Assets Recovery Agency v Jackson & Ors

The Respondent’s further case is that this property was let out between

487 High Road Leytonstone (“High Road”)

60 Dukes Avenue Grays, Essex. (“Dukes Avenue“)

Flat 3,285 Higham Hill Road Walthamstow (“Higham Hill Road”)

The other forms were exhibited to a statement of the 4^th of January 2007

The history of the Selfridges’ deposit boxes is that the first, D43, was opened by the Respondent in November 1999. He was then some 23 years of age. It will be recalled that this box was ultimately found in June 2002 to contain a substantial collection of jewellery and valuable watches. The second, B388 was opened on the 3^rd of May 2000 in the name of the Second Respondent but the First Respondent was a registered user. This was to be found to contain over £17,000 in cash in addition to jewellery. D2869, ultimately to be found with cash of £34,970 was opened by the Respondent in March 2002.

It is not in dispute that the Ford Focus was purchased on the 5^th of March 2002 by the Respondent for £9,788.75, although it was registered in the name of the Second Respondent. The Respondent accepts that he bought it by trading in a Ford Puma for which he was allowed some £8,000 and paying the £1,700 balance in cash. On his own case he had had bought the Puma some 3 months earlier from the Second Respondent’s mother for £8,500 again paid by him in cash.

The Yamaha motorcycle Y680 NLO was one of two motorcycles, the other being a Suzuki, which according to the Receiver were bought from a motor cycle dealership for cash by the Respondent using a false name in June 2001 in an overall transaction costing £13,400, £7,500 being attributable to this particular cycle. The Respondent accepts he did buy this cycle but claims to have sold it on. This is one of the exceptional cases arising in this claim the detail of which is considered below in paragraph 92 as is the other Yamaha cycle in which the Respondent claims never to have had any interest at all.

The 5 accounts in the claim relate to two at the National Westminster bank, one at the Nationwide Building Society and two National Savings Accounts. In fact over the years between May 1995 and 2004 the Receiver reports that the Respondent has opened some 11 bank accounts into which he has deposited cash on a regular basis. The Receiver’s analysis at para.4.27 of her final report is revealing since it highlights not only the amount of deposits and withdrawals for each fiscal year between 1995/6 to 2003/4 but the number of days the Respondent was in custody in any particular year with no apparent source of income. For example the Respondent opened his first two accounts at the National savings and the Woolwich Building Society on the 31^st of May and the 10^th of June 1995 respectively. He was then just 19 with no apparent employment or pay or tax details held by the Inland Revenue. The Woolwich account was opened with a deposit of £1,000 in cash. He was then in custody at a Young Offenders’ Institution for 1 week between the 3^rd and 10^th of July and then from the 9^th of August 1995 to the 14^th of February 1997, a period of about 18 months although during the fiscal year 1995/96 there was deposits of £15,655.98.

I set out below the table from the Receivers’ Report:

During this whole period therefore the total deposits were some £133,341.17 with withdrawals of £132,313.66. I record however alongside this information that which the Respondent urged upon me to bear in mind that the major property purchases were in March/April 1998 (Porter Close £22,500); June 2000 (High Rd-£40,000); March 2001 (Dukes Avenue-£3,200 deposit, balance of £28,000 by loan paid overtime); and April/May 2001 (Higham Hill Rd – deposit £14, 500, balance by £52,000 mortgage.)

Although the Respondent asserted in oral evidence that he had a post office savings account much earlier than 1995, the Receiver’s investigations have revealed no bank or savings account prior to May 1995 and no evidence – other than assertions by the Respondent himself- that he received any income from employment.

The basic issue raised in these proceedings is whether the Claimant has discharged the burden which is upon her to prove on the balance of probabilities that the property so identified in the schedules is “recoverable property” within the meaning of the Act.

The Claimant’s general case, denied by the Respondent, is that this property is, or represents or is profit accrued through and hence represents, property obtained through unlawful conduct of one or more of the following kinds:

The Claimant’s contention is that this unlawful conduct can be inferred from:

In addition to this general case the Claimant relies on a specific case of mortgage fraud in respect of the property at Higham Hill Road.

As will be clear from the histories already outlined, the Respondent does not in principle dispute that the property in the claim has been purchased with his monies and is still owned by him. In general the Respondent does not claim that specific purchases were financed from other sources.

The only exceptions relate first to those real properties which were in part financed by a loan, that is to say Dukes Avenue and Higham Hill Road. As regards Dukes Avenue the exception is in reality of no consequence for the present purposes since the Respondent concedes that he has repaid the loan using his own monies. The Higham Hill Road exception falls to be determined as a discrete case by reason of the allegation of mortgage fraud.

The only other exceptions concern first, certain limited items of jewellery and other goods said to have been gifts, either to himself or his daughter or the Second Respondent’s son, or which are said to belong to some-one else, and secondly, the two motor cycles in respect of one of which, as I have already indicated, the Respondent claims to have sold on to another person, and in respect of the other the Respondent disclaims ever having had any interest.

These exceptions apart however, the Respondent’s positive case which he supported by his own written and oral evidence to this court – although not with any documentary evidence – is that all the property was acquired by him through monies arising through the profits of his legitimate trading in six different businesses in which he has been engaged since finishing full time education at the age of 16 in the Summer of 1992, namely:

These assertions come from the Respondent’s third witness statement of the 21^st of March 2006 which was in effect a consolidation of earlier ones. In his fourth witness statement of 5^th of January 2007 he claimed for the first time that he also been involved in selling cars although in oral evidence he accepted this was a minor part of his businesses.

The common and significant characteristic of each business on the Respondent’s case is that it was cash based and conducted on an informal basis. The Respondent had no business premises – save he says in respect of the car hire business – and sales would be made through contacts made with friends or in restaurants or from street trading from a car boot. The income of the Respondent was for all intents and purposes always received in cash. The cash recovered by the police from his home and deposit boxes was money saved from past profits built up over a number of years. Money was kept at his home and in safety deposit boxes to allow for ease of access. The items of jewellery and watches found either in the safety deposit boxes or his home were apart from certain gifts, stock for his jewellery and watch businesses. Similarly the items listed in schedules 5 and 6 (non jewellery found at either Moray Rd or and Flat 3 Higham Hill Road) comprising multiple electrical and computer items and the like, such as Sony Play stations in boxes and DVD players, cameras, camcorders, and boxed Prada Kids sports shoes, were, with certain limited exceptions apart, trading stock. A lot of these were in fact the ‘Respondent’ says recovered from the boot of his Ford Focus.

The Respondent does not claim to have kept any business records and has produced no documentary evidence of any profitable business activity. In support of his claim that he would buy clothing and shoes for trading purposes he called evidence from the Sethi Brothers who traded as Meteor Sports. In support of his claim that the jewellery recovered was trading stock and that good mark ups of well over 100% -the Respondent himself claiming to have obtained anything between 100% and 500%- were achievable in this trade, he called the expert evidence of the valuer Mr Buckie. This apart however he called no live evidence in support of his positive case although he did rely on the transcripts of the evidence given at his criminal trial by George Rankin, the jeweller from whom he asserted he bought his jewellery.

In particular he has been unable to provide any evidence of any customer of his various businesses, that is to say evidence of anyone having purchased goods from him or utilised his services but this is because he says he did not keep records of any transaction, in particular he had no record of whom he sold to or when. He did not issue invoices or receipts. He does not claim to have paid or sought to pay any tax to the Inland Revenue or to have submitted any tax returns in relation to his trading. However his submission is that although these may be undesirable practices they should not in themselves lead to the court rejecting his claim to legitimate trading activities. This (to quote the closing written submission on behalf of the Respondent at paragraph 89) “is just the way (in retrospect inadvisably on account of his current inability to provide a ‘paper trail’) that R1 has conducted himself”

Further the Respondent submits that no adverse inferences sufficient to establish unlawful conduct for the purposes of this claim, can or should properly drawn from the general way he conducted his businesses in cash or from the lack of documentary trading records. Receiving and using cash is not illegal. Dealing in cash and the absence of records or evidence of customers cannot it is said be indicative of criminal conduct. Failure to pay tax does not prove that his sources of income for which no account was made to the Revenue were themselves unlawful.

Thus quite separate from his positive case, the Respondent raises a negative case in order to seek to defeat this claim, namely that none of the matters relied on by the Claimant – even if for example his positive case as to the sources of his income were rejected by the court so that this is a case of “unexplained wealth” – is capable either separately or taken together of supporting the inferences which the Claimant invites the court to draw. In short the Respondent asserts that the Claimant has failed to discharge the burden of proof which is upon her.

In this context the Respondent took specific issue with the contamination evidence relied on by the Claimant. The issue taken relates not to the fact of the contamination as such but to the inferences which can be properly drawn from the same. On this issue which centred upon the extent to which the MSA database of banknotes used for purposes of comparison with the Respondents’ specific notes could properly be regarded as representative of banknotes in general circulation, both parties called expert evidence. The Respondent also took issue with the materiality of his criminal convictions.

Further,the Respondent takes the overall point that the Claimant has failed sufficiently to particularise the criminal conduct alleged against the Respondent let alone prove the same. A bare allegation of “drug dealing” or “money laundering” is said not to be enough. It is further submitted that the court is not entitled to take a global approach to the claim but must consider whether the Claimant has proved her case on an item by item basis.

I am quite satisfied that on a conservative basis the Respondent required at least £400,000 over the years in question in order to acquire the property which is the subject matter of this claim. The Respondent’s own figures at paragraph 11 of his third witness statement suggested a total acquisition cost of £320,587.05 but this self evidently failed to include the £28,000 loan which he had repaid to Joy Smith referable to Dukes Avenue, and further reduced by some £37,000 the amount attributable to his acquisition of jewellery from the £l08,820 claimed in his own exhibited schedule by reason of the claimed error in his previous estimates to which I have already referred, and his claims to gifts. It further took no account of living expenses. Submissions made on behalf of the Respondent suggested a maximum sum for living expenses taking account of time spent in prison of £90,000. Taking all these matters into account I consider that the £400,000 does no injustice to the Respondent (the Claimant would put it higher) as a starting point by which to consider the Respondent’s case that all this expense was funded by the profits of his legitimate trading businesses..

I turn now to consider the evidence put forward by the Respondent in support of his positive case in a little more detail.

