Dunham & Anor v and Government of the United States

By requests dated 1 May 2012, the Government of the United States of America (‘the US Government’) sought the extradition of the Appellants, who are husband and wife, in order that each of them should stand trial for offences of dishonesty in the United States of America.

The USA is designated as a Category 2 territory; and the request is therefore governed by the provisions of Part 2 of the Extradition Act 2003 (‘the 2003 Act’); and the extradition requests were certified pursuant to s.70 of the 2003 Act by the Secretary of State for the Home Department on 18 May 2012.

There was a hearing before District Judge Zani at Westminster Magistrates Court on 13 June 2013; and, on 8 July, he ruled that there were no bars to extradition, and sent the case to the Secretary of State for a decision on whether the Appellants should be extradited. On 23 August 2013 the Secretary of State ordered the Appellants’ extradition.

This is the appeal from the decision of the District Judge. The appeal against the Secretary of State, who was joined as Second Respondent, has been dismissed by consent; and the only Respondent to this appeal is now the US Government.

Similar issues arise on this appeal as arose in the Magistrates Court: whether the extradition should be barred under s.87 of the 2003 Act, on the basis that to order the Appellants’ extradition would be a disproportionate infringement of their rights under article 8 of the European Convention on Human Rights, as secured by the Human Rights Act 1998.

The facts as found by the District Judge at §6 of his decision can be briefly summarised. Both appellants worked for a US company, Pace Inc, from 2002 to 2009. Pace Inc is an electronics company (specialising in soldering equipment), with offices both in the USA and in the United Kingdom. The Appellants are alleged to have defrauded their employer by the dishonest misuse of company credit cards and by rendering dishonest claims for expense on the basis that they had been incurred on the companies’ behalf.

It is alleged that, having been given company credit cards to be used for company business, Mr Dunham charged personal expenditure to these cards. It is also said that he disguised personal expenses as company business expenses; that both Appellants received reimbursement for these expenses from the Pace Inc and Pace Europe by the rendering of false documentation; and that the same sums were claimed in respect of the same expenses from both the US and the UK companies. The total amount involved is said to be of the order of US $1m. The sums are alleged to have been transferred into a bank account in their joint names in Maryland, and to have been subsequently transferred and spent.

It is common ground that the legal principles which apply on this appeal are to be derived from two decisions of the Supreme Court: Norris v. USA (No.2) [2010] UKSC 9 [2010] 2 AC 487 and HH v. Deputy Prosecutor of the Italian Republic, Genoa [2012] UKSC 25 [2013] 1 AC 338, in which the Supreme Court considered how the balance is to be drawn when the Court is being invited to decide that extradition should be refused on the basis of the gravity of the interference with a Requested Person’s article 8 rights.

In summary, extradition will be refused if it would result in a disproportionate interference in a person’s family and/or private life, see HH and the judgment of Lady Hale at [8], where five propositions of practical significance to the present case were set out.

Before considering the detailed arguments in the present case, it is convenient to highlight two points.

First, counsel referred to a number of cases whose relevance was not always apparent. Many were cited as instances of the application of well-established principles and, since the assessment of the weight to be attached to the importance of the public interest in extradition and the countervailing article 8 rights is sensitive to the particular facts of the case, the citation of extensive authority where the decision depended on the facts, was not always as helpful as the parties may have thought.

Secondly, the evidence and the arguments on appeal bore little resemblance to those before the District Judge. The Court was told that the reason for this was that the significance of Mr Dunham’s medical condition, and the impact of detention on his mental and physical well-being, was only appreciated at a relatively late stage.

The emergence of late evidence gives rise to a tension between two applicable principles: finality in legal proceedings and recognition that the impact of extradition on the human rights of a Requested Person may not remain constant.

The first of these two principles emerges clearly from the judgment of Sir Thomas Bingham MR in Barrow v Bankside Agency Limited [1996] 1 WLR 257, at p.260.

