them. He deliberately omitted to disclose them in both civil and criminal proceedings. In the civil proceedings he referred to the Denton Hall payments and payments to CIEE (a company engaged to develop the fragrance) as improper when he knew they were not.

There is another area in which the applicant suggests Mr. Rafael has not told the truth. On 25 July 2001 Mr. Rafael saw Mr. Wentzel, the lawyer representing the applicant’s family. According to Mr. Wentzel Mr. Rafael stated that he knew that $6 million was wholly inadequate for the launch of the perfume. Mr. Wentzel suggests that contradicts Mr. Rafael’s assertion to Monsieur Tappolet, the examining Magistrate in Switzerland, that he was merely a passive partner. It suggests that he knew far more of the business.

Third, as to the allegation that she was deceiving Mr. Rafael about the proposed sale, the applicant disputes that. He knew of genuine attempts by her to sell Deux Amis. She told him she herself had been misled by Doveland.

Fourth, there was no deceit about the account at Bordier or the use of her account at UBS. Mr. Rafael had equal access to the Bordier account. He knew that Bordier required a separate company account for Deux Amis. He knew the applicant had an existing Cocktail account which could not be used. He knew that payments could not go into the company account until the company was incorporated and its account opened. There was no dishonesty about the use of the applicant’s Cocktail account. He knew that money was being transferred from the Bordier account to the applicant’s UBS account. He agrees he transferred direct to that account on six occasions. UBS was used because it has a more sophisticated payment system than Bordier.

Fifth, she has paid substantial sums personally. Again, she refers to Mr. Macdonald’s evidence.

In short, the applicant’s case is that there are many things which rebut fraud and tend to suggest a genuine commercial enterprise (albeit one which ultimately did not succeed). Mr. Garlick submits that it is clear Mr. Rafael has deliberately not mentioned them. That is highly relevant when considering whether the accusations he makes are in good faith in the interests of justice.

Each charge of obtaining by deception alleges the obtaining of a specific money transfer by deception on a different date. Two alleged deceptions feature in every charge, namely that the applicant falsely represented to Mr. Rafael

Charges 1 to 3 additionally allege a misrepresentation to the effect that the Cocktail account at Bordier was a new account for Deux Amis.

Charge 24 alleges the theft of choses in action totalling $2,020,000, said to be the debts owed by Bordier to Deux Amis.

The Brink allegations

Nina Brink is a sophisticated and wealthy businesswoman. She was an acquaintance of the applicant. She states that at the end of 1999 the applicant approached her with different investment proposals. The first two she refused. They both were said to involve Mr. Rafael. The second was the perfume project. Finally, towards the end of 2000, Ms. Brink agreed to invest in an American entertainment agency called ICM. The investment was to be through a British Virgin Islands company owned by the applicant and called Filver.

Ms Brink says this about her investment.

Ms. Brink produces none of the exhibits referred to by her. However, the applicant has produced the formal agreement between her and Ms Brink, which is dated 20 October 2000. Among other things, it provides

Ms. Brink made two further payments.

Ms. Brink states that from October 2000 to January 2001 the applicant assured her that Filver was on the point of concluding a contract with ICM. Draft contracts were sent to her. The applicant did not want her to speak to Jeff Berg, the president of ICM. When Ms. Brink was asked to transfer $25 million additional funds, she made some enquiries. She states that she discovered that the applicant was deceiving her and trying to induce her to transfer funds for a deal to which she was not to be a party. She spoke to Mr. Berg who knew nothing of her involvement. He believed that the applicant was acting with Mr. Rafael. She states she spoke to Mr. Rafael and learnt he was not investing in Filver. She states

Again, it is the applicant’s case that the agreement with Ms. Brink was a genuine commercial one. Moreover, that Ms Brink is not truthful when she claims she only agreed to invest because the applicant assured her that Mr. Rafael was an investor. The agreement speaks of an entitlement, not an obligation upon the applicant to sell one third of the Filver shares to Mr. Rafael. An experienced businesswoman such as Ms Brink would never have signed an agreement in such terms if the facts had been as she claims.