The Respondent asserts that his various businesses were more than sufficient to generate this sort of income. In his third statement of March 2006 he estimated (at paragraph 128) that “to date I have received by way of income in excess of £350,000 through the profits made in my various businesses”, an assertion which he sought to support in his fourth statement of January 2007 by the following assertions of note referable to the fiscal years material to this claim:

In 1995/96 he earned £35,000 to £45,000, on average £3,700 to £4,500 per

In 1997/98 when he was at liberty throughout he earned (at the age of 20/21)

In 1998/99 when he was in prison for 182 days he was earning £55,000 to

In 1999/00 he was in custody 79 days until 24^th June 1999, but he was still

In 2000/01 when at liberty throughout, all his businesses were very profitable

In the fiscal year 2002/3 he was in custody from the 13^th of June 2002 and not released until the following June - hence he was unable to trade.

I should add that the Respondent asserts he was earning good money prior to 1995. In particular not long after he left school in the summer of 1992 he went to America to stay with his grandparents where he realised how cheap items of designer trainers/shoes and clothes were compared within Britain and hence even at that early age he started to make good profits with mark ups in the region of 200%, by selling in this country various trainers and selected designer jeans which he had brought back from the USA. He gave oral evidence that he began importing goods from the USA through his grandparents shortly after returning from that family holiday. Hence his case was in effect that he started up his own business of buying and selling shoes and clothing almost from the moment he left full time education at the age of 16. In oral evidence he confirmed his written case that he had started his jewellery sales as early as 1994. For good measure in his written evidence he referred also to the sum of £25 a day through assisting his uncles in their decorating business both before and after he left school and to a short period undertaking a YTS scheme in computers but in oral evidence did not lay claim to significant income from these sources.

In keeping with the Respondent’s evidence throughout both written and oral, the Respondent when putting forward these figures set out above by way of earnings or “profits” never sought to take account of or give evidence about any business or living expenses. This was very evident when being cross examined generally about his asserted earnings from his various business in all their claimed guises but in particular in relation to the up to £200 a week claimed to have been “made” from car rentals. He on occasion appeared mystified by what counsel for the Claimant was referring to in this regard.

The Respondent claimed that he was earning £6,000 to £8,000 a month from his car rental business between 1998 and 2000 albeit for part of that time between the 5^th of October 1998 and the 24^th of June 1999 he was in custody. His evidence was that this income was not put through the books. The researches of the Receiver revealed that the business in question, Car Wise Car Rental Ltd, was incorporated on January 28 1998, but then in November 1999 was dissolved and struck off the Companies Register for failure to file any accounts, that the company’s bank accounts were in the name of one Colin Tapper and not the Respondent, that the Respondent was not a director although appointed company secretary in documents of January 1998, and that the available company bank statements for the 8 month period September 1998 to May 1999 revealed payments-in of £8,454 and withdrawals totalling just over £18,000. The Respondent’s explanation for this documented history was that this business was initially going to be a joint venture with Colin Tapper, his mother’s partner, who lost interest when they were unable to obtain finance to acquire cars, so he the Respondent subsequently ran the company although Tapper assisted with the paperwork which he would sign. He managed to buy cars for the purposes of the business by his own means. The business ceased trading in November 1999 as far as Companies House was concerned because of problems with insuring the vehicles and hirers running up unpaid speeding tickets but he the Respondent was still making profits of “around £200 per week” (earlier stating that he would hire out vehicles for £100 - £200 in cash) per car, through renting them out on a regular basis and he only ceased renting them out in or around November 2000.

In keeping with his whole asserted trading history, no documentary records were produced to this court of evidencing hiring agreements. In oral evidence he asserted he had packs of formal agreements but generally did not get his customers to complete them. The Receivers findings were stark in this regard: there was some documentary evidence that the Respondent had signed documents connected with the leasing of an office, but there was no evidence produced to her that the business was profitable and there was not one document demonstrating any money coming to the Respondent personally in connection with this business.

In his written evidence the Respondent asserted he made in excess of £80,000 from the sale of trainers and achieved mark ups on the sale of jewellery and watches of anything between 100 to 500 %.

I have already indicated that in support of his claim that he would buy clothing and shoes for trading purposes. The Respondent called evidence from the Sethi Brothers who traded as Meteor Sports and that in support of his claim that the jewellery recovered was trading stock and that good mark ups of well over 100% were achievable in that trade, he called the expert evidence of the valuer Mr Buckie and relied further on the transcripts of the evidence given at his criminal trial by George Rankin, the jeweller from whom he asserted he bought his jewellery.

The difficulty with all this evidence however from the Respondent’s standpoint was that although it gave limited support to the proposition that on occasion in more recent years the Respondent was acquiring items of a kind and in a quantity which suggest they may have been for resale, it did not in the result lend any support to the case the Respondent was putting forward that the trading in question had been in place from 1994 in the case of the jewellery from Rankin, or from 1995 in the case of shoes from Meteor Sports, or that he would through the prices he obtained from these sources, be able to sell on at a consistently high level of mark up sufficient to produce the sort of profits asserted above.

Thus the evidence of both Kashif and Mohammed Sethi suggested the Respondent had become a customer only in around 2000 and had initially bought items only for his own personal use.

Kashif’s witness statement signed on the day he came to give evidence (21^st March 2007) but likely to have been first drafted in 2006 around the same date as that of his brother in March of that year, said that he had known the Respondent for 5 or 6 years and in oral evidence Kashif confirmed that at the beginning the Respondent was buying footwear (trainers) in small quantities for himself paying retail prices and only later progressed into buying other sizes in greater quantities. He agreed that the case put to him at the criminal trial in 2003 (as evidenced by the available transcript) by counsel on behalf of the Respondent was that the Respondent although he had used to come into the shop as long ago as 1997 had only been buying in bulk in large amounts for “may be two or three years” i.e. since 2000 or 2001.

Mohammed’s evidence dealt primarily with the sale of Prada shoes and designer clothes to the Respondent. He again painted a picture of the Respondent being initially only the occasional retail purchaser. He too was referred to his evidence at the criminal trial to the effect that the Respondent had moved from being only a retail customer “well over a year or maybe two” before the date of that evidence in June 2003 which he did not dispute, in other words no earlier than 2001. Mohammed under cross examination expressly recalled that from the time that the Respondent became a regular customer he was in the shop “more or less every week” and he could not remember a period of months when he did come in at all.

It will be recalled that the Respondent was in custody from the 5th of October 1998 to the 24^th of June 1999. I agree with the Claimants submission that the effect of all this evidence is that the Respondent cannot have been a regular customer of Meteor Sports before he was released from prison in June 1999.

Some limited but only limited documentation was produced through these witnesses to support the Respondent.

Kashif’s evidence was directed to the purchase of trainers and he did refer to 6 pages of documents which he had produced to the police all from 2002 as showing records of orders placed by the Respondent for numerous pairs of such trainers, one for example arguably refers to an order for 56 pairs of design “Air Max 95L”, although none were invoices as such and bore more the hall mark of stocktaking forms. Kashif’s evidence moreover was that he would be reluctant to give any discount and any he did give would be the smallest “he could get away with”, none of which supported the Respondent’s case that he resold the trainers bought from Meteor Sports at mark-ups of between 200-500% (according to his written statement) or between 300-400% (oral evidence ). Moreover, Kashif in cross examination had to agree that common sense would suggest that people are not likely to want to buy off a friend at a price far more than that charged by a proper retailer with ostensible expertise.

The high water mark of Mohammed’s evidence (at paragraph 13 of his witness statement) was that over a couple of years the Respondent spent in excess of £10,000 on Prada shoes as well as designer clothing and “this figure may have been more” and (at paragraph 14) that discounts would be offered to the Respondent enabling him to sell on at anything between 200-1000%. In cross-examination however he appeared reluctant to detail the size of the discounts given but eventually agreed they were not likely to have been more than 50% which gave me little confidence in the reliability of his evidence on the mark ups achievable by the Respondent (who himself in evidence claimed only 200-300%).

Mohammed agreed that he himself had not witnessed any sale transaction on the part of the Respondent but claimed to have met people who said they had bought from the Respondent. He produced some pages of spreadsheets originally handed to the police to support the sale to the Respondent in 2002 of some 87 pairs of “Prada kids” stock. The records are not entirely convincing as evidence of a sale but even if they be what it is said they are, it is noteworthy these documents and those produced by Kashif are the entirety of the records they are able to produce of trading with the Respondent. When asked why there were so few documents held by their business to do with the Respondent given their collective evidence of at least two or three years of bulk buying, Mohammed’s explanation was that records would be kept on a personal computer which would crash. When Kashif was originally asked in cross examination why these were the only documents he had come across to do with the Respondent, he could give no explanation. It was only in re-examination that he remembered his witness statement account that one or two of his laptops had been stolen and some had had viruses deleting all his records.

I did not find either of the Sethis convincing witnesses. As indicated they at the highest give only very limited support to the Respondent’s case.

Mr Rankin’s evidence came from the transcript of his testimony before the criminal trial produced as part of the Respondent’s case. It undermined the Respondent’s case before me that he had been buying from Rankin, who was his only claimed source of jewellery stock, and selling on jewellery to members of the public at regular mark-ups of between 100-500% and that he had been doing so since 1994. The thrust of Rankin’s evidence in May 2003 was that business was very cut throat and profit margins were not good and that 65% would be his full mark up to members of the public but good customers would expect a good discount while his annual profit margin after overheads was around 10%; He said had known the Respondent for about 5 or 6 years i.e. since about 1997. Indeed it was the Respondent’s own case at the criminal trial that he had been a customer of Rankin only since 1997. When questioned about a particular transaction in 1997 (transcript p.2168-9) Rankin replied “unfortunately this was early days and Mr Brissett (the name by which he knew the Respondent) was not the established customer he was to become”.

Mr Buckie’s expert evidence called on behalf of the Respondent equally did not assist the Respondent’s case on the sort of mark-up (let alone profit) achievable by his claimed jewellery trading. Counsel on behalf of the Respondent in support of his client’s case in this regard understandably in his final written submission (paragraphs101-3) relied on the valuation figures given by the Claimant’s expert (Mr Truman) of the wholesale/retail valuation of the jewellery found in the Respondent’s possession, to demonstrate that the average mark-up between wholesale and retail over all the watches and jewellery was 200% and that single item mark-ups ranged on occasion from 140% to 950%. The problem with this analysis however was twofold. The first lay in the Respondent’s own schedule of the prices he paid for the items to which I have already referred, even allowing for the Respondent’s claimed errors. The second lay in the figures put by Mr Buckie on the wholesale /retail valuations. Mr Buckie’s wholesale figures were not that far from Mr Truman’s. His retail figures tended to be of a lower order. The reason he gave which appears entirely convincing, is that the watches and jewellery were second hand and hence the retail valuations had to be on a like basis and there were occasions when he felt Mr Truman had not been comparing like with like: he had been comparing a second-hand wholesale value with a new retail price and hence arriving at too great a difference. The average mark-up on a second hand basis was no more than 135%. Furthermore an analysis of the prices paid by the Respondent on his own case compared with the Buckie figures shows that the Respondent paid consistently more than the wholesale price although less than the retail. The Claimant in final submission produced a schedule described as Appendix 3 showing that on the Buckie valuations the Respondent paid approximately £93,000 - £94,000 for items with a second-hand wholesale value of between approximately £51,000 -£61,000 and a second-hand retail value of approximately £112,000-£135,000 – an average potential mark up of just under 50%.