The rule in Henderson v Henderson (1843) 3 Hare 100 is very well known. It requires the parties, when a matter becomes the subject of litigation between them in a court of competent jurisdiction, to bring their whole case before the court so that all aspects of it may be finally decided (subject, of course, to any appeal) once and for all. In the absence of special circumstances, the parties cannot return to the court to advance arguments, claims or defences which they could have put forward for decision on the first occasion but failed to raise. The rule is not based on the doctrine of res judicata in a narrow sense, nor even on any strict doctrine of issue or cause of action estoppel. It is a rule of public policy based on the desirability, in the general interest as well as that of the parties themselves, that litigation should not drag on for ever and that a defendant should not be oppressed by successive suits when one would do. That is the abuse at which the rule is directed.

It was articulated more recently by Sir Anthony May PQBD in Szombathely City Court and others v. Roland Fenyvesi and another [2009] EWHC 231 (Admin) at [3] and [6].

It is normally incumbent on litigants in first instance courts or tribunals in which evidence is adduced to advance their whole case at first instance and to adduce all the evidence on which they want or need to rely. In most cases, the purpose and function of an appeal is to review the decision of the lower court upon the evidence which was adduced before the lower court. An appeal court is not generally there to enable a litigant who has lost in the lower court to advance their case upon new and enlarged evidence which they failed to adduce in the lower court ...

The discretion to admit fresh evidence afforded by statute and rule in criminal and civil appeals respectively, although it remains a discretion, is not unregulated. Intrinsically the principles of justice would expect the court to ask why the evidence was not adduced at first instance, and whether there is a good reason or excuse for not doing so – for the policy is that litigants should normally adduce their whole case and evidence at first instance ...

The second principle is inherent from the Court’s obligation as public body to consider human rights issues at all stages of the judicial process, notwithstanding that the issue was not raised before the fact-finding tribunal (in this case the District Judge), and therefore disputes of fact have not been resolved by hearing the evidence.

This tension is reflected in two short passages taken from decisions of this Court.

In general, the difficulties will be resolved by the application of the principles established by the Court of Appeal in Ladd v. Marshall [1954] 1 WLR 1489. Further evidence will be admitted where (1) the evidence could not have been obtained with reasonable diligence for use at the trial; (2) the evidence must be such that, if given, it would probably have an important influence on the result of case, though it need not be decisive; and (3) the evidence must be such as is presumably to be believed: it must be apparently credible, although it need not be incontrovertible.

It is unnecessary to resolve the inherent tension in the present case, where permission has been given to adduce the new evidence, following a Case Management Hearing before the Master.

In his argument on behalf of Mr Dunham, Mr Watson submitted that there were a number of unusual features of the case which demonstrated a reduced public interest in extradition, and a number of further features which showed the severity of the infringement of the Appellants’ human rights.

Before turning to these points it is necessary to set out some further background to the extradition request.

Mr Dunham was born in September 1955 and is now aged 58. Mrs Dunham, was born in April 1956 and is now aged 57. Apart from seven years in the USA, they have lived and worked in this country, and their home and family has been here. They have been married for many years.

In his evidence Mr Dunham has described how, when they started working for Pace Inc and Pace Europe, the companies were owned and controlled by a man named Bill Siegel. In 2002 Bill Siegel invited Mr Dunham to go the USA to run the businesses as CEO and President of Pace Inc. This he did until 2009, settling in the USA and buying a home there. The Appellants’ difficulties come from the involvement of Bill Siegel’s son, Eric, in the management of the companies. Until 2007 Eric Siegel had been excluded from involvement; thereafter he began to take control of them. In September 2008 Mr Dunham’s salary was reduced; and in April 2009 Eric Siegel was appointed a director. On 23 May 2009 Mr Dunham wrote to Eric Siegel giving notice of his resignation from both companies, since his position as CEO had become untenable as a result of Eric Siegel’s activities. A similar letter was written by Mrs Dunham. In letters dated 26 May 2009 Eric Siegel wrote to Mr and Mrs Dunham terminating their employment on the grounds of fraud and gross misconduct. The allegations against them were immediately denied, and remain fiercely contested.

Shortly after their resignations the Dunhams left the United States and returned to their home in this country.

In August 2009 the Pace companies began civil proceedings against them in the courts of North Carolina and obtained an order of attachment (a freezing order) against their assets. The Dunhams denied the claim and brought a cross-claim for wrongful dismissal. Depositions were due to be taken from them in this country on 18 June 2010; and there is no dispute that they did not attend. Nor did they attend the trial which took place on 28 June 2010. They had asked for, and had assumed they would obtain, an adjournment of the hearing. The adjournment was refused, the trial continued without them and judgment was given against them in the sum of $2,112,071.75, with a set off in favour of Mr Dunham was allowed in the sum of $318,511.45. On the basis that their actions had constituted unfair and deceptive trade practices, the Judge ordered that the damages to be trebled. The Pace companies then brought legal proceedings in this country to enforce the US judgments.