That was an argument which succeeded before the Swiss Civil Court (both at first instance and on appeal). It lifted what we would term a freezing order which had been imposed at the suit of Ms Brink. The applicant places considerable reliance upon the approach of the Swiss Civil Courts which is summarised in the following part of the judgment at first instance.

Mr. Rafael and Ms. Brink state Mr. Rafael was not involved in Filver. Mr. Rafael said as much to Professor Schaap of Ernst and Young, who represented Ms. Brink.

The applicant’s case is that Mr. Rafael was involved but dropped out. She refers, among other things, to an email from his lawyer in the United States, which on its face suggests knowledge of ICM and refers to a draft letter of intent. She also relies on what Mr. Wentzel states was said by Mr. Rafael on 25 July 2001: that he “had knowledge” of the Filver/ICM transaction.

In short, the applicant denies misleading Ms Brink.

The three charges are in similar terms and reflect each payment made by Ms Brink. Each alleges that the applicant obtained a money transfer by falsely representing to Ms. Brink that

“Embezzlement/misappropriation” and “fraud” are offences under Articles 138 or 146 of the Swiss Federal Code. It is not necessary to say more than that.

On 25 January 2001 Ms Brink withdrew from the Filver deal. She contacted the applicant’s solicitors. There were negotiations for the applicant to buy her out. On 2 February 2001 Ms Brink obtained her freezing order. There was a draft agreement dated 12 February 2001. On 21 February 2001 Ms Brink filed her criminal complaint.

On about 31 January Mr. Rafael spoke to the applicant. He asked her to buy him out. He filed a civil claim. On 7 February 2001 he filed a criminal complaint.

There then followed protracted negotiations between the lawyers for the applicant (or her family) and the complainants. The objective was an agreement in each case under which the applicant would repay Mr. Rafael and Ms Brink the sums they claim they are owed. A number of draft agreements were produced. Once it was clear there were criminal complaints, and at the instigation of those representing the applicant, there was inserted a clause into the draft agreements to the following effect:

The proceedings there referred to included the prosecutions. However, as Mr. Dinichert, the applicant’s lawyer puts it in a letter to her,

Negotiations continued during April and May 2001. Various draft agreements were produced. The applicant states that throughout the negotiations Mr. Rafael and Ms Brink were co-ordinating strategy and exerting “maximum pressure on me.”

On 3 April 2001 the judge, M. Tappolet issued an arrest warrant. On 20 June 2001 the applicant was arrested in London. She states that agreement had been reached with Ms. Brink and almost with Mr. Rafael. She was remanded at Holloway Prison for a week, which we readily accept was an awful experience for her.

In addition to the draft agreements under which the complaints would be withdrawn if payment were made, the applicant states that other improper pressure was put on her and her family.

According to Mr. Wentzel Mr. Rafael spoke of re-payment at the meeting on 25 July 2001. He said he had incriminating evidence; unless the $6 million was repaid in full he would pursue civil and criminal proceedings. He wanted the applicant’s family to buy him out. He “intimated” that if they did not settle he would proceed with the criminal proceedings. Mr. Wentzel states that

In November 2001 Mr. Wentzel saw Mr. Tappolet. According to Mr. Wentzel, the judge said that

Mr. Garlick does not suggest bad faith on the part of the judge.

The applicant states that she was approached through an intermediary acting on behalf of Ms. Brink in 2002 and 2003 to see if it was possible to re-open negotiations in return for dropping the criminal complaints.

On 14 June 2002 the applicant’s Legal Aid both for the civil and the criminal proceedings was refused in Switzerland. The lawyers acting on behalf of Mr. Rafael had written to the Legal Aid authorities and urged them not to grant Legal Aid. Among other things, it was suggested she had means. Mr. Garlick has told us that this conduct has continued.

Unusually in this case, following Letters of Request issued to Switzerland, there was a hearing before the judge in Switzerland (M. Tappolet). Mr. Garlick attended and questions were asked of Mr. Rafael and Ms. Brink. Mr. Rafael said that he was acting in good faith and in the interests of justice. Ms. Brink said one of her concerns “is to try and retrieve my money and I also think that [the applicant] should be tried for what she has done. I also wish her to cease from deceiving others, thus making no other victims. This is my primary purpose.” She said she was “definitely” behaving in good faith and the interests of justice.