However, even this analysis did not take account of the defects in what counsel for the Claimant described as the Respondent’s business model which Mr Buckie agreed had basic flaws making it highly unlikely that the Respondent would achieve even that result on a regular basis. This was a reference to:

Mr Buckie had no difficulty in agreeing that in order to command a good price, business reputation was important and that whilst a customer may well be prepared to take on the risk that goods might be counterfeit or stolen if buying apparently high value watches/jewellery from an informal street/restaurant trader, or to forgo the opportunity to return the goods or to have a receipt for insurance purposes ,such a customer would expect the price to be paid to be significantly lower than in a retail jewellers. He agreed with the proposition that where, as here, the Respondent was paying significantly above wholesale prices and was seeking to trade informally with all the disadvantages and suspicions attached to such a trader, that he was not going to be able to command anything close to normal retail prices for the goods in question. Furthermore when Mr Rankin’s evidence that margins on second hand watches were very competitive, was put to Mr Buckie, he agreed that prestigious branded watches such as the Rolexes in the Respondent’s possession generally attracted smaller percentage mark-ups in any event.

The only comfort Mr Buckie gave to the Respondents case was his opinion that the watches were typical of items found in a dealer’s stock in that there were about 14 Rolex watches which although not identical were often of more or less the same model with subtle differences. His finally expressed opinion was that they belonged to someone who if he did not deal in jewellery, “dabbled in it” as a secondary occupation. He did not think there was anything sinister in the dates of acquisition being as long ago as 1997 since stock turnover in jewellery was only 1.8% of total stock per annum.

The Respondent asserted he made in the region of £30,000 - £40,000 from eBay trading which he said commenced in 1998 although he re-registered in September 2003 following his release from custody in June 2003. He would not accept the Receiver’s’ findings to the effect that although he was certainly registered to begin eBay trading on the 2^nd of September 2003, on her investigations of eBay he had not been registered before that date. The Receiver did find eBay records of purchases and sales by the Respondent after that September 2003 date although again in keeping with the overall history in this case could find no record of any profits made as a result. As a summary of the trading patterns evidenced after that date the Receiver analysed by schedule the eBay records attributable to the Respondent’s account from the 20^th of September 2003 to the 28^th of November 2003. These for the most part related to the sale by him of electrical goods and Nike products, with a recorded value of just under £11,000. They included brand new digital cameras. One particular record of interest on the overall issue as to when the Respondent commenced eBay trading, was a purported sale by “Mr Sneaker” to the Respondent of a pair of Nike trainers for $1. There was no dispute that “Mr Sneaker” was a reference to Kashif Sethi of Meteor Sports to whom reference has already been made. The evidence of Kashif to the court was that the likelihood was this was not a genuine transaction but a fictional one designed to boost the Respondent’s positive feedback rating.

I have already outlined above the exceptional case raised by the Respondent in respect of certain items of jewellery and other goods said to have been gifts for which he did not pay or which belong to other persons, and the two motorcycles. The detail of the exceptional case put forward by the Respondent in respect of both motor cycles is of sufficient significance in the overall consideration of this case to merit recounting in a little detail.

On the evidence adduced by the Receiver (in particular the dealer’s documentation), the first Yamaha Y684 NL0 was purchased in June 2001 by the Respondent using the name Al Kurt (two of his middle names) for £7,500 in cash from Motorcycle City at the same time as using the same name he bought for £5,900 a Suzuki motor cycle Y763 NL0 making a total cash expenditure of £13,500. The Suzuki has never been recovered. However, the Yamaha has been and its key and the V5 certificate in the name of Al Kurt was found at Moray Road in the search of the 26^th of June 2002, and as at the 23^rd of August 2003 it was still registered in the name of Al Kurt. The Respondent does not dispute he purchased this Yamaha (as opposed to the Suzuki which he claims was purchased by Marvin Campbell) but asserted in his third witness statement that he had agreed to sell this cycle to Mark Chandler just before the Respondent’s arrest on the 12^th of June 2002 and that the sale was completed while the Respondent was in custody by Chandler paying the Second Respondent. His explanation for the continuing registration of the bike in his (Al Kurt) name was simply that the requisite documentation was still with the police so no change of registration could take place. His explanation for the use of what was in effect a false name for the purchase, was in his written evidence to “avoid speeding or parking tickets” and also in oral evidence because he had no motorcycle licence, admissions to which I shall return when I consider the overall picture which emerges from the evidence in this case.

Equally of significance in that overall picture is that in his witness statement the Respondent did not choose to give any detail as to the price he had obtained from Chandler or the form in which it had been paid. However when he came to be cross-examined in the course of his oral evidence, he claimed that the exhibit PF/18 which was the £5,715 cash found in his house on the 27^th of June 2002 in a plastic bag (“blue carrier bag containing a large number of wraps of banknotes”) and which was found to have a frequency of heroin contamination of 100%, was the money Chandler had paid for the motorcycle. This all emerged in the context of his being asked for any explanation which he might choose to give, for the frequency of contamination found on his cash. This was in fact the only explanation he personally put forward in oral evidence. As will be seen, a general submission was made by counsel on his behalf that his case was that the cash represented the product of legitimate trading on his part and hence were monies received in good faith from customers whom he had no reason to suspect might have been involved in illegal drug dealing or otherwise been in contact with drugs (if which was not conceded, that be a proper inference to draw from the fact of the contamination).

As regards the second motorcycle, the Yamaha W279 RPC, the Receiver reports that this was retrieved by the Metropolitan Police in June 2002 along with the first Yamaha from a lock up garage said to belong to the Respondent. The cycle was then registered in the name of Marcus Chandler and had been since the 19^th of October 2001. The Respondent asserts that he has never had any interest in this vehicle. The Receiver reports however that when the police requested that Chandler provide proof of ownership and a statement to explain why his vehicle was in the Respondent’s lock up garage - a request which followed on a request by solicitors for the Respondent and Chandler that the police release the cycle as it was not the Respondent’s - no further correspondence was received. The Receiver believes the motorcycle was bought by the Respondent with a payment of £2,400 paid by way of a debit on the 7^th of November 2003 from the Respondent’s National Westminster bank account credited to Marcus Chandler, although the current keeper details had not been changed.

I also record the evidence relating to an Audi motor car the keys for which, together with an Audi car book, and speeding ticket issued to “Fabian Brissett” were found at one of the Respondent’s properties during the searches referred to. The Receiver’s investigations uncovered records at the DVLA Swansea showing a curious history whereby this vehicle was transferred into the name of June Campbell of 5, Bowness Close Beechwood Road, London E8 3SY on the 2^nd of February 2000, then registered in the name of Fabian Brisset, one of the Respondent’s many names, of the same address, on the 21^st of March 2000, (the new keeper’s signature however appearing as J. J. Campbell), before being transferred back into the name of June Campbell in June 2000 (again with the only signature on the material document being that of Campbell). A notice of intended prosecution dated the 21^st of February 2000 sent to June Campbell as the registered keeper, was signed by “F.Brissett “as the driver on the 24^th of February 2000. Contrary to the Receiver’s report, the Respondent says he never had any interest in this vehicle, its registration history being something for which he was not responsible and knew nothing about at the time, although he concedes he did borrow the car once and received a speeding ticket for which he took responsibility by signing the notice as driver.

This motor car is not the subject of the present claim, it having been subsequently transferred on to a third party. The particular truth of the Respondent’s involvement in the registration history may never be known. The significance of the evidence for present purposes is however that it certainly tends to support a picture of a Respondent happily using different names, this time in the year 2000, when it comes to his use of motor vehicles, which of course similarly emerges in the history relating to the first of the two Yamaha motorcycles.

As already indicated at paragraph 42.4 above, there is a specific allegation of unlawful conduct raised by the Claimant referable to one particular real property, namely the Flat 3, 285 Higham Road, that this was obtained by mortgage fraud. The allegation is that the Respondent knowingly provided false material information, in particular in relation to the source and amount of his available regular income, in support of his mortgage application. The Claimant contends that as a matter of law she is not obliged to particularise the unlawful conduct in any more detail but that if any more details are desirable she relies upon the following sections of the Theft Act 1968, namely section 1 (theft), and/or section 15A (obtaining a money transfer by deception and/or section 17 (false accounting).

The Respondent denies he was party to any mortgage fraud. He does not dispute that the mortgage application form signed by him in fact contained untrue particulars as follows: the form in the section headed “Income Details –Self Employed” asserts that the Respondent is a disc jockey self employed in a company named as “Spinning Disc” of 62, Porter Close, Grays, Essex, that he has been so employed for 1 year 2 months, and has an annual income of £30,000. It further gives the name and address of his accountant as that of J. Rumley Associates with an address in Bedfordshire. The Respondent’s signature appears immediately beneath these particulars in a box headed “Self Certification –Self Employed” alongside a printed statement “I confirm that my personal income is as stated above and is sufficient to meet the repayments on the amount of the loan requested”. The Respondent says these false particulars were inserted without his authority by those acting on his behalf at Allerford Financial Services, i.e. Mr Matto. The Respondent does not claim to have signed a blank form but rather a form with details already filled out which he did not read. At paragraphs 241 and 242 of his third witness statement the Respondent expressly says that “I was advised by the finance company on completion of the form to sign it. They said they had completed the form and the only details I gave them were my name and address……….at the time I was earning money from buying and selling jewellery clothing, shoes and letting properties through cash transactions and they were fully aware of the situation”.

Before proceeding to give my conclusions in this case it is convenient at this stage to set out the statutory framework governing this claim and to identify how I intend to approach the question of proof of recoverable property having regard to the submissions made by both Claimant and Respondent to which I have referred.

The relevant legislative provisions are set out in Part 5 of the Proceeds of Crime Act 2002, the purpose of which is to enable the Claimant as the enforcement authority to recover in civil proceedings in the High Court “property which is or represents property obtained through unlawful conduct” (section 240(1) (a)) and whether or not any criminal proceedings have been brought for an offence in connection with the property (section 240 (2)).

To this end section 240(3) empowers the Claimant to take proceedings for a recovery order of the kind sought in this case against any person she think holds “recoverable property”. Under section 266 (1) the court must make a recovery order vesting the property in the trustee for civil recovery if satisfied the property is “recoverable” subject only to the provisions of 266 (3) which in effect preclude the court from making an order if the respondent obtained the property in good faith and changed his position to his detriment at a time he had no notice that the property was recoverable, and it would not be just and equitable to make an order (see sections 2663(a) and (4)(5)(6), or if the order would be incompatible with a convention right within the meaning of the Human Rights Act 1998.