After some initial success in resisting the enforcement of that judgment, the High Court (HHJ Purle QC) decided on 12 March 2012 that at least part of the judgment was enforceable in this jurisdiction: a sum $1,794,260.30 (the amount of the judgment before the trebling of the damages), see Pace Europe and others v. Paul Alan Dunham and Sandra Jane Dunham [2012] EWHC 852 (Ch).

In the meantime criminal proceedings had begun in the State of Maryland. On 7 December 2011, following an investigation by the FBI, a Federal Grand Jury sitting at Greenbelt Maryland returned a 13 count indictment; and on the following day a warrant was issued for their arrest. On 23 April 2012 affidavits were sworn by David Salem, an Assistant United States Attorney, acting on behalf of the US Government seeking the extradition of the Dunhams to face the charges contained in the indictment. On 13 November 2012 they were arrested pursuant to warrants issued by the Central London Magistrates Court on 19 September 2012.

The first argument on this appeal is that the criminal proceedings are an abuse of the process of the court, since there is a proper basis to believe that the criminal prosecution reflects a personal vendetta by Eric Siegel, whose actions in the civil proceedings have already bankrupted the Dunhams and left them destitute. The claims for expenses had been signed off (and implicitly approved) by the Financial Controllers at the time, one of whom has now been promoted to director. Although Mr Watson sought support for this argument from the decision of this court in a case under the Extradition Act 1989, Sutej v. HM Prison Holloway and the Government of Switzerland [2003] EWHC 1940 (Admin), I am very doubtful whether a decision under an entirely different extradition regime is of much assistance.

In Symeou v Public Prosecutor’s Office at the Court Of Appeals, Patras, Greece [2009] EWHC 897 (Admin), Ouseley J, giving the judgment of the court, reiterated that the abuse of process jurisdiction is a residual jurisdiction, but noted its limitations at [33].

The focus of this implied jurisdiction is the abuse of the requested state’s duty to extradite those who are properly requested, and who are unable to raise any of the statutory bars to extradition. The residual abuse jurisdiction identified in Bermingham and Tollman concerns abuse of the extradition process by the prosecuting authority. We emphasise those latter two words. That is the language of those cases. It is the good faith of the requesting authorities which is at issue because it is their request coupled with their perverted intent and purpose which constitutes the abuse. If the authorities of the requesting state seek the extradition of someone for a collateral purpose, or when they know that the trial cannot succeed, they abuse the extradition processes of the requested state.

This is not a case where the prosecuting authority is, or could be said to be, implicated in any abuse of the extradition process. Furthermore, in Zakrzewski v. Regional Court in Lodz, Poland [2013] 1 WLR 324, Lord Sumption at [13] indicated, albeit in the different context of the misdescription of an offence in a Part 1 case, that, if an abuse of process argument were to succeed, the true facts must be clear and beyond legitimate dispute.

The truth of the facts relied on by the Appellants is very plainly in issue and is not a matter which can be resolved in these proceedings. They are matters for the courts of the Requesting State. As Mr Caldwell submitted, the matter can be tested if one were to assume that the abuse argument was based on the contention that a rape victim had maliciously made a false allegation of rape. It would be both impractical, and contrary to the structure of Part 2 of the 2003 Act for this court to investigate the underlying evidence, see for example Abu Hamza and others v. Secretary of State for the Home Department [2012] EWHC at [108].

I would add that this is not a case where the Prosecution depends solely on the evidence of Eric Siegel. The US Government is entitled to point to documents which support the Prosecution case that the Dunhams forged documents and charged the same expenses against both Pace Inc and Pace Europe.

In my view this first argument is without merit.

The second point made by Mr Watson and Ms Barnes is that the extradition offences are not grave or serious. If this is right it is plainly a potentially material consideration, see for example Norris, Lord Phillips at [63] and HH, Lady Hale at [8(5)] above, where it was accepted that an offence at the bottom of the scale of gravity was capable of being one of a combination of features which might render extradition a disproportionate interference with article 8 rights.

