[2018 (2) CILR 633]
IN THE MATTER OF CASTRO-QUESADA
GRAND COURT (Williams, J.): December 20th, 2018
Criminal Procedure—proceeds of criminal conduct—restraint order—restraint order under Proceeds of Crime Law (2018 Revision), s.45(1) is interlocutory remedy—Crown to show good arguable case alleged offender benefited from criminal conduct and has interest in assets—order made under precondition in s.44(1)(a) that criminal investigation started in Islands and reasonable cause to believe alleged offender benefited from criminal conduct may be discharged if undue delay bringing criminal charges
The Crown sought a restraint order pursuant to s.45 of the Proceeds of Crime Law (2018 Revision).
The alleged offender owned a property in the Islands. In an ex parte application, the Crown sought an order prohibiting her from transferring or relinquishing control or in any way disposing of or dealing with the property or causing the property to diminish in value. A criminal investigation was ongoing and there was a possibility that the alleged offender would be convicted of serious offences under the Penal Code, including obtaining property by deception and theft.
Held, granting the restraint order:
The purpose of a restraint order under the Proceeds of Crime Law (2018 Revision) was to preserve any realizable property if there was a real risk of it being dissipated. It was an interlocutory remedy. The Crown did not have to prove the case to the criminal or even the civil standard. The test was the same as on an application for a civil freezing order, namely that a good arguable case had been established that the alleged offender had benefited from criminal conduct and that he had an interest in the assets in relation to which the application was made. Section 44 of the Law laid down a number of preconditions, one of which had to be satisfied before a restraint order could be made, including in s.44(1)(a) that “a criminal investigation has been started in the Islands with regard to an offence and there is reasonable cause to believe that the alleged offender had benefited from his criminal conduct . . .” Section 69(4) of the Law provided that a person benefited from an offence if he obtained property as a result of or in connection with his conduct. In the present case, the court was satisfied on the evidence before it that there was a real risk of dissipation of the property and that that would frustrate attempts to
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recover the property. The Crown had established a good arguable case that the alleged offender had benefited from conduct which constituted an offence in the Islands and that she had an interest in the property. As the restraint order was made on the condition of s.44(1)(a) of the Law, the Crown was reminded that the court would discharge the order if there was undue delay in charging the alleged offender with any offences (
paras. 7–16).
Case cited:
(1) Crown Prosecution Serv. v. Compton, [2002] EWCA Civ 1720, applied.
Legislation construed:
Proceeds of Crime Law (2018 Revision), s.44: The relevant terms of this section are set out at
para. 9.
s.45(1): “Where any of the conditions set out in section 44 is satisfied the court may make a restraint order prohibiting any specified person from dealing with any realisable property held by him subject to such conditions and exceptions as may be specified in the order.”
G.K. Kelly, Crown Counsel, for the D.P.P.
1 WILLIAMS, J.:
Procedural background
This matter came before me in chambers.
2 I have before me the summons filed by the Director of Public Prosecutions (“the Crown”) seeking a restraint order pursuant to s.45 of the Proceeds of Crime Law (2018 Revision) (“the Law”), prohibiting Lacey Lakaysha Castro-Quesada (“LQ”) in her capacity as owner of the property at No. 42 Poinsettia Lane, Tropical Gardens, George Town registered at Georgetown East, Block 22E, Parcel 84 (“the property”), except as otherwise authorized by this order, from transferring or relinquishing control or in any way disposing of or dealing with the property or causing the property to diminish its value.
3 I note that in the bundle LQ is referred to as being the defendant. However, pursuant to s.44(3)(a) of the Law, as the condition relied upon for the making of the restraint order is s.44(1)(a) of the Law, it would be preferable if she is referred to, at this stage, as “the alleged offender” rather than as the defendant.
The hearing
4 At the hearing I have received oral and written submissions from Crown Counsel. I have also considered the content in the application
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bundle and, in particular, the contents of the affidavit sworn by Ingrid Spence on December 20th, 2018.
5 The application has been heard ex parte. Therefore, I am conscious that I have not had the benefit of hearing from LQ. The Crown is, of course, aware of its responsibility at ex parte hearings to give full and frank disclosure, including sharing with the court any possible defence or information which it recognizes that LQ would raise if she was in attendance. At paras. 3 and 29 of her affidavit, Ingrid Spence sets out the reason why the application has been made ex parte, namely that if LQ became aware of an application before a restraint order was made there is a real risk that she will attempt to dissipate or transfer the property and thereby frustrate the purpose of the application. At para. 29 of the affidavit, it is also contended that notice of the hearing of this application will hinder or halt the investigation. Having reviewed the affidavit, in the circumstances of this case, I am satisfied that it is appropriate for me, pursuant to s.46(1)(b) of the Law, to consider this application without notice being given to LQ.