The primary definition of “recoverable property “is that set out in section 304 (1) namely “property obtained through unlawful conduct”.

However, this definition is supplemented in ensuing sections so as to encompass for present purposes:

Provision is also made for tracing, i.e. for following recoverable property into the hands of a third party into whom it has passed (section 304(2) ) but not if the third party received it in good faith without notice (section 308(1) ). This latter provision is relied on by the Respondent who says that even if the court were to be satisfied that the drug contaminated cash was property “obtained through unlawful conduct”, such cash would not be recoverable if as the Respondent asserts, he received it innocently in exchange for goods or services supplied by himself in the course of legitimate trading.

I have already referred to the provisions of section 266 (3) and section 308 (1) designed to protect the innocent third party who has come into possession of otherwise recoverable property. With like purpose sections 270 to 272 of the Act address the problem of property in which there is more than one interest, not every one of which is within the definition of recoverable property. These sections accordingly deal with what is termed “associated property” as defined in section 245(1). This definition includes property which is not in itself recoverable property but which consists of:

In the absence of any agreement between the enforcement authority and the holder of the associated property (a situation governed by section 271), section 273 gives the court a range of powers to enable the associated property to be realised and payment made to the holder. This power is of particular use where the purchase of otherwise recoverable property has been in part funded by a loan raised by mortgage and there is no suggestion that the mortgage provider has been party to any unlawful conduct. In the present case such a mortgage provider provided part of the funds whereby the Respondent was able to purchase the property at Higham Hill Road. An order could provide in these circumstances for the sale of the property with the discharge of the mortgage from the proceeds of sale.

Two ancillary questions arise out of the definition of recoverable property of some importance. First, what is meant by “unlawful conduct” and secondly what exactly has to be proved by the Claimant in order to establish that property has been obtained through such conduct, it not being disputed that the burden is on the Claimant to establish the same on the balance of probabilities.

“Unlawful conduct “is defined in section 241 (1) as conduct occurring in any part of the United Kingdom which is “unlawful under the criminal law of that part”.

Under section 241(3) the court must decide on the balance of probabilities whether it has been proved that “any matters alleged to constitute unlawful conduct have occurred”.

Under section 242 (1) “a person obtains property through unlawful conduct (whether his own or another’s) if he obtains property by or in return for the conduct”. This will accordingly include a person innocent of the conduct in question, subject always to the defence of good faith to which I have already referred (section 266(3)).

These provisions were considered by Sullivan J. in Green. In that case the Director sought to argue that there was no obligation on the Claimant to identify any particular unlawful conduct – that the Director could simply allege that property had been obtained through “unlawful conduct” and was under no obligation to establish any kind or kinds of unlawful conduct.

Sullivan J. rejected that submission. Although he accepted that the Claimant need not allege or prove the commission of a specific criminal offence he held it was still necessary for the Director to prove that on the balance of probabilities the property was obtained by or in return for a particular kind or one of a number of kinds of unlawful conduct and that the onus was on the Director to set out the matters that were alleged to constitute the particular kind or kinds of unlawful conduct. See part one of the declaration recorded at para 47 of his judgment and paragraph 50 thereof.

At paragraph 17 of his judgment however Sullivan J. was clearly of the view that the matters the Director was obliged to specify could be in relatively generalised terms. Thus:

The Director also submitted that the claimant could sustain a case for civil recovery in circumstances where a respondent has no identifiable lawful income to warrant the lifestyle and purchases of that respondent. This too was rejected by Sullivan J when making the second part of the declaration referred to, in the following terms:

“A claim cannot be sustained solely upon the basis that a respondent has no identifiable lawful income to warrant his lifestyle”.

I see no reason to depart from the approach adopted by Sullivan J. It was followed by Langley J. in the only reported decision to date on a contested application under Part 5 of the Act in High Court proceedings in The Director of the Assets Recovery Agency v. Olupitan [2007] EWHC 162 (QB). Langley J. summarised the effect of Green at paragraph 22 of his judgment:

I also echo what Langley J. said on the emphasis to be put on the qualifying adverb “solely” in the context of proof of obtaining property through unlawful conduct, by reference to a comparison between lifestyle and identifiable sources of income. Such a comparison will not in itself be sufficient but as in Olupitan so in the present case the Claimant is entitled to ask the court to look at the totality of the evidence and the whole picture which emerges. As Langley J. said at paragraph 23 it is one thing to point to an unexplained lifestyle, it may be another, “if an explanation is offered but rejected as untruthful; and taken with other evidence either might be more or less persuasive”.

I equally reject the submission made on behalf of the Respondent that I am not entitled to take a global approach to the issue of proof that the property in issue is recoverable within the meaning of the Act. The question is whether the Respondent obtained the property through the unlawful conduct alleged or whether the property in the Respondent’s hands is representative of property so obtained. The test is whether it is more probable than not that such is the case. It is as was said in Olupitan the whole picture painted by the totality of the evidence which has to be balanced. I see nothing wrong in the court ultimately concluding that any significant asset of the Respondent has been obtained by or represents the proceeds of his criminal conduct as particularised by the Claimant in the terms set out at paragraph 51 above, if the court is satisfied on the evidence that this is more probable than not. I do not consider it essential that the court considers each property transaction on an item by item basis in the sense that the Claimant has an obligation to show some particular unlawful actions by the Respondent at some particular time which enabled the particular transaction.

I note that Langley J. felt able to adopt a similar approach in Olupitan. See in particular his observations at paragraph 67 of his judgment.

I also consider that the court is entitled to take a common sense approach to the inferences to be drawn from the manner in which the Respondent chose to store his accumulated cash and from the failure of the Respondent to keep any business records in the context of the evidence as a whole. I have already made a passing comment in this regard when describing the evidence relating to the finding of the contaminated cash. Of course one must not automatically equate the storage of cash in large quantities either in bags in ones house or in a deposit box with proof of criminal origin. Equally one must not draw that conclusion automatically from the absence of any regularly documented source of income or capital. And of course care must be taken not to reverse the burden of proof. However such storage and the absence of documentation may become a much more persuasive element if the court were to reject as false the explanations put forward by the Respondent for his ability to have the necessary ready funds to acquire assets.

As Sullivan J. said in Green at paragraph 32 onwards when discussing the forfeiture of cash decisions such as Muneka v. Commissioners of Customs and Excise [2005] EWHC 495(admin), in today’s “cashless society” the ordinary law abiding citizen does not normally need to keep large numbers of banknotes in his possession. It will almost always be safer (bearing in mind the risk of loss through accident or crime) and more profitable (bearing in mind the opportunity to earn interest) and more convenient (bearing in mind the many other ways of paying for unlawful goods and services) not to be in possession of large sums of money in banknotes. In contrast given the other characteristic of cash that it is readily negotiable and unless promptly seized has a tendency to disappear without trace, the criminal will find property in that particular form convenient as an untraceable means of funding crime or as the most sensible way from his standpoint of retaining the proceeds of crime before using it to acquire what he will hope to be untraceable assets.

Equally as the Receiver said in evidence one would expect any successful law abiding businessman to keep some sort of record no matter how simple, of what he was he was buying, what he was selling, and the amounts of his overheads – if only to work out the sort of profit he was making and which were his most profitable items. The criminal dealer in for example illicit drugs will of course eschew any record by which his activities might be detectable.

I do however accept that the Respondent is entitled to rely on that line of authority which establishes that although no gloss is to be put upon the applicable standard of proof, where as here the allegation is of particular seriousness the court should look for cogent evidence in support. The classic exposition is that of Lord Nicholls in Re H (Minors)[1996]AC 563, at 586D-F :

Particular mention should also be made of sub - section 242 (2)(b) which provides that in deciding whether property was obtained through unlawful conduct “it is immaterial whether or not any money, goods, or services were provided in order to put the person in question in a position to carry out the conduct”. The explanatory note states that the purpose of this subsection is to ensure that property counts as having been obtained through unlawful conduct regardless of any investment in that conduct. The example is given of that of the purchase of illicit drugs with honest money in which case the whole of the proceeds of sale will be recoverable.

The Claimant relies on this provision for the submission that even if contrary to her primary case, the Respondent profited in part from legitimate business activities which were neither financed by unlawfully acquired capital nor a cover for illegal money laundering, any legitimately acquired cash will have become mixed at some point with cash from drug dealing, and in such circumstances whenever the mixed funds were used to buy drugs for resale, all the proceeds from the sale of those drugs would be deemed recoverable property by virtue of the subsection. Over time it is said it is probable that all the legitimately acquired cash will have become tainted by frequent repetition of this process. This submission is built upon the concessions made by the Respondent in cross-examination that he conducted nearly all his transactions in cash, that he did not keep separate bank accounts for his different business activities and that all his cash was mixed together.

It is convenient if I begin by stating my conclusions on the discrete issue of mortgage fraud in relation to the Respondent’s purchase of Higham Rd.

I have already referred to the mechanics and history of this purchase and the evidence which was before the court See above at paragraphs 42.4 and 97 - 98. It is not in dispute that in April 2001 the Respondent signed a mortgage application form which was used to apply for and obtain the mortgage advance of just over £50,000, which contained false particulars in relation to his employment and income from that employment. As already set out the material false particulars were that the Respondent was a self employed disc jockey in a company “Spinning Disc” and had been for 1 year 2 months earning £30,000 per annum.

I have no hesitation in rejecting the Respondent’s evidence that he himself did not provide this information to Mr Matto of Allerford Financial Services, who it is not disputed filled out the form, and his further evidence that to the contrary he had in fact informed Allerford Services and Mr Matto in particular that he “was earning money from buying and selling jewellery, clothing, shoes and letting properties through cash transactions and they were fully aware of the situation.” I consider the Respondent in giving this evidence was deliberately lying to the court.