However these are not trivial charges. To describe them, as Mr Watson did in §3.4 of his skeleton argument, as ‘only an expenses fraud’ does not address the gravity and extent of the alleged criminality over a number of years. The alleged offences might equally be characterised as ‘a substantial and protracted fraud carried out in breach of trust.’

A third point was raised as potentially relevant to the weight to be attached to the public interest in the extradition of the Appellants. In the US indictment the Appellants are charged with a conspiracy to defraud. As a matter of English law, they could not be charged with a conspiracy to which they alone were parties, because s.2(2)(a) of the Criminal Law Act 1967 precludes charging a conspiracy between husband and wife. This point was not pursued in oral argument, since it was recognised that it is not an argument which assists the Appellants. The conduct alleged against them would plainly amount to criminal conduct under the laws of England and Wales even though they could not be prosecuted on a conspiracy charge.

The fourth point that was raised related to what is said to have been delay. Unreasonable delay is potentially relevant because it may throw light on the Requesting State’ own assessment of the public interest in extradition; and it may also be material to the development of a family and private life, even if the delay is not such as to make it unjust and oppressive to extradite the Requested Person and bar extradition under s.82 of the 2003 Act.

However, there has been no material delay in the present case. The Grand Jury indictment followed an investigation into a fraud said to have been committed over a period of 7 years. Within 5 months the arrest warrants were issued and the Prosecutor had made an affidavit in support of the request for extradition. On 18 May 2012 the requests were certified by the Secretary of State of the Home Department.

In conclusion I do not consider that any of these matters relied on by the Appellants significantly lessens the public interest in the Appellants’ extradition. I turn then to the countervailing factors under article 8: the right to a private and family life.

The evidence is in two parts: evidence as to the Appellants’ physical and mental health, and evidence as to the conditions in which they (and, in particular, Mr Dunham) would be held before trial in the USA.

The evidence as to Mr Dunham’s health comes from a report dated 24 November 2013 from of Dr Aamir Ehjaz (a Consultant Forensic Psychiatrist) employed by the Northamptonshire Healthcare NHS Trust. The reference to ‘CDF’ is to the Chesapeake Detention Facility in Maryland.

Although the Court has considered the entirety of the report it is convenient to set out some parts of Dr Ehjaz’s evidence under the headings he has used.

Psychiatric evaluation

In my opinion Mr Dunham fulfils the International Classification of Diseases 10th version (ICD-10) criteria for Adjustment Disorder (ICD-10 code F43.28). This in his case has been brought on by a significant life change (namely that of extradition) leading to continued unpleasant circumstances. This continued trauma is the direct cause through which this disorder has arisen. As further stipulated by the ICD-10, in Mr Dunham’s case, these unpleasant circumstances are ‘the primary and over-riding causal factor, and the disorder would not have occurred without the impact’. This disorder can thus be regarded as a maladaptive response to the continued stress and it interferes with successful coping mechanisms, leading to problems of social functioning.

Perpetuating Factors

The Disorder has been perpetuated by the ongoing legal process of extradition. It has been made ‘unbearable’ by (as Mr Dunham alleges) the contacting of his relatives, friends and business contacts by Mr Siegel and/or his associates. Ongoing financial difficulties and health complaints have also contributed significantly in the perpetuation of Mr Dunham’s disorder. In turn, the anxiety perpetuates his physical health complaints and Mr Dunham remains stuck in this vicious cycle.

Protective Factors

His relationships with his clinicians have also been hugely positive for Mr Dunham: he has been able to receive timely advice and support from Changing Minds as well as frequently attending to see his GP (and hospital physicians and surgeons). Accessing physical and mental health services with relative ease has helped to protect against deterioration in his mental state, limiting his anxiety and improving his insight regarding his mental and physical health complaints.

Treatment and Prognosis

The single most effective treatment recommendation would be to remove the ‘stressor’. As long as Mr Dunham remains under this stress his chances of recovery are limited. If the extradition proceedings were discontinued then he is likely to begin to recover.