Mr. Garlick submits that it is clear that on many occasions Mr. Rafael and Ms. Brink have made plain that they would withdraw their complaints if they were paid what they claim they are owed. The accusations they make, which form the basis of the application for extradition, are no more than bargaining tools in the civil claim they have. That is not, he submits, a proper use of the criminal justice or the extradition process.

For present purposes we are prepared to accept that the complainants’ predominant motive in bringing and continuing the criminal proceedings has been and is to recover the substantial sums they claim to have lost. They have made it clear to the applicant that if they do so, insofar as it is within their power, they would be prepared to drop the criminal charges. However, the decision as to whether they would in such circumstances be dropped is that of the judge, M. Tappolet. No-one suggests he would take such a decision other than in good faith.

As part of the attack on the honesty of the accusations, it is said that the complainants have co-operated in bringing their complaints. Their statements, submits Mr. Garlick, have self evidently been drafted by a solicitor at Kingsley Napley called Stephen Gentle. His reference is at the foot of each. In evidence before Mr. Tappolet they did not accept such co-operation. Mr. Garlick emphasises that he does not suggest any improper conduct by Mr. Gentle. He relies upon what he submits are the false denials of co-operation as indicating concerted action to “beef up” the extradition.

When asked by Mr. Garlick whether the document had been submitted to her English counsel before she signed it, Ms. Brink said that it was possible. She said the statement represented what she wished to express “in total independence.” Mr. Rafael stated that there was no co-operation with Ms. Brink. He suggested Mr. Gentle should be asked what had happened.

For present purposes, we are prepared to accept that Mr. Gentle did draft both statements and that there was some co-operation between Mr. Rafael and Ms. Brink, although how it arose and who precisely was involved we cannot say.

This application for habeas corpus is made exclusively by reference to section 11(3)(c) of the Extradition Act 1989, which states:

The terms “unjust” and “oppressive” were explained as follows by Lord Diplock in Kakis v Government of the Republic of Cyprus[1978] 1 WLR 779 (at pages 782 – 783):

We address first the question whether the Applicant has established on the balance of probabilities, that “the accusation” against her is not made “in good faith in the interests of justice”. As there is no allegation of bad faith against the Swiss authorities, including M. Tappolet, we concentrate on Mr. Rafael and Ms. Brink.

In early 2001 Mr. Rafael filed first civil proceedings and then, on 7 February, a criminal complaint against the Applicant. We must first consider whether, when he did so, he genuinely believed that he was the victim of her fraudulent behaviour. In many ways, the key to this issue is the document dated 10 October 1997. If, as he alleges, it is a forgery, the obvious inference is that the varied contractual terms which the Applicant asserts did not exist and she defaulted on the agreement evidenced by the document of 14 September 1997 by failing to put into Deux Amis the investment she had promised. In that event, the civil and criminal proceedings would have a clear foundation. Although the Applicant points to the letter from Mr. Dudhia dated 13 June 2003 and the letter of 13 October 1997 from the Applicant to which it refers, this court does not have to take those documents at face value. We are in no position to try this issue. In our judgment, there remains a serious and triable issue in both the civil and criminal proceedings about the document dated 10 October 1997.

We are fortified in this conclusion by the accounts for Deux Amis that were produced by Jari Cerny. On their face, they are difficult to reconcile with the document dated 10 October 1997 if that was a contemporaneous living instrument. These factors lead us to the conclusion that the Applicant has not established that Mr. Rafael acted in bad faith when he filed his criminal complaint.

The next question is whether Mr. Rafael acted and continues to act in bad faith by using the criminal complaint – the accusation – as a bargaining tool in relation to his civil claim. In our judgment, this is simply not borne out by the chronology which establishes that the proposed settlement term that, upon payment of the settlement sum, the criminal complaint would be withdrawn, was introduced into negotiations at a fairly late stage and at the request of the Applicant’s own lawyers.