6 The affidavit of Ingrid Spence sets out in quite some detail, from paras. 5–14, the evidence leading to the currently ongoing criminal investigation. At paras. 15–24 of her affidavit, Ms. Spence sets out the nature of the criminal investigation that has hitherto been conducted, leading to a conclusion that LQ is facing the possibility of being convicted of serious offences under the Penal Code, including obtaining property by deception and theft. Although I have carefully considered those paragraphs, I do not intend to set out that detail herein, because at this stage I am satisfied that a photocopy of my sealed order and a copy of the transcript of this ex tempore judgment written in this manner will be sufficient for the purposes of putting the relevant parties on notice.
The Law
7 The purpose of restraint orders under the Law is to preserve any realizable property if there is a real risk of it being dissipated. In this case I am satisfied, on the evidence before me, that that risk exists in relation to the property and that this would frustrate any attempts made to recover the property.
8 A restraint order is an interlocutory remedy. The Crown does not have to prove the case to the criminal or even the civil standard when applying for a restraint order. In Crown Prosecution Serv. v. Compton (1), the Court of Appeal held that the test is the same as on an application for a civil freezing order, namely that a good arguable case has been established that the alleged offender has benefited from criminal conduct and that he has an interest in the assets in relation to which the application is made. Although Compton was a case dealing with an application under the Drug
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Trafficking Act 1994, the approach advocated is equally applicable to restraint orders under the Proceeds of Crime Law (2018 Revision).
9 Section 44 of the Law lays down a number of preconditions, one of which must be satisfied before a restraint order may be made. The relevant part, in this case, is s.44(1) of the Law which provides:
“The court may grant a restraint order in accordance with section 45 if any one of the following conditions is satisfied—
(a) a criminal investigation has been started in the Islands with regard to an offence and there is reasonable cause to believe that the alleged offender has benefited from his criminal conduct . . .”
10 Section 69(4) of the Law provides that a person benefits from an offence if he obtains property as a result of or in connection with his conduct. Pursuant to s.69(7) where he benefits from the conduct his benefit is the value of the property so obtained.
Conclusions
11 On the evidence before me, the Crown has established a good arguable case that LQ has benefited from conduct which constitutes an offence in the Cayman Islands and that she has an interest in the property. I am satisfied that the condition set out at s.44(1)(a) of the Law has been established by the Crown as they have started a criminal investigation in the Cayman Islands in relation to such offences and that, on the limited evidence before me, there is reasonable cause to believe that LQ has benefited from criminal conduct.
12 Accordingly, pursuant to s.45(1) of the Law, I make a restraint order prohibiting LQ, in her capacity as owner of the property at No. 42 Poinsettia Lane, Tropical Gardens, George Town registered at Georgetown East, Block 22E, Parcel 84, whether by herself or by instructing another, from transferring or relinquishing control or in any way disposing of or dealing with the property or causing the property to diminish its value.
13 As the restraint order is made in respect of land, the supplementary restraint orders set out at s.51(a)–(c) of the Law apply. A copy of the restraint order under the seal of the court should be sent to the Registrar of Lands.
14 Pursuant to s.45(5) of the Law, I make the following orders to ensure that the restraint order is effective. First, that a photocopy of the sealed order and a transcript of this ex tempore judgment are sufficient for the purpose of putting relevant parties on notice and that a copy of the sealed order is sufficient for the purposes of putting all of the relevant third parties on notice. Secondly, that LQ shall be notified and served within
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seven days with a copy of the order and a copy of the transcript of this ex tempore judgment, but shall not without further order of this court or consent from the Office of the Director of Public Prosecutions be provided with the evidence upon which the order was made.
15 The Office of the Director of Public Prosecutions gives to the court the undertakings at Schedule 1.
16 As the order has been made on the condition at s.44(1)(a) of the Law, the Crown is respectfully reminded that s.46(4) of the Law provides that the court “shall discharge the order if within a reasonable time proceedings for the offence are not started,” in other words, if the time comes when there becomes an undue delay in charging LQ with any offences.
Order accordingly.
Attorneys: Govt. Legal Dept. for the Crown.