Effects of Extradition/Detention at CDF

Given the description of the conditions under which Mr Dunham is likely to be detained in the United States, I have significant concerns about how they will affect Mr Dunham, including his physical and mental health as well as the risk of him committing suicide. With the increased stress, lack of support (including lack of visits from his family (especially wife) and friends), isolation and legal uncertainties, Mr Dunham’s level of anxiety will certainly increase. This in turn will likely worsen his physical health and psychological complaints.

Were Mr Dunham to find himself at CDF (or a similar facility), not only would he have lost his ‘protective’ factors but the ‘perpetuating’ factors would also have increased in their number frequency and intensity. Mr Dunham already has a plan to end his life; I fear that attempted suicide would be a likely scenario; he will have a high chance of succeeding in killing himself, unless he is placed under continuous observation.

The medical evidence about Mrs Dunham came from her GP, Dr Chisti, in a letter dated 20 January 2014 in which he describes his working diagnosis of moderate to severe depression. This seems to have been ameliorated to a moderate level as her result of her engagement with the Northampton Wellbeing Team. There is another letter (of the same date) from Dr Scanlan of the Wellbeing Team, which notes that both Appellants have been seen; and in which he expresses the view that,

... their issues are related to the current legal and financial situation rather than any underlying psychiatric or mental health problems.

The evidence relates to three arguments advanced on behalf of the Appellants, and comes from Gary Proctor (an experienced defence attorney practicing in the Federal Courts).

Like the medical evidence, this evidence was not deployed before the District Judge; and the explanation is given in Ms Barnes’s Skeleton Argument at §8.

That evidence was not available before the District Judge because the issue of the conditions of custody on remand was not apparent, nor was the fact that detention is most likely to be in a state run, rather than federal, detention facility, and further, one with such a poor reputation (CDF). That evidence has brought to the fore the question of mental health of both Mr and Mrs Dunham since it is now apparent that the medical facilities at CDF for those with psychological and psychiatric healthcare requirements are inadequate.

As to point (1), the evidence indicates that, if they were extradited, the Appellants would be remanded in custody (or pre-trial detention) pending trial.

Because the Appellants’ immigration status is confined to facing criminal charges they would be held in immigration custody, described by Mr Proctor as an ‘immigration hold’ or ‘ICE detainer.’ The very strong likelihood is that they would not be admitted to bail. Time spent in immigration custody before being produced at the first appearance before the Federal court does not count against any time served; although time after the first appearance does count against the sentence. There is a statutory and constitutional right to a speedy trial; and on average the time between first appearance and going to trial is 5-7 months.

As to point (2), the Appellants would be held before trial in CDF, which only houses those awaiting trial. CDF was a former Supermax prison and for this reason the conditions of detention are restrictive. The Appellants would be allowed to speak to their lawyers as often as they want and they would be allowed to write to each other as often as they like, but they would not be allowed to see or speak to each other.

As to point (3), the mental health facilities at CDF are poor. Mr Proctor’s views can be summarised in a short passage from p.7 of his report.

That said, I have never had a client suffer a serious medical episode while at CFD, but I have to say this seems more attributable to luck than anything else. I have never heard of mental health counselling or anything like that. The jail says they have a psychiatrist on staff, but clients describe to me that they have meetings that last than 10 minutes and at the end of it each is invariably prescribed some generic anti-depression medication regardless of symptoms. A priest that visits occasionally is as close as it gets to counselling.

He added that there are suicide watches for those thought to be at risk and he had never heard of any suicide occurring.

The evidence of Mr Procter has been answered on behalf of the US Government by a sworn declaration of Paul Rivers, who is employed as a Supervisory Deputy Marshal in the United States Marshals Service (‘USMS’).

Mr Rivers has taken issue with a number of points, but makes clear that the pre-trial process for the Appellants would be the same as it would be for every person charged in the United States with a Federal crime. If the Appellants were ordered to be detained, it would be for the USMS to determine in which facility they would be detained. CDF is one of four possibilities. One of the remaining three facilities houses only men. However, only 35% of prisoners from the Greenbelt division (where these offences are said to have been committed) are lodged at CDF. Each of the facilities is required to provide full medical, dental and mental health care; and CDF was accredited by the American Correctional Association in 2013, where its standards were described as the national benchmark for the effective operation of correctional systems throughout the US.