We do not accept the submission on behalf of the Applicant that, by exhibiting a willingness to withdraw the criminal complaint upon receipt of the settlement sum, Mr. Rafael was acting otherwise than in good faith in the interests of justice. As Mr. Hines submits, that submission ascribes a somewhat idealistic purity of motive to a criminal complainant. It is simply unrealistic to suppose that a genuine complainant always acts at all times only by reference to the public interest in the prosecution to conviction and sentence of the guilty. The mere fact that a complainant in the position of Mr. Rafael is more interested in the recovery of his investment than in the conviction and sentence of the Applicant does not mean that he lacks good faith, provided that his complaint is based on an honest belief in the essentials of the complaint.

Nor do we find that any bad faith on the part of Mr. Rafael can be inferred from the evidence that M. Tappolet has indicated a willingness not to proceed further with the criminal complaint if an agreed settlement of the civil claim were effected. It is not suggested that M. Tappolet has acted in bad faith or been unduly influenced in any way by Mr. Rafael or his representatives. His attitude does not disclose even a provisional view that the criminal complaint was improperly initiated or unsustainable.

What, then of Mr. Garlick’s submission that some of Mr. Rafael’s submissions are demonstrably untrue? We are prepared to accept that, in his complaints, Mr. Rafael did not disclose the extent to which his investment had been applied on the development of the perfume and his allegations of misappropriation included sums which were in fact expended on, for example, the legitimate legal and other expenses of Deux Amis. We also accept that, notwithstanding their protestations to the contrary, there probably has been a degree of collaboration between Mr. Rafael and Ms Brink in relation to their strategy and tactics. However, these matters do not lead us to the conclusion that Mr. Rafael’s accusation was not or is not made in good faith. In our experience, it is not uncommon for those who make essentially genuine criminal complaints to say or to fail to say things in the hope of putting their cases in a better light or their opponents’ cases in a worse one. Genuine victims of criminal violence often deny or understate their own provocative behaviour; genuine victims of sexual offences sometimes conceal some of the background to or aftermath of the offence; and genuine victims of dishonesty sometimes exaggerate the wrongdoing of the offender or the consequences of the offence. However, it would be inappropriate to say that in all such cases the victim does not make the accusation in good faith. The important question is whether the real essence of the accusation is made in good faith. Notwithstanding Mr. Garlick’s forceful submission in this area, he has not persuaded us that any of the overstatements, understatements or inaccuracies, separately or cumulatively, establish bad faith in relation to Mr. Rafael’s accusation. Nor is it established by his lawyers’ communication with the Swiss legal aid authorities. For all these reasons, we are unable to say that he made the accusation or accusations otherwise than in good faith in the interests of justice.

There are two factors which cause us particular concern about Ms. Brink’s accusation. The first is that her complaint that she was induced to invest in Filver by a representation that Mr. Rafael was also going to be an investor is simply not borne out by the agreement between the Applicant and Ms. Brink dated 20 October 2000 which recites not that Mr. Rafael would be or was then obliged to be an investor in Filver but that the Applicant

Mr. Garlick submits that these factors, coupled with documentary evidence in Filver at the material time, establish that, on a balance of probabilities, Ms. Brink’s accusation was and is not made in good faith in the interests of justice. Of course, he also seeks to rely on points raised in relation to Mr. Rafael – in particular the “bargaining tool” point and the denied collaboration between the complainants.

It is incumbent on this court to apply the “good faith in the interests of justice” test to the material which is now before it. In the case of Ms. Brink’s accusation, we are persuaded that it is not made in good faith in the interests of justice. In effect, extradition is being sought on the basis of an alleged deception which is at variance with the express agreement between the parties and in circumstances wherein the civil courts of the requesting state have rejected the essentials of the accusations, even to the lower standard of proof. In so doing, the first instance court observed that Ms Brink “does not even begin any explanation on the reasons which may have led her to accept such a wording”. Whilst the good faith of the Swiss authorities is not in doubt, that of the principal witness is improbable. In these circumstances, although the Applicant would undoubtedly be treated justly by the Swiss courts, we conclude that it would be oppressive to return her on the Brink charges. She must therefore be discharged in relation to them. That is a decision which we do not take lightly. It is based on the unusual facts and history of this case. We do not intend or anticipate that it will provide any comfort to future applicants.

It follows from what we have said that we shall order the discharge of the Applicant in relation to the Brink charges but not in relation to the Rafael charges. If counsel can agree the terms of a final order, there will be no need for them to attend when judgment is handed down.