I reach this conclusion by the following process of reasoning which is not affected in my view by the absence of any evidence from Mr Matto himself:

The information in question was either provided to Allerford Services by the Respondent for them to put on the form or was simply made up either by Mr Matto or his boss Mr Lavender. There is no other sensible explanation. Similarly in respect of how the self same information appeared on the other two forms subsequently completed by Mr Lavender and signed by the Respondent in May 2001 i.e. the ISA policy application form and the Financial Advisor’s “Fact Find Form”

There is information personal to the Respondent recorded in the Mortgage application form (and identical information in the other two forms referred to which it is not disputed is entirely accurate or (in the case of time at address) broadly accurate. This information, relating to his marital status, length of time at current address, national insurance number and telephone number could not have been accurately guessed at by either Mr Matto or Mr Lavender. The overwhelming probability is that this information at least was provided verbally by the Respondent on one or more of his various visits to the Allerford office of which he spoke in his evidence .The Respondent himself accepted in cross examination that some of the information on the mortgage application form must have been given by him verbally to Mr Matto. Likewise in respect of additional information, conceded by the Respondent likely to be accurate, which appeared in the forms completed by Mr Lavender- such as the name and address of the Respondent’s doctor this must in all probability have been supplied verbally to Mr Lavender by the Respondent, rather than simply made up or guessed at by those at Allerford

It must follow in my judgment on the balance of probabilities that there was verbal discussion between the Respondent and Mr Matto leading to the completion of the mortgage application form signed by the Respondent – even on his own case – at the Allerford Offices on the 3rd of April 2001

The overwhelming probability is that in the course of such discussion the Respondent supplied the material false particulars to Mr Matto rather than Mr Matto simply making the information up. I accept the Claimant’s submission that Mr Matto had no reason to represent that the Respondent was a disc jockey rather than a trader in jewellery, shoes or clothes, if the Respondent had truly identified these as his trades. In contrast the Respondent would have every reason to misrepresent the true source of his income if, as the Claimant contends, that source was an unlawful one. (I shall return to the significance of this particular submission when considering below the probabilities of the nature of the Respondent’s sources of income generally at this time). I reach this conclusion even though I accept that the undoubtedly misleading particulars as to the identity and address of the Respondent’s accountant must have been suggested to the Respondent by in all probability Mr Matto, given on the evidence of both the Receiver and Mr Lavender, the accountant named was a genuine person trading from the given address and was known to Allerford Financial Services. These particulars were misleading since on any view the Respondent did not have an accountant at the material time of the filling out of the form although Mr Lavender in evidence sought to put an innocent gloss on the matter by suggesting that his firm through Mr Matto on discovering the Respondent had no accountant would have recommended Mr Rumley to him

However none of this in my judgment dilutes the cogency of the Claimant’s submission that Mr Matto would have no reason to make up the fact the Respondent was trading as a disc jockey as opposed to a jeweller and so forth, even if thereafter he felt compelled to assist in the identifying of an accountant. Mr Matto could not have thought the precise source of the Respondent’s income as between a lawful trader in jewellery, clothing, shoes and lettings, and a lawful trader as a disc jockey, would have been a matter of moment to the mortgage provider. In other words the probabilities must be that the Respondent did not tell Mr Matto that he was trading in jewellery and so forth as he now contends to this court he did, since if he had, Mr Matto in my judgment would have put that trading on the form

Significantly, as already explained, the Respondent’s signature is directly underneath the false information about his employment on the mortgage application form and alongside a statement of self certification. The Respondent does not claim to have filled out a blank form but rather to have attended the offices to sign the necessary form on being informed everything was now ready for this purpose. It is highly likely in my judgment that the material information was already present on that form when the Respondent signed it and that the Respondent saw it at the time of signing – it would have been staring him in the face. In these circumstances had in truth the position been as he would have this court believe namely that the information as written was totally contrary to what he had told Mr Matto, then I am quite sure the Respondent – assuming him to be a man of honesty – would not have signed and would have made a protest

I accordingly have no hesitation in concluding that the Respondent did knowingly supply to the mortgage provider false particulars on material matters in support of his mortgage application and thereby obtained the mortgage loan by deception and thus by fraud. I do not in the context of proceedings under the 2002 Act accept that such a conclusion is not open to me because I have not heard evidence directly from the mortgage provider. The notion that this false declaration of employment and income would not have materially influenced the decision to lend £50,000 on a property being purchased for £65,000 is fanciful. I am fortified in taking this approach by a similar approach taken by Langley J. in Olupitan at paras 29-36. I further infer that had the Respondent answered the questions on the form truthfully he would not have obtained a mortgage. By putting forward false particulars the Respondent was patently seeking to avoid disclosing the truth which he was anxious to conceal from the lender. As will be seen below the overwhelming probabilities are that at this time the Respondent was not conducting any legitimate trade of significance – not least because had he been so doing he would have informed Mr Matto of such trading, which on my findings he did not.

I accordingly find that the Claimant has established on the balance of probabilities that this mortgage loan was obtained by fraud on the part of the Respondent and that accordingly not only the mortgage monies but also the whole property was thereby obtained by unlawful conduct within the meaning of the Act, whether that conduct be characterised simply as mortgage fraud or obtaining a money transfer by deception or simple theft. That the whole property has been obtained through this unlawful conduct is self evident using the same process of reasoning rehearsed again in Olupitan at paragraph 35. But for the deception the Respondent would not have obtained the mortgage loan; but for the obtaining of the mortgage funds the Respondent would not have acquired the property.

Hence it must follow in my judgment that the whole of the material property Higham Hill Rd is recoverable for the purposes of this claim subject only to the right of the mortgage provider as an innocent party to be repaid its monies pursuant to the provisions relating to associated property to which I have referred.

I should make clear that I have reached these conclusions without reliance upon the evidence of Mr Lavender that he in 2007 could recall the contents of conversations between Mr Matto and the Respondent in 2001 which he both witnessed and heard. Mr Lavender was first asked to turn his mind to these matters only very recently at the time of his most recent witness statement. In these circumstances I was not sufficiently convinced of the reliability of Mr Lavender’s powers of recall after so long to allow his evidence on the precise contents of the conversation, to be of any real value. As can be seen I have preferred to reach the conclusions I have by a process of reasoning from the material documents themselves and the evidence of the Respondent himself.

I turn next to my conclusions on the Respondent’s own positive case as to how he has been able to acquire the means to obtain the property which is the subject of to this claim.

I consider first the general credibility of that case or rather the lack of it.

I have no hesitation in concluding that in the round the Respondent’s account of his asserted legitimate trading businesses conducted over the year’s material to this claim was and is wholly lacking in credibility. I refer in particular to the following:

I turn from this general conclusion on the Respondent’s lack of credibility in the round, to consider the overall effect of such evidence as there is in relation to each asserted head of legitimate business, upon the credibility of Respondent’s assertions as to the amount of profits and years of trading attributable to each.

I take each business in turn. However my firm conclusion at this stage is that in light of that evidence whatever limited trading there may have been in any particular field, that cannot have been the source of the means whereby the Respondent was able over the years to acquire the assets he has which are the subject of this claim, bearing in mind my finding that he has required monies for this purpose totalling in the round some £400,000.

I have already summarised the material evidence at paragraph 85 – 89 above.

The Respondent only ever claimed to have run this business from selling on jewellery obtained by him at a discount from Rankin the Jewellers. In the light however of the evidence of the Respondent own expert witness Mr Buckie and the transcript of the Rankin evidence from the criminal trial and the Respondent’s own estimate of the prices he paid as set out in his own schedule, the Respondent claim in both his written and oral evidence that he would consistently buy such jewellery and resell the same at regular mark-ups of between 100% and 500% is wholly implausible and I reject it as untrue.

Moreover the Respondent’s assertion in the evidence before me that he had been trading in jewellery obtained from Rankin since 1994 (when he would have been some 18 years of age) was wholly inconsistent not only with the Rankin evidence given at the trial but with the way the Respondent’s case was put on his behalf at the criminal trial which was that he had only been a Rankin customer since 1997 – and even then, according to Rankin himself, the Respondent was not immediately a regular one.

In my judgment this change of stance since the criminal trial and the claim to jewellery trading from as far back as 1994 was a discrete lie deliberately told to this court by the Respondent in order to meet the difficulties posed to him by this claim and the investigations of the Receiver whose net necessarily by reason of the statutory provisions went back 12 years from the date of her appointment, and the need to avoid any finding that any start up capital used in any future business was itself obtained by unlawful means, with the consequential tainting of any future profits . It will be recalled that as far back as 1995 the Respondent in May and June of that year just before he went into custody for what was to be some 18 months, opened two bank accounts one with a cash deposit of £1,000 and on the evidence of the Receiver, deposits were made in the year 1995/96 totalling over £15,000.

Again I have already rehearsed such evidence as was called in support of this head of business in particular the evidence of the two Sethi brothers from Meteor Sports.

I have already explained why I did not find either brother to be a convincing witness but on any view of their evidence in particular on the question of discounts offered, I again find the Respondent’s evidence that he consistently bought trainers from Meteor Sports and resold them at mark ups of 300-400% and simarly Prada shoes with mark ups of 200-300% wholly implausible, bearing in mind as I do my general view of his lack of credibility and that of his so called business model in particular. As with his claim to hugely profitable trade in jewellery, I have no hesitation in rejecting this account as untrue.

Moreover although the Sethi evidence gave limited if somewhat dubious support to a claim by the Respondent to the bulk buying of trainers and Prada Kids shoes in 2002 the effect of their evidence as already explained was that the Respondent could not have been a regular customer of Meteor Sports before he was released from prison in 1999 and further that he had become a customer only from 2000, and then initially on a personal basis. Further it will be recalled that the Respondent’s case at the criminal trial was that he had known Kashif Sethi since 1997 and had been buying in bulk only since 2000 or 2001.

In all these circumstances I again regard the Respondent’s assertion in this case that he had been buying and reselling goods from Meteor Sports since before August 1995 and embracing every year thereafter not only as a deliberate change of stance since the criminal trial but a discrete and deliberate lie designed to meet the difficulty of explaining his sources of income in the early years relevant to this claim to which I have already referred.

I do not forget the Respondent’s claim that he had since in effect the age of 16 in 1993 been selling shoes and clothes imported from the USA at substantial profits through the agency of his grandparents. The vaguest of details were given about this business in his witness statements before trial during which he mentioned for the first time the pivotal role of his grandparents in this venture. I have already made clear my view on the general implausibility of this part of the Respondent’s case which is wholly unsupported by any evidence and I have no hesitation in rejecting it as untrue. It will be recalled that the Receiver ‘s investigations going back to 1991 found no evidence of any bank or savings account opened by the Respondent prior to May 1995.

The Respondent claimed to have been involved in a car hire business from 1998 to 2000 earning between £6, 000 to £8,000 a month, including while he was in prison from the 5^th of October 1998 to 24^th of June 1999. I have summarised the effect of the material evidence relating to this part of his case at paragraphs 71 - 72 above.

This was a head of asserted trade in relation to which I found the Respondent’s case particularly weak and implausible and I reject his account of this business as untrue.

I have already referred to features of evidence demonstrating that he had no real understanding of the nature of a car hire business, namely his inability to comprehend the concept of running expenses and the difference between hire charges and profits and his claim to having pro forma agreements which he did not use, to which I should add his evidence that there was no clear agreement with customers about what would happen in the event a car was stolen or if involved in an accident.

Furthermore, not only is there no supporting evidence of any kind be it documentary or otherwise in support of the Respondent entering into hiring agreements with anyone, but such evidence as the Receiver could uncover following up the Respondent’s case that he had operated through Car Wise Rental Limited, totally undermined the Respondent’s claim to a substantial income from any such business. There is no evidence that Car Wise was profitable to anyone. It is known that the company had a very short shelf life being incorporated in January 1998 and struck off for failure to file accounts in November 1999. The only available bank accounts for the business - are more consistent with the business having lost money. Crucially, there is not a shred of evidence that the Respondent derived any income from it. According to such documents as there are, the Respondent was company secretary rather than a director and there is no evidence that the Respondent owned a share of the business or received any salary or income. I reject the Respondent’s wholly implausible attempts to explain all these matters in the way he has as disingenuous and false.

The Respondent did not dispute that a person needs to be registered with eBay in order to be able to trade on eBay.

In the absence of any documentary evidence – or indeed any other evidence apart from the Respondent’s own assertion – of any registration or trading prior to the 2^nd of September 2003, I reject the Respondent’s claim that he had been trading on eBay since 1998 earning thereby some £30,000 - £40,000. I accept that he did become registered on the 2^nd of September 2003 following his release from custody as evidenced by the Receiver’s findings and that he thereafter participated in some limited trading as described by the Receiver. However this trading post September 2003 self evidently can have had no bearing on his acquisition of the assets under claim.

His claim to have been registered prior to that date is not only undermined by the failure of the Receiver’s investigations with eBay to uncover evidence of such registration but is inconsistent with the evidence (see paragraph 90 above) that after September 2003 the Respondent went to the trouble of engaging in fictional eBay transactions in order to improve his positive feedback. As the Claimant submits, had the Respondent been previously registered as he contends, he could have re-used his previous account and taken advantage of such positive feedback he had already acquired.

The Respondent has produced not one piece of evidence, be it documentary or otherwise, to support his various claims to letting out properties and receiving income there from. I have set the detail of individual alleged lettings alleged him in the history of the individual real properties under claim in this case. In every case the Respondent seeks to explain away the absence of any formal letting agreement or proof of receipt of rental. I again reject his explanations as totally implausible. I consider his account under this head to be untruthful.

I should add that one particular finding I have already made in my conclusions on the mortgage fraud provides powerful support for my above findings. This is the finding that the Respondent did not tell Mr Matto in April 2001 that he was trading in jewellery, shoes, designer, clothes, or letting properties.

This is powerful evidence that as at April 2001 the Respondent was not legitimately trading in any meaningful or profitable way in any of these goods or services. I am quite sure that if the Respondent had been so trading legitimately and profitably he would have told Mr Matto (as indeed he asserted he did, and I have found he did not).

In the light of all these considerations both as to the Respondent’s lack of credibility in the round and the implausibility of the individual features of the Respondent’s evidence concerning the individual heads of legitimate business trading to which he has laid claim I am quite satisfied that the Claimant has made out one of the essential factors relied in support of the claim to recoverable property, namely the lack of any credible explanation from the Respondent as to how he was able legitimately to acquire the assets which make up this claim. In other words I am quite satisfied on the totality of the evidence that this is a case of “unexplained wealth”.

For the avoidance of doubt my primary conclusion is that on the balance of probabilities the Respondent has not during the material period relevant to the acquisition of the alleged recoverable property engaged in any identifiable legitimate profitable business activity of any significance. I say of “significance” since I cannot exclude the possibility arising out of the nature of some of the boxed shoes, electrical, camera, computer and similar goods found in his possession at the time of his arrest in 2002 that he was “dabbling” in such trade and the same may be true of some to a very limited extent in relation to shoes obtained from the Sethis in 2002. However I am quite satisfied that this will not have contributed in any meaningful way to the overall ability of the Respondent to acquire the assets said to be recoverable property

I should also make clear at this stage that on the totality of the evidence I do not consider the jewellery found in the Respondent’s possession was his stock in trade referable to any legitimate trading activity. There has to be another explanation which the Respondent has yet to give.

I turn to give my conclusions on the Claimant’s case.

I state at once my overall conclusion that it is more probable than not on the totality of the evidence and the cogent picture which has thereby emerged, that any asset which the Respondent has acquired using his own monies during the period material to this claim, and that of course embraces on the undisputed evidence all the property which is the subject of this claim (subject only to the limited exceptional cases to which I shall have to return), is property which has been obtained by unlawful conduct or is representative of such property, of the kind sufficiently particularised by the Claimant in her claim, namely drug dealing or through money laundering the proceeds of drug dealing. I make clear I have reached this conclusion on a global approach to this case and not – save for the specific finding of mortgage fraud -on an item by item basis.

My process of reasoning is as follows.

I fully accept that my finding of “unexplained wealth” cannot in accordance with the decision in Green be in itself sufficient for the Claimant to sustain her claim to recoverable property. However as in Olupitan, this is not simply a case of “unexplained wealth”. It is a case in which the Respondent has offered explanations in response to the claim which the court has rejected as untrue. This in itself is a powerful pointer in my judgment that the assets concerned have been acquired through unlawful means of some kind. And indeed there are a number of pointers in the evidence in this case that the Respondent has been quite willing to commit acts likely to constitute unlawful conduct, for example his purchasing of the Yamaha Y684 NLO in a false name in order to avoid speeding or parking tickets or because he had no motorcycle licence (see again the history of this transaction set out at paragraph 92 above) or his self confessed failure to pay income tax on what he asserted was legitimate income. His habit of using different alias’ when it comes to his use of motor vehicles, as further exemplified in his admitted use of the name Fabian Brissett when caught speeding in the Audi hatchback in 2000, is another pointer to his being involved in criminality.

I then turn to consider – as invited to do by the Claimant – the picture which emerges as to a specific kind of criminality when one looks to the evidence relating to the two ends of the chronology material to this claim. I take each in turn.

The court is here reviewing the position of the Respondent in the period before he went into custody in August 1995 for what proved to be some 18 months.

It is certain from the Respondent’s known criminal convictions, in particular the four for which he was sentenced in December 1995 that he was engaged in a certain amount of Class A drug dealing prior to that August. I have already at the beginning of this judgment set out the history of these convictions which leads me to conclude that of the four offences they represent, the latter two were committed while on bail for the first two and in all probability were committed sometime in early 1995.

I agree with the Claimant however that it is very unlikely that the Respondent was so unlucky that on four isolated occasions that he dabbled in drug dealing he was arrested, charged and successfully prosecuted on each of those four occasions. The obvious inference is that he was involved in more drug dealing than the four convictions show. And of course there is evidence of his possession of a Class A drug in October 1993.

This is one side of the picture at this time. The other concerns whether the Respondent was during this period engaged in any form of legitimate business activity.

It is known from the Receiver’s investigations that the Respondent prior to August 1995 had by the age of 19 been able to build up a certain amount of capital since he was able in May and June 1995 to open the two bank/savings accounts to which I have already referred, one at least with a deposit of £1,000 in cash and subsequently in the fiscal year 95/96 deposits were made totalling over £15,000 in cash. The Respondent’s case as I have already set out was that at this time he was earning substantial sums (up to £4,500 a month) principally from daily trading in shoes, clothing and jewellery. In his fourth witness statement he claimed for the first time that he had also been involved in selling cars but he accepted this was a minor part of his business. However, I have already rejected his assertion that he was trading in jewellery as far back as 1994 and 1995 as a discrete lie, given he only ever claimed to have done so through his business with Rankin. Similarly I have already found he has deliberately lied in asserting the buying and reselling of goods from Meteor Sports from before 1995. The only other candidate for a legitimate source of income material to this period is the Respondent’s claim to have been running a successful business importing shoes and clothes from the age of 16. However as has been seen this claim is all premised upon his account of having gone to the USA at that age for a family holiday and on his return starting up importing goods from America through his grandparents living there, which I have already rejected as being entirely implausible and supported by no evidence whatsoever - quite apart from the question how the Respondent obtained the initial finance to fund all this activity.

The fact is although the Respondent claimed to have had a post office savings account much earlier than 1995, the Receiver in the course of her investigations found no evidence of any bank accounts or savings accounts prior to May 1995 and no evidence of any income from any employment in relation to this initial period beginning in 1991and ending in 1995. Indeed the only source of income by way of salary or wages alleged by the Respondent relevant to this time was the occasional day of working for his uncle at £25 per day and a period of time on the YTS scheme for pay which he agreed was very poor, before taking into living expenses.

In all these circumstances I am quite satisfied that the Respondent can have been involved in no legitimate trading prior to his going into custody in August 1995 or if he was it was a tiny proportion of the sources of his income during this time and that it is more likely than not that the sources of income which enabled the Respondent to build up the capital he did came from drug dealing. There is no other sensible conclusion in my judgment.

In other words I accept the Claimant’s submission as well made that on the balance of probabilities such capital as the Respondent was able to build up prior to August 1995 which was subsequently used to initiate any business activities initiated after that date was derived from unlawful conduct of the kind identified. This finding inevitably assists the Claimant in her claim to recoverable property in this case on the basis of it being representative property within the meaning of the statutory provisions.

I then turn to the picture emerging at the other end of the material chronology and the question of the proper inferences to be drawn from the discovery of the large amount of banknotes totalling some £150,000 discovered stored in the way described in the Respondent’s house and deposit boxes and subsequently found to have been contaminated with heroin.

The significance if any of the contamination evidence was a topic which occupied much of the hearing before me.

I have already set out the findings of frequency of heroin contamination found in respect of the Respondent’s cash compared with that found on the batches of notes making up the MSA database. On any view the difference between the two is huge. I repeat that the frequency percentages on the MSA database show an average of 2.4% and save for one sample, the frequency is between 0.00% and less than 5%. The one sample had a frequency of 20%. In contrast the average result attributable to the Respondent’s cash is 55%. The lowest was 40% .The highest was 100%.When one looks at the table set out at the beginning of this judgment it can be seen that the batches of cash totalling over £90,000 found in the Respondent’s home on the 12 of June 2002 in various forms of carrier bags, included examples of frequencies of over 70% with one as high as 94%.

When asked in the course of his opening to identify the inferences that the court was being invited to draw from these findings, Mr Maxwell-Scott on behalf of the Claimant replied as follows:

“That the First Respondent was in close contact with significant amounts of heroin. That is how they came to be on his bank notes. The inference that can be further drawn is that he was himself involved with drug dealing, specifically not necessarily exclusively dealing in heroin. That is consistent with him having prior criminal convictions for dealing in possession with intent to supply Class A drugs”.

These forensic findings in truth go only to the prior issue whether it can be properly inferred that these banknotes were and are contaminated with heroin with a frequency far beyond banknotes in general circulation (“the basic contamination issue”). The legitimacy of further inferences that first the notes have been and then the Respondent has been, in close contact with significant amounts of heroin and that the Respondent himself has involved with drug dealing, must depend on the totality of the other evidence in this case , in particular the court’s findings as to the truthfulness of any explanations put forward by the Respondent for any such basic contamination, and of his explanations for his accumulation and storage of these large amounts of cash and of his assets generally.

The Respondent disputes that any adverse inferences can be drawn from the forensic findings.

On this basic contamination issue I received evidence from experts on behalf of both parties. The Claimant relied upon (i) Dr Richard Sleeman, a founding director of MSA, (a qualified chemist and a fellow of the Royal Society of Chemistry who has specialised in the detection of trace quantities of drugs and explosives and made many presentations in criminal proceedings (ii) Professor Brereton, the professor of chemometrics to whom I have already referred. The Respondent relied upon (i) Dr.R.E. Audrey’ a senior lecturer in analytical chemistry at the University of Huddersfield specialising in the analysis of drugs and (ii) Professor Patrick Laycock, Emeritus Professor of Statistics the University of Manchester. I heard live evidence from Dr Sleeman, Professor Brereton and Professor Laycock.

In the event although many reports were produced for the purposes of these proceedings the sole issue which emerged between the experts was the extent to which the MSA database can be said to be representative of banknotes in general circulation so as to enable a court to conclude that the frequency of heroin contamination on the Respondent’s cash is so unusually high that his banknotes cannot have originated from general circulation and but are likely to have been in close proximity to heroin.

On the one hand Professor Laycock called by the Respondent was (as he had been before the Court of Appeal in Benn) highly critical of the use made of the MSA database which in his view was wholly inadequate for the purposes of determining whether or not any given level of contamination was higher than normal in general circulation. It constituted entirely random samples which could have no more statistical significance than that. “The sampled data is very largely classic convenience or happenstance.” The sample design was fundamentally flawed and no use had been made of sound statistical methods in drawing up a design before sampling was undertaken, such as stratification, clustering, construction of a sample frame and significance testing. Emphasis was put on the very small percentage of samples taken from non bank sources, on the haphazard geographical spread of the areas from which sampling was undertaken and the failure to represent in the database the specific geographic and socio economic area from which the Respondent came.

On the other hand there was the evidence of Professor Brereton. He is not a pure statistician but has an interest in statistics. His experience is in the application of statistics to chemical data and part of his expertise has been in determining in advance how sophisticated a model is required which in turn he says depends on the nature of the differences revealed in the data concerned and the purpose for which the comparison is being made. The more subtle the differences the more sophisticated statistical model may be required. The more stark the differences the less the need for sophistication. He accordingly asked the court to concentrate on the facts of this particular case. His essential point was that the difference between the contamination found in the quite extensive background database, and the notes from the Respondent was so enormous that there was in this case no need for formal statistical sampling designs. His overall conclusion was that the frequency of contamination in notes seized from the Respondent was “beyond reasonable doubt higher than is found in the background population.” His further opinion was that “in the absence of an alternative explanation presented by the respondent this would suggest the banknotes do not originate from general circulation and are likely to have been in close proximity to heroin”.

Dr Sleeman prayed in aid:

There was however no longer any dispute as to the findings themselves. The forensic methodology was not attacked and it is accepted in a Sleeman/Audrey joint report that the batches of notes tested were representative of the material exhibits.

Equally both these experts agreed that (paragraph 15) the “results do not indicate a definite connection between the banknotes and illegal drug activity” and (paragraph 17) that “it is not possible to determine whether the heroin originates…from a single source”.

Nor is it now in dispute that the MSA database is representative of banknotes taken from banks located in the United Kingdom. In the joint Sleeman/Audrey report both experts agreed that conclusions in the Ronan statements of 2002 that “the levels of diamorphine (heroin) found on the banknotes was much greater than that found on banknotes taken from general circulation” and “ I would regard the possibility of this occurring by chance as remote” should be better expressed as “would regard the possibility of withdrawing a similar quantity of banknotes from a bank in the United Kingdom and finding them to be contaminated to the same extent as slight”. Professor Laycock in his joint report with Dr Sleeman conceded that “the measurements made on the banknotes in the MSA database as used for in comparison in court can be regarded as reasonably representative of all such measurements which might be made on banknotes taken from banks located in the United Kingdom”

In these circumstances both parties concentrated their fire upon the question (posed by Dr Sleeman under cross examination) of “the likelihood of money from banks being dissimilar to money in general circulation”. However, no expert before me put himself forward as a banking expert. Hence the Respondent contended in final submission that this court has no evidence upon which it can properly answer this question.

The Claimant however in response in effect makes two points, both arising from the same striking feature in this case: the huge size of the frequency of contamination revealed on the Respondents cash compared with that on the database.

The Claimant says first that the differences here are so striking that adverse inferences should be drawn and the only reason for not doing so would be if there were grounds for believing based on the characteristics of heroin and/or or the banking system that the process of banknotes entering and exiting the banking system was likely to have a dramatic effect on the extent to which banknotes are contaminated with heroin. The Claimant then points to such evidence as is available to the court from peer reviewed journals as suggesting the opposite .This is a reference to material annexed to Dr Sleeman’s written response to Professor Laycock containing inter alia (i) results of a study suggesting heroin does not transfer easily from one banknote to another, and (ii) references to data from the Association of Payment Clearing Services showing that “weekly cash payments within the UK account for approximately 20% of the total cash in circulation which represents significant mixing over time. In addition, cash entering the banking system and other major organisations such, as supermarkets, is collected on a daily basis and sent to sorting centres”. Reliance is also placed on published research from other countries referred to in peer reviewed papers within the same material showing that “although a significant proportion of banknotes world wide has been found to be contaminated with cocaine, the occurrence of other controlled substances, specifically DAM, has been shown to be comparatively rare.” The paper concerned further states that other researchers have reported frequencies of 1% and 3% for other European currencies.

I should record at once the Respondent’s objection to the court paying any attention to the references to banking issues on the ground that they were not accepted, were untested by cross examination and had not been presented in the context of the issues arising in this claim.

The Claimant’s second point is in effect to adopt a point made by Professor Laycock himself under cross examination that in truth the differences here are so huge and the frequency of contamination on the Respondent’s notes so high (in some instances over 70%, 90% and 100% respectively) that the issue here has little to do with statistics but much more to do with the court’s assessment of the Respondent’s explanations if any for the high levels of contamination on his notes. I make no apology for setting out the material extracts from cross examination to which the Claimant referred me in closing submissions:

My criticism, as I say, all the concentration has been on the data, the MSA database and its uses and the description that has been made of it. It is not of how one might analyse these data. Presumably, the respondent has to give his own justification or none at all for why there is a 100% contamination of a particular set of notes. Most of that, it seems to me, has nothing to do with statistics, that is an entirely different problem for the court to make judgments on “.

I have of course considered carefully the submissions made on behalf of the Respondent as to why little or no weight can be put upon the forensic findings in this case. In particular I take on board all that is said about the inadequacy of the MSA database for comparative purposes, and the dangers of relying on peer reviewed journals which have not been tested under cross examination.

However ultimately I have no hesitation in preferring the approach advanced on behalf of the Claimant through the evidence of Professor Brereton that on the facts of this particular case where the differences between the two sets of results are so huge and the frequency of heroin contamination on the Respondents cash is so high, the inference can be drawn from a comparison with the MSA data base that the Respondent’s bank notes cannot have originated from general circulation but are likely to have been in close proximity to heroin - subject always to the court carefully considering the explanations put forward by the Respondent.

I agree with the Claimant that this approach is consistent with that of the Court of Appeal in R v. Compton [2002] EWCA Crim 2835 and R.v.Benn [2004] EWCA Crim 2100. I of course accept that both these decisions where made in a context different from the present. Each was a set of criminal proceedings on an appeal in which the sole issue was whether a conviction for drug dealing was unsafe in the light of all the evidence. Neither decision is binding on this court in these civil recovery proceedings. Nonetheless each is helpful in emphasising that the significance of contamination evidence such as the present must be viewed in the context of the other evidence pointing to illicit activity on the part of a particular defendant or respondent

In Compton, a heroin case where no statistical evidence was called, the Court of Appeal dealt with the attack made on the MSA database in two particular paragraphs 27 and 28, thus:

The difficulty we found with these arguments was that if they were seriously to be pursued, they needed to be supported by the evidence of a statistician which Mr Bottomley was plainly not. Dr Sleeman explained that Lloyds was used because it was MSA’s own bank, and notes could therefore be obtained in the ordinary course of business; that it could be assumed that the ordinary process of circulation of notes through the banking system produced notes from a variety of sources. We found these observations convincing. Since the evidence on the part of the appellants amounts to no more than an appeal to common sense, we apply our own common sense to conclude that the range and weight of MSA’s database is sufficient for comparisons safely to be based upon it.

There is however a further reason why we do not accept this part of the appellants’ argument. In this case the difference between the levels of contamination found on the appellants’ money and the levels found on the money in ordinary circulation is so striking that even if some attack could be made on the margins of MSA’s database the discrepancy would still cry out for an explanation. For that reason the explanations were properly required of the appellants at the trial, explanations that the jury did not accept”

Benn was a cocaine case in which the evidence was that the level of cocaine contamination (not simply frequency of contamination) on the material notes was on average 10 times higher than the database average. In Benn the Court of Appeal did hear oral evidence from both Professor Laycock and Professor Brereton as well as Dr Sleeman. The judgment summarises their evidence. It is clear that Professor Laycock’s was to the same effect as was given to me. Equally so in the case of Professor Brereton whose evidence was summarised as making “the point that the extent to which contamination on the notes found in the Appellants’ possession was such that there was in his view overwhelming evidence that the notes were close to the source of contamination. The question that had to be asked was whether or not the database was sufficient for the purpose of whatever comparison was being made. The comparison that was being made in this case was a very crude comparison for which the databases were sufficient”.

The Court of Appeal in Benn in the context of all the evidence in that case had no difficulty in endorsing the Brereton approach. The critical paragraphs are those at paras.44 and 45:

This leaves ……..the issue relating to the databases. We accept entirely the evidence of Professor Laycock that these could not properly provide any statistical basis for a conclusion as to the provenance of the suspect notes. But as he himself accepted in cross examination, the question of the validity of a database depends upon the purpose which is to be served. In the present case the comparison made between the notes in the appellants’ possession and the databases was merely part of the prosecution case showing a connection between the appellants and the cocaine. That was in the context of other evidence which pointed in the absence of any innocent explanation to the fact that the appellants were involved in illicit activity which resulted in substantial financial gain. (my emphasis) We do not consider a jury even confronted with the evidence of Professor Laycock could come to any other conclusion but that the levels of contamination here were significant.”

So in the present case it is in my judgment essential to consider the context in which the contamination evidence has been adduced, namely the discovery of such contaminated cash totalling some £150.000 in the Respondent’s house and deposit boxes stored in a variety of containers but including wash bag and supermarket carrier bags together with the rejection by the court of the explanations put forward by the Respondent as to the legitimate sources of this money and the reasons for its storage.

As a matter of commonsense as well as through my acceptance of the evidence of Professor Brereton, the huge differences between the frequency of heroin contamination on the Respondent’s notes compared with those found on the notes in the MSA database called for an explanation from the Respondent, as does the manner in which this large amount of contaminated cash were kept stored.

As the Claimant submits, despite being given every opportunity to do so the Respondent offered no explanation for the contamination other than claiming for the first time in oral evidence that the 100% cache in the plastic /blue carrier bag containing wraps of banknotes totalling £5,715 ,represented money paid by Mark Chandler in respect of the sale of the Yamaha motorcycle and the general submission that the monies were received in good faith through innocent transactions from customers of his legitimate trading activities .

However as already stated in my consideration of the Respondent’s general credibility, I have no hesitation in rejecting the Chandler story put forward as it was at the last moment by a Respondent who produces no supporting evidence.

Further the general submission must fail alongside my rejection of the Respondent’s case that he has been carrying on legitimate trading activities of any significance.

Moreover this submission fails on a more narrow ground by reference to the Respondent’s own case since three of the parcels of cash found to be contaminated at percentages of 50% or more, were very substantial sums, namely:

One then turns to the way in which the cash was stored. I repeat my observations already made that this is a clear pointer to the cash having been obtained through unlawful activity which becomes the more persuasive once the Respondent’s explanations of legitimate trading activities sufficient to generate such monies have been rejected as incredible. The contamination evidence in these circumstances patently must go to the probabilities of what that unlawful activity was.

I should also add that the levels of contamination frequency are so high that I find no substance in the further submission made on the part of the Respondent that the court cannot exclude the possibility of cross contamination of the Respondent’s notes either before or after being seized by the police, and notwithstanding the concession extracted from Dr Sleeman in cross examination that cross contamination was possible, that he could not say what had happened to the notes before they were seized and that the amounts detectable were miniscule, being measured in terms of a nanogram. In this context I refer back to the table set out above showing how the various wads of cash were stored in the Respondent’s house.

It has always to be remembered when considering these submissions as to innocent possibilities that this is not a criminal trial but civil proceedings where the court is having to analyse the evidence before it on the balance of probabilities.

In these circumstances in my judgment the inferences which the Claimant invites me to draw can be legitimately drawn and properly represent the likelihoods of the position and I do draw them. That is to say first , that on the facts of this particular case where the differences between the two sets of results are so huge then in the absence of any other credible explanation the inference can be drawn from a comparison with the MSA data base that the frequency of heroin contamination on the Respondent’s cash is so unusually high that his bank notes cannot have originated from general circulation but are likely to have been in close proximity to heroin ; and secondly, the court having rejected as untrue the Respondent’s explanations as to the legitimate sources of this cash and his reasons for it being stored in the way it was , that the Respondent had himself been in close contact with significant amounts of heroin and had himself been involved in illicit drug dealing specifically but not necessarily exclusively dealing in heroin. As the Claimant submits this is consistent also with him having his prior criminal convictions for dealing and being in possession with intent to supply Class A drugs.

I therefore conclude on the balance of probabilities that at either end of the chronology in this case that is to say up until the Respondent going into custody in 1995 and then as at the time of his arrest in 2002 the Respondent cannot have been conducting any legitimate trade of any significance but rather he was unlawfully dealing in drugs as claimed by the Claimant and the seized cash is the product of that dealing.

As to the intermediate period there is my judgment really only one credible conclusion: the probabilities must be that the Respondent was engaged in the same kind of lawful conduct as he was at either end of the time span with which this court is concerned. I have already set out and explained my general conclusion that the Respondent has not during the material period relevant to the acquisition of the alleged recoverable property engaged in any identifiable legitimate profitable business activity of any significance and it must be highly unlikely that the Respondent was in this intermediate period engaged in some quite different kind of unlawful conduct sufficient to generate the necessary funds required to buy the various properties and so forth.

All these conclusions so far, lead inevitably to the finding that all the property which is the subject of this claim which has been acquired with the Respondent’s own monies , is recoverable property as having been obtained through unlawful conduct of the kind specified or as being representative of it, having been obtained with the proceeds of such conduct or on the disposal of original such property (e.g. the Ford Focus which was bought in part for the Respondent’s own cash and in part by the trade in of the Ford Puma which itself had been bought with the Respondent’s own cash).

However even if the Respondent has at some stage in the material period generated some profits by engaging in legitimate business activity – and as I have said I cannot exclude the possibility of some sort of trading of a limited kind having regard to the nature of some of the goods found in his possession in 2002 – I am quite satisfied that those profits and any assets represented by them constitute recoverable property on the grounds that the initial capital which enabled the Respondent to engage in those activities was itself derived from the Claimant’s unlawful conduct in the form of drug dealing. I refer back to my findings in relation to the period prior to the Respondent going into custody in August 1995. As already explained, profits derived from recoverable property are deemed recoverable property under section 307 of the Act.

Thus my overall conclusion is as already stated that on the balance of probabilities on the totality of the evidence and the cogent picture which in my judgment has thereby emerged, any asset which the Respondent has acquired using his own monies during the period material to this claim, and that of course (subject only to the limited exceptional cases to which I shall have to return), embraces on the undisputed evidence all the property which is the subject of this claim (including for example Dukes Avenue, the loan for which the Respondent has repaid out of his own monies) is property which has been obtained by unlawful conduct of the kind sufficiently particularised by the Claimant in her claim, namely drug dealing or through money laundering the proceeds of drug dealing, or is representative of such property.

It follows that I am satisfied that all the property under the claim is recoverable property within the meaning of the Act – subject only to my findings in respect of the Exceptions. I again make clear I have reached this conclusion on a global approach to this case and not – save for the specific finding of mortgage fraud - on an item by item basis.

I turn to the exceptions.

In so far the Respondent’s case on his acquisition of Higham Hill Road through the obtaining of the mortgage loan ranks an exception to his general case, my findings on the mortgage fraud is determinative of the issue. As I have already stated, in the light of those findings the whole of the property is recoverable subject only to the sums due to the lender.

As regards the other claimed exceptions, I have no hesitation in holding the two motorcycles are recoverable property as property which on the totality of the evidence he must have acquired using monies generated by or which represent the profits of his own unlawful conduct as found by this court and which in my judgment he still owns. I reject as untrue his contrary account which I have already rehearsed in a little detail and which I found implausible.

As regards the other claimed exceptions which relate to those items for which the Respondent asserts he did not pay and in respect of which he puts up a variety of explanations concerning either gifts or loans to himself or to others, I find myself in a less certain position. The detail of these exceptions are summarised in one of the appendices to the Claimant’s closing submissions which for convenience I annex to this Judgment. On the one hand the Respondent produced no evidence whether by document or witness to corroborate these various explanations. On the other there has in the course of the hearing been no detailed examination of the circumstances relating to them.

In these circumstances, bearing in mind the burden of proof, I have decided the only proper course is to exclude these remaining exceptions from the recovery order which otherwise must follow arising out of my other findings. I make clear these exceptions relate only to those items listed in the appended schedule which the Respondent asserts either do not belong to him or which he acquired as a gift. They do not include items listed for example by the Respondent in closing written submission at paragraph 173 (i) as being items for trading or personal use. These are caught as recoverable property by virtue of my overall finding in respect of any asset acquired through the Respondent’s own monies of which such items are but examples.

I therefore propose to make a recovery order in this claim vesting the property covered by the order in the trustee for civil recovery pursuant to section 266 of the Act. The order will cover the totality of the property claimed save for (1) the necessary exception in relation to the monies due to the High Hill Road mortgage provider and (2) the limited exceptions referred to above.

I should add that I have considered the points raised by Mr Meredith- Hardy on behalf of the Respondent under the heading of Human rights. I do not consider that the proposed order is incompatible with the Respondent’s human rights either under Article 1 of the Protocol to the Convention on Human Rights or Article 8 of the Convention or generally.

As regards article 1 to the protocol which gives a qualified protection from interference with property rights. Mr Meredith-Hardy referred me to the decision of the European Court in James v. UK (1986) 8 EHRR 123 for the guiding principle that in order for a deprivation to be justified under article 1 of the Protocol, a “fair balance” has to be struck. Under the article “ no one shall be deprived of his possessions except in the public interest” and the public interest requires that (i) that any deprivation of property is for a legitimate purpose and (ii) the achievement of that purpose must strike a “fair balance” between the demands of the community and the needs to protect individual rights. I however see nothing unfair in the balance here being struck given the legitimate public interest in the prevention of crime by ensuring that crime does not pay and my findings against the Respondent that his assets the subject of this claim are all in effect the product of criminal conduct.

Similarly article 8 gives only a qualified protection to the right to respect for private and family life and in so far as the proposed order interferes with that right of the Respondent I consider it for like reasons to be justifiable under article 8 (2) as being a necessary proportionate response of the State in pursuit of a legitimate purpose, namely the prevention of crime. I see nothing disproportionate to the legitimate public interest in preventing crime by ensuring that crime does not pay, in making the recovery order in this case given my findings against the Respondent.

Mr Meredith-Hardy made a general human rights challenge against the provisions for civil recovery orders under the 2002 Act on the grounds of retrospectivity. This was not an issue which was the subject of any detailed argument before me. I deal with it generally. There is no express prohibition on retrospectivity in the Convention in the context of the present proceedings which are civil in character. The express prohibition in article 7 relates only to punishment for a criminal offence of which someone has been found guilty which is not this case. If it be relevant the conduct said to amount to unlawful conduct in these proceedings was undoubtedly a criminal offence under domestic English law at the material time of it being carried out. I regard this element of retrospectivity as but one of a number of important factors, to be put in the balance when considering the issue of whether a fair balance has been struck under article 1 of the protocol. I do not consider this in anyway changes the conclusion I have reached that a fair balance has been struck. It must have always been reasonably foreseeable to some one in the position of the Respondent, that the State might take steps to deprive him of property obtained through criminal conduct if he chose to embark upon the same.

I will hear counsel on the precise terms of the appropriate form of order and any ancillary applications on the handing down of this judgment.