There was a further statement from Mr Proctor by way of response, which it is not necessary to refer to in detail. His view is that those with mental health problems are held at CDF.

Mr Watson and Ms Barnes submitted that their clients, having endured a lengthy process of civil proceedings, now face the prospect of being remanded in prison conditions which will severely compromise their mental health. Mr Watson expressed it thus in his skeleton argument.

The grant of bail would ordinarily be a significant safeguard which would operate to protect an individual from unnecessary and disproportionate interference [with article 8 rights] pending resolution of the issue at trial, but bail would not be granted here.

They point to cases in which this Court has either adjourned an extradition appeal to seek assurances from a Requesting State (see for example, Sullivan v. Government of the United States [2012] EWHC 1680 (Admin) at [36]); or, following the lack of any such assurances, has allowed an appeal (see for example, Government of the United States v. Shlesinger [2103] EWCA 2671 (Admin) at [37]). In the present case, the US Government has remained unresponsive to the concerns expressed in the evidence.

They submitted that in all the circumstances and most particularly the lack of bail for people of good character, of their age, who are not fugitives from justice, whose mental state is (at the very least) highly fragile, tipped the balance decisively in favour of refusing extradition.

In some cases there is compelling evidence of an acute or chronic psychiatric illness which cannot or will not be treated if the Requested Person is extradited. This is not such a case.

In summary, and without seeking to minimise Mr Dunham’s mental condition, the medical evidence shows that he is suffering from an Adjustment Disorder due to a high degree of stress associated with uncertainty and apprehension arising out of the legal proceedings and the prospect of extradition. This has been in existence since the start of the civil legal proceedings. The stated intention to commit suicide is not linked to his mental condition, but appears to be a rational choice that the Dunhams have said they will make if they are ordered to be extradited. Although Mr Watson was not prepared to concede this, his client’s mental condition does not approach the threshold test set out in s.91 of the 2003 Act: a mental conditions such that it would be unjust or oppressive to order extradition. In any event there is no reliance on Mr Dunham’s article 3 rights.

It is clear that, if extradited, neither of the Appellants will be granted bail. They would be remanded to one of four detention facilities. If it were at CDF there would be the advantages that the Appellants would be in close touch, which would not be possible if they were in separate facilities.

The CDF regime is plainly harsh; and the treatment of Mr Dunham’s mental condition might be unsatisfactorily perfunctory, although it is unlikely that his life would be at risk. On the other hand it is not clear that he would be detained at CDF, and the evidence about the other facilities is very limited.

So far as Mrs Dunham is concerned, her mental condition is not so serious as her husband’s, and there is no real evidence that her detention before trial would not be adequately addressed.

The Appellants would be separated from their family, home and friends (and from each); but this is implicit from the nature of extradition; and the question will always be whether it amounts to an undue or exceptionally severe interference with private or family.

As Lord Mance said in Norris (No.2) at [107]

Interference with private and family life is a sad, but justified, consequence of many extradition cases. Exceptionally serious aspects or consequences of such interference may however outweigh the force of the public interest in extradition on a particular case

Having weighed the considerations on which the Appellants to rely (and bearing in mind the matters which they pray in aid by way of background), I am not persuaded that the public interest in extradition is outweighed by an interference with the Appellants’ article 8 rights which is exceptionally severe.

I would dismiss the Appeal.

I am grateful to Mr Justice Simon for his comprehensive summary of the material facts and the questions for decision in this appeal. I agree with his conclusion and his reasoning.

I add one observation about the principles of finality in legal proceedings and the recognition that the impact of extradition on the rights of a Requested Person under the Human Rights Act 1998 may not remain constant, and the tension between them to which Mr Justice Simon has referred in §§14-18. When the time comes to resolve that tension, the fact that this court is exercising an appellate jurisdiction under s.103 of the Extradition Act 2003 Act may be relevant to the way it is done. In Re B (A Child) (FC) [2013] UKSC 33 a majority of the Supreme Court held that an appellate court should treat the determination of the proportionality of an interference with the rights protected by the ECHR as an appellate exercise and not a fresh determination of necessity or proportionality, notwithstanding the duty of the court as a public body to consider human rights, see in particular [35]-[36], [83]-[85] and [136]. Lady Hale and Lord Kerr dissented ibid, at [119], [121] and [205].