There can be no doubt that before a substantive offence of money laundering can be committed, there must have been an antecedent (or “predicate”) offence committed by someone, which generated the criminal property concerned, the House of Lords so held in relation to similar earlier English legislation in R v Montila [2004] UKHL 50; [2004] 1 WLR 3141.
a) It does not follow that for a Defendant to be convicted of a substantive offence of money laundering, there must have been a conviction for the antecedent offence. What has to be proved is that an antecedent offence was committed, not that a conviction followed;
b) It follows that at the stage of an application for a CIO in aid of a money laundering investigation, what has to be established is not that a Defendant has committed a money laundering offence but that there are reasonable grounds for believing that a prospective Defendant has done so.
c) The Board was thus satisfied that the Court of Appeal fell into error insofar as it held that the existence of a conviction for the antecedent offence before an application for a CIO can be entertained in relation to a money laundering investigation was required.
d) The Board concluded that the Court of Appeal was wrong to hold that an application for a CIO could not be made, in aid of a forfeiture investigation, until the Defendant has been convicted of the offence with which he is charged.
e) Reasonable grounds for believing a primary fact, such as that the person under investigation has benefited from his criminal conduct, or has committed a money laundering offence, do not involve proving that he has done such a thing, whether to the criminal or civil standard of proof. The test is concerned not with proof but the existence of grounds (reasons) for believing (thinking) something, and with the reasonableness of those grounds. Debate about the standard of proof required, such as was to some extent conducted in the courts below, is inappropriate because the test does not ask for the primary fact to be proved. It only asks for the Applicant to show that it is believed to exist, and that there are objectively reasonable grounds for that belief.
f) The Court of Appeal was in error in this case in holding that before a CIO could be made in relation to a money laundering investigation, the person specified must be “proved” to have some connection with criminal property.
g) Evidence-gathering orders, including a CIO, are available to the prosecution or Agency whenever they want them. They are only available when the judge determines that they ought to be granted. All ex parte applications impose on the Applicant the duty to disclose to the judge everything which might point against the grant of the order sought, as well as everything which is said to point towards grant. The role of the judge is to ensure that the order is justified.
The Court of Appeal was correct to dismiss the Agency’s appeal against the judge’s refusal to make the CIO sought on account of defects that were too extensive to warrant remitting the present application to the judge.
The Board relied on its authority in Director of Public Prosecutions of Mauritius v Bholah [2011] UKPC 44 where it held that proof of a particular predicate crime is not necessary in order to prove a substantive charge of money laundering to the criminal standard. The Board also upheld similar decisions in the Court of Appeal (Criminal Division) for England and Wales, for example R v Anwoir [2008] EWCA Crim 1354; [2009] 1 WLR 980.
The Board relied on the House of Lords answer in R v Southwark Crown Court Ex p Bowles [1998] AC 641. There, the legislation under consideration was Section 93H of the Criminal Justice Act 1988, which was the precursor of provisions now found in the current UK Proceeds of Crime Act 2002. The statute allowed the Crown to seek a production order in aid of an enquiry into whether any person had benefited from any criminal conduct, if there were reasonable grounds for suspecting that the person had so benefited.
Further in Ex p Bowles above, the House of Lords rejected the Crown’s argument that a production order could be granted in aid of the prosecution’s enquiry into whether the prospective Defendant had committed the substantive offence. It held that such an order could only be granted in aid of the ancillary enquiry into benefit from criminal conduct, and thus in aid of the prospective confiscation proceedings. It held that if the information given under the order sought might be useful to the prosecution for both reasons, the judge should grant the order only if satisfied that the dominant purpose of the application was the ancillary (confiscation) enquiry.
It also made clear that incorporated into the ancillary confiscation enquiry might well be an enquiry into whether a restraint order ought to be sought, and that a production order could legitimately be made in aid of prospective restraint order proceedings. At 647E Lord Hutton referred to what Simon Brown LJ had said on this topic in the Divisional Court and at 647H-648A went on to say: “However, I consider that Simon Brown LJ was right to hold that ... Section 93H is concerned with an investigation into the proceeds of crime to assist the authorities to obtain information which may enable an application to be brought for a restraint order or a confiscation order.”[emphasis supplied] He further said, at 651G: “Accordingly I consider that if the true and dominant purpose of an application under Section 93H is to enable an investigation to be made into the proceeds of criminal conduct, the application should be granted even if an incidental consequence may be that the police will obtain evidence relating to the commission of an offence. But if the true and dominant purpose of the application is to carry out an investigation whether a criminal offence has been committed and to obtain evidence to bring a prosecution, the application should be refused. I further consider that if the police discover evidence of the commission of an offence in the course of an investigation consequent upon an order properly made under Section 93H, the fact that the evidence was discovered in this way would not be a reason for the exclusion of the evidence under Section 78 of PACE on the ground of unfairness at a trial where the prosecution sought to adduce such evidence.”
Reasonable belief in the presence of stolen goods in premises was the historic test for the grant of a search warrant at common law: see Chic Fashions (West Wales) Ltd v Jones [1968] 2 QB 299, per Lord Denning at 